SUBJECT: 

FROM: 

TO: 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

REGION III 

1650 Arch Street 

Philadelphia, Pennsylvania 19103-2029 

Maryland Dept. ofthe Environment 

PSDINNSR SIP Revision Requests 

David Talley ThAA A, '-rJ Pill, (L,).-vl--, 11..--

Permits and Te~fc~l Ce-;;:;;ent Branch 

Air Protection Division 

Kathleen Cox, Associate Director 

Office of Permits and Air Toxics 

Approval and Promulgation of Air Quality Implementation Plans; 

Maryland; Preconstruction Requirements-Prevention of Significant Deterioration and 

Nonattainment New Source Review 

I. BACKGROUND 

The Maryland Department ofthe Environment (MDE) has submitted three State Implementation 

Plan (SIP) revision requests, pertaining to the New Source Review (NSR) requirements of the 

Clean Air Act (CAA). The proposed revisions affect both Maryland's Prevention of Significant 

Deterioration (PSD) program and its Nonattainment NSR program. If approved, this action 

would revise each previously approved version of these rules as described in detail below. 

In addition, the proposed SIP revisions will satisfY the following required SIP elements: NSR 

Reform, NOx as a precursor to ozone, Infrastructure, and Greenhouse Gases. 

II. SUMMARY OF ACTIONS 

A. SIP Revision #07-13 

On October 24, 2007 MDE submitted a SIP revision request to EPA. This SIP revision request 

includes amendments to Regulations .01-.03, repeal of existing Regulations .04 and .05, and the 

adoption of new Regulations .04 - .09 under COMAR 26.11.17, Nonattainment Provisions for 

Major New Sources and Major Modifications. 

This action, if approved, would revise the previously-approved versions of these rules as 

approved into the Maryland SIP on February 12,2001 for COMAR 26.11.17 Regulations .02, 

.04, and .05 (66 FR 9766) and September 20, 2004 for COMAR 26.11.17 Regulations .01 and 

.03 (69 FR 56170). A public hearing was held on August 8, 2007. No comments were 

submitted. These amendments were adopted by Maryland on September 18,2007 and became 

effective on October 22, 2007. The State adopted these regulations in order to meet the relevant 

plan requirements of Title 40 of the Code of Federal Regulations (CFR) Part 51.165 and the 

CAA. The MDE is now seeking approval of these amendments. 
B. SIP Revision #09-03 

On July 31, 2009, MDE submitted a SIP revision request to EPA. This SIP revision request 

consists of the incorporation by reference of the federal PSD requirements codified in the 

July 1, 2008 edition of the CFR. The SIP revision request includes amendments to the MDE 

Regulations .01 under COMAR 26.11.01 (General Administrative Provisions) and Regulations 

.14 under COMAR 26.11.06 (General Emission Standards, Prohibitions, and Restrictions). On 

June 23, 2011, MDE submitted a letter, retracting the part of submission #09-03 which updated 

the incorporation by reference date. Since originally submitting #09-03, Maryland has adopted 

the federal regulations as they appear in the July 1, 2009 version of the CFR (See State 

Submission #11-02, below). Today's action proposes approval of only that part of the 

submission which clarifies the definitions of "Administrator" and "reviewing authority". 

This action, if approved, would revise the previously-approved versions of these rules as 

approved into the Maryland SIP on May 28,2002 (67 FR 36810). A public hearing was held on 

May 28, 2009. No comments were submitted. These amendments were adopted by Maryland on 

June 11, 2009 and became effective on July 16, 2009. The State adopted these regulations in 

order to meet the relevant plan requirements of 40 CFR 51.166 and the CAA. The MDE is now 

seeking approval of these amendments. 

C. SIP Revision #11-02 

On June 23, 2011, MDE submitted a SIP revision request to EPA. This SIP revision request 

consists ofthe incorporation by reference ofthe federal PSD requirements as codified in the July 

1,2009 edition of the CFR, as well as the incorporation of the revisions to 40 CFR 52.21 

promulgated in the Greenhouse Gas Tailoring Rille (75 FR 31514). The SIP revision request 

includes amendments to the MDE Regulation .01 under COMAR 26.11.01 (General 

Administrative Provisions), Regulations .01 and .12 under COMMAR 26.11.02 (Permits, 

Approvals, and Registration), and Regulation .14 under COMAR 26.11.06 (General Emission 

Standards, Prohibitions, and Restrictions). 

This action, if approved, would revise the previously-approved versions of these rules, approved 

as follows: COMAR 26.11.01.01 and COMAR 26.11.06.14 were adopted into the Maryland SIP 

on May 28,2002 (67 FR 36810). COMAR 26.11.02.01 and.12 were adopted into the Maryland 

SIP on February 27,2003 (68 FR 9012). A public hearing was held on February 15,2011. 

These amendments were adopted by Maryland on April 14, 2011 and became effective on May 

16,2009. The State adopted these regulations in order to meet the relevant plan requirements of 

40 CFR 51.166 and the CAA. The MDE is now seeking approval of these amendments. 

III. ANALYSIS 

A. NSR REFORM 

History 

On December 31, 2002 (67 FR 80 186), EPA published final rule changes to 40 CFR Parts 51 and 

52, regarding the CAA's PSD and Nonattainment NSR programs. On November 7, 2003 

2 
(68 FR 63021), EPA published a notice of final action on the reconsideration of the 

December 31,2002, final rule changes. The December 31,2002, and the November 7, 2003, 

final actions are collectively referred to as the "2002 NSR Reform Rules." The purpose of this 

action is to propose to approve the SIP submittals from the State of Maryland that include State 

rule changes made as a result of EPA's 2002 NSR Reform Rules. 

The 2002 NSR Reform Rules are part of EPA's implementation of parts C and D oftitle I of the 

CAA, 42 U.S.C. 7470-7515. Part C of title I of the CAA, 42 U.S.C. 7470-7492, is the PSD 

program, which applies in areas that meet the National Ambient Air Quality Standards 

(NAAQS}-"attainment" areas--as well as in areas for which there is insufficient information to 

determine whether the area meets the NAAQS-"unclassifiable" areas. Part D oftitle I of the 

CAA, 42 U.S.C. 7501-7515, is the Nonattainment NSR program, which applies in areas that are 

not in attainment ofthe NAAQS-"nonattainment" areas. Collectively, the PSD and 

Nonattainment NSR programs are referred to as the "New Source Review" or NSR programs. 

EPA regulations implementing these programs are contained in 40 CFR 51.165, 51.166, 52.21, 

52.24, and part 51, appendix S. 

The CAA's NSR programs are preconstruction review and permitting programs applicable to 

new and modified stationary sources of air pollutants regulated under the CAA. The NSR 

programs of the CAA include a combination of air quality planning and air pollution control 

technology program requirements. Briefly, section 109 of the CAA, 42 U.S.C. 7409, requires 

EPA to promulgate primary NAAQS to protect public health and secondary NAAQS to protect 

public welfare. Once EPA sets those standards, states must develop, adopt, and submit to EPA 

for approval a SIP that contains emissions limitations and other control measures to attain and 

maintain the NAAQS. Each SIP is required to contain a preconstruction review program for the 

construction and modification of any stationary source of air pollution to assure that the NAAQS 

are achieved and maintained; to protect areas of clean air; to protect air quality related values 

(such as visibility) in national parks and other areas; to assure that appropriate emissions controls 

are applied; to maximize opportunities for economic development consistent with the 

preservation of clean air resources; and to ensure that any decision to increase air pollution is 

made only after full public consideration of the consequences of the decision. 

The 2002 NSR Reform Rules made changes to five areas of the NSR programs. In summary, the 

2002 Rules: (I) provide a new method for determining baseline actual emissions; (2) adopt an 

actual-to-projected-actual methodology for determining whether a major modification has 

occurred; (3) allow major stationary sources to comply with a Plantwide Applicability Limit 

(PAL) to avoid having a significant emissions increase that triggers the requirements of the 

major NSR program; (4) provided a new applicability provision for emissions units that are 

designated clean units; and (5) excluded pollution control projects (PCPs) from the definition of 

"physical change or change in the method of operation." On November 7,2003 (68 FR 63021), 

EPA published a notice of final action on its reconsideration of the 2002 NSR Reform Rules, 

which added a definition for "replacement unit" and clarified an issue regarding PALs. For 

additional information on the 2002 NSR Reform Rules, see, 67 FR 80186 (December 31, 2002), 

and http://www.epa.gov/nsr. 

