82430 Federal Register / Vol. 75, No. 250 / Thursday, December 30, 2010 / Rules and Regulations 

1Prevention of Significant Deterioration and Title 

V Greenhouse Gas Tailoring Rule; Final Rule. 75 FR 

31514 (June 3, 2010). The Tailoring Rule is 

described in more detail later in this preamble. 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[EPA–HQ–OAR–2010–1033; FRL–9245–2] 

RIN 2060–AQ67 

Determinations Concerning Need for 

Error Correction, Partial Approval and 

Partial Disapproval, and Federal 

Implementation Plan Regarding Texas 

Prevention of Significant Deterioration 

Program 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Interim Final rule. 

SUMMARY: EPA is correcting its previous 

full approval of Texas’s Clean Air Act 

(CAA) Prevention of Significant 

Deterioration (PSD) program to be a 

partial approval and partial disapproval. 

The state did not address, or provide 

adequate legal authority for, the 

program’s application to all pollutants 

that would become newly subject to 

regulation in the future, including nonNational Ambient Air Quality Standard 

(NAAQS) pollutants, among them 

greenhouse gases (GHGs). Further, EPA 

is promulgating a federal 

implementation plan (FIP), as required 

following the partial disapproval, to 

establish a PSD permitting program in 

Texas for GHG-emitting sources. EPA is 

taking this action through interim final 

rulemaking, effective upon publication, 

to ensure the availability of a permitting 

authority—EPA—in Texas for GHGemitting sources when they become 

subject to PSD on January 2, 2011. This 

will allow those sources to proceed with 

plans to construct or expand. This rule 

will expire on April 30, 2011. EPA is 

also proposing a notice-and-comment 

rulemaking that mirrors this 

rulemaking. 

DATES: This action is effective on 

December 30, 2010. 

ADDRESSES: EPA has established a 

docket for this rulemaking under Docket 

ID No. EPA–HQ–OAR–2010–1033. All 

documents in the docket are listed in 

the http://www.regulations.gov index. 

Although listed in the index, some 

information is not publicly available, 

e.g., confidential business information 

or other information whose disclosure is 

restricted by statute. Certain other 

material, such as copyrighted material, 

will be publicly available only in hard 

copy. Publicly available docket 

materials are available either 

electronically in http:// 

www.regulations.gov or in hard copy at 

the U.S. Environmental Protection 

Agency, Air Docket, EPA/DC, EPA West 

Building, Room 3334, 1301 Constitution 

Ave., NW., Washington, DC. The Public 

Reading Room is open from 8:30 a.m. to 

4:30 p.m., Monday through Friday, 

excluding legal holidays. The telephone 

number for the Public Reading Room is 

(202) 566–1744, and the telephone 

number for the Air Docket is (202) 566– 

1742. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Peter Keller, Air Quality Policy 

Division, Office of Air Quality Planning 

and Standards (C504–03), 

Environmental Protection Agency, 

Research Triangle Park, NC 27711; 

telephone number: (919) 541–5339; fax 

number: (919) 541–5509; e-mail 

address: keller.peter@epa.gov. 

SUPPLEMENTARY INFORMATION: 

I. General Information 

A. Does this action apply to me? 

The only governmental entity 

potentially affected by this rule is the 

State of Texas. Other entities potentially 

affected by this rule include sources in 

all industry groups within the State of 

Texas, which have a direct obligation 

under the CAA to obtain a PSD permit 

for GHGs for projects that meet the 

applicability thresholds set forth in the 

Tailoring Rule.1 This independent 

obligation on sources is specific to PSD 

and derives from CAA section 165(a). 

The majority of entities potentially 

affected by this action are expected to be 

in the following groups: 

Industry group NAICSa

Utilities (electric, natural gas, other systems) .......................................... 2211, 2212, 2213. 

Manufacturing (food, beverages, tobacco, textiles, leather) .................... 311, 312, 313, 314, 315, 316. 

Wood product, paper manufacturing ........................................................ 321, 322. 

Petroleum and coal products manufacturing ........................................... 32411, 32412, 32419. 

Chemical manufacturing ........................................................................... 3251, 3252, 3253, 3254, 3255, 3256, 3259. 

Rubber product manufacturing ................................................................. 3261, 3262. 

Miscellaneous chemical products ............................................................. 32552, 32592, 32591, 325182, 32551.

Nonmetallic mineral product manufacturing ............................................. 3271, 3272, 3273, 3274, 3279. 

Primary and fabricated metal manufacturing ........................................... 3311, 3312, 3313, 3314, 3315, 3321, 3322, 3323, 3324, 3325, 3326, 

3327, 3328, 3329. 

Machinery manufacturing ......................................................................... 3331, 3332, 3333, 3334, 3335, 3336, 3339. 

Computer and electronic products manufacturing ................................... 3341, 3342, 3343, 3344, 3345, 4446. 

Electrical equipment, appliance, and component manufacturing ............ 3351, 3352, 3353, 3359. 

Transportation equipment manufacturing ................................................. 3361, 3362, 3363, 3364, 3365, 3366, 3366, 3369. 

Furniture and related product manufacturing ........................................... 3371, 3372, 3379. 

Miscellaneous manufacturing ................................................................... 3391, 3399. 

Waste management and remediation ...................................................... 5622, 5629. 

Hospitals/nursing and residential care facilities ....................................... 6221, 6231, 6232, 6233, 6239. 

Personal and laundry services ................................................................. 8122, 8123. 

Residential/private households ................................................................. 8141. 

Non-residential (commercial) .................................................................... Not available. Codes only exist for private households, construction 

and leasing/sales industries. 

a North American Industry Classification System. 

B. How is the preamble organized? 

The information presented in this 

preamble is organized as follows: 

I. General Information 

A. Does this action apply to me? 

B. How is the preamble organized? 

II. Overview of Interim Final Rule 

A. Brief Summary 

B. Detailed Overview 

III. Background 

A. Legal Background 


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2Texas will continue to be the permitting 

authority for sources of other pollutants. This split 

permitting process will also take place in the seven 

other states for which EPA is implementing a GHG 

PSD FIP. 

1. Requirements for SIP Submittals and 

EPA Action 

2. General Requirements for the PSD 

Program 

3. SIP PSD Requirements 

B. Regulatory Background: Texas SIP and 

PSD Program 

1. Texas’s Initial Attainment SIP Revision 

2. Texas’s Initial PSD SIP Revision 

C. Regulatory Background: GHG Rules 

1. GHGs and Their Sources 

2. GHG Regulatory Actions 

3. Implementation of GHG PSD 

Requirements 

4. Summary of the Effect of EPA’s 

Implementation Actions in States Other 

Than Texas 

5. EPA’s Implementation Approach for 

Texas and Texas’s Response 

IV. Interim Final Action 

A. Determination That EPA’s Previous 

Approval of Texas’s PSD Program Was in 

Error 

1. Gaps in Texas’s PSD Program 

Concerning Application of PSD to 

Pollutants Newly Subject to Regulation 

and Concerning Assurances of Legal 

Adequacy 

2. Flaws in PSD Program 

3. EPA’s Error in Approving Texas’s PSD 

Program 

B. Error Correction: Conversion of Previous 

Approval to Partial Approval and Partial 

Disapproval 

C. Reconsideration Under CAA Section 

301, Other CAA Provisions, and Case 

Law 

D. Relationship of This Action to GHG PSD 

SIP Call 

E. Relationship of This Rulemaking to 

Other States 

V. Federal Implementation Plan 

A. Authority To Promulgate a FIP 

B. Timing of FIP 

C. Substance of GHG PSD FIP 

1. Components of FIP 

2. Dual Permitting Authorities 

D. Period for GHG PSD FIP To Remain in 

Place 

E. Primacy of Texas’s SIP Process 

VI. Interim Final Rule, Good Cause Exception 

VII. Statutory and Executive Order Reviews 

A. Executive Order 12866—Regulatory 

Planning and Review 

B. Paperwork Reduction Act 

C. Regulatory Flexibility Act 

D. Unfunded Mandates Reform 

E. Executive Order 13132—Federalism 

F. Executive Order 13175—Consultation 

and Coordination With Indian Tribal 

Governments 

G. Executive Order 13045—Protection of 

Children From Environmental Health 

Risks and Safety Risks 

H. Executive Order 13211—Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use 

I. National Technology Transfer and 

Advancement Act 

J. Executive Order 12898—Federal Actions 

To Address Environmental Justice in 

Minority Populations and Low-Income 

Populations 

K. Congressional Review Act 

VIII. Judicial Review 

IX. Statutory Authority 

II. Overview of Interim Final Rule 

A. Brief Summary 

This rulemaking is intended to assure 

that large GHG-emitting sources in 

Texas will be able to obtain 

preconstruction permits under the CAA 

New Source Review (NSR) PSD 

program, and do so when they become 

subject to PSD, which will occur on 

January 2, 2011. In this manner, this 

rulemaking will allow those sources to 

avoid delays in construction or 

modification. 

In this rulemaking, EPA is 

determining that it erred in fully 

approving Texas’s PSD program in 1992 

because at that time, the program had a 

gap, which recent statements by Texas 

have made particularly evident. The 

program did not address its application 

to, or provide assurances that it has 

adequate legal authority to apply to, all 

pollutants newly subject to regulation, 

including non-NAAQS pollutants, 

among them GHGs. As a result, EPA is 

correcting its previous full approval to 

be a partial approval and partial 

disapproval. EPA is taking this action 

through the error-correction mechanism 

provided under CAA section 110(k)(6). 

The partial disapproval requires EPA, 

under CAA section 110(c)(1)(B), to 

promulgate a FIP within 2 years, and, as 

part of this rulemaking, EPA is 

exercising its discretion to promulgate 

the FIP immediately. Under the FIP, 

EPA will become the permitting 

authority for, and apply federal PSD 

requirements to, large GHG-emitting 

sources in accordance with the 

thresholds established under what we 

call the Tailoring Rule, which EPA 

recently promulgated. 

By becoming the permitting authority, 

EPA will be able to process 

preconstruction PSD permit 

applications for GHG-emitting sources 

and thereby allow the affected sources 

to avoid delays in construction and 

modification.2 According to Texas, 167 

GHG-emitting sources will require PSD 

permits during 2011. It is likely that 

some of these sources will become 

subject to PSD soon after January 2, 

2011, and therefore will have a pressing 

need to have a permitting authority in 

place by that time. Although the CAA 

allows states to implement PSD, and 

Texas has been implementing an EPAapproved PSD program since 1992, 

Texas has recently informed EPA that it 

does not have the intention or the 

authority to apply PSD to GHG-emitting 

sources, and that it could very well 

maintain this position even if the DC 

Circuit upholds the GHG rules against 

legal challenges that Texas and other 

parties have recently brought. Texas’s 

unwillingness to implement this aspect 

of the federal PSD program leaves EPA 

no choice but to resume its role as the 

permitting authority for this portion, in 

order to assure that businesses in Texas 

are not subject to delays or potential 

legal challenges and are able to move 

forward with planned construction and 

expansion projects that will create jobs 

and otherwise benefit the state’s and the 

nation’s economy. It bears emphasizing 

that it is incumbent on EPA to take 

action now so that there will be no 

period of time when sources are unable 

to obtain necessary PSD permits, 

beginning on January 2, 2011. 

In order to assure no gap in 

permitting, EPA is taking this action, 

including the FIP, through an interim 

final rule that is exempt from noticeand-comment due to the ‘‘good cause’’ 

exception of the Administrative 

Procedure Act. This interim final rule 

will remain in place until April 30, 

2011. On a parallel track, EPA is also 

initiating a proposed rulemaking that 

mirrors this rulemaking, and that EPA 

intends to finalize and make effective by 

May 1, 2011. 

B. Detailed Overview 

The CAA requires each state, 

including Texas, to adopt into its State 

Implementation Plan (SIP) a PSD 

program. CAA sections 110(a)(2)(C), 

110(a)(2)(J), 161. One of the PSD 

requirements is that PSD applies by 

operation of law to any pollutant as 

soon as that pollutant becomes subject 

to regulation under the CAA for the first 

time, and that includes non-NAAQS 

pollutants. CAA section 165(a)(1), 

169(1). EPA has consistently interpreted 

these CAA provisions in that manner. 

The CAA further requires that EPAapproved PSD programs must meet all 

CAA requirements, CAA section 

110(k)(3), and this includes applying 

PSD to all pollutants newly subject to 

regulation, including non-NAAQS 

pollutants. In addition, the CAA 

requires each state to adhere to various 

requirements related to SIP adoption, 

including that the state ‘‘provide * * * 

necessary assurances that the State 

* * * will have adequate * * * 

authority under State * * * law to carry 

out such implementation plan. * * *’’ 

CAA section 110(a)(2)(E)(i). Once a state 

has made a SIP submittal, the CAA 

requires EPA to approve or disapprove 

the SIP revision in whole or in part, 


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82432 Federal Register / Vol. 75, No. 250 / Thursday, December 30, 2010 / Rules and Regulations 

3Texas made these statements in various letters 

to EPA in response to rulemakings and in court 

filings challenging those rulemakings, as discussed 

in detail later in this preamble. 

depending on the extent to which the 

CAA requirements are met. CAA section 

110(k)(3),(4). If EPA disapproves, it 

must promulgate a FIP that addresses 

the disapproved SIP or portion of the 

SIP at any time within two years of the 

disapproval. CAA section 110(c)(1)(B). 

In addition, the CAA authorizes EPA to 

‘‘determine [ ]’’ if a previous action in 

approving a SIP revision was ‘‘in error,’’ 

and if so, to ‘‘revise such action as 

appropriate.’’ CAA section 110(k)(6). 

In 1972, EPA approved Texas’s initial 

SIP to attain and maintain the NAAQS. 

At that time, EPA approved the state’s 

assurances of adequate legal authority. 

In the early 1980s, following the 1977 

CAA Amendments that enacted the PSD 

program, EPA, which at that time 

administered PSD, delegated to Texas 

partial authority to implement the PSD 

program. During this time, EPA made 

clear to Texas that EPA’s regulatory PSD 

program covers non-NAAQS pollutants. 

In 1985–88, Texas developed a PSD 

program and in a series of submittals, 

submitted it to EPA as a SIP revision. 

The Texas program incorporated by 

reference much of EPA’s PSD 

regulations, 40 CFR part 52, including 

the PSD applicability provisions in 40 

CFR part 52.21(b)(1)(i). Thus, the Texas 

PSD program by its terms applied to 

‘‘any air pollutant regulated under the 

Clean Air Act.’’ However, Texas state 

law imposed limits that precluded the 

Texas PSD program from applying 

automatically, as a matter of law, to 

each newly regulated pollutant. Rather, 

Texas’s program applied only to 

pollutants that were subject to 

regulation at the time the state adopted 

the SIP revision establishing the PSD 

program, so that the state would need to 

take additional action to subject 

subsequently regulated pollutants to 

PSD, for example, an expeditious state 

law change that would be promptly 

submitted to EPA as a SIP revision to 

update the PSD program. Texas and 

EPA were both well aware of this 

limitation. In fact, while EPA was 

reviewing Texas’s PSD SIP revision, 

EPA promulgated a national ambient air 

quality standard (NAAQS) for PM10, 

thereby subjecting that pollutant to PSD 

for the first time, and Texas updated its 

state PSD rule to apply to PM10 and 

submitted that as a SIP revision. Texas 

did not, however, explicitly recognize 

that after EPA approved its PSD 

program, EPA could well subject to PSD 

for the first time additional pollutants, 

and Texas did not address that situation 

in any manner. For example, Texas did 

not provide assurances that it would 

take action to apply its PSD program to 

all pollutants newly subject to 

regulation, including non-NAAQS 

pollutants; nor did Texas provide 

information as to the method or timing 

of such action. 

During the course of its consideration 

of Texas’s proposed PSD SIP revision, 

EPA became concerned that Texas 

would not implement EPA’s 

interpretation of the core PSD 

requirement that sources’ implement 

best available control technology 

(BACT). As a result, EPA asked for 

written commitments that Texas would 

implement the PSD program in 

accordance with EPA interpretations. In 

a September 5, 1989, letter, which we 

call the Texas PSD Commitments Letter, 

Texas stated that it was ‘‘committed to 

the implementation of EPA decisions 

regarding PSD program requirements.’’ 

Separately, as for Texas’s legal authority 

to carry out the PSD program, the state, 

in its various SIP submittals, made 

general references to its legal authority 

for adopting and submitting SIP 

revisions. 

In 1992, EPA fully approved Texas’s 

PSD rules. In the preamble to this final 

approval, EPA did not specifically 

address the issue of how the PSD 

program would apply to pollutants 

newly subject to regulation, including 

non-NAAQS pollutants, or the state’s 

legal authority for applying PSD to such 

pollutants. EPA did state that it was 

basing the approval on (among other 

things) the 1989 Texas PSD 

Commitments Letter. However, EPA 

acknowledged questions about the 

scope of these commitments and EPA 

made clear that even with that letter, 

Texas retained significant discretion in 

implementing the PSD program. 

Because the application of PSD to 

pollutants newly subject to regulation is 

a key component of the program, and 

because Texas’s PSD program, unlike 

that of most states, did not 

automatically apply to such pollutants, 

it was important that Texas, in its SIP 

submittals, address how it would apply 

its program to such pollutants. This 

could include providing, for example, 

assurances that its program would apply 

to such pollutants or information as to 

the method and timing for applying its 

program to such pollutants. In addition, 

under CAA section 110(a)(2)(E)(i), Texas 

was required to provide assurances that 

it had adequate legal authority to apply 

its program to such pollutants. 

However, as noted previously, there is 

no indication in the record of Texas’s 

SIP submissions or EPA’s action on 

them that Texas specifically addressed 

its program’s application to pollutants 

newly subject to regulation. Texas did 

provide the 1989 Texas PSD 

Commitments Letter, in which it 

generally committed ‘‘to implement EPA 

requirements relative to [PSD].’’ But by 

its terms, this 1989 letter did not 

commit to apply PSD to such pollutants 

and in any event, EPA, in discussing 

this letter in the preamble to the final 

rule, acknowledged that Texas retained 

substantial discretion in implementing 

PSD. 

Thus, at the time that Texas submitted 

and EPA approved the state’s PSD 

program, the program had important 

gaps. It did not address its application 

to, or provide the requisite assurance 

that it had legal authority to apply to, 

pollutants newly subject to regulation, 

including non-NAAQS pollutants. 

Texas has recently made statements 

that have made these gaps particularly 

evident.3 Texas has stated that it is not 

required to submit a SIP revision to 

apply PSD to non-NAAQS pollutants, 

including GHGs. Texas has explained 

that in its view, the CAA is clear, under 

the legal doctrine that we call Chevron 

step 1, described later, that the PSD 

program is limited to NAAQS pollutants 

and does not apply to non-NAAQS 

pollutants. In addition, Texas has stated 

that it does not have the intention or the 

authority to apply PSD to GHG-emitting 

sources, and that it could very well 

maintain this position even if the D.C. 

Circuit upholds the GHG rules in the 

current litigation before that Court. 

Texas’s recent statements highlight 

the gaps in its PSD program concerning 

the application of PSD, and the legal 

authority for applying PSD, to 

pollutants newly subject to regulation, 

including non-NAAQS pollutants, 

among them GHGs. What’s more, 

Texas’s recent statements are consistent 

with the view that the state’s silence on 

this subject at the time it submitted and 

EPA approved its PSD SIP means that 

Texas did not, at that time, view itself 

as obligated to apply PSD to each 

pollutant newly subject to regulation, 

including non-NAAQS pollutants. 

Specifically, Texas’s recent statement 

that the CAA PSD provisions are clear 

by their terms—which is what a 

Chevron step 1 interpretation means— 

that they do not apply to non-NAAQS 

pollutants, suggests that Texas would 

have interpreted the CAA PSD 

provisions the same way at the time 

Texas submitted its PSD program. But at 

the least, Texas’s PSD program 

contained a gap because it failed to 

address this issue; and that gap is 

significant because it facilitates Texas, 

at this time, taking the position that PSD 

does not apply to non-NAAQS 


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4 It should be noted that in the past, Texas has 

applied its PSD program to non-NAAQS pollutants. 

Even so, Texas’s recent statements indicate very 

clearly that Texas does not consider itself obligated 

to update its PSD program to apply to all newly 

regulated non-NAAQS pollutants, but instead Texas 

may choose which non-NAAQS pollutants to which 

it will apply PSD. 

pollutants.4 Texas’s recent statement 

that it does not have the authority to 

apply PSD to GHG-emitting sources 

highlights that Texas’s PSD program has 

a gap due to its failure to provide 

assurances of adequate legal authority. 

Specifically, Texas’s direct statement 

that it does not have authority to apply 

PSD to GHGs casts doubt on whether 

Texas, at the time it submitted the PSD 

SIP submittals, would have viewed 

itself as having such authority. There 

seems to be a meaningful possibility 

that at the time Texas submitted and 

EPA approved the state’s PSD program, 

during 1985–1992, Texas considered 

itself under some legal limit or 

constraint in applying PSD to all 

pollutants newly subject to regulation. 

At the least, it is apparent that at the 

time that Texas submitted its PSD 

program, Texas did not provide the 

‘‘necessary assurances’’ that it ‘‘will have 

adequate * * * authority under State 

* * * law to carry out such 

implementation plan (and is not 

prohibited by any provision of * * * 

State law from carrying out such 

implementation plan or portion 

thereof),’’ as required under CAA section 

110(a)(2)(E)(i). 

The gaps in Texas’s PSD SIP—its 

failure to address, or provide assurances 

of the requisite legal authority 

concerning, the application of PSD to all 

pollutants newly subject to regulation, 

including non-NAAQS pollutants— 

means that the PSD SIP was flawed at 

the time that EPA reviewed it for action. 

EPA did not address those flaws and 

instead, issued a full approval of the 

SIP. 

In this rulemaking, therefore, EPA is 

‘‘determin[ing]’’ that EPA’s previous 

action fully approving Texas’s PSD 

program was ‘‘in error,’’ under CAA 

section 110(k)(6). The key terms in this 

provision, as just quoted, confer broad 

discretion upon EPA to make decisions 

as to when it erred in approving a SIP 

revision. Thus, it is clear that under this 

provision, EPA erred in approving the 

Texas PSD program in light of that 

program’s flaws. 

Once EPA determines that its 

previous approval of the Texas PSD SIP 

was in error, EPA, under CAA section 

110(k)(6), ‘‘may * * * revise [its 

previous full approval] as appropriate. 

***’’ In this rulemaking, EPA is 

revising its previous full approval of 

Texas’s PSD SIP to be (i) a partial 

approval, so that Texas’s SIP remains 

approved to the extent of the pollutants 

that the PSD program already does 

cover; and (ii) a partial disapproval. The 

partial disapproval is based on the 

Texas PSD SIP’s failure to apply PSD to 

each pollutant newly subject to 

regulation, including each non-NAAQS 

pollutant, among them GHGs. An 

alternative legal basis for this 

rulemaking is EPA’s inherent 

administrative authority to reconsider a 

previous action. 

It should be noted that even if the 

general assurances that Texas provided 

in its 1989 PSD Commitments Letter or 

may have otherwise provided in the 

record of its PSD SIP submittal were 

read to indicate that Texas did provide 

assurances that it would implement, 

and had legal authority to implement, 

EPA’s interpretation that PSD applies to 

each pollutant newly subject to 

regulation, including non-NAAQS 

pollutants, then Texas’s recent 

statements to the contrary indicate that 

Texas now is not complying with those 

assurances. Under these circumstances, 

EPA would still be justified in 

determining that its prior approval was 

in error and should be converted to a 

partial approval and partial disapproval. 

This is because under these 

circumstances, EPA’s prior approval 

should be considered to have been 

based on those assurances, so that 

Texas’s explicitly stated intent to not act 

in accordance with those assurances 

would eliminate the basis for that prior 

approval. 

After promulgating the partial 

disapproval in this rulemaking, EPA is 

required to promulgate a FIP ‘‘at any 

time within 2 years,’’ under CAA section 

110(c)(1). EPA is exercising its 

discretion to immediately promulgate 

the FIP, and is doing so as part of this 

rulemaking. The FIP consists of 

appropriate action to apply the PSD 

program to pollutants that are subject to 

the PSD program under the CAA, but 

that Texas has not made subject to 

Texas’s PSD program. At present, Texas 

has stated that it has neither the 

intention nor the authority to apply its 

PSD program to GHG-emitting sources. 

Therefore, the FIP applies the EPA PSD 

regulatory program to the GHG portion 

of the PSD permit for GHG-emitting 

sources in Texas, including the 

thresholds in what we call the Tailoring 

Rule that limit PSD to large sources. 

Further, the FIP commits EPA to take 

future action as appropriate with respect 

to any additional newly regulated 

pollutants. The FIP does not apply to 

any other currently regulated pollutants 

because at this point, Texas’s PSD 

program addresses all other pollutants 

that are subject to regulation under the 

CAA. EPA is promulgating the FIP 

immediately, as opposed to a later time 

within the two-year period, because 

certain GHG-emitting sources in Texas 

will become subject to the PSD program 

as of January 2, 2011. Immediate 

promulgation of the FIP will allow EPA 

to act as the permitting authority in 

Texas for these sources as of January 2, 

2011, and thereby avoid delays in these 

sources’ ability to construct or modify. 

It should be noted that EPA has 

recently taken another action 

concerning Texas’s PSD program as that 

program relates to GHGs. In a final rule 

signed on December 1, 2010 and 

published by notice dated December 13, 

2010, EPA issued what we call a SIP 

call, under CAA section 110(k)(5), 

requiring Texas and 12 other states 

whose SIP-approved PSD programs do 

not apply to GHG-emitting sources to 

submit a corrective SIP revision; and 

EPA established a deadline for that SIP 

submittal for each state, which ranged 

from as early as December 22, 2010 for 

seven of the states to December 1, 2011 

for Texas. In addition, EPA stated that 

if Texas or any of the other states failed 

to submit its corrective SIP revision by 

its deadline, EPA intended to 

promulgate a FIP immediately 

thereafter. 

The timing of the SIP call was driven 

by the fact that the affected states did 

not have authority to issue PSD permits 

to GHG-emitting sources and, as a 

result, those sources could face delays 

in construction and modification when 

they become subject to PSD as early as 

January 2, 2011. EPA designed the SIP 

call to maximize the opportunity of each 

affected state to assure that its sources 

would have a permitting authority 

available as of that date. EPA did so by 

allowing each state flexibility for its SIP 

submittal deadline, and therefore for the 

date that EPA could put a FIP in place. 

Each of the affected states except Texas 

responded with a plan that would 

assure that its sources would not 

confront permitting delays. Texas did 

not submit such a plan and as a result, 

its sources—according to Texas, as 

many as 167 during 2011—do confront 

the possibility of permitting delays. In 

addition, it was in responding to the SIP 

call and related EPA rulemakings that 

Texas made the statements noted earlier 

in this preamble that made particularly 

evident the flaws in its PSD program. 

This is an important reason why EPA 

is proceeding with this error-correction/ 

partial-disapproval rulemaking at this 

time. This rulemaking allows EPA to 

put a FIP in place immediately, instead 

of waiting until December 1, 2011; 


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82434 Federal Register / Vol. 75, No. 250 / Thursday, December 30, 2010 / Rules and Regulations 

5Prevention of Significant Deterioration and Title 

V Greenhouse Gas Tailoring Rule; Proposed Rule.’’ 

74 FR 55,292 (Oct. 27, 2009) (proposed Tailoring 

Rule). 

6 ‘‘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,’’ 75 FR 77698 (Dec. 13, 2010) (final SIP 

call); ‘‘Action To Ensure Authority To Issue Permits 

Under the Prevention of Significant Deterioration 

Program to Sources of Greenhouse Gas Emissions: 

Finding of Substantial Inadequacy and SIP Call; 

Proposed Rule,’’ 75 FR 53,892 (proposed SIP call). 

7States are subject to sanctions for failure to 

submit, or for EPA disapproval of, SIPs for 

nonattainment areas, under CAA section 179. These 

sanctions provisions are not relevant for this rule 

because they do not apply to PSD SIPs. 

thereby act as the permitting authority 

in Texas beginning January 2, 2011; and 

in that capacity, allow Texas sources to 

avoid delays in construction or 

modification. 

