May 2010

Prevention of Significant Deterioration and 

Title V GHG Tailoring Rule: EPA’s 

Response to Public Comments

U.S. Environmental Protection Agency

Office of Air Quality Planning and Standards

Air Quality Policy Division

Research Triangle Park, NC
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Foreword

This document provides responses to public comments on the U.S. Environmental Protection 

Agency’s (EPA’s) proposed “Prevention of Significant Deterioration and Title V Greenhouse 

Gas Tailoring Rule.” EPA received comments on this proposal via mail, e-mail, facsimile, and 

the web site at http://regulations.gov. Additionally, EPA conducted two public hearings to allow 

the public to provide oral testimony on the proposed rule. Copies of the public hearing 

transcripts and all comment letters submitted to the docket are available at the EPA Docket 

Center Public Reading Room, or electronically through http://www.regulations.gov by searching 

Docket ID EPA-HQ-OAR-2009-0517.

In light of the very large number of comments received and the significant overlap between 

many comments, this document does not respond to each comment individually. Rather, EPA 

summarizes and provides a single response to each significant argument, assertion, and question 

contained within the totality of comments. Within each comment summary, EPA provides in 

parentheses one or more Docket ID numbers for commenters who raised particular issues. 

However, the list of commenter ID numbers is not meant to be exhaustive. EPA does not 

individually identify each and every commenter who made a certain point in all instances, 

particularly in cases where multiple commenters express essentially identical arguments. 

Although portions of the preamble to the final rule are paraphrased in this document, to the 

extent any ambiguity is introduced by this paraphrasing, the preamble itself remains the 

definitive statement of the rationale for the final rule.

The primary contact regarding questions or comments on this document is:

Joseph Mangino

Air Quality Policy Division

Office of Air Quality Planning and Standards 

Mail Code C504-03

Environmental Protection Agency

Research Triangle Park, NC 27711

e-mail: mangino.joseph@epa.gov
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Table of Contents

Foreword.......................................................................................................................................... i

Table of Contents........................................................................................................................... iii

Acronyms and Abbreviations ........................................................................................................ vi

Chapter 1. Introduction ...............................................................Error! Bookmark not defined.1

Chapter 2. Public Hearing, Form Letters, and General Comments Related to GHG-Related Rules 

and the Proposed Tailoring Rule .................................................................................................... 3

2.1 Public Hearings.....................................................................Error! Bookmark not defined.3

2.2 Small Business Outreach Meeting........................................................................................... 4

2.3 Meeting with Semiconductor Industry Association................................................................. 5

2.4 Form Letters and General Comments Received on GHGs Regulation and the Proposed 

Tailoring Rule ................................................................................................................................. 5

2.5 General Comments on the Tailoring Rule and Comments on Other GHG Regulations......... 9

2.5.1 Regulation of GHGs Under the CAA and The Proposed Tailoring Rule........Error! 

Bookmark not defined.10

2.5.2 Endangerment Finding Under Section 202 of the CAA......................................... 17

2.5.3 Light Duty Vehicle Rule (LDVR) ........................................................................ 203

2.5.4 Reconsideration of Interpretation of Regulations that Determine Pollutants Covered 

by CAA Permitting Programs (“CAA Interpretation Reconsideration Rulemaking”)............... 287

Chapter 3. Comments on the Legal Basis for the Proposed Rule................................................ 30

3.1 Comments on Regulation of GHGs under the CAA.............................................................. 30

3.1.1 Comments on Regulation of GHGs under the CAA in General............................. 30

3.1.2 Comments on Regulation of GHGs under the PSD Program............................... 333

3.1.3 Comments on Regulation of GHGs under the Title V Program........................... 389

3.2 Comments on the Administrative Necessity Doctrine........................................................... 42

3.3 Comments on the Absurd Results Doctrine........................................................................... 49

3.4 Comments on the Step-by-Step Process................................................................................ 54

3.5 Comments on Implementation through Retroactively Limiting Approval of SIPs and Title V 

Programs....................................................................................................................................... 54

Chapter 4. Comments on Streamlining Options and Tools To Address the Administrative 

Burdens of PSD and Title V for GHGs ........................................................................................ 58

4.1 General Comments on Permit Streamlining Options for PSD and Title V ........................... 58

4.2 Redefining “Potential to Emit” .............................................................................................. 62

4.3 Presumptive BACT................................................................................................................ 65

4.4 General Permits and Permits-by-Rule ................................................................................... 77

4.5 Electronic Permitting ............................................................................................................. 81

4.6 “Lean” Techniques for Permit Process Improvement ........................................................... 82

Chapter 5. Comments on the Proposed Definition of the GHG Pollutant................................... 84

5.1 Comments on the Compounds Included in the Definition of the GHG Pollutant ................. 84

5.2 Comments on Use of GWP and the CO2e Metric.................................................................. 90

5.2.1 General Support and Opposition to the CO2e Metric ............................................. 90

5.2.2 Comments on Combining the Six GHGs into a Single Metric............................... 94

5.2.3 Comments on Linking the Definition of CO2e to EPA’s “Inventory of U.S. 

Greenhouse Gas Emissions and Sinks” ........................................................................................ 98
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5.2.4 Comments on the Use of Dual Thresholds for Pollutants that Do Not Exceed the 

Statutory Thresholds but Do Exceed the CO2e Thresholds........................................................ 101

5.2.5 Comments on the Use of English versus Metric Tons for GHG Metric............... 103

Chapter 6. Comments on Permitting Thresholds....................................................................... 104

6.1 Comments on Administrative Burden and Sources Impacted under the Statutory Thresholds

..................................................................................................................................................... 104

6.2 Comments on the Administrative Burden and Sources Impacted under the Proposed 

Thresholds................................................................................................................................... 107

6.3 Comments on the Methodology Used to Evaluate Burden.................................................. 115

6.4 Comments on Recommended Thresholds ........................................................................... 124

6.4.1 Comments Recommending a Non-GHG Trigger ............................................................. 124

6.4.2 Comments Recommending Specific Thresholds.............................................................. 127

6.4.3 Comments on the PTE Basis for Thresholds.................................................................... 145

6.4.4 Comments Recommending Alternative Approaches to Applicability.............................. 146

6.4.5 Comments on the Proposed Phasing of the Thresholds.................................................... 148

Chapter 7. Comments on the Economic Impacts of the Proposed Rule .................................... 153

7.1 Economic/Societal Impacts and the Regulatory Impacts Analysis of the Rule................... 153

7.2 Regulatory Flexibility Analysis........................................................................................... 164

Chapter 8. Implementation Issues.............................................................................................. 172

8.1 Comments on EPA’s Mechanism for Implementing and Adopting the Tailoring Approach

..................................................................................................................................................... 172

8.2 Transitional Issues ............................................................................................................... 182

8.2.1 Requests for “Grandfathering” and for Exemptions from Revision, Reopening or 

Update Requirements for Application and Permits.................................................................... 182

8.2.2 Requests for Delays in Implementation................................................................ 192

8.3 Requests for Specific Exemptions/Deferrals from Applicability ........................................ 202

8.3.1 Source Categories ................................................................................................. 202

8.3.2 Biogenic Emissions and Combustion of Biomass................................................ 208

8.3.3 Fugitive Emissions................................................................................................ 213

8.3.4 Pollution Control Projects..................................................................................... 216

8.3.5 Indirect Emissions................................................................................................. 218

8.4 PSD and Title V Permitting Implementation Issues and Questions.................................... 218

8.4.1 General Suggestions, Comments, or Questions.................................................... 218

8.4.2 General Requests for Guidance ............................................................................ 221

8.4.3 General Suggestions or Comments for Specific Sectors ...................................... 224

8.4.4 General Suggestions or Comments on Emissions Monitoring, Public Participation, 

and Funding ................................................................................................................................ 226

8.4.5 PSD-Specific Implementation Issues.................................................................... 228

8.4.6 Title V-Specific Implementation Issues............................................................ 23333

Chapter 9. Comments on Statutory and Executive Order Reviews....................................... 24242

9.1 General Comment ............................................................................................................ 24242

9.2 Executive Order 12866 – Regulatory Planning and Review ........................................... 24242

9.3 Paperwork Reduction Act................................................................................................ 24343

9.4 Regulatory Flexibility Act ............................................................................................... 24444

9.5 Unfunded Mandates Reform Act..................................................................................... 24444

9.6 Executive Order 13132 – Federalism .............................................................................. 24545
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9.7 Executive Order 13175 – Consultation and Coordination with Indian Tribal Governments

................................................................................................................................................. 24646

9.8 Executive Order 13211 – Actions That Significantly Affect Energy Supply, Distribution, or 

Use .......................................................................................................................................... 24646

Chapter 10. Miscellaneous Comments .................................................................................. 24848

Appendix A

Appendix B
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Acronyms and Abbreviations

Acronym/

Abbreviation Definition

ANPR Advance Notice of Proposed Rulemaking

APA Administrative Procedure Act

BACT Best Available Control Technology

BMP Best Management Practice(s)

Btu British Thermal Unit

CAA or Act Clean Air Act

CAAAC Clean Air Act Advisory Committee

CAFE Corporate Average Fuel Economy

CAIR Clean Air Interstate Rule

CAM Compliance Assurance Monitoring

CARB California Air Resources Board

CCS Carbon Capture and Sequestration

CFR Code of Federal Regulations

CH4 Methane

CO Carbon Monoxide

CO2 Carbon Dioxide

CO2e Carbon Dioxide Equivalent

CREDO Chaplains Religious Enrichment Development Operation

CRU Climate Research Institute

CTG Control Techniques Guidelines

CWA Clean Water Act

D.C. Circuit District Court Circuit

DOE Department of Energy

DOT Department of Transportation

EAB Environmental Appeals Board

EITE Energy-Intensive Trade-Exposed 

EO Executive Order

EPA Environmental Protection Agency

FERC Federal Energy Regulatory Commission

FR or Fed.

Reg.

Federal Register

GHG Greenhouse Gas

GSP Gross State Product

GWP Global Warming Potential

HAP Hazardous Air Pollutants

HFC Hydrofluorocarbon

H.R. House of Representatives

HVAC Heating, Ventilation, & Air Conditioning

HQ Headquarters

ICR Information Collection Request
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Acronym/

Abbreviation Definition

IGCC Integrated Gasification Combined Cycle

IL Illinois

IPCC Intergovernmental Panel on Climate Change

Lbs Pounds

LAER Lowest Achievable Emission Rate

LFG Landfill Gas

LDVR Light-Duty Vehicle Rule

MMBtu Million British Thermal Units

MSW Municipal Solid Waste

MW Megawatt

MWh Megawatt Hours

MY Model Year

N2O Nitrous Oxide

NAAQS National Ambient Air Quality Standard(s)

NESHAP National Emission Standards for Hazardous Air Pollutants

NG Natural Gas

NHTSA National Highway Traffic Safety Administration

NMOC Non-Methane Organic Compound

NOD Notice of Determination

NOx Nitrogen Oxides

NRC Nuclear Regulatory Commission

NRDC Natural Resources Defense Council

NSPS New Source Performance Standard

NSR New Source Review

NTTAA National Technology Transfer and Advancement Act

OA Office of Advocacy

OAR Office of Air and Radiation

ODS Ozone Depleting Substances

OIRA Office of Information and Regulatory Affairs

OMB Office of Management and Budget

OPEI Office of Policy, Economics, and Innovation

PAL Plantwide Applicability Limit

PFC Perfluorocarbons

PM Particulate Matter

POTW Publicly Owned Treatment Works

ppm Parts per Million

ppmv Parts per Million by Volume

PRA Paperwork Reduction Act

PSD Prevention of Significant Deterioration

PTE Potential to Emit

RACT Reasonably Available Control Technology

R&D Research and Development

RFA Regulatory Flexibility Act
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Acronym/

Abbreviation Definition

RIA Regulatory Impact Analyses

RMRR Routine Maintenance, Repair, Replacement

SBA Small Business Administration

SBARP Small Business Advocacy Review Panel

SBREFA Small Business Regulatory Enforcement Fairness Act

SER Small Entity Representative

SF6 Sulfur Hexafluoride

SIA Semiconductor Industry Association

SIP State Implementation Plan

SO2 Sulfur Dioxide

T&D Transmission and Distribution

TDF Tire-Derived Fuel

TIP Tribal Implementation Plan

tpy/TPY Tons Per Year

TSD Technical Support Document

UMRA Unfunded Mandates Reform Act

UNFCCC United Nations Framework Convention on Climate Change

U.S.C. United States Code

USDA United States Department of Agriculture

U.S. or 

U.S.A.

United States of America

VA Virginia

VOC Volatile Organic Compound
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Chapter 1. Introduction

On October 27, 2009, we proposed to tailor the major source applicability thresholds for 

greenhouse gas (GHG) emissions under the Prevention of Significant Deterioration (PSD) and 

title V programs of the Clean Air Act (CAA or Act) by setting first-phase applicability threshold 

levels under both programs, setting a first-phase PSD significance level for GHG emissions, 

undertaking efforts to streamline the administration of the programs, and committing to an 

assessment of the administration of the programs within 5 years and a second-phase rulemaking 

within 6 years. (See 74 Federal Register [FR] 55292, October 27, 2009). As the first phase, we 

proposed to establish applicability thresholds for both the PSD and title V programs at the level 

of 25,000 tons per year (tpy) carbon dioxide equivalent (CO2e) and to establish a PSD 

significance level of between 10,000 and 25,000 tpy CO2e. In addition, we proposed to commit 

that, within 5 years of promulgating the first phase, we would conduct a study of the permitting 

authorities' ability to administer the programs going forward, and then, within a year, conduct a 

rulemaking for the second phase of the program. This second phase would either confirm the 

first-phase permitting levels, or establish revised levels or other streamlining techniques. 

We proposed to identify the GHG metric as the group of six GHGs, on a CO2e basis. A

source’s emissions for any of the six primary GHGs that are “subject to regulation” under the 

CAA, and therefore considered “regulated NSR pollutants,” are summed on a CO2e basis using 

their global warming potential (GWP) values. The summed CO2e emissions would then be 

compared to the applicable permitting threshold to determine whether the source is subject to 

PSD and title V requirements. 

Moreover, we also proposed a process, consisting of several components, for conforming 

the EPA-approved State Implementation Plans (SIPs) and title V programs to reflect the GHG 

threshold levels. As part of the proposed Tailoring Rule, we proposed to limit our approval of 

previously approved SIPs and title V programs to the extent that they would require permitting 

for sources below the GHG permitting thresholds. In addition, we explained our intention to 

undertake a separate rulemaking to resolve issues related to the definition of the pollutants 

covered under the permitting programs in certain approved SIPs and title V programs.

In conjunction with the first phase of our proposed action to tailor the GHG permitting 

thresholds, we committed to a concurrent effort to investigate, evaluate, and support the 

implementation of streamlining techniques to address GHG sources. In addition to developing 

permit streamlining techniques, we also proposed plans to compile and make available technical 

and background information on GHG emission factors, control technologies, strategies and 

measurement and monitoring methodologies for key GHG source categories. We also stated that 

we would pursue using this information to develop presumptive Best Available Control 

Technology (BACT) levels for selected source categories, focusing our support effort on the 

largest emitting GHG source categories. A key objective of this support effort is to help 

permitting authorities find cost effective ways to achieve GHG controls under the BACT 

requirement. 
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The docket for this proposed rulemaking contains 19,123 public submission items that 

represent over 446,000 public comments received during the public comment period for the 

proposed rule. The docket also contains the transcripts for two public hearings conducted for the 

proposed rule (see Docket Id. No. EPA-HQ-OAR-2009-0517-5319 for the transcript of the 

November 18, 2010 public hearing in Arlington, VA, and Docket Id. No. EPA-HQ-OAR-2009-

0517-3412 for the transcript of the November 19, 2010 public hearing in Rosemont, IL. 

Appendix A to this document presents the list of public submissions (by Docket ID No.) with a 

description of the type of comment and the organization/individual submitting the comment. 

Specific and general comments received at the public hearings and during the public comment 

period for the proposal are summarized in this document, organized under the following 

Chapters:

 Chapter 2 – Public Hearing, Mass Campaign Letters/Form Letters, and General 

Comments Related to GHG-Related Rules and the Proposed Tailoring Rule

 Chapter 3 – Comments on the Legal Basis for the Proposed Rule

 Chapter 4 – Comments on Streamlining Options and Tools To Address the 

Administrative Burdens of PSD and Title V for GHGs

 Chapter 5 – Comments on the Proposed Definition of the GHG Pollutant

 Chapter 6 – Comments on Permitting Thresholds

 Chapter 7 – Comments on the Economic Impacts of the Proposed Rule

 Chapter 8 – Comments on Implementation Issues

 Chapter 9 – Comments on Statutory and Executive Order Reviews

 Chapter 10 – Miscellaneous Comments
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Chapter 2. Public Hearing, Form Letters, and General Comments 

Related to GHG-Related Rules and the Proposed Tailoring Rule

The proposal preamble for the Tailoring Rule provided background information on GHG 

regulation under the CAA, the current (at that time) and proposed treatment of GHG emissions 

under the title V and PSD programs and what future actions may change that treatment. The 

proposal also announced that we would conduct a public hearing if one was requested and 

provided numerous avenues that the public could use to comment on the proposed Tailoring 

Rule. A public hearing was requested and two public hearings were held, and hundreds of 

thousands of comments were received on the proposal through various avenues. An overview of 

the public hearings, mass campaign letters/form letters and general comments related to the 

proposed Tailoring Rule are presented in this Chapter. Section 2.1 of this Chapter presents an 

overview of the public hearings; section 2.2 summarizes the form letters as well as the general 

support and opposition comments related to the proposal; and section 2.3 summarizes examples 

of the general comments received on the regulation of GHGs under the CAA, the proposed 

Tailoring Rule, and other CAA GHG-related rules. 

2.1 Public Hearings

On November 18 and November 19, 2009, EPA conducted public hearings on the 

proposed PSD and title V GHG Tailoring Rule in Arlington, Virginia (VA) and Rosemont, 

Illinois (IL), respectively. There were 128 attendees and 49 speakers at the Arlington, VA 

hearing, and 157 attendees and 77 speakers at the Rosemont, IL hearing. Transcripts for these 

hearings can be found in the docket for this rulemaking (see EPA Docket No. EPA-HQ-OAR2009-0517-5319 for the Arlington, VA public hearing transcript, and EPA-HQ-OAR-2009-0517-

3412 for the Rosemont, IL public hearing transcript). 

Each of the public hearings conducted for the PSD and title V proposed GHG Tailoring 

Rule included an introduction which included an overview of the proposed rule, and procedures 

for the hearing by the EPA. Comments received at both of these hearings parallel comments 

received during the public comment period. Some of the more unique comments not received 

during the public comment period were about the use of nuclear power and/or use of clean coal 

technology, and/or the vegan lifestyle as being necessary or desired in reducing carbon dioxide 

(CO2) and other GHG emissions, and were not specifically germane to the proposed Tailoring 

Rule rulemaking. One commenter (representing the Nongovernmental International Panel on 

Climate Change) raised extensive arguments against the scientific basis EPA is using to support 

regulation of GHGs and provided copyrighted material that is in opposition to EPA’s 

position/conclusions (which is available for viewing at the Air Docket; see EPA Docket No. 

EPA-HQ-OAR-2009-0517-5319.2 for further information). Several commenters support EPA 

regulating GHG emissions (focusing on support for reductions from coal and/or other industries), 

while others opposed the regulation of GHG emissions on an economic or scientific basis. Oral 

testimonies at public hearings from differing industries/environmental groups raise parallel 

arguments to those submitted in greater detail during the public comment period. The moredetailed comments submitted during the public comment period that are representative of those 

presented at the public hearings are represented and responded to in this document.
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2.2 Small Business Outreach Meeting

The EPA, in collaboration with the Small Business Administration (SBA) and OMB, 

conducted an outreach meeting designed to exchange information with small entities that may be 

affected by various rulemakings that EPA is developing for GHGs. The meeting focused, in 

particular, on the proposed Tailoring Rule. Small entity representatives (SERs) participating in 

person and via conference call were briefed on the rulemaking proposal and given the 

opportunity to provide input that the EPA considered while developing the final rule. The 

meeting took place in Arlington, Virginia on November 17, 2009, and included representatives 

from EPA, SBA, OMB, as well as small entity representatives. The outreach effort was 

organized and led by representatives from EPA’s OAQPS within the Office of Air and Radiation 

(OAR), EPA’s Office of Policy, Economics, and Innovation (OPEI), the Office of Information 

and Regulatory Affairs (OIRA) within the OMB, and the Office of Advocacy (OA) of the SBA. 

Documentation of this meeting, which includes a summary of the advice and recommendations 

received from the SERs identified for the purposes of this process can be obtained in the docket 

for this rulemaking. (See Docket No. EPA-HQ-OAR-2009-0517-19130). 

Comment:

Comments received from small entity representatives are generally reflected by

comments submitted during the public comment period and are addressed elsewhere in the RTC. 

One of the more unique comments not generally provided in written comments during the public 

comment period was provided by an agriculture representative (Farm Bureau). This commenter 

stated that section 424 of the Interior and Environment Appropriations Act states that, 

notwithstanding any other provision of law, none of the funds made available in this Act or any 

other Act may be used to promulgate or implement any regulation requiring the issuance of 

permits under title V of the CAA for CO2, nitrous oxide (N2O), water vapor or methane (CH4) 

emissions resulting from biological processes associated with livestock production. The Farm 

Bureau representative was concerned that the Light Duty Vehicle Rule (LDVR) will trigger title 

V permits for livestock operations involving biological processes. 

Response: 

The appropriations provision states that “[n]otwithstanding any other provision of law, 

none of the funds made available in this Act or any other Act may be used to promulgate or 

implement any regulation requiring the issuance of permits under title V of the CAA (42 United 

States Code [U.S.C.] 7661 et seq.) for carbon dioxide, nitrous oxide, water vapor, or methane 

emissions resulting from biological processes associated with livestock production.” Section 424 

of the FY 2010 Interior-Environment Appropriations Act. This language does not prohibit EPA 

from spending funds on the Tailoring Rule because the Tailoring Rule does not require the 

issuance of permits under title V for certain emissions from biological processes associated with 

livestock production. Rather, the statute would require title V permits (to the extent title V does 

apply to these emissions) in the absence of the Tailoring Rule. In other words, if we do not 

finalize this Tailoring Rule then, pursuant to the terms of the CAA, sources of GHG emissions in 

excess of the 100 tpy would be subject to title V permitting as of January 2, 2010. The Tailoring 

Rule relieves certain sources of the obligation to apply for title V permits, and thus its 
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promulgation is not prohibited by section 424 of the Interior and Environment Appropriations 

Act for Fiscal Year 2010.

Moreover, the LDVR also was not prohibited by this provision because the regulations in 

the LDVR do not require issuance of permits under title V for emissions from biological 

processes associated with livestock. The regulatory requirements in the LDVR are directed at 

automobile manufacturers and the vehicles they produce, and would not address or require 

issuance of any permits under title V. EPA does not interpret the provision to prohibit the 

Agency from promulgating or implementing regulations that do not establish title V permitting 

requirements for certain emissions from biological processes associated with livestock. For 

example, EPA does not interpret the provision to prohibit the Agency from promulgating or 

implementing a non-title V regulation that, by operation of the CAA, could make a pollutant 

“subject to regulation” under the Act, potentially triggering title V. Such a regulation would not 

itself establish (or implement) any requirements under title V. Further, a mobile source 

regulation such as the Light Duty Vehicle Rule, would not establish any requirements with 

regard to GHG emissions from livestock. This interpretation is consistent with the legislative 

history of this provision, which states that the provision "[p]rohibits EPA from regulating certain 

livestock emissions under the Clean Air Act," S. Rep. No. 111-38 at 95 (2009), and described 

this “a provision ... regarding greenhouse gas reporting requirements associated with livestock

production.” House Rep. No. 111-316 (2009).

2.3 Meeting with Semiconductor Industry Association

The EPA met with the Semiconductor Industry Association (SIA) on February 3, 2010 to 

listen to comments they had on the proposed Tailoring Rule. Documentation for this meeting 

can be found in the docket for this rulemaking. (See Docket No. EPA-HQ-OAR-2009-0517) 

Comments received from SIA at the meeting parallel their written comments on the proposal and 

are addressed in this RTC.

2.4 Form Letters and General Comments Received on GHGs Regulation and the Proposed 

Tailoring Rule

Comment:

Hundreds of thousands (over 400,000) of form letters were received during the public 

comment period for the proposed Tailoring Rule. In addition, thousands of commenters 

submitted e-mails providing statements of general support or opposition to the proposed 

Tailoring Rule and regulation of GHGs. Examples of the comments submitted are presented in 

this subsection of the RTC, and examples of many of the “base” form letters cited in these 

examples (in italics) are included in Appendix B of this document. Note that many of the form 

letters are similar in content and often even adopt phrases used in another letter. Where 

substantive additional comment was provided with a form letter, we have addressed the comment 

or parallel comment in the appropriate Chapter of this document.
6

Many commenters support regulation of GHGs because:

 Regulation of GHGs is the right thing to do (Chaplains Religious Enrichment 

Development Operation [CREDO] Action, over 34,500 commenters). (8909)

 They support EPA’s goal of controlling GHG emissions (over 7,200 commenters).

 They support the overall plan to limit global warming pollution emitted by coal plants 

and other big polluters through the CAA (Form Letter 9, over 8,300 commenters). 

 They support EPA’s recognition that GHGs must be regulated to protect human health 

and the environment (Form Letter 11, over 80 commenters). 

 They generally support EPA in reducing GHG emissions and using regulations to control 

emissions (Form Letter 17, over 200 commenters). 

Other commenters oppose regulation of GHGs because:

 They generally oppose EPA’s regulation of GHGs (over 150 commenters).

 They assert that regulating GHGs under the CAA will cripple the country’s economy and 

that EPA’s rationale for the proposed Tailoring Rule, by claiming “absurd results” and 

“administrative necessity,” is flawed given that the EPA is applying the law that produces 

the “absurd results” (Form Letter 5, over 18,500 commenters). The commenters urge 

EPA to defer to Congress to decide how to regulate GHGs.

In regards to the Tailoring Rule, many commenters support the proposed rule. Some of 

these commenters (over 280 commenters) use a form letter to express their support (only provide 

comments that are several lines in length), while other commenters use form letters to express 

their support. Form letter supporters believe that:

 The biggest polluters should be regulated and prevented from passing on the costs 

associated with their pollution to the public. They add that the public that is most 

exposed and vulnerable to these big polluters are the undeserved and people in poverty 

(Form Letter 6, over 30 commenters). 

 The proposed rule and EPA’s efforts to address GHG emissions will ensure substantial 

capital investments in the largest sources of GHGs are in sync with efforts to reduce 

GHGs, avoiding costly retrofits in the future (Form Letter 7, over 600 commenters) The 

commenters also support the use of the 25,000 ton threshold to shield small sources. 

 EPA should regulate GHGs from “mega-polluters” (Form Letter 8, a couple of 

commenters).

 The rule targets the worst offenders and that it will create the largest emissions reductions 

while helping the economy grow (Form Letter 10, over 10 commenters). 

 EPA should “finalize a strong rule to require big smokestack industries to meet modern 

pollution standards for carbon emissions” (Form Letter 12, over 550 commenters). They

also generally support EPA’s goal of controlling GHG emissions.

 EPA should “finalize a strong rule to require big smokestack industries to meet modern 

pollution standards for global warming pollution” (Form Letter 13, over 49,900 

commenters). The letter also urges EPA to investigate various renewable resources such 

as wind and solar power to further reduce global warming pollution and transition to 

clean energy sources. 

 EPA should finalize a strong rule to hold industry sources accountable (Form Letter 14,

over 9,700 commenters). The letter asserts that EPA's proposed new rule would use the 
7

CAA to curb pollution from these large sources, while at the same time assuring small 

sources (like millions of mom and pop businesses) that they will not be regulated.

 EPA should require America’s largest industrial facilities to obtain CAA Permits (Form 

Letter 15, over 5,900 commenters). 

 This proposal is an essential step that will help reduce GHG pollution and address climate 

change (Form Letter 16, over 180 commenters). 

 The proposed rule is a major step to holding “mega-polluters” accountable for GHG 

emissions, and this strategy will ensure that GHG emissions are cut quickly while 

maintaining economic growth (Form Letter 18, over 38,600 commenters). 

 A strong rule by the EPA requiring heavy polluters to meet modern emission standards 

when expanding or building new facilities is a critical first step in cutting America’s 

emissions (Form Letter 19, over 5,400 commenters). The letter also requests that a 

reporting system be created to provide businesses the necessary data to compare and 

control emissions as well as inform federal strategies on national emissions reduction. 

 EPA’s rule will limit GHGs from the largest sources of U.S. global warming pollution 

sources (Form Letter 20, over 39,500 commenters). 

 Regulation of “big polluters” and the reduction of GHG emissions from coal plants under 

the CAA is the right thing to do. (Form Letters 21 through 24, over 190,000 

commenters).

 EPA should require mitigating global warming pollution by transitioning to clean energy

sources that do not harm the environment, never run out, and create new, local jobs 

(Form Letter 25, over 170 commenters). The postcard asserts that mitigation of global 

warming pollution will only succeed if we require coal-fired power plants-America's 

largest single source of global warming pollution-and other big polluters to reduce their 

GHG emissions.

Nevertheless, many commenters oppose the proposed rule because they believe that:

 The rule is based upon “faulty and discredited science” and would raise energy prices 

(Form Letter 1, over 800 commenters). 

 The CAA is not designed to regulate GHGs and that regulating GHGs under the CAA 

will lead to economic hardship and few environmental benefits (Form Letter 2, over 20 

commenters). Moreover, the letter cites A Regulatory Burden: The Compliance 

Dimension of Regulating CO2 as a Pollutant” which provides a breakdown of the 

millions of businesses that have the potential to emit (PTE) 250 tpy or more. 

 The proposed rule will have unintended adverse consequences (Form Letter 3, over 500 

commenters). Consequences cited by the letter include permitting delays, and the 

prevention of energy sector projects from moving forward. The letter also advocates that 

a market-based mechanism be employed for addressing GHGs, although no specifics are 

provided. 

 Congress (not EPA) should address the climate change issue. (Form Letter 4, over 800 

commenters). The letter asserts that the proposed rule opens the door for regulation of 

GHGs emitted from many small businesses and even homes. The letter also states that 

the proposed rule will cost jobs and undermine America’s ability to remain globallycompetitive. 
8

Other commenters provide general comments, ranging from topics on health care to why 

coal is a good or bad energy source, and on various types of renewable resources that should be 

used for energy independence (over 580 commenters). 

Response: 

We agree with those commenters that support EPA’s efforts to regulate GHGs. As we 

state in the final rule titled: “Endangerment and Cause or Contribute Findings for Greenhouse 

Gases Under Section 202(a) of the Clean Air Act” (74 FR 66496), the Agency has found that 

GHGs in the atmosphere may reasonably be anticipated to endanger both public health and 

public welfare. The Agency reached this determination after considering an extensive amount of 

data on both observed and projected effects of GHGs in the atmosphere, their effect on climate, 

and the public health and welfare risks and impacts associated with such climate change not only

in the U.S., but also in the world. See 74 FR 66496 for more information. Furthermore, even if 

some of the data that the Agency considered to reach this conclusion were erroneous, as some of

these commenters claim, the overall evidence that the EPA looked at provides compelling 

support that GHGs endanger the public health and public welfare of both current and future 

generations. In addition, the risk and the severity of adverse impacts on public health and 

welfare are expected to increase over time.

However, regardless of whether the CAA is the preferred mechanism for GHG regulation

and as we state in the final action titled: “Reconsideration of Interpretation of Regulations That 

Determine Pollutants Covered by Clean Air Act Permitting Programs (75 FR 17004), the U.S. 

Supreme Court determined that GHGs fit within the definition of air pollutant in the Act and 

directed EPA to take actions in accordance with that determination. EPA is responding to the 

Court’s decision by following the statutory requirements of the CAA. Accordingly, EPA 

finalized its endangerment and cause and contribute findings for GHGs under section 202(a) of 

the CAA and finalized corresponding GHG controls for light duty vehicles. In addition, the final 

vehicle rule will trigger PSD requirements for GHGs because EPA has decided to interpret the

phrase “subject to regulation” found within the definition of the term “regulated NSR pollutant” 

to include each pollutant subject to either a provision in the CAA or regulation adopted by EPA 

under the CAA that requires actual control of emission of a pollutant when the regulatory

requirement to control emissions of that pollutant “takes effect.” Thus, EPA is taking 

appropriate action in the “Reconsideration of Interpretation of Regulations that Determine 

Pollutants covered by Clean Air Act Permitting Programs” (see 75 FR 17004) and this rule to 

ensure a common sense and efficient approach to GHG regulation. For these reasons, this rule is 

not the appropriate forum for addressing whether the CAA is suited to GHG regulation or 

opining on potential Congressional action with regard to GHG regulation.

We also agree with those commenters that support the Tailoring Rule because without it, 

and as we state in the preamble of this rule, PSD and title V requirements would apply, as of 

January 2, 2011, at the 100 or 250 tpy levels provided under the CAA, greatly increasing the 

number of required permits, overwhelming the resources of permitting authorities, and severely 

impairing the functioning of the programs. EPA is relieving these resource burdens by phasingin the applicability of these programs to GHG sources. 
9

The Tailoring Rule establishes two initial steps of the phase-in. Step 1 begins on January

2, 2011, and covers only sources and modifications that would otherwise undergo PSD or title V 

permitting based on emissions of non-GHG pollutants. Step 2 begins on July 1, 2011, and 

covers large sources of GHG emissions that emit or have the potential to emit 100,000 tpy CO2e 

or more, and modifications at those sources that increase net GHG emissions by 75,000 tpy CO2e 

or more, provided those sources or modifications also have GHG mass emissions that exceed the 

relevant mass-based applicability thresholds. This rule also requires EPA to promulgate by July

1, 2012, a step 3 rule that will consider phasing-in additional sources. EPA excludes from PSD 

and title V permitting for GHG emissions, until at least April 30, 2016, sources that are not 

already subject and that emit less than 50,000 tpy of CO2e, as well as modifications that do not 

increase net GHG emissions by 50,000 tpy CO2e, or more. EPA will use this time to streamline 

the programs for those sources and must complete a study by April 30, 2015, to assess 

improvements in administrability of the programs for such sources, and must complete a rule by

April 30, 2016, addressing additional such sources based on this study. Thus, we disagree with 

the commenters that believe that the proposed rule will have unintended adverse consequences 

including permitting delays and the prevention of energy sector projects from moving forward 

since we are phasing-in the applicability of the PSD and title V programs to GHG sources as 

described here and in more detail in the preamble of this rule.

EPA’s legal basis for this Tailoring Rule is its interpretation of the PSD and title V 

applicability provisions under the familiar Chevron two-step framework for interpreting 

administrative statutes, taking account of the legal doctrines authorizing agencies to apply

statutory requirements in way that avoids absurd results or administrative impossibility and 

authorizing agencies to implement statutory requirements a step at a time. Details on why we 

disagree with those commenters that oppose the use of the “administrative results” and 

“administrative necessity” doctrine are included in the final preamble of this rule under section 

V.B.

2.5 General Comments on the Tailoring Rule and Comments on Other GHG Regulations

2.5.1 Regulation of GHGs Under the CAA and the Proposed Tailoring Rule

Comment:

Several commenters (0480, 0600, 4631, 5184, 8071) explicitly state that they generally 

support EPA’s mission in regards to climate change. However, one of these commenters also 

states that climate change is a global problem and requires a global solution. It is imperative that 

the U.S. re-establish itself as a world leader in solving the complex challenges posed by climate 

change. Strong U.S. emission reduction commitments will enable a wide range of developing 

economies to take more ambitious domestic actions and create new markets to grow the global 

green economy from which we will all benefit (0600).

Various commenters (0480, 0600, 3916, 3918, 3998, 4154, 4238, 4239, 4518, 4694, 

4742, 4746, 4778, 4860, 4863, 4903, 4988, 5039, 5052, 5057, 5081, 5305, 5314, 5528, 5745, 

6665, 7935, 8025, 8607, 8803, 8685, 9613), including four commenters (5122, 5306, 5311, 

5448) representing 12 environmental advocacy groups, generally support the regulation of GHGs
10

and the use of the CAA to regulate GHGs. One commenter adds that in the absence of 

comprehensive climate change legislation, EPA must act under its authority in the CAA (3918), 

while another commenter opines that the CAA is necessary and appropriate as a critical bridge 

towards comprehensive federal legislation, and can be a valuable component of comprehensive 

federal climate policy in the future (7935).

Other commenters (0033, 0041, 0410, 3741, 5140, 5258, 5278, 5136, 5452, 5603, 5606, 

5784, 6712, 7133, 7295, 7961, 8014, 17451) explicitly state that they generally oppose EPA 

regulating CO2/GHG emissions while several other comments (0040, 0331, 2504, 2797, 2832, 

3277, 3278, 3512, 3513, 3607, 3720, 3741, 3858, 3906, 3915, 3917, 4020, 4095, 4106, 4108, 

4113, 4118,4119, 4120, 4123, 4208, 4209, 4228, 4298, 4302, 4504, 4512, 4514, 4515, 4519, 

4521, 4522, 4525, 4544, 4554, 4567, 4630, 4667, 4691, 4745, 4749, 4794, 4801, 4851, 4859, 

4862, 4863, 4866, 4871, 4903, 4904, 4949, 4990, 4991, 5004, 5038, 5040, 5045, 5052, 5056, 

5058, 5062, 5063, 5064, 5073, 5074, 5079, 5082, 5083, 5085, 5104, 5109, 5111, 5112, 5113, 

5120, 5123, 5124, 5125, 5129, 5130, 5135, 5136, 5137, 5140, 5142, 5144, 5145, 5179, 5182, 

5183, 5198, 5199, 5205, 5214, 5235, 5236, 5245, 5257, 5274, 5275, 5276, 5278, 5279, 5280, 

5300, 5301, 5305, 5307, 5310, 5312, 5313, 5315, 5316, 5317, 5318, 5328, 5335, 5336, 5340, 

5342, 5344, 5347, 5367, 5391, 5392, 5417, 5425, 5444, 5449, 5525, 5603, 5605, 5607, 5676, 

5706, 5708, 5712, 5714, 5715, 5725, 5740, 5743, 5744, 5768, 5769, 5770, 5771, 5773, 5784, 

5787, 5789, 5800, 5801, 5803, 5808, 5809, 5844, 5884, 5885, 5886, 5922, 5939, 6201, 6202, 

6270, 6460, 6491, 6609, 6880, 7026, 7125, 7126, 7130, 7131, 7134, 7192, 7193, 7203, 7204, 

7212, 7217, 7294, 7961, 7986, 8014, 8015, 8071, 8273, 8283, 8300, 8303, 8459, 8460, 8513, 

8514, 8521, 8533, 8583, 8584, 8585, 8691, 9269, 10432, 14697, 14710, 16411, 17451, 18025, 

19129) oppose the use of the CAA to regulate GHGs. The reasons for their opposition include: 

 The CAA is not the tool or is ill-suited for addressing GHG emissions (0040, 2797, 2832, 

3512, 3917, 4020, 4118, 4119, 4120, 4123, 4208, 4209, 4228, 4243, 4302, 4514, 4521, 

4525, 4630, 4667, 4801, 4851, 4862, 4863, 4866, 4903, 4990, 5040, 5056, 5062, 5064, 

5073, 5074, 5082, 5085, 5130, 5136, 5140, 5142, 5144, 5199, 5214, 5236, 5275, 5278, 

5280, 5300, 5301, 5305, 5307, 5312, 5313, 5315, 5316, 5317, 5318, 5328, 5335, 5336, 

5340, 5347, 5367, 5444, 5740, 5769, 5770, 5773, 5784, 5808, 6202, 6270, 6460, 6609, 

7126, 7193, 8300, 8513, 8691, 10432, 14697, 17451, 18025, 19129), and have problems 

with the legal/congressional intent and scientific basis for using the CAA to regulated 

GHGs (2797, 3512, 3513, 3858, 4095, 4106, 4243, 4298, 4515, 4554, 4691, 4741, 4745, 

4851, 4871/5063/5605, 4949, 5004, 5058, 5074, 5082, 5111, 5124, 5137, 5183, 5199, 

5275, 5318, 5391, 5706, 5744, 5787, 5844, 5922, 7193, 7961, 8014, 8459, 8460, 10432, 

14697, 17451, 18025, 19129). 

 Attempting to implement a comprehensive federal climate policy by means of the 

decades-old CAA achieves none of EPA’s objectives. The CAA was not designed to 

address global climate issues. Even though EPA attempts to avoid “absurd results” by 

proposing the Tailoring Rule, all the Tailoring Rule does is highlight the legal and 

practical problems of attempting to regulate stationary source GHG emissions under the 

CAA. (4862, 8513)

 Forcing GHG regulation under the CAA is inappropriate. For example, by regulating 

GHGs through PSD requirements triggered by finalizing the motor vehicle rule, EPA will 
11

in effect preclude permitting authorities and regulated entities alike from needed time to 

adequately analyze emissions and available controls and otherwise prepare for sourcespecific regulation. (5315) 

 The differences of GHGs relative to NAAQS pollutants are so substantial that EPA, 

working closely with Congress, should be evaluating more appropriate solutions to 

regulating GHG rather than force fitting them into existing CAA programs not designed 

to regulate GHGs (3917, 4209, 4243, 4302, 4863, 4866, 5040, 5064, 5074, 5145, 5199, 

5214, 5275, 5280, 5305, 5307, 5335, 5336, 5525, 5886, 8691). They believe or state that: 

o EPA has spent decades developing health-based NAAQS and no such standard exists 

for CO2e. (5305) 

o The CAA is clearly not designed to address pollutants that are distributed on a global 

scale and remain in the atmosphere (4243, 8691). The CAA – designed for regulating 

pollutants from specific sources and measuring impacts on specific areas – mandates 

EPA to designate areas as either attainment or nonattainment (4243). Due to the 

global nature of GHGs and their associated atmospheric lifetime properties, EPA 

would likely have to assess air quality on a national scale, and thus designate the 

entire country as either attainment or nonattainment (4243).

o The impacts of conventionally-regulated pollutants under the CAA (e.g., criteria 

pollutants) are more local and regional as opposed to well-mixed and dispersed GHG. 

(5040, 5145, 5199, 5275, 5280, 5886); 

o CO2 creates different effects on human health (which has secondary non-direct 

effects) than conventional pollutants regulated under the CAA (e.g., hazardous air 

pollutant [HAP] and criteria pollutants which have primary direct and secondary nondirect effects), and therefore, the EPA is attempting to regulate the secondary effects 

of a pollutant (CO2) rather than the pollutant itself. (5214) 

o The CAA is in large part a statutory structure for regulating localized air emissions 

based upon empirical health and environmental based standards, and therefore not 

designed for the regulation of global GHGs - much of which originate outside the 

U.S. and for which there are no empirical standards. (4209, 5525)

o The fate of criteria pollutants in the atmosphere are well understood while current 

global climate models are typically long term, macroscopic overviews. (5305)

o Control technologies for criteria pollutants have an established track record, whereas 

control and measurement of GHG are more tenuous. (5305)

o Federal regulatory thresholds have been developed around criteria pollutants which 

are more typically emitted at the parts per million concentration level, as opposed to 

GHG which are typically emitted at the percent levels. CO2, for example, is emitted 

at levels that are completely different from the currently regulated pollutants (4302, 

5214) and the health effects levels are also completely different (4302). 

 The CAA fails to encourage innovation to reduce emissions beyond its scope through 

such critical projects as emissions mitigation programs in agriculture, forestry, 

greenscaping, and beyond. (8691).

Opposing commenters (3278, 3512, 3513, 4095, 4020, 4106, 4118, 4504, 4667, 5275, 

5317, 5335, 5715, 5743, 5787, 6457, 8691) also provide suggestions, including:

 Prior to developing any GHG air permitting regulation that is intended to address climate 

change concerns; an overall air quality assessment needs to be completed by EPA. This 
12

assessment must include: 1) An overall emissions inventory which includes all GHG 

emissions from all source categories (mobile, off-road mobile, area, stationary sources); 

2) A climate change assessment to determine the relative impact of each source category

(climate change models could be used to conduct this assessment) and; 3) A GHG 

reduction strategy focusing on the largest emitting sources. Specific regulations or 

permit requirements should not be developed until this assessment is completed. (5787)

 EPA has available to it several means of avoiding the need for any tailoring, all of which 

are consistent with the CAA. (5715) 

o EPA should have declined to find that GHG emissions endanger public health and 

welfare. The Supreme Court has left EPA with the option of declining to make an 

endangerment finding on the basis of such prudential considerations as the CAA 

unsuitability for regulating GHGs, itself established by the very proposal under 

consideration. 

o Under the clear terms of the CAA, EPA can determine that GHGs do not contribute to 

climate change or EPA can provide some reasonable explanation as to why it cannot 

or will not exercise its discretion to determine whether they do. 

o A reviewing court surely would accept as a reasonable explanation "economic and 

bureaucratic collapse resulting from application of CAA programs to control a 

vanishingly small fraction of total emissions of a 'pollutant' that is a natural, trace 

constituent of the global atmosphere with no known or knowable 'safe' or 'unsafe 

levels,' the presence in the atmosphere of which possibly leads to variations in 

temperature that yield costs and benefits far beyond human capacity to meaningfully 

quantify." And so Massachusetts leaves EPA to the best option of all: Decline 

further action until Congress actually enacts a law intended to control GHGs without 

all of the unintended consequences of trying to do so under the CAA.

o If EPA were correct that the adoption of mobile source standards ineluctably leads to 

regulation of GHG emissions from stationary sources, and to the untenable costs and 

administrative burdens that it then seeks to avoid with the Tailoring Rule, it should 

indefinitely postpone those burdens by declining to adopt the vehicle emissions rules. 

EPA's proposed GHG emission standards for motor vehicles are only 4 percent more 

stringent in effect than the fuel efficiency standards proposed by the Department of 

Transportation (DOT).

o Even if EPA were to press its finding that mobile source GHG emissions endanger 

public health and welfare, and to adopt tailpipe standards and fuel efficiency 

standards accordingly, it is not at all inevitable that GHG's then become a "regulated 

pollutant" for purposes of CAA permitting programs intended for stationary sources. 

In fact, quite the contrary, Congress did not mandate the nonsensical result that a 

decision to regulate mobile source emissions of a pollutant should somehow change 

the requirements for issuing permits to stationary sources.

o The CAA is the wrong tool to use to reduce GHG emissions. If nonetheless EPA 

decides to proceed with the PSD Tailoring Rule, neither the statute nor the Supreme 

Court ruling compels the approach proposed by EPA. EPA must exercise more 

flexibility than proposed and take into account the nature of GHG emissions 

(compared to conventional pollutants); the relative contribution from each industry to 

the total global emissions that EPA claims is causing the endangerment, and the facts 

and circumstances applicable to each industry. (5335) 
13

 An effective climate change program will be market-based, comprehensive, and would 

preempt state law – and it should come from Congress. The commenter recommends that 

any economy-wide climate change program should have flexible approaches to establish 

a price signal for carbon. The commenter suggests such approaches may vary by

economic sector and could include, depending on the sector, market-based incentives; 

cap and trade; tax reform; performance standards; and incentives for technology research, 

development, and deployment. (3512) 

 A market-based program to regulate GHG emissions would work (4120, 4504, 4667, 

8691). Cap-and-trade has the added benefit of harmonizing with similar programs 

already in place and under consideration globally (5743, 8691). Another commenter 

added that market-based approaches achieved through new legislation should properly 

consider energy, emissions, allowances and costs, including legislation that coordinates 

energy efficiencies and emission reductions, and that provides compliance options and 

cost management through provisions such as cap-and-trade, prevention of GHG leakage 

to overseas from unequal impacts on energy intensive and trade exposed industry in the 

U.S., and provisions for cost-effective GHG offsets (4667). Commenter 4020 prefers a 

legislative solution to this issue, and favors a market-based cap and trade program 

tailored to address issues of emission reductions and allocations, credits for early 

performance and alternative measures to reduce GHG’s, such as through expanded 

recycling. 

 Emissions offsets provide critical cost-containment and price stability, whether under 

federal cap-and-trade legislation or existing CAA authority, by providing flexibility to 

regulated industries to find the lowest-cost emissions reductions across a range of 

options. GHG reduction opportunities are diverse and spread across the entire economy, 

and offset trading is the best means to tap these opportunities and create real change by 

overcoming market barriers, serving investment needs, and correcting misaligned 

incentives. Numerous studies have concluded that use of market-based offset approaches 

can reduce air pollution compliance costs in the range of 70-90 percent. In addition to 

providing cost-containment and price moderation, by energizing innovation and market 

forces, offset projects provide an essential bridge to a transformative low-carbon 

economy. Offset projects are already providing jobs and opportunity for the U.S. 

economy through a robust voluntary market. (6457)

 Future legislation should not impose a carbon tax. The commenter states that federal 

regulations that would result in federal or state program fees or taxes on the livestock 

industry will impose a significant added cost that almost always cannot be absorbed or 

passed on to consumers. (5743) 

Several commenters (3512, 3917, 3954, 4106, 4554, 4667, 4691, 4862, 4866, 4990, 5052, 

5056, 5062, 5085, 5086, 5123, 5124, 5140, 5182, 5245, 5257, 5258, 5274, 5275, 5278, 5279, 

5301, 5307, 5315, 5318, 5328, 5336, 5347, 5367, 5451, 5607, 5744, 5769, 5922, 6491, 7134, 

7203, 7204, 7212, 7217, 8014, 8015, 8071, 8300, 8401, 8405, 8513, 8585, 8691, 10432, 14710, 

16411) also opine that GHGs regulations should be developed by Congress or established under 

a single national program. Some of these commenters made the following points:

 New regulations should be determined by Congress-not by the EPA (3512, 4667, 5086, 

5140, 5182, 5245, 5258, 5275, 5278, 5279, 5336, 5451, 5607, 5769, 5922, 6491, 7134, 

7212, 7217, 8014, 8015, 8071, 8585). 
14

 The cap-and-trade program that Congress is considering to limit GHG emissions may

have duplicative, contradictory, or overlapping requirements with this rule. (5336) 

 GHG regulation is beyond the authority of just the EPA (4554, 5124, 5182, 5318, 5607, 

6491, 7134, 7212, 8071). 

 EPA’s recent GHG-related rulemakings are not compelled under the CAA, and the EPA 

should exercise its discretion under the statute in deference to Congress’ primary role in 

establishing this new and sweeping policy framework. (5086)

 The best way to arrive at the right climate change solution is to develop a single national 

program, scientifically based and purposefully designed to deal with the issue of climate 

change, and addressing as well the interrelated issues of energy policy, (8015) 

 EPA should not regulate GHG emissions from stationary sources using existing CAA 

authority unless and until Congress has had an opportunity to consider the policy and 

economic implications of taking this step. (5123)

 Regulating GHGs under the CAA should be addressed through the legislative or 

regulatory process. (3917, 4667, 4691, 4862, 4990, 5056, 5062, 5085, 5140, 5274, 5278, 

5328, 5367, 8513) 

 EPA has voluntarily elected to establish a national GHG emission limit as part of the 

LDVR before the CAA was ready to regulate GHG emissions effectively and before 

Congress has had an opportunity to pass comprehensive climate change legislation. 

(5245) 

 New legislation (5052) and international agreements are needed to address the GHG 

emissions not only in the U.S. but worldwide (4106, 4866, 5257, 5307, 5315, 5336, 

8691). Climate change is a global issue best addressed on a worldwide basis. 

 EPA should develop a single national program to deal with the issue of climate change, 

and address the interrelated issues of energy policy. The commenter notes it is essential 

that climate change regulatory policy promote the health and welfare of Americans by

not causing severe adverse economic impacts domestically and placing U.S. industry at a 

severe international competitive disadvantage. (16411) 

 Congress continues to debate market approaches such as a cap-and-trade system for 

reducing GHG emissions, a command and control regulatory scheme under the CAA will 

only complicate the regulation of GHGs – resulting in a maze of partially developed 

regulatory permitting regulations that will be in direct conflict with Congressional 

legislative language and intent. Because GHG reduction technologies are in the research 

and development (R&D) stage, the commenter believes that unproven technologies will 

complicate and delay BACT determinations, whereas a market-based legislative solution 

would allow reductions at the lowest cost to society. The commenter is also concerned 

about the impact of the PSD program on the ability to use offsets, such as landfill and 

coal mine waste-to-energy projects, under a future market-based program – without a 

clear signal of a future for these offset projects, incentives for reductions from these 

projects would wither. (5301)

Various commenters (0600, 3916, 3918, 3998, 4154, 4238, 4239, 4518, 4694, 4746, 

4778, 4860, 4863, 4903, 5039, 5052, 5057, 5081, 5305, 5314, 5528, 5740, 5745, 5808, 7935, 

8025, 8607, 8803, 9613), including four commenters (5122, 5306, 5311, 5448) representing 12 

environmental advocacy groups, generally support the use of the CAA to regulate GHGs and the 

proposed Tailoring Rule. These commenters often made the following points: 
15

 The rule is a significant step forward in the national effort to develop a clear regulatory

structure for addressing GHG emissions in the U.S. (4860, 3918). 

 Adoption of the rule will allow their state to focus on the largest sources of GHGs (3916). 

 With the implementation of the rule, impacts on some of the sensitive lands of Indian 

Country may be diminished. (4778, 8803) 

 The applicability thresholds governing the traditional criteria pollutants are not 

appropriate for facilities that emit CO2 and other GHGs and must be increased in order to 

provide a workable and reasonable regulatory structure - and to avoid the “absurd results” 

that EPA discusses (3998). In addition, various commenters that do not necessarily agree 

with EPA’s legal interpretation of when PSD and title V permitting requirements would 

be triggered, do agree that a "tailoring" of the thresholds for each of these programs must 

be performed to avoid the unintended consequence of subjecting a large number of small 

sources to the regimens of PSD and title V (4746, 4863, 4903, 5052, 5740, 5808, and 

5305).

 The rule:

o Proposes a regulatory method that has been proven as an effective means of 

achieving pollution reduction. EPA analysis has found the CAA has achieved 

cost-effective reductions in sulfur dioxide (SO2), nitrogen oxides (NOx), and 

particulate matter (PM) with an economic benefit demonstrated to be 42 times 

greater than the costs of compliance. Therefore, applying BACT standards under 

the CAA to GHG emissions continues the legacy of a demonstrably successful 

program to now meet the threats of global climate change and energy

independence. (0600)

o Establishes an equitable framework, by setting a regulatory threshold that holds 

the largest polluters accountable while protecting the nation’s schools, farms, and 

small businesses. This arrangement would most fairly assign responsibility to the 

small handful of big polluters who account for a majority of the nation’s global 

warming pollution. This allows the EPA to achieve the greatest impact with the 

fewest agency resources in the short timeframe needed to protect the public from 

the risks to health and welfare posed by climate change. (0600)

o Facilitates a sustainable energy strategy for the country’s future. By applying 

NSR standards for GHG emissions, the EPA sends a strong signal of support for 

the clean energy industry. No longer will fossil-fuel facilities reap the unfair 

advantage of being financially unaccountable for the costs of their pollution. 

Such signals are necessary to drive investment in low-carbon technologies that 

will spur sustainable growth and create valuable jobs. (0600)

Other commenters (2504, 2797, 3278, 3512, 3858, 3278, 3607, 3720, 3741, 3915, 4020, 

4118, 4120, 4123, 4298, 4512, 4519, 4521, 4554, 4768, 4866, 4871/5063/5605, 4903, 4949, 

4990, 5045, 5056, 5062, 5073, 5074, 5082, 5085, 5111, 5135, 5140, 5142, 5276, 5278, 5307, 

5308, 5312, 5315, 5318, 5328, 5336, 5340, 5417, 5706, 5769, 5773, 5800, 5922, 7026, 7986, 

8585) oppose the issuance of the Tailoring Rule because they believe that: 

 The rule is unnecessary. The LDVR does not need to trigger PSD and title V (5312) 

(See comments on the LDVR rulemaking and the “subject to regulation” reconsideration 

rulemaking in this section for further comments regarding applicability trigger dates for 

GHG PSD and title V requirements).
16

 The Tailoring Rule should not be finalized under the authority of CAA section 202. 

(4118). EPA should delay or withdraw the rule and lay a statutory groundwork that will 

enable a reasonable and orderly transition for incorporation of GHG emissions into the 

existing PSD and title V programs. (3278) 

 EPA should conclude that PSD and title V permitting are not meant to apply based on a 

source’s CO2 or GHG emissions, and cite Congressional, legislative history, and legal 

support for their position. (3512, 3720, 4298, 5082, 5111, 5318, 5800, 5922) 

 EPA must realize that it is unreasonable and unnecessary to interpret the CAA to impose 

PSD requirements suddenly upon issuance of a wholly separate regulation such as the 

LDVR. (4871/5063/5605) 

 The proposal will precipitate costly legal challenges and more time is needed to study the 

environmental and economic impacts that would be associated with regulating GHGs. 

(8585)

 The rule is not an efficient use of taxpayer money and represents duplicity of regulation 

for no apparent reason. (4554)

Response:

Most of the above comments are not relevant to the proposed rule at issue in this 

rulemaking. This rulemaking is not about whether and/or when EPA should determine, under 

section 202(a), that emissions of GHGs from new motor vehicles cause or contribute to air 

pollution that may reasonably be anticipated to endanger public health or welfare, and if so 

when EPA should or should not establish emissions standards under section 202(a) of the CAA. 

Rather, this proposed rule was about developing a reasonable implementation plan for the PSD 

and title V permitting programs in the event they are triggered for GHGs. Thus, for example, 

comments questioning the timing of a final section 202(a) endangerment finding, opining about 

the timing of regulations under section 202(a), discussing generally the appropriateness of using 

the CAA to address GHGs, arguing that GHGs require a global approach, noting a preference for

legislation generally and/or a preference for a particular regulatory or legislative approach, and 

otherwise arguing against CAA actions to address GHGs are outside the scope of the specific 

questions and issues raised and addressed in the proposed Tailoring Rule. Therefore, we are not 

responding to them in this RTC. We note that many of these comments have been raised and 

addressed in other GHG rulemakings. See, e.g., Final Endangerment and Cause or Contribute 

Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act, 74 FR 66496, 66500 

(Dec. 15, 2009) (responding to comments regarding timing of endangerment finding). As noted 

above, comments that are relevant to the specific issue of how to implement the title V and PSD 

programs for GHGs are addressed in Chapter 8 of this RTC (Implementation Issues). 

Importantly, because EPA has finalized the endangerment finding and the LDV rule, we 

must move forward with the Tailoring Rule. Thus, we also agree with those commenters that 

support the Tailoring Rule because without it, and as we state in the preamble of this rule, PSD 

and title V requirements would apply, as of January 2, 2011, at the 100 or 250 tpy levels 

provided under the CAA, greatly increasing the number of required permits, overwhelming the 

resources of permitting authorities, and severely impairing the functioning of the programs. EPA 

is relieving these resource burdens by phasing-in the applicability of these programs to GHG 
17

sources as we explained above and as explained in more detail in the preamble of this final 

action. 

EPA’s legal basis for this Tailoring Rule is its interpretation of the PSD and title V 

applicability provisions under the familiar Chevron two-step framework for interpreting 

administrative statutes, taking account of the legal doctrines authorizing agencies to apply

statutory requirements in way that avoids absurd results or administrative impossibility and 

authorizing agencies to implement statutory requirements a step at a time. Details on why we 

disagree with those commenters that oppose the use of the “absurd results” and “administrative 

necessity” doctrine as well as our responses to the comments received on how this Tailoring 

Rule fits into the CAA (e.g., details on our interpretation of the concept that a NAAQS should be 

established before GHGs can be regulated under the PSD program) are included under Section 

V.B. under the final preamble of this rule. We note that for the reasons presented in those 

sections we disagree that we are required, or allowed, to undertake the rulemakings and other 

regulatory actions (e.g., inventory development) that commenters suggest are needed prior to 

subjecting a pollutant to PSD review. See also 75 FR 17400 (April 2, 2010).

2.5.2 Endangerment Finding Under Section 202 of the CAA 

Comment:

Two commenters representing eight environmental groups, support the endangerment 

finding under section 202 of the CAA. (5306, 5311)

Other commenters (3720, 3954, 4095, 4118, 4542, 4630, 4631, 4693, 4741, 4851, 4867, 

4871, 5005, 5045, 5063, 5082, 5110, 5120, 5129, 5137, 5140, 5142, 5184, 5235, 5278, 5309, 

5310, 5317, 5328, 5605, 5607. 5712, 5715, 5718, 5800, 6712, 7204, 8015, 8459, 10432, 14697) 

express or imply that they oppose the endangerment finding under section 202 of the CAA. 

Other commenters argue that EPA is under no obligation to issue these rules at the 

present time, and that the Supreme Court noted in Massachusetts v. EPA that the EPA has 

administrative discretion regarding the timing and form of issuing rules (0523, 3720, 5110, 5120, 

5235, 5800, 8015, 16411). 

Several other commenters (4542, 4851, 5142, 5235, 5712, 8459) state that the science 

does not support an endangerment finding, while other commenters (e.g., 15054) request 

clarification/evidence and quantification of the effects of global warming that they believe EPA 

had not sufficiently provided to support an endangerment finding because:

 Data from the Intergovernmental Panel on Climate Change (IPCC) has been found to be 

suspect. The IPCC relied on information from the Climate Research Institute (CRU) at 

the University of East Anglia in England. More than 61 megabytes of CRU e-mails and 

documents that were made public has cast serious doubt of the reliability of this 

information and its ability to meet the requirements of the IQA. The publicly-available emails suggest that CRU scientists have been suppressing, possibly destroying and 

misstating data. Public review needs to be held to determine if raw data was deleted, 

doctored or otherwise withheld that would have changed any of the GWPs prior to 
18

relying on the values referenced to the IPCC SAR. There must be an opportunity to 

determine if a correction is needed and, if so, then time needed to propose the correction. 

The commenter asserts that EPA’s proposal to define, by reference, the GWPs of EPA's 

Inventory of U.S. Greenhouse Gas Emissions and Sinks also violates the CAA 307(d) 

rulemaking requirements, as well as regulations of the Director of the Federal Register. 

(8459)

 EPA's finding that high concentrations of GHGs are "very likely" the cause of increased 

global temperatures ignores strong evidence that global temperatures have stopped rising. 

As recently as November 20, 2009 Der Spiegel reported that climatologists are "puzzled 

as to why average global temperatures have stopped rising over the last 10 years." (5235) 

 The article cites a recent study completed by Great Britain's Hadley Centre for Climate 

Prediction and Research questioning the IPCC's figures pertaining to an increase in 

global climate temperatures. According to the Hadley Centre, the “world grew warmer 

by .07 degrees Celsius from 1999 to 2008 and not by the .2 degrees Celsius assumed by

the United Nations Intergovernmental Panel on Climate Change." Furthermore, the 

Hadley Center attributes the .07 degree increase to naturally occurring phenomena, El 

Niño and La Niña. 

 Recently released confidential documents from the University of East Anglia's Climate 

Research Unit, strongly suggest that key IPCC scientists have improperly manipulated 

evidence to support the theory of anthropogenic global warming. (4542, 4851)

A couple of commenters believe EPA misstates the regulatory ramifications of the 

Supreme Court's decision in Massachusetts vs. EPA (5082) or EPA could have determined that a 

policy-based reason prevents EPA from making a reasoned decision on endangerment (5110) 

because: 

 EPA could provide some reasonable explanation as to why it cannot or will not exercise 

its discretion to determine whether GHG emissions from new motor vehicles or new 

motor vehicle engines contribute to air pollution that may reasonably be anticipated to 

endanger public health or welfare. The commenter believes that EPA can meet this 

standard, and respond to the remand in Massachusetts on the ground that an 

endangerment finding under section 202 will directly lead to the trigger of NAAQS, 

NSPS, PSD and title V, which the commenter believes were never intended to cover such 

emissions, and triggering these provisions will have a devastating effect on the already 

fragile economy. (5082)

 The Court did not require that EPA’s "reasonable explanation" not to undertake the 

endangerment process be wholly science-based. Instead, the commenter believes that a 

decision by EPA not to undertake the process for finding endangerment, on the basis that 

such a finding will trigger a regulatory cascade and cause economic chaos - of the precise 

type contemplated by the Tailoring Rule itself - constitutes a "reasonable explanation" as 

required by the ruling in the cited case. (5110) The commenter cites the statement made 

by the Supreme Court that states: "[u]nder the clear terms of the CAA, EPA can avoid 

taking further action only if it determines that GHGs do not contribute to climate change 
19

or if it provides some reasonable explanation as to why it cannot or will not exercise its 

discretion to determine whether they do." 

Other commenters argue that: 

 By moving several separate, near-simultaneous packages to initiate and define the 

regulation of GHGs under authority of the CAA, EPA has obscured fundamental issues 

of how and when EPA should proceed to respond to the Supreme Court’s decision in 

Massachusetts v. EPA. (4095) 

 EPA did not allow for comment on the affect the findings of endangerment and the 

promulgation of mobile source rules under section 202 had on the implementation of 

PSD or other title I requirements on stationary sources, saying it was unrelated. Under 

the Tailoring Rule, EPA is proposing regulations on stationary sources without discussion 

or elicitation of comment on how the other requirements of title I under the CAA are 

affected by these coordinated rulemakings. EPA must analyze and describe how the 

other provisions of title I will be affected by its coordinated rulemakings for GHGs 

before finalizing any GHG Endangerment Finding or rulemakings under the Act. (5082)

Finally, some commenters believe EPA should withdraw or revoke the Endangerment 

Finding and/or proposed Tailoring Rule because: 

 EPA should defer to sound science, Congress, and world organizations to address policy

on the issue of manmade climate change. (5607, 5712)

 The Tailoring Rule will have a devastating effect on their state’s economy. 

(4871/5063/5605)

Response:

As noted earlier, comments regarding the section 202(a) endangerment and cause or 

contribute findings, and the Supreme Court’s decision in Massachusetts v. EPA, are outside the 

scope of this rulemaking. Indeed, many of these same issues were raised in the comment period 

on the findings or on pending petitions for reconsideration on the findings. Thus, they have 

either already been responded to in the final findings, to the extent relevant, or are pending 

before EPA in petitions for reconsideration and will be addressed in EPA’s response to those 

petitions. They are not, however, within the scope of this rulemaking. 

We disagree with commenters who argue that EPA has obscured fundamental issues of 

how it should respond to the Supreme Court’s decision or the effect of regulating GHGs under 

the CAA through the promulgation of several rules addressing GHGs. EPA has been moving 

forward in careful, thoughtful manner to address this complicated issue. This rule, which 

addresses implementation issues regarding the PSD and title V programs is a key part of that 

overall process.

We further note that withdrawing the Tailoring Rule would be counter-productive to solving 

the problems that commenters argue flow from the endangerment finding and LDVR. The 

Tailoring Rule will provide relief and establish a reasonable path forward for implementing the 

PSD and title V programs. See section 6.1 of this RTC. 
20

2.5.3 Light Duty Vehicle Rule (LDVR) 

Comment:

Several commenters (5306, 5311) support the promulgation of the LDVR under section 

202 of the CAA, at least in the near term. 

One commenter (4524), while not necessarily supporting or opposing the rule, states that 

EPA should take steps to allow for sufficient time for states to revise their own title V and PSD 

programs before GHGs become regulated pollutants triggering PSD and title V requirements by 

either delaying the adoption of its portion of the LDVR or by adopting an effective date of its 

portion of the rule that gives a sufficient time for states to revise their own title V and PSD 

programs.

Several other commenters (3513, 3720, 3858, 4016, 4095, 4021, 4106, 4113, 4118, 4122, 

4123, 4243, 4318, 4519, 4522, 4523, 4631, 4741, 4851, 4862, 4870, 4952, 4992, 5005, 5038, 

5052, 5080, 5083, 5088, 5089, 5113, 5114, 5120, 5123, 5128, 5137, 5140, 5141, 5143, 5184, 

5214, 5224, 5245, 5278, 5310, 5316, 5317, 5327, 5328, 5342, 5345, 5346, 5390, 5451, 5601, 

5712, 5713, 5714, 5715, 5741, 5768, 5773, 5800, 5886, 6141, 6414, 6459, 6880, 7217, 8015, 

8071, 8273, 8301, 8303, 8533, 8545, 8581, 16411) oppose the promulgation or support delaying 

promulgation of the LDVR under section 202 of the CAA because:

 EPA is not required by the CAA or judicial decisions to regulate GHGs from motor 

vehicles under CAA section 202/statute by a particular deadline. (3513, 3720, 4095,

4519, 5005, 5120, 5245, 5310, 5316, 5317, 5328, 5452, 5800)

o While EPA is now required to set standards for vehicles under CAA section 202 

by virtue of its December 6, 2009 final Endangerment Determination, the 

Supreme Court’s opinion in Massachusetts v. EPA indicated clearly that EPA has 

significant discretion with regard to the time, manner, and form of its regulations

(4095). 

o EPA was not forced to propose a LDVR that needs to be promulgated by March 

31, 2010 to ensure that this requirement applies to 2012 MY vehicles. Because of 

its own proposed action, EPA has created the very “absurd result” from which it 

now seeks relief in the proposed GHG Tailoring Rule. (5245, 5452) 

o EPA as a policy decision could decide not to establish GHG emission limits under 

section 202(a) of the CAA at this time (4519, 5317). One commenter added that a 

decision not to regulate under the CAA would be consistent with the text of the 

CAA and the Supreme Court’s decision in Massachusetts v. EPA, 549 U.S. 497 

(2007), which emphasizes that the Court “h[e]ld only that EPA must ground its 

reasons for action or inaction in the statute.” Id. at 535 (emphases added) (5317). 

In other words, section 202(a) imposes no deadline for promulgating regulations.

 EPA’s section 202 rule should be withdrawn or re-proposed since it violates several 

statutes and EOs. (4095, 5607)

 The proposed rules: (1) are not projected by EPA to prevent, to any meaningful or 

discernible extent, risks to public health and welfare (5317); and (2) are, with respect to 

the small reductions of those risks that those rules are projected to produce, essentially

duplicative of NHTSA’s proposed Corporate Average Fuel Economy (CAFÉ) standards 
21

(3720, 4016, 4095, 4106, 4113, 4118, 4123, 4870, 5184, 5245, 5245, 5317, 5328, 5451, 

5713, 5800, 6880, 8071, 8303, 8533, 8581).

Commenters who support delaying the promulgation of the LDVR (if not forego 

promulgation altogether) (3720, 3858, 4095, 4113, 4118, 4122, 4318, 4522, 4523, 4952, 4992, 

5038, 5080, 5089, 5114, 5128, 5245, 5317, 5327, 5601, 5741, 5768, 5800, 6459, 6880, 8273, 

8301, 8303, 8533, 8581) added that: 

 EPA could use this time to pursue streamlining of PSD and title V requirements for 

GHGs, to allow states time to prepare, and to avert negative economic impacts (3720, 

4095, 4524, 5800).

 Delaying the GHG tailpipe rule would provide states with sufficient time to update their 

SIPs to mirror EPA's proposed Tailoring Rule and otherwise hire sufficient staff to deal 

with the onslaught of stationary source permits that will result from the regulation of 

GHGs. (3720, 5800)

 A delay of 5 to 6 years will allow: (1) NHTSA’s new CAFE standards to reduce vehicle 

emissions, (2) states to “ramp up” administrative resources as necessary to address PSD 

and title V permit applications, and (3) EPA and states to develop any appropriate and 

lawful “streamlining” techniques for permits and permit processing. The commenter 

adds that this approach would obviate (or defer) any need to deviate from the clear text of 

the CAA and would also allow EPA to engage the regulated community and other 

members of the public in meaningful discussion about how GHG emissions might be 

addressed in a cost-effective way, to the extent GHG regulation may occur under the Act, 

thereby allowing time and opportunity for development of reasonable approaches to 

regulatory decision-making. (5317) 

 EPA could address GHGs through climate change legislation. The LDVR requirements 

being proposed overlap with the fuel efficiency standards proposed by the NHTSA. 

In addition, opposing commenters (3513, 3720, 4016, 4106, 4118, 4119, 4122, 4243, 

4318, 4519, 4522, 4523, 4684, 4741, 4862, 4952, 4992, 5038, 5080, 5083, 5088, 5089, 5114, 

5120, 5123, 5128, 5137, 5140, 5141, 5143, 5214, 5245, 5278, 5317, 5327, 5328, 5345, 5390, 

5601, 5711, 5714, 5715, 5741, 5770, 5773, 5800, 6141, 6414, 6459, 7126, 7217, 8301, 8545, 

16411) provide the following suggestions:

 GHG emissions from automobiles can be regulated without using section 202, which 

would eliminate the need for the Tailoring Rule (5214). For example, one commenter 

stated that EPA could limit the scope of the rulemaking for light-duty vehicles to fuel 

efficiency (CAFÉ) standards while deferring regulatory action on tailpipe GHG 

standards. (4106)

 EPA should decouple the upcoming final vehicle emissions rule from impacts on 

stationary sources in order to obviate the need for the proposed Tailoring Rule (5317, 

5844, 6141). One commenter added that EPA can make a determination that the LDVR 

does not trigger PSD (or, by extension, title V) requirements for CO2, even if the LDVR 

is promulgated under section 202(a). (5317) 

 EPA and NHTSA should establish fuel economy standards that accomplish the desired 

goals of substantial reductions in GHG emissions and improvements in fuel economy. If 

this was done, the other sections of the CAA (specifically title V permitting and PSD 

permitting) will not be triggered. (4519) 
22

 EPA should work together with the Administration and Congress to agree on an interim 

legislative directive so that EPA could move forward on the pending LDVR in a manner 

that would not trigger stationary source controls. (4016) Automotive GHG emissions 

will be reduced through new fuel efficiency regulations established by the U.S. DOT. 

(5444, 5770) and EPA could work through existing platforms, like those outlined by the 

Department of Transportation (DOT) for light duty vehicles, to better control GHG 

emissions and thus avoid radically altering the regulations. (7126) 

 EPA should withdraw the GHG emissions limits from the LDVR, avoid the 

administrative problem that is created through the applicability of PSD and title V permit 

requirements for sources emitting small amounts of GHGs, and allow Congress to 

address this issue with climate change legislation. (5088, 5245, 7217). 

Response:

The comments that EPA had no authority to promulgate, or should not have promulgated, 

the endangerment/cause or contribute findings or the LDVR at the times that EPA did are not 

relevant to this rule, the Tailoring Rule. EPA has already promulgated the findings and the 

LDVR, and the LDVR triggers PSD and title V applicability, as we have seen. These comments 

would have been relevant only to the proposed findings and LDVR, and we are not, in this 

rulemaking, revisiting or reopening the findings or the LDVR. EPA does have pending before it 

ten petitions to reconsider the endangerment and cause or contribute findings. EPA is carefully 

evaluating those petitions and expects to issue its decision(s) on or about July 30, 2010.

Commenters claim that if EPA promulgates the LDVR, the “absurd results” doctrine will 

no longer apply to the Tailoring Rule because it will have been EPA’s own action –

promulgation of the LDVR – that gives rise to the “absurd results”. We disagree for several 

reasons. For one thing, commenters have not cited case law, and our research has disclosed 

none, in which a court specifically addressed a similar situation and issued a holding along the 

lines of what commenters urge. Moreover, commenters’ approach would be punitive because 

the absurd results would occur absent this rule going final. Such an outcome would be counter to 

the purpose of the doctrine. That is, it would mean that PSD and title V would apply to GHG 

sources by their terms – at the statutory levels, as of January 2, 2011 – with all the adverse 

consequences described elsewhere. In any event, and although we are not obligated to respond 

to these comments on the merits, they are incorrect on the merits, for the reasons that follow. 

This discussion should not be viewed as reopening the endangerment/cause or contribute 

findings or the LDVR because, as stated previously, we are not reconsidering or reopening those 

two actions in this rule.

In determining and implementing congressional intent, it is important that the statutory

provisions at issue be considered together – (1) the obligation to make a determination on 

endangerment and contribution under CAA section 202(a); (2) if affirmative 

endangerment/cause or contribute findings are made, the obligation to promulgate standards 

applicable to the emission of any air pollutant from new motor vehicles or new motor vehicle 

engines under CAA section 202(a); and (3) the PSD and title V applicability provisions. The 

most appropriate reading, and certainly a reasonable reading, is that we are required to take the 

action we have taken, and are taking with this rule, and that is to issue the findings, promulgate 
23

the LDVR, and promulgate the Tailoring Rule. Our approach gives effect to as much of 

Congress’s intent for each of these provisions, and the CAA as whole, as possible. 

With respect to the endangerment/cause or contribute findings under CAA section 202(a), 

congressional intent is clear that, as we stated in making the findings and the Supreme Court held 

in Massachusetts v. EPA, we are precluded from considering factors other than the science based 

factors relevant to determining the health and welfare effects of the air pollution in question. 

Accordingly, EPA determined that under Massachusetts v. EPA, 549 U.S. 497 (2007) we were 

precluded from deferring or foregoing the findings due to concern over impacts on stationary

sources affected by PSD or title V requirements. See 74 FR at 66496, 66500-01 (“Taken as a 

whole, the Supreme Court’s decision clearly indicates that policy reasons do not justify the 

Administrator avoiding taking further action on the questions here.”); see also Massachusetts v. 

EPA, 549 U.S. at 533; see also 74 FR at 66515-16 (December 9, 2009). (The Administrator 

“must base her decision about endangerment on the science, and not on the policy considerations 

about the repercussions or impact of such a finding).1 Moreover, as EPA also noted, “EPA has 

the ability to fashion a reasonable and common-sense approach to address greenhouse gas 

emissions and climate change.” 74 FR at 66516.

Regarding the timing of the LDVR, Congress’s intent was that endangerment/cause or 

contribute findings under section 202(a) would in fact lead to control of the air pollutants from 

new motor vehicles and new motor vehicle engines contributing to the harm. The primary goal 

of section 202(a) is to achieve such reductions by requiring that EPA adopt emissions standards, 

and as a result, proceeding with the LDVR is consistent with that goal. In contrast, deferring the 

LDVR and thereby delaying achievement of the public health and welfare benefits Congress 

expected and required under section 202(a) would run directly counter to what Congress 

intended under section 202(a) - EPA issuing emissions standards to address the public health and 

welfare problems that were identified, not EPA refusing to do so.

Moreover, we have compelling reasons to proceed with the LDVR, in the manner that we 

did. As we stated in the LDVR, in response to similar comments that we were not obligated to 

conduct that rulemaking, or to conduct it at the time that we did: 

Some of the comments relating to the stationary source permitting issues 

suggested that EPA should defer setting GHG standards for new motor vehicles to 

avoid ... [adverse] stationary source permitting impacts. EPA is issuing these 

final GHG standards for light-duty vehicles as part of its efforts to expeditiously 

respond to the Supreme Court’s nearly three year old ruling in Massachusetts v. 

EPA, 549 U.S. 497 (2007). In that case, the Court held that GHGs fit within the 

definition of air pollutant in the Clean Air Act, and that EPA is therefore 

compelled to respond to the rulemaking petition under section 202(a) by 

determining whether or not emissions from new motor vehicles cause or 

contribute to air pollution which may reasonably be anticipated to endanger 

public health or welfare, or whether the science is too uncertain to make a 

 

1

Note, that at least one petition for reconsideration on the endangerment/contribution findings raises the 

same arguments related to the timing of decisions and absurd results. As noted before, EPA is carefully evaluating 

all the pending petitions for reconsideration.
24

reasoned decision. The Court further ruled that, in making these decisions, the 

EPA Administrator is required to follow the language of section 202(a) of the 

CAA. The Court stated that under section 202(a), "[i]f EPA makes [the 

endangerment and cause or contribute findings], the Clean Air Act requires the 

agency to regulate emissions of the deleterious pollutant." 549 U.S. at 534. As 

discussed above, EPA has made the two findings on contribution and 

endangerment. 74 FR 66496 (December 15, 2009). Thus, EPA is required to 

issue standards applicable to emissions of this air pollutant from new motor 

vehicles. 

The Court properly noted that EPA retained "significant latitude" as to the 

"timing ... and coordination of its regulations with those of other agencies" (id.). 

However it has now been nearly three years since the Court issued its opinion, 

and the time for delay has passed. In the absence of these final standards, there 

would be three separate federal and state regimes independently regulating lightduty vehicles to increase fuel economy and reduce GHG emissions: NHTSA’s 

CAFE standards, EPA’s GHG standards, and the GHG standards applicable in 

California and other states adopting the California standards. This joint EPANHTSA program will allow automakers to meet all of these requirements with a 

single national fleet because California has indicated that it will accept 

compliance with EPA’s GHG standards as compliance with California's GHG 

standards. 74 FR at 49460. California has not indicated that it would accept 

NHTSA’s CAFE standards by themselves. Without EPA’s vehicle GHG 

standards, the states will not offer the federal program as an alternative 

compliance option to automakers and the benefits of a harmonized national 

program will be lost. California and several other states have expressed strong 

concern that, without comparable federal vehicle GHG standards, the states will 

not offer the federal program as an alternative compliance option to automakers. 

Letter dated February 23, 2010 from Commissioners of California, Maine, New 

Mexico, Oregon and Washington to Senators Harry Reid and Mitch McConnell 

(Docket EPA-HQ-OAR-2009-0472-11400). The automobile industry also 

strongly supports issuance of these rules to allow implementation of the national 

program and avoid “a myriad of problems for the auto industry in terms of 

product planning, vehicle distribution, adverse economic impacts and, most 

importantly, adverse consequences for their dealers and customers.” Letter dated 

March 17, 2010 from Alliance of Automobile Manufacturers to Senators Harry

Reid and Mitch McConnell, and Representatives Nancy Pelosi and John Boehner 

(Docket EPA-HQ-OAR-2009-0472-11368). Thus, without EPA’s GHG 

standards as part of a federal harmonized program, important GHG reductions as 

well as benefits to the automakers and to consumers would be lost. In addition, 

delaying the rule would impose significant burdens and uncertainty on 

automakers, who are already well into planning for production of MY 2012 

vehicles, relying on the ability to produce a single national fleet. Delaying the 

issuance of this final rule would very seriously disrupt the industry’s plans.
25

Instead of delaying the LDVR and losing the benefits of this rule and the 

harmonized national program, EPA is directly addressing concerns about 

stationary source permitting in other actions that EPA is taking with regard to 

such permitting. That is the proper approach to address the issue of stationary

source permitting, as compared to delaying the issuance of this rule for some 

undefined, indefinite time period.

75 FR 25,402 cols. 1-3 (May 7, 2010) (footnote omitted).

With respect to both the endangerment/cause or contribute findings and the LDVR, it 

would require speculation and conjecture to defer – or, certainly, to forego altogether - the 

findings or LDVR until EPA completed streamlining the PSD and title V requirements on 

grounds that doing so would allow full compliance in the future with all PSD and title V 

statutory provisions. That is the gist of commenters’ argument – that EPA should defer or forego 

issuance of the findings and the LDVR to avoid causing an absurd result from implementation of 

the separate PSD and title V programs. Underlying this claim is the assumption that this would 

allow EPA to avoid the “absurd results”. As we discuss elsewhere in this rulemaking, there is no 

basis at this point to determine that streamlining will ultimately allow full compliance with the 

PSD and title V requirements. Rather, it is possible that EPA may conclude that none of the 

available streamlining techniques will allow all GHG sources at the statutory thresholds to 

comply with PSD and title V requirements in a manner that does not impose undue costs on the 

sources or undue administrative burdens on the permitting authorities. Under these 

circumstances, EPA may then permanently exclude GHG source categories from PSD or title V 

applicability under the absurd results doctrine. Moreover, it may well take many years before 

EPA is in a position to come to a conclusion about the extent to which streamlining will be 

effective and therefore be able to come to a conclusion as to whether any source categories 

should be permanently excluded from PSD or title V applicability. In this final rulemaking, we 

describe what actions we expect to take in the first 6 years after PSD and title V are triggered for 

GHG sources, and we may well be in a situation in which we continue to evaluate streamlining 

measures and PSD and title V applicability to GHG sources after this 6-year period. 

Accordingly, deferring the endangerment/cause or contribute findings and LDVR until 

such time that PSD and title V streamlining would allow full implementation of these programs 

at the statutory limits would serve only to delay the benefits of the LDVR, as well as the benefits 

that come from phasing in implementation of the PSD program to cover larger sources first. It 

would rely on an assumption that is unfounded at this point, that is, that such full compliance 

will be required at some point in the future. Delaying the emissions benefits of the LDVR and 

the related emissions benefits from partial implementation of the PSD program fails to 

implement Congress’ intent that the endangerment/cause or contribute findings “shall” lead to 

emissions standards for new motor vehicles contributing to the endangerment, and related 

emissions controls for the same air pollutant under the PSD program. EPA need not determine at 

this time what approach would be appropriate if there was a determination that full compliance 

with PSD and title V would in fact occur at some point in the future. In this case, absent such a 

determination, it would be improper to rely on speculation of such a future possibility as a basis 

under section 202(a) to defer or forego issuance of the LDVR on the grounds that EPA should 
26

defer or forego the LDVR to avoid causing an absurd result. Likewise there is no basis to defer 

proceeding at this time with the streamlining of the PSD and title V programs.

With respect to the PSD and title V applicability requirements, as we discuss elsewhere, 

we believe that Congress expressed a clear intent to apply PSD and title V to GHG sources and 

that the phase-in approach incorporated in the Tailoring Rule is fully appropriate. Proceeding 

now with the endangerment/contribution findings and LDVR, even if phasing-in of the PSD and 

title V programs is required, is consistent with our interpretation of the PSD and title V 

applicability requirements. Delaying the endangerment/contribution findings or LDVR, and 

thereby delaying the triggering of PSD and title V requirements for GHG sources, would lead to 

the loss of a practicable opportunity to implement the PSD and title V requirements in important 

part, and thereby lead to the loss of important benefits. As discussed elsewhere, promulgating 

the LDVR and applying the PSD and title V requirements to the largest GHG sources, as we do 

in this Tailoring Rule, is practicable because the sources that would be affected by the initial 

implementation steps we promulgate in this rule are able to bear the costs and the permitting 

authorities are able to bear the associated administrative burdens. Promulgating the LDVR now 

provides important advantages because the sources that would be affected by the initial steps are 

responsible for most of the GHG emissions from stationary sources. 

It should also be noted that as discussed elsewhere in this rulemaking, our ability to 

develop appropriate streamlining techniques for PSD and title V requirements is best done within 

the context of actual implementation of the permitting programs, and not in isolation of them. 

That is, because the great majority of GHG sources have not been subject to PSD and title V 

requirements, we will need to rely on the early experience in implementing the permitting 

requirements for the very large sources that initially will be subject to those requirements in 

order to develop streamlining techniques for smaller sources. It is the real world experience 

gained from this initial phase that will allow EPA to develop any further modifications that 

might be necessary. This would not and could not occur if the LDVR were delayed indefinitely 

or permanently, so that PSD and title V requirements were not triggered. It is unrealistic to 

expect that delaying action until a future Tailoring Rule could resolve all of the problems 

identified in this rulemaking, absent any real world implementation experience. 

At its core, commenters’ argument is that EPA should delay (if not forego altogether) 

doing anything to address GHG emissions and the problems they cause until it can do so in a 

way that does not cause any implementation challenges, even if that delay results in continued 

endangerment to public health and welfare. EPA does not take such a myopic view of its duties 

and responsibilities under the CAA. Congress wrote the CAA to, among other things, promote 

the public health and welfare and the productive capacity of the population. CAA section 

101(b)(1). EPA’s path forward does just this. Thus, proceeding with the endangerment/cause or 

contribute findings, the LDVR, and with PSD and title V through the phase-in approach of the 

Tailoring Rule maximizes the ability of EPA to achieve the Congressional goals underlying 

sections 202(a) and the PSD and title V provisions, and the overarching CAA goal of protecting 

public health and welfare. Congress called for EPA (1) to determine whether emissions from 

new motor vehicles contribute to air pollution that endangers, (2) if that the determination is 

affirmative, to issue emissions standards for new motor vehicles to address the endangerment, 

and (3) to implement the PSD and title V program to address similar emissions in their 
27

permitting program as another tool to address the air pollutant at issue. Delaying both the LDVR 

and PSD/title V implementation, as commenters have called for, would run directly counter to 

these Congressional expectations. Commenters’ calls for deferral or foregoing of the findings or 

LDVR are generally phrased in a conclusory fashion, and do not demonstrate how EPA could 

take the required CAA actions concerning GHGs while remaining within the requirements of 

each of the various CAA provisions, and achieving the overall goals of the CAA. As such the 

comments do not provide a valid basis for the deferral of agency action they suggest. 
28

2.5.4 Reconsideration of Interpretation of Regulations that Determine Pollutants Covered 

by CAA Permitting Programs (“CAA Interpretation Reconsideration Rulemaking”) 

Comment:

Three commenters, representing nine environmental advocacy groups, support EPA’s 

“Reconsideration of Interpretation of Regulations that Determine Pollutants Covered by Clean 

Air Act Permitting Programs” proposal. (5139, 5306, 5311)

Other commenters (4095, 4118, 4119, 4243, 4298, 4515, 4567, 4691, 4741, 4746, 4862, 

4863, 4871/5063/5605, 4903, 5052, 5062, 5073, 5082, 5083, 5084, 5088, 5111, 5120, 5123, 

5133, 5137, 5138, 5140, 5141, 5143, 5145, 5147, 5199, 5224, 5278, 5305, 5317, 5328, 5345, 

5390, 5714, 5715, 5740, 5800, 5808, 5886, 6414, 7026, 8460, 8513, 8545, 16411) on the 

“Reconsideration of Interpretation of Regulations that Determine Pollutants Covered by CAA 

Permitting Programs” proposed rulemaking express that EPA should use its discretion to find 

that issuance of the title II LDVR will never trigger PSD and title V permitting. Other 

commenters add that they disagree with EPA’s conclusion that the title II LDVR triggers 

PSD/title V (4095, 4903 5062, 5083, 5120, 5800, 5317, 5714, 5773).

