Reconsideration of Interpretation of 

Regulations that Determine Pollutants 

Covered by Clean Air Act Permitting 

Programs

EPA’s Response to Public

Comments

U.S. Environmental Protection Agency

Office of Air Quality Planning and Standards

Air Quality Policy Division

Research Triangle Park, NC

March 29, 2010

i

FOREWORD

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

Agency’s (EPA’s) Reconsideration of Interpretation of Regulations that Determine Pollutants 

Covered by Clean Air Act Permitting Programs.” EPA received comments on this 

Reconsideration proposal via mail, e-mail, and facsimile. Copies of all comment letters 

submitted are available at the EPA Docket Center Public Reading Room, or electronically

through http://www.regulations.gov by searching Docket ID EPA-HQ-OAR-2009-0597.

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

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

parentheses, one or more lists of Docket ID numbers for commenters who raised particular 

issues; however, these lists are not meant to be exhaustive and EPA does not individually

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

cases where multiple commenters expressed essentially identical arguments.
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Table of Contents

FOREWORD................................................................................................................................... i

Acronyms and Abbreviations ......................................................................................................... v

Chapter 1. Introduction ................................................................................................................. 1

Table 1. Comment Letters Received on Proposed Reconsideration Notice ............................. 3

Chapter 2. Procedural Issues......................................................................................................... 6

2.1. Codification of EPA Interpretation.................................................................................... 6

2.2. Issuance of Memorandum without Notice and Comment Process.................................... 8

2.2.1. Effect and Meaning of Previous EPA Interpretation Issued in 1978........................ 10

2.2.2. Argument that PSD Interpretive Memo Overturns an EAB Decision...................... 13

2.2.3. Contention that PSD Interpretive Memo Amends the Substance of the PSD Program

............................................................................................................................................... 16

2.3. Relevance of Related Public Participation Opportunities................................................ 17

2.4. Interpretation of Statute and Revisions Thereto .............................................................. 18

2.5. Revisions to Interpretation in PSD Interpretive Memo ................................................... 19

Chapter 3. Actual Control of Emissions..................................................................................... 21

3.1. Overview of Comments on Actual Control Interpretation .............................................. 21

3.2. Interpretation of the Clean Air Act ................................................................................. 24

3.2.1. Arguments that Plain Language of Act Precludes Actual Control Interpretation .... 27

3.2.2. Meaning of the Term “regulation”............................................................................ 30

3.2.3. Ambiguity of Statutory Language and EPA Discretion ........................................... 31

3.2.4. Pollutants “Subject To” Regulation Are Pollutants That EPA Has the Authority to 

Regulate ................................................................................................................................ 33

3.2.5. Distinction Between Term “Control” and “Regulations” In Other Portions of the 

Clean Air Act ........................................................................................................................ 38

3.2.6. EPA Elevates Policy Preference Over Plain Statutory Meaning.............................. 41

3.3. Interpretation of Regulations ........................................................................................... 42

3.4. Policy Considerations Raised by Actual Control Interpretation..................................... 44

3.4.1. Orderly and Deliberative Decision Making Process................................................. 45

3.4.2. Public Participation Concerns................................................................................... 46

3.4.3. Development of Control Strategies........................................................................... 48

3.4.4. Past Policy and Practice ............................................................................................ 49

Chapter 4. Monitoring and Reporting Requirement ................................................................... 56

4.1. Overview of Comments on Monitoring and Reporting Interpretation ............................ 56

4.2. Statutory Interpretation .................................................................................................... 56

4.2.1. Meaning of the Term Regulation.............................................................................. 56
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4.2.2. Effect of Section 821 of the Clean Air Act............................................................... 58

4.2.3. Effect of 2008 Consolidated Appropriations Act and Mandatory Greenhouse Gas 

Reporting Rule ...................................................................................................................... 60

4.2.4. Effects Threshold for PSD Permitting ...................................................................... 61

4.3. Policy Considerations Raised by Monitoring and Reporting Interpretation.................... 63

4.4. Monitoring Equipment Captures and Controls Emissions............................................... 68

4.5. Applicability of Title V Requirements Based on Monitoring and Reporting.................. 69

4.6. Practice of Distinguishing Pollutants Covered by Control Requirements and Monitoring 

Requirements ............................................................................................................................ 70