Although this rulemaking and the SIP 

call have similarities, EPA is authorized 

to proceed with each rulemaking with 

respect to Texas at this time, and it is 

both necessary and appropriate that we 

do so. EPA is authorized to proceed 

with the SIP call for reasons explained 

in that rule. Nothing in CAA section 

110(k)(5), which authorizes the SIP call, 

precludes EPA from proceeding with 

this rulemaking, which, as noted earlier, 

is authorized under CAA section 

110(k)(6). As we discuss below, it was 

Texas’s response to the SIP call 

proposal, along with other statements 

Texas made around the same time, that 

focused attention on the underlying 

flaws in Texas PSD SIP, which led to 

this error-correction rulemaking. EPA is 

not, at this time, undertaking a similar 

error-correction rulemaking for any of 

the other states that are subject to the 

SIP call. EPA has discretion as to 

whether and when to undertake such a 

rulemaking, and each of the other states 

has chosen a course of action that at 

present appears to assure that its large 

GHG-emitting sources will have a 

permitting authority available when the 

sources need one, and therefore will not 

face delays in constructing or 

modifying. Moreover, none of these 

other states has made the type of recent 

statements that may have exposed flaws 

in its SIP, as Texas has done. As a result, 

EPA sees no need to inquire into 

whether any of these other states have 

flaws in their SIP PSD programs as 

Texas does. 

EPA is applying the ‘‘good cause’’ 

exemption from notice-and-comment 

rulemaking, authorized under 

Administrative Procedure Act section 

553(b)(3)(B) to promulgate this action as 

an interim final rulemaking that takes 

effect immediately upon publication in 

the Federal Register. As a result, this 

action, including the FIP, will take 

effect by January 2, 2011, when GHGemitting sources become subject to the 

requirement to obtain a PSD 

preconstruction permit. The use of the 

‘‘good cause’’ exemption is justified 

because the notice-and-comment 

process would add delays in issuing the 

final rule and therefore is impractical 

and contrary to public interest. Unless 

and until EPA promulgates this rule, 

Texas sources will not have available a 

permitting authority to process their 

PSD permit applications and as a result, 

may face delays in construction and 

modification. 

Simultaneously with issuing this 

interim final rulemaking, EPA is 

proposing for notice-and-comment an 

error-correction/partial-disapproval and 

FIP rule that mirrors this rule. EPA 

expects to complete final action on this 

notice-and-comment rule so that it takes 

effect by May 1, 2011. This interim final 

rule will stay in place until April 30, 

2011, and then be replaced by the 

notice-and-comment rule. 

Although we recognize that Texas has 

indicated that the state does not intend 

to submit a SIP revision to apply its PSD 

program to GHG-emitting sources, we 

emphasize that it is our preference that 

Texas assume responsibility for 

permitting GHG-emitting sources as 

soon as possible, and we are prepared 

to work with Texas to bring this about. 

Thus, we are prepared to work with the 

state to help it promptly develop and 

submit to us a SIP revision that extends 

its PSD program to GHG-emitting 

sources and if it does so, we intend to 

act on that SIP revision promptly. We 

also encourage Texas to accept a 

delegation of authority to implement the 

FIP, so that it will still be the state that 

processes the permit applications, albeit 

operating under federal law. 

III. Background 

EPA described the relevant 

background information in the 

preambles for several proposed and 

final rulemakings that implement the 

PSD GHG permitting program. These 

include the Tailoring Rule,5 75 FR at 

31518–21, and the GHG PSD SIP call,6

75 FR at 53896–98 (September 7, 2010) 

(proposal), or, simply, the SIP call. 

Knowledge of this background 

information is presumed and will be 

only briefly summarized here. 

A. Legal Background 

1. Requirements for SIP Submittals and 

EPA Action 

This section reviews background 

information concerning the CAA 

requirements for what SIPs must 

include, the process for state submittals 

of SIPs, requirements for EPA action on 

SIPs and SIP revisions, and FIPs. 

a. Requirements for What SIPs Must 

Include 

Congress enacted the NAAQS and SIP 

requirements in the 1970 CAA 

Amendments. CAA section 110(a)(1) 

requires that states adopt and submit to 

EPA for approval SIPs that implement 

the NAAQS. CAA section 110(a)(2) 

contains a detailed list of requirements 

that all SIPs must include to be 

approvable by EPA. 

Of particular relevance for this action, 

subparagraph (E)(i) of CAA section 

110(a)(2) provides that SIPs must 

‘‘provide * * * necessary assurances 

that the state * * * will have adequate 

personnel, funding, and authority under 

State * * * law to carry out such 

implementation plan. * * *’’ As 

applicable to PSD programs, this 

provision means that EPA may approve 

the SIP PSD provisions only if EPA is 

satisfied that the state will have 

adequate legal authority under state law. 

b. EPA Action on SIP Submittals 

After a SIP or SIP revision has been 

submitted, EPA is authorized to act on 

it under CAA section 110(k)(3)–(4). 

Those provisions authorize a full 

approval or, if the SIP or SIP revision 

meets some but not all of the applicable 

requirements, a conditional approval, a 

partial approval and disapproval, or a 

full disapproval. If EPA disapproves a 

required SIP or SIP revision, then EPA 

must promulgate a FIP at any time 

within two years after the disapproval, 

unless the state corrects the deficiency 

within that period of time by submitting 

a SIP revision that EPA approves. CAA 

§ 110(c)(1).7

c. SIP Call 

The CAA provides a mechanism for 

the correction of SIPs with certain types 

of inadequacies, under CAA section 

110(k)(5), which provides: 

(5) Calls for Plan Revisions 

Whenever the Administrator finds that the 

applicable implementation plan for any area 

is substantially inadequate to * * * comply 

with any requirement of this Act, the 

Administrator shall require the State to revise 

the plan as necessary to correct such 

inadequacies. The Administrator shall notify 

the State of the inadequacies and may 

establish reasonable deadlines (not to exceed 

18 months after the date of such notice) for 

the submission of such plan revisions. 

This provision by its terms authorizes 

the Administrator to ‘‘find[] that [a SIP] 

* * * is substantially inadequate to 


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* * * comply with any requirement of 

this Act,’’ and, based on that finding, to 

‘‘require the State to revise the [SIP] 

* * * to correct such inadequacies.’’ 

This latter action is commonly referred 

to as a ‘‘SIP call.’’ In addition, this 

provision authorizes EPA to establish a 

‘‘reasonable deadline (not to exceed 18 

months after the date of such notice)’’ 

for the submission of the corrective SIP 

revision. 

If EPA does not receive the corrective 

SIP revision by the deadline, CAA 

section 110(c) authorizes EPA to ‘‘find[ ] 

that [the] State has failed to make a 

required submission.’’ CAA section 

110(c)(1)(A). Once EPA makes that 

finding, CAA section 110(c)(1) requires 

EPA to ‘‘promulgate a Federal 

implementation plan at any time within 

2 years after the [finding] * * * unless 

the State corrects the deficiency, and 

[EPA] approves the plan or plan 

revision, before [EPA] promulgates such 

[FIP].’’ 

CAA section 110(k)(5), by its terms— 

specifically, the use of the term 

‘‘[w]henever’’—authorizes, but does not 

require, EPA to make the specified 

finding and does not impose any time 

constraints for EPA to do so. As a result, 

EPA has discretion in determining 

whether and when to make the specified 

finding. See New York Public Interest 

Research Group v. Whitman, 321 F.3d 

316, 330–31 (2d Cir. 2003) (opening 

phrase ‘‘Whenever the Administrator 

makes a determination’’ in CAA section 

502(i)(1) grants EPA ‘‘discretion whether 

to make a determination’’); Her Majesty 

the Queen in Right of Ontario v. EPA, 

912 F.2d 1525, 1533 (DC Cir. 1990) 

(‘‘whenever’’ in CAA section 115(a) 

‘‘impl[ied] a degree of discretion’’ in 

whether EPA had to make a finding). 

d. Authority for EPA To Revise Previous 

Action on SIPs 

EPA has authority to revise its 

previous action concerning SIP 

submittals. Two mechanisms are 

available to EPA: The error correction 

mechanism provided under CAA 

section 110(k)(6), and EPA’s general 

administrative authority to reconsider 

its own actions under CAA sections 110 

and 301(a), in light of case law. 

(i). Error Correction Under CAA Section 

110(k)(6) 

CAA section 110(k)(6) provides as 

follows: 

Whenever the Administrator determines 

that the Administrator’s action approving, 

disapproving, or promulgating any plan or 

plan revision (or part thereof), area 

designation, redesignation, classification, or 

reclassification was in error, the 

Administrator may in the same manner as the 

approval, disapproval, or promulgation 

revise such action as appropriate without 

requiring any further submission from the 

State. Such determination and the basis 

thereof shall be provided to the State and 

public. 

The key provisions for present purposes 

are that the Administrator has the 

authority to ‘‘determine ;’’ when a SIP 

approval was ‘‘in error,’’ and when she 

does so, she may then revise the SIP 

approval ‘‘as appropriate,’’ in the same 

manner as the approval, and without 

requiring any further submission from 

the state. 

As quoted previously, CAA section 

110(k)(6) provides EPA with the 

authority to correct its own ‘‘error,’’ but 

nowhere does this provision or any 

other provision in the CAA define what 

qualifies as ‘‘error.’’ Thus, the term 

should be given its plain language, 

everyday meaning, which includes all 

unintentional, incorrect or wrong 

actions or mistakes. 

The legislative history of CAA section 

110(k)(6) is silent regarding the 

definition of error, but the timing of the 

enactment of the provision suggests a 

broad interpretation. The provision was 

enacted shortly after the Third Circuit 

decision in Concerned Citizens of 

Bridesburg v. U.S. EPA, 836 F.2d 777 

(1987). In Bridesburg, the court adopted 

a narrow interpretation of EPA’s 

authority to unilaterally correct errors. 

The court stated that such authority was 

limited to typographical and other 

similar errors, and stated that any other 

change to a SIP must be accomplished 

through a SIP revision. Id. at 786. In 

Bridesburg, EPA determined that it 

lacked authority to include odor 

regulations as part of a SIP unless the 

odor regulations had a significant 

relationship to achieving a NAAQS, and 

so directly acted to remove 13-year-old 

odor provisions from the Pennsylvania 

SIP. Id. at 779–80. EPA found the 

previous approval of the provisions to 

have been an inadvertent error, and so 

used its ‘‘inherent authority to correct an 

inadvertent mistake’’ to withdraw its 

prior approval of the odor regulations 

without seeking approval of the change 

from Pennsylvania. Id. at 779–80, 785. 

After noting that Congress had not 

contemplated the need for revision on 

the grounds cited by EPA, Id. at 780, the 

court found that EPA’s ‘‘inherent 

authority to correct an inadvertent 

mistake’’ was limited to corrections such 

as ‘‘typographical errors,’’ and that 

instead EPA was required to use the SIP 

revision process to remove the odor 

provision from the SIP. Id. at 785–86. 

When the court made its 

determination in Bridesburg in 1987, 

there was no provision explicitly 

addressing EPA’s error correction 

authority under the CAA. In 1990, 

Congress passed CAA section 110(k)(6), 

apparently for the purpose of 

overturning the Bridesburg opinion. 

This is apparent because CAA section 

110(k)(6) both (i) authorizes EPA to 

correct SIP approvals and other actions 

that were ‘‘in error,’’ which, as noted 

previously, broadly covers any mistake, 

and thereby contrasts with the holding 

in Bridesburg that EPA’s pre-section 

110(k)(6) authority was limited to 

correction of typographical or similar 

mistakes; and (ii) provides that the error 

correction need not be accomplished via 

the SIP revision or SIP call process, 

which contrasts with the holding of 

Bridesburg requiring a SIP revision. 

Because Congress apparently intended 

CAA section 110(k)(6) to overturn 

Bridesburg, the definition of ‘‘error’’ in 

that provision should be sufficiently 

broad to encompass the error that EPA 

asserted it made in its approval action 

at issue in Bridesburg, which goes well 

beyond typographical or other similar 

mistakes. 

EPA has used CAA section 110(k)(6) 

in the past to correct errors of a nontechnical nature. For example, EPA has 

used CAA section 110(k)(6) as authority 

to make substantive corrections to 

remove a variety of provisions from 

federally approved SIPs that are not 

related to the attainment or maintenance 

of NAAQS or any other CAA 

requirement. See, e.g., ‘‘Approval and 

Promulgation of Implementation Plans; 

Kentucky: Approval of Revisions to the 

State Implementation Plan,’’ 75 FR 2440 

(Jan. 15, 2010) (correcting the SIP by 

removing a provision, approved in 1982, 

used to address hazardous or toxic air 

pollutants); ‘‘Approval and 

Promulgation of Implementation Plans; 

New York,’’ 73 FR 21,546 (April 22, 

2008) (issuing a direct final rule to 

correct a prior SIP correction from 1998 

that removed general duties from the 

SIP but neglected to remove a reference 

to ‘‘odor’’ in the definition of ‘‘air 

contaminant or air pollutant’’); 

‘‘Approval and Promulgation of 

Implementation Plans; New York,’’ 63 

FR 65557 (Nov. 27, 1998) (issuing direct 

final rule to correct SIP by removing a 

general duty ‘‘nuisance provision’’ that 

had been approved in 1984); ‘‘Correction 

of Implementation Plans; American 

Samoa, Arizona, California, Hawaii, and 

Nevada State Implementation Plans,’’ 63 

FR 34,641 (June 27, 1997) (correcting 

five SIPs by deleting a variety of 

administrative provisions concerning 

variances, hearing board procedures, 

and fees that had been approved during 

the 1970s). 


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8For additional case law, see Belville Mining Co. 

v. United States, 999 F.2d 989, 997 (6th Cir. 1993); 

Dun & Bradstreet Corp. v. United States Postal 

Service, 946 F.2d 189, 193 (2d Cir. 1991); Iowa 

Power & Light Co. v. United States, 712 F.2d 1292 

(8th Cir. 1983). 

9 In contrast, the ‘‘nonattainment new source 

review (NSR)’’ program applies in areas not in 

attainment of a NAAQS and in the Ozone Transport 

Region and is implemented under the requirements 

of part D of title I of the CAA. We commonly refer 

to the PSD program and the nonattainment NSR 

program together as the major NSR program. The 

EPA rules governing both programs 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 CO2

or any of the other well-mixed GHGs, nor has EPA 

CAA section 110(k)(6), by its terms— 

specifically, the use of the terms 

‘‘[w]henever’’ and ‘‘may’’ and the lack of 

any time constraints—authorizes, but 

does not require, EPA to make the 

specified finding. As a result, EPA has 

discretion in determining whether and 

when to make the specified finding. See 

New York Public Interest Research 

Group v. Whitman, 321 F.3d 316, 330– 

31 (2d Cir. 2003) (opening phrase 

‘‘Whenever the Administrator makes a 

determination’’ in CAA section 502(i)(1) 

grants EPA ‘‘discretion whether to make 

a determination’’); Her Majesty the 

Queen in Right of Ontario v. EPA, 912 

F.2d 1525, 1533 (D.C. Cir. 1990) 

(‘‘whenever’’ in CAA section 115(a) 

‘‘impl[ied] a degree of discretion’’ in 

whether EPA had to make a finding). 

(ii) Inherent Authority To Reconsider 

The provisions in CAA section 110 

that authorize EPA to take action on a 

SIP revision inherently authorize EPA 

to, on its own initiative, reconsider and 

revise that action as appropriate. The 

courts have found that an administrative 

agency has the inherent authority to 

reconsider its decisions, unless 

Congress specifically proscribes the 

agency’s discretion to do so. See, e.g., 

Gun South, Inc. v. Brady, 877 F.2d 858, 

862 (11th Cir. 1989) (holding that 

agencies have implied authority to 

reconsider and rectify errors even 

though the applicable statute and 

regulations do not provide expressly for 

such reconsideration); Trujillo v. 

General Electric Co., 621 F.2d 1084, 

1086 (10th Cir. 1980) (‘‘Administrative 

agencies have an inherent authority to 

reconsider their own decisions, since 

the power to decide in the first instance 

carries with it the power to reconsider’’); 

see also New Jersey v. EPA, 517 F.3d 

574 (DC Cir. 2008) (holding that an 

agency normally can change its position 

and reverse a prior decision but that 

Congress limited EPA’s ability to 

remove sources from the list of 

hazardous air pollutant source 

categories, once listed, by requiring EPA 

to follow the specific delisting process 

at CAA section 112(c)(9)).8

Section 301(a) of the CAA, read in 

conjunction with CAA section 110 and 

the case law just described, provides 

further statutory authority for EPA to 

reconsider its actions under CAA 

section 110. CAA section 301(a) 

authorizes EPA ‘‘to prescribe such 

regulations as are necessary to carry out 

[EPA’s] functions’’ under the CAA. 

Reconsidering prior rulemakings, when 

necessary, is part of ‘‘[EPA’s] functions’’ 

under the CAA—in light of EPA’s 

inherent authority as recognized under 

the case law to do so—and as a result, 

CAA section 301(a) confers such 

authority upon EPA. 

EPA finds further support for its 

authority to narrow its approvals in 

APA section 553(e), which requires EPA 

to give interested persons ‘‘the right to 

petition for the issuance, amendment, or 

repeal of a rule,’’ and CAA section 

307(b)(1), which expressly contemplates 

that persons may file a petition for 

reconsideration under certain 

circumstances (at the same time that a 

rule is under judicial review). These 

authorizations for other persons to 

petition EPA to amend or repeal a rule 

suggest that EPA has inherent authority, 

on its own, to issue such amendment or 

repeal. This is because EPA may grant 

a petition from another person for an 

amendment to or repeal of a rule only 

if justified under the CAA, and if such 

an amendment or repeal is justified 

under the CAA, then EPA should be 

considered as having inherent authority 

to initiate the process on its own, even 

without a petition from another person. 

EPA recently used its authority to 

reconsider prior actions and limit its 

prior approval of a SIP in connection 

with California conformity SIPs. See, 

e.g., 68 FR 15720, 15723 (discussing 

prior action taken to limit approvals); 67 

FR 69139 (taking final action to amend 

prior approvals to limit their duration); 

67 FR 46618 (proposing to amend prior 

approvals to limit their duration, based 

on CAA sections 110(k) and 301(a)). 

EPA had previously approved SIPs with 

emissions budgets based on a mobile 

source model that was current at the 

time of EPA’s approval. Later, EPA 

updated the mobile source model. But, 

even though the model had been 

updated, emissions budgets would 

continue to be based on the older, 

previously approved model in the SIPs, 

rather than the updated model. To 

rectify this problem, EPA conducted a 

rulemaking that revised the previous 

SIP approvals so that the approvals of 

the emissions budgets would expire 

early, when the new ones were 

submitted by states and found adequate, 

rather than when a SIP revision was 

approved. This helped California more 

quickly adjust its regulations to 

incorporate the newer model. EPA is 

using its authority to reconsider and 

limit its prior approval of SIPs generally 

in the same manner as it did in 

connection with California conformity 

SIPs. 

f. FIPs 

As noted previously, if the state fails 

to submit a required SIP revision, or 

does so but EPA then disapproves that 

SIP revision, then the CAA requires EPA 

to promulgate a FIP and thereby, in 

effect, federalize the part of the air 

pollution control requirements for 

which the state, through the required 

SIP revision, would otherwise have 

been responsible. Specifically, under 

CAA section 110(c)(1), EPA is required 

to— 

promulgate a [FIP] at any time within 2 years 

after the Administrator (A) finds that a State 

has failed to make a required submission 

* * *, or (B) disapproves a [SIP] submission 

in whole or in part, unless the State corrects 

the deficiency, and the Administrator 

approves the plan or plan revision, before the 

Administrator promulgates such [FIP]. 

Although this provision, by its terms, 

mandates that EPA promulgate a FIP 

under the specified circumstances, and 

mandates that EPA do so within two 

years of when those circumstances 

occur, the provision gives EPA 

discretion to promulgate the FIP ‘‘at any 

time within [that] 2 year [ ]’’ period. 

Thus, EPA is authorized to promulgate 

a FIP immediately after either the 

specified state failure to submit or EPA 

disapproval. 

However, CAA section 110(c)(1), as 

quoted earlier, further provides that if 

EPA delays promulgating a FIP until 

later in the 2-year period, and, in the 

meantime, the state corrects the 

deficiency by submitting an approval 

SIP revision that EPA approves, then 

EPA is precluded from promulgating the 

FIP. Similarly, once EPA promulgates a 

FIP, it stays on the books until the state 

submits an approvable SIP that EPA 

then approves. 

2. General Requirements for the PSD 

Program 

The PSD program is a preconstruction 

review and permitting program 

applicable, under EPA rules, to large 

new stationary sources and, in general, 

expansions of existing sources. The PSD 

program applies in areas that are 

designated ‘‘attainment’’ or 

‘‘unclassifiable’’ for a NAAQS, and is 

contained in part C of title I of the 

CAA.9


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proposed any such NAAQS; therefore, unless and 

until we take further such action, the nonattainment 

NSR program does not apply to GHGs. 

10 ‘‘Interpretation of Regulations that Determine 

Pollutants Covered by Clean Air Act Permitting 

Programs.’’ 75 FR 17,004 (April 2, 2010). This action 

finalizes EPA’s response to a petition for 

reconsideration of ‘‘EPA’s Interpretation of 

Regulations that Determine Pollutants Covered by 

Federal Prevention of Significant Deterioration 

(PSD) Permit Program’’ (commonly referred to as the 

‘‘Johnson Memo’’), December 18, 2008. 

11 In the Tailoring Rule, we noted that 

commenters argued, with some variations, that the 

PSD provisions applied only to NAAQS pollutants, 

and not GHGs, and we responded that the PSD 

provisions apply to all pollutants subject to 

regulation, including GHGs. See 75 FR 31560–62; 

‘‘Prevention of Significant Deterioration and Title V 

GHG Tailoring Rule: EPA’s Response to Public 

Comments,’’ May 2010, pp. 38–41. We are not 

reopening that issue in this rulemaking. 

12This history is described in ‘‘Approval and 

Promulgation of Implementation Plan, State of 

Texas; Prevention of Significant Deterioration— 

Final rulemaking, 57 FR 28,093, 28,094 (June 24, 

1992); ‘‘Approval and Promulgation of 

Implementation Plan, State of Texas; Prevention of 

Significant Deterioration—Proposed rulemaking, 54 

FR 52,823, 52,824 (December 22, 1989). 

The applicability of PSD to a 

particular source must be determined in 

advance of construction or modification 

and is pollutant-specific. Sources 

subject to PSD cannot construct or 

modify unless they first obtain a PSD 

permit that, among other things, 

includes emission limitations that 

qualify as BACT (discussed later). CAA 

sections 165(a)(1), 165(a)(4), 169(1). 

Under the CAA, PSD applies to a 

stationary source that qualifies as a 

‘‘major emitting facility,’’ and that newly 

constructs or undertakes a modification. 

A source is a ‘‘major emitting facility’’ if 

it emits or has the potential to emit 100 

or 250 tpy, depending on the source 

category, of ‘‘any air pollutant.’’ CAA 

section 165(a)(1), 169(1). We refer to 

these levels as the 100/250-tpy 

thresholds. EPA has implemented these 

requirements in its regulations, which, 

as discussed next, use somewhat 

different terminology for determining 

PSD applicability and which have 

interpreted the term ‘‘any air pollutant’’ 

more narrowly so that only emissions of 

any pollutant subject to regulation 

under the CAA trigger PSD. 

Specifically, under EPA’s regulations, 

PSD applies to a ‘‘major stationary 

source’’ that newly constructs or that 

undertakes a ‘‘major modification.’’ 40 

CFR 52.166(a)(7), (b)(1)(i), (b)(2)(i). A 

‘‘major stationary source’’ is any source 

that emits or has the potential to emit 

100 or 250 tpy or more, depending on 

the source category, of any ‘‘regulated 

NSR pollutant.’’ 40 CFR 

51.166(b)(1)(i)(a). The regulations define 

that term to include four classes of air 

pollutants, including, as a catch-all, 

‘‘any pollutant that otherwise is subject 

to regulation under the Act.’’ 40 CFR 

51.166(b)(49)(iv). As discussed below, 

the phrase ‘‘subject to regulation’’ will 

begin to include GHGs on January 2, 

2011, under our interpretation of that 

phrase as described in the Tailoring 

Rule, 75 FR at 31,580/3, and what we 

call the ‘‘Johnson Memo 

Reconsideration’’ (or the ‘‘Timing 

Decision’’).10

One principal PSD requirement is that 

a new major source or major 

modification must meet emissions 

limitations based on application of 

BACT, which must be determined on a 

case-by-case basis taking into account 

energy, environmental, and economic 

impacts, among other factors. To ensure 

that these criteria are satisfied, EPA has 

developed and recommends that 

permitting authorities apply a ‘‘topdown’’ approach for BACT review, a 

decision process that includes 

identification of all available control 

technologies, elimination of technically 

infeasible options, ranking of remaining 

options by control and effectiveness; 

evaluation (and possible elimination) of 

controls based on economic, 

environmental or energy impacts; and 

then selection of the remaining topranked option as BACT. When PSD 

applies to a source because of its 

emissions of a particular pollutant, then 

BACT (and other PSD requirements) 

apply for other pollutants that are 

subject to regulation and that exceed 

specified levels. 

3. SIP PSD Requirements 

The CAA contemplates that the PSD 

program be implemented by the states 

through 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, 

CAA section 165(a)(1), 169(1), mandate 

that SIPs include PSD programs that are 

applicable to any air pollutant that is 

subject to regulation under the CAA, 

including, as discussed later in this 

preamble, GHGs as of January 2, 2011.11

Most states have EPA-approved SIP 

PSD programs, and as a result, in those 

states, PSD permits are issued by state 

or local air pollution control agencies. 

In states that do not have EPA-approved 

SIP PSD programs, EPA issues PSD 

permits under its own authority, 

although in some cases, EPA has 

delegated such authority to the state or 

local agency. 

B. Regulatory Background: Texas SIP 

and PSD Program 

1. Texas’s Initial Attainment SIP 

Revision 

In 1972, shortly after the enactment of 

the 1970 CAA Amendments, Texas 

submitted to EPA its SIP to attain and 

maintain the NAAQS that EPA had 

promulgated by that time. As part of 

that SIP revision, Texas provided 

assurances that it had legal authority to 

carry out the SIP, in accordance with 

the predecessor to CAA section 

110(a)(2)(E)(i). EPA approved Texas’s 

SIP, including the assurances of legal 

authority, by notice dated May 31, 1972. 

37 FR 10842. 

2. Texas Initial PSD SIP Revision 

In the 1977 CAA Amendments, 

Congress enacted the PSD program. In 

the immediate aftermath, EPA acted as 

the PSD permitting authority in the 

states, but EPA began to delegate to 

various state authorities all or part of 

EPA’s authority to issue PSD permits. In 

addition, at this time, EPA revised its 

pre-existing regulations, which had 

established a preconstruction permitting 

program, to conform to the 1977 CAA 

requirements. Each state was required to 

adopt a PSD program and submit it for 

approval as a SIP revision, and if the 

PSD program met CAA requirements, 

EPA approved the program, and the 

state then became the PSD permitting 

authority. 

This process occurred for most of the 

states in the Nation, including Texas. A 

brief history of Texas’s initial PSD SIP 

approval follows:12

a. Texas’s Receipt of Delegation 

Authority for the PSD Program 

Beginning in 1980, when EPA was 

still the permitting authority for 

federally required PSD permits in Texas, 

the state requested delegation of certain 


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13See, e.g., 48 FR 6023 (February 9, 1983). 

14Letter from Jack S. Divita, U.S EPA, Region 6, 

to Roger Wallis, Texas Air Control Board (December 

23, 1980), p. 2. In that letter, EPA objected to 

Texas’s proposed definitions of the terms ‘‘major 

facility/stationary source’’ and ‘‘major modification’’ 

on grounds they are not equivalent to the definition 

of those terms in EPA’s PSD and nonattainment 

NSR regulations because Texas’s proposed 

definitions—include only those stationary sources 

and modifications with emissions of air 

contaminants for which a [NAAQS] has been 

issued. Under the PSD and [nonattainment] NSR 

requirements, [Texas’s] definitions must include 

sources with emissions of ‘‘any air pollutant subject 

to regulation under the Act.’’ * * * Since the 

proposed definitions would exclude PSD and 

[nonattainment] NSR coverage for those sources 

emitting pollutants subject to regulations under the 

Act, but for which a NAAQS has not been issued, 

they are not equivalent to the federal definitions of 

‘‘major stationary source’’ and ‘‘major modification.’’ 

Id. (emphasis omitted). 