A few commenters (4118, 4741, 5062, 5082, 5084, 5199) suggest that we can interpret 

the CAA such that:

 It does not apply to a pollutant under PSD until “actual controls” are required to be 

implemented (5082, 5084) or, alternatively, until EPA designates a pollutant as regulated 

under the provisions of title I as detailed in the provisions and requirements of title I

section 108. However, one of these commenters adds that the provisions in the Johnson 

Memorandum are not sufficient to provide an orderly interpretation of GHG regulations 

under the PSD and title V programs. (5084) 

 (1) PSD requirements should not be considered to apply to emissions of a pollutant 

before an emission control regulation for that pollutant has become effective (in this case 

the motor vehicle rule), and (2) that to be "effective" a regulation must have become 

applicable in a real-world sense, such that the new requirements imposed by the 

regulation have actually become applicable for regulated sources and are no longer 

merely prospective obligations. (5062, 5199) 

 The phrase “pollutants subject to regulation” excludes GHGs. This simple and 

straightforward approach again provides EPA a way to avoid "absurd results" without 

stretching the "administrative necessity" doctrine further than it can lawfully reach. 

(4118, 4741)

Various commenters state that EPA should clarify under the Tailoring Rule that the 

trigger date for GHGs being a “pollutant subject to regulation” is no earlier than the date of 

compliance with the section 202 rule (3720, 4016, 4118, 4119, 4298, 4567, 4684, 4903, 5062, 

5073, 5111, 5133, 5138, 5147, 5714, 5800, 7026, 8460) or no earlier than the date on which the 

final motor vehicle GHG rules “take effect” or actual controls are required (3720, 4118, 4120, 

4122, 4243, 4318, 4522, 4523, 4691, 4952, 4992, 5038, 5062, 5080, 5089, 5114, 5128, 5317, 

5327, 5328, 5601, 5711, 5741, 5800, 6459, 8301). PSD requirements should not be triggered 
29

when a rule controlling GHGs pollutants is promulgated (4120, 4691, 5062, 5088). In addition, 

some commenters assert that this date is:

 No sooner than the date on which a 2012 model year vehicle can be produced and is 

subject to “actual controls.” (3720, 4016, 4106, 4118, 4119, 4298, 4684, 5111, 5800, 

7026) 

 When EPA certifies that the first 2012 model vehicles meet the GHG limits in the vehicle 

rule. (5133)

 The date on which such rules would become operative and create current, legally binding 

obligations, which would be no earlier than October 1, 2011 and could be as late as in 

January 2011, or sometime in 2012. (3720, 4120, 4122, 4243, 4318, 4522, 4523, 4952, 

4992, 5038, 5080, 5089, 5114, 5128, 5317, 5327, 5328, 5601, 5711, 5741, 5800, 6459, 

8301).

A few commenters added that this date should not be the date when the Tailoring Rule 

goes into effect, since the proposed Tailoring Rule appears to be written so that GHG emissions 

above the thresholds would trigger PSD and title V applicability as soon as the Tailoring Rule 

goes into effect. See, e.g., proposed 40 C.F.R. 52.21(b)(1)(i)(d)). That would be inconsistent 

with EPA’s claim of statutory authority to apply these permitting programs to GHGs. (4903, 

5062, 5317) 

One commenter requests that EPA clarify when each of the six GHGs become “subject to 

regulation” under the CAA. (5922)

Other commenters argue that PSD is triggered only after a NAAQS has been established 

for those pollutants and where a source’s location is in attainment with a NAAQS. (3513, 4095, 

4118, 4243, 4862, 5123, 5141, 5143, 5181, 5277, 8513, 16411). Some commenters add that: 

 GHG emissions occurring as part of a construction or reconstruction or modification 

cannot independently trigger PSD permitting, but rather PSD can be triggered by

emissions of a NAAQS pollutant, and then a BACT determination could potentially

extend to GHG emissions units if emissions are over established thresholds and if the 

specific GHGs being emitted by the source have been subject to actual control at 

stationary sources under the CAA. (8513). 

 EPA should interpret PSD as being triggered only upon a significant net emissions 

increase of a criteria pollutant. Under this interpretation, only those major sources that

otherwise trigger PSD for a criteria pollutant would have to comply with BACT for 

GHGs (4095, 4298). Sources that are major only for GHGs, or that undergo a change 

that increases only GHG emissions should not be subject to PSD (4095). The commenter 

(4095) asserts that this interpretation of when PSD would be triggered would largely 

eliminate the “absurd results” EPA cites as justification for the Tailoring Rule. 

 Section 116 of the CAA mandates the promulgation of PSD regulations within 2 years of 

establishing a new NAAQS and provides that the effective date for such regulations is to 

occur one year later. Thus, PSD applicability is never “triggered” by a new pollutant 

becoming “subject to regulation” under the CAA, only by the establishment of a new 

NAAQS pursuant to sections 108 and 109 of the CAA and the designation of new areas 

for that NAAQS under section 107. (4095)
30

Commenter 4871 asks whether it is EPA’s position that GHGs will be “subject to 

regulation” upon promulgation of EPA’s LDVR (i.e., the date the final rule appears in the 

Federal Register), or upon the effective date of this rule, which is typically 60 days after 

publication. 

Response:

EPA addressed these topics in detail in the April 2, 2010 final action (75 FR 17400) and 

the associated RTC document located in the docket for that action. EPA incorporates those 

documents by reference as its response to the comments on these topics submitted to the docket 

for this action. Additional responses to comments arguing that a NAAQS should be established 

before GHGs can be regulated under the PSD program are found in the preamble of this final 

rule under section V.B. 
31

Chapter 3. Comments on the Legal Basis for the Proposed Rule

In this chapter we summarize and respond to the significant comments related to the legal 

basis for the proposed rule. In the first section we discuss regulation of GHGs under the CAA. 

While we did not discuss this topic at length in the proposal preamble, we received numerous 

comments on this subject which we address in section 3.1.

In sections 3.2 through 3.4, we address the comments received on the legal bases we 

proposed for phasing in the applicability thresholds for PSD and title V: the “administrative 

necessity” and “absurd results” doctrines, as well as the line of cases that establishes, in certain 

situations, the acceptability of a “step-by-step process” for implementing a statutory requirement. 

We do not summarize and directly respond to the numerous comments we received that stated, 

without specific reference to any of these three potential legal bases, that it is legally 

impermissible to alter the unambiguous numeric thresholds in the CAA. We believe that our 

responses to the more specific comments on the potential legal bases for the rule serve to respond 

to these more general legal concerns as well.

In addition, we received numerous comments on the legal basis for our proposal to 

retroactively limit our approval of the PSD provisions in SIPs and of title V programs. These 

comments are addressed in section 3.5.

3.1 Comments on Regulation of GHGs under the CAA 

We received many comments questioning EPA’s interpretation that GHGs can, and 

should, be regulated under the CAA. However, many of these comments pertain to the related 

developments that triggered the Tailoring Rule proposal (i.e., the Massachusetts v. EPA decision, 

the section 202(a) Endangerment Finding, the LDVR, and the reconsideration of the PSD 

Interpretive Memorandum) and are not, therefore, germane to this rulemaking. Such comments, 

which were also submitted for consideration under the related actions, are properly addressed in 

those actions. Here we address only those comments that pertain more directly to the Tailoring 

Rule. Section 3.1.1 addresses general comments regarding regulation of GHGs under the CAA, 

comments on regulating GHGs under the PSD program are addressed in section 3.1.2, and in 

section 3.1.3 we address comments on regulating GHGs under the title V program.

3.1.1 Comments on Regulation of GHGs under the CAA in General

In our recent actions, we have announced our intention to begin regulating GHGs under 

various portions of the CAA and have begun to follow through on that intention. We have 

finalized an Endangerment Finding for GHGs under section 202(a) of the CAA and have 

finalized the LDVR. In addition, we have finalized our interpretation of when an air pollutant 

becomes subject to regulation for purposes of the PSD and title V programs. We received 

numerous comments on the general topic of regulating GHGs under the CAA. 
32

Comment:

Many state government (4209, 4771, 5258, 5318, 5451, 5525, 5607, 5784, 6491, 7134, 

7212, 7217, 8071), industry (4095, 4118, 4243, 4298, 4691, 4851, 4862, 4903, 5004, 5041, 5111, 

5136, 5182, 5199, 5275, 5301, 5312, 5315, 5317, 5922, 6609, 6880, 8015, 8303, 8533, 8545), 

and state/local air agency (2797, 3858, 4871/5063/5605, 4949) commenters argue that the CAA 

was never intended by Congress or is ill-suited to address GHGs. These commenters often cite 

the development of the CAA over time, the language and structure of the CAA, and the 

legislative history to assert that EPA cannot and should not go forward with regulation of GHGs 

under the CAA. These commenters often made the following points:

 Congress enacted the CAA of 1970 and subsequent amendments, including those in 

1990, with an explicit focus on large sources and certain categories of pollutants that 

have direct effects on public health in the U.S. (which does not include GHGs). (5111, 

8545)

 The CAA is intended to address pollutants with direct impacts and control alternatives on 

a local, state, or regional level, but GHGs are global pollutants that produce indirect 

impacts on a global level. (4209, 4243, 4851, 5136, 5199, 6315, 5525, 8545)

 The need for the Tailoring Rule demonstrates that the CAA is not structured to address 

global pollutants. (4298, 4862, 5111, 5784)

 Regulating GHG under the Act is not consistent with the intent of the Act as expressed in 

section 101(b) because their inclusion will do little to “protect and enhance the quality of 

the Nation’s air resources” yet will significantly weaken the “productive capacity of [the 

U.S.] population.” (5138, 5301) 

 The issue of global climate change resulting from the emissions of GHGs should be 

addressed through comprehensive federal legislation, full public debate, and U.S. 

political consensus, rather than through unilateral EPA action. (5182, 5258, 5275, 5312, 

5451, 5607, 6491, 7212, 7217, 7134, 8015, 8071) 

 Congress declined to give EPA clear authority to regulate GHGs in the CAA. For EPA 

to seize such authority is an affront to rule by consent of the governed. (5784)

 The CAA does not allow EPA to deliver the regulatory relief it theorizes will occur (i.e., 

thresholds higher than the 100/250 tpy prescribed under the CAA) and thus this rule is 

unnecessary, ineffective and/or unlawful (4095, 4118, 4903, 5004, 6609, 6880, 8303, 

8533). 

On the other hand, numerous state/local air agency (3916, 3918, 4154, 4238, 4239, 4694, 

4778, 4860, 5039, 5057, 5081, 5314, 5528, 7935, 8025, 8803), state government (0600, 4518), 

and environmental (5122, 5306, 5311, 5448) commenters support the use of the CAA to regulate 

GHGs. These commenters typically believe it is important to begin regulation of the largest 

sources of GHGs now, pending comprehensive climate change legislation. Some of these 

commenters indicate that the CAA can be a valuable component of comprehensive federal 

climate policy in the future. 

One industry commenter (5110) believes that CAA section 115 (International Air 

Pollution) and section 179B (International Border Areas) are the logical place to start to address 

global GHG pollution under the current CAA. According to the commenter, section 115 has not 

been used to regulate domestic emissions that are connected to international air pollution, but 
33

only because each time its use was considered Congress enacted legislation to address the 

problem (i.e., for the acid rain and stratospheric ozone programs). Section 179B would apply 

only if a NAAQS for GHGs is promulgated.

One industry commenter (5143) suggests EPA should consider invoking other CAA 

authorities such as NSPS and section 111(d) in lieu of PSD/title V permitting. Under this 

approach, EPA would have the ability to set emissions performance standards for existing 

sources, and thereby avoid many of the difficulties under the PSD and title V permitting regimes. 

Regulation under section 111(d) offers additional advantages, including flexibility in 

determining the scope of sources to be regulated, the type and stringency of standards and 

guidelines and the timing of their implementation, and the ability to weigh the costs and benefits.

Response:

Comments that the CAA was never intended by Congress to address GHGs are not 

relevant to this tailoring rulemaking. In any event, the U.S. Supreme Court’s decision in 

Massachusetts v. EPA, 549 U.S. 497 (2007), which held that GHGs are an “air pollutant” under 

the CAA, made clear that the requirements of CAA section 202(a) apply to GHGs if EPA makes 

the endangerment and contribution findings. As a result, this decision makes clear that the CAA 

does apply to GHGs, notwithstanding the commenters’ concerns.

In addition, in EPA’s recently promulgated LDVR for GHGs, EPA promulgated 

requirements for GHGs under CAA section 202(a), and we explained our basis for doing so. 

“Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy 

Standards; Final Rule,” p. 151 (promulgated on April 1, 2010), 

http://www.epa.gov/otaq/climate/regulations/ldv-ghg-final-rule.pdf

In that rule, we also responded to some of the same arguments made by commenters in 

this rule that EPA does not have authority under the CAA to regulate GHGs. See “Light-Duty 

Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards,

EPA Response to Comments Document for Joint Rulemaking,” p. 1-67, 

http://www.epa.gov/otaq/climate/regulations/420r10012a.pdf. 

The comments concerning sections 115 and 111(d) are not relevant to this rulemaking. 

In the preamble for this rule we state a reason why the PSD and title V requirements apply to 

GHG sources. These requirements are not vitiated by the possible applicability of, or benefits of, 

other sections of the CAA to GHGs, such as sections 115 and 111(d), as raised by the 

commenters.

It is the position of the agency that comprehensive climate change legislation is a more 

effective way to address GHGs than through the CAA, but that does not mean that the CAA does 

not apply to GHGs.
34

3.1.2 Comments on Regulation of GHGs under the PSD Program

We proposed the Tailoring Rule based on our interpretation that GHG sources would 

become subject to the PSD and title V permitting programs upon finalization of the LDVR. In 

this section, we address the numerous comments that we received on the legal aspects of 

regulating GHGs under PSD.

Comment:

Many state (4871) and industry (3512, 3513, 4095, 4106, 4522, 4745, 4771, 4870, 4952, 

5052, 5058, 5083, 5110, 5112, 5137, 5138, 5140, 5169, 5179, 5183, 5275, 5278, 5345, 5417, 

5446, 5800, 5844, 5922, 5935, 8089, 16411) commenters believe that, based on the language of 

the CAA, PSD applicability can be triggered only by pollutants for which there is a NAAQS. 

Several of the commenters submitted one or more points of the following argument:

The EPA bases applicability of the PSD program solely on the scope of “pollutants 

subject to regulation” under CAA section 165(a)(4). While this language is relevant to PSD 

applicability because it determines the applicability of the BACT requirement, EPA must take 

into consideration the statutory provisions that act to constrain the applicability of the PSD 

program at the outset. The text of the statute is more naturally read to limit PSD applicability to 

sources that are major for a NAAQS [criteria] pollutant only. Once PSD is triggered by a major 

source for a NAAQS pollutant, the statute would impose BACT on pollutants “subject to 

regulation.” The EPA’s approach – which first asks what pollutants are “subject to regulation” 

and then bases all applicability determinations of the PSD program solely on this criterion – is 

inconsistent with the statutory language because it bypasses the core applicability provisions and 

renders their inclusion in the statute superfluous.

Indeed, the text of sections 161 and 165(a) limit application of PSD to certain areas –

those designated attainment or unclassifiable pursuant to section 107 of the CAA. Section 107 is 

applicable only to NAAQS pollutants. Only section 165(a)(4) (which simply establishes the 

requirement to apply BACT) uses the phrase “pollutants subject to regulation.” The EPA has not 

effectuated the applicability limitation in section 161 and 165(a) by interpreting that language as 

mere surplusage. Specifically, under EPA’s historical interpretation of the statutory provisions, 

the location limiting language would simply require that a source be located in an area that is 

attainment for any pollutant. But that is no limitation at all since every area of the country is and 

always has been in attainment with at least one criteria pollutant. Congress must be presumed to 

have been aware of this fact when it enacted the PSD provisions, making EPA’s construction 

inconsistent with canons of statutory construction requiring all words in the statute to be given 

meaning.

The NAAQS prerequisite requirement of the CAA is also consistent with the holding in 

Alabama Power Co. v. Costle (636 F.2d 323 (D.C. Cir. 1979), where the court found that 

location is the key determinant for PSD applicability and rejected EPA’s contention that PSD 

should apply in all areas of the country, regardless of attainment status. The court stated: “The 

plain meaning of the inclusion in [42 U.S.C. § 7475] of the words ‘any area to which this part 
35

applies’ is that Congress intended location to be the key determinant of the applicability of the 

PSD review requirements.” (636 F.2d 365 (D.C. Cir. 1979))

In its regulatory response to the Alabama Power decision, EPA gave this ruling only

grudging effect by an interpretation of PSD requirements in the preamble to the 1980 PSD 

regulations. (45 FR 52675, 52676, August 7, 1980) The 1980 Preamble provides that PSD 

requirements still apply to any area that is “designated ... as ‘attainment’ or ‘unclassifiable’ for 

any pollutant for which a national ambient air quality standard exists.” This is inconsistent with 

the CAA, but attracted little scrutiny because, to date, it has had very little practical impact. But 

now, this incorrect interpretation could trigger a host of absurd results that contravene 

Congressional intent. Accordingly, to give effect to unambiguous terms of the statute (and 

regulations), EPA cannot require a source to undergo PSD permitting solely on the basis of 

emissions of a pollutant for which there is no NAAQS. [Chevron, U.S.A. v. Natural Resources 

Defense Council (NRDC), 467 U.S. 837, 842 (1984) (agency must give effect to the 

unambiguously expressed intent of Congress)].

Because EPA’s improper interpretation appears only in the preamble to the 1980 PSD 

rules and the regulatory language in 40 Code of Federal Regulations (CFR) 52.21(a)(2) properly 

includes the location limitation of the statutory provisions, the only change that is needed for 

EPA to properly limit the scope of PSD applicability consistent with the statute is to announce its 

interpretation in the Federal Register. Since EPA has solicited comment on the effect of this 

proposed rule regarding PSD applicability, not only in the LDVR but also in the reconsideration 

of the PSD Interpretive Memorandum, it is a logical outgrowth of these actions for the Agency to 

announce that in response to comments it is adopting the proper scope of applicability for the 

PSD program.

Some industry commenters (4095, 4745, 4870, 4952, 5052, 5137) also argue that this 

interpretation (that PSD applicability is based only on NAAQS pollutants) is further supported 

by the presence of section 166 in the CAA, which sets forth the process and time line to regulate 

“other pollutants” under PSD. These commenters make the following points:

 Section 166 mandates the promulgation of PSD regulations within 2 years of establishing

a NAAQS for a new pollutant, provides that the effective date for such regulations is to 

occur 1 year later, and requires EPA to approve plan revisions for the new regulations 

within 25 months of their promulgation. (4095, 4745, 4870, 4952, 5137)

 An endangerment finding is merely the first step in establishing a NAAQS for CO2 and 

other GHGs under section 109 and, unless and until a NAAQS is established and the 

steps set out in section 166 are subsequently followed, EPA has no legal authority

regulate GHGs under the PSD/NSR provisions of the CAA. (4095, 4870, 5137)

 It seems inconceivable that the statutory structure of the PSD program could be 

interpreted to provide for near-immediate triggering of PSD applicability for GHGs upon 

becoming subject to regulation when section 166 provides for 2 years to promulgate new 

PSD regulations for new NAAQS and another 25 months for EPA to act on plan 

submissions related to the new NAAQS. Instead, the interplay of sections 166 and 165 of 

the CAA bespeak of a clear statutory scheme that PSD applicability is never “triggered” 

by a new pollutant becoming “subject to regulation” under the CAA, only by the 

establishment of a new NAAQS pursuant to sections 108 and 109 of the CAA and the 
36

designation of new areas for that NAAQS under section 107. (4745, 4952) The CAA 

clearly requires EPA to first establish a National Ambient Air Quality Standard 

(NAAQS) for GHGs before the Agency has the legal ability under the CAA to require 

PSD solely on the basis of increases in GHG emissions. (4095, 5183, 5844, 5922) Since 

EPA is not establishing a NAAQS for GHGs, the PSD program should not be made 

applicable to GHG emissions (3513, 4106, 5183, 5275). 

 Now that EPA has announced that it believes that there is a public health and welfare 

effect from GHGs, EPA must establish a NAAQS to determine the level at which public 

health and welfare need to be protected. This would allow the full PSD program to be 

implemented for GHGs, including the CAA’s requirements for an impact analysis and 

PSD increments (PSD provisions that are currently meaningless for GHGs in the absence 

of a NAAQS) (5052). Another commenter reports that they would not support the 

establishment of a NAAQS for GHGs, as an “attainment” or “nonattainment” status for 

the entire U.S. given the global nature of GHGs. (4106)

Some industry (5111, 5278, 5140, 5715) commenters base comments on the language of 

section 110(a)(2)(C) of the CAA, which requires SIPs to include PSD permit programs “as 

necessary” to assure that the NAAQS are achieved:

 Industry commenters 5278, 5140 infer from the language of section 110 (a)(2)(C) that the 

purpose of the PSD program is to assure the NAAQS are achieved. The commenters 

contend that it is inconsistent with this language to apply PSD based on emissions of 

pollutants such as GHGs for which there is no NAAQS. In addition, these commenters 

point out that CAA section 163(b)(4) specifies that the maximum allowable concentration 

of “any air pollutant” in “any area” to which part C applies shall not exceed the NAAQS, 

further indicating that the PSD program is focused on attaining the NAAQS and is not 

applicable to non-NAAQS pollutants such as GHGs.

 Industry commenters (5111, 5715) state that parts A and C of title I plainly indicate that 

the PSD program is implemented solely through SIPs, and that while states’ SIPs must 

include PSD permit programs “as necessary” to assure that the NAAQS are achieved, the 

CAA cannot be read to authorize, much less require, SIPs (including their PSD programs) 

to include provisions that are not necessary for the achievement of the NAAQS – such as 

the regulation of sources based on emissions on a non-NAAQS pollutant like GHGs. The 

commenter adds that EPA has often refused to approve the inclusion of provisions of a 

state’s air quality rules into SIPs because they are not related to the attainment or 

maintenance of the NAAQS. 

A number of industry (4630, 4801, 4870, 5052, 5082, 5112, 5446) and state (4521) 

commenters also assert that the language and legislative history of the PSD provisions of the Act 

make it clear that Congress never intended PSD to apply to such pollutants as GHGs. These 

commenters state the PSD program was clearly intended to address ground-level pollution 

threats to local air quality, such that pollution controls on major sources can affect local and 

regional ambient air quality. The commenters point out that GHGs are present in the global 

atmosphere at uniform concentrations which do not pose a direct threat to human health and, 

thus, are not intended to be covered by PSD. Some specific comments include the following:

 It is clear that PSD is designed to prevent significant deterioration to the “ambient air” for 

NAAQS pollutants, and it would be reasonable for EPA to interpret “ambient air” to 
37

exclude regulating the climate and the stratosphere (which would not preclude EPA from 

regulating GHGs in the future when the EPA has examined the technologies for 

controlling GHGs from specific industries). (5052)

 Regulation of GHGs under the CAA will constrain an expressed intent of the PSD 

program under section 160(c) which states that one purpose of the PSD program is to 

"insure that economic growth will occur consistent with the preservation of existing clean 

air resources. (5082)

 The original 28 source categories listed by Congress constitute the sources EPA regarded 

as posing the greatest potential for air quality degradation due to conventional pollutants. 

The 100 tpy threshold for these source categories makes sense only in terms of 

conventional pollutants. (4870, 5112, 5446) 

 The air quality monitoring and impact analysis provisions of CAA sections 165(a) and (e) 

focus on local and regional impacts. For example, section 165(e)(1) requires an analysis 

of “the ambient air quality at the proposed site and in areas which may be affected by 

emissions from [the proposed] facility for each pollutant subject to regulation under the 

[CAA] which will be emitted from such facility.” (4522, 4870, 5112, 5446)

 The legislative history of sections 165(a) and 169(l) under the 1977 CAA amendments 

makes clear that Congress had only conventional pollutants in mind when creating those 

provisions. Both the Senate and the House were engaged primarily in continuing the 

work that a prior Congress had begun, through the 1970 CAA, to rid the Nation, 

especially urban areas, of unhealthy levels of smog, particulates, sulfur dioxide, and other 

conventional pollutants. The air quality problems of concern to the 95th Congress in 

1977 did not include global warming. (4870)

 The EPA has assumed, without any analysis, that the “any pollutant” component of the 

phrase “any pollutant subject to regulation” has no bounds and therefore can include 

GHGs. However, the 100/250 tpy statutory thresholds are an equally integral part of the 

statutory fabric and cannot be reconciled with an unbounded reading of the phrase “any 

pollutant subject to regulation.” (4870)

 Without a NAAQS, PSD increments, or proven control devices in practice, regulating 

GHG emissions under the PSD program at this time will lead to a paperwork exercise of 

“empty” or “hollow” permits. (4521)

In addition, some industry (4522, 5125, 5345) and state (4871) commenters note that the 

CAA provides separate and distinct treatment for stationary sources pursuant to title I and for 

mobile sources pursuant to title II, including providing for a separate finding of endangerment 

pursuant to the two titles. These commenters believe that the Endangerment Finding made 

pursuant to section 202 of the CAA is a predicate only for the promulgation of standards for 

mobile sources pursuant to title II, and GHGs cannot be considered “subject to regulation” for 

purposes of title I of the CAA on the basis of actions under title II. 

In particular, industry commenter 5345 states that the structure of the Act assumes that 

title I action precedes title II action in that the authorities and responsibilities to investigate the 

impacts of pollutants on public health and welfare are set forth in title I (e.g., sections 103, 104 

(specifically addressing fuels and vehicles), 105 (grants), 107 (states’ responsibility for air 

quality), 108 (including section 108(e) which requires EPA to include emissions from mobile 

sources in analyses of pollutant impacts)), while any evaluation required under title II are 
38

dependent upon analyses performed under title I or are directly related to mobile sources and 

fuels. The commenter contends that there is no evident intent that requirements under title II 

should activate stationary source programs – to the contrary the most recent Congressional action 

on the Act (Energy Investment and Security Act of 2007, P.L. 110-140) shows that Congress 

could intentionally address a mobile source issue without it spilling over to title I stationary

sources.

Contrary to the commenters discussed above, some commenters agree with EPA that 

GHGs will become subject to PSD when the control requirements of the final LDVR go into 

effect. While few commenters make an explicit statement to this effect, many commenters 

acknowledge that this regulatory action will render GHGs “subject to regulation,” and, therefore, 

subject to PSD. 

Response:

In these comments, commenters argue that at least the applicability provisions of the 

PSD program should be limited to emissions by a source in an attainment or unclassifiable area 

of NAAQS pollutants for which the area is attainment or unclassifiable. We will refer to this as 

the “NAAQS Approach.” We responded to many of these comments in the preamble, section 

V.B.5.c. We provide the following additional responses:

We disagree with commenters who assert that we improperly base PSD applicability on 

the BACT provision, CAA section 165(a)(4), which applies requirements to air pollutants that 

are “subject to regulation.” While we believe that PSD applies to sources of air pollutants that 

are subject to regulation, this is because, as explained in the preamble, we have long read the 

term “subject to regulation” into the term “any air pollutant” as found in CAA section 169(1), 

which is the PSD applicability provision. 

We disagree that the provision in CAA section 165(a) (flush language at beginning) that 

refers to “any area to which this part applies” means that the PSD program is applicable only to a 

source that emits NAAQS pollutants for which the area in which the source is located is 

attainment or unclassifiable, for the reasons we stated in the preamble. In essence, in the 1977 

Clean Air Act Amendments, Congress divided the nation into two types of air quality basins, 

which could overlap: nonattainment areas and attainment/unclassifiable areas. Congress 

designed the provisions for nonattainment areas, found in Part D of title I, to include stringent 

control requirements for sources that emit NAAQS pollutants for which the area is 

nonattainment. Congress designed the provisions for attainment areas, found in Part C of title I, 

to include control requirements for sources that emit NAAQS pollutants for which the area is in 

attainment or unclassifiable. However, Congress also designed the part C provisions to cover 

non-NAAQS pollutants, as is clear from the broadly phrased applicability provision, CAA 

section 169(1), which, as we have interpreted it, applies to “any air pollutant [subject to 

regulation];” and the BACT provision, CAA section 165(a)(4), which similarly applies to “any

pollutant subject to regulation.” Thus, Congress in effect divided the nation into two, sometimes 

overlapping, geographic “boxes,” one for nonattainment areas, and one for 

attainment/unclassifiable areas, but the latter “box” was large enough to include the non-NAAQS 

pollutants. Through this approach, Congress applied the relevant requirements of the PSD 
39

process to non-NAAQS pollutants, including, most importantly, the source-by-source BACT 

requirement. As we discussed in the preamble, the PSD process, with its stringent, source-bysource review requirements, serves important environmental benefits, and it is for this reason 

that Congress designed the PSD provisions to cover non-NAAQS pollutants. The inclusion of 

the phrase “any area to which this part applies” in CAA section 165(a) has the effect of 

designating the relevant “box” – the attainment/unclassifiable one, and not the nonattainment one 

– but does not restrict the PSD requirements to NAAQS pollutants for which the area is 

attainment or unclassifiable. The phrase also makes clear that certain of the PSD requirements, 

such as the CAA section 165(a)(2) requirements for certain analysis and a hearing, as well as the 

CAA section 165(a)(4) requirement for BACT -- which by their terms are broad enough to apply 

to even a source in a nonattainment area that emits a NAAQS pollutant for which the area is 

nonattainment -- apply only in areas designated attainment or unclassifiable, and not in 

nonattainment areas. The D.C. Circuit’s decision in Alabama Power v. Costle supports this 

analysis because it stated, as a background explanation, that the PSD applicability provision 

under CAA §169(1) applies by its terms to all pollutants, 636 F.2d at 352, but it held that 

because of the limiting phrase, “any area to which this part applies” under CAA §169(a), PSD 

requirements do not apply to sources constructing in nonattainment areas. Id. at 365. Evidently, 

the Court recognized that the existence in the CAA of the nonattainment provisions in Part D 

means that NAAQS pollutants in nonattainment areas are to be governed by those provisions, 

leaving the PSD provisions to cover both NAAQS pollutants in attainment areas and nonNAAQS pollutants.

We disagree with commenters who state that we could adopt the NAAQS Approach in 

this final action as a logical outgrowth of our solicitation of comment on the effect of the 

proposed rule regarding PSD applicability. We do not believe that our general solicitation of 

comment can be said to have alerted the public to the possibility of adoption of the NAAQS 

Approach. In addition, the NAAQS approach would amount to a fundamental change in our 

long-standing regulatory approach. Accordingly, were we inclined to consider the NAAQS 

approach further, we would need to propose it.

We disagree with commenters who state that CAA §166 acts to limit the scope of the 

PSD program to NAAQS pollutants. In Alabama Power v. Costle, 636 F.2d 323, 405-406 (D.C. 

Cir. 1980), the D.C. Circuit rejected a similar argument. There, industry petitioners argued that a 

pollutant did not become covered by the PSD program until EPA promulgated a NAAQS and 

finalized a rulemaking under 166 for such pollutant. The Court rejected this argument as being 

"contradicted by the plain language of section 165.” Id. at 406. The Court upheld EPA’s 

regulations, which the Court described as “appl[ying] PSD and BACT immediately to each type 

of pollutant regulated for any purpose under any provision of the Act....” Id. at 403. We concur 

with the Court’s analysis and similarly reject this claim. By the same token, we disagree with 

commenters who state that GHGs cannot be considered “subject to regulation” by virtue of their 

regulation by the LDVR on ground that the LDVR is promulgated under title II of the CAA. 

We disagree with commenters who state that because certain provisions in Part C are 

clearly directed towards NAAQS pollutants, that indicates that part C as a whole is limited to 

NAAQS pollutants, or that the applicability provisions of part C are limited to NAAQS 

pollutants. We recognize that a major focus of the PSD provisions was NAAQS pollutants for 
40

which the area was attainment or unclassifiable, and this is clear from many of the provisions in 

the PSD program and the legislative history. However, as we have discussed elsewhere, other 

provisions in part C clearly apply to both NAAQS and non-NAAQS pollutants, and as a result, 

we cannot conclude that the PSD program as a whole, or its applicability provisions, applies to 

only NAAQS pollutants for which the area is attainment or unclassifiable. Further in this regard, 

we disagree with commenters who state that the purpose provisions of CAA section160 are 

limited to pollutants for which the area is designated attainment or unclassifiable. We believe 

that the purpose provisions can be read more broadly to refer to non-NAAQS pollutants as well. 

This reading of the purpose provisions is consistent with the other provisions in the PSD 

program that concern both NAAQS and non-NAAQS pollutants.

We disagree with commenters that either our regulations or the CAA provisions compel, 

or permit, a view that the PSD program is limited to ground level pollution threats to local air 

quality. While we agree with the commenters that a major focus of the PSD program is on local 

air quality, we reject the view that the program is solely concerned with local air quality. As an 

initial matter, we note that this position is inconsistent with the plain language of our regulatory

applicability provisions – the definition of "regulated NSR pollutant" – which we promulgated, 

as we discuss in the preamble, many years ago, so that the time for challenge of which has long 

since passed. Specifically, we note that the definition of “regulated NSR pollutant” by its terms 

covers ozone depleting substances, which are regulated due to their effects on the stratosphere, 

and not because of local effects or even effects on ambient air. CAA section 165(a) (3) requires 

that before a permit may issue, the owner or operator must demonstrate that the facility will not 

"cause, or contribute to, a violation of any . . . national ambient air quality standard in any air 

quality control region." By its terms, this requirement is not limited to the attainment area in 

which the source is located. Instead, this requirement covers non-localized effects. Indeed for 

some NAAQS, such as ozone, the PSD program primarily serves to address air quality impacts 

outside of the attainment area in which the source is locating (even if the transport is to areas 

hundreds of miles away). Similarly, the requirement to ensure protection of air quality related 

values addresses impacts outside of the attainment area in which the source is locating. Most 

importantly, however, without a clear demonstration that Congress's sole focus – as opposed to a 

major focus -- was to address localized air quality impacts, the provisions cited by commenters 

fail to overcome the plain language of Act. Specifically, none of the provisions identified by

commenters demonstrates a congressional intent to not give literal meaning to the requirement to 

apply PSD to “any pollutant [subject to regulation],” under CAA section 169(1) (as we interpret 

it), or "each pollutant subject to regulation under this chapter." CAA section 165(a)(4). As 

discussed more fully in the preamble, Congress certainly knew how to express a narrower 

pollutant coverage, such as that urged by petitioners. For example, in CAA section 166(e),

Congress provided that area classification plans would not be required for "any air pollutant for 

which a national ambient air quality standard is established."

We disagree with commenters that the phrase establishing the 100/250 tpy statutory

thresholds should be interpreted to narrow the meaning of the phrase, as we have interpreted it, 

“any air pollutant [subject to regulation]” in the applicability provisions. There is nothing 

inherent in the 100/250 tpy statutory threshold that limits the “air pollutant [subject to 

regulation]” to certain pollutants and not others.
41

We disagree with commenters that without a NAAQS, PSD increments, or proven control 

devices in practice, regulating GHG emissions under the PSD program at this time will lead to a 

paperwork exercise of “empty” permits. GHG sources that are subject to PSD will become 

subject to the BACT requirement, which will be a case-by-case determination and may well lead 

to, for example, energy efficiency measures, which would be reflected in their permits.

We disagree with commenters who state that because EPA has the authority to interpret 

the applicability provisions narrowly – that is, to read into the phrase “any air pollutant” in CAA 

§169(1) the qualifier “subject to regulation” – we have authority to interpret those provisions 

more narrowly still, to be limited to NAAQS pollutants or pollutants that have local air quality 

impacts. Our interpretation that reads in the qualifier “subject to regulation” – which, as we state 

elsewhere, we promulgated many years ago and are not now re-opening – was a justifiable 

interpretation under the principles of statutory construction, and we do not believe that the same 

is true of the NAAQS Approach or a similar approach limiting PSD to pollutants with local air 

quality impacts.

3.1.3 Comments on Regulation of GHGs under the Title V Program 

As noted previously, we proposed the Tailoring Rule based on our interpretation that 

GHG sources would become subject to the PSD and title V permitting programs upon 

finalization of the LDVR. In this section, we address the comments that we received on the legal 

aspects of regulating GHGs under title V.

Comment:

Some industry (5140, 5181, 5278, 5317, 5800, 16411) and state (3278, 4019) 

commenters believe that Congress never intended the title V program to cover GHGs, and that 

EPA need not interpret GHGs to be a regulated pollutant subject to title V. The following 

represent typical reasons for this position:

 Title V permits are intended to compile applicable requirements for major sources. 

Because there are no applicable requirements that require control of GHGs, title V should 

not apply. (5317)

 EPA should conclude that PSD and title V permitting are not meant to apply based on a 

source’s CO2 or GHG emissions, and cite Congressional, legislative history, and legal 

support for their position. (3512, 3720, 4298, 5082, 5111, 5318, 5800, 5922) 

 The legislative history shows that Congress did not intend for title V to apply to the types 

of sources that will be covered based on GHG emissions at the statutory level. (5317)

 Congress’ understanding of the scope of the title V program is evidenced by the fact that 

the costs of the program were considered so modest that they were not broken out in the 

analyses of the 1990 CAA Amendments. This would not have been the case if Congress 

had envisioned that GHGs could be pollutants for which applicability could be 

considered at a level of 100 tpy. (5140, 5181, 5278)

 The EPA has long exercised discretion with respect to the title V provisions under the 

CAA, narrowing applicability from the statutory “any air pollutant” to only those 

pollutants that are regulated under the CAA (e.g., the Wegman memo). (5140, 5278, 

5317)
42

 GHGs are not a regulated pollutant per 40 CFR 70.2 until a source becomes subject to 

PSD. Thus, there is no requirement for a source that would be subject to title V only for 

GHGs to apply for a title V permit within a year if it is not subject to PSD. (3278)

 Per the intent of title V, no title V application should be required if the resulting permit 

would be a “hollow” permit. In addition, existing title V permits need not be revised for 

GHGs if there are no emissions limits or standards that apply to GHGs. (5317)

 The EPA should interpret the CAA as requiring only sources that otherwise trigger title V 

for criteria pollutants to be required to obtain permits for their GHG emissions. (5800)

Industry commenter 5715 notes that the title V permit program is meant for 

implementation by each state. According to the commenter, title V is intended solely to codify a 

stationary source’s otherwise applicable requirements, but no such requirements are created by

EPA’s decision to regulate mobile source GHG emissions. The commenter concludes that EPA 

lacks authority under the Act to compel any state title V program to govern GHGs.

Response:

EPA has addressed many of these comments in the preamble to the final rule, particularly 

in section V.B. As discussed in the preamble, although we agree that various provisions of title 

V indicate that a purpose of title V is to gather a source’s applicable requirements into a single 

permit, see CAA sections 503(b)(1), 504(a), we do not read those provisions as expressly

limiting title V to sources with applicable requirements. The applicability provisions, by their 

terms, include sources based on amount of emissions, and do not include any explicit limits to 

applicability based on whether the sources has applicable requirements. As described in the 

preamble, we believe that Congress, although clearly expressing an intent that title V apply to 

GHG sources generally, did not express a clear intent as to how title V applies to GHG sources. 

The tension between these two sets of provisions, which we identified in the proposal and 

commenters further discussed, provides further support for that conclusion. Accordingly, we 

have discretion under Chevron step 2 to determine a reasonable approach, consistent with the 

statutory requirements, concerning the application of title V to GHG sources with empty permits.

We note that to date, we have issued permits to sources without applicable requirements, 

albeit on rare occasions. We have little reason to believe that the “empty-permits” issue will 

arise in steps 1 and 2 of our tailoring approach because we believe there will be no “empty 

permits” in step 1 or step 2 or, if there are, that they will be very few in number. As stated in the 

preamble, we believe that the tailoring approach we adopt in this rulemaking for steps 1 and 2 is 

a reasonable approach that is consistent with statutory requirements. 

We need to gather more information concerning the potential number and utility of 

“empty permits” for GHG sources, in light of the fact that the need for requirements in title V 

permits will vary based on the requirements of each SIP, and the fact that some SIPs contain 

broadly applicable requirements. As stated in the preamble, we intend to consider the issue of 

the applicability of title V to GHG sources with “empty permits” in step 3 of our tailoring 

approach. When we do so, we will further assess the potential for the approach of excluding 

empty permits from title V to relieve burden consistent with statutory requirements. 
43

The preamble also contains an extensive discussion of evidence of Congressional intent 

about the size, scope, and timelines for permitting under the title V program. EPA agrees that 

subjecting all sources that emit at least 100 tpy of GHG to title V permitting as of January 2011 

would be inconsistent with Congressional intent. For the reasons described in the preamble, we 

believe that the tailoring approach we adopt in this rulemaking best reconciles the statutory

provisions with congressional intent.

EPA disagrees with the comment that suggests that sources with GHG emissions in 

excess of the major source threshold (or the threshold as tailored by this rule) would not be 

required to apply for title V permits as a result of GHG emissions until the source triggered PSD. 

Although it is true that GHG are not specified in the definition of “regulated air pollutant” in 40 

CFR 70.2, any “major source” is subject to title V permitting, see 40 CFR 70.3, and the 

definition of “major source” in 40 CFR 70.2 refers to “any air pollutant,” not simply regulated air 

pollutants. See also CAA section 501, 502, 302. The EPA has consistently interpreted the 

regulatory and statutory definitions of “major source” under title V, including the term “any air 

pollutant”, as applying to pollutants “subject to regulation.” Memorandum from Lydia 

N.Wegman, Deputy Director, Office of Air Quality Planning and Standards, U.S. EPA, to Air 

Division Directors, “Definition of Regulated Air Pollutant for Purposes of Title V” (Apr. 26, 

1993)(Wegman Memo). EPA recently re-affirmed this position in EPA’s Reconsideration of 

Interpretation of Regulations that Determine Pollutants Covered by Clean Air Act Permitting 

Programs. 75 FR 17704, 17022-23 (April 2, 2010)(Interpretive Memorandum Reconsideration 

Final Action). We do not interpret the Act to give EPA discretion to exclude categorically major 

sources of certain pollutants subject to regulation (such as those that are not criteria pollutants) 

from the requirements of title V. Thus, when GHG become subject to regulation, sources which 

emit GHGs in excess of the major source threshold (or the threshold as tailored by this rule) are

subject to the obligation to undergo title V permitting. 

EPA notes that this approach is based on its interpretation of sections 302, 501, and 502 

of the Act. Thus, EPA believes that such sources are required by the Act to apply for title V 

permits, and EPA is authorized to ensure that approved title V programs issue permits to such 

sources.

EPA agrees with the comment that where a source has previously been issued a title V 

permit, the permit need not be revised solely as a result of GHG becoming subject to regulation 

if the source is not subject to any additional applicable requirements. Transition issues related to 

title V permits are discussed in more detail in section V.E.4 of the preamble.

3.2 Comments on the Administrative Necessity Doctrine

Many state (4519, 4864, 4871), industry (3512, 4095, 4118, 4302, 4741, 4749, 4841, 

4870, 4871, 4905, 5086, 5088, 5104, 5110, 5125, 5140, 5169, 5179, 5181, 5276, 5278, 5312, 

5317, 5328, 5343, 5390, 5676, 5715, 5789, 5939, 8283, 8545), environmental (5139), and 

agricultural (3953, 3953, 5062, 5168, 5743) commenters believe that EPA’s invocation of the 

administrative necessity doctrine is legally uncertain and could (or should) to be struck down 

upon review, which would lead to reinstatement of the statutory thresholds for PSD and title V 
44

and the permitting overload and paralysis that EPA hoped to avoid. Commenters give a number 

of reasons for this belief, including the following:

 The EPA misstates the nature and availability of the administrative necessity doctrine. 

(5317, 5676)

 The administrative necessity doctrine applies where Congress intended regulation but it 

cannot be carried out. (5169, 5317) Commenter 5317 believes that the administrative 

necessity doctrine fails on this count because, as the proposal preamble demonstrates, 

Congress never intended GHG sources to be regulated under PSD or title V. 

Commenter 5169 believes that the doctrine fails on this count because EPA cannot 

demonstrate that the statute clearly intends for GHGs to be “subject to regulation” as 

evidenced by the contentious debate surrounding this issue (e.g., the controversy over the 

Endangerment Finding, the PSD Interpretive Memo, etc.).

 The administrative necessity doctrine is a narrow and limited doctrine that cannot support 

such a wide departure from the statute. It is not a delegation to rewrite the CAA. (3512, 

4118, 4905, 5168, 5181, 5343, 5676, 5743, 8283)

 The EPA cannot use the administrative necessity doctrine in this case because it has 

created the situation though its own discretionary actions which it now seeks to remedy

using this doctrine. Where there is a statutory alternative that would eliminate the 

administrative necessity, EPA must use it. (3512, 3953, 4118, 4302, 4741, 4905, 5062, 

5169, 5179, 5317, 5328, 5715)

 According to the Alabama Power decision, the administrative necessity doctrine does not 

create a general ability to vary from the statute based on a determination that the costs 

outweigh the benefits. The EPA is attempting to do just that. (4243, 4870, 5139)

 The Alabama Power court noted that there is a particularly high burden of proof when 

attempting to invoke this doctrine prospectively, which is what EPA is trying to do here. 

(4095, 4741, 4870, 5104, 5139, 5140, 5278)

 The Alabama Power court indicated that categorical exemptions from clear statutory

language, such as EPA is attempting, are not favored under this doctrine. (4870, 5104, 

5140, 5278)

 The administrative necessity doctrine was not upheld in any of the six cases cited by EPA 

in the proposal preamble. Contrary to EPA’s assertion, the facts in this case are not more 

supportive than in the unsuccessful cases. (3953, 4741, 4870, 5110, 5139, 5140, 5278, 

5317, 5343, 5676)

 Even if the conditions for the administrative necessity doctrine exist, EPA has not met the 

burden of proof that the doctrine is justified. (4095)

 The EPA’s claim of administrative necessity is unfounded for a variety of reasons related 

to the achievability of the permitting requirements and EPA’s past regulatory practices. 

(5312, 5715)

 The administrative necessity doctrine is legally vulnerable because the Tailoring Rule 

will be ineffective – state laws with thresholds at the 100/250 tpy levels will continue to 

apply. (4095)

 The “administrative necessity” doctrine was not available because EPA has not moved 

expeditiously to initiate streamlining. (4095)

 The “administrative necessity” doctrine was not available because EPA has not explained 

the amount of time that it needed to conduct streamlining measures. (4095) 
45

 A commenter also asserted that EPA has not established that it faces a shortage of funds, 

time, or technical personnel, and that for this reason, too, the “administrative necessity” 

doctrine is not available. (4095) 

 The title V fee provisions (which require states to collect fees sufficient to fund the 

program) undercut the administrative necessity doctrine for that program. (3953)

Some industry (4298, 5052, 5104, 5111, 5143) and state (3918, 4694, 4860, 5057, 5314) 

commenters agree with EPA’s proposed use of the administrative necessity doctrine, if EPA 

proceeds with applying PSD and title V to GHGs. The commenters make the following 

additional points:

 This situation meets the requirements for the administrative necessity doctrine based on 

the shortage of funds, time, and personnel needed to administer the programs. (5143)

 The administrative necessity doctrine will face a lower burden given that EPA intends to 

phase in the statutory thresholds. (5052)

 The EPA is correct in its analysis that the Tailoring Rule does not represent a permanent 

exemption based on cost/benefit considerations. (5052)

 The EPA’s 3-step process for implementing the administrative necessity doctrine is 

correctly formulated. (5052, 5111)

 The administrative necessity doctrine and the absurd results doctrine are independent 

precedents – one may prevail even if the other does not. (5052)

However, some of these supportive commenters (5052, 5143) believe that EPA must take 

additional steps to improve the administrability of the PSD and title V programs through other 

means so as to deviate as little from the statute as possible in order to prevail in court. One such 

supportive commenter (5052) believed such additional steps include “further steps to streamline 

the application of PSD by delaying for another year its applicability date, by redefining critical 

applicability requirements (at least temporarily), and by adjusting the definition of ‘major 

source’ in the first phase of the program to avoid initially [sic.] applicability to small 

businesses....” Another supportive commenter (5143) believes that the administrative necessity

doctrine is justified, but EPA’s analysis is deficient because a systematic, sector-based evaluation 

is needed with full analysis of, and measures to mitigate, the serious regulatory, technical, and 

economic consequences.

Some of the industry commenters (5140, 5181, 5278) who believe that the administrative 

necessity doctrine will fail for the PSD program believe that it is more legally defensible for the 

title V program. These commenters believe it is clear that Congress clearly did not intend for 

over 6 million sources to be covered by the title V program. The commenters add that when the 

title V regulations were first issued, the question of whether CO2 was required to be considered 

in determining title V applicability was raised and the Agency issued a determination that CO2

was not considered an air pollutant that could trigger title V applicability. 

One environmental commenter (5306) supports the use of only the administrative 

necessity doctrine (and not the absurd results doctrine) for the first phase of the Tailoring Rule. 

This commenter believes that EPA should defer any decisions on whether application of the 

statutory thresholds would constitute an absurd result until it has completed the further 
46

proceedings contemplated in the proposal to streamline implementations of the PSD and title V 

programs.

In addition, a few commenters (5139, 5315) argue that the resource constraints and 

administrative challenges at the heart of the Tailoring Rule have been caused in large part by the 

agency’s lengthy delay in addressing GHGs under the CAA.

Response:

Having reviewed the comments, we continue to believe that the “administrative 

necessity” doctrine supports our rulemaking in the manner that we describe in the preamble. We 

believe that we have accurately stated the nature and availability of the doctrine, which we set 

out at length in the proposal, including summarizing in detail all of the D.C. Circuit case law. 

We believe that the doctrine applies because, as we discuss in the preamble, Congress intended 

that PSD and title V apply to GHG sources in general, but that a literal reading of the PSD and 

title V applicability provisions creates administrative burdens that are impossible for the 

permitting authorities to carry. 

Some commenters argued that the administrative necessity doctrine is not available to 

EPA under the present circumstances, which are that the need to apply the doctrine – which 

render the PSD and title V requirements administrable -- result from an action that EPA itself 

took, which is promulgating the LDVR and thereby triggering PSD and title V applicability. 

That is, according to these comments, EPA created this situation through its own discretionary

actions and, for that reason, cannot avail itself of the “administrative necessity” doctrine. 

We do not find anything in the “administrative necessity” caselaw, and commenters have 

not pointed to anything, that limits the availability of the doctrine in the manner suggested by the 

commenters. Once PSD and title V are triggered, the administrative burdens will become 

overwhelming, and that scenario brings into play the “administrative necessity” doctrine. 

Preclusion of the use of the doctrine for this rule, the Tailoring Rule, as suggested by 

commenters, would not be appropriate because that would, in effect, punish the EPA, permitting 

authorities, and the regulated community for EPA’s action in another rule, the LDVR. We 

believe that commenters’ argument that the doctrine is not available for use in the Tailoring Rule 

are in effect arguing that EPA should not, or is not authorized to, proceed with the LDVR 

because doing so would trigger PSD and title V applicability and that, in turn, would give rise to 

absurd results and administrative impossibilities. Several commenters do directly make that 

comment as well. We respond to that comment elsewhere. 

To the commenter who argues that Congress did not intend that GHGs become “subject 

to regulation” under other provisions of the CAA, we respond that once we regulate GHGs under 

another provision of the CAA, then, under our reconsideration of the interpretive memo, GHGs 

are “subject to regulation” for purposes of PSD and title V. Any comments that GHGs should 

not have been regulated under the other CAA provision may be relevant for that rulemaking, but 

not the Tailoring Rule; and any comments that the interpretive memo reconsideration was 

incorrect may be relevant for the interpretive memo reconsideration, but, again, not the Tailoring 

Rule.
47

The comments that the “administrative necessity” doctrine is a narrow and limited 

doctrine that cannot support such a wide departure from the statute because it is not a delegation 

to rewrite the CAA are, in general, linked to the comments that EPA cannot use the 

administrative necessity doctrine in this case because it has created the situation though its own 

discretionary actions which it now seeks to remedy using this doctrine. These commenters add 

that there alternative ways to interpret the statutory requirements that would eliminate the 

administrative necessity, such as interpreting the PSD provisions to apply only to sources that 

emit NAAQS pollutants for which the area is designated attainment or unclassifiable (or some 

variation of that argument), or interpreting the term “subject to regulation” to exclude GHGs. 

According to these commenters, EPA must use one of those alternatives.

Our response to these comments is that for the reasons discussed in the preamble, we 

believe that the “administrative necessity” doctrine provides a basis for the Tailoring Rule. As 

we stated in the preamble, the PSD provisions and their legislative history and the title V 

provisions and their legislative history indicate a clear congressional intent, under Chevron step 

1, on the issue of whether PSD and title V, respectively, apply to GHG sources, and that is in the 

affirmative, that PSD and title V do apply to GHG sources. In the preamble, we further discuss 

congressional intent as to how PSD and title V apply to GHG sources, and we conclude that the 

Tailoring Rule is appropriate under that analytical approach. As we further discuss, the 

“administrative necessity” doctrine is consistent with this approach. Because Congress intended 

that PSD and title V apply to GHG sources, but a literal application of the PSD and title V 

applicability provisions to GHG sources would be impossible to administer, then, under the 

“administrative necessity” doctrine, PSD and title V applicability may be phased-in for GHG 

sources.

We disagree with commenters that under the “administrative necessity” doctrine, we 

must construe the PSD and title V requirements as commenters have suggested, e.g., for PSD, to 

limit PSD to sources that emit a NAAQS pollutant for which the area is attainment or 

unclassifiable, and for PSD and title V, by construing the term “subject to regulation” to exclude 

GHGS -- in order to avoid creating an administrative impossibility. Under our analytical 

approach – the key to which is that Congress expressed a clear intent that PSD and title V apply

to GHG sources – PSD and title V must be applied to GHG sources, and the “administrative 

necessity” doctrine authorizes a mechanism to do so. That mechanism is a phase-in approach. 

The alternative analytical constructions suggested by commenters are not justifiable because they

are not consistent with congressional intent, which is, as we have said, to apply PSD and title V 

to GHG sources.

EPA disagrees with commenters that EPA is required to adopt the alternative 

constructions recommended by commenters on grounds that those constructions are reasonably 

consistent with the PSD and title V provisions by their terms and avoid the problems of 

administrative impossibility. As discussed in the preamble, the PSD and title V provisions, by

their terms, read literally, clearly apply to GHG sources. The alternative constructions 

recommended by commenters, which exempt GHG sources from PSD and title V, cannot be 

considered to be constructions that are reasonably consistent with the terms of the statutory

provisions. We discuss elsewhere why interpreting the PSD provisions to apply only to sources 
48

that emit NAAQS pollutants for which the area is attainment or unclassifiable is not valid. 

Although we adopt an interpretation of “subject to regulation” under the Tailoring Rule – under 

which GHGs emitted from certain sources are considered to be subject to regulation and GHGs 

emitted from other sources are not, at present – we recognize that this interpretation is not 

consistent with the literal meaning of the term “subject to regulation.” Rather, under a literal 

meaning, as we have said in the preamble, once GHGs are regulated under the LDVR, then all 

GHGs are considered to be subject to regulation in a literal sense. However, our construction is 

acceptable in the context of our analytical approach. Therefore, although the alternative 

constructions do obviate the problem of administrative impossibility, simply because they

exempt GHG sources from PSD and title V, their inconsistency with the literal terms of the 

provisions and with clear congressional intent to apply PSD and title V to GHG sources means 

that EPA cannot adopt them.

As for certain aspects of the “administrative necessity” doctrine raised by commenters, 

we disagree that we are conducting the type of cost-benefit analysis that the D.C. Circuit, in 

Alabama Power v. Costle, 636 F.2d 323 (D.C. Cir. 1980) said could not be used, as we say in the 

preamble. In addition, we state in the preamble that we recognize, as commenters emphasize, 

that the “administrative necessity” doctrine carries a particularly high burden of proof when the 

agency is attempting to invoke the doctrine prospectively, but we believe that the facts in this 

case are compelling and therefore that we meet that burden of proof. We also recognize that the 

Court in Alabama Power indicated that categorical exemptions are not favored under the 

“administrative necessity” doctrine. We read the opinion to leave the door open to categorical 

exemptions, although cautioning that they are disfavored, based on a strong factual showing. We 

are not, in this rule, promulgating any categorical exemptions, although we note that we may

address them in future rulemaking. We also recognize, as commenters pointed out, that the

administrative necessity doctrine was not upheld in any of the cases cited by EPA in the proposal 

preamble. We disagree with commenters that the facts in this case are not more supportive than 

in the unsuccessful cases. In the proposal, we compared the facts of the present case to those in 

the cases decided by the D.C. Circuit, and explained why the facts in the present case are more 

compelling than the facts in the other cases. For reasons discussed in the preamble to this final 

Tailoring Rule, since we published the proposed rulemaking, we have improved our 

understanding of the facts, and we now recognize that the facts are even more compelling than 

we understood them to be at proposal.

As for the comment that the “administrative necessity” doctrine is legally vulnerable 

because the Tailoring Rule will be ineffective – state laws with thresholds at the 100/250 tpy

levels will continue to apply – we have revised our proposal to address the state legal problem 

that the commenter identifes. As discussed in the final rule, if some states are not able to take 

advantage of our mechanism, we intend to promptly take additional action. Even if state law 

problems remain for some period of time – that is, even if in certain states, GHG sources at the 

100/250 tpy level and higher remain subject to PSD as a matter of state law for some period of 

time – we do not believe that this jeopardizes the applicability of the “administrative necessity” 

doctrine, as the commenter asserts. Nothing in the case law concerning the “administrative 

necessity” doctrine suggests that the doctrine is available only to the extent it allows the agency

to fashion a remedy that will solve the administrative problem in total, to the satisfaction of 

every affected party. Even with some remaining state law problem, the Tailoring Rule 
49

ameliorates administrative burdens resulting from federal law requirements and shows promise 

to ameliorate at least a meaningful amount of the administrative burdens under state law. 

A commenter also asserted that the “administrative necessity” doctrine was not available 

because EPA has not moved expeditiously to initiate streamlining. (4095) The commenter 

emphasized that EPA had raised the issue of administrative burdens attendant to PSD and title V 

applicability to GHGs in the advance notice of proposed rulemaking (ANPR) concerning 

regulating GHGs under the CAA, which EPA published by notice dated July 30, 2008, 73 FR 

44354, and asserted that EPA has had plenty of time since then to complete at least some 

streamlining actions, particularly, action involving PTE. 

We disagree with the commenter. As discussed in the preamble, we believe that under 

the “administrative necessity” doctrine, the agency must, as the first step, make every effort to 

adjust the applicable requirements within the statutory constraints, and it is only if, after the 

agency does so, that if the agency determines that an impossible administrative burden remains, 

then the agency is authorized to adjust the statutory constraints themselves. We believe that in 

the present context, this means applying whatever streamlining opportunities are presently 

authorized and available to GHG sources, and then determining whether the remaining 

administrative burdens are impossible to manage. However, we do not think that this means that 

the availability of the “administrative necessity” doctrine is conditioned on our taking 

streamlining action prior to finalizing the Tailoring Rule. Resources are scarce, and as a result, it 

is difficult for an agency to expend resources (in this case, by conducting rulemaking on 

streamlining measures) prior to taking the action that confirms the need to expend the resources 

(in this case, by completing the Tailoring Rule). Certainly, we see no basis to the commenter’s 

assertion that, in effect, the “clock began running” immediately after publication of the ANPR. 

In any event, as explained in the preamble to this rule, we have taken important steps since 

publication of the proposal for the Tailoring Rule to begin streamlining actions.

The commenter also stated that the “administrative necessity” doctrine was not available 

because EPA has not explained the amount of time that it needed to conduct streamlining 

measures. We have provided that information in the preamble.

A commenter also asserted that EPA has not established that it faces a shortage of funds, 

time, or technical personnel, and that for this reason, too, the “administrative necessity” doctrine 

is not available. We disagree. We describe in the preamble the extraordinary increase in 

numbers of sources that will become subject to PSD and title V permitting requirements, 

immediately after GHGs become subject to regulation on January 2, 2011, absent tailoring. We 

also describe the numbers of hours and FTEs, and the attendant financial cost, to permitting 

authorities, and we compare that information with the amounts that permitting authorities 

currently spend on PSD and title V permitting. These figures make clear the enormous increase 

in permitting authority obligations absent the Tailoring Rule.

With respect to the comment that the title V fee provisions (which require states to collect 

fees sufficient to fund the program) undercut the administrative necessity doctrine for that 

program, we have discussed in the preamble for the final rule the significance of title V fees for 

the “administrative necessity” rationale.
50

With respect to the comment that EPA must take “further steps to streamline the 

application of PSD by delaying for another year its applicability date, by redefining critical 

applicability requirements (at least temporarily), and by adjusting the definition of ‘major 

source’ in the first phase of the program to avoid initially [sic.] applicability to small 

businesses...,” the tailoring schedule we have established, as described and justified in the 

preamble addresses these concerns by limiting PSD and title V to the largest GHG sources in the 

near term, but in a manner that is practicable for the stakeholders, and establishes an appropriate 

process for addressing expansion of the program to smaller sources, so that there is no need to 

delay applicability by a year.

We note that many commenters generally agreed with our approach at proposal, and we 

appreciate those comments. One supportive commenter stated that EPA should rely on only the 

administrative necessity doctrine (and not the absurd results doctrine) for the first phase of the 

Tailoring Rule because EPA should defer any decisions on whether application of the statutory 

thresholds would constitute an absurd result until it has completed the further proceedings 

contemplated in the proposal to streamline implementations of the PSD and title V programs. 

We are not promulgating any permanent exemption from PSD or title V applicability with this 

rule, although we may address such exemptions in future rulemaking. We believe that the 

“absurd results” doctrine supports our action in this rulemaking because we believe the doctrine 

may be applied whenever a statutory requirement of any type, if applied literally, would produce 

an absurd result. Thus, we believe that the “absurd results” doctrines applies even to statutory

provisions related to timing and can therefore justify a delay or phase-in, as we do in this case. 

As explained in the preamble, we believe that the doctrines we cite – the “absurd results,” “onestep-at-a-time,” and “one-step-at-a-time” – support our action today both independently of each 

other and in an integrated fashion. 

3.3 Comments on the Absurd Results Doctrine

As with the administrative necessity doctrine, many state (4519, 4864, 4871), industry

(3512, 4118, 4243, 4630, 4741, 4749, 4841, 4870, 4871, 4905, 5086, 5088, 5110, 5125, 5129, 

5140, 5169, 5179, 5181, 5199, 5236, 5245, 5278, 5312, 5317, 5328, 5343, 5390, 5676, 5715, 

5789, 5939, 8545), environmental (5139), and agricultural (3953, 5062, 5168, 5743) commenters 

believe that EPA’s invocation of the absurd results doctrine is legally uncertain and could (or 

should) be struck down upon review, which would lead to reinstatement of the statutory

thresholds for PSD and title V and the permitting overload and paralysis that EPA hoped to 

avoid. Commenters give a number of reasons for this belief (some of which are the same as for 

the administrative necessity doctrine), including the following:

 The absurd result doctrine is a narrow and limited doctrine that cannot support such a 

wide departure from the statute. (4118, 4871, 4905, 5110, 5125, 5140, 5168, 5181, 5199, 

5278, 5343, 5743)

 The EPA cannot use the absurd result doctrine in this case because it has created the 

situation though its own discretionary actions which it now seeks to remedy using this 

doctrine. (3512, 3953, 4118, 4243, 4741, 4905, 5062, 5169, 5199, 5236, 5245, 5317, 

5328)
51

 The EPA cannot use the absurd result doctrine in this case because a Chevron analysis in 

this case stops at step 1 – unambiguous statutory meaning. (4741, 5139, 5179, 5715)

 The absurd result doctrine allows a court to read a statute in a way that is not the most 

ordinary reading, but is a permissible reading, to avoid an absurdity. That is, it allows 

interpretation to narrow the meaning of a vague term (or, more rarely, broaden the 

meaning of a vague term), but it cannot be used as a basis to rewrite the clear meaning of 

a statute. The broad term in this situation is “pollutant,” not the thresholds. Thus, 

“pollutant” should be interpreted to exclude GHGs in the PSD and title V contexts to 

avoid the absurdity. (5676)

 The absurd result doctrine requires a perverse outcome that is demonstrably at odds with 

Congressional intent, not excessive fulfillment of that intent. If EPA is correct to assume 

that Congress intended GHGs to be regulated under CAA permitting programs, it must 

also assume that Congress intended the application of BACT, title V permitting, etc. 

There is nothing inherently absurd about applying beneficial programs to the widest array

of sources, particularly when Congress set the thresholds. (5715)

 Under the absurd result doctrine, one must construe the statutory language to avoid a 

“literal” interpretation that would frustrate Congressional intent. Because EPA 

established in the proposal preamble that Congress never intended to subject sources to 

PSD and title V due to GHGs, it must construe the CAA to avoid this outcome rather than 

rewrite the plain language of the Act. (3953, 4870, 5140, 5181, 5278, 5317)

 According to Griffin v. Oceanic Contractors, Inc., where a statute can be interpreted to 

avoid absurd results, it must be so interpreted rather than relying on judicially created 

exceptions. The EPA should consider alternative approaches (no endangerment finding, 

no PSD without a NAAQS, excluding GHGs from "regulated NSP pollutant" 

classification, use of CAA sections 115 and 179B) to avoid the absurd result in this case. 

(5110, 5140, 5278)

 The EPA’s analysis of related cases misapplies the absurd result doctrine. The 

application of this doctrine in this way is not supported by case law. (4741, 4870, 5140, 

5278, 5312, 5343, 5715)

 The absurd result doctrine cannot be applied temporarily, so the temporary exemption 

provided by the Tailoring Rule has greater legal vulnerability than would a permanent 

exemption. (3953, 5104)

 It is the province of the courts to declare that results are “absurd,” it is not for EPA to 

decide. (3512)

 EPA should conclude that PSD and title V permitting are not meant to apply based on a 

source’s CO2 or GHG emissions, and cite Congressional, legislative history, and legal 

support for their position. (3512, 3720, 4298, 5082, 5111, 5318, 5800, 5922) 

While not entirely opposed to the use of the absurd result doctrine, one environmental 

commenter (5306) cautions that it would be advisable for EPA to defer any decision on whether 

to invoke that doctrine until after the first phase of implementation is complete. (The commenter 

supported using the administrative necessity doctrine to justify the first phase.) The commenter 

notes that Congress did not restrict the PSD or title V programs to a closed category of sources or 

pollutants – here, as elsewhere, the CAA provides flexibility to respond to new, or newly

recognized, threats to public health and welfare. The commenter states that EPA should be 

hesitant to conclude that the application of the CAA’s structure to newly identified problems –
52

even when awkward and challenging – is “demonstrably at odds” with Congressional intent until 

reasonable means of accommodation have been rigorously examined.

Some industry (3998, 4298, 5052, 5104, 5111, 5143) and state (3858, 4860, 5057, 5314) 

commenters agree with EPA’s proposed use of the absurd result doctrine (if EPA proceeds with 

applying PSD and title V to GHGs) on the basis that the statutory thresholds would cause an 

absurd result. The commenters make the following additional points:

 The absurd result doctrine can apply when a challenged statutory application: (1) was 

unanticipated or unresolved by the legislature; (2) would not advance the statute’s 

substantive goals; and (3) would lead to a harsh or problematic result. The commenter 

believes that this situation clearly applies in this case. (5143)

 The administrative necessity doctrine and the absurd results doctrine are independent 

precedents – one may prevail even if the other does not. (5052)

 The absurd results doctrine will face a lower burden given that EPA intends to phase in 

the statutory thresholds. (5052)

 It is correct to apply the absurd result doctrine in this case, but EPA should exempt GHGs 

from coverage under this doctrine rather than raise the thresholds. (5104)

However, some of these supportive commenters (3858, 4298, 5052, 5111) believe that 

EPA must take additional steps to improve the administrability of the PSD and title V programs 

through other means so as to deviate as little from the statute as possible in order to prevail in 

court.

Response:

Commenters assert that the “absurd results” doctrine is available only to construe a 

statutory term in a way that may not be its ordinary meaning but that nevertheless is a 

permissible reading, and that the doctrine is not available when the literal meaning of a statutory

provision is unambiguous. We do not believe that the “absurd results” doctrine is limited to the 

circumstances described by the commenters, and our reading of the caselaw is that in fact, Courts 

have employed the doctrine to construe terms differently than their literal meaning would 

provide. In the preamble, we cite examples.

More broadly, we believe that our application of the “absurd results” doctrine to the PSD 

and title V applicability provisions is fully consistent with the way that many of the cases have 

applied the doctrine. Many of the cases have applied the doctrine to a statutory provision that 

imposes a requirement or a constraint on a specified group or entity, and, by its terms, describes 

or defines the group or entity in broad terms. In these cases, the Courts have determined that a 

literal reading of the description or definition of the group or entity would sweep in some 

component, but that applying the requirement or constraint to that component would be an 

absurd result. Accordingly, the Court interpreted the statutory provision that describes or defines 

the group or entity narrowly – even though not in accordance with the provision’s literal 

meaning – to exclude that component. See, e.g., Nixon v. Missouri Municipal League, 541 U.S. 

125, 132-33 (2004) (“any entity” includes private but not public entities); Raygor v. Regents of 

Univ. of Minn., 534 U.S. 533, 542-45 (2002) (“implying a narrow interpretation of ... ‘any claim 

asserted’ so as to exclude certain claims dismissed on Eleventh Amendment grounds”); Rowland 
53

v. Cal. Men’s Colony, 506 U.S. 194, 200 (1993) (finding that an artificial entity such as an 

association is not a “person” under the statute, and describing the absurdity doctrine as a 

“common mandate of statutory construction”); Green v. Bock Laundry Machine Company, 490 

U.S. 504 (1989) (provision in Federal Rule of Evidence that protects “the defendant” against 

potentially prejudicial evidence, but not the plaintiff, refers to only criminal, and not civil, 

defendants); Watt v. Alaska, 451 U.S. 259, 266 (1981) (rejecting reliance on plain statutory

language and concluding that the term “minerals” in § 401(a) of the Wildlife Refuge Revenue 

Sharing Act applies only to minerals on acquired refuge lands; stating “[t]he circumstances of the 

enactment of particular legislation may persuade a court that Congress did not intend words of 

common meaning to have their literal effect”); Train v. Colorado Public Interest Research 

Group, Inc., 426 U.S. 1, 23-24 (1976) (prohibition in Federal Water Pollution Control Act 

against discharging into navigable waters “pollutants,” which are defined to include “radioactive 

materials,” does not apply to three specific types of radioactive materials).

Here, the CAA imposes requirements, which are PSD or title V permitting obligations, on 

certain entities, which are, for PSD purposes, a “major emitting facility,” including one that 

undertakes a “modification,” and, for title V purposes, a “major source.” The CAA defines those 

terms broadly, and those definitions, by their literal meaning, (i) include all GHG sources that 

emit above specified thresholds or, in the case of a “modification,” all such sources that make a 

physical or operational change that results in GHG emissions above a certain threshold, and (ii) 

include such GHG sources immediately after GHGs become subject to regulation under any

other CAA provision. (As discussed in the preamble, EPA has incorporated these statutory

definitions into its regulations.) However, subjecting all those GHG sources at that time to PSD 

and title V requirements produces absurd results. Accordingly, EPA may interpret those terms 

narrowly to exclude, at least temporarily, some GHG sources from the terms “major emitting 

facility, “modification,” and “major source” (and their counterpart regulatory terms). 

As EPA explains in the preamble for this rulemaking, each of “major emitting facility,” 

“modification,” and “major source” includes, as part of its definition, four terms, and any one or 

all four of those terms may be interpreted – that is, used as the legal mechanism, or “hook” -- to 

achieve the overall result of interpreting “major emitting facility,” “modification,” or “major 

source” more narrowly to exclude, at least temporarily, some of the GHG sources. Specifically, 

each provision includes (i) the term “any ... source,” or “a stationary source,” and that term 

could be considered not to refer literally to all of the GHG sources; (ii) either the term “two 

hundred fifty tons per year” or “100 tons per year,” or the term “increases the amount,” and those 

terms could be considered not to refer literally to the tonnage amount of emissions from all of the 

GHG sources; (iii) the term “any air pollutant,”2and that term could be considered not to refer 

literally to the emissions from all of the GHG sources; and (iv) the term “subject to regulation 

under the CAA” (which we have interpreted “any air pollutant” to include), and that term could 

be considered not to refer literally to the emissions from all of the GHG sources. As long as any 

one of those four terms may be considered not to have its literal meaning as applied to GHG 

sources, then the definition as a whole – again, for PSD, the terms “major emitting facility” or 

 

2 We do not believe that this term is ambiguous with respect to the need to cover GHG sources under either the PSD 

or title V program, only with respect to what sources of GHG should be covered under the circumstances presented 

here.
54

“modifications,” and for title V, the term “major source” – cannot be considered to apply to all 

GHG sources, at least, not for an initial period of time. 

As a result, regardless of the specific legal mechanism, or “hook,” the end result should 

be the same as in the many other cases, a few of which are cited above, in which the courts have 

considered a similar problem, and that is that these broadly written definitions of a group or 

entity (“major emitting facility,” “modification,” or “major source”) that is subject to a 

requirement or constraint (PSD or title V requirements) should be interpreted narrowly – even 

though not in accordance with the literal meaning of the definition – to exclude some component 

(smaller GHG sources, at least temporarily) when necessary to avoid absurd results.

We reiterate that in the present case, the absurd result is the enormous increase in 

permitting actions that would be required as of the January 2, 2011 “take-effect” date for the 

LDVR, which increase would, by overwhelming the PSD and title V permitting processes and 

thereby impeding the orderly issuance of both types of permits, undermine Congress’s goals for 

both the PSD program (to issue permits that allow large industrial sources to construct or expand, 

with environmental safeguard) and the operating permit program (to issue permits that promote 

accountability and enforceability). This result occurs because of the literal application of the 

PSD and title V applicability provisions to GHG sources, and, for this reason, this case falls well 

within the caselaw in which the courts have applied the “absurd results” doctrine. In those cases, 

the courts have declined to interpret or apply statutory provisions in accordance with their literal 

meaning when doing so would undermine the intent of the statute or lead to absurd or futile 

results. Because our application of the “absurd results” doctrine in this case is consistent with 

the caselaw in the manner just described, we disagree with commenters who state that under the 

caselaw, we misapply the “absurd results” doctrine. 

In addition, we disagree with commenters who state that the “absurd results” doctrine is 

not available in this case because it was our own action – promulgation of the 

endangerment/cause or contribute findings and the light duty vehicle rule – that, by triggering 

PSD, created the absurd results. We respond to this comment in the preamble. We also disagree 

with those who say the doctrine cannot be applied temporarily; we believe the doctrine may

potentially be applied in any circumstance in which a statutory requirement, read literally, 

produces a result that undermines the purposes of the provision, whether that result is temporary

or not. We also disagree with commenters who say that the “absurd results” doctrine does not 

apply to this case because Congress’s intent was to apply the PSD and title V programs to the 

widest array of sources; rather, as we discuss in the preamble, although Congress did intend that 

PSD and title V apply to GHG sources in general, Congress cannot be said to have intended the 

literal application of the statutory provisions to GHG sources – that is, the 100/250 tpy thresholds 

-- because that would bring in many sources during the initial period than the permitting 

authorities could handle. For the same reason, we also disagree with commenters who read the 

proposal to state that Congress did not intend to apply PSD or title V to GHG sources. We 

disagree with commenters who state that only the courts may apply the “absurd results” doctrine; 

we believe that the doctrine is one of the precepts of statutory construction and EPA should 

apply the precepts of statutory construction to interpret the CAA. We also disagree with 

commenters who argue that interpreting the PSD provisions as being limited to sources that emit 

pollutants for which the area in which they are located is designated as attainment or 
55

unclassifiable resolves the “absurd results.” For the reasons discussed elsewhere, we disagree 

that the PSD provisions can or should be interpreted in that manner. 

3.4 Comments on the Step-by-Step Process

In the proposal preamble we took comment on a third potential justification for our 

proposal – a line of cases that establishes, in certain situations, the acceptability of a “step-bystep process” for implementing a statutory requirement. 74 FR 55319. We received a few 

comments on this topic.

Comment:

An environmental commenter (5122) and an industry commenter (4298) support the use 

of the case-by-case justification. The environmental commenter (5122) stresses that EPA should 

make clear that it is not seeking to avoid its statutory obligations by providing far greater detail

on its future plans for the step-by-step regulation of GHGs. This commenter provides additional 

case citations to support the viability of this approach.

A state commenter (2797) does not concur with EPA’s interpretation of case law. This 

commenter believes that EPA stretches the U.S. Supreme Court opinion related to first steps.

An industry commenter (5676) states that the cases cited by EPA stand for a different 

legal principle than EPA advances to justify the Tailoring Rule. The commenter believes that the 

relevant analogy to these cases would be EPA deciding to regulate GHG only under some CAA 

programs because it believed that these would be sufficient to achieve its goals – in neither case 

did the Court excuse compliance with specific statutory criteria for a limited period.

Response:

We have discussed the “one-step-at-a-time” doctrine in greater detail, including more 

extensive discussion of the caselaw, in the preamble for the final rule than we did at proposal. In 

addition, we discussed in more detail in the preamble for the final rule our future plans for 

addressing GHG sources under the PSD and title V programs. For the reasons stated in the 

preamble, we believe that the Tailoring Rule is fully consistent with the “one-step-at-a-time” 

doctrine.

3.5 Comments on Implementation through Retroactively Limiting Approval of SIPs and Title V 

Programs

In the proposal preamble, we discussed our proposal to implement the PSD thresholds for 

GHGs by limiting our approval of the PSD permitting threshold level provisions and the 

significance level provisions in the previously fully approved SIPs of those states with SIPapproved PSD programs. 74 FR 55342. We proposed to take this action under authority of 

CAA section 301(a), which incorporates the inherent authority of an agency to reconsider its 

actions, and Administrative Procedure Act (APA) section 553. In the alternative, we proposed to 

limit our approval of PSD SIPs through the error correction provisions of CAA section 
56

110(k)(6). Similarly, we proposed to limit our approval of the title V permitting threshold level 

provisions in the previously fully approved state title v programs, again based on CAA section 

301(a) and APA section 553. 74 FR 55345.

Comment:

Several industry commenters (4095, 4106, 4118, 4691, 4870, 5083, 5058, 5131, 5133, 

5137, 5140, 5179, 5181, 5278, 5317, 5713, 6414, 16411) and state (2729, 4019, 4866, 4989, 

5039, 5084) commenters object to our proposal to limit our approval of previously fully

approved SIPs. The arguments against the proposed approach include the following:

 The EPA has overstated its authority under CAA section 301(a). The District Court 

Circuit (D.C. Circuit) has observed that section 301(a)(1) “does not provide the 

Administrator with carte blanche authority to promulgate any rules, on any matter 

relating to the CAA, in any manner that the Administrator wishes.” Where the CAA 

includes express provisions – such as section 110(k)(5) (the SIP call provision) – EPA is 

required to follow those provisions. If there was a mistake in prior SIP approvals as EPA 

contends, section 110(k)(5) is EPA’s sole and exclusive mechanism for seeking to correct 

a SIP that has been determined to be inadequate. (4019, 4866, 4870, 5058, 5083, 5131, 

5140, 5181, 5278, 5317, 5714)

 The EPA’s invocation of 5 U.S.C. 553(e) is legally indefensible. The EPA has 

mentioned no outstanding petition for EPA to revisit its PSD SIP approvals, so section 

553(e) appears to be inapposite. In addition, CAA section 307(d)(1)(B) and the 

penultimate sentence of section 307(d)(1) expressly state that the provisions of section 

553 do not apply to “the promulgation or revision of an implementation plan by the 

Administrator” under CAA section 110(c), which, in practical effect, is the action EPA 

proposes here. Even where section 553(e) applies, it merely directs agencies to allow 

parties to seek revisions of rules; it plainly does not permit agencies to disregard 

procedural requirements – whether under the APA or under organic statutes such as the 

CAA – that agencies must follow in effecting any such revisions. (5317, 5714)

 The EPA’s CAA section 110(k)(6) justification is flawed because section 110(k)(6) 

authority is limited to the correction of technical or clerical errors made in a SIP approval 

and does not allow any unilateral revision by EPA of substantive provisions or any 

changes to the nature or terms of a SIP that EPA has approved in the past. (2797, 4019, 

4866, 4870, 4989, 5039, 5083, 5133, 5131, 5140, 5179, 5181, 5279, 5317, 6414)

 The type of action EPA wishes to undertake can only be taken through a SIP call under 

section 110(k)(5) of the CAA, although that section is not applicable in this situation 

because SIPs that incorporate the CAA applicability thresholds are not inadequate to 

“comply with any requirement of the Act.” (4106, 4691, 4870, 5058, 5140, 5181, 5278, 

5317, 6414)

 If EPA wishes to pursue its current regulatory strategy, it could amend the minimum PSD 

SIP elements in 40 CFR 51.166 and allow states to develop and submit SIP revisions in 

accordance with those new provisions. (5182, 5317)

 The EPA’s retroactive limitation on its prior approval of the SIPs is not being done to 

correct a mistake – even EPA does not claim its approvals were in error at the time it 

promulgated them. Rather, the Agency is trying to change the SIPs now to avoid 
57

substantive and timing problems it has created by its own deliberate actions. (4870, 

5058, 5131, 5140, 5181, 5278, 5317, 6414)

 The EPA is not proposing to correct any “error” “in the same manner” as it made its 

approval. The proposed Tailoring Rule in effect proposes a blanket limitation on all past 

approvals; EPA is not issuing an individualized new proposed approval (or disapproval) 

action for each SIP that had been the subject of an individual EPA notice-and-comment 

SIP approval proceeding. A SIP call is the proper procedure to address any alleged 

inadequacies in state resources. (2797, 4989, 5181, 5317)

 In Concerned Citizens of Bridesburg v. EPA, 836 F.2d 777 (3d Cir. 1987), the court held

that EPA’s attempt to rescind SIP revisions that EPA had approved 13 years earlier 

because EPA claimed its original approval was in error, when in fact the SIP provisions 

were no longer consistent with EPA policy due to an intervening change in that policy, 

was not an inadvertent mistake that would justify a unilateral change in disregard of 

procedural requirements for SIP revisions. (This case took place before enactment of 

section 110(k) of the CAA.) See also Detroit Edison Co. v. EPA, 496 F.2d 244, 248-49 

(6th Cir. 1974) (a proposed clarification by EPA of a SIP several months after 

promulgation was not in fact a clarification but a revision because it effected substantive 

change). (4870, 5080, 5140, 5181, 5278, 5317)

 The EPA’s invocation of section 110(k)(6) establishes a troubling precedent that 

undermines the role of states under the CAA. The EPA’s approach is unguided by any

standards, criteria, or precedent. States and regulated sources would no longer have 

confidence that they could rely on approved SIPs, safe from EPA’s revision of those SIPs 

whenever the Agency decides – on any grounds it chooses or no grounds at all – that its 

prior approval had been an “error.” Under this interpretation of section 110(k)(6), EPA 

could dispense entirely with SIP calls under section 110(k)(5) and the states’ role in SIP 

revisions, which was clearly not what Congress had in mind when it enacted section 

110(k). The EPA’s approach seriously undermines the carefully crafted federal-state 

partnership the CAA creates, which assigns states the primary role in designing SIPs, 

while giving EPA a more limited, reviewing role. (4870, 5039, 5140, 5181, 5278, 5317)

 The EPA's approach to ask states to quickly revise their SIPs to comport with the 

increased significance thresholds is likely to be challenged by activist groups citing the 

CAA's anti-backsliding provisions, which limit relaxation in certain rules. Under EPA’s 

interpretation of PSD applicability, once the section 202 rule requires PSD to apply to 

GHGs, the existing thresholds contained in SIPs could be alleged by activist groups to 

become binding on GHGs under the anti-backsliding arguments that these groups are 

currently advancing in various court cases. Thus, even if a state wanted to revise its 

regulations similar to the federal Tailoring Rule and, thereby, relax the threshold, the 

anti-backsliding provision might prevent it. (5140, 5181, 5278, 5713)

 The EPA should exercise all available legal authority to ensure that SIPs come into 

conformity with the Tailoring Rule. Instead of taking no action other than to limit 

approval of SIPs, EPA should mandate or strongly encourage states to revise their PSD 

rules to reflect the higher thresholds. This could be accomplished through an expedited 

SIP call or by conditioning section 105 grant funding on appropriate revisions to the PSD 

rules in SIP-approved states. (4691)

 The EPA is ignoring the fact that it will take time for the states to amend their laws and 

regulations to accommodate the revised applicability thresholds. It will be of little help 
58

for EPA to quickly amend the SIP because states will still be bound to implement their 

underlying programs until corrections can be made. For sources, this means no relief 

from the statutory thresholds for a lengthy time after GHGs become regulated. (4019, 

4095, 4866, 5080, 5083, 5084, 5131, 5133, 5140, 5179, 5278, 5317, 16411)

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.

An environmental commenter (5306) believes that EPA and the states should collaborate 

on an expeditious, smooth transition in carrying out obligations to address GHGs under the PSD 

and title V programs. The commenter believes it is reasonable for EPA to call for a SIP revision 

under section 110(k)(5) with an expeditious deadline for states to submit corrective plan 

revisions. Further, according to the commenter, EPA can ease state adoption of PSD permit 

program revisions and expedite EPA’s own review and approval of the states’ adjustments by

adopting model guidelines to help inform state rulemaking. The commenter recommends that 

EPA should promptly start the process with the aim to complete it by the end of 2010. The same 

basic framework and timelines can apply to the title V permit program and state administration 

of corrective adjustments. See 42 U.S.C. § 7661a(i).

Many commenters (4019, 5083, 5140, 5179, 5181, 5278, 5317, 5714) raised the same 

objections to our proposed use of CAA section 301(a) and APA section 553 authorities to limit 

our approval of previously fully approved title V programs as were summarized above in relation 

to the proposed use of these authorities to limit our approval of SIPs. They also expressed the 

same concerns related to the timing of changes to state title V laws and regulations. The 

comments on SIPs related to CAA section 110(k)(6) do not apply to the proposed action on title 

V programs.

Response:

We appreciate these comments. As explained in the preamble to this final rule, we are 

not finalizing our proposal to narrow our approval of the PSD SIPs or federally approved title V 

programs. Instead, it is our understanding that many states will be able to interpret their PSD 

SIPs and title V programs to accommodate the Tailoring Rule. If some states are not able to do 

so, then we may, in the future, take action to finalize narrowing our approval of SIPs and/or title 

V programs. As a result, we will not respond to these comments in this rulemaking, but if, in the 

future, we consider taking action to narrow our approval of PSD SIPs or title V programs as we 

proposed, then, in that action, we would respond to these comments.
59

Chapter 4. Comments on Streamlining Options and Tools To 

Address the Administrative Burdens of PSD and Title V for GHGs

4.1 General Comments on Permit Streamlining Options for PSD and Title V

Section VII of the proposal preamble for the Tailoring Rule presents several PSD and 

title V permitting streamlining options/tools. Though we acknowledged that these techniques 

could not be fully developed in the near-term, we committed to aggressively pursuing the 

development of these streamlining techniques in the first step of our overall PSD and title V 

GHG permitting strategy and solicited comment on our proposed streamlining techniques as well 

as other techniques that could be employed. This subsection presents the general comments 

received on the use of streamlining techniques to mitigate potential PSD and title V permitting 

burdens that would be associated with regulating GHGs under these permitting programs. 

