1

IN THE UNITED STATES COURT OF APPEALS 

FOR THE DISTRICT OF COLUMBIA CIRCUIT 

COALITION FOR RESPONSIBLE REGULATION, ) 

et al., ) 

 Petitioners, ) 

 ) 

 v. ) No. 09-1322 (and 

 ) consolidated cases) 

UNITED STATES ENVIRONMENTAL ) 

PROTECTION AGENCY, ) 

 Respondent. ) 

_____________________________________________ ) 

 

COALITION FOR RESPONSIBLE REGULATION, ) 

INC., et al., ) 

 Petitioners, ) 

 ) 

 v. ) No. 10-1073 (and 

 ) consolidated cases) 

UNITED STATES ENVIRONMENTAL ) 

PROTECTION AGENCY, ) 
2

 Respondent. ) 

_____________________________________________ ) 

 ) 

COALITION FOR RESPONSIBLE REGULATION, ) 

et al., ) 

 Petitioners, ) 

 ) 

 v. ) No. 10-1092 (and 

 ) consolidated cases) 

UNITED STATES ENVIRONMENTAL ) 

PROTECTION AGENCY, ) 

 Respondent. ) 

_____________________________________________ 

 ) 

SOUTHEASTERN LEGAL FOUNDATION, ) 

INC., et al., ) 

 Petitioners, ) 

 ) 

 v. ) No. 10-1131 (and 

 ) consolidated cases) 

UNITED STATES ENVIRONMENTAL ) 

PROTECTION AGENCY, ) 

 Respondent. ) 
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DECLARATION OF REGINA MCCARTHY 

I, Regina McCarthy, declare under penalty of perjury under the laws of the United States of 

America that the following is true and correct to the best of my knowledge, information and 

belief, and is based on my own personal knowledge or on information contained in the records of 

the United States Environmental Protection Agency (EPA) or supplied to me by EPA employees 

under my supervision.

1. I am the Assistant Administrator for the Office of Air and Radiation at EPA, a 

position I have held since June 2009. The Office of Air and Radiation (OAR) is the EPA office 

that develops national programs, technical policies, and regulations for controlling air pollution. 

OAR’s assignments include the protection of public health and welfare, pollution prevention and 

energy efficiency, air quality, industrial air pollution, pollution from vehicles and engines, acid 

rain, stratospheric ozone depletion, and climate change. 

2. OAR is responsible for the development and implementation of regulations, policy, 

and guidance associated with the Prevention of Significant Deterioration (PSD) and title V 

operating permits programs under the Clean Air Act (CAA or Act). This includes the 

development of regulations governing the way that the PSD program applies to sources of 

greenhouse gas (GHG) emissions. In particular, my office was responsible for developing the 

Tailoring Rule and the other actions at issue in the above-captioned cases. Along with other 

EPA offices and States, OAR is responsible for implementing the actions at issue. 

3. Prior to joining EPA, I served as the Commissioner of the Connecticut Department of 

Environmental Protection. I have worked at both the state and local levels on critical 

environmental issues, helped coordinate policies on economic growth, energy, transportation and 

the environment, and have experience with the Regional Greenhouse Gas Initiative, the nation’s 

first market-based, greenhouse gas cap-and-trade system. I have a B.A. in Social Anthropology 

from the University of Massachusetts at Boston and a joint M.S. in Environmental Health 

Engineering and Planning and Policy from Tufts University. 

4. EPA is currently – and has been for some time – very closely focused on the need to 

implement the PSD and Title V programs in a smooth-running fashion for GHG-emitting 

sources. The purpose of this declaration is to describe the status of state and EPA efforts to 

implement the PSD and title V programs for GHG-emitting sources, including the Tailoring Rule 

thresholds. Much of this information is available in various rulemakings that EPA has 

promulgated or proposed; even so, for convenience, this declaration will summarize it. As I will 

explain in this declaration, we have carefully developed a plan – which involves several 

additional rulemakings that are now in process – that will provide for smooth implementation of 

PSD and Title V permitting requirements for GHG-emitting sources. In almost all cases, the 
4

states are working closely with us. Our current information, which I describe at length here and 

in the supporting attachments, demonstrates that come January 2, 2011, when GHG requirements 

will take effect, there is every reason to expect that the permitting authorities – the states and in 

some cases EPA – will be fully able to manage the permitting process. Moreover, as I also 

explain in this declaration, there is every reason to expect that the permitting authorities will be 

well-equipped to determine the central PSD permitting requirement, which is the identification 

of best available control technology (BACT), for the regulated sources, based on the procedures 

and precedents in EPA’s 30-year history of BACT implementation. 

I. The PSD program and applicability to GHGs 

5. EPA is undertaking several actions and working closely with the states to assure that 

in each state, locality, or other jurisdiction in the United States, as appropriate, as of January 2, 

2011 or as soon as possible thereafter, there is a permitting authority to process PSD permit 

applications, and the Tailoring Rule thresholds are in place under both federal and state law. 

6. EPA is taking these actions against the backdrop of EPA’s recent completion of four 

distinct actions related to regulation of greenhouse gases under the Clean Air Act. The first was 

the Endangerment Finding, which is governed by CAA § 202(a). Based on an exhaustive review 

and analysis of the science, in December 2009 the Administrator exercised her judgment to 

conclude that “six greenhouse gases taken in combination endanger both the public health and 

the public welfare of current and future generations.” The Administrator also found “that the 

combined emissions of these greenhouse gases from new motor vehicles and new motor vehicle 

engines contribute to the greenhouse gas air pollution that endangers public health and welfare 

under CAA section 202(a).” Endangerment and Cause or Contribute Findings for Greenhouse 

Gases Under Section 202(a) of the Clean Air Act, 74 FR 66496 (December 15, 2009). This 

Endangerment Finding led directly to promulgation of what we call the Vehicle Rule, also 

governed by CAA § 202(a), in which EPA set standards for the emission of greenhouse gases for 

new motor vehicles built for model years 2012-2016. Light-Duty Vehicle Greenhouse Gas 

Emission Standards and Corporate Average Fuel Economy Standards; Final Rule, 75 FR 25324 

(May 7, 2010). 

7. The other two actions, the Johnson Memo Reconsideration and the Tailoring Rule, 

governed by the PSD and title V provisions in the CAA, were issued to address the automatic 

statutory triggering of these programs for greenhouse gases due to the Vehicle Rule establishing 

the first controls for greenhouse gases under the Act. More specifically, the Johnson Memo 

Reconsideration provided EPA’s interpretation of a pre-existing definition in its PSD regulations 

delineating the “pollutants” that are taken into account in determining whether a source must 

obtain a PSD permit and the pollutants each permit must control. The Johnson Memo 

Reconsideration stated that when the Vehicle Rule “takes effect” on January 2, 2011, the 

regulations in that rule will, by operation of the applicable CAA requirements, subject GHGemitting sources to PSD requirements. Interpretation of Regulations that Determine Pollutants 
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Covered by Clean Air Act Permitting Programs, 75 FR 17,004 (April 2, 2010). The Tailoring 

Rule established a series of steps for phasing in the applicability thresholds that govern what 

sources PSD and title V permit requirements for greenhouse gases apply to, starting with the 

largest sources of greenhouse gas emissions. Prevention of Significant Deterioration and Title V 

Greenhouse Gas Tailoring Rule; Final Rule, 75 FR 31,514 (June 3, 2010). 

 A. Introduction 

 8. In the following paragraphs, I will briefly provide the essential background 

information concerning the CAA PSD program, the incorporation of the PSD program into state 

implementation plans (SIP), and the applicability of the PSD program to GHGs. More detailed 

expositions of this background information are contained in a number of rules or proposed rules.1

 

B. The PSD program 

9. As provided in EPA regulations, the PSD program requires that a “major stationary 

source” obtain a permit before it constructs or undertakes a major modification. While I focus 

on major stationary sources in this declaration, most PSD triggering actions relate to major 

modifications and much of the discussion below applies equally to them as well. 