After the 2002 NSR Reform Rules were finalized and effective (March 3, 2003), industry, state, 

and environmental petitioners challenged numerous aspects of the 2002 NSR Reform Rules, 

along with portions of EPA's 1980 NSR Rules (45 FR 52676, August 7,1980). On June 24, 

2005, the United States Court of Appeals for the District of Columbia (D.C. Circuit Court) issued 

a decision on the challenges to the 2002 NSR Reform Rules. New York v. United States, 413 

3 
F.3d 3 (New York 1). In summary, the D.C. Circuit Court vacated portions of the rules pertaining 

to clean units and PCPs, remanded a portion of the rules regarding recordkeeping and the term 

"reasonable possibility" found in 40 CFR 52.21 (r)(6) and 40 CFR 5l.l66(r)(6), and either upheld 

or did not comment on the other provisions included as part of the 2002 NSR Reform Rules. On 

June 13, 2007 (72 FR 32526), EPA took final action to revise the 2002 NSR Reform Rules to 

remove from federal law all provisions pertaining to clean units and the PCP exemption that 

were vacated by the D.C. Circuit Court. 

With regard to the remanded portions of the 2002 NSR Reform Rules related to recordkeeping, 

on December 21,2007, EPA took final action to establish that a "reasonable possibility" applies 

where source emissions equal or exceed 50 percent of the CAA NSR significance levels 

for any pollutant (72 FR 72607). The "reasonable possibility" provision identifies for sources 

and reviewing authorities the circumstances under which a major stationary source undergoing a 

modification that does not trigger major NSR must keep records. 

Finally, on January 19,2010, EPA denied a petition from the Natural Resources Defense Council 

(NRDC) and Sierra Club (SC) requesting EPA to reconsider and stay the Wisconsin Department 

of Natural Resources SIP revision that incorporated EPAs New Source Review Reforms of2002. 

Petitioners submitted comments arguing that these NSR Reform provisions were "backsliding", 

and thus prohibited under CAA sections 110(1) and 193. EPA approved the Wisconsin SIP 

revisions and addressed Petitioners' arguments about backsliding by (l) noting that the 

provisions had been upheld by the New York I court, (2) that the general analysis that EPA had 

done to support the 2002 rule supported NSR Reform in Wisconsin, and (3) Petitioners had not 

provided any information or arguments demonstrating that the general analysis did not apply in 

Wisconsin, and that information in the record countered Petitioners' specific arguments that the 

revisions would be backsliding. Additionally, in response to comments, EPA performed an 

analysis specific to Wisconsin to examine the impacts of applying reform in that State. Our 

findings were consistent with those of the supplementary environmental analysis (SEA) for the 

2002 reform rule (neutral). 

NRDC v. Jackson: On June 16,2011, the u.S. Court of Appeals for the Seventh Circuit (Seventh 

Circuit) denied the petitions for review filed by NRDC and Sierra Club challenging EPA's 

approval of the 2002 NSR Reform provisions into the Wisconsin SIP. The primary issue 

addressed in the opinion was whether EPA's approval of Wisconsin's NSR SIP was backsliding 

prohibited by CAA sections 110(1) and 193. The Court held that EPA's decision was not 

contrary to these provisions. First, the court found that Petitioners' arguments were a repeat of 

the arguments that they had made and lost in New York 1. Second, the court held that the general 

analysis that supported the NSR Reform provisions when they were challenged after 

promulgation "supply substantial evidence for the EPA's decision [with respect to the Wisconsin 

SIP] and show that it is neither arbitrary or capricious." But, the court did note that some states 

have implemented the NSR Reform provisions and that the experience in those states might 

support or refute EPA's conclusions and that "[a]t some point, preferring predictions over facts is 

no longer rational." 

Analysis 

The 2002 NSR Reform Rules required that state agencies adopt and submit revisions to their SIP 

permitting programs implementing the minimum program elements of the 2002 NSR Reform 

Rules no later than January 2,2006 (Consistent with changes to 40 CFR 51.166(a)(6)(i), 

state agencies are now required to adopt and submit SIP revisions within three years after new 

amendments are published in the Federal Register). State agencies may meet the requirements of 

4 
40 CFR Part 51 and the 2002 NSR Reform Rules with different but equivalent regulations. For 

the purposes of PSD, Maryland has incorporated by reference 40 CFR 52.21. For nonattainment NSR, the State has adopted regulations that in most respects track the federal rules. 

The proposed SIP revisions include only those provisions which were upheld by the D.C. Circuit 

in 2005, and reaffirmed in the Seventh Circuit's denial ofthe petition to reconsider EPA's 

approval ofNSR Reform into Wisconsin's SIP (NRDC v. Jackson). 

With respect to Maryland's nonattainment NSR rules, a line-by-line comparison indicates that 

they vary from the federal 2002 NSR Reform rules in insignificant ways. For instance, the 

State's definition of "baseline actual emissions" for sources other than electric steam generating 

facilities has a five-year presumptive "look-back" period but allows a facility to request up to a 

1 0 year look-back period if it is more representative of actual source operations. In addition, 

PALs are limited to a five year effective date, rather than ten years as allowed in the federal 

rules. As noted above, states may have different but equivalent rules and in this regard, it is clear 

that Maryland's nonattainment NSR rules contain the basic elements for implementing NSR 

reform. 

Section 110(1) of the CAA prohibits the approval of a SIP revision which would interfere with 

any applicable requirement concerning attainment and reasonable further progress or any other 

applicable requirement of the CAA. EPA has determined that approval of the proposed revisions 

to COMAR 26.11.17 and the incorporation of 40 CFR 52.21 will.not violate Section 110(1). The 

inherent checks and balances afforded by the CAA have been maintained, including the 

independent obligation for attainment of the NAAQS. Nevertheless, the Seventh Circuit, in 

upholding EPA's approval of the Wisconsin NSR SIP rules, cautioned that predictions made 

when these rules were promulgated should no longer be relied upon to demonstrate that NSR 

Reform is not a relaxation ofthe SIP. In fact, the proposed regulations have been in effect in 

Maryland since 2007, and several states, including Georgia, New York, and North Carolina have 

had the NSR Reform regulations approved into their SIPs with no demonstrable link between 

reform and a decrease in air quality or an interference with reasonable further progress. This is 

not surprising. NSR Reform only affects permitting of modifications to existing sources. Any 

growth occurring from new, greenfield sites would be controlled and permitted the same both 

pre- and post-reform. Therefore, any concerns about NSR Reform would be related to 

unregulated growth from existing major sources. In the specific case of Maryland, the State 

maintains a robust minor NSR program that specifically regulates minor changes to major 

stationary sources. So while a facility may escape the requirements of NSR, they do not escape 

the requirement to obtain a pre-construction permit that includes the requirement to monitor 

emissions after a change and may also include an air quality impact analysis. Finally, 

Maryland's demonstration of reasonable further progress for nonattainment areas does not rely 

on this NSR rule, but on other control requirements such as Reasonably Available Control 

Technology (RACT). 

Reasonable Possibility 

As noted above, EPA took final action in December of 2007 to promulgate the "reasonable 

possibility" provisions which had been remanded by the D.C. Circuit in 2005 in New York I. 

These are recordkeeping and reporting requirements for major stationary sources undergoing 

minor modifications. These requirements are included in the PSD regulations that Maryland has 

incorporated by reference. However, because Maryland's proposed non-attainment regulations 

were effective and submitted to EPA in October of 2007, the submittal does not include the 

"reasonable possibility" requirements promulgated on December 21, 2007 (72 FR 72607). 

5 
While these provisions are a required minimum program element, we note that in the preamble to 

the final rule, we acknowledge that "State and local authorities may adopt or maintain NSR 

program elements that have the effect of making their regulations more stringent than these 

rules." (72 FR 72614). Maryland maintains a robust minor NSR program, with recording 

keeping and reporting requirements that are more stringent than the "reasonable possibility" 

requirements. As further discussed in the preamble, "Minor NSR programs by definition apply 

to emissions increases less than the major NSR significant level, and only activities that a State 

qualifies as "insignificant activities" under the SIP-approved program may be excluded from 

review. Thus, reviewing authorities have an opportunity to review virtually all projects causing 

an emissions increase before construction begins. Moreover, our regulations (40 CFR 51.161) 

provide for public review of information submitted by owners/ operators for purposes of minor 

NSR review. Thus, information provided for purposes of minor NSR programs is also of value 

in determining applicability of major NSR" (72 FR 72613). On December 6, 2011, MDE 

submitted a letter acknowledging that the SIP approved regulations under COMAR 26.11.02 

fulfill the requirements of 40 CFR 5U65(a)(6) and (a)(6)(vi). 