Comment:

Several commenters (2369, 2504, 2797, 3003, 4515, 4691, 4746, 4767, 4800, 5052, 5056, 

5079, 5083, 5086, 5131, 5143, 5280, 5301, 5313, 5346, 5347, 5391, 5417, 5740, 8461) support 

the use of streamlining options and tools to address the administrative burdens of the PSD and 

title V programs for GHGs. Some supporting commenters gave suggestions about possible

streamlining techniques and/or options, while others expressed concerns, or provided comments 

on the timing of our proposed streamlining options. Examples of these comments are provided 

below.

General Support

 EPA should consider any and all streamlining including the use of general permits, 

permits by rule, electronic permitting, workshops, on-line electronic compliance tools, 

and other streamlining options. (2369, 5056, 5086, 5391)

 A public process should be developed to address permit streamlining approaches to 

include general permits, permit by rule, and presumptive BACT for GHGs. (5301)

 The Agency should continue to pursue efforts to streamline title V and NSR permitting, 

including BACT determinations. (5083)

General Concerns

 While streamlining options contemplated by EPA may provide limited relief, there is still 

a very real concern that the Tailoring Rule will significantly increase regulatory and 

administrative burden (putting U.S. facilities at a competitive disadvantage) without a 

corresponding reduction in emissions. (5236) 

 The streamlining approaches are vague: (1) there is no mechanism described in the rule 

for how they will be implemented, and (2) they have not been proven to work in practice. 

For these reasons, the commenter believes the streamlining options should be evaluated 

before the rule is promulgated to determine which approaches are feasible, after which 

the satisfactory options can be promulgated through rulemaking. (5788)
60

 While EPA has indicated that it intends to reevaluate the requirements for smaller sources 

and consider streamlined permitting options such as general permits, any such options for 

sources with less than 25,000 tons of GHG emissions will most likely impose substantial 

regulatory burdens with little, if any, environmental benefits. (5236)

 The other NSR Reform flexibility mechanisms designed to lessen the burden of PSD will 

not be available to streamline GHG permitting because they have not been fully adopted 

into many SIPs and were not designed with GHGs in mind. (5143)

Many commenters made suggestions on the mechanisms and timing to put streamlining 

techniques in place. Examples of these comments are provided below.

Mechanisms

 EPA should implement these options by rule and not guidance as many states cannot 

implement EPA guidance (2504). 

 EPA should provide equipment specific permitting templates as models for monitoring, 

recordkeeping, and reporting requirements. (4154) 

 EPA should develop streamlining techniques for common combustion sources, such as a 

boilers and turbines using natural gas fuel to minimize the amount of application 

preparation time and agency review time associated with obtaining permits for these 

types of sources. (5130) EPA should identify emission units fired with fuels with broad 

cross-sector applicability as priority sources for information compilation and publication. 

For example, boiler, process heaters, reciprocating engines, and combustion turbines 

should be considered as high priority sources. EPA should also identify priority sources 

based on fuel type and emission units – e.g., coal, oil and natural gas for boilers, natural 

gas for combustion turbines, diesel and natural gas for reciprocating engines. (4515, 

4691)

Timing

 EPA’s proposed streamlining techniques would not be in place in time to avoid the 

potentially devastating impact on their U.S. operations. (4632, 5417) One of these 

commenters added that these techniques will be less effective than establishing thresholds 

at more appropriate levels. (4632) 

 EPA must provide a more detailed explanation of possible “streamlining” approaches 

before using them as part of the justification for adopting the Tailoring Rule. The 

streamlining approaches proposed by EPA are complex and likely to be controversial, 

thus, if EPA intends to pursue such ideas it must do so in a more deliberate and 

systematic way and in light of previous rulemakings, remands, and vacaturs. (5058, 

4863, 5064, 5305) 

 EPA should have all streamlining techniques finalized by the start of the program (i.e., 

before sources are regulated for GHG). (2797, 4746, 5086, 5347, 5391)

 EPA should expeditiously finalize its streamlining options. (2504, 2797, 8405)

 EPA should allow more time to resolve critical implementation issues. (5417). 

 EPA should install measures to expedite permitting, such as pre-approving certain 

equipment or processes. (3003) 
61

 EPA should make clear that the intent of its proposed approach is to impose, over time, 

some type of BACT requirement on all GHG stationary sources in the U.S. that emit or 

have the potential to emit GHGs above 250 tpy – that EPA’s streamlining approaches do 

not offer a complete or permanent solution to the problems associated with regulating 

multitudes of sources under PSD and making even more such sources subject to title V 

requirements. (5317)

 EPA should structure a first phase program with minimal impact to the regulated 

community, allowing reasonable time for the regulatory environment surrounding climate 

change to mature, and during this period, EPA should work with state and other 

regulators to eliminate patchwork regulations, and create a greater focus on cost-effective 

and consistent programs to regulate GHG emissions. (4746, 4951)

 EPA should develop a first-phase threshold that reflects a true major source, but allows 

enough sources to enter the program so EPA can evaluate the "pros and cons" of bringing 

GHG into the PSD and title V programs is needed. (4863, 5064, 5305)

 EPA should phase in title V requirements over the 5-year renewal process to even out the 

workload. (4154)

Legality of Our Proposed Streamlining Techniques

Many commenters made general comments about the legality of our proposed 

streamlining techniques. Examples of these comments are given below.

 The "streamlining" procedures that EPA is considering are of questionable legality and 

effectiveness (5129, 5179, 5417, 5317) or conflict with the plain language of the CAA. 

(4118, 5140, 5278, 5317)

 One of these commenters adds that, as a minimum, EPA should postpone any actions that 

may trigger PSD and title V requirements for GHGs until it has invested the time 

necessary to conduct a more thorough assessment of the workability and defensibility of 

its proposals. (5317)

 Redefining PTE to mean actual emissions would allow many sources to avoid the 

classification as "major" emitting facilities, but the statute specifically defines the PSD 

and title V applicability thresholds in terms of PTE. (5129) 

 There is no explicit authority in the CAA's PSD provisions for "general permits" or 

"presumptive BACT" determinations. In fact, as EPA acknowledges, these options 

would appear to conflict with the CAA section 165, which requires a "public hearing" on 

each PSD permit (5140, 5278, 5129), and section 169, which requires BACT to be 

determined for each major source on a "case-by-case" basis (5140, 5278, 5129, 5317). 

Two of these commenters also added that the proposed streamlining methods conflict 

with the CAA’s air quality monitoring requirements. (5140, 5278) 

 It is ironic that EPA proposed in the Tailoring Rule the utilization of standard permits 

(i.e., general permits) and permits-by-rule as streamlining options for PSD and title V 

permitting considering that EPA recently proposed to disapprove various aspects of the 

Texas air permitting program because EPA was adamantly opposed to the notion of using 

standard permits and PBRs to permit major source emissions. (5179)

 The only possibility of streamlining requires extensive and significant changes to the 

actual regulatory framework. (8025) 
62

Response:

We agree with those commenters who support using streamlining techniques to mitigate 

the potential PSD and title V permitting burdens. Nothing in the opposing comments has 

persuaded us that we should abandon our streamlining efforts. To the contrary, the strong 

support for these efforts shown by many commenters reinforces our intention, as stated in the 

proposal, to move forward with the approaches as an integral part of our phase-in approach. 

However, because the uncertainty surrounding the streamlining approaches and the concerns 

expressed by some commenters, we are not committing to finalize rules on any particular 

approach, but we do plan to explore all streamlining options as expeditiously as possible, 

beginning immediately and proceeding throughout the phase-in period, and we encourage 

permitting authorities to do the same. We commit to consider a wide array of possible 

streamlining measures, and we commit to propose and take comment on, in the step 3 

rulemaking, a set of those measures that we determine are viable to pursue further. 

For these reasons and since we will need to collect significant category-specific data for 

source and emission unit types that have heretofore generally not been regulated by the CAA

(e.g., furnaces, water heaters, etc.), we are not making a conclusion as to whether any

streamlining options will or will not be feasible for any sources, especially smaller sources, 

and/or if a particular option will be available at a certain time. 

We disagree, however, with the commenter that suggested that “while streamlining 

options contemplated by EPA may provide limited relief, there is still a very real concern that the 

Tailoring Rule will significantly increase regulatory and administrative burden” because while 

implementation of steps 1 and 2 – which will cover larger sources -- will pose implementation 

challenges, and some of the streamlining tools could assist with meeting these challenges, we 

have assessed the burdens associated with GHG permitting and have established a phase-in 

schedule that represents a manageable workload, even in the absence of streamlining techniques. 

In addition, no sources under 50,000 tpy CO2e will be regulated before April 30, 2016. Thus, we 

also disagree with the commenter that stated that “EPA should make clear that the intent of its 

proposed approach is to impose, over time, some type of BACT requirement on all GHG 

stationary sources in the U.S. that emit or have the PTE GHGs above 250 tpy.” 

Consistent with our phase-in approach, it is important for us to consider whether, at some 

point during the implementation of step 2, it will become possible to administer GHG permitting 

programs for additional sources. For example, if EPA is able to promulgate measures that 

streamline programs to at least some extent, if permitting authorities increase their resources, or 

if implementation experience and more seasoned staff results in more effective use of scarce 

permitting resources, then we expect that we will be able to phase-in the application of PSD and 

title V to more sources by establishing step 3. We do not have enough information now to 

establish a final step 3, particularly because there will be significant transition occurring in the 

GHG permitting programs during steps 1 and 2. However, we believe that it will be possible to 

develop a record on which to base step 3 sometime soon after we begin to implement step 2. 
63

Therefore, we plan to propose a rule in which we solicit comment on or propose lower 

thresholds for PSD and title V applicability, and we establish an enforceable commitment to 

finalize a rule in which we address those matters by July 1, 2012. In order to provide a year for 

permitting authorities and sources to prepare for any additional GHG permitting action in Step 3, 

we will establish that step 3 would take effect on July 1, 2013. We also commit to explore, 

between now and the step 3 proposal, a wide range of streamlining options. In the proposal, we 

will take comment on streamlining approaches we think may be viable (except to the extent we 

will have already issued guidance documents concerning streamlining approaches), and we will 

address those options in the final rule. 

In addition, as part of the step 3 action, we may solicit comment on a permanent 

exclusion of certain sources from PSD, title V or both, based on an “absurd results” rationale. 

For example, we may make a final determination that under the “absurd results” doctrine, PSD 

and/or title V do not apply to a set of GHG sources that, although above the statutory thresholds 

for those programs, are too small and relatively inconsequential in terms of GHG contribution. 

Another type of such exclusion for the title V program could be for sources that would otherwise 

be required to obtain an “empty permit,” that is, for example, one that would not contain any 

applicable requirements because there are none that apply to the source. If we promulgate a 

permanent exclusion, we may conclude that by that time, we will have brought into the PSD and 

title V programs the full set of sources that would be consistent with congressional intent (or, if 

congressional intent on that point is unclear, with a reasonable policy consistent with statutory

requirements), and, under those circumstances, we would find that such a rule brings the 

tailoring process to a close. The application of the “absurd results” rationale for a permanent 

exclusion is discussed in more detail in section V.B. of the final rule preamble.

Regarding those comments about other possible streamlining techniques that were not 

part of this proposal, such as NSR reform mechanisms, we are not making a decision about 

finalizing these options at this time. We would likely want to explore, through a notice and 

comment process, which of these measures is viable to pursue further. These comments, 

including any opinions about the legal and policy direction we must take regarding these 

streamlining options, will be addressed in the action(s) where we might apply them.

4.2 Redefining “Potential to Emit”

At proposal, we proposed an approach to establish PTE calculation methods (and 

redefining PTE) for various categories of sources that emit GHGs. Potential to emit, or PTE, is 

defined as the maximum capacity of a source to emit any air pollutant under the source’s 

physical and operational design, including legal limitations on emissions or hours of operation. 

Many sources have no legal limitations on operational conditions that affect their PTE 

calculation, such as their hours of operation, and as a result, they are treated as if they operate 

continuously (24 hours per day, 7 days per week, totaling 8,760 hours per year), even when they

do not actually do so. As a result, basing the applicability thresholds on PTE rather than actual 

emissions has the potential of sweeping enormous numbers of sources into permitting programs 

that would otherwise not actually emit close to the applicability thresholds. Thus, many GHG 

emission sources will find that they can establish legally and practically enforceable limits on 

their operational parameters to limit their PTE, that will allow them to avoid major source status, 
64

and thus major source permitting. Sources that do not operate anywhere near the 8,760 hours per 

year typically assumed in PTE calculations and whose actual emissions are below major source 

applicability thresholds would be candidates for such PTE limits.

We requested specific comments on experience with limiting PTE by rule rather than 

through individual permits, considerations in phasing-in this approach, and identification of 

categories that might benefit from the use of rules limiting PTE. Comments received are 

presented in this subsection.

Comment:

Several commenters (4298, 4513, 4696, 5078, 5079, 5111, 5130, 5183, 5224, 5711, 7026, 

8461) support the idea of redefining “potential to emit.” The reasons for their support include: 

 The option to limit GHG PTE by rule rather than through individual permits is a good 

idea. (5130) Voluntarily limiting PTE would limit the PSD and title V programs to 

sources whose actual emissions are likely to be greater than the major source threshold 

for CO2e. (4691, 5078, 5079)

 Allowing sources to refine facilities' PTE to be closer to expected actual emissions is a 

good idea, particularly for sources where actual emissions are demonstrated to be 

substantially lower than a traditional calculation of PTE would indicate. (4696, 5079, 

5111, 5711) This approach will be consistent with EPA’s GHG Mandatory Reporting 

Rule (4696, 8461) and some of the source categories that could benefit from this 

approach could be residential and commercial furnaces. (5711).

 If “actual” historical emissions are not used, EPA should reinstate historic policies for 

both the PSD and title V programs that allow sources and states to presume “synthetic 

minor” status for sources whose historic emissions are less than 50 percent of “major 

source” levels. A previous title V interpretation allowed a transition period for permitting 

title V sources whose historic actual emissions were less than 50 percent of major source 

thresholds to be treated as minor sources, regardless of their PTE. [See ,e.g., J. Seitz and 

R. Van Heuvlin, “Options for Limiting the Potential to Emit (PTE) of a Stationary Source 

Under Section 112 and Title V of the Clean Air Act” (Jan. 16, 1995); J. Seitz, Calculating 

PTE for Emergency Generators (Jan. 16, 1995); J. Seitz, Calculating Potential to Emit 

(PTE) and Other Guidance for Grain Handling Facilities) (Nov. 14, 1995)]. The 

commenter argues that these policies remain sound for both PSD and title V permitting, 

are within EPA’s discretion, and will reduce burdens significantly during the early phases 

of title V and PSD permitting of GHG sources. (5111, 5470)

 EPA should evaluate opportunities to interpret and define PTE for GHG emissions such 

that they approach, if are not equal to, actual emissions, similar to EPA’s approach to 

estimating PTE for emergency generators which recognizes inherent limitations in how 

such equipment is intended to be operated. (5224)

 EPA could establish a rule or policy establishing PTE for GHGs based on actual 

emissions, where sources that can demonstrate that their GHG emissions are below 

75 percent of the major source thresholds could be treated as synthetic minor sources. 

(5224)

 In crafting PTE definitions, it will be important to allow for the entry of new 

technologies. Taking a functional approach should help in this regard. (5711) 
65

 For certain equipment, a commenter supports the proposal to develop “prohibitory rules” 

that would preclude operation during a certain number of days per year, and allowing 

flexibility by offering a streamlined method to allow a source to operate for longer hours 

upon request to the permitting agency. (5711)

 One commenter supports the proposal to define furnaces and similar heating equipment 

to include the thermostat to which they are attached, which constrains them from 

operating in warmer weather. The commenter also suggests that a similar definition 

could be used for natural gas-fired water heaters, both conventional and tankless models, 

to recognize their intermittent operation. Tankless natural gas water heaters operated in 

conjunction with solar water heating could be defined to recognize the operational 

constraint that keeps the natural gas heater from turning on during a certain percentage of 

the time (based on minimum number of sunny days for example). (5711)

 Any redefinition of PTE should include provisions for crediting existing facility offsets of 

GHGs, especially CO2. (5183)

Various commenters (3278, 4515, 4691, 5073, 5135, 5198) did not explicitly support or 

oppose the idea of redefining “potential to emit,” but provide suggestions for “redefining PTE.” 

These suggestions include:

 EPA should clarify that the proposed Tailoring Rule does not preclude a source from 

pursuing a source-specific PTE limitation, as opposed to general or sector-wide PTE 

limitations. If sector-specific PTE is defined or needs to be defined, EPA could consider 

average utilization profiles, especially for the natural gas industry. (4515, 4691) 

 Restrictions based on expected “real-world” operating conditions may be helpful to some 

industries, but do not appear to be applicable to natural gas transmission facilities. 

Federal Energy Regulatory Commission (FERC) requires pipelines to build and operate 

systems that are capable of meeting peak demand days, and thus have the potential to 

emit far more GHGs than are emitted in practice. For that reason, FERC requirements 

could prevent pipelines from accepting facility-specific operational limitations, as 

suggested by EPA, in order to reduce PTE. In addition, with the increased use of natural 

gas as both a heating and cooling fuel source, natural gas providers are less able than 

other industries to take on seasonal limitations. (4515, 4691) 

Several commenters (3916, 4120, 4238, 4239, 4696, 4860, 4949, 5129, 5306) oppose the 

idea of redefining “potential to emit.” The reasons for their opposition include: 

 The statute specifically defines the PSD and title V applicability thresholds in terms of 

PTE (4949, 5129, 5306) and any future efforts to reduce the scope of PSD and title V 

through re-defining PTE risk running afoul of the text of the CAA. (5306)

 Alterations to the current practice for calculating PTE will upset longstanding policies 

and procedures in NSR permitting guidance and will affect all of the regulated NSR 

pollutants. (3916, 4238, 4239, 4860, 4949)

 EPA’s proposal of limiting PTE by undertaking federally enforceable restrictions on 

operating hours or design operating parameters could potentially affect natural gas 

facilities by contradicting compressor station’s obligations to its customers under the 

FERC certificate. FERC regulations require compressor stations to be “available” to 

meet peak demand as defined in its certificate to ensure that construction and operation of 

natural gas facilities are in the “public convenience and necessity” and are in compliance 
66

with all applicable regulations. Therefore, the commenter concludes that, unless EPA has 

an explicit exemption for such natural gas facilities to exceed its “redefined” PTE to meet 

FERC requirements, the EPA tailoring proposal to redefine the PTE will not be a 

functional option. (4120)

Response: 

We are not making any final decisions on redefining PTE at this time. We will take these

comments into account during the development of any streamlining techniques during step 3 of 

our phase-in approach. 

4.3 Presumptive BACT

The proposal preamble informs that CAA section 165(a)(4) requires that sources subject 

to PSD implement BACT for each pollutant subject to regulation under the CAA, and that CAA 

section 169(3) requires that BACT emissions limits be determined on a case-by-case basis that 

reflects the use of state-of-the-art demonstrated control technology at the time of the permit 

action. We acknowledge that determining BACT for a particular source can often be a 

complicated, resource-intensive, time-consuming, and sometimes contentious process. In order 

to streamline the BACT process for GHG sources that will be brought into the PSD program, we 

proposed a system under which permitting authorities can make BACT determinations for 

common types of equipment and sources, where they can apply those determinations to 

individual permits with little to no additional revisions or analysis, known as “presumptive 

BACT.” The proposal preamble solicited comment on the use of presumptive BACT limits with 

the PSD program, including our authority to do so, whether there is a need or value for such an 

approach, and suggestions for how such limits could be established, updated, and used 

consistently within the requirements of the CAA, or by departing as little as possible from those 

requirements. This subsection presents comments received on the “presumptive BACT” 

approach as an option to streamline the BACT determination requirement under PSD for GHG 

emission sources.

Comment:

Several commenters (3858, 3919, 4120, 4140, 4154, 4238, 4239, 4512, 4521, 4526, 4747, 

4860, 4749, 4767, 4800, 4866, 4949, 4989, 5039, 5052, 5058, 5061, 5078, 5079, 5084, 5113, 

5130, 5131, 5135, 5198, 5224, 5276, 5280, 5301, 5313, 5338, 5346, 5391, 5711, 5742, 5714, 

5922, 6458, 6681, and 7935) support the use of presumptive BACT as a streamlining option. 

The reasons for their support include:

 Presumptive BACT could be a helpful approach to ensuring consistency in the 

application of PSD to stationary sources of GHGs. (5276)

 The use of presumptive BACT would be helpful for common combustion sources such as 

boilers, process heaters, and combustion turbines (5130). 

 The use of presumptive BACT is justified for the natural gas combustion sector because 

of the clean and efficient characteristics of natural gas and the unavailability of “add-on” 

control technologies to mitigate GHGs. (5058) 
67

 Presumptive BACT for GHG emissions from combustion sources should be temporarily 

defined while EPA takes the time to develop essential GHG guidance through 

rulemaking. This will allow states time to make adjustments to their state rules. (4521)

Supporting commenters also offer suggestions for implementing the presumptive BACT 

streamlining technique or for moving forward with regulating GHGs without presumptive 

BACT. Their suggestions include:

 EPA should pursue presumptive BACT determinations by source category (4747, 4860). 

One of the commenter adds that some of the source categories to include are: emergency

units and seasonal combustion sources such as furnaces. (4747)

 EPA should establish fuel- and technology-specific performance based (i.e., carbon 

intensity) presumptive BACT standardsfor each category of anticipated major sources. 

(EPA has used a similar approach to establish “presumptive Reasonably Available 

Control Technology [RACT]” standards under the Control Techniques Guidelines [CTG]

program under the statute). Further, the commenter adds that sources should have the 

option of applying presumptive BACT or case-by-case BACT. Under such a program, 

consistent with its precedent, EPA should evaluate a source as it is proposed and should 

not require a source to change fuels or alter the basic engineering design as a BACT 

control option or alternative. EPA would retain the authority to update any presumptive 

BACT standard as it gains information. Any future changes in BACT standards should 

not apply to sources with applications deemed complete prior to any changes in the 

standard. (4298)

 BACT for GHG emissions should be commercially-accepted, presently in use, and 

technologically complete. The commenter recommends that BACT apply at the specific 

source level (i.e., industrial boilers). Requiring facilities to install BACT for major 

modifications at the facility level would create unnecessary burdens on industrial 

facilities. (5236)

 The approach should be flexible enough such that the owner can still make a case-by-case 

BACT demonstration for a given project if needed (4140, 5113, 5130, 5131, 5313, 5714, 

5922) or more stringent controls are warranted (4694, 5314). Two commenters add that 

sources must continue to be allowed the opportunity to address environmental, energy, 

and economic considerations. (5113, 5714)

 EPA should recognize and accommodate inherent differences in GHG emissions from 

sources within a source category due to different designs, technologies, and source 

configurations. (5224)

 EPA should wait until it has obtained sufficient data from the final GHG Mandatory

Reporting Rule to decide which sectors EPA should prioritize in regards to presumptive 

BACT. Presumptive BACT for GHGs and the traditional BACT review process should 

rely on the use of sound data to determine which industrial sources are the largest 

emitters for GHGs, for which EPA should prioritize. (5922)

 EPA should apply cost-effectiveness criteria for GHG emissions in a manner that reflects 

commercially available technologies and that is consistent with carbon prices in existing 

markets and expected under currently pending federal legislation. The commenter 

believes that, at the present time, a carbon reduction cost-effectiveness in the range of 

approximately $10/ton CO2e would be a reasonable benchmark. The cost-effectiveness 

range should be updated on an ongoing basis as market prices change, and EPA obtains 
68

information regarding the cost of various carbon reduction strategies and the commercial 

feasibility of technology options. Furthermore, EPA should provide by regulation that 

the cost effectiveness range is to be applied by permitting authorities in evaluating BACT 

on a case-by-case basis and that control costs exceeding that range would be 

presumptively economically infeasible. (4298)

 EPA should set each BACT standard (whether presumptive or case by-case) on a 

pollutant-specific basis. The commenter adds that the applicability and BACT-setting 

functions will establish the performance expectations of each source. Once the permit’s 

performance requirements are so established, then the commenter recognizes that there 

may be both economic and environmental benefits of providing the source the option of 

meeting the permit requirement by averaging (or trading) across the full range of GHGs 

and, as appropriate, across or outside the facility. The commenter adds that providing 

such compliance flexibility would provide EPA with valuable experience in a transition 

to a national emissions trading program because it would develop the necessary

accounting protocols and enforcement tools to underpin such a program. (4298)

 Compliance flexibility will be critical to the success of the BACT program (whether 

presumptive or case-by-case). The commenter believes that any facility with equipment 

subject to BACT should have the option of demonstrating compliance with the 

presumptive BACT standard at the affected equipment on an annual average performance 

basis. The commenter adds that EPA can make a formal finding, subject to notice and 

comment, that available offsets exist to provide sufficient cost containment, and the 

facility should have the option of purchasing compliance credits from an EPAadministered reserve credit pool at a predetermined price that reflects EPA’s upper bound 

cost-effectiveness for BACT determinations. (4298)

 Any presumptive BACT mechanism must be subject to an open and transparent process 

with ample opportunities for public review and comment. (5742)

 The BACT determination must include consideration of the intended purpose and use of 

a facility. For example, a facility being constructed or modified that is intended to serve 

as a peaking facility will have different emissions and economic constraints than a 

baseload facility, and those factors must be considered in the BACT determination 

process. (5079)

 Imposing even “streamlined” individual PSD permits and BACT on natural gas 

equipment changes but not on electric resistance equipment would effectively create a 

perverse incentive for customers to switch from natural gas to electric equipment. To the 

extent this occurs, there would cause an overall increase in GHG emissions, contrary to 

congressional intent to decrease emissions. (5711)

 Fuel-switching should not be considered as a control technology during BACT review 

with regard to new electricity generation facilities. A company proposing to build a new 

natural gas-fired combined cycle facility should not be required to consider wind 

generation in a BACT analysis. (5079)

 EPA should coordinate its thinking on BACT with the U.S. Department of Energy (DOE)

on energy efficiency requirements for various kinds of energy consuming equipment. 

(5338) 

 Landfills are particularly suited to presumptive BACT, and BACT for new sources 

should be congruent with the applicable NSPS subpart WWW requirements (5276, 5391) 

and for existing sources congruent with the Emission Guideline standards (5276).
69

 BACT should not be used as a means to drive technology development. (5079).

 EPA and the states must make sure that presumptive BACT determinations do not 

become dated, and then the burden would shift to owners and operators that did not elect 

one of the presumptive BACT technologies to demonstrate why none were technically

feasible or economically available. (5052)

 EPA should slow down the promulgation of the rule to allow carbon capture/storage 

technology to develop. (5789)

 Because BACT for calcination emissions will be demonstrated to be “no additional 

controls,” the only way a lime plant could avoid PSD review would be to make less lime, 

thereby eliminating the incentive to invest in energy efficiency projects. (5133) The 

proposed rule fails to address emissions from industries that emit CO2 as a byproduct of 

the chemical reaction inherent in the process. Failure to address these process emissions 

is significant as more than one-half of GHG emissions from lime plants come from 

calcining limestone. If calcination emissions are subject to the PSD program, then lime 

plants will be discouraged from undertaking energy efficiency projects that would 

otherwise reduce GHG emissions. Energy efficiency projects reduce fuel consumption, 

GHG combustion emissions, and emissions of other criteria pollutants. However, some 

of these very same energy efficiency projects present the potential to increase lime 

production and, therefore, increase related calcination emissions. 

 EPA can guide the analysis of BACT by providing information that EPA currently 

collects in the RACT/BACT/lowest achievable emission rate (LAER) clearinghouse 

(RBLC) (such as type of facility, size, other pollutants, process constraints, region of 

the country, fuels, etc.), and sources will have to select one of the presumptive 

technologies or demonstrate that none is effective through the customary case-bycase analysis that is currently performed. (5052) EPA should update the RBLC that 

is the basis for most (if not all) BACT determinations. (4238, 5084)

 Consistent with existing policy and regulations, BACT for GHGs should be limited 

to the new or modified emission units. (5079)

 Natural gas is not an option for many large sections of the country because of the 

absence of infrastructure to deliver natural gas. (Commenter provides detailed 

rationale for this position). (5052)

 BACT reviews should use thermal efficiency as a comparable metric because it will 

encourage GHG reductions. However, many factors affect thermal efficiency, and 

all plants experience some degradation in thermal efficiency over the life of the 

plant. 

 At the current time, Integrated Gasification Combined Cycle (IGCC) is not yet 

available as a broad and commercially-demonstrated retrofit BACT technology. 

(4749, 5052, 5079, 5301) 

 Carbon Capture and Sequestration (CCS) is not BACT. (5052, 5224) Another 

commenter agrees that CCS is not BACT currently, although it might be in the 

future if it is demonstrated to be technically-feasible. (5079)

 Presumptive energy efficient BACT measures should include the following (the 

commenter appended very extensive information on efficiency projects): (1) Energy

Audits, (2) ENERGY STAR© Products, (3) Weatherization, (4) Variable 

Speed/High Efficiency Motors, (5) LED Traffic Lighting for Municipalities. (5052) 
70

 Some maintenance measures should be exempt from PSD (5052, 5078, 5079). One 

of these commenters adds that, at a minimum, EPA must identify a list of activities 

at power plants that would be presumed to be routine maintenance, repair, and 

replacement (RMRR) unless unique conditions demonstrate otherwise. (5078)

 The tradeoffs between regulating GHGs and criteria pollutants should be addressed. 

For that reason, EPA’s presumptive BACT determinations must include guidance on 

the impacts of GHG mitigation on conventional pollutant levels. (4515, 4691, 4989, 

6458) 

 BACT should be allowed the flexibility to obtain emission reductions from all 

equipment at the facility as well as from beyond the fenceline (e.g., compliance on a 

generating fleet basis, use of emissions offsets, etc.). (5078) 

 To satisfy the public notice requirements for PSD permits: (1) EPA can publish 

BACT guidance and periodic BACT updates in the Federal Register pursuant to the 

administrative procedures in section 307 of the CAA for notice-and-comment 

rulemaking, (2) permitting authorities can publish in the newspaper or on their 

websites lists of sources in the state that have applied for construction (or title V) 

permits and/or revisions, as is currently done by most states, and (3) EPA can 

publish model permits which have these BACT alternatives imbedded through 

notice-and-comment rulemaking, and sources could opt into the permits by rule just 

as current sources utilize general storm water permits and other general permits 

under the Clean Water Act (CWA). (5052) Another commenter (5078) adds that 

presumptive BACT can be developed through notice-and-comment rulemaking, but 

permitting authorities should allow public comment on individual permits as to 

whether there are significant case-specific impacts that would require adjustment of 

BACT for that particular source. 

 Should there be no presumptive BACT established, the EPA should issue the permit 

without consideration of a full BACT analysis. (4120) The commenter points out that 

this does not mean the facility would propose older and inefficient equipment, rather, it 

would base presumptive BACT on existing operational and environmental 

considerations. For the natural gas sector, for example, a permit could be issued without 

a full BACT analysis as follows:

o BACT for CO2 emissions = Good Combustion Controls.

 Considering there are no pilot or commercial demonstration of end-of-stack CO2

controls (including CCS) for turbines in natural gas pipeline operations, the 

BACT for the unit will be good combustion practices that optimize NOx and 

carbon monoxide (CO) (which are by-products of incomplete combustion) with 

CO2 (which is a product of complete combustion). Good Combustion Control 

Practices involve parametric monitoring and controlling the operating parameters 

of the turbine to ensure the unit continually operates as close to optimum 

(minimum emission) conditions as feasible.

o BACT for CH4 emissions = Best Management Practices (BMPs) under EPA Gas Star 

or company specific programs.

 Due to measurement concerns related to fugitive and vented CH4 emissions, the 

commenter urges the EPA not to prescribe quantitative PSD limits or standards 

related to CH4-related emissions. The commenter suggests that EPA could 

instead issue the PSD permit considering work practice programs. For CH4
71

emissions, these could be the company’s operating practice of reducing GHG 

emissions through application of BMPs related to reducing fugitive and vented 

CH4 emissions or the industry-wide work practices as outlined in the Natural Gas 

Star program. 

o Domestic U.S. Offsets = BACT for sources without presumptive BACT.

 The commenter supports the use of offsets and the use of domestic U.S. GHG 

offsets as a “transitional” solution under the Tailoring Rule till EPA finalizes 

presumptive BACT for sources. Offsets are supported as part of the 

nonattainment NSR program and for control of air pollution from the outer 

continental shelf activities. In addition, the commenter states that using offsets as 

BACT would produce the same environmental result at less cost to regulated 

facilities, because offset projects can provide lower cost emission reductions than 

many of the mitigation options otherwise applicable to large sources.

Some commenters (2504, 2731, 2797, 3306, 3512, 3916, 3858, 3916, 4019, 4106, 4118, 

4241, 4512, 4515, 4519, 4555, 4691, 4746, 4749, 4863, 4864, 4866, 4871, 4949, 4951, 4989, 

4990, 5041, 5056, 5058, 5059, 5061, 5064, 5073, 5079, 5084, 5085, 5110, 5113, 5123, 5124, 

5133, 5139, 5147, 5236, 5301, 5305, 5339, 5340, 5443, 5714, 5742, 5863, 6203, 6458, 6681, 

7935, 8025, 8691, 16411) did not explicitly support or oppose the use of presumptive BACT as a 

streamlining option, but they did offer suggestions about the use of BACT and/or presumptive 

BACT in general. Examples of the types of general comments received on presumptive BACT 

streamlining options are included in the following bullets:

 The preamble does not provide enough detail for meaningful comment on presumptive 

BACT. (5113, 5714) The commenters support a public and transparent process to 

address BACT issues generally and presumptive BACT specifically and would encourage 

EPA to provide an opportunity for this public discussion.

 Though the commenter acknowledges that there is an internal workgroup working on 

BACT options for industry, the proposed rulemaking does not address how to establish 

BACT for sources subject to PSD permitting requirements for GHG emissions. The 

commenter asserts that it is difficult to assess the economic impacts of the rule without 

more-detailed information on what would constitute BACT for the metal casting industry. 

(5236)

 Even though the use of presumptive BACT is supported, it is an insufficient streamlining 

tool. The commenter questions whether EPA will be able to make presumptive BACT 

determinations in a timely manner (especially within the next 1-2 years), and is 

concerned that presumptive BACT standards will be vulnerable to legal challenge and 

resulting delays and uncertainty. In addition, presumptive BACT would not alleviate 

other time-consuming aspects of the PSD permitting process, such as the requirement for 

public notice and comment. Ultimately, the hope that presumptive BACT will eventually

make the PSD program feasible to administer is no substitute for reasonable limits on the 

initial scope of the PSD program. (4515, 4691) 

 The EPA should adhere to the time-tested policies and procedures for determining BACT 

and, thus, avoid any requirement to redefine sources in the industry. (5131)

 Statements about “presumptive BACT” in the preamble seem inconsistent with the fact 

that BACT is by statute supposed to be a case-by-case analysis, rather than the imposition 

of national emission standards. (16411)
72

 The application of BACT under this rule should not be expanded beyond the historical 

definition and interpretation of the "affected source" (4106, 5124). BACT analysis 

should be limited to only those sources or units which are being installed or modified 

under a permit. (4106) 

 EPA seems to be suggesting that it could be appropriate, under the rubric of determining 

BACT, to tell a source what type of combustion unit it must build, or what type of fuel it 

may use, or how it must engineer its manufacturing operations to reduce demand for the 

thermal energy or electricity that the combustion unit will generate. Such expansion of 

the statutory requirement to assure that the BACT is used for a particular project, into an 

inquiry by the permitting authority into whether a plant can be designed or operated more 

efficiently, or whether it might be environmentally preferable for the plant to be 

proposing a different kind of project, would be inconsistent with EPA’s statutory

authority, long-standing EPA interpretations and policy, and judicial and Environmental 

Appeals Board (EAB) decisions. (4749)

 EPA should temporarily assume the role of establishing “technical feasibility” for GHG 

control technologies until commercial availability becomes a decided issue. The EPA 

has held that technically feasible BACT is technology which is “available” and 

“applicable and the states should not assume this role initially to avoid a patchwork of 

regulations. (4106)

 Some commenters (4989, 5301, 6681) strongly support the consideration of energy 

efficiency improvements as BACT for GHGs and other pollutants to avoid disincentives 

for efficiency improvements, especially at power plants. Presumptive BACT 

considerations should also include biomass projects, energy efficiency projects, and 

offset projects. (5301) 

 EPA should consider how PSD BACT requirements might be applied and streamlined for 

sources subject to regional or state GHG controls and cap and trade programs. (4118, 

4863, 5064, 5305)

 It is incorrect to claim that insufficient information exists to at least estimate costs and 

streamlining efficiencies of BACT. (5139) 

 BACT development should be a priority for the Tailoring Rule (4951). EPA 

“recognize[s] that considerable work will be needed to determine what options exist for 

controlling GHG emissions from different source categories and the various types of 

emitting equipment they use. (6203)” If no BACT definition is provided, it will be 

difficult to plan for and budget for projects if a potentially significant expense is 

unknown. (4241) 

 Other commenters point out that the fundamental question is, "What is BACT for 

GHGs?" The commenters are concerned that, to date, there is no answer to this question 

(3306, 4515, 4691, 4871, 5110, 5137), including both combustion and non-combustion 

sources. In addition, there are no effective or commonly used add-on controls for 

removing GHG emissions. (4515, 4691, 5123) 

 Presumptive BACT should not include CO2 requirements (and CO2 should be specifically

excluded from presumptive BACT requirements), because there is no BACT for CO2. 

(5183)

Examples of the types of comments received presumptive BACT streamlining options for 

particular industry sectors are provided in the following bullets:
73

 Thermal destruction technology and combined heat and power should be exempt from all 

PSD and title V requirements. (5041)

 EPA should be consistent in its encouragement of the use of biomass as a fuel source. If 

EPA does not specifically exempt the carbon neutral emissions from these processes from 

the applicability determination, it is likely that fuel switching projects to biomass could 

trigger PSD review for CO2, when EPA has been otherwise promoting the use of 

renewable fuels. (4749, 5073, 5313) 

 EPA should consider net reductions (i.e. life-cycle analysis) of GHG emissions when 

establishing a presumptive BACT for waste-to-energy operations. (5305, 5742) One 

commenter contends that the direct emissions from waste-to-energy facilities are more 

than offset by the overall GHG reductions that waste-to-energy provides through three 

separate mechanisms: 1) by generating electrical power or steam, waste-to-energy avoids 

CO2 emissions from fossil fuel- based electrical generation; 2) combustion of waste in 

waste-to-energy facilities eliminates the need for landfill of those wastes and effectively 

avoids landfill CH4 emissions; and 3) the recovery of ferrous and nonferrous metals from 

municipal solid waste at waste-to-energy facilities is more energy efficient than 

production from raw materials. (5305) Another commenter (6458) added that treatment 

of waste-to-energy as a source of GHG emissions would be inconsistent with 

internationally accepted science and accounting procedures (commenter cited various 

examples of where this idea has been embraced).

 EPA should provide special considerations for the oil & gas production and chemical and 

refining industries through separate rulemakings with opportunity for notice and 

comment, in lieu of the PSD permit-by-permit BACT approach. (4106)

 There is considerable uncertainty as to what constitutes BACT for the manufacturing 

sector. For example, what viable technology exists for GHG control? Would BACT 

have to be developed for each of the GHGs or would it require a net certain percentage 

reduction? The commenter welcomes the opportunity to work with other interested 

stakeholders in establishing BACT for their industry to advocate the following: (1) 

Ensuring GHG BACT requirements are technically feasible and cost effective; (2) 

Maintaining current source definitions; (3) BACT is equipment/project specific and not 

facility-wide; (4) Allowing netting-out provision, including ability to use offsite 

"offsets;" (5) Modified "top-down" BACT analysis; (6) Expedited development of GHG 

Presumptive-BACT standards; and (7) PSD GHG trigger/permit applicability based on 

current conventional pollutant PSD Program. (8691)

 Modern NG facilities should be presumed to comply with BACT or should be exempt 

from BACT analysis. (4515, 4691, 4749) Natural gas pipeline combustion units 

minimize GHG emissions to the greatest extent feasible, and therefore already satisfy

BACT standards. (4515, 4691) Gas-fired engines, such as those used in pipeline 

compressor stations, are designed to operate at an optimal level of efficiency given other 

engineering and regulatory constraints that apply to pipelines. (4515, 4691) Altering the 

horsepower of these engines could upset a delicate balance between pipe size and 

compression levels that allow interstate pipelines to operate cost-effectively. (4515, 

4691) Requiring a PSD permitting process for GHGs would not yield any significant 

environmental benefit because there is no available add-on control technology (e.g., CCS

technology is still years from being widely available), using electric pumps would result 

in higher emissions in most parts of the country, and firing with biogas is technically 
74

infeasible (4515, 4691, 4749). Moreover, consideration of these alternatives would lead 

permitting authorities to engage in dubious second-guessing of natural gas pipeline 

design and engine selection, potentially leading to redefinition of the source in a way that 

is inconsistent with the language of the CAA and past practice in PSD proceedings. 

(4515, 4691) 

 One of these commenters adds that BACT for GHGs must take into account the demands 

of the marketplace for flexible power generation. This would include: (1) Flexible 

technologies that can start up and be brought online quickly where peak demand is 

unpredictable; (2) trade-offs between criteria pollutants and GHG control; and (3) 

development of new technology such as the use of IGCC (or any other technology) when 

coal has been selected as the fuel for a source. (5147)

 Presumptive BACT or general permits for fossil-fired generating units should provide 

for, and focus on, measures that only address CO2, and not all six of the GHGs (which 

would require a wide range of reduction measures). (5313)

 Implementation of GHG emission controls at small installation sites of engines and gas 

turbines with a multitude of unique application requirements is a function of two aspects 

(3512): (1) efficiency of the work performed at each unique site, and (2) the fuel used. 

To try to address this GHG BACT issue for these small sites, the commenter makes 

following general comments and observations concerning GHG BACT related issues:

o The local/state GHG BACT review should not redefine the type of source being 

permitted or prime mover technology being proposed. A control technology must be 

feasible within the design elements and process configuration proposed, including the 

prime technology and fuel types chosen by the permittee.

o Not all biofuels are created equally when it comes to GHG impact. EPA’s recent 

“Renewable Fuel Standard 2” clearly showed significant differences in the GHG 

impacts of various renewable fuels based on the lifecycle analysis completed.

o If the agency chooses to institute presumptive BACT analysis for GHG emissions 

from ethanol production facilities, the creation of an agency/industry advisory group 

to identify and develop realistic and cost-effective tools for the implementation is 

absolutely needed. (4555)

o EPA should establish a collaborative process in developing BACT for CO2

management, for entities which are already engaged in “best practice” management of 

CO2. (4990) In addition, the impact of the application of BACT to facilities that 

currently sell certain off-gas streams to processors that remove and purify the CO2

and place it into commercial applications should be addressed. (4990)

o Streamlining should be developed for landfills. EPA should carefully develop 

presumptive BACT that initially aligns with current regulations, citing in particular, 

the NSPS for landfills that was carefully developed to reduce non-methane organic 

compound(s) (NMOC[s]), but also effectively reduces CH4 emissions. Commenter 

continues that at a later date, presumptive BACT can be updated as EPA's reevaluation of the landfill NSPS is completed and any resultant rulemaking finalized 

and asserts this approach should minimize unnecessary impacts to the landfill 

industry. (4863)

Examples of particular presumptive BACT streamlining mechanism suggestions 

submitted by commenters include the following:
75

 In the absence of a GHG technologies database, EPA should develop industry-specific 

BACT guidelines along with the rule. (2731, 4989)

 EPA should develop BACT templates at least for larger sources to streamline the 

permitting process. (5147) 

 Guiding principles should be developed to frame the development of GHG BACT and 

these principles should consider and/or state that: 

o Limiting the definition of the affected source such that unaffected sources/operations 

are not subject to BACT. Barring downstream/debottlenecking effects, increases of 

GHGs at a single source within a unit should not subject an entire unit to BACT 

review. This approach is identical to that already employed for other criteria 

pollutants (5124).

o Fundamental redesign of a unit should not be an option under BACT. BACT is the 

application of a control technology. The redesign of a unit to utilize different fuels or 

to require a different process design falls outside of the scope of a control technology. 

For example, BACT reviews should not force utilities and other combustion sources 

to “fuel switch” from coal to natural gas, which would have significant economic 

impacts throughout the country. EPA should continue to defer to regulatory and 

operational considerations in determining BACT for GHGs. (4515, 4691, 5058, 

5079, 5085 5124, 5123, 5224) 

o Questions such as "why does this unit need to be built?" and "why does the design 

capacity need to be at X level?" are not within the purview of the BACT analysis 

(5124). For example, it should not be appropriate for EPA, under the rubric of 

determining BACT, to tell a source what type of combustion unit it must build, or 

what type of fuel it may use, or how it must engineer its operations to reduce demand 

for the thermal energy or electricity that the combustion unit will generate. (16411) 

Commenters believe that such expansion of the statutory requirement to assure that 

BACT is used for a particular project, into an inquiry by the permitting authority into 

whether a plant can be designed or operated more efficiently, or whether it might be 

environmentally-preferable for the plant to be proposing a different kind of project, 

would be inconsistent with EPA’s statutory authority, long-standing EPA 

interpretations and policy, and judicial and EAB decisions.

o Energy efficiency will be central to BACT. At this time, there are virtually no "endof-pipe" control technologies for GHGs. BACT requirements should not force 

unproven or uneconomical technology, such as CCS. (5124)

Various commenters (2797, 4860, 5062, 5081, 5141, 5143, 5306, 5082, 5143, 5337, 

7935, 8015) oppose the use of presumptive BACT as a streamlining option. Examples of general 

reasons provided by commenters for opposing presumptive BACT as a streamlining option 

include the following:

 Presumptive BACT may not be an effective means to address permitting burden concerns 

because the insufficiently flexible permitting scheme requires a flexible BACT analysis, 

appropriate to the particulars of a specific tool and process configurations and 

technologies. For that reason, it is unlikely that presumptive BACT could play a 

constructive role in addressing these deep and fundamental concerns, at least in the near 

term. (5143)
76

 EPA should not decide the BACT absent a notice-and-comment rulemaking. In the 

proposed rulemaking EPA does not address how to set the BACT for sources subject to 

the PSD and permitting requirements. (5062) 

 EPA statements in the rule preamble about "presumptive BACT" seem inconsistent with 

the fact that BACT is by statute supposed to be a case-by-case analysis, rather than the 

imposition of national emission standards. (5141, 5306, 8015) Case-by-case BACT 

determination affords flexibility to consider a range of case-specific factors, such as 

available control options and collateral cost, energy, and environmental impacts. (5141) 

The diversity of process technologies within industry creates a range of case-specific 

factors that would likely interfere with identification of a presumptive BACT approach 

that would achieve the desired streamlining and permit efficiency. (5141) One of 

commenters is also concerned that EPA seems to be suggesting that it could be 

appropriate, under the rubric of determining BACT, to tell a source what type of 

combustion unit it must build, or what type of fuel it may use, which would be 

inconsistent with EPA's statutory authority, longstanding EPA interpretations and policy, 

and judicial and EAB decisions. (8015) One of these commenters added that 

presumptive BACT may therefore only be imposed on the basis of source - and pollutantspecific demonstrations of necessity such that: (1) The PSD provisions do not 

contemplate the use of presumptive BACT; and (2) presumptive BACT is considered 

only under limited circumstances. (5306) 

 Establishing presumptive BACT raises various concerns (5082): 

o Would the presumptive BACT undergo public scrutiny?

o How would presumptive BACT be established for a pollutant with no currently

available feasible control technology options? 

o How would you establish BACT for combustion devices when reducing CO2 and 

reducing CO (another PSD pollutant) are mutually exclusive?

o How will EPA reconcile PSD permits where BACT for CO is catalytic conversion, 

which consequently causes increases in CO2 emissions and cannot by definition be 

BACT for CO2?

o How will EPA resolve BACT for energy efficiency projects at single combustion 

sources which necessarily mean increases in CO2 because to increase energy

efficiency requires more efficient combustion resulting in more CO2 emissions per 

hour than inefficient combustion?

o Under PSD, would we have to consider inefficient combustion as a means of reducing 

CO2 from a combustion source because that would result in the lowest emissions 

limitation achievable in practice?

o It will dampen the technology forcing aspects of case-by-case BACT determinations. 

(4860, 5081, 7935) 

o It does not address the largest sources that would be brought under the Tailoring 

Rule. (2797) 

Examples of the type of comments received on particular industry sector presumptive 

BACT streamlining concerns submitted by commenters include the following:

 The use of presumptive BACT may cause several problems for the semiconductor 

industry:
77

o To date, there are no BACT determinations for GHGs for the semiconductor industry. 

Moreover, even if in the near future there are BACT determinations for combustion 

sources, it is unlikely that there will be any near term BACT determinations for 

control of PFCs used in manufacturing. Because the semiconductor industry’s use of 

PFCs is unique, the determination of BACT for PFCs will likely be slow and time 

consuming, at least at first. (5143) 

o It is impossible for the fast moving semiconductor manufacturing industry to plan 

ahead and design the necessary controls when it is unknown if those controls will 

later be deemed to be compliant with BACT standards. Since BACT would be 

determined case-by-case, it is also not feasible for the semiconductor industry

association to identify common BACT solutions for all of its operations, since the 

BACT review would be performed by different state and local agencies for 

semiconductor industry association member companies’ different locations. (5143)

o Since the actions to reduce PFC emissions in the semiconductor industry have been 

voluntary, the abatement devices are not incorporated into local or state air permits; 

therefore, they would not be federally “enforceable” to limit the potential to emit of 

these GHGs. (5143) 

o Most of the abatement devices used to control PFCs are point-of-use devices (e.g., 

burn boxes) which are connected by interlocks into each separate manufacturing tool. 

As such, not only are there potentially hundreds of tools that will be replaced 

numerous times over a 5-year period, but there are a similar number of abatement 

devices in use. Because the devices are connected to each tool, and hundreds are 

spread throughout the manufacturing facility, the application of periodic or 

compliance assurance monitoring (CAM) to these devices under title V would be a 

huge administrative burden. Similarly, compliance testing would be problematic and 

expensive because these devices are neither designed, nor manufactured, with 

traditional sampling locations or ports. Finally, because the devices are connected to 

the tools they support, as the tools are changed out, the control devices also will be 

changed frequently. As such, it will be challenging for permitting agencies to 

respond to changes of this nature. (5143)

 The use of presumptive BACT could be tremendously damaging to the Energy-Intensive 

Trade-Exposed (EITE) industry. Process emissions are inherent in the underlying 

chemical reactions, and by and large they can only be changed by a change in the process 

itself – in which case the operation becomes a different type of operation. EITEs have 

powerful economic incentives to manage energy and emissions using things like recycled 

materials, cogeneration or combined heat and power systems, process improvements, and 

fuel switching. The use of the most efficient production processes, and maximizing 

energy efficiencies are already an integral part of the production processes in the EITE 

industry, and should not be addressed through a regulation which includes presumptive 

BACT. (5337) 

Opposing commenters (4238, 4239, 4860) also gave suggestions about how to address 

presumptive BACT. These suggestions include:

 If EPA is to pursue presumptive BACT determinations, a commenter (4860) recommends 

that: (1) presumptive BACT determinations should be limited to a small number of 

source categories; 2) timely guidance regarding presumptive BACT by source category 
78

should be issued by EPA; and (3) that BACT determinations should be revisited by EPA 

on a predefined schedule of not more than 5 years.

 If EPA believes that predefining the technology is the best approach, then EPA should 

develop a NSPS instead. (4238, 4239) 

Response: 

Since many commenters had differences of opinion as to whether and how we should 

move forward on the use of “presumptive BACT” as a streamlining option, including policy and 

legal concerns, we are not finalizing this option at this time. We would likely want to explore, 

through a notice and comment process, if this measure is viable to pursue further. These 

comments, including as any concerns expressed by commenters about this approach, will be 

addressed in the action(s) where we might apply this streamlining option.

Nevertheless, we want to clarify that while the BACT provisions clearly contemplate that 

the permitting authority evaluate control strategies on a case-by-case basis, EPA recognizes the 

need to develop and share policy guidance and technical information for sources and permitting 

authorities as they begin to permit sources of newly regulated pollutants, such as GHGs. When 

applied in a practical matter, this additional EPA guidance and technical information should 

reduce the time and resource needs when evaluating BACT for newly regulated pollutants. For 

that reason, section IV.E.2 of the final rule preamble discusses details of the current efforts 

underway to issue BACT guidance. 

Thus, while BACT will remain a case-by-case assessment, as it always has been under 

the PSD program, EPA is confident that this guidance development effort will help support a 

smooth transition to permitting emissions of GHGs. Furthermore, EPA will continue to work to 

provide the most updated information and support tools to allow permitting authorities to share 

and access the most updated information on GHG BACT determinations as they are made once 

permitting of GHGs begins. EPA remains committed to involving stakeholders in the upcoming 

efforts to develop guidance to help to permitting authorities in making BACT determinations for 

sources of GHGs. 

4.4 General Permits and Permits-by-Rule

The proposal preamble notes that we have limited experience in developing general 

permits and permits-by-rule under the PSD program because of the predominance of the case-bycase BACT determination process. In contrast, we note that, in the title V program, general 

permits are specifically authorized under CAA section 504(d) and are widely-used. 40 CFR 

70.6(d) specifically authorizes the use of general permits covering numerous similar sources 

under the title V program, and 40 CFR 70.7(h) stipulates the public participation requirements. 

We acknowledged that the process for a general permit can take anywhere from 2 to 3 years to 

be fully developed. Additionally, at proposal, we sought comment on the use of general permits 

within the PSD and title V programs. Comments received on the use of general permits/permitsby-rule to streamline permitting under PSD and title V are presented in this subsection.
79

Comment:

Various commenters (2997, 3278, 4154, 4298, 4515, 4526, 4691, 4860, 4863, 4940, 

5078, 5079, 5111, 5130, 5135, 5198, 5280, 5306, 5313, 5329, 5711, 7026, 7935) support the use 

of general permits and/or permits-by-rule to streamline the permitting process. Some of the 

reasons for their support include:

 The general permits and/or a permit-by-rule option would serve to streamline the process 

and reduce both administrative burden and potential permitting delay. (4154, 4515, 4691, 

4863, 5130, 5329, 5711, 7026, 7935) Some of these commenters added that this would 

be particularly helpful for semiconductor facilities (5329) and common types of control 

devices such as boilers, process heaters, and combustion turbines (4154, 5130) as well as 

commercial and residential natural gas appliances and equipment (5711).

 General permits and permits-by-rule are adequate streamlining options, but case-by-case 

review and the development of a site-specific permit, even if there is a general permit that 

would cover the site in question, should always remain an option. (4940, 5079)

 EPA should issue a standard general PSD permit for very small GHG emission sources 

that will effectively allow these permits to be issued within 30 to 90 days. (5417).

 General permits may prove useful in administration of a title V program for sources 

subject to title V solely by virtue of their GHG emissions. (4515, 4691, 5306) 

Commenters (3278, 4298, 4515, 4526, 4691, 4860, 4863, 4990, 5111, 5313, 5711) also 

provide comments on and suggestions for developing general permits and/or permits-by-rule. 

These suggestions include:

 Use of general permits should be limited to a small list of source categories and that these 

general permits should contain output based emission limitations wherever possible. 

(4860) 

 Using PTE limits and/or permits by rule for smaller or limited-use sources, such as 

emergency generators or Heating, Ventilation, & Air Conditioning (HVAC) equipment 

where there are practical and/or legal limitations on hours of operation or other key

factors in determining a facility’s true PTE. (5078, 5079)

 These general rules could take the form of operational limitations, provided such 

limitations provide a streamlined method to allow a source to operate for longer hours or 

at a greater throughput upon request to the permitting agency, and provided such 

limitations do not apply to energy efficiency and pollution control improvements. (4298)

 Recognizing that a sector-by-sector general permit would take time to develop, perhaps 

in the first 3 years of the first phase, a general PSD permit for GHG can simply have a 

few requirements, such as mimicking any requirements from EPA's mandatory reporting 

program, a listing of Class I National Parks with distances from the facility, and a 

generalized discussion of BACT (4863). The commenter adds that at this stage, BACT 

can be efficiency measures used by the project to reduce energy. (4863)

 For a limited period, initiate blanket use of general permits for “urgent” (necessary to 

avoid a material adverse affect on health and safety) and “small” (less than 100,000 

metric tpy CO2e) projects, and a moratorium on GHG permits for all other projects. This 

would maximize streamlining, diminish adverse economic impacts (and reduce the 

likelihood of litigation from permitted sources), and allow more time for the Clean Air 
80

Act Advisory Committee (CAAAC) Climate Change Work Group to formulate a legally 

robust and administratively streamlined set of procedures. (4526)

 General permits will violate the text of the CAA if we move from a case-by-case BACT 

determination basis to a presumptive BACT system. For that reason, this commenter 

would like general permits to only be imposed on the basis of source- and pollutantspecific demonstrations of necessity such that: (1) the PSD provisions do not contemplate 

the use of general permits, and (2) general permits are considered only under limited 

circumstances. (5306, 5711) One of the commenters adds that for gas-burning sources, 

general permits should only be applied to those sources that could not be excluded from 

the PSD program under EPA's proposed approach. Even then, it should serve simply as a 

checklist of generally accepted technology that sources should consult to make sure they

were not behind the times. (5711)

 Permits-by-rule should be allowed to exempt sources from NSR pollutant requirements 

for PSD because small sources captured in the program under the initial definition and 

subjected to PSD/title V permitting requirements might not later be considered a 

PSD/title V source with a revision of the definition for PTE. (3278)

 General permits could easily be developed for different categories of landfills, which 

should ease the burden on smaller sites that are currently not in the title V program. 

(4863)

 The EPA should develop an affirmative designation for sources that use administrative 

controls to remain below the “major source” threshold, e.g. a facility that has the 

potential to emit enough CO2 to be required to obtain a permit, but sets limits on 

operating hours or other controls to ensure that the facility stays below the permitting 

threshold. Such an affirmation of administrative control could either be in the form of a 

general permit, permit-by-rule, or as a self-declaration kept on record at the affected site. 

(4990) 

 Allow for a variance from a general permit on a case-by-case basis where an alternate 

standard is warranted. (5313)

 Employing general permits would require a fundamental change to the PSD program 

(4515, 4691) because: 

o General permits, while well-established, have typically been used for minor source 

NSR permits and a limited number of title V operating permits, not PSD, mainly

because the CAA’s PSD provisions require case-by-case determinations of BACT. 

o States would need to revise their SIPs to adopt this more expedient process for PSD. 

o General permits must also include presumptive BACT, which could take years to 

develop. 

o The paucity of technical and economic data and other supporting information related 

to GHG BACT will result in a significant number of challenges during the required 

public review process. Such legal challenges could delay permits for months or 

years.

 EPA should consider issuing national model PSD permits for GHG sources that contain a 

menu of options of potential BACT measures that sources can adopt to streamline 

permitting. If a source elects one of these options, then it can forgo case-by-case BACT 

review by adopting a presumptive BACT that already has been subject to public 

participation, thereby alleviating the burden of public comment on its decision. Because 

such general permits already will have been subject to public comment upon adoption of 
81

the general permit into a state’s law, additional public comment will not be required and 

the burden to regulators and the regulated community would be reduced. (5111)

 In order to streamline permit issuance by eliminating case-by-case public participation 

requirements, the commenter urges EPA to immediately commence rulemaking on a 

national general permit for title V sources pursuant to which an affected entity would 

provide notice of applicability of the general permit to its operations and operate under 

that national permit. Since title V fees do not apply by law to pollutants other than 

pollutants regulated under a NAAQS, NSPS or National Emission Standards for 

Hazardous Air Pollutants (NESHAPs), pursuant to section 502(b) (3) (B) (ii) of the CAA, 

state and local authorities would be relieved of the considerable burden of issuing title V 

permits to entities for whom they would have no authority to levy permitting fees, and the 

notices would provide national and local authorities the ability to track major sources of 

GHGs. (5111)

Some commenters (4863, 5139, 6414) did not explicitly support or oppose the use of 

general permits and/or permits by rule as a streamlining option. However, these commenters had 

comments on the use of general permits and/or permits by rule, including: 

 EPA’s argument that it should be allowed to redefine “potential to emit” as “actually 

emitting” is not justified in this instance, as the permits themselves could be streamlined 

by including legally and practically enforceable general limits on operational parameters. 

(5139)

 EPA has proposed to disapprove elements of the commenter’s state’s air permitting 

program where a key component of the minor source permitting program is the use of 

general permits or permits-by-rule, because of the assumption that these minor source 

programs have systematically been utilized inappropriately to authorize major sources 

and circumvent major NSR requirements. The commenter believes that EPA now 

proposing to use these very same mechanisms to authorize major sources will be 

confusing to some, but perhaps a signal that a more rational policy has been adopted by

others. (6414)

Some commenters (5082, 7935) oppose the use of general permits and/or permits by rule 

as a permitting streamlining option. Their reasons for opposition include:

 If GHGs were to become subject to control requirements, many sources would be 

applying for title V permits at the same time. As a result, permitting authorities would 

face unrealistic title V permit processing demands. Such demands would likely make it 

impossible for authorities to act on title V applications within 18 months, as generally 

required, which could ignite a wave of litigation over missed deadlines. (5082)

 General permits cannot substitute for the case-by-case analyses required under PSD 

provisions because general permits do not allow for facility-specific conditions. (7935)

Response: 

Since commenters echoed many of our concerns about why it will take time to put these 

measures in place and many commenters had differences of opinion as to whether and how we 

should move forward on these approaches, including policy and legal concerns, we are not 

finalizing the general permits and permits-by-rule streamlining options at this time. We would 
82

likely want to explore, through a notice and comment process, which of these measures is viable 

to pursue further. These comments, including any opinions about the legal and policy direction 

we must take regarding these streamlining options, will be addressed in the action(s) where we 

might apply them.

4.5 Electronic Permitting

The proposal preamble for the Tailoring Rule acknowledges that the use of electronic 

permitting is growing across the U.S. as more states implement new or upgraded systems. We 

believe that the use of electronic permitting (in addition to the use of general permits) could 

assist in addressing some of the administrative burdens that may occur due to GHG emission 

sources being added to the PSD and title V programs. Comments received on electronic 

permitting as an option to streamline the PSD and title V permitting process are presented in this 

subsection.

Comment:

Some commenters (5079, 5711) support the use of electronic permitting as a streamlining 

option. These commenters state that electronic permitting could: 

 Help streamline the PSD program for sources already considered major sources for 

conventional pollutants, as well as those that would be brought into the program for GHG 

emissions by reducing the time, cost and resources expended by permitting agencies and 

applicants to obtain a PSD permit. (5711)

 Help where data entry may be used for multiple compliance programs, such as a 

consistent data platform between PSD and GHG Mandatory Reporting Rule 

requirements. (5711)

Various commenters (2504, 4238, 4239, 5082, 5135, 5198) oppose the use of electronic 

permitting as a streamlining option. The reasons for their opposition include:

 EPA should not address electronic permitting as part of the Tailoring Rule. EPA should 

do so in a separate rulemaking and only after a careful evaluation of how such rules 

impact individual states. (2504) 

 Electronic permitting approaches would not be helpful until states have gained some 

experience implementing the new requirements into their PSD and title V permitting 

programs. (4238, 4239)

 The commenters’ states attempted the use of electronic permitting and that the effort was 

unsuccessful and resulted in a significant loss of money and time. (5135, 5198)

 EPA has not demonstrated how electronic permitting of major sources of GHG will 

reduce the amount of time required for permitting or how it "streamlines" the permitting 

process. Therefore, the commenter states that EPA should not rely on this "potential" 

streamlining" method to mitigate the absurdities that will result from EPA's regulation of 

GHGs. (5082)
83

Response: 

Even though electronic permitting is a streamlining approach that does not require 

rulemaking or state adoption, this approach will require implementation experience with GHG

that is not now available. We expect that at least 1 year of implementation experience (of the 

type we will gain starting in 2011) would be required, plus at least an additional year to 

extrapolate that experience to small sources and put this approach into effect. For that reason, 

we are not able, at this time, to presume that this approach will ease any burden prior to the 

planned rulemaking for step 3 (i.e., later half of 2011, to promulgate by July 2012, effective July

2013). These comments, including as any concerns expressed by commenters about this 

approach, will be addressed in the action(s) where we might apply this streamlining option.

4.6 “Lean” Techniques for Permit Process Improvement

The proposal preamble describes “lean” techniques as referring to a collection of process 

improvement principles, methods, and tools designed to help organizations identify and 

eliminate non-value-added activity (“waste”), in order to meet customer needs better, more 

quickly, and more efficiently. In the context of air permitting, we assert that “lean” improvement 

events typically focus on eliminating administrative process waste (e.g., backlogs in permitting, 

document errors, unnecessary rework on documents, delays associated with transmission of 

documents between various parties that develop and approve them). We acknowledge that many 

states employ “lean” techniques to improve air permitting and other agency processes and 

believe that similar and improved “lean” techniques could be employed as a streamlining 

option/tool for GHG PSD and title V permitting purposes. This subsection presents comments 

on the use of “lean” techniques as a streamlining option/tool for GHG PSD and title V 

permitting.

Comment:

One commenter (5711) expresses explicit support for the use of “lean” techniques for 

permit process improvement. The commenter believes that lean permitting may reduce 

procedural waste by reducing or eliminating permit backlogs, errors, unnecessary redrafting of 

documents, and delays due to transmitting documents among the parties that develop and 

approve them. (5711)

A few commenters (2504, 4238, 4239) oppose the use of “lean” techniques for permit 

process improvement. The reasons for their opposition include:

 EPA should not address “lean” as part of the Tailoring Rule. EPA should do so in a 

separate rulemaking and only after a careful evaluation of how such rules impact 

individual states. (2504) 

 “Lean” approaches would not be helpful until states have gained some experience 

implementing the new requirements into their PSD and title V permitting programs. 

(4238, 4239)
84

Response: 

Even though “lean” permitting is another streamlining approach that does not require 

rulemaking or state adoption, this approach will require implementation experience with GHG 

that is not now available. We expect that at least 1 year of implementation experience (of the 

type we will gain starting in 2011) would be required, plus at least an additional year to 

extrapolate that experience to small sources and put this approach into effect. For that reason, 

we are not able, at this time, to presume that this approach will ease any burden prior to the 

planned rulemaking for step 3 (i.e., later half of 2011, to promulgate by July 2012, effective July

2013). These comments, including as any concerns expressed by commenters about this 

approach, will be addressed in the action(s) where we might apply this streamlining option.
85

Chapter 5. Comments on the Proposed Definition of the GHG 

Pollutant

5.1 Comments on the Compounds Included in the Definition of the GHG Pollutant

We proposed to identify the GHG metric to be used for determining PSD and title V 

permitting applicability as the group of six GHGs summed on a CO2e basis. The six constituent 

GHGs included in the proposed metric were CO2, CH4, N2O, SF6, HFCs, and PFCs. Absent a 

definition of “greenhouse gases” under another regulatory provision that we could crossreference, we proposed to define “greenhouse gases” for permitting purposes as “the single air 

pollutant that is comprised of the group of six GHGs, as proposed in the [CAA] section 202(a) 

endangerment and contribution findings.” 74 FR 55329. The six well-mixed GHGs identified in 

the proposed contribution finding were CO2, CH4, N2O, SF6, HFCs, and PFCs. In the proposal, 

we further recognized that the LDVR for GHGs, as it was proposed, would result in reductions 

of only four of the gases, not all six, because only four are emitted by vehicles. However, we 

concluded that if the endangerment and cause and contribute findings and LDVR were finalized 

as proposed, then the air pollutant for purposes of PSD and title V applicability would be a single 

air pollutant that is the aggregate mix of the group of six GHGs.

It is worth noting overall that a majority of the proposal comments did not speak to or 

show a preference for or against the proposed GHG metric for the purposes of determining 

applicability under the PSD and title V programs. Below we summarize our responses to those 

comments that specifically showed support for or opposition to the proposed metric. For more 

information regarding the rationale for the GHG metric, see section V.A. of the preamble to the 

rule.

Comment:

Various state commenters (4239, 4860, 7935, 8025, 4866) and public advocacy groups 

(5306) express support for listing the six compounds identified by EPA as GHGs. Generally, 

commenters in support of including all six of the well-mixed GHGs in the threshold metric cite 

the same reasons they provided in support of grouping the individual GHGs together: namely, 

the contribution findings that identify the pollutant as “the combined mix of six key, directly 

emitted, long-lived and well-mixed GHGs.” See 74 FR 66496, 66516, 66536 (December 15, 

2009). They also emphasize that EPA, in order to protect the public, has to control all the GHGs

it has regulated and reduce the overall impact of the mix of six GHGs. One fuels sector 

commenter (2369) generally agrees with EPA’s proposed GHG metric to define the “air 

pollutant” as the class of six GHGs.

A significant number of industrial commenters contend that only the GHGs actually

subject to controls under the LDVR should be defined as GHGs under the Tailoring Rule. Some 

of these commenters (4122, 4298, 4318, 4522, 4523, 4952, 4992, 5038, 5052, 5080, 5089, 5111, 

5114, 5128, 5137, 5257, 5317, 5327, 5328, 5601, 5741, 5788, 6459, 8301) believe that only the 

three compounds (CO2, N2O, and CH4) for which the LDVR contains limits should be 

considered GHGs, while others (3306, 4020, 4095, 4106, 4118, 5058, 5059, 5140, 5181, 5278, 
86

5714, 5276) would also add HFCs (which are included in a credit flexibility arrangement under 

the LDVR) for a total of four GHGs. 

The commenters present some or all of the following arguments for reducing the number 

of compounds included in the definition of GHG:

 PSD is not triggered for all six GHGs by the LDVR, even under EPA’s theory of the 

statute, because under the proposed PSD Interpretation, actual emission controls under 

the CAA – not simply an endangerment finding – are required to trigger PSD obligations 

for a given pollutant (citing 74 FR 51535, 51539-51541, 51544). (4122, 4318, 4522, 

4523, 4952, 4992, 5038, 5080, 5089, 5114, 5128, 5257, 5317, 5327, 5601, 5741, 6459, 

8301)

 Including all six would conflict with the “absurd results” and “administrative necessity” 

doctrines because it would lead to larger numbers of sources subject to permitting, 

increasing the harm that EPA says it wants to avoid. The EPA cannot both widen the 

scope of the applicability to six GHGs at its discretion and rely on these judicial 

doctrines, which apply only where the EPA has availed itself of all reasonable discretion 

to minimize the harm. (4122, 4318, 4522, 4523, 4952, 4992, 5038, 5080, 5089, 5114, 

5128, 5257, 5317, 5327, 5601, 5741, 6459, 8301)

 The LDVR must dictate how the subject GHGs are regulated and any other result is 

arbitrary and, therefore, does not pass muster under section 307(d) of the Act. (4118) 

An operator of waste-to-energy facilities (2371) recommends that the Tailoring Rule 

require the measurement of the same emissions as the GHG Mandatory Reporting Rule (40 CFR 

part 98) in determining which of the six GHGs to measure for specific source categories. The 

commenter also suggests that the Tailoring Rule state that emissions should be determined 

according to the methods of GHG Mandatory Reporting Rule, or an equivalent method, in order 

to avoid unintentional noncompliance. State commenters 4521 and 5338 also recommend that 

chemicals listed as GHGs should be consistent with those listed in the GHG Mandatory

Reporting Rule.

Some commenters raise the issue of regulating black carbon or similar short-lived climate 

forcers as GHGs subject to permitting: 

 One environmental commenter (5311) agrees with EPA’s decision to exclude black 

carbon for purposes of the Endangerment Finding for now but would like EPA to move 

forward expeditiously to list black carbon as a GHG and establish appropriate regulation 

in the near future because:

o Black carbon is a potent, short-lived climate forcer that contributes significantly to 

climate change. 

o Reducing these emissions is among the most effective strategies to mitigate global 

warming in the immediate future, particularly for slowing Arctic warming.

o Scientific evidence makes clear that black carbon meets all of the requirements of the 

endangerment and contribution tests under section 202(a) of the CAA.

 Some state commenters (4239, 4860, 7935) also encourage EPA to consider adding black 

carbon and other short-lived climate forcers to the list of GHGs. 
87

One fuels sector commenter (2369) (who generally agrees with EPA’s proposal to define 

the “air pollutant” as the class of six GHGs) also suggests the alternative of defining the 

regulated pollutants in the LDVR as “GHG emissions from Light Duty Vehicles,” similar to the 

approach taken for municipal solid waste (MSW) landfills where the pollutant defined for the 

NSPS is “emissions from MSW landfills.” The commenter believes this approach would prevent 

triggering PSD and title V requirements for stationary sources as a result of the LDVR.

A solid waste industry commenter (5276) asserts that the Tailoring Rule should confirm 

that CH4 and N2O will not be regulated under PSD or title V because these pollutants are only 

emitted in miniscule amounts from automobiles. The commenter believes that EPA’s failure to 

consider the significance of each automobile GHG individually is inconsistent with purpose of 

the CAA requirement to determine whether an air pollutant contributes to an air pollution 

concern before regulating it. At a minimum, the commenter asks EPA to consider using the 

Tailoring Rule to avoid the PSD and title V regulation of CH4 and N2O emissions from landfills 

until it can address the emission of those pollutants from stationary sources more directly 

through notice and comment rulemaking.

One commenter (6457) notes that EPA has previously stated that the “single designated 

pollutant” at MSW landfills is landfill gas (LFG), and not individual GHG components. For that 

reason, the commenter believes that emissions from municipal solid waste landfills would not be 

separately regulated under the NSR/PSD or title V programs solely on the basis of the individual 

components of LFG consisting of CH4 or CO2. Because the pollutant emitted from landfills is 

not considered to be any one of the gases subject to the Tailoring Rule (or the Endangerment 

Finding), the commenter does not read either of these rules as foreclosing voluntary reductions 

of LFG at non-NSPS regulated landfills (often undertaken to generate carbon offsets for sale).

Response: 

We appreciate the commenters’ responses and support for the GHG metric we proposed. 

After considering these comments, and taking into account other related actions that have 

occurred since proposal, we have determined that PSD and title V permitting program 

requirements will apply, as proposed, to the “single air pollutant that is comprised of the group of 

six GHGs.” 74 FR 55329. We believe that this approach is both compelled by the statute and 

reflects the preferable policy approach. We describe in full our rationale for this approach in 

section V.A of the preamble for the final rulemaking. 

We disagree with commenters who suggest that because the LDVR actually regulates 

only four of the six GHGs, EPA may apply PSD and title V to only those four GHGs. It is true 

that the LDVR for the single air pollutant that is comprised of the aggregate of six GHGs 

consists of individual standards for only four particular constituents of the single air pollutant—

which are emissions limits or caps for three GHGs (CO2, CH4, and N2O) and an emission 

crediting option for one GHG (HFCs) –but it does not dictate that only those four compounds are 

subject to regulation for permitting purposes. Although the LDVR results in reductions only

with respect to four specific GHGs, as a legal matter the LDVR standard covers the entire set of 

GHGs that as a class are the single “air pollutant” in the contribution finding. 
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EPA’s conclusion that the pollutant subject to regulation is the single pollutant comprised 

of the six individual gases, and not the four individual constituents, is dictated by the 

interrelationship between the endangerment and contribution findings and the requirement to set 

standards under section 202(a), and not the endangerment finding itself. We agree with 

commenters that the endangerment and contribution findings do not by themselves define the 

pollutant or make GHGs subject to regulation. Specifically, as detailed below, our conclusion on 

as to what pollutant is subject to regulation is dictated by our obligation to regulate under section 

202(a) the air pollutant for which EPA made the cause or contribute finding. 

The Administrator found that emissions from new motor vehicles and new motor vehicle 

engines of the single air pollutant defined as the aggregate group of these same six GHGs contribute 

to the air pollution and hence to the threat of climate change. These findings require EPA to issue 

standards under section 202 (a) “applicable to emission” of the “air pollutant” that EPA found causes 

or contributes to the air pollution that endangers public health and welfare. The final emissions 

standards satisfy this requirement for GHGs from light-duty vehicles – in the LDVR, EPA 

determined that the final emissions standards in that rule are “standards applicable to the emission” 

of the single “air pollutant” defined as the aggregate group of six GHGs. EPA also interpreted 

section 202(a) as providing the Administrator with significant discretion in how to structure the 

standards that apply to the emission of the air pollutant at issue, the aggregate group of six GHGs. 

EPA has the discretion under section 202(a) to adopt separate standards for each gas, a single 

composite standard covering various gases, or any combination of these. In the LDVR rulemaking 

EPA finalized separate standards for N2O and CH4, and a CO2 standard that provides for credits 

based on reductions of HFCs, as the appropriate way to issue standards applicable to emissions of the 

single air pollutant, the aggregate group of six GHGs. EPA did not set any standards for 

perfluorocarbons (PFCs) or sulfur hexafluoride (SF6) as they are not emitted by motor vehicles. EPA 

determined that this combination of standards satisfied its obligation to set emissions standards 

applicable to emissions of the single air pollutant for this group of motor vehicles. In addition, EPA 

did not define the regulated pollutants in the LDVR as “GHG emissions from Light Duty

Vehicles,” similar to the approach taken for MSW landfills where the pollutant defined for the 

NSPS is “emissions from MSW landfills,” because the definition of pollutants in the LDVR is out 

of the scope of this rulemaking. The fact that EPA exercised its discretion in how to structure the 

standards for the aggregate group of six GHGs does not change that the standards are applicable to 

emission of the single air pollutant defined as the aggregate group of the six GHGs. [See 75 FR 

25398 (May 7, 2010).]

As explained in the preamble to this final rule, we must adhere to the definition of air 

pollutant as established in the endangerment finding and the final LDVR for GHGs, which 

includes CO2, CH4, N2O, HFCs, PFCs, and SF6. We do not have discretion to select only a 

subset of these gases in defining our GHG threshold metric for permitting applicability purposes. 

For the same reasons, we disagree that this approach is inconsistent with the Agency’s 

final action in “EPA’s Interpretation of Regulations that Determine Pollutants Covered by 

Federal Prevention of Significant Deterioration (PSD) Permit Program.” While it is the case, 

that only four constituent gases are reduced by the LDVR, the ‘air pollutant” that is controlled, 

and thus “subject to regulation,” is the group of six, and it is this “air pollutant” to which PSD 

and title V apply. 
89

We also disagree with commenters who suggested that including all six GHGs in 

determining permitting applicability would conflict with our “absurd results” and “administrative 

necessity” rationale for the phase-in periods and applicability thresholds for GHGs. Even if we 

did have discretion to identify the air pollutant for PSD and title V purposes as consisting of only 

four of the six well-mixed GHGs, we do not believe that doing so would have any meaningful 

impact on the administrative burdens that are at the heart of our reliance on the “absurd results” 

and “administrative necessity” doctrines. The number of additional permitting actions and 

amount of additional permitting burden resulting from including all six GHGs, rather than four, 

in the definition is minimal. This is because the administrative burden of GHG permitting is 

dominated by CO2 and CH4 emission sources. For example, with a major source threshold set at 

100,000 tpy CO2e, the combined population of sources that would be major for N2O, HFCs, 

PFCs, and SF6 accounts for fewer than two percent of the GHG sources that would remain 

covered.

In regards to the few commenters that suggested the Tailoring Rule should only include 

the GHGs for source categories that are required to be reported under the EPA’s Mandatory

Reporting Rule for GHGs, we also disagree. The Tailoring Rule addresses the permitting 

requirements under PSD and title V programs for GHGs and, as described above, these 

requirements must address the single pollutant subject to regulation as defined in the LDVR. We 

cannot identify different subsets of individual GHGs for different source categories, and there are 

no categorical exclusions under the final Tailoring Rule that would exempt specific emission 

sources (see section V.E.3 of the preamble to the final rule for EPA’s rationale regarding 

requests for exemptions). Also, it is worth noting that the Mandatory Reporting Rule for GHGs 

generally does indeed require the reporting of all six of the primary GHGs – as well as other 

fluorinated gases – that are included in the sum-of-six GHG metric used in the Tailoring Rule; 

however, in some cases the rule identifies where the current lack of a specific GHG measurement 

technique may result in some specific GHGs not being reported by a specific source category. 

The GHG Tailoring Rule does not establish the GHG measurement techniques for determining 

the amount of GHG emissions released at a source; sources will need to verify what GHG 

measurement techniques are acceptable for use by contacting their applicable permitting 

authority. It is likely that the same or similar techniques as identified in the GHG Mandatory

Reporting Rule will be required, but this should be confirmed with the applicable permitting 

authority.

We disagree with the commenters who suggest we include black carbon and other shortlived climate forcers to the list of GHGs as well as with those asking for an exclusion of CH4 and 

N2O. The definition of the air pollutant, as cited in the LDVR, includes CH4 and N2O and does 

not include black carbon or other short-lived gases. 

We also disagree with the commenter who states that we should have defined the air 

pollutant as “GHG emissions from LDVs,” similar to the approach taken for municipal solid 

waste (MSW) landfills where the pollutant defined for the NSPS is “emissions from MSW 

landfills.” In addition to the reasons noted above, including the definition of the air pollutant 

being outside the scope of this rulemaking, we find our action on landfills not to be instructive 

(56 FR 24468, 24473; May 30, 1991). As we explained in that action, EPA found that the 

complex mixture of the constituent gases which emanated from landfills endangered public 
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health and welfare based on a number of concerns. Under section 111(b)(1)(A), we determined 

that this category of sources – MSW landfills - caused or contributed significantly to air 

pollution which may reasonably be anticipated to endanger public health or welfare.

The term “air pollution” as used in section 111 and various other CAA provision 

generally refers to an ambient concentration of some compound or set of compounds. In most 

cases the ambient concentrations of a compound are the result of emissions from a variety of 

sources, and can include both anthropogenic and non-anthropogenic sources of emissions. For 

example, ambient concentrations of PM are a form of air pollution, and the PM in the ambient air 

results from emissions from many different source categories.

For MSW landfills, the air pollution at issue was unique in that it was defined as the 

emissions from MSW landfills, making the air pollution at issue a source specific definition. 

This was done because the impacts on public health or welfare were in part tied to these specific 

emissions (e.g. welfare effects were tied to landfill odors and off-site explosions from pollutant 

migration), not simply a broader air pollution where MSW emissions played just one part. 56 FR 

24468, 24473 (May 30, 1991).3 Since the air pollution was defined this way, the category clearly

caused or significantly contributed to this air pollution. It was the unique, source specific nature 

of the definition of the air pollution that led to the result that the air pollutant emitted by the 

MSW landfills was also defined as emissions from MSW landfills. Accordingly, it was the 

specific mixture, which emanates solely from landfills, that we were concerned about. 

As discussed above, the endangerment finding here is of a different nature. Specifically, 

the Administrator determined that the air pollution was atmospheric levels of the combination of 

six GHGs. This air pollution was not limited to any one source of GHGs, but was defined as the 

atmospheric concentrations of these gases, irrespective of sources. Unlike MSW landfills, EPA 

did not define the air pollution in terms of emissions from a specific source category, but instead 

defined it in terms of the atmospheric concentrations irrespective of any one source category. 

See 74 FR 66496, 66516-523 (December 15, 2009). The endangerment to public health and 

welfare came from this total atmospheric concentration of GHGs, not from a subset reflecting 

just emissions from one source category. EPA rejected suggestions that it should define the air

pollution in terms of a subset of the GHGs in the atmosphere, such as the emissions from new 

motor vehicles. Id at 66521, and Endangerment RTC Volume 9, at p.16. The air pollutant was 

defined in the same manner as the air pollution, irrespective of source category, and was not 

limited to emissions from new motor vehicles. Id. at 66536-41. Of course, EPA focused on the 

emissions of this air pollutant coming from new motor vehicles, as that was required to 

determine whether emissions from these sources caused or contributed to the atmospheric air 

pollution. However the air pollutant was defined in the same way as the air pollution, without 

reference to any specific source. Thus, the GHG endangerment and contribution findings did not 

follow the somewhat unique approach to defining the air pollution that was used in listing MSW 

 

3 While it is the case that the section 111 listing was based in part on ozone impacts from the VOCs emitted by 

landfills, VOCs were already regulated under the CAA. This is because the ozone precursors found in landfill gases 

are already covered by the regulated NSR pollutant VOC. Therefore, EPA's designation of the problem as the 

source specific emissions from landfills did not result in other sources of VOCs, which impacted ozone generally, to 

be unregulated. However, if we were to define the GHG air pollutant as only those gases emitted by LDVs, as the 

commenter suggests, this would result in other sources of GHGs being unregulated. 
91

landfills under section 111, and the agency decisions in the MSW landfill listing does not 

provide a basis for defining air pollutant here different than the air pollutant and the air pollution 

defined in the GHG endangerment and contribution findings. 

Moreover, the proposed approach would appear to circumvent the requirement that an air 

pollutant regulated under the CAA be subject to PSD permitting as it would give the Agency 

authority to avoid this result simply by issuing source specific definitions of a pollutant even 

where the air pollutant is of general concern.

With respect to landfills, we also disagree with commenters that because we designated 

the pollutant in the landfills NSPS as LFGs that the only regulated NSR pollutant emitted from 

them is LFGs. Nothing in that rulemaking suggests that other pollutants meeting the definition 

of regulated NSR pollutant (e.g. NOx from flaring) would not also be covered. 

Arguments that certain individual constituents should not have been included under the 

LDVR (CH4 and N2O) because they are emitted in small amounts are beyond the scope of this 

rulemaking. Rather their inclusion was the subject of the endangerment and cause or contribute 

finding and the LDVR and are properly addressed there. Questions as to the impact that the 

LDVR has on the availability of reductions of GHGs at landfills for use as offsets or credits is 

also beyond the scope of this rulemaking and we are not addressing those issues at this time. 

5.2 Comments on Use of GWP and the CO2e Metric

As noted previously, we proposed to identify the GHG metric as the group of the six 

GHGs, on a CO2e basis. Specifically, this means that a source’s emissions of all six GHGs 

would be combined into a single metric by multiplying the mass of each individual GHG (in tpy) 

by its GWP value, and summing these products to determine the total emissions of the GHG 

pollutant expressed in terms of tpy CO2e. We received comments on many aspects of the 

proposed metric. In our proposal preamble discussion of GHG metric, EPA also raised the 

possibility of including a limitation in the metric to address the prospect (expected to occur only 

rarely) that high-GWP gases could be emitted in quantities less than statutory thresholds for PSD 

and title V but nevertheless exceed the proposed thresholds in terms of CO2e.

5.2.1 General Support and Opposition to the CO2e Metric

Comment:

Several commenters (3916, 4154, 4518, 4747, 4886, 5306, 5311, 5347, 5922, 8025) 

explicitly support the use of GWP and the CO2e metric for GHG emissions. These commenters 

make the following points in support:

 The EPA has the discretion and authority to select an appropriate metric to measure 

GHGs in the PSD program, and policy considerations support the choice of GWP. 

(5306)

 The GWP is a widely-used metric which employs internationally-recognized conversion 

factors to compare GHGs based upon their climate properties. (4518, 5306, 5347)
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 This approach provides for an inherent balancing among the GHGs, possibly minimizing 

PSD reviews. (3916)

 This will lead to a more effective system for permitting authorities and create more 

opportunities to reduce emissions over the full class of GHGs, rather than focusing on 

reducing individual GHGs. (4866)

 States and local areas that have climate action plans for GHG reductions use CO2e. 

(4518, 5347)

 The use of CO2e ensures a standard measure across all permitting agencies. (4518)

However, even though one commenter agrees that using GWPs sensibly focuses on the 

characteristic that endangers the public health and welfare (i.e., the potential to cause global 

warming), this state commenter (4742) believes that there is no reason that EPA should select 

carbon dioxide equivalency over another metric. The commenter recommends that EPA 

consider adopting a unit of measurement that would eliminate the need to adjust the numeric 

thresholds in the statute. In addition, another supportive commenter (4518) believes that the 

proposal underestimates CH4’s heat-trapping potency relative to the other GHGs. Because CH4

has an atmospheric lifetime of approximately one decade instead of 100 years like other GHGs, 

its GWP value (which is derived based on a warming potential over 100 years per the IPCC 

methodology) is relatively lower than the more persistent GHGs. The commenter believes that 

this is a missed opportunity to get significant, near-term emissions reductions. 

