[Federal Register Volume 75, Number 247 (Monday, December 27, 2010)]
[Proposed Rules]
[Pages 81179-81187]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-32456]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R07-OAR-2010-0945, FRL-9243-9]


Approval and Promulgation of Implementation Plans; Nebraska: 
Prevention of Significant Deterioration; Greenhouse Gas Permitting 
Authority and Tailoring Rule Revision

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to approve revisions to the Nebraska State 
Implementation Plan (SIP), which were recently submitted by the 
Nebraska Department of Environmental Quality (NDEQ). These revisions 
include proposed changes to Nebraska's Prevention of Significant 
Deterioration (PSD) program, submitted by NDEQ to EPA on November 19, 
2010; and proposed changes to Nebraska's greenhouse gas (GHG) 
construction permit related regulations, submitted by NDEQ to EPA on 
October 19, 2010 (that NDEQ requested parallel processing for on 
September 30, 2010). The proposed SIP revision (Chapters 1, 2, 5, 14, 
15, 17 and 19 of Title 129 of the Nebraska Administrative Code) to 
Nebraska's Prevention of Significant Deterioration (PSD) program 
includes Nebraska's adoption of portions of EPA's 2002 new source 
review (NSR) rule, which we call the NSR Reform Rule, and which we 
issued by notice dated December 31, 2002, 67 FR 80186. The proposed SIP 
revision also provides the state of Nebraska with authority to regulate 
GHG emissions under the PSD program and incorporates the GHG emission 
thresholds established in EPA's ``PSD and Title V Greenhouse Gas 
Tailoring Final Rule,'' which EPA issued by notice dated June 3, 2010, 
75 FR 31514. EPA is proposing approval of both submittals and is 
proposing approval of the GHG portion of the proposed SIP revision 
through a parallel processing action. In the alternative, EPA is 
soliciting comments from the public on whether it should initially only 
approve Nebraska's October 19, 2010 submittal with respect to the 
revisions to the GHG construction permit regulations, and address 
Nebraska's November 19, 2010 submittal related to NSR Reform in a 
subsequent final action.

DATES: Comments must be received on or before January 26, 2011.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R07-
OAR-2010-0945, by one of the following methods:
    1. http://www.regulations.gov: Follow the on-line instructions for 
submitting comments.
    2. E-mail: <a href="/cdn-cgi/l/email-protection#b7d0d8d9cdd6dbd2cd99dbd6c5c5cef7d2c7d699d0d8c1"><span class="__cf_email__" data-cfemail="f5929a9b8f9499908fdb999487878cb5908594db929a83">[email protected]</span></a>.
    3. Fax: (913) 551-7844.
    4. Mail: Air Planning and Development Branch, Air and Waste 
Management Division, U.S. Environmental Protection Agency, Region 7, 
901 North 5th Street, Kansas City, Kansas 66101.
    5. Hand Delivery or Courier: Mr. Larry Gonzalez, Air Planning and 
Development Branch, Air and Waste Management Division, U.S. 
Environmental Protection Agency, Region 7, 901 North 5th Street, Kansas 
City, Kansas 66101. Such deliveries are only accepted during the 
Regional Office's normal hours of operation. The Regional Office's 
official hours of business are Monday through Friday, 8 a.m. to 4:30 
p.m., excluding Federal holidays.
    Instructions: Direct your comments to Docket ID No. EPA-R07-OAR-
2010-0945. EPA's policy is that all comments received will be included 
in the public docket without change and may be made available online at 
http://www.regulations.gov, including any personal information 
provided, unless the comment includes information claimed to be 
Confidential Business Information (CBI) or other information whose 
disclosure is restricted by statute. Do not submit through http://www.regulations.gov or e-mail, information that you consider to be CBI 
or otherwise protected. The http://www.regulations.gov Web site is an 
``anonymous access'' system, which means EPA will not know your 
identity or contact information unless you provide it in the body of 
your comment. If you send an e-mail comment directly to EPA without 
going through http://www.regulations.gov, your e-mail address will be 
automatically captured and included as part of the comment that is 
placed in the public docket and made available on the Internet. If you 
submit an electronic comment, EPA recommends that you include your name 
and other contact information in the body of your comment and with any 
disk or CD-ROM you submit. If EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, EPA 
may not be able to consider your comment. Electronic files should avoid 
the use of special characters, any form of encryption, and be free of 
any defects or viruses. For additional information about EPA's public 
docket visit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm.
    Docket: All documents in the electronic docket are listed in the 
http://www.regulations.gov index. Although listed in the index, some 
information is not publicly available, i.e., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, is not placed on the Internet and will be 
publicly available only in hard copy form. Publicly available docket 
materials are available either electronically in http://www.regulations.gov or in hard copy at the Air Planning and Development 
Branch, Air and Waste Management Division, U.S. Environmental 
Protection Agency, Region 7, 901 North 5th Street, Kansas City, Kansas 
66101. EPA requests that if at all possible, you contact the person 
listed in the FOR FURTHER INFORMATION CONTACT section to schedule your 
inspection. The Regional Office's official hours of business are Monday 
through Friday, 8:30 a.m. to 4:30 p.m., excluding Federal holidays.