B. Related Infrastructure Requirements 

CAA section 11 O(a) imposes obligations upon states to submit a SIP submission "within 3 years 

(or such shorter period as the Administrator may prescribe) after the promUlgation of a national 

primary ambient air quality standard (or any revision thereof)." These SIP submissions are to 

provide for the "implementation, maintenance, and enforcement" of such NAAQS. Section 

110(a)(2) includes a list of specific elements that "[ eJach such plan" submission must meet. EPA 

has historically referred to these particular submissions that states must make after the 

promulgation of a new or revised NAAQS as "infrastructure SIPs." This specific term does not 

appear in the statute, but EPA uses the term to distinguish this particular type of SIP submission 

designed to address basic structural requirements of a SIP from other types of SIP submissions 

designed to address other different requirements, such as "nonattainment SIP" submissions 

required to address the nonattainment planning requirements of part D, "regional haze SIP" 

submissions required to address the visibility protection requirements of CAA section 169 A, new 

source review permitting program submissions required to address the requirements of part D, 

and a host of other specific types of SIP submissions that address other specific matters. 

Although states typically have met many of the basic program elements required in section 

110(a)(2) through earlier SIP submissions, states (including all the Region 3 states) were still 

required to submit SIP revisions that address section 11 0(a)(2) for the 1997 PM2.5 and 8-hour 

Ozone NAAQS and the 2006 PM2.5 NAAQS. Maryland provided EPA with multiple submittals 

to satisfY section 110(a)(2) requirements for the 1997 PM2.5 and 8-hour Ozone NAAQS and the 

2006 PM2.5 NAAQS. Maryland's 11O(a)(2) submittals relating to the 1997 8-hour Ozone 

NAAQS were dated July 27,2007 and November 30, 2007. Maryland's 110(a)(2) submittals 

relating to the 1997 PM2.5 NAAQS were dated April 3, 2008 and April 16, 2010. And, 

Maryland's 11O(a)(2) submittals relating to the 2006 PM2.5 NAAQS were dated April 16,2010 

and July 21,2010. These submissions addressed one or more of the section 11 0(a)(2) 

requirements for each of these NAAQS. 

On September 12, 2011 (76 FR 56130), EPA proposed to approve portions of these submittals. 

Final approval was granted on November 25, 2011 (76 FR 72624). EPA's approval of each of 

these submissions was limited to the following 110(a)(2) elements which were subject to EPA's 

completeness findings pursuant to CAA section 11 O(k)(l) for the 1997 8-hour ozone NAAQS 

6 
dated March 27, 2008 and the 1997 PM2.5 NAAQS dated October 22, 2008: 11O(a)(2)(A), (B), 

(C), (D)(ii), (E), (F), (0), (H), (J), (K), (L), and (M), or portions thereof; and the following 

infrastructure elements for the 2006 PM25 NAAQS: 110(a)(2)(A), (B), (C), (D)(ii), (E), (F), 

(0), (H), (J), (K), (L), and (M), or portions thereof. See 76 FR 56130. EPA explicitly stated 

that such action did not include the portions of 110(a)(2)(C) and (J) as they pertain to a permit 

program as required by Part C of Title I of the CAA. EPA proposed approval of these 

submissions as they related to all other portions of 1l0(a)(2)(C) and (J). EPA also stated that 

such action did not include the portion of 11O(a)(2)(D)(i)(II) that pertained to Part C of Title I or 

to visibility. A general discussion relating to Section 11O(a)(2) requirements may be found in 

EPA's proposed approval. See 76 FR 56130. 

The proposed PSD SIP revisions in the present action relate to Maryland's compliance with the 

portions of 110(a)(2)(C), (D)(i)(II) and (J) which pertain to a permit program as required by Part 

C of Title I of the CAA. Maryland recognized that these SIP revisions are also related to its 

compliance with 11 0(a)(2) requirements in its June 22,2011 cover letter to EPA. 

The proposed SIP revisions correct deficiencies identified by EPA in the March 27, 2008 Federal 

Register action entitled, "Completeness Findings for Section 110(a) State Implementation Plans 

for the 8-hour Ozone National Ambient Air Quality Standards (1997 Ozone NAAQS)" (73 FR 

16205). The proposed SIP revisions address Maryland's compliance with the portion ofCAA 

Section 110(a)(2)(C) & (J) relating to the CAA's parts C and D permit programs for the 1997 

Ozone NAAQS, because this proposed approval would approve regulating NOx as a precursor to 

ozone in Maryland's SIP in accordance with the Federal Register action dated November 29, 

2005 (70 FR 71612) that finalized NOx as a precursor for ozone regulations set forth at 40 CFR 

51.165 and in 40 CFR 52.21. 

Additionally, on August 4, 2011 (76 FR 47090), EPA proposed to approve a submittal from 

MDE related to Maryland's PSD and non-attainment NSR programs. That submittal revised and 

supplemented the preconstruction requirements for electric generating stations. On February 10, 

20 12, EPA granted limited approval of this submittal. See 77 FR 6963. 

Based upon EPA's February 10, 2012 final action (approving SIP revisions that revised and 

supplemented the preconstruction requirements for electric generating stations) and the proposed 

SIP revisions addressed in this current action, EPA is proposing to approve Maryland's 

submittals for purposes of meeting the requirements of CAA sections 11 0(a)(2)(C), (D)(i)(II) and 

(J) relating to Maryland's PDS permitting program as necessary to implement, maintain, and 

enforce the 1997 8-hour ozone and PM25 NAAQS and the 2006 PM25 NAAQS. EPA is also 

proposing to approve those portions of Maryland's July 27,2007, April 3, 2008 and July 21, 

2010 SIP submittals which relate to the portions of 11 0(a)(2)(C), (D)(i)(II) and (J) as they pertain 

to a permit program as required by Part C of Title I ofthe CAA. 

The relevant portion ofCAA section 11O(a)(2)(C) requires that-

"Each implementation plan ... shall ... include a program to provide 

for. .. regulation of the modification and construction of any stationary 

source within the areas covered by the plan as necessary to assure that 

national ambient air quality standards are achieved, including a permit 

program as required in part[] C ... of this subchapter." 

7 
The relevant portion ofCAA section 110(a)(2)(D)(i)(II) requires that-

"Each implementation plan . . . shall . . . contain adequate provisions 

prohibiting, consistent with this subchapter, any source or other type of emissions 

activity within the State from emitting any air pollutant in amounts which will ... 

. interfere with measures required to·be included in the applicable implementation 

plan for any other State under part C of this subchapter to prevent significant 

deterioration of air quality ... " 

The relevant portion ofCAA section 110(a)(2)(J) requires that-

"Each implementation plan ... shall.. .meet the applicable requirements 

of ... part C of this subchapter (relating to significant deterioration of air 

quality and visibility protection)." 

Maryland has made sufficient demonstration that its SIP meets the requirements of llO(a)(2)(C), 

(D)(i)(II) and (J) which relate to Part C of Title I of the CAA. As stated above, for the purposes 

of PSD, Maryland incorporates the federal regulations by reference. COMAR 26.11.06.14(8)(1) 

prohibits the construction, modification, or operation of any PSD source in a manner that would 

violate any provision of 40 CFR 52.21. For non-attainment NSR, the State has adopted 

regulations that in most respects track the federal rules. The proposed SIP revisions include only 

those provisions which were upheld by the D.C. Circuit in 2005, and reaffirmed in the Seventh 

Circuit's denial ofthe petition to reconsider EPA's approval ofNSR Reform into Wisconsin's 

SIP (NRDC v. Jackson). 

By incorporating by reference the regulations set forth at 40 CFR 52.21, Maryland has ensured 

that its SIP approved PSD program will be as stringent and as comprehensive as EPA's PSD 

regulations. Therefore, EPA proposes to find that Maryland has met its obligations pursuant to 

1l0(a)(2)(C) that require its SIP to "include a program to provide for. .. regulation ofthe 

modification and construction of any stationary source within the areas covered by the plan as 

necessary to assure that national ambient air quality standards are achieved, including a permit 

program as required in part[] C ... ofthis subchapter." 