Several state (4519, 4864, 5081) and industrial commenters (4020, 4095, 4747, 5082, 

5086, 5183, 5276, 5391, 6457) oppose the use of GWP and CO2e in setting the thresholds for 

GHGs, and most of these believe that thresholds should be based on individual mass-based 

emissions for each GHG. Specific reasons for this opposition include the following:

 Two industry commenters (4095, 5082) do not believe EPA has any discretion to ignore 

the metric for regulation established by Congress for PSD in section 169 of the Act. 

 A state commenter (5081) suggests that regulating each of the GHGs individually on a 

mass basis provides a better, more immediate environmental result and is a more 

appropriate approach under the administrative necessity doctrine.

 An industry commenter (5183) states that facilities will face enough challenges without

introducing requirements to consider intensity multipliers or other factors beyond the 

simple NSR threshold levels, and that a facility which emits less than an established 

threshold level should not trigger PSD or title V requirements, regardless of the type and 

intensity of the emission. 

 Two solid waste industry commenters (5086, 5391) state that an individual mass-based 

emissions metric without GWP would be consistent with the GHG Mandatory Reporting 

Rule and the current landfill-specific PSD regulation based on NMOC. 

 Some state (4864), solid waste industry (5391), and semiconductor industry (5143, 5417) 

commenters are concerned that the CO2e metric relies on GWP assumptions that could 

change with periodic updates to the scientific literature. Commenter 5391 adds that GWP 

is therefore a variable, and EPA cannot grant permits that include variables. (See

additional comments on this topic below.)

 An industry commenter (5276) contends that the use of CO2e will complicate the 

implementation of BACT because sources that trigger PSD will be required to install 

BACT for each regulated pollutant, not for CO2e. As a result, a source that exceeds the 
93

threshold primarily due to its CO2 emissions would be forced to install BACT for all 

other individual GHGs, regardless of how minor those other emissions may be. The 

commenter states that EPA should provide further analysis on how the single GHG-based 

metric approach is representative and equitable for all sources impacted by the proposed 

rule.

 One commenter (6457) supports elevated thresholds, but believes that these thresholds as 

applied to CH4 should be expressed on a mass basis because a 25,000 tpy threshold on a 

CO2e basis would effectively lower the threshold for CH4 emissions to approximately

1,000 tpy, which would potentially extend PSD and title V requirements to hundreds of 

small facilities such as landfills, farm manure digesters, coal mine fugitive emissions, 

non-uniform oil/gas system components, and small wastewater treatment facilities that 

could not afford the administrative and compliance costs. This permitting need would 

overwhelm state and local permitting authorities.

Some industry commenters (4298, 5111, 7026) recommend using a combination 

approach based on the mass emissions of each synthetic GHG (PFC, HFC, and SF6) and the 

CO2e or other equivalent emissions of each naturally occurring GHG (CO2, CH4, and N2O). 

Industry commenters 4298 and 5111 argue that for sources of PFC, HFC, and SF6, which each 

have low mass emissions, there is no justification under the avoidance of “absurd results” and 

“administrative necessity” doctrines to group these pollutants or use an equivalency metric to 

evaluate title V and PSD applicability because they would rarely trigger applicability based on 

their mass emissions at the statutory thresholds.

Without necessarily opposing the use of GWP, state commenters 4239 and 7935 

recommend that EPA consider using a mass basis for individual GHGs because it may be 

feasible to regulate and control emissions of each GHG, other than CO2, at the 100/250 tpy

thresholds (or less if deemed necessary) according to the established mechanisms of the CAA. 

An industry commenter (4298) suggested that an alternative approach for calculating 

global warming equivalency could be based on N2O (i.e., N2Oe), which would yield emission 

ranges that would fall far closer to the statutory threshold levels than if a CO2e approach is used. 

The commenter notes that an N2Oe approach applied to a major source threshold of 100 tpy

would be only slightly less stringent than the proposed threshold of 25,000 tpy CO2e (i.e., 100 

tpy N2O is equivalent to 29,600 tpy CO2). The commenter adds that, to the extent that an N2Oe 

approach would exclude sources from PSD that EPA feels should be subject to GHG standards, 

EPA has the option to promulgate NSPS for such sources.

Response: 

After considering these comments, we have decided to adopt applicability thresholds 

based on a CO2e metric for the sum-of-six well-mixed gases, and also to adopt an additional 

mass-based threshold for the sum-of-six gases as discussed in the proposal. First, as discussed in 

the previous section, we have explained why the appropriate pollutant for PSD purposes is the 

single pollutant GHG, which is composed of the six well-mixed gases. Regarding the CO2e 

metric, we continue to believe there are a number of advantages, as laid out in the proposal, to a 

CO2e measure that would not be available if we used only a mass-based metric. These include: 
94

(1) a CO2e metric, by incorporating the GWP values, best addresses the relevant environmental 

endpoint, which is radiative forcing of the GHGs emitted; (2) when combined with a sum-of-six 

gases approach, the CO2e metric best allows for consideration of their combined effects when 

sources emit any one or combination of the six well-mixed GHGs; (3) a cumulative CO2e metric 

is consistent with the applicability metric used in the mandatory reporting rule and other related 

rules and guidelines; and (4) a CO2e metric allows more flexibility for designing and 

implementing control strategies that maximize reductions across multiple GHGs. We recognize 

the tension between the mass-based metric in the statute and the CO2e-based metric we are 

adopting in this rule, but as discussed later, we will address this by also retaining the mass-based 

metric. Moreover, given our need to tailor our approach for covering sources of GHGs, we 

believe that the considerations driving our choice to also use a CO2e-based metric are appropriate 

for defining the phase-in and allow for permitting resources to be directed at those sources and 

modifications that have the greatest impact on radiative forcing of the GHGs emitted. 

We recognize the concern of commenters who stated that we cannot ignore the statutory

thresholds based on the mass-based emissions of an air pollutant as described under CAA section 

169(1). As we mentioned in the proposal, because both the PSD and title V statutory thresholds 

are expressed on a mass basis—i.e., tons of a pollutant with no weighting values applied—we 

were concerned from a legal standpoint that the metric proposed (CO2e) could have the effect of 

subjecting to PSD or title V requirements a source whose emissions fall below the statutory

threshold limits on a strictly mass basis, but whose CO2e-based emissions exceed the CO2e 

thresholds we establish under the Tailoring Rule. As an example, in rare instances it is possible 

that a source may emit only a non-CO2 GHG in very small amounts, on a mass basis, but one 

that carries a very large GWP. In this case, it is possible that the source may emit the GHG in 

amounts that fall below the PSD and/or title V statutory applicability threshold (100 or 250 tpy, 

as applicable) on a mass basis, but exceed the 100,000 CO2e PSD and title V applicability

thresholds for step 2 in this action. Under these circumstances, without a mass-based threshold, 

the source would trigger PSD and title V for its CO2e emissions even though its GHG mass 

emissions would not, in fact, exceed the statutory triggers. 

Upon review of the comments pertaining to this issue and further analysis of the legal and 

programmatic implications, we are adopting a two-part applicability process, for both major 

source applicability determinations for GHGs under PSD and title V and for determining if a net 

increase has occurred in PSD applicability determinations for modifications. We accomplish this 

two-step applicability approach by continuing to rely on the existing mass-based applicability 

provisions in the current regulations, and by including new regulatory provisions that add a 

definition of "subject to regulation" that in turn includes the phase-in thresholds. Similarly, for 

PSD modification reviews and associated netting analyses, the same two-step process must be 

used. Our summary in section IV.A of the preamble describes how we expect this provision to 

be implemented in practice. 

Regarding concerns raised by one commenter that applying a CO2e-based threshold to 

methane sources will create an overwhelming permitting burden, we have carefully considered 

the impact of our final GHG threshold selection under step 2 of the phase-in on the 

administrative permitting burden that is created, including specifically the inclusion of the 

applicable methane sources mentioned in the comment. As discussed in more detail in Section 
95

V.B of the preamble to the final rule, we have decided upon a higher GHG threshold than was 

proposed, 100,000 tpy CO2e instead of 25,000 tpy CO2e for major source applicability, and we 

believe that there will not be an overwhelming permitting burden created for states as result of 

our step 2 thresholds, inclusive of any CH4 sources affected at the step 2 threshold. While, there 

may be some newly permitted CH4 sources under step 2, such as additional landfills and 

underground coal mines, we believe that these additional sources, which we estimate at less than 

300 total, will not result in a number of permitting actions that will overwhelm permitting 

authorities. 

We acknowledge that the possibility of changing GWP values is a downside to the use of 

CO2e for the GHG metric, and we address this comment later in this chapter, where we discuss 

our plan to codify GWP values. By codifying GWP, any changes will be manageable, and, in 

our judgment, will not outweigh the benefits of a CO2e-based approach. We also acknowledge 

that a CO2e-based approach may appear to complicate the BACT review and implementation 

process. However, we disagree with the commenter’s ultimate conclusion that BACT will be 

required for each constituent gas rather than for the regulated pollutant, which is defined as the 

combination of the six well-mixed GHGs. To the contrary, we believe that, in combination with 

the sum-of-six gases approach described above, the use of the CO2e metric will enable the 

implementation of flexible approaches to design and implement mitigation and control strategies 

that look across all six of the constituent gases comprising the air pollutant (e.g., flexibility to 

account for the benefits of certain CH4 control options, even though those options may increase 

CO2). Moreover, we believe that the CO2e metric is the best way to achieve this goal because it 

allows for tradeoffs among the constituent gases to be evaluated using a common currency. We 

also note that any BACT analysis conducted at a facility would have to take into account the cost 

of control and accordingly disagree that grouping the constituent gases into a single pollutant 

will lead to the imposition of controls that are not cost effective. 

We do not agree also with the commenter who suggested an N2O-based equivalent 

metric. There is little evidence of this approach being used anywhere in formal national GHG 

emissions reporting mechanisms, GHG emission trading regimes, or state and local GHG 

reporting programs. However, CO2e is a universally recognized and utilized metric for 

estimating and reporting GHG emissions, with well established protocols for applying GWP 

values based on CO2 equivalency. We find no reason to divert from this well-established metric 

for permitting purposes. Similarly, we have chosen to follow the same GWP values that are 

adopted in EPA’s final GHG Mandatory Reporting Rule, which are based on the 100-year time 

horizon; these GWP values are well established in international and national GHG reporting 

mechanisms and we see no reason to divert from those values for permitting program purposes

either.

5.2.2 Comments on Combining the Six GHGs into a Single Metric

Comment:

Most commenters who submitted comments during the public comment period did not 

speak to or show a preference for or against the combination of the six GHGs into a single 

metric, and there were some who agreed with the metric we proposed. Of those commenters that 
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specifically support the combining of the individual GHGs as one pollutant for purposes of 

determining permitting applicability, they stated that it is not uncommon for EPA to recognize 

‘collective’ air pollutants comprised of many individual compounds based upon shared threats to 

health and welfare, including such EPA-created group pollutants as sulfur oxides, nitrogen 

oxides, volatile organic compounds (VOCs), and PM. One state commenter (4742) agrees that 

EPA has substantial discretion to regulate pollutants collectively, and believes that this seems 

particularly appropriate with respect to GHGs.

A smaller number of commenters (many who also oppose including all six of the 

proposed GHGs) (2797, 4122, 4298, 4318, 4522, 4523, 4952, 4992, 5038, 5052, 5080, 5089, 

5111, 5114, 5128, 5143, 5257, 5317, 5327, 5328, 5601, 5741, 6459, 7026, 8301) specifically

oppose the proposal to combine all six GHGs into a single metric for permitting purposes, for 

some of the same reasons:

 Regulating all six GHG as a group will increase the likelihood that a source will trigger 

permitting requirements. The LDVR dictates how these GHGs will be regulated, and any 

other result is arbitrary and, therefore, does not pass muster under section 307(d) of the 

Act. (4118)

 Grouping all six GHGs is not appropriate because GHGs are not like other air pollutants 

that are comprised of numerous substances of concern (e.g., VOCs and PM). Since 

GHGs do not interact or combine to create a pollutant of concern, and EPA has not 

established a GHG NAAQS, GHGs should be regulated individually and treated in the 

same way as under the LDVR. (2797, 5328)

 The EPA should not regulate CO2 the same as the other GHGs because the other gases 

have higher GWP and are more potent. (2797)

 Defining the six GHGs as a single pollutant is unnecessary and would expand the scope 

of the statute. (7026)

Response:

After considering these comments, and taking into account other related actions that have 

occurred since proposal, we have determined that PSD and title V permitting program 

requirements will apply, as proposed, to the “single air pollutant that is comprised of the group of 

six GHGs.” 74 FR 55329. See the discussion under section 5.1 regarding which compounds are 

included in the definition of the GHG pollutant. We believe that this approach is both compelled 

by the statute and reflects the preferable policy approach. As more fully discussed in the 

preamble, under the plain language of section 169(1) a PSD major emitting facility is one that 

emits 100 or 250 tpy of “any air pollutant.” Through regulation we have reasonably limited the 

scope to this provision to those tonnages of any “regulated NSR pollutant,” which includes any 

pollutant that is “subject to regulation under the Act.” 40 CFR 52.21(b)(50)(iv). This same 

limitation exists in the definitions of major modification and BACT. 40 CFR 52.21(b)(2) and 

(b)(12). This regulatory limitation reflects the statutory directive that BACT is required for 

“each pollutant subject to regulation under this chapter.” 42 U.S.C. 7475(a)(4). 

Based on these provisions, the sole question in determining what a BACT analysis must 

cover is what pollutant is “subject to regulation.” This phrase carries with it no suggestion that 

the Agency may subdivide or otherwise change a pollutant that is regulated elsewhere in the Act. 
97

Instead, it carries with it a dictate that BACT be applied to the air pollutant which the 

Administrator has determined elsewhere to regulate. As described below, this air pollutant, in 

the case of GHGs, is the aggregate mix of the six constituent gases identified in the contribution 

finding which led to the promulgation of the LDVR, and is the air pollutant that the various 

LDVR emission standards address. This same logic regarding the definition of a pollutant 

“subject to regulation” applies to the determination of whether a source is a major stationary

source of a “regulated NSR pollutant.” Thus, we also read the definition of major emitting 

facility at CAA section 169 to be guided by the same requirement to define the “regulated NSR 

pollutant” that is “otherwise subject to regulation” to be the same air pollutant that is actually

regulated elsewhere under the Act. If, as here, that regulation considers the aggregate emissions 

of several compounds to be a single air pollutant, the same single air pollutant is a regulated NSR 

pollutant. As noted above, the statutory definition of major emitting facility covers “any 

pollutant.” As the LDVR and associated contribution finding have defined the aggregate group 

of the six GHGs to be the single “air pollutant,” they must be considered as such in determining 

if “any pollutant” is emitted above the provided thresholds. 

Similar to our discussion in section 5.1 above, since the time of our proposal, we have 

finalized both the Contribution Finding and the LDVR for GHGs. The final LDVR for GHGs 

specifies, in the rule’s applicability provisions, the air pollutant subject to control as the 

aggregate group of the six GHGs, including CO2, N2O, CH4, HFCs, PFCs, and SF6.

4

 Because it 

is this pollutant that is regulated under the LDVR, it is this pollutant that to which PSD and title 

V apply. Specifically, the applicability provision in the LDVR provides a clear reference to the 

definition of the single pollutant comprised of the aggregate group of the six well-mixed GHGs, 

which makes clear PSD and title V applicability depends on the same sum-of-six GHG construct. 

We must follow this construct of the aggregate group of the six gases and do not have discretion 

to interpret the GHG “air pollutant” differently for the purposes of PSD or title V. We note that 

many of the comments opposed to aggregating the six GHGs in this rule were already addressed 

in the final Contribution Finding. See, e.g., 74 FR 66541.

Of course, because the LDVR follows the Contribution Finding, this construct of the 

pollutant as the aggregate group of the six gases is also consistent with the definition of the air 

pollutant in the final Contribution Finding for GHGs (see 74 FR 66496, 66499, 66536-7, 

December 15, 2009). There, the Administrator defined the air pollutant as the “aggregate group 

of the same six...greenhouse gases” (see, specifically, 74 FR 66536), and these well-mixed 

GHGs are defined to include CO2, CH4, N2O, HFCs, PFCs, and SF6. 

Moreover, even if we had discretion to identify the GHGs air pollutant differently in the 

permitting programs than in the LDVR, we believe it is reasonable to identify the GHGs air 

pollutant through the sum-of-six construct for the same reasons why we adopted that definition 

in the contribution finding and for additional reasons noted below specific to the permit 

programs. The term “air pollutant” is defined under CAA section 302(g) as “any air pollution 

 

4

See 40 CFR 86.1818-12(a) Greenhouse gas emission standards for light-duty vehicles, light-duty trucks, 

and medium-duty passenger vehicles. (“Applicability. This section contains standards and other regulations 

applicable to the emission of the air pollutant defined as the aggregate group of six greenhouse gases: carbon 

dioxide, nitrous oxide, methane, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride.”).
98

agent or combination of such agents, including any physical, chemical, biological, radioactive...

substance or matter which is emitted into or otherwise enters the ambient air.” Under this 

definition, EPA has broad discretion to identify an air pollutant, including, as appropriate, 

treating a combination of air pollutant agents as a single air pollutant. Here, we think that the six 

well-mixed gases are appropriately combined into a single air pollutant because, as noted in the 

contribution findings, they share several important attributes: Each of the six gases --

 Is directly emitted (and is not formed by secondary processes in the atmosphere)

 Is long-lived in the atmosphere after it is emitted 

 Is sufficiently long-lived that it becomes “well-mixed,” which means that its 

concentration is essentially uniform in the atmosphere (as opposed to having significant 

local/regional variation); and 

 Has well understood atmospheric properties (e.g., radiative forcing).

See 74 FR 66516-66518.

In addition, treating the six GHGs as a single air pollutant is consistent with the actions of 

international scientific bodies. For example, the Intergovernmental Panel on Climate Change 

(IPCC) considers in various reports how the six gases drive human-induced climate change and 

how that affects health, society, and the environment. Similarly, the United Nations Framework 

Convention on Climate Change (UNFCCC) requires reporting of these six gases and the 

commitments under the UNFCCC and Kyoto Protocol are based on the combined emissions of 

these six gases. Finally, as discussed later, it is standard practice to compute the “carbon dioxide 

(CO2) equivalency” of aggregate emissions using GWP. 

We disagree with commenters who argued that grouping all six GHGs is not appropriate 

because GHGs are not like other air pollutants that are comprised of numerous substances of 

concern (e.g., VOCs and PM). First, as noted previously, we are following the approach to a 

single air pollutant comprised of the aggregate of the six GHGs initially adopted in the 

Contribution Finding and followed in the LDVR. We note that many of the comments opposed 

to aggregating the six GHGs in this rule were already addressed in the final Contribution 

Finding. See, e.g., 74 FR 66541.

In addition to the reasons described in the endangerment and contribution findings, there 

are CAA permitting programmatic and policy advantages to using the sum-of-six construct for 

the GHG air pollutant for PSD and title V applicability purposes. We believe now, as we did at 

proposal, that the benefits in using the cumulative group of GHGs outweigh any implementation 

advantages to using an individual-GHG-based metric. The advantages to sum-of-six definition 

include that it may -- (1) allow significantly more flexibility to sources for designing and 

implementing control strategies that maximize reductions across multiple GHGs and would also 

likely align better with possible future regulations that allow for such flexibility; (2) more 

effectively support possible future offsets or trading mechanisms that involve different source 

categories and different compositions of GHG emissions; and (3) could better accommodate and 

harmonize with future regulations because it establishes one class of pollutants that includes 

individual components that may, in turn, become subject to specific emission standards under 

future regulatory efforts. 
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We also disagree with commenters who believe that aggregating the GHGs under one 

GHG metric for permitting applicability purposes would lead to an excessive amount of source 

permitting activity or would increase the likelihood for a source to trigger applicability. This is 

because the phase-in approach addresses the overwhelming permitting burdens associated with 

permitting of GHGs. It does so by designing our applicability thresholds to allow for a 

manageable amount of new permitting actions based on the emissions from sources using the 

sum-of-six metric. If we based applicability on individual gases, (assuming, again, that we have 

authority to deviate from the definition of “air pollutant” as used in the LDVR), we would still 

need to determine what level of permitting is manageable and appropriate based on thresholds on 

an individual gas basis and would expect that the final rule would result in the same levels of 

remaining burden. Accordingly, unless the permitting program were being implemented at the 

statutory thresholds, the effect of a decision to aggregate or not aggregate would not reduce 

workload; it would simply shift work from permitting facilities that trigger based on combined 

GHGs to those that trigger based on individual GHGs. Although we acknowledge that this may

affect applicability for a particular source, we disagree with the commenter that doing so would 

conflict with our conclusions based on the “absurd results” or “administrative necessity” 

doctrines. By using a consolidated and weighted measurement, we are able to direct the limited 

administrative resources to those new sources and modifications with the greatest impact on 

GHG emissions.

5.2.3 Comments on Linking the Definition of CO2e to EPA’s “Inventory of U.S. 

Greenhouse Gas Emissions and Sinks”

Comment:

Numerous commenters express concerns about the proposal to link the definition of CO2e 

[see, e.g., proposed 40 CFR 51.166(b)(58)] to EPA’s “Inventory of U.S. Greenhouse Gas 

Emissions and Sinks” because that document may change from year to year. This document 

includes information about applicable GWPs and guidance on calculating emissions in terms of 

CO2e. Representative comments include the following:

 One commenter (4518) believes it is important to ensure that all permitting agencies are 

using the same calculations for the determination of CO2e for GHGs. The commenter 

notes that EPA’s document, which is updated annually, should address this issue, 

provided this information is provided in annual guidelines for permitting agencies.

 One fuels industry commenter (8459) states that EPA should follow the proper notice and 

comment procedures and the requirements of the IQA for the relevant technical 

underpinnings of the proposal. The EPA relies upon the GWPs of the IPCC without 

providing the supporting data for review, and it is inappropriate to use this as a basis for 

this rule without first making all the raw data available for public inspection and 

comment.

 A utility and natural gas industry commenter (4749) asserts that EPA cannot tie the 

definition to a non-regulatory document that may be changed without notice and 

comment rulemaking. This and other industry commenters (4106, 5140, 5181, 5278) 

contend that before EPA utilizes a new GWP, that GWP must be subject to notice and 

comment to comply with the requirements of CAA section 307 and the APA.
100

 Two solid waste industry commenters (5086, 5391) state that EPA should include 

guidelines in the rule for how the Agency will evaluate and adopt or reject changes to the 

international GWP standard and how it will apply the standard to PSD and title V 

permits.

 A number of commenters (4020, 4120, 4515, 4691, 5073, 5140, 5141, 5181, 5278, 5417) 

are concerned that an annual update of GWP would create a moving target for sources 

conducting applicability determinations and assessing compliance with minor NSR and 

PSD emission limits. According to the commenters, this type of enforcement jeopardy 

creates substantial uncertainty and will chill investment in more efficient technologies. 

The commenters assert that, at a minimum, EPA needs to ensure that applicability and 

compliance with limits continues to be based on the GWP that existed when the 

determination was made or the limit was established. One of the commenters provides 

two alternatives to address the issue of changing GWPs, along with several GHG 

calculation scenarios:

1. “Freeze” the GWP at the current values by incorporating those values into the 

regulation. The EPA could still revise the “NSR” GWP, but would have to revise the 

regulation to do so.

2. Allow the GWP to change as more research becomes available, but ensure that the 

new values are not used retroactively. This policy requires:

a. A date on which a revised GWP becomes effective (e.g., 30 days after the date the 

new Inventory is issued).

b. A transition discussion in the preamble to the final rule and, as needed, transition 

language in the final rule. The transition would ensure that the new GWP:

i. Would not apply to any complete applications submitted prior to the effective 

date of the revised GWP.

ii. Would not be used to revisit past applicability determinations.

iii. Would be used for future applicability determinations, including recalculation 

of past emissions increases and decreases as part of determining the net 

emissions increase.

 Some commenters (5143, 5417) have concerns about complications arising from 

fluctuating GWPs and the fact that new materials may be added to the IPCC list when it 

is revised, creating a change in a company’s emissions even if its operations did not 

change. This is a particular concern to semiconductor manufacturers because they use 

fluorinated materials (currently unlisted), which are a key focus in GHG regulation and 

likely to be listed in the future.

 One energy sector commenter (5742) believes that current GWPs reflecting the current 

scientific consensus should be used in calculating CO2e, specifically the GWPs specified 

in the IPCC Fourth Assessment Report (AR4). Using outdated factors strictly for 

consistency with a soon-to-expire international agreement to which the U.S. is not even a 

party results in incorrect emissions projections, which is particularly problematic in a 

GHG regulatory scheme where investment decisions with potentially long-term 

consequences will be made based on outdated science.

 One commenter (4948) suggests that EPA revise the definition of CO2e to reference the 

GHG Mandatory Reporting Rule for methods of calculating GHG emissions. The 

commenter indicates that if the GHG Mandatory Reporting Rule does not address a 
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facility’s GHG emissions, then the inventory and sinks document could be used as the 

reference.

Response: 

We agree with commenters who suggested we should codify, either in the Tailoring Rule 

or through reference to codified values in another rulemaking, the GWP values to be used in 

permitting analyses. We agree that this approach provides certainty as to which GWP values 

need to be used and permitting authorities and sources can plan appropriately for possible 

changes in the GWP values. As mentioned in the comments, recommended GWP values from 

IPCC can change over time. While this is infrequent – the last such changes were in 2007 –

when it occurs, there are generally significant lag times in universal adoption of new values 

because of inconsistencies that could be created in national inventories and emission reporting 

mechanisms. In a regulatory setting, such as in the permitting programs, this could potentially

create significant implementation issues, such as when a GWP change occurs while a permit 

action is in progress.5 EPA also recognized similar potential implementation issues in 

developing its final Mandatory Reporting Rule for GHGs, and codified in the regulatory text for 

that rule the GWP values to be used in reporting GHGs as part of that final rulemaking.

For these reasons, we have decided to follow the approach in the GHG Mandatory

Reporting Rule and require that for PSD and title V permitting requirements, wherever emissions 

calculations are performed, that permitting authorities and sources use GWP values that are 

codified in EPA rules. We will establish the GWP values for PSD and title V rules based on a 

cross-reference to the values that are codified in the EPA’s GHG Mandatory Reporting Rule 

[Reference: Table A-1 to Subpart A of 40 CFR part 98 – Global Warming Potentials, 74 FR 

56395]. Any changes to Table A-1 of the GHG Mandatory Reporting Rule regulatory text must 

go through a notice-and-comment regulatory process. In this manner, the values used for the 

permitting programs will reflect the latest values adopted for usage by EPA after a formal 

regulatory process and will be consistent with those values used in the EPA’s GHG Mandatory

Reporting Rule. Furthermore, the lead time for adopting changes to that rule will provide a 

transition time to address implementation concerns raised by commenters.

As noted above, we have decided to follow the approach in the EPA’s final GHG 

Mandatory Reporting Rule and require that for PSD and title V permitting requirements, 

wherever emissions calculations are performed, permitting authorities and sources use GWP 

values that are codified in that rule. We believe that maintaining consistency with the GHG 

Mandatory Reporting Rule in terms of what GWP values to use will provide a necessary level of 

certainty for both sources and permitting authorities. 

We also disagree with commenters who believe that, by updating the GWP values, this 

will necessarily result in shifting compliance obligations. Permitting authorities should be able 

to write BACT limits referencing the regulations in effect at the time.

 

5 We note that our approach does not entirely avoid the possibility that a GWP change can occur while a permit is in 

progress although it will ensure advance notice of such a change. In the event that we propose a change to GWP 

values, we will work with permitting authorities as necessary to provide guidance to sources on transitional issues. 
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5.2.4 Comments on the Use of Dual Thresholds for Pollutants that Do Not Exceed the 

Statutory Thresholds but Do Exceed the CO2e Thresholds

Comment:

In our proposal preamble discussion of GHG metric, EPA raised the possibility of 

including a limitation in the metric to address the prospect (expected to occur only rarely) that 

high-GWP gases could be emitted in quantities less than statutory thresholds for PSD and title V 

but nevertheless exceed the proposed thresholds in terms of CO2e. Most commenters (2369, 

4120, 4122, 4298, 4318, 4515, 4523, 4691, 4747, 4952, 4992, 5038, 5078, 5079, 5080, 5089, 

5111, 5114, 5128, 5236, 5257, 5280, 5317, 5327, 5601, 5741, 6459, 8301, 8545) on this subject 

support a dual threshold under which a source would be subject to title V or PSD only if its GHG 

emissions exceeded both the statutory thresholds on an actual tonnage basis and the tailored 

thresholds on a CO2e basis. Specific comments include the following:

 It would be unlawful to apply PSD when GHGs are below the statutory thresholds. With 

respect to netting, a source should not trigger PSD requirements unless there is a net 

emissions increase. (4122, 4318, 4523, 4952, 4992, 5038, 5080, 5089, 5114, 5128, 5236, 

5257, 5317, 5327, 5601, 5741, 6459, 8301)

 The complexity of accounting for emissions according to both mass and GWP should be 

manageable, and is not a reason to ignore the role of mass-based emission rates in 

determining the applicability of PSD requirements. (4120, 4515, 4691)

 A dual threshold is consistent with the phasing in of the Tailoring Rule and is an effective 

way to address the current uncertainty surrounding how to measure high-GWP gases. 

The commenters recommend that SF6 and other high-GWP gases not trigger PSD in such 

small quantities during the first phase because measurement is too uncertain and SF6’s 

high GWP will magnify potential measurement errors. (5078, 5079)

 For modifications to be considered major under PSD, the net emissions increase would 

have to be greater than 100 tpy on a mass emissions basis (for each individual GHG) and 

greater than 25,000 tpy CO2e of combined GHG emissions. (2369)

State commenter 8025 does not support a dual threshold trigger that incorporates the 

actual mass tonnage and the GHG GWP thresholds, believing that there is no benefit to the 

added complexity.

Response: 

As discussed in more depth in section V.A of the preamble, we recognize the concern of 

commenters who stated that we cannot ignore the statutory thresholds based on the mass-based 

emissions of an air pollutant as described under section 169 of the Act. As we mentioned in the 

proposal, because the PSD and title V statutory thresholds are expressed on a mass basis – i.e., 

straight tons of a pollutant with no weighting values applied – we were concerned from a legal 

standpoint that the metric proposed (CO2e) could have the effect of subjecting to PSD or title V 

requirements a source whose emissions fall below the statutory threshold limits on a strictly mass 

basis, but whose CO2e-based emissions exceed the CO2e thresholds we establish under the 

Tailoring Rule. Although we feel this hypothetical situation would rarely occur, mainly in 
103

instances where a source emits only a non-CO2 GHG with a high GWP value in very small 

amounts, we believe we are required to address this occurrence in the final rule.

Upon review of the comments pertaining to this issue and further analysis of the legal and 

programmatic implications, we are now requiring a two-part applicability process, for both major 

source applicability determinations for GHGs under PSD and title V and for determining if 

significance levels have been exceeded in the PSD applicability determinations. While the 

regulation we are promulgating today does not contain tonnage thresholds on a mass basis for 

GHGs, by implementing this tailoring approach through the term "subject to regulation" we 

achieve the result described above, that is that to be a major stationary source a source must emit 

100/250 tpy on a mass basis of some regulated pollutant and for a major modification to occur 

there must be an emissions increase on a mass basis. The rule achieves this result because all 

that the CO2 e based thresholds do is determine if GHGs are "subject to regulation" at a specific 

source. If GHGs are determined to be subject to regulation at a specific source then GHGs 

would be considered "regulated NSR pollutants" within the meaning of 51.166(b) (49) or 

52.21(b)(50).

Assuming that GHGs are determined to be a regulated NSR pollutant, this does not mean 

that PSD automatically applies. Rather, the remaining regulatory structure, which is unaffected 

by this action, would then come into play. This includes the definition of "major stationary

source" at 52.21 (b)(1) and 51.166(b)(1), which requires that a source emits 100/250 tpy (on a 

mass basis) of a "regulated NSR pollutant" before a source is a major stationary source. It also 

includes the definition of "major modification" at 52.21(b)(2) and 51.166(b)(2) which requires 

that before a modification occurs there be a "significant net emissions increase", also determined 

on a mass basis. 

By way of example, assume that a new source wanting to construct after July 1, 2011 will 

have the potential to emit 10tpy of sulfur hexafluoride (SF6) but have no other emissions. First 

the source would determine if it emitted a "regulated NSR pollutant" by using the formula 

specified in 51.166(b)(48) or 51.21(b)(49) (as applicable). In this case by using the specified 

formula we would determine that the source emits 239,000 tons of CO2e ((10 ton SF6) x 23,900 

(GWP of SF6)). Because this exceeds the 100,000 tpy (CO2e) threshold for new sources after 

July 1, 2011 specified in the regulation, GHGs would be "subject to regulation" for this source 

and would constitute a "regulated NSR pollutant."

The source, however, would not be a major stationary source, and thus not subject to 

PSD. This is because the source only emits 10 tpy (mass basis) of a regulated NSR pollutant 

(GHGs) which is below the major source threshold of 100/250 tpy (mass basis). Both 

determinations would be based on the sum-of-six GHGs. Additional explanation of how to 

implement this approach is provided in section IV.A of the preamble.
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5.2.5 Comments on the Use of English versus Metric Tons for GHG Metric

Comment:

We proposed that the GHG metric would be expressed in terms of English (or short) tons, 

rather than metric (or long) tons. The existing applicability thresholds for PSD and title V are in 

terms of English tons.

Some state commenters (4238, 4239) support using English tons rather than metric tons, 

but several commenters (4513, 4526, 4864, 4951, 5130, 5147, 5224, 5314, 5305, 5338, 5351, 

8461, 8546) prefer metric tons for this purpose. Most of the latter commenters note that the 

GHG Mandatory Reporting Rule is based on metric tons and believe that the Tailoring Rule 

should be consistent. Specific comments include: 

 Use of the same units will avoid confusion. (5305).

 In addition to the GHG Mandatory Reporting Rule, various “cap and trade” legislative 

proposals quantify GHGs in metric tons. The 10 percent difference between short tons 

and metric tons will cause significant confusion, complexity, and burden for states and 

sources. (4106 and 5040).

 If the difference between the units of the Tailoring Rule and the GHG Mandatory

Reporting Rule is retained, a site that would not be subject to the GHG Mandatory

Reporting Rule could be subject to PSD, which is not in keeping with EPA’s intent to 

apply the Tailoring Rule only to “major sources.” (4951)

 The EPA should be consistent and use the same units (i.e., metric tpy CO2e) in this rule 

and for all future GHG rules. (5351)

 The proposed rule is not clear as to whether it is based on English or metric tons. (8546)

Other state (4521, 4989, 5061), industry (4298, 4801), and military (4747) commenters 

say that EPA should harmonize the applicability thresholds established under the proposed 

Tailoring Rule and the GHG Mandatory Reporting Rule to utilize the same units (i.e., either 

English tons or metric tons).

An industry commenter (5922) recommends that EPA change the GHG Mandatory

Reporting Rule to require that data be collected in English tons to promote consistency.

Response: 

Short tons are the standard unit of measure for both the PSD and title V permitting 

programs and the basis for the threshold evaluation to support this rulemaking. Calculation 

inputs for PSD are typically prepared in English units (e.g., pounds [lbs] of fuel, million British 

thermal units [MMBtu’s], etc.) which is the common convention for all PSD analyses and the 

units of the statutory thresholds under the Act. 

It is true that the GHG Mandatory Reporting Rule uses metric tons, but this does not 

create an inconsistency between permitting programs and the GHG Mandatory Reporting Rule

because the two rules already use different applicability approaches. Although we originally

proposed 25,000 tpy as the major source level for permitting programs, which was similar to the 
105

threshold in the GHG Mandatory Reporting Rule, we decided to adopt substantially higher 

thresholds in the final rule. Furthermore, even if the numbers were similar, the thresholds used 

for the GHG Mandatory Reporting Rule are based on actual emissions, while the PSD and title V 

programs are based on potential to emit. Therefore, we are less persuaded by arguments for 

consistency, and believe it is more important for ease of permit program implementation to 

ensure that GHG emissions calculations for PSD and title V will build on the same set of input 

variables used to develop short ton-based estimates for non-GHG pollutants. Thus, the use of 

short tons should actually facilitate the development of the GHG emission estimate. It would 

likely be more confusing to require a multi-pollutant PSD applicability analysis to present 

emissions information using different units for different pollutants, as would be the case if we 

required metric tons for GHG but continue to use short tons for every other pollutant. Finally, 

we do not expect this choice to introduce additional complexity because the conversion between 

short tons and metric tons is a very simple calculation. Therefore, based on these considerations 

we are requiring that short tons be used as the basis for emission calculations used to meet PSD 

and title V permitting requirements. 
106

Chapter 6. Comments on Permitting Thresholds

6.1 Comments on Administrative Burden and Sources Impacted under the Statutory Thresholds 

At proposal, we discussed the impacts that we projected would occur if the PSD and 

title V programs were implemented for GHGs at the statutory thresholds of 100/250 tpy. We 

received many comments on these projected impacts, which are addressed below.

Comment:

Most commenters, including industrial (3512, 3513, 3906, 4020, 4123, 4741, 4794, 4870, 

4903, 5088, 5104, 5110, 6201, 8545, 16411), agricultural (3917, 4572, 5245, 5602, 5743), state 

(4522), and other (3277, 5342) commenters, agree with EPA that the immediate imposition of 

the statutory major source thresholds for PSD and title V would overwhelm both programs, to 

the detriment of facilities; federal, state, and local permitting authorities; and the nation as a 

whole. Some of these commenters (4020, 4522, 4903, 5104, 6201) also believe that we

underestimated the number of sources that would be subject to these programs at the statutory

thresholds, asserting for example that many more residential homes, commercial buildings, and 

retail stores than estimated would be subject because the estimate in EPA’s Technical Support 

Document (TSD) was based on actual emissions from space heating equipment rather than PTE. 

Some agricultural sector commenters (5245, 5602) provided examples of the types of small 

agricultural operations (with no experience in air permitting) that would be subject at the 

statutory thresholds. 

Numerous commenters believe that the statutory thresholds will become applicable, 

despite the Tailoring Rule, if EPA goes forward with regulation of stationary sources of GHGs 

under the Act. These commenters give one or more of the following reasons:

 States will require time to revise their laws and regulations to reflect the Tailoring Rule. 

Thus, the statutory thresholds will apply immediately and remain applicable during this 

interim period. Some states may choose not to conform their programs to the Tailoring 

Rule thresholds. (3720, 3953, 4019, 4095, 4515, 4524, 4691, 4864, 4866, 4903, 5058, 

5084, 5113, 5123, 5143, 5168, 5181, 5276, 5343, 5714, 5800, 7935, 8015, 8459, 16411)

 The Tailoring Rule is legally uncertain and thresholds may revert to the statutory levels. 

(3277, 3513, 4095, 4123, 4864, 5074, 5342, 5743, 8400)

 The thresholds will return to the statutory levels after the initial phase of tailored 

thresholds, development of streamlining approaches, and EPA study. (3917, 3953, 4572, 

5056, 5186, 5245, 5602, 5743, 5789, 8521)

 Three state commenters state that the additional workload and backlog will significantly 

delay or jeopardize economically critical PSD programs in their states. (2504, 4312, 

4871)

 One state commenter argues that it is very likely that their permitting programs will grind 

to a halt because they will not have state authority to issue permits addressing GHGs but 

will be required to by federal statute. (4949)

 One state commenter opines that their state will be in jeopardy of not meeting its 

statutorily imposed time frame for the issuance of title V and PSD permits under the 

proposed rule. (5307)
107

 The proposed rule would negatively impact their state government, because their state 

constitution requires a balanced budget. The recession has resulted in diminished 

revenues and increased needs for social services and implementing the proposed rule 

could further undermine critical state programs. (3906)

 It is unacceptable that regulating GHGs under the CAA will render it impossible for 

permitting authorities to meet the CAA section 165(c) requirement to process PSD permit 

applications within 12 months. EPA must do more to lessen the impact of PSD on state 

agencies and stationary sources under the proposal. (5082)

Response:

We agree with the many commenters indicating that applying permitting requirements to 

GHG sources at the statutory thresholds in the near term would be an overwhelming 

administrative burden for permitting authorities. In this final action we address this situation 

through a common sense, phased-in approach to GHG applicability that makes the permitting 

process for GHG sources administratively feasible. The legal and policy rationale for this 

approach to burden in the final rule is described in detail in section V.B. of the final preamble.

We disagree with commenters who stated we underestimated the number of residential 

and/or commercial facilities that would be subject at the statutory thresholds of 100 and 250 tpy

because we based those emissions on an ‘actuals’ basis instead of a PTE basis. In fact, our 

threshold analysis estimates for the residential and commercial sectors (as well as all other 

sectors) are based on a PTE basis. We used a significant adjustment to reflect PTE in the 

residential and commercial sectors, assuming that a residential facility operates its fuel 

combustion sources only at 10 percent of capacity and commercial facilities only at 15 percent of 

their capacity. Based on these assumptions, we adjusted residential actual emissions upward by

a factor of 10, and commercial actual emissions by a factor of 6.6 to obtain PTE-based estimates 

in order to determine the number of buildings in these sectors that would exceed a particular 

GHG threshold. There is very little information available on the capacity utilization rates of fuel 

combustion equipment at different types of residential and commercial facilities, but we believe 

our estimate is within a reasonable range of what would be expected at these types of facilities. 

Information on the development of these estimates is provided in our Technical Support 

Document for Greenhouse Gas Emissions Thresholds Evaluation. 

In this final action we have addressed the concerns raised by some of the commenters on 

the time period necessary for states and local permitting authorities to amend or revise their laws 

and regulations, and the uncertain prospect of the statutory thresholds coming into effect if the 

state and local permitting authorities did not have time to make those changes. There will be no 

permitting requirements for GHG stationary sources prior to January 2, 2011 as a result of the 

final reconsideration of the PSD Interpretive Memo’s interpretation of “subject to regulation.” 

After this date, based on the actions established through this final Tailoring Rule, we are a 

requiring a multi-step, phased-in approach for permitting GHGs at stationary sources utilizing an

implementation mechanism for states and local agencies that allows them to rely on EPA’s 

interpretation of the “subject to regulation” language codified under this final action. By

utilizing this mechanism, we believe most states will be able to readily implement the phased-in 

approach to GHG permitting required by this rulemaking, which does not allow the GHG 
108

threshold levels for permitting applicability to drop below 50,000 tpy CO2e at least until April 

30, 2016. We ask permitting authorities to confirm that they will follow this implementation 

approach for their programs, and if they cannot, then we will ask them to notify us so that we can 

take appropriate follow-up action to narrow our federal approval of their programs before GHGs 

become subject to regulation for PSD and title V programs on January 2, 2011. This will ensure 

that our approvals do not federally obligate states to implement these programs for GHG until 

they demonstrate that they have adequate resources to do so by undertaking necessary

programmatic, statutory, and/or regulatory changes at the state, local or tribal level.

We have also stated in this final action that there will not be an automatic sunset 

provision to the statutory threshold levels at the end of any of the phase-in steps and a general 

exclusion for sources less than 50,000 tpy CO2e will not end until such time as EPA undertakes 

rulemaking action in 2016 to reflect the 5-year implementation study results. We believe this 

action provides certainty to both permitting authorities and sources as they plan ahead to address 

GHG permitting requirements.

We are confident in the legal basis for the final Tailoring Rule, which is described in 

more detail in section V of the preamble to the final rule and in our response to comments on the 

legal basis for the final rule summarized in Chapter 3 of the this RTC.

6.2 Comments on the Administrative Burden and Sources Impacted under the Proposed 

Thresholds

At proposal, we estimated the administrative burden that would result from regulation of 

GHGs under the PSD and title V programs at the proposed thresholds. We received numerous 

comments on these estimated burdens and the types of sources that would be impacted, which 

are addressed below.

Comment:

Many commenters provided comments on the administrative burden that would result 

from the proposed thresholds for PSD and title V major sources and PSD significance. Many

commenters address these thresholds generally, while some gave specific comments on one or 

more of the thresholds individually. 

One state commenter agrees with the EPA’s administrative burden estimates. (8803)

Numerous state commenters (2504, 2797, 3858, 3915, 3916, 3918, 4154, 4238, 4512, 

4521, 4694, 4864, 4871/5063, 4949, 4989, 5039, 5061, 5084, 5135, 5198, 5307, 5314, 5339, 

5524, 7935, 19144) indicate that the administrative burden at the proposed thresholds will be 

excessive, and many of these commenters (2504, 2797, 3916, 3918, 4154, 4512, 4864, 4949, 

4989, 5307, 5313, 5314, 5339, 5672, 5744) believe that EPA has significantly underestimated 

these administrative burdens. According to some state commenters (3858, 3916, 4521, 4531), 

EPA also has overestimated permitting authorities’ ability to hire and train sufficient staff to 

implement GHG permitting. These commenters state that they do not have the staff currently, 

nor do they have the budget to hire additional staff to shoulder the increased burden. 
109

A number of state commenters provide estimates of the impact on their permitting 

programs that would occur under the proposed thresholds:

 Approximately 130 new PSD major sources and 90 new title V sources. (4019)

 Coal-fired units, natural gas-fired units, Nos. 1-4 fuel oil units, Nos. 5-6 fuel oil units, 

and wood-fired units will be substantially smaller than what has historically been subject 

to major source permitting. (4519)

 Current list of approximately 150 operating permit sources would increase by

approximately 360 to a total of 510 sources, and a title V threshold of 50,000 tons of 

CO2e would result in approximately 180 new sources. (4860)

 There could be over 30 new title V permits issued in one source category (natural gas 

compressors) alone. (5061)

 The number of new or modified PSD sources projected to be over the proposed 25,000 

tpy CO2e annually would be approximately 20. The number of new title V permits under 

the proposed threshold would be approximately 165. (19144)

 The number of facilities subject to title V would increase by 45 percent to 115 percent, 

adding from 66 to 163 new facilities to their current roster of 142 title V sources, and 

PSD actions would increase from 3-4 per year to 70 per year. (6681)

 Thirty additional permitting FTEs would be needed for the oil and gas industry alone for 

title V permits due to GHGs, with this estimate only including permitting staff and not 

taking into account other agency staff needed. At least 150 FTEs would be needed to 

handle PSD permitting with a significance level of 10,000 tpy. (2797)

 The state would need to issue new title V permits to 50 additional facilities, which is a 

substantial administrative task. (4154)

 Ninety percent (283) of 314 currently permitted title V sources would need modification 

and 522 of the 2,448 synthetic minor and small permitted sources that are currently not 

title V sources would trigger the major source threshold (with 48 of these needing title V 

permits and the other 474 able to become synthetic minors) (4864). The commenter 

believes that there may be many other sources that currently do not have permits that 

would be above the major source threshold for title V, such as 75-115 active landfills and 

hundreds of inactive landfills. Regarding PSD permitting, the commenter estimates that, 

in addition to about 6 PSD permits per year presently, a significance level of 25,000 tpy

would result in 28 NSR actions for title V sources and 96 NSR actions for synthetic 

minor and small permitted sources, with an unknown number for currently unpermitted 

sources.

 There will be 578 permit actions in the state as a result of the Tailoring Rule and of these 

actions, 119 would be major stationary source permit actions. (4949)

 There will be a doubling of PSD work and an increase of 69 percent for title V work. 

(5339)

 The increase in title V permit workload should be close to EPA's estimate of a factor of 

two and that an additional eight projects per year will trigger PSD permit requirements 

due to GHG emissions, which represents an increase in workload of about a factor of 

four. (8747)

 Title V sources in their state will increase from the current level of 685 to 942 (38 percent 

increase) based on PTE, and from 685 to 784 (14 percent increase) based on allowable 

emissions (5135/5198). The commenter estimates current staffing levels for operating 
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permits would need to increase by at least 50 percent. The commenter also estimated a 

600-638 percent increase in PSD permits per year, with current staffing levels needed to 

increase at least 6-fold, adding an additional 42 FTE employees. 

 A doubling and possibly a tripling of the number of PSD permits the state issues per year

will occur. (5528)

 The number of regulated sources will increase at least two-fold and perhaps more. 

(5307)

 Workload and costs will be two to three times higher than that estimated by EPA. (4512)

 A 29 percent increase in the title V permitting workload as well as an increase in 

synthetic minor permitting will occur because many of the sources newly subject to title 

V and PSD will seek synthetic minor permit limits to reduce their PTE instead of 

submitting a title V application. (3916) 

 There will be at least 75 new title V sources at a threshold of 25,000 tpy CO2e and at least 

15 new title V sources at 50,000 tpy CO2e. (5039)

Numerous industry (3512, 3859, 3998, 4018, 4106, 4113, 4241, 4298, 4368, 4515, 4632, 

4691, 4692, 4749, 4865, 4370, 4903, 5052, 5056, 5059, 5073, 5083, 5085, 5086, 5111, 5133, 

5136, 5140, 5141, 5143, 5181, 5275, 5278, 5303, 5328, 5329, 5351, 5391, 5417, 5425, 5708, 

5711, 5729, 5740, 5770, 5773, 5787, 6141, 7125, 7213, 8015, 8283, 8303, 8396, 8459, 8581, 

8584, 16411), agricultural (8013), government agency (5367), and other (5346, 5444) 

commenters also contend that EPA significantly underestimated the administrative burden 

associated with the proposed thresholds (some providing data) and/or that the administrative 

burden under the proposed thresholds would still overwhelm the states and result in significant 

permitting delays and uncertainty for sources. Many of these commenters indicate that our 

estimate of the number of sources that would be subject to permitting is too low, and some add 

that we have underestimated the per-permit effort required. (More detail on these comments is 

given in section 6.3 on the methodology used in the analysis.) Representative comments include 

the following:

 The proposed thresholds would not make PSD requirements for GHGs administratively

feasible or cure the absurd results because EPA has underestimated the number of 

affected sources. (4749)

 Even if EPA's estimates are correct these figures still represent a significantly increased 

permitting burden for the states. (5328, 8013)

 The EPA’s underestimation means that the proposed thresholds are not at “the level 

closest to the statutory levels that permitting authorities can reasonably administer during 

this initial phase.” (4515, 4691)

 The manpower demand for the GHG regulatory requirements along with the strict state 

hiring practices and training requirements would slow the permitting process, thus stifling 

construction and much needed investments at a time when the economy is struggling to 

recover and unemployment rates continue to rise. (5328, 5367, 8015)

 The EPA should revisit the justification for the proposed thresholds on the basis of more 

detailed sector-by-sector data. (4515, 4691)

 Projects that actually improve energy efficiency could be delayed because of the way

calculations must be carried out to determine whether a significant emissions increase 

will result from the project. For example, if there is a project that would reduce CO2

emissions overall, but the project involves a new emissions unit (as defined in the 
111

regulations), then the significance threshold may be exceeded based on the potential 

emissions of the new unit, and the project would be delayed due to PSD permitting. 

(4241)

 Although plantwide applicability limits (PALs) might be useful in some cases, it is likely

that many routine changes would still trigger permit revision requirements. (5143, 5417)

 The proposed thresholds would cause many small and possibly closed landfills to be 

newly subject to PSD requirements and would also adversely influence potential plans by

existing landfills to convert landfill flares into landfill-gas-to-renewable-energy projects. 

(5086, 5391)

 The proposed thresholds and associated permitting delays will impede the ability of the 

natural gas (NG) sector to build the infrastructure necessary to support the anticipated 

increase in demand, which will be particularly problematic in the rapidly-developing 

Appalachian region where the coal industry is expected to be negatively impacted by 

GHG regulation. (4749, 6141)

 The semiconductor manufacturing industry’s business depends upon developing and 

bringing new products to market regularly and quickly, often requiring modifications to 

existing factories to do so. There will be a tremendous risk that many of the permits 

would not be issued rapidly enough to allow for these changes. Clearly, such a situation 

provides a competitive advantage to facilities located outside the U.S. that are able to 

make rapid changes without delay. (5141, 5143, 5329, 5417)

 Some commenters indicate that EPA underestimated the number permits required for 

specific industry sectors (often providing data), including the oil and gas production 

industry (4749), the NG transmission industry (4515, 4691, 6141), the semiconductor 

industry (5141, 5143, 5329, 5417), the wood products industry (4903), the brick industry

(5073), and landfills (4368, 5086, 5391).

Response:

We agree with the many commenters that believe EPA underestimated the permitting 

actions, and thus the administrative burden, associated with the proposed thresholds. Since the 

proposal, we have reevaluated our assessment of the potential permitting actions and 

administrative burdens related to the inclusion of GHG emission sources, both for the PSD and 

title V programs, at the proposed thresholds and for other options. Based on this re-evaluation, 

which is described in detail in the TSD contained in the public docket for this final rulemaking, 

“Summary of Methodology and Data Used to Estimate Burden Relief and Evaluate Resource 

Requirements at Alternative Greenhouse Gas (GHG) Permitting Thresholds,” we determined a 

number of reasons for our underestimate of permitting actions in the proposal and have 

substantially revised our estimate of permitting actions accordingly. Based on these revisions, 

we are now finalizing significantly higher applicability thresholds than what was in our proposal, 

occurring in a multi-step phase in process.

We identified three main reasons for our underestimate of permitting activity under the 

proposed GHG thresholds. (Please refer to section V.B.2 of the preamble for the final rule and 

the burden analysis TSD mentioned in the previous paragraph above for further explanation of 

our final burden assumptions and changes from the proposal.) The most significant reason for 

underestimation, and raised by multiple commenters, was that we did not fully account for the 
112

number of major modification projects at existing major sources because we did not capture the 

number of existing projects that avoid major PSD review (by either taking limits—synthetic 

based modifications—or by netting out) for existing pollutants but that would not be able to 

avoid PSD for GHGs (at either the 10,000 or 25,000 tpy CO2e significance levels). Currently we 

estimate the population of these types of minor modifications at about 23,000, almost 9,000 of 

which we now estimate under our revised burden analysis would be subject to major PSD review 

at the proposed 25,000 CO2e PSD significance levels. In comparison, this is significantly higher 

than our original estimate of 273 modifications under PSD due to GHG emissions in the 

proposal. 

Second, our proposed general modification rate (2 percent of major source population) 

used to estimate modifications at newly major GHG sources does not appear to have caught the 

extent to which facility level changes may quickly surpass the proposed significance levels for 

CO2 (e.g., multiple changes involving combustion units can aggregate to a 10,000 or 25,000 

CO2e significance level threshold fairly quickly). In reassessing this modification rate, we 

determined that we had not fully accounted for all PSD modifications relative to the major 

source population in calculating this modification rate. Based on this reassessment we have 

revised our general modification rate to 4 percent which is used to estimate the annual 

modification activity at newly major GHG sources. 

Third, we believe our estimate of capacity utilization used for estimating PTE-based 

emissions for the general manufacturing source category (referred to as ‘unspecified stationary

combustion’ in the GHG threshold analysis TSD) and the oil and gas industry was not accurate. 

In our proposal, the range for capacity utilization for ‘unspecified stationary combustion’ varied 

from 70 to 90 percent depending on manufacturing category, and for the oil and gas industry we 

used 90 percent. Based on comments received indicating that these utilization rates are higher 

than what is normally achieved in real-world conditions, particularly for smaller manufacturing 

type facilities, we used a 50 percent capacity utilization rate for both of these source categories. 

We believe that these assumptions better reflect what can be deemed reasonable operation under 

normal conditions for facilities in these source categories.

We recognize commenter concerns on the potential for serious delays in the permitting 

process as a result of a possible excessive influx of permitting actions due to newly permitting 

GHG emission sources at our proposed thresholds. One of our goals in selecting the proposed 

thresholds for GHG permitting was to ensure that the PSD and title V permitting programs were 

not severely disrupted to the point they were not operating effectively and in a timely basis due 

to the addition of GHG permitting requirements. For our finalization of this rule we have 

addressed these concerns through both our reassessment of the burden as described above (and 

the resulting GHG applicability thresholds selected for the final rule) and through now applying 

a multi-step phase-in process. See section IV of the preamble for the final rule for a full 

explanation of the steps in the phase-in approach and the final applicability thresholds that are to 

be used in each step. 

The end result of the adjustment to our burden estimates described above is that our 

estimates of PSD and title V permitting actions increased significantly at the proposed GHG 

threshold levels, to a level that we believe our proposed GHG thresholds for applicability are not 
113

consistent with the goal of avoiding a permitting burden that would overwhelm the capacity of 

permitting authorities to effectively implement their programs. Therefore, for this final action 

we are establishing a multi-step, phase-in approach that contains significantly higher GHG 

starting point threshold levels (i.e., a 100,000 tpy CO2e major source threshold for PSD and title 

V and a 75,000 tpy CO2e PSD significance level in step 2). 

In addition to establishing higher GHG applicability thresholds for step 2 of the Tailoring 

Rule phase-in, we have defined a step 1 to the phase-in process that applies only to sources that 

currently have, or would otherwise be subject to, PSD or title V permitting requirements under 

the CAA for other non-GHG pollutants. That is, no source under the step 1 phase, which extends 

from January 2, 2011 to June 30, 2011, would trigger permitting requirements for PSD or title V 

solely based on their GHG emissions. We believe the combined effect of the GHG applicability

triggers and the phased-in schedule for their implementation finalized in steps 1 and 2 of the final 

rule will result in an administrative and permitting burden that is manageable for both permitting 

authorities and sources in this near term and that will address concerns of commenters regarding 

excessive delays in permitting due to the permitting of GHG emission sources. 

We appreciate the comments by individual states in which they describe the increases in 

their workload that they anticipate. This information generally confirmed that our proposal 

underestimated the amount of administrative burden, and proved useful to us in recalculating the 

amount of the burden. Data on a nationwide basis was the comprehensive that was available 

because we did not have a full set of data from each state, and as a result, we made the final 

burden estimates on a nation-wide basis, as opposed to attempting to do so on a state-by-state 

basis.

Comment:

A number of commenters (3512, 4123, 4368, 4746, 4863, 4903, 4951, 5052, 5064, 5073, 

5086, 5104, 5137, 5140, 5181, 5236, 5245, 5276, 5278, 5305, 5342, 5391, 5712, 6201, 6457, 

7129, 8283, 8459, 16411) believe the proposed 25,000 tpy CO2e threshold is too low, 

representing smaller sources, rather than larger sources, which is not in keeping with 

congressional intent. Comments include the following:

 A CO2 emissions rate of 25,000 tpy corresponds to a relatively small combustion source, 

perhaps as low as a 4 megawatt (MW) boiler or engine. If BACT is applied, the 

corresponding NOx emission levels may be as low as 2 tpy, far below the 100/250 tpy

levels in PSD or title V. (4746, 4863, 5064, 5276, 5305)

 The proposed threshold of 25,000 tpy would still capture many small businesses. A 

California Air Resources Board (CARB) list of businesses and other entities that have the 

PTE over 25,000 tpy of CO2e includes dairies, breweries, wineries, landfills, universities, 

food production plants and packing companies, water pollution control plants, paper 

plants, pharmaceutical factories, military installations, irrigation facilities, and farms, 

among others. (5140, 5181, 5278, 7129)

 The thresholds should be set at levels that correspond to Congressional intent to impose 

regulation only on sources that are “major,” i.e., of a size in the range of 100/250 tpy of 

conventional pollutants such as NOx, VOCs, and particulate matter. (3512, 4746, 4863, 
114

4903, 5086, 5276, 5305, 5342, 5391, 6457) Some commenters add the following 

rationale:

o This approach would obviate the need for the administrative necessity argument since 

permitting authorities would not be overwhelmed. (3512, 4746)

o This approach could be used in EPA’s planned first phase to evaluate the pros and 

cons of bringing GHGs into the PSD and title V programs, and the thresholds could 

be changed later if necessary to capture more sources or CO2e. (4746)

o This approach would be consistent with the doctrines of administrative necessity and 

absurd results, which require EPA to remain as true to original Congressional intent 

as possible. (5276)

 The D.C. Circuit, in rejecting an approach to PSD applicability under which the heating 

plant of a large high school or a small community college would be subjected to PSD, 

stated: “We have no reason to believe that Congress intended to define such obviously

minor sources as “major” for the purposes of the PSD provision.” Alabama Power, 636 

F.2d at 354. There simply is no basis for EPA’s assertion that small boilers and other 

small sources are the type of facilities that Congress intended to be addressed through the 

PSD program. This commenter provides Congressional Record citations to support this 

position. (4903)

 The threshold should be consistent with existing clean air standards, such as NSPS and 

NESHAP. (4951)

 The EPA should establish appropriate sector-specific thresholds, including much higher 

thresholds for landfills which will be disproportionately impacted by the proposed 

thresholds. The EPA already has established unique, landfill-specific PSD thresholds for 

NMOC, and should establish GHG thresholds for landfills that are consistent with the 

current PSD thresholds and regulate a comparable portion of the solid waste management 

sector. (4368, 5086, 5305, 5391)

 A 10 tpy NOx source (which is major in extreme nonattainment areas) roughly equates to 

100,000 tpy CO2e (4746). Commenter 4903 presents several calculations relating NOx 

and CO emissions to CO2e emissions from boilers (NG and wood-fired) and lime kilns, 

along with the major modification implications of these differences (i.e., that the 

proposed GHG thresholds would bring much smaller sources into the system than under 

the current system based on criteria pollutants).

 More than 90 percent of public power systems (i.e., not-for-profit municipal and other 

state and local community-owned electric utilities) qualify as small businesses under the 

Small Business Act and Small Business Regulatory Enforcement Fairness Act 

(SBREFA), yet approximately 88 percent of the association’s more than 2,000 members 

with generation facilities will be subject to the PSD during the first phase of the proposed 

rule. (5052)

 A large turkey or broiler operation could be subject to permitting at a 25,000 tpy

threshold, and many medium-sized operations would be subject at a threshold of 

10,000 tpy. (5254)

 The threshold levels should be low enough to cover the vast majority of public utility

power generation sites, the medium and larger petroleum refineries, and the medium and 

larger industrial sites; but high enough to not include the many inconsequential gas 

compression, landfill, petroleum drilling and production, and small power generation 

sites.
115

Response:

Based on these comments, we reassessed our original burden estimates from our 

proposal. This reassessment is discussed in our previous response. After all adjustments were 

factored in, we determined the burdens at the proposed 25,000 threshold and the proposed 

10,000-25,000 significance levels would be unmanageable. For example, our reassessment of 

PSD program burden to the permitting authorities at the 25,000 tpy CO2e major 

source/significance level shows an annual increase of $217 million (this is approximately a 1,800 

percent increase over current permitting authority annual burden for the major NSR program). 

For title V, the estimated increase under our final burden analysis at a 25,000 tpy CO2e 

represents an approximate 100 percent increase ($64 million annually) in annual program costs 

to permitting authorities. At that level, too many sources – many more than we thought at 

proposal – would be subject to high permitting costs. 

Therefore, in this final action we address this situation through a common sense, phasedin approach to GHG applicability that makes the permitting process for GHG sources 

administratively feasible. The first step of the phase-in approach, involving “anyway” sources, 

applies key PSD and title V program requirements as soon as January 2, 2011 to large sources of 

emissions, but because it applies only to sources that are already regulated under the CAA for 

other pollutants, it can be implemented efficiently and with an administrative burden that is 

manageable within the first half of 2011. Limiting step 1 to these sources will still capture a 

large portion of the GHG inventory. See section IV of the final preamble for more detail on the 

implementation process for step 1.

For step 2, we evaluated higher thresholds ranging from a 25,000 tpy CO2e major source 

applicability level for PSD and title V to a 50,000, 75,000, or 100,000 tpy CO2e level, with 

associated PSD GHG significance levels of equal or lesser magnitude; we selected the 

100,000/75,000 tpy CO2e level. We believe that the sources that will become subject to PSD and 

title V requirements at the 100,000/75,000 tpy CO2 levels will be able to accommodate the 

additional costs of permitting. For the most part, these sources will be of a comparable size and 

activity level as those sources that are already subject to those requirements. These source 

categories include fossil fuel-fired power plants, petroleum refineries, cement plants, iron and 

steel plants, and petroleum refineries, in addition to other large industrial type source categories. 

A full description of the type of sources that we expect will have GHG emissions that exceed the 

100,000 tpy CO2 threshold is provided in the “Technical Support Document for Greenhouse Gas 

Emissions Thresholds Evaluation” located in the public docket for this rulemaking.

We are not acting on commenters’ requests for special thresholds for particular industries 

for the same reasons that we are not acting on requests for exemptions from permitting 

requirements for particular industries, as discussed in the preamble.
116

6.3 Comments on the Methodology Used to Evaluate Burden

Comment:

A number of commenters fundamentally disagree with the methodology EPA used to 

develop the proposed thresholds, often stating that EPA’s proposal was arbitrary and capricious. 

These comments include the following:

 One agricultural commenter asserts that the way EPA has set the thresholds is 

scientifically uncertain, based on practical concerns and speculation rather than 

competent evidence; thus, they are arbitrary and capricious. The EPA must obtain, 

review, and analyze the data from the GHG Mandatory Reporting Rule (which does not 

take effect for over a year) to determine if the proposed thresholds are rational and 

reasonably related to a regulatory purpose. (5062)

 One fuels sector commenter maintains that the proposed GHG emission thresholds are 

not supported by an adequate analysis of the effects that GHG emissions at the proposed 

threshold levels would have on the environment; that is, the record does not demonstrate 

that the substantial additional burdens and costs associated with such a rule would be 

justified by the environmental benefits that might be realized through imposition of the 

rule. (5199)

 Other fuels sector commenters state that EPA’s proposed thresholds are arbitrary and 

capricious because there is no health and/or welfare basis for the cut-offs. On a global 

scale, U.S. sources with 25,000 tpy of GHG emissions are just as de minimis as sources 

with 250 tpy of GHG emissions. Further, EPA has not justified why it selected a 25,000 

tpy CO2e threshold when a threshold such as 150,000 tpy level would exclude 

significantly more sources from the programs while reducing emissions coverage by only 

a very small percentage. Finally, the proposal’s assumption of a 2 percent modification 

rate, which underlies its selection of the proposed significance level, is arbitrary and 

capricious because it is merely assumed without reasonable explanation. (4870, 5058)

 Industry groups make many of the same points, adding that EPA has not provided a 

rational basis for selecting a 25,000 tpy major source threshold as compared with higher 

thresholds, and that EPA has not provided sufficient information on the analysis 

performed for the public to meaningfully comment. (5140, 5181, 5278)

 A utility industry commenter states that the Administrator made the Endangerment 

Finding based on science as required by the CAA, but no scientific studies were cited as 

to why the proposed thresholds are appropriate. Nowhere in the Act is EPA specifically

authorized to consider the administrative implications, as was done in this case. In 

addition, EPA acknowledges that the 25,000 tpy level may not be adequate to achieve the 

necessary reduction goals, and the rule will be modified after 6 years of study to 

determine what the appropriate level should be, which is an unprecedented approach for a 

substance that has been found to endanger public health and welfare. (5312)

 An industry commenter is concerned that (1) EPA has performed no analysis of the types 

of sources affected by the categorical exemption created by the proposed thresholds, (2) 

EPA provides no analysis indicating that sources that emit over 25,000 tpy of GHGs are 

more financially able to address such emissions or that sources below such a threshold 

level are less financially able to address GHG emissions, and (3) EPA has not analyzed 

whether sources over 25,000 tpy are technically capable of emission reductions and those 
117

under this limit are not technically capable - or that certain technologies are more 

available at various threshold levels. (4095)

 An industry commenter claims that it is arbitrary for EPA to choose the higher thresholds 

it has proposed based almost entirely on Agency resource constraints, without 

consideration of costs and impacts on industry and the broader economy. (3512)

 An environmental group asserts that the analyses EPA used to set the significance 

thresholds in the proposal violate the administrative precedents for setting “de minimis” 

thresholds that were used to set the significance thresholds for other pollutants. (5139)

 EPA has provided no authority within the statute for arbitrarily raising the “major source” 

definition which is clearly, unambiguously and plainly stated by Congress in CAA 

section 302(j). (2997)

 A commenter questions whether the proposed thresholds were influenced by similar 

thresholds established or suggested by other federal, state, and/or regional GHG 

initiatives, usually in the context of GHG reporting rather than actual controls. The 

commenter states that such other programs should not have any bearing on the objective 

of this rulemaking, which is to avoid unmanageable workload increases and permitting 

gridlock. (4515, 4691)

Response:

We disagree with commenters that the basis for the thresholds is based merely on 

practical concerns and speculation rather than evidence. We discuss at length our basis, from 

both a legal and policy perspective, for establishing the GHG thresholds, for both major sources 

and significance levels, in section V of the preamble, including why we did not use the de 

minimis basis for setting GHG significance levels. We believe through our burden analysis and 

consideration of different threshold options we have collected a substantial amount of evidence 

to undertake the tailoring steps outlined in this action. We generally considered costs to sources, 

and we have concluded that sources that will be subject to our Tailoring Rule steps 1 and 2 are 

already subject to PSD or title V, or are of similar size or close in size to sources that are already 

subject to PSD or title V, and that as a result, those sources can be expected to bear the costs of 

permitting. We also considered administrative burdens to permitting authorities. Please refer to 

the RIA for the final rulemaking, contained in the public docket, for more detail on the 

assessment of impacts of this rulemaking.

We have also made significant improvements to the analysis from our proposal, based in 

large part in response to comments received on the proposal, and believe we have a strong 

technical basis for threshold selection. However, we recognize that currently there is limited 

information available on facility-level GHG emissions nationwide, particularly on smaller 

sources that have not been subject to permitting requirements for conventional pollutants, and 

that data obtained from the EPA’s GHG Mandatory Reporting Rule may provide additional 

information that could help inform us on decisions for threshold development for step 3 of the 

phase-in period. We will be carefully analyzing information that results from the GHG 

Mandatory Reporting Rule as it becomes available for this purpose. 

Regarding comments that we did not consider environmental benefits relative to imposed 

burdens of the PSD and title V programs due to GHG permitting, it is important to note that the 
118

basis of this action is to relieve excessive and unmanageable administrative burden from 

permitting authorities so that these programs can continue to function properly and effectively, 

and, as appropriate, costs to sources. There are no environmental performance standards 

attached to the selection of the applicability thresholds required by this rulemaking, and as such, 

there is no cost-benefit criteria involved. Similarly, there is no health or welfare basis for the 

selection of the applicability thresholds since the basis for the threshold selections is based on 

legal concepts involving program administration, and, as appropriate, costs to sources. In 

addition, we did not consider environmental benefits in or “absurd results” analysis. 

We disagree with commenters that we should have considered the costs to reduce 

emissions by sources at different thresholds. Decisions on reasonable and available reduction 

strategies and controls are part of the actual BACT review process under PSD. The Tailoring 

Rule does not impose costs related to emission reduction requirements and thus we did not 

differentiate between such costs and threshold options as it relates to developing the final GHG 

applicability thresholds. We did consider whether the sources that will become subject to PSD 

and title V requirements will be able to accommodate the additional costs of permitting, and 

concluded that, for the most part, these sources that will become subject to PSD and title V at 

Tailoring Rule steps 1 and 2 will be of a comparable size and activity level, or close to the size 

and activity level, as those sources that are already subject to PSD and title V, and therefore can 

be expected to manage those costs. We will continue to monitor permitting costs to sources and 

administrative burdens on permitting authorities in future rulemakings under the tailoring 

approach.

Comment:

Numerous industry (4298, 4515, 4567, 4691, 4749, 4870, 4903, 5052, 5086, 5110, 5111, 

5133, 5140, 5181, 5278, 5417, 5711, 5740, 5773, 5787, 16411), state (3278, 3916, 4989, 5328, 

5528, 8025) and other (10432) commenters are critical of specific aspects of EPA's 

methodology, asserting that the methodology and assumptions underestimated the administrative 

burden associated with GHG permitting. While these comments typically were directed to the 

proposed thresholds, they could apply more generally to the analysis at any threshold level. The 

following comments are representative of those asserting that methodology underestimated the 

administrative burden:

 The EPA’s estimate of 60 hours to process a new major source PSD permit for GHGs in 

the commercial and residential category is extremely low. (4989, 5417, 5711, 8025) 

o Even for PSD permits issued for criteria pollutants, it is not uncommon for a permit to 

require a thousand or more hours of processing time and synthetic minor permits to 

take between 300 and 500 hours. (4989)

o The commercial and residential category PSD permits may require 20 percent less 

technical time for review than the industrial source category, but these sources will 

also draw significantly more public comment and debate than the industrial category

because they are located where people live. There will be no time savings when the 

public participation process and local politics are factored in. (8025)

o Because state and local permitting authorities would be making the complex

determinations necessary in any PSD permitting action for GHG sources for the first 

time, it is likely that there would be a substantial increase in processing time. (5417)
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 Because state and local authorities have no experience permitting sources of GHGs

(particularly BACT), it is not reasonable to assume that the workload hours for PSD 

permitting of industrial GHG sources would be comparable to that of non-GHG industrial 

sources. (4515, 4691, 4749, 5328, 5417) 

o Commenters 4515, 4691 and 4749 add that establishing BACT for GHGs on a caseby-case basis is likely to be contentious and time consuming given the lack of 

precedent, the keen interest, and the need to collect supporting economic and 

operational data. In addition, the initial PSD permits for GHGs will be heavily

litigated by both applicants and third parties. 

o Commenter 5417 notes that EPA recognized the difficulties and complexities inherent 

in quantifying GHG emissions in the electronics industry when it elected to postpone 

finalizing the electronics portion of the GHG Mandatory Reporting Rule. As a result, 

there are currently no agreed-upon methods for quantifying emissions from 

semiconductor and other electronics sources. Forcing state and local authorities to 

make these determinations in the first instance for purposes of determining threshold 

questions of permit applicability and demonstrating compliance via monitoring, 

recordkeeping, and reporting will add substantially more delay to the permitting 

process.

 Commercial and residential category title V permits will not experience a 90 percent 

savings of time over industrial sources because the title V program has certain standard 

time requirements (i.e., preparation of the permit, administrative overhead, newspaper 

publication, etc.) that are required regardless of the size or type of source. Even though 

the sources may be simpler, they will be in areas where more people live so there will 

greater public participation and local political processes (i.e. zoning, district disputes, 

etc.). In addition, most permitting authorities have streamlined their permitting process 

such that there is no more efficiency to be gained in the system. (8025)

 The EPA incorrectly concludes that when a source triggers PSD for conventional 

pollutants, no additional work would be required to cover GHGs as well. (5110, 5711)

 There will be an increase in non-PSD permitting work and an increase in the number and 

complexity of permits for criteria pollutants because: (1) increases in criteria pollutant 

emissions that would not have been subject to PSD BACT will now become subject to 

BACT because the source will be major for GHGs, and (2) many BACT decisions result 

in a greater use of energy to power control devices and as a result, applicants may

propose less stringent controls for criteria pollutants because of potential GHG emissions. 

(5528)

 The EPA underestimated the administrative burden associated with GHG permitting 

because BACT controls for criteria pollutants (e.g., an oxidizer for VOC) may result in 

significant GHG emissions, triggering an additional BACT determination. (3278)

 The EPA has not accounted for the burden of PSD review for other CAA pollutants 

“subject to regulation” (such as criteria pollutants) once a source becomes a major source 

due solely to GHG emissions. (4298, 5111, 5367, 5740)

 The EPA did not account for the additional recordkeeping systems that would be needed 

to record applicability analyses and determinations that PSD is not triggered (e.g., 

“reasonable possibility” analyses and recordkeeping). (4298, 5110, 5111)

 The EPA has not accounted for the costs due to delays in permitting due to depleted state, 

local, and tribal resources. (5740)
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 The EPA has not accounted for the burden for complying with BACT. (5110)

 The EPA does not consider the permit fee for a PSD permit. (10432)

 The EPA does not adequately account for many previously “minor facilities” that would 

become major under the rule. (4515, 4691)

 The EPA has not considered existing “synthetic minor” sources. Many such sources will 

not be able to keep GHGs below the proposed thresholds, and those who could do so may

not be able to establish enforceable synthetic minor limits because GHGs are not yet 

defined as “pollutants” in many permitting regulations. (5417)

 Commenter 8461 inquires whether sources will have the option of operating under a 

synthetic minor permit if they agree to permit conditions that limit emissions. (8461)

 The EPA has not accounted for the significant title V burden for sources that want to 

obtain synthetic minor source status to avoid PSD (and possibly also title V) by assuming 

federally enforceable permit limits on GHGs. (3916, 5052)

 The EPA's analysis omitted the impact from increased demands for “minor source” NSR 

permits to restrict emissions below major source/modification levels. (4749, 4903)

 The EPA has failed to account for sources that will be required to consider GHGs in 

minor NSR permitting. (5140, 5181, 5278, 5773)

 The EPA has underestimated the rate of major modifications for GHGs under PSD. The 

EPA has provided no justification for the assumed 2 percent modification rate, and 

current modification rates for criteria pollutants are an inappropriate basis for estimation. 

Some commenters provide sector-specific data. (4515, 4567, 4691, 4749, 5052, 5133, 

5140, 5181, 5278)

o While few new major utility plants are expected, the demand for electricity is 

predicted to grow, and thus, significant modifications will become necessary. (5052)

o Most power plant changes will increase the efficiency of facilities to produce power 

and those changes could lead to increased utilization and increases in GHGs. (5052)

o Most industrial sources are specifically designed to ensure that current PSD 

thresholds are not exceeded by using add-on control technologies, netting, or other 

compliance strategies. Since these approaches are difficult to apply to GHG 

emissions and add another as yet untested variable in the engineering design analysis, 

the rate at which facilities become subject to PSD is likely to be much higher for 

GHGs than for non-GHG pollutants. (4515, 4691, 4749)

o Essentially any project that directly or indirectly affects generation would trigger PSD 

requirements for coal-fired electric generating units and large industrial facilities. For 

example, at an 800 MW coal-fired electric generating unit with an 85 percent capacity

factor, a 0.0035 percent increase in generation would cause a “significant” emissions 

increase at the proposed level of 25,000 tpy. (5328)

o Because combustion sources are typically replaced more often than process lines, and 

given EPA’s narrow interpretation of the routine maintenance, repair, and 

replacement exclusion, it is likely that a significantly higher rate of modification 

would apply when considering GHG emissions. (5140, 5181, 5278)

o The Regulatory Impact Analyses (RIA) does not add any rationale or transparency to 

EPA’s use of a 2 percent modification rate. The RIA addresses only new sources 

using an approach based on growth rates for various industry sectors, which does not 

account for the variety and types of modifications that routinely require permit 
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analysis and would easily be more frequent than the assumed growth rate. (5140, 

5181, 5278)

 Indirect costs such as modification and approval of SIPs are not covered. (5787)

Some industry commenters (5140, 5278) provide comprehensive lists of the 

component burdens that they believe EPA is required to estimate in order to determine the 

burdens caused by applicability of PSD based solely on GHG emissions: 

 The number of major sources that will exist based solely on GHG emissions. (4870, 

5140, 5181, 5278)

 The number of new major sources that will be built or otherwise created each year 

(e.g., through expansion), including the burdens associated with PSD permitting for 

GHGs and for any other PSD pollutant the source emits above significance levels. 

(4870, 5140, 5181, 5278)

 The number of major modifications that will trigger PSD based on another pollutant 

but will now require BACT for significant GHG emissions increases and the 

associated burden of BACT determination and installation. (4870, 5140, 5181, 5278)

 The number of major modifications at sites that would be major only due to GHGs, 

but that now will be subject to PSD review and BACT for projects causing significant 

increases in criteria pollutants. (4870, 5181) 

 The number of major modifications that will trigger PSD based on GHG emissions 

increases alone, including the burdens associated with obtaining PSD permits for 

GHGs and for any other PSD pollutant the source emits in significant amounts. (4870, 

5140, 5181, 5278)

 The number of sources that must accept permit limits or otherwise restrict operations 

to avoid triggering PSD, including the cost of obtaining and the ongoing 

administrative burdens associated with these minor NSR permits. (4870, 5140, 5181, 

5278)

 The number of sources that would trigger the requirement to keep 5 or 10 years of 

emissions records because, although PSD is not triggered, there is a reasonable 

possibility that PSD could be triggered. (4870, 5140, 5181, 5278)

One solid waste industry commenter (5086) believes the TSD is inadequate because it 

lacks applicable data on landfills and its calculations of emissions from landfills are not 

transparent. The commenter alleged the following specific inadequacies:

 Tables are missing for MSW landfills and onsite industrial landfills showing the 

impact a 25,000 CO2e will have on the industry and the number of facilities affected 

by the proposed rule. 

 The TSD is not transparent with respect to the assumptions used by EPA in evaluating 

the impacts on landfills, e.g., EPA states that landfill covers are capable of oxidizing 

CH4 without qualifying the degree of oxidation that occurs or how the Agency derived 

a value. 

 The EPA does not provide or explain the values used in calculating the amount of 

emissions assumed to be biogenic, and in addition, EPA should explain how each of 

these assumptions relates to the way that these emissions will actually be treated for 

GHG emissions calculations under the PSD program. 
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 The only data that can be evaluated are the 2008 U.S. GHG Inventory data; however 

these data were not collected by landfills and submitted to EPA, but were calculated 

by the Agency from waste generation data from other government entities that may or 

may not represent the industry. 

Based on these perceived inadequacies in the TSD, the commenter believes EPA does not have 

adequate data to determine the regulatory impact of the GHG Tailoring Rule on landfills 

specifically or the solid waste industry sector in general. The commenter contends that such data 

must be collected, published, and subjected to industry comment before EPA can establish viable 

threshold limits for landfills.

Response:

Based on comments received from both permitting authorities and affected sources, and 

our own reassessment of permitting actions created by the addition of GHGs, we have made a 

number of improvements to our permitting burden assessment to support the final rulemaking. 

Please refer to the final burden analysis TSD referenced earlier in this Chapter for a full 

description of our final assessment and assumptions for determining the burden associated with 

PSD and title permitting actions due to GHGs. 

The basis for the burden analysis is administrative costs for permitting authorities and 

sources, and while based on the ICR-based average costs for permitting conventional pollutants 

under the PSD and title V programs, we believe that this approach provides our best estimate of 

costs associated with permitting GHGs. We recognize, as many of the commenters do above, 

that there are significant uncertainties in predicting the costs associated with permitting GHGs, 

since there is no historical record to refer to. In reality, administrative costs may end up being 

lower or higher, depending on the particular source, the complexity of the emission units 

involved, the amount of public review involved, and other variables that arise on a case-by-case 

basis. However, by using the ICR costs, we believe we included all key elements of the 

administrative cost component of the permit process, which in turn allowed us to evaluate the 

relative burden of different thresholds considered for the final rule.

In response to comments that we need to account for a possible BACT GHG review for 

permits that would otherwise be undergoing BACT review for conventional pollutants, in our 

final burden analysis we have now added specific line item burdens for permitting actions related 

to adding a GHG component to otherwise occurring PSD and title V permitting actions for 

conventional pollutants. In our proposal we had not explicitly associated an additional burden 

with these occurrences. 

We have also raised the per-permit burden hours for commercial and residential sources 

for PSD and title V to reflect numerous comments from permitting authorities that we had 

significantly underestimated the amount of effort that would be required for these newly 

permitted source categories. Specifically, we raised the PSD per-permit hours from 60 hrs to 

210 hrs for new commercial and residential sources, and for title V we raised the per-permit 

hours from 43 hours to 214 hours. We agree with commenters that many of these sources will 

need significantly more permitting authority staff time to assist them with the permit application 

and preparation process because of their lack of experience with these requirements and also to 
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respond to public review and comment on these permits as one of the commenter’s suggested. 

The complete description of the basis for these revisions is included in the burden analysis TSD 

contained in the public docket. EPA-HQ-OAR-2009-0517. We appreciate the various 

comments pointing out particular ways in which our estimates at proposal were underestimated. 

These comments justify our overall conclusion about the need to raise our burden estimates. We 

believe it is appropriate to conduct the burden estimate on the basis of nationwide average costs, 

based on the information in the ICRs, because this approach affords a comprehensive assessment 

of costs for all sources in all areas.

We also agree with commenters who believe our proposal estimate of modifications did 

not fully address the numbers of modification projects that may become subject to PSD review 

under various thresholds. As mentioned in a previous response, one the most significant 

improvements to our burden analysis was that we developed a better assessment of the number 

of existing projects that avoid major PSD review (by either taking limits—synthetic based 

modifications—or by netting out) for existing pollutants but that would not be able to avoid PSD 

for GHGs. In addition, based on our reassessment of burden for the final analysis, we have 

revised our general modification rate to 4 percent to estimate the annual modification activity at 

newly major GHG sources. We recognize this modification rate is still based on projects 

involving conventional pollutants, but we believe through the applicability steps defined for 

GHG permitting in this final action, large sources similar to those undergoing permitting now 

will be most affected and that the 4 percent modification rate represents a reasonable estimate of 

the annual occurrences of modifications. The basis for these improvements to our estimates of 

modifications is explained in the burden analysis TSD contained in the public docket. EPA-HQOAR-2009-0517.

We disagree with the commenters that suggest we did not include PSD review costs for 

non-GHG pollutants that may become subject to PSD review because a source becomes major 

solely for its GHG emissions. The average cost for new PSD permits that we used in our burden 

analysis represents an average across permits that include different numbers and combinations of 

covered pollutants. Therefore, we believe this estimate provides a reasonable representation of 

the multi-pollutant PSD reviews that may result when a source becomes major solely for GHGs. 

We did not include a specific permit fee as part of our estimate of source burden in 

estimating burden relief as part of the RIA prepared for the final rule. There is no regulatory

requirement that sets these fees and their use and amount varies across permitting authorities. 

Because of the inconsistency in its use, we did not have sufficient basis to determine the 

incremental additional burden relief that would come from sources that did not have to pay these 

fees because they would not be subject to PSD review. 

We disagree with commenters who suggested that by basing our estimates on the 

numbers of newly constructing and modifying sources with high enough emissions to qualify as 

major emitting facilities, we failed to account for the costs of sources that seek “synthetic minor” 

permits to avoid PSD, and possibly title V, requirements. In fact, our methodology includes 

sources that might take such limits as newly-major sources for their GHG emissions; therefore 

we count the full administrative burden associated with a PSD permit and a title V permit for 

those sources. In effect, we assume that such sources would go through PSD or title V 
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permitting, rather than take “synthetic minor” limits. We take this approach because although 

we suspect that there may, in fact, be significant synthetic minor activity, we do not have data 

that would allow us to determine whether, and how many of, these sources will be able to adopt 

“synthetic minor” limits or restrict their operations to obtain minor source permitting status. Nor 

do we have data on the amount of the administrative burden that would fall on any particular 

permitting authority to establish a “synthetic minor” limit, except that we understand that the 

amount varies widely across states. As a result, we opted to include these sources in our analysis 

as sources receiving a PSD or title V permit. Therefore, to the extent that synthetic minor 

activity occurs, our estimate would already have included the burden for that activity. In fact, 

our estimate would have overestimated the burden to the extent that a permitting authority would 

have less administrative costs issuing a “synthetic minor” permit, than issuing a PSD or title V 

permit.

We did not, as one commenter indicated, include indirect costs to permitting authorities 

such as modification and approval of SIPs. However, we believe that with the implementation 

process as revised from proposal and as described in detail in section V.C of the preamble, that 

the final process will facilitate more rapid adoption and implementation of the Tailoring Rule by 

states through interpretation of language in existing state regulations. Therefore substantial 

changes to SIPs will not likely be necessary for many permitting authorities. Refer to the 

preamble section V.C for further explanation on the implementation process and how it will 

work for PSD and title V programs. 

As noted in the RIA for the final rule, and as raised by commenters on the proposal, we 

did not estimate burdens for complying with BACT, such as the costs for controls or mitigation 

strategies to reduce GHG emissions. Control costs are not part of the administrative burden to 

permitting authorities which was a key consideration in the determination of final threshold 

levels for applicability. In addition, it was not necessary to consider the relevance of BACT 

control costs for sources for purposes of this rule. We established the levels of steps 1 and 2 of 

this rule based on administrative burdens to permitting authorities, coupled with a general sense 

that affected sources could comply with the costs because they are generally of about the same 

size, or close to the same size, as sources already subject to PSD. Further, if BACT control costs 

are relevant, then they must be considered in establishing the appropriate level of BACT 

controls. In any event, BACT control costs are unknown at this point, as there has been no

experience in permitting GHG sources to date, and we do not have sufficient information to 

determine what these costs may be based on a case-by-case PSD review basis. However, as the 

RIA states, this rulemaking does not impose new economic impacts on any sources, but instead 

is a regulatory relief for smaller GHG emission sources. The lack information on BACT control 

costs therefore actually discounts the amount of relief that is estimated in the RIA. 