10. EPA regulations define a “major stationary source” as a source that emits 100 or 250 

tons per year (tpy), depending on the source category, of any “regulated NSR pollutant.” I will 

refer to this 100 or 250 tpy threshold as the “100/250 tpy threshold.” 

11. EPA regulations define the term “regulated NSR pollutant” to include, among other 

things, “any other pollutant subject to regulation under the CAA.” 

12. EPA adopted the requirement that PSD apply to a source that emits a “regulated NSR 

pollutant” in Prevention of Significant Deterioration (PSD) and Nonattainment New Source 

Review (NSR); Final Rule and Proposed Rule,, 67 FR 80186 (December 31, 2002) (NSR 

Reform rule). Prior to this rule, EPA regulations required that PSD apply to a source that emits 

                                                           

1

 See Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule; 

Proposed Rule, 74 FR 55292 (October 27, 2010) (proposed Tailoring Rule); 75 FR 31514. 

Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule; Final Rule,

75 FR 31514 (June 3,2010) (final Tailoring Rule); Action to Ensure Authority to Issue Permits 

under the Prevention of Significant Deterioration Program to Sources of Greenhouse Gas 

Emissions: Finding of Substantial Inadequacy and SIP Call; Proposed Rule, 75 FR 53,892 

(September 2, 2010) (proposed GHG PSD SIP Call or proposed SIP Call); Action to Ensure 

Authority to Issue Permits under the Prevention of Significant Deterioration Program to Sources 

of Greenhouse Gas Emissions: Federal Implementation Plan; Proposed Rule, 75 FR 53,892 

(September 2, 2010) (proposed GHG PSD FIP or proposed FIP).
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“any pollutant subject to regulation.” This phrase is not part of the definition of “regulated 

pollutant.” 

13. Once a source is subject to PSD, it must obtain a permit before it constructs or 

modifies and the permit must meet certain requirements. For purposes of the applicability of the 

PSD program to GHG-emitting sources, the key requirement is that the source must implement 

BACT. 

C. The incorporation of the PSD program into the SIP 

14. Each state is required to include a PSD program in its approved SIP. 

15. Most states have done so, as indicated in Attachment 1 (Table 1: State 

Implementation of Greenhouse Gas PSD Permitting Requirements). 

16. The approved SIP PSD programs must contain requirements that mirror, or are at 

least substantially equivalent to, EPA regulatory requirements. 

17. Most of the approved SIP PSD programs apply to a stationary source that emits at the 

100/250 tpy threshold any “regulated NSR pollutant” when it constructs or undertakes a major 

modification, in accordance with current EPA regulations, which reflect the NSR Reform rule 

requirements. 

18. Some of the approved PSD SIPs provide that they apply the PSD program to a 

stationary source that emits at the 100/250 tpy threshold any “pollutant subject to regulation” 

when it constructs or undertakes a major modification, in accordance with EPA regulations in 

place prior to revision by the NSR Reform rule. 

19. In the states that do not have a PSD program as part of their approved SIP, EPA 

regulations are the applicable law in the state and EPA acts as the permitting authority for PSD 

permits. In this case, the EPA regulations constitute a Federal implementation plan (“FIP”). 

See, 40 C.F.R. 52.21(a)(1). 

20. A state with a FIP may accept a delegation from EPA to administer the FIP and issue 

PSD permits pursuant to federal law as EPA’s agent. See,40 C.F.R. 52.21(u). Such delegations 

are implemented through a delegation agreement between EPA Regional Offices and state or 

local air pollution control agencies and do not require a notice and comment rulemaking process. 

Delegation agreements may be completed in a relatively short time frame, as soon as the parties 

are able to agree upon the appropriate terms. EPA has several existing delegation agreements for 

PSD permitting that may be used as a model for agreements addressing PSD permitting for 

greenhouse gases.
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21. In a state that has an approved SIP PSD program, the provisions of the SIP PSD 

program as well as the CAA are the applicable law in the state and the state – or in some cases 

local government – acts as the permitting authority for PSD permits. 

D. Applicability of PSD program to GHGs 

22. As of January 2, 2011, PSD requirements will apply to certain stationary sources of 

GHG emissions. 

23. In promulgating the Tailoring Rule, EPA recognized that absent such a rule, the PSD 

program would apply to GHG-emitting sources at the 100/250 tpy threshold, in accordance with 

the CAA, EPA’s PSD regulatory requirements and with SIP PSD requirements. 

24. In the Tailoring Rule, EPA further recognized that if PSD requirements applied to 

GHG-emitting sources at the 100/250 tpy threshold levels as of January 2, 2011, permitting 

authorities would be overwhelmed by the large number of permit applications. 

25. Accordingly, in the Tailoring Rule, EPA revised its regulations to phase in the 

application of PSD requirements to GHG-emitting sources. As of January 2, 2011, PSD applies 

only to sources that would otherwise be required to obtain PSD permits for their other pollutants 

(which we refer to as “anyway” sources), and that emit 75,000 tpy CO2e of GHGs as a result of 

construction or will increase emissions by at least 75,000 tpy CO2e as a result of a modification. 

As of July 1, 2011, PSD continues to apply to such “anyway” sources, and also applies to any 

other sources that emit at least specified amounts of GHGs when they construct or modify. 

E. Categories of SIPs 

26. The smooth-running of the PSD program for GHG-emitting sources necessitates 

assuring that in each state or locality (as appropriate) as of January 2, 2011 or as soon as possible 

thereafter, there is a permitting authority in place to process PSD permit applications and either 

(i) the Tailoring Rule thresholds are in place under both federal and state law or, (ii) if the state 

prefers thresholds lower than the Tailoring Rule thresholds, the state has provided assurances in 

accordance with CAA §110(a)(2)(E)(i) that it has adequate resources to carry the associated 

permitting burdens. Assuring the availability of a permitting authority is important because the 

CAA requires sources to have a permit and without a permitting authority, the source cannot 

acquire the permit and therefore would face an obstacle to constructing or modifying. Including 

the Tailoring Rule thresholds in the SIP is important – assuming the state does not seek lower 

thresholds – because otherwise, large numbers of small sources would require permits and 

permitting authorities would experience overwhelming burdens. 

27. Each state falls into one of three categories with respect to the authority contained in 

its SIP to apply its PSD program to GHG-emitting sources and its authority to implement the 

Tailoring Rule thresholds: Category 1 includes states that do not have an approved SIP PSD 
8

program. In each of these states, the applicable law is EPA regulatory requirements – which 

already incorporate the Tailoring Rule thresholds – and the permitting authority is either EPA or 

the state (if the state has accepted delegation). Category 2 includes states that do have approved 

SIP PSD programs but do not have the authority to apply those programs to GHG emitting 

sources because, for example, their SIP PSD programs are limited to certain listed pollutants 

(and do not list GHGs) or are not automatically self-updating to include newly regulated 

pollutants. For these states, steps must be taken to ensure that a permitting authority is available 

to process PSD permit applications from GHG-emitting sources, and to ensure that PSD 

requirements apply to GHG-emitting sources. Category 3 includes states that do have approved 

SIP PSD programs that apply to GHG-emitting sources. For these states, steps must be taken to 

ensure that PSD requirements apply only to GHG-emitting sources at the Tailoring Rule 

thresholds. 

1. Category 1: States that do not have an approved SIP PSD Programs

28. Category 1 includes states and other jurisdictions that do not have an approved SIP 

PSD program. 

29. As indicated in Attachment 1, table 1, Category 1 includes 47 locations total – 7 

states, 4 territories, 35 localities (including Michigan Class I areas), and the District of Columbia 

– as well as all of Indian country (which is not included in this table). 

30. In each of these states and other jurisdictions, EPA regulations, 40 CFR 52.21, 

constitute the applicable PSD regulatory requirements. These regulations constitute a federal 

implementation plan (FIP). 