15Environmental Protection Agency—Region 6, 

‘‘EPA Review of Texas Revisions to the General 

Rules and Regulations VI,’’ p. 4 (August 1983), cited 

in 48 FR 55483/1 & n.1 (December 13, 1983). 

16For convenience, we will use the acronym 

‘‘IBR’’ for the various grammatical usages of 

incorporate by reference, including the noun form, 

i.e., IBR, for incorporation by reference; as well as 

the verb form, e.g., IBR’d, for incorporated by 

reference. 

17As also discussed elsewhere, this is a 

narrowing interpretation of the PSD applicability 

requirements in CAA section 169(1), which, read 

literally, apply PSD to ‘‘any air pollutant.’’ 

18TACB Board Order No. 85–7 (July 26, 1985). 

19 Id. 

20Letter from Mark White, Governor of Texas, to 

Lee M. Thomas, Administrator of U.S. EPA, 

December 11, 1985. 

21Letter from William B. Hathaway, Director, Air, 

Pesticides and Toxics Division, EPA Region 6, to 

Allen Eli Bell, Executive Director, TACB (July 3, 

1986). Specifically, EPA stated— State’s authority 

to IBR Federal rules prospectively—The Board 

approved and signed the incorporation of the PSD 

regulations on July 26, 1985, An amendment to the 

Federal PSD regulations [40 CFR 52.21(o)(3), p(1) 

and p(3)] occurred on July 12, 1985. However, the 

TACB proposed to adopt the Federal regulations 

and carried out the public participation process 

before the July 12, 1985, promulgation date of the 

amendments. We need a legal analysis from the 

state concerning the TACB’s legal authority to 

incorporate by reference the Federal rules 

prospectively. We recognize that the proposed 

Federal rules were unchanged on the final 

promulgation; however, the Texas Water 

Commission believes that the State can not adopt 

prospective Federal rules under the State laws. We 

would appreciate a legal clarification on this 

subject. If the State did not intend prospective 

adoption, the rules should be clarified by 

referencing the appropriate date. Id. p. 2 and 

Enclosure p. 5. 

22Letter from to Steve Spaw, Deputy Executive 

Director, TACB, to William B. Hathaway, Director, 

Air, Pesticides and Toxics Division, EPA Region 6 

(October 24, 1986). 

23 Id. 1–2. 

24TACB Board Order No. 87–09 (July 17, 1987). 

See 12 Tex. Reg. 2575/2 (August 7, 1987) 

(discussing revision to section 116.3(a)(13) in 

response to request from U.S. EPA). 

25Letter from William P. Clements, Jr., Governor 

of Texas, to Lee M. Thomas, Administrator of U.S. 

EPA (October 26, 1987). 

26 52 FR 24634 (July 1, 1987). 

27TACB Board Order No. 88–08 (July 15, 1988). 

28Letter from Letter from William P. Clements, 

Jr., Governor of Texas, to Lee M. Thomas, 

Administrator of U.S. EPA (September 29, 1988). 

29TACB Board Order No. 88–08 (July 15, 1988). 

aspects of the Federal PSD program, and 

in a series of actions, EPA granted that 

authority.13 During this time, Texas also 

revised its state—i.e., Texas Air Control 

Board (TACB)—PSD regulations. EPA 

commented on an early set of proposed 

revisions to TACB regulations by letter 

dated December 23, 1980 and made 

clear that PSD applies to non-NAAQS 

pollutants.14 EPA reiterated these 

statements to Texas in 1983.15

b. Texas’s SIP PSD Program 

During 1985–1988, Texas submitted a 

series of SIP revisions comprising its 

PSD program to EPA for approval. In 

these SIP revisions, Texas established 

key components of its PSD rules by 

incorporating by reference EPA’s PSD 

rules found in 40 CFR 52.21. Of most 

importance for present purposes, Texas 

incorporated by reference (IBR’d) EPA’s 

PSD applicability regulations in 52.21.16

Under EPA’s regulations, as then 

written, PSD applied to ‘‘any pollutant 

subject to regulation under the [Clean 

Air] Act.’’ 40 CFR 52.21(b)(1)(i)) (1985– 

1988). It bears emphasis that this 

provision, by its terms, applied PSD to 

each and every air pollutant subject to 

regulation under the CAA, which, as 

discussed elsewhere, has been EPA’s 

consistent interpretation of the CAA 

requirements for PSD applicability. 

CAA section 165(a)(1), 169(1).17

(i). Incorporation by Reference 

In adopting a particular SIP revision 

that IBR’ed EPA’s regulations, however, 

Texas intended that IBR to apply to only 

the EPA regulations as they read as of 

the date that Texas adopted the SIP 

revision. Texas did not intend that IBR 

in that SIP revision to apply to 

subsequent revisions to those 

regulations. This became readily 

apparent during the course of EPA’s 

review of Texas’s SIP revisions. The 

TACB adopted the first SIP revision on 

July 26, 1985.18 This SIP revision 

consisted, in relevant part, of a revision 

to TACB Regulation VI—§ 116.3.(a) to 

add subparagraph (13), which read, in 

relevant part, 

(13) The proposed facility shall comply 

with the Prevention of Significant 

Deterioration of Air Quality regulations 

promulgated by the [EPA] in the Code of 

Federal Regulations at 40 CFR 52.21 as 

amended * * *, hereby incorporated by 

reference, except for [certain identified] 

paragraphs [not here relevant].19

The TACB submitted this SIP revision 

to EPA on December 11, 1985.20 EPA 

responded with a letter to Texas, dated 

July 3, 1986, commenting on several 

aspects of the SIP revision, including 

inquiring whether the state had 

authority to IBR Federal rules 

prospectively, asking for ‘‘legal 

clarification’’ on the subject, and 

recommending that if the TACB did not 

have such authority, then the TACB 

should clarify the IBR by ‘‘referencing 

the appropriate date.’’ 21

Texas responded with a letter dated 

October 24, 1986,22 in which it stated: 

An issue of concern * * * is whether the 

[TACB] intended to incorporate by reference 

federal rules prospectively in the PSD rule 

§ 116.3(a)(13) and in the stack height rule 

§ 116.3(a)(14). [A]lthough our intention was 

not prospective rulemaking and we do not 

believe the rule language implies such, we 

have no specific objection to including the 

date of federal adoption of any federal 

material adopted by reference by the TACB 

in future SIP revisions (including the 

proposed PSD and stack height revisions). By 

initiating the public hearing process for PSD 

rules again (to incorporate requested 

revisions), federal PSD regulations amended 

on July 12, 1985 will be subject to the state 

public participation process. This should 

eliminate the concern expressed in your July 

3, 1986 letter.23

Accordingly, on July 17, 1987, the 

TACB adopted a revision to its PSD 

rule, § 116.3(a)(13), so that the rule 

continued to IBR EPA’s PSD regulatory 

requirements at 40 CFR 52.21, but 

referenced the date of November 7, 

1986.24 Texas submitted that as a SIP 

revision to EPA on October 26, 1987.25

However, some eight months later, by 

notice published on July 1, 1987, EPA 

adopted the PM10 NAAQS,26 and 

thereby subjected to PSD sources 

emitting PM10. Recognizing this, the 

TACB, on July 15, 1988, adopted still 

another revision to its PSD rule to 

change the referenced date to August 1, 

1987, and thereby incorporated EPA’s 

application of PSD to PM10-emitting 

sources into Texas’s PSD program.27

Texas submitted that revised rule to 

EPA as a SIP revision on September 29, 

1988.28 As so revised, the Texas PSD 

rule (again, § 116.3(a)(13)) read, in 

relevant part, as follows: 

(13) The proposed facility shall comply 

with the Prevention of Significant 

Deterioration (PSD) of Air Quality regulations 

promulgated by the Environmental 

Protection Agency (EPA) in the Code of 

Federal Regulations at 40 CFR 52.21 as 

amended August 1, 1987 * * *, except for 

[certain identified] paragraphs [not here 

relevant].29

EPA proposed to approve this SIP 

revision, with this iteration of the Texas 

PSD rule, by notice dated December 22, 


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30 54 FR 52823. 

31 57 FR 28093. 

32 57 FR 28093, 28094/2 (June 24, 1992) (final 

rule); 54 FR 52823, 52824/1 (December 22, 1989) 

(proposed rule); Technical Support Document: 

Texas State Implementation Plan for Prevention of 

Significant Deterioration, U.S. Environmental 

Protection Agency, 4 (November 28, 1988). 

Moreover, Texas submitted another SIP revision on 

February 18, 1991 to change the date in section 

116.3(a)(13) from ‘‘August 1, 1987’’ to ‘‘October 17, 

1988’’ to reflect the amendments to 40 CFR 52.21 

as promulgated in the Federal Register on October 

17, 1988 (53 FR 40656) (Nitrogen Oxides PSD 

increments). EPA did not act on this SIP revision 

when it approved the Texas PSD program on June 

24, 1992, but did approve this SIP revision later, on 

September 9, 1994 (59 FR 46556). See 62 FR 

44084/2. 

33Following EPA approval of Texas’s PSD 

program, Texas has occasionally submitted SIP 

revisions to update its PSD program to 

accommodate further EPA regulatory revisions. See, 

e.g., 69 FR 43752, 43753 (July 22, 2004). 

34Letter from A. Stanley Meiburg, Director, Air, 

Pesticides & Toxics Division, EPA Region 6, to 

Steve Spaw, Executive Director, TACB (March 30, 

1992). 

35Letter from Steve Spaw, Executive Director, 

TACB, to A. Stanley Meiburg, Director, Air, 

Pesticides and Toxics Division, EPA Region 6 (April 

17, 1992). 

1989,30 and EPA issued a final approval 

by notice dated June 24, 1992.31 In the 

preambles to the proposed and final 

rule, and in supporting documents, EPA 

recounted part of this history of Texas 

revising its regulations to IBR the 

current EPA regulatory requirements.32

This history shows that both EPA and 

Texas were well aware that Texas’s 

method of IBR’ing EPA’s regulatory 

requirements into Texas’s PSD rule was 

not prospective, and that as a result, 

Texas would need to take further action, 

such as a SIP revision, to update its PSD 

rules whenever EPA newly subjected 

another pollutant to PSD. In fact, Texas 

did so—to apply PSD to PM10—during 

the time that EPA was reviewing its PSD 

SIP. However, after stating simply that 

it does not intend prospective IBR, 

Texas did not explicitly address this 

issue. That is, Texas did not 

acknowledge that following approval of 

Texas’s PSD program, EPA could well 

subject to regulation additional 

pollutants—whether through a revised 

NAAQS or regulation under another 

CAA provision—and Texas did not 

discuss how it would respond.33

(ii). Legal Authority 

The record of Texas’s PSD program 

includes limited references to, or 

discussion of, legal authority that may 

be relevant to whether Texas provided 

assurances that it had adequate legal 

authority to apply PSD to pollutants 

newly subject to regulation. The 

following merit review: 

First, in adopting and submitting the 

PSD SIP revisions, the TACB—the 

agency charged with taking that 

action—relied on its general legal 

authority to adopt and submit the SIP 

revisions. The TACB adopted regulatory 

amendments through ‘‘Board Orders,’’ 

and then submitted those Board Orders 

to EPA as SIP revisions. The Board 

Orders typically cited general authority 

under the Texas CAA. One example is 

TACB Board Order No. 88–08 (July 15, 

1988), which revised the Texas PSD rule 

to provide a later date for IBR’ing EPA’s 

PSD program, and which comprised one 

of the SIP revisions that formed the 

basis for the Texas PSD program that 

EPA approved by notice dated June 24, 

1992 (57 FR 28093). This Board Order 

provides, in relevant part, ‘‘Section 

3.09(a) of the Texas CAA gives the 

Board authority to make rules and 

regulations consistent with the general 

intent and purposes of the Act and to 

amend any rule or regulation it makes’’ 

and ‘‘the Board hereby certifies that the 

amendments as adopted have been 

reviewed by legal counsel and found to 

be a valid exercise of the Board’s legal 

authority.’’ Board Order No. 88–08, page 

2. 

Second, the 1990 CAA Amendments 

amended CAA section 169(1) to add 

another type of source that was subject 

to PSD: Large municipal combustors. 

Shortly after the 1990 amendments, and 

before issuing final approval for the 

Texas PSD program, EPA asked Texas 

for assurances that its PSD program 

would apply to large municipal waste 

combustors. In a March 30, 1992 letter, 

EPA stated the following: 

Since we proposed approval of this SIP 

before enactment of the 1990 Clean Air Act 

Amendments (CAAA), it is necessary that we 

address several issues in the final approval 

notice in order to be in conformance with the 

CAAA. 

* * * * * 

‘‘Municipal Waste Combustion—Section 

169(1) is amended by expanding the list of 

major emitting facilities that are subject to 

PSD requirements if they emit or have the 

potential to emit 100 tons per year or more 

of any regulated pollutant. This list now 

includes municipal incinerators capable of 

charging more than fifty tons of refuse per 

day. This requirement has been effective 

since November 15, 1990, for all applicable 

PSD sources. In the conference call [with 

EPA Region 6], the * * * TACB * * * legal 

representative said that the TACB has the 

existing legal authority, and can and will be 

reviewing such sources for PSD applicability 

and permitting.’’ 34

Thus, according to this letter, Texas 

provided oral statements in a conference 

call with EPA Region 6 that Texas has 

legal authority to apply its state PSD 

rules to large municipal waste 

combustors. 

Texas responded in a letter dated 

April 17, 1992: 

We understand that you need confirmation 

in several areas to conform with the 

requirements of the 1990 Federal Clean Air 

Act Amendment * * * before the final 

delegation will be made. 

* * * * * 

We will address as a major source subject 

to PSD review, municipal waste combustors 

capable of changing more than 50 tons of 

refuse per day as one of the sources subject 

to PSD review if they emit or have the 

potential to emit 100 tons per year or more 

of any regulated pollutant.35

Although the TACB Board Order 

referred to the TACB’s general legal 

authority, the record reveals no 

discussion or assurances that this legal 

authority was adequate to apply PSD to 

pollutants newly subject to regulation. 

Similarly, the oral assurance that the 

TACB apparently provided that it had 

legal authority to apply PSD to large 

municipal combustors, as required 

under the then-newly enacted 1990 

CAA Amendments, does not address 

whether Texas had adequate authority 

to apply PSD to each pollutant that EPA 

newly subjects to regulation. 

(iii). Texas’s Commitments 

The rulemaking record of EPA’s 

approval of Texas’s PSD SIP shows that 

Texas provided two commitments that 

are relevant for present purposes: 

(I). 1987 Texas PSD Commitments 

Statement 

The TACB adopted revisions to TACB 

Regulation VI on July 17, 1987, which 

the Governor submitted on October 27, 

1987. Those revisions included the 

following statement, which we call the 

1987 Texas PSD Commitments 

Statement: 

Revision To The Texas State 

Implementation Plan For Prevention Of 

Significant Deterioration Of Air Quality 

The Texas Air Control Board (TACB) will 

implement and enforce the federal 

requirements for Prevention of Significant 

Deterioration of Air Quality (PSD) as 

specified in 40 CFR 51.166(a) by requiring all 

new major stationary sources and major 

modifications to obtain air quality permits as 

provided in TACB regulation VI, Control of 

Air Pollution by Permits for New 

Construction and Modification. In addition, 

the TACB will adhere to the following 

conditions in the implementation of the PSD 

program: 

* * * * * 

4. Plan assessment 

The TACB will review the adequacy of the 

Texas PSD plan on an annual basis and 

within 60 days of the time information 

becomes available that an applicable 

increment may be violated. If the TACB 

determines that an increment is being 


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36Technical Support Document: Texas State 

Implementation Plan for Prevention of Significant 

Deterioration, U.S. Environmental Protection 

Agency, 6 (November 28, 1988). 

37Letter from Allen Eli Bell, Executive Director, 

Texas Air Control Board to Robert Layton Jr., 

Regional Administrator, U.S. EPA (September 5, 

1989) 1 (Texas’s Commitments Letter). 

38Texas’s 1989 Commitments Letter, p. 1. 

39Sic: the word ‘‘to’’ should be in between 

‘‘forward’’ and ‘‘approval’’ 

40Texas’s 1989 Commitments Letter, p. 1. 

41 54 FR 52823. 

exceeded due to the violation of a permit 

condition, appropriate enforcement action 

will be taken to stop the violation. If an 

increment is being exceeded due to a 

deficiency in the state PSD plan, the plan 

will be revised and the revisions will be 

subject to public hearing. 

This 1987 Texas PSD Commitments 

Statement does not specifically address 

the application of PSD to pollutants 

newly subject to regulation. The first 

paragraph, as quoted above, commits 

TACB to require ‘‘all new major 

stationary sources and major 

modifications to obtain air quality 

permits as provided in TACB regulation 

VI * * *,’’ but this does not commit 

TACB to address pollutants newly 

subject to regulation. Instead, this limits 

the TACB requirement to application of 

PSD to sources ‘‘as provided in TACB 

regulation VI,’’ and that regulation VI 

does not automatically update. As for 

‘‘#4, Plan assessment,’’ although the first 

sentence calls for the TACB to review 

the adequacy of the Texas PSD plan on 

an annual basis, and although the rest 

of the provision requires a plan revision 

if an increment violation is determined 

to result from a deficiency in the plan, 

this does not address what happens 

when a new pollutant becomes subject 

to regulation and does not require a plan 

revision to apply to the new pollutant. 

The fact that Texas agreed to revise the 

plan if the plan is found to be deficient 

and that deficiency results in an 

increment being exceeded serves to 

highlight the lack of any comparable 

focus on how the plan would deal with 

pollutants newly subject to regulation. 

EPA’s technical support document 

supporting its proposed approval stated, 

with respect to this 1987 Texas PSD 

Commitments Statement: 

The ‘‘Revision to Texas State 

Implementation Plan for Prevention of 

Significant Deterioration of Air Quality’’ 

specifies how the TACB will fulfill the 

requirements of 40 CFR 51.166(a), plan 

revisions, and plan assessment. The EPA has 

reviewed the State’s commitment and has 

determined that the TACB has addressed the 

continuous plan revisions and assessments 

adequately.36

This general discussion by EPA does not 

indicate that EPA considered the Texas 

statement to apply to pollutants newly 

subject to regulation. 

(II). 1989 Texas Commitment Letter 

In 1989, as EPA considered Texas’s 

SIP revision submittal, EPA became 

concerned that a Texas official had 

made statements that lead EPA to 

question whether Texas would adhere 

to EPA’s interpretation that BACT must 

be implemented through the Top-Down 

process.37 Accordingly, EPA advised 

Texas that EPA would not approve 

Texas’s PSD program unless Texas 

provided a letter assuring EPA that 

Texas would follow EPA requirements 

in general, and particularly with respect 

to the interpretation of BACT. Texas 

provided this letter, which we call the 

Texas PSD Commitments Letter, on 

September 5, 1989.38 In this letter, 

Texas acknowledged EPA’s concern that 

a Texas official had— 

indicated a lack of intent to follow federal 

interpretations of the Clean Air Act and 

Environmental Protection Agency (EPA) 

operating policies, most specifically, the 

‘‘Top-Down’’ approach for Best Available 

Control Technology (BACT) analysis in 

reviewing PSD permit applications. 

Texas went on to state: 

[Y]ou may be assured that the position of 

the [Texas Air Control Board (TACB)] is, and 

will continue to be, to implement EPA 

requirements relative to programs for which 

we have received State Implementation Plan 

approval, and to do so as effectively as 

possible.* * * Again, the TACB is 

committed to the implementation of EPA 

decisions regarding PSD program 

requirements. We look forward 39 approval of 

the PSD revisions and believe EPA will find 

the management of that program in Texas to 

be capable and effective.40

By notice dated December 22, 1989, 

EPA proposed to fully approve Texas’s 

PSD program.41 In this proposal, EPA 

focused on the issue of how EPA’s 

current and future interpretations of 

PSD statutory requirements would be 

reflected in the state-implemented 

program. EPA stated: 

In adopting the Clean Air Act, Congress 

designated EPA as the agency primarily 

responsible for interpreting the statutory 

provisions and overseeing their 

implementation by the states. The EPA must 

approve state programs that meet the 

requirements of 40 CFR 51.166. Conversely, 

EPA cannot approve programs that do not 

meet those requirements. However, PSD is by 

nature a very complex and dynamic program. 

It would be administratively impracticable to 

include all statutory interpretations in the 

EPA regulations and the SIPs of the various 

states, or to amend the regulations and SIPs 

every time EPA interprets the statute or 

regulations or issues guidance regarding the 

proper implementation of the PSD program, 

and the Act does not require EPA to do so. 

Rather, action by the EPA to approve this 

PSD program as part of the SIP will have the 

effect of requiring the state to follow EPA’s 

current and future interpretations of the Act’s 

PSD provisions and EPA regulations, as well 

as EPA’s operating policies and guidance (but 

only to the extent that such policies are 

intended to guide the implementation of 

approved state PSD programs). Similarly, 

EPA approval also will have the effect of 

negating any interpretations or policies that 

the state might otherwise follow to the extent 

they are at variance with EPA’s interpretation 

and applicable policies. Of course, any 

fundamental changes in the administration of 

PSD would have to be accomplished through 

amendments to the regulations in 40 CFR 

52.21 and 51.166, and subsequent SIP 

revisions. 

54 FR 52,824/2–3. 

EPA went on to state that it was 

basing its proposed approval of Texas’s 

PSD program on Texas’s agreement, as 

contained in the September 5, 1989, 

letter, that Texas would ‘‘implement that 

PSD SIP approved program in 

compliance with all of the EPA’s 

statutory interpretations and operating 

policies.’’ 54 FR 82,825/2. EPA stated— 

* * * EPA’s approval of the Texas PSD SIP 

requires the state to follow EPA’s statutory 

interpretations and applicable policies[], 

including those concerning [BACT].* * * 

In support of the discussion above, the 

Executive Director of the TACB has 

submitted a letter, dated September 5, 1989, 

which commits the TACB to implement the 

PSD SIP approval program in compliance 

with all of the EPA’s statutory interpretations 

and operating policies. Specifically, the 

TACB’s letter states that (1) ‘‘* * * you may 

be assured that the position of the agency is, 

and will continue to be, to implement EPA 

requirements relative to programs for which 

we have received [SIP] approval, and to do 

as effectively as possible * * *’’, and (2) 

‘‘* * * the TACB is committed to the 

implementation of the EPA decisions 

regarding PSD program requirements * * *’’. 

The EPA has evaluated the content of this 

letter and has determined that the letter 

sufficiently commits the TACB to carry out 

the PSD program in accordance with the 

Federal requirements as set forth in the 

[CAA] applicable regulations, and as further 

clarified in the EPA’s statutory and 

regulatory interpretations, including the 

proper conduct of BACT analyses. The EPA 

also interprets this letter as committing the 

TACB to follow applicable EPA policies such 

as the ‘‘Top-Down’’ approach. This letter will 

be incorporated into the SIP upon the final 

approval action. 

54 FR 52,825/1–2. 

EPA issued a final rule to give full 

approval to the program by notice dated 

June 24, 1992, 57 FR 28,093. In the final 

rule, EPA indicated that it had received 

adverse comments concerning its 

statements in the proposal that Texas 

was required to adopt all of EPA’s 


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42See ‘‘Technical Support Document (TSD): State 

of Texas State Implementation Plan for Prevention 

of Significant Deterioration’’ (November 28, 1988). 

43 ‘‘Prevention of Significant Deterioration (PSD) 

and Nonattainment New Source Review (NNSR): 

Baseline Emissions Determination, Actual-toFuture-Actual Methodology, Plantwide 

Applicability Limitations, Clean Units, Pollution 

Control Projects—Final Rule,’’ 67 FR 80186 

(December 31, 2002) (NSR Reform rule). 44 75 FR 56,424 (September 15, 2010). 

interpretations of the PSD requirements. 

Accordingly, EPA refined its views. EPA 

stated: 

Comment 1: The commenters expressed 

concern with the preamble language in the 

proposal notice, suggesting that final 

approval would require that the State follow 

EPA’s current and future interpretations of 

the Act’s PSD provisions and EPA 

regulations as well as EPA’s operating 

policies and guidance. The commenter 

contended that such a condition would be 

unlawful * * * and would improperly limit 

the State’s flexibility. * * * 

Response 1: The EPA did not intend to 

suggest that Texas is required to follow EPA’s 

interpretations and guidance issued under 

the Act in the sense that those 

pronouncements have independent status as 

enforceable provisions of the Texas PSD SIP, 

such that mere failure to follow such 

pronouncements, standing alone, would 

constitute a violation of the Act. As clarified 

herein, EPA’s intent is merely to place the 

State and the public on notice of EPA’s 

longstanding views that the Agency must 

continue to oversee the State’s 

implementation of the PSD SIP.* * * 

* * * Texas and other states [have] 

considerable discretion to implement the 

PSD program as they see fit. 

* * * PSD–SIP approved states remain 

free to follow their own course, provided that 

state action is consistent with the letter and 

spirit of the SIP, when read in conjunction 

with the applicable statutory and regulatory 

provisions. 

* * * * * 

Comment 4: One commenter noted that the 

TACB’s letter, dated September 5, 1989, 

cannot reasonably be interpreted as a legal 

requirement that the State follow the EPA’s 

present and future new source review 

interpretations, policies and guidance, 

including the BACT ‘‘Top-Down’’ approach, 

because it only commits Texas to implement 

properly established EPA requirements and 

legally-binding EPA decisions. The 

commenter said that the Clean Air Act 

specifically requires that, if at all, any such 

change in EPA policy for BACT 

determinations be accomplished through 

notice and comment rulemaking, and that the 

EPA first prepare an economic impact 

assessment. 

Response 4: In certain circumstances, 

EPA’s approval of a SIP revision through 

notice-and-comment rulemaking procedures 

can serve to adopt specific interpretations or 

decisions of the Agency. For example, a state 

may commit in writing to follow particular 

EPA interpretations or decisions in 

administering the PSD program. As part of 

the SIP revision process, EPA may 

incorporate that State’s commitment into the 

SIP by reference. This process has been 

followed in today’s action. Of course, EPA 

agrees with the commenter that the Agency 

must act reasonably in construing the terms 

of a commitment letter, so as to avoid 

approving it in a manner that would 

contravene the state’s intent in issuing the 

letter in the first place. Moreover, the State 

commitment must be consistent with the 

plain language of the applicable statutory or 

regulatory provisions at issue. Similarly, EPA 

cannot unilaterally change the clear meaning 

of any approved SIP provision by later 

guidance or policy. Rather, as stated in the 

proposed approval notice, such fundamental 

change must be accomplished through the 

SIP revision process. 

Consistent with the terms of the TACB 

letter dated September 5, 1989, EPA views 

that letter as a commitment on the part of the 

TACB to ‘‘implement EPA program 

requirements * * * as effectively as 

possible,’’ and as a commitment ‘‘to the 

implementation of the EPA decisions 

regarding PSD program requirements.’’ EPA 

agrees, however, that the TACB letter need 

not be interpreted as a specific commitment 

by the State to follow a ‘‘Top-Down’’ 

approach to BACT determinations. 

57 FR 28095/1–2; 28096/1. 

As for the fact that Texas’s PSD 

program was limited to pollutants that 

were regulated as of the date Texas 

adopted the program as a SIP revision, 

but did not automatically apply to 

newly regulated pollutants, the 

preamble to the final rule alluded to this 

limitation: 

The State’s regulation VI requires review 

and control of air pollution from new facility 

construction and modification and allows the 

TACB to issue permits for stationary sources 

subject to this regulation. Section 

116.3(a)(13) of the TACB Regulation VI 

incorporates by reference the Federal PSD 

regulations (40 CFR 52.21) as they existed on 

August 1, 1987, which include revisions 

associated with the July 1, 1987, 

promulgation of revised National Ambient 

Air Quality Standards for particulate matter 

(52 FR 24872) and the visibility NSR 

requirements noted above. 