FOR FURTHER INFORMATION CONTACT: For information regarding the Nebraska 
SIP, contact Mr. Larry Gonzalez, Air Planning and Development Branch, 
Air and Waste Management Division, U.S. Environmental Protection 
Agency, Region 7, 901 North 5th Street, Kansas City, Kansas 66101. Mr. 
Gonzalez's telephone number is (913) 551-7041; e-mail address: 
<a href="/cdn-cgi/l/email-protection#3d5a5253475c51584713515c4f4f447d584d5c135a524b"><span class="__cf_email__" data-cfemail="6c0b0302160d00091642000d1e1e152c091c0d420b031a">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. What Action is EPA Proposing in Today's Notice?
II. What is the Background for the Action Proposed by EPA in Today's 
Notice?
    A. What are GHGs and their sources?
    B. What are the general requirements of the PSD program?

[[Page 81180]]

    C. What are the CAA requirements to include the PSD program in 
the SIP?
    D. What actions has EPA taken concerning PSD requirements for 
GHG-emitting sources?
    E. What is the background for EPA's New Source Review (NSR) 
Reform Rule?
III. What is EPA's analysis of Nebraska's proposed SIP revision?
    A. What does Nebraska's proposed SIP revision do?
    B. Why is approval of Nebraska's proposed SIP revision 
consistent with the Clean Air Act?
IV. Proposed Action
V. Statutory and Executive Order Reviews

I. What action is EPA proposing in today's notice?

    On October 19, 2010, NDEQ submitted draft revisions to the Nebraska 
Administrative Code to EPA for approval into the state of Nebraska's 
SIP to (1) provide the state with the authority to regulate GHGs under 
its PSD program; and (2) establish appropriate emission thresholds and 
time-frames for determining which new or modified stationary sources 
become subject to Nebraska's PSD permitting requirements for GHG 
emissions. These draft revisions submitted on October 19, 2010 revise 
existing regulations that NDEQ had amended to adopt portions of EPA's 
2002 NSR Reform rules. Because NDEQ had not previously submitted these 
amendments, on November 19, 2010, NDEQ submitted revisions to the 
Nebraska Administrative Code to EPA for approval into the state of 
Nebraska's SIP that adopt portions of the 2002 NSR Reform rules. The 
combination of the October 19, 2010 submittal and the November 19, 2010 
submittal will be referred to as the submissions.
    With respect to Nebraska's GHG revisions, the thresholds and time-
frames are consistent with the ``PSD and Title V Greenhouse Gas 
Tailoring Final Rule'' (75 FR 31514) hereafter referred to as the 
``Tailoring Rule.'' Final approval of Nebraska's submissions into the 
SIP would make Nebraska's SIP adequate with respect to PSD requirements 
for GHG-emitting sources. Furthermore, final approval of Nebraska's 
submissions into the SIP would put in place the GHG emission thresholds 
for PSD applicability set forth in EPA's Tailoring Rule, ensuring that 
smaller GHG sources emitting less than these thresholds will not be 
subject to permitting requirements when PSD requirements begin applying 
to GHGs on January 2, 2011. Finally, final approval of Nebraska's 
submissions into the SIP would update the SIP to reflect Nebraska's 
adoption of portions of EPA's 2002 NSR Reform rules. Pursuant to 
section 110(k)(3) and 110(l) of the CAA, EPA is proposing to approve 
this revision into the Nebraska SIP.\1\
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    \1\ In today's proposal, EPA is also soliciting public comment 
on whether it should initially only approve the revisions related to 
GHGs into the Nebraska SIP in this rulemaking, and address the 
revisions related to NSR Reform in a subsequent final action. Under 
this alternative, Nebraska SIP-approved rules that are applicable to 
the State's authority to regulate GHG would stem from the provisions 
of EPA's Federal PSD rules as of July 1, 1997, in conjunction with 
Nebraska's revised regulations which change the definition of ``NSR 
regulated pollutant'' to provide NDEQ with the authority to regulate 
GHGs.
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    Due to the fact that the proposed rule revision relating to GHGs is 
not yet state-effective, on September 30, 2010, Nebraska requested that 
EPA ``parallel process'' this portion of the revisions. Under this 
procedure, the EPA Regional Office works closely with the state while 
developing new or revised regulations. Generally, the state submits a 
copy of the proposed regulation or other revisions to EPA before 
conducting its public hearing. EPA reviews this proposed state action 
and prepares a notice of proposed rulemaking. EPA publishes this notice 
of proposed rulemaking in the Federal Register and solicits public 
comment in approximately the same time frame during which the state is 
holding its public hearing. The state and EPA thus provide for public 
comment periods on both the state and the Federal actions in parallel.
    After Nebraska submits the formal state-effective rule and SIP 
revision request (including a response to all public comments raised 
during the state's public participation process), EPA will prepare a 
final rulemaking notice for the SIP revision. If changes are made to 
the state's proposed rule after EPA's notice of proposed rulemaking, 
such changes must be acknowledged in EPA's final rulemaking action. If 
the changes are significant, then EPA may be obliged to re-propose the 
action. In addition, if the changes render the SIP revision not 
approvable, EPA's re-proposal of the action would be a disapproval of 
the revision.