31. In most of these states and other jurisdictions, EPA is the permitting authority, but 5 

states and 7 localities (including Michigan Class 1 areas) have accepted delegation (and one 

additional state has accepted partial delegation). 

32. In all of these states and other jurisdictions, EPA revised the operative law when it 

promulgated the Tailoring Rule, so that the operative PSD requirements incorporate the 

Tailoring Rule thresholds. 

33. Therefore, in each of these states and other jurisdictions, as of January 2, 2011, when 

GHG-emitting sources become subject to PSD requirements for their GHGs, a permitting 

authority will be in place to process the sources’ PSD permit applications, and the applicable law 

will reflect the Tailoring Rule thresholds, so that sources of GHGs below the Tailoring Rule 

thresholds will not be subject to the requirement to obtain a PSD permit. 

2. Category 2: States with approved SIP PSD programs that do not apply to GHGs

34. Category 2 includes states and other jurisdictions that do have approved SIP PSD 

programs, but whose PSD programs do not apply to GHG-emitting sources. 
9

35. In Category-2 jurisdictions in this category, the lack of an approved SIP PSD program 

that applies to GHG-emitting sources means that EPA’s regulatory interpretation of the 

applicability of PSD to GHG-emitting sources governs (as opposed to whatever an approved SIP 

PSD program might have otherwise provided about PSD applicability to GHG-emitting sources), 

and under the Tailoring Rule, EPA interpreted the PSD applicability provisions to apply only to 

GHG-emitting sources above the Tailoring Rule thresholds. As a result, in these jurisdictions, 

only GHG-emitting sources at or above the Tailoring Rule thresholds are required to apply for 

permits for their GHGs. 

36. However, for these states, it is important to take steps to ensure that a permitting 

authority is available to process PSD permit applications from GHG-emitting sources. Without 

an authority, no permits can be issued to these sources. 

a. Proposed SIP Call and FIP 

37. EPA addressed Category 2 states and other jurisdictions in two companion rules 

proposed by notice dated September 2, 2010: the proposed GHG PSD SIP Call (or SIP Call) and 

the GHG PSD FIP (or FIP). 

38. In the proposed GHG PSD SIP Call and FIP, EPA stated that 13 states (including, in 

two of the states, some localities) had approved SIP PSD programs that did not apply to GHGs, 

that is, that fell into Category 2, and EPA proposed a SIP Call and FIP, as discussed below, for 

each of those states. 

39. In the GHG PSD SIP Call and FIP proposals, EPA explained in detail what a SIP Call 

and FIP are the legal basis and expected process for the SIP Call and FIP, and how the SIP Call 

and FIP will address the availability of a permitting authority. The following is a summary 

description of what we said in our proposals. 

40. Approved SIPs are required to include PSD programs. PSD programs, in turn, are 

required to apply to all pollutants subject to regulation. As noted above, as of January 2, 2011, 

GHGs will be subject to PSD. Accordingly, PSD programs are required to apply to GHGs as of 

that date. 

41. Under CAA §110(k)(5), EPA is authorized to find that a SIP is substantially 

inadequate to meet CAA requirements, and if EPA makes such a finding, to require the state to 

submit a corrective SIP revision. We refer to that requirement as a SIP call. In issuing a SIP 

call, EPA is required to establish a reasonable deadline not to exceed 18 months for the state to 

submit the corrective SIP revision. 

42. Under CAA §110(c), if the state fails to submit the corrective SIP revision by that 

deadline, then EPA is authorized to find that the state failed to submit a required SIP submittal. 
10

That finding triggers an obligation by EPA to issue a FIP under 110(c) any time within two years 

of the finding. 

43. In the PSD GHG SIP Call proposal, EPA, applying these requirements to the 13 

states, proposed to find that their SIPs were substantially inadequate to meet CAA requirements 

because they do not apply the PSD requirements to GHGs as of January 2, 2011. EPA stated 

that it intended to finalize the SIP Call on Dec. 1, 2010. 

44. In the PSD GHG SIP Call proposal, EPA proposed a SIP submittal deadline of 12 

months from date of the final rule, unless the state indicated that it preferred, or at least did not 

object to, an earlier deadline, as early as 3 weeks from the date of signature of the final rule (that 

is, December 22, 2010). EPA asked states to advise EPA by letter, by October 4, 2010, how 

each state intended to respond to the SIP Call, including the SIP submittal date that the state 

believed EPA should establish for the state. We refer to this letter as the “30-day letter.” EPA 

made clear that if a state indicated in its 30-day letter that it did not object to EPA establishing an 

earlier SIP submittal date that the state identifies – again, as early as three weeks after 

promulgation of the GHG PSD SIP Call final rule – EPA would establish that date as the SIP 

submittal deadline. 

45. In the GHG PSD FIP proposal, EPA proposed a FIP for each of the 13 states that 

were the subject of the GHG PSD SIP Call proposal. The FIP would consist of the applicable 

provisions of EPA regulations, 40 CFR 52.21, and as a result, would apply PSD to GHGs and 

would include the Tailoring Rule thresholds. 

46. In the GHG PSD SIP Call and FIP proposals, EPA stated that upon the SIP submittal 

date, if the state had submitted a corrective SIP revision, EPA would proceed to promptly take 

action on it. EPA further stated that if the state so requested, EPA would expedite its action on 

the SIP submittal through parallel processing. Under this approach, the state would send EPA 

the draft of the SIP revision on which the state intended to seek comment at the state level. EPA 

would publish a Federal Register notice proposing to approve the SIP revision and providing a 

public comment period. In this manner, the state public comment period and the Federal public 

comment period would occur at approximately the same time. Following the state public 

comment period, the state would submit the final SIP revision to EPA as a formal SIP 

submission. If the final SIP revision was substantially similar to the draft SIP submittal upon 

which EPA solicited comment, then EPA would expeditiously move to take final action on the 

final SIP revision. In this manner, parallel processing provides for expedited EPA action on SIP 

submittals. Parallel processing is specifically authorized in EPA regulations, and EPA has used 

it many times.

47. In the GHG PSD SIP Call and FIP proposals, EPA further stated that upon the SIP 

submittal date, if the state had not submitted the corrective SIP revision, then EPA would 
11

immediately make a finding of failure to submit and immediately finalize the proposed FIP for 

the state. 

48. In the GHG PSD SIP Call and FIP proposals, EPA further stated that the FIP, if 

promulgated, would remain in place until the state submitted and EPA approved the corrective 

SIP revision, in accordance with CAA section 110(c). 

49. In the GHG PSD SIP Call and FIP proposals, EPA made clear that its preferred 

outcome was that the states submit and EPA approve corrective SIP revisions that applied PSD 

to GHG-emitting sources and either incorporated the Tailoring Rule thresholds or, if the state 

selected lower thresholds, demonstrated adequate resources to implement those lower thresholds. 

EPA explained that this action would establish the state as the permitting authority and would 

establish the proper thresholds. EPA emphasized that if it ended up promulgating a FIP, it would 

rescind the FIP as soon as the state submitted and EPA approved a corrective SIP revision. 

50. Through this approach, the GHG PSD SIP Call and FIP actions are designed to 

encourage the states to submit for approval a corrective SIP revision as soon as possible. In 

addition, these actions establish a mechanism by which, if any state is unable to submit a 

corrective SIP revision for approval prior to January 2, 2011, EPA may take action – that is, 

promulgate a FIP – to establish a permitting authority and to establish the Tailoring Rule 

thresholds as the applicable law. EPA stated in the SIP Call proposal that the state can assure 

that EPA will take that action by the January 2, 2011 date that PSD applies to GHG sources by 

indicating that the state does not object to EPA establishing a SIP submittal date of December 

22, 2010. EPA asked the States to send letters within 30 days indicating their SIP submittal 

deadline. We call these letters the 30-day letters. The letters EPA received from the 

jurisdictions, on October 4, 2011 and shortly thereafter, are included in Attachment 2. 