57 FR 28094. 

However, there is no indication in the 

preamble for the final rule that (i) Texas 

specifically addressed the requirement 

that its PSD program apply to pollutants 

newly subject to PSD, including nonNAAQS pollutants, or (ii) Texas 

provided assurances that it had 

adequate authority under State law to 

carry out the PSD program, including 

applying PSD to pollutants newly 

subject to regulation, among them nonNAAQS pollutants. Nor is there any 

indication that EPA asked Texas to do 

so.42

As discussed later, in 1996 EPA 

proposed, and in 2002 finalized, what 

we call the NSR Reform Rule,43 which 

included a set of amendments to the 

PSD provisions that included revisions 

to conform to the 1990 CAA 

Amendments. See 61 FR 38250 (July 23, 

1996), 67 FR 80186 (December 31, 

2002). The NSR Reform Rule revised the 

terminology for PSD applicability. In 

2006, Texas submitted a SIP revision to 

incorporate the NSR Reform Rule into 

its PSD program, including revising its 

applicability provisions. EPA 

disapproved this SIP revision by notice 

dated September 15, 2010.44

Accordingly, the applicable Texas PSD 

applicability provisions remain the ones 

in the state’s currently approved SIP. 

C. Regulatory Background: GHG Rules 

1. GHGs and Their Sources 

Greenhouse gases 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. Greenhouse 

gases 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 

(CO2), 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. 

As previously noted, the well-mixed 

GHGs of concern directly emitted by 

human activities include CO2, methane 

(CH4), nitrous oxide (N2O), 

hydrofluorocarbons (HFCs), 

perfluorocarbons (PFCs), and sulfur 

hexafluoride (SF6). These six GHGs, for 

the purposes of this final rule, are 

referred to collectively as ‘‘the six wellmixed GHGs,’’ or, simply, GHGs, and 

together constitute the ‘‘air pollutant’’ 

upon which the GHG thresholds in the 

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. The heating effect 

caused by the human-induced buildup 

of GHGs in the atmosphere is very likely 

the cause of most of the observed global 

warming over the last 50 years. A 

detailed explanation of greenhouse 

gases, climate change and its impact on 

health, society, and the environment is 


hsrobinson on DSK69SOYB1PROD with RULES_2
82442 Federal Register / Vol. 75, No. 250 / Thursday, December 30, 2010 / Rules and Regulations 

45 ‘‘Endangerment and Cause or Contribute 

Findings for Greenhouse Gases Under Section 

202(a) of the Clean Air Act.’’ 74 FR 66,496 

(December 15, 2009). 

46 ‘‘Light-Duty Vehicle Greenhouse Gas Emission 

Standards and Corporate Average Fuel Economy 

Standards; Final Rule.’’ 75 FR 25,324 (May 7, 2010). 

included in EPA’s technical support 

document (TSD) for the endangerment 

finding final rule (Docket ID No. EPA– 

HQ–OAR–2009–0472–11292). 

In the United States, the combustion 

of fossil fuels (e.g., coal, oil, gas) is the 

largest source of CO2 emissions and 

accounts for 80 percent of the total GHG 

emissions. Anthropogenic CO2

emissions released from a variety of 

sources, including fossil fuel 

combustion and industrial 

manufacturing processes that rely on 

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, all 

perturb the atmospheric concentration 

of CO2 and cause readjustments in the 

distribution of carbon within different 

reservoirs. More than half of the energyrelated emissions come from large 

stationary sources such as power plants, 

while about a third comes from 

transportation. Of the six well-mixed 

GHGs, four (CO2, CH4, N2O, 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 of GHGs. 

Different GHGs have different heattrapping capacities. The concept of 

Global Warning Potential 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 CO2

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 CO2e basis. For example, CH4 has a 

GWP of 21, meaning each ton of CH4

emissions would have 21 times as much 

impact on global warming over a 100- 

year time horizon as 1 ton of CO2

emissions. Thus, on the basis of heattrapping capability, 1 ton of CH4 would 

equal 21 tons of CO2e. The GWPs of the 

non-CO2 GHGs range from 21 (for CH4) 

up to 23,900 (for SF6). Aggregating all 

GHGs on a CO2e basis at the source level 

allows a facility to evaluate its total 

GHG emissions contribution based on a 

single metric. 

2. GHG Regulatory Actions 

Over the past year, EPA has 

completed four distinct actions related 

to greenhouse gases under the CAA. The 

result of these rules, in conjunction with 

the operation of the CAA, has been to 

trigger PSD applicability for GHG 

sources on and after January 2, 2011, but 

to limit the scope of PSD for those 

sources. These actions include, as they 

are commonly called, the 

‘‘Endangerment Finding’’ and ‘‘Cause or 

Contribute Finding,’’ which we issued in 

a single final action; 45 the Johnson 

Memo Reconsideration, noted 

previously; the ‘‘Light-Duty Vehicle 

Rule’’ (LDVR or Vehicle Rule); 46 and the 

‘‘Tailoring Rule,’’ also noted previously. 

a. Endangerment Finding, Vehicle Rule, 

Johnson Memo Reconsideration 

In the Endangerment Finding, which 

is governed by CAA section 202(a), the 

Administrator exercised her judgment, 

based on an exhaustive review and 

analysis of the science, to conclude that 

‘‘six greenhouse gases taken in 

combination endanger both the public 

health and the public welfare of current 

and future generations.’’ 74 FR at 66,496. 

The Administrator also found ‘‘that the 

combined emissions of these 

greenhouse gases from new motor 

vehicles and new motor vehicle engines 

contribute to the greenhouse gas air 

pollution that endangers public health 

and welfare under CAA section 202(a).’’ 

Id. 

The Endangerment Finding led 

directly to promulgation of the Vehicle 

Rule, also governed by CAA § 202(a), in 

which EPA set standards for the 

emission of greenhouse gases for new 

motor vehicles built for model years 

2012–2016. 75 FR 25,324. The Vehicle 

Rule established the first controls for 

GHGs under the CAA. 

The Johnson Memo Reconsideration— 

as well as the Tailoring Rule, which we 

discuss later—is governed by the PSD 

and Title V provisions in the CAA. It 

was issued to address the automatic 

statutory triggering of the PSD and Title 

V programs for GHGs due to the Vehicle 

Rule establishing controls for GHGs. 

The Johnson Memo Reconsideration 

provided EPA’s interpretation of a preexisting definition in its PSD regulations 

delineating the ‘‘pollutants’’ that are 

taken into account in determining 

whether a source must obtain a PSD 

permit and the pollutants each permit 

must control. The Johnson Memo 

Reconsideration stated that when the 

Vehicle Rule takes effect on January 2, 

2011, it will, in conjunction with the 

applicable CAA requirements, trigger 

the application of PSD to GHG-emitting 

sources. 75 FR 17,004. 

b. Tailoring Rule 

In the Tailoring Rule, EPA limited 

PSD applicability, at the outset, to only 

the largest GHG-emitting sources, and to 

phase-in PSD applicability, as 

appropriate, to smaller sources over 

time. 75 FR 31,514. In the Tailoring 

Rule, EPA identified the air pollutant 

that, if emitted or potentially emitted by 

the source in excess of specified 

thresholds, would subject the source to 

PSD requirements, as the aggregate of 

six GHGs: CO2, CH4, N2O, HFCs, PFCs, 

and SF6. EPA based this identification 

on the Vehicle Rule, which included 

applicability provisions specifying that 

the rule ‘‘contains standards and other 

regulations applicable to the emissions 

of those six greenhouse gases.’’ 75 FR at 

25686 (promulgating 40 CFR 86.1818– 

12(a)). The Tailoring Rule noted that it 

was because the Vehicle Rule subjected 

to regulation the pollutant that 

comprises the six GHGs, that PSD was 

triggered for that pollutant and that, as 

a result, the pollutant must be defined 

for PSD purposes in the same way as it 

is identified in the Vehicle Rule. 75 FR 

31,527. The Vehicle Rule identified the 

pollutant as the aggregate of the six 

gases because in the Endangerment 

Finding, the Administrator found that 

those six gases—which she described as 

long-lived and directly emitted GHGs— 

may reasonably be anticipated to 

endanger public health and welfare. 

c. Scope of PSD Applicability 

In the Tailoring Rule and subsequent 

rulemakings, commenters raised an 

issue concerning the applicability of 

PSD to non-NAAQS pollutants. A 

discussion of this issue is useful 

background information for the present 

action, including what we call the 

automatic-updating nature of PSD 

requirements under the CAA, that is, 

that as soon as a pollutant becomes 

subject to regulation under another CAA 

provision, it becomes subject to PSD. 

i. Applicability of PSD to Non-NAAQS 

Pollutants 

In the Tailoring Rule, EPA responded 

to a set of comments that PSD applies 

only to NAAQS pollutants, and not nonNAAQS pollutants such as GHGs. In 

brief, several commenters advanced the 

argument that primarily because the 

PSD provisions in CAA sections 161 

and 165(a) limit PSD applicability to 

sources located in attainment or 

unclassifiable areas, PSD applicability 

should be limited to the NAAQS 

pollutants for which the area in which 

the source is located is attainment or 

unclassifiable. On the basis of this 

interpretation, the commenters urged 


hsrobinson on DSK69SOYB1PROD with RULES_2
Federal Register / Vol. 75, No. 250 / Thursday, December 30, 2010 / Rules and Regulations 82443 

47 ‘‘Prevention of Significant Deterioration and 

Title V GHG Tailoring Rule: EPA’s Response to 

Public Comments,’’ p. 39. 

48 ‘‘Prevention of Significant Deterioration (PSD) 

and Nonattainment New Source Review (NNSR): 

Baseline Emissions Determination, Actual-toFuture-Actual Methodology, Plantwide 

Applicability Limitations, Clean Units, Pollution 

Control Projects—Final Rule,’’ 67 FR 80186 

(December 31, 2002) (NSR Reform rule). 

49EPA gave additional reasons why it does not 

agree that PSD applies only to NAAQS pollutants 

in the record for the Tailoring Rule, ‘‘Prevention of 

Significant Deterioration and Title V GHG Tailoring 

Rule: EPA’s Response to Public Comments,’’ May 

2010, pp.38–41; and in EPA’s court filings in 

defense of challenges to the Tailoring Rule. ‘‘EPA’s 

Response To Motions To Stay’’ 47–59 Coalition for 

Responsible Regulation v. EPA, No. 09–1322 (and 

consolidated cases) (DC Cir. 2010), Coalition for 

Responsible Regulation v. EPA, No. 09–1073 (and 

consolidated cases) (DC Cir. 2010), Coalition for 

Responsible Regulation v. EPA, No. 09–1092 (and 

consolidated cases) (DC Cir. 2010), Coalition for 

Responsible Regulation v. EPA, No. 09–1131 (and 

consolidated cases) (DC Cir. 2010) (hereafter, 

Coalition for Responsible Regulation v. EPA, No. 

09–1322 (and consolidated cases)). 

EPA to conclude that PSD does not 

apply to GHGs. 75 FR 31,560/2–3. 

EPA disagreed with these comments 

and reiterated its long-held view that 

PSD applies to ‘‘any pollutant subject to 

regulation under the CAA,’’ and that 

includes non-NAAQS pollutants. 75 FR 

31,560/3. EPA explained— 

We recognize, as we have said elsewhere, 

that a major purpose of the PSD provisions 

is to regulate emissions of NAAQS pollutants 

in an area that is designated attainment or 

unclassifiable for those pollutants. However, 

we do not read CAA sections 161 and the ‘‘in 

any area to which this part applies’’ clause in 

165(a), in the context of the PSD applicability 

provisions, as limiting PSD applicability to 

those pollutants. The key PSD applicability 

provisions are found in sections 165(a) and 

169(1). Section 165(a) states, ‘‘No major 

emitting facility on which construction is 

commenced after August 7, 1977, may be 

constructed in any area to which this part 

applies unless [certain requirements are met]. 

A ‘‘major emitting facility’’ is defined, under 

CAA section 169(1), as ‘‘any * * * stationary 

source[] which emit[s], or ha[s] the potential 

to emit, one hundred [or, depending on the 

source category, two hundred fifty] tons per 

year or more of any air pollutant.’’ As 

discussed elsewhere, EPA has long 

interpreted the term ‘‘any air pollutant’’ to 

refer to ‘‘any air pollutant subject to 

regulation under the CAA,’’ and for present 

purposes, will continue to read the ‘‘subject 

to regulation’’ phrase into that term. 

Although section 165(a) makes clear that 

the PSD requirements apply only to sources 

located in areas designated attainment or 

unclassifiable, it does not, by its terms, state 

that the PSD requirements apply only to 

pollutants for which the area is designated 

attainment or unclassifiable. Rather, section 

165(a) explicitly states that the PSD 

requirements apply more broadly to any 

pollutant that is subject to regulation. 

Id. 

EPA went on to discuss the 

statements by the D.C. Circuit 

concerning the PSD applicability 

provisions—which, again, according to 

their literal terms, apply PSD to ‘‘any air 

pollutant,’’ CAA section 165(a)(1), 

169(1)—in the seminal case interpreting 

the PSD requirements: Alabama Power 

v. Costle, 636 F.2d 323 (DC Cir. 1980). 

There, the DC Circuit noted that these 

PSD applicability provisions must be 

read to apply PSD quite broadly; indeed, 

the Court indicated they could apply 

even to air pollutants not yet regulated 

under other provisions of the Act. 636 

F.2d at 352–53 & n. 60.47

EPA also emphasized that EPA’s longstanding regulations have interpreted 

this provision broadly enough to 

capture non-NAAQS pollutants: 

In addition, it should not be overlooked 

that we have applied PSD to non-NAAQS 

pollutants since the inception of the program 

over 30 years ago. For example, prior to the 

1990 CAA Amendments, PSD applied to 

HAPs regulated under CAA section 112; and 

over the years, EPA has established 

significance levels for fluorides, sulfuric acid 

mist, hydrogen sulfide, TRS, reduced sulfur 

compounds, municipal waste combustor 

organics, municipal waste combustor metals, 

municipal waste combustor acid gases, and 

municipal solid waste landfill emissions, see 

40 CFR 51.166(b)(23)(i) * * *. Of course, the 

basis for all these actions is PSD’s 

applicability to these non-NAAQS air 

pollutants. We are not aware that EPA’s 

actions in establishing significance levels for 

these pollutants gave rise to challenges on 

grounds that the PSD provisions do not apply 

to them. As the U.S. Supreme Court recently 

stated in upholding an EPA approach in 

another context: ‘‘While not conclusive, it 

surely tends to show that the EPA’s current 

practice is a reasonable and hence legitimate 

exercise of its discretion * * * that the 

agency has been proceeding in essentially 

this fashion for over 30 years.’’ Entergy Corp. 

v. Riverkeeper, Inc., 129 S.Ct. 1498, 1509 

(2009) (citations omitted). 

75 FR 31,581/3 to 31,582/1 

To this, it may be added that the 

regulatory history of the PSD 

applicability provisions supports their 

broad application: EPA’s initial, 1977– 

78 rulemaking implementing the PSD 

program made explicit that the PSD 

program applied to ‘‘any pollutant 

regulated under the Clean Air Act.’’ 43 

FR 26380, 26403, 26406 (June 19, 1978) 

(promulgating 40 CFR 51.21(b)(1)(i)). In 

1979–1980, EPA revised the PSD 

program to conform to Alabama Power 

v. Costle, 636 F.2d 323 (DC Cir. 1980). 

44 FR 51924 (September 5, 1979) 

(proposed rule); 45 FR 52676 (August 7, 

1980) (final rule). In this rulemaking, 

EPA did not disturb the pre-existing 

provisions that applied the PSD 

program to regulated air pollutants. In 

October 1990, EPA prepared the ‘‘New 

Source Review Workshop Manual— 

Prevention of Significant Deterioration 

and Nonattainment Area Permitting’’ 

(draft NSR Manual), which although in 

draft form, and not a binding rule, has 

often been referenced as a reflection of 

EPA’s thinking on PSD permitting 

issues. See, Alaska Dept. of 

Conservation v. EPA, 540 U.S. 461, 476 

n. 7 (2004); In re: Indeck-Elwood, LLC, 

13 E.A.D. 133 n. 13 (EAB Sept. 27, 

2006); In re: Prairie State Generating 

Company, 13 E.A.D. 6 n. 2 (EAB Aug 24, 

2006). This manual states that PSD 

applies to ‘‘each pollutant regulated by 

the Act,’’ including ‘‘criteria and * * * 

noncriteria’’ pollutants. Draft NSR 

Manual, pp. A.18. See id. at A.28, A.30. 

In 1996 EPA proposed, and in 2002 

finalized what we call the NSR Reform 

Rule,48 which included a set of 

amendments to the PSD provisions that 

included revisions to conform to the 

1990 CAA Amendments. See 61 FR 

38250 (July 23, 1996), 67 FR 80186 

(December 31, 2002). In the preamble to 

the final rule, EPA noted that based on 

a request from a commenter, EPA was 

amending the regulations to ‘‘clarify 

which pollutants are covered under the 

PSD program.’’ EPA accomplished this 

by promulgating a definition for 

‘‘regulated NSR pollutant,’’ and by 

substituting that defined term for the 

phrase ‘‘pollutant regulated under the 

Act’’ that was previously used in various 

parts of the PSD regulations. 67 FR 

80240. The definition of ‘‘regulated NSR 

pollutant’’ includes several categories of 

pollutants, including, in general, 

NAAQS pollutants and precursors, 

pollutants regulated under CAA section 

111 NSPS, Class I or II substances 

regulated under CAA title VI, and a 

catch-all category, ‘‘[a]ny pollutant that 

otherwise is subject to regulation under 

the Act.’’ E.g., 40 CFR 52.21(b)(50). The 

explicit inclusion of Class I or II 

substances regulated under CAA title VI 

confirms that PSD applies to nonNAAQS pollutants. 75 FR 31,561/3 to 

31,562/1. 

In the Tailoring Rule, EPA went on to 

discuss other PSD and CAA provisions, 

including their legislative history and 

interpretation in the case law, that all 

support applying PSD to any pollutant 

this is subject to regulation, including 

non-NAAQS pollutants. Id. 31,560/2 to 

31,562/2.49

ii. Automatic Application of PSD to 

Newly Regulated Pollutants 

Under the PSD applicability 

requirements, PSD applies to sources 

automatically, that is, by operation of 

law, as soon as their emissions of 

pollutants become subject to regulation 


hsrobinson on DSK69SOYB1PROD with RULES_2
82444 Federal Register / Vol. 75, No. 250 / Thursday, December 30, 2010 / Rules and Regulations 

50 75 FR at 53,897/3 (proposed GHG PSD SIP 

call). 

51A detailed description of EPA’s 

implementation efforts, and the status of state 

compliance with those efforts, is included in 

Declaration of Regina McCarthy, Coalition for 

Responsible Regulation v. EPA, DC Cir. No. 09– 

1322 (and consolidated cases) (McCarthy 

Declaration), including Attachment 1 (Tables 1, 2, 

and 3), which can be found in the docket for this 

rulemaking. 

52Even so, EPA recognized that many SIPs with 

approved PSD programs would continue to require 

PSD permitting of GHG-emitting sources at the 

statutory thresholds because these SIPs would 

remain in place even after EPA finalized the 

Tailoring Rule. Until the states revised those SIPs, 

sources in those states would remain subject to 

those thresholds as a matter of both state and 

federal law. This would result in the same problems 

of overwhelming administrative burdens and costs 

that EPA designed the Tailoring Rule to address. To 

solve these problems, EPA encouraged each affected 

state to submit a SIP revision that EPA would 

approve to raise the thresholds to conform to the 

Tailoring Rule. EPA recognized that it would take 

time for the states to develop and submit for 

approval such SIP revisions, and for EPA to 

approve them. Accordingly, as an interim measure, 

EPA proposed, as part of the proposed Tailoring 

Rule, to narrow its approval of the existing EPAapproved SIPs so that those SIPs would remain 

approved only to the extent they regulate GHG 

emissions at or above the Tailoring Rule thresholds. 

Specifically, EPA proposed to rescind its approval 

of the SIP permitting threshold provisions to the 

extent they required PSD permits for sources whose 

GHG emissions fall below the proposed Tailoring 

Rule thresholds. 74 FR at 55,340/3 to 55,343/3 

(proposed Tailoring Rule). 

53 40 CFR 51.166(a)(7)(i), (b)(1)(i)(a), (b)(49). 

54Specifically, under the revised definition of 

‘‘subject to regulation,’’ sources that emit at least the 

75,000 and/or 100,000 tpy CO2e threshold amount 

of GHGs are subject to PSD as long as the amount 

of GHG emissions also exceeds, in general, 100/250 

tpy on a mass basis for new sources and zero tpy 

on a mass basis for modifications of existing 

sources. 40 CFR 51.166(b)(48), 75 FR at 31,606; see 

EPA Office of Air Quality Planning and Standards, 

‘‘PSD and Title V Permitting Guidance for 

Greenhouse Gases (November 2010). 

under the CAA. This is because CAA 

section 165(a)(1) prohibits ‘‘major 

emitting facilit[ies]’’ from constructing 

or modifying without obtaining a permit 

that meets the PSD requirements, and 

CAA section 169(1) defines a ‘‘major 

emitting facility’’ as a source that emits 

a specified quantity of ‘‘any air 

pollutant,’’ which, as noted earlier, EPA 

has long interpreted as any pollutant 

subject to regulation. Whenever EPA 

promulgates control requirements for a 

pollutant for the first time, that 

pollutant becomes subject to regulation, 

and any stationary source that emits that 

pollutant in sufficient quantities 

becomes a ‘‘major emitting facility’’ that, 

when it constructs or modifies, becomes 

subject to PSD without any further 

action from EPA or a state or local 

government. 

EPA regulations have long codified 

automatic PSD applicability. See 43 FR 

26380, 26403/3, 26406 (June 19, 1978) 

(promulgating 40 CFR 51.21(b)(1)(i)) and 

42 FR 57479, 57480, 57483 (November 

3, 1977) (proposing 40 CFR 

51.21(b)(1)(i)) (applying PSD 

requirements to a ‘‘major stationary 

source’’ and defining that term to 

include sources that emit specified 

quantities of ‘‘any air pollutant regulated 

under the Clean Air Act’’). Most 

recently, in the 2002 NSR Reform Rule, 

noted previously, EPA reiterated these 

requirements, although changing the 

terminology to ‘‘any regulated NSR 

pollutant.’’ 67 FR 80,186. EPA stated in 

the preamble: ‘‘The PSD program applies 

automatically to newly regulated NSR 

pollutants, which would include final 

promulgation of an NSPS applicable to 

a previously unregulated pollutant.’’ 67 

FR at 80240/1. 

In most states with approved PSD 

programs, PSD does apply 

automatically. However, in a minority of 

states with approved PSD programs, it 

does not.50 Instead, each time EPA 

subjects a previously unregulated air 

pollutant to regulation, these states must 

submit a SIP revision incorporating that 

pollutant into its program. Despite the 

time needed for the state to submit a SIP 

revision and EPA to approve it, the 

pollutant-emitting sources in the state 

become subject to PSD under the CAA 

as soon as EPA first subjects that 

pollutant to control. Because under 

CAA section 165(a)(1) and 169(1), as 

interpreted by EPA, a source that emits 

specified quantities of any air pollutant 

subject to regulation cannot construct or 

modify unless it first receives a PSD 

permit, as a practical matter, in a state 

with an approved PSD program that 

does not automatically update and that 

has not been revised to include the 

newly regulated pollutant, the sources 

may find themselves subject to the CAA 

requirement to obtain a permit, but 

without a permitting authority to issue 

that permit. As discussed later, this 

action is needed because GHG-emitting 

sources in Texas would otherwise 

confront that situation. 

In a recent decision, the 7th Circuit, 

mistakenly citing to PSD provisions 

when the issue before the court 

involved the separate and different nonattainment provisions of CAA sections 

171–193, concluded that sources could 

continue to abide by permitting 

requirements in an existing SIP until 

amended, even if that SIP does not 

comport with the law. United States v. 

Cinergy Corp., No. 09–3344, 2010 WL 

4009180 (7th Cir. Oct. 12, 2010). In stark 

contrast to the nonattainment provisions 

actually at issue in Cinergy—which are 

not self-executing and must therefore be 

implemented through a SIP–PSD is selfexecuting; it is the statute (CAA section 

165), not just the SIP, that prohibits a 

source from constructing a project 

without a permit issued in accordance 

with the Act. 

3. Implementation of GHG PSD 

Requirements 

Because PSD is implemented through 

the SIP system, EPA has taken a series 

of actions to address the obligations of 

states (including localities and other 

jurisdictions, as appropriate) to 

implement PSD requirements for GHGemitting sources. EPA has taken these 

actions through the Tailoring Rule and 

a series of subsequent actions.51

a. Tailoring Rule 

EPA proposed the Tailoring Rule by 

notice dated October 27, 2009, 74 FR 

55292. In that action, EPA proposed to 

phase in PSD applicability, for GHGs, 

starting with a threshold of 25,000 tpy 

on a CO2e basis. This threshold was 

above the statutory thresholds of 100 or 

250 tpy on a mass basis, depending on 

the source category, for new 

construction).52

EPA finalized the Tailoring Rule by 

notice dated June 3, 2010. 75 FR 31514. 

Comments on the proposed rule had 

persuaded EPA that the proposed GHGapplicability threshold was too low to 

avoid undue administrative burdens. 

Accordingly, in the final Tailoring Rule, 

EPA raised those threshold levels to, 

depending on the circumstances, 75,000 

and/or 100,000 tpy on a CO2e basis, 

while retaining the approach of a phasein. EPA established the initial levels in 

the first two steps of the phase-in 

schedule, committed the agency to take 

future steps addressing smaller sources, 

and excluded the smallest sources from 

PSD permitting for GHG emissions until 

at least April 30, 2016. 

In addition, in the Final Tailoring 

Rule, EPA incorporated the PSD 

thresholds for GHGs in the definition of 

the term ‘‘subject to regulation.’’ As 

noted previously, under EPA’s PSD 

regulations, PSD applies to a ‘‘major 

stationary source;’’ a ‘‘major stationary 

source’’ is defined as a source that emits 

100/250 tpy on a mass basis of a 

‘‘regulated NSR pollutant;’’ and a 

‘‘regulated NSR pollutant,’’ in turn, is 

defined as, among other things, a 

pollutant that is ‘‘subject to regulation’’ 

under the CAA.53 In the Tailoring Rule, 

EPA added a limitation to the term 

‘‘subject to regulation’’ so that the only 

GHG emissions that would be treated as 

‘‘subject to regulation’’ (and therefore 

subject to PSD) are those emitted at or 

above specified thresholds of, 

depending on the circumstances, 75,000 

and/or 100,000 tpy on a CO2e basis.54


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55Specifically, a state’s implementation of the 

Tailoring Rule in this manner prior to January 2, 

2011 would obviate the need for EPA to narrow its 

approval of that state’s SIP, as EPA had proposed 

in the proposed Tailoring Rule. Thus, in the Final 

Tailoring Rule, EPA delayed final action on its 

narrowing proposal so that EPA could gather 

information about the process and time-line for 

states to implement the Tailoring Rule. 

56Alternatively, a state could choose to apply its 

PSD program to sources below the Tailoring Rule 

thresholds and acquire sufficient resources to 

implement the program as expanded, but no state 

had indicated an intention to proceed in this 

manner. 

57McCarthy Declaration, paragraphs 28–33, page 

8, and Attachment 1, Table 1. 

58 Id., paragraphs 34–55, pages 8–12, and 

Attachment 1, Table 2. 

59Specifically, for these states, EPA has stated 

that it intends to finalize its proposal in the 

Tailoring Rule to narrow its approval of their PSD 

applicability provisions to only the extent they 

apply PSD to GHG-emitting sources at or above the 

Tailoring Rule thresholds, which we call the 

Narrowing Rule. Id. paragraph 90, page 19. In 

addition, recognizing that GHG-emitting sources 

also have permitting obligations under state law, 

EPA has strongly encouraged states to revise their 

state law as promptly as possible to eliminate the 

state PSD obligations of sources below the Tailoring 

Rule thresholds. Id. paragraph 92, page 19. 

60 Id. paragraphs 62–94, pages 13–20, and 

Attachment 1, Table 3. 

61 ‘‘Action to Ensure Authority to Issue Permits 

under the Prevention of Significant Deterioration 

Program to Sources of Greenhouse Gas Emissions: 

Finding of Substantial Inadequacy and SIP Call— 

Proposed Rule,’’ 75 FR 53892 (September 2, 2010); 

‘‘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). 

62 ‘‘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,’’ 75 FR 77,698 (December 13, 2010). 