II. What is the background for the action proposed by EPA in today's 
notice?

    Today's proposed action on the Nebraska SIP relates to four 
distinct Federal rulemaking actions. The first rulemaking is EPA's 
``Prevention of Significant Deterioration and Title V Greenhouse Gas 
Tailoring Rule,'' Final Rule (the Tailoring Rule). 75 FR 31514 (June 3, 
2010). 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,'' Final Rule (GHG SIP Call), which was signed 
by the EPA Administrator on December 1, 2010 (see http://www.epa.gov/nsr/documents/20101201finalrule.pdf). 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 proposed FIP), which serves as a companion 
rulemaking to EPA's GHG SIP Call, and which EPA has stated it intends 
to finalize for certain states as soon as December 23, 2010. The fourth 
rulemaking is EPA's ``Prevention of Significant Deterioration (PSD) and 
Nonattainment New Source Review (NSR): Baseline Emissions 
Determination, Actual-to-Future-Actual Methodology, Plantwide 
Applicability Limitations, Clean Units, Pollution Control Projects,'' 
Final Rule, 67 FR 80186 (December 31, 2002) (NSR Reform), which revised 
the applicability of the PSD requirements. A summary of each of these 
rulemakings is described below.
    In the first rulemaking, the Tailoring Rule, EPA established 
appropriate GHG emission thresholds for determining the applicability 
of PSD requirements to GHG-emitting sources. In the second rulemaking, 
the GHG SIP Call, EPA issued a finding that the EPA-approved PSD 
programs in 13 states (including Nebraska) are substantially inadequate 
to comply with CAA requirements because they do not apply PSD 
requirements to GHG-emitting sources. For each of these states, EPA 
required the state (through a ``SIP Call'') to revise its SIP as 
necessary to correct such inadequacies. EPA imposed an expedited 
schedule for these states, in most cases, to submit their corrective 
SIP revision, in light of the fact that as of January 2, 2011, certain 
GHG-emitting sources will become subject to the PSD requirements and, 
without an approved SIP or Federal Implementation Plan (FIP) in place 
in the state--which would authorize the State or EPA to act as the 
permitting authority--may not be able to obtain a PSD permit in order 
to construct or modify. In the third rulemaking, the proposed GHG FIP, 
EPA is proposing a FIP to apply in any state that is unable to submit, 
by its deadline, a corrective SIP revision. In the fourth rulemaking, 
NSR Reform, EPA promulgated certain revisions to the

[[Page 81181]]

PSD program to, among other things, provide administrative flexibility 
while retaining or enhancing environmental benefits of the permitting 
program.
    Nebraska has submitted a proposed SIP revision to make the SIP 
adequate with respect to federal PSD requirements for GHG-emitting 
sources. This SIP revision puts 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 
will not be subject to applicable GHG permitting requirements as of 
January 2, 2011. The proposed SIP revision also makes other changes to 
the PSD program consistent with NSR Reform.
    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 Nebraska SIP revision and EPA's other national rulemakings as 
well as EPA's analysis of Nebraska's SIP revision.

A. 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 http://www.regulations.gov). The endangerment finding rulemaking is discussed 
later in this rulemaking. A summary of the nature and sources of GHGs 
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 (CO<INF>2</INF>), 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 CO<INF>2</INF>, methane 
(CH<INF>4</INF>), nitrous oxide (N<INF>2</INF>O), hydrofluorocarbons 
(HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride 
(SF<INF>6</INF>), hereafter referred to collectively as ``the six well-
mixed GHGs,'' 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 U.S., the combustion of fossil fuels (e.g., coal, oil, gas) 
is the largest source of CO<INF>2</INF> emissions and accounts for 80 
percent of the total GHG emissions by mass. Anthropogenic 
CO<INF>2</INF> 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 
CO<INF>2</INF> emissions from land-use changes such as deforestation, 
perturb the atmospheric concentration of CO<INF>2</INF>, 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 (CO<INF>2</INF>, CH<INF>4</INF>, 
N<INF>2</INF>O, and HFCs) are emitted by motor vehicles. In the U.S., 
industrial processes (such as the production of cement, steel, and 
aluminum), agriculture, forestry, other land use, and waste management 
are also important sources of GHGs.
    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 CO<INF>2</INF> 
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 (CO<INF>2</INF>e) basis. For example, 
CH<INF>4</INF> has a GWP of 21, meaning each ton of CH<INF>4</INF> 
emissions would have 21 times as much impact on global warming over a 
100-year time horizon as 1 ton of CO<INF>2</INF> emissions. Thus, on 
the basis of heat-trapping capability, 1 ton of CH<INF>4</INF> would 
equal 21 tons of CO<INF>2</INF>e. The GWPs of the non-CO<INF>2</INF> 
GHGs range from 21 (for CH<INF>4</INF>) up to 23,900 (for 
SF<INF>6</INF>). Aggregating all GHGs on a CO<INF>2</INF>e basis at the 
source level allows a facility to evaluate its total GHG emissions 
contribution to global warming based on a single metric.