Upon final approval of the NSRlPSD SIP submissions at issue, Maryland will have a SIP 

approved PSD program that is consistent with current federal requirements in place. The 

permitting program is codified at 40 CFR 52.1070. 

C. Greenhouse Gases 

Below is an overview of GHGs and GHG-emitting sources, the CAA PSD program, minimum 

SIP elements for a PSD program, and EPA's recent actions regarding GHG permitting, as well as 

the relationship between the proposed Maryland SIP revision and EPA's other national 

rulemakings, and EPA's analysis of Maryland's SIP revision. 

Background 

On June 23,2011, MDE submitted a draft revision to EPA for approval into the Maryland SIP to 

establish appropriate emission thresholds for determining which new or modified stationary 

sources become subject to Maryland's Prevention of Significant Deterioration (PSD) permitting 

requirements for GHG emissions. Maryland has chosen to adopt changes under COMAR 

8 
consistent with those incorporated by the Tailoring Rule on June 3,2010 (75 FR 31514). Final 

approval of Maryland's June 23,2011, SIP revision will put in place the GHG emission 

thresholds for PSD applicability set forth in EPA's "Prevention of Significant Deterioration and 

Title V Greenhouse Gas Tailoring Rule," (the Tailoring Rule) Final Rule, 75 FR 31514 (June 3, 

2010), ensuring that smaller GHG sources emitting less than these thresholds will not be subject 

to permitting requirements. Pursuant to section 110 of the CAA, EPA is proposing to approve 

this revision into the Maryland SIP. 

With regard to GHG's, the proposed action on the Maryland SIP generally relates to four federal 

rulemaking actions. The first rulemaking is EPA's Tailoring Rule. The second rulemaking is 

EPA's "Action to Ensure Authority to Issue Permits Under the Prevention of Significant 

Deterioration Program to Sources of Greenhouse Gas Emissions: Finding of Substantial 

Inadequacy and SIP Call," Proposed Rule (GHG SIP Call) 75 FR 53892 (September 2, 2010). 

The third rulemaking is EPA's "Action to Ensure Authority to Issue Permits Under the 

Prevention of Significant Deterioration Program to Sources of Greenhouse Gas Emissions: 

Federal Implementation Plan," Proposed Rule, 75 FR 53883 (September 2,2010) (GHG FIP), 

which serves as a companion rulemaking to EPA's proposed GHG SIP Call. The fourth 

rulemaking is the "Limitation of Approval of Prevention of Significant Deterioration Provisions 

Concerning Greenhouse Gas Emitting-Sources in State Implementation Plans" 75 FR 82536 

(Narrowing Rule) (December 30, 2010). A summary of each ofthese rulemakings is described 

below. 

In the first rulemaking, the Tailoring Rule, EPA established appropriate GHG emission 

thresholds for determining the applicability ofPSD requirements to GHG-emitting sources. In 

the second rulemaking, the GHG SIP Call, EPA proposed to find that the EPA-approved PSD 

programs in 13 States (not including Maryland) are substantially inadequate to meet CAA 

requirements because they do not appear to apply PSD requirements to GHG-emitting sources. 

For each of these States, EPA proposed to require the State (through a "SIP Call") to revise its 

SIP as necessary to correct such inadequacies. EPA proposed an expedited schedule for these 

States to submit their SIP revision, in light of the fact that on January 2,2011, certain GHGemitting sources would be subject to the PSD requirements and would not be able to obtain a 

PSD permit in order to construct or modify. In the third rulemaking, the GHG FIP, EPA 

proposed a FIP to apply in any state that is unable to submit, by its deadline, a SIP revision to 

ensure that the state has authority to issue PSD permits for GHG-emitting sources. Because 

Maryland already has authority to regulate GHGs, Maryland is only seeking to revise its SIP to 

put in place the GHG emission thresholds for PSD applicability set forth in EPA's Tailoring 

Rule, thereby ensuring that smaller GHG sources emitting less than these thresholds are not 

subject to permitting requirements. In the Narrowing Rule, EPA limited its approval ofthose 

states' programs which had the authority to regulate GHG's, but lacked a vehicle to limit 

applicability to the higher thresholds established by the Tailoring Rule. 

Below is a brief overview of GHGs and GHG-emitting sources, the CAA PSD program, 

minimum SIP elements for a PSD program, and EPA's recent actions regarding GHG permitting. 

Following this section, EPA discusses, in sections III and IV, the relationship between the 

proposed Maryland SIP revision and EPA's other national rulemakings as well as EPA's analysis 

of Maryland's SIP revision. 

9 
What are GHGs and their sources? 

A detailed explanation of GHGs, climate change and the impact on health, society, and the 

environment is included in EPA's technical support document for EPA's GHG endangerment 

finding final rule (Document ID No. EPA-HQ-OAR-2009-0472-11292 at \vww.regulations.gov). 

The endangerment finding rulemaking is discussed later in this rulemaking. A summary ofthe 

nature and sources ofGHGs is provided below. 

GHGs trap the Earth's heat that would otherwise escape from the atmosphere into space and form 

the greenhouse effect that helps keep the Earth warm enough for life. GHGs are naturally 

present in the atmosphere and are also emitted by human activities. Human activities are 

intensifYing the naturally occurring greenhouse effect by increasing the amount of GHGs in the 

atmosphere, which is changing the climate in a way that endangers human health, society, and 

the natural environment. 

Some GHGs, such as carbon dioxide (C02), are emitted to the atmosphere through natural 

processes as well as human activities. Other gases, such as fluorinated gases, are created and 

emitted solely through human activities. The well-mixed GHGs of concern directly emitted by 

human activities include C02, methane (CH4), nitrous oxide (N20), hydrofluorocarbons (HFCs), 

perfluorocarbons (PFCs), and sulfur hexafluoride (SF6), hereafter referred to collectively as "the 

six well-mixed GHG," or, simply, GHGs. Together these six well-mixed GHGs constitute the 

"air pollutant" upon which the GHG thresholds in EPA's Tailoring Rule are based. These six 

gases remain in the atmosphere for decades to centuries where they become well-mixed globally 

in the atmosphere. When they are emitted more quickly than natural processes can remove them 

from the atmosphere, their concentrations increase, thus increasing the greenhouse effect. 

In the United States, the combustion offossil fuels (e.g., coal, oil, gas) is the largest source of 

C02 emissions and accounts for 80 percent of the total GHG emissions by mass. Anthropogenic 

C02 emissions released from a variety of sources, including through the use of fossil fuel 

combustion and cement production from geologically stored carbon (e.g., coal, oil, and natural 

gas) that is hundreds of millions of years old, as well as anthropogenic CO2 emissions from landuse changes such as deforestation, perturb the atmospheric concentration of C02, and the 

distribution of carbon within different reservoirs readjusts. More than half of the energy-related 

emissions come from large stationary sources such as power plants, while about a third come 

from transportation. Of the six well-mixed GHGs, four (C02, CH4, N20, and HFCs) are emitted 

by motor vehicles. In the United States, industrial processes (such as the production of cement, 

steel, and aluminum), agriculture, forestry, other land use, and waste management are also 

important sources ofGHGs. 

Different GHGs have different heat-trapping capacities. The concept of Global Warming 

Potential (GWP) was developed to compare the heat-trapping capacity and atmospheric lifetime 

of one GHG to another. The definition of a GWP for a particular GHG is the ratio of heat 

trapped by one unit mass of the GHG to that of one unit mass of C02 over a specified time 

period. When quantities of the different GHGs are multiplied by their GWPs, the different 

GHGs can be summed and compared on a carbon dioxide equivalent (C02e) basis. For example, 

CH4has a GWP of21, meaning each ton ofCH4 emissions would have 21 times as much impact 

on global warming over a 1 OO-year time horizon as 1 ton of CO2 emissions. Thus, on the basis 

of heat-trapping capability, 1 ton ofCH4 would equa121 tons ofC02e. The GWPs ofthe nonC02 GHG range from 21 (for CH4) up to 23,900 (for SF6). Aggregating all GHG on a C02e 

10 
basis at the source level allows a facility to evaluate its total GHG emissions contribution based 

on a single metric. 

What are the general requirements of the PSD program? 