Some states advised EPA that it is 

likely they would be able to implement 

the Tailoring Rule thresholds by 

interpreting the term ‘‘subject to 

regulation’’ in their SIPs, and without 

having to take further action. A state’s 

ability to take this approach would have 

implications for how EPA needed to 

implement the Tailoring Rule.55

Accordingly, in the Tailoring Rule, EPA 

began a process to gather more 

information about how states would 

implement permitting for GHG-emitting 

sources. 

b. 60-Day Letters 

To gather this information, EPA, in 

the Tailoring Rule, asked states to 

submit letters within 60 days of 

publication of the Tailoring Rule, which 

we refer to as the 60-day letters, 

concerning the status of their PSD 

program and their legal authority for 

applying PSD program to GHG-emitting 

sources. This information would help 

clarify, for each state, the two central 

issues for PSD applicability to GHGemitting sources: (i) Whether the state 

has an approved PSD program that 

applies to GHG-emitting sources; and 

(ii) if so, what action the state would 

take to limit the applicability of its PSD 

program to GHG-emitting sources at or 

above the Tailoring Rule thresholds.56

This information would assist EPA to 

determine what, if any, action it needed 

to take with respect to the states. 

Almost all states submitted 60-day 

letters, generally by August 4, 2010. The 

letters, along with other information 

EPA received through review of state 

requirements and further 

communications with state officials, 

indicate that the states, localities, and 

other jurisdictions may be divided into 

three categories, described below, for 

purposes of EPA’s implementation of 

the PSD program to GHG-emitting 

sources. 

c. The Three Categories of States and 

EPA’s Implementation Process 

The first category, which includes 7 

states, 35 subsections of states, the 

District of Columbia, American Samoa, 

Guam, Puerto Rico, the U.S. Virgin 

Islands, and Indian Territory, does not 

have an approved SIP PSD permitting 

program. Instead, federal requirements 

apply. Thus, implementation of PSD for 

GHG-emitting sources in these 

jurisdictions is the simplest of all the 

states: GHG-emitting sources will 

become subject to PSD and the 

thresholds in the Tailoring Rule will 

apply as of January 2, 2011 without 

further action.57

The second category includes 14 

states and a number of districts within 

states that have approved PSD SIPs, but 

those SIPs do not apply the PSD 

program to GHG-emitting sources. This 

group includes Texas, which is the 

focus of this action. The implementation 

process for this category is discussed 

later.58

The third category includes the 

remaining states, which have an 

approved SIP PSD program that applies 

to GHG-emitting sources. As for the 

implementation process for this 

category, some of these states have 

indicated that they are able to interpret 

their SIPs to apply PSD only to GHG 

emissions at or above the Tailoring Rule 

thresholds, and they do not need to 

revise their SIPs to do so. However, 

most indicated that they would need to 

submit SIP revisions to EPA in order to 

incorporate the Tailoring Rule 

thresholds. This means that in these 

states, until they do submit their SIP 

revisions and EPA approves them, 

sources emitting GHGs at or above the 

100/250 tpy levels will be subject to 

PSD requirements as of January 2, 2011 

if they construct or modify. EPA has 

encouraged these states to submit SIP 

revisions adopting the Tailoring Rule 

thresholds as soon as possible and some 

of these states have already done so. 

Moreover, almost all of these states are 

proceeding to revise their state law to 

reflect the Tailoring Rule thresholds and 

will do so by January 2, 2011 or very 

soon thereafter. In the meantime, EPA 

has finalized the Narrowing Rule so that 

as of January 2, 2011, at least for federal 

purposes, PSD will apply to GHGemitting sources only at the Tailoring 

Rule thresholds or higher.59 As a result 

of these state actions and EPA’s 

Narrowing Rule, by January 2, 2011 or 

shortly thereafter, in all or almost all of 

these states, only GHG-emitting sources 

at or above the Tailoring Rule 

thresholds will be subject to PSD 

requirements.60

d. SIP Call States, Including Texas 

As just noted, the second category, 

which includes Texas, includes 14 

states and some districts within states 

whose SIPs have an approved PSD 

program but do not have the authority 

to apply that program to GHG-emitting 

sources. For most of these states, 

including Texas, the reason is that their 

PSD applicability provision applies to 

any ‘‘pollutant subject to regulation’’ 

under the CAA (or a similar term), but 

other provisions of state law preclude 

automatic updating. As a result, this 

applicability provision covers only 

pollutants—not including GHGs—that 

were subject to regulation at the time 

the state adopted the applicability 

provision. 

After proposing action by notice dated 

September 2, 2010,61 EPA promulgated 

the final SIP call for 13 states, including 

Texas, by notice signed on December 1, 

2010, and published on December 13, 

2010, 75 FR 77,698, which we call the 

GHG PSD SIP Call or, simply, the SIP 

call.62 In this action, consistent with the 

requirements of CAA section 110(k)(5), 

EPA (i) issued a finding that the SIPs for 

13 states (comprising 15 state and local 

programs) are ‘‘substantially inadequate 

to * * * comply with any requirement 

of this Act’’ because their PSD programs 

do not apply to GHG-emitting sources as 

of January 2, 2011; (ii) issued a SIP call 

requiring submission of a corrective SIP 

revision; and (iii) established a 

‘‘reasonable deadline[] (not to exceed 18 

months after the date of such notice)’’ 

for the submission of the corrective SIP 

revision. This deadline ranges, for 

different states, from 3 weeks to 12 


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63McCarthy Declaration, p. 12, paragraph 55. 

64 In California’s PSD program is administered in 

its entirety by local jurisdictions. 

65McCarthy Declaration, p. 20, paragraph 98. 

There have been a few changes in the status of 

individual states since this time, but the overall 

picture remains the same. In no small part, the 

current state of EPA’s implementation effort is 

attributable to the fact that EPA has been in close 

communication with almost every state and many 

other jurisdictions, along with multi-state 

organizations such as the National Association of 

Clean Air Agencies (NACAA). In addition to the 

letters that states have sent responding to the 

Tailoring Rule (the 60-day letters) and proposed SIP 

Call (the 30-day letters), EPA officials, primarily 

through the Regional offices, have had numerous 

communications with their state counterparts. 

months after the date of the final SIP 

call, as discussed below. 

EPA justified its finding that the 

affected SIPs are ‘‘substantially 

inadequate’’ to comply with CAA 

requirements on grounds that (i) the 

CAA requires that PSD requirements 

apply to any stationary source that emits 

specified quantities of any air pollutant 

subject to regulation under the CAA, 

and those PSD requirements must be 

included in the approved SIPs; (ii) as of 

January 2, 2011, GHG-emitting sources 

will become subject to PSD; (iii) as a 

result, the CAA requires PSD programs 

to apply to GHG-emitting sources; and 

(iv) accordingly, the failure of any SIP 

PSD applicability provisions to apply to 

GHG-emitting sources means that the 

SIP fails to comply with these CAA 

requirements. 

In the SIP call proposal, EPA 

discussed in some detail the SIP 

submittal deadline under CAA section 

110(k)(5). Under this provision, in 

issuing a SIP call, EPA ‘‘may establish 

reasonable deadlines (not to exceed 18 

months after the date of such notice) for 

the submission of such plan revisions.’’ 

EPA proposed to allow each of the 

affected states up to 12 months from the 

date of signature of the final finding of 

substantial inadequacy and SIP call 

within which to submit the SIP revision, 

unless, during the comment period, the 

state expressly advised that it would not 

object to a shorter period—as short as 3 

weeks from the date of signature of the 

final rule—in which case EPA would 

establish the shorter period as the 

deadline. EPA stated that, assuming that 

EPA were to finalize the SIP call on or 

about December 1, 2010, as EPA said it 

intended to do in the proposal, then the 

earliest possible SIP submittal deadline 

would be December 22, 2010. 

EPA made clear that the purpose of 

establishing the shorter period as the 

deadline for any interested state is to 

accommodate states that wish to ensure 

that a FIP is in effect as a backstop to 

avoid any gap in PSD permitting. EPA 

also made clear that if a state did not 

advise EPA that it does not object to a 

shorter deadline, then the 12-month 

deadline would apply. EPA emphasized 

that for any state that receives a 

deadline after January 2, 2011, the 

affected GHG-emitting sources in that 

state may be delayed in their ability to 

receive a federally approved permit 

authorizing construction or 

modification. This is because after 

January 2, 2011, these sources may not 

have available a permitting authority to 

review their permit applications until 

the date that EPA either approves the 

SIP submittal or promulgates a FIP. 

EPA asked that each of the affected 

states write EPA a letter during the 

comment period to identify the deadline 

for SIP submission to which the state 

would not object if EPA established. We 

call these the 30-day letters. Each 

affected state wrote a 30-day letter to 

EPA, as requested. Except for Texas, 

each state identified a SIP submittal 

deadline, which differed among the 

states, and which ranged from three 

weeks to 12 months. In the final SIP 

call, EPA established SIP submittal 

deadlines identified by the states, 

except that EPA established a deadline 

of 12 months for Texas, in accordance 

with EPA’s proposal. Except for Texas, 

each state explained in its 30-day letter 

and in subsequent communications 

with EPA, that it was planning on either 

receiving a FIP or adopting a SIP and 

that it chose a deadline that would 

result in having either the FIP or an 

approved SIP, as appropriate, in place 

by January 2, 2011 or soon enough 

thereafter so as to avoid any hardship to 

its sources. In the final SIP call, EPA 

justified approving this three-week-to12-month time period, although 

expeditious, as meeting the CAA section 

110(k)(5) requirement to be a 

‘‘reasonable’’ deadline in light of: (i) The 

SIP development and submission 

process; (ii) the preference of the state; 

and (iii) the imperative to minimize the 

period when sources will be subject to 

PSD but will not have available a PSD 

permitting authority to act on their 

permit application and therefore may 

face delays in constructing or 

modifying. 

In the final SIP call, based on the 

states’ 30-day letters and other 

communications, EPA established a SIP 

submittal deadline of December 22, 

2010 for seven states. Each of the states 

indicated that it did not expect to 

submit a SIP revision by that date and 

instead expected to receive a FIP. On 

December 23, 2010, for each of the 

seven states, EPA issued a finding of 

failure to submit its corrective SIP 

revision by that deadline, and EPA 

promulgated a FIP. 

Except for Texas, EPA expects each of 

the other states subject to the SIP call to 

adopt a SIP revision and receive EPA 

approval of it, or receive a FIP, within 

the first half of 2011, and, in most cases, 

substantially sooner. Although none of 

these states will have a permitting 

authority in place as of January 2, 2011, 

none of these states expects that gap to 

pose meaningful difficulties for sources 

because, depending on the state, the gap 

is brief, the state does not expect any 

sources to seek a permit during the gap, 

or even if the state were the permitting 

authority during the gap, it could not 

complete processing the permits during 

that time.63

As discussed later, Texas has 

responded to the SIP call differently 

than the other states. As a result, its 

GHG-emitting sources do face the 

prospect of permitting delays. This 

rulemaking action addresses that 

situation. 

4. Summary of the Effect of EPA’s 

Implementation Actions in States Other 

Than Texas 

EPA recently summarized the status 

of its implementation efforts, for all 

three categories of sources, as follows: 

Overall, EPA has received information 

about the status of 99 jurisdictions (49 

states,64 4 territories, 45 localities, and the 

District of Columbia), and included that 

information in Attachment 1. Of these 

jurisdictions, 94 will have, for Federal law 

purposes, a PSD permitting program for GHG 

emissions at the Tailoring Rule thresholds on 

Jan. 2, 2011. Of these 94 entities, 84 will have 

made any necessary amendments to state or 

local law to ensure that state or local permits 

are not required for GHG emissions below 

Tailoring Rule thresholds. By the end of the 

first quarter of 2011, only one jurisdiction 

will not have authority to permit GHG 

sources, and that jurisdiction will obtain 

authority by July 1, 2011 and in the 

meantime, does not expect large sources 

seeking permits for their GHGs. In addition, 

by the end of the first quarter of 2011, all but 

one more state will have made any necessary 

amendments to state or local law to ensure 

that permits are not required for GHG 

emissions below Tailoring Rule levels. 1 

program with GHG permitting authority at 

the lower statutory levels has not yet 

determined how, and on which timeline, it 

will incorporate the Tailoring Rule 

thresholds into its state law.65

Thus, under EPA’s implementation 

program, (i) in every state, (a) only 

sources at or above the Tailoring Rule 

thresholds will be subject under federal 

law to obtain a PSD permit when they 

construct or modify as of January 2, 

2011, and (b) only those same sources 

will be subject under state law to obtain 

a PSD permit when they construct or 

modify as of January 2, 2011 or very 


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66Letter from Bryan W. Shaw, Chairman, Texas 

Commission on Environmental Quality, and Greg 

Abbott, Attorney General of Texas, to Hon. Lisa 

Jackson, Administrator, U.S. Environmental 

Protection Agency, and Dr. Alfredo ‘‘Al’’ 

Armendariz, Regional Administrator, U.S. 

Environmental Protection Agency, Region 6 (August 

2, 2010) (Texas’s 60-day letter), included in the 

docket for this rulemaking. 

67 In this explanation, Texas was referring to the 

PSD applicability provision that Texas adopted 

under State law in 2006, which differed slightly 

from the applicability provision approved into the 

SIP in 1993. 

soon thereafter; and (ii) in every state, 

except for Texas, as of January 2, 2011 

or very soon thereafter, GHG sources 

that construct or modify will be able to 

receive permits when they need them, 

so that the sources will not face 

obstacles to constructing and modifying. 

Again, Texas has responded to EPA’s 

implementation program in a manner 

that has resulted in its sources facing 

obstacles to constructing and modifying, 

as discussed next, which this 

rulemaking addresses. 

5. EPA’s Implementation Approach for 

Texas and Texas’s Response 

The following describes the progress 

to date of implementing PSD for GHG 

emissions in Texas, based on extensive 

communications between EPA and 

TCEQ. It should be borne in mind, as 

noted earlier, that Texas is in the second 

of the three categories of states, that is, 

it has an approved PSD program that 

does not apply to GHGs-emitting 

sources. 

a. Texas’s 60-Day Letter 

Texas’s 60-day letter provides the 

state’s clearest articulation of its 

response to EPA’s efforts to implement 

PSD for GHG-emitting sources at the 

Tailoring Rule thresholds beginning 

January 2, 2011. As noted previously, in 

the preamble to the final Tailoring Rule, 

EPA asked each state to send EPA a 

letter within 60 days to identify which 

category the state was in and what 

action the state intended to take. 

Specifically, with regard to sources in 

Category 2, EPA stated: 

In our proposed rule, we also noted that a 

handful of EPA-approved SIPs fail to include 

provisions that would apply PSD to GHG 

sources at the appropriate time. This is 

generally because these SIPs specifically list 

the pollutants subject to the SIP PSD program 

requirements, and do not include GHGs in 

that list, rather than include a definition of 

NSR regulated pollutant that mirrors the 

federal rule, or because the state otherwise 

interprets its regulations to limit which 

pollutants the state may regulate. At 

proposal, we indicated that we intended to 

take separate action to identify these SIPs, 

and to take regulatory action to correct this 

SIP deficiency. 

We ask any state or local permitting agency 

that does not believe its existing SIP provides 

authority to issue PSD permits to GHG 

sources to notify the EPA Regional 

Administrator by letter, and to do so no later 

than August 2, 2010. This letter should 

indicate whether the state intends to 

undertake rulemaking to revise its rules to 

apply PSD to the GHG sources that will be 

covered under the applicability thresholds in 

this rulemaking, or alternatively, whether the 

state believes it has adequate authority 

through other means to issue federallyenforceable PSD permits to GHG sources 

consistent with this final rule. For any state 

that lacks the ability to issue PSD permits for 

GHG sources consistent with this final rule, 

we intend to undertake a separate action to 

issue a SIP call, under CAA section 110(k)(5). 

As appropriate, we may also impose a FIP 

through 40 CFR 52.21 to ensure that GHG 

sources will be permitted consistent with this 

final rule. 

75 FR 31582/3. 

With regard to states in category 3, 

EPA requested that in the states’ 60-day 

letter, 

The state should explain whether it will 

apply EPA’s meaning of the term ‘‘subject to 

regulation’’ and if so, whether the state 

intends to incorporate that meaning of the 

term through interpretation, and without 

undertaking a regulatory or legislative 

process. If a state must undertake a regulatory 

or legislative process, then the letter should 

provide an estimate of the time needed to 

adopt the final rules. If a state chooses not 

to adopt EPA’s meaning by interpretation, the 

letter should address whether the state has 

alternative authority to implement either our 

tailoring approach or some other approach 

that is at least as stringent, whether the state 

intends to use that authority. If the state does 

not intend to interpret or revise its SIP to 

adopt the tailoring approach or such other 

approach, then the letter should address the 

expected shortfalls in personnel and funding 

that will arise if the state attempts to carry 

out PSD permitting for GHG sources under 

the existing SIP and interpretation. 

For any state that is unable or unwilling to 

adopt the tailoring approach by January 2, 

2011, and that otherwise is unable to 

demonstrate adequate personnel and 

funding, we will move forward with 

finalizing our proposal to limit our approval 

of the existing SIP. 

75 FR 31582/3. 

On August 2, 2010, Texas submitted 

its 60-day letter, signed by the Texas 

Attorney General and the Chairman of 

the Texas Commission on 

Environmental Quality.66 In that letter, 

Texas responded specifically to EPA’s 

request that ‘‘any state * * * that does 

not believe its existing SIP provides 

authority to issue PSD permits to GHG 

sources to notify [EPA and] * * * 

indicate whether the state intends to 

* * * to revise its rules to apply PSD 

to * * * GHG sources’’ by stating: 

‘‘Texas has neither the authority nor the 

intention of interpreting, ignoring, or 

amending its laws in order to compel 

the permitting of greenhouse gas 

emission.’’ Id. p. 1. Texas offered several 

explanations for this position. First, 

Texas noted: 

Texas’ stationary source permitting 

program encompasses all ‘‘federally regulated 

new source review pollutants,’’ including, 

‘‘any pollutant that otherwise is subject to 

regulation under the [federal Clean Air Act].’’ 

30 Tex. Admin. Code § 116.12(14)(D). The 

rules of the Texas Commission on 

Environmental Quality (TCEQ), like the 

EPA’s rules, do not define the phrase ‘‘subject 

to regulation.’’ 

Id. p. 2. Texas then explained that it had 

several objections to interpreting the 

phrase ‘‘subject to regulation’’ to allow 

regulation of GHGs. For one thing, 

according to Texas, long-standing state 

case law precluded the term—and the 

PSD applicability provisions generally— 

from automatically incorporating newly 

regulated pollutants. Specifically, Texas 

said: 67

* * *Texas’ stationary source permitting 

program encompasses all ‘‘federally regulated 

new source review pollutants,’’ including 

‘‘any pollutant that otherwise is subject to 

regulation under the [federal Clean air Act].’’ 

30 Tex. Admin. Code § 116.12(14)(D). This 

delegation of legislative authority to the EPA 

is limited solely to those pollutants regulated 

when Texas Rule 116.12 was adopted (1993) 

and last amended (2006). As the Texas 

Supreme Court has explained, ‘‘The general 

rule is that when a statute is adopted by a 

specific descriptive reference, the adoption 

takes the statute as it exists at that time, and 

the subsequent amendment thereof would 

not be within the terms of the adopting act.’’ 

Trimmer v. Carlton, 296 S.W. 1070 (1927). 

Thus, in order for Texas Rule 116.12 to pass 

constitutional muster, it must be limited to 

adopting by reference the definition of 

‘‘subject to regulation’’ in existence when 

Rule 116.12 was last amended in 2006. In 

other words, Texas Rule 116.12 cannot 

delegate authority to the EPA to define 

‘‘subject to regulation’’ in 2010 to include 

pollutants that were not ‘‘subject to 

regulation’’ in 2006. 

Id. at 4. 

Secondly, Texas took the position that 

PSD applies only to NAAQS pollutants, 

and not non-NAAQS pollutants. Texas 

stated: 

The only sensible interpretation of the 

Clean Air Act is one that requires the EPA 

to promulgate a National Ambient Air 

Quality Standard (NAAQS) for greenhouse 

gases before the EPA can require PSD 

permitting of greenhouse gases.* * * EPA, 

however, has not developed a NAAQS for 

greenhouse gases. * * * 

Id. at 4–5. 

Texas provided a more detailed 

exposition of its view that PSD applies 


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68 ‘‘State of Texas’s Motion For A Stay Of EPA’s 

Endangerment Finding, Timing Rule, and Tailpipe 

Rule,’’ Coalition for Responsible Regulation v. EPA, 

No. 09–1322 (and consolidated cases) (September 

15, 2010). On December 10, 2010, the DC Circuit 

denied Texas’s, and other parties’, motions to stay. 

Order, Coalition for Responsible Regulation v. EPA, 

No. 09–1322 (and consolidated cases) (December 

10, 2010). 

69 ‘‘State of Texas’s Motion For A Stay Of EPA’s 

Greenhouse Gas Tailoring Rule,’’ Coalition for 

Responsible Regulation v. EPA, No. 09–1322 (and 

consolidated cases) (September 15, 2010) (Texas’s 

Motion to Stay the Tailoring Rule). 

70Texas’s Motion to Stay Three GHG Actions, at 

27. 

71 Id. at 5. 

72 ‘‘Texas Commission on Environmental Quality 

Comments on Actions 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, Docket ID No. EPA–HQ–OAR–2010– 

0107, FRL–9190–7 Federal Implementation Plan 

(FIP), Docket ID No EPA–HQ–OAR–2010–0107, 

FRL–9190–8 (October 4, 2010) (Texas 30-day letter). 

73Final SIP Call, 75 FR at 77706/2–3 and n. 18. 

74Texas’s Motion to Stay the Tailoring Rule, pp. 

2, 16. 

only to NAAQS pollutants in its 

challenges before the D.C. Circuit to 

EPA’s GHG actions, where Texas moved 

to stay the Endangerment Finding, the 

Vehicle Rule, and the Johnson Memo 

Reconsideration (Texas’s Motion to Stay 

Three GHG Actions).68 (In a separate 

motion, Texas also moved to stay the 

Tailoring Rule.69) There, Texas 

reiterated arguments based on the text of 

some of the CAA PSD provisions that, 

in Texas’s view, lead to the conclusion 

that the CAA precludes applying PSD to 

non-NAAQS. As noted previously, these 

arguments were raised by commenters 

to the Tailoring Rule. Texas concluded 

that EPA’s efforts to apply PSD to 

GHGs— 

Thus violates the CAA. Moreover, [EPA’s] 

interpretation of the CAA is not entitled to 

deference because the text of the statute is 

unambiguous. Chevron, U.S.A. v. NRDC, 467 

U.S. 837, 842 (1984) (the Agency must give 

effect to the unambiguously expressed intent 

of Congress). Accordingly, EPA’s attempt to 

short cut the CAA’s NAAQS process in order 

to regulate GHG emissions from stationary 

sources through PSD and Title V must fail.70

At the close of its 60-day letter, Texas 

added, ‘‘In the event a court concludes 

EPA’s actions comport with the law, 

Texas specifically reserves and does not 

waive any rights under the federal Clean 

Air Act or other law with respect to the 

issues raised herein.’’ 71

b. Texas’s 30-Day Letter 

As noted previously, in the GHG PSD 

SIP call proposal, EPA proposed to 

establish, for each affected state, a 

deadline of 12 months from the date of 

signature of the final SIP call for 

submitting the corrective SIP revision, 

unless the state expressly advised EPA 

in its 30-day letter that it would not 

object to a shorter period. Texas 

submitted a 30-day letter on October 4, 

2010,72 and in that letter, voiced various 

objections to the proposed SIP call. 

Texas reiterated its view that PSD is 

limited to NAAQS pollutants, and 

therefore cannot apply to GHGs, and 

added that the SIP call is ‘‘based on an 

impermissible interpretation of the 

[Clean Air Act]. EPA cannot * * * 

impose permitting through [the PSD] 

program without first setting a NAAQS. 

* * * ’’ Texas 30-day letter p. 2, 4. EPA 

responded to those objections in the 

final SIP call.73

In its 30-day letter, Texas went on to 

discuss the SIP submission schedule 

and FIP that EPA proposed, but Texas 

declined EPA’s invitation to identify a 

specific deadline for the state’s SIP 

submission. As a result, in the final SIP 

call, EPA was obliged to establish the 

default SIP submission deadline for 

Texas of December 1, 2011, in 

accordance with EPA’s proposal. 

Because Texas has clearly stated that it 

does not intend, and, in its view, does 

not have the authority, to adopt a SIP 

revision to apply PSD to GHG-emitting 

sources, EPA expects to promulgate a 

FIP to do so. But, again, because Texas 

did not identify an earlier deadline for 

its SIP submittal, the earliest that EPA 

could promulgate such a FIP would be 

December 2, 2011. Under this approach, 

due to the position Texas has taken, 

absent further action, sources in Texas 

could not expect to have a permitting 

authority with authority to issue 

preconstruction permits for their GHG 

emissions until that December 2, 2011 

date. As a result, absent further action, 

sources in Texas would face obstacles in 

constructing or modifying before that 

date. 

Texas’s 30-day letter indicates that 

Texas was well aware of the 

consequences of its decision not to 

identify a specific deadline for its SIP 

submission, but had several reasons for 

making that decision. These included its 

view, again, that PSD applies only to 

NAAQS pollutants, and also that EPA 

was required to employ a different 

process for requiring a SIP revision, one 

that would have provided the state with 

more time to adopt a SIP revision. Texas 

30-day letter at 4–5. In addition, Texas 

asserted that there is no reason to allow 

EPA to promulgate an early FIP for the 

benefit of Texas’s sources because, in 

Texas’s view, for practical reasons, EPA 

could not issue those permits for the 

‘‘foreseeable future’’ anyway. 

Specifically, Texas explained that EPA 

had not issued guidance for determining 

BACT, the key element of a PSD permit 

for a GHG source. Texas added that even 

after EPA issued that guidance, BACT 

will, in Texas’s view, remain uncertain 

and contentious, and the guidance will 

be of limited usefulness until the 

control technology is proven. Id. at 5. 

Texas added that ‘‘[i]ndustry should be 

particularly concerned about EPA’s lack 

of resources and experience to issue 

these permits * * *.’’ Id. at 6. Texas 

concluded, ‘‘The result of all this is that, 

even under a FIP, it is unlikely that 

construction of new major GHG sources 

or major modifications will commence 

in the foreseeable future.’’ Id. at 6. 

It should be noted that Texas stated in 

filings before the D.C. Circuit in which 

it challenged the Tailoring Rule that it 

believed 167 projects in Texas would be 

affected by the lack of a permitting 

authority during 2011.74

IV. Interim Final Action 

In this action, EPA is taking the 

following actions on an interim final 

basis to ensure that the PSD program in 

Texas complies with the CAA. First, 

EPA is determining that the 

Administrator’s action approving the 

Texas SIP PSD program was in error 

under CAA section 110(k)(6). 

Second, EPA, in the same manner as 

its action to approve the Texas SIP PSD 

program, is revising such action as 

appropriate without requiring any 

further submission from Texas. Id. The 

appropriate revision is to convert the 

previous approval to a partial approval 

and a partial disapproval. The partial 

approval applies to the extent that 

Texas’s PSD program actually covers 

pollutants that are required to be 

included in PSD. The partial 

disapproval applies to the extent that 

Texas failed to address or to include 

assurances of adequate legal authority 

(required under CAA section 

110(a)(2)(E)(i)) for the application of 

PSD to each newly regulated pollutant, 

including non-NAAQS pollutants, 

under the CAA. Note that as an 

alternative basis to CAA section 

110(k)(6) for taking these first two steps, 

EPA relies on its inherent 

administrative authority to reconsider 

its previous action. 

Third, in this rulemaking, EPA is 

promulgating a FIP to apply appropriate 

measures to assure that EPA’s PSD 

regulatory requirements will apply to 

non-NAAQS pollutants that are newly 

subject to regulation under the CAA that 

the Texas PSD program does not already 

cover. At present, the only such 

pollutant is GHGs. Therefore, EPA’s FIP 

will at present apply the EPA regulatory 

PSD program in the GHG portion of PSD 


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permits for GHG-emitting sources in 

Texas, and EPA commits to take 

whatever steps are appropriate if, in the 

future, Texas fails to apply PSD to 

another newly regulated non-NAAQS 

pollutant. 

In light of the immediate need of 

Texas’s GHG-emitting sources for a 

permitting authority to process their 

permit applications for GHGs, EPA is 

promulgating this action immediately 

though an interim final rule, in reliance 

on the good cause exemption from 

notice-and-comment rulemaking under 

section 553(b)(3)(B) of the 

Administrative Procedures Act. This 

action will remain in effect until April 

30, 2011. At the same time, EPA is 

initiating a notice-and-comment 

rulemaking that mirrors this one and 

that EPA expects to replace this one. 