With respect to the suggestion by some commenters that we account for the costs to 

sources resulting from permitting delay due, in turn, to depleted state, local and tribal resources, 

we would like to clarify that we have not attempted to quantify these costs and in fact,, we do

not have any information about what those costs might be. However, we have recognized that 

the likelihood of long permitting delays absent tailoring will be damaging to sources and 

potentially to the national economy and this is a key reason why the “absurd results” doctrine

applies and justifies the Tailoring Rule.
125

With respect to the number of sources that would trigger the requirement to keep 5 or 10 

years of emissions records because there is a reasonable possibility that PSD could be triggered, 

we currently do not have sufficient information to determine how many sources might have a 

reasonable possibility to trigger PSD based on GHG permitting. However, as we have stated 

previously and in the RIA for this rule, this rulemaking does not impose new economic impacts 

on any sources, but instead is a regulatory relief for smaller GHG emission sources.

In response to the solid waste industry commenter, we have corrected the Technical 

Support Document for Greenhouse Gas Emissions Thresholds Evaluation, included in the public 

docket to the final rule, to include the summary tables showing the landfill totals at the different 

emission threshold levels evaluated. The proposal contained the facility counts for landfills in 

the appendix A to the original threshold study; however, they were not summarized in the 

upfront portions of the TSD. The threshold TSD is based on the landfill emissions data that was 

used in support of the EPA’s GHG Mandatory Reporting Rule and references the applicable 

supporting documents from the docket for that rulemaking. 

We believe the GHG Mandatory Reporting Rule dataset represents the most 

comprehensive national statistics on landfill generation rates available, and provides our best 

assessment of the number of landfills that would exceed different GHG emission thresholds 

based on the potential to generated CH4 emissions. In addition, the proposed rule solicited 

comments specifically on our assessment of permitting burden, including any quantified data that 

could be used to better evaluate our estimates of affected facilities. We believe this request 

provided adequate notice and opportunity for affected sectors of the economy, including the 

waste sector, to provide alternative data for us to consider. 

6.4 Comments on Recommended Thresholds

6.4.1 Comments Recommending a Non-GHG Trigger

Comment:

Many state (3858, 4519, 4694, 8025, 8471), industry (3512, 3998, 4106, 4118, 4120, 

4122, 4298, 4318, 4515, 4523, 4555, 4632, 4691, 4749, 4870, 4903, 4934, 4992, 5038, 5052, 

5058, 5059, 5078, 5079, 5080, 5086, 5089, 5111, 5112, 5113, 5114, 5124, 5128, 5130, 5131, 

5138, 5140, 5180, 5199, 5224, 5257, 5275, 5276, 5278, 5301, 5327, 5345, 5391 5601, 5714, 

5741, 5774, 5939, 6459, 8301, 8545), and agricultural (5062, 5183) commenters support basing 

PSD and title V applicability on emissions of non-GHG pollutants, at least during the first phase 

of the GHG permitting program. Under this approach, PSD and title V applicability would be 

determined as it is now, without regard to GHGs. However, sources subject to PSD as a result of 

non-GHG emissions would be subject to BACT requirements for GHGs if their GHG emissions 

exceed the significance level established in the final rule, and sources subject to title V based on 

non-GHG emissions would be required to include any applicable requirements for GHGs in their 

permits (although some of these commenters argue that no PSD or title V requirements should 

apply to GHGs under any circumstances). The following are representative comments in support 

of this approach:
126

 This is a better (or only legally permissible) reading of the Congress’s intent in the Act 

and is consistent with Alabama Power v. Costle. (4120, 4515, 4691, 4870, 4903, 4934, 

5052, 5058, 5078, 5086, 5111, 5112, 5113, 5138, 5140, 5180, 5199, 5278, 5345, 5391, 

5714, 5939, 8471, 8545)

 EPA should define “source” for purposes of the proposed rule and the first phase as being 

limited to those facilities that are or become subject to title V or PSD requirements under 

the existing 100/250 tpy for criteria pollutants. (5183)

 This would reduce the permitting workload on sources currently considered minor and 

focus PSD on large sources of non-GHG pollutants as intended by Congress. (3998, 

4515, 4691, 4749, 5391)

 This approach is preferable because EPA has underestimated the number of sources that 

may be subject to PSD based on GHGs (e.g., in the oil and natural gas industry), so the 

proposed approach would have greater impacts than EPA predicted. (4749)

 EPA should wait for data from the GHG Mandatory Reporting Rule and, in the 

meantime, use non-GHG emissions as the trigger for PSD. (4106, 4120)

 A non-GHG trigger would provide time to study the impacts of non-CO2 GHGs and to 

develop specific thresholds. (4694)

 In the initial phase, this would be more straightforward to administer, would provide a 

more predictable permitting workload, and would prevent a flood of newly regulated 

sources from overburdening state agencies. (2369, 3858, 4120, 4515, 4519, 4691, 5058, 

5086, 5391)

 This can be used as a permanent approach to prevent an unmanageable broadening of the 

scope of the PSD program and to streamline and add clarity to the PSD and Title V 

permitting processes. (4298, 5078, 5131, 5714, 5774, 8545)

 This would provide permitting agencies time to develop experience handling GHGs 

under the PSD and title V programs. (4515, 4691, 5058, 5276)

 This would provide EPA and the permitting agencies an opportunity to develop 

streamlining techniques. (4515, 4691, 5058)

 This is an effective way to address the current uncertainty about how to measure highGWP gases such as SF6 (and the fact that high GWP will magnify potential measurement 

errors). (5079)

 This satisfies the administrative necessity and absurd results doctrines because the scope 

of the program would remain consistent with both Congressional intent and current 

administrative practice, but still allow EPA and state agencies to begin regulating GHG 

emissions from existing PSD and title V sources. (4515, 4691, 5276)

 This would remove the need to invoke the doctrines of absurd results and administrative 

necessity. (4118, 4120, 4515, 4691, 5180)

 This would capture most major GHG emitters without adding a large administrative 

burden on permitting agencies. (5180, 5301)

 Sources already required to obtain PSD permits are best equipped to work through BACT 

issues with permitting authorities. (5180)

 U.S. fuel ethanol plants should only become subject to the PSD or title V program if the 

facility is also subject to that program for non-GHG regulated pollutants. (4555)
127

Some commenters (5278, 5140) note that even if EPA adopts the NAAQS prerequisite 

requirement for PSD applicability, EPA would still need to establish a significance level for 

GHGs to define the level of emissions at which the requirement to apply BACT for GHGs would 

become applicable. Without a defined significance level, any increase in GHG emissions would 

be subject to BACT. The commenters believe that EPA could set a significance level for GHGs 

without reference to the statutory major source thresholds, as they would no longer be relevant 

because the sources for which a GHG BACT analysis would be conducted would by definition 

be “major emitting facilities” by virtue of their emissions of a NAAQS pollutant. 

Response:

We agree with commenters who suggest that in order to effectively address 

administrative necessity concerns and transitional issues related to GHG permitting that we 

consider an initial step in the final Tailoring Rule that would focus primarily on the largest 

sources of GHGs that already have or would be otherwise be coming in for PSD and title V 

permits for conventional pollutants. See section V.B. of the preamble to the final rule for a 

comprehensive discussion on our final legal and policy rationale for establishing this initial 

phase-in step. After considering the increased permitting actions based on our final burden 

analyses and the need for permitting authorities and sources to have sufficient time to develop 

necessary expertise and staffing resources to address that burden, we have decided in the final 

action to establish a first step in the tailoring approach – referred to as “Step 1” in the preamble -

that would limit GHG applicability to only those sources that would otherwise be coming in for 

PSD and title V permits for conventional pollutants, or what we refer to in the preamble as 

“anyway” sources. No sources would become major for PSD or title V under this step based 

solely on their GHG emissions alone. A full description and our rationale for establishing this 

initial phase-in step in provided in section V of the final preamble.

This “anyway” source approach has particular appeal during this, the first step of the 

phase-in approach because it begins to apply key PSD and title V program requirements as soon 

as January 2, 2011 to large sources of emissions. Because it applies only to sources that are 

already regulated under the CAA for other pollutants, it can be implemented efficiently and with 

an administrative burden that is manageable in the next eight months. Under this approach, the 

sources and permitting authorities will still face substantial additional work due to the GHG 

emissions.

We agree with commenters that the establishment of a GHG significance level under the 

PSD program – which, in effect, is a BACT review threshold -- is appropriate for this initial step, 

and we have decided to establish this level at 75,000 tpy CO2e. At this level, the administrative 

burdens will be manageable and very small increases in GHG emissions, such as those that might 

result from very minor increases in fuel consumption at a facility, will not be subject to BACT 

review. Importantly, we believe a consistent significance level between steps 1 and 2, as 

opposed to a lower significance level in step 1, will provide for a smoother transition and avoid 

the problems that would arise if PSD applied to modifications during step 1 that PSD would not 

apply to in step 2. 
128

Additionally, we estimate that facilities meeting the non-GHG applicability threshold 

account for approximately 65 percent of total national stationary source GHG emissions. 

6.4.2 Comments Recommending Specific Thresholds 

Numerous commenters suggest specific levels for the GHG thresholds, if EPA goes 

ahead with regulating GHGs under the CAA. In some cases, the comments address the 

thresholds together, while other comments address a specific threshold. In this section, we first 

address comments on PSD and title V applicability thresholds (along with PSD significance 

levels where the commenters combined comments on these thresholds), then address specific 

comments on PSD significance levels. 

Comments on Applicability Thresholds:

We proposed major source GHG applicability thresholds of 25,000 tpy CO2e for both the 

PSD and title V programs and a possible range for the PSD GHG significance level of between 

10,000 and 25,000 tpy CO2e. We provided our rational for these preferences in the proposal, but 

we also asked for comments for alternatively higher or lower thresholds than these levels. 

Commenters recommended specific major source thresholds for PSD and title V, including 

levels ranging from 25,000 tpy CO2e (as proposed) up to 1,000,000 tpy CO2e. A majority of the 

commenters recommended major source thresholds of 100,000 tpy CO2e, including both industry

and state agency commenters. However, several state agency commenters recommended 

thresholds of 50,000 tpy CO2e. Other commenters recommended sector-specific thresholds. 

Overall, we received many comments recommending higher thresholds for these programs due 

to increased permitting burdens, which are summarized below with our responses.

Lower than 10,000 tpy. 

In response to EPA’s request for comments on the lower ends of the applicability

thresholds that were evaluated for the proposal (74 FR 55332), one refinery industry trade 

association commenter (3757, 3968), who states general opposition to the proposed Tailoring 

Rule, reports that lowering the major source threshold below 10,000 tpy CO2e would have 

minimal effect on its members because even a small furnace in a refinery has a PTE greater than 

10,000 tpy, although lowering it would ease the burden indirectly by spreading the responsibility

for achieving GHG emission cuts across a larger population of sources. The same commenter 

also states that lowering the significance level would have a large impact on refiners, since very

small projects could trigger PSD for CO2e, while remaining very far beneath the significance 

level for other criteria pollutants. The same commenter questions why thresholds are being 

determined at this time since there will be more information in about a year or so as a result of 

EPA’s GHG Mandatory Reporting Rule. 

25,000 tpy. 

 Citizen commenter 5455 supports EPA setting the level at 25,000 tpy CO2e.

 State commenter 5338 suggests that EPA set the level at 25,000 tpy for both a major 

stationary source and as the emission rate for an emissions increase triggering PSD. 
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 State commenter 8803 agrees with the thresholds proposed by EPA.

 State commenter 5314 supports EPA’s proposed 25,000 tpy threshold, but only if current 

PSD requirements are streamlined and only if EPA authorizes a phase-in of 

implementation over period of 5 years. If EPA is not willing to implement a 5 year 

phase-in period, then this commenter supports a significantly higher threshold. 

 One fuels sector commenter (2369) agrees that the permitting threshold should be the 

same for title V and PSD permitting so as not to burden the title V program with 

additional "hollow" permits and that threshold should be no less than 25,000 tpy.

 Two agricultural commenters (4572, 5168) agree with EPA that a threshold level of 

25,000 tpy for permitting would reduce the adverse impacts on agriculture over the 

statutory thresholds (although they are troubled that thresholds may revert to the statutory

levels after the first phase of the program).

 An industry group, 5120, generally supports an increase to 25,000 tpy for PSD and title V 

requirements.

 Utility industry commenter 5078 supports a temporary applicability threshold for PSD 

and title V of a minimum of 25,000 tpy CO2e, and preferably higher, in order to avoid the 

overwhelming the administrative capacity of permitting agencies, avoid delays in the 

issuance of permits to all sources, and avoid the applicability to thousands or millions of 

relatively small sources.

 Utility industry commenter 5180 supports finalizing the applicability threshold for title V 

at 25,000 tpy CO2e. The commenter believes that the absurd results and administrative 

necessity doctrines are more compelling for title V (with over 6 million sources newly

subject at the statutory threshold) than for PSD (for which the absurdity and 

administrative burden can be avoided by interpreting PSD to be triggered only by 

NAAQS pollutants). The commenter asserts that Congress clearly did not intend for 

title V to be the exercise in futility that would result from so many “hollow” permits.

 A military commenter (4747) recommends that the major source threshold for GHGs in 

the title V program be set at a level consistent with the GHG Mandatory Reporting Rule, 

in this case, that would be 25,000 metric tons CO2e or 27,550 short tons CO2e.

Higher, but unspecified, level

Some state commenters (2504, 3918) believe EPA underestimated the workload 

associated with the proposed thresholds and should consider setting the thresholds at a higher 

level in the first phase and later phase in the proposed levels.

One government agency commenter (5367) suggests that EPA consider setting the 

applicability thresholds at a higher level at the beginning of the program with a schedule to phase 

in a 50,000 tpy CO2e (actual emissions not potential) threshold. The commenter suggests that 

setting the early PSD and title V programs at a level that that would correspond to the number of 

sources that are currently subject to title V or PSD under the current CAA regulated air pollutant 

thresholds would provide time for compliance assistance providers and permitting agencies to 

gear up for an increased workload and provide time for source and staff education. In addition, 

the commenter questions basing the permitting programs on the same applicability level as the 

GHG Mandatory Reporting Rule because until the required reports are filed and analyzed from 
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these sources, no one knows the real impact of these levels as applicability levels for PSD and 

title V.

Industry commenters 3998, 4801, and 5041 recommend that EPA consider a much higher 

limit than 25,000 tpy that is based on a more realistic determination of the number of current and 

future small facilities that will be potentially affected by any GHG regulations. 

40,000 tpy

A fuels sector commenter (5705) recommends raising GHG applicability threshold to 

40,000 tpy so that the number of [PSD] permits remains similar to the recent 280 permits. Based 

on extrapolating EPA data, the commenter believes that a 40,000 tpy threshold would still 

represent 66.5 percent of GHG emissions, or only 1.5 percent less than EPA's proposed 

25,000 tpy threshold. 

50,000 tpy

 A few industry commenters (3720, 4298, 5800) suggest EPA consider a step-down 

approach for phasing in permitting, starting at 50,000 tpy of CO2e to reduce the workload 

during the first year following promulgation and help states issue permits within required 

time frames. They cite EPA estimates that the difference in GHG emissions captured 

between the 25,000 and 50,000 tpy CO2e thresholds is only 3 percent, but twice as many

facilities would be permitted at 25,000 tpy, including commercial facilities and hospitals. 

(Commenter 5277 also cites these figures.) Also, they think the threshold could be 

lowered to 25,000 tpy once streamlining techniques have been developed and 

implemented.

 State commenters 2797, 4238, 4694, 4860, 5039, 5084, 7935 support an initial threshold 

level of 50,000 tpy because it will result in a sustainable workload. According to these 

state commenters, the technical and administrative costs would be enormous at 25,000 

tpy, and a higher threshold level would decrease the administrative burden. Some of 

these commenters add that the thresholds could be tightened in later years if warranted.

 Some industry commenters (5040, 5130, 5277, 5303, 5922) believe the thresholds should 

be at least 50,000 tpy CO2e to offer regulatory relief to smaller sources (including 

residential and commercial) and reduce administrative burdens on permitting authorities. 

Commenter 5277 believes that EPA must adopt a higher threshold to comport with CAA 

section 160(3), which says that a purpose of PSD is to “insure that economic growth will 

occur in a manner consistent with the preservation of existing clean air resources.” 

Commenter 5130 recommends that the major source threshold (and the major 

modification threshold) be raised to 50,000 metric tpy based on emissions of 40 tpy of 

NOx from a well-designed boiler that achieves NOx emissions of 0.08 lbs/MMBtu heat 

input.

 Utility commenter 7026 recommends PSD major source and significance thresholds for 

naturally-occurring GHG pollutants (CO2, N2O and CH4) of 50,000 tpy CO2e for each 

individual pollutant because this would only minimally reduce the percentage of GHG 

emissions covered while substantially reducing the number of affected sources and the 
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overall administrative burden. (For title V, the commenter recommends a threshold of 

100,000 tpy CO2e for each of the three pollutants.) 

 One manufacturing commenter (4241) prefers major source thresholds matching the 

GHG Mandatory Reporting Rule, i.e., 25,000 tpy of CO2e actual emissions in the prior 

calendar year, but, if the threshold must be based on PTE, the commenter requests 

thresholds of 50,000 tpy CO2e.

100,000 tpy

 Numerous state commenters recommend a threshold of 100,000 tpy or higher (3858, 

3915, 4019, 4512, 4519, 4521, 4866, 4989, 5336, 6681). These state commenters think 

only a small fraction of covered entities would be lost over the proposed approach. Some 

of these commenters recommended approaches for subsequently adjusting the threshold: 

o The EPA should review the threshold after 3 years to see if it should be changed 

based on the information obtained under the GHG Mandatory Reporting Rule and 

after reviewing state and local programs progress in implementing the programs. 

(4989 and 5336)

o The EPA should raise the threshold level to 100,000 tpy CO2e for all sources until the 

year 2015, and then lower it. (4866)

 An SBA commenter (4867) recommends that EPA raise the applicability threshold to 

100,000 tpy and the significance threshold to 50,000 tpy. The commenter also suggests 

that EPA consider longer phase-in periods for these applicability and significance 

thresholds to apply. Industry commenter (4794) agrees with these SBA 

recommendations.

 One commenter (5346) notes that increasing the threshold and significance levels from 

25,000 tpy to 100,000 tpy CO2e would do a lot to reduce the administrative burden while 

achieving nearly equivalent environmental benefits.

 Utilities/utility groups (4122, 4318, 4523, 4952, 4992, 5038, 5080, 5089, 5114, 5128, 

5257, 5317, 5327, 5601, 5741, 5773, 6459, 8301) assert that the major source (and 

significance) thresholds should be no lower than 100,000 tpy for the following reasons:

o There is no bright-line threshold level above which permitting would become clearly 

un-administrable and below which it would be clearly administrable. 

o The EPA could easily have determined that raising the major-source threshold to 

100,000 tpy and the significance level above 25,000 tpy would involve no significant 

impact to the environment but would avoid burdening thousands of sources.

o The EPA could have set higher thresholds and not “lose” any of the large power 

plants or most of the large manufacturing facilities. 

o Commenter (5317) adds that, had EPA conducted even a limited cost-benefit 

analysis, it would have concluded that a 25,000-tpy threshold (as compared to a 

higher threshold such as 100,000 tpy) will impose significant costs on power 

companies, manufacturing industries, and the economy yet produce no significant 

increased coverage in emissions. Based on information in the proposal preamble, a 

threshold of 100,000 tpy would reduce the number of permits by two thirds while 

reducing the percentage of GHGs regulated by only 4 percent. (Other commenters 

who cited these same preamble figures: 4298, 4903, 5169, 5300, 5367, 5742, 8283, 

8545, 16411)
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 Other utility commenters (4567, 5113, 5773) who support a 100,000 tpy threshold for the 

same basic reasons as the previous commenters, cite the RIA for the GHG Mandatory

Reporting Rule and conclude that the difference between the 25,000 tpy and 100,000 tpy

thresholds is thousands of entities that combined emit only 1 percent of the nation’s GHG 

emissions. Commenter 5773 thinks the 100,000 tpy threshold will lower the number of 

minor sources that will have to get enforceable restrictions to lower their PTE.

 Utility commenter 5809 believes that a threshold of 100,000 tpy will further streamline 

the process.

 Another utility industry commenter (4745) believes that 100,000 tpy for new and 

modified sources is closer to a threshold that would remove smaller sources from 

unnecessary regulatory review, but EPA should take the time necessary to study this issue 

in detail. This commenter notes that at proposed thresholds:

o Small sources of conventional pollutants would have to conduct BACT reviews for 

these conventional pollutants because they are major for GHG.

o Existing minor sources such as NG peaking combustion turbines and NG boilers in 

commercial buildings would be major based on PTE so that no additional combustion 

sources could be installed at these sources without GHG BACT review. 

 One utility group commenter (5052) provides aggregate calculations for the predicted 

effect of 100,000 tpy and 50,000 tpy for the public utilities sector (i.e., not-for-profit 

municipal and other state and local community-owned electric utilities):

o 100,000 tpy – total CO2 PTE not covered at this threshold would be 5 percent of 2007 

emissions from public utilities and 263 facilities would be below threshold (out of 

total of more than 2,000 facilities in sector)

o 50,000 tpy – total CO2 PTE not covered would be less than 2 percent of 2007 

emissions and 150 facilities would be below the threshold

 One industry commenter (4106) states that the major source and PSD significance levels 

should be established at 100,000 metric tons per year or higher. 

 Some commenters (5145, 5224, 5886) believe that setting a threshold level for GHGs at 

100,000 tpy would do little detriment to EPA’s objectives and would protect more 

entities from the burden of regulation.

 Some industry commenters (8015, 16411) recommend an initial threshold for GHGs of at 

least 100,000 tpy, which would still pull in many fossil-fuel combustion sources that 

would not be considered major for any other pollutant.

 One fuels sector commenter (5351) suggests that using either PTE of not less than 

100,000 metric tons CO2e or 25,000 metric tons CO2e of actual emissions as the 

threshold for regulation under this rule would achieve appropriate balance between 

protecting human health and the environment and the economic health of business and 

industry and their ability to sustain and grow jobs in this nation.

 One commenter 4513 suggests that if EPA must use PTE, it should finalize a threshold 

not less than 100,000 metric tons CO2e. (4513)

 An industry commenter (6458) recommends EPA consider alternative major source and 

significance levels for different source categories, starting at 100,000 tpy. The 

commenter thinks this will significantly reduce administrative burden with minor impact 

on the number of sources covered. The commenter does not believe these levels should 

be set at the GHG Mandatory Reporting Rule levels (25,000 tpy), as PSD has 

substantially more beneficial environmental impact than simply reporting emissions.
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 One fuels sector commenter (5711) believes a more appropriate PSD threshold level 

would be 100,000 tpy PTE for all natural gas combustion sources, in particular for 

sources that use natural gas for space heating. The commenter gives the following 

reasons:

o The threshold should not be influenced by pending legislation (i.e., the WaxmanMarkey bill, House of Representatives [H.R.] 2454), which is legally irrelevant to the 

question of which emission level is most consistent with the purposes of the PSD 

program as adjusted by the doctrine of absurd results. Further, the 25,000 threshold 

in the pending legislation is in metric tons and based on actual emissions.

o The EPA’s estimates of the difference in the number of permits and percentage of 

GHG emissions covered at 100,000 tpy and 25,000 tpy fail to establish any clear 

justification for setting an emissions threshold at 25,000 tons and thereby increasing 

the workload of an already overburdened program.

o The proposed threshold is too restrictive for sources that burn natural gas and in 

particular for commercial and residential facilities because: (1) Use of PTE grossly 

overestimates the actual emissions of commercial and residential facilities that burn 

gas for space heating; and (2) Requiring residential and commercial NG users to 

obtain PSD and title V permits and to apply as yet undetermined BACT will likely

cause these customers to switch to electric equipment and appliances, which will 

cause an overall net increase in emissions. A life-cycle or source energy analysis 

demonstrates that it takes at least double the amount of NG combusted at a power 

plant to serve the same load that can be served by combusting natural gas directly at 

the customer’s site. Emissions of N2O, SO2, and CO2 will be even higher if the 

regional mix of generation includes coal-fired power plants.

 Utility commenter 7026 recommends that title V permitting be triggered only if a new 

source’s emissions for CO2e from CO2, N2O, and CH4 exceed 100,000 tpy. The 

commenter opposes requiring sources to submit a title V renewal application that 

accounts for GHG emissions unless and until the sources are subject to GHG emissions 

standards through stationary source regulations or PSD permit conditions. The 

commenter adds that monitoring and reporting requirements are already defined in the 

GHG Mandatory Reporting Rule. The commenter adds that increasing the threshold 

from 25,000 tpy to 100,000 tpy minimally reduces the percentage of GHG emissions 

covered by the program, while substantially reducing the administrative burden. (For 

PSD major source and significance thresholds, the commenter recommends a threshold of 

50,000 tpy CO2e for each of the three pollutants.)

 Some industry (4630, 5111, 5335, 5740) and government agency (5367) commenters 

state that thresholds should be no lower than or be equal to 100,000 tpy.

 Energy sector commenter 5742 suggests 100,000 tpy because EPA should not establish 

the threshold and significance level at the same level as that set by the GHG Mandatory

Reporting Rule (25,000 tpy), as PSD would involve substantially more than simply

reporting emissions.

 Industry commenter 5300 states that if EPA adopts a 25,000 tpy threshold, which is 

roughly equivalent to only 40 tpy of NOx, manufacturers who have worked hard to 

achieve and maintain non-major source status under both the PSD and title V programs 

will lose their non-major source status and become subject to the PSD provisions for 
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major modifications and the requirement to obtain the title V permit they worked so hard 

to legitimately avoid. 

 Industry commenter 5147 contends that a threshold of 100,000 tpy or greater should be 

applied per emissions unit to allow for common efficiency improvement projects to move 

forward without triggering PSD, while ensuring that when significant investments are 

made in energy producing equipment, there is review for BACT.

 Industry commenter 4298 supports 100,000 tpy title V major source thresholds for CO2, 

CH4 and N2O because the empty nature of the title V requirement itself – in the absence 

of actual applicable requirements to control GHG emissions – provides EPA with a sound 

argument for avoiding the absurd, costly, and time-consuming result of a paperwork 

requirement that has no corresponding environmental benefit. The commenter adds that 

there is no reason for consistency between the title V and PSD thresholds.

 One ceramics industry commenter (5077) proposes that the title V major source 

applicability threshold should be set at 100,000 tons CO2e because almost all stationary

sources that emit 100,000 tons CO2e or greater would already be subject to the title V 

permitting program, thereby reducing the regulatory burden on the regulated community

as well as permitting agencies.

 Industry commenter 5169 believes that a threshold of 100,000 tpy would be in line with 

the intent of the PSD program in 1977 – to cover major emitters that are financially able 

to bear the regulatory costs and are collectively responsible for most of the nation’s air 

pollution.

100,000 to 150,000 tpy

A utility and natural gas industry commenter (4749) recommends that EPA increase the 

major source threshold to between 100,000 and 150,000 tpy (and the PSD significance level to 

higher than 25,000 tpy and up to 50,000 tpy). The commenter (4749) notes that EPA’s emission 

data show that these thresholds would still cause the PSD program to apply to the facilities 

responsible for the majority of GHG emissions and still capture more facilities than are currently

subject to PSD, but the additional facilities represent a more manageable permitting workload 

than at the proposed levels.

One fuels sector commenter (5056) states the proposed thresholds are too low to 

successfully implement a PSD and a title V permitting program without creating burdensome 

requirements on state regulatory agencies and the regulated community. The commenter 

encourages EPA to raise the applicability threshold to between 50,000 and 100,000 tpy until the 

EPA has a better understanding of the real impacts to states and the regulated community.

150,000 tpy

Some commenters (4691, 5059, 5181, 5199, 19139) state that the PSD and title V 

emission threshold for new sources should be no less than 150,000 tpy (and the significance level 

for modifications should be no less than 50,000 tpy or 75,000 tpy [19139]). One or more of 

these commenters make the following points:
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 These thresholds are based on the relative size of capacity upgrades that trigger PSD 

under the current program and the number of affected facilities at different thresholds in 

this industry sector. 

 Higher alternative thresholds achieve the objective of defining thresholds that are at a 

“level closest to the statutory levels that permitting authorities can reasonably administer 

during this initial phase.” 

 These thresholds would include the largest sources, capture a significant amount of the 

national GHG inventory, and include additional sources not otherwise subject to PSD –

while minimizing the potential for a significant and administratively infeasible surge in 

PSD permitting workload for the initial phase. Commenter 4691 provides calculations to 

support these numbers.

 An additional factor for the NG industry is that EPA has announced that it will strictly

interpret source aggregation rules, which will force more aggregation and result in higher 

emission counts.

 Setting lower threshold levels likely will adversely impact the maintenance and 

development of natural gas pipeline infrastructure, which is inconsistent with the intent of 

the GHG Tailoring Rule – lowering the total emissions of GHGs into the atmosphere. 

(19139) 

 A 25,000 tpy threshold would have a crippling effect on the NG industry.

Other industry commenters (5073, 5712) contend that the threshold level for PSD should 

be 150,000 tpy (with significance level between 50,000 and 100,000 tpy) to avoid regulating 

sources that should not be regulated. Commenter 5073 believes that these thresholds would 

include the largest sources, capture a significant amount of the national GHG inventory, and still 

likely include some additional sources not otherwise subject to PSD, while minimizing the 

potential for a significant and administratively infeasible surge in PSD permitting workload for 

the initial phase.

100,000 – 250,000 tpy

One state commenter (6183) suggests that the first level be from 100,000 to 250,000 tpy, 

then decreased yearly by 25,000 tpy so that the fiscal impact of GHG regulation can be 

minimized.

250,000 tpy

An electric and NG utility (5082) believes that the title V and PSD major source level for 

CO2 should be set at no less than 250,000 tpy based on the PTE for CO2 of a 250 MMBtu/hr 

fossil fuel-fired boiler, which is a listed source under section 169 of the CAA as a major source 

when it meets the lower PSD threshold of 100 tpy.

An industry commenter (5077) proposes that the PSD major source applicability

threshold should be set at 250,000 tpy CO2e. The commenter states that most stationary sources 

that emit 250,000 tpy CO2e or more would already be subject to the PSD program for criteria 

pollutants, and raising the threshold to this level would reduce the regulatory burden on industry
136

and permitting agencies alike while at the same time target the largest and most pertinent sources 

for emission reductions through the implementation of BACT as appropriate.

Another industry commenter (5712) recommends that the threshold start at 250,000 tpy

(150,000 tpy significance level) for the first phase, which should be implemented over a 5-year 

timeframe while information is obtained to determine whether a second phase is needed. If the 

second phase is proven to be needed, then a threshold level of 150,000 tpy (100,000 tpy

significance level) could be used.

1,000,000 tpy

One utility group (4567) believes that a threshold level of 1 million tpy CO2e would be 

the most appropriate major source threshold for GHGs. However, since EPA did not propose 

thresholds as high as this, they support 100,000 tpy CO2e instead.

One industry commenter (5111) believes it may be necessary during the first phase to 

only apply PSD to sources that emit 1,000,000 tons of GHGs per year.

One state commenter (4786) requests that EPA stage thresholds in such a way that only

sources that are truly “major” trigger PSD and title V initially, which they assert would require 

that EPA establish an initial applicability threshold much higher than 25,000 tpy CO2e. They

suggest that the first year start with a 1,000,000 tpy CO2e threshold, where after 2 years, it could 

be cut in half to 500 tpy CO2e, and then after another 2 years, could be cut again to 250,000 tpy 

CO2e or lower. (4786)

Sector-Specific Thresholds

Some commenters suggest different thresholds for the 28 source categories listed in 

section 169(1) of the CAA (which have a PSD major source threshold of 100 tpy) and the 

unlisted source categories (which have a PSD threshold of 250 tpy):

 One environmental group (5311) suggests that EPA apply the statutory 100 tpy

applicability threshold to the 28 listed source categories, while maintaining its proposed 

25,000 tpy CO2e applicability threshold for all other sources during the first phase of 

implementation.

 Industry commenter 4801 recommends that EPA establish a PSD GHG emissions 

threshold of 25,000 metric tons for the 28 listed source categories and 60,000 metric tons 

for other sources because this is consistent with the ratio of the 100/250 ton threshold 

established by the CAA for the listed 28 source categories and all other sources. 

Solid waste industry commenters (4863, 5305, 5391) note that EPA already has 

established unique, landfill-specific PSD thresholds for “municipal solid waste landfill 

emissions,” measured as NMOC, and contend that EPA should establish GHG thresholds for 

landfills that are consistent with the current PSD thresholds and regulate a comparable portion of 

the solid waste management sector. The commenters provide calculations and suggest the 

following GHG thresholds:
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 A PSD major source applicability threshold of 820,000 tpy CO2e (4863, 5391) or 

745,080 metric tpy CO2e (5305) to be consistent with 250 tpy NMOC.

 A PSD major modification significance threshold of 160,000 tpy CO2e (5391) or 

149,016 metric tpy CO2e (5305) to be consistent with 50 tpy NMOC as specified in 

existing PSD regulations.

 A title V major source threshold of 320,000 tpy CO2e to be consistent with 100 tpy

NMOC (or 160,000 tpy CO2e to be consistent with 50 tpy NMOC based on the NSPS for 

MSW landfills). (5391)

 In addition, commenter 5391 contends that higher thresholds for landfills are particularly

important because of the role that landfills can play in developing renewable energy

projects from LFG, and because it has been recognized that landfills can provide indirect 

GHG emission reduction benefits. Lower thresholds could have the effect of 

discouraging existing permitted landfills from applying for permits to convert from flarebased systems to gas-to-energy systems for fear of triggering lengthy, burdensome, 

expensive, and uncertain PSD major source or major modification review.

Some other commenters suggest a similar approach for determining GHG thresholds that 

correspond to existing thresholds: 

 Use a combustion device, such as a boiler, and determine its CO2 level when operating at 

the criteria pollutant major source threshold (100 tpy) for NOx. Using this approach, a 

boiler operating at a level of 12 parts per million (ppm) NOx (at the high end of BACT) 

and fueled with natural gas, would yield CO2 emissions of approximately 777,000 tpy.

 Establish a CO2 level that would be equivalent to the title V extreme nonattainment area 

major source threshold of 10 tpy. The NOx 10 tpy level roughly equates to about 

100,000 tpy CO2.

 Establish a threshold at 300,000 tpy of CO2 based on the amount of heat input (fuel) 

required to emit 250 tons of NOx from natural gas turbine systems. If the threshold were 

based on comparability with SO2 emissions, the appropriate CO2 threshold would be 

more than 1 million tons of CO2. (3512)

A glass industry commenter (4771) states that EPA should tailor the threshold to the 

circumstances of each industry. For the flat glass industry, the commenter suggests 300,000 tpy

or higher (based on additional analysis), or alternatively that flat glass plants that use natural gas 

should be excluded from GHG regulation. The commenter indicates that a threshold of 

300,000 tpy would ensure that EPA is targeting the large sources of CO2 and other regulated 

pollutants. The commenter recommends that EPA reevaluate the impact on the number of 

sources covered at higher thresholds up to 300,000 tpy using updated, industry specific 

information.

Response:

Based on numerous comments from both state and local permitting authorities, small 

business representatives, and industry commenters, we have reassessed our original burden 

estimates from our proposal and have decided to finalize higher GHG permitting thresholds than 

the 25,000 tpy CO2e major source threshold identified in the proposal (see response above 

regarding burden reassessment at 25,000 tpy CO2e threshold). In section V.B of the preamble to 
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the final rule, we discuss at length our basis, from both a legal and policy perspective, for 

establishing the GHG thresholds in the final rule, for both major sources and significance levels. 

In addition, as mentioned in response to general comments on burden above, we describe the 

basis and assumptions for our final permitting burden estimates, which ultimately informed our 

decisions on GHG threshold selection, in the burden analysis TSD contained in the public docket 

for the final rule (Summary of Methodology and Data Used to Estimate Burden Relief and 

Evaluate Resource Requirements at Alternative Greenhouse Gas (GHG) Permitting Thresholds). 

Following are some key points from discussion relevant to the comments above.

After step 1, which involves a non-GHG permit prerequisite (where a major GHG 

threshold does not apply), we determined that a 100,000 tpy CO2e major source threshold level, 

and a 75,000 tpy CO2 significance level, produce a level of permitting activity at step 2 in the 

tailoring process that is administratively feasible. We further concluded and are finalizing with 

this action that the GHG threshold for both PSD and title V programs should be no less than 

50,000 tpy CO2, at least through to April 30, 2016 at which time a follow-up rulemaking will be 

finalized to establish any further reductions or changes to the GHG permitting thresholds.

Based on our final burden analysis, we have decided to set our final step 2 thresholds at 

100,000 tpy CO2e for major source applicability under PSD and title V and at a 75,000 tpy CO2

significance level for PSD. Overall, we estimate that the almost 900 additional PSD permitting 

actions (virtually all of which would be modifications) per year at these levels will result in an 

approximately a $21 million increase (from step 1) in states’ annual costs for running PSD 

programs. In addition, we estimate that the 1,000 additional title V permit actions will cause the 

total title V burden for permitting authorities to increase by $6 million annually from step 1. 

This total increase in permit program burdens of $27 million represents a 34 percent increase 

over the $78 million in total cost of PSD and title V programs at step 1. We consider this a 

substantial increase particularly because step 2’s start date of July 1, 2011 is only 6 months after 

step 1’s start date of January 2, 2011. What’s more, step 1 will entail a substantial increase in 

permitting authority obligations, so that adding the costs of step 1 and step 2 together -- $31 

million – means that permitting authorities will be required to increase their permitting resources 

by approximately 42 percent between now and step 2. In addition to the administrative burdens 

we have been able to monetize, we must be mindful that permitting authorities will incur other 

burdens, including the significant support and outreach activities by permitting staff for the many

newly permitted sources. We believe that any lower thresholds in this timeframe, whether in the 

PSD and title V applicability levels or in the significance level, would give rise to administrative 

burdens that are not manageable by the permitting authorities. Additionally, although not a basis 

for our decision on the step 2 phase-in levels, we estimate that facilities meeting the step 2 major 

source applicability thresholds account for approximately 67 percent of total national stationary

source GHG emissions. 

Central to our decision to promulgate higher thresholds than what we proposed is our 

recognition, based on comments and further analysis, that applying PSD to GHG sources at the 

statutory or any other threshold level or significance level that we considered would result in (i) a 

greater number of sources, and significantly greater number of modifications than we first 

estimated becoming subject to those programs; and (ii) a greater per-permit cost than we first 

estimated to the permitting authority of processing those permit actions. A detailed discussion of 
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our revised estimates and reasoning for our final threshold selections is provided in Section V of 

the preamble to the final rule. Similarly, because the administrative burdens at the 

100,000/75,000 level are manageable, we do not believe that higher threshold levels are 

justifiable for step 2. Specifically, at the 100,000/100,000 level – which would entail a 100,000 

tpy CO2e significance level, rather than a 75,000 tpy CO2e level – permitting sources would need 

to handle only 20 additional modifications beyond current levels, and thus would not incur 

substantial additional costs. 

EPA has decided not to take final action on requests for exemptions from applicability

determinations (major source and major modification) under title V and PSD for certain GHG 

emission sources, emission activities, or types of emissions at this time. For similar reasons, we 

have decided not to take final action on requests to establish categorical-specific applicability

thresholds as requested by some of the commenters above. Although some commenters 

requested several applicability exemptions with respect to GHGs, we have decided to address the 

need for tailoring through a uniform threshold-based approach, rather than through a collection 

of various specific exclusions. Our uniform threshold approach achieves the same result—i.e., 

permitting programs that are not overwhelmed due to the influx of GHG permitting—and does 

so in a way that will be simpler to administer, covering all key GHG source categories, while 

achieving the program objectives. In establishing our thresholds, we generally took into account 

the same factors – including costs to sources and administrative burdens to sources, amount of 

GHG emissions from sources – covered at various levels – as the commenters used as the basis 

for their suggestions.

We recognize the concern of commenters who believe that, under our proposed 

applicability threshold, a large number of ‘hollow’ permits might be created under title V for 

GHG. During step 1, permitting for GHGs is only required if the source is otherwise subject to 

permitting for its emissions of non-GHGs, meaning that those sources will be subject to existing 

substantive applicable requirements for non-GHGs (e.g., NSPS, MACT, and SIP requirements, 

including PSD). Thus, there should be no, or at least no additional, “empty permits” during 

step 1. For step 2, it is possible that sources that become subject to title V requirements for GHG 

emissions may not be subject to other requirements, but our assessment suggests that this is very

unlikely. We estimate that virtually all of the 550 newly-major sources in step 2 will be subject 

to applicable requirements under the CAA because they are from categories that have been 

traditionally subject to regulations, such as smaller industrial sources from already regulated 

categories, large landfills, and oil/gas/coal production. Even the approximately 50 newly-subject 

commercial sources in step 2, which we estimate to be comprised of very large hospitals, are 

likely to be covered by standards for medical waste incinerators. In addition, we expect these 

sources may well be subject to SIP requirements. Thus we do not expect any, or at most very

few, “empty permits” during step 2. 

Comments on the Significance Level:

We proposed a PSD significance level range for consideration and comment of 10,000 to 

25,000 tpy CO2e. We received many comments recommending specific significance levels, 

ranging from 10,000 tpy to 150,000 tpy CO2e, which are summarized below.
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No level specified

In response to an EPA inquiry (74 FR 55334), one refinery industry commenter (3757, 

3968) indicates that lowering the significance level would have a very large impact through 

increased permitting fees, consulting costs, and the high cost of control devices. 

One commenter (4518) does not believe that there is a clear basis for the proposed 

significance level. The commenter makes the following points:

 The EPA stated that it normally uses 20 percent of NSPS in the establishment of a 

significance level, but the proposed significance level (10,000 to 25,000 tpy) is 40-100 

percent of NSPS. 

 With the proposed significance level, a modification that results in a 10,000 tpy increase 

in GHG would trigger permitting requirements, but a new facility that emits 10,000 tpy

would not. 

 Since the EPA has no health data on which to base significance levels for GHG 

emissions, different options need to be weighed. 

 The EPA could not set a significance level for the initial phase, so the default significance 

level of 0 would apply. 

 In selecting a significance level the EPA should be careful not to make it easier for a 

facility to get around the permitting rules by simply choosing a permit for a new 

operation rather than a modification permit. It is not clear if permitting agencies will 

have the personnel to investigate if a new permit application is applied to a new operation 

or modification of an existing one. 

 There should be a modification permit option for stationary sources that uses technology

and/or best practices to reduce GHGs below the 25,000 tpy threshold. 

10,000 tpy

One state commenter (3916) indicates that the PSD threshold should be set at 10,000 tpy

CO2e. The commenter reasons that if the significance level were set at 25,000 tpy, an existing 

source with a PTE of greater than 25,000 tpy could add another 24,999 tpy of potential emissions 

without triggering a PSD review. 

Citizen commenter 5455 supports EPA setting the significance level for GHGs at 10,000 

tpy CO2e.

15,000 metric tpy

An industry commenter (4801) urges EPA to establish the GHG significance level at 

15,000 metric tons because the amount of natural gas combustion needed to achieve this level of 

GHG emissions would be consistent with the established significance level of 40 tpy of NOx

emissions.

20,000 tpy
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Commenter 4526 supports a significance level of 20,000 metric tons of CO2e per year 

during the 5-year phase 1 period to distinguish it from the major source applicability threshold. 

25,000 tpy

Some state (2792, 4238, 4239, 5338), industry (2369, 4241, 4555, 6203), and union 

(5342) commenters suggest adoption of a 25,000-tpy significance level:

 The EPA could revisit this level at the 5-year review period and establish a lower 

threshold if the original estimates are found to be accurate. (4238, 4239)

 State commenter 2797 notes that this would be the same as the major source threshold, 

which would avoid PSD permitting for GHGs at sources that are major for a conventional 

pollutant but minor for GHGs.

 State commenter 2797 indicates that a significance threshold level of 10,000 tpy is too 

low and would force schools and apartment buildings that would not otherwise be 

considered major to be subject to major source permitting. 

 Fuels sector commenter 2369 adds that if EPA determines during the proposed 5-year 

evaluation period that a 10,000 tpy significance level is appropriate, sources should have 

at least 18 months advanced notice to plan for these changes.

 Industry commenter 6203 suggests 25,000 tpy to preserve jobs. Alternatively, if EPA 

sets the significance level at a lower amount, EPA could set a much higher significance 

level for industries manufacturing energy efficiency products because energy efficiency

will play a critical role in addressing climate change and reduction of GHGs.

 Union commenter 5342 supports a 25,000 tpy significance level because there is merit in 

maintaining consistency on the type and size of facilities covered by the PSD and title V 

permit requirements. A 25,000 tpy significance level appears more than adequate to 

provide effective GHG management without creating unwieldy new permitting 

requirements for many small sources.

Other industry commenters (2371, 4020, 4112, 4632, 5079, 5124, 5133, 5180, 5236, 

5277, 5300, 5303, 5345, 5347) recommend a significance level of at least 25,000 tpy, but would 

prefer a higher level:

 Commenter 4112 believes that the PSD significance level for GHGs should be no lower 

than 25,000 tpy.

 A utility group (5079) recommends a significant emissions rate of at least 25,000 tpy and 

preferably higher. The commenter included three examples (with calculations) of 

situations where PSD permitting at the 25,000 tpy level could discourage energy

efficiency upgrades and investments at fossil fuel-fired power plants:

o A NG combined cycle facility that undergoes a steam turbine upgrade to improve 

efficiency. Based on a pre-modification utilization rate of 50 percent, a postmodification increase in utilization of 4 percent would trigger the 25,000 tpy CO2e 

threshold, while being well below the thresholds for NOx and CO (< 3 tpy combined). 

Utilization would have to increase to over 80 percent to reach the NOx threshold. 

(Utilization may increase as a result of improved efficiency, and grid-wide GHG 

emissions would be expected to go down.) 

o Efficiency upgrades at a number of turbines will increase the capacity of the units,, 

which will increase total fuel consumption per unit by almost 500,000 million British 
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Thermal Unit (Btu) per year at a constant utilization rate but reduce GHG emissions 

per megawatt hour (MWh). Example calculations for a 200 MW turbine unit at 94 

percent utilization show an increase of over 25,000 tpy CO2e, but only 2 tpy NOx and 

1.3 tpy CO.

o The California Energy Commission is considering an application to repower a portion 

of an aging NG-fired plant to more-efficient combined cycle generation, which will 

significantly reduce GHG emissions per MWh. However, with the significant 

increase in utilization that would likely occur as this plant displaces generation at less 

efficient plants, GHG emissions from the facility could go up very significantly

(while reducing grid-wide GHG emissions) without reaching the threshold for NOx.

 A utility industry commenter (5180) recommends a significance level of at least 

25,000 tpy, but based on the de minimis principle rather than absurd results or 

administrative necessity. (The commenter couples this with interpreting PSD to be 

triggered only by an increase in emissions of a NAAQS pollutant.) The commenter cites 

the examples provided by Commenter 5079 and the potential for such beneficial projects 

to be foregone due to the uncertainty surrounding BACT for GHGs to suggest a 

substantially higher significance level (e.g., 100,000 tpy).

 A utility industry commenter (5345) and fuels sector commenter (5124) believe that the 

significance level should be set no lower than 25,000 metric tpy.

 An industry commenter (5277) believes the significance threshold should be at least 

25,000 tpy to avoid permitting gridlock that would threaten to indefinitely delay needed 

business investment, and additional analysis is required to determine whether a higher 

limit is necessary.

 An operator of waste-to-energy facilities (2371) supports a significance threshold of no 

less than 25,000 tpy in Phase I of the program, given that the financial impact of the rule 

on industry has yet to be determined, as the technology that plants triggering the PSD 

threshold will have to install is not yet been specified.

 An aluminum association commenter (4020) believes that, at the very least, EPA should 

make the thresholds for PSD significance equivalent to the proposed major stationary

source threshold of 25,000 tpy CO2e to help mitigate the impacts of the proposed rule. 

The commenter would prefer a higher threshold of 100,000 tpy CO2e to further relieve 

the administrative burden caused by regulation of GHG under the CAA.

 An industry commenter (5133) asserts that if the significance level is less than 25,000 

tpy, EPA is likely to capture thousands of additional minor activities that the PSD 

program was not intended to regulate. For example, a lime plant that performs routine 

maintenance by adjusting the burner flame could exceed a CO2 significance level of 

10,000 tpy. Increased permitting likely to flow from a lower significance threshold will 

further delay the permitting time, impose excessive costs on industry and permitting 

agencies, and delay or preclude environmentally beneficial projects.

 An industry commenter (5300) believes the significance level for triggering PSD 

requirements for modifications at existing major stationary sources should be no less than 

25,000 tpy because there is a rough parity between 25,000 tpy CO2 emissions and 40 tpy

NOx emissions from natural gas-fired combustion units.

 A coating industry commenter (5347) reports that a 10,000 tpy CO2e significance level 

could potentially increase the number of coating facilities impacted by 35 percent based 

on actual emissions. If EPA requires emissions be based on a facilities’ PTE, this 
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estimate would be higher. Because EPA did not perform an analysis on the 15,000 tpy

CO2e or even the 20,000 tpy CO2e level, this commenter believes EPA’s proposed range 

of 10,000 – 25,000 tpy CO2e is arbitrary. The commenter opines that EPA should set the 

threshold at no less than 25,000 tpy CO2e and perhaps higher and that the threshold be 

based on actual emissions. (5347)

No lower than major source threshold (no level specified)

One state commenter (4864) and one fuels sector commenter (5711) state that EPA 

should set the significance level equal to the applicability thresholds for new sources. The fuels 

sector commenter (5711) believes that no other result is legally defensible under the doctrine of 

absurd results, particularly because EPA’s analysis shows that the administrative burden for 

permitting a modification would be the same as for permitting a new source, but (because 

existing sources have less design and construction freedom) BACT would be expected to be less 

stringent and result in less environmental benefit. In addition, this commenter notes that there is 

precedence for this approach – EPA set the significance level for CO equal to the major source 

threshold. 

40,000 tpy

A fuels sector commenter (5705) who recommends a major source threshold of 

40,000 tpy also recommends that the significance level for PSD be raised to the same level to be 

consistent. If EPA retains the 25,000 tpy major source thresholds for PSD and title V, the 

commenter recommends that the significance level be 25,000 tpy as well. 

50,000 tpy

 Some fuels sector commenters (4515, 4691, 5059, 5181, 5199) state that the significance 

level for modifications should be no less than 50,000 tpy (and the PSD and title V 

emission threshold for new sources should be no less than 150,000 tpy). 

 A utility and natural gas industry commenter (4749) recommends a PSD significance 

level of greater than 25,000 tpy up to 50,000 tpy (and a major source threshold between 

100,000 and 150,000 tpy). 

 A utility industry commenter (5301) states that 50,000 tpy significance threshold would 

be more in line with the current PSD significance thresholds for other regulated 

pollutants (e.g., NOx) for natural gas-fired RICE and combustion turbines used for 

electrical generation peak shaving and natural gas transmission and storage, while lower 

significance levels could potentially trigger PSD for modifications of existing RICE and 

combustion turbines. Industry commenter 5130 similarly recommends that the major 

modification thresholds (and the major source threshold) be raised to 50,000 metric tpy

based on emissions of 40 tpy of NOx from a well-designed boiler that achieves NOx

emissions of 0.08 lbs/MMBtu heat input.

 An electric and NG utility (5082) believes the PSD significance level should be 

50,000 tpy, based on 20 percent of the commenter’s suggested major source level of at 

least 250,000 tpy.
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 Utility commenter 7026 recommends PSD significance (and major source) thresholds for 

naturally-occurring GHG pollutants (CO2, N2O and CH4) of 50,000 tpy CO2e for each 

individual pollutant because this would only minimally reduce the percentage of GHG 

emissions covered while substantially reducing the number of affected sources and the 

overall administrative burden.

 An SBA commenter (4867) recommends that EPA raise the significance threshold to 

50,000 tpy (and the applicability threshold to 100,000 tpy). The commenter also suggests 

that EPA consider longer phase-in periods for these applicability and significance 

thresholds to apply. Industry commenter (4794) agrees with these SBA 

recommendations.

 Industry commenters 4771 and 5922 recommend a significance level of 50,000 tpy.

Between 50,000 to 100,000 tpy

An industry commenter (5073) says that the PSD significance level should be 50,000 to 

100,000 tpy, which (along with an major source threshold of 150,000 tpy) would include the 

largest sources, capture a significant amount of the national GHG inventory, and still likely 

include some additional sources not otherwise subject to PSD, while minimizing the potential for 

a significant and administratively infeasible surge in PSD permitting workload for the initial 

phase.

100,000 tpy

Several commenters (4567, 4745, 4903, 5052, 5077, 5113, 5335, 5367, 5712, 5742, 5809, 

16411) assert that the PSD significance level should be no lower than 100,000 tpy. Their 

rationale included the following points:

 A utility group (4567) contends that at 25,000 tpy, challenges from citizen groups could 

bring corporate maintenance programs to a halt.

 Utility commenter 4745 suggests 100,000 tpy, but requests that EPA take time to study

what the appropriate level should be.

 Utilities 5052 and 5113 believe the major source thresholds should be 100,000 tpy and 

assert that there is no policy rationale to support a lower significance level, while a higher 

level will reduce the number of facilities that must apply for a PSD permit and help to 

alleviate some of the burden. Government agency commenter 5367 similarly believes 

that this higher significance level would prevent the unintended consequences and 

economic burden of the rule as written.

 Commenter 5052 adds that a lower significance level would achieve no environmental 

benefit because there is no available retrofit BACT for GHG modifications.

 Energy sector commenter 5742 suggests 100,000 tpy because EPA should not establish 

the threshold and significance level at the same level as that set by the GHG Mandatory

Reporting Rule (25,000 tpy), as PSD would involve substantially more than simply

reporting emissions.

 Steel industry commenter 5712 contends that the significance level should be 100,000 tpy

(with threshold level for PSD of 150,000 tpy) to avoid regulating sources that should not 

be regulated.
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 Ceramics industry commenter 5077 believes that selecting this significance level would 

reduce the regulatory burden on industry and permitting agencies alike while at the same 

time target the largest and most pertinent sources for emission reductions.

150,000

An industry commenter (5712) recommends that the significance level start at 

150,000 tpy (250,000 tpy applicability threshold) for the first phase, which should be 

implemented over a 5-year timeframe while information is obtained to determine whether a 

second phase is needed. If the second phase is proven to be needed, then a significance level of 

100,000 tpy (150,000 tpy applicability threshold) could be used.

Higher, but unspecified, level

 State commenter 7935 recommends a PSD significance level that would not expand the 

number of sources subject to PSD requirements beyond current levels, noting that the 

10,000 tpy PSD significance threshold would cause too many administrative burdens for 

them.

 State commenter 3278 believes the proposed thresholds would cause conflicts with 

criteria pollutant BACT requirements for certain types of sources. For example, if a 

source modifies with a 50 tons VOC increase, BACT for that VOC increase is a thermal 

oxidizer, resulting in a significant increase in GHG and an additional BACT requirement. 

The commenter recommends the PSD significance level for GHGs be set higher than 

25,000 tpy or else exemptions be provided for industries using combustion techniques for 

controlling regulated NSR Pollutants.

Response:

As mentioned in our responses above regarding general applicability thresholds, our 

reassessment of PSD modification actions was the primary basis for choosing a higher 

significance level in this final action than was proposed. We describe the rationale behind 

selecting the GHG significance level in more detail in section V.B of the preamble to the final 

rule. As that description makes clear, in establishing the significance levels, we generally 

considered the same factors that commenters suggested. Our final burden analysis describing the 

impacts of different possible significance levels considered, and upon which our final rationale is 

based, is contained in the public docket for the final rulemaking (see Docket No. EPA-HQ-OAR2009-0517). As noted above, we made a number of corrections to our estimates of modification, 

the most significant being the consideration of minor modification activities for conventional 

pollutants that would become major PSD actions for GHGs. In addition, we received numerous 

comments from both permitting authorities and industry indicating that we underestimated the 

burdens associated with the proposed significance level range of 10,000 to 25,000 tpy CO2e. For 

this final action, we have established the PSD GHG significance level at 75,000 tpy CO2e, for 

both steps 1 and 2, to avoid creating excessive and unmanageable burden on the permitting 

authorities. 
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6.4.3 Comments on the PTE Basis for Thresholds

Consistent with the PSD and title V statutes and implementing regulations, we proposed 

that the major source and significance thresholds would be based on a source’s PTE for GHGs. 

We received several comments on this basis for the thresholds, which are summarized below.

Comment:

A number of industry (3720, 4020, 4119, 4298, 4524, 4632, 4684, 5052, 5056, 5111, 

5236, 5280, 5351, 5705, 5712, 5714, 5800, 16411), agricultural (3917, 5062, 5074, 5245), and 

government agency (4867, 5367) commenters express or imply concern that using PTE for 

determining applicability will bring in many sources that have actual emissions well below the 

thresholds. These commenters typically prefer the use of actual emissions, which would be 

consistent with the GHG Mandatory Reporting Rule, spare thousands of smaller sources from 

PSD and title V permitting, and eliminate regulatory burden for both source and permitting 

authority. Representative comments include the following:

 Space heating applications in commercial buildings and other seasonal activities may

become subject to permitting based on PTE even though actual emissions are 

significantly lower than the threshold. The TSD suggests that commercial buildings 

operate at 15 percent of capacity. (3720, 4524, 5705, 5800)

 As it did for the residential and commercial sectors, EPA needs to make an upward 

adjustment for industrial sectors to convert actual emissions to PTE because combustion 

equipment is sized to satisfy short-term demand due to the variability in weather and 

production. (5140, 5278)

 Farms use propane or natural gas-fired heaters, as well as small motors and engines, 

which are often used intermittently or only during emergencies. Thus PTE is ill-suited 

for farms, and EPA should define PTE consistent with actual emissions from normal and 

customary use of equipment. The EPA should work with USDA and livestock producers 

to develop a meaning for PTE for such equipment. (5074)

 Applicability should be consistent with the GHG Mandatory Reporting Rule. Many

sources are below the 25,000 metric ton actual emission threshold in the GHG Mandatory

Reporting Rule but over the English ton/PTE level proposed in the Tailoring Rule, which 

is exacerbated by the fact that the GHG Mandatory Reporting Rule includes GHG 

emissions only from combustion units, while the proposed Tailoring Rule includes GHGs 

from all emitting activities at a source. (4632, 4684, 4867, 5052, 5236, 5245, 5351)

 Sources with actual emissions below 75-90 percent of the major source threshold should 

have significantly more than 1 year to submit their significant minor applications, which 

would allow permitting authorities to use their scarce resources to address the largest 

emitters first, and to make sure these sources are appropriately permitted before moving 

on to smaller sources. (4298)

Response:

In section III of the preamble, we discuss the basic requirement for using PTE in 

applicability determinations for both PSD and title V programs. Under PSD, a "major stationary

source" is any source belonging to a specified list of 28 source categories which emits or has a 
147

PTE 100 tpy or more of any pollutant subject to regulation under the CAA, or any other source 

type which emits or has the PTE such pollutants in amounts equal to or greater than 250 tpy. 

Likewise, the title v program defines “major source” to be “any stationary facility or source of 

air pollutants which directly emits, or has the PTE, one hundred tpy or more of any air 

pollutant.” Therefore, we based our emission estimates, and thus the resultant number of 

affected facilities at different GHG emissions thresholds, for all sectors (not just residential and 

commercial) on a PTE basis. The basis for the PTE estimates is described in the Technical 

Support Document for Greenhouse Gas Emissions Thresholds Evaluation contained in the public 

docket. 

We do agree with commenters that there may be source categories and emission unit 

types, such as space heating units that only operate seasonally, that lend themselves to 

consideration of redefining PTE. However, as we stated in the proposal, any such 

determinations will need to be done through a careful review of specific source categories and 

emission units, and likely through rulemaking actions. As described in greater detail in section 

V.E.1 of the preamble, we intend to assess streamlining options, tools, and guidance, including 

possibly alternative definitions of PTE for some categories, to reduce the costs to sources and 

permitting authorities of GHG permitting. The development and implementation of these 

techniques will be an integral part of our strategy during the phase-in period, and we plan to 

undertake streamlining actions as quickly as possible. Technical information gathered during 

steps 1 and 2 will impact our step 3 rulemaking, which will provide an opportunity for us to use 

that experience and data to begin to propose streamlining approaches that need notice and 

comment rulemaking. In addition, it may be possible for some sources to adopt federally

enforceable limits that more closely represent their operational limits and actual emission levels, 

similar to such limits taken now for minor source permitting actions related to conventional, nonGHG pollutants. However, these actions will need to be developed through consultation with the 

applicable permitting authority. 

6.4.4 Comments Recommending Alternative Approaches to Applicability

Comment:

Several commenters suggested alternative approaches to applicability as summarized 

below:

 A utility commenter (5052) supports using the historic “synthetic minor policy” under 

which it was presumed that sources with actual emissions less than 50 percent of major 

source thresholds are minor sources. The commenter believes this policy significantly 

assisted states by removing the need to permit thousands of sources. 

 One state commenter (3915) recommends that EPA consider limiting GHG applicability

to a smaller group, perhaps by performing a study to identify who the actual big polluters 

are and tailoring the numbers so as to only capture the main offenders. 

 State commenter 4866 recommends two alternative approaches:

o A two-step approach, first looking at a source’s criteria pollutants for the 100/250 tpy

threshold. Only if a source is considered major for criteria pollutants would GHG 

emissions be reviewed for PSD/title V applicability.
148

o A two-tiered approach based on a source’s GHG emissions. Sources that fall under 

the 40 CFR 98.2(a)(1) of the GHG Mandatory Reporting Rule Requirements would 

trigger PSD with 25,000 tons of CO2e and all other source categories would trigger 

PSD with 100,000 tons of CO2e. 

 State commenter 3278 recommends the inclusion of additional tiers of applicability, with 

different emission levels for establishing a title V major source and a PSD major source. 

 A utility and natural gas industry commenter (4749) suggests that EPA consider a phased 

implementation that would apply to new sources initially and address existing sources 

later, which would allow permitting authorities to ramp up resources and allow time to 

develop and provide to states guidance on GHG PSD for existing sources. The 

commenter (4749) points out that this approach has been used in EPA’s regulatory

process for section 316(b) of the CWA.

 Several commenters (4208, 4228, 4514, 4525, 5144, 5706, 6202, 6270, 6460) 

recommend that EPA separate criteria pollutant (and other non-GHG pollutants) 

applicability under PSD from applicability for GHGs, such that exceeding the threshold 

for GHGs would not trigger PSD for criteria pollutants. The commenters suggest that the 

same approach could be applied to title V, whereby GHG emissions alone would not 

cause a facility to be a regulated entity under title V.

 State commenters 4864 and 5339 suggest that EPA treat GHGs similarly to 112(r) 

pollutants and not require title V permits solely based on GHG emissions. [Section 

112(r) establishes the program to prevent accidental release of hazardous substances, 

under which EPA has created the list of substances subject to the program (i.e., “section 

112(r) pollutants”).]

 Industry commenter 5147 suggests that EPA set the significance level based on the 

emissions per unit of power or steam produced, not based on a pure tons per year level. 

This is appropriate for GHG emissions because the overall goal is to reduce emissions per 

unit of power or steam generated. If EPA adopts this approach, there would be a level 

playing field for all utilities and industrial sources creating incentives to produce power 

on the lowest CO2 basis.

 Industry commenter 5340 urges EPA to allow offset credits submitted by a facility to be 

counted in determining the GHG emissions of a source for purposes of the PSD and 

title V programs. Under this approach, new facilities will be able to obtain and submit 

offset credits to avoid triggering the PSD and title V applicability thresholds. In addition, 

existing facilities will be able to submit offset credits to avoid triggering the PSD 

significance level when undergoing a modification, i.e., by applying the reductions 

represented by the offset credits against emissions associated with the modification.

 Some semiconductor industry commenters (5141, 5143) opine that different triggering 

thresholds should be established for combustion gas GHG emissions and non-combustion 

gas GHG emissions, especially for the PFCs emitted in small volumes as part of a 

dynamically evolving toolset and process configuration. The commenters do not suggest 

specific thresholds.

Response:

We agree with commenters who suggested alternatives on the general basis of a phased 

approach, initially causing only the largest sources of GHG emissions to become subject to PSD 
149

and title V permitting requirements, because it would be more successfully implemented. We 

recognized that, on the basis of these programs being administratively feasible to implement, a 

phased approach that results in a manageable number of permitting actions was necessary. 

Therefore, as part of this final action we have adopted a 2-step approach for the initial phases of 

the tailoring process as described earlier in this RTC and at greater length in section V of the 

final preamble for the rule. We believe this 2-step process addresses many of the concerns raised 

by commenters regarding perceived permitting burdens and at the same time includes program 

coverage of the largest GHG emitting sources. 

We do agree with the commenter that suggests there may be opportunities to establish 

minor source permits for GHG emission sources, and nothing in this rulemaking precludes 

consideration and application of existing minor source permitting process. However, we believe 

more research will be necessary on the type of emission units and processes resulting in GHG 

emissions, and how they operate over a wide range of utilization patterns at a variety of source 

categories, before permitting authorities will be able to establish procedures and rules for 

developing minor source permit limitations. 

Many of the specific alternatives for applicability determinations mentioned by

commenters, however, are not viable options from both a legal or programmatic standpoint. For 

example, sources that would be required to apply for title V permits solely as a result of being 

subject to requirements under section 112(r) are not required to apply for such permits because 

CAA section 112(r)(F)(7) contains an explicit exemption from title V applicability for such 

sources. There is no comparable exclusion in the Act for GHG sources from title V applicability. 

Alternatives that differentiate applicability by source category type, either based on the GHG 

Mandatory Reporting Rule or other criteria, were not considered consistent with the objective of 

establishing uniform applicability criteria based on the legal concepts of administrative necessity 

and absurd results as described in section V of the final rule preamble. We also disagree with a 

suggested alternative that only affects new sources initially, since this would in effect exclude 

GHG review of any PSD actions, such as modification activity, at existing sources and any

revisions to existing title V permits based on GHG-related requirements. The concepts of 

applying offset credits from unrelated or offsite projects, and the use of emission indices instead 

of straight tonnage amounts for applicability determinations, are currently not allowed under the 

PSD regulations and were not considered as a means to address administrative necessity 

concerns under this rulemaking. 

6.4.5 Comments on the Proposed Phasing of the Thresholds

We proposed the Tailoring Rule as a phased program to bring GHGs into the PSD and 

title V permitting programs. The higher thresholds for GHGs discussed above are the first phase 

of our tailoring program. We also committed to evaluate the effectiveness of this first phase and 

take other steps to improve the administrability of the permitting programs for GHGs within 

5 years from the effective date of the final Tailoring Rule. Finally, we proposed to promulgate 

within 6 years a follow-up rulemaking that will establish a second phase of the tailoring program, 

i.e., either to confirm the continued use of the GHG permitting thresholds implemented in the 

first phase, or promulgate alternative GHG permitting thresholds or other streamlining 
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techniques. We received some comments on our proposed phasing of the thresholds, which are 

addressed below.

Comment:

A number of state (4238, 4239, 8025, 8803), industry (2371, 4950, 5052, 5280, 5712), 

environmental (5139, 5306, 5448), and union (5342) commenters give at least qualified support 

to EPA’s proposal to phase in GHG regulation by subjecting the only largest sources to 

regulation in the initial phase. Examples of specific comments on EPA’s proposed phasing in of 

the proposed thresholds include the following:

 Some state commenters (4238, 4239, 8025, 8803) support EPA’s approach to provide a 

first phase of five years with a sixth year to complete additional rulemaking. 

o One of the state commenters (8025) adds that 3 years is too short a period as it may

take regulatory or legislative action to accomplish any streamlining efforts and that 

would not be enough time to determine whether the rule has provided any benefit – it 

may be that streamlining will produce nothing new, and it would be irresponsible at 

that point to continue on toward the statutory thresholds. 

o State commenters 4238, 4239, and 8025 do not support the alternative option of a 

“step down” approach in which thresholds are reduced in regular predetermined stepdown levels, because this is an uncertain and potentially arbitrary exercise.

 A union commenter (5342) supports the intent and purpose of EPA’s proposal to evaluate 

the effectiveness of the PSD Tailoring Rule over a 5-year period, and will then make 

recommendations for potential changes to applicability thresholds.

 One industry commenter opines that EPA will need time to implement its proposed 

streamlining approaches and that 3 years would not allow EPA sufficient time to do that. 

The commenter states that, even if EPA finalizes higher GHG title V and PSD 

applicability thresholds than proposed, EPA will still have a difficult time to complete all 

of the activities required for the implementation and evaluation of the initial phase of the 

GHG program within 5 years. (5280)

 One environmental group (5306) supports the phased approach on the basis of 

“administrative necessity” because it will allow EPA to begin regulating the largest 

sources of GHGs quickly, while collecting more information about smaller sources, as 

well as more fully considering streamlining options for subsequent phases.

 Two environmental group commenters (5139, 5448) support EPA’s stated intent to 

ensure that NSR is fully-implemented immediately for the largest polluters in order to 

maximize pollution reductions.

 One fuels sector commenter (5711) supports a phased-in approach, but not if it leads to 

imposing the statutory 100/250 tpy thresholds – or thresholds lower than 25,000 tpy – on 

residential and commercial natural gas customers. The commenter states that phase 2 

should still use higher thresholds for residential and commercial customers, depending on 

results of the streamlining tools developed in phase 1.

 One fuels sector commenter (2369) supports the 5-year time frame, but suggests that to 

avoid overburdening regulatory agencies and sources during the 5-year evaluation period, 

permitting should be required only for those sources that would be required to permit 

without consideration of GHG emissions.
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 An operator of waste-to-energy facilities (2371) supports the phased approach, given that 

the financial impact of the rule on industry has yet to be determined because the 

technology that plants triggering the PSD threshold will have to install is not yet been 

specified. This commenter adds that EPA will be able to adjust the PSD significance 

threshold, as needed, based on more accurate information such as the results of Phase I, 

and the results of other GHG control regulations and legislation.

 One industry commenter (4950) agrees that only large emitters should have to meet the 

permitting requirements in the initial phase, but is concerned about the impact the cost of 

large emitters’ compliance will have on downstream end users, such as the retail industry.

 An industry commenter (5712) states that only currently regulated PSD facilities should 

be regulated at first to maintain the current status quo. Other larger facilities should be 

considered after 5 years at lower triggers and only after everything is validated related to 

the need to regulate.

 An industry commenter (5052) believes that the history of the CAA demonstrates a 

phasing of regulations by pollutants and by industry, which is consistent with the 

approach that EPA has proposed for GHGs. The commenter presents an extensive 

history of air pollution laws in the U.S. from 1955 forward and of the implementation of 

ozone depleting substances (ODS) controls to illustrate that air pollution control has 

always been incremental and pragmatic.

An environmental group commenter (5139) (who supports the intent to implement NSR 

immediately for the larges sources) states that EPA has failed to demonstrate that 6 years are 

necessary to study and implement NSR for sources emitting less than 25,000 tpy. The 

commenter states that while EPA discusses predictions of the effect of implementing individual 

streamlining measures and maintains that none of them alone would be sufficient to overcome 

the claimed administrative logjam, EPA never analyzes why it cannot administer the permitting 

programs as required if all of its proposals are implemented simultaneously. The commenter 

makes the following points in support of this position: 

 Under title V of the Act, major facilities are not required to submit title V permits until 

1 year after they become subject to the permitting program. The EPA’s analysis is 

flawed because it has not analyzed what combined effect the full implementation of its 

streamlining proposals during that period would have to reduce the cost, complexity, and 

number of title V permits that would have to be submitted at that time. 

 The issue of BACT for GHGs has been in the forefront of EPA consideration since the 

Massachusetts v. EPA decision (i.e., since April 2007), and EPA has made considerable 

progress on this issue aided by thousands of public comments. While the definition and 

application of BACT for GHGs will be significantly refined and expanded in coming 

years (as is the case for all other air pollutants as well), EPA is incorrect to claim that 

insufficient information exists to at least estimate costs and streamlining efficiencies of 

BACT and/or general permitting requirements. 

 The EPA suggests that calculations of GHG emissions from commercial and residential 

sources should be based on actual usage rather than their PTE, but EPA’s argument that it 

should be allowed to redefine PTE as “actually emitting” is not justified because the 

permits themselves could be streamlined by including legally and practically enforceable 

general limits on operational parameters. But regardless of whether streamlining occurs 

through general rulemaking or a simplified permit process, EPA fails to explain why the 
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cost and time savings that could be achieved if such measures were adopted and 

combined with other streamlining procedures cannot work together so that NSR for 

GHGs can be implemented for all sources as required by law. The commenter asserts 

that EPA should not adopt a 6-year time frame for sources below 25,000 tpy, but rather 

should move as expeditiously as possible to fully implement the NSR program to achieve 

all available pollution reductions as the statute and common sense require.

A state commenter (4521) recommends that EPA to delay GHG permitting until there is 

accurate monitoring and reporting data available. The commenter believes that states should be 

given additional time (at least 1 year after March 2011, but more appropriately, 3 years for which 

there is ample precedent) to assess the reporting data and plan for any additional permitting 

needs.

One commenter (4518) states that the basis of the 5 year period is unclear – it is not clear 

if all operating permits expire after 5 years and then need to be renewed, or if permits are simply 

reviewed every 5 years. The commenter believes that if permits expire after 5 years, and then 

undergo a speedy renewal process, then a 5-year period for the first phase is sufficient since all 

operating permits will either be newly issued or renewed within the period. However, the 

commenter is concerned that many permitting agencies have delays in their permitting process 

and that permitting agencies would need to hire a significant number of permit engineers in order 

to meet the permitting requirements, which could take up to 2 years.

The commenter (4518) also believes that EPA should explain what kind of oversight will 

be ongoing within the initial phase. The commenter notes that EPA may need to work closely 

with permitting agencies to monitor the permit process within each permitting agency to 

determine compliance with standard procedures as established by the EPA, and funding will be 

an important issue, particularly within the initial phase of the process. The EPA has indicated a 

willingness to assist permitting agencies with the establishment of e-permitting applications and 

other means of streamlining the permit application process, which the commenter believes 

should prove useful. Although facilities will have to supply information on estimates of GHG 

emissions for renewal of permits, the commenter contends that it is not clear if the rules for 

calculating estimates will change, or if there will be less deviation allowed for these estimates. 

The commenter believes that this could prove to be a critical point regarding the significance 

level, and for new facilities and modifications that result in GHG emissions that are close to the 

threshold.

Response:

We agree with commenters who support the phased-in approach of the GHG Tailoring 

Rule. Our final action reflects a multi-step process that we believe will create a manageable 

workload for the increase in permitting actions that will occur due to the regulation of GHG 

emission sources under the PSD and title V programs. In our final action we do not include any

automatic reversion to the statutory thresholds for GHGs; instead, we have established the initial 

steps of a multi-step phase-in of lower applicability thresholds with a commitment for further 

regulatory activity and review for any lower GHG threshold adoption. We believe this process 

will provide substantial opportunity for permitting authorities and sources to establish enough 
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experience and information, and to provide significant real-world feedback to EPA, so as to 

better inform decisions on future phase-in steps. For complete discussion of the legal and policy

rationale behind our phased-in approach, including the basis for the chosen thresholds and time 

periods under steps 1 and 2 and the need for further study on the implications of adding smaller 

GHG sources, please refer to section V.B of the preamble.

We disagree with the one commenter that does not believe that our proposed five-year 

evaluation study is necessary to evaluate implementation issues for smaller sources. We believe, 

as we did at proposal, that this time is necessary to adequately examine the permitting 

authorities’ progress in implementing the PSD and title V programs for GHG sources as well as 

EPA’s and the permitting authorities’ progress in developing streamlining methods. As we 

discussed in the proposal, and reiterate in this final action, we do not have sufficient information 

at this time to determine the applicability, effectiveness and legal viability of the various 

permitting streamlining techniques proposed. For reasons discussed in more detail in 

section V.E.1 of the final preamble regarding streamlining, we are not now able to determine 

how such techniques will be implemented or whether they will prove viable or effective. We 

agree with the commenter that these measures may reduce the scope, cost, and complexity of 

these programs, but there is considerable uncertainty as to the extent of this effect. EPA will first 

need to collect and analyze small source data that we do not currently have – because these are 

sources that EPA has not traditionally regulated – in order to assess which of these techniques 

are viable or effective for such sources. In general, EPA will then need to conduct notice-andcomment rulemaking to establish the approaches, and that rulemaking will need to address 

various legal and policy aspects of these approaches. After that, the permitting authorities will 

need some time to adopt the streamlining techniques as part of their permitting programs. 

Throughout this entire phase-in process, EPA will be interacting with permitting authorities to 

obtain feedback on the real-world implementation. 

As we proposed, we are establishing in the final rule an enforceable commitment to act 

within 5 years to complete a study projecting the administrative burdens that remain for small 

sources after permitting authorities have had time to secure resources, hire and train staff, and 

gain experience with GHG permitting for new types of sources and technologies, and after EPA 

has had time to develop (and states have had time to adopt) streamlining measures to reduce the 

permitting burden for such sources. We will use this study to serve as the basis for an additional 

rulemaking that would take further action to address small sources. And to clarify for the 

commenter that suggested that the 5 year study period is linked somehow to the operating permit 

expiration and renewal process, we did not consider the operating permit cycle as a basis for the 

5 year study period. 
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Chapter 7. Comments on the Economic Impacts of the Proposed 

Rule

7.1 Economic/Societal Impacts and the Regulatory Impacts Analysis of the Rule

Section IX of the proposal preamble (74 FR 55337, October 27, 2009) presents EPA’s 

assessment of the economic impacts of the proposed rule, including the expected benefits and 

costs of the proposed rule on affected entities. At proposal, we concluded that the proposed rule 

lifts, for a period of 6 years, the burden to obtain a title V operating permit required by the CAA 

for smaller sources of GHGs and the burden of PSD requirements for smaller new or modifying 

sources of GHGs. We also concluded that, for larger GHG sources, there are no direct economic 

burdens or costs as a result of the proposed rule, because requirements to obtain a title V 

operating permit or to adhere to PSD requirements of the CAA are already mandated by the 

CAA and by existing rules and are not imposed as a result of the proposal.

At proposal, we conducted an RIA that provided the details of the benefits of regulatory

relief that smaller GHG sources will experience in terms of costs avoided as a result of the 

proposal and the potential for social costs in terms of foregone environmental benefits during this 

6-year period. We concluded that the proposal would provide relief to small entities (as defined 

by industry category for stationary sources by the SBA definition). 

We also assessed the social costs of the proposal. The social costs represent the foregone 

environmental benefits that would occur if regulatory relief were offered to small sources of 

GHG emission sources, as proposed. These benefits are those attributed to title V and PSD 

permitting programs in general. We acknowledged at proposal that it was not possible at the 

time to quantify these social costs, but stated that the universe of possible emissions that would 

be regulated by sources excluded under the Tailoring Rule is small compared to those that would 

remain subject to title V and PSD permitting. We also expressed our interest in continuing to use 

regulatory and non-regulatory tools for reducing emissions from smaller GHG sources because 

we believe that these tools will likely result in more efficient and cost-effective regulation than 

would case-by-case permitting.

Comments received on the economic and societal impacts of the proposed rule and our 

RIA are presented in this subsection.

Comment:

Several commenters (2504, 2797, 3278, 3512, 3607, 3741, 3858, 3859, 3860, 3906, 3915, 

3916, 3998, 4020, 4021,4106, 4122, 4123, 4123, 4154, 4209, 4210, 4238, 4241, 4318, 4512, 

4519, 4521, 4522, 4523, 4555, 4574, 4632, 4667, 4745, 4747, 4749, 4770, 4771, 5169, 4794, 

4859, 4862, 4864, 4865, 4866, 4867, 4868, 4871/5063/5605, 4903, 4949, 4950, 4952, 4953, 

4989, 4991, 4992, 5005, 5038, 5045, 5056, 5059, 5073, 5080, 5082, 5083, 5089, 5104, 5110, 

5114, 5128, 5135, 5136, 5140, 5141, 5142, 5143, 5148, 5179, 5184, 5198, 5215, 5224, 5236, 

5243, 5245, 5257, 5258, 5276, 5277, 5278, 5279, 5280, 5304, 5307, 5315, 5317, 5327, 5328, 

5329, 5336, 5337, 5339, 5340, 5343, 5344, 5346, 5347, 5351, 5367, 5392, 5411, 5417, 5444, 
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5449, 5451, 5452, 5453, 5454, 5504, 5525, 5573, 5601, 5602, 5603, 5605, 5606, 5607, 5708, 

5712, 5713, 5729, 5741, 5743, 5767, 5769, 5771, 5784, 5785, 5787, 5789, 5803, 5808, 5844, 

5884, 5885, 5922, 6141, 6201, 6203, 6359, 6491 7125, 7127, 7128, 7130, 7131, 7132, 7133, 

7134, 7136, 7192, 7203, 7204, 7212, 7294, 7295, 7295, 7935, 7961, 7986, 7993, 8015, 8071, 

8089, 8212, 8272, 8300, 8301, 8303, 8322, 8396, 8400, 8401, 8405, 8521, 8533, 8581, 8584, 

8585, 8803, 10432, 14710, 15050, 15051, 16411) express concern about the economic impacts 

of the proposed rule on industry and the overall U.S. economy/society (including costs passed on 

to the general public). These commenters state that EPA’s effort to regulate GHG emissions will 

impose too great a burden on businesses in America, given the status of our economy (especially 

if regulated under the CAA). Specific impacts listed by commenters include added costs 

(including increased energy costs) and permitting delays that hamper the business sector’s ability

to create jobs, grow, and modify, thus delaying recovery from the recession. Several 

commenters believe that jobs will be lost. Other commenters express concern that businesses 

will be forced to relocate overseas (causing leakage of jobs and emissions), which would 

ultimately negatively affect the environment because they would be relocating to countries that 

do not have the restrictions and requirements found in the United States. Some commenters 

contend that the proposed rule will not deliver regulatory relief to small entities as intended as 

sources will still be subject to state laws and minor NSR. 

Several of these commenters express concern over the proposed rule’s impact on industry

and the economy as a whole. A sample of representative comments is presented in the following 

bullets:

 The commercial/industrial community may not remain economically viable if it must 

absorb another costly and complex layer of environmental regulation, especially in this 

period of economic hardship when many firms are barely holding on. Jobs could be lost 

and local economies could suffer. (5351, 5573, 5767, 7128) Regulation of GHGs is an 

unfunded mandate that will cause prices to rise by approximately 17 percent for U.S. 

firms, making U.S. goods uncompetitive and costing jobs. (5712)

 The requirements would slow down or stop many proposed new businesses or the 

expansion of existing ones and impose a heavy, costly blanket of regulation at this 

particularly ill-chosen time. The inability for industries to increase production by adding 

more equipment in a short time would hinder their ability to meet customer needs and 

would stifle productivity and true job growth. (3860, 4770, 5712, 5713, 5789) Economic 

growth will be stifled because of the delay associated with:

o Permitting for sources/modifications that previously were not subject to PSD (up to 

12 to 18 months). (4241, 5329)

o The backlog of permits at state agencies overwhelmed by the increased permitting 

load. (4770, 5343, 5524, 5573, 5672, 5713, 5744, 5884) Alternatively, the 

government will have to expand, throwing our country further into debt. (5573)

o Litigation over permits. (7131)

 Regulation of GHGs puts U.S. businesses at an economic disadvantage with no 

demonstrated environmental benefit. (3915, 4521, 4667, 4864, 4871/5063/5605, 5179, 

5789, 7986) Controlling GHGs in the manner proposed by EPA may have some 

beneficial effects on air quality, but will have little to no measurable effects on climate, 

and great detrimental effects on the economy and our standard of living. (5307)

 Regulating GHG emissions will increase energy costs (especially natural gas), hurting all 
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industry sectors. (5179, 5607, 5729, 6491)

 Companies will be forced to redirect resources – that could have been used for growth 

and investment – for regulatory compliance efforts. Additionally, these regulations will 

result in production cuts, reduced consumer spending, increased unemployment, higher 

energy costs, and ultimately a much slower economy. (5789)

 Changing the emissions standards is an expensive proposition for businesses. This is a 

time of extreme economic uncertainty and many companies cannot afford to alter their 

internal systems or make costly operational modifications in order to comply with drastic 

rule changes. (4209)

 Many facilities below the 25,000 tpy threshold will nevertheless be affected, as sources 

over the Tailoring Rule‘s thresholds and significance levels will likely pass their 

compliance costs through to end users through increased prices. For many end users, 

increased costs, including energy costs, could be the difference between staying in 

business and closing up shop. (4950, 5110, 7128) The proposed regulation will cost 

American consumers a staggering amount of money. (5136)

 Title V permitting entails significant costs and paperwork but does little, if anything, to 

reduce CO2 and GHG emissions. (3915, 4521, 4632, 4864, 4871/5063/5605, 7986)

 Uncertainty is a significant impediment to economic recovery right now, and the 

proposed GHG rule only adds to this sense of uncertainty. (4123, 5884) The rule will 

certainly be challenged in court, adding to uncertainty around business expansion. (5713)

 The proposed PSD/title V GHG Tailoring Rule would result in economic disruption and 

subject regulated industries to significant business investment and legal compliance risks. 

(4106)

 Regulation of GHGs under the CAA will discourage projects meant to improve efficiency

or otherwise make current businesses more environmentally-friendly. (4667, 5344, 

16411)

 Even if new green jobs are created, they would be more than offset by job losses in the 

traditional energy sector and across all existing sectors. (3860, 5729)

Several commenters (0331, 3953, 4512, 4632, 4749, 4771, 4786, 4871/5063/5605, 5038, 

5073, 5142, 5245, 5411, 5602, 5743, 5785, 5922, 6141, 7295) express concerns regarding the 

economic impact that they believe the proposed Tailoring Rule would have on specific 

industries/affected entities. Representative comments are presented in the following bullets:

 Agricultural sector: 

o Permitting costs, “citizen suits,” and the uncertainty associated with the proposed rule 

are very concerning. Many local economies rely heavily on the livestock industry. 

(4632, 5245, 5602, 5743)

o Some agricultural commenters (3953, 4512, 5602) include the following footnote to 

their concerns regarding the burden their industry would face if title V fees were 

imposed on emissions of GHGs from livestock: “Section 424 of the FY 2010 

Interior-Environment Appropriations Act prohibits the expenditure of funds to 

promulgate or implement any regulation requiring title V permits based on biological 

processes from livestock. Thus, for at least FY 2010, livestock producers will not be 

required to obtain title V permits based on emissions from livestock.”

 Oil and gas industry: The industry and associated jobs will move overseas where 

emission restrictions are significantly less stringent or do not exist, therefore resulting in 
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a net increase in global GHG emissions and an increase in our country’s dependence on 

foreign oil. (4871/5063/5605)

 Refining, production, and energy industry as a whole: The proposed rule would have a 

major impact on energy supply, fuel prices, and energy security for the entire country. 

(7295) It will increase the country’s reliance on imported energy. (5607)

 Natural gas industry: The demand for natural gas is expected to increase due to GHG 

regulations, and the natural gas industry will need to significantly expand its transmission 

infrastructure, especially in the Appalachian region. The proposed PSD provisions would 

affect the construction and modification of interstate natural gas pipelines and supporting 

facilities, and the title V provisions would affect a number of existing natural gas pipeline 

facilities and potentially affect the smaller facilities associated with the well heads and 

gathering pipelines. Permitting delays and uncertainty could worsen an already ailing 

economy in the region, which will be facing major negative economic impacts from the 

expected effect of GHG regulation on the coal industry in Appalachia. In addition, 

permitting delays may discourage the use of larger compressor stations in favor of 

smaller ones, with the result that the economies of aggregation would be lost and a far 

larger environmental footprint and greater GHG emissions would result. (4749, 6141)

 Rural electric cooperatives: Because they are not-for-profit, cooperatives will be forced to 

pass along all costs of meeting any new requirements to their consumer-owners. Such 

increased costs for electric power, particularly in rural areas served by cooperatives, have 

negative impacts on economic development and jobs. (4122, 4318, 4523, 4992, 5038, 

5080, 5089, 5114, 5128, 5327, 5601, 5741, 6459, 8301) Because cooperatives have a 

disproportionate amount of fossil-fuel fired generation when compared to the electric utility

industry as a whole, these negative impacts could be disproportionately higher for rural 

electric cooperatives and their consumer-owners. (5038)

 Ethanol industry: The 25,000 tpy GHG emissions threshold would force every

commercial-scale ethanol plant in Iowa to obtain a title V permit, adding economic and 

regulatory burden to ethanol producers following one of the most challenging periods in 

the 30-year history of the modern ethanol industry. Because of their low emissions of 

conventional pollutants, the vast majority of today’s ethanol plants qualify for a synthetic 

minor source permit, not the more burdensome title V permit. (5142)

 Rubber and tire manufacturing industry: Growth will be stifled, which is contrary to the 

intent of the statute. The tire manufacturing industry is a trade sensitive industry, and the 

cost (direct transactional costs, the cost of delay, the regulatory uncertainty and its affect 

on the company’s ability to raise capital, and the cost of BACT) would increase at U.S. 

plants relative to foreign competitors in the global rubber manufacturing industry. Such 

competitive disadvantage would move production from the United States to other 

countries which have less stringent GHG controls, resulting in carbon “leakage” such that

total global emissions will increase. (5922)

 Flat glass industry: The industry already employs many methods to increase fuel burning 

efficiency and optimize the use of scrap glass which helps to reduce the GHG emissions 

from the glass melting furnace (4771). Increased costs at U.S. plants (as listed in the 

previous bullet) will result in carbon leakage and an increase in net global GHG 

emissions. (4771, 5169) 

 Semiconductor manufacturing: The United States will lose jobs in this sector, and 

become more dependent on non-U.S. semiconductor suppliers for the chips that are the 
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‘building blocks" of the electronics industry. These chips help enable new and greener 

technologies and support the creation of green technology and green energy jobs. (5411) 

The industry must be able to predict potential regulatory requirements in order to 

effectively design future processes and controls (which are developed over a 10-year 

period or longer) to meet its regulatory obligations and remain a leader in the highly 

competitive semiconductor industry. The proposed regulation of GHGs would be 

potentially devastating to U.S. operations due to the inherent delay and regulatory

uncertainty and the reversal of years of planning and extensive resources devoted to 

managing regulatory obligations. (5417)

 Brick manufacturing: An expensive and lengthy major NSR permitting process will 

further damage the industry’s potential to recover during these difficult economic times. 