51. In the GHG PSD SIP Call, EPA solicited comment on whether each of the 13 states’ 

SIP PSD programs fails to apply to GHGs, and whether any of the other states’ SIP PSD 

programs fail to cover GHGs. EPA stated that if, after receiving comment, EPA concluded that 

any of the 13 states’ SIP PSD program actually does apply to GHGs, then EPA would not 

finalize the SIP Call for that state. By the same token, if EPA concluded that any of the other 

states’ SIP PSD programs actually does not apply to GHGs, then EPA would finalize the SIP 

Call for such a state. 

 b. Expected action 

52. EPA expects to finalize the GHG PSD SIP Call by December 1, 2010. Although no 

final decision has been made, at present, based on comments and other information received, we 

expect the final SIP Call to cover the same states and localities as proposed, except that we do 

not expect to finalize the SIP call at this time for Alaska, Kentucky (Louisville Metro APCD 

(Jefferson County)), or Nevada (Clark County), for which we proposed the SIP Call, because we 

expect those jurisdictions to submit SIP revisions prior to December 1, 2010; and we do expect 
12

to finalize the SIP call for Wyoming, for which we did not propose the SIP call but did solicit 

comment on whether to issue a SIP call. 

53. For any state that submits a corrective SIP revision by its deadline, EPA expects to 

take action promptly on that SIP revision. 

54. For any state that fails to submit a corrective SIP revision by its deadline, EPA 

expects, immediately after that deadline, to issue a finding of failure to submit a required SIP 

revision and, at the same time, to promulgate a FIP. 

c. Status of states. 

55. EPA regional and headquarters officials have conferred extensively with state 

officials concerning the states’ progress and plans, and the results are summarized in Table 2 in 

Attachment 1 and discussed below.2

 Based on the states’ 30-day letters and other 

communications with the states, 12 states and 4 localities (16 total) operate PSD programs under 

SIPs that EPA expects to identify as lacking the authority to issue PSD permits for GHG 

emissions starting Jan. 2, 2011.3

 EPA expects that of these programs, 7 states and 1 locality will 

be subject to a FIP by Jan. 2, 2011; and 2 additional states and 1 additional locality will have an 

approved SIP in place by Jan. 2, 2011. Of the remaining 3 states and 2 localities, 2 states and 1 

locality are expected to have a SIP revision or FIP in place in the first quarter of 2011 and 1 

locality is expected to have a SIP in place in the first half of 2011. As noted in the table, in none 

of these states are the gaps expected to pose meaningful difficulties for sources in the states 

because, depending on the state, the gap is very brief, the state does not expect any sources to 

seek a permit during the gap, or even if the state were the permitting authority during the gap, it 

could not complete processing the permits during that time. One remaining state, Texas, has not 

yet specified a SIP submittal deadline and as a result, EPA intends to continue to work with the 

state to satisfactorily establish a permitting authority so as to avoid delays in processing the 

permitting applications for the sources in the state that are expected to undertake construction or 

modification projects. 

                                                           

2

 In addition, the National Association of Clean Air Agencies (NACAA) recently reviewed the 

30-day letters from the states and accurately summarized them in a report, “GHG Permitting 

Programs Ready To Go By January 2nd” (October 28, 2010). This report is included as 

Attachment 3. In a few cases, the information EPA collected is more recent than what was 

available to NACAA because EPA’s information is based not just on the 30-day letters but also 

on conferring with the states.

3

 Note that the proposed GHG PSD SIP call proposed the SIP call for 13 states and localities. 

However, our most recent information indicates that 12 states and 4 localities should be subject 

to the SIP call. See ¶¶ 51-52, supra. Because of our solicitation of comment, no supplemental 

proposal for this action is necessary.
13

d. Other FIP Issues 

56. We expect that of the 10 states and localities4

for which there is a strong chance we 

will promulgate a FIP, 4 intend to accept delegation and 1 is considering accepting delegation. 

57. In general, any state that accepts a delegation and implements the FIP in its state, 

would retain a great deal of discretion in making PSD permitting decisions, including the BACT 

determination. The BACT determination will generally be the most important of determination 

that a permitting authority will make for GHG emissions during the permitting process. 

58. I am aware that officials in Texas have expressed reservations about the impact that 

becoming subject to a FIP would have on state prerogatives. 

59. Accordingly, as part of our ongoing efforts to satisfactorily establish a permitting 

authority in Texas, we have analyzed one of the choices available to Texas, which is our 

promulgation of a FIP and Texas’ acceptance of a delegation of permitting authority, with an eye 

to ascertaining how this choice would impact Texas’ ability to make key permitting decisions for 

its sources. If Texas were to accept delegation, Texas would be required to implement EPA 

regulations, including EPA regulatory requirements concerning BACT. Even so, the PSD BACT 

requirements that Texas would be required to apply if it were the permitting authority by virtue 

of being EPA’s delegee would be the same as it would be required to apply if it were the 

permitting authority by virtue of having the Texas approved SIP apply to GHG sources. 

55982/1, See 75 Fed. Reg. 55978, 55982/1, 55986 (Sept. 15, 2010) (recent approval of Texas SIP 

submission for PSD BACT) (in taking this action, EPA stated, “Based upon TCEQ’s July 2010 

SIP revision, which reinstates into the TCEQ rules the federal PSD BACT definition, its PSD 

BACT definition is EPA’s PSD BACT definition.” (emphasis in original)). 

60. In addition, Texas, like any permitting authority, would inherently have a great deal 

of discretion PSD permitting decisions because BACT determinations are made on a case-bycase basis that entails making judgments about a number of factors. 

61. EPA recognizes that it will need to devote additional resources to permitting in those 

states and localities for which EPA has promulgated a FIP but that do not accept a delegation. 

EPA expects to have adequate resources for each such state. 

3. Category 3: States with approved SIP PSD programs that apply to GHGs but 

that do not incorporate the Tailoring Rule thresholds. 

62. The third PSD category includes states and localities that do have approved SIP PSD 

programs that will apply to GHG-emitting sources as of January 2, 2011, but that do not 

                                                           

4

 This count does not include Texas, for which, as noted above, we intend to continue to work 

on a resolution.
14

incorporate the Tailoring Rule thresholds. As a result, absent further action, as of January 2, 

2011, these SIPs will apply PSD to GHG-emitting sources at the 100/250 tpy level. Because 

none of these states has indicated an intent to permit GHG-emitting sources at levels below the 

Tailoring Rule thresholds, or any assurance that they may have sufficient resources to do so, it is 

important to take steps as soon as possible to ensure that PSD requirements in these states apply 

to GHG-emitting sources at the Tailoring Rule thresholds. 

63. EPA addressed this category in the Tailoring Rule proposal and final rule, and is 

preparing additional action, to be completed before the end of this year. The following describes 

how EPA intends to address this category, as set forth in the Tailoring Rule and as EPA expects 

to set forth in an upcoming action, and the status of state efforts to implement the Tailoring Rule 

thresholds. 

a. Tailoring Rule Proposal 

64. The States in Category 3 have approved SIPs that incorporate either EPA’s current 

PSD regulatory requirements (established in the NSR Reform rulemaking in 2002) or EPA’s 

PSD regulatory requirements prior to being revised in the NSR Reform rulemaking. 

65. As noted above, under the current EPA regulatory requirements, PSD applies to a 

“major stationary source,” which is defined as a stationary source that emits, at the 100/250 tpy 

threshold, a “regulated NSR pollutant,” and that term, in turn, is defined in relevant part as “any 

pollutant that is otherwise subject to regulation.” These regulations reflect EPA’s interpretation 

of the PSD applicability requirements in Clean Air Act section 165(a)(1) and 169. 