A. Determination That EPA’s Previous 

Approval of Texas’s PSD Program Was 

in Error 

In applying CAA section 110(k)(6), 

EPA must first ‘‘determine[] that the 

Administrator’s action approving * * * 

[the Texas PSD program] was in error 

* * *.’’ EPA has determined that the 

Texas PSD program had flaws at the 

time Texas submitted it and EPA 

approved it, so that EPA’s approval was 

in error. 

1. Gaps in Texas’s PSD Program 

Concerning Application of PSD to 

Pollutants Newly Subject to Regulation 

and Concerning Assurances of Legal 

Adequacy 

Texas’s PSD program, although 

approved by EPA, contained important 

gaps concerning the application of PSD 

to pollutants newly subject to 

regulation, including non-NAAQS 

pollutants, and Texas’s legal authority 

for doing so. 

a. Gaps in Texas’s PSD Program at the 

Time of EPA Approval 

The application of the PSD program to 

pollutants newly subject to regulation, 

including non-NAAQS pollutants, is a 

key component of the program. As 

noted earlier, it is EPA’s long-standing 

position that PSD applies to all such 

pollutants, and most of the states’ PSD 

programs do apply to such pollutants 

automatically, as soon as those 

pollutants become subject to regulation. 

In particular, as noted previously, 

EPA had previously made clear to 

Texas, during 1980 and again during 

1983, that PSD applies to non-NAAQS 

pollutants. Because Texas’s PSD 

program, unlike that of most states, did 

not automatically apply to such 

pollutants, it was important that during 

the time when Texas submitted SIP 

revisions and EPA acted on them, 1985– 

1992, that Texas address the application 

of PSD to pollutants newly subject to 

regulation. 

It is clear from the record that both 

Texas and EPA were well aware that the 

Texas PSD rules’ IBR of EPA PSD 

regulatory requirements did not 

automatically update. Indeed, when 

EPA promulgated the NAAQS for PM10, 

a previously unregulated pollutant, and 

thereby subjected that pollutant to PSD 

for the first time, Texas revised its PSD 

rules to update the IBR and thereby 

assure that the state PSD program 

applied to PM10.

Had Texas recognized that following 

approval of its PSD program, EPA 

would likely continue to subject 

previously unregulated pollutants to 

regulation, and therefore to PSD for the 

first time, Texas could have addressed 

how it would handle that situation. 

Texas could have provided both 

assurances that the state would apply 

PSD to such pollutants and information 

as to the method and timing for doing 

so. The most likely method would be 

through a separate SIP revision. The 

timing would most likely relate to the 

time necessary to adopt and submit a 

SIP revision. This timing issue is 

important because the sources emitting 

pollutants are subject to PSD under the 

CAA as soon as the pollutants become 

subject to regulation, but if the SIP PSD 

program does not automatically apply to 

the sources, then the state does not have 

authority to issue permits to the sources 

as soon as the sources become required 

to obtain the permits. By comparison, as 

noted earlier in this preamble, Texas 

committed to submit a SIP revision if a 

SIP inadequacy led to an increments 

violation. 

However, there is no indication in the 

record of Texas’s SIP submissions that 

Texas specifically addressed this issue 

of the treatment of pollutants that would 

newly become subject to PSD after 

Texas’s PSD SIP was approved, or that 

Texas provided any such information as 

to method or timing. Nor is there any 

indication in the record that during this 

1985–92 period, EPA identified this 

issue and sought such information from 

Texas. 

Texas did provide the 1987 Texas 

PSD Commitments Statement, in which 

Texas agreed to ‘‘implement and enforce 

the federal requirements for [PSD] as 

specified in [EPA regulations] by 

requiring all new major stationary 

sources and major modifications to 

obtain air quality permits as provided in 

TACB regulation VI, Control of Air 

Pollution by Permits for New 

Construction and Modification.’’ 

However, this 1987 statement does not 

specifically address the application of 

PSD to pollutants newly subject to 

regulation. It commits TACB to require 

‘‘all new major stationary sources and 

major modifications to obtain air quality 

permits as provided in TACB regulation 

VI * * * ’’, but that regulation VI does 

not automatically update. 

Texas also provided the 1989 Texas 

PSD Commitments Letter, in which 

Texas generally committed ‘‘to 

implement EPA requirements relative to 

[PSD].’’ However, as quoted previously, 

this letter was phrased generally and 

did not specifically commit to apply 

PSD to pollutants newly subject to 

regulation, including non-NAAQS 

pollutants; nor did the letter identify the 

method and timing for doing so. 

Accordingly, we do not read this letter 

as a commitment by Texas to apply PSD 

to each newly regulated pollutant, 

including non-NAAQS pollutants, 

whether through a SIP revision or some 

other method, or on any particular timetable. Moreover, although EPA approved 

the Texas PSD program in reliance on 

the letter, EPA indicated, in the final 

approval preamble, that the scope and 

binding impact of the letter were limited 

and that Texas retained discretion in 

implementing the PSD program. 

In addition, the rulemaking record for 

Texas’s PSD program does not indicate 

that Texas provided, as required under 

CAA § 110(a)(2)(E)(i), assurances that 

Texas had adequate legal authority to 

carry out the PSD program, including, 

insofar as relevant for this rulemaking, 

applying PSD to pollutants newly 

subject to regulation, among them nonNAAQS pollutants. Some 15 years 

previously, in Texas’s 1972 submission 

of its original SIP, the state had 

provided assurances of legal authority to 

carry out the SIP, and EPA had 

approved those assurances. But the 

record for the PSD SIP submission does 

not indicate whether, or how, that legal 

authority applied to PSD applicability to 

such pollutants. In submitting the PSD 

SIP program, the TACB provided 

general references to legal authority, but 

the TACB did not indicate whether PSD 

applies to such pollutants either. Nor 

did the Texas PSD Commitments Letter 

specifically identify legal authority to 

apply PSD to such pollutants. Nor did 

the assurance of legal authority to apply 

the Texas PSD program to large 

municipal waste combustors, as 

required by the 1990 CAA 

Amendments, which assurances Texas 

apparently made in a 1992 conference 

call with EPA Region 6 officials, address 

legal authority to apply PSD to 

pollutants that newly become subject to 

PSD as a result of EPA regulation. 

Therefore, the Texas PSD SIP 

submittal contained gaps: It did not 


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75As noted previously, Texas has also recently 

confirmed, in Texas’ 60-day letter, that its PSD 

program does not automatically apply to pollutants 

newly subject to regulation. 

76See Texas ‘‘Motion to Stay Three GHG Actions’’ 

27, Coalition for Responsible Regulation v. EPA, No. 

09–1322 (and consolidated cases). 

77See 43 FR 26380, 26403/3, 26406 (June 19, 

1978) (promulgating 40 CFR 51.21(b)(1)(i)) and 42 

FR 57479, 57480, 57483 (November 3, 1977) 

(proposing 40 CFR 51.21(b)(1)(i)) (applying PSD 

requirements to a ‘‘major stationary source’’ and 

defining that term to include sources that emit 

specified quantities of ‘‘any air pollutant regulated 

under the Clean Air Act’’). 

78 It should be noted that Texas has applied its 

PSD program to non-NAAQS pollutants because 

Texas has IBR’d EPA’s PSD regulatory requirements 

and those requirements apply to non-NAAQS 

pollutants. However, as noted earlier, Texas has 

made clear that it has no intention of submitting a 

SIP revision to apply PSD to GHGs. All this is 

consistent with the view described previously that 

Texas interprets its PSD applicability provision to 

authorize it to apply PSD to non-NAAQS pollutants 

at Texas’s discretion, but that Texas does not view 

itself as required to apply PSD to non-NAAQS 

pollutants. 

address the application of PSD to 

pollutants newly subject to regulation, 

including non-NAAQS pollutants; and 

it did not include any information 

concerning Texas’s methods or timing 

for doing so. Nor did the program 

provide assurances that the state had 

adequate legal authority to apply PSD to 

such pollutants. 

b. Recent Statements by Texas That 

Confirm the Gaps in Texas’s PSD 

Program 

Texas has recently made several 

statements that confirm that at the time 

EPA approved the state’s PSD program, 

that program had gaps.75

(i). Gap Concerning Application of PSD 

to All Pollutants Newly Subject to 

Regulation, Including Non-NAAQS 

Pollutants 

First, Texas has made clear that it is 

not required to apply PSD to nonNAAQS pollutants that are newly 

subject to regulation, including GHGs. 

Specifically, in its August 2, 2010 

60-day letter, Texas stated that it 

interprets the CAA PSD applicability 

provisions to apply to only NAAQS 

pollutants, and therefore to not include 

non-NAAQS pollutants, among them 

GHGs. Texas asserted that ‘‘the only 

sensible interpretation of the CAA’’ is 

that PSD applies to only NAAQS 

pollutants. Texas 60-day letter, p. 4. 

Similarly, in its court challenge to EPA’s 

four GHG rules, Texas stated that its 

interpretation is mandated under 

Chevron step 1. There, Texas stated that 

EPA’s ‘‘interpretation of the CAA [that 

PSD applies to non-NAAQS pollutants] 

is not entitled to deference because the 

text of the statute is unambiguous. 

Chevron, U.S.A. v. NRDC, 467 U.S. 837, 

842 (1984) (the Agency must give effect 

to the unambiguously expressed intent 

of Congress).’’ 76 As noted previously, 

EPA responded at length to this 

argument in the Tailoring Rule and in 

EPA’s response in the court challenge to 

EPA’s GHG rules. EPA asserts that the 

CAA mandates that PSD apply to nonNAAQS pollutants, including GHGs, 

once they become subject to regulation; 

and EPA is not reopening this issue on 

the merits in this rulemaking. 

For present purposes, however, what 

is important is that Texas takes the 

position that under a Chevron step 1 

reading of the CAA, the PSD program 

does not apply to non-NAAQS 

pollutants. This position has important 

ramifications for how Texas must 

interpret EPA’s PSD applicability 

regulations and for the meaning of 

Texas’s SIP PSD applicability 

provisions. As noted previously, under 

EPA’s current regulations, PSD applies 

to ‘‘any pollutant that otherwise is 

subject to regulation under the [CAA].’’ 

52.166(b)(49)(iv). These regulations 

have read this way since they were 

revised in EPA’s 2002 NSR Reform Rule, 

and the regulations that predated them 

were phrased in much the same way: 

They applied PSD to ‘‘any air pollutant 

regulated under the Clean Air Act.’’ 77

These regulations are based on the CAA 

PSD applicability requirements, and as 

a result, cannot apply PSD to any 

pollutants that the CAA does not itself 

subject to PSD. Accordingly, although 

Texas did not specifically address the 

meaning of EPA’s regulations in its 60- 

day letter or court filings, it must be that 

in Texas’s view, these EPA regulations 

may lawfully apply PSD to only NAAQS 

pollutants. 

Texas’s SIP PSD applicability 

provisions, in turn, mirror EPA’s. As 

quoted earlier, Texas’s EPA-approved 

PSD applicability provisions apply PSD 

to ‘‘any air pollutant subject to 

regulation under the [Clean Air] Act.’’ 

Although these Texas provisions mirror 

EPA’s regulatory applicability 

provisions—which, again, Texas 

appears to interpret as limited to 

applying PSD only to NAAQS 

pollutants—Texas is authorized to apply 

them more expansively than the EPA 

regulations. This is because a state must 

comply with CAA requirements as a 

minimum, but retains authority to 

impose additional or more stringent 

requirements. CAA section 116. 

Therefore, it is in accordance with 

Texas’s view that the CAA and EPA 

regulatory requirements for PSD 

applicability be limited to NAAQS 

pollutants, that Texas would 

nevertheless consider itself 

authorized—but not required—to apply 

its PSD program to particular nonNAAQS pollutants. This position would 

allow Texas, in effect, to choose which 

non-NAAQS pollutants to subject to 

PSD. 

In fact, Texas has clearly stated that 

it does not consider itself required to 

apply its PSD program to one nonNAAQS pollutant in particular: GHGs. 

In its 60-day letter, Texas stated: ‘‘Texas 

has neither the authority nor the 

intention of interpreting, ignoring, or 

amending its laws in order to compel 

the permitting of greenhouse gas 

emissions.’’ Texas 60-day letter, at 1. 

Texas’s letter went on to provide 

numerous reasons for why it did not 

believe EPA lawfully subjected GHGs to 

PSD; why, in any event, EPA was 

required to allow states more time 

before PSD would apply to GHGemitting sources; and, as noted 

previously, why, in any event, Texas’ 

SIP does not automatically update to 

apply PSD to newly regulated 

pollutants. Texas added, ‘‘[i]n the event 

a court concludes EPA’s actions 

comport with the law, Texas specifically 

reserves and does not waive any rights 

under the federal Clean Air Act or other 

law with respect to the issues raised 

here.’’ Texas 60-day letter, p. 5. With 

this statement, Texas intimated that it 

may not consider itself obligated to 

apply PSD to GHGs even if a Court 

dismissed all of Texas’s arguments and 

upheld all of EPA’s actions that lead to 

the requirement to apply PSD to GHGs. 

With these two statements—that (i) 

‘‘Texas has neither the authority nor the 

intention of interpreting, ignoring, or 

amending its laws in order to compel 

the permitting of greenhouse gas 

emissions,’’ and (ii) Texas would not 

necessarily consider itself bound by 

EPA requirements even if those 

requirements are upheld in Court— 

Texas has made clear that it does not 

view itself as obligated to apply PSD to 

GHGs under the CAA. Thus, these 

statements confirm Texas’s view that it 

is not obligated to apply PSD to each 

newly regulated non-NAAQS, 

including, of course, GHGs.78

These statements from Texas are 

significant because they confirm that 

Texas’s PSD program, as approved by 

EPA, had an important gap: Texas did 

not address the applicability of its PSD 

program to pollutants newly subject to 

regulation, including non-NAAQS 

pollutants, such as by providing 

assurances that Texas would take action 

to apply PSD to such pollutants or 

describing the methods (such as SIP 

revision) and timing for doing so. 


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79By the same token, we see nothing in these 

recent statements to indicate that Texas views itself 

as rescinding any pre-existing understanding that it 

would apply PSD to each such pollutant. 80 57 FR at 28095/2, 28096/1. 

Moreover, Texas’s recent statements are 

consistent with the view that Texas’s 

silence on the subject at the time of the 

PSD SIP action means that Texas did 

not, at that time, view itself as obligated 

to apply PSD to each pollutant.79

In particular, Texas’s recent statement 

that the CAA PSD provisions are clear 

by their terms, as a matter of Chevron 

step 1, that they do not apply to nonNAAQS pollutants, suggests that Texas 

would have viewed the CAA PSD 

provisions the same way at the time 

Texas submitted its PSD program. As 

noted earlier, the Texas Attorney 

General and the Chairman of the Texas 

Commission on Environmental Quality, 

who are the joint signatories of Texas’s 

60-day letter, are of the view that ‘‘[t]he 

only sensible interpretation of the Clean 

Act’’ is that PSD applies only to NAAQS 

pollutants, and not non-NAAQS 

pollutants. Texas 60-day letter, p. 4. 

Texas has confirmed its reading—and 

clarified that it is based on a Chevron 

step 1 interpretation—in filings before 

the D.C. Circuit. The fact that these high 

state officials view this reading of the 

CAA as, again, ‘‘[t]he only sensible 

reading,’’ indicates that in the past, 

Texas is less likely to have adopted the 

opposite reading, which would be that 

the CAA mandates that PSD applies to 

non-NAAQS pollutants. Statutory 

provisions whose meaning is clear on 

their face, at least to a particular reader, 

would not be expected to have had a 

different or uncertain meaning to that 

same reader at an earlier point in time. 

By the same token, Texas’s insistence, 

noted previously, that it does not have 

the intention or authority to apply PSD 

to one non-NAAQS in particular, GHGs, 

suggests that Texas could well have 

expressed the same view, had the issue 

arisen, at the time EPA approved 

Texas’s PSD program. 

We further note that Texas itself 

appears to take the position that an 

agency’s present interpretation of its 

regulations should be presumed to have 

been the agency’s past interpretation of 

those regulations, so that Texas’s 

current interpretation that its PSD 

program does not apply to at least one 

non-NAAQS, GHGs, should be 

presumed to be Texas’s interpretation of 

its PSD program in the past, including 

at the time Texas submitted its program 

as a SIP revision to EPA and EPA 

approved it. Specifically, in its 60-day 

letter, Texas noted that in the Tailoring 

Rule, EPA asked states to consider 

whether their SIPs that include the term 

‘‘subject to regulation’’ can be 

interpreted to incorporate the Tailoring 

Rule thresholds on grounds that the 

state interprets that term as being 

sufficiently open-ended. 

75 FR 51,581/2. Texas stated, 

In the Tailoring Rule you have asked TCEQ 

to report to you by August 2, 2010, whether 

it would ‘‘interpret’’ the undefined phrase 

‘‘subject to regulation’’ in TCEQ Rule 116.12 

consistent with the newly promulgated 

definition in EPA Rule 51.166, in all its 

specifics and particulars. That is, you have 

effectively requested that Texas agree to 

regulate greenhouse gases in the exact 

manner and method proscribed by the EPA. 

In other words, you have asked Texas to 

agree that when it promulgated its air quality 

permitting program rules for pollutants 

‘‘subject to regulation’’ in 1993, that Texas 

really meant to define the term ‘‘subject to 

regulation’’ as set forth in the dozens of 

paragraphs and subparagraphs of EPA Rule 

51.166, first promulgated in 2010. 

Texas 60-day letter, p. 3. In these 

statements, Texas appears to reveal 

Texas’s own understanding of the 

circumstances under which Texas can 

be said to give the term ‘‘subject to 

regulation’’ a particular interpretation, 

and that is if Texas interpreted that term 

that same way at the time that Texas 

first promulgated the term in 1993. By 

that same logic, Texas’s position, as 

stated in its 60-day letter, that it ‘‘has 

neither the authority nor the intention 

of interpreting, ignoring, or amending 

its laws in order to compel the 

permitting of greenhouse gas emissions’’ 

would have applied to ‘‘its laws’’— 

including the SIP PSD requirements—at 

the time that Texas adopted those rules. 

Therefore, it seems reasonable to 

conclude that just as Texas does not 

currently view its PSD program as 

applying to all newly regulated nonNAAQS pollutants, Texas did not, at the 

time it submitted and EPA approved its 

PSD program, view its PSD program as 

applying to all newly regulated nonNAAQS pollutants. 

By the same token, Texas’s recent 

statements also confirm that the 

assurances Texas provided in its 1989 

Texas PSD Commitments Letter cannot 

be interpreted as having committed 

Texas to apply PSD to all pollutants 

newly subject to regulation, including 

non-NAAQS pollutants. The assurances, 

by their terms, were phrased generally 

and did not address the application of 

PSD to such pollutants; and EPA, in the 

preamble for the final approval of 

Texas’s PSD SIP, indicated that the 

scope and binding impact of the 

assurances were limited.80 Texas’s 

recent direct statements that PSD does 

not cover non-NAAQS pollutants 

indicates that the generally phrased 

assurances in the letter, whatever they 

meant, did not mean that Texas would 

apply PSD to each newly regulated 

pollutant, including non-NAAQS 

pollutants. 

As a result, it stands to reason that at 

the time Texas submitted its PSD 

program, Texas did not view the CAA 

as mandating the application of PSD to 

at least certain pollutants newly subject 

to regulation, non-NAAQS pollutants. 

But at a minimum, it can be said that 

Texas’s PSD program contained a gap: 

EPA required that PSD apply to each 

pollutant newly subject to regulation, 

including non-NAAQS pollutants; 

Texas’s program applied only to 

pollutants already subject to regulation 

at the time Texas adopted its program, 

not to subsequently regulated 

pollutants, including non-NAAQS; and 

Texas did not address its program’s 

applicability to such pollutants, 

including how or when its program 

would do so. This gap is significant 

because it facilitates Texas’s current 

position, with which EPA disagrees, 

that PSD does not apply to non-NAAQS 

pollutants. 

(ii). Gap Concerning Assurances of 

Adequate Legal Authority 

Texas’s recent statement that it does 

not have the authority to apply PSD to 

GHG-emitting sources also highlights 

that Texas’s PSD program had a gap in 

its failure to provide ‘‘necessary 

assurances’’ of adequate legal authority 

to carry out the PSD program. Although 

Texas’s letter described obstacles to 

applying PSD to GHG-emitting sources 

without first adopting a SIP revision, 

and did not describe obstacles that 

precluded Texas from adopting a SIP 

revision if it chose to do so, Texas’s 

direct statement that it does not have 

authority to apply PSD to GHGs at least 

casts doubt on whether Texas has such 

authority under any circumstances. 

Moreover, Texas has never indicated 

that there has been a recent change that 

places new limits on its legal authority 

to carry out the CAA. 

Accordingly, it is possible that at the 

time that Texas submitted its PSD 

program, Texas considered itself under 

limits in its legal authority to apply PSD 

to each non-NAAQS pollutant. At a 

minimum, in light of Texas’s recent 

statement that it does not have authority 

to apply PSD to at least one newly 

regulated, non-NAAQS, GHGs, it is 

apparent that at the time that Texas 

submitted its PSD program, Texas did 

not provide the ‘‘necessary assurances’’ 

that it ‘‘will have adequate * * * 

authority under State * * * law to carry 

out such implementation plan (and is 


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not prohibited by any provision of * * * 

State law from carrying out such 

implementation plan or portion 

thereof).’’ CAA section 110(a)(2)(E)(i) 

(emphasis added). ‘‘[C]arrying out such 

implementation plan’’ includes meeting 

all CAA requirements applicable to the 

plan and, in the case of a PSD SIP 

program, that includes applying PSD to 

each pollutant newly subject to 

regulation, including non-NAAQS 

pollutants. 

2. Flaws in PSD Program 

The Texas PSD program’s gaps— 

which are, again, that Texas did not 

address the applicability of PSD to all 

pollutants newly subject to regulation, 

including non-NAAQS pollutants; and 

Texas did not provide assurances of 

adequate legal authority to do so—mean 

that the state’s PSD program has flaws. 

These flaws were present at the time 

that EPA approved Texas’s PSD 

program. Moreover, these flaws are 

significant. They have figured 

prominently into the present situation 

in which EPA takes the position that 

Texas is obligated under the CAA and 

EPA regulations to apply its PSD 

program to a newly regulated 

pollutant—GHGs—but Texas takes the 

opposite position. 

3. EPA’s Error in Approving Texas’s 

PSD Program 

In this rulemaking, EPA is 

‘‘determin[ing]’’ that EPA’s action fully 

approving Texas’s PSD program was ‘‘in 

error’’ within the meaning of CAA 

section 110(k)(6). This section contains 

EPA’s basis for that determination. 

a. CAA Section 110(k)(6) Error 

Correction 

Under the familiar Chevron two-step 

framework for interpreting 

administrative statutes, an agency must, 

under Chevron step 1, determine 

whether ‘‘Congress has directly spoken 

to the precise question at issue.’’ If so, 

‘‘the court, as well as the agency, must 

give effect to the unambiguously 

expressed intent of Congress.’’ However, 

under Chevron step 2, if ‘‘the statute is 

silent or ambiguous with respect to the 

specific issue, the question for the court 

is whether the agency’s answer is based 

on a permissible construction of the 

statute.’’ Chevron U.S.A. Inc. v. NRDC, 

467 U.S. 837, 842–43 (1984). 

As noted previously, the term ‘‘error’’ 

in CAA section 110(k)(6) is not defined 

and, as a result, should be given its 

ordinary, everyday meaning. The 

dictionary definition of ‘‘error’’ is ‘‘a 

mistake’’ or ‘‘the state or condition of 

being wrong in conduct or judgment,’’ 

Oxford American College Dictionary 467 

(2d ed. 2007); or ‘‘(1) an act, assertion, 

or belief that unintentionally deviates 

from what is correct, right or true (2) the 

state of having false knowledge * * * 

(4) a mistake * * * .’’ Webster’s II New 

Riverside University Dictionary 442 

(Houghton Mifflin Co. 1988). These 

definitions are broad, and include all 

unintentional, incorrect or wrong 

actions or mistakes. 

Moreover, CAA section 110(k)(6) 

authorizes EPA to ‘‘determine[]’’ that its 

action was in error, and does not direct 

or constrain that determination in any 

manner. That is, the provision does not 

identify any factors that EPA must, or 

may not, consider in making the 

determination. This further indicates 

that this provision confers broad 

discretion upon EPA. 

b. Gaps in Texas PSD Program 

As previously discussed, the Texas 

SIP PSD program was flawed because it 

contained gaps: Texas did not address 

the applicability of PSD to all pollutants 

newly subject to regulation, including 

non-NAAQS pollutants; and Texas did 

not provide assurances of adequate legal 

authority to do so. EPA did not address 

these gaps in its action on Texas SIP 

PSD program and instead, EPA fully 

approved the PSD program. 

Therefore, EPA’s action in fully 

approving Texas’s SIP PSD program in 

the face of these flaws was ‘‘in error’’ 

under CAA section 110(k)(6), in 

accordance with Chevron step 1. 

‘‘[E]rror’’ should be defined broadly to 

include any mistake, and approval of a 

flawed SIP is a mistake. Moreover, this 

flaw is significant because it affects the 

applicability of the PSD program to a 

pollutant and, as a result, to an entire 

set of sources. 

Even if the term ‘‘error’’ is not 

considered unambiguously to 

encompass, under Chevron step 1, the 

mistake that EPA made in approving the 

Texas PSD SIP, and instead is 

considered ambiguous on this question, 

then under Chevron step 2 EPA has 

sufficient discretion to determine that 

its approval action meets the definition 

of ‘‘error.’’ That is, under CAA section 

110(k)(6), the breadth of the term ‘‘error’’ 

and of the authorization for EPA to 

‘‘determine[]’’ when it made an error, 

mean that EPA has sufficient discretion 

to identify the gaps in Texas’s PSD 

program as flawed and to identify EPA’s 

action in approving Texas’s PSD SIP in 

the face of those flaws as an error. 

c. Alternative Basis for Error Correction 

As explained previously, we view 

Texas’s recent statements that the CAA 

does not apply to non-NAAQS 

pollutants and that Texas has neither 

the authority nor the intention to apply 

PSD to GHGs as an indication that at the 

time Texas submitted its PSD program, 

Texas did not address the applicability 

its program to pollutants newly subject 

to regulation or provide assurances that 

it legal authority to do so. Absent 

specific evidence to the contrary, we are 

not inclined to conclude that at the time 

EPA approved the Texas PSD program 

in 1992, Texas in fact had filled those 

gaps—by, for example, providing 

assurances that it would apply PSD to 

each newly regulated non-NAAQS 

pollutants and had the legal authority to 

do so—but that more recently, Texas has 

failed to comply with those assurances. 

The CAA is based on a partnership 

between the states and the federal 

government, and we think it more 

consonant with the principles of that 

partnership to interpret the evidence as 

indicating that Texas never addressed 

the gap or provided the requisite 

assurances. 

However, in the alternative, if one 

were to conclude that during the course 

of Texas’s submittal of, and EPA’s 

action on, the state’s PSD program, 

Texas did in fact provide the requisite 

assurances—in particular, that the 1989 

Texas PSD Commitment Letter provided 

adequate assurances that Texas would 

apply PSD to pollutants newly subject 

to regulation, including non-NAAQS— 

so that no gaps in Texas’s PSD program 

existed at that time, then Texas’s recent 

statements would amount to failing to 

comply with, or even rescinding, those 

assurances. Under these circumstances, 

EPA would still consider its previous 

approval of Texas’s PSD SIP to have 

been in error. This is because if one 

assumes that Texas provided the 

appropriate assurances, then one should 

also assume that EPA’s approval would 

have been based on those assurances. In 

fact, EPA stated in approving the Texas 

PSD program that EPA was relying on 

the Commitments Letter. Rescinding or 

failing to comply with those 

assurances—if that is what Texas is 

considered to have done—would 

eliminate the basis for EPA’s approval. 

Compare CAA section 110(k)(4) 

(authorizing EPA to approve a SIP 

revision based on a commitment by the 

state to adopt certain measures by a date 

certain, but if the state does not do so, 

then the conditional approval is treated 

as a disapproval). 