(5073)

 Commercial real estate sector: The Tailoring Rule will affect property values and 

operating costs. (5785)

 Homebuilding sector: The cost to homebuilders of raw materials, commodities (such as 

concrete and glass), and energy will increase substantially because the industries that 

supply the housing industry will be subject to these CAA permitting obligations. (4794, 

5104, 6201, 6203) One of the commenters (5104) provides several pages explaining the 

impact of the proposed rule on the ability of individuals to afford to buy homes and the 

impact on home energy costs. The commenter estimates that between 337,000 and 1.57 

million households would be priced out of the home buying market, and an increase in 

energy costs of from about $200 a year to about $1,200 a year.

 California’s transformation of the electric generator system to greater reliance on 

renewable generation: The federal permit gridlock that could result from the proposed 

rule has the potential to interfere with California’s transformation, which could retard, 

rather than facilitate, reductions in GHG emissions from the electricity sector. (4786)

 Low-income households: Higher energy prices fall disproportionately on low-income 

households since they spend a larger percentage of their income on energy. (5789)

Several commenters express concern about the “leakage” of jobs and GHG emissions to 

outside the United States, resulting in a net increase in GHG emissions (4667, 4771, 4859, 

4871/5063/5605, 5082, 5169, 5224, 5302, 5337, 5922, 7134, 8089, 8303, 8581, 10432). As set 

out in the bullets above, this concern was specifically noted for the oil and gas industry

(4871/5063/5605), the tire manufacturing industry (5922), and the flat glass industry (4771, 

5169). One commenter (5337) opines that the implications of leakage are complex and reach 

beyond the immediate economic harm to the regulating country, and that such leakage also 

presents a threat to international trade relations and to international agreements on limiting 

GHGs. The commenter cites an interagency report (The Effects of H.R. 2454 on International 

Competitiveness and Emission Leakage in Energy-Intensive Trade-Exposed Industries

(December 2, 2009)) which was completed as part of the consideration of proposed cap and trade 

legislation, and notes that it identifies which industrial sectors are most vulnerable to leakage. 

The commenter suggests that this report provides a workable and well supported list of industries 

that should be exempted from PSD regulation of GHGs, which should be supplemented with an 

“individual showing” process for additional sectors to qualify for a leakage-protecting 

exemption. This commenter strongly encourages EPA to exempt the entire industrial sector from 

GHG regulation under PSD. Another commenter (5169) provides a figure illustrating a detailed 
159

rebate system included in the Waxman-Markey and Boxer-Kerry bills to prevent leakage for 

energy-intensive industries (Waxman-Markey; S. 1733, Boxer-Kerry).

Several state commenters address the economic impacts of the rule. All of these state 

commenters are concerned over the increased costs that would result to their states. (2797, 3858, 

3916, 4154, 4238, 4521, 4786, 4989, 4871/5063/5605, 5135, 5148, 5198, 5339, 7935, 8803) 

According to state commenters, at a time when state budgets are being cut and fee revenue is 

down, agencies are laying off staff, implementing furloughs, reducing salaries, enacting hiring 

freezes, and taking other cost-reducing measures, the ability to increase staff and obtain 

additional resources simply does not exist and will not exist for the foreseeable future. (4989, 

5135, 5198, 19144)

Several other commenters (5179, 5258, 5346, 7961) express concern that the proposed 

Tailoring Rule will have an adverse affect on a specific state’s economy (sometimes 

disproportionately to other states). One commenter (5258) states that the proposed changes will 

severely affect the manufacturing industry, specifically in New Hampshire. Similarly, another 

commenter (7961) is concerned that Kansas, which is fuel intensive and reliant on agriculture 

and its complements, would find itself disproportionately harmed by the proposed GHG 

regulations. Three commenters (5140, 5179, 5278) address potential effects on Texas. An 

industry group representing refining, petroleum, and electric generation industries in Texas 

(5278) indicates that if GHGs are addressed in the permit-by-permit manner EPA proposes in the 

Tailoring Rule, these industries, and Texas industry overall, will be disproportionately affected 

because of Texas’ status as a major energy and chemical producer. Another commenter (5179) 

notes regulation of GHG emissions under the CAA would significantly harm the Texas chemical 

industry and Texas manufacturing as a whole. The commenter asserts that chemicals are the 

number one export from Texas with over $30 billion annually and are the top Texas 

manufacturing sector, and account for 60 percent of the U.S. chemical production. A third 

commenter (5140) indicates that it would not be economically viable to spend the approximately

$4.6 billion necessary to permit newly subject sources pursuant to regulation under the CAA in 

Texas. The group feels that to the extent that industry does not leave the state to avoid 

permitting costs, the costs of regulation may be passed on to consumers in the form of increased

energy costs. The commenter estimates that, in Texas alone, increased energy costs will result in 

a loss of $12 to $16.6 billion in Gross State Product (GSP) per year by 2020 and $44.3 to $52.2 

billion by 2030. [Texas Advisory Panel on Federal Environmental Regulations, Comments on 

the Environmental Protection Agency’s Proposed Endangerment and Cause or Contribute 

Findings for Greenhouse Gases under Section 202(a) of the Clean Air Act (June 23, 2009) at p. 

21] 

Several commenters (5124, 5140, 5181, 5191, 5278, 6609) assert that EPA’s proposed 

rule offers no relief to regulated entities obligated to comply with state law and minor NSR 

permitting requirements. Implementation-related comments from these commenters and other 
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commenters, and EPA’s response to implementation-related concerns, are presented in Chapter 8 

of this document. 

Many commenters (2371, 3512, 3858, 4095, 4106, 4122, 4298, 4318, 4319, 4521, 4522, 

4523, 4684, 4745, 4747, 4770, 4862, 4865,8545, 4952, 4992, 5038, 5062, 5063/5605, 5073, 

5080, 5082, 5083, 5085, 5086, 5089, 5110, 5111, 5114, 5124, 5128, 5133, 5137, 5139, 5140, 

5141, 5143, 5179, 5181, 5183, 5224, 5257, 5277, 5278, 5279, 5280, 5317, 5327, 5337, 5339, 

5342, 5343, 5347, 5367, 5390, 5417, 5601, 5718, 5741, 5773, 5787, 5858, 5886, 6459, 8015, 

8283, 8301, 8400, 8459, 10432) believe that EPA’s RIA understates the impact of the proposed 

rule or that EPA’s analysis is insufficient or flawed. Comments on specific aspects of EPA’s 

methodology for estimating the burden of the proposed rule are addressed in section 6.3 of this 

document. Examples of the broader comments on the RIA are presented below.

Numerous commenters contend (2371, 3858, 4095, 4106, 4122, 4318, 4521, 4522, 4523, 

4745, 4770, 4862, 4870, 4952, 4992, 5038, 5062, 5063/5605, 5073, 5080, 5082, 5083, 5085, 

5089, 5110, 5114, 5140, 5128, 5133, 5137, 5143, 5179, 5181, 5257, 5277, 5278, 5317, 5324, 

5327, 5337, 5342, 5343, 5367, 5390, 5601, 5741, 5787, 5886, 6459, 8283, 8301, 8459, 8545) 

that EPA has not fulfilled its requirement to fully evaluate the impacts of regulating GHGs under 

the CAA, which necessitates a full RIA of the burden on regulated entities (and state permitting 

authorities), and an opportunity for the public to comment on such analysis. The commenters 

believe that the proposed rule fails to provide a comprehensive analysis of the regulatory burdens 

created by PSD and title V for GHGs in that the RIA solely focuses on the avoided permitting 

costs for sources of GHG emissions when compared to statutory thresholds and does not evaluate 

the newly imposed costs for sources above the proposed thresholds and significance levels. In 

addition, they assert that the RIA is inadequate because it contains no assessment of the policy or 

economic consequences of regulating the remaining sources under PSD and title V. 

Representative comments enlarging on this theme are summarized below:

 The RIA is incorrect in stating that “larger sources” of GHGs will not be economically

impacted because requirements to obtain a title V operating permit or to adhere to PSD 

requirements are already mandated by existing rules and are not imposed as a result of 

this proposed rulemaking. (5083, 5110) The EPA's assertion that larger sources will not 

experience an impact stands in contrast to its statement in the section 202 proposed rule 

that the regulatory impacts of the PSD and title V obligations would be addressed in the 

Proposed Tailoring Rule. (5083)

 The EPA has provided no assessment of the implications of its actions for large stationary

sources, such as power plants and manufacturing facilities, or for the nation’s economy. 

Such an impact analysis is required because EPA could have chosen not to regulate 

GHGs at all. (2371, 3858, 4095, 4122, 4318, 4521, 4522, 4523, 4745, 4862, 4870, 4952,

4992, 5038, 5080, 5082, 5085, 5089, 5110, 5114, 5128, 5137, 5179, 5181, 5257, 5277, 

5317, 5327, 5337, 5342, 5343, 5601, 5741, 6459, 8301, 8545) This violates section 

307(d) of the Act and the APA. (4870, 5181) Because EPA did not analyze these 

impacts for the LDVR, it must do so under the Tailoring Rule. (5181)

 The EPA has failed to satisfy its obligations under the CAA and administrative law to 

assess and solicit comment on the full range of impacts of its proposed regulation of 

GHG emissions under the CAA. This is more than a procedural flaw in EPA’s 

rulemaking process – it is a failure to assess the true impacts of its actions and to consider 
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less burdensome and costly alternatives to regulating GHGs under the CAA. (4122, 

4318, 4522, 4523, 4952, 4992, 5038, 5080, 5089, 5114, 5128, 5257, 5317, 5327, 5601, 

5741, 6459, 8301) The EPA must not regulate in an arbitrary way, something it does 

when it fails to “consider all of the relevant factors and demonstrate a reasonable 

connection between the facts on the record and the resulting policy choice.” Small 

Refiner Lead Phase-Down Task Force v. EPA, 705 F.2d 506, 519 (D.C. Cir. 1983) 

(quoting Sierra Club v. Costle, 647 F.2d 298, 323 (D.C. Cir. 1981)). The EPA’s 

assessment of the impacts of regulating GHGs under the CAA is so clearly deficient that 

there is no question that it is arbitrary under the CAA and basic principles of 

administrative law. (5317)

 A comprehensive RIA is needed to determine the economic impact on mid-sized and 

small businesses with process emissions that would otherwise avoid the PSD program. 

(5083, 5133, 5143, 5367)

 The EPA has failed to assess costs and benefits associated with “leakage” of jobs and 

GHGs emissions. (5337, 8459)

 EPA’s analysis must address individual industrial sectors that would be impacted by

regulation of GHGs under the CAA. (5143)

 The analysis should include the impact of applying minor NSR to GHGs. As written, 

SIP-approved minor NSR programs will be affected by the proposed regulation. While, 

as EPA states in the proposal, it is true that the CAA does not require minor NSR 

programs to address non-NAAQS pollutants, the facts are that states have adopted 

applicability provisions identical to the PSD program for minor NSR. The EPA has 

approved those programs as part of SIPs – SIPs that EPA deemed “necessary to attain 

and maintain” a NAAQS pursuant to section 110. Given this approval and federalizing 

of the state regulations, EPA cannot now claim that minor NSR implications are 

irrelevant to this action. To the extent EPA interprets the Act and its PSD regulations to 

require that PSD be triggered based on a non-NAAQS pollutant, EPA cannot ignore the 

implications for SIP-approved minor NSR programs using the same language. As a 

practical matter, EPA needs to address and resolve the enormous and unreasonable 

burden imposed by regulating GHGs under state minor NSR programs. (5140, 5181, 

5278)

 The costs for a PSD permit (in actual fees, consulting fees, and cost of lost time) should 

be included in any assessment and EPA should justify that each cost (and the total cost) is 

reasonable, based on environmental benefit. (5073)

 The EPA has a duty to conduct an RIA of the effect the proposed revisions to 40 CFR 51 

and 52 have on stationary sources of GHGs as required in section 317(2) (sic) of the 

CAA (but it has failed to meet this obligation. (5082) [Note: Section 317(a)(4) would 

apply to this PSD rulemaking.] 

 The proposed Tailoring Rule fails to recognize a source’s regulatory costs and burdens. 

Sources must spend considerable time and resources on planning, analysis, design, 

maintenance and operational plans, training, standard operating procedures, etc. to 

manage ongoing regulatory obligations in addition to monitoring, recordkeeping, and 

reporting requirements typically specified in permits to demonstrate compliance. Similar 

expenditures and resources are necessary to ensure compliance with potential regulatory

requirements for continuing changes in equipment and operations. Even newly permitted 

title V sources of GHGs, which EPA erroneously states “would be issued permits that do 
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not include any applicable requirements,” would be subject to burdensome title V 

requirements (e.g., compliance certification, deviation reporting, annual or semi-annual 

monitoring reporting) and more stringent monitoring (including CAM) under 40 C.F.R. 

part 64), recordkeeping, and reporting than would otherwise be required to demonstrate 

compliance with non-GHG applicable requirements under existing minor source permits. 

(5417)

 If EPA elects to interpret CAA section 165 to automatically require PSD permits for 

GHGs, then it must fully consider all the costs that stem from that interpretation. 

Absent full consideration of those costs, the Tailoring Rule (and EPA's related LDVR 

and Reconsideration Rule) will be arbitrary and capricious. See American Iron &

Steel Inst. v. EPA, 115 F.3d 979, 997 (D.C. Cir. 1997) (remanding because EPA 

"adopted a cost estimate that can only be described as fanciful" and "failed to address 

whether the measure is cost-justified"). (5277)

 The EPA is effectively playing a shell game with respect to its statutory obligation to 

provide a thorough RIA to accompany its proposal. The EPA’s strategy will render such 

a rule vulnerable to legal challenge. A rule that fails to address relevant comments may

be held arbitrary and capricious (American Mining Congress v. EPA). (4862)

 EPA needs to quantify the costs to federal, state, and local governments and the regulated 

community, assess the benefits associated with reduction of GHG emissions, and show 

that the benefits to U.S. citizens of such regulations outweigh the costs. (5063/5605)

One commenter (5139) believes that EPA’s cost-benefit analysis is seriously flawed 

because EPA generally characterizes the foregone benefits of reducing GHGs as negligible, 

while the savings achieved through eliminating compliance with the CAA for sources below the 

proposed thresholds are extremely large. Even though EPA acknowledges the numerous, 

significant uncertainties involved in its assumptions throughout this rulemaking, it is somehow 

able to set precise price tags on the administrative burdens purportedly avoided by “small” 

sources that would be exempted from compliance by the Tailoring Rule. EPA claims that these 

sources would save some $52 billion and $1.15 billion, respectively, in title V and PSD 

permitting costs. Yet, EPA says that it simply cannot estimate the other side of the coin: “It is 

not possible at this time to quantify the social costs of avoided BACT.” The EPA compounds 

the error by combining this assertion with contradictory claims that the allegedly unquantifiable 

benefits of compliance “are likely to be small,” and that, “while it is extremely difficult to 

measure the degree of improved compliance, if any, that would be foregone [by not requiring 

title V permits], we expect that they would be negligible.” 

Some commenters (4770, 5328, 5390, 8015, 8283, 8400) believe that EPA should 

perform a thorough analysis of the potential cost and economic impacts of applying PSD and 

title V to GHGs at the statutory thresholds. Some of these commenters believe this is necessary

because if the Tailoring Rule does not survive legal scrutiny, the statutory thresholds for PSD 

and title V must be implemented (4770, 5328, 5390, 8015, 8400). A commenter (5390) indicates 

that this analysis should encompass the significant adverse consequences that will be faced by

industry, including, in particular, potentially millions of newly regulated sources that are small 

businesses with small capital improvement budgets, small profit margins, and almost no 

tolerance for increased regulatory costs.
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Response:

Some of the comments discussed above disagree with the assertion that the proposed 

Tailoring Rule provides “regulatory relief”. Other comments contend that the Tailoring Rule as 

proposed: (1) has a significant economic burden on industry, the U.S. economy, and society, (2) 

hampers businesses ability to create, grow, and modify operations delaying recovery from the 

recession, (3) may result in movement of industry overseas contributing to leakage of jobs and 

emissions, and (4) negatively impacts specific domestic industry, commercial, agriculture, waste, 

and energy sectors significantly and some business sectors disproportionately. Numerous 

comments outlined above assert that the RIA completed for proposal was inadequate for the 

following reasons: (1) the RIA did not consider impacts to large sources that will be required to 

comply with title V and NSR permitting when GHG emissions are regulated, (2) the RIA 

underestimated the number of sources affected at the proposal threshold/significance levels of 

<25,000 CO2 equivalent (CO2e), (3) the RIA failed to estimate or underestimated the costs for 

sources to obtain permits and to comply with NSR BACT requirements and for permitting 

authorities to process permits, and (4) the RIA overstates the benefits of regulating sources of 

GHGs. A number of comments state that EPA must analyze the full impacts of the Tailoring 

Rule to comply with CAA section 307(d) and the APA. 

EPA has carefully considered the comments addressing the issue of whether the Tailoring 

Rule is a “regulatory relief” rule, and we are not persuaded that we erred in concluding that the 

effect of the Tailoring Rule is to provide regulatory relief to a large number of sources of GHG 

for a period of up to six years. This final rule will provide relief from title V permitting to over 6 

million sources of GHG in this country in total. Likewise tens of thousands of sources 

potentially subject to PSD permitting requirements annually for GHG will have regulation 

postponed for a period of up to 6 years under this rule, followed by an additional required rule 

addressing the period beyond 6 years. While larger sources of GHG may be required to obtain 

title V permits or modify existing permits and to comply with PSD requirements, these burdens 

result not from the Tailoring Rule but rather from the CAA requirement to apply PSD to each 

pollutant subject to regulation, which is triggered when the Light Duty Vehicle Rule takes effect. 

To clearly illustrate this, consider what would occur if EPA did not complete the Tailoring Rule. 

Sources would not be relieved of the requirement to obtain permits addressing each pollutant 

subject to regulation when they construct or modify, nor would they be relieved of their 

obligation to obtain title V permits. Instead, these requirements would simply apply to a much 

larger population of sources and modifications, and would lead to the absurd results and severe 

impairment to program implementation that this rule is designed to address.

In response to comments that the Tailoring Rule will: (1) have a significant economic 

burden on industry, the U.S. economy, and society, (2) hamper businesses ability to create, grow, 

and modify operations delaying recovery from the recession, (3) may result in movement of 

industry overseas contributing to leakage of jobs and emissions and (4) negatively impact 

specific domestic industry, commercial, agriculture, waste, and energy sectors significantly and 

some sectors disproportionately, the EPA responds that this Tailoring Rule does not impose 

regulatory burdens on any entities. This Tailoring Rule lifts the burden of title V and PSD 

permitting for over six million title V sources in total and tens of thousands of new and 

modifying PSD sources annually. This rule does not impose regulatory requirements on any 
164

entities, but rather provides regulatory relief to sources of GHG and permitting authorities. This 

final rule provides permitting thresholds for sources of GHG that exceed levels contained in the 

CAA and these levels are phased in steps based upon application of the administrative necessity 

and absurd results doctrines as explained in the preamble for the rule section V.B. The EPA 

carefully considered comments provided in setting the threshold levels for the final rule that 

exceed the levels proposed. For step 1 that is effective from January 2, 2011 through June 30, 

2011, only sources required to undergo title V or PSD permitting based upon non-GHG air 

pollutants are required to obtain an operating permit or PSD permit to include GHG emissions. 

Step 2, effective from July 1, 2011 until such time as EPA acts on a rule to amend it (which for 

reasons described above, we assume is June 30, 2013 for the purposes of this analysis), requires 

larger sources emitting GHG above 100,000 CO2e tpy to obtain a title V permit (if they do not 

already have one) and to comply with PSD requirements when they are newly constructed or 

modify in a way that increases emissions by more than a 75,000 CO2e tpy significance level. 

Thereafter, EPA makes an enforceable commitment to consider a possible step 3 to further lower 

thresholds below 100,000 CO2e tpy and/or permanently exclude some sources from the 

program(s), but only after a regulatory process is conducted addressing administrative necessity

and absurd results considerations based upon the actual permitting experiences in the first two 

steps of the phase-in. In addition, EPA provides a deferral of permitting until we take required 

action in April 2016 for sources and modifications that emit below 50,000 CO2e tpy. The 

deferral will end when a required study is conducted of the permitting process for sources of 

GHG and EPA acts, based on the study, to promulgate a rule that describes the additional GHG 

permitting requirements beyond 2016. The EPA notes that the threshold/significance levels 

established in the final rule substantially exceed those proposed. In the 6 years following 

promulgation of this rule, the EPA estimates that compared to baseline estimates that do not 

include the effects of this rule, over six million sources of GHG emissions in total will be 

allowed to continue to operate without a title V operating permit. During this period, tens of 

thousands of new sources or modifying sources each year will not be subject to PSD 

requirements for GHG. For this large number of smaller sources, this rule alleviates the 

regulatory burden associated with obtaining an operating or PSD permit or complying with NSR 

BACT requirements. Therefore, this final action may be considered beneficial to these small 

sources because it provides relief from regulation that would otherwise be required. 

With regards to comments received that the RIA should have been a more comprehensive 

analysis to include the larger sources of GHG that will be required to obtain permits when GHG 

are regulated, the EPA maintains as previously explained that there are no direct economic 

burdens or costs as a result of this rule for these sources. Requirements for larger GHG sources 

to obtain title V or PSD permits are already mandated by the Act and by existing rules and are 

not imposed as a result of the Tailoring Rule. Thus the economic impacts for larger sources of 

GHG do not occur because of this Tailoring Rule. To include these larger sources in the RIA 

would actually be an inaccurate assessment of how this rule affects sources and would ignore the 

fact that this rule is regulatory relief.

Regarding comments that EPA underestimated the number of sources affected at the 

proposal threshold/significance levels of 25,000 CO2e, failed to estimate or underestimated the 

costs for sources to obtain permits and to comply with NSR BACT requirements and for 

permitting authorities to process permits and overstated the benefits of regulating sources of 
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GHGs, the EPA did make improvements and modifications to the RIA completed for this final 

rule. As previously discussed the threshold levels finalized in this rule were revised substantially

upward. Based upon comments, EPA modified estimates of the number of sources affected at 

various threshold levels upward. EPA also improved the burden estimates associated with 

obtaining permits for sources and permitting authorities in response to comments. After 

consideration of the burden imposed by the proposed rule with these improved estimates for 

affected sources, the EPA modified the steps of the phase-in period to include two initial steps, 

described previously that are higher, and therefore cover fewer sources and are less burdensome 

than the proposal threshold of 25,000 CO2e tpy emissions. EPA also increased the threshold 

below which permitting would not apply for six years from 25,000 to 50,000 tpy CO2e. After the 

initial two step period, EPA has committed to consider lower thresholds but only down to 50,000 

tpy CO2e, and only after a regulatory process that uses information gathered on actual permitting 

activity during the first two steps of the phase-in period. The RIA conducted for the final rule 

also incorporates improvements in our estimates of the number of sources affected at alternative 

thresholds and improved estimates of the costs of obtaining permits by sources and processing 

permits by permitting authorities. The EPA acknowledges that the regulatory relief associated 

with the control costs due to BACT requirements for PSD new and modifying sources is not 

included in the RIA for the final rule due to the lack of sufficient data about the nature of those 

requirements. However, it is the case that, as it relates to burden, those estimates would simply

increase the amount of regulatory relief associated with this final rule. For more information 

about the economic analysis conducted for the final rule, see the “Regulatory Impact Analysis 

for the Final Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring 

Rule” EPA 452/R-10-003 included in the docket for this rulemaking. 

7.2 Regulatory Flexibility Analysis 

The Regulatory Flexibility Act (RFA) generally requires an agency to prepare a RFA of 

any rule subject to notice and comment rulemaking requirements under the APA or any other 

statute unless an agency certifies that the rule will not have a significant economic impact on a 

substantial number of small entities. After considering the economic impacts of our Tailoring 

Rule proposal, we certified that it would not have a significant economic impact on a substantial 

number of small entities. We concluded at proposal that, since our proposal relieves the 

regulatory burden on small entities, it will not have a significant impact on a substantial number 

of small entities under both the title V and PSD permitting programs. 

At proposal, and as noted previously, EPA certified that the proposed rule would not have 

a significant impact on a substantial number of small entities and therefore we concluded that we 

were not obligated to convene a formal Small Business Advocacy Review Panel (SBARP). 

Nonetheless, because we were, and are, aware that many small entities may be interested in the 

various GHG rulemakings that were under development and the potential impacts of the 

statutory imposition of PSD requirements that may occur as a result of these rulemakings, we, in 

collaboration with the SBA, conducted an outreach meeting designed to exchange information 

with small entities. The outreach effort was organized and led by representatives from EPA’s 

OAQPS within the OAR, EPA’s OPEI, the OIRA within the OMB, and the OA of the SBA. 

Documentation of this meeting, which includes a summary of the advice and recommendations 
166

received from the SERs identified for the purposes of this process can be obtained in the docket 

for this rulemaking. (See Docket No. EPA-HQ-OAR-2009-0517-19130). 

Comments received on RFA SBREFA requirements and the small business impacts 

anticipated by the proposed Tailoring Rule are presented in this subsection.

Comment:

Several commenters (3513, 3698, 3720, 3757, 3859, 3906, 4095, 4630, 4632, 4684, 4693, 

4865, 4867, 4870, 4950, 5052, 5056, 5058, 5073, 5083, 5085, 5088, 5104, 5110, 5111, 5136, 

5140, 5145, 5181, 5183, 5184, 5236, 5277, 5278, 5236, 5279, 5343, 5344, 5367, 5449, 5705, 

5715, 5771, 5801, 5886, 6201, 6880, 7127, 7134, 7961, 8015, 8071, 8322, 8400, 14710) state 

that regulation of GHGs under the CAA will result in additional and significant regulatory

burden on many small businesses and sources. Additionally, several of these commenters 

express that EPA failed to conduct an adequate analysis of the effects that the proposed Tailoring 

Rule will have on small entities as required under RFA SBREFA (including EPA’s failure to 

conduct the required SBARP) and other statutes and EOs. 

Some of these commenters specifically comment on the adverse effect that regulation of 

GHGs under the CAA will have on small facilities/entities, with and without the Tailoring Rule. 

Examples of the types of comments received are summarized below.

Some commenters indicate that certain industrial sectors include many small businesses 

that would be adversely impacted even at the thresholds of the proposed Tailoring Rule. These 

include companies that explore and produce domestic oil and gas (5056), the baking industry

(5303), small refiners (3757, 3968, 5705), concrete paver producers (5088), the housing industry 

(5104/6201), more than 100 small brick manufacturers (4867), 400-500 small foundries (4867), 

150 small pulp and paper mills (4867), over 100 small coal mines (4867), 80 small lime 

manufacturers (4867), 350 small municipal utilities (4867), more than 40 small electric 

cooperatives (4867), and at least 16 small petroleum refineries (4867). Some of these 1,200+ 

small entities report that they will be required to obtain title V permits for the first time solely

because of their GHG emissions. (4867)

A number of commenters note that the Tailoring Rule defers small source regulation, but 

does not permanently exempt small sources from permitting requirements. The commenters are 

concerned about the impacts on small entities that will occur when the temporary thresholds 

under the Tailoring Rule revert to the statutory levels (if that ultimately occurs). (3906, 4684, 

4870, 5104/6201, 5110, 5236, 5343) Some of the commenters elaborated as follows:

 Expanding the PSD and title V programs by reverting to the statutory thresholds will 

result in precisely the same "absurd results" that led EPA to promulgate the Tailoring 

Rule. The 2008 report, A Regulatory Burden: The Compliance Dimension of Regulating 

CO2 as a Pollutant indicates that 1.2 million or more buildings would be subject to PSD 

at the 250 tpy threshold level, many of which are previously-unregulated establishments 

(e.g., office buildings, warehouses, health care facilities). Permitting under PSD could 

cost these newly-regulated buildings an average of $125,120 (using EPA estimates from 

the Information Collection Request [ICR] for the proposed rule), and that is before 

factoring in the cost of installing BACT equipment. (5110)
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 One industry commenter (5104/6201) provides several pages of examples of how the 

building industry has already implemented a number of voluntary initiatives to reduce the 

overall GHG emission contributions associated with energy use, such as improving 

energy efficiency and incorporating green building practices into the mainstream. The 

Tailoring Rule responds to the commenter’s concerns and gives a measure of critically 

needed relief to the homebuilding industry from the repercussions of PSD and title V 

permitting. However, the commenter expresses concern that this relief be made as 

permanent as possible.

Other representative comments related to the impacts of GHG regulation under the CAA 

and the Tailoring Rule include the following:

 Any attempt to require PSD permitting for GHGs would impose significant costs on 

regulated entities, not relieve them. EPA repeatedly asserts that the Proposed Rule would 

"lift" costs on small entities and impose no new costs on large entities. That theory is 

incorrect with respect to PSD permitting. (5277)

 Despite EPA’s intention, the proposed threshold for the GHG Tailoring Rule will include 

substantially more small sources of GHG emissions than will be included in the 

25,000 ton threshold for EPA’s recently promulgated GHG reporting rule. (4632)

 Even with the raised 25,000-ton threshold, a large number of small businesses will be 

ensnared. According to comments submitted by the SBA (4867), over 1,200 small 

businesses will not be provided relief by the Tailoring Rule from the "absurd results" 

created by EPA‘s efforts to regulate GHGs under the CAA. (5110)

 EPA is giving inadequate consideration to the significant resource burdens on small 

business owners and regulatory agencies, absent evidence that there will be a 

corresponding environmental benefit. The commenter does not agree that a program that 

will potentially subject new small business sources to PSD and title V requirements in the 

short-term is the same as "providing regulatory relief." The "cost saving" noted by EPA 

is similarly incorrect. The direct economic impacts will be felt by the businesses 

throughout the U.S., both small and large. (5367)

 The proposed rule will have a negative effect on the “economic resurgence” of small 

businesses through the triggering of regulation of millions of stationary sources. (8400)

 Regulatory approval is already a serious hurdle for small businesses, and this ruling 

would put in even greater burden on them. (5771)

 Based on the language of the CAA, small businesses with GHG emissions from 250 to 

25,000 tpy could find themselves trying to figure out what compliance and enforcement 

regulations apply. (3859) Even though the EPA and larger environmental groups state 

that they will not press for expansion of federal power over small manufacturers through 

the court system, smaller sources will have significant exposure to civil liability. (3513)

 Sources such as agricultural, residential, and small businesses (as defined by the SBA) 

should be exempted from this rule during the first 5-7 years to allow EPA and permitting 

authorities time to gain experience with the program. Many small businesses do not have 

the money or resources to spend on environmental consultants to assist them in 

calculating their GHG emissions and do all the other cumbersome paperwork that will be 

required under this proposal, including determining BACT, doing the modeling required 

for the NAAQS, as well as the increment modeling. Small businesses and service 

providers must be provided with education, resources, and tools to help them understand 
168

whether and how they will be impacted by the rule and how they can report and comply. 

Without this time and resource consideration, implementation of this rule as written will 

cause undue hardships for small businesses. (5367)

 The estimated costs for a title V permit are unduly burdensome for small businesses 

subject to the rule. This is particularly true because the title V permit does not 

necessarily ensure reduction of GHG emissions or provide any additional environmental 

benefit. (5236)

As noted above, several commenters provide that EPA, in considering the economic 

impacts, failed to conduct an adequate analysis of the effects that the proposed Tailoring Rule 

will have on small entities as required under RFA SBREFA (including EPA’s failure to conduct 

the required SBARP). Examples of the types of comments received are presented below.

Several commenters contend that EPA has not met the requirements of the RFA by not 

conducting an adequate analysis of the impacts of the proposed rule on small businesses and/or 

by not convening an SBARP for the proposed Tailoring Rule (or for the other related GHG 

rulemakings). (3757, 3968, 4095, 4630, 4632, 4648, 4684, 4693, 4867, 4870, 5052, 5062, 5073, 

5085, 5088, 5111, 5140, 5145, 5181, 5236, 5278, 5343, 5705, 5715, 5886)

 It is clear that the LDVR directly triggers regulatory impacts for small entities. If this 

were not true, EPA would not need the GHG Tailoring Rule. (4630, 4867, 4870, 5181) 

Nevertheless, EPA declined to take comment on the potential impacts of the LVDVR on 

small businesses, and directed comment on this issue to the Tailoring Rule. Now, EPA 

deflects any substantive consideration of the issue by concluding that the Tailoring Rule 

relieves regulatory burden. Thus, EPA has deflected its obligations under sections 603 

and 604 of the RFA. (4630) The EPA cannot state on the one hand that it was not 

obligated to address the PSD burdens raised in the LDVR and on the other claim that it is 

not required to conduct an RFA in this rule because it “relieves” the burdens on small 

entities. (4870, 5181)

 EPA has no legal basis to avoid conducting a SBAR panel. Although there are rare 

situations where an agency may have a legitimate reason for not conducting the small 

business impact analysis required by the RFA (which in this case would include a SBAR 

panel), none of those situations are present here. (4867)

 The EPA should have convened as many as four separate SBARPs to evaluate the impact 

of the GHG rulemakings on small entities, including SBARPs for the Endangerment 

Finding, the LDVR, the Tailoring Rule, and (even if for none of the individual rules) for 

the combined GHG rulemakings. This new regulatory program should not have been 

launched without the benefit of a thorough review of the potential small entity impacts, as 

required by the RFA. (4648, 4693, 5145, 5715, 5886)

 The EPA should initiate a SBARP to examine the economic impact in detail before a 

final rule is published. (3757, 3968)

 The EPA should convene a separate SBAR panel for each primary industry sector likely 

to be affected by GHG regulation. (4684)

 By not convening an SBARP, EPA has lost its best opportunity to learn how its new 

GHG rules would actually affect small businesses, small communities, and small nonprofit associations. (5088)

 Although EPA has undertaken some outreach efforts in lieu of convening an SBARP(s), 
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these efforts are insufficient to meet the requirements of the RFA or to estimate the 

economic impact of this rule on small businesses, which will be significant in many

cases. (3757, 3968, 4867, 5052, 5073, 5140, 5278) The EPA's use of section 609(c) of 

the RFA to justify consultation with Office of Management and Budget (OMB) and SBA, 

with input from outreach to small entities, instead of convening an SBARP is a 

misreading of the RFA. (4867)

 Although the Tailoring Rule defers small-source regulation, it does not exempt small 

sources from regulation. Since EPA has now legally committed itself to small-source 

regulation under PSD and title V, it is obligated to examine the effects on small sources 

now, not at some point in the future. The commenter states that the fact that EPA does 

not know the precise character of small-source regulation at this point is no defense. 

EPA could conduct an evaluation of various alternative regulatory scenarios. (5343)

Some commenters specifically indicate that EPA was incorrect in certifying under the 

RFA that regulating GHGs under the CAA will not have “a significant economic impact on a 

substantial number of small entities.” These commenters sometimes referred to the proposed 

Tailoring Rule, sometimes to the LDVR, sometimes to the Endangerment Finding, and 

sometimes to the combination of these rulemakings which EPA has advanced in coordination. 

(3757, 3968, 4867, 5073, 5088, 5133, 5181, 5705) Some commenters elaborated on this point as 

follows:

 The EPA has offered little or no information to support this certification with respect to 

small business refiners. The commenter disagrees with EPA’s certification and suggests 

that such a peremptory dismissal of possible economic impact is primarily intended to 

obviate the need for a SBARP that would otherwise be required under SBREFA. (3757, 

3968, 5705)

 The EPA’s RFA certifications for the three GHG rule proposals lack a factual basis and 

are improper. It is clear that the GHG rules are likely to have a significant economic 

impact on a large number of small entities, including small businesses, small 

communities, and small non-profit associations who will be affected either immediately

or in the near-term. Over 1,200 small entities and their representatives have informed the 

SBA that their anticipated GHG emissions will exceed the 25,000 tpy CO2e threshold; 

accordingly, they will immediately become subject to PSD and title V permitting 

requirements for GHGs. Some of these 1,200+ small entities (e.g., brick manufacturers) 

report that they will be required to obtain title V permits for the first time solely because 

of their GHG emissions. The EPA estimates the cost of obtaining a first-time title V 

permit for industrial facilities at $46,350 per permit, and new PSD permits are estimated 

to cost $84,530 per permit. These estimates do not include the costs of project delays and 

potential operational modifications required by permitting authorities. In total, these 

costs may exceed 3 percent of annual operating expenditures for some small entities (e.g., 

electrical distribution cooperatives). Under EPA’s RFA Guidance, rules with 3 percent 

or greater economic impact on more than 1,000 small entities are presumed to be 

ineligible for certification under the RFA. Had EPA thoroughly analyzed the potential 

reach of the GHG permitting requirements on small entities, it would have learned that 

the GHG Tailoring Rule will not benefit a substantial number (over 1,200) of small 

entities. (4867)
170

 The EPA’s RFA certification for the LDVR states that the SBREFA review of the 

potential impacts on small entities of regulating GHG emissions under the PSD program 

would occur in the context of the Tailoring Rule. However, the Tailoring Rule lacks any 

analysis of the costs of regulating GHGs under the PSD program and the impact of those 

costs on small businesses. Instead, the analysis in the rule focuses exclusively on avoided 

costs. (5133)

 The EPA neglected to consider the millions of small businesses, hospitals, schools, small 

government entities, and others that will be dramatically impacted by the rule’s 

unprecedented and direct effect on small entities, because the rule imposes these burdens 

in the first instance (as a result of the LDVR), is ineffective to change state law, and will 

inevitably be struck down by the courts. Moreover, even at the 25,000 tpy threshold 

level, numerous small businesses will be affected by this rule. (4870, 5181)

Response:

The RFA generally requires an agency to prepare a regulatory flexibility analysis of any

rule subject to notice and comment rulemaking requirements under the APA or any other statute 

unless the agency certifies that the rule will not have a significant economic impact on a 

substantial number of small entities subject to the rule. If a covered agency, such as EPA, is 

unable to certify a rule at proposal, they must conduct a SBAR panel.

If an agency certifies that the rule at issue does not have a significant impact on a 

substantial number of small entities (SISNOSE), the agency is not required to undertake any 

regulatory flexibility analyses or conduct a SBAR panel. 5 U.S.C. section 605(b). 

EPA disagrees with commenters that assert EPA must undergo an SBAR panel to 

determine how much more relief EPA could potentially give. The SBAR panel is required only 

when EPA is unable to certify no SISNOSE. EPA’s certification of this action is fully supported 

by the RFA, and accordingly EPA was not required to undertake RFA analyses such as the 

SBAR panel or regulatory flexibility analyses.

Agencies can properly certify a rule when the rule does not impose burdens on regulated 

entities, as the “relevant economic impact [is] the impact of compliance with the proposed rule 

on regulated small entities.” Mid-Tex Elec. Co-Op., Inc. v. FERC, 773 F.2d 327, 342-343 (D.C. 

Cir. 1985) (emphases added). Courts have refused to “convert every rulemaking process into a 

massive exercise in economic modeling” by requiring a full RFA analysis. Cement Kiln 

Recycling Coalition v. EPA, 255 F.3d 855, 869 (D.C. Cir. 2001).

This rule does not impose any new regulatory requirements or burdens on any small 

entities. Instead, this rule is designed to relieve potential burdens associated with applying for 

title V and PSD permits. Because there is no new impact associated with this rule, EPA is able 

to certify that there is no SISNOSE for this rule. Contrary to the assertions of some commenters, 

the RFA does not require that EPA consider multiple rules in the context of an RFA analysis for 

an individual rule, as to do so would require the type of “massive exercise in economic 

modeling” that courts have rejected. EPA is only require to consider the new impacts of the 
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specific rule in question on the small entities subject to regulatory requirements of the rule under 

consideration. 

Although the RFA does not apply to this action, EPA recognized that some small entities 

were concerned about the potential indirect impacts of the statutory imposition of PSD 

requirements that may occur given the various EPA rulemakings concerning GHG emissions. In 

the interest of providing small entities a forum to express their concerns in addition to the 

opportunity provided in the notice and comment process, EPA used the discretion afforded to it 

under section 609(c) of the RFA to consult with OMB and SBA, with input from outreach to 

small entities, regarding the potential impacts of PSD regulatory requirements on small entities 

that might occur as EPA considers regulations of GHGs. 

EPA, in collaboration with the SBA, conducted an outreach meeting designed to 

exchange information with small entities that may be interested in these regulations. The 

outreach effort was organized and led by representatives from EPA’s OAQPS within the OAR, 

EPA’s OPEI, the OIRA within the OMB, and the Office of Advocacy of the SBA. 

Documentation of this meeting, which includes a summary of the advice and recommendations 

received from the SERs identified for the purposes of this process, can be obtained in the docket 

for this rulemaking. (See Docket No. EPA-HQ-OAR-2009-0517-19130). 

The EPA took this small business outreach effort into account when finalizing this rule. 

Many commenters from this outreach effort said that there were many more small businesses that 

would subject to PSD and title V due to the proposed permitting thresholds than EPA estimated 

at proposal. Based upon these comments and others received regarding the threshold, the EPA 

increased the threshold and significance levels from the proposal levels to levels at or above 

those recommended by SBA. The final Tailoring Rule provides permitting thresholds for 

sources of GHG that exceed levels contained in the CAA and these levels are phased in steps 

based upon application of the administrative necessity and absurd results doctrines as explained 

in the preamble for the rule in preamble section V.B. For step 1 that is effective from January 2, 

2011 through June 30, 2011, only sources required to undergo title V or PSD permitting based 

upon non-GHG air pollutants are required to obtain an operating permit or PSD permit to include 

GHG emissions. Step 2, effective from July 1, 2011 until such time as EPA acts on a rule to 

amend it (which for reasons described above, we assume is June 30, 2013 for the purposes of this 

analysis), requires larger sources emitting GHG above 100,000 CO2e tpy to obtain a title V 

permit (if they do not already have one) and to comply with PSD requirements when they are 

newly constructed or modify in a way that increases emissions by more than a 75,000 CO2e tpy

significance level. Thereafter, EPA makes an enforceable commitment to consider a possible 

step 3 to further lower thresholds below 100,000 CO2e tpy and/or permanently exclude some 

sources from the program(s), but only after a regulatory process is conducted addressing 

administrative necessity and absurd results considerations based upon the actual permitting 

experiences in the first two steps of the phase-in. In addition, EPA provides a deferral of 

permitting until we take required action in April 2016 for sources and modifications that emit 

below 50,000 CO2e tpy. The deferral will end when a required study is conducted of the 

permitting process for sources of GHG and EPA acts, based on the study, to promulgate a rule 

that describes the additional GHG permitting requirements beyond 2016. In the 6 years 

following promulgation of this rule, the EPA estimates that compared to baseline estimates that 

do not include the effects of this rule, over six million sources of GHG emissions in total will be 
172

allowed to continue to operate without a title V operating permit. During this period, tens of 

thousands of new sources or modifying sources each year will not be subject to PSD 

requirements for GHG. . During this period, tens of thousands of new sources or modifying 

sources each year will not be subject to PSD requirements for GHG. For this large number of 

smaller GHG sources – some of which are small businesses, governments or other small entities

– this rule, this rule alleviates the regulatory burden associated with obtaining an operating or 

PSD permit or complying with NSR BACT requirements. Therefore, this final action should be 

considered beneficial to these small sources that are small entities because it provides relief from 

regulation that would otherwise be required.

Section 609(c) of the RFA allows agencies to, in their discretion, apply the provisions of 

the RFA that address SBAR panels to a rule that “the agency intends to certify... but the agency

believes may have a greater than de minimis impact on a substantial number of small entities.” 5 

U.S.C. § 609(c) (emphasis added). EPA does not believe that the use of this discretion requires a 

rigid application of the entirety of section 609(c). Instead, agencies may pick and choose 

elements of the SBAR panel process to apply as they deem appropriate for the rule at issue. 

EPA believes that section 609(c) of the RFA authorizes agencies to engage in outreach 

similar to that of a formal SBAR panel where, as in this action, the RFA would not otherwise 

apply due to the certification of the rule.6 EPA maintains that this action does not create new 

significant impacts for small entities, and EPA’s use of 609(c) does not indicate otherwise. As 

indicated by the word “may,” an agency has discretion to invoke this provision in a variety of 

circumstance and is not limited to those situations where it is certain that a rule has a greater than 

de minimis impact. 

EPA is not required to take into account effects beyond those caused by the Tailoring 

Rule for the purposes of the RFA. No permitting requirements are imposed by this final 

Tailoring Rule. Instead, this final Tailoring Rule offers regulatory relief to over an estimated six 

million sources of GHG emissions that would otherwise be required to obtain a title V permit 

and tens of thousands of sources of GHG emissions subject to PSD permitting requirements that 

would otherwise be required statutorily to obtain permit. The RFA does not require that an 

agency complete a regulatory flexibility analysis or conduct an SBAR panel where the rule does 

not have any negative impact on small entities subject to the rule.

Accordingly, EPA maintains that it has fully complied with the requirements of the 

Regulatory Flexibility Act in this action. Because this rule does not create new significant 

impacts for a substantial number of small entities, EPA has statutory authority to certify this rule 

under the RFA. Thus, EPA was not required to conduct an SBAR panel or any regulatory

flexibility analyses for this action. 

 

6 EPA does not believe that section 609(c) of the RFA offers agencies a chance to circumvent the panel 

process where they do not intend to certify that the rule does not have a SISNOSE, and EPA remains committed to 

holding SBAR panels where contemplated by the RFA.
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Chapter 8. Implementation Issues

8.1 Comments on EPA’s Mechanism for Implementing and Adopting the Tailoring Approach

This section concerns comments received on the proposal’s approach to adopting the 

Tailoring Rule within our regulations and by state, local and tribal permitting authorities. 

Comment:

Many commenters argue that EPA has not addressed the need for states to adopt the 

Tailoring Rule into state regulations before it can take effect. Before the Tailoring Rule could 

apply, states will need time to amend their SIPs from the 100 or 250 tpy statutory thresholds to 

the thresholds in the Tailoring Rule (4118, 4243, 4298, 4515, 4691, 4903, 5084, 5140, 5143, 

5276, 5278, 5317, 5417, 5789, 6414, 7935, 8015, 16411). In addition, states run the risk of 

being sued if they issue permits to sources that emit more than 100/250 tpy of GHGs before the 

state law and regulations are amended for this purpose (5133). Similarly, sources that emit more 

than 100/250 tpy of GHGs may be subject to state enforcement actions or third-party suits, which 

would produce inequality in treatment of sources in SIP-approved states versus other states 

(4243). Other commenters add that the Tailoring Rule adjustments of emissions thresholds will 

directly conflict with their state’s existing laws and implementation plans (5085, 7294). Thus, 

some of these commenters suggest that:

 EPA should clarify whether the current statutory thresholds for PSD and title V apply 

until the SIP is revised. (5063)

 EPA could modify the Tailoring Rule to assure that state programs do not apply to the 

smaller sources of GHGs. (16411) 

 EPA should disapprove state SIPs that require PSD permits for sources/modifications 

below the Tailoring Rule thresholds (5922, 8015). One commenter adds that EPA has 

enough information to conclude that states would not have adequate resources to 

implement their state PSD programs if the threshold for GHGs is 100/250 tpy. Thus, 

EPA can disapprove state SIPs to the extent they require PSD permits for 

sources/modifications below the thresholds established in the Tailoring Rule. Failure to 

disapprove such SIPs would create great confusion for sources and generate permitting 

gridlock (and “absurd results”) that EPA is trying to avoid (5922).

 EPA should issue a Notice of Deficiency (NOD), under CAA section 502(i)(1), and a SIP 

call, under CAA section 110(k)(5), 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). 

Issuing a NOD and a SIP call in this manner is necessary to maintain an even playing 

field among the states. The commenter believes that EPA should not finalize any action 

that would trigger GHG permitting until each state program has been amended (4298). In 

addition, one commenter (4515/4691) supports the use of a SIP call under section 

110(k)(5) of the CAA or the conditioning of section 105 grant funding to force 

appropriate revisions in SIP approved states. 

 EPA should use every available legal tool to ensure that the Tailoring Rule requirements 

are incorporated into SIPs (4196). One commenter adds that EPA should establish an 

expeditious deadline for states to submit corrective plan revisions (5306). According to 
174

the commenter, EPA can ease state adoption of PSD permit program revisions and 

expedite EPA review and approval of the states’ adjustments by adopting model 

guidelines to help inform state rulemaking, and EPA should complete this process by the 

end of 2010. The same basic framework and timelines can apply to the title V permit 

program and state administration of corrective adjustments. Here, too, EPA can promptly 

issue a notice of deficiency and call for expeditious corrective action. See 42 U.S.C. 

7661a(i). (5306).

 EPA must defer regulating GHGs until states have time to amend their rules and laws and 

submit amended SIPs to EPA, and EPA has finalized approval of the SIP revisions (3720, 

4106, 4118, 4524, 4903, 5800). Deferring application of PSD to GHGs until SIPs are 

revised, one commenter adds (4903), would be consistent with Congress’s intent in the 

CAA Amendments of 1977, where EPA was given two years “to propose regulations for 

increments or other means for preventing significant deterioration” for four criteria 

pollutants (pollutants subject to NAAQS) for which the legislation did not supply

increments. Those regulations then would not go into effect for another year. Then at 

that point, “revision of SIPs would begin.” Additionally, PSD “[r]egulations for new 

ambient air quality standards are to be followed within two years by measures to prevent 

significant deterioration.” H.R. Rep. 95-564 at 151.

Other commenters state that while EPA has proposed to essentially change the meaning 

and application of federal law, EPA cannot amend the statutes and rules in effect at the state 

level (3720, 4524, 5133, 5317, 5743, 5789, 5800, 6414, 8283, 16411) as EPA proposed. Sources 

will still be subject to state-specific regulations (4243, 5343, 16411) and by specifically using the 

proposed Tailoring Rule’s revised thresholds a state will be in violation of its own SIP and thus 

the CAA (4631, 5318, 6491, 7961). In addition, the Tailoring Rule does not require states to 

change laws or regulations to conform to the thresholds set by the rule (3935, 4095, 5743). 

Some states could conclude, based on their own individual legal opinion, that they cannot follow 

the same "administrative necessity" approach that EPA is adopting (5789, 6414, 8283) because 

they feel that EPA is relaxing the statutory thresholds without appropriate authority (7961). 

Moreover, one commenter argues the state law issues mentioned above make the Tailoring Rule 

ineffective practically and thus legally vulnerable because the “administrative necessity” doctrine 

cannot be justified (4095). 

Other commenters argue EPA’s proposal is likely to encourage a confusing patchwork of 

inharmonious federal and state regulations, since states have the authority to be more stringent 

than the EPA and thus to decide not to change their state regulations to implement the Tailoring 

Rule (3720, 3935, 4518, 4524, 5140, 5168, 5278, 5743, 5789, 5800, 6414, 8015, 8283, 16411) or 

may wait to revise their laws until it becomes clear that whatever final rule emerges has survived 

judicial review (5317). One commenter adds, however, that it is important for states to strive for 

GHG emissions reductions and that this can be achieved by offering incentives to institute best 

practices and technologies to reduce GHG emissions to levels that are below the 25,000 tpy 

CO2e threshold (4518). ). Another commenter said the proposed rule lacks an appropriate 

coordinating plan with state governments regarding their respective SIPs for the PSD program. 

(4555)
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Response:

In response to these concerns, we are adding another mechanism to implement the 

tailoring approach for PSD, and that is to adopt a definition within our PSD regulations, of the 

phrase “subject to regulation,” as found within the phrase “any regulated NSR pollutant,” which, 

in turn, is part of the definitions of “major stationary source” and “major modification.” To 

implement this mechanism, we are defining the phrase “subject to regulation” so that the GHGs 

emitted by sources that fall below the thresholds or scope established in steps 1 and 2 are not 

treated as “subject to regulation,” and therefore do not trigger PSD for the sources that emit 

them. As discussed in section V.B.3. of the preamble to the final rule published in the Federal 

Register, the term “subject to regulation” is one of four terms that should be considered not to 

apply literally in the case of GHG sources. 

To understand this approach, it is useful to return to the definition of “major stationary

source,” which, again, is central to PSD applicability. The definition, quoted previously, 

employs the term “regulated NSR pollutant,” which is a defined term. The definition 

incorporates many other elements as well (e.g., the 100/250 threshold requirements), but for 

convenience, we quote it as follows: a “major stationary source” is “[a]ny ... source[] of air 

pollutants, which emits, or has the potential to emit, [depending on the source category, either] 

100 [or 250] tons per year or more of any air pollutant that is subject to regulation under the 

Clean Air Act.” 40 CFR 51.166(b)(1)(i(a)-(b). Applying our definition of “subject to 

regulation” to exclude GHG sources that emit below specified thresholds, the definition may

now be paraphrased as follows: A “major stationary source” is any source of air pollutants, 

which emits, or has the potential to emit, depending on the source category, either 100 or 250 tpy

or more of any air pollutant subject to regulation under the CAA, except that the source’s GHGs 

are considered to be subject to regulation under the CAA only to the extent indicated under steps 

1 and 2 of the Tailoring Rule, e.g., for step 2, only if the source’s GHG emissions exceed the 

threshold established in step 2. We adopt the same approach for the definition of the regulatory

term “major modification.” 

Although EPA is codifying its regulations to apply the phrase “subject to regulation” in 

this manner, we have been advised that states may be able to adopt our approach without having 

to undertake a rulemaking action to revise their SIP regulations or without requiring an act of the 

state legislature. Instead, it is our understanding that states may adopt our approach by 

interpreting the term “subject to regulation” reflected in their regulations to have the same 

meaning that we are assigning to that term in our regulations in this rulemaking. This is 

particularly – although not exclusively -- the case in a state that has taken the position, or 

determines now, that the state’s definition of “subject to regulation,” or, more broadly, 

“regulated NSR pollutant” or “major stationary source” or “major modification, is intended to be 

interpreted in a way that tracks the meanings that EPA has assigned to these phrases. Such states 

can adopt the meaning of “subject to regulation” that we establish in this rule by January 2, 2011, 

and thereby avoid the situation in which, as a matter of state law, GHG-emitting sources above 

the 100 or 250 tpy thresholds become subject to PSD by that date. The following explains our 

basis for concluding that states may apply EPA’s approach under existing regulations that use the 

term “subject to regulation.” 
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On December 18, 2008, EPA issued the Interpretive Memorandum, establishing EPA’s 

interpretation of the definition “regulated NSR pollutant” found at 40 CFR 52.21(b)(50). EPA 

intended this memorandum to resolve ambiguity in subpart (iv) of this definition, which includes 

“any pollutant that otherwise is subject to regulation under the Act.” Specifically, the 

memorandum stated that EPA will interpret the definition of “regulated NSR pollutant” to 

exclude pollutants for which EPA regulations only require monitoring or reporting but to include 

pollutants 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. 

After reconsidering this interpretation through a formal notice-and-comment process, 

EPA refined its interpretation to establish that the PSD permitting requirements will not apply to 

a newly regulated pollutant until a regulatory requirement to control emissions of that pollutant 

“takes effect.” 75 FR 17704. Importantly, as stated previously, because the term “regulated 

NSR pollutant” is embedded within the definition of “major stationary source,” this 

interpretation effectively defines which major stationary sources are subject to PSD permitting. 

As a result, for example, EPA explained that PSD and title V permitting requirements for GHGs 

will not apply to GHGs until at least January 2, 2011, following the anticipated promulgation of 

EPA regulations requiring control of GHG emissions under title II of the CAA. Id. 

In the RTC document for EPA’s reconsideration of the PSD interpretative memorandum, 

we stated that, 

Absent a unique requirement of state law, EPA believes that state laws that use the same 

language that is contained in EPA’s PSD program regulations at 52.21(b)(50) and 

51.166(b)(50) are sufficiently open-ended to incorporate greenhouse gases as a regulated 

NSR pollutant at the appropriate time consistent with EPA’s interpretation of these 

regulations (emphasis added). (Docket ID No. EPA-HQ-OAR-2009-0597-0128). 

Because the state regulations that include EPA’s definition of the term “subject to regulation” in 

the reconsideration of the PSD interpretive memorandum are “sufficiently open-ended to 

incorporate greenhouse gases as a regulated pollutant,” those state regulations are also 

sufficiently open-ended to incorporate the further refinement to the meaning of the phrase 

“subject to regulation” that we make in this rulemaking.

By the same token, EPA has historically interpreted certain state SIP-approved programs 

as sufficiently open-ended such that the rules provide for the “automatic assumption for the 

responsibility for review” of new pollutants before the general deadline for states to revise their 

PSD programs. See, e.g., 52 FR at 24682. Conversely, we have also read federal rules and state 

rules approved in SIPs to provide for the automatic removal of a pollutant when such pollutant is 

no longer “subject to regulation.” For example, the 1990 CAA amendments exempted HAPs 

listed in Section 112(b)(1) from the PSD requirements. See CAA section 112(b)(6). Following 

passage of the amendments, EPA issued “New Source Review (NSR) Program Transitional 

Guidance“, a memorandum from John S. Seitz, Director, Office of Air Quality Planning and 

Standards to Regional Air Division Directors on March 11, 1991. In that guidance, EPA 

interpreted its PSD regulations to automatically cease to apply to listed HAPs (with some noted 

exceptions), and implicitly stated that a state with an open-ended SIP-approved PSD rule could 

also take the position that its SIP-approved rule automatically ceased to regulate HAPs. 
177

After reviewing these past practices in the PSD permitting program, and EPA’s prior 

statements regarding pollutants subject to the PSD program, we conclude that states with SIPapproved rules that contain the same language as used in 40 CFR 52.21(b)(50) or 40 CFR 

51.166(b)(49), or that otherwise have sufficiently open-ended PSD regulations, would be able to 

implement our Tailoring Rule approach to permitting by interpreting their regulations, and 

without needing to promulgate a regulation or seek state legislative action. This is particularly –

although not exclusively -- the case for states that take the position that they intend their rules to 

apply in the same manner as EPA's counterpart rules. If states adopt this reading of their

regulations, GHG sources falling below the specified cutoffs would not be emitting pollutants 

“subject to regulation” within the definition of “regulated NSR pollutant” and therefore would 

not be subject to PSD permitting as a major stationary source or for making a major 

modification.

 

During our consideration of this action, we participated in teleconferences with one local 

and six state permitting authorities to discuss this issue of whether they could implement the 

proposed rule without the need for state law or regulation changes or a revision of the provisions 

of state law that are a part of the SIP. We specifically discussed whether defining the phrase 

“subject to regulation” would better facilitate state incorporation of the limitations in this final 

rule. The state and local agencies participating in the calls generally agreed that defining the 

phrase “subject to regulation” would, compared to our proposed approach, better facilitate state 

incorporation of the limitations in the final rule in states with regulations that mirror the existing 

federal rules, or in states whose rules are otherwise sufficiently open-ended to incorporate the 

limitations in the final rule by interpretation. Participants from each agency also indicated that 

their rules contain the term “subject to regulation” and that term has not been previously 

interpreted in ways that would preclude application of the meaning assigned to the term by EPA. 

We therefore concluded it is likely the state rules are sufficiently open-ended to apply EPA’s 

approach by interpretation (although some states indicated they may elect to pursue rulemaking 

in addition to or instead of interpretation). Accordingly, we selected the “subject to regulation” 

regulatory approach as the mechanism for implementing the final rule.

 

As just described, we selected the “subject to regulation” mechanism because it most 

readily accommodated the needs of States to expeditiously revise – through interpretation or 

otherwise -- their state rules. Even so, it is important to recognize that this mechanism has the 

same substantive effect as the mechanism we considered in the proposed rule, which was 

revising numerical thresholds in the definitions of major stationary source and major 

modification. Most importantly, although we are codifying the “subject to regulation” 

mechanism, that approach is driven by the needs of the states, and our action in this rulemaking 

should be interpreted to rely on any of several legal mechanisms to accomplish this result. Thus, 

our action in this rule should be understood as revising the meaning of several terms in these 

definitions, including: (i) the numerical thresholds, as we proposed; (ii) the term, “any source,” 

which some commenters identified as the most relevant term for purposes of our proposal; (iii) 

the term, “any air pollutant; or (iv) the term, “subject to regulation.” The specific choice of 

which of these constitutes the nominal mechanism does not have a substantive legal effect 

because each mechanism involves one or another of the components of the terms “major 

stationary source” -- which embodies the statutory term, “major emitting facility” -- and “major 
178

modification,” which embodies the statutory term, “modification,” and it is those statutory and 

regulatory terms that we are defining to exclude the indicated GHG-emitting sources.7

Our final action also differs from the proposal in the specific regulatory mechanism by

which we tailor the definition of “major source” for title V permit programs, but is a logical 

outgrowth of our proposed rule. EPA proposed to implement tailoring for GHGs under title V 

by excluding sources of GHGs from the general definition of “major source” under 40 CFR 70.2 

and 71.2, and adding a separate definition of “major source” with tailored thresholds for sources 

of GHGs. In response to comments, particularly from states concerned with implementation of 

the proposed approach under state law, EPA is adopting an approach in the final rule that 1) 

amends the definition of “major source” by codifying EPA’s longstanding interpretation that 

applicability for a “major stationary source” under CAA sections 501(2)(B) and 302(j) and 40 

CFR 70.2 and 71.2 is triggered by sources of pollutants “subject to regulation,” and 2) adding a 

definition of “subject to regulation.” Further, we are delaying our action to move forward with 

limiting our previous approval of existing state part 70 programs.

We finalize this alternative approach to address concerns similar to those we received 

with respect to state implementation of SIP-approved PSD programs. Specifically, we received 

comments that the mechanism we proposed would not address the significant administrative and 

programmatic considerations associated with permitting GHGs under title V, because the 100 tpy 

threshold would continue to apply as a matter of state law. Commenters stated that states would 

need to undertake a regulatory and/or legislative process to change the threshold in their state 

laws which they could not complete before the laws would otherwise require issuance of 

operating permits to GHGs sources. After considering the commenters’ concerns, we are 

finalizing an approach designed to address the state law concerns for states. As a result, it is 

unnecessary to move forward at this time with our proposed approach to limit approval of 

existing part 70 programs in many states.

 

EPA’s approach involves the interrelationship of terms within the part 70 definition of 

“major source” in title V and EPA’s implementing regulations, and EPA’s historical practice of 

interpreting the term “any air pollutant” in the “major stationary source” component of that 

definition. EPA believes the approach in the final rule will allow many states to adopt the final 

rule through interpretation of existing state laws. Specifically, paragraph (3) within the 

definition of “major source” found in 40 CFR 70.2 and 71.2 defines a major source as a “a major 

stationary source of air pollutants, as defined in section 302 of the Act, that directly emits or has 

the potential to emit, 100 tpy or more of any air pollutant...” The EPA previously articulated the 

Agency’s interpretation that the regulatory and statutory definitions of “major source” under title 

V, including the term “any air pollutant,” applies to pollutants “subject to regulation.”8 EPA 

recently re-affirmed this position in EPA’s Reconsideration of Interpretation of Regulations that 

 

7 We also think that this approach better clarifies our long standing practice of interpreting open-ended 

SIP regulations to automatically adjust for changes in the regulatory status of an air pollutant, because it 

appropriately assures that the Tailoring Rule applies to both the definition of “major stationary source” and 

“regulated NSR pollutant.” 

8 Memorandum from Lydia N. Wegman, Deputy Director, Office of Air Quality Planning and Standards, 

U.S. EPA, to Air Division Directors, “Definition of Regulated Air Pollutant for Purposes of Title V” (April 26, 

1993) (Wegman Memo).
179

Determine Pollutants Covered by Clean Air Act Permitting Programs. 75 FR 17704, 17022-23 

(April 2, 2010), the Interpretive Memorandum Reconsideration Final Action. 

Accordingly, under our long-established policy, states historically have interpreted the 

term “any air pollutant” under the title V definition of “major source” to mean any pollutant 

“subject to regulation” under the Act. Thus, as a matter of established interpretation, EPA and 

states effectively read the definition of “major source” under title V to include a source “...that 

directly emits or has the potential to emit, 100 tpy or more of any air pollutant subject to 

regulation under the Act” [emphasis added]. By amending our regulations to expressly include 

and define “subject to regulation” to implement our tailoring for GHGs under title V, we are 

seeking to enable states to adopt and implement this approach through a continued interpretation 

of the phrase “any air pollutant” within the “major source” definition, without the need for 

changes to state regulations or statutes. States may be able to track EPA’s approach to tailoring 

for GHG permitting without regulatory or statutory changes, for example, where a state has taken 

the position, or determines now, that the state’s interpretation of “major source,” “subject to 

regulation” and/or “any air pollutant” is intended to track EPA’s interpretation. 

Thus, EPA is adding the phrase “subject to regulation” to the definition of “major source” 

under 40 CFR 70.2 and 71.2. EPA is also adding to these regulations a definition of “subject to 

regulation.” Under the part 70 and part 71 regulatory changes adopted, the term “subject to 

regulation,” for purposes of the definition of “major source,” has two components. The first 

component codifies the general approach EPA recently articulated in the “Reconsideration of 

Interpretation of Regulations That Determine Pollutants Covered by Clean Air Act Permitting.” 

75 FR 17704. Under this first component, a pollutant “subject to regulation” is defined to mean 

a pollutant 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 and that has taken effect under the 

CAA. See id. at 17022-23; Wegman Memo at 4-5. To address tailoring for GHGs, EPA 

includes a second component of the definition of “subject to regulation,” specifying that GHGs 

are not subject to regulation for purposes of defining a major source, unless as of July 1, 2011, 

the emissions of GHGs are from a source emitting or having the potential to emit 100,000 tpy of 

GHGs on a CO2e basis.

As explained previously, we find no substantive difference between the alternative 

mechanisms for implementing GHG tailoring in the final rule. Whether we add GHG thresholds 

directly to the definition of “major source” (as we proposed), or alternatively, expressly add and 

define the term “subject to regulation,” both approaches revise the definition of “major source” 

to implement the GHG Tailoring Rule. Accordingly, we adopt the later approach to facilitate 

state implementation of the final rule through an interpretation of existing state part 70 programs. 

Similar to our explanation previously for PSD, while we adopt the “subject to regulation” 

mechanism for implementing GHG tailoring in the final rule, the thrust of our rulemaking is to 

apply the title V definition of “major source” – which includes the statutory term, “major 

stationary source” - to GHG sources by treating only GHG sources that emit at levels above the 

steps 1 and 2 thresholds as meeting that definition. Further, we believe that our action may

reasonably be construed to revise any of several terms in that definition, including (i) the 

numerical thresholds, as we proposed; (ii) the term “any air pollutant,” (iii) the term “a major 

stationary source,” (iv) the term “subject to regulation,” which, as discussed previously, our 
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regulations graft into the definition of “major source.” We believe that the specific choice of 

which term constitutes the legal mechanism does not have a substantive legal effect because each 

mechanism involves one of the components of the regulatory term “major source” – which 

embodies the meaning of the statutory term, “major source” -- and it is that term that we are 

interpreting to tailor title V applicability for GHG-emitting sources. Thus, while the “subject to 

regulation” mechanism facilitates expeditious implementation by states, and we are therefore 

revising our regulations to adopt this approach, we otherwise find no substantive difference 

between the alternative mechanisms we may use to finalize the proposed rule.

Further, similar to our revised approach for addressing state SIP-approved PSD 

programs, we are delaying our action to limit our previous approvals for state part 70 operating 

permit programs. In our proposed rule, we explained our concern that states lack adequate 

personnel and resources to carry out part 70 operating permit programs for GHG sources that 

emit or have the potential to emit 100 tpy of GHGs. Accordingly, we proposed to use our 

general rulemaking authority under section 301(a) of the CAA and APA section 553 to limit our 

prior approval of state operating permit programs. This limited approval action would have had 

the effect of applying CAA permitting requirements only to sources that exceed the permitting 

thresholds established in this rule for the phase-in, because only those sources would be covered 

by the federally approved part 70 programs. 74 FR at 55345. As discussed previously, we are 

proceeding with a slightly revised approach to address concerns similar to those raised with our 

proposed approach for addressing SIP-approved PSD permit programs. Because we now 

recognize that, like the PSD program, many states will be able to implement the final rules 

without the need to revise their existing part 70 operating permit programs, we are delaying 

further action on our proposal to limit approval of existing part 70 programs until we better 

understand how permitting authorities will implement our final rule.

 

In addition to the information requested previously on SIP-approved PSD permit 

programs, we ask each state to submit a letter to the appropriate EPA Regional Administrator no 

later than 60 days after promulgation detailing the state’s plan for permitting of GHG sources 

under the state’s part 70 program. In that letter, states should explain whether they will adopt an 

interpretation of the terms “major source” or any of its component terms – “a major stationary

source,” “any air pollutant,” or “subject to regulation,” or the numeral thresholds -- that is 

consistent with EPA’s regulatory interpretation of the these terms as codified at 40 CFR 70.2, 

and whether the state intends to adopt the interpretation without undertaking a regulatory or 

legislative process. This approach may be available, for example, where a state has taken the 

position, or determines now, that the state’s interpretation of these terms is intended to track 

EPA’s interpretation, resulting in title V permitting for sources of GHGs as described in EPA’s 

regulations adopted in this rule. If a state must revise its title V regulations or statutes to 

implement the interpretation, we ask that it provides an estimate of the time to adopt final rules 

or statutes in its letter to the EPA Regional Administrator. If a state chooses not to (or cannot) 

adopt our interpretation, the letter should address whether the state has alternative authority to 

implement the GHG tailoring approach or some other approach that is at least as stringent, but 

which also addresses the expected shortfalls in personnel and funding and delays in permitting 

that would exist if the state carried out permitting under part 70 program thresholds lower than 

those adopted by EPA in this final rule. For any state that is unable or unwilling to adopt the 

permitting thresholds in the final rules, and otherwise is unable to demonstrate adequate 
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personnel and funding, EPA will move forward with finalizing a narrowed limited approval of 

the state’s existing part 70 program. If we do so, then we will respond in that action to 

comments on our proposal. 

In our proposed rule, we also noted that a handful of part 70 operating permit programs 

may include provisions that would not require operating permits for any source of GHG 

emissions because, for example, the programs may apply only to pollutants specifically 

identified in the program provisions, and the provisions do not specifically identify GHGs. In 

these cases, states may be unable to interpret their regulatory provisions to interpret the term 

“any pollutant” to include pollutants “subject to regulation.” We indicated that we intended to 

take separate action to identify these programs, and to take regulatory action to correct this 

deficiency. Accordingly, we ask any state or local permitting agency that does not believe its 

existing part 70 regulations convey authority to issue title V permits to GHG sources consistent 

with the final rule to notify the EPA Regional Administrator by letter as to whether the state 

intends to undertake rulemaking to revise its rules consistent with these applicability thresholds. 

This notification should be done no later than the previously described letter regarding adoption 

of the Tailoring Rule, and could be combined with similar notifications we request regarding the 

PSD program. We intend to undertake a separate regulatory action to address part 70 programs 

that lack the ability to issue operating permits for GHG sources consistent with the final rule. 

We also intend to use our federal title V authority to ensure that GHG sources will be permitted 

consistent with the final rule. Also, while EPA does not believe NODs, authorized under section 

502(i) of the Act and §70.10(b), are needed at this time, EPA will review the information 

submitted by states in response to this final rule, work with them to adopt the tailoring rule, and 

undertake oversight actions, if appropriate, which may include issuing NODs.

Comment:

Several commenters question the legal merits of EPA’s “retroactive” reinterpretation of 

SIPs (3720, 4524, 5083, 5133, 5140, 5181, 5278, 5800). For example, courts may not agree that 

EPA may circumvent the procedural requirements of SIP calls and public notice and comment by

withdrawing prior approvals of any GHG threshold below EPA’s 25,000 tpy (5133) and even if 

EPA could rely on the SIP “correction” provision in section 110(k), there is no similar provision 

for EPA to “correct” an error in its original approval of a title V program (5140, 5181, 5278). In 

addition, this plan disrupts the normal, orderly process of revision of state programs (5133) and 

this contravenes settled law on the roles of EPA and the states in SIP planning (5181). 

Furthermore, if a state wanted to fix its SIP after the fact, relaxing the CAA rules would fall 

under the CAA’s “antibacksliding” provision (4631, 5318, 6491, 7961). Such a retroactive effort 

would call into question the validity of permits issued and invite litigation. Two commenters 

(5140, 5278) also contend that EPA’s proposed approach to program revisions is problematic 

because the requirement to obtain a permit is a source obligation, so if EPA’s approach is 

invalid, the sources will be liable for failure to obtain a permit. Sources are also at risk of citizen 

suits under federal law for failure to hold required permits. While a source may raise the 

proposed rule as a defense to a citizen suit, a court that believes EPA was not authorized to 

retroactively revise its SIP approvals could similarly disregard the proposed rule. EPA’s 

proposed rule thus puts sources at an unacceptable risk of enforcement through citizen suits. 
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Response:

Because we now anticipate that many states will be able to implement our tailoring 

approach through interpretation of the term “subject to regulation,” and without the need to 

revise their SIPs, we are delaying further action on our proposal to limit our approval of SIPs 

until we better understand how permitting authorities will, in fact, implement our tailoring 

approach. For this purpose, we ask each state to submit a letter to the appropriate EPA Regional 

Administrator no later than 60 days after publication of this rule in the Federal Register. In that 

letter, the state should explain whether it will apply EPA’s meaning of the term “subject to 

regulation” and if so, whether the state intends to incorporate that meaning of the term through 

interpretation, and without undertaking a regulatory or legislative process. If a state must 

undertake a regulatory or legislative process, then the letter should provide an estimate of the 

time needed to adopt the final rules. If a state chooses not to adopt EPA’s meaning by 

interpretation, the letter should address whether the state has alternative authority to implement 

either our tailoring approach or some other approach that is at least as stringent, whether the state 

intends to use that authority. If the state does not intend to interpret or revise its SIP to adopt the 

tailoring approach or such other approach, then the letter should address the expected shortfalls 

in personnel and funding that will arise if the state attempts to carry out PSD permitting for GHG 

sources under the existing SIP and interpretation. 

For any state that is unable or unwilling to adopt the tailoring approach by January 2, 

2011, and that otherwise is unable to demonstrate adequate personnel and funding, we will move 

forward with finalizing our proposal to limit our approval of the existing SIP. Although we 

received comments questioning our authority to limit approval as proposed, using our general 

rulemaking and section 110(k)(6) authorities, we are not responding to those comments at this 

time. We will address these comments in any final action we take to implement a limited 

approval.

In our proposed rule, we also noted that a handful of EPA-approved SIPs fail to include 

provisions that would apply PSD to GHG sources at the appropriate time. This is generally 

because these SIPs specifically list the pollutants subject to the SIP PSD program requirements, 

and do not include GHGs in that list, rather than include a definition of NSR regulated pollutant 

that mirrors the federal rule, or because the state otherwise interprets its regulations to limit 

which pollutants the state may regulate. At proposal, we indicated that we intended to take 

separate action to identify these SIPs, and to take regulatory action to correct this SIP deficiency.

 

We ask any state or local permitting agency that does not believe its existing SIP 

provides authority to issue PSD permits to GHG sources to notify the EPA Regional 

Administrator by letter, and to do so no later than 60 days after publication of this rule in the 

Federal Register. This letter should indicate whether the state intends to undertake rulemaking to 

revise its rules to apply PSD to the GHG sources that will be covered under the applicability 

thresholds in this rulemaking, or alternatively, whether the state believes it has adequate 

authority through other means to issue federally-enforceable PSD permits to GHG sources 

consistent with this final rule. For any State that lacks the ability to issue PSD permits for GHG 

sources consistent with this final rule, we intend to undertake a separate action to issue a SIP 
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call, under CAA section 110(k)(5). As appropriate, we may also impose a FIP through 40 CFR 

52.21 to ensure that GHG sources will be permitted consistent with this final rule.

8.2 Transitional Issues

This section involves comments concerning transitional issues, including commenter 

requests for grandfathering exemptions from GHG permitting requirements; commenter requests 

for clarification on whether and when permits and applications must be revised, reopened or 

otherwise updated to address GHG emissions after the Tailoring Rule takes effect; and 

commenter requests for delays in the effective “trigger” date of the Tailoring Rule.

8.2.1 Requests for “Grandfathering” and for Exemptions from Revision, Reopening or 

Update Requirements for Application and Permits

Comment:

Several commenters ask that existing permits be exempted from having to consider GHG 

emissions in PSD and title V permitting after the Tailoring Rule is finalized. They suggest that 

EPA not require sources with valid PSD (5079) or title V (4120, 5059, 5079, 5224) permits to 

seek revised permits for GHGs. 

Several commenters would also like us to grandfather sources that have no permits at the 

time the new GHGs requirements come into effect. They recommend that facilities that have 

been determined not to need PSD permits before the effective date of GHG regulation and that 

exceed the thresholds for GHG emissions, but not for criteria pollutants, not be required to apply 

for PSD permits (5113). Another commenter thinks that EPA should grandfather facilities that 

may not be title V facilities now, but would become subject to title V due to GHG thresholds. 

(3282) 

Other commenters would like us to grandfather permit applications that were submitted 

prior to the effective date (or when GHG emissions are first subject to regulation) of the 

Tailoring Rule from any requirement to address GHGs in the application, and by extension, the 

permit (because the application is the basis for the permit). They believe it would be unduly

burdensome and impose unreasonable additional costs and delay to reopen PSD and title V 

permit applications already submitted to address GHG emissions if the sources are working in 

good faith under the existing regulatory process (4515, 4691, 4786, 5147, 5224, 5277, 5341, 

5711, 5742, 6458). Some of these commenters (4208, 4228, 4514, 4525, 4903, 5144, 5706, 

5742, 5773, 6202, 6270, 6458, 6460) add that there is no information currently available as to 

what BACT will look like for GHG emissions, while one commenter (5277) adds that this would 

slow PSD and other permitting to a crawl due to low staff numbers, hiring freezes, and lack of 

training opportunity for permitting staff. For these reasons, some of these commenters 

recommend that:

 EPA require sources that have already submitted a complete PSD permit application 

before the applicable PSD triggering date for GHGs (and irrespective of when any 

completeness determination is made) to have the application evaluated, and its permit 

issued, on the basis of the PSD requirements in effect at the time the application was 
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submitted. (4122, 4318, 4522, 4523, 4749, 4992, 5038, 5080, 5089, 5113, 5114, 5128, 

5257, 5317, 5327, 5601, 5741, 6459, 8025, 8301). Some of these commenters believe

this approach would be consistent with the administrative law principle that legislative 

rules cannot have retroactive effect unless expressly authorized by Congress [citing, e.g., 

Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208-09 (1988)]. 

 EPA should add that neither the application nor the final permit would need to address 

GHGs (5317) and that the permit applications would be final and should not be reopened 

to address GHG emissions. (5113) 

 EPA should clarify that GHG permitting is not required for applications received before 

the effective date of the Tailoring Rule, assuming the permit has not been issued, and that 

EPA should delay permitting until at least October 1, 2011. (5341) 

 Facilities should be grandfathered (4515, 4691, 4770, 5180, 5199, 5277, 5301, 5711, 

6458) because EPA has provided similar exclusions in the past when the rules of the NSR 

program changed (4515, 4691, 5180, 5277, 5711) (e.g., comment 5277 cites the PM-10 

surrogate policy, 40 CFR 52.21(i)(1)(x) and two guidance documents as examples of past 

practices EPA has used for grandfathering) and EPA could use the “administrative 

necessity” doctrine to confirm that only new permit applications are impacted. If a PSD 

or title V permit application is submitted and is administratively complete before the date 

on which PSD or title V begins to apply to a pollutant, then that application should not be 

subject to any requirements for that pollutant nor should the application be considered as 

incomplete on the ground that it did not address that pollutant (5199)

Various commenters ask EPA to clarify that if a source with a final PSD permit has not 

commenced construction by the time GHGs become subject to regulation, they should not be 

required to submit new permit applications to address the new GHGs requirements. They

recommend that EPA allow permitted sources that commence construction within 18 months 

from the date when GHGs become subject to regulation (or any earlier date required by the SIP) 

not be required to seek a revised PSD permit for GHGs (5078, 5079) or be required to obtain a 

PSD permit solely due to their GHGs emissions (5180). One commenter (5224) requests that 

EPA confirm that construction projects that have not commenced when the LDVR goes into 

effect, where all the applicable permitting has been initiated/completed, are exempt from having 

to revise their PSD permit application. 

Other commenters would like us to grandfather minor sources from the new GHG

requirements (4122, 4318, 4522, 4523, 4691, 4749, 4992, 5038, 5080, 5089, 5114, 5128, 5257, 

5301, 5317, 5327, 5601, 5741, 6459, 8301). They recommend that EPA provide that any source 

that is not “major” and that has submitted a complete “minor NSR” application before the 

applicable PSD triggering date for GHGs have that application evaluated, and its permit issued, 

on the basis of the minor NSR requirements in effect at the time the application was submitted 

(4122, 4318, 4522, 4523, 4691, 4749, 4992, 5038, 5080, 5089, 5114, 5128, 5257, 5317, 5327, 

5601, 5741, 6459, 8301). One commenter adds that this would be consistent with, for example, 

the 1980 PSD Regulations, which exempted all sources not subject to the pre-existing PSD 

regulations if they obtained all permits required by the applicable SIP before the date of 

promulgation of the new PSD regulations (and commenced construction within 18 months of the 

date of promulgation) (4691). 
185

One commenter, 4298, requests that EPA implement a generous transition policy for 

sources with actual emissions below the PTE thresholds. The commenter adds that any “stateenforceable limits that are enforceable as a practical matter” should be explicitly recognized as 

limiting PTE, without the need to eventually upgrade such requirements to “federal 

enforceability” in a permit. 

Many commenters request, in general, that EPA clarify transitional and timing issues 

associated with the Tailoring Rule. 

 EPA must adopt reasonable transition provisions and this is consistent with EPA past 

practice. (4122, 4318, 4522, 4523, 4749, 4992, 5038, 5080, 5089, 5114, 5128, 5257, 

5317, 5327, 5601, 5741, 6459, 8301) The commenters provide many examples where 

EPA has provided such transition considerations in the past. 

 At a minimum, any new GHG rules should provide a transition period and allow greater 

phase-in to reduce economic disruption and ease state administration of permits, 

suggesting the transition should extend to March 2012. (4106) 

General comments and questions, specific to the transition for the PSD program:

 EPA should consider provisions in the final rule that would allow an orderly transition of 

GHG regulation under the PSD program (4120, 4749). If not, the Tailoring Rule might 

still yield an unworkable program.

 The final Tailoring Rule should clarify at which stage ongoing projects' PSD reviews 

must consider GHGs. (5079)

 EPA should consider not requiring approval of PSD permits between approval of the 

Tailoring Rule and the date the state approves the GHG thresholds in their rules (5338) to 

allow time for the state to incorporate the new thresholds into their rules.

 What will the requirement be for a facility that has a PSD permit underway with the 

appropriate regulatory authority? Must the PSD application be rewritten to include a 

review of GHG emissions from the proposed project and then resubmitted to the 

regulator for review (4747)? 

General comments, specific to the transition for the title V program:

 For sources with existing title V permits:

o Incorporate GHG references and the GHG monitoring rule requirements into their 

title V permits at the time the permit is normally up for renewal. (2797, 5084, 5443, 

5528, 6681) 

o Incorporate the GHG provisions when their permit is up for renewal, but not before 

the first year of GHG reporting data for year 2010 is submitted in early 2011. The 

data will be better and will avoid the need for companies to prepare the data twice. 

(5705)

o Permits should not be required to address GHGs before renewals even if they undergo 

a modification. (4749)

o How must a source amend the permit to incorporate GHGs? Should the source 

assume that the provisions for “reopening for cause” at 40 CFR 70.7(f)(1)(i) apply? 

o Permits should not be required to comply with the new GHGs provisions until the 

source undertakes a PSD modification or consider a phased-in approach with a higher 

major source threshold for title V initially than that for PSD. The same 
186

"administrative necessity" and "absurd results" legal doctrines that EPA relies on for 

the proposal as a whole would also apply to these types of title V-specific tailoring 

approaches. (7935) 

o GHGs limits (and any associated monitoring, recordkeeping, reporting, or testing 

requirements) should not be included in title V permits because there are no 

applicable requirements that place limits or require controls of GHGs in the CAA. 

(4749)

 For sources that become subject to title V for the first time:

o Require application submittal one year after they become subject to regulation. 

(2797, 5084, 5443, 5528, 6681)

o Sources subject under step 2 should submit applications one year after the effective 

date of step 2. (2797, 5084, 5443, 5528, 6681) 

o Where title V permitting for GHGs is required EPA should eliminate states’ 

discretion to require permit applications any sooner than 1 year after commencing 

operation. (4298) 

o EPA should clarify that sources in states with merged PSD and title V permit 

programs should apply for the permit prior to construction. (4298)

o Authority should be given to the states to call for 20 percent of the new required title 

V applications for sources over 25,000 tpy CO2e every year over a 5-year period. If 

not, all of the renewal applications will be due together 5 years later, and every 5 

years thereafter. (8747) 

o EPA should provide the maximum legally defensible amount of time to pass between 

the issuance of the LDVR and the date GHGs become regulated pollutants. (5338) 

Response:

We partially addressed transitional issues for PSD permitting in our April 2, 2010 final 

action on reconsideration of the Interpretive Memo. 75 FR 17021. This action addressed the 

applicability of PSD permitting requirements for GHGs to pending PSD permit applications that 

were (or will be) submitted prior to January 2, 2011 based on emissions of pollutants other than 

GHGs. However, we have not yet addressed the questions raised by public comments 

concerning sources that obtain PSD permits, minor NSR permits, or determinations that no such 

permits are needed prior to the step 1 period set forth in this rule. We have also not yet 

addressed questions about the applicability of PSD permitting requirements for sources that are 

not currently required to submit an application for a PSD permit but that could be required to do 

so in step 2 of the phase-in established in this action. In addition, our April 2, 2010 action did 

not address transitional issues concerning the application of the title V provisions to GHGs.

1. Transition for PSD Permit Applications Pending When Step 1 Begins

In our action on April 2, 2010, EPA explained that the Agency did not see grounds to 

establish a transition provision for pending PSD permit applications because we had determined 

that PSD permitting requirements would not apply for GHGs for another 9 months. We 

explained that permit applications submitted prior to April 2, 2010 should in most cases be 

issued prior to January 2, 2011 and, thus, effectively have a transition period of 9 months to 

complete processing before PSD requirements become applicable to GHGs. We also observed 

that, in the case of any PSD permit application review that cannot otherwise be completed within 
187

the next 9 months based on the requirements for pollutants other than GHGs, it should be 

feasible for permitting authorities to begin incorporating GHG considerations into permit 

reviews in parallel with the completion of work on other pollutants without adding delay to 

permit processing. Additional discussion of EPA’s reasons for not developing transition 

provisions for PSD permit applications that are pending on January 2, 2011 are provided in the 

April 2, 2010 notice. 75 FR 17021-22.