(i). Applicability threshold and method of revising regulations

66. In the Tailoring Rule proposal, EPA recognized that when PSD became applicable to 

sources – which would occur by operation of the PSD statutory requirements in CAA section 

165(a)(1) as a result of EPA’s completion of the Vehicle Rule the PSD applicability thresholds 

of 100/250 tpy in the EPA regulations and the SIPs for states in this category would apply, and 

result in many small sources becoming subject to PSD. As a practical matter, this would impose 

extraordinary administrative burdens on the permitting authorities. 

67. Accordingly, and on the basis of its legal interpretation of the Clean Air Act PSD 

applicability requirements, EPA proposed to phase-in the applicability of PSD to GHG-emitting 

sources. 

68. To accomplish this, EPA proposed to revise the definition of major stationary source 

in its regulations to establish for GHGs an applicability threshold of, in general, 25,000 tpy 

carbon dioxide equivalent (CO2e), instead of the 100/250 tpy threshold, and to adopt this as the 

threshold for determining if a modification has occurred. Under this proposal, this higher 
15

threshold would remain in place for at least six years, after which time EPA would conduct 

further rulemaking. 

69. EPA proposed to revise the major stationary source definition by replacing the 

100/250 tpy threshold with a higher threshold that applied only for GHGs, so that when GHGs 

became subject to regulation and therefore became a regulated NSR pollutant, a source emitting 

GHGs would be treated as a major stationary source on account of its GHG emissions only if it 

emitted at or above the higher threshold established for GHGs. 

(ii). Proposed Process for SIP action by states and EPA 

70. In the Tailoring Rule proposal, EPA recognized that even after it revised its 

regulations to include higher thresholds for GHGs, in states in this category, the SIP PSD 

requirements would apply to GHG-emitting sources as of the date that GHGs became subject to 

regulation under the Clean Air Act, and the SIP PSD requirements would remain applicable until 

the state revised them and EPA approved those revisions. Moreover, those approved SIPs would 

impose PSD requirements at the 100/250 tpy threshold. 

71. EPA further recognized that application of the PSD applicability requirements by the 

SIPs at the 100/250 tpy threshold – notwithstanding the fact that EPA would have revised its 

regulations to include the Tailoring Rule thresholds – would give rise to the administrability 

issues that the Tailoring Rule was designed to address. 

72. EPA also recognized that many states might find it difficult to submit a SIP revision 

incorporating the higher Tailoring Rule threshold for GHGs in time for EPA to approve it by the 

date that PSD would become applicable to GHG-emitting sources. 

73. To address the problems posed by the continuing applicability of the SIPs with 

approved PSD provisions to GHGs, EPA included in the Tailoring Rule proposal a proposal to 

rescind EPA approval of these SIPs to the extent they applied the PSD program to GHG-emitting 

sources below the Tailoring Rule threshold. Such a rescission of approval would mean that 

GHG-emitting sources below the Tailoring Rule threshold would not be under any SIP 

requirement as a matter of Federal law to obtain a PSD permit. 

74. EPA explained that its legal basis for this rescission proposal was rooted in the 

requirement under CAA §110(a)(2)(E), 42 U.S.C. 7410(a)(2)(E) that States have adequate 

resources to implement their SIP. Specifically, EPA stated: 

[O]f particular relevance for this action, subparagraph (E)(i) of section 110(a)(2) of the 

CAA provides that SIPs must "provide ... necessary assurances that the state ... will have 

adequate personnel ... [and] funding ... to carry out such implementation plan...." As 

applicable to PSD programs, this provision means that EPA may approve the SIP PSD 

provisions only if EPA is satisfied that the state will have adequate personnel and funding 

to administer the PSD program, including conducting the appropriate analyses for new 
16

and existing sources, issuing the permits, conducting enforcement, and taking other 

necessary administrative action. 

74 Fed. Reg. at 55341/1. EPA went on to state that in light of the potentially enormous 

expansion of these SIP PSD programs once GHGs become subject to regulation, it is clear that 

“[s]tate resources accordingly will not be adequate to administer the program.” Id. at 55343/1. 

EPA concluded: 

EPA believes that the SIPs did not provide the necessary assurances, as required under 

CAA section 110(a)(2)(E), that the permitting authorities would have personnel and 

funding adequate to implement the extensive SIP PSD programs that could result from 

the broadly applicable PSD threshold provisions . . . as approved. 

Id. In light of the states’ obvious lack of adequate resources, EPA proposed several different 

legal mechanisms for EPA that would allow it to rescind its previous approval of the SIPs to the 

extent the SIPs required permits, ranging from an agency’s inherent authority to reconsider its 

previous action to the special provision included under CAA section 110(k)(6) authorizing the 

EPA Administrator, upon finding that a previous action (such as a SIP approval) was in error, to 

correct that error. Id. at 55342/2 to 55343/2. 

(iii). Comments 

75. EPA received numerous comments from states and other commenters on the 

proposed Tailoring Rule that the proposed PSD applicability threshold was too low and 

therefore, if finalized, would not solve the administrability burdens that the permitting authorities 

would confront. No state commented that it had adequate resources to implement PSD at the 

100/250 tpy threshold, and no state requested that EPA retain the 100/250 tpy threshold. 

76. EPA also received numerous comments from states affirming that they would have 

difficulty in developing SIP revisions and submitting them for EPA approval to occur by the date 

that PSD became applicable for GHG-emitting sources. Moreover, the states expressed concern 

that although the proposed rescission of EPA approval would, if finalized, eliminate the 

obligation for GHG-emitting sources below the Tailoring Rule thresholds to obtain PSD permits 

under Federal law, this rescission of approval would leave in place the sources’ obligations to 

obtain PSD permits under state law. As a result, according to the states, the rescission of 

approval would not eliminate the severe administrative problems that state permitting authorities 

would confront. 

77. Accordingly, a number of states recommended that EPA recast its approach to 

revising its regulatory requirements to incorporate the higher thresholds so that states could 

adopt those higher thresholds by interpretation of their SIPs, rather than through the more timeconsuming process of revision of their SIPs. 

(iv). Final Rulemaking 
17

78. In the final Tailoring Rule, EPA adopted the basic approach it proposed of phasingin the applicability threshold for PSD requirements to GHG-emitting sources, but EPA 

established the initial thresholds at, in general, a 75,000 and 100,000 tpy CO2e, which is 

significantly higher than the level EPA proposed in the proposed Tailoring Rule. 

79. EPA explained that it established the higher threshold based on further analysis and 

in response to concerns by states and others that the thresholds in the proposed Tailoring Rule 

would result in too many small sources remaining subject to PSD requirements, which would 

give rise to administrative burdens. EPA conducted an extensive analysis of the administrative 

burdens that would result from applying PSD to GHG-emitting sources at various threshold 

levels, including the ones it finalized, and concluded that the burdens at the levels finalized 

would be manageable by the permitting authorities. This is because during the first step of the 

phase-in process, PSD would apply only to the new “anyway” sources and “anyway” 

modifications that had high levels of GHG emissions (the total number of which EPA estimated 

as 688 on an annual basis, nationwide), and that in the second step of the phase-in process, PSD 

would apply only to the new sources and modifications with high levels of GHG-emissions (the 

total number of which EPA estimated to be 917 on an annual basis, nationwide). 

80. EPA also finalized a revised phase-in process to address, as appropriate, future 

revisions to the PSD applicability thresholds to cover more GHG-emitting sources. 

81. In the final Tailoring Rule, EPA also revised its regulations to incorporate the higher 

thresholds for GHGs in a manner that would allow states, if they chose, to adopt those higher 

thresholds into their SIPs through interpretation rather than SIP revision. Specifically, EPA 

incorporated the higher thresholds into the definition of “subject to regulation.” Under this 

revised definition, GHGs would be considered “subject to regulation under the Clean Air Act,” 

and therefore constitute a “regulated NSR pollutant,” if emitted in amounts at or above the 

Tailoring Rule threshold of, as noted above, in general, 75,000 and 100,000 tpy CO2e. As a 

result, a stationary source that emits GHGs in such amounts would be treated as emitting a 

regulated NSR pollutant and, if the amount were also above the 100/250 tpy threshold on a mass 

basis, would be treated as a major stationary source and therefore subject to PSD. 