B. What are the general requirements of the PSD program?

1. Overview of the 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 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 generally contained in 40 CFR 
51.165, 51.166, 52.21, 52.24, and part 51, Appendices S and W. There is 
no NAAQS for CO<INF>2</INF> or any of the other well-mixed GHGs, nor 
has EPA proposed any such NAAQS; therefore, unless and until EPA takes 
further such action, the nonattainment NSR program does not apply to 
GHGs.
    The applicability of PSD 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 estimated 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.
a. Major Stationary Source
    Under EPA's regulations, PSD applies to a ``major stationary 
source,'' which is defined as any source belonging to a specified list 
of 28 source categories that emits or has the potential to emit 100 tpy 
or more of any air pollutant or any other source type that emits or has 
the potential to emit any air pollutant in amounts equal to or greater 
than 250 tpy. 40 CFR 51.166(a)(7)(i), 51.166(b)(1)(i). 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

[[Page 81182]]

section 165(a)(1) of the CAA, which applies PSD to any ``major emitting 
facility''; and CAA section 169(l), which defines the term to include 
any source that emits or has a PTE of 100 or 250 tpy, depending on the 
source category. EPA's regulations have revised the terminology, by 
applying PSD to any ``major stationary source,'' and have interpreted 
PSD applicability more narrowly by defining that term to include a 
source that emits at least one ``regulated NSR pollutant,'' 40 CFR 
51.166(b)(1)(i)(a). The regulations define that term, in turn, to 
include pollutants regulated under specified provisions of the CAA; and 
to, as a catch-all category, ``[a]ny pollutant that otherwise is 
subject to regulation under the [CAA].'' Id. at 51.166(b)(49)(iv). This 
catch-all category will include GHGs on January 2, 2011, under our 
interpretation of the term ``subject to regulation under the [CAA],'' 
as discussed in EPA's recently issued memorandum entitled, 
``Reconsideration of Interpretation of Regulations that Determine 
Pollutants Covered by Clean Air Act Permitting Programs.'' 75 FR 17004 
(April 2, 2010).
b. Major Modifications
    Under EPA regulations, PSD also applies to existing sources that 
undertake a ``major modification,'' which occurs when: (1) 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 51.166(b)(23)(i)); and (3) there is a ``significant net emissions 
increase'' of a pollutant subject to regulation that is equal to or 
above the significance level 40 CFR 51.166(b)(23)(i)). 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).
2. 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 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.\2\
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    \2\ 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.
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    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) may be 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 of the 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, if PSD 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 PSD 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 PSD 
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.

C. What are the CAA requirements to include the PSD program in the SIP?

    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 110(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.

CAA 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).

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--which, as noted above, apply, by their terms, to ``any air 
pollutant,'' and which EPA has, through regulation, interpreted more 
narrowly as any ``NSR regulated pollutant''--and read in conjunction 
with other provisions, such as the BACT provision 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, including, as discussed below, GHGs on and after January 2, 
2011.\3\
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    \3\ 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 
FR31560-62 (June 3, 2010). EPA maintains its position that the PSD 
provisions apply to all pollutants subject to regulations, and the 
Agency incorporates by reference the discussion of this issue in the 
Tailoring Rule.

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[[Page 81183]]

    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 acting as EPA's delegatee serves as the 
permitting authority. On the other hand, 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. Nebraska has a 
SIP-approved PSD program.

D. What actions has EPA taken concerning PSD requirements for GHG-
emitting sources?

1. What are the Endangerment Finding, the Light Duty Vehicle Rule, and 
the Johnson Memo Reconsideration?
    By notice dated December 15, 2009, pursuant to CAA section 202(a), 
EPA issued, in a single final action, 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 Endangerment Finding, the Administrator 
found that six long-lived and directly emitted GHGs--CO<INF>2</INF>, 
CH<INF>4</INF>, N<INF>2</INF>O, HFCs, PFCs, and SF<INF>6</INF>--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 GHG air pollution that endangers public health and 
welfare.
    By notice dated May 7, 2010, EPA and the National Highway Traffic 
Safety Administration 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 CO<INF>2</INF>, CH<INF>4</INF>, 
N<INF>2</INF>O, HFCs, PFCs, and SF<INF>6</INF>. 75 FR 25686 (40 CFR 
86.1818-12(a)).
    Shortly before finalizing the LDVR, by notice dated April 2, 2010, 
EPA published an interpretation that we call the Johnson Memo 
Reconsideration. ``Reconsideration of Interpretation of Regulations 
that Determine Pollutants Covered by Clean Air Act Permitting 
Programs'', 75 FR 17004. In this action, EPA stated that it would 
continue to apply its interpretation 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. EPA added that a pollutant becomes subject 
to regulation at the time the first 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 (the first model year in which the 
rule's GHG requirements apply) may be introduced into commerce.
2. What is EPA's tailoring rule?
    By notice dated June 3, 2010, EPA published what we call the 
Tailoring Rule, which was a final rulemaking for the purpose of 
relieving overwhelming permitting burdens that would, in the absence of 
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 
\4\ 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.\5\
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    \4\ The Tailoring Rule also applies to the title V program, 
which requires operating permits for existing sources. However, 
today's action does not affect Nebraska's title V program. We plan 
to take action on Nebraska's title V program in the future.
    \5\ EPA adopted the Tailoring Rule after careful consideration 
of numerous public comments. On October 27, 2009 (74 FR 55292), EPA 
proposed the Tailoring Rule. EPA held two public hearings on the 
proposed rule, and received over 400,000 written public comments. 
The public comment period ended on December 28, 2009. The comments 
provided detailed information that helped EPA understand better the 
issues and potential impacts of the Tailoring Rule. The preamble of 
EPA's Tailoring Rule describes in detail the comments received and 
how some of these comments were incorporated in EPA's fine rule. See 
75 FR 31514 for more detail.
---------------------------------------------------------------------------