Overview ofthe PSD Program 

The PSD program is a preconstruction review and permitting program applicable to new major 

stationary sources and major modifications at existing stationary sources. The PSD program 

applies in areas that are designated "attainment" or "unclassifiable" for a national ambient air 

quality standard (NAAQS). The PSD program is contained in part C of title I of the CAA. The 

"nonattainment new source review (NSR)" program applies in areas not in attainment of a 

NAAQS or in the Ozone Transport Region, and it is implemented under the requirements of part 

D of title I of the CAA. Collectively, EPA commonly refers to these two programs as the major 

NSR program. The governing EPA rules are contained in 40 CFR 51.165, 51.166, 52.21, 52.24, 

and part 51, Appendices S and W. There is no NAAQS for C02 or any of the other well-mixed 

GHGs, nor has EPA proposed any such NAAQS; therefore, unless and until EPA takes such 

further action, the nonattainment NSR program does not apply to GHGs. 

The applicability ofPSD to a particular source must be determined in advance of construction or 

modification and is pollutant-specific. The primary criterion in determining PSD applicability 

for a proposed new or modified source is whether the source is a "major emitting facility," based 

on its predicted potential emissions of regulated pollutants, within the meaning of CAA section 

169(1) that either constructs or undertakes a modification. EPA has implemented these 

requirements in its regulations, which use somewhat different terminology than the CAA does, 

for determining PSD applicability. 

Major Stationary Source 

Under PSD, a "major stationary source" is any source belonging to a specified list of28 source 

categories that emits or has the potential to emit (PTE) 100 tons per year (tpy) or more of any air 

pollutant subject to regulation under the CAA, or any other source type that emits or has the 

potential to emit such pollutants in amounts equal to or greater than 250 tpy. We refer to these 

levels as the 100/250-tpy thresholds. A new source with a potential to emit (PTE) at or above 

the applicable "major stationary source threshold" is subject to major NSR. These limits 

originate from section 169 ofthe CAA, which applies PSD to any "major emitting facility" and 

defines the term to include any source that emits or has a PTE of 100 or 250 tpy, depending on 

the source category. Note that the major source definition incorporates the phrase "subject to 

regulation," which, as described later, includes GH Gs, under our interpretation of that phrase as 

discussed in the recent memorandum entitled, "EPA's Interpretation of Regulations that 

Determine Pollutants Covered by Federal Prevention of Significant Deterioration (PSD) Permit 

Program." 75 FR 17004 (April 2, 2010). 

Major Modifications 

PSD also applies to existing sources that undertake a "major modification," which occurs when: 

(l) there is a physical change in, or change in the method of operation of, a "major stationary 

source;" (2) the change results in a "significant" emissions increase of a pollutant subject to 

regulation (equal to or above the significance level that EPA has set for the pollutant in 40 CFR 

52.21(b)(23)); and (3) there is a "significant net emissions increase" of a pollutant subject to 

11 
regulation that is equal to or above the significance level (defined in 40 CFR 52.21 (b)(23». 

Significance levels, which EPA has promulgated for criteria pollutants and certain other 

pollutants, represent a de minimis contribution to air quality problems. When EPA has not set a 

significance level for a regulated NSR pollutant, PSD applies to an increase of the pollutant in 

any amount (that is, in effect, the significance level is treated as zero). 

General Requirements for PSD 

This section provides a very brief summary of the main requirements of the PSD program. One 

principal requirement is that a new major source or major modification must apply best available 

control technology (BACT), which is determined on a case-by-case basis taking into account, 

among other factors, the cost effectiveness of the control and energy and environmental impacts. 

EPA has developed a "top-down" approach for BACT review, which involves a decision process 

that includes identification of all available control technologies, elimination of technically 

infeasible options, ranking of remaining options by control and cost effectiveness, and then 

selection of BACT. Under PSD, once a source is determined to be major for any regulated NSR 

pollutant, a BACT review is performed for each attainment pollutant that exceeds its PSD 

significance level as part of new construction or for modification projects at the source, where 

there is a significant increase and a significant net emissions increase of such pollutant.] 

In addition to performing BACT, the source must analyze impacts on ambient air quality to 

assure that sources do not cause or contribute to violation of any NAAQS or PSD increments and 

must analyze impacts on soil, vegetation, and visibility. In addition, sources or modifications 

that would impact Class I areas (e.g., national parks) maybe subject to additional requirements 

to protect air quality related values (AQRVs) that have been identified for such areas. Under 

PSD, if a source's proposed project may impact a Class I area, the Federal Land Manager is 

notified and is responsible for evaluating a source's projected impact on the AQRVs and 

recommending either approval or disapproval ofthe source's permit application based on 

anticipated impacts. There are currently no NAAQS or PSD increments established for GHGs, 

and therefore these PSD requirements would not apply for GHGs, even when PSD is triggered 

for GHGs. However, ifPSD is triggered for a GHG-emitting source, all regulated NSR 

pollutants that the new source emits in significant amounts would be subject to PSD 

requirements. Therefore, if a facility triggers NSR for non-GHG pollutants for which there are 

established NAAQS or increments, the air quality, additional impacts, and Class I requirements 

would apply to those pollutants. 

Pursuant to existing PSD requirements, the permitting authority must provide notice of its 

preliminary decision on a source's application for a PSD permit and must provide an opportunity 

for comment by the public, industry, and other interested persons. After considering and 

responding to comments, the permitting authority must issue a final determination on the 

construction permit. Usually NSR permits are issued by a state or local air pollution control 

agency that has its own authority to issue PSD permits under a permit program that has been 

approved by EPA for inclusion in its SIP. In some areas, EPA has delegated its authority to issue 

PSD permits under federal regulations to the state or local agency. In other areas, EPA issues the 

permits under its own authority. 

I EPA notes that the PSD program has historically operated in this fashion for all pollutants--when new sources or 

modifications are "major," PSD applies to all pollutants that are emitted in significant quantities from the source or 

project. This rule does not alter that for sources or modifications that are major due to their GHG emissions. 

12 
What are the CAA Requirements to include the PSD Program in the SIP? 

As stated above, the CAA contemplates that the PSD program be implemented in the first 

instance by the states and requires that states include PSD requirements in their SIPs. CAA 

section 11O(a)(2)(C) requires that-

"Each implementation plan ... shall .. .include a program to provide 

for. .. regulation of the modification and construction of any stationary 

source within the areas covered by the plan as necessary to assure that 

national ambient air quality standards are achieved, including a permit 

program as required in part[] C ... ofthis subchapter." 

CAA section 11O(a)(2)(J) requires that-

"Each implementation plan ... shall ... meet the applicable requirements 

of ... part C of this subchapter (relating to significant deterioration of air 

quality and visibility protection)." 

CAA section 161 provides that -

"Each applicable implementation plan shall contain emission limitations 

and such other measures as may be necessary, as determined under 

regulations promulgated under this part [C], to prevent significant 

deterioration of air quality for such region ... designated ... as attainment or 

unclassifiable." 

These provisions, read in conjunction with the PSD applicability provisions as well as other 

provisions such as the BACT provision the under CAA Section 165(a)(4), mandate that SIPs 

include PSD programs that are applicable to, among other things, any air pollutant that is subject 

to regulation. As discussed below, this includes GHGs on and after January 2,2011.2 

A number of states do not have PSD programs approved into their SIPs. In those states, EPA's 

regulations at 40 CFR 52.21 govern, and either EPA or the state as EPA's delegatee acts as the 

permitting authority. However, most states have PSD programs that have been approved into 

their SIPs, and these states implement their PSD programs and act as the permitting authority. 

What Actions Has EPA Taken Concerning PSD Requirements for GHG-emitting 

Sources? 

a. What are the Endangerment Finding, the Light Duty Vehicle Rule, and the Johnson 

Memo Reconsideration? 

By notice dated December 15,2009, and pursuant to CAA section 202(a), EPA issued two 

findings regarding GHGs that are commonly referred to as the "Endangerment Finding" and the 

"Cause or Contribute Finding." "Endangerment and Cause or Contribute Findings for 

Greenhouse Gases Under Section 202(a) of the Clean Air Act," 74 FR 66496. In the 

2 In the Tailoring Rule, EPA noted that commenters argued, with some variations, that the PSD provisions applied 

only to NAAQS pollutants, and not GHG, and EPA responded that the PSD provisions apply to all pollutants subject 

to regulation, including GHG. See 75 FR 31560-62 (June 3, 2010). EPA maintains its position that the PSD 

provisions apply to all pollutants subject to regulation, and the Agency incorporates by reference the discussion of 

this issue in the Tailoring Rule. 