82. In the final Tailoring Rule, EPA requested that each state submit a letter to EPA 

within 60 days of publication of the rule (which we refer to as the “60-day letters”), advising 

EPA as to the state’s process and timetable for incorporating the Tailoring Rule thresholds into 

its SIP. 

83. EPA did not finalize its proposal to rescind approval of SIP PSD programs that apply 

PSD to GHG-emitting sources but that do not incorporate the Tailoring Rule thresholds. EPA 

indicated that it would await receipt of the states’ 60-day letters before deciding what further 

steps were necessary to implement PSD permitting for GHG sources. 
18

84. In addition, in the final Tailoring Rule, EPA codified the definition of “subject to 

regulation” added by the Johnson Memo Reconsideration, which clarified that GHGs would 

become subject to PSD on the date that the motor vehicle rule takes effect, which is January 2, 

2011. 

4. EPA and state action; 60-day letters 

85. The states submitted their 60-day letters to EPA in generally a timely manner. 

Almost all of the states submitted a 60-day letter, including those in Categories 1 and 2, sas 

discussed above. The majority of states submitting 60-day letters fall into Category 3, the status 

and EPA’s expected future action for which are discussed below. The 60-day letters are 

available on this link: http://www.epa.gov/nsr/2010letters.html 

86. The National Association of Clean Air Agencies (NACAA) accurately tabulated and 

summarized the statements made by the states in their letters. NACAA, “States Moving Full 

Speech Ahead on Greenhouse Gas Permitting,” Attachment 4, at 1. NACAA stated, 

The vast majority of states are moving full speed ahead to begin permitting emissions of 

... GHGs ... under the [CAA], and expect to complete revisions of state and/or local 

rules by, or within a few months after, January 2, 2011 – the date that GHG permitting 

under the Act’s ... PSD ... and Title V programs begins. 

5. Expected future action 

87. EPA, through its regional offices, has maintained close communication with the 

states over implementation of the SIP PSD program for GHGs. Through the regional offices, 

EPA is conducting an ongoing survey of the states’ efforts to implement PSD for GHG-emitting 

sources, the results of which are included in Attachment 1 Table 3, and described in this 

declaration. Through this ongoing contact with the states, EPA in effect is regularly updating the 

60-day letters. 

88. The Category-3 states – which, again, have SIP-approved PSD programs that apply 

to GHG-emitting sources but that do not incorporate the Tailoring Rule thresholds – can be 

divided into two groups, as discussed below. For each, EPA is undertaking a process to 

maximize the smooth-running administration of the PSD program and, in particular, to minimize 

the possibility that sources below the Tailoring Rule thresholds will be required to obtain PSD 

permits after January 2, 2011 under either federal or state law. 

89. The first group of Category-3 states is those that interpret their SIPs to include the 

Tailoring Rule thresholds, and do not need a SIP revision to incorporate those thresholds. 

Officials in 8 jurisdictions indicated in their 60-day letters and in conferring with EPA regional 

officials that they are able to interpret their SIPs to include the Tailoring Rule thresholds. As a 

result, as of January 2, 2011, as a matter of both state and Federal law, the SIP PSD programs in 
19

these states will not apply to GHG-emitting sources below the Tailoring Rule thresholds, and 

EPA is not planning to take further action with respect to these states prior to January 2, 2011.5 

90. The second group is the rest of the category-3 jurisdictions. For these, EPA intends 

to finalize its proposal in the Tailoring Rule proposal to rescind its previous approval of 

Category-3 SIP PSD programs to the extent those programs apply to GHG-emitting sources 

below the Tailoring Rule thresholds. EPA intends to sign the final rule and forward it to the 

Federal Register for publication by no later than December 30, 2010, and I expect that this rule 

will take effect by January 2, 2011. This action will not disturb EPA’s previous approval of the 

affected SIPs’ PSD program to the extent the program applies to GHG-emitting sources at or 

above the Tailoring Rule thresholds. This narrowing of EPA approval will have the effect of 

eliminating any federal legal requirement for GHG-emitting sources below the Tailoring Rule 

thresholds to obtain a PSD permit. 

91. In addition, in its final action rescinding its approval, EPA intends to request each 

Category 3 state to withdraw the part of its approved SIP PSD requirements that apply PSD to 

sources below the Tailoring Rule thresholds. Through such a withdrawal, EPA will not be 

required to take further action (such as a disapproval) on those SIP provisions. 

92. In addition, for each of the states for whose SIP EPA is narrowing its approval, EPA 

is strongly encouraging the state to revise its state law as soon as possible to incorporate the 

Tailoring Rule thresholds. Once the state does so, sources in the state below the Tailoring Rule 

threshold will no longer be under a state law requirement to obtain a PSD permit. The 

combination of EPA’s narrowing of its approval (to cover only the part of the SIP PSD 

requirements that applies PSD to GHG-emitting sources above the Tailoring Rule thresholds) 

and state revision of state law (to incorporate the Tailoring Rule threshold) will mean that GHGemitting sources in the state below the Tailoring Rule threshold will not be subject to Federal or 

state requirements to obtain a PSD permit. 

93. In addition, EPA is strongly encouraging each state to complete the processing of 

state law changes as a SIP revision and to submit it to EPA for approval. Doing so will clarify 

the SIP provisions. EPA included in the final Tailoring Rule recommendations to the states to 

expedite their SIP development process. 

94. In addition, EPA is making implementation of the PSD program for GHG-emitting 

sources one of EPA’s highest priorities. EPA is working closely with the states to assist them in 

                                                           

5

 Even so, EPA is recommending that these states develop and submit to EPA a SIP revision that 

codifies this interpretation of the SIP for purposes of clarity, and 3 jurisdictions have indicated 

that they intend to do so. 
20

developing, and is committed to acting expeditiously on, SIP revisions to implement the PSD 

program for GHG-emitting sources, including parallel processing the SIP revisions, upon request 

from the State. 

6. Status of states 

95. 30 states and 6 localities (36 total) comprise Category 3. 8 of these jurisdictions have 

stated that they can interpret their SIPs to include the Tailoring Rule threshold. As a result, for 

these jurisdictions, as of January 2, 2011, only GHG-emitting sources at or above the tailoring 

Rule thresholds will be required to obtain PSD permits under either Federal or state law. 

96. For each of the rest of the jurisdictions, EPA intends to finalize the rule to rescind 

EPA approval of the SIPs so that, by January 2, 2011, as a matter of Federal law, only GHGemitting sources at or above the Tailoring Rule threshold, and not those below, will be subject to 

PSD. 

97. As for the obligations of GHG-emitting sources under the Tailoring Rule threshold to 

obtain a PSD permit under state law, EPA anticipates that programs in 23 states and 3 localities 

will interpret or make state or local law amendments effective to incorporate the Tailoring Rule 

thresholds by Jan. 2, 2011. 5 state and 3 locality programs anticipate that state law changes will 

be in place by Feb. 2, 2011, and one additional state program anticipates that state law changes 

will be in place by mid-Feb. 2011. One state has not yet determined whether it may interpret its 

state laws to incorporate the thresholds, or whether it must seek amendments to its state law. 