    For the first step of the Tailoring Rule, which will begin on 
January 2, 2011, PSD requirements will 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 will not require sources that newly construct or modify to apply 
PSD requirements solely on account of their GHG emissions. 
Specifically, for PSD, Step 1 requires that as of January 2, 2011, the 
applicable requirements of PSD, most notably, the BACT requirement, 
will apply to projects that increase net GHG emissions by at least 
75,000 tpy CO<INF>2</INF>e, but only if the project also significantly 
increases emissions of at least one non-GHG pollutant and thereby 
trigger PSD anyway.
    The second step of the Tailoring Rule, beginning on July 1, 2011, 
will phase in additional large sources of GHG emissions. New sources 
that emit, or have the potential to emit, at least 100,000 tpy 
CO<INF>2</INF>e will become subject to the PSD requirements. In 
addition, existing sources that emit or have the potential to emit at 
least 100,000 tpy CO<INF>2</INF>e and that undertake a modification 
that increases net GHG emissions by at least 75,000 tpy CO<INF>2</INF>e 
will also be subject to PSD requirements. For both steps, EPA notes 
that if sources or modifications exceed these CO<INF>2</INF>e-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 of PSD 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 1, 2013. In the Tailoring 
Rule, EPA established an enforceable commitment that the Agency will 
complete this rulemaking by July 1, 2012, which will allow for 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 GHGs, 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.

[[Page 81184]]

    In the Tailoring Rule, EPA also included a provision, that no 
source with emissions below 50,000 tpy CO<INF>2</INF>e, and no 
modification resulting in net GHG increases of less than 50,000 tpy 
CO<INF>2</INF>e, 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 
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 them, PSD would apply to all stationary 
sources that emit or have the potential to emit 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 takes effect, imposing control 
requirements for the first time on CO<INF>2</INF> and other GHGs. If 
this January 2, 2011, date were to pass without the Tailoring Rule 
being in effect, PSD requirements would apply to GHG emissions at the 
100/250 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 has requested 
permitting authorities to confirm that they will follow this 
implementation approach for their programs, and if they cannot, then 
EPA has requested that they notify the Agency so that we can take 
appropriate follow-up action to narrow federal approval of their 
programs before GHGs become subject to PSD permitting on January 2, 
2011.\6\ On September 30, 2010, the state of Nebraska provided a letter 
to EPA with the requested modification. See the docket for this 
proposed rulemaking for a copy of Nebraska's letter.
---------------------------------------------------------------------------

    \6\ Narrowing EPA's approval will ensure that for federal 
purposes, sources with GHG emissions that are less than the 
Tailoring Rule's emission thresholds will not be obligated under 
federal law to obtain PSD permits during the gap between when GHG 
PSD requirements go 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. EPA expects to finalize the narrowing 
action prior to the January 2, 2011 deadline with respect to those 
states for which EPA will not have approved the Tailoring Rule 
thresholds in their SIPs by that time.
---------------------------------------------------------------------------

    The thresholds that EPA established are based on CO<INF>2</INF>e 
for the aggregate sum of six GHGs that constitute the pollutant that 
will be subject to regulation, which we refer to as GHG.\7\ These gases 
are: CO<INF>2</INF>, CH<INF>4</INF>, N<INF>2</INF>O, HFCs, PFCs, and 
SF<INF>6</INF>. 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 of that 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 
CO<INF>2</INF>e basis and the statutory thresholds of 100 or 250 tpy on 
a mass basis.\8\ Similarly, in order for a source to be subject to the 
PSD modification requirements, the source's net GHG emissions increase 
must exceed the applicable significance level on a CO<INF>2</INF>e 
basis and must also result in a net mass increase of the constituent 
gases combined.
---------------------------------------------------------------------------

    \7\ 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.
    \8\ The relevant thresholds are 100 tpy for title V, and 250 tpy 
for PSD, except for 28 categories listed in EPA regulations for 
which the PSD threshold is 100 tpy.
---------------------------------------------------------------------------