13 
Endangerment Finding, the Administrator found that six long-lived and directly emitted GHGsC02, CH4, N20, HFCs, PFCs, and SF6-may reasonably be anticipated to endanger public health 

and welfare. In the Cause or Contribute Finding, the Administrator "define[ d] the air pollutant 

as the aggregate group of the same six ... greenhouse gases," 74 FR 66536, and found that the 

combined emissions of this air pollutant from new motor vehicles and new motor vehicle engines 

contribute to the GH G air pollution that endangers public health and welfare. 

By notice dated May 7, 2010, EPA published what is commonly referred to as the "Light-Duty 

Vehicle Rule" (LDVR), which for the first time established federal controls on GHGs emitted 

from light-duty vehicles. "Light-Duty Vehicle Greenhouse Gas Emission Standards and 

Corporate Average Fuel Economy Standards; Final Rule." 75 FR 25324. In its applicability 

provisions, the LDVR specifies that it "contains standards and other regulations applicable to the 

emissions of six greenhouse gases," including CO2, CH4, N20, HFCs, PFCs, and SF6. 75 FR 

25686 (40 CFR 86.1818-12(a». Shortly before finalizing the LDVR, by notice dated April 2, 

2010, EPA published a notice commonly referred to as the Johnson Memo Reconsideration. On 

December 18, 2008, EPA issued a memorandum, "EPA's Interpretation of Regulations that 

Determine Pollutants Covered by Federal Prevention of Significant Deterioration (PSD) Permit 

Program" (known as the "Johnson Memo" or the "PSD Interpretive Memo," and referred to in 

this preamble as the "Interpretive Memo"), that set forth EPA's interpretation regarding which 

EPA and state actions, with respect to a previously unregulated pollutant, cause that pollutant to 

become "subject to regulation" under the CAA. Whether a pollutant is "subject to regulation" is 

important for the purposes of determining whether it is covered under the federal PSD permitting 

program. The Interpretive Memo established that a pollutant is "subject to regulation" only if it 

is subject to either a provision in the CAA or regulation adopted by EPA under the CAA that 

requires actual control of emissions of that pollutant (referred to as the "actual control 

interpretation"). On February 17, 2009, EPA granted a petition for reconsideration on the 

Interpretive Memo and announced its intent to conduct a rulemaking to allow for public 

comment on the issues raised in the memorandum and on related issues. EPA also clarified that 

the Interpretive Memo would remain in effect pending reconsideration. 

On March 29,2010, EPA signed a notice conveying its decision to continue applying (with one 

limited refinement) the Interpretive Memo's interpretation of "subject to regulation" 

("Interpretation of Regulations that Determine Pollutants Covered by Clean Air Act Permitting 

Programs," 75 FR 17004). EPA concluded that the "actual control interpretation" is the most 

appropriate interpretation to apply given the policy implications. However, EPA refined the 

Agency's interpretation in one respect: EPA established that PSD permitting requirements apply 

to a newly regulated pollutant at the time a regulatory requirement to control emissions of that 

pollutant "takes effect" (rather than upon promulgation or the legal effective date of the 

regulation containing such a requirement). In addition, based on the anticipated promulgation of 

the LDVR, EPA stated that the GHG requirements of the vehicle rule would take effect on 

January 2, 2011, because that is the earliest date that a 2012 model year vehicle may be 

introduced into commerce. In other words, the compliance obligation under the LDVR does not 

occur until a manufacturer may introduce into commerce vehicles that are required to comply 

with GHG standards, which will begin with model year 2012 and will not occur before January 

2,2011. 

b. What is EPA's Tailoring Rule? 

On June 3, 2010 (effective August 2,2010), EPA promulgated a final rulemaking, the Tailoring 

Rule, for the purpose of relieving overwhelming permitting burdens that would, in the absence of 

14 
the rule, fall on permitting authorities and sources 75 FR 31514. EPA accomplished this by 

tailoring the applicability criteria that determine which GHG emission sources become subject to 

the PSD program

3 of the CAA. In particular, EPA established in the Tailoring Rule a phase-in 

approach for PSD applicability and established the first two steps of the phase-in for the largest 

GHG-emitters. Additionally, EPA committed to certain follow-up actions regarding future steps 

beyond the first two, discussed in more detail later in this notice. 

For the first step of the Tailoring Rule, which began on January 2, 2011, PSD requirements apply 

to major stationary source GHG emissions only if the sources are subject to PSD anyway due to 

their emissions of non-GHG pollutants. Therefore, in the first step, EPA did not require sources 

or modifications to evaluate whether they are subject to PSD requirements solely on account of 

their GHG emissions. Specifically, for PSD, Step I requires that as of January 2,2011, the 

applicable requirements ofPSD, most notably, the BACT requirement, apply to projects that 

increase net GHG emissions by at least 75,000 tpy C02e, but only if the project also significantly 

increases emissions of at least one non-GHG pollutant. 

The second step ofthe Tailoring Rule, which began on July I, 2011, phased in additional large 

sources of GHG emissions. New sources that emit, or have the PTE, at least 100,000 tpy C02e 

are subject to the PSD requirements. In addition, sources that emit or have the PTE at least 

100,000 tpy C02e and that undertake a modification that increases net GHG emissions by at least 

75,000 tpy C02e are also be subject to PSD requirements. For both steps, EPA notes that if 

sources or modifications exceed these C02e-adjusted GHG triggers, they are not covered by 

permitting requirements unless their GHG emissions also exceed the corresponding mass-based . 

triggers in tpy. 

EPA believes that the costs to the sources and the administrative burdens to the permitting 

authorities ofPSD permitting will be manageable at the levels in these initial two steps and that 

it would be administratively infeasible to subject additional sources to PSD requirements at those 

times. However, EPA also intends to issue a supplemental notice of proposed rulemaking in 

2011, in which the Agency will propose or solicit comment on a third step of the phase-in that 

would include more sources, beginning on July I, 2013. In the Tailoring Rule, EPA established 

an enforceable commitment that the Agency will complete this rulemaking by July I, 2012, 

which will allow 1 year's notice before Step 3 would take effect. 

In addition, EPA committed to explore streamlining techniques that may well make the 

permitting programs much more efficient to administer for GHG, and that therefore may allow 

their expansion to smaller sources. EPA expects that the initial streamlining techniques will take 

several years to develop and implement. 

In the Tailoring Rule, EPA also included a provision, that no source with emissions below 

50,000 tpy C02e, and no modification resulting in net GHG increases ofless than 50,000 tpy 

C02e, will be subject to PSD permitting before at least 6 years (i.e., April 30, 2016). This is 

because EPA has concluded that at the present time, the administrative burdens that would 

accompany permitting sources below this level would be so great that even with the streamlining 

actions that EPA may be able to develop and implement in the next several years, and even with 

the increases in permitting resources that EPA can reasonably expect the permitting authorities to 

3 The Tailoring Rule also applies to the title V program, which requires operating permits for existing sources. 

However, today's action does not affect Virginia's title V program. 

15 
acquire, it would be impossible to administer the permit programs for these sources until at least 

2016. 

As EPA explained in the Tailoring Rule, the threshold limitations are necessary because without 

it, PSD applies to all stationary sources that emit or have the PTE more than 100 or 250 tons of 

GHG per year, beginning on January 2, 2011. This is the date when EPA's recently promulgated 

LDVR took effect, imposing control requirements for the first time on COz and other GHGs. If 

this January 2,2011, date had passed without the Tailoring Rule being in effect, PSD 

requirements would have applied to GHG emissions at the 1001250 tpy applicability levels 

provided under a literal reading of the CAA as of that date. From that point forward, a source 

owner proposing to construct any new major source that emits at or higher than the applicability 

levels (and which therefore may be referred to as a "major" source) or modify any existing major 

source in a way that would increase GHG emissions would need to obtain a permit under the 

PSD program that addresses these emissions before construction or modification could begin. 

Under these circumstances, many small sources would be burdened by the costs of the 

individualized PSD control technology requirements and permit applications that the PSD 

provisions, absent streamlining, require. Additionally, state and local permitting authorities 

would be burdened by the extraordinary number of these permit applications, which are orders of 

magnitude greater than the current inventory of permits and would vastly exceed the current 

administrative resources of the permitting authorities. Permit gridlock would result since the 

permitting authorities would likely be able to issue only a tiny fraction of the permits requested. 