4.7. Enforceability of Monitoring Regulations....................................................................... 70

Chapter 5. EPA-Approved State Implementation Plan (SIP)..................................................... 72

5.1. Overview of Comments on the SIP Interpretation........................................................... 72

5.2. Consistency with the Statute and Congressional Intent................................................... 72

5.3. Implications of Applying State-specific Decisions to the Nation................................... 77

5.4. Content of “Applicable Implementation Plan”................................................................ 79

5.5. Implementation Considerations of a SIP Interpretation for GHGs.................................. 80

5.6. Reliance on Connecticut Decision.................................................................................. 80

Chapter 6. Finding of Endangerment.......................................................................................... 82

6.1. Appropriateness of Triggering PSD Requirements from an Endangerment Finding...... 82

6.2. Endangerment Finding Must be Specific to Stationary Sources to Trigger PSD 

Requirements ............................................................................................................................ 84

6.3. Endangerment Finding as Prerequisite to Regulation or as a Regulation Itself ............. 85

6.4. Consistency with Supreme Court Ruling......................................................................... 86

Chapter 7. Granting of Section 209 Waiver................................................................................ 88

7.1. Granting Waiver of State Preemption.............................................................................. 88

7.2. Adoption of California Standards by Other States .......................................................... 94

Chapter 8. Timing of Regulation ................................................................................................ 95

8.1. Effective Date of Control Requirements.......................................................................... 95

8.1.1. Legal analysis for the “takes effect” reading for the effective date interpretation: .. 95

8.1.2. General comments on the effective date interpretation: ......................................... 100

8.2. Compliance Date............................................................................................................ 104

8.3. Promulgation Date ......................................................................................................... 108

8.4. Apply PSD only after Significance Level has been promulgated.................................. 112
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8.5. Timing Based on Economic and Technical Feasibility of Controls.............................. 113

Chapter 9. Regulation of Greenhouse Gases ............................................................................ 114

9.1. GHG and CO2 are Air Pollutants.................................................................................. 114

9.2. Date When PSD Permitting Requirements Apply to GHGs.......................................... 114

9.3. Need More Time Before PSD/Title V Applies to GHGs .............................................. 120

9.3.1. Impacts from GHG Regulation Support Actual Control Interpretation.................. 120

9.3.2. Implementation Concerns Warrant More Time...................................................... 122

9.3.3. Provide More Time by Delaying Final Action on the GHG LDV Rule................. 128

9.4. Identifying the Greenhouse Gases “Subject to Regulation” Under LDV Rule ............. 129

9.5. Permit Application Transition........................................................................................ 130

9.6. Potential Retroactive Liability ....................................................................................... 133

9.7. Clean Air Act Is Poorly Suited to Greenhouse Gas Regulation .................................... 134

9.8. Arguments That PSD Cannot Apply to Pollutants Regulated Only Under Title II of 

Clean Air Act .......................................................................................................................... 136

9.9. Need for Additional Process and Analysis Before Regulating Stationary Source GHG 

Emissions................................................................................................................................ 155

9.9.1. Requests for More Orderly Process and Judgment Before EPA Regulates GHGs 

Emissions from Stationary Sources.................................................................................... 155

9.9.2. Analysis of Effects on Large Stationary Sources ................................................... 157

9.10. Combustion of Biomass-Derived Fuels....................................................................... 159

Chapter 10. State Program Implementation.............................................................................. 161

10.1. Applicability of PSD Interpretive Memo to State PSD Programs............................... 161

10.2. Need to Complete SIP Revision Process..................................................................... 162

Chapter 11. Other Issues........................................................................................................... 165

11.1. Combination of Interpretations.................................................................................... 165

11.2. Municipal Solid Waste (MSW) Landfill Gas Emission Standards.............................. 165

11.3. Section 821 of Public Law 101-549............................................................................. 166

11.4. Alternatives Analysis Under Section 165 of the CAA ................................................ 169

11.5. Broad Focus of Proposal.............................................................................................. 169