98. Overall, EPA has received information about the status of 99 jurisdictions (49 states6

, 

4 territories, 45 localities, and the District of Columbia), and included that information in 

Attachment 1. Of these jurisdictions, 94 will have, for Federal law purposes, a PSD permitting 

program for GHG emissions at the Tailoring Rule thresholds on Jan. 2, 2011. Of these 94 

entities, 84 will have made any necessary amendments to state or local law to ensure that state 

or local permits are not required for GHG emissions below Tailoring Rule thresholds. By the 

end of the first quarter of 2011, only one jurisdiction will not have authority to permit GHG 

sources, and that jurisdiction will obtain authority by July 1, 2011 and in the meantime, does not 

expect large sources seeking permits for their GHGs. In addition, by the end of the first quarter 

of 2011, all but one more state will have made any necessary amendments to state or local law to 

ensure that permits are not required for GHG emissions below Tailoring Rule levels. 1 program 

with GHG permitting authority at the lower statutory levels has not yet determined how, and on 

which timeline, it will incorporate the Tailoring Rule thresholds into its state law. As discussed 

above, for one remaining program – Texas’ ––– we intend to continue to work on establishing, in 

a satisfactory manner, a permitting authority. 

                                                           

6

 In California’s PSD program is administered in its entirety by local jurisdictions.
21

VI. GHG PSD and BACT guidance 

99. The Clean Air Act Advisory Committee formed the Climate Change Work Group in 

October 2009 to recommend information and guidance that would be useful for EPA to provide 

to permitting agencies regarding the consideration of the energy, economic, and environmental 

impacts of potential control options for greenhouse gases in the context of a BACT analysis and 

to identify approaches to enable state and local permitting authorities to apply the BACT criteria 

in a consistent, practical and efficient manner. 

The Work Group included 45 representatives from state and local governments, a variety 

of industries and environmental and public health non-profit organizations. The Work Group 

issued two reports, one in February 2010 and the second in October 2010. The reports provide 

valuable insights on stakeholders perspectives on how PSD, and BACT in particular, should be 

applied to GHGs. The first report focused on recommending information and guidance that 

would be useful for EPA to provide to permitting agencies regarding the consideration of the 

energy, economic, and environmental impacts of potential control options for greenhouse gases 

in the context of a BACT analysis . The second report focused on how the BACT process could 

be used to encourage energy efficiency and innovative control technology waivers to encourage 

the development of more efficient and less emitting processes. 

Together, these reports have assisted EPA in developing a document entitled “PSD and 

Title V Permitting Guidance for Greenhouse Gases” (hereinafter GHG Guidance) (which I 

expect to be available shortly, as noted below) and a number of technical and other resources to 

assist in the transition of permitting for GHGs under the PSD and title V Programs. 

In addition to the GHG Guidance, EPA has also developed a number of technical 

resources and tools to assist permitting authorities and permit applicants. For example, EPA has 

developed technical “white papers”, targeting specific industrial sectors, that provide basic 

information on GHG control options to assist states and local air pollution control agencies, 

tribal authorities and regulated entities implementing measures to reduce GHG, particularly in 

the assessment of best available control technology (BACT) under the PSD permitting program. 

These papers will provide basic technical information that may be useful in a BACT 

analysis but they do not define BACT for each sector. The industrial sectors covered include: 

• Electric Generating Units 

• Large Industrial/Commercial/Institutional Boilers 

• Pulp and Paper 

• Cement 

• Iron and Steel Industry 
22

• Refineries 

• Nitric Acid Plants 

EPA also has implemented enhancements to the Control Technology Clearinghouse 

(known as the RACT/BACT/LAER Clearinghouse, or the RBLC). This website provides access 

to information and decisions about pollution control measures required by air pollution emission 

permits issued for GHG by state and local permitting agencies so that the information is 

accessible to all permitting agencies working on similar projects. The expanded RBLC includes 

GHG control and test data, and a GHG message board for permitting authorities. 

In addition, EPA will provide a GHG Mitigation Strategies Database. EPA expects 

technology capable of reducing GHG emissions in various major industrial sectors will evolve. 

Recognizing the importance of tracking these developments, EPA will provide a new online tool 

which includes specific performance and cost data on current and developing GHG control 

measures. It also provides available data on other potential environmental impacts that a GHG 

control measure may have. Currently, the database includes information on GHG controls for 

electric generating and cement production. 

Finally, EPA has formed a GHG Permitting Action Team. This team will assist EPA and 

permitting authorities in responding to GHG permitting questions. The GHG Permitting Action 

Team, comprised of experienced senior staff and permitting managers from EPA, will work 

together to provide a smooth transition to GHG permitting and consistent GHG permitting 

guidance.. 

My expectation is that EPA will make available the guidance and all of the tools in the 

near term and well before January 2, 2011. 

At EPA’s request, the CAAAC Climate Change Work Group reviewed the application of 

BACT for GHGs and reached general consensus that the existing Top-Down BACT Process that 

EPA has applied and recommended that states apply for over 20 years to determine BACT, 

should be used for GHGs. This methodology for determining BACT, on a case-by-case basis, 

calls for all available control technologies for a given pollutant to be identified and ranked in 

descending order of control effectiveness. The permit applicant should first examine the highestranked (“top”) option. The top-ranked options should be established as BACT unless the permit 

applicant demonstrates to the satisfaction of the permitting authority that technical 

considerations, or energy, environmental, or economic impacts and other costs justify a 

conclusion that application of the top-ranked technology is not “achievable” in that particular 

case. The cost of applying pollution control strategies is an important consideration in 

determining BACT. If the most effective control strategy is eliminated in this fashion based on 

cost or other factors, then the next most effective alternative should be evaluated, and so on, until 

an option is selected as BACT. 
23

In accordance with the recommendation of the Work Group, EPA will continue to apply 

and recommend that states apply the Top-Down BACT Process to determine BACT for GHGs. 

EPA’s guidance for GHGs will reaffirm and build on an extensive body of existing guidance 

reflected in EPA memorandum and orders describing and applying the Top Down BACT 

process. 

Based upon the input from the Work Group and the current state of technology 

development, it is EPA’s expectation that initially, in many instances energy efficiency measures 

will serve as the foundation for a BACT analysis for GHGs at the present time. 

From a capital cost perspective, we do not anticipate that the addition of energy 

efficiency measuresare likely to represent a significant part of the project cost, certainly when 

compared to costs for add-on controls. Typical capital costs of criteria pollutant add-on controls 

are in the millions of dollars (and often result in no economic payback), whereas energy 

efficiency measures are typically an order of magnitude lower and often generate cost savings 

over a reasonable amount of time. Further, improved energy efficiency measures will always 

have a payback (in fuel savings). For example, many of the measures that are commonly 

employed at a refinery have payback periods of 1-2 years. Thus, a number of energy efficiency 

measures are going to be included in new equipment without regard for BACT. Furthermore, 

many of these efficiency measures are already considered in BACT reviews for criteria 

pollutants, since improving a unit’s energy efficiency reduces not only GHG but also non-GHG 

products of combustion (e.g., NOx, SO2, CO) on an output basis. Finally, in cases where the 

capital cost or other cost factors are high for an energy efficiency measure, the permitting 

authority has discretion within the BACT review to determine whether the costs are 

unreasonable. 

100. There has been, and continues to be, a very high level of collaboration between EPA 

and the states in moving forward with GHG SIP PSD and title V implementation. For example, 

EPA Regional officials and state officials have conferred on a regular basis. The OAR Office of 

Air Quality Planning and Standards held teleconferences with NACAA to discuss the rulemaking 

efforts on June 22 and 29, 2010, and August 11 and 23, 2010. OAQPS .conducted a webinar on 

the proposed SIP Call and FIP rules on September 23, 2010, which included representatives of at 

least 39 states, several state air pollution organizations, and several tribes and a tribal 

environmental organization. 

VII. Title V 

101. In this section, I will briefly provide the essential background information 

concerning the CAA title V program, including the implementation of the program through state 

permit programs and the applicability of the title V program to GHG-emitting sources. More 
24

detailed expositions of this background information may be found in the proposed and final 

Tailoring Rule. 

A. Background Information on Title V 

102. The title V operating permits program is designed to improve sources’ compliance 

with the requirements of the CAA. Title V establishes a federal-state partnership that is similar 

to the one established for SIPs and for the PSD program. Unlike PSD, however, title V does not 

impose substantive pollution control requirements. 