B. Error Correction: Conversion of 

Previous Approval to Partial Approval 

and Partial Disapproval 

Under CAA section 110(k)(6), once 

EPA determines that its previous action 

approving a SIP revision was in error, 

EPA ‘‘may * * * revise such action as 


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appropriate without requiring any 

further submission from the State. 

***’’ Under this provision, EPA may 

revise its previous full approval of 

Texas’s PSD program as appropriate, 

without requiring any submission from 

Texas. 

This provision offers EPA a great deal 

of discretion in revising its previous 

action. Indeed, the use of the term ‘‘may’’ 

means that this provision simply 

authorizes, and does not require, EPA to 

revise its previous action even after EPA 

has determined the error, and that, in 

turn, implies that EPA has discretion in 

determining how to revise its previous 

action. Moreover, if EPA does decide to 

revise its previous action, EPA may do 

so in any way that is ‘‘appropriate.’’ The 

term ‘‘appropriate’’ offers EPA 

significant latitude in deciding what 

type of revision to do. 

Here, EPA is revising its previous full 

approval of Texas’s PSD program to be 

a partial approval and a partial 

disapproval. Specifically, EPA is 

retaining the approval of Texas’s PSD 

program to the extent of the pollutants 

that the PSD program already does 

cover. This amounts to a partial 

approval. In addition, EPA is 

disapproving the Texas PSD program 

because it has not provided assurances 

that its PSD program will apply to each 

pollutant newly subject to regulation, 

including non-NAAQS pollutants, and 

because it has not provided assurances 

of adequate legal authority to do so. 

C. Reconsideration Under CAA Section 

301, Other CAA Provisions, and Case 

Law 

As an alternative to the error 

correction provision of CAA section 

110(k)(6), EPA is using its inherent 

administrative authority to reconsider 

its prior approval actions as a basis for 

revising its previous full approval of the 

Texas PSD program to a partial approval 

and partial disapproval. This authority 

lies in CAA section 301(a), read in 

conjunction with CAA section 110 and 

case law holding that an agency has 

inherent authority to reconsider its prior 

actions. 

As noted earlier, EPA approved the 

Texas PSD program by notice dated June 

24, 1992, 57 FR 28,093, under the 

authority of CAA section 110(k)(3)–(4). 

These provisions authorize EPA to 

approve a SIP submittal ‘‘as a whole,’’ 

‘‘approve [the SIP submittal] in part and 

disapprove [it] in part,’’ or issue a 

‘‘conditional approval’’ of a SIP 

submittal. CAA section 110(k)(3)–(4). 

EPA issued a full approval under CAA 

section 110(k)(3). 

In its approval action under that 

provision, EPA retained inherent 

authority to revise that action. The 

courts have found that an administrative 

agency has the inherent authority to 

reconsider its decisions, unless 

Congress specifically proscribes the 

agency’s discretion to do so. See, e.g., 

Gun South, Inc. v. Brady, 877 F.2d 858, 

862 (11th Cir. 1989) (holding that 

agencies have implied authority to 

reconsider and rectify errors even 

though the applicable statute and 

regulations do not provide expressly for 

such reconsideration); Trujillo v. 

General Electric Co., 621 F.2d 1084, 

1086 (10th Cir. 1980) (‘‘Administrative 

agencies have an inherent authority to 

reconsider their own decisions, since 

the power to decide in the first instance 

carries with it the power to reconsider’’). 

Section 301(a) of the CAA, read in 

conjunction with CAA section 110(k)(3) 

and the case law just described, 

provides statutory authority for EPA’s 

reconsideration action in this 

rulemaking. Section 301(a) authorizes 

EPA ‘‘to prescribe such regulations as 

are necessary to carry out [EPA’s] 

functions’’ under the CAA. 

Reconsidering prior rulemakings, when 

necessary, is part of ‘‘[EPA’s] functions’’ 

under the CAA—in light of EPA’s 

inherent authority as recognized under 

the case law to do so—and as a result, 

CAA section 301(a) confers authority 

upon EPA to undertake this rulemaking. 

EPA finds further support for its 

authority to narrow its approval in APA 

section 553(e), which requires EPA to 

give interested persons ‘‘the right to 

petition for the issuance, amendment, or 

repeal of a rule;’’ and CAA section 

307(b)(1), which expressly contemplates 

that persons may file a petition for 

reconsideration under certain 

circumstances (at the same time that a 

rule is under judicial review). These 

authorizations for other persons to 

petition EPA to amend or repeal a rule 

suggest that EPA has inherent authority, 

on its own, to issue such amendment or 

repeal. This is because EPA may grant 

a petition from another person for an 

amendment to or repeal of a rule only 

if justified under the CAA, and if such 

an amendment or repeal is justified 

under the CAA, then EPA should be 

considered as having inherent authority 

to initiate the process on its own, even 

without a petition from another person. 

EPA recently used its authority to 

reconsider prior actions and limit its 

prior approval of a SIP in connection 

with California conformity SIPs. See, 

e.g., 68 FR 15720, 15723 (discussing 

prior action taken to limit approvals); 67 

FR 69139 (taking final action to amend 

prior approvals to limit their duration); 

67 FR 46618 (proposing to amend prior 

approvals to limit their duration, based 

on CAA sections 110(k) and 301(a)). 

EPA had previously approved SIPs with 

emissions budgets based on a mobile 

source model that was current at the 

time of EPA’s approval. Later, EPA 

updated the mobile source model. But, 

even though the model had been 

updated, emissions budgets would 

continue to be based on the older, 

previously approved model in the SIPs, 

rather than the updated model. To 

rectify this problem, EPA conducted a 

rulemaking that revised the previous 

SIP approvals so that the approvals of 

the emissions budgets would expire 

early, when the new ones were 

submitted by states and found adequate, 

rather than when a SIP revision was 

approved. This helped California more 

quickly adjust its regulations to 

incorporate the newer model. In this 

rule, EPA is using its authority to 

reconsider and limit its prior approval 

of SIPs generally in the same manner as 

it did in connection with California 

conformity SIPs. 

EPA is relying, in the alternative, on 

this inherent authority to convert its 

previous approval of Texas’s PSD 

program to a partial approval and partial 

disapproval for the same reasons 

discussed previously in connection with 

the ‘‘error’’ correction provision of CAA 

section 110(k)(6). That is, EPA approved 

Texas’s PSD program even though that 

program had significant flaws because 

Texas did not provide the requisite 

assurances that it would apply PSD to 

all pollutants newly subject to 

regulation, including non-NAAQS, and 

that Texas had adequate legal authority 

to do so. 

EPA’s inherent authority to reconsider 

its previous action also supports 

revising its previous action in the same 

manner, and for the same reasons, as 

under CAA section 110(k)(6), as 

described earlier. That is, in light of the 

flaws in the Texas PSD program, EPA is 

revising EPA’s previous full approval to 

be a partial approval (to the extent of the 

pollutants regulated under the CAA that 

are subject to Texas’s PSD program) and 

a partial disapproval (to the extent 

Texas’s program does not provide 

assurances that it will apply to 

pollutants newly subject to regulation, 

including non-NAAQS pollutants). 

D. Relationship of This Action to GHG 

PSD SIP Call 

As noted previously, EPA has recently 

taken another action concerning Texas’s 

PSD program as that program relates to 

GHGs: the GHG PSD SIP call, which we 

published by notice dated December 13, 

2010, 75 FR 77698 (December 13, 2010). 

This section describes the relationship 

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81Texas’s 60-day letter, p. 1. 

82Texas 30-day letter, at 5, 6; Texas ‘‘Motion to 

Stay Three GHG Actions’’ 40–41, Coalition for 

Responsible Regulation v. EPA, No. 09–1322 (and 

consolidated cases). 

83See Texas ‘‘Motion to Stay Three GHG Actions’’ 

41, Coalition for Responsible Regulation v. EPA, No. 

09–1322 (and consolidated cases). 

disapproval/FIP action to the SIP call. 

For convenience, the background for the 

SIP call, although described in detail 

earlier in this preamble, is reiterated 

here. 

EPA promulgated the SIP call under 

CAA section 110(k)(5), which provides: 

Whenever the Administrator finds that the 

applicable implementation plan for any area 

is substantially inadequate to * * * comply 

with any requirement of [the CAA], the 

Administrator shall require the State to revise 

the plan as necessary to correct such 

inadequacies. The Administrator * * * may 

establish reasonable deadlines (not to exceed 

18 months after [notifying the state of the 

inadequacies] for the submission of such 

plan revisions. 

In the SIP call, EPA made a finding that 

the PSD SIPs of each of 13 states, 

including Texas, do not apply to GHGemitting sources and therefore are 

‘‘substantially inadequate to * * * 

comply with [the PSD applicability] 

requirement[s]’’ of the CAA. 

Accordingly, EPA required each state, 

including Texas, to submit a corrective 

SIP revision. EPA established a deadline 

for the SIP submittal for each state as 12 

months from the date of the SIP call, or 

December 1, 2011, unless the state 

indicated in its 30-day letter that it did 

not object to an earlier deadline. Each 

state for which EPA would finalize the 

SIP call submitted a 30-day letter, and 

each, except for Texas, indicated a date 

sooner than December 1, 2011. Texas 

did not indicate any particular date and, 

as a result, EPA established December 1, 

2011 as Texas’s deadline. In addition, 

EPA stated that if Texas or any of the 

other states failed to submit its 

corrective SIP revision by its deadline, 

EPA intended to promulgate a FIP 

immediately thereafter. 

The timing of the SIP call—both the 

time that EPA promulgated the SIP call 

and the deadlines it established for SIP 

submittal—was driven by the fact that 

the affected states did not have 

authority to issue PSD permits to GHGemitting sources and as a result, those 

sources could face delays in 

construction and modification when 

they became subject to PSD as early as 

January 2, 2011. EPA designed the SIP 

call to maximize the opportunity of each 

affected state to assure that its sources 

would have a permitting authority 

available as of that date or a later date, 

if the state concluded that a later date 

would not leave its sources facing 

delays. EPA did so by allowing each 

state flexibility for its SIP submittal 

deadline. 

Each of the affected states except 

Texas responded with a plan that would 

assure that its sources would not 

confront permitting delays. Most 

states—seven of the 13—indicated they 

would not object to EPA’s establishing 

a SIP submittal date of December 22, 

2010, recognizing that as a practical 

matter, that meant that EPA would 

promulgate a FIP on December 23, 2010. 

The other five states indicated a later 

date, and again, one indicated a date as 

late as July 1, 2011. This means that 

purely as a legal matter, there will be no 

permitting authority in place in those 

states to issue GHG permits on January 

2, 2011, when GHG-emitting sources 

become subject to PSD. Even so, the 

later dates were acceptable to each of 

the five states because (i) they intended 

to submit a SIP revision by their date, 

and (ii) they did not expect the lack of 

a permitting authority during the period 

before their deadline to place their 

sources at risk for delays in construction 

or expansion. 

Texas responded differently than the 

other states. In its 30-day letter, Texas 

did not indicate a particular date for its 

SIP submittal, and as a result, EPA, as 

we had proposed, established Texas’s 

deadline at December 1, 2011. But 

shortly before submitting its 30-day 

letter, Texas stated, in its 60-day letter, 

that ‘‘Texas has neither the authority nor 

the intention of interpreting, ignoring, 

or amending its laws in order to compel 

the permitting of greenhouse gas 

emission.’’ 81 Texas has never qualified 

this statement, and as a result, EPA 

reads this statement to indicate that 

Texas does not intend to submit a SIP 

revision as required under the SIP call. 

This means that a permitting 

authority for GHG-emitting sources 

would not be in place until EPA 

promulgated a FIP, no earlier than 

December 2, 2011. Importantly, Texas 

has indicated that this one-year delay in 

the availability of a permitting authority 

would, in fact, mean that under EPA’s 

interpretation of the CAA, Texas’s 

sources would face delays in 

constructing and modifying.82

Moreover, Texas indicated that during 

2011, some 167 construction or 

modification projects would be 

affected,83 which are significantly more 

sources than any other state. 

Moreover, Texas’s indication that it 

does not intend to submit a SIP revision, 

and that it does not consider its PSD 

program as being required to apply to 

non-NAAQS pollutants, including 

GHGs, have cast a spotlight on 

underlying flaws in Texas’s fully 

approved PSD SIP, and that, in turn, has 

brought into play the error-correction 

provision in CAA section 110(k)(6). All 

this is discussed in detail earlier in this 

preamble, but to reiterate for 

convenience: CAA section 110(k)(6) 

provides, ‘‘Whenever the Administrator 

determines that the Administrator’s 

action approving * * * any [SIP] * * * 

was in error, the Administrator may 

* * * revise such action as 

appropriate.* * *’’ Here, the Texas SIP 

was flawed at the time EPA approved it 

because it did not address, or assure 

adequate legal authority for, application 

of the PSD program to pollutants newly 

subject to regulation, including nonNAAQS pollutants. As a result, EPA has 

the authority to determine that its full 

approval of the SIP was ‘‘in error’’ and 

to convert that action to a partial 

approval/partial disapproval; and as a 

result of that, EPA is authorized to 

promulgate a FIP immediately. 

This is an important reason why EPA 

is proceeding with this error-correction/ 

partial-disapproval rulemaking at this 

time. By allowing EPA to implement a 

FIP immediately, instead of waiting 

until December, 2011; EPA may act as 

the permitting authority in Texas 

beginning January 2, 2011, and in that 

capacity, allow Texas sources to avoid 

delays in construction or modification. 

With the present rulemaking, EPA has 

both (i) promulgated a SIP call and 

established a SIP deadline of December 

1, 2011 for Texas, under CAA section 

110(k)(5); and (ii) corrected its error in 

previous fully approving Texas’s PSD 

program by converting that action to a 

partial approval and partial disapproval, 

under CAA section 110(k)(6), and then 

promulgating a FIP immediately under 

CAA section 110(c)(1)(B). For the 

reasons just discussed, each of these 

actions is fully justified under the 

applicable CAA provisions. 

Moreover, there is no preclusion 

against taking both of these actions with 

respect to Texas at this time, for the 

following reasons: First, the two actions 

are based on CAA provisions—CAA 

section 110(k)(5) (SIP call), and section 

110(k)(6) (error correction)—that 

overlap, so that it is to be expected that 

circumstances may arise in which both 

apply. If EPA approves a flawed SIP, 

then circumstances could well arise 

under which EPA has a basis for 

concluding both that (i) the SIP is 

‘‘substantially inadequate’’ to meet a 

CAA requirement, under CAA section 

110(k)(5); and (ii) EPA’s action in 

approving the SIP was ‘‘in error,’’ under 

CAA section 110(k)(6). The same flaw in 


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84 In contrast, situations could also arise in which 

EPA has a basis for imposing a SIP call but not 

issuing an error correction because the SIP 

currently has a substantial inadequacy but was not 

flawed at the time of its submittal and approval. 

85 In this case, the substantial inadequacy for 

which EPA issued the SIP call, which was the PSD 

program’s failure to apply to GHGs, is narrower 

than the flaw in the SIP for which EPA is issuing 

the error correction, which is the PSD program’s 

failure to address, or assure legal authority for, 

application of PSD to all pollutants newly subject 

to regulation. In another case, it is conceivable that 

the opposite would be true, that the substantial 

inadequacy would be broader than the flaw in the 

SIP for which EPA issues the error correction. In 

that case, if EPA imposed a FIP after the deadline 

for SIP submittal related to the SIP call, the FIP 

would be broader than the FIP imposed after the 

disapproval related to the error correction. 

86We recognize that Texas has indicated that it 

does not intend to submit a SIP revision, but this 

does not eliminate the utility of establishing a SIP 

submittal schedule. 

87 In any event, to conclude that the promulgation 

of a FIP under this error-correction rulemaking 

compromised the SIP call rulemaking would be 

tantamount to concluding that the SIP call should 

somehow take priority over this error correction. 

There would be no basis for taking that position. 

Each action is fully justifiable in its own right. The 

process of completing one before the other does not 

give the first one a priority simply because it is first 

any more than that process would give the second 

a priority because the latter is more recent. 

the SIP would be the basis for each of 

those actions.84

This is case with EPA’s two actions 

concerning Texas. As EPA stated in the 

SIP call, the basis for the finding of 

‘‘substantial inadequacy’’ was the failure 

of Texas’s approved SIP PSD program to 

apply to GHGs, which was rooted in the 

program’s failure to apply pollutants 

newly subject to regulation. As EPA 

stated earlier in this preamble, the basis 

for the determination that EPA’s 

previous full approval of Texas’s SIP 

was ‘‘in error’’ was the gap in the SIP 

due to the SIP’s failure to address, or 

assure that it has adequate legal 

authority for, the application to 

pollutants newly subject to regulation.85

Second, each provision, by its terms, 

is discretionary to EPA, and neither 

provision precludes the application of 

the other. CAA section 110(k)(5) applies 

‘‘[w]henever the Administrator finds’’ 

that the SIP is substantially inadequate. 

CAA section 110(k)(6) applies 

‘‘[w]henever the Administrator 

determines’’ that her previous action 

was in error. Neither provision 

references the other. Neither provision 

includes any requirement or limitation 

that constrains the application of the 

other at any time. 

Third, each provision serves a 

different purpose and when applied to 

this case—including in conjunction 

with the FIP provision in CAA section 

110(c)(1)—leads to a different outcome, 

but each outcome is neither dependent 

on, or compromised by, the other 

outcome. CAA section 110(k)(5), as 

applied in the current case, is focused 

on a present problem with the SIP, that 

is, a ‘‘substantial [ ] inadequacy’’ that 

presently exists. This provision 

mandates that EPA require a corrective 

SIP revision to address that inadequacy, 

but further provides that EPA must 

allow a reasonable deadline for the state 

to submit the SIP revision. In the GHG 

PSD SIP call, EPA allowed states to, in 

effect, choose within a range of 

deadlines. But if the state fails to submit 

the required SIP revision by its 

deadline, then EPA is required to 

promulgate a FIP under CAA section 

110(c)(1)(A). CAA section 110(k)(6), as it 

applies in the current case, is focused 

on a past problem with SIP, that is, a 

flaw that existed at the time EPA 

approved the SIP, so that EPA’s 

approval was ‘‘in error.’’ This provision 

authorizes EPA to convert the approval 

to a disapproval, but does not mandate 

that the State submit a new SIP revision. 

This is because the state has already 

submitted a SIP revision, the one that is 

flawed, and EPA has acted on it. 

Instead, EPA is required to promulgate 

a FIP under CAA section 110(c)(1)(B), 

and EPA may do so immediately. 

Viewing the two provisions as applied 

here together: (i) CAA section 110(k)(5) 

allows EPA to exercise its discretion to 

make a finding that Texas’s SIP is 

‘‘substantially inadequate,’’ and then to 

establish a SIP submittal schedule for 

Texas, one that is consistent with 

whatever choice as to deadline Texas 

had available to it; and (ii) CAA section 

110(k)(6) allows EPA to exercise its 

discretion to convert its previous 

approval of Texas’s SIP, which EPA 

made ‘‘in error,’’ to a disapproval, and 

then to promulgate a FIP immediately. 

The requirement that Texas submit a 

corrective SIP revision and do so by a 

date certain—a date that Texas 

exercised some control over—serves the 

useful function of establishing a 

mechanism and a timeframe for Texas to 

address the substantial inadequacy in its 

PSD SIP.86 The immediate promulgation 

of a FIP serves the useful purpose of 

assuring the availability of a permitting 

authority as of January 2, 2011, so that 

Texas sources will not face delays in 

their plans to construct or modify. 

Importantly, the immediate 

promulgation of a FIP through this 

rulemaking does not compromise in any 

manner the SIP submittal deadline 

established for Texas through the SIP 

call. After EPA’s promulgation of the 

FIP, Texas remains obligated to submit 

the corrective SIP revision by December 

1, 2011. As soon as Texas does submit 

that SIP revision and EPA approves it, 

EPA will rescind the FIP. It is always 

the case that when EPA has 

promulgated a FIP of any type in a 

particular state, the state remains 

obligated to adopt a SIP revision. 

Nothing about a FIP impedes the state 

from doing so; and when the state does 

so and EPA approves the SIP revision, 

then EPA rescinds the FIP. 

It is true that one of the purposes of 

the SIP call, as applied here, is to allow 

states to in effect select an early FIP— 

by selecting an early SIP submittal date 

and then not submitting a SIP by that 

date—so as to assure the availability of 

a permitting authority for their sources 

by that early date. And it is further true 

that Texas, in its 30-day letter, chose not 

to select such an early date and, on the 

contrary, stated its opposition to a FIP; 

yet, in this present rulemaking, EPA is 

promulgating an immediate FIP for 

Texas. But this does not mean that the 

present rulemaking has compromised 

the SIP call or any choices made 

available to Texas in the SIP call. The 

focus of the SIP call, as it related to 

Texas, was the finding of a substantial 

inadequacy in Texas’s PSD program, the 

imposition of a requirement for Texas to 

submit a corrective SIP revision, and— 

based on Texas’s choice—the 

establishment of a deadline of December 

1, 2011 for Texas to do so. The 

promulgation of an immediate FIP 

through the present rulemaking does not 

disturb that. Texas remains subject to 

the December 1, 2011, SIP submittal 

schedule that EPA established for it, 

based on Texas’s decision not to 

respond directly to EPA’s request that 

Texas itself identify a deadline.87

Texas’s expressed opposition to a FIP 

does not preclude EPA from imposing 

one as justified through the present 

rulemaking. 

It is also true that, as EPA stated in 

the SIP call, ‘‘federalism principles 

* * * underlie the SIP call process and 

the SIP system as a whole,’’ and that 

means that ‘‘in the first instance, it is to 

the state to whom falls the 

responsibility of developing pollution 

controls through an implementation 

plan.’’ 75 FR 77710/2. And it is further 

true that the immediate promulgation of 

a FIP through the present errorcorrection action means that a FIP will 

be in place in Texas before the 

December 1, 2011 deadline established 

under the SIP call for Texas to adopt its 

SIP. However, imposition of the FIP is 

fully justified under this errorcorrection action, as discussed 

previously, and is essential to assure 

that Texas sources will not face delays 


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88Texas 60-day letter, p. 1. 

89Texas 30-day letter. 

in construction or modification, a risk 

that Texas acknowledges will occur 

under EPA’s interpretation of the 

applicable CAA requirements. In any 

event, Texas’s statement that ‘‘Texas has 

neither the authority nor the intention 

of interpreting, ignoring, or amending 

its laws in order to compel the 

permitting of greenhouse gas 

emission,’’ 88 as we read it, is 

tantamount to a direct statement that it 

does not intend to submit a GHG PSD 

SIP revision, and is a direct statement 

that it does not intend to require its 

sources to obtain permits for their GHG 

emissions. Accordingly, it is difficult to 

see how it could meaningfully be 

claimed that an early FIP, promulgated 

through this rulemaking, could displace 

any prerogatives Texas may have under 

the SIP call to develop its own SIP 

revision before the imposition of a FIP 

or to exercise control over the 

permitting of GHG emissions of its 

sources. Similarly, Texas has stated that 

it does not believe that EPA’s FIP will 

be effective because, according to Texas, 

EPA will be unable to issue permits for 

a lengthy period due to uncertain over 

how to apply PSD requirements to GHGemitting sources.89 Accordingly, it is 

difficult to see how it could 

meaningfully be claimed that a FIP, 

which Texas considers ineffective, 

could adversely affect Texas’s interests. 

It is also true that under the principles 

of federalism that underlie the SIP 

system, states exercise some discretion 

over controls for their industry, so that 

a state may impose more stringent 

controls than minimum CAA 

requirements. CAA section 116. But this 

discretion does not mean that Texas is 

authorized to create the circumstances 

under which its sources face delays in 

constructing or modifying and EPA is 

precluded from promulgating a FIP— 

when justified under this rulemaking— 

for the purpose of protecting those 

sources against such delays. Absent this 

action, Texas sources would face delays 

in construction and modification 

resulting from Texas’s decision during 

the course of the SIP call to neither 

adopt a SIP promptly nor facilitate an 

early FIP. Those delays do not result 

from Texas’s decision to impose more 

stringent controls than the CAA 

requires. On the contrary, Texas’s action 

is inconsistent with one of the purposes 

of the PSD provisions, which is ‘‘to 

insure that economic growth will occur 

in a manner consistent with the 

preservation of clean air resources.’’ 

CAA section 160(3). EPA is justified in 

interpreting and applying CAA section 

110(k)(6) to correct errors related to 

Texas’s SIP PSD program in order to 

effectuate this purpose of PSD. The D.C. 

Circuit has held that the terms of the 

PSD provisions should be interpreted 

with the PSD purposes in mind, New 

York v. EPA, 413 F.3d 3, 23 (DC Cir.), 

rehearing en banc den., 431 F.3d 801 

(2005), and the same should be true of 

CAA section 110(k)(5) as applied to PSD 

requirements. 

E. Relationship of This Rulemaking to 

Other States 

EPA is not, at this time, undertaking 

a similar error-correction rulemaking for 

any of the other states that are subject 

to the SIP call. EPA has discretion as to 

whether and when to undertake such a 

rulemaking, and each of the other states 

has chosen a course of action that at 

present appears to assure that its large 

GHG-emitting sources will have a 

permitting authority available when the 

sources need one, and therefore will not 

face delays in constructing or 

modifying. As a result, EPA has not 

inquired into whether any of these other 

states have flaws in their SIP PSD 

programs as Texas does. 

V. Federal Implementation Plan 

A. Authority To Promulgate a FIP 

In this rulemaking, EPA is 

promulgating a FIP to apply EPA’s PSD 

regulatory program to GHG-emitting 

sources in Texas and to commit to take 

action as appropriate with respect to 

pollutants that become newly subject to 

regulation. 

The CAA authority for EPA to 

promulgate a FIP is found in CAA 

section 110(c)(1), which provides— 

The Administrator shall promulgate a 

Federal implementation plan at any time 

within 2 years after the Administrator * * * 

(B) disapproves a State implementation plan 

submission in whole or in part, unless the 

State corrects the deficiency, and the 

Administrator approves the plan or plan 

revision, before the Administrator 

promulgates such [FIP]. 

As indicated earlier in this notice, 

EPA is partially disapproving Texas’s 

PSD program by correcting EPA’s 

previous full approval to be a partial 

approval and disapproval. Accordingly, 

under CAA section 110(c)(1)(B), EPA is 

required to promulgate a PSD FIP for 

Texas. 

The FIP must be designed to address 

the flaws in Texas’s PSD program. As 

discussed earlier in this preamble, the 

Texas PSD program contains significant 

gaps: It does not address, or provide 

assurances of adequate legal authority 

for, application to pollutants newly 

subject to regulation, including nonNAAQS pollutants. As a practical 

matter, at present, the only pollutant the 

program does not address is GHGs. 

Accordingly, the FIP applies the EPA 

regulatory PSD program to GHGs. In 

addition, the FIP commits to address 

pollutants that become newly subject to 

regulation, as appropriate. 

B. Timing of FIP 

EPA is promulgating the FIP in this 

rulemaking, so that it takes effect 

immediately upon the partial 

disapproval. This timing for FIP 

promulgation is authorized under CAA 

section 110(c)(1), which authorizes us to 

promulgate a FIP ‘‘at any time within 2 

years after’’ EPA disapproves a SIP 

submission in whole or in part. The 

quoted phrase, by its terms, establishes 

a two-year period within which EPA 

must promulgate the FIP, and provides 

no further constraints on timing. 

Accordingly, this provision gives EPA 

discretion to promulgate the FIP at any 

point in time within that two-year 

period, and in this rulemaking, EPA is 

promulgating the FIP immediately. 

The reason why we are exercising our 

discretion to promulgate the FIP 

immediately is to minimize any period 

of time during which larger-emitting 

sources in Texas may be under an 

obligation to obtain PSD permits for 

their GHGs when they construct or 

modify, but no permitting authority is 

authorized to issue those permits. We 

believe that acting immediately is in the 

best interests of the regulated 

community. Note that for similar 

reasons, in EPA’s recently promulgated 

SIP call, EPA stated that if a state failed 

to submit its required SIP revision by its 

deadline, EPA would immediately make 

a finding of failure to submit and 

immediately thereafter promulgate a 

FIP. 75 FR 53889/2. 

The lack of constraints in CAA 

section 110(c)(1)(B) stands in contrast to 

other CAA provisions that do impose 

requirements for the timing of 

proposals. See CAA sections 

109(a)(1)(A), 111(b)(1)(B). In light of the 

lack of constraints, EPA was free to 

promulgate the FIP concurrently with 

the disapproval action. 