11.6. Adequacy of Comment Opportunity............................................................................ 171
v

Acronyms and Abbreviations

Acronym/Abbreviation Definition

AEP American Electric Power

APS Arizona Public Service

AFBF American Farmers Bureau Federation

AF&PA American Forest & Paper Association

AMI American Meat Institute

ANPR Advance Notice of Proposed Rulemaking

APA Administrative Procedures Act

API American Petroleum Institute

APPA American Public Power Association

BACT Best Available Control Technology

CAA or Act Clean Air Act

CAFE Corporate Average Fuel Economy

CAIP Clean Air Implementation Project

CAPCOA California Air Pollution Control Officers Association

CARB California Air Resources Board

CEMS Continuous Emissions Monitoring System

CIBO Council of Industrial Boiler Owners 

CO2 Carbon Dioxide

CRA Congressional Review Act

DfE Design for the Environment

DHEC Department of Health and Environmental Control

EAB Environmental Appeals Board

EDF Environmental Defense Fund

EEI Edison Electric Institute

EPA Environmental Protection Agency

FR Federal Register

GHG Greenhouse Gas

HAP Hazardous Air Pollutants

HFC Hydrofluorocarbon

ICR Information Collection Request

IDEM Indiana Department of Environmental Management

INGAA Interstate Natural Gas Association of America

LDV Light-Duty Vehicle

LDVR Light-Duty Vehicle Rule

LPPC The Large Public Power Council

MACT Maximum Achievable Control Technology

MY 2012 Model Year 2012

NAAQS National Ambient Air Quality Standard(s)

NACAA National Association of Clean Air Agencies

NAM National Association of Manufacturers
vi

Acronym/Abbreviation Definition

NEDA/CAP National Environmental Defense Association/Clean Air Project 

NHTSA National Highway Traffic Safety Administration

NMA National Mining Association

NRDC Natural Resources Defense Council

NSPS New Source Performance Standard

NSR New Source Review

NRECA National Rural Electric Cooperative Association

PFC Perfluorocarbons

PM Particulate Matter

PRA Paperwork Reduction Act

PSD Prevention of Significant Deterioration

PTE Potential to Emit

RFA Regulatory Flexibility Act

RIA Regulatory Impact Analyses

RMA Rubber Manufacturers Association

SBREFA Small Business Regulatory Enforcement Fairness Act

SF6 Sulfur hexafluoride

SIP State Implementation Plan

SO2 Sulfur Dioxide

TCC Texas Chemical Council

TCEQ Texas Commission on Environmental Quality

TIP Texas Industry Project

TPY Tons Per Year

UARG Utility Air Regulatory Group

UMRA Unfunded Mandates Reform Act

U.S. United States of America
1

Chapter 1. Introduction

On December 18, 2008, then-EPA Administrator Stephen Johnson issued a memorandum 

setting forth EPA’s interpretation regarding which pollutants were “subject to regulation” for the 

purposes of the federal Prevention of Significant Deterioration (PSD) permitting program. See

Memorandum from Stephen Johnson, EPA Administrator, to EPA Regional Administrators, RE: 

EPA’s Interpretation of Regulations that Determine Pollutants Covered by Federal Prevention of 

Significant Deterioration (PSD) Permit Program (Dec. 18, 2008) (“PSD Interpretive Memo” or 

“Memo”); see also 73 FR 80300 (Dec. 31, 2008) (public notice of Dec. 18, 2008 memo). The 

Memo interprets the phrase “subject to regulation” to include pollutants “subject to either a 

provision in the CAA or regulation adopted by EPA under the CAA that requires actual control 

of emissions of that pollutant.” The Memo was necessary after issues were raised regarding the 

scope of pollutants that should be addressed in PSD permitting actions following the Supreme 

Court’s April 2, 2007 decision in Massachusetts v. EPA, 549 U.S. 497 (2007). The Memo also 

addresses a November 13, 2008 decision by the Environmental Appeals Board (EAB) in a 

challenge to a PSD permit to construct a new electric generating unit. In re Deseret Power 

Electric Cooperative, PSD Appeal No. 07-03 (EAB Nov. 13, 2008) (“Deseret”). The Deseret 

Power permit was issued by EPA Region 8 in August 2007 and did not include best available 

control technology (BACT) limits for carbon dioxide (CO2).