103. The title V program requires a “major source” (discussed below) to obtain an 

operating permit that: consolidates all CAA requirements applicable to the source into a 

document; includes conditions necessary to assure compliance with such requirements; provides 

for review of these documents by EPA, states, and the public; and requires permit holders to 

track, report, and annually certify their compliance status with respect to their permit 

requirements. 

104. A “major source” is defined to include, among other things, a source that actually 

emits or has the potential to emit 100 tpy, of “any air pollutant.” CAA 501(2), 302(j). See also

40 CFR 70.2 and 71.2. Since 1993, EPA has interpreted the Clean Air Act to define a “major 

source” for purposes of title V to include any sources that emit, or have the potential to emit, at 

least 100 tons per year of an air pollutant subject to regulation under the CAA. Memorandum 

from Lydia N. Wegman, Deputy Director, Office of Air Quality Planning and Standards, U.S. 

EPA, “Definition of Regulated Air Pollutant for Purposes of Title V” (Apr. 26, 1993); 75 FR 

31553-54. In the Johnson Memo Reconsideration (75 FR 17022-23), EPA determined that 

GHGs should be considered “subject to regulation” for purposes of title V no earlier than the 

date on which a control requirement for GHGs “takes effect.” 

105. Section 502(b) requires EPA to promulgate regulations setting forth the minimum 

elements of any title V permit program, and specifies certain such minimum requirements. 

Section 502(d) provides that Governors shall develop title V permit programs consistent with 

these requirements and submit them to EPA for approval. If a permit program consistent with 

the requirements of title V has not been approved in a timely fashion for any state, then EPA is 

required to administer and enforce a federal operating permit program for that state. 

106. Section 503 provides that a source is required to apply for a permit generally within 

one year of the later of: 1) the effective date of a permit program applicable to the source; or 2) 

the date the source becomes subject to section 502(a). 

107. The requirements for title V are primarily implemented through the operating 

permit program rules promulgated at 40 CFR part 70, which set out the minimum requirements 

for title V operating permit programs administered by state, local, and tribal permitting 

authorities (57 FR 32261; July 21, 1992); and part 71, the federal operating permit program 
25

requirements that apply where EPA or a delegate agency authorized by EPA to carry out a 

federal permit program is the title V permitting authority (61 FR 34228, July 1, 1996). 

B. Background information on the Tailoring Rule 

108. On January 2, 2011, if the Tailoring Rule does not take effect, GHGs will become 

subject to regulation for purposes of title V. In the Tailoring Rule, EPA concluded that it was 

necessary to limit, at least initially, the scope of required title V permitting. Accordingly, EPA 

amended the regulations for the title V permit program, promulgated at 40 CFR parts 70 and 71, 

to provide that no source will be considered a major source of GHG for purposes of title V until 

July 1, 2011. Sources that are subject to title V for other reasons (because they are major for 

some other pollutant, or fall within a different clause of section 502(a), such as the requirement 

to get a PSD permit) would be subject to title V in the same manner as prior to the Tailoring 

Rule. Such sources would need to address any GHG requirements from other Clean Air Act 

programs when they apply for a renewed or revised permit, as appropriate; EPA expects this 

exercise to be relatively straightforward for most sources. Beginning July 1, 2011, sources of 

GHGs that emit at least 100 tpy on a mass basis and 100,000 tpy CO2e will be considered major 

sources for purposes of title V. 

109. In the final Tailoring Rule, EPA requested that states provide information as to 

whether they have sufficient authority to permit GHG sources, and, if so, whether they can and 

will do so consistent with the thresholds established in part 70 by the Tailoring Rule. 

110. States responded by providing information in the same 60-day letters that they 

provided with information as to their PSD programs. 

C. Categories of States 

111. Because all states have approved title V programs – that is, in each state, the title V 

program consists of state regulations that were submitted to, and approved by, EPA – there are 

two general categories of title V states for purposes of addressing sources that are major sources 

subject to title V as a result of their GHG emissions (GHG Sources): approved title V programs 

that include authority to require and issue permits for GHG sources, and approved title V 

programs that do not. 

 1. Category 1 

112. Most of the states have approved title V programs that will apply to GHG Sources. 

Based on their 60-day letters, these states may be divided into two groups. The first group 

includes states that are able to interpret their approved title V program to include the Tailoring 

Rule thresholds, and do not need to revise their title V program to do so. For these states, EPA 

does not anticipate further action being necessary at this time, although we will continue to work 

with states on implementation of title V permitting for sources of GHGs. Beginning July 1, 
26

2011, the GHG Sources that will become subject to title V will become obligated to submit an 

application for a title V permit, generally within one year. 

113. The second group includes states that need to revise their title V programs to reflect 

the Tailoring Rule thresholds.7

 

114. EPA recognizes that the state regulations that comprise the permitting program may 

include a lower threshold for major sources applicable to GHG Sources. In the proposed 

Tailoring Rule, EPA proposed to limit its approvals of states’ title V programs to the extent they 

apply to sources below the Tailoring Rule thresholds. 74 FR 55345. EPA intends to finalize this 

proposal and thereby narrow the scope of its approval of these state programs such that any 

requirement for permitting of sources at lower levels of GHG emissions will not be federally 

approved, and thus there will be no obligation on these sources for federal purposes to apply for 

title V permits. 

115. EPA is currently planning to issue its determination narrowing its approval of state 

title V programs so as to conform them to the Tailoring Rule thresholds by the end of the year. 

116. As a result, on January 2, 2011, EPA anticipates that there will be no requirement 

under a federally-approved title V program for any source of GHGs to apply for a title V permit 

due to its status as a major source of GHG. 

117. Beginning July 1, 2011, in states with a title V program that is applicable to GHG 

Sources, such sources at the Tailoring Rule thresholds will generally have up to one year to 

apply for a title V permit. Thus, EPA does not anticipate any title V applications for such 

sources being due until 2012. See 75 FR 31595/2. 

118. Many of these states have already begun to work on revisions to their title V 

programs, as indicated in their 60-day letters. 

2. Category 2 

119. The second category includes states whose title V programs do not cover GHG 

Sources. 

120. Under section 503(a), a source does not “become subject to a [title V] permit 

program, and required to have a [title V] permit” until there is a title V permit program 

                                                           

7

 EPA also proposed in the tailoring rule that, if a state wants to implement an approved title V 

program at a threshold level lower than the thresholds in the Tailoring Rule, the state may submit 

an operating permit program revision that identifies the lower thresholds and provides the 

necessary assurances that it has adequate personnel and funding. 74 FR 55345. No state has 

indicated to EPA in its 60-day letter that it intends to do so.
27

“applicable to the source.” Thus, EPA’s interpretation of the Clean Air Act is that if a state with 

an approved title V program lacks any authority to permit GHG Sources, then there is no title V 

permit program “applicable to the source” and GHG Sources in that state have no obligation to 

apply for a title V permit until after such time as a permit program becomes applicable to them. 

121. Several states have indicated that their programs currently do not apply to GHG 

Sources. Some of these states have indicated that they are taking steps to include GHG Sources 

within the scope of their title V programs. EPA intends to work with states, through program 

revisions, notices of deficiency and/or application of the federal title V program, in order to 

assure that GHG Sources in all states are subject to title V programs. 75 FR 31526. 

122. In states without a title V program applicable to GHG Sources, there will be no 

requirement for any GHG Sources to apply for a title V permit until a title V program becomes 

applicable to such sources. 

123. At the time that these states do have a revised title V program that applies to GHG 

Sources, or, if necessary, EPA promulgates a federal program, GHG Sources meeting the 

thresholds in the Tailoring Rule in those states generally will have one year to submit their 

permit applications. Accordingly, EPA does not expect that in these states, any GHG Sources 

will be under any requirements to submit permit applications until at least 2012. 

Executed this 28th of October, 2010 

/s/ 

Regina McCarthy 

Assistant Administrator 

Office of Air and Radiation 

United States EPA