In the Tailoring Rule, EPA adopted regulatory language codifying the phase-in approach. As 

explained in that rulemaking, many state, local and tribal area programs will likely be able to 

immediately implement the approach without rule or statutory changes by, for example, 

interpreting the term "subject to regulation" that is part of the applicability provisions for PSD 

permitting. EPA requested permitting authorities to confirm that they will follow this 

implementation approach for their programs, and if they could not, then EPA requested that they 

notify the Agency so that we could take appropriate follow-up action to narrow federal approval 

of their programs before GHGs became subject to PSD permitting on January 2,2011. On 

August 2, 2010, Maryland provided a letter to EPA with confirmation that the State has the 

authority to regulate GHG in its PSD and title V programs, but lacked the authority to interpret 

"subject to regulation" as defined in the Tailoring Rule without additional rulemaking. See the 

docket for this proposed rulemaking for a copy of Maryland's letter. 

c. What is the GHG SIP Call? 

By Federal Register notice dated September 2,2010, EPA proposed the GHG SIP Call. In that 

action, along with the companion GHG FIP rulemaking published at the same time, EPA took 

steps to ensure that in the 13 States that did not appear to have authority to issue PSD permits to 

GHG-emitting sources at present, either the State or EPA would have the authority to issue such 

permits by January 2, 2011. EPA explained that although for most states, either the state or EPA 

is already authorized to issue PSD permits for GHG-emitting sources as of that date, our 

preliminary information showed that these 13 States have EPA-approved PSD programs that did 

not appear to include GHG-emitting sources and therefore did not appear to authorize these 

States to issue PSD permits to such sources. Therefore, EPA proposed to find that these 13 

States' SIPs were substantially inadequate to comply with CAA requirements and, accordingly, 

proposed to issue a SIP Call to require a SIP revision that applies their SIP PSD programs to 

GHG-emitting sources. In the companion GHG FIP rulemaking, EPA proposed a FIP that would 

16 
give EPA authority to apply EPA's PSD program to GHG-emitting sources in any State that is 

unable to submit a corrective SIP revision by its deadline. Maryland was not one of the States 

for which EPA proposed a SIP Call. 

What is the Relationship Between Today's Proposed Action and EPA's Proposed GHG SIP Call 

and GHG FIP? 

As noted above, by notice dated September 2, 2010, EPA proposed the GHG SIP Call. At the 

same time, EPA proposed a FIP to apply in any state that is unable to submit, by its deadline, a 

SIP revision to ensure that the state has authority to issue PSD permits to GHG-emitting 

sources.

4 As discussed earlier, Maryland interprets its current PSD regulations as providing 

them with the authority to regulate GHG, and as such, Maryland is not included on the list of 

areas for the proposed SIP call. Additionally, Maryland would not be subject to the FIP to 

implement GHG for PSD applicability. Maryland's June 23,2011, proposed SIP revision (the 

subject of this rulemaking) merely modifies Maryland's SIP to establish appropriate thresholds 

for determining which stationary sources and modification projects become subject to permitting 

requirements for GHG emissions under the PSD program of the CAA. 

d. What is the Narrowing Rule? 

EPA finalized the "Limitation of Approval of Prevention of Significant Deterioration Provisions 

Concerning Greenhouse Gas Emitting-Sources in State Implementation Plans" (75 FR 82536), 

also known as the "Narrowing Rule" on December 30, 2010. Narrowing EPA's approval ensured 

that for federal purposes, sources with GHG emissions that are less than the Tailoring Rule's 

emission thresholds were not obligated under federal law to obtain PSD permits during the gap 

between when GHG PSD requirements went into effect on January 2,2011 and when either (1) 

EPA approves a SIP revision adopting EPA's tailoring approach, or (2) if a state opts to regulate 

smaller GHG-emitting sources, the state demonstrates to EPA that it has adequate resources to 

handle permitting for such sources. Maryland was one of the states impacted by the Narrowing 

Rule. With the regulations submitted in the proposed SIP revision, Maryland has adopted EPA's 

tailoring approach. 

The thresholds that EPA established in the Tailoring Rule are based on C02e for the aggregate 

sum of six GHGs that constitute the pollutant that will be subject to regulation, which we refer to 

as GHG.5 These gases are: C02, CH4, N20, HFCs, PFCs, and SF6• Thus, in EPA's Tailoring 

Rule, EPA provided that PSD applicability is based on the quantity that results when the mass 

emissions of each of these gases is multiplied by the GWP ofthat gas, and then summed for all 

six gases. However, EPA further provided that in order for a source's GHG emissions to trigger 

PSD requirements, the quantity of the GHG emissions must equal or exceed both the 

applicability thresholds established in the Tailoring Rule on a C02e basis and the statutory 

thresholds of 100 or 250 tpy on a mass basis.6 Similarly, in order for a source to be subject to the 

4 As explained in the proposed GHG SIP Call (75 FR 53892, 53896), EPA intends to finalize its finding of 

substantial inadequacy and the SIP call for the 13 listed states by December 1, 2010. EPA requested that the states 

for which EPA is proposing a SIP call identify the deadline-between 3 weeks and 12 months from the date of 

signature of the final SIP Call-that they would accept for submitting their corrective SIP revision. 

S The term "greenhouse gases" is commonly used to refer generally to gases that have heat-trapping properties. 

However, in this notice, unless noted otherwise, we use it to refer specifically to the pollutant regulated in the 

LDVR. 

6 The relevant thresholds are 100 tpy for title V, and 250 tpy for PSD, except for 28 categories listed in EPA 

17 
PSD modification requirements, the source's net GHG emissions increase must exceed the 

applicable significance level on a COze basis and must also result in a net mass increase of the 

constituent gases combined. 

IV. Summary of Changes 

A. SIP Revision #07-13 

COMAR 26.11.17 Nonattainment Provisions for Major New Sources and Major 

Modifications 

The following is a brief summary of the changes. 

fi .. Regulation .01: De llltIons 

Section Status Description 

.01B(l} Modified text· Clarified definition of "actual emissions" 

.0IB(3)(a)- Modified text Added definition of ""Baseline Actual Emissions" ("BAE") and 

(t) guidelines for calculating them; .0IB(3)(b) is for existing EGU's; 

(c) is for existing units other than EGU's; (d) is for new units; (e) 

proscribes how to calculate BAE for a Plantwide Applicability 

Limit ("PAL"); (t) is general provisions . 

.01B(5) Modified text Re-ordered definition of Best Available Control Technology 

("BACT") [Formerly .0IB(3)]; clarified that BACT requirements 

apply to "regulated NSR pollutants" 

.0IB(6) Modified text Re-ordered definition of "building, structure, facility, or 

installation" [formerly .01B(5)]; removed (a)(ii): reference to 

outer continental shelf 

.0IB(8) Modified text Re-orderedlclarified definition of "construction" [formerly 

.01B(7)] 

.0IB(9) Modified text Added definition of "electric utility steam generating unit" 

.0IB(10) Modified text Added definition of "Emissions Reduction Credit (ERC)" 

.01B(1l} Modified text Re-ordered definition of "emissions unit" [formerly .0IB(8)]; 

revised definition to more broadly apply definition to "regulated 

NSR pollutant(s)" [formerly only VOC, NOx, and CO applied] 

.0IB(12) Modified text Added definition of "existing emissions unit" 

.0IB(13) Modified text Re-ordered and clarified definition of "federally enforceable" 

[formerly.01B(921 

.0IB(14) Re-ordered Formerly .0IB(10); Text unchanged 

.0IB(15) Modified text Re-ordered and clarified definition of "Lowest Achievable 

Emission Rate" [formerly .0IB(11)] 

.01B(16) Modified text Re-ordered [formerly .0IB(12)]; Revised definition of "Major 

Modification" to apply to "any regulated NSR pollutant", 

"significant emissions increases", and "major stationary sources"; 

includes PAL exclusion 

regulations for which the PSD threshold is 100 tpy. 