The purpose of the PSD Interpretive Memo is to “establish[] an interpretation clarifying 

the scope of the EPA regulation that determines the pollutants subject to the federal PSD 

program under the Clean Air Act (CAA or Act)” by providing EPA’s “definitive interpretation”

of the definition of the term “regulated NSR pollutants” found at 40 CFR 52.21(b)(50) and 

resolving “any ambiguity in subpart ([iv]) of that paragraph, which includes ‘any pollutant that 

otherwise is subject to regulation under the Act.’” As the Memo explains, the statute and 

regulation use similar language – the regulation defines a regulated NSR pollutant to include 

“[a]ny pollutant that otherwise is subject to regulation under the Act” and requires BACT for 

“each regulated NSR pollutant,” 40 CFR 52.21(b)(50) and (j), while the Act requires BACT for 

“each pollutant subject to regulation under this [Act],” CAA sections 165(a)(4) and 169. The 

PSD Interpretive Memo seeks to resolve the ambiguity in implementation of the PSD program 

by stating that “EPA will interpret this definition of ‘regulated NSR pollutant’ to exclude 

pollutants for which EPA regulations only require monitoring or reporting but to include each 

pollutant subject to either a provision in the Clean Air Act or regulation adopted by EPA under 

the Clean Air Act that requires actual control of emissions of that pollutant.”

On December 31, 2008, EPA received a petition for reconsideration of the position taken 

in the PSD Interpretive Memo from Sierra Club and 14 other environmental, renewable energy, 

and citizen organizations. Petitioners argued that the PSD Interpretive Memo violated the 

Administrative Procedure Act and the CAA, conflicts with prior agency actions and 

interpretations, and attempts to establish an interpretation of the Act that conflicts with the plain 

language of the statute. On February 17, 2009, EPA granted the petition for reconsideration on 

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

comment on the issues raised in the Memo and on any issues raised by Deseret, to the extent 

they do not overlap with the issues raised in the Memo. EPA did not stay the effectiveness of the 
2

PSD Interpretive Memo pending reconsideration, but the Agency did reiterate that the Memo 

“does not bind States issuing [PSD] permits under their own State Implementation Plans.”

On October 7, 2009 (74 FR 51535), EPA proposed a reconsideration of the PSD 

Interpretive Memo that solicited comment on five possible interpretations of the regulatory 

phrase “subject to regulation” – the “actual control” interpretation (adopted by the Memo); the 

“monitoring and reporting” interpretation (advocated by Petitioners); the inclusion of regulatory

requirements for specific pollutants in SIPs (discussed in both the Memo and the Petition for 

Reconsideration); an EPA finding of endangerment (discussed in the Memo); and the grant of a 

section 209 waiver interpretation (raised by commenters in another EPA action). EPA also 

addressed, and requested public comment on, other issues raised in the PSD Interpretive Memo 

and related actions. 

The comment period for the proposed reconsideration notice ended on December 7, 2009. 

EPA received 71 comments on the proposal. Commenters represented a range of interests, 

including regulatory agencies, corporations that may need to obtain PSD permits, trade 

associations representing various industrial sectors, and environmental and public interest 

groups. Table 1 identifies each public comment received on the proposal submitted to the 

Federal Register Docket Management System (FDMS). In this document, we identify each 

commenter by using its Docket Document ID number in Air Docket ID No. EPA–HQ–OAR–

2009–0597. For example, “0065.1” identifies the specific comment document in the docket (i.e., 

Docket Document ID No. EPA–HQ–OAR–2009–0597–0065.1).

The purpose of this Response-to-Comments document (RTC) is to respond to comments 

received on EPA’s October 7, 2009 proposal. This document contains summarized public 

comments and EPA responses to those comments. This document responds to all comments 

received, although it does not respond to comments on issues we did not seek comment on in the 

proposal, that were beyond the scope of the issues raised in the proposal, or that were otherwise 

not relevant to the proposal. The comments in this document are grouped into categories to 

reflect major issues discussed in the proposal and other related issues.
3

Table 1. Comment Letters Received on Proposed Reconsideration 

Notice

The full text of each comment is available for public inspection and copying at EPA’s Air 

and Radiation Docket and Information Center, Environmental Protection Agency, Room B102, 

1301 Constitution Avenue, NW, Washington, DC (Docket ID No. EPA-HQ-OAR-2009–0597). 

The EPA Docket Center 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 Reading Room is (202) 

566-1744 and the telephone number for the Air and Radiation Docket and Information Center is 

(202) 566-1742. Copies may also be mailed on request from the Air Docket by calling (202) 

260-7548. A reasonable fee may be charged for copying. Electronic versions of public 

comments on the proposal are contained in Docket ID No. EPA–HQ–OAR–2009–0597, which 

can be accessed the federal-wide eRulemaking site at www.regulations.gov.