3. What is the GHG SIP Call and the proposed GHG FIP?
    On December 1, 2010, the EPA Administrator signed the final GHG SIP 
Call. In that action--along with the companion GHG FIP, which EPA 
proposed by notice dated September 2, 2010 and expects to finalize for 
some states on December 23, 2010--EPA took steps to ensure that in the 
13 states that do not have authority to issue PSD permits to GHG-
emitting sources at present, either the state or EPA will have the 
authority to issue such permits by January 2, 2011 or soon thereafter. 
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, these 13 states have EPA-approved PSD programs that do not 
include GHG-emitting sources and therefore do not authorize these 
states to issue PSD permits to such sources. Therefore, EPA issued a 
finding that these 13 states' SIPs are substantially inadequate to 
comply with CAA requirements. Accordingly, and as part of the same 
action, EPA also issued a SIP Call to require a SIP revision that 
applies their SIP PSD programs to GHG-emitting sources. EPA also 
established a SIP submittal deadline. In the proposed SIP call, EPA had 
stated that the deadline could range from as little as three weeks 
after the final SIP call was signed to as long as 12 months after the 
final SIP call was signed, and that each affected state was authorized 
to indicate to EPA that it did not object to a deadline on the earlier 
end of that range. In the final SIP call, EPA established deadlines 
that ranged, for the various states, from December 23, 2010 (three 
weeks after signature) to December 1, 2011 (12 months after signature), 
based, in general, on each state's preference. In the companion GHG FIP 
rulemaking, EPA proposed a FIP that would 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.
    Nebraska was one of the states for which EPA proposed and finalized 
the SIP Call. The state's comments regarding the proposed SIP call, 
submitted September 30, 2010, are included in the docket for this 
rulemaking. In the SIP call, EPA established a SIP submittal deadline 
for Nebraska of March 1, 2011, in accordance with Nebraska's statement

[[Page 81185]]

in that letter that ``Nebraska does not object to EPA's establishment 
of a deadline of March 1, 2011 for submittal of Nebraska's corrective 
SIP, although we are expeditiously working for an earlier submittal.''
    In addition, in the SIP call rulemaking, EPA stated certain 
requirements that the corrective SIP revision must meet, which are that 
the corrective SIP revision must--
    (i) apply the SIP PSD program to GHG-emitting sources;
    (ii) define GHGs as the same pollutant to which the Light-Duty 
Vehicle Rule \9\ (LDVR) applies, that is, a single pollutant that is 
the aggregate of the group of six gases (carbon dioxide 
(CO<INF>2</INF>), methane (CH<INF>4</INF>), nitrous oxide 
(N<INF>2</INF>O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), 
and sulfur hexafluoride (SF<INF>6</INF>)); and
---------------------------------------------------------------------------

    \9\ ``Light-Duty Vehicle Greenhouse Gas Emission Standards and 
Corporate Average Fuel Economy Standards; Final Rule.'' 75 FR 25324 
(May 7, 2010).
---------------------------------------------------------------------------

    (iii) either limit PSD applicability to GHG-emitting sources by 
adopting the applicability thresholds included in the Tailoring Rule or 
adopt lower thresholds and show that the state has adequate personnel 
and funding to administer and implement those lower thresholds.

GHG SIP Call, at 12-13. In addition, if the corrective SIP revision 
adopts the Tailoring Rule thresholds, then it must either adopt the 
CO<INF>2</INF>e metric and use short tons (as opposed to metric tons) 
for calculating GHG emissions in order to implement those thresholds, 
or assure that its approach is at least as stringent as under the 
Tailoring Rule, so that the state does not exclude more sources than 
under the Tailoring Rule. See id. at 96.

E. What is the background for EPA's New Source Review (NSR) Reform 
rule?

    The 2002 NSR Reform rules made changes to five areas of the NSR 
programs (concerning both PSD and nonattainment NSR). In summary, the 
2002 rules: (1) 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 plantwide applicability limits (PALs) 
to avoid having a significant emission increase that triggers the 
requirements of the major NSR program; (4) provide a new applicability 
provision for emissions units that are designated clean units; and (5) 
exclude pollution control projects (PCPs) from the definition of 
physical change or change in the method of operation.
    After the 2002 NSR Reform rules were finalized and effective, 
various petitioners challenged numerous aspects of the 2002 NSR Reform 
rules, along with portions of EPA's 1980 NSR rules (45 FR 5276 August 
7, 1980). On June 24, 2005, the Court of Appeals for the District of 
Columbia issued a decision on the challenges to the 2002 NSR Reform 
Rules. New York v.  United States, 413 F.3d 3 (DC Cir. 2005). In 
summary, the Court vacated portions of the rules pertaining to clean 
units and pollution control projects, remanded a portion of the rules 
regarding exemption from recordkeeping, e.g., 40 CFR 52.21(r)(6) and 40 
CFR 51.166(r)(6), and let stand the other provisions included as part 
of the 2002 NSR Reform rules.