For these same reasons, we continue to feel that a transition period is not warranted to 

incorporate GHG requirements into any PSD permit applications that are pending when step 1 of 

the permitting phase-in begins for those sources that would otherwise need to obtain a PSD 

permit based on emissions of pollutants other than GHGs. Thus, this action makes no change to 

the position we expressed on this particular issue in the April 2, 2010 notice. In this final rule on 

tailoring the PSD program to address GHGs, we have determined that the additional burden of 

incorporating GHG requirements into PSD permits for the sources already required to obtain 

such permits is manageable in the step 1 period. Thus, this rule has added no additional 

requirements or limitations that would justify deferring the establishment of pollution controls 

for this category of GHG sources once PSD permitting requirements are initially triggered for 

GHGs.

2. PSD Permits Issued Prior to Step 1

EPA has not historically required PSD permits to be updated or reopened after they are 

issued in the absence of an action by the applicant to change the physical or operational 

characteristics of the source described in the permit application. EPA’s PSD permitting 

regulations contain no provisions that address the modification or amendment of a PSD permit or 

require a PSD permit to be reopened or modified on the basis of new PSD permitting 

requirements that take effect after the final permit is issued. Since PSD permits are construction 

permits, EPA has not required updates to PSD permits in the same manner as is typically 

required for operating permits that incorporate a variety of applicable requirements (such as title 

V permits and NPDES permits under the CWA). In addition, unlike operating permits, PSD 

permits are not required to be renewed. However, if construction under a PSD permit is not 

commenced in a timely manner or is discontinued for an extended period, a PSD permit may

expire if an extension is not requested or justified. See, 40 CFR 52.21(r)(2); 40 CFR 124.5(g).

With respect to the application of PSD permitting requirements for GHGs beginning on 

January 2, 2011, we do not see any cause to deviate from our historical practice of not requiring 

PSD permits to be reopened or amended to incorporate requirements that take effect after the 

permit is issued. Thus, we are not promulgating any new rules or requirements pertaining to 

PSD permits issued prior to Step 1 of the phase-in described in this rule. There is no mandatory

requirement to reopen a previously issued PSD permit to incorporate GHG requirements that 

were not applicable at the time the permit was issued. 

A major source that obtains a PSD permit prior to January 2, 2011 will not be required 

under EPA regulations to reopen or revise the PSD permit to address GHGs in order for such a 

source to begin or continue construction authorized under the permit. Our current PSD 

permitting regulations provide that “[n]o new major stationary source or major modification to 
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which the requirements of paragraphs (j) through (r)(5) of this section apply shall begin actual 

construction without a permit that states the major stationary source or major modification will 

meet those requirements.” 40 CFR 51.166(a)(7)(iii); 40 CFR 52.21(a)(2)(iii). The term “begin 

actual construction” generally means “initiation of physical onsite construction activities on an 

emissions unit which are of a permanent nature” and includes activities such as “installation of 

building supports and foundations, laying underground pipework and construction of permanent 

storage structures.” 40 CFR 51.166(b)(11); 40 CFR 52.21(b)(11). A source that begins actual 

construction authorized under a PSD permit prior to January 2, 2011 will not be in violation of 

the prohibition described previously if it continues construction after that date. This portion of 

the regulation precludes only beginning construction without the appropriate preconstruction 

permit and does not require a permit to be updated to continue actual construction that has 

already begun. 

Furthermore, a source that is authorized to construct under a PSD permit but has not yet 

begun actual construction on January 2, 2011 may still begin actual construction after that date 

without having to amend the previously-issued PSD permit to incorporate GHG requirements. 

Sections 51.166(a)(7)(iii) and 52.21(a)(2)(iii) require “a permit that states that the major 

stationary source or major modification will meet those requirement,” which refers to the 

“requirements in paragraphs (j) through (r)(5)” referenced earlier in those provisions. EPA 

construes this language to describe a permit that meets the requirements of paragraph (j) through 

(r)(5) that are in effect at the time the permit is issued. Permitting and licensing decisions of 

regulatory agencies must generally reflect the law in effect at the time the agency makes a final 

determination on a pending application. See Ziffrin v. United States, 318 U.S. 73, 78 (1943); 

State of Alabama v. EPA, 557 F.2d 1101, 1110 (5th Cir. 1977); In re: Dominion Energy Brayton 

Point, LLC, 12 E.A.D. 490, 614-616 (EAB 2006); In re Phelps Dodge Corp., 10 E.A.D. 460, 478 

n. 10 (EAB 2002). 

Thus, a source may begin actual construction on or after January 2, 2011 under a PSD 

permit that authorized construction to begin prior to January 2, 2011 because such a permit states 

that the source will meet the requirements of paragraphs (j) through (r)(5) of these regulations (or 

state equivalents) that were in effect at the time the permit was issued. However, this would not 

be the case if the permit has expired because the applicant has discontinued construction or failed 

to commence construction by the necessary date. See, 40 CFR 52.21(r)(2). 

This approach is consistent with EPA’s practice when the preconstruction permitting 

requirements change by virtue of the designation of an area as a nonattainment area after a PSD 

permit is in issued. In transitional guidance issued by EPA in 1991, EPA explained that “the 

area designation in effect on the date of permit issuance by the reviewing agency determines 

which regulations (part C or D) apply to that permit.” Memorandum from John S. Seitz, 

Director OAQPS, New Source Review (NSR) Program Transitional Guidance, page 6 (Mar. 11, 

1991). This memorandum explained further that “where a source receives a PSD or other permit 

prior to the date the area is designated as nonattainment, the permit remains in effect” as long as 

the sources meets the conditions necessary to prevent the permit from expiring. Id. at 6. 

This approach does not apply if the source engages in a major modification after January

2, 2011 that is not authorized by the previously issued permit. Once step 1 of the phase-in 
189

begins, if the PSD requirements for GHGs are applicable to a previously-permitted source that 

engages in a major modification not covered by the permit, such a source will need obtain a new 

PSD permit to authorize the modification and that permit may need to include GHG 

requirements depending on the level of increase in GHGs that results from the modification.

3. Additional Sources for Which PSD Applies in Step 2

In light of the terms of existing PSD regulations and the lead time provided in this action 

for sources that will first become subject to PSD permitting in step 2, we do not believe there is 

presently a need to establish transition provisions for sources that will be required to obtain PSD 

permits for the first time in step 2 of the phase-in. As described previously, under our current 

PSD permitting regulations, a new major stationary source or major modification may not begin 

actual construction without a PSD permit that meets the applicable preconstruction permitting 

requirements. 40 CFR 51.166(a)(7)(iii); 40 CFR 52.21(a)(2)(iii).

Since a permit must be obtained before a major source may begin actual construction, the 

major source preconstruction permitting requirements in sections 51.166 and 52.21 of the 

regulation do not generally apply to a source that begins actual construction at a time when it 

was not a major source required to obtain a PSD permit. One exception, however, is the unique 

circumstance when a source becomes a major source solely by virtue of the relaxation of an 

enforceable limitation on the source’s potential to emit. 40 CFR 51.166(r)(2); 40 CFR 

52.21(r)(4). But absent these circumstances, PSD preconstruction permitting requirements do 

not generally preclude a source from continuing actual construction that began before the source 

was a source required to obtain a PSD permit. Thus, a source that began actual construction 

under the authorization of any previously required minor source or state construction permit is 

not required to meet any PSD preconstruction permitting requirement that becomes applicable 

after actual construction begins unless the source engages in a major modification after PSD 

permitting requirements are applicable. Likewise, a PSD permit is not required after a source 

begins actual construction based on a valid determination (by the source or the permitting 

authority) that the source need not obtain either a major PSD permitting requirements or and 

minor NSR permit. Based on these provisions in existing regulations, EPA will not require any 

sources to which PSD permitting requirements begin to apply in step 2 to obtain a PSD permit to 

continue construction that actually begins before step 2 begins.

However, we will expect phase 2 sources that begin actual construction in phase 2 (i.e., 

beginning July 1, 2011) to do so only after obtaining a PSD permit in accordance with sections 

52.21, 51.166, or any applicable state regulation that meets the requirements of section 51.166. 

We recognize the potential for the triggering of step 2 to result in a change in status where a 

project may legally have begun actual construction before step 2 but did not do so and would 

then need a PSD permit. However we also note that we are providing over a year of lead time 

before PSD permitting requirements become applicable to step 2 sources. If projects would be 

adversely affected by this change in status, this lead time affords an opportunity for sources 

planning such projects to secure appropriate minor NSR permits (which generally take less than 

a year to issue), non-applicability determinations, etc. in time to avoid such a change in status. If 

a new or modified source that would become newly subject to PSD in step 2 plans to begin 

actual construction before step 2, it has more than a year to obtain the applicable preconstruction 
190

approvals and begin actual construction. Likewise, a step 2 source that does not anticipate the 

ability to begin actual construction before step 2 begins should have enough lead time to submit 

a PSD permit application and obtain the necessary permit without significantly delaying the 

project further. Therefore, we do not think it is necessary or appropriate to promulgate a 

transition provision that would exempt step 2 sources from PSD permitting requirements that 

will apply based on construction that begins after step 2 takes effect.

This approach for step 2 sources that have obtained a minor source construction permit or 

non-applicability determination differs from the approach described previously for source that 

obtained a PSD permit prior to step 1. As described previously, a step 1 source that is authorized 

to begin actual construction before January 2, 2011 under a previously-issued PSD permit may

begin actual construction under that permit after January 2, 2011 without modifying the PSD 

permit to address GHGs. However, a step 2 source that was not required to obtain a PSD permit 

before Step 2 begins would need to obtain a PSD permit addressing GHGs if it has not yet begun 

actual construction prior to step 2, even if the source had obtained any preconstruction approvals 

that were necessary to authorize construction prior to step 2. This is because such a step 2 source 

that begins actual construction after step 2 would likely be doing so without having any permit 

meeting the requirements of paragraphs (j) through (r)(5) of section 52.21, 51.166, or a state 

equivalent. A source that has obtained only a minor source permit prior to step 2 but that begins 

actual construction after July 1, 2011 would violate the requirements of section 52.21(a)(2)(iii), 

51.166(a)(7)(iii), or a state equivalent, unless the source took care to ensure that it was 

authorized to construct under a PSD permit or could demonstrate that the source’s minor source 

construction permit makes clear that requirement of paragraphs (j) through (r)(5) of sections 

52.21, 51.166, or a state equivalent would be met by the source even though such a permit was 

not nominally a PSD permit. This difference in approach for non-PSD sources is driven by the 

terms of sections 52.21(a)(2)(iii) and 51.166(a)(7)(iii). Since we have not provided any prior 

notice that we might be considering revisions to sections 52.21 and 51.166 to address this topic, 

we are unable to revise the regulations in this action to achieve the same result for non-PSD 

sources as for PSD sources. Furthermore, this difference in approach is not unreasonable since 

non-PSD sources will not trigger permitting for GHG until step 2 (only anyway PSD source 

trigger in step 1). Thus sources will have until July 1, 2010, an additional 6 months of lead time,

to prepare for the transition described here. 

EPA has previously promulgated exemptions that have authorized some sources that 

were not previously subject to the PSD regulations to commence construction on the basis of 

minor source permits after the date new PSD requirements have took effect in 1978 and 1980. 

See e.g., 40 CFR 52.21(i)(1)(iv)-(v). There is a notable distinction between these provisions, 

which use the term “commence construction,” and the terms of sections 52.21(a)(2)(iii) and 

51.166(a)(7)(iii), which use the term “begin actual construction.” Commence construction is 

defined more broadly than begin actual construction to include obtaining all necessarily 

preconstruction approvals and either beginning actual on-site construction or entering into 

binding contracts to undertake a program of actual construction. 40 CFR 52.21(b)(9); 40 CFR 

51.166(b)(9). The term commence construction is also defined in the CAA. 42 USC 

7479(2)(A). Among other purposes, the term “commence construction” is generally used in the 

Act and EPA regulations to distinguish construction activities that are exempt from new PSD 

permitting requirements from those that are not. See e.g., 42 USC 7475(a); 40 CFR 
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52.21(i)(1)(i)-(v). In the absence an explicit exemption in the CAA or the PSD regulations that 

uses the term “commence construction,” we do not believe we can use the date a source 

“commences construction” under a minor source construction permit approval as a demarcation 

point for step 2 sources that may continue ongoing construction activities without having to 

obtain a PSD permit based on emissions of GHGs. Since we did not provide prior notice of an 

intention to adopt transition provisions applicable to this situation, we are unable to adopt such 

an exemption in this action that applies the term commence construction in this context. 

Consequently, the approach described previously applies the term “begin actual construction” 

based on the language in sections 52.21(a)(2)(iii) and 51.166(a)(7)(iii).

4. Transitional Issues for Title V Permitting

Since the title V permitting regulations already include a robust set of provisions to 

address the incorporation of new applicable requirements and other transitional considerations, 

we do not see grounds to establish unique transition or grandfathering provisions for GHGs in 

this action. Furthermore, since the purpose of title V is to collect all regulatory requirements 

applicable to a source and ensure compliance, we do not believe special exemptions for GHG 

requirements are likely to be justified. The existing title V rules do not provide any exemptions 

that relieve the obligation to incorporate all applicable requirements into a title V permit. 

However, the title V regulations contain numerous provisions that allow a reasonable period of 

time for incorporating new applicable requirements or applying for a title V permit that was not 

previously required. Transitional issues for incorporation of GHG requirements into title V 

permitting generally involve questions in the following categories: (1) permit application 

requirements for sources not previously subject to title V that will become subject to title V 

requirements in step 2 of the phase-in; (2) the need for updates or amendments to title V permit 

applications that are pending when GHGs become subject to regulation in step 1 of the phase-in; 

and (3) the incorporation of new applicable requirements for GHGs into existing permits for 

sources currently subject to title V. 

With respect to the first category, a title V source applying for the first time must submit 

its permit application within 12 months after the source “becomes subject to the [operating] 

permit program” or such earlier time that the permitting authority may require (see section 

70.5(a)(1)). Sources not otherwise subject to title V can become major sources subject to title V 

due to emissions of GHG no sooner than July 1, 2011. If a source becomes “subject to the 

[operating] permit program” on July 1, 2011, then its permit application under the title V 

operating permit program would typically have to be submitted no later than July 1, 2012. The 

title V program has traditionally provided significant flexibility to state programs in setting 

deadlines for permit application submittal, consistent with the statutory requirements, and EPA 

does not believe, as several commenters suggested, that it is appropriate or necessary to limit 

state discretion in this regard in this action, provided the state’s deadlines are consistent with the 

statutory requirements. Also in this final rule, EPA has reduced the number of sources that will 

potentially be subject to title V as a result of GHG emissions in step 2, compared to the proposal, 

because we believe permitting additional sources in step 2 would overwhelm the permitting 

process and be contrary to congressional intent, thus, helping states to manage the transition to 

permitting GHG sources. In the prospective step 3 rulemaking, we will continue to consider 
192

approaches to phasing-in title V applicability for sources of GHG emissions, which will also 

potentially help states with transitional issues, consistent with congressional intent.

There are also existing regulations relevant for the second category of GHG transition 

issues, where sources currently subject to title V have title V permit applications pending with a 

permitting authority as of January 2, 2011. Where additional applicable requirements become 

applicable to a source after it submits its application, but prior to release of a draft permit, the 

source is obligated to supplement its permit application. See 40 CFR 70.5(b); 71.5(b). 

Furthermore, title V permits are generally required to contain provisions to assure compliance 

with all applicable requirements at the time of permit issuance. See CAA section 504(a); 40 

CFR 70.6(a)(1); 71.6(a)(1). If a permitting authority determines that additional information is 

necessary to evaluate or take final action on an application (e.g., because of uncertainty over 

whether a draft permit assures compliance with all applicable requirements), it may, and should, 

request additional information from the source in writing and set a reasonable deadline for a 

response. See 40 CFR 70.5(a)(2); 71.5(a)(2). 

Likewise, the existing title V regulations provide sufficient transition for the third 

category of issues, where a source has additional GHG-related applicable requirements (such as 

the terms of a PSD permit) that must be incorporated into its existing title V permit. Where a 

source is required to obtain a PSD permit, the source must apply for a title V permit or permit 

revision within 12 months of commencing operation or on or before such earlier date as the 

permitting authority may establish (or prior to commencing operation if an existing title V permit 

would prohibit the construction or change in operation). See 40 CFR 70.5(a)(1)(ii); 

71.5(a)(1)(ii); see also sections 70.7(d) and (e); 71.7(d) and (e) (permit modifications). In 

addition, where a source becomes subject to additional applicable requirements, the permitting 

authority is required to reopen the permit to add those applicable requirements if the permit term 

has three or more years remaining and the applicable requirements will be in effect prior to the 

date the permit is due to expire. See 40 CFR 70.7(f)(1)(i); 71.7(f)(1)(i). 

Finally, EPA notes that the existing title V regulations require sources to furnish 

permitting authorities, within a reasonable time, any information the permitting authority may

request in writing to determine whether cause exists for modifying, revoking, and reissuing, or 

terminating the permit, and for other reasons, and further provide that permitting authorities shall 

reopen and revise permits if EPA or the permitting authority determine that the permit must be 

revised or revoked to assure compliance with applicable requirements. See sections 

70.6(a)(6)(v);71.6(a)(6)(v) and sections 70.7(f)(1)(iv); 71.7(f)(1)(iv).

Thus, EPA believes that the existing title V regulations provide an adequate regulatory

framework for managing the transition to incorporating GHG requirements in title V permits and 

additional specific exemptions or transition rules for title V are not currently warranted.
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8.2.2 Requests for Delays in Implementation

Comment:

Several commenters assert that EPA has discretion to delay the implementation of GHG 

permitting as described in the proposal in various ways using various mechanisms under the 

“absurd results” and “administrative necessity” doctrines. Examples of the types of comments 

received include the following:

 If EPA has the legal authority to defer regulation for sources emitting equal to or less 

than 25,000 tpy of GHGs, then by implication, EPA also would have the authority to 

exempt sources above 25,000 tpy of GHG emissions, if it is necessary to do so to avoid 

“absurd results” (4771, 4863, 5305, 5922) and “administrative infeasibility.” (4771, 

5922)

 EPA should delay promulgation of the final automotive emission CO2 rule, now 

scheduled for March 2010, to ensure that EPA’s proposed BACT guidance is available 

for public comment, and that states are in position to implement PSD and BACT reviews 

pursuant to EPA’s final guidance. In the mean time, the companion CAFE rule that will 

be issued by NHTSA in March 2010 will require equivalent CO2 emission limits on new 

automobiles as the final automotive emission CO2 rule. (5342)

o EPA can finalize just the CAFE standards to allow time to formulate an efficient 

approach to stationary source regulation without sacrificing expected light-duty

vehicle efficiency improvements. (5714) 

o EPA should delay promulgation of the GHG emission standards portion of the Motor 

Vehicle GHG rule until mitigating measures are lawfully in place. There is little 

environmental benefit from regulating GHGs under this rule and the fact that the 

timing of the Motor Vehicle GHG Rule is discretionary means that the PSD Tailoring 

Rule cannot be justified under the “absurd results” or “administrative necessity” 

doctrine. (4870) 

 EPA has an obligation to respond to the remand from Massachusetts v. EPA9, but EPA 

retains significant discretion on taking action concerning regulation of GHGs under the 

CAA (4771, 5131, 5183, 5300, 5343, 6414, 7131, 8283) and regarding timing of rules 

based on this remand (4870, 5318, 6414, 8283). Two commenters add that the Court of 

Appeals for the District of Columbia (“D.C. Circuit”) has already denied a petition to 

compel EPA action in response to Massachusetts v. EPA10 (5278, 5140). For that 

reason:

o EPA has clear legal authority to defer promulgation of section 202 GHG emission 

standards and thereby avoid the need for the PSD Tailoring Rule altogether, even now 

that the Agency has proceeded to finalize the endangerment and cause or contribute 

findings under CAA section 202 (4870). One commenter (5318) adds that EPA needs 

to conduct further evaluation of the numerous legal questions surrounding the 

Tailoring Rule and evaluate the impact on state and local permitting authorities in 

order to insure that the Unfunded Mandates Reform Act (UMRA) of 2005 is not 

violated.

 

9

See 549 U.S. 497, 533 (2007).

10 See Commonwealth of Mass. v EPA, No. 03-1361 (D.C. Cir. Jun. 26, 2008)
194

o EPA is well-justified in deferring action on a CAA GHG regulatory program to 

provide a reasonable period of time for EPA, states, and regulated entities to prepare 

for such a program, given the enormous difficulties of regulating GHGs under the 

CAA (5131), and to ensure that its regulatory program in fact will not create more 

problems than it solves (5343). One commenter adds that EPA should take the time 

to gather adequate public input on this plan and carefully examine all of the 

consequences of this action (7131).

o EPA should simply defer regulating GHG emissions under the PSD and title V 

programs to allow Congress the time and opportunity to develop a GHG regulatory

mechanism outside the CAA. Congress never contemplated, and certainly never 

intended, that GHG emissions be regulated under the CAA. (5300)

Various commenters state that a delay is necessary to evaluate legal questions and to 

accommodate inevitable legal challenges because the court system needs to test the legality of 

the Tailoring Rule (5184, 5504, 5524, 5606, 5785, 8015) and the endangerment finding, and as 

such, EPA should consider suspending implementation of this proposed rule (4555).

Several commenters believe that a delay is also necessary to give everyone time to 

prepare for the new GHGs requirements because: 

 EPA has not given the states sufficient time to revise their SIPs for GHG permitting 

(2504, 3278, 3858, 3916, 3918, 4019, 4238, 4239, 4515, 4519, 4521, 4630, 4694, 4691, 

4860, 4864, 4866, 4871, 4989, 5061, 5063, 5073, 5081, 5084, 5142, 5304, 5314, 5338, 

5339, 5343, 5443, 5528, 6679, 7296, 7935, 8747, 16411). 

 EPA must delay the rule at least for more than six months (2504, 3278, 3918, 4019, 4238, 

4239, 4860, 4864, 4866, 4871, 4989, 5061, 5081, 5084, 5314, 5339, 5443, 5528, 6679, 

6681, 7296, 7935) until more programmatic systems have been developed (4555, 5143) 

and to give states sufficient time to: (1) revise their regulations (3307, 4515, 4524, 4691, 

5134, 5711, 16411), (2) contribute to the development of BACT (5342) or any other 

guidance (4863, 5276, 5305), (3) train personnel about the new PSD and BACT 

requirements (4515, 4691, 5342), (4) prepare for the massive influx in permit requests 

(4863, 5184, 5305, 5504, 5606, 5785, 8015), and (5) allow for an orderly transition and 

avoid economic disruption (4749, 5276, 5301, 16411). 

 EPA must allow for enough time to resolve all implementation issues. (3858, 5143) 

 A deferral of 4-5 years is necessary to resolve implementation issues. (16411)

 It can take up to 2 years to change state rules, hire, and train new people (4154, 4519, 

4521, 5061, 5135, 5443, 5711, 7296) and SIP approval of a state rule takes between 12 to 

20 months. (3858) 

 EPA’s suggestion to use emergency rulemaking procedures is unworkable because there

must be an imminent threat to public health, safety, or the environment (4521), 

adjustments to thresholds and fees under this rule do not rise to that threat level, and such 

rules can only stay in place for 90 days and can be renewed only once. (4521) 

 Sources will need sufficient time to collect CO2 emissions data for title V renewal 

applications that may be due shortly after this rule takes effect. (3757, 3968) 

 The lack of BACT guidance remains a massive obstacle to successful implementation of 

this rule no matter what applicability thresholds are adopted. (3282)
195

Thus, concerning timing, some of these commenters recommend that:

 EPA should allow states 12 months before this rule applies to major PSD sources. (4863, 

5228, 5305)

 EPA should allow for a 1- (5314) to 2-year (4515/4691) extension of the implementation 

of these requirements, starting from the date that the vehicle GHG standards become 

effective. (4515, 4691, 5314)

 EPA should extend the applicability date for both programs to no sooner than 1 year after 

the effective date of any rule making GHGs a regulated NSR pollutant. (4767, 4800)

 EPA should phase-in the title V program over 5 years. (4767, 4800)

 EPA should delay applicability for GHGs other than CO2 for at least another year from 

when the vehicle GHG standards become effective to allow EPA and the states to further 

understand the workload and title V applicability to pollutants with high GWP. (5134)

 EPA should wait until the GHG Mandatory Reporting Rule data is available in order to 

perform a more thorough evaluation of the impacted universe (4903, 5339) and to 

minimize the burden on firms seeking permits (4513).

 EPA should allow the implementation of this rule to begin with certification of MY 2012 

vehicles. (3918, 4019, 4238, 4864, 4866, 5057, 5084, 6681), providing 15 months for 

states to take the necessary actions to implement the rule. 

 EPA should postpone any actions that may trigger PSD and title V until it has conducted 

a thorough assessment of the workability and defensibility of the proposed streamlining 

techniques (5317) or has developed an effective means of streamlining implementation 

(4862, 4903, 5142, 5183, 5773, 16411). For example, EPA stated in the preamble of the 

Tailoring Rule that it would take 3 to 4 years to develop and implement the various 

potential techniques needed to “streamline” and reduce the burden of PSD and title V 

permitting (16411). 

 EPA must provide an implementation timeframe for the establishment of control 

technologies for reducing CO2 emissions. (5142)

 EPA should allow a 3- to 5-year phase-in of the Tailoring Rule to allow sources the time 

necessary to make emissions reductions and avoid PSD applicability. (3278) 

 At a minimum, a title V application for a major sources of GHG emissions (but a minor 

source of criteria and HAPs) should not be due any earlier than one year after the first 

substantive compliance date of any GHG requirement applicable to that source (e.g., 

NSPS). (4871)

 EPA clearly has not mapped out a process for implementation that will foster a climate of 

investment and regulatory certainty. It is not clear the control technology for BACT for 

GHG is commercially-viable, and the interrelation of other EPA regulations, such as the 

GHG Mandatory Reporting Rule, and companion provisions within the proposed 

Tailoring Rule, are unclear. (4862)

Other commenters request a delay in order to develop an adequate impact assessment:

 EPA needs to conduct an adequate impact evaluation (0331, 4018, 4123, 5145, 5318, 

5451, 5744, 5787, 5886, 7136, 8585, 15050), including the economic consequences 

(8272), and the burdens and unforeseen consequences of these rules (2831). 

 EPA needs to further evaluate the impact on state and local permitting authorities in order 

to insure that UMRA of 2005 is not violated. (5304, 5524)
196

 EPA should conduct a comprehensive analysis (including convening a SBAR panel) of 

the impacts of this rule (5088, 5771, 5789, 5236) as well as the other GHG rules 

(including the endangerment finding) on all small businesses (4867).

 Members of Congress and agency officials should evaluate the effect that the proposed 

regulation will have on local environmental and economic initiatives (4768) because 

there are alternative approaches that would be less expensive, less burdensome, and more 

economically sound. 

Various commenters believe EPA should delay or stop implementation of GHG 

regulation until Congress completes their current debate on GHG regulation because:

 Curbing GHG pollution should be fully debated by Congress and, therefore, the 

rulemaking should be delayed until impact projections can be made (7128) or it is 

determined that it is the policy of the U.S. to regulate GHGs (5784).

 The CAA is not the appropriate tool for addressing the regulation of GHG emissions and 

that the Agency should delay long enough to allow Congress to take action. (4771, 5169, 

5573, 14710) 

 EPA should withdraw the proposed rule and publish a Federal Register notice 

announcing (what they feel is) more reasonable interpretation of the overall applicability

of the PSD program that excludes GHGs. (5140, 5278)

 EPA should abandon or defer the Tailoring Rule and GHG regulation under the CAA. 

(4990, 5056, 5074, 5085, 5142).

 Congress can use this delay to: (1) consider necessary and meaningful climate 

legislation/public policy (3307, 3607, 4021, 4903, 5088, 5141, 5258, 5525, 5713, 5803, 

8071), (2) alleviate the burden of this regulation on EPA (3607), (3) develop an 

implementation plan that can be agreed upon (5072). One commenter recommends that 

EPA should withdraw and re-propose the Tailoring Rule after Congress fully considers 

the policy and economic implications of the Tailoring Rule (5141). 

 EPA should withdraw the Tailoring Rule as it is conceived on a legally precarious theory 

and agriculture will inevitably be subject to CAA permitting. At the very least, EPA 

should delay action until Congress finishes work on GHG regulation. (5303)

 It should be Congress, not the Agency that develops such a “breathtaking” scope of 

regulation. (4861)

 Congress is already considering climate change legislation and will provide a more 

comprehensive response to climate change and GHG emissions. (5076, 5103)

 Congress can pass compromise climate legislation alleviating the burden on the EPA. 

(5803)

One commenter (7295) did not request a delay, but did state that changes this significant 

should, at a minimum, be debated by Congress and should not be decided unilaterally by EPA. 

Another commenter that did not specifically request a delay or hold on the rule opines that, if 

EPA implements the NSR and title V programs for GHGs, the applicability of these programs 

should only be considered interim and should “sunset” upon the commencement of a GHG 

program enacted by Congress (7076).

Several commenters believe that a delay is needed to allow time (1) for the American 

public to review the Tailoring Rule proposal (3741, 4123, 4209, 4631, 4953, 5184, 5454, 5767, 
197

5784, 7131), (2) for EPA to clarify why the Tailoring Rule is needed, and (3) for EPA to clearly 

and accurately explain its costs (5784).

Various commenters believe delays are necessary to give Congress, scientists, and the 

public time to evaluate the science behind these rulemakings. 

 Appropriate scientific and regulatory documentation of the environmental or climate 

change benefits is needed to support the Tailoring Rule and Congress needs to enact a 

law allowing what we proposed. (5787)

 EPA should consider scientific facts regarding GHGs on the health of our citizens and the 

effect on global warming. (4120)

 The recent allegations of bias and lack of peer-reviewed science on the part of the IPCC 

mean that all underlying data supporting the findings in the IPCC report should be 

available for review by EPA and the science community. (5607) 

Response:

Many of the changes we have made to the Tailoring Rule since proposal, discussed in this 

and other sections of the RTC and in the preamble for the final rule, address many of the specific 

concerns that prompted the commenters’ to request delays in implementation (e.g., we increased 

the GHG applicability threshold for step 2 from 25,000 to 100,000 tpy CO2e and made other 

changes with respect to GHG applicability, compared to proposal, which effectively limits the 

number of sources potentially subject to permitting during the early stages of implementation).

With respect to the endangerment/cause or contribute findings under CAA section 202(a), 

congressional intent is clear that, as we stated in making the findings and the Supreme Court held 

in Massachusetts v. EPA, we are precluded from considering factors other than the science based 

factors relevant to determining the health and welfare effects of the air pollution in question. 

Accordingly, EPA determined that under Massachusetts v. EPA, 549 U.S. 497 (2007) we were 

precluded from deferring or foregoing the findings due to concern over impacts on stationary

sources affected by PSD or title V requirements. See 74 FR at 66496, 66500-01 (“Taken as a 

whole, the Supreme Court’s decision clearly indicates that policy reasons do not justify the 

Administrator avoiding taking further action on the questions here.”); see also Massachusetts v. 

EPA, 549 U.S. at 533; see also 74 FR at 66515-16 (December 9, 2009). (The Administrator 

“must base her decision about endangerment on the science, and not on the policy considerations 

about the repercussions or impact of such a finding).11 Moreover, as EPA also noted, “EPA has 

the ability to fashion a reasonable and common-sense approach to address greenhouse gas 

emissions and climate change.” 74 FR at 66516.

Regarding the timing of the LDVR, Congress’s intent was that endangerment/cause or 

contribute findings under section 202(a) would in fact lead to control of the air pollutants from 

new motor vehicles and new motor vehicle engines contributing to the harm. The primary goal 

of section 202(a) is to achieve such reductions by requiring that EPA adopt emissions standards, 

and as a result, proceeding with the LDVR is consistent with that goal. In contrast, deferring the 

 

11 Note, that at least one petition for reconsideration on the endangerment/contribution findings raises the 

same arguments related to the timing of decisions and absurd results. As noted before, EPA is carefully evaluating 

all the pending petitions for reconsideration.
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LDVR and thereby delaying achievement of the public health and welfare benefits Congress 

expected and required under section 202(a) would run directly counter to what Congress 

intended under section 202(a) -- EPA issuing emissions standards to address the public health 

and welfare problems that were identified, not EPA refusing to do so.

Moreover, we have compelling reasons to proceed with the LDVR, in the manner that we 

did. As we stated in the LDVR, in response to similar comments that we were not obligated to 

conduct that rulemaking, or to conduct it at the time that we did: 

Some of the comments relating to the stationary source permitting issues 

suggested that EPA should defer setting GHG standards for new motor vehicles to 

avoid ... [adverse] stationary source permitting impacts. EPA is issuing these 

final GHG standards for light-duty vehicles as part of its efforts to expeditiously 

respond to the Supreme Court’s nearly three year old ruling in Massachusetts v. 

EPA, 549 U.S. 497 (2007). In that case, the Court held that greenhouse gases fit 

within the definition of air pollutant in the Clean Air Act, and that EPA is 

therefore compelled to respond to the rulemaking petition under section 202(a) by 

determining whether or not emissions from new motor vehicles cause or

contribute to air pollution which may reasonably be anticipated to endanger 

public health or welfare, or whether the science is too uncertain to make a 

reasoned decision. The Court further ruled that, in making these decisions, the 

EPA Administrator is required to follow the language of section 202(a) of the 

CAA. The Court stated that under section 202(a), "[i]f EPA makes [the 

endangerment and cause or contribute findings], the Clean Air Act requires the 

agency to regulate emissions of the deleterious pollutant." 549 U.S. at 534. As 

discussed above, EPA has made the two findings on contribution and 

endangerment. 74 FR 66496 (December 15, 2009). Thus, EPA is required to 

issue standards applicable to emissions of this air pollutant from new motor 

vehicles. 

The Court properly noted that EPA retained "significant latitude" as to the 

"timing ... and coordination of its regulations with those of other agencies" (id.). 

However it has now been nearly three years since the Court issued its opinion, 

and the time for delay has passed. In the absence of these final standards, there 

would be three separate federal and state regimes independently regulating lightduty vehicles to increase fuel economy and reduce GHG emissions: NHTSA’s 

CAFE standards, EPA’s GHG standards, and the GHG standards applicable in 

California and other states adopting the California standards. This joint EPANHTSA program will allow automakers to meet all of these requirements with a 

single national fleet because California has indicated that it will accept 

compliance with EPA’s GHG standards as compliance with California's GHG 

standards. 74 FR at 49460. California has not indicated that it would accept 

NHTSA’s CAFE standards by themselves. Without EPA’s vehicle GHG 

standards, the states will not offer the federal program as an alternative 

compliance option to automakers and the benefits of a harmonized national 

program will be lost. California and several other states have expressed strong 
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concern that, without comparable federal vehicle GHG standards, the states will 

not offer the federal program as an alternative compliance option to automakers. 

Letter dated February 23, 2010 from Commissioners of California, Maine, New 

Mexico, Oregon and Washington to Senators Harry Reid and Mitch McConnell 

(Docket EPA-HQ-OAR-2009-0472-11400). The automobile industry also 

strongly supports issuance of these rules to allow implementation of the national 

program and avoid “a myriad of problems for the auto industry in terms of 

product planning, vehicle distribution, adverse economic impacts and, most 

importantly, adverse consequences for their dealers and customers.” Letter dated 

March 17, 2010 from Alliance of Automobile Manufacturers to Senators Harry

Reid and Mitch McConnell, and Representatives Nancy Pelosi and John Boehner 

(Docket EPA-HQ-OAR-2009-0472-11368). Thus, without EPA’s GHG 

standards as part of a federal harmonized program, important GHG reductions as 

well as benefits to the automakers and to consumers would be lost.165 In 

addition, delaying the rule would impose significant burdens and uncertainty on 

automakers, who are already well into planning for production of MY 2012 

vehicles, relying on the ability to produce a single national fleet. Delaying the 

issuance of this final rule would very seriously disrupt the industry’s plans 

75 FR 25,402 cols. 1-3 (May 7, 2010) (footnote omitted).

With respect to both the endangerment/cause or contribute findings and the LDVR, it 

would require speculation and conjecture to defer – or, certainly, to forego altogether -- the 

findings or LDVR until EPA completed streamlining the PSD and title V requirements on 

grounds that doing so would allow full compliance in the future with all PSD and Title V 

statutory provisions. That is the gist of commenters argument – that EPA should defer or forego 

issuance of the findings and the LDVR to avoid causing an absurd result from implementation of 

the separate PSD and title V programs. Underlying this claim is the assumption that this would 

allow EPA to avoid the absurd results. As we discuss elsewhere in this rulemaking, there is no 

basis at this point to determine that streamlining will ultimately allow full compliance with the 

PSD and title V requirements. Rather, it is possible that EPA may conclude that none of the 

available streamlining techniques will allow all GHG sources at the statutory thresholds to 

comply with PSD and title V requirements in a manner that does not impose undue costs on the 

sources or undue administrative burdens on the permitting authorities. Under these 

circumstances, EPA may then permanently exclude GHG source categories from PSD or title V 

applicability under the absurd results doctrine. Moreover, it may well take many years before 

EPA is in a position to come to a conclusion about the extent to which streamlining will be 

effective and therefore be able to come to a conclusion as to whether any source categories 

should be permanently excluded from PSD or title V applicability. In our rulemaking today, we 

describe what actions we expect to take in the first six years after PSD and title V are triggered 

for GHG sources, and we may well be in a situation in which we continue to evaluate 

streamlining measures and PSD and title V applicability to GHG sources after this six-year 

period. 

Accordingly, deferring the endangerment/cause or contribute findings and LDVR until 

such time that PSD and title V streamlining would allow full implementation of these programs 
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at the statutory limits would serve only to delay the benefits of the LDVR, as well as the benefits 

that come from phasing in implementation of the PSD program to cover larger sources first. It 

would rely on an assumption that is unfounded at this point, that is, that such full compliance 

will be required at some point in the future. Delaying the emissions benefits of the LDVR and 

the related emissions benefits from partial implementation of the PSD program fails to 

implement Congress’ intent that the endangerment/cause or contribute findings “shall” lead to 

emissions standards for new motor vehicles contributing to the endangerment, and related 

emissions controls for the same air pollutant under the PSD program. EPA need not determine at 

this time what approach would be appropriate if there was a determination that full compliance 

with PSD and Title V would in fact occur at some point in the future. In this case, absent such a 

determination, it would be improper to rely on speculation of such a future possibility as a basis 

under section 202(a) to defer or forego issuance of the LDVR on the grounds that EPA should 

defer or forego the LDVR to avoid causing an absurd result. Likewise there is no basis to defer 

proceeding at this time with the streamlining of the PSD and title V programs.

With respect to the PSD and title V applicability requirements, as we discuss elsewhere, 

we believe that Congress expressed a clear intent to apply PSD and title V to GHG sources and 

that the phase-in approach incorporated in the Tailoring Rule is fully appropriate. Proceeding 

now with the endangerment/contribution findings and LDVR, even if phasing-in of the PSD and 

title V programs is required, is consistent with our interpretation of the PSD and title V 

applicability requirements. Delaying the endangerment/contribution findings or LDVR, and 

thereby delaying the triggering of PSD and title V requirements for GHG sources, would lead to 

the loss of a practicable opportunity to implement the PSD and title V requirements in important 

part, and thereby lead to the loss of important benefits. As discussed elsewhere, promulgating 

the LDVR and applying the PSD and title V requirements to the largest GHG sources, as we do 

in this Tailoring Rule, is practicable because the sources that would be affected by the initial 

implementation steps we promulgate in this rule are able to bear the costs and the permitting 

authorities are able to bear the associated administrative burdens. Promulgating the LDVR now 

provides important advantages because the sources that would be affected by the initial steps are 

responsible for most of the GHG emissions from stationary sources. 

It should also be noted that as discussed elsewhere in this rulemaking, our ability to 

develop appropriate streamlining techniques for PSD and title V requirements is best done within 

the context of actual implementation of the permitting programs, and not in isolation of them. 

That is, because the great majority of GHG sources have not been subject to PSD and title V 

requirements, we will need to rely on the early experience in implementing the permitting 

requirements for the very large sources that initially will be subject to those requirements in 

order to develop streamlining techniques for smaller sources. It is the real world experience 

gained from this initial phase that will allow EPA to develop any further modifications that 

might be necessary. This would not and could not occur if the LDVR were delayed indefinitely 

or permanently, so that PSD and title V requirements were not triggered. It is unrealistic to 

expect that delaying action until a future Tailoring Rule could resolve all of the problems 

identified in this rulemaking, absent any real world implementation experience. 

At its core, commenters’ argument is that EPA should delay (if not forego altogether) 

doing anything to address GHG emissions and the problems they cause until it can do so in a 
201

way that does not cause any implementation challenges, even if that delay results in continued 

endangerment to public health and welfare. EPA does not take such a myopic view of its duties 

and responsibilities under the CAA. Congress wrote the CAA to, among other things, promote 

the public health and welfare and the productive capacity of the population. CAA section 

101(b)(1). EPA’s path forward does just this. Thus, proceeding with the endangerment/cause or 

contribute findings, the LDVR, and with PSD and title V through the phase-in approach of the 

Tailoring Rule maximizes the ability of EPA to achieve the Congressional goals underlying 

sections 202(a) and the PSD and title V provisions, and the overarching CAA goal of protecting 

public health and welfare. Congress called for EPA (1) to determine whether emissions from 

new motor vehicles contribute to air pollution that endangers, (2) if that the determination is 

affirmative, to issue emissions standards for new motor vehicles to address the endangerment, 

and (3) to implement the PSD and title V program to address similar emissions in their 

permitting program as another tool to address the air pollutant at issue. Delaying both the LDVR 

and PSD/title V implementation, as commenters have called for, would run directly counter to 

these Congressional expectations. Commenters’ calls for deferral or foregoing of the findings or 

LDVR are generally phrased in a conclusory fashion, and do not demonstrate how EPA could 

take the required CAA actions concerning GHGs while remaining within the requirements of 

each of the various CAA provisions, and achieving the overall goals of the CAA. As such the 

comments do not provide a valid basis for the deferral of agency action they suggest. 

Comment:

Some commenters contend EPA has the discretion to choose a date besides the “effective 

date” of the rule as the date where a pollutant becomes “subject to regulation” or on which 

compliance requirements would apply (5088, 5124). This date can be the “first compliance date” 

instead of the “effective date” of the rule because: (1) neither the statute, nor its accompanying 

regulations, mandate the specific trigger date(s) and the long-held judicial doctrines of absurd 

results and administrative necessity support even agency action that would deviate from statutory

language, if such action is necessary to avoid results contrary to Congressional intent or due to 

administrative necessity (4298), (2) it is reasonable for EPA to interpret the timing of “subject to 

regulation” (based on section 165(a)(4) of the CAA (5143, 5147)) to start at the time emission 

control requirements are actually applied to a regulated entity (4862, 5058, 5110, 5111, 5134, 

5181, 5236, 5390, 5922) and (3) the complexity of adapting the existing permitting programs to 

GHGs justifies this definition (4693, 4867, 5180). For these reasons, some commenters have 

different recommendations on what the “first compliance date” should be for regulating GHGs 

under the PSD and title V programs. They suggest:

 January 2, 2011 (the first date on which a 2012 model year vehicle can be produced) 

because only after the “first substantive compliance date” would the new standard be 

enforceable in a manner that “actually controls” and reduces emissions of GHGs (4298, 

5180). One commenter adds that no automobile will be subject to control before January

2, 2001, and compliance certification will not be needed until March 2013 for the 2012 

MY. (5111) 

 October 1, 2011 (the start date of the first model year to which the rules apply) because, 

if EPA does go ahead with the LDVR (which most of these commenters do not support), 

EPA should recognize that PSD and title V would not be triggered until the LDVR “takes 
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effect.” (4122, 4318, 4522, 4523, 4952, 4992, 5038, 5058, 5080, 5089, 5114, 5128, 

5317, 5327, 5342, 5601, 5741, 5922, 6459, 8301)

 No specific date, but they say that "actual control" of GHGs under the section 202 rule 

does not occur until: (1) such time as model year 2012 vehicles are certified (4693, 

4867), (2) the date when manufacturer fleets must comply with the attribute-based 

standard created by the regulation for the control of CO2 (5134), or (3) the point in time 

at which compliance with other MY 2012 GHG standards is considered to occur. (4862, 

5110, 5134, 5181, 5236, 5390) 

Response:

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 the preamble of this final rule 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 and title V permitting programs. The Interpretive 

Memo established that a pollutant is “subject to regulation” only if it is subject to either a 

provision in the CAA or regulation adopted by EPA under the CAA that requires actual control 

of emissions of that pollutant (referred to as the “actual control interpretation”). On February 17, 

2009, EPA granted a petition for reconsideration on the Interpretive Memo, and announced its 

intent to conduct a rulemaking to allow for public comment on the issues raised in the 

memorandum and on related issues. EPA also clarified that the Interpretive Memo would remain 

in effect pending reconsideration.

On March 29, 2010, EPA signed a notice conveying its decision to continue applying 

(with one limited refinement) the Interpretive Memo’s interpretation of “subject to regulation” 

(“Interpretation of Regulations that Determine Pollutants Covered by Clean Air Act Permitting 

Programs“). See 75 FR 17004. EPA concluded that the “actual control interpretation” is the 

most appropriate interpretation to apply given the policy implications. However, we refined our 

interpretation in one respect: we 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, we 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 MY 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 MY 2012 and will not occur before January 2, 2011. We also reiterated EPA’s 

interpretation that the 100 tpy major source threshold for title V is triggered only by pollutants 

“subject to regulation” under the Act, and we defined and applied that term for title V purposes 

in the same way that we did for PSD purposes. That is, we stated that a pollutant is “subject to 

regulation” if it is subject to a CAA requirement establishing “actual control of emissions;” that a 

pollutant is considered “subject to regulation” for title V purposes when such a requirement 
203

“takes effect”; and, based on the anticipated promulgation of the LDVR, that the GHG 

requirements of the vehicle rule would take effect on January 2, 2011.

On April 1, 2010, we finalized the LDVR as anticipated, confirming that manufacturer 

certification can occur no earlier than January 2, 2011. Thus, under the terms of the final notice 

for the Interpretive Memo, GHGs become subject to regulation on that date, and PSD and title V 

program requirements will also begin to apply upon that date.

8.3 Requests for Specific Exemptions/Deferrals from Applicability

Although we did not propose any categorical exemptions, many commenters request 

exemptions from major source and major modification applicability determinations under title V 

and PSD for certain types of GHG-emitting sources or certain types of GHG emissions. 

8.3.1 Source Categories

Comment:

Many commenters request complete and permanent exemptions from the applicability or 

other requirements of the permitting rules with respect to GHG emissions as set forth in the 

proposal with respect to a wide variety of sources, source categories, and types of emissions.

Requests for exemptions for small sources, such as farms, homes, and other residential or 

commercial buildings:

 Smaller sources such as residential homes (4522), commercial buildings (4522), retail 

stores (4522), small space heaters (4522), and pool houses (4522) should be exempt from 

GHG permitting. Another commenter believes that sources such as agricultural, 

residential, and small businesses (as defined by the SBA) should be exempted from this 

rule during the first 5-7 years to allow EPA and permitting authorities time to gain 

experience with the program (5367). In addition, small businesses and service providers 

must be provided with education, resources, and tools to help small business owners 

understand whether and how they will be impacted by the rule and how they can report 

and comply (5367).

 Four commenters (3953, 4572, 5168, 5743) state that EPA anticipates at some future date 

to require the “absurd results” of having entities emitting more than 100 or 250 tpy of 

GHG to comply with PSD and title V permitting requirements. Thus, under the Tailoring 

Rule, it presumably is not a question of if permitting will be applied to farms, ranches and 

other small entities, but a question of when such requirements will be applied. The 

distinction between exemption and deferral for such entities becomes important when 

considering that PSD is a pre-construction program because exempt entities can begin 

building, but deferred entities may not be on as solid legal ground. Thus, small entities 

like farms and ranches will not escape PSD or title V requirements, even with the 

Tailoring Rule. 

The semiconductor industry should be exempt (5141, 5143), including solar and LED 

(8640); or at least defer action on the semiconductor industry pending further study of 

alternatives for this industry (8460) because:
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 PSD is ill-suited to regulate GHG from the semiconductor industry. (8640) 

 These sources have a small contribution to the total GHG inventory, comprising only 0.1 

percent of the total U.S. inventory of GHG. (5141, 5143, 8640)

 The industry is making substantial efforts to reduce GHG emissions under a partnership 

with EPA. (5143)

 Significant competitiveness issues for this industry to be permitted (5141, 5143, 8640). It 

is not realistic for this industry to be subject to PSD permitting considering the substantial 

lead time needed to conduct monitoring and prepare an application (8640).

 The high GWP factors for the GHGs emitted by this industry will burden them with 

permitting. (5141, 5143)

For the semiconductor industry, short of an outright exemption, one commenter (5141) 

urges EPA to adopt other approaches to minimize burdens. At a minimum, such approaches 

should include a deferral until streamlining mechanisms become available, or a separate 

regulatory regime for the high GWP emissions, and different thresholds, especially for PFCs, 

which may trigger permitting at low volumes.

Energy-intensive trade-exposed (EITE) industries, industries that consume a great deal of 

energy and that are subject to intense international competitiveness should be exempted pending 

further analysis of the impacts on those industries, and pending international agreements 

covering industrial GHG emissions (4771, 5169, 5737). If not exempted, regulation of the 

manufacturing/industrial sector, or at least the EITE producers should be delayed until the 

“second phase” of regulation, after 6 years (5737). EPA has not carefully considered the 

environmental and economic consequences of this action because if we had, we would have 

exempted them for several reasons, including that other countries typically exempt similar 

sources from GHG cap and trade programs because the industries are making significant energy

efficiency improvements absent GHG regulation, and because permitting such sources may

cause many facilities to move to countries that have less regulation or no regulation for GHGs. 

Regulation of the glass manufacturing industry will not achieve CO2 emission reductions 

for the foreseeable future. Process emissions account for 20-30 percent of emissions, but there 

are no substitute raw materials to reduce emissions. Glass manufacturers already use low-carbon 

fuels and recycle scrap glass to the extent possible. (4771, 5169) In addition, glass products 

(e.g., windows and windshields) are often used to meet specified energy efficiency standards, 

and are used in solar cells. (4771)

The PSD program should exclude calcination emissions to encourage energy efficiency

projects (5133). It is pointless to subject process emissions to the PSD program because it is 

already known that BACT for calcination emissions is no additional controls and fuel costs alone 

are sufficient to ensure that new and modified kilns will utilize the most energy efficient designs 

that are economically and technologically available. In addition, because less than 5 percent of 

the U.S.’s GHG emissions are from industrial process emissions, exclusion of calcination 

emissions from the PSD program will not have a material effect on air quality or global 

warming.
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Commenter 4112 requests that EPA exclude from the PSD significance analysis those 

GHG emissions resulting from incidental combustion where the process creates heat and the 

emissions are de minimis. The commenter states that their operations include carbon activation 

and reactivation processes that are conducted in heated units where the primary fuel is natural 

gas and the carbon being processed, or in the case of regeneration, a combination of natural gas 

and the adsorbates on the spent carbon. In the activation process it is necessary to burn some of 

the carbon to activate it. The fact that the process creates heat that is used in the activation is not

controllable from a GHG reduction perspective.

Commenter 4112 requests that EPA exclude process-based emissions similar to the GHG 

Mandatory Reporting Rule. The GHG Mandatory Reporting Rule does not require sources 

within the general stationary fuel combustion source category to monitor and report processbased emissions because EPA recognized that such process emissions are negligible. See

40 CFR 98, subpart C.

 

Natural respiration from poultry should be excluded from GHG regulation applicability

determinations because: (1) the U.S. agricultural sector was responsible for less than 6 percent of 

total U.S.GHG emissions and less than a tenth of that 6 percent (7.6 percent) was attributable to 

poultry production, (2) approximately 90-93 percent of GHG emissions from poultry farms are 

attributable to natural bird respiration or breathing (only 7-10 percent is associated with poultry

litter) and the IPCC itself has excluded natural respirations from consideration in its 

methodology for estimating GHG emissions (5245).

EPA should clarify how it will address GHG emissions from the solid waste management 

sector, such as fugitive emissions, biogenic emissions, and "common control” (5391). EPA 

should be consistent with NSPS applicability determinations that exclude landfills that closed 

prior to November 8, 1987 (4951). The 25,000-tpy threshold will cause many old closed 

landfills to be brought into this rule, while the GHG Mandatory Reporting Rule exempts landfills 

that were closed prior to 1980 (4951).

Commenter 8461 inquires whether EPA is planning on exemptions for GHGs used or 

emitted from military, warfare, and security operations.

Small electric generating units should not become subject to PSD or title V (4122, 4318, 

4523, 4992, 5080, 5038, 5089, 5114, 5128, 5257, 5317, 5327, 5601, 5741, 5788, 6459, 8301). 

EPA did not seriously consider the impacts on small entities that emit above the 25,000-tpy

threshold, which may include, among many others, small municipal electric utilities, small rural 

electric cooperative generators, automobile service centers, and small diesel generators in rural 

or remote areas. These smaller facilities have more in common with commercial establishments 

EPA proposes defer over the long term, also citing SBA concerns over small entities that emit 

more than 25,000 tpy of CO2. 

Emergency generators should be exempt or EPA should increase the applicability

thresholds sufficiently to ensure that they do not become subject to the GHG requirements 

because:
206

 Some generators may feel the need to accept a limit on hours of operation to avoid PSD 

or title V requirements, and that could impair communities’ ability to obtain a reliable 

supply of electricity in emergency situations. (4122, 4318, 4523, 4749, 4770, 4992, 

5080, 5038, 5089, 5114, 5128, 5257, 5317, 5327, 5601, 5741, 6459, 8301)

 Emissions from these emergency generation units are truly negligible including those 

generating units that meet the “black start” definition except where those units run more 

than 1,000 hours. (4122, 4318, 4523, 4992, 5038, 5052, 5080, 5089, 5114, 5128, 5257, 

5327, 5601, 5741, 6459, 8301)

 Becoming subject to PSD and BACT requirements could jeopardize their ability to meet 

the Nuclear Regulatory Commission (NRC) Reliability and Availability requirements, 

which would place nuclear power plants at risk of not being able to perform in 

emergency situations and thus not complying with their NRC-required Emergency and 

Security Plans. (5788) 

Research and development facilities, including national labs involved in defense and 

homeland security should be exempt from the GHG requirements, especially minor GHG 

emissions from research activities, to avoid confusion with EPA’s GHG Mandatory Reporting 

Rule. (8546)

The EPA should defer regulation of SF6 in the transmission of electricity until the second 

phase of the PSD permit program because there are no known SF6 controls and SF6 is used to 

prevent arcing and death. If SF6 is regulated, it should be controlled through BMPs – possession 

stewardship and good tank recycling practices for SF6 delivery, use, and return of tanks. (5052)

Response:

Although the proposal for the Tailoring Rule generally addressed how the statutory

requirements for major source applicability (100/250 thresholds) could be phased-in in ways that 

would offer relief to traditional and non-traditional sources, such as residences, farms, small 

business, and semiconductor manufacturers, it did so by establishing relatively high CO2e 

thresholds during the early implementation period and lowering the thresholds over time as 

streamlining mechanisms become available to reduce administrative burdens. We did not 

propose any permanent exemptions of any kind or temporary exemption based on source 

category. Also, note that the proposal discussed energy efficiency, process efficiency

improvements, recovery and beneficial use of process gases, and certain raw material and 

product changes in the context of short-term, low-cost means of achieving GHG emission 

reductions for small-scale stationary sources, but not in the context of exemptions.

 

As discussed previously, we are still considering whether permanent exemptions from the 

statute are justified for GHG permitting based on the “absurd results” legal doctrine. However, 

we do not have a sufficient basis to take final action at this time to promulgate any of the 

suggested exclusions on the grounds, described previously, suggested by the commenters. We 

did not propose any sort of permanent exclusion based on an interpretation of the statutory 

provisions of PSD or title V. Regardless of any arguments about the legality and advisability 

from a policy or economic standpoint of such exclusions, we would need to propose a PSD 

and/or title V specific legal and policy rationale that fits within the CAA, to specify details 
207

regarding our implementation approach, and to provide an opportunity for public comment 

before adopting any such exclusion. Therefore we are not doing so here. We note, however, that 

nothing in this rule forecloses the opportunities we may have to explore such options in the 

future. Therefore, we are taking no action in this rule on these various commenters’ requests for 

exclusions.

Some commenters also recommended that we create exclusions for their particular source 

categories for the specific purpose of avoiding overwhelming permitting burdens. We did solicit 

comment on alternative approaches to burden relief in the proposal. Some commenters 

suggested that the “administrative necessity” or “absurd results” rationale, each of which would 

be based on extraordinary administrative burdens, could be used to create at least temporary

exclusions that would allow more sources to escape permitting than what we proposed. 

However, commenters have not, to date, provided specific information about the costs and 

administrative burdens associated with permitting their source categories. In addition, we have 

finalized steps 1 and 2 using the threshold-based approach, which applies the various legal 

doctrines, in the context of the Chevron framework, in a way that effectively exempts all small 

sources during this part of the phase-in, while assuring the administrability of the permitting 

programs for the sources that remain subject to them. Furthermore, specifically with respect to 

high GWP gases as discussed previously, we are maintaining the statutory mass-based threshold, 

and this should address commenters’ concerns regarding the inclusion of those gases. Therefore, 

we reiterate that we are not finalizing any such exclusions in this rule and, as noted above, we are 

not taking final action in the commenters’ requests for exclusions. 

Concerning the comment that we did not take appropriate economic and environmental 

considerations into account for this rulemaking action, we disagree. The approach we finalize in 

this notice for steps 1 and 2 minimizes economic burdens by limiting permitting to the largest 

GHG emission sources. We further note that the PSD program as applied to the sources that are 

covered in steps 1 and 2 contains an express requirement to take energy, environmental, and 

economic considerations into account when making control technology (i.e., BACT) decisions 

and accordingly many of the concerns about control costs will be able to be accounted for in that 

analysis. Also, EPA, in collaboration with the SBA, conducted an outreach meeting with small

entities to brief them on the Tailoring Rule and its environmental and economic impacts and to 

seek advice and recommendations from them on the proposal. (See Docket No. EPA-HQ-OAR2009-0517-19130). 

Several commenters were concerned that the proposal defers, rather than exempts, 

permitting at the statutory thresholds (100/250 tpy), and thus, that small sources will eventually

be subject to permitting that those thresholds. In response, we do not have adequate information 

at this time to conclude that the statutory thresholds will ever be administrable for permitting 

GHG sources, so the commenters are premature in assuming that the statutory thresholds will 

apply to any particular source categories, or anyone, in the future. We explain in the preamble 

for the final rule how we will address smaller sources in a future rulemaking based on the 5-year 

study – we explain that in no event will sources below 50,000 tpy CO2e be subject to PSD or title 

V permitting, nor will PSD modification be triggered for emission increases below 50,000 tpy

CO2e, during the 6-year period ending April 30, 2016, which is the date by which we have 

committed to complete a rulemaking action based on the 5-year study to determine exemptions 
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or appropriate thresholds for GHG permitting after step 3. See section IV.B.2.b.5 of the 

preamble for the final rule.

We are not prepared at this time to exempt closed landfills, as one commenters suggested, 

for the same reasons we have not decided to exempt open landfills, or other source categories, at 

this time. Landfills continue to generate GHGs after they stop accepting new solid waste, and 

thus, they continue to be stationary sources potentially subject to permitting under the 

applicability provisions of title V. Also, the higher GHG thresholds for step 2 in the final rule –

we proposed 25,000 tpy CO2e and finalize 100,000 tpy CO2e – will potentially result in fewer 

landfills needing permits during step 2, including less potential for closed landfills to meet the 

applicability thresholds.

8.3.2 Biogenic Emissions and Combustion of Biomass

Several commenters request that EPA exempt emissions from biogenic activities or 

biomass combustion or oxidation activities from PSD or title V applicability determinations.

Comment:

Biogenic CO2 emissions should be exempted from the PSD program (2371, 4770, 8015, 

8283) or not be counted towards the applicability thresholds for PSD and title V permitting 

requirements (4122, 4241, 4318, 4523, 4667, 4749, 4951, 4992, 5038, 5070, 5075, 5080, 5089, 

5114, 5124, 5126, 5128, 5257, 5279, 5280, 5300, 5303, 5317, 5327, 5335, 5346, 5601, 5741, 

5742, 5922, 6459, 8301, 8283, 8395) because:

 GHG emissions that result from biogenic activities are "carbon neutral" (4122, 4241, 

4318, 4523, 4667, 4749, 4951, 4992, 5038, 5040, 5070, 5080, 5089, 5114, 5128, 5257, 

5280, 5300, 5301, 5303, 5317, 5327, 5601, 5741, 6459, 8015, 8283, 8301, 16411) or 

should be considered (5124) “carbon neutral” and thus outside the scope and intent of the 

PSD and title V programs. This approach:

o Has been widely accepted by scientists and regulators in both the U.S. and Europe 

(4667, 5070, 5303, 16411). Commenter 4667 cites various domestic and 

international policies. 

o Would create an important incentive for companies to try to use biomass-based fuels 

where possible, with the dual benefits of reducing atmospheric GHG loadings as 

compared to fossil-fuel combustion and increasing the use of renewable energy. 

(5335, 16411)

o Is clearly aligned with the agency's policy goals of promoting renewable/sustainable 

industrial operations with low-carbon or carbon neutral footprints and "biogenic 

activities" should encompass everything from fermentation processes to the 

combustion of renewable fuels, including ethanol manufacturing, biodiesel 

production, and other alternative energy production based on biomass feedstocks. 

(5124)

o Would not be arbitrary and capricious for EPA to do (5040), because EPA would not 

be imposing PSD on a source’s CO2 emissions if those emissions do not have the 

potential to degrade air quality (i.e., increase atmospheric CO2 concentrations). 

(5335, 5040)
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 EPA has acknowledged that the guidance on how to calculate a source’s GHG emissions 

in tpy CO2e and referenced directly by the proposed rule language, excludes CO2 emitted 

from the CO2 neutral biomass. (4667, 5303) 

 Only anthropogenic stationary emissions should count towards the major source or 

significance thresholds (4863, 5064, 5276, 5305, 6458). If EPA does not differentiate 

between biogenic and anthropogenic CO2 emissions, sources whose CO2 emissions are 

largely biogenic, such as landfills (e.g., landfills that generate less than 300 scfm of LFG) 

and publicly owned treatment works (POTWs), would easily trigger any threshold, 

regardless of the facility's size (4746, 5064, 5276, 5305, 6458). 

 If landfills must count CO2 in determining whether PSD or title V is triggered, it would 

discourage efforts by landfills to either flare CH4 or combust it to produce electricity –

projects that reduce GHG emissions overall. (5276)

 Several commenters add that: (1) this approach is consistent with both proposed federal 

and state regulations for reducing GHGs (they cite various examples) (4746, 4863), (2) in 

the RIA of the Tailoring Rule, EPA recognizes that CO2 emissions from landfills and the 

combustion of LFG do not constitute anthropogenic GHG emissions and these emissions 

were not counted in the study that formed the basis of the proposed rule (5276), (3) 

biogenic CO2 emissions are not included in national and international inventories (5276, 

6458), (4) the Clean Development Mechanism of the Kyoto Protocol does not include 

CO2 from biogenic sources as an emission (6458), (5) inclusion of biogenic emissions 

may adversely affect efforts to develop new renewable resources (4746), (6) it would be 

premature to regulate process CO2e emissions from wastewater treatment since they are 

not well understood (4746). 

 The inclusion of biogenic GHGs in the PSD program is contradictory to the objectives of 

climate change control and requiring additional title V permits and BACT measures for 

net GHG reducers such as waste-to-energy sources will discourage the expansion of 

renewable sources. The contribution of waste-to-energy facilities to GHG reductions 

should be recognized as it is in climate change legislation such as House Bill 2454 and 

Senate Bill 1733. (2371)

 Including biogenic emissions in the applicability determination would dramatically

increase the number of facilities subject to regulation (5742), especially for PSD in the 

forest products industry (4667, 8015) and will potentially undermine the biofuels and 

bioenergy industries, widely recognized as having a key role to play in a low carbon 

future (4667, 5742). In addition, combustion of biomass may be discouraged if shifting 

to renewable or low-carbon fuels (or installation of equipment necessary to burn such 

fuels) could be deemed to trigger PSD requirements (4122, 4318, 4523, 4749, 4992, 

5038, 5080, 5089, 5114, 5128, 5257, 5317, 5327, 5601, 5741, 6459, 8301). One 

commenter adds that fossil carbon and anthropogenic emissions of CH4 are the primary

drivers behind global increases in atmospheric CO2 concentrations and thus these 

emissions should be the focus of any GHG regulation. (5742)

 Emissions from yeast fermentation during bread making are carbon-neutral and should 

not be counted as industrial emissions for purposes of GHG regulation. (5303)

 Sugarcane is an annual crop and bagasse is a by-product of the sugarcane harvest. Thus, 

bagasse is a renewable biomass fuel and as a fuel, it is carbon-neutral. (5280)

 Biogenic CO2 should be exempt from permitting because there is a precedent under the 

PSD program for EPA to exclude a class of compounds that would otherwise be 
210

regulated (4667, 8283). For example, EPA has logically determined PSD applicability on 

a functional basis when: (1) EPA, by regulation excluded certain compounds, which are 

in fact "volatile" and "organic," from the definition of VOCs for purposes of applying the 

PSD regulations, including applicability thresholds, (2) faced with the fact that ambient 

air quality standards (and therefore attainment areas) are defined for ozone, whereas it is 

the emission of ozone precursors, especially VOCs that can cause nonattainment of the 

ozone NAAQS, EPA applied the major-source thresholds to VOC emissions rather than 

to ozone emissions. (8283) 

 The GHG Mandatory Reporting Regulation excludes biogenic emissions from basic 

threshold criteria for report applicability, except where they are captured and sold for 

commercial use. (4241, 4122, 4318, 4523, 4749, 4992, 5038, 5080, 5089, 5114, 5124, 

5128, 5257, 5280, 5317, 5327, 5346. 5601, 5741, 6459, 8301, 8395).

 Excluding these emissions is consistent with domestic and international standards (4122, 

4318, 4523, 4667, 4749, 4992, 5038, 5080, 5089, 5114, 5128, 5257, 5303, 5317, 5327, 

5335, 5601, 5741, 6459, 8301).

One commenter adds source owners should be allowed to consider net GHG emissions 

from biomass fuels when determining a facility's PTE for PSD/title V applicability purposes 

(5279). 

In addition, EPA could require the GWP of biomass CO2 emissions to be zero due to CO2

neutrality (4667). If biogenic CO2 emissions are not excluded or GWP considered zero then 

EPA should: (1) allow public comment on any revised “Inventory of U.S. Greenhouse Gas 

Emissions and Sinks,” since this guidance affects the calculation of these thresholds (5126) and 

(2) give CO2e credit against a source’s baseline CO2 emissions for those facilities that convert 

and use CH4 emissions from landfills as an energy source in the production of renewable fuels 

(5075). 

Furthermore, two commenters would like us to exempt renewable energy facilities: (1) 

that do not trigger the PSD thresholds for criteria pollutants (3918) to further align this concept 

with EPA's policy goals of promoting alternative/renewable energy (5124). Providing an 

exemption from GHG PSD would give industry more regulatory certainty under which to plan 

and execute projects, provide more stability to the market, and reduce industry's burden in 

meeting regulatory GHG obligations (5124).

Nevertheless, several commenters would like EPA to clarify in the final Tailoring Rule 

that biogenic CO2 emissions trigger the BACT statutory requirements (5311) or are not exempt 

from the Tailoring Rule (4860, 5519, 6673, 10376) because:

 There is scientific evidence refuting the notion that biomass combustion is categorically

carbon neutral (5311, 6673, 10376) and thus exempting biogenic CO2 emissions from 

BACT would violate the Act (5311). For example, the DOE reports that CO2 emissions 

from biomass burning were at least 7000 million tpy in 2002 and so EPA must regulate 

power plants that burn biomass (10376). In addition, the projected growth in CO2

emissions from biomass burning is at least 700 million tpy by 2020 (about 11 percent of 

total U.S. GHG emissions) (6673).
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 There is no valid scientific basis for differentiating CO2 emissions from biomass 

combustion from CO2 emissions from other forms of electric power production (6673). 

EPA’s exemption of biomass combustion CO2 from the GHG Mandatory Reporting Rule 

is based on an outdated and unsupportable “assumption” that this activity is “carbon 

neutral (4860, 6673).” The “carbon neutral” myth stems in part from a “critical 

accounting error” in the Kyoto protocols. This error has been incorporated into the 

structure of EPA’s GHG Mandatory Reporting Rule and wholly undermines efforts to 

curb GHG emissions from power production. In fact, it promotes biomass power 

production and makes climate change worse. For these reasons, the Tailoring Rule 

should not compound this error by exempting biogenic CO2 emissions form applicability

determinations. 

 The IPCC recommended that biomass burning be exempt because those emissions may

be double-counted in both the land-use category as well as the energy category (5519, 

10376). However, regulatory systems do not take into account land-use and thus 

biomass-burning emissions should not be exempt (5519, 10376). 

For these reasons a commenter recommends that:

 Facilities should be required to calculate emissions of biogenic CO2 in accordance with 

the GHG Mandatory Reporting Rule (5311). 

 EPA, either in regulations or in a guidance document, should develop a policy addressing 

when biomass may constitute a “clean fuel” within the meaning of BACT, since biomass 

may play an important role in combating climate change (5311).

Several other commenters simply asked for clarification:

 EPA should clarify whether biogenic CO2 is a GHG, provide a clear definition of 

biogenic CO2, and indicate how, if all, it is counted in CO2e determinations (4239, 4860, 

4864).

 EPA should clarify its treatment of emissions from the combustion of biomass (5338). 

Another asks if emissions from fermentation are included in the PSD and title V 

applicability determinations (3916)? 

Response:

The proposed Tailoring Rule did not address this issue of exemptions for biomass 

combustion or biogenic emissions. We are mindful of the role that biomass or biogenic fuels and 

feedstocks could play in reducing anthropogenic GHG emissions, and we do not dispute the 

commenters’ observations that many state, federal, and international rules and policies treat 

biogenic and fossil sources of CO2 emissions differently. 

Nevertheless, we have determined that our application of the “absurd results,” 

“administrative necessity,” and one-step-at-a-time legal rationales that support this rule, which 

are based on the overwhelming permitting burdens described previously, does not provide 

sufficient basis to exclude emissions of CO2 from biogenic sources in determining permitting 

applicability provisions at this time. This is because such an exclusion alone, while reducing 

burdens for some sources, would not address the overwhelming permitting burdens described 

above, and a threshold-based approach would still be needed. As noted above, we have not 
212

examined burdens with respect to specific categories and thus we have not analyzed the 

administrative burden of permitting projects that specifically involve biogenic CO2 emissions 

taking account of the threshold-based approach, nor did the commenters provide information to 

demonstrate that an overwhelming permitting burden would still exist, justifying a temporary

exclusion for biomass sources. 

At the same time, the decision not to provide this type of an exclusion at this time does 

not foreclose EPA’s ability to either (1) provide this type of an exclusion at a later time when we 

have additional information about overwhelming permitting burdens due to biomass sources, or 

(2) provide another type of exclusion or other treatment based on some other rationale. Although 

we do not take a final position here, we believe that some commenters’ observations about a 

different treatment of biomass combustion warrant further exploration as a possible rationale. 

Therefore, although we did not propose any sort of permanent exclusion from PSD or title V 

applicability based on lifecycle considerations of biogenic CO2, we plan to seek further comment 

on how we might address emissions of biogenic carbon dioxide under the PSD and title V 

programs through a future action, such as a separate ANPR. This action would seek comment on 

how to address biogenic carbon under PSD and title V, the legal and policy issues raised by 

options regarding implementation. We will provide an opportunity for public comment before 

adopting any final approach. 

We further note that, while we are not promulgating an applicability exclusion for 

biogenic emissions and biomass fuels or feedstocks, there is flexibility to apply the existing 

regulations and policies regarding BACT in ways that take into account their lifecycle effects on 

GHG concentrations. This topic has already been explored by the CAAAC workgroup on BACT 

issues related to GHGs that recently provided recommendations to EPA. These 

recommendations are located in the public docket for this rulemaking and at 

http://www.epa.gov/air/caaac/climate/2010_02_InterimPhaseIReport.pdf. While that group 

was unable to come to a consensus on how biomass-based emissions should be treated, it 

provided us with information that we will consider as we issue guidance on BACT. As 

previously discussed, we plan to issue BACT guidance later this year, but are not doing so as 

part of this rulemaking. Without prejudging the outcome of our process to seek comment 

whether and how we might address emissions of biogenic carbon under the PSD and title V 

programs through a future action, this issue warrants further exploration in the BACT context as 

well, and we plan to fully explore it and take action if appropriate. 

8.3.3 Fugitive Emissions 

Comment:

EPA has provided no clarity as to how fugitive emissions of GHGs are to be measured or 

considered in applicability threshold calculations (4106, 4122, 4317, 4318, 4523, 4770, 4992, 

5038, 5080, 5089, 5137, 5114, 5128, 5183, 5257, 5317, 5327, 5343, 5601, 5715, 5741, 6459, 

8301). Fugitive emissions present unique problems of measurement, quantification and control 

(5145, 5715). In addition, even though difficult to quantify, fugitive emissions of GHGs with 

large GWP may be significant in determining whether the applicability threshold has been met 

(4122, 4318, 4523, 4770, 4992, 5038, 5080, 5089, 5114, 5128, 5257, 5317, 5327, 5601, 5741, 
213

6459, 8301). For these reasons, some commenters suggest that EPA exclude fugitive emissions 

of GHGs for all sources (4298, 4903, 4951, 5052, 5111, 5224, 5715) or sources that have to do a 

PSD applicability determination (4122, 4318, 4523, 4770, 4992, 5038, 5080, 5089, 5114, 5128, 

5257, 5317, 5327, 5601, 5741, 6459, 8301) because:

 Excluding fugitive emissions would: (1) reduce the burden on regulators and regulated 

entities (4298, 5111, 5715), (2) have little, if any, environmental impact (4298, 5111), (3) 

serve the purpose of the Tailoring Rule (5715). If fugitive emissions are included in 

applicability determinations, the proposed GHG thresholds would be rendered 

meaningless (5715). In addition, EPA currently exempts a major source or a major 

modification form PSD if it would be major only for fugitive emissions, to the extent 

quantifiable, and if the stationary source or modification does not belong to any [of the 

listed] categories (5715).

 The source categories listed in 40 CFR 52.21(b)(1)(iii) and (i)(vii) and 40 CFR 70.2 

(definition of major source) (subsection (2)) may present a limited exception to this rule 

(4298, 5111). Since EPA has not undertaken rulemaking under section 302(j) for any

source category of fugitive GHG emissions, EPA should not count fugitive GHG 

emissions until there has been a rulemaking to determine the feasibility and advantages of 

doing so. (5111, 5224) 

 In the July 2008 ANPR, EPA acknowledges that fugitive emissions do not count toward 

determining if a source is a major source. (4106)

Concerning fugitive emissions, EPA should clarify:

 Whether, and in which cases, fugitive emissions of GHGs are to be included to determine 

PSD applicability for those categories of sources listed under 40 CFR 52.21(b)(1)(iii). 

(4122, 4318, 4523, 4770, 4992, 5080, 5038, 5089, 5114, 5128, 5257, 5317, 5327, 5601, 

5741, 6459, 8301)

 EPA should not consider fugitive emissions for non-listed source categories. (5343 

8545)

 The treatment of emissions from the combustion of fugitive emissions. In the absence of 

clarity, this state assumes that the existing guidance on fugitives applies to GHG 

emissions. (5338)

 Which GHG emission sources are covered in a facility’s PTE for GHG with regards to 

stack-level emissions versus fugitives and in terms of source categories and size. (4864)

Fugitive CH4 emissions should be exempted because: 

 Fugitive CH4 emissions pose a conflict with pending climate change legislation that 

provides for emission offsets from the reduction of CH4 from underground coal mining. 

Application of BACT requirements would eliminate this potentially large source of 

domestic emission offsets. (5342)

 Fugitives are difficult, and potentially impossible to account for. If EPA reconsiders the 

Fugitive Emissions Rule, coal mine fugitives may need to be counted in determining a 

significant emissions increase and, as EPA has determined in other rulemakings, CH4

emissions from post-mining operations cannot be accurately measured and would be 

similarly difficult to control. (5145)

 Until EPA identifies a standard measurement methodology for fugitive CH4 emissions 

(4691) it will be impossible to ensure that PSD permits for fugitive and vented CH4
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emissions are consistently enforced or based on accurate data. Commenters (4120, 4749, 

5301) add that this is especially true for emissions from Oil & Gas systems and that the 

GHG Mandatory Reporting Rule does not require measurement of such emissions 

because of the significant challenge in monitoring and measuring such emissions. If EPA 

rejects this recommendation and decides that fugitive and CH4 emissions should be 

considered in the initial phase of PSD for GHGs, commenter (4691) urges EPA to issue 

guidance for proper quantification of these emissions for purposes of determining 

applicability and establishing BACT, and that this guidance should be provided before 

the requirements take effect (4691).

Fugitive emissions from natural gas transmission, storage, and distribution should not 

count toward the PSD major source applicability threshold because they are not part of the 28 

listed PSD source categories (4120, 5711). Only combustion related CO2e emissions should be 

considered in the threshold determination (4120).

Fugitive emissions from landfills should be excluded from major source determinations 

(4863, 5276, 5305) because:

 EPA (in a 1994 memorandum) has previously made a determination that if a landfill Gas 

Collection and Control System (GCCS) could be reasonably designed to collect the 

landfill's gas emissions, then the emissions are not fugitive and should not be counted 

toward regulatory compliance, such as major source status. (5305) 

 Existing federal regulations for MSW landfills do not count fugitive emissions (i.e., CH4, 

non-CH4 organic compounds, and VOC) for applicability purposes and the GHG 

Tailoring Rule should do the same to maintain consistency. (5086)

However, one commenter (4951) opines that the Tailoring Rule appears to count fugitive 

emissions when determining applicability (with proposed thresholds which correspond to as little 

as 200 scfm of LFG), and adds that while this is consistent with the GHG Mandatory Reporting 

Rule, it is unclear how the Tailoring Rule would quantify these emissions because:

 The Landfill Gas Emission Model (LandGEM) that the GHG Mandatory Reporting Rule 

used to estimate landfills gas (LFG) generation has an EPA acknowledged error of 30 to 

400 percent and that this level of error is unacceptable when the model results are applied 

to possible PSD and title V applicability. The commenter adds that the error for closed 

landfills could be even higher (4951).

 MSW landfills are not included in the source categories where fugitive emissions must be 

counted and were not subject to an NSPS or NESHAPS as of August 7, 1980, and as 

such, fugitive emissions of regulated criteria pollutants from MSW landfills, which 

include NMOCs and VOCs from LFG, would not be counted toward PSD and title V 

applicability thresholds (4951).

Response:

In the proposal, EPA did not offer any specific guidance or discuss exemptions for 

fugitive emissions of GHGs. Commenters did not suggest that a fugitive exemption would 

address the overwhelming permitting burdens described previously, or that it was necessary to 
215

specifically tailor GHG applicability through the use of a fugitive emissions exclusion for 

categories that would otherwise be required to include them. 

We do agree with commenters who stated that we should clarify how to count fugitives in 

determining applicability under this rule. In response, we note that we are not taking final action 

with respect to commenters’ request, and we are not finalizing any special rules for fugitive 

emissions related to GHG. Thus, EPA's rules related to the treatment of fugitives would 

continue to apply to GHG, the same as they apply to other air pollutants. 

Despite multiply requests for implementation guidance, including guidance on 

measurement of fugitive GHG for various industries, we are not including such guidance in the 

final rule at this time. Such guidance is beyond the scope of this rulemaking, which concerns 

adopting GHG applicability thresholds that mitigate untenable administrative burdens that would 

apply at the statutory thresholds that apply absent this rulemaking, rather than about gathering 

detailed technical information on measurement techniques for particular source categories or 

finalizing other implementation guidance relevant to those source categories. The Mandatory

GHG reporting rules rule sought to establish measurement requirements applicable to many of 

these source categories, or may do so in the future (e.g., that rule is being revised to address 

GHG from underground mining and a few other source categories at this time) but that was never 

the primary intent of this rulemaking action. See section 8.4 of this RTC for more on emission 

calculation requests for guidance on implementation issues, including monitoring and emission 

calculation.

Regarding the comment that a section 302(j) rulemaking is required before fugitive 

emissions may be counted, we disagree. As we read section 302(j), once EPA has established by

rule that fugitive emissions are to be counted for a specific source category, nothing in section 

302(j) requires EPA to conduct new rulemaking to allow for the counting of additional pollutants 

from that category. We read section 302(j) as imposing an obligation to determine if fugitive 

emission generally should be counted from a source or source category and not requiring that 

EPA list both source categories and relevant pollutants. Indeed, our practice in listing categories 

has not been to limit the pollutants to which the listing applies. Therefore, we are applying our 

existing rules and policies for fugitive emissions for GHG as we would any other pollutant. 

8.3.4 Pollution Control Projects 

Comment:

Many commenters request exemptions or deferrals (temporary exemptions) from major 

source determinations for GHG emissions that would result in emissions reductions for GHGs or 

for other regulated air pollutants, including pollution control projects, energy efficiency projects, 

and generally, the installation of control devices or use of cleaner fuels: 

 EPA should not discourage installation of control devices that may be used to lower 

conventional pollutants even if collateral GHG emission increases result. (4122, 4318, 

4523, 4745, 4749, 4770, 4992, 5080, 5038, 5089, 5114, 5128, 5224, 5257, 5301, 5317, 

5327, 5601, 5741, 6459, 8301)
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 If EPA does not exempt or defer from major source determinations, projects that would 

result in emissions reduction for GHGs or other regulated air pollutants, such as pollution 

control projects, EPA may create an untenable situation of "control devices that require 

control devices" (5124)

 EPA should evaluate whether energy efficiency projects should trigger PSD permitting 

for GHGs. Some energy efficiency projects will benefit the environment by reducing 

overall GHG emissions, but still trigger PSD permitting for GHGs due to direct, unitlevel emissions. EPA can promote energy efficiency and reduce administrative 

permitting burdens by allowing permitting agencies to consider the overall GHG 

emissions impact of energy efficiency projects. This makes sense for because it makes 

no environmental difference where GHG emissions (or reductions) occur – whether at the 

same unit, the same facility or even in the same state. (5277)

 EPA should exempt projects from BACT (without imposing operational limits) that: (1) 

improve efficiency or thermal performance and deliver net emission reductions when 

measured on an output basis (e.g., production level or electricity generated), or (2)

control GHG or criteria pollutant emissions. A similar exemption for emission controls is 

provided under the NSPS regulations at 40 CFR 60.14(e)(5). If EPA declines to follow 

this approach, at a minimum, EPA should state that: (1) any increases in criteria 

pollutants from GHG control devices are presumed to be so minimal that it would not be 

cost effective to control them, and thus, additional controls to capture criteria pollutants 

are presumptively unnecessary, and (2) it is presumed that it would not be cost-effective 

to control any increase in GHG emissions resulting from criteria pollutant controls, and 

thus, additional controls to capture GHGs are presumptively unnecessary. (4298) 

Furthermore, if a project:

o Increases the efficiency or thermal performance of a unit or facility, such that the 

resulting intensity of all emissions is reduced on a pounds per gross megawatt hour or 

production basis, then that project should not trigger the “major modification” 

provisions of PSD. 

o Is specifically for the collection of a GHG, then a “control project exemption” should 

apply and exempt any ancillary emissions from the implementation of the control 

project from triggering PSD on the grounds that it provides a “net environmental 

benefit.” A carbon control exemption will also be necessary to encourage investment 

in carbon capture and sequestration projects at existing units. To the extent EPA 

determines that such exemptions cannot be provided under the existing CAA, the 

commenter urges EPA to encourage Congress to enact appropriate authorizing 

legislation. 

 EPA should defer GHG permitting for sources already subject to state climate programs, 

to offshore oil and gas development, and to clean fuel projects. EPA should provide 

special consideration for the energy intensive and trade exposed refining and chemical 

industries, as well as the onshore oil & gas production industry by developing alternative 

regulatory approaches in lieu of the PSD/title V GHG Tailoring Rule. (4106)

 Emissions from the combustion of tire-derived fuel (TDF) (or at least the natural rubber 

portion of TDF) should not be counted towards applicability because TDF is used in lieu 

of alternatives that emit higher levels of GHG emissions. TDF is primarily used in 

biomass boilers in order to stabilize the combustion process or in cement kilns, pulp and 
217

paper mill boilers and electric utility boilers in lieu of other traditional fuels, which are 

likely to emit more GHG emissions. (5922)

Response: 

The current PSD rules do not exclude pollution control or similar projects from being 

considered a physical change or change in the method of operation that would – if it resulted in a 

significant net emissions increase -- constitute a major modification, nor does case law suggest 

that we could adopt a permanent exclusion in the future.12 To the extent that the commenters 

seek an exclusion for pollution control or similar projects that relies solely on “absurd results” or 

“administrative necessity” for reasons similar to those described previously for other requested 

exclusions, we take no action on this request in this rulemaking. Although such an exclusion 

may have positive features, it would not address the overwhelming permitting burdens that 

justify the tailoring approach.

8.3.5 Indirect Emissions

Comment:

EPA should specifically state that indirect GHGs emissions, such as transportation or offsite electricity generation, are not evaluated as a part of the PSD major source/major 

modification process or for title V major source thresholds (5124, 16411). As with the existing 

PSD program, indirect emissions should be analyzed and addressed during the permitting 

process for projects related directly to these sources (5124). Lacking state preemption, states 

may include such emissions in their determinations (5124). The regulation of indirect GHG 

emission has not been considered in the context of BACT, offsets, etc., and consequently cannot 

be allowed unless and until EPA has done a thorough analysis of the consequences of this 

approach (5124). 

Response:

The CAA requires that PSD review includes a detailed air quality impact assessment to 

determine if there is a violation of a NAAQS or of a PSD increment, and this may involve 

secondary emissions (sometimes called “indirect emissions”) in limited cases, but the CAA does 

not require any secondary emissions to count for applicability purposes. See 40 CFR 52.21(k) 

and 52.21(b)(18). In the proposed Tailoring Rule, EPA explained that since there are no 

NAAQS or PSD increments for GHGs, ambient impact assessment would not be a requirement 

for GHG, and we have not changed this policy in the final rule.13 Also, the Act generally does 

not require mobile source emissions to count for PSD or title V applicability determinations and 

we have not revised any provisions that address such requirements as part of this rulemaking 

action.

 

12 On June 24, 2005, the United States Court of Appeals for the District of Columbia Circuit vacated the 

portions of the 2002 and 1992 NSR rules that pertained to PCP, among other provisions. In response to this Court 

action, on June 5, 2007, EPA removed these provisions from the NSR regulations. (See 72 FR 32526). These 

provisions were added as part of EPA’s NSR improvement rule that was issued on December 31, 2002.

13 See page 55298 of the October 27, 2009 proposed Tailoring Rule.
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8.4 PSD and Title V Permitting Implementation Issues and Questions

8.4.1 General Suggestions, Comments, or Questions

Comment:

Various commenters provide suggestions or comments regarding implementation of the 

Tailoring Rule. They state that:

 EPA’s methodology for determining GHG emissions in the Tailoring Rule does not take 

into account that not all fuel gas use is associated with combustion. The commenter has a 

proprietary carbon manufacturing process that scavenges carbon from flammable gases 

and incorporates the carbon into their product. This process is actually a form of carbon 

sequestration according to the commenter; however, the Tailoring Rule would incorrectly 

include all carbon that is incorporated in their product as CO2 emissions to the 

atmosphere. (4859)

 EPA should acknowledge (under the Tailoring Rule) the importance of lifecycle analysis 

in achieving GHG management objectives by encouraging and not discouraging the 

production of recycled and used fuel sources. Commenter makes some suggestions on 

how EPA could do that (e.g., by crediting re-refiners with the emissions reduced as a 

result of not burning the product as a fuel source, exempt recycling facilities). (5066)

 EPA should clarify that the definitions of “facility” under the GHG Mandatory Reporting 

Rule and the Tailoring Rule differ and the GHG Mandatory Reporting Rule definition 

should not be precedential for purposes of interpreting the scope of “stationary source” 

under PSD and title V. (5224)

 EPA should do a one source determination for school districts, residential and 

commercial buildings, and portable concrete, asphalt, and aggregate crushing plants. 

(3916)

 EPA should clarify that motor vehicle, nonroad engines, and nonroad vehicle emissions 

do not need to be accounted for in assessing major source status under PSD or title V. 