Docket ID. No. Commenter Name

0048 Anonymous Commenter

0049 National Association of Manufacturers (NAM)

0050 American Farm Bureau Federation (AFBF)

0051 BP America

0052 Ohio Environmental Protection Agency (EPA)

0053 American Petroleum Institute (API)

0054 Regional Air Pollution Control Agency

0055 Georgia-Pacific

0056 National Environmental Defense Association/Clean Air Project 

(NEDA/CAP)

0057 Alabama Department of Environmental Management

0058 California Air Pollution Control Officers Association (CAPCOA)

0059 Flexible Packaging Association

0060 Lilly

0061 The National Climate Coalition

0062 National Association of Clean Air Agencies (NACAA)

0063 Interstate Natural Gas Association of America (INGAA)

0064 The Large Public Power Council (LPPC)

0065 Midwest Ozone Group

0066 American Meat Institute (AMI)

0067 American Electric Power (AEP)

0068 Alliance of Automobile Manufacturers

0069 City Utilities of Springfield, Missouri

0070 The Class of 85 Regulatory Response Group

0071 American Forest & Paper Association (AF&PA)

0072 Calpine Corporation

0073 Edison Electric Institute (EEI)
4

Docket ID. No. Commenter Name

0074/0075 U.S. Chamber of Commerce1

0076 Council of Industrial Boiler Owners (CIBO)

0077 California Air Resources Board (CARB)

0078/0094 Semiconductor Industry Association

0079 Nucor Corporation

0080 Peabody Energy

0081 Progress Energy

0082 Rubber Manufacturers Association (RMA)

0083 Consumers Energy

0084 Landmark Legal Foundation

0085 Air Permitting Forum

0086 American Chemical Council, American Iron and Steel Institute, Brick 

Industry Association, Corn Refiners Association, Institute of Shortening and 

Edible Oils, National Association of Manufacturers, National Oilseed 

Processors Association, and National Petrochemical and Refiners 

Association

0087 Clean Air Task Force, Indiana Wildlife Federation, Michigan Environmental 

Council, and the Ohio Environmental Council

0088 Jeff Walker, Private Citizen

0089 Utility Air Regulatory Group (UARG)

0090 Arizona Public Service (APS)

0091 South Carolina Department of Health and Environmental Control (DHEC)

0092 BCCA Appeal Groups

0093 ConocoPhillips

0094 Semiconductor Industry Association

0095 Sierra Club, Natural Resources Defense Council (NRDC) and 

Environmental Defense Fund (EDF)

0096 Missouri Joint Municipal Electric Utility Commission

0097 RRI Energy, Inc.

0098 Texas Industry Project (TIP)

0099 Sierra Club

0100 Coalition for Responsible Regulation, Inc.

0101 Center for Biological Diversity

0102 Texas Commission on Environmental Quality (TCEQ)

0103 Indiana Department of Environmental Management (IDEM)

0104 Texas Chemical Council (TCC)

0105 Dow Chemical Company

0106/0107 American Public Power Association (APPA)

0108 The National Rural Electric Cooperative Association (NRECA)

0109 Duke Energy Corporation

 

1

 0075 comments were comments submitted by U.S. Chamber of Commerce in response to the Advance Notice of 

Proposed Rulemaking “Regulating Greenhouse Gas Emissions Under the Clean Air Act” published in the Federal 

Register on July 30, 2008.
5

Docket ID. No. Commenter Name

0110 National Mining Association (NMA)

0111 Texas Oil & Gas Association

0112 Intel Corporation

0113 Energy-Intensive Manufacturers Working Group on Greenhouse Gas 

Regulation

0114 National Association of Manufacturers

0115 SCANA Corporation

0116 South Carolina Chamber of Commerce

0117 National Association of Homebuilders

0118 Clean Air Implementation Project (CAIP)
6

Chapter 2. Procedural Issues

2.1. Codification of EPA Interpretation

Comment: 

One industry commenter (0104) does not support a codification of the final interpretation 

of when a pollutant is “subject to regulation” because it is not necessary. The commenter notes 

that because regulation under PSD already includes a stringent permitting analysis that requires 

the installation of BACT, the performance of an ambient air quality impacts analysis, an 

additional impacts analysis and thorough public participation throughout the process, there is no 

need to further codify the law in this area.