18 
Section Status Description 

.01B(17) Modified text Re-ordered [formerly .0IB(13)]; Revised definition of "Major 

Modification" 

.0IB(18) Re-ordered Formerly .0IB(14); text unchanged 

.01B(19) Modified text Re-ordered [formerly .0IB(1S)]; Revised definition of "Net 

Emissions Increase" 

.01B(20) Modified text Added definition of "New Emissions Unit" 

.0IB(21) Re-Ordered Formerly .0IBI6; text unchanged 

.01B(22) Modified text Added definition of "proj ect" 

.0IB(23) Modified text Added definition of "Projected Actual Emissions" 

.0 1 B(24) Modified text Added definition of "Regulated NSR Pollutant" 

.01B(2S) Modified text Added definition of "Replacement Unit" 

.0IB(26) Modified text Re-ordered [formerly .01B(18)]; clarified significant emission 

rates 

.01B(27) Modified text Re-ordered [formerly .01B(18)]; clarified definition of "Stationary 

Source" 

Rel!.ulation.02: Applicabilin 

Section Status Description 

.02A Modified text Clarified statewide applicability 

.02B Modified text Clarification 

.02D Modified text Clarified possible additional applicability ofPSD requirements 

for attainment areas 

.02F Modified text Deleted existing; replaced with definition of when a project is a 

major modification [.02F(1)] and procedures for applicability 

tests [.02F(2)(a)-(c)] 

.020 Modified text Clarified applicability to sources which become major by virtue 

of relaxation of synthetic minor limits 

.02H Modified text Clarified applicable regulations to sources with PAL's 

.021 Modified text Clarified applicability of regulations to sources in attainment 

areas where the new construction or modification would result in 

a violation of the NAAQS 

R el!.u I· atlOU. 03 : G enera Ie on dT I Ions 

Section Status Description 

.03A Modified text Clarification 

.03B(2) Modified text Clarification 

.03B(3) Modified text Clarification of emission offset ratios for reasonable further 

progress; Deleted .03B(3)(c) [CO ratio] 

.03B(S) Modified text Changed timeframe of requirement that ERC's be federally 

19 
Section Status Description 

enforceable to before commencement of construction. [Formerly 

before permit to construct was issued] 

.03B(7) Modified text Clarified the quantity of emissions required to be offset 

.03C Modified text Clarified LAER requirements for phased construction 

.03D Modified text Clarification 

.03E Modified text Synthetic minor requirements 

.03F Modified text Retroactive applicability of regulations to synthetic minor 

facilities that become major 

Regulation .04: Creating Emission Reduction Credits (ERCs) 

*NOTE: Existing Regulations .04 and .OS were repealed and replaced in their entirety with the 

sections below 

Section Status Description 

.04A Added Guidelines for creating NOx and VOC ERC's [.04A(J)-(3)] 

.04B Added Procedures for establishing ERC's [.04B(J)-(3)] 

.04C Added Quantification and use ofERC's [.04C(J)-(6)] 

.04D Added Location ofERC's [.04D(l),(2)] 

.04E Added Exclusions and limitations [.04E(J)-(3)] 

Regulation .05: Transferring Emission Reduction Credits 

*NOTE: Existing Regulations .04 and .OS were repealed and replaced in their entirety with the 

sections below 

Section Status Description 

.OSA Added Required information for creating ERC's [.OSA(l)-(S)] 

.OSB Added Requirement that ERC's be certified 

.OSC Added Procedure for certifying ERC's [.OSC(J),(2)] 

Regulation .06: Transferring Emission Reduction Credits 

*NOTE: Regulations. 06 - .09 are new. D" escnptIOns b I eow 

Section Status Description 

.06A Added ERC may be transferred after it has been certified and is federally 

enforceable 

.06B Added Prohibition against using ERCs in a manner that would violate 

State or federal emission standard/requirement 

.06C Added Prohibition against transfer for any purpose other than offsets 

through federally enforceable permit to construct 

.06D Added Requirements for MD sources using ERCs generated in other 

states [.06D(l)-(3)] 

Regulation .07: Plantwide Applicability Limit (PAL) - General 

*NOTE: RegulatIOns. . 06 - 09 are new. D" escnptIOns b I eow 

Section Status Description 

.07A Added Applicability [.07 A(l )-(3)] 

.07B Added Definitions [.07B(l)-(JS)] 

20 
Regulation .08: Plantwide Applicability Limit (PAL) - Permits 

*NOTE' Regulations 06 - 09 are new Descriptions below 

Section Status Description 

.08A Added Application requirements 

.08B Added Establishing the PAL limit [.08B(I)-(4)1 

.08C Added Issuance of PAL permits [.08(1),(2)] 

.08D Added General requirements [.08(1)-(6)] 

.08E Added Expiration of PALs [.08E(1)-(7)] 

.08F Added Re-opening a PAL [.08F(1)-(3)] 

.08G Added Renewal ofa PAL [.08G(I)-(5)] 

.08H Added Increasing a PAL [.08H(I)-(3)] 

Regulation .07: Plantwide Applicability Limit (PAL) - Monitoring, Recordkeeping, and 

Reporting 

*NOTE R egu I' atlOns. 06 - 09 are new. D b I escnptlOns eow 

Section Statns Description 

.09A Added Monitoring and Recordkeeping Requirements [.09A(1)-(14)] 

.09B Added Reporting requirements [.09B(1)-(3)] 

B. SIP REVISION #09-03 

COMAR 26.11.06: General Emission Standards, Prohibitions, and Restrictions 

The following is a brief summary of the changes. 

R e2u It' a Ion. 14 : C t I on ro 0 fPSD S ources 

Section Status Description 

.14A Modified text Clarified definition of "Administrator" as used in 40 CFR 

§§52.21 and 51.166 

.14B(2) Modified text Clarified definition of "Reviewing Authority" as used in 40 CFR 

§§52.21 and 51.166 

C. SIP REVISION #11-02 

COMAR 26.11.01 General Administrative Provisions (Terms Defined) 

Th e fill 0 owmg IS a b'f ne summary 0 fh tee h anges. 

Section Status Description 

.01B(6-1) Revised/Reordered Added definition of C02e 

.01B(l8-1) Added Definition of greenhouse gases 

.01B(37) Modified Updated federal incorporation by reference date in the 

Definition of regulatory text to the July 1, 2009 edition of the CFR, "as 

Prevention of amended by the tailoring rule" for all air emission units. 

Sigoificant Modified B(37)(a),(b) to exclude greenhouse gases from 

Deterioration 100/250 ton/year applicability thresholds. Added B(37)(c),(d) 

(PSD) source to incorporate Tailoring Rule thresholds for greenhouse gases 

21 
COMAR 26.11.02 Permits, Approvals, and Registration 

The following is a brief summary of the changes 

Section Status Descr!J!tion 

.0IB(44)(f) Added Added ORO to definition of "regulated air pollutant" 

.01 (C)(1)(d) Added Added ORO to definition of "Major Source" 

.l2(A)(2) Added Added ORO sources to those subject to the permitting 

procedures of Regulation .12 

COMAR 26.11.06 General Emission Standards, Prohibitions, and Restrictions 

Th e 611 0 owmg IS . a b'f ne summary 0 ffu e c h anges. 

Section Status Description 

.14 B(1) Modified text Updated federal incorporation by reference date in the regulatory 

text to fue July I, 2009 edition of the CFR, "as amended by the 

tailoring rule" for all air emission units. 

The following items were provided by Maryland in support of this SIP Revision Request. This 

infonnation was provided in the State's Technical Support Document: 

I. Sources Affected by this SIP Revision 

These regulations affect new and major modification sources in attainment areas in Maryland 

with emissions of any pollutant subject to regulation under fue Clean Air Act. A new source 

is subject to PSD requirements if it is within a listed source category with emissions of at 

least 100 tons per year or a non-listed source with emissions of at least 250 tons per year or 

more of any regulated pollutant. Existing major sources undergoing a major modification 

will be subject to PSD requirements iffue modification causes an increase in emissions of 40 

tons or more per year. A source may "net out" of PSD requirements if emission reductions 

during the contemporaneous period cause fue net emissions increase to be less than the 

applicable threshold. 

2. Economic Impact of this SIP Revision 

The proposed action has no economic impact because the substantive requirements of the 

PSD program have not changed. 

3. Requirements of the PSD Program in Maryland 

The PSD regulation requires an affected source to install BACT. It is the responsibility of 

the applicant to review available documents, including the EPA BACT/LAER 

Clearinghouse, to detennine fue best controls demonstrated for the type equipment being 

proposed or modified. The applicant must also demonstrate that emissions will not exceed 

PSD increment for certain criteria pollutants. An air dispersion model may be necessary to 

demonstrate that the proposed emission increase will not cause or contribute to a violation of 

the National Ambient Air Quality Standards. 

22 
V. RECOMMENDED AGENCY ACTION 

I find that the proposed revisions represent a strengthening of Maryland' s SIP. Accordingly, I 

recommend that the October 24, 2007 proposed revisions to COMAR 26.11.17, the July 31, 

2009 proposed revisions to COMAR 26.11.06, and the June 23,2011 proposed revisions to 

COMAR 26.11.01, .02, and .06 be approved as described above. 

23