C. Substance of GHG PSD FIP 

1. Components of FIP 

The FIP consists of two components. 

The first mirrors the GHG PSD FIP that 

EPA is promulgating for seven states for 

which EPA issued the PSD GHG SIP call 

and, subsequently, issued a finding of 

failure to submit a required SIP 

submittal. Thus, this component of the 

FIP constitutes the EPA regulations 

found in 40 CFR 52.21, including the 


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PSD applicability provisions, with a 

limitation to assure that, strictly for 

purposes of this rulemaking, the FIP 

applies only to GHGs. Under the PSD 

applicability provisions in 40 CFR 

52.21(b)(50), the PSD program applies to 

sources that emit the requisite amounts 

of any ‘‘regulated NSR pollutant[s],’’ 

including any air pollutant ‘‘subject to 

regulation.’’ However, Texas’s partially 

approved SIP already applies PSD to 

other air pollutants. To appropriately 

limit the scope of the FIP, EPA amends 

40 CFR 52.21(b)(50), as incorporated 

into the Texas FIP, to limit the 

applicability provision to GHGs. 

We adopt this FIP because, as we 

stated in the proposed GHG PSD FIP— 

It would, to the greatest extent possible, 

mirror EPA regulations (as well as those of 

most of the states). In addition, this FIP 

would readily incorporate the phase-in 

approach for PSD applicability to GHG 

sources that EPA has developed in the 

Tailoring Rule and expects to develop further 

through additional rulemaking. As explained 

in the Tailoring Rule, incorporating this 

phase-in approach—including Steps 1 and 2 

of the phase-in as promulgated in the 

Tailoring Rule—can be most readily 

accomplished through interpretation of the 

terms in the definition ‘‘regulated NSR 

pollutant,’’ including the term ‘‘subject to 

regulation.’’ 

In accordance with the Tailoring Rule, 

* * * the FIP would apply in Step 1 of the 

phase-in approach only to ‘‘anyway sources’’ 

(that is, sources undertaking construction or 

modification projects that are required to 

apply for PSD permits anyway due to their 

non-GHG emissions and that emit GHGs in 

the amount of at least 75,000 tpy on a CO2e 

basis) and would apply in Step 2 of the 

phase-in approach to both ‘‘anyway sources’’ 

and sources that meet the 100,000/75,000-tpy 

threshold (that is, (i) sources that newly 

construct and would not be subject to PSD 

on account of their non-GHG emissions, but 

that emit GHGs in the amount of at least 

100,000 tpy CO2e, and (ii) existing sources 

that emit GHGs in the amount of at least 

100,000 tpy CO2e, that undertake 

modifications that would not trigger PSD on 

the basis of their non-GHG emissions, but 

that increase GHGs by at least 75,000 tpy 

CO2e). 

Under the FIP, with respect to permits for 

‘‘anyway sources,’’ EPA will be responsible 

for acting on permit applications for only the 

GHG portion of the permit, and the state will 

retain responsibility for the rest of the permit. 

Likewise, with respect to permits for sources 

that meet the 100,000/75,000-tpy threshold, 

our preferred approach—for reasons of 

consistency—is that EPA will be responsible 

for acting on permit applications for only the 

GHG portion of the permit, that the state 

permitting authorities will be responsible for 

the non-GHG portion of the permit, and EPA 

will coordinate with the state permitting 

authority as needed in order to fully cover 

any non-GHG emissions that, for example, 

are subject to BACT because they exceed the 

significance levels. 

75 FR 53889/3 to 53,890/1. 

This formulation of the FIP is 

authorized because it is part of the 

‘‘appropriate’’ action EPA is authorized 

to take as part of EPA’s correction of its 

previous, erroneous full approval, under 

CAA section 110(k)(6). 

The second component of the FIP 

consists of a commitment that EPA will 

take such action as is appropriate to 

ensure that pollutants that become 

newly subject to regulation are subject 

to the FIP. If a pollutant becomes newly 

subject to regulation in the future, and 

if Texas does not take steps to subject 

it to its PSD program, then EPA will 

take the appropriate action. 

2. Dual Permitting Authorities 

In the GHG PSD FIP proposal, 

commenters raised concerns about how 

having EPA issue the GHG portions of 

a permit while allowing states under a 

FIP to continue to be responsible for 

issuing the non-GHG portions of a PSD 

permit will work in practice. 

Commenters specifically identified the 

potential for a source to be faced with 

conflicting requirements and the need to 

mediate among permit engineers making 

BACT decisions. 

We well recognize that dividing 

permitting responsibilities between two 

authorities—EPA for GHGs and the state 

for all other pollutants—will require 

close coordination between the two 

authorities to avoid duplication, 

conflicting determinations, and delays. 

We note that this situation is not 

without precedent. In many instances, 

EPA has been the PSD permitting 

authority but the state has accepted a 

delegation for parts of the PSD program, 

so that a source has had to go to both 

the state and EPA for its permit. In 

addition, all nonattainment areas in the 

nation are in attainment or are 

unclassifiable for at least one pollutant, 

so that every nonattainment area is also 

a PSD area. In some of these areas, the 

state is the permitting authority for 

nonattainment NSR and EPA is the 

permitting authority for PSD. As a 

result, there are instances in which a 

new or modifying source in such an area 

has needed a nonattainment NSR permit 

from the state and a PSD permit from 

EPA. 

EPA is working expeditiously to 

develop recommended approaches for 

EPA regions and affected states to use in 

addressing the shared responsibility of 

issuing PSD permits for GHG-emitting 

sources. 

In addition, we note that the concern 

over dual permitting authorities would 

become moot if Texas were either to 

submit and EPA approve a SIP revision 

that applies PSD to GHGs or request a 

delegation of permitting responsibility. 

If it did request and receive a 

delegation, it would be responsible for 

issuing both the GHG part and the nonGHG part of the permit, and that would 

moot concerns about split-permitting. 

D. Period for GHG PSD FIP To Remain 

in Place 

In the FIP proposal, we stated our 

intention to leave any promulgated FIP 

in place for as short a period as possible, 

and to process any corrective SIP 

revision submitted by the state to fulfill 

the requirements of the SIP call as 

expeditiously as possible. Specifically, 

we stated: 

After we have promulgated a FIP, it must 

remain in place until the state submits a SIP 

revision and we approve that SIP revision. 

CAA section 110(c)(1). Under the present 

circumstances, we will act on a SIP revision 

to apply the PSD program to GHG sources as 

quickly as possible. Upon request of the state, 

we will parallel-process the SIP submittal. 

That is, if the state submits to us the draft SIP 

submittal for which the state intends to hold 

a hearing, we will propose the draft SIP 

submittal for approval and open a comment 

period during the same time as the state 

hearing. If the SIP submittal that the state 

ultimately submits to us is substantially 

similar to the draft SIP submittal, we will 

proceed to take final action without a further 

proposal or comment period. If we approve 

such a SIP revision, we will at the same time 

rescind the FIP. 

75 FR 53889/2–3. 

We continue to have these same 

intentions. Thus, we reaffirm our 

intention to leave the GHG PSD FIP in 

place only as long as is necessary for the 

state to submit and for EPA to approve 

a SIP revision that includes PSD 

permitting for GHG-emitting sources. As 

discussed in more detail later in this 

preamble, EPA continues to believe that 

the states should remain the primary 

permitting authority. 

Specifically, EPA will rescind the FIP, 

in full or in part, if (i) Texas submits, 

and EPA approves, a SIP revision to 

apply Texas’s PSD program to GHGemitting sources, (ii) Texas provides 

assurances that in the future, it will 

apply its PSD program to all pollutants 

newly subject to regulation, including 

non-NAAQS pollutants, and (iii) Texas 

provides ‘‘necessary assurances’’ under 

CAA section 110(a)(2)(E)(ii) that it ‘‘will 

have adequate * * * authority under 

State law’’ to apply its PSD program to 

such pollutants. 

E. Primacy of Texas’s SIP process 

This action to partially approve and 

partially disapprove Texas’s SIP PSD 


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90 ‘‘State Of Texas’s Motion for Stay of EPA’s 

Endangerment Finding, Time Rule and Tailpipe 

Rule,’’ Coalition for Responsible Regulation v. EPA, 

No. 09–1322 (and consolidated cases) at 41. 

program and to promulgate a FIP is 

secondary to our overarching goal, 

which is to assure that it will be Texas 

that will be the permitting authority. 

EPA continues to recognize that Texas 

is best suited to the task of permitting 

because the state and its sources have 

experience working together in the state 

PSD program to process permit 

applications. EPA seeks to remain solely 

in its primary role of providing 

guidance and acting as a resource for 

Texas as it makes the various required 

permitting decisions for GHG emissions. 

Accordingly, we are prepared to work 

closely with Texas to help it promptly 

develop and submit to us a SIP revision 

that extends its PSD program to GHGemitting sources and that assures that 

the program will apply to each pollutant 

newly subject to regulation in the 

future. If Texas submits such a SIP 

revision, we intend to promptly act on 

it, and if we approve it, then we intend 

to rescind the FIP immediately. Again, 

EPA’s goal is to have in place in Texas 

the necessary permitting authority by 

the time businesses seeking 

construction permits need to have their 

applications processed and the permits 

issued—and to achieve that outcome by 

means of engaging with Texas directly 

through a concerted process of 

consultation and support. 

EPA is taking up the additional task 

of partially disapproving Texas’s PSD 

program and promulgating the FIP at 

this time only because the Agency 

believes it is compelled to do so by the 

need to assure businesses, to the 

maximum extent possible and as 

promptly as possible, that a permitting 

authority is available to process PSD 

permit applications for GHG-emitting 

sources once they become subject to 

PSD requirements on January 2, 2011. 

At the same time, we invite Texas to 

accept a delegation of authority to 

implement the FIP, so that it will still 

be the state that processes the permit 

applications, albeit operating under 

federal law. 

VI. Interim Final Rule, Good Cause 

Exception 

EPA is issuing this action as an 

interim final rule. As an interim final 

rule, this action is time-limited. It will 

be effective from the date of signature 

until the earlier of April 30, 2011 or the 

date that EPA promulgates final rules on 

its proposals for (i) a partial approval 

and partial disapproval of Texas’s PSD 

SIP and (ii) a FIP for Texas’s PSD 

program and those final rules take 

effect. 

The present rule is effective upon 

publication, without first undergoing 

notice and comment. Under APA 

section 553, a federal agency generally 

must provide for public notice and 

comment prior to finalizing an agency 

rule. However, this obligation is 

excused, under APA section 

553(b)(3)(B), ‘‘when the agency for good 

cause finds (and incorporates the 

finding and a brief statement of reasons 

therefore in the rules issued) that notice 

and public procedure thereon are 

impracticable, unnecessary, or contrary 

to the public interest.’’ While the good 

cause exception is to be narrowly 

construed, Utility Solid Waste Activities 

Group v. Environmental Protection 

Agency, 236 F.3d 749, 754 (DC Cir. 

2001), it is also ‘‘an important safety 

valve to be used where delay would do 

real harm.’’ U.S. Steel Corp. v. U.S. 

Environmental Protection Agency, 595 

F.2d 207, 214 (5th Cir. 1979). Notice and 

comment is impracticable where ‘‘an 

agency finds that due and timely 

execution of its functions would be 

impeded by the notice otherwise 

required.’’ Utility Solid Waste Activities 

Group, 236 F.3d at 754. Notice and 

comment is contrary to the public 

interest where ‘‘the interest of the public 

would be defeated by any requirement 

of advance notice.’’ Id. at 755. 

Notice and comment here would be 

contrary to the public interest. As 

discussed previously, major stationary 

sources of GHG emissions will be 

subject to PSD permitting requirements 

as of January 2, 2011, a date which is 

rapidly approaching. As of that date, no 

major stationary source emitting GHG at 

or above the levels set in the Tailoring 

Rule will be able to construct or modify 

without first obtaining a permit for its 

GHG emissions. In the absence of this 

rule, such sources will have no 

permitting authority from which to 

obtain such a permit. Without a 

permitting authority in place, sources 

would be subject to delays in 

construction or modification, causing 

economic harm to those sources and to 

others secondarily affected. 

Specifically, the State of Texas has 

estimated that 167 sources will require 

GHG permits in 2011.90 This is a 

substantial number of entities and the 

economic harm that they face as a result 

of permitting delays could affect a 

substantial number of related entities, 

employees, shareholders, and the 

public. 

This rule serves the necessary 

function of ensuring that a permitting 

authority is available to issue permits 

for these sources, and thus that large 

sources in Texas do not face a long 

delay in their ability to construct or 

modify. The public interest would 

certainly be hindered if EPA did not act 

now to ensure that economic progress is 

not impeded by a lack of access to an 

authorized permitting authority. 

The good cause exception also applies 

here because of the impracticability of 

notice and comment. EPA only recently 

became aware that no GHG PSD 

permitting authority would be 

authorized to issue permits to Texas 

sources on January 2, 2011, and thus 

had insufficient time to seek public 

comment before acting. As discussed 

previously, Texas submitted its 60-day 

letter to EPA on August 2, 2010; it 

submitted its Motion to Stay Three GHG 

Actions on September 15, 2010; and it 

submitted its 30-day letter to EPA on 

October 4, 2010. It was only after having 

received and analyzed all of these recent 

documents that it became clear that, due 

to underlying flaws in the Texas SIP 

PSD program and to Texas’s position 

regarding amending its SIP or seeking a 

FIP, all as described earlier, no 

permitting authority had authority to 

issue GHG PSD permits as of January 2, 

2011, and that there was no other way 

besides this rulemaking action to 

ameliorate that situation in a timely 

manner. The EPA’s agency functions 

would be compromised if it must 

impose legal obligations on sources 

when sources have no legal means to 

fulfill those obligations. In light of the 

limited time frame and the harmful 

effects on sources if this action is 

delayed, notice and comment is 

impracticable. 

In addition, the public has had and 

will have some opportunity to 

comment. The public was given the 

opportunity to comment on some of the 

issues in this action in response to 

proposals for the Tailoring Rule and the 

GHG PSD SIP call. This rule is also only 

an interim rule; the public will be given 

full opportunity to comment on the 

permanent rule that EPA is concurrently 

proposing, which mirrors this rule. By 

issuing this rule as an interim final rule, 

paired with a comment period on the 

proposal for more permanent action, 

EPA is providing as much opportunity 

for notice and comment as possible on 

the issues presented by this rule, and is 

striving to replace this rule with a rule 

encompassing that further comment as 

soon as is reasonably possible. 

For the same reasons cited earlier, 

EPA finds that there is good cause for 

this rule to take immediate effect. In 

addition, since this is not a major rule 

under the Congressional Review Act, 

the 60-day delay in effective date 


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required for major rules under the CRA 

does not apply. 

EPA is taking this action to do an 

error correction under CAA section 

110(k)(6) ‘‘in the same manner as [EPA’s 

previous] approval’’ of the Texas PSD 

program. The term ‘‘in the same 

manner’’ is not defined by statute, and 

it therefore takes on its ordinary, 

everyday meaning. It is a broad term, 

and thus undergoing any proper type of 

rulemaking process should be 

considered to be ‘‘in the same manner’’ 

as undergoing a proper rulemaking 

process of any other type. Both the 

original approval of Texas’s SIP and this 

action are rulemakings, conducted in 

accordance with the rulemaking 

process. It is immaterial that the original 

approval underwent notice and 

comment, and this action is subject to 

the good cause exception, since both of 

these processes are provided for by the 

prescribed agency rulemaking process. 

VII. Statutory and Executive Order 

Reviews 

A. Executive Order 12866—Regulatory 

Planning and Review 

Under Executive Order (EO) 12866 

(58 FR 51735, October 4, 1993), this 

action is a ‘‘significant regulatory action’’ 

because it raises novel legal or policy 

issues. Accordingly, EPA submitted this 

action to the Office of Management and 

Budget (OMB) for review under EO 

12866 and any changes made in 

response to OMB recommendations 

have been documented in the docket for 

this action. 

B. Paperwork Reduction Act 

This action does not impose any new 

information collection burden. The 

OMB has previously approved the 

information collection requirements 

contained in the existing regulations for 

PSD (see, e.g., 40 CFR 52.21) under the 

provisions of the Paperwork Reduction 

Act, 44 U.S.C. 3501 et seq. and has 

assigned OMB control number 2060– 

0003. The OMB control numbers for 

EPA’s regulations in 40 CFR are listed 

in 40 CFR part 9. 

C. Regulatory Flexibility Act 

This interim final rule is not subject 

to the Regulatory Flexibility Act (RFA) 

which generally requires an agency to 

prepare a regulatory flexibility analysis 

for any rule that will have a significant 

economic impact on a substantial 

number of small entities. The RFA 

applies only to rules subject to noticeand-comment rulemaking requirements 

under the APA or any other statute. This 

rule is not subject to notice-andcomment requirements under the APA 

or any other statute because, although 

the rule is subject to the APA, the 

agency has invoked the ‘‘good cause’’ 

exemption under 5 U.S.C. 553(b); 

therefore, it is not subject to the notice 

and comment requirement. 

Notwithstanding the previous 

conclusion, EPA is publishing a 

proposed rule in this Federal Register 

that mirrors this interim final rule, and 

the applicability of the RFA is 

addressed further in that proposed rule. 

D. Unfunded Mandates Reform Act 

This action contains no federal 

mandates under the provisions of Title 

II of the Unfunded Mandates Reform 

Act of 1995 (UMRA, 2 U.S.C. 1531– 

1538) for state, local or tribal 

governments or the private section. The 

action imposes no enforceable duty on 

any state, local or tribal governments or 

the private sector. With this action, EPA 

is only revising its previous approval of 

the Texas PSD SIP to be a partial 

approval and partial disapproval and 

promulgating a FIP to address the 

deficiencies as authorized by the CAA. 

Thus, this rule is not subject to the 

requirements of sections 202 or 205 of 

UMRA. 

This action is also not subject to the 

requirements of section 203 of UMRA 

because it contains no regulatory 

requirements that might significantly or 

uniquely affect small governments. 

E. Executive Order 13132—Federalism 

This action does not have federalism 

implications. It will not have substantial 

direct effects on Texas, on the 

relationship between the national 

government and Texas, or on the 

distribution of power and 

responsibilities among the various 

levels of government, as specified in 

Executive Order 13132. With this 

action, EPA is only revising its previous 

approval of the Texas PSD SIP to be a 

partial approval and partial disapproval 

and promulgating a FIP to address the 

deficiencies as authorized by the CAA. 

Thus, Executive Order 13132 does not 

apply to this action. 

In the spirit of Executive Order 13132, 

and consistent with EPA policy to 

promote communications between EPA 

and state and local governments, EPA is 

specifically soliciting comment on the 

proposed rule also published in this 

Federal Register that mirrors this 

interim final rule. 

F. Executive Order 13175—Consultation 

and Coordination With Indian Tribal 

Governments 

This action does not have tribal 

implications, as specified in Executive 

Order 13175 (65 FR 67249, November 9, 

2000). In this action, EPA is not 

addressing any tribal implementation 

plans. This action is limited to Texas’s 

PSD SIP. Thus, Executive Order 13175 

does not apply to this action. 

G. Executive Order 13045—Protection of 

Children From Environmental Health 

Risks and Safety Risks 

EPA interprets EO 13045 (62 FR 

19885, April 23, 1997) as applying only 

to those regulatory actions that concern 

health or safety risks, such that the 

analysis required under section 5–501 of 

the EO has the potential to influence the 

regulation. This action is not subject to 

EO 13045 because EPA is only revising 

its previous approval of the Texas PSD 

SIP to be a partial approval and partial 

disapproval and promulgating a FIP to 

address the deficiencies as authorized 

by the CAA. 

H. Executive Order 13211—Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use 

This action is not a ‘‘significant energy 

action’’ as defined in Executive Order 

13211 (66 FR 28355 (May 22, 2001)), 

because it is not likely to have a 

significant adverse effect on the supply, 

distribution, or use of energy. With this 

action, EPA is only revising its previous 

approval of the Texas PSD SIP to be a 

partial approval and partial disapproval 

and promulgating a FIP to address the 

deficiencies as authorized by the CAA. 

I. National Technology Transfer and 

Advancement Act 

Section 12(d) of the National 

Technology Transfer and Advancement 

Act of 1995 (‘‘NTTAA’’), Public Law 

104–113, 12(d) (15 U.S.C. 272 note) 

directs EPA to use voluntary consensus 

standards in its regulatory activities 

unless to do so would be inconsistent 

with applicable law or otherwise 

impractical. Voluntary consensus 

standards are technical standards (e.g., 

materials specifications, test methods, 

sampling procedures, and business 

practices) that are developed or adopted 

by voluntary consensus standards 

bodies. NTTAA directs EPA to provide 

Congress, through OMB, explanations 

when the Agency decides not to use 

available and applicable voluntary 

consensus standards. 

This rulemaking does not involve 

technical standards. Therefore, EPA is 

not considering the use of any voluntary 

consensus standards. 


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82460 Federal Register / Vol. 75, No. 250 / Thursday, December 30, 2010 / Rules and Regulations 

J. Executive Order 12898—Federal 

Actions To Address Environmental 

Justice in Minority Populations and 

Low-Income Populations 

Executive Order 12898 (59 FR 7629, 

February 16, 1994) establishes federal 

executive policy on environmental 

justice. Its main provision directs 

federal agencies, to the greatest extent 

practicable and permitted by law, to 

make environmental justice part of their 

mission by identifying and addressing, 

as appropriate, disproportionately high 

and adverse human health or 

environmental effects of their programs, 

policies, and activities on minority 

populations and low-income 

populations in the U.S. 

EPA has determined that this interim 

final rule will not have 

disproportionately high and adverse 

human health or environmental effects 

on minority or low-income populations 

because it does not affect the level of 

protection provided to human health or 

the environment. With this action, EPA 

is only revising its previous approval of 

the Texas PSD SIP to be a partial 

approval and partial disapproval and 

promulgating a FIP to address the 

deficiencies as authorized by the CAA. 

K. Congressional Review Act 

The Congressional Review Act, 5 

U.S.C. 801, et seq., as added by the 

Small Business Regulatory Enforcement 

Fairness Act of 1996, generally provides 

that before a rule may take effect, the 

agency promulgating the rule must 

submit a rule report, which includes a 

copy of the rule, to each House of the 

Congress and to the Comptroller General 

of the United States. Section 808 allows 

the issuing agency to make a rule 

effective sooner than otherwise 

provided by the CRA if the agency 

makes a good cause finding that notice 

and public procedure is impracticable, 

unnecessary, or contrary to the public 

interest. This determination must be 

supported by a brief statement, 5 U.S.C. 

808(2). As stated previously, EPA has 

made such a good cause finding, 

including the reasons therefore, and 

established an effective date of 

December 30, 2010. EPA will submit a 

report containing this rule and other 

required information to the United 

States Senate, the United States House 

of Representatives, and the Comptroller 

General of the United States prior to 

publication of the rule in the Federal 

Register. This action is not a ‘‘major 

rule’’ as defined by 5 U.S.C. 804(2). 

VIII. Judicial Review 

Section 307(b)(1) of the CAA specifies 

which Federal Courts of Appeal have 

jurisdiction to hear petitions for review 

of which final actions by EPA. This 

section provides, in part, that petitions 

for review must be filed in the Court of 

Appeals for the District of Columbia 

Circuit: (i) When the agency action 

consists of ‘‘nationally applicable 

regulations promulgated, or final actions 

taken, by the Administrator,’’ or (ii) 

when such action is locally or regionally 

applicable, if ‘‘such action is based on a 

determination of nationwide scope or 

effect and if in taking such action the 

Administrator finds and publishes that 

such action is based on such a 

determination.’’ 

This rule is based on a determination 

of nationwide scope or effect. Texas’s 

response to the SIP call—including 

Texas’s statements that it does not 

intend to submit a SIP revision and its 

decision not to identify a SIP submittal 

deadline, which have placed its sources 

at risk for delays in construction or 

modification—led us to determine that 

we should examine whether there may 

be a flaw in Texas’s SIP that was present 

at the time of our approval. We then 

conducted a closer inquiry and on the 

basis of that, we are concluding that in 

fact a flaw was present. As a result, we 

are authorized to undertake an error 

correction, as we are doing in this 

rulemaking. For all other states subject 

to the SIP call, their response to the SIP 

call—which did not raise the concerns 

Texas’s did and which assured that their 

sources would not be at risk for delays 

in construction or modification—lead us 

to determine that it was not necessary 

to examine further whether their SIPs 

were flawed at the time we approved 

them. That determination—whether to 

examine the SIPs further—is a 

determination of nationwide scope or 

effect because it affected Texas and the 

12 other states subject to the SIP call. 

Further indication that this 

determination of nationwide scope or 

effect is that EPA is making it as part of 

the complex of rules EPA has 

promulgated to implement the GHG 

PSD program for each of the states in the 

nation. Those rules include (i) the 

Tailoring Rule and the Johnson Memo 

Reconsideration, which revise EPA 

regulations to incorporate the Tailoring 

Rule thresholds, and which apply in 

each state that does not have an 

approved SIP PSD program, and 

therefore operates under EPA’s 

regulations; (ii) the SIP call, which 

applies in each state that has an EPAapproved SIP PSD program but does not 

apply that program to GHG-emitting 

sources; and (iii) the PSD Narrowing 

rule, which applies in each state that 

has an EPA-approved SIP PSD program 

that does apply to GHG-emitting 

sources. 

Thus, under section 307(b)(1) of the 

Act, judicial review of this final action 

is available by filing of a petition for 

review in the U.S. Court of Appeals for 

the District of Columbia Circuit by 

February 28, 2011. 

IX. Statutory Authority 

The statutory authority for this action 

is provided by sections 101, 110, 114, 

116, 160–169, and 301 of the CAA as 

amended (42 U.S.C. 7401, 7410, 7414, 

7416, 7470–7479, and 7601). 

List of Subjects in 40 CFR Part 52 

Air pollution control, Carbon dioxide, 

Carbon dioxide equivalents, Carbon 

monoxide, Environmental protection, 

Greenhouse gases, Hydrofluorocarbons, 

Incorporation by reference, 

Intergovernmental relations, Lead, 

Methane, Nitrogen dioxide, Nitrous 

oxide, Ozone, Particulate matter, 

Perfluorocarbons, Reporting and 

recordkeeping requirements, Sulfur 

hexafluoride, Sulfur oxides, Volatile 

organic compounds. 

Dated: December 23, 2010. 

Lisa P. Jackson, 

Administrator. 

■ For the reasons set out in the 

preamble, title 40, chapter I of the Code 

of Federal Regulations is amended as 

follows: 

PART 52—[AMENDED] 

■ 1. The authority citation for part 52 

continues to read as follows: 

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

■ 2. Section 52.2303 is amended by 

adding paragragh (d) to read as follows: 

§ 52.2303 Significant deterioration of air 

quality. 

* * * * * 

(d)(1) The Texas PSD SIP is partially 

disapproved as of December 30, 2010 

because the Texas PSD SIP fails to apply 

to pollutants newly subject to 

regulation, including the pollutant 

greenhouse gases (GHGs) from 

stationary sources described in 

§ 52.21(b)(49)(iv). 

(2) The requirements of sections 160 

through 165 of the Clean Air Act are not 

met to the extent the plan, as approved, 

does not apply with respect to 

emissions of pollutants subject to 

regulation under the Clean Air Act, 

including the pollutant GHGs from 

certain stationary sources as of January 

2, 2011. Therefore, from January 2, 2011 

through April 30, 2011, the provisions 

of § 52.21 except paragraph (a)(1) are 

hereby made a part of the plan for the 


hsrobinson on DSK69SOYB1PROD with RULES_2
Federal Register / Vol. 75, No. 250 / Thursday, December 30, 2010 / Rules and Regulations 82461 

pollutant GHGs from stationary sources 

described in § 52.21(b)(49)(iv). In 

addition, the United States 

Environmental Protection Agency shall 

take such action as is appropriate to 

assure the application of PSD 

requirements to any other pollutants 

that become subject to regulation under 

the federal Clean Air Act for the first 

time after January 2, 2011. 

(3) For purposes of this section, the 

‘‘pollutant GHGs’’ refers to the pollutant 

GHGs, as described in § 52.21(b)(49)(i). 

[FR Doc. 2010–32786 Filed 12–29–10; 8:45 am] 

BILLING CODE 6560–50–P 


hsrobinson on DSK69SOYB1PROD with RULES_2