(5224)

 EPA should consider a waiver of penalties for first-time mistakes that are made in 

calculating a threshold. (4684)

 EPA implementation support should address source types or emission units that cut 

across sectors, e.g., boilers, process heaters, reciprocating engines, and combustion 

turbines by fuel type, rather than specific sectors or source categories. (4691) 

 EPA should create a website for the Tailoring Rule similar to the website for the GHG 

Mandatory Reporting Rule. (3916)

 EPA should promulgate a list of projects that it considers to be routine or non-routine 

(4866). One government agency (4867) states that EPA needs to explain more clearly 

how it will apply the GHG significance threshold to routine operational changes and 

clarify how PSD modifications could be triggered by such operational changes. 

 EPA should address what triggers PSD for utilities. (4866)

 EPA should make clear in the final rulemaking that PSD and title V are not subject to the 

“once in, always in” policy that has been applied to sources regulated under section 112 

of the CAA. (4749, 4515/4691, 3917)
219

 EPA should allow offset credits to be counted in determining the GHG emissions for 

purposes of the PSD and title V programs. Under this approach, new facilities would be 

able to obtain and submit offset credits to avoid triggering the PSD and title V 

applicability thresholds. In addition, existing facilities would be able to submit offset 

credits to avoid triggering the PSD significance level when undergoing a modification. 

(5340)

 EPA must answer the following questions about GHG BACT determination: (1) Will fuel 

switching be considered part of BACT, such as requiring a coal power plant to consider 

natural gas alternatives or co-firing?; (2) Will BACT determination include “redefining 

the source” such as evaluating Integrated Gasification Combined Cycle as an alternative 

to traditional coal power plants?; (3) How does one consider tradeoffs in pollutant 

controls, such as an SO2 scrubber reducing the efficiency of a coal power plant and thus 

requiring more CO2 emissions per unit of power produced?; and (4) What is an 

acceptable CO2 ambient air impact for PSD evaluation and how will one evaluate other 

impacts of CO2 as required by PSD rules. (5061)

 Before PSD applies to GHGs, EPA needs to address the unique characteristics of GHGs 

which, in some cases, will create a direct conflict with other pollutants when making 

BACT determinations. (4515, 4691, 5059, 6681) For example, increasing the efficiency

of an engine can have the unintended consequence of increasing emissions of 

conventional pollutants, such as NOx. (4515, 4691) One commenter added that EPA 

must include a broad review of identified GHG BACT for the various industries to ensure 

it will not directly conflict with other criteria pollutants being emitted by the same source. 

(4515, 4691, 5056) For these reasons, EPA should weigh this difficult technical issue as 

a factor that favors a more limited scope for the PSD and title V programs (either 

through higher thresholds or the use of non-GHG pollutants as a “trigger” for PSD 

requirements for GHGs). (4515, 4691) 

 EPA should authorize investment in offset credits as a means of compliance with BACT 

requirements. (5340) Under this approach, offset credits could contribute to reducing a 

source’s emissions to the level of the required BACT emissions limitation. (5340) One 

commenter added that EPA should allow offset credits to be considered part of the 

“source” for purposes of applicability and significance determinations as well as BACT 

requirements under the PSD program. The definition of “source” should be interpreted to 

include any GHG offsets held by the source. This will increase demand for offset credits, 

which will drive investment into low-carbon technology and efficient carbon-reduction 

projects throughout the economy. Moreover, offsets would produce the same 

environmental result at lower cost. (4749)

 Several commenters believe that EPA should determine, under the CAA, that NSPS in 

the short-term represents BACT until GHG technologies are developed (2504, 3916, 

4019, 4512, 4521, 4864, 5084, 5339, 5443, 7935, 8025). Some of these commenters state

that: (1) this will prevent hollow permits at the outset and the approach will result in 

researched controls established by industry group. (5339) Another commenter (7935) 

added that we should implement this approach by focusing on the source categories with 

the highest levels of GHG emissions. 

In addition, several commenters request clarification for the following implementation 

issues and questions (3003, 4747, 15947):
220

 Has BACT or LAER been determined? (3003)

 What will be the nature of the secondary impact analysis required under PSD for GHGs? 

(4866)

 Will CO2e offsets be required and will they be limited to the immediate air basin? (3003)

 How will visibility impact analyses, required in PSD, be conducted? (4863)

 Will an air quality analysis be required for GHGs and what will it look like? (4866)

 How GHG emissions are calculated? (3916)

 Will CEMS be required for major CO2e emission sources? If so, what is the maximum 

emission level in parts per million by volume (ppmv) for these units? (3003)

 Is the R&D facility definition in the proposed rule the same as in the CAA? (8691)

 Under the current PSD and title V program, engine testing emissions are treated as 

stationary sources. Will they receive the R&D exclusion as in 40 CFR 98.2(a) (5)? 

(8691)

 Are refrigerants included in facility-wide title V considerations? (8691)

 One military commenter states that under PSD, there is a significance level for fluorides 

of 3 tpy but there is no discussion in the proposed Tailoring Rule about whether 

fluorinated GHGs are covered in this threshold. (4747)

 What are the permit conditions regarding GHG emissions that will need to be added to a 

title V permit renewal if the facility has not made a significant modification requiring a 

GHG BACT analysis? (3916) 

 How are agricultural operations handled under this rule? (4866)

 Can districts phase-in over a 3- to 5-year period the title V permit submissions for newly 

captured facilities and major sources? (3003)

Response:

EPA appreciates the suggestions and general comments as to what parts of the PSD and 

title V permitting programs should be clarified before permitting of GHGs commences. Several 

of the requests for clarification or questions are specifically addressed in the preamble to the 

final Tailoring Rule or in the BACT guidance, Source Category Exemptions, or other sections of 

this RTC. Other of these comments are requests for specific guidance or determinations that are 

beyond the scope of the Tailoring Rule (e.g., source-specific determinations, appropriate 

monitoring, emission calculations for particular GHG sources). Furthermore, since these issues 

were not specifically addressed in the proposal of the Tailoring Rule, we do not have a sufficient 

record upon which to make such decisions at this time. However, a few clarifications may be 

helpful:

 EPA is currently preparing PSD technical and policy guidance for GHG and expects to 

issue it by the end of 2010.

 As explained in the proposed Tailoring Rule, LAER does not apply to GHGs.

 No “once-in always-in” policies with respect to title V or PSD applicability are addressed 

with respect to GHGs in this final rule.

 The use of CO2 offsets in PSD programs are not addressed in this final rule.

 Questions about how to determine GHG emissions for permitting applicability purposes 

with respect to specific categories of GHG sources are beyond the scope of this rule. 

However, the proposal clarified that such calculations must be based on a source’s PTE 
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and that implementation of the Mandatory GHG reporting Rule will produce information, 

including facility-level GHG emissions data, that will help permitting authorities to 

address GHG emissions for specific source categories in their programs. Also, see 

section 8.4.4 of this RTC for more on monitoring and other methods of calculating 

emissions. 

 We are not finalizing any exemption for PSD or title V for R&D emissions for engine 

testing or for any other source category.

 The categories of HFCs and PFCs are fluorinated GHGs, included in the group of six 

pollutants regulated under this final Tailoring Rule; these fluorinated GHGs are contained 

in many refrigerants in common usage today. 

 Fluorinated GHGs are GHGs covered under the Tailoring Rule, while fluorides are a 

separate category of regulated NSR pollutants not addressed by the Tailoring Rule. 

 The title V permit conditions that will be included in any particular permit are sourcespecific and determined by the permitting authority at the time the permit is issued.

 The CAA requires all operating permitting programs in existence for three years or more 

to issue all permits within 18 months of submittal of a timely and complete permit 

application and we are not finalizing any variation from this requirement for GHG 

sources in this final rule.

8.4.2 General Requests for Guidance

Comment:

Several commenters ask EPA to provide guidance on various issues related to GHG 

permitting. They request that:

 EPA provide guidance on identifying and quantifying sources covered by title V, similar 

to the general and sector-specific applicability guidance provided with the Mandatory

Reporting of Greenhouse Gases Rule. (5079) 

 EPA issue guidance to permitting authorities on title V general permits to ensure a 

manageable, consistent, and efficient program. (4515, 4691)

 EPA provide guidance for industries that do not have specific emission factors for GHGs. 

(3278, 5073) One of these commenters recommends delaying implementation for 

industries for which emission factors are not available to allow time to develop these 

emission factors. (3278)

 EPA provide guidance to the states. (4747, 4860, 5063, 5336, 5338) This guidance 

should include or be for:

◦ Standardized general permits for certain source categories. (4747, 4860) 

◦ Permits-by-Rule language. (4860)

◦ How states should fund the program through fees and on seeking federal funding for 

state and local agencies under section 105 or 103 of the CAA. (4860)

◦ How facilities should calculate their GHG emissions to determine if they fall under 

PSD and title V programs. (5336) 

◦ How to handle PSD permit applications that are in process when the Tailoring Rule 

becomes effective. (5338) 
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 EPA immediately commence work on a PSD and additional title V “white paper” 

guidance to handle GHG aspects of permitting including provisions for a one-time listing 

of annual emission targets for title V facilities under cap and trade, as well as the permit 

revision routes to be followed for title V permit modifications dealing with GHG, etc. 

4863)

 EPA issue specific guidance to potential sources and permitting authorities of when 

administrative limitations to PTE are appropriate. (5078, 5079) 

 EPA produce a guide that explains how the 25,000 tpy threshold calculation is done, and 

the types of businesses that would likely be covered or not covered. (4684)

 EPA establish a toll-free phone number for small businesses to call and inquire whether 

they are covered or not (without fear of enforcement). (4684) 

 EPA specify a calculation method for determining GHG emissions for PSD and title V 

permits; BACT guidance (including applicability triggering of BACT); and permit 

transition considerations. (8461) 

 EPA (1) publish a Case Study for each permit example for source categories expected to 

trigger PSD and title V requirements for GHGs in phase 1 (which could be included on 

their website); (2) hold Case Study review seminars in each EPA Region for state 

regulatory staff on a semi-annual, then annual basis; (3) advertise the notice and comment 

period for select permit applications on EPA’s website, including the EPA 

implementation assistance and support material, and invite comments from interested 

parties. (4526) 

 EPA’s BACT guidance development process should involve all stakeholders and should 

be more transparent. (4512, 4515, 4691, 4866, 4951, 4691, 5110, 5863, 6681, 16411)

 GHG BACT guidance is needed since GHG do not have well established industrial 

BACT beyond efficiency improvements. In addition, the BACT refinement effort is 

further complicated by the use of a single CO2e pseudo-pollutant which is really six 

different constituents that could possibly lead to six different BACT determinations for a 

single source. (4519, 4746, 4863, 4949, 5064, 5305) One of these commenters requests 

clarification on how a BACT evaluation will be done for a stack emitting multiple GHGs 

and whether the applicant should do one BACT analysis using CO2e, or would they do 

separate BACT analyses for each of the individual GHGs? (4519) 

 Additional time provided to develop BACT guidance that is necessary to fully evaluate 

the economic impact of regulating GHG emissions under the PSD and title V programs. 

Currently, the CAAAC’s Climate Change Workgroup is struggling to develop BACT 

guidance for source categories that emit the most GHG emissions. According to the 

commenter, only after BACT is evaluated will EPA have information necessary to fully

analyze the economic impact of the rule. (5133)

 The CAAAC’s BACT guidance document should, at a minimum, include the following 

criteria: (1) BACT requirements that are equipment and project specific; (2) BACT 

requirements should be based on what is available at the time of permit issuance; (3) 

BACT must be cost-effective and technically feasible; and (4) EPA must ensure that 

permit issuance is not delayed. (5346)

 EPA’s BACT procedures summarized by the Climate Change Workgroup provide for the 

evaluation of innovative technologies – they believe that there is a bias against innovative 

technology built in to the current process because it eliminates all but “demonstrated” 

technologies as being feasible control options under BACT. (5728)
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 EPA provide sector-specific guidance on BACT which includes finalizing a document 

that addresses BACT determinations entitled "New Source Review Workshop Manual: 

Prevention of Significant Deterioration and Nonattainment Permitting (Draft, October 

1990)." (5078, 5079) One commenter adds that EPA should evaluate the applicability of 

the current “top-down BACT” approach many states currently follow for criteria 

pollutants (and their precursors) and provide initial guidance to states on how such an 

approach would be applicable to BACT determination for emissions of GHGs. (4239)

 EPA develop practical guidance on BACT standards (3858, 4512, 4154, 4238, 4239, 

4521, 4866, 4949, 4989, 5039, 5061, 5084, 5135, 5198, 6681, 7935), with the opportunity

for stakeholder input if not formal comments, prior to implementation of this rule in 

early-to-mid 2010 (5079). 

 EPA’s BACT guidance include thermal efficiency degradation factors when establishing 

the BACT limit. (5079)

 EPA prepare white papers that provide guidance on a range of control technologies and 

measures that can be applied in a cost-effective manner for major stationary source 

categories, such as power plants, cement kilns, glass furnaces, and other sources. (4512, 

6681) 

 EPA issue a white paper to define real world potential for boilers in high schools and 

hospitals so that permits are reviewed and issued based on realistic emission estimates. 

(4512)

 EPA provide guidance for computing GHG emissions for any sources that are not in 

EPA’s GHG Mandatory Reporting Rule but are covered in the PTE calculation. (4864)

 EPA provide timely and sufficient guidance to states to assist them in implementing 

comprehensive PSD and title V GHG permitting programs. (4238, 4239)

 EPA address ties to other CAA programs, such as the CAM Rule. (4691)

In addition, several commenters would like EPA to harmonize the Tailoring Rule with 

the GHG Mandatory Reporting Rule (2371, 3306, 4862, 4951): 

 Because the GHG Mandatory Reporting Rule does not impose reporting requirements on 

combustion of biomass but the PSD does, there is ambiguity over whether biomass 

combustion is regulated under the Tailoring Rule. If EPA does not harmonize the PSD 

program and the GHG Mandatory Reporting Rule, regulators will run the risk of 

reversing established policies, which will increase regulatory uncertainty, and force 

regulation of stationary sources for which they lack comprehensive reporting. (4862)

 EPA should reference the methodologies contained in the GHG Mandatory Reporting 

Rule (74 FR 56259) for calculation methods in the Tailoring Rule. This would eliminate 

any potential inconsistencies between the two rulemakings. (3306)

 EPA can link the schedule for enforcements under the GHG Tailoring Rule to the 

schedule for the GHG Mandatory Reporting Rule by waiving enforcement action for 

sources that fail to comply with the rule prior to the March 2011 initial reporting deadline 

under 40 CFR part 98. (2371) 

Response:

In general, these comments raise implementation issues that are beyond the scope of this 

rule, which is generally limited to tailoring the PSD and title V applicability requirements. EPA 
224

will address the issues raised in these comments as it moves forward with implementing PSD 

and title V for GHG sources.

Concerning the request for harmonizing the Tailoring Rule with the GHG Mandatory

Reporting Rule, we have harmonized them in this final rule to some extent, in that both rules 

adopt the same group of six GHGs. However, this action does not preclude us from further 

harmonizing this rule in the future after a notice and comment process. For more on BACT 

guidance, see section 8.4.5 of this RTC; for more on Biomass, see section 8.3.2 of this RTC; for 

more on methodologies for calculating emissions, including those required by the Mandatory

GHG Reporting Rule, see section 8.4.4.

Concerning the interplay between the Tailoring Rule and the CAM rule, EPA did not 

propose any revisions to any regulations to treat GHGs any differently than any other regulated 

air pollutants for purposes of CAM and that approach is the approach of the final rule. The 

CAM rule, under 40 CFR part 64, adds monitoring designed to provide a reasonable assurance of 

compliance in cases where underlying monitoring (e.g., monitoring imposed through a PSD 

permit) for an active control device (e.g., a scrubber) does not meet certain CAM monitoring 

criteria. Also, CAM applies on a pollutant-specific basis at each emission unit located at a major 

source that has a title V permit and provided certain emission thresholds at met or exceeded. 

CAM is normally determined as part of a title V permitting action, including during initial permit 

issuance or as part of a significant permit revision. A more-detailed explanation of CAM is 

beyond the scope of this rulemaking.

Lastly, EPA did not propose to link any schedules for enforcement under the Tailoring 

Rule to such schedules under the GHG Mandatory Reporting Rule, and we are not specifically

addressing this issue in the final rule because it is beyond the scope of the rule. However, 

because the final rule delays the applicability of the Tailoring Rule until January 2, 2011, the 

final rule will likely mitigate the commenter’s concern to some extent, compared to the proposal, 

which would have triggered applicability upon the promulgation of the final rule. 

8.4.3 General Suggestions or Comments for Specific Sectors

Comment:

Various commenters offer suggestions and comments for specific sectors potentially

subject to the Tailoring Rule. They state that:

 For the semiconductor and other electronics facilities: It would be especially difficult for 

a facility to operate under title V and PSD programs, which require close tracking of 

emission levels to determine if permit thresholds are exceeded, when EPA and state 

regulatory agencies have not determined the relevant emission measurement and 

quantification methods for semiconductor and other electronics facilities. Even EPA 

recognized the difficulties and complexities inherent in quantifying GHG emissions in 

the semiconductor manufacturing industry when it elected to postpone finalizing the 

electronics portion of the GHG Mandatory Reporting Rule. (5329)

 For the Public Owned Treatment Works (POTWs) Facilities EPA could achieve better 

results for limiting GHG emissions at POTWs by providing incentives for utilities to 
225

increase energy efficiency, to reuse bio-solids and biogas generated through the 

wastewater treatment process as fuel, and to adjust treatment processes when viable, 

rather than instituting PSD permit requirements. (5336)

 For Landfills 

o EPA should clarify and streamline the common control determination process for 

landfills associated with LFG energy production (4154, 5391). One commenter adds 

that separately-owned LFG control and or treatment operations should not be 

considered to be under "common control" of the landfill owner/operator for purposes 

of PSD and title V permitting, and emphasizes that this is particularly true when the 

landfill can operate independently from a renewable energy recovery project. 

According to this commenter, EPA should, among other things, (1) define a separate 

class of parties engaged in the treatment and/or combustion of LFG, either on-site or 

off-site, that will bear compliance responsibility under the Landfill NSPS; and (2) 

create an option by which a landfill owner/operator may transfer compliance 

responsibilities to a collection, control or treatment system owner/operator, consistent 

with the parties' contractual provisions, through a certification procedure. Finally, 

this commenter also believes EPA should narrowly prescribe the circumstances under 

which compliance responsibility may transfer to a third party under the NSPS for 

landfills, so that landfill owners/operators would have meaningful opportunities and 

flexibility to maximize the value of beneficial use projects involving LFG (5391).

o EPA should reconsider the allowable amounts for CH4 oxidation for older, closed 

landfills. Because these sites generate such low quantities of LFG, the capacity for 

the cover soils to oxidize the CH4 is significantly higher than for active or recently 

closed facilities. For landfills that have been closed for more than 20 years, CH4

oxidation of up to 100 percent should be allowed, and more recently closed facilities 

should be allowed a sliding scale. (4951)

o In addition to generating CH4 through breakdown of waste in a landfill, a portion of 

the carbon is stored in the landfill and thus, landfilling provides storage capacity for 

carbon through this sequestration. This quantity of sequestered carbon should be 

considered as GHG regulations progress. At a minimum, sequestration of other 

biogenic carbon should be allowed as part of the net calculations that landfills use to 

determine their contribution of GHG to the environment. (4951)

 For Electric Utilities and Transmission and Distribution (T&D) Facilities:

o EPA should clarify that it does not intend to regulate mobile sources of emissions 

from electric utilities (i.e., fleet vehicles, customer service vehicles, service vehicles, 

and emergency or outage management vehicles). (5052)

o EPA should clarify that it does not intend to regulate emissions from the office 

buildings of Transmission and Distribution (“T&D”) utilities which do not burn fossil 

fuels (coal or gas) directly. The commenter notes that the final rule on GHG 

reporting did not cover fleet vehicles or T& D facilities with no generation by

excluding the reporting of SF6 emissions, and believes that the same decision should 

be made for the Tailoring Rule. If not, EPA should at least delay or determine as de 

minimis electric utility office buildings without generation such as, but not limited to, 

bill paying centers, customer relations buildings, or storage areas with transmission 

equipment that might contain SF6 canisters or tanks that function as true storage 

areas. The commenter believes that regulation of these de minimis sources of non-
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CO2 GHGs should be postponed until phase 2 or 3 of the PSD and title V permitting 

programs since no control technology has been identified and the NAAQS process 

has not been established. (5052)

o EPA should delay PSD and title V for any extraneous GHGs (e.g., nitric acid, water 

vapor, or any other de minimis GHGs) at power plants. (5052)

o EPA should not require additional CO reduction controls if a 250-ton threshold 

triggers PSD CO regulation (5052). This commenter considers CO as an extraneous 

de minimis GHG that should not be regulated in the future (5052).

Response:

Many of the requests for special consideration for these source categories were 

considered by EPA in the context of our response to request for deferrals, exemptions, or 

particular major source thresholds for the categories, and we decided not to take final action on 

any such special treatment at this time. Instead, we have decided to adopt higher applicability

thresholds that will apply to all source categories and phase-in the permitting requirements such 

that only the largest sources in any category will be permitted first. Nevertheless, we have 

committed to further consider which sources should be permitted or exempted in the prospective 

step 3 rulemaking or the rulemaking associated with the 5-year study. Also, several of questions 

raised by the commenters are directly or indirectly addressed in the preamble to the final rule or 

elsewhere in this response to comments (e.g., treatment of biogenic emissions for landfills, 

secondary or indirect emissions from electrical generation).

8.4.4 General Suggestions or Comments on Emissions Monitoring, Public Participation, 

and Funding

Comment:

Two commenters provide specific suggestions or comments regarding emissions 

monitoring in response to the Tailoring Rule. They state that:

 EPA should establish monitoring exemptions to address GHG emissions monitoring, 

including compliance issues arising under the CAM rule. (4515/4691) 

 To determine emissions: (1) physical measurements rather than only using empirical 

determinations should be allowed; (2) temperature, pressure, or variations in gravity

which use mass and weight should also be allowed since the metric related calculations 

seem to be oversimplified, (3) the most efficient engines should be supported regardless 

of the emissions produced, instead than supporting various fuels and combustion 

techniques, (4) EPA should clarify whether it supports the development of higher 

efficiency engines; and (5) emissions should be based on the optimal ratio of CO and 

CO2 produced during combustion, rather than using raw quantities. Any exemptions to 

CO emissions that currently exist should also apply to CO2 emissions. (15947)

Concerning public participation, one commenter suggests that in order to ensure technical 

support documents are based on the most complete and substantial information from sources as 

possible, operators and industry stakeholders should be included in the development and review 

of support documents, and technical and cost information should be peer-reviewed and based on 
227

technically supportable references. The commenter is especially concerned that limited 

information (e.g., projections on technology performance or cost) provided by one or two 

sources could result in biased support documents. (4515/4691)

Several commenters request funding assistance from the federal government to assist 

state and tribal governments. They state that:

 Even with the Tailoring Rule there is likely to be a significant increase in workload for 

permitting authorities (3919). Consequently, EPA should seek federal funding assistance 

for permitting authorities, at least as a stop-gap measure as states work to develop new 

regulations and seek the needed additional resources (3919). Another commenter adds 

EPA should provide the states with additional funds to implement the Tailoring Rule, 

including increased funds in the first year of implementation to cover the cost of synthetic 

minor permitting. They request that funding be sufficient to support new staff, training, 

and outreach (3916). 

 EPA should provide funding for inspection and enforcement or this rule would be another 

unfunded mandate. (5063, 6681) 

 EPA should increase CAA section 105 program funding and provide for the collection of 

title V fees for GHGs. (7935)

 The final rule should include CO2 presumptive emission fees that are lower than the fees 

for criteria pollutants, since source emissions of CO2 are typically 100 to 1000 times 

higher than emissions of criteria pollutants from the same source. (4154) 

 Tribal air grant funding should be increased to more accurately reflect the air qualityrelated needs of tribes across the nation, and allow these same tribes the opportunity to 

implement the Act’s PSD and title V programs. (8803)

Response:

EPA would like to thank the commenters for their suggestions and general comments and

we may consider them in our future deliberations.

 Concerning monitoring and other methods for calculating GHG emissions, the 

establishment of monitoring requirements or exemptions is beyond the scope of this rule. 

We note that the GHG Mandatory Reporting Rule contains GHG monitoring 

requirements and detailed GHG emission calculation protocols for many different source 

categories. [See, e.g., 40 CFR part 98, Subpart C – General Stationary Fuel Combustion 

Sources]. In addition, the GHG Mandatory Reporting Rule may be amended in the future 

to add monitoring requirements and emission calculation protocols for additional source 

categories. If the GHG Mandatory Reporting Rule does not specify particular monitoring 

or emission calculation methods for your processes, then state and local permitting 

authorities will take the lead in authorizing appropriate calculation methods as part of the 

permitting process. Also, under PSD and title V, permitting authorities retain authority to 

require monitoring or other approaches for calculating emissions for compliance 

purposes, and EPA takes no action in this rule on commenter’s request to exempt GHG 

sources from such requirements. 

 In the proposal, EPA explained that we support energy efficiency or other measures to 

reduce GHG emissions, and we continue to do so.

 Concerning public participation, EPA has conducted public outreach in the development 
228

of this rule and has to-date sought the input of the public, including industry, 

environmental groups, and state and local agencies, and others. We remain committed to 

meeting all statutory requirements for public participation, including the requirements of 

the APA, and to conducting other outreach as may be appropriate to help inform our 

decisions.

 Concerning funding issues, issues related to any grants EPA may issue to state and local 

or tribal agencies are beyond the scope of this rule, but we appreciate the feedback 

nevertheless. EPA also directs the commenters to our response on issues related to title V 

fees below, which are an important mechanism for funding air quality permitting 

programs under the CAA.

8.4.5 PSD-Specific Implementation Issues

Comment:

Various commenters provide suggestions or comments regarding implementation issues 

related to the PSD program. They state that:

 EPA needs to make every effort to modify or clarify its regulations and policy concerning 

the determination of a source’s “potential to emit” GHGs. According to the commenter, 

EPA has asserted in the past that it has substantial discretion in determining such details 

of the PSD program, and the courts have agreed. Additionally, the commenter believes 

that it is clear from existing regulations, that EPA also should reinforce explicitly that the 

GHG emissions to be assessed are those from the source itself, and not those from 

activities like transportation or off-site electricity generation that have some connection 

with the source. (4903)

 EPA should not consider GHGs in determining if a modification at an existing source is a 

major modification and therefore subject to PSD review (6458). According to this 

commenter, if “significant’ increases in GHGs are used to determine if a change at an 

existing facility is a major modification, existing plants will not be able to make 

modifications or changes that, for instance, improve energy/operational efficiency, 

increase electrical generation capacity or reduce maintenance without the change being 

considered a major modification because there are no GHG limits that could be lowered 

to net out of PSD review and that this would effectively foreclose existing plants from 

make any substantial improvements. If this is not possible, a commenter suggests that 

EPA should clearly indicate in the regulations how “contemporaneous” increases and 

decreases of GHGs will be addressed with respect to changes in GHG emissions that took 

place before they became regulated under the PSD rules (4903). 

 EPA should consider a major modification under PSD to occur when the net emissions 

increase would be greater than 100 tpy on a mass emission basis for the individual gas 

(e.g., CO2, HFCs, N2O, and CH4) and greater than 25,000 tpy CO2e of combined GHG 

emissions. EPA could evaluate the need to move back to the currently proposed 

significance level and provide a basis for the proposed value based on the 5 years of 

gathering information/review. (3306)

 EPA should clarify if sources can be excluded from PSD, under existing regulations, due 

to changes at a facility that merely result in the increased utilization of a unit or increased 

fuel burning or burning of an alternative fuel, provided the unit was capable of 
229

accommodating that change (4903, 16411). See 40 CFR 52.21(b)(2)(iii)(e) - (f). Since 

EPA has identified combustion sources like boilers as the primary units that will be

affected by or will trigger PSD permitting for GHGs, see 74 FR 55,334, there will be an 

increased number of questions about whether increases in fuel consumption or fuelswitching at those units are exempted from being a PSD major modification (4903). The 

commenter (4903) encourages EPA to reinforce the interpretation it applied to those 

exemptions from the definition of modification soon after they were promulgated so that, 

so long as a unit itself (not including peripheral equipment) is capable of burning a fuel, 

or is capable of burning greater quantities of a fuel, the increased emissions associated 

with fuel switching or increased utilization are not counted in determining a “net 

emissions increase,” regardless of whether other changes at a facility made the fuel 

switching or increased rate of operation necessary or more desirable. 

 EPA needs to clarify how debottlenecking projects will be treated and how projects must 

be aggregated for PSD applicability purposes. (4903, 16411)

 EPA should develop a standard evaluation process to determine if best practices and 

technologies have been incorporated in the case-by-case review of new or modified 

facilities that trigger PSD permitting requirements, otherwise there may be wide 

variations between permitting agencies, even agencies located in the same state. It might 

be better to have streamlined standard reviews by source categories. (4518, 8531) 

 EPA should clarify whether PSD requirements for GHG sources trigger additional 

environmental impact and air quality analyses. (4691)

 EPA should clarify how GHG emissions thresholds apply to routine operational changes 

that may trigger PSD major modification procedures (4867). Another asks how major 

modification is determined for GHGs (5124)?

 EPA should exclude GHG emissions from that portion of the PSD definition of 

“significant” that defines a 1 μg/m3impact within a Class I area as significant, because 

GHGs are emitted from combustion sources in amounts orders of magnitude higher than 

criteria pollutant emissions (see 40 CFR 52.21(b)(23)(iii)) (4692). For sources located 

within 10 km of a Class 1 area, this criterion would require a PSD permit for combustion 

sources so small they are exempt from both minor permit NSR and title V permits (4692).

o Since GHGs are global pollutants, EPA should (6457):

o Recognize “carbon offsets” from off-site reduction, destruction, avoidance or 

sequestration of GHG as a legitimate method of netting on-site GHG from regulated 

major emitting facilities for purposes of PSD/NSR (or title V) applicability,

thresholds, or emissions analysis. Under current law, the federal CAA does not 

prevent EPA from doing so.

o Create a trading system for GHG emissions, which can be readily distinguished from 

the trading programs in the Clean Air Interstate Rule (CAIR) and NOx SIP Call that 

were recently invalidated by federal courts on the grounds that those programs failed 

to adequately account for inter-airshed transfers and resulting concentrations of 

pollutants in upwind airsheds, which may have posed a localized risk to health and 

welfare. 

o Consider on- or off-site carbon reduction projects in determining the appropriate 

technology standard (BACT, LAER, RACT, etc.) applicable to regulated stationary

sources under various provisions of the CAA. 
230

 EPA should be explicit on how the PSD major modification threshold is determined. For 

ubiquitous industrial emissions sources such as process heaters, and in light of the very

low GHG thresholds EPA has proposed, the commenter supports the current regulatory

practice of determining changes in emissions as "actual to future actual" and not "actual 

to potential.” The commenter supports the "actual to future actual" regulations as the 

more reasoned approach to applying NSR to GHG emissions and requests EPA to 

specifically document this approach in the final regulations. (5124)

Response: 

EPA appreciates these comments. They are beyond the scope of this rule, which is 

generally limited to tailoring the PSD and title V applicability requirements. EPA will address

the issues raised in these comments as it moves forward with implementation of PSD 

requirements for GHG sources.

Because many of the comments concerned BACT, it should be noted that the CAA 

requires that a PSD permit contain, among other things, emissions limits based on the BACT for 

each pollutant subject to regulation under the Act emitted from the source that triggers PSD. 42 

U.S.C. section 7475(a)(4); 42 U.S.C. section 7479(3). BACT is defined as follows:

(3) The term "best available control technology" means an emission limitation based on 

the maximum degree of reduction of each pollutant subject to regulation under this Act 

emitted from or which results from any major emitting facility, which the permitting 

authority, on a case-by-case basis, taking into account energy, environmental, and 

economic impacts and other costs, determines is achievable for such facility through 

application of production processes and available methods, systems, and techniques, 

including fuel cleaning, clean fuels, or treatment or innovative fuel combustion 

techniques for control of each such pollutant. In no event shall application of "best 

available control technology" result in emissions of any pollutants which will exceed the 

emissions allowed by any applicable standard established pursuant to section 111 or 112 

of this Act. Emissions from any source utilizing clean fuels, or any other means, to 

comply with this paragraph shall not be allowed to increase above levels that would have 

been required under this paragraph as it existed prior to enactment of the Clean Air Act 

Amendments of 1990.

42 U.S.C. § 7479(3).

Thus, the BACT process is designed to determine the most effective control strategies 

achievable in each instance, considering energy, environmental, and economic impacts. 

However, the case-by-case nature of BACT, together with the range of factors and technologies 

that must be considered, presents a challenge in determining BACT for newly regulated 

pollutants. When a new pollutant is regulated, the first permit applicants and permitting 

authorities that are faced with determining BACT for a new pollutant will likely need to invest 

more time and resources in gathering and analyzing information necessary to make an 

assessment of BACT under the statutory criteria. Once the PSD permitting program matures 

with respect to the new pollutant, successive BACT analyses will establish precedents that can 

inform subsequent BACT determinations. While the BACT provisions clearly contemplate that 
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the permitting authority evaluate control strategies on a case-by-case basis, EPA recognizes the 

need to develop and share policy guidance and technical information for sources and permitting 

authorities as they begin to permit sources of newly regulated pollutants, such as of GHGs. 

When applied in a practical manner, this additional EPA guidance and technical information 

should reduce time and resource needs when evaluating BACT for newly regulated pollutants.

As described in the proposed GHG Tailoring Rule, EPA intends to compile and make 

available technical and background information on GHG emission factors, control technologies 

and measures, and measurement and monitoring methodologies for key GHG source categories. 

We expressed our intent to work closely with stakeholders in developing this supporting 

information and to ensure this information is available in sufficient time to assist permitting 

agencies in their BACT determinations. The proposal took comment on what other types of 

support or assistance EPA can provide to initially help air pollution control agencies with the 

permitting of GHGs.

Commenters on the proposed GHG Tailoring Rule generally supported EPA providing 

technical information and policy guidance for sources of GHGs. Several commenters 

specifically requested guidance to clarify GHG-related issues, such as how to compute CO2e 

emissions, how to evaluate emissions of CO2 from biomass fuel, and whether an air quality

analysis will be required for GHGs. Additionally, commenters requested that EPA issue “white 

papers” and other tools that would provide information on a range of control technologies and 

measures for major stationary source categories, such as power plants, cement kilns, glass 

furnaces, and other sources. Many of these commenters further requested that EPA provide an 

opportunity for stakeholder input on the guidance, and a few commenters insisted that permitting 

for sources of GHGs should not begin prior to issuing final guidance.

Consistent with our commitment at proposal to involve all stakeholders in our guidance 

development, EPA called upon the CAAAC in September 2009, to provide assistance and 

recommendations for what types of guidance and technical information would be helpful.14 

Specifically, our charge to the CAAAC was “... to discuss and identify the major issues and 

potential barriers to implementing the PSD Program under the CAA for greenhouse gases ... 

[and] focus initially on the BACT requirement, including information and guidance that would 

be useful for EPA to provide concerning the technical, economic, and environmental 

performance characteristics of potential BACT options.” This charge also requested the 

CAAAC to “identify and discuss approaches to enable state and local permitting authorities to 

apply the BACT criteria in a consistent, practical and efficient manner.”

At its October 6, 2009 meeting, the CAAAC established a Climate Change Work Group, 

made up of 35 representatives from a variety of industries, state and local governments, and 

 

14 The CAAAC is a senior-level policy committee established in 1990 to advise the U.S. EPA on issues 

related to implementing the CAA Amendments of 1990. The committee is chartered under the Federal Advisory 

Committee Act and has been renewed every 2 years since its creation. The membership is approximately 40 

members and experts representing state and local government, environmental and public interest groups, academic 

institutions, unions, trade associations, utilities, industry, and other experts. The CAAAC meets 3 times a year, 

normally in Washington, D.C. It provides advice and counsel to EPA on a variety of important air quality policy 

issues. The committee has formed several subcommittees to provide more detailed discussion and advice on many 

technical issues.
232

environmental and public health non-profit organizations, organized under CAAAC’s Permits, 

New Source Review and Toxics Subcommittee. The Work Group initially focused its attention 

on the procedure for evaluating BACT and decided that the process and criteria for determining 

BACT for criteria pollutants represented a workable and acceptable framework for GHGs. The 

Work Group also recommended a second phase, in which the Work Group would consider 

member proposals regarding possible alternative or supplementary approaches to applying the 

PSD program to GHG sources. 

In February 2010, the CAAAC completed work on the first phase of its effort and sent 

EPA a list of recommendations that highlighted areas of the BACT determination process that 

are in need of technical and policy guidance. For more information, see the Interim Phase I 

Report on Issues related to BACT for GHGs, February 3, 2010 that is located in the public 

docket for this rulemaking and at 

http://www.epa.gov/air/caaac/climate/2010_02_InterimPhaseIReport.pdf. In response we are 

working on a number of fronts to develop technical information, guidance, and training to assist 

states in permitting large stationary sources of GHGs, including identifying GHG control 

measures for different industries. EPA is currently working with states on technical information 

and data needs related to BACT determinations for GHGs. This includes developing the EPA 

Office of Research and Development GHG Mitigation Strategies Database, enhancing the 

RACT/BACT/LAER Clearinghouse to include GHG-specific fields, and preparing technical 

information on sector-based GHG control measures. Also, EPA is actively developing BACT 

policy guidance for GHGs that will undergo notice and comment and will culminate in training 

courses for state, local and tribal permitting authorities. The results of all of these efforts will 

roll out over the remainder of 2010. EPA currently awaits the Work Group’s recommendations 

from its second phase of deliberations, which is underway as of the date of this notice.

EPA does not agree with some commenters’ suggestion that EPA should delay permitting 

of any sources until final BACT guidance is issued. As discussed in the final action on 

reconsideration of the Interpretive Memo, delaying the application of BACT to enable the 

development of guidance or control strategies is not consistent with the BACT requirements. 63 

FR at 17008. Furthermore, as just described, EPA expects such a delay to be unnecessary

because EPA will soon begin providing technical information to inform BACT decisions, and 

will continue to provide additional guidance prior to the date that GHG permitting begins. 

However, even in the absence of such guidance, a delay would not be justified under the legal 

doctrines of “absurd results” and “administrative necessity.” While implementation of the 

BACT requirement during steps 1 and 2 will pose implementation challenges, EPA has assessed 

the burden associated with GHG permitting with consideration given to these challenges, and has 

established a phase-in schedule that represents a manageable workload.

Thus, while BACT is a case-by-case assessment, EPA is confident that this guidance 

development effort will help support a smooth transition to permitting emissions of GHGs. 

Furthermore, EPA will continue to work to provide the most updated information and support 

tools to allow permitting authorities to share and access the most updated information on GHG 

BACT determinations as they are made once permitting of GHGs begins. EPA remains 

committed to involving stakeholders in the upcoming efforts to develop guidance to help to 

permitting authorities in making BACT determinations for sources of GHGs. 
233

8.4.6 Title V-Specific Implementation Issues

8.4.6.1 General Comments or Suggestions

Comment:

EPA should clarify the status of facilities with existing title V permits, whether:

 The requirement to obtain a title V permit where none was previously needed would 

require the newly permitted facility to include all pollutants into a title V permit or 

whether the minor sources could remain outside of the title V permit. (4990).

 Will the GHG requirements be added to existing permits or will they be required to be in 

a new and separate permit. The commenter recommends that EPA make the new 

requirements additions to existing permits, rather than a separate permit. (4990)

Response:

We did not propose to revise the title V regulations to treat GHGs any differently within 

title V permits and we are not finalizing any such changes at this time. Concerning the scope of 

the permit, the current rules specify that when any regulated air pollutants, including GHGs, 

trigger major source status, all emission units and all regulated air pollutants at those emissions 

units must be included in the permit application. Also, permits for major sources must include 

all applicable requirements at all emissions units, while certain permits for minor sources may be 

limited in scope with respect to applicable requirements. See 40 CFR 70.5(c)(3)(i) and 

70.3(c)(1). In the preamble to the final rule we discussed the future consideration of certain 

“hollow permit” theories for limiting the applicability for the permitting rules in the future but 

we are taking no action on that approach at this time. See more on this under section 8.4.6.2.

Concerning the comment that EPA allows permitting authorities to add new GHG permit 

requirements as additions to permits, rather than as a separate permit, we are not requiring such 

an approach at this time. The permit rules allow permitting authorities to either issue a single 

permit or multiple permits to a single major source provided all the applicable requirements at 

the facility are covered by the permit or collection of permits, and we are not changing this 

discretion for permitting authorities at this time. 

8.4.6.2 Hollow Permits

Comment:

Several commenters assert that permitting agencies would spend a lot of time and money

to process the permits of applicants (3858) who have essentially nothing to report, because there 

are no applicable GHGs requirements under the CAA (4692, 5143, 5179, 5417, 5808, 8545) and 

these sources have no other obligations under the Act (5129). For that reason, it would seem that 

the D.C. Circuit might be receptive to EPA's adopting a scheme to provide relief from title V for 

these sources (8545). However, if “hollow” permits are created or would be created, two 

commenters suggest that EPA could: (1) include the GHG Mandatory Reporting Rule as an 

applicable requirement under title V to prevent this from happening (4747), or (2) provide model 
234

permit language for the first round of title V permits (5338) to facility the issuance of all the new 

permits. 

One commenter has concerns about how compliance assurance measures would be 

established in title V permits for the semiconductor industry given that there are no applicable 

requirements. Even the GHG Mandatory Reporting Rule has been deferred for semiconductor 

manufacturers, and the commenter contends that establishment of reporting and monitoring 

requirements outside of the GHG Mandatory Reporting Rule on a patchwork basis through stateadministered title V permitting programs would undermine the Tailoring Rule and also the 

efforts by the semiconductor industry to establish voluntary GHG emissions reporting and 

reduction goals on a worldwide basis through the World Semiconductor Council. (5143)

Response: 

Many commenters argued that EPA should apply the title V program only to sources that 

are subject to applicable requirements, so that sources should not be required to hold empty

permits (i.e., permits issued to a source that is not subject to any applicable requirement for any

pollutant). To the extent that commenters argue that the statute requires EPA to adopt a “noempty–permits” theory, we disagree. We believe that although various provisions of title V 

indicate that one of title V’s purposes is to gather a source’s applicable requirements into a single 

permit, see CAA sections 503(b)(1), 504(a), we do not read those provisions as expressly

limiting title V to sources with applicable requirements. We also note that to date, we have 

issued permits to sources without applicable requirements, albeit on rare occasions. We believe 

that the tailoring approach we adopt in this rulemaking best reconciles the statutory provisions 

with congressional intent.

We also raised the issue of “hollow” or “empty” permits in discussing our rationale for 

why it may make sense to delay title V permitting under our proposal. We were concerned that 

many title V permits for GHG sources would contain no applicable requirements, and their 

issuance would therefore be of little value and would not be the best use of scarce resources. 

Several commenters agreed that implementing title V for GHG will, at least initially, require 

“empty permits” to be issued to GHG sources because such sources will not be subject to 

“substantive” requirements, and that this would not be the best use of scarce resources. 

We believe that the amount of resources that would be spent on, and the limited value 

that would result from, “empty permits” does warrant consideration under the Chevron analysis, 

taking account of the “absurd results” doctrine. Therefore, we intend to consider the role of 

“empty permits” when we undertake future rulemaking. However we believe the issue of 

“empty permits” has limited or no relevance to the first two steps of the phase in that we are 

promulgating in this rule. During step 1, permitting for GHGs is only required if the source is 

otherwise subject to permitting for its emissions of non-GHGs. Those sources very likely will be 

subject to existing substantive applicable requirements for non-GHGs (e.g., NSPS, MACT, and 

SIP requirements, including PSD). Thus, there should be no, or at least no additional, “empty

permits” during step 1. For step 2, it is possible that sources that become subject to title V 

requirements for GHG emissions may not be subject to other requirements, but our assessment 

suggests that this is very unlikely. We estimate that virtually all of the 550 newly-major sources 
235

in step 2 will be subject to applicable requirements under the CAA because they are from 

categories that have been traditionally subject to regulations, such as smaller industrial sources 

from already regulated categories, large landfills, and oil/gas/coal production. Even the 

approximately 50 newly-subject commercial sources in step 2, which we estimate to be 

comprised of very large hospitals, are likely to be covered by standards for medical waste 

incinerators. In addition, we expect these sources may well be subject to SIP requirements. 

Thus, we do not expect any, or at most very few “empty permits” during step 2.

In later stages of implementation (e.g., prospective step 3) or in the event that we permit 

smaller, non-traditional sources of GHGs that have never otherwise been subject to major source 

permitting, there would be a greater potential for “empty permits” to be issued under title V. 

Cognizant of this, we intend to further explore in the rulemaking for step 3 “empty permit” 

theories under the “absurd results” rationale that may serve to permanently narrow the scope of 

title V to exclude sources that would potentially be required to obtain an “empty permit” due to 

GHG emissions.

Concerning the request for EPA to develop model language for hollow permits, EPA 

reiterates that it does not expect many, if any, such permits to be issued under the approach of 

this final rule and further notes that no title V permit, even a “hollow” one, would be a 

completely blank slate. Each title V permit must include the title V administrative requirements, 

such as fee payment requirements, title V’s recordkeeping, reporting and monitoring 

requirements, and procedures of applying for permit revisions or permit renewals. Because each 

state, local or tribal title V program is unique, permit language would depend on the 

requirements of the EPA-approved title V program. As such, the state, local, or tribal agency

would be in the best position to develop such model language based on the specific requirements 

of their approved permit program, if such language is deemed necessary.

8.4.6.3 Application Shield 

Comment:

Several commenters request that EPA address the issue of the title V Application Shield 

in the proposed rulemaking (3003, 4298, 4860) because section 502 of the CAA states that it is 

unlawful for a source to operate except in compliance with an operating permit (4860) and upon 

triggering GHG applicability, all the sources that become subject to operating permit 

requirements will not have the required permit pursuant to the CAA or state regulations. 

Therefore, they will not be shielded from enforcement or be able to certify compliance. For 

these reasons, two commenters ask EPA to:

 Clarify whether “shields” would be granted to newly captured facilities even if a title V 

permit application is determined to be incomplete? (3003)

 Implement a uniform national policy, with respect to the treatment of synthetic minor 

permit applications that extends permit shield protections afforded to major sources that 

have applied for title V permits to sources that have applied for synthetic minor status. In 

the event a synthetic minor permit is not ultimately issued, sources should have at least 

six months to submit an administratively complete title V permit application without 

penalty. (4298)
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Response: 

The title V regulations offer two types of “shields” for sources, an application shield and 

a permit shield. Application shields protect sources from a violation for operating without a 

permit, provided they submit a timely and complete permit application by the applicable 

deadline; this is a mandatory element of state title V program. See 40 CFR 70.7(b) and 

section 503(d) of the Act. The title V regulations generally provide that a permitting authority 

must determine that an application is incomplete with 60 days following receipt or the 

application will be deemed complete. See 40 CFR 70.5(a)(2). Where a permitting authority 

seeks additional information regarding an application previously determined or deemed 

complete, the application shield continues to apply so long as the source meets any deadlines set 

by the permitting authority for submission of additional information. See 40 CFR 70.5(a)(2);

70.7(b). Permit shields protect sources from a violation for not meeting the terms of an 

applicable requirement, provided the source meets the terms and conditions of the applicable 

requirement that are included in the permit; this provision is an optional element for state title V 

programs. See 40 CFR 70.6(f)(1)(i) and section 504(f) of the Act. The EPA did not propose to 

revise the title V regulations with respect to these shields as part of the proposal for the Tailoring 

Rule and we have not finalized any such provisions. Thus, these shields are available in 

permitting for GHGs to the same extent that they are available with respect to other pollutants.

8.4.6.4 Title V Fees 

Comment:

 

A few commenters support EPA’s position that it is not necessary to amend the federal 

regulations to establish presumptive fees that account for GHG emissions or to mandate 

revisions to fee regulations in states that did not adopt the presumptive fee approach because:

 Current fees on traditional “regulated pollutants” emitted from sources newly covered by 

title V should suffice to cover the costs of permitting. In fact, they believe that EPA 

should go further than it proposes and prohibit presumptive and/or supplementary fees for 

GHG emissions. (4298)

 Applying the current "presumptive fee" of $43.75/ton for GHG emissions would impose 

an insurmountable financial burden on a large number of companies (5300) and thus EPA 

should eliminate or severely limit the title V fees that states can collect for GHG 

emissions (4745, 5300, 5773). However, they assert that EPA should not leave this to 

state discretion (4745, 5300) since this will cause an unsatisfactory patchwork of state 

approaches (5300). 

 EPA has used its discretion under section 502(b)(3) of the CAA to establish presumptive 

fees for GHGs and has left the fee adequacy requirement to each state. (4120)

Other commenters disagree with EPA’s suggestion that states should not charge for GHG 

emissions and/or increase the fees of other pollutants to cover the cost of regulating GHG 

emissions because:

 This approach unfairly punishes existing sources and brings in no additional revenue 

from new sources triggering PSD and title V permitting for the first time. These new 
237

sources will continue to need permit modifications and renewals after the first permit 

issuance, and states and local agencies will need to continue to cover the cost of these 

permit actions over time. (4521)

 EPA lacks any credible support for its assumption that a 50 percent increase in resources 

is needed and achievable to fund the expanded resources required by state permitting 

authorities. (4630) 

Several commenters state that any effort to increase fees for GHGs will be contentious 

because: 

 Many regulated sources such as coal-fired power plants and refineries in their state 

already pay the maximum title V fee. (5135) 

 Many states are subject to statutory limitations on title V fee increases and existing fees 

are likely to be insufficient to address the increasing workload. (4691, 5063)

 Pending federal GHG legislation would potentially negate the need for such an increase. 

(5135) 

 Many states are prohibited from collecting fees for CO2e by their authorizing legislation 

or it could take, like in this state, 3 years to get fee change authorization. (8025)

 Given the status of the economy, certain states will not be able to raise fees on 

businesses. (5301) 

 The potential that states can charge a fee for administering the program could 

significantly impact the economics of regulated sources. (3757) 

 The CAA is very clear in section 502(b)(3)(B)(ii) that permitting authorities may not levy

title V permit fees on any regulated pollutant for which a NAAQS, NSPS, or NESHAP 

has not been established (5052). The commenter (5052) also notes that this section also 

caps permit fees at 4,000 tpy of that regulated pollutant.

 Given that legislative and regulatory changes are needed, the timing of the influx of 

permit applications will precede their state’s ability to collect fees and obtain additional 

resources. (4238, 5135)

For these reasons, several commenters ask EPA to:

 Clearly detail permitting agencies' authority to collect fees under this program (7935), 

and provide such agencies with general guidance and recommendations for fee structure 

(4555, 5056, 7935). One commenter adds that EPA should develop a range of 

recommended fees for the title V program so that the states do not have to develop an 

independent cost analysis (4866). 

 Clarify if there will be a separate fee in $/ton for GHG and criteria pollutants. (2493, 

2505)

 Modify its part 70 rules to adopt presumptive title V fees that are tailored to the GHG 

program. (4864, 5057, 5084) 

 Establish a presumptive minimum title V fee that includes the additional cost related to 

the inclusion of GHGs in title V permits to ensure that adequate funding is available to 

implement this rule. (3278, 4989)

 Monitor closely state GHG programs to ensure fees are reasonable, appropriate and 

dedicated to the GHG program (4106, 4120, 4238, 4555, 4691, 5056). Fees should not 

be used for general revenues by the states (4106, 4120).

 Ensure that any relief given for fees should apply to all sources regardless of size. (5082)
238

 Clarify for CO2 if there will be a cap on fees per pollutant similar to the acid rain rule. 

(2493, 2505) 

Response:

The title V program requires permitting authorities to collect fees “sufficient to cover all 

reasonable (direct and indirect) costs required to develop and administer [title V] programs.” 15 

To meet this requirement, permitting authorities either collect an amount not less than a 

minimum amount specified in our rules (known as the “presumptive minimum”), or may collect 

a different amount (usually less than the presumptive minimum). We did not propose to change 

the title V fee regulations in our notice of proposed rulemaking for this action, nor did we 

propose to require new fee demonstrations when title V programs begin to address GHGs. 

However, we did recommend that each state, local or tribal program review its resource needs 

for GHG and determine if the existing fee approaches will be adequate. If those approaches will 

not be adequate, we suggested that states should be proactive in raising fees to cover the direct 

and indirect costs of the program or develop other alternative approaches to meet the shortfall. 

We are retaining this proposed approach, and are not changing our fee regulations as part of this 

final action establishing steps 1 and 2 of the phase-in. However, we are offering some additional 

clarification of our fee approach during these steps in response to comments we received on this 

issue. Additional discussion of fees will be included as part of subsequent actions establishing 

step 3 and beyond.

A few state commenters suggested that EPA should modify part 70 to adopt a 

presumptive minimum fee (or range for such fee) for GHGs, some of whom suggested that 

current fees may be insufficient to cover the costs of their program. It is important to clarify that 

altering the presumptive minimum would only affect those states that chose to charge the 

presumptive minimum fee to sources. Most states – including some of the commenters asking 

EPA to raise the presumptive minimum -- collect a lower amount that is not based on the 

presumptive minimum, but rather, relies on another fee schedule that it developed and EPA 

approved as adequate to cover costs. Therefore, it is useful to first discuss our approach to 

programs that have fee schedules resulting in a different amount before discussing our approach 

to the presumptive minimum.

Because of the added GHG title V permitting workload described elsewhere in this 

notice, any state that will not, under its current fee structure, collect fees adequate to fund the 

permitting of GHG sources must alter its fee structure in order to meet the requirement that fees 

be adequate to cover costs. Changes may not be required in every instance; circumstances will 

vary from state to state. For example a state may see increases in revenue from newly-covered 

sources (based on emissions of pollutants already subject to fees) that fully cover the state’s 

increased costs, or a state may be over-collecting fees now and could use the surplus to offset the 

increased costs. Nonetheless, in many cases, we think states will need to adjust their fee 

structures to cover the costs of GHG permitting in order to meet the requirements of the Act and 

our regulations.

 

15 The fee provisions are set forth in CAA section 502(b)(3) and in our regulations at 40 CFR 70.9 and 71.9.
239

For this reason, although we are not calling for new fee demonstrations at this time, we 

plan to closely monitor state title V programs during the first two steps of the Tailoring Rule to 

ensure that the added workload from incorporating GHGs into the permit program does not result 

in fee shortfalls that imperil operating permit program implementation and enforcement, 

whatever the basis of the states’ fee schedule. As described in the proposal, such fee oversight 

by EPA may involve fee audits under the authority of section70.9(b)(5) to ensure that adequate 

fees are collected in the aggregate to cover program costs, with emphasis on whether the 

additional GHG workload is being appropriately funded. Also, EPA retains the ability to initiate 

a program revision under section70.4(i)(3) or issue a notice of deficiency under the process 

described in section70.10(b) to address fee adequacy issues, which may be uncovered during a 

fee audit. By relying on existing oversight measures, we are ensuring that the fee requirements 

are met with a minimum of disruption to existing programs at a time when they will already be 

facing significant challenges related to GHG permitting.

Turning to the minority of states that do use the presumptive minimum, we did not 

propose to change the presumptive minimum calculation method to account for GHG. Currently

under the statute and our rules, the presumptive minimum is based on a subset of air pollutants 

(i.e., VOC, NAAQS pollutants except for CO, and pollutants regulated under the NSPS and 

MACT standards promulgated under sections 111 and 112 of the Act, respectively) that does not 

include GHGs. The amount is specified on a per-ton basis and changes with inflation (it is 

currently set at $43.75/ton), but does not apply to emissions over 4,000 tpy of a given pollutant 

from a given source. We noted several difficulties in applying the presumptive minimum to 

GHG, including the large amounts of GHG emissions relative to other pollutants and the need for 

better data to establish a GHG-specific amount. Noting that GHGs are not currently included in 

the Act’s list of pollutants to which the presumptive fee applies, we also invited comment on 

whether we should raise the fee for listed pollutants to cover the added cost of GHG permitting.

A few state commenters asked us to set a presumptive fee for GHGs, which we take to 

mean we should add GHGs to the list of pollutants to which a presumptive fee would apply. 

However, many commenters noted that the current presumptive minimum fee is unreasonable for 

GHGs because GHGs are emitted in greater quantities than the pollutants currently subject to 

presumptive fees, which would result in excessive fees. These commenters believe that EPA 

needs to limit the fees that states can charge for GHGs. Moreover, one commenter read the 

statute to prohibit us from listing GHGs in the presumptive fee calculation in the first place. 

Several commenters disagreed with the idea of instead increasing the presumptive fee for other 

pollutants to cover the cost of regulating GHGs, some of whom believed that this would unfairly

punish existing sources or would bring in no new revenue from sources triggering title V for the 

first time.

After considering these comments, we remain disinclined, as we were at proposal, to 

change the presumptive fee calculation regulations. While there is some support for changing 

the regulations, the comments confirm the challenges in doing so. While we expressly rejected 

charging the full presumptive cost per ton amount for GHG, we also did not propose language to 

establish a different amount just for GHG, to establish whether a different tpy cap would apply, 

or to assess whether GHGs could even be added to the list. Thus, many commenters were very

concerned about whether the full $43.75 or the 4000 tpy cap would apply to GHG if we listed it 
240

as a regulated pollutant for fee purposes. Furthermore, we noted at proposal, and commenters 

did not disagree, that more data would be needed to establish the appropriate basis for the GHG 

presumptive minimum. We are not taking a final position in this notice on whether the statute is 

amenable to including GHG in the presumptive fee calculation currently, but these comments 

illustrate some of the difficulties of such an approach.

 

At the same time, we are not increasing the presumptive minimum for other pollutants 

already included in the fee calculation. We disagree with the commenter who said such an 

approach would bring in no new revenue from newly-subject sources. Many of the newly 

subject sources would emit already-included pollutants. If new revenue from these pollutants 

were insufficient, and because the Act does not specify how the shortfall must be addressed, the 

amount of any projected shortfall could be made up by increasing fees on these pollutants. In 

fact, the projected shortfall could be addressed without having to inventory GHG emissions from 

title V sources, since the emissions of already-included pollutants are well-known. We also note 

that, although some commenters are concerned that failing to assess fees for GHGs directly

would be unfair, the statute does not provide that the presumptive fee be proportional to each 

type of pollutant or be proportionally allocated to all sources. Rather, the presumptive fee 

approach provides a backstop for states that do not wish to adopt a more tailored approach. 

Nonetheless, we have decided not to increase the presumptive fee amounts for other pollutants 

because we lack information about the extent to which shortfalls exist due to GHG permitting, 

and which mix of sources and fees is appropriate for addressing any such shortfall in a state. 

This decision also provides greater flexibility to states and minimizes disruption to existing 

programs. 

We note that, contrary to the statements of some commenters, the CAA provisions 

allowing for a presumptive fee calculation do not override the basic requirement that fees be 

adequate to cover costs. As noted previously, we expect states to see a revenue increase from 

emissions of listed pollutants at newly-major sources for GHG, and it is also possible that the 

presumptive minimum may currently be resulting in over-collection of fees in a state. Thus, a 

state continuing to use the presumptive minimum may not have a shortfall. However, if states 

using the presumptive minimum approach do have a revenue shortfall due to GHG permitting, 

the statute requires the shortfall to be addressed. The EPA has had, and will continue to have, 

the ability to require states that use the presumptive minimum to increase their fees if the 

presumptive minimum results in a revenue shortfall that imperils operating permit program 

implementation and enforcement. Thus, although we are not changing the presumptive 

minimum in our regulations, we plan to follow the same oversight approach for states using the 

presumptive minimum as for those collecting less based on a resource demonstration. As 

described previously, this approach may involve fee audits with emphasis on whether the 

additional GHG workload is being appropriately funded, and other appropriate follow-up. 

Consistent with our proposal, EPA is not modifying its own part 71 fee structure (which 

closely mirrors the presumptive minimum) in order to charge an additional fee for GHG. EPA 

must revise its fee schedule if the schedule does not reflect the costs of program administration. 

We have not determined that the existing fee structure will be inadequate to fund the part 71 

programs costs during the first two phases of permitting GHGs as set forth in this action. 

However, we are required to review the fee schedule every 2 years, and make changes to the fee 
241

schedule as necessary to reflect permit program costs. 40 CFR 71.9(n)(2). Thus we will 

continue to examine the increases in part 71 burden due to GHG permitting, the current revenue 

collection, and the increases in revenue from newly-subject part 71 sources, and will adjust the 

part 71 fee approach accordingly.

Finally, several state and industry commenters asked EPA to provide guidance and 

recommendations for an appropriate GHG fee structure. We note that title V grants permitting 

authorities considerable discretion in charging fees to sources for title V purposes and does not 

require or prohibit fees specifically for GHGs, provided the states collect fees in the aggregate 

that are sufficient to cover all the direct and indirect program costs. In responding to requests for 

guidance, we do not wish to limit state discretion. For example, some commenters suggest that 

EPA prohibit emissions-based fees for GHG or cap the amount that can be collected, while 

others suggest we provide a range of acceptable fees. We are concerned that, given the wide 

variety of fee approaches that states now take, providing specific guidance may be disruptive, 

rather than helpful, to states.

On the other hand, we recognize that it will initially be difficult for states to establish an 

appropriate emissions fee for GHG. As noted previously, there are currently limited data 

available for establishing such a fee, and, due to the large quantities of GHG emissions, such a 

fee may only amount to a few cents per ton. At the same time, as noted in the proposal, a 

number similar to that used for other pollutants (e.g., the presumptive minimum of 

approximately $45/ton of GHG) would be inappropriate because it would likely result in huge 

over-collection. Because of this challenge, we note that section 70.9(b)(3) allows the state to 

charge fees to individual sources on any basis (e.g., emission fee, application fee, service-based 

fees, or others, in any combination). While most states use emissions-based fees, there is merit 

to considering all the available fee bases to address increased GHG workload, including 

approaches that do not require a GHG emissions inventory for fee purposes. For example, where 

it is possible to estimate a revenue shortfall as a percentage of fee revenue, it may be appropriate 

to simply attach a percentage-based surcharge to each source’s fee to match that shortfall. 

Similarly, where the shortfall could be estimated as a total dollar amount, a flat surcharge could 

be added to each source’s fee to address the shortfall. 

These suggestions should not be read to indicate that EPA prefers any particular 

approach, or that EPA rejects a cost per ton approach. Rather, they illustrate that it is possible to 

address a revenue shortfall without establishing a GHG per-ton fee. While the EPA is declining 

to recommend specific approaches in the preamble of this final rule, we are committed to 

assisting states in implementing the fee requirements for GHG. Therefore, we will work with 

any state that requests assistance from EPA in developing a workable fee approach. EPA 

recognizes that states need time to adopt new fee structures, collect fees, and hire additional 

permitting staff, and has taken these issues into consideration in adopting this final rule.
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Chapter 9. Comments on Statutory and Executive Order Reviews

Section XI of the proposal preamble for the Tailoring Rule sets out EPA’s obligations 

under EOs 12866, 13045, 13132, 13175, 13211, and 12898; the PRA; the RFA; the UMRA; and 

the National Technology Transfer and Advancement Act (NTTAA); and EPA’s conclusions and 

actions performed (where necessary) to meet those obligations for the proposed Tailoring Rule. 

Comments received on EPA’s obligations under these statutory and Executive Order (EO)

reviews and EPA’s actions in response to those obligations are presented in this Chapter. 

Specific comments related to RFA SBREFA are presented in Chapter 7, section 7.2.

9.1 General Comment

Comment:

One commenter (5052) notes that it filed comments with EPA and SBA on December 1, 

2009 to help provide data on small business implications and asks that these comments be 

considered under SBREFA, UMRA, and EO 12866. (These comments are in the docket for this 

action, Docket ID No. EPA-HQ-OAR-2009-0517-5052.8.) 

Response:

We have considered all comments on the proposed action for this final rule. 

9.2 Executive Order 12866 – Regulatory Planning and Review

Comment:

Several commenters state that EPA’s failure to estimate the full costs of the effects of its 

interpretation of PSD applicability in the proposed Tailoring Rule violates EO 12866 (3513, 

4095, 4862, 4870, 5052, 5058, 5062, 5083, 5110, 5140, 5181, 5183, 5278, 5279, 5317, 5343, 

5886, 8015, 8513). Some of these commenters (4095, 5052, 5083, 5181, 5317) maintain that EO 

12866 directs EPA to submit to OMB new significant regulations under consideration by the 

EPA. These commenters assert that, in the section 202 rule, EPA failed to analyze the effect on 

stationary sources in the cost benefit analysis and there is no indication that EPA included these 

impacts in its submission to OMB. According to the commenters, in EPA’s proposal for this 

rulemaking, EPA has similarly failed to analyze the costs and benefits of triggering PSD for 

stationary sources. The commenters assert that without this key information, OMB could not 

fully review the impacts of the proposed rule. According to one commenter (4095), EPA’s 

failure to account for known costs that will occur as a direct result of the promulgation of the 

proposed rule in conjunction with the section 202 rule violates several applicable requirements of 

EO 12866, including sections 6(B)(ii) and 6(C)(iii), which require assessments of the potential 

costs and benefits of the regulatory action and “reasonably feasible alternatives to the planned 

regulation, identified by the Agencies or the public . . .” thereby violating both the APA and 

CAA section 307(d) because they deprive businesses and permitting authorities alike of a 

meaningful opportunity to comment on the rule.
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Response:

The EPA has prepared a revised RIA assessing the benefits and costs of the final 

Tailoring Rule to support this rulemaking in accordance with EO 12866 as was done with the 

proposal for this rulemaking. Similarly, the RIA completed for this action is subject to review by 

an inter-agency review panel that includes the President’s OMB as was the case with the 

proposal RIA. Further, the RIA completed for this final rule fully assesses the known benefits 

and costs associated with the tailoring rulemaking. This final rule is one of regulatory relief 

from statutory requirements in which a large number of sources of GHGs will be relieved of the 

burden of title V and PSD permitting for a period of at least six years. This final rule will 

provide relief from title V permitting to over 6 million sources of GHG in this country. 

Likewise, tens of thousands of sources potentially subject to PSD permitting requirements for 

GHGs will have regulation postponed for a period of at least 6 years. While larger sources of 

GHG may still be required to obtain title V permits or modify existing permits and to comply

with PSD requirements, these burdens result from existing statutory requirements, not from this 

final Tailoring Rule.

9.3 Paperwork Reduction Act

Comment:

Some commenters (4095, 4870, 5058, 5083, 5140, 5181, 5183, 5278, 16411) believe 

EPA has failed to comply with its obligations under the PRA. Although EPA asserts that the 

PRA’s requirement for creation and OMB review and approval of an ICR does not apply because 

of prior approval of an ICR for the PSD program, this ignores the fact that there would be a huge 

increase in the paperwork burden as a result of applying PSD and title V permitting requirements 

to sources that are “major” only because of their GHG emissions. One commenter (5181) 

maintains that the Paperwork Reduction Act (PRA) requires the EPA to seek approval from the 

OMB prior to engaging in rulemaking that will involve information collection requirements. 

EPA may not “conduct or sponsor the collection of information unless in advance of the 

adoption or revision of the collection of information... The Director [of OMB] has approved the 

proposed collection of information.” Contrary to the PRA’s clear mandate, the EPA neglected to 

submit this proposed rule to OMB for approval on the basis that “this action does not impose any

new information collection burden.” Rather, EPA claims that “this proposed action would 

significantly reduce costs incurred by sources and permitting authorities relative to the costs that 

would be incurred if EPA did not revise the rule.” Finally, according to the commenter, it is not 

an answer that EPA has previously submitted the PSD and title V regulations to OMB under the 

PRA and has received approval based on existing criteria pollutant emissions. Those approvals 

were based on the burdens created at that time, not the dramatic expansion of the program that 

EPA proposes in this rulemaking (even with the lower thresholds, doubling the number of title V 

subject sources). According to the commenter (5181), unless EPA resubmits the information 

collection approval request to OMB with a proper and fully inclusive analysis, EPA will lack 

authority to collect information from stationary sources for PSD and title V GHG emissions 

permitting. 
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Response:

As we stated in the proposal, this is a burden relief rule and as such it does not impose 

any new requirements for the NSR or title V programs that are not currently required. For that 

reason, we concluded that for purposes of this rule it was unnecessary for us to submit a new 

ICR to the OMB and that the ICR contained in the existing regulations for PSD (see, e.g., 40 

CFR 52.21) and title V (see 40 CFR parts 70 and 71) that had already been approved under the 

provisions of the PRA, 44 U.S.C. 3501 et seq. and was assigned OMB control number 20600003 

and OMB control number 20600336, respectively, still applies.

Nevertheless, we understand that once GHGs are regulated under the PSD and title V 

programs, there might be an increase in the overall paperwork burden for these programs. EPA 

will have to assess this possible burden during the normal course of 3-year renewal ICR process.

9.4 Regulatory Flexibility Act

For discussion of RFA issues, please see section 7.2 of this RTC.

9.5 Unfunded Mandates Reform Act

Comment:

Some commenters (4095, 4512, 4870, 5052, 5058, 5083, 5110, 5140, 5181, 5278, 5312, 

10432) on the proposed rule assert that EPA has failed to comply with the requirements of 

UMRA, pursuant to which EPA must assess the effects of the Proposed Rule on state, local, and 

tribal governments and the private sector. Specifically, these commenters state that section 202 

of the UMRA requires EPA to prepare a written statement, including a cost-benefit analysis, for 

proposed rules with “federal mandates” that may result in expenditures to state, local, and tribal 

governments, in the aggregate, or to the private sector, of $100 million or more in any one year. 

According to the commenters, in concluding that “the revisions would ultimately reduce the PSD 

and title V program administrative burden that would otherwise occur in the absence of this 

rulemaking,” EPA completely failed to account for the billions of dollars that permitting 

authorities and stationary sources will soon be required to spend once PSD is triggered for 

GHGs. One commenter (5052) asserts that EPA failed to adequately study the proposed rules 

costs and operational impacts on unfunded mandates as required by UMRA. The commenter 

contends that the EPA grossly underestimated the impacts to public utilities which are 

owned/operated by local governments and also to state regulatory agencies. One commenter 

(5312) alleges that implementation of PSD and title V at the statutory thresholds would generate 

permit fees at levels adequate to support those programs. If, however, EPA imposes a threshold 

of 25,000 tpy for the first 5 years, this will wall off new sources of revenue from smaller emitters 

and, essentially, impose an unfunded mandate on the various state air agencies because the they 

will not be able to attract, hire, train, and utilize the additional staff necessary to carry out the 

rule. Commenters 5304 and 5524 opine that EPA needs to further evaluate the impact on state 

and local permitting authorities in order to insure that UMRA of 2005 is not violated. 
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Response:

The EPA has carefully considered the comments on unfunded mandates expressed by

commenters to the proposed rule. The EPA did complete a RIA for the final rule assessing the 

benefits and costs of the Tailoring Rule, including any unfunded mandates. As previously

discussed, the Tailoring Rule is one of regulatory relief because it increases the GHG emissions 

threshold for NSR and title V permitting substantially above otherwise statutory requirements. 

As such, the EPA asserts this Tailoring Rule does not impose unfunded mandates on any entities. 

This RIA of the final rule incorporates the extensive changes made in this final rule, including 

increased threshold levels for title V and PSD above those contained in the proposed rule. While 

we also incorporated improved estimates of the costs for sources to obtain permits and for 

permitting authorities to process permits, they do not change our conclusion that this final rule 

does not impose unfunded mandates on any entities. 

9.6 Executive Order 13132 – Federalism

Comment:

Some comments (4095, 5058, 5083, 5715) received on the proposed rule assert that 

federalism concerns were ignored, in violation of EO No. 13132. According to the commenters, 

EPA cannot maintain that the Tailoring Rule "will not have a substantial direct effect on the 

states, on the relationship between the national government and the states, or on the distribution 

of power and responsibilities between various levels of government," such that EO No. 13132 

does not apply. Some of these commenters assert that the proposed rulemaking would require 

radical changes in state laws, interjects GHGs into permit programs never once conceived for 

that purpose (any more than was EPA's), requires massive staff hiring at state agencies, and 

rewrites SIPs in place for years or even decades.

Response:

As we stated previously, this is a burden relief rule and as such it does not impose any

requirements for the NSR or title V programs that are not currently required. In addition, this 

action does not interject GHGs into the permit programs, nor does it change state laws or SIPs to 

impose any new permitting requirements. Instead, this action will significantly reduce the 

burden and costs incurred by sources and permitting authorities relative to the burden and costs 

that would be incurred if EPA did not revise the permitting provisions to account for higher 

applicability thresholds for GHG emissions. While we are aware that a few states will have to 

amend their SIPs to incorporate these new thresholds if they do not implement the federal PSD 

and title V rules by reference in their SIPs, EO 13132 is still not implicated by this rule because

it finalizes burden reducing thresholds that would not otherwise apply to the PSD and title V 

programs. 
246

9.7 Executive Order 13175 – Consultation and Coordination with Indian Tribal Governments

Comment:

A commenter asserts that the proposed rule violates EO 13175 (5058). Another

commenter (8803) supports EPA’s proposed rule but requests that tribal air grant funding be 

increased to reflect the air quality-related needs of tribes across the nation, and to allow these 

tribes the opportunity to implement the CAA’s PSD and title V programs. The commenter states 

that, not only are tribes eligible for section 103 grant funding to conduct air quality monitoring, 

emissions inventories, and other studies and assessments, but they may also obtain section 105 

grant funding to implement CAA regulatory programs. According to the commenter, tribes are 

facing many of the same air-related issues that neighboring state and local jurisdictions are 

facing, but are significantly underfunded to address such issues.

Response:

The Agency is aware and concerned about the resource needs for the tribal air program 

and we are working to see how grant funding might be increased in the future. Nevertheless and 

for the purpose of the permitting programs, we want to clarify that tribes that develop Tribal 

Implementation Plans (TIPs) can charge for permits and tribes with delegation or authorization 

would develop permit fee programs under their authority (e.g., Navajo’s permit fee program for 

their delegated title V permit program) to fund both the NSR and title V programs. For these 

reasons, there are a number of ways we would like to work to address the funding concern, 

including encouraging delegation or authorization of permitting programs and having model 

codes available for tribes that want to do TIPs for NSR and title V permitting.

9.8 Executive Order 13211 – Actions That Significantly Affect Energy Supply, Distribution, or 

Use

Comment:

A few commenters assert that the proposed rule violates EO 13211. (5058, 5317) One 

commenter (5317) asserts that EPA’s analysis under EO 13211 is insufficient because it 

addresses only smaller sources. The commenter contends that EPA has not meaningfully

examined the energy implications of its proposed actions and interpretations of the CAA. The 

commenters disagree with EPA’s conclusion that the imposition of costly PSD obligations on 

power plants would have no impact on power supply, distribution, or use, when those plants will 

have had no time to prepare for compliance and no idea what BACT may be for GHG emissions. 

Other commenters opine that the adoption of BACT for some industries newly-subject to PSD 

permitting requirements for GHGs could involve fuel-switching, and increased energy costs 

(e.g., due to the need for a source to convert from coal to natural gas to meet BACT). (4515, 

4691, 5058, 5079, 5085 5123, 5124, 5179, 5607, 5729, 6491)
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Response:

Again, this action is a burden relief rule and as such it does not create any new 

requirements for sources in the energy supply, distribution, or use sectors. For the purpose of the 

BACT determinations for GHGs, the long-standing top-down BACT selection process still 

applies. Under the CAA and EPA’s implementing regulations, BACT is still an emission 

limitation based on the maximum degree of emission reduction achievable through application of 

production processes and available methods, systems, and techniques that considers energy, 

environmental, and economic impacts. In other words, BACT determinations for GHGs will still 

have to consider energy, environmental and economic feasibility for the various control 

technologies under consideration before selecting a particular technology as BACT for a 

particular source. For that reason, what BACT may be for GHG emissions will vary by source, 

and the technology that is ultimately selected has to be one that is feasible based on the current 

energy, environmental and economic impacts that the planned technology might have. Thus, we 

do not believe that this action is likely to have a significant adverse effect on the supply, 

distribution, or use of energy.
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Chapter 10. Miscellaneous Comments

This Chapter of the document contains comments that are relevant but not specificallygermane to what was proposed for the Tailoring Rule and/or do not fit under Chapters 2 through 

9 of this document.

Comment:

The United States Department of Agriculture (USDA) should take the lead in addressing 

GHG issues related to agriculture. This commenter provides several reasons for their position 

(e.g., knowledge, agriculture regulation experience). (5074)

Response:

The purpose of this rulemaking is to tailor the applicability criteria that determine which 

stationary sources and modification projects become subject to permitting requirements for GHG

emissions under the PSD and title V programs of the CAA. For that reason, EPA is the lead on 

any GHG issues related to the CAA. Nevertheless, any GHG issues related to a specific sector, 

such as the agriculture sector, will likely be addressed through notice and comment rulemaking 

and the USDA, as well as all other stakeholders, will be involved in this process. 

Comment:

A utility representative and utility group (5113, 5714) notes that, in the Tailoring Rule 

proposal preamble, EPA states that “sources covered by the Acid Rain program have been 

required to monitor and report CO2 emissions pursuant to the CAA” (citing 74 FR 55300). The 

commenter (5113) points out that the monitoring and reporting requirements that EPA refers to 

are required by section 821 of Public Law Number 101-549, which is not part of the CAA. The 

commenter (5113) requests that in the final rule, when EPA refers to section 821 monitoring and 

reporting requirements, it should clarify that these requirements are not part of the CAA.

Response:

We have not referenced the Acid Rain program monitoring provisions in the final rule.

In addition, we have not made a final decision whether section 821 of the CAA Amendments of 

1990 is part of the CAA. As we stated in the final rule titled: “Reconsideration of Interpretation 

of Regulations to Determine Pollutants Covered by Clean Air Act Permitting Programs (75 FR 

17004), in the October 7, 2009 proposal notice of this rule, EPA also solicited comment on the 

question of whether section 821 of the CAA Amendments of 1990 is part of the Clean Air Act. 

EPA indicated that the Agency was inclined against continuing to argue that section 821 was not 

a part of the CAA, as the Office of Air and Radiation and Region 8 had done in briefs submitted 

to the EAB in the Deseret matter. This question bears on the determination of whether the CO2

monitoring requirements in EPA’s Part 75 regulations are requirements ‘‘under the Act.’’ In the 

proposed reconsideration notice, EPA explained that it would be necessary to resolve whether or 

not the CO2 monitoring and reporting regulations in Part 75 were promulgated ‘‘under the Act’’ 

if EPA adopted the monitoring and reporting interpretation. EPA received public comments on 
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both sides of this issue, with one environmental organization pressing EPA to drop the position 

that section 821 is not a part of the CAA and several industry parties requesting that EPA affirm 

it. EPA has not yet made a final decision on this question, and it is not necessary for the Agency

to do so at this time. Since EPA is not adopting the monitoring and reporting interpretation, the 

status of section 821 is not material to the question of whether and when CO2 is ‘‘subject to 

regulation under the Act.’’ Because there are currently no controls on CO2 emissions, the 

pollutant is not ‘‘subject to regulation.’’ Given that the provisions in Part 75 do not ‘‘regulate’’ 

emissions of CO2, it is unnecessary to determine whether such provisions are ‘‘under the Act’’ or 

not to determine PSD applicability. Furthermore, the promulgation of EPA’s GHG Mandatory

Reporting Rule makes this issue even less material. In that rule, which became effective in 

December 2009 and required monitoring to begin in January of this year, EPA established 

monitoring and reporting requirements for CO2 and other GHGs under sections 114 and 208 of 

the CAA. Thus, there can be no dispute that monitoring and reporting of CO2 (as well as other 

GHGs) is now occurring under the CAA, regardless of the status of section 821 of the 1990 

amendments. At this point, the section 821 issue would only become relevant if a court were to 

find that the monitoring and reporting interpretation is compelled by the CAA and a party

subsequently seeks to retroactively enforce such a finding against sources that had not obtained a 

PSD permit with any limit on CO2 emissions. If this situation were to arise, EPA will address 

the section 821 issue as necessary.

Comment:

One commenter (8531) states that EPA should clarify when the FLM should be notified 

of PSD permit actions. In the discussion of General Requirements for PSD, on page 55298, in 

order to align with EPA and FLM guidance, the commenter recommends that the sentence reads: 

"Under PSD, if a source's proposed project may impact a Class I area, the Federal Land Manager 

(FLM) is notified and is responsible for evaluating a source's projected impact on the AQRVs..." 

The commenter states that the FLAG 2000 Report, consistent with EPA guidance, does not use a 

bright line test of 100 kilometers in determining when to notify the FLM. The significance of 

the impact to AQRVs is more important than the distance of the source. The commenter states 

that the requested change allows for the use of the most current FLM guidance for notifying the 

FLM of PSD permit actions. In addition, the requested change allows the FLM to carry out its 

affirmative responsibility of protecting Class I area.

Response:

We agree with the commenter when he states that the significance of the impact to 

AQRVs is more important than the distance of the source to a Class I area. We should not have 

specified a distance in the preamble of the proposed rule. For that reason, we are amending the 

text in the preamble of the final rule to state, as the commenter suggested, that: “Under PSD, if a 

source's proposed project may impact a Class I area, the FLM is notified and is responsible for 

evaluating a source's projected impact on the AQRVs...." 
250

Comment:

Several commenters (0523, 1157, 3607, 3741, 4021, 4123, 5184, 5312, 5318, 5454, 5766, 

5803, 7136, 8534) requested that EPA extend the period of public comment. 

One industry commenter (0523) requested a 30 day extension to the public comment

period for the proposed PSD and title V GHG Tailoring Rule. The proposed rule requests 

comment on an array of issues, many of which require detailed analysis and consideration. The 

commenter stated that they believe that the proposed 60 day comment deadline is wholly

inadequate to assess implications, review background documentation, and develop comments 

substantiated with technical data and facts, especially in the midst of the holiday season. The 

commenter stated that until GHG related mobile source regulations are promulgated, EPA is 

under no obligation to promulgate GHG regulations for stationary sources and that a 30 day

extension would allow those who wish to comment additional time to consider the rulemaking 

and develop a thoughtful response well before the mobile source regulations are promulgated. 

One manufacturing association commenter representing a group of 20 industry 

associations (1157) submitted, on November 18, 2009, a request to EPA to extend until January

28, 2010, the public comment period for the Tailoring Rule. The commenter states that the 

associations should be given the opportunity to fully evaluate the consequences of the GHG 

rulemakings, develop data and analyses, and formulate appropriate comments. The commenter 

further states that the current comment period is simply insufficient to allow the associations a 

fair opportunity to do so. The request for extension of the comment period was denied by EPA 

on November 25, 2009.

On December 22, 2009, the commenter submitted another request for an extension. 

(5766) 

The commenter summarizes the request in the following paragraph: 

"To ensure an adequate and complete record for the GHG rulemakings, to give 

commenters a fair and full opportunity to analyze the proposals individually and 

collectively, and given the close timing and inter-relatedness of the rulemakings, the 

Associations respectfully request that either: (1) EPA and NHTSA extend the public 

comment deadline for the Motor Vehicle GHG Rule until December 28, 2009, and that 

EPA extend the public comment deadlines for both the GHG Tailoring Rule and the PSD 

Interpretive Memo Reconsideration until January 28, 2010; or alternatively (2) that EPA 

consider comments submitted in the GHG Tailoring Rule to be submitted in both the PSD 

Interpretive Memo Reconsideration and Motor Vehicle GHG Rule dockets, and viceversa. The Associations believe that a failure to grant this reasonable request would be 

arbitrary and capricious."

Response:

As we stated in the letter of November 25, 2009; we were not able to extend the comment 

period of the Tailoring Rule or any of the other proposed actions related to GHGs due to the 

importance of proceeding with these actions. However, we did clarify that, as we have done in 
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the past, we would consider, to the extent possible, any comments that arrived after the close of 

the comment period. 

Comment:

One academic commenter (3003) suggests that EPA use the University of California 

dataset of GHG emissions available either through the Climate Registry or the CARB. These 

data include GHG emissions data from on-site stationary combustion and will soon be thirdparty certified and may be useful to EPA. If the commenter already collects these data for other 

purposes, it should not be difficult for the commenter to comply with the GHG Mandatory

Reporting Rule requirements if applicable. 

Response:

We thank this commenter for their suggestion, but we believe that the GHG data we are 

collecting under the GHG Mandatory Reporting Rule is the data most useful for the Agency at 

this time. 

Comment:

State commenter 3915 expresses concern over the proposed implementation periods. 

They state, “If EPA intends to reduce CO2 significance levels to current PSD levels, then it 

should be done now, thereby creating only one period of chaos and panic instead of two 

separated by 5 years. According to the commenter, if EPA does not intend to reduce the 

significance levels, then that should be made clear now or this rule promulgation postponed until 

EPA is more certain on the path forward and can justify it.” 

Response:

We disagree with this commenter. As we have stated in the preamble of this final 

Tailoring Rule, this rulemaking is necessary because without it, PSD and title V would apply to 

all stationary sources that emit or have the PTE more than 100 or 250 tons of GHGs 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 this rule being in effect, PSD and title V requirements would 

apply at the 100/250 tpy applicability levels provided under a literal reading of the CAA as of 

that date. 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 with the 

permitting authorities able to issue only a tiny fraction of the permits requested. 

These impacts – the costs to sources and administrative burdens to permitting 

authorities – that would result from application of the PSD and title V programs for GHG 
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emissions at the statutory levels as of January 2, 2011 are so severe that they bring into play the 

judicial doctrines of “absurd results” and “administrative necessity.” The “absurd results” 

doctrine authorizes departure from a literal application of statutory provisions if such an 

application would produce a result that is inconsistent with, and especially a result that 

undermines congressional intent. The “administrative necessity” doctrine authorizes an agency

to depart from statutory requirements if the agency can demonstrate that those requirements, as 

written, are impossible to administer. The departure from the statutory provisions must be no 

greater than necessary to effectuate congressional intent, in the case of the “absurd results” 

doctrine, and administrative imperatives, in the case of the “administrative necessity” doctrine. 

We have determined, through analysis of burden and emissions data as well as 

consideration of extensive public comment, that the costs to sources and administrative burdens 

to permitting authorities that would result from application of the PSD and title V programs for 

GHG emissions at the statutory levels as of January 2, 2011 should be considered “absurd 

results” that are contrary to congressional intent for each program. Similarly, the administrative 

burdens are so great as to render compliance with the literal provisions of the PSD and title V 

permitting programs administratively impossible under the “administrative necessity” doctrine. 

The phase-in approach that we promulgate with this rulemaking is consistent with congressional 

intent and administrative imperatives because it will implement the statute as closely to the 

literally prescribed levels as possible and as soon as possible, while still assuring that permitting 

authorities and affected sources can manage their permitting requirements.

In particular, the first two steps that we promulgate in this rule, which take effect on 

January 2, 2011 and July 1, 2011, are consistent with congressional intent and administrative 

imperatives because they constitute the most that permitting authorities can reasonably be 

expected to do by those times. Similarly, the 50,000 tpy floor that we promulgate through at 

least April 30, 2016 is reasonable because the information we have available now shows that it 

constitutes the most that permitting authorities can reasonably be expected to do by that date. 

Finally, the study and two additional rulemakings – to take effect by July 1, 2013 and April 30, 

2016 -- to which we commit in this rule are also consistent with congressional intent and 

administrative imperatives because they establish a track for acquiring additional information 

and for taking further steps to apply PSD and title V more closely to the literal statutory levels. 

Although we cannot say whether or when we would ultimately apply the PSD and title V 

programs at the literal statutory thresholds, we can say that we intend to apply them as closely to 

those levels as is consistent with congressional intent and administrative imperatives, consistent 

with the “absurd results” and “administrative necessity” doctrines. 

Comment:

One commenter asserts that to the extent that the rule works a discriminatory hardship 

against Midwestern coal-burning sources, it also imposes an economic hardship against the 

lower income populations in that region. The commenter believes that by using an 

environmental regulation to selectively create an economic harm, EPA is raising serious issues of 

environmental justice. (5312)
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Response:

As we stated in the previous chapter, this is a burden relief rule and as such it does not 

impose any requirements for the NSR or title V programs that are not currently required. In 

addition, this action does not interject GHGs into the permit programs, nor does it change state 

laws or SIPs to impose any new permitting requirements. Instead, this action will significantly 

reduce the burden and costs incurred by sources and permitting authorities relative to the burden 

and costs that would be incurred if EPA did not revise the permitting provisions to account for 

higher applicability thresholds for GHG emissions. For these reasons, we disagree with this 

commenter when he states that the rule might work a discriminatory hardship against 

Midwestern coal-burning sources.