III. What is EPA's analysis of Nebraska's proposed SIP revision?

A. What does Nebraska's proposed SIP revision do?

    In the submissions, Nebraska proposed a SIP revision to its GHG 
construction permit related regulations and submitted its proposal to 
EPA for parallel processing and eventual approval as the corrective SIP 
revision in anticipation of EPA's SIP call. If and when EPA approves 
this SIP revision, Nebraska will have authority to issue PSD permits to 
GHG-emitting sources, and thereby assure that those sources will be 
able to construct or undertake modifications after January 1, 2011. In 
addition, this SIP revision establishes the Tailoring Rule thresholds 
for determining which stationary sources and modification projects 
become subject to permitting requirements for GHG emissions under the 
PSD program. Without these Tailoring Rule thresholds, PSD requirements 
would apply, as of January 2, 2011, at the 100- or 250-tpy levels 
provided under the CAA. This would greatly increase the number of 
required permits, would impose undue costs on small sources, and would 
overwhelm Nebraska's permitting resources and severely impair the 
function of the program.
    Specifically, Nebraska's proposed SIP revision includes changes to 
Chapter 1 of Title 129 of the Nebraska Administrative Code--
Definitions. These revisions update Nebraska's air regulations by 
providing the state the authority to regulate GHGs and aligning the 
thresholds for GHG permitting applicability with those specified in the 
Tailoring Rule. The proposed SIP revisions also include a change to 
Chapter 5 of Title 129 of the Nebraska Administrative Code--Operating 
Permits--When Required. This revision allows sources to limit their 
potential to emit in order to become a synthetic minor source.
    The proposed SIP revision also adopts those portions of the NSR 
Reform rules which were not vacated or remanded by the Court, and 
includes changes to Chapter 2 of Title 129 of the Nebraska 
Administrative Code--Definition of Major Source, Chapter 14 of Title 
129 of the Nebraska Administrative Code--Permits: Public Participation, 
Chapter 15 of Title 129 of the Nebraska Administrative Code--Permit 
Revisions; Reopening for Cause, Chapter 17 of Title 129 of the Nebraska 
Administrative Code--Construction Permits--When Required, and Chapter 
19 of Title 129 of the Nebraska Administrative Code--Prevention of 
Significant Deterioration of Air Quality. These changes adopt portions 
of the 2002 NSR Reform rules. These revisions have already been adopted 
and are effective at the state level. Thus, unlike the Tailoring Rule 
revisions where the state is in the process of adopting the proposed 
revisions, these rules are not subject to parallel processing. 
Nebraska's proposed SIP revision includes the 2002 NSR Reform 
provisions for determining baseline actual emissions, adopting actual-
to-projected actual methodology for determining whether a major 
modification has occurred, and allowing plantwide applicability limits 
(PALs). Nebraska's proposed SIP revision does not include the 2002 NSR 
Reform provisions relating to clean units, pollution control projects 
(PCPs), and reasonable possibility recordkeeping provisions. In 
addition, Nebraska's submittal does not include a change to the named 
source category list in Chapter 2, which changed the designation of 
``chemical processing plants'' to exclude certain ethanol production 
facilities. Therefore, this proposed action does not propose to approve 
into the SIP EPA's ``ethanol rule'' revision promulgated in May 2007.
    EPA is proposing in today's action to simultaneously approve 
Nebraska's proposed SIP revisions relating to GHGs and NSR Reform. In 
the alternative, EPA is also soliciting public comment on whether it 
should initially only approve the SIP revisions related to GHGs in this 
rulemaking, and address the proposed SIP revisions related to the NSR 
Reform provisions in a subsequent final action. Under this alternative, 
Nebraska's SIP-approved rules that are applicable to the State's 
authority to regulate GHG would stem from the provisions of EPA's 
Federal PSD rules as of July 1, 1997, in conjunction with Nebraska's 
revised regulations which change the definition

[[Page 81186]]

of ``NSR regulated pollutant'' to provide NDEQ with the authority to 
regulate GHGs.

B. Why is approval of Nebraska's proposed SIP revision consistent with 
the Clean Air Act?

    With respect to the GHG part of the SIP submission, Nebraska has 
received a SIP call because its PSD program does not apply to GHGs, and 
as a result, Nebraska is required to submit, by March 1, 2010, a SIP 
revision that applies PSD to GHGs and does so either at the Tailoring 
Rule thresholds or at lower thresholds and, if the latter, then 
Nebraska is required to demonstrate that it has adequate resources for 
implementation. In its letter dated September 30, 2010, referenced 
above, Nebraska notified EPA that the state is in the process of 
revising its regulation (the subject of this proposed action) to 
provide this authority. It will do so by updating the definitions of 
``major source'' and ``regulated NSR pollutant'' to explicitly include 
GHG as a regulated NSR pollutant. In addition, the Nebraska rules 
incorporate the same thresholds and phase-in schedule as the Tailoring 
Rule and they adopt the CO<INF>2</INF>e metric and use of short tons 
for determining the thresholds.
    EPA has preliminarily determined that this change to Nebraska's 
regulation meets the requirements of the SIP call. Thus, this change is 
consistent with the CAA and its implementing regulations regarding GHG. 
The changes included in this submittal are substantively the same as 
EPA's Tailoring Rule, and therefore comply with the requirements of the 
SIP call. The Nebraska rules have been formatted to conform to 
Nebraska's rule drafting standards, but in substantive content the 
rules that address the Tailoring Rule provisions are the same as the 
federal rules.
    With respect to the NSR Reform part of the proposed SIP revision, 
Nebraska's proposed SIP revision tracks the Federal NSR Reform Rules, 
and EPA previously determined that the implementation of the Federal 
NSR Reform Rules will be environmentally beneficial. (See 68 FR 44620 
and 63021). Section 110(k) of the CAA provides that EPA shall approve a 
SIP revision as a whole if it meets all the applicable requirements of 
the CAA. EPA's Supplemental Analysis for the Federal NSR Reform Rules 
estimated that there are likely to be reductions in emissions of 
volatile organic compounds (VOC) due to the use of PALs. It is more 
difficult to assess the environmental impacts of the actual-to-
projected-actual test and the ``2 in 10'' baseline provisions. The 
Supplemental Analysis determined that there is a slight national 
environmental benefit brought about by these NSR Reform provisions. 
Overall, we expect changes in air quality as a result of implementing 
PALs, the actual-to-projected-actual test, and the ``2 in 10'' baseline 
provisions in Nebraska to be somewhere between neutral and providing 
modest benefits toward air quality improvements. Accordingly, EPA 
believes that these changes are consistent with the requirements of 
section 110(l).
    In addition, the Nebraska NSR Reform rules are, in substantive 
content, the same as EPA's December 2002 NSR Reform rule, as it relates 
to PALs, the ``actual to projected actual'' test, and the calculation 
of baseline actual emissions. As stated previously, Nebraska has not 
adopted the other provisions of the federal rule vacated or remanded by 
the Court in the New York case.\10\
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    \10\ As stated above, EPA is proposing in today's action to 
simultaneously approve Nebraska's proposed SIP revisions relating to 
GHGs and NSR Reform. In the alternative, EPA is also soliciting 
public comment on whether it should initially only approve the SIP 
revisions related to GHGs in this rulemaking, and address the 
proposed SIP revisions related to the NSR Reform provisions in a 
subsequent final action.
---------------------------------------------------------------------------

IV. Proposed Action

    Pursuant to sections 110(k)(3) and 110(l) of the CAA, EPA is 
proposing to approve the state of Nebraska's proposed revisions to the 
Nebraska Administrative Code that were submitted to EPA relating to PSD 
requirements for GHG-emitting sources. Specifically, Nebraska's 
submissions meet the requirements of the GHG SIP Call because they (1) 
provide the state of Nebraska with the authority to regulate GHGs under 
its PSD program, and (2) establish appropriate emissions thresholds for 
determining PSD applicability to new and modified GHG-emitting sources 
in accordance with EPA's Tailoring Rule. EPA is also proposing to 
approve prior revisions to Nebraska's PSD rule, identified above, which 
incorporate portions of EPA's 2002 NSR Reform rule. EPA has made the 
preliminary determination that this SIP revision is approvable because 
it is in accordance with the CAA and EPA regulations regarding PSD 
permitting for GHGs, and with the EPA regulations implementing NSR 
Reform.
    As noted above, at Nebraska's request, EPA is ``parallel 
processing'' this proposed rule revision as it relates to GHGs. After 
Nebraska submits the formal state-effective rule revisions (including a 
response to all public comments raised during the state's public 
participation process), EPA will prepare a final rulemaking notice for 
the SIP revision. If changes are made to the state's proposed rule 
after EPA's notice of proposed rulemaking, such changes must be 
acknowledged in EPA's final rulemaking action. If the changes are 
significant, then EPA may be obliged to re-propose the action. In 
addition, if these changes render the SIP revision not approvable, 
EPA's re-proposal of the action would be a disapproval of the revision.

V. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP 
submission that complies with the provisions of the Act and applicable 
federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in 
reviewing SIP submissions, EPA's role is to approve state choices, 
provided that they meet the criteria of the CAA. Accordingly, this 
proposed action merely approves the state's law as meeting federal 
requirements and does not impose additional requirements beyond those 
imposed by the state's law. For that reason, this proposed action:
    <bullet> Is not a ``significant regulatory action'' subject to 
review by the Office of Management and Budget under Executive Order 
12866 (58 FR 51735, October 4, 1993);
    <bullet> Does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
    <bullet> Is certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
    <bullet> Does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
    <bullet> Does not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
    <bullet> Is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
    <bullet> Is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
    <bullet> Is not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the CAA; and
    <bullet> Does not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human

[[Page 81187]]

health or environmental effects, using practicable and legally 
permissible methods, under Executive Order 12898 (59 FR 7629, February 
16, 1994).
    In addition, this rule does not have tribal implications as 
specified by Executive Order 13175 (65 FR 67249, November 9, 2000), 
because the SIP is not approved to apply in Indian country located in 
the state of Nebraska, and EPA notes that it will not impose 
substantial direct costs on tribal governments or preempt tribal law.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by 
reference, Intergovernmental relations, and Reporting and recordkeeping 
requirements.

    Authority: 42 U.S.C. 7401 et seq.

    Dated: December 15, 2010.
William W. Rice,
Acting Regional Administrator, Region 7.
[FR Doc. 2010-32456 Filed 12-23-10; 8:45 am]
BILLING CODE 6560-50-P


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