An industry commenter (0105) states that EPA should not codify its final interpretation in 

the federal PSD rules found at 40 CFR 52.21 and 51.166, and should leave the interpretation as a 

policy memo. The commenter believes the logic presented in support of the “actual control”

interpretation was very reasonable and supported by existing regulatory language and case law. 

Further, the commenter states that given the dynamic nature of the GHG regulatory and 

legislative activity currently on-going in the U.S., leaving the interpretation in a policy memo 

would be preferred and more easily allow EPA to potentially respond to future scenarios. 

Commenter also states that if EPA determines it would like to codify these interpretations, they

should publish specific regulatory language for review and comment.

Eight industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) took 

no position on codification of the actual control interpretation in 40 CFR 52.21 other than to note 

that (1) EPA should not delay final action on the proposed PSD Interpretation while it undertakes 

any codification, and (2) that interpretation should apply both to administration of the federal 

PSD permitting program under 40 CFR 52.21 and to EPA approval of (or other action on) new or 

revised state PSD plans under 40 CFR 51.166.

A state agency commenter (0091) states that it is absolutely essential that the definition of 

a regulated NSR pollutant, and when a pollutant is subject to NSR, be resolved, and that it is just 

as important that the resolution is a practical and scientifically justified approach that can be 

readily-implemented by the permitting agencies.

One industry commenter (0050) submits that EPA’s interpretation (they support the 

“actual control” interpretation) should be codified in regulation so that it can be applied generally 

to any future “air pollutant.”

Another industry commenter (0081) states that EPA should consider codifying its chosen 

interpretation. The commenter (0081) believes this would more formally clarify EPA’s position, 

provide certainty to the regulated community, and help resolve the issue of the PSD requirements 

potentially applying retroactively. The commenter (0081.1) also recommended that EPA codify

its position as to the specific regulatory event that triggers PSD, i.e., when a regulation 
7

establishing actual controls takes effect. However, the commenter (0081.1) believes EPA should 

formally propose its various codifications through additional notice and comment rulemaking 

because this Reconsideration should not be seen as the equivalent of a formal regulatory process; 

rather, the commenter (0081) believes that through the Reconsideration EPA is requesting 

comment on whether it should undertake such a process. 

One industry commenter (0093) urges EPA to continue the interpretation of “subject to 

regulation” per the PSD Interpretive Memo and perhaps, although unnecessary, codify the 

clarification in regulatory text.

One industry commenter (0108) states that it would be a positive step for EPA to codify

its chosen interpretation, assuming EPA selects the actual control interpretation. The commenter 

(0108) believes this would more formally clarify EPA’s position, provide certainty to the 

regulated community, and help resolve the issue of the PSD requirements potentially applying 

retroactively. The commenter (0108) adds that to ensure consistency in application of PSD by

states that incorporate EPA regulatory language in their State Implementation Plan(s) (SIP[s]), 

EPA should also consider making similar codifications of its interpretation in 40 CFR 51.66. 

The commenter (0108) also recommends that EPA codify its position as to the specific 

regulatory event that triggers PSD, i.e., when a regulation establishing actual controls takes 

effect. However, the commenter (0108) believes EPA should formally propose its various 

codifications through additional notice and comment rulemaking because this Reconsideration 

should not be seen as the equivalent of a formal regulatory process.

Response:

EPA does not believe it is necessary to codify its interpretation in the regulatory text. 

The Agency feels it is more important to promptly communicate and apply our final decisions 

regarding the applicability of the PSD program in light of recent and upcoming actions related to 

GHGs. More specifically, EPA recently finalized the “Mandatory Reporting of Greenhouse 

Gases” rule (known as the “Reporting Rule”), 74 FR 56259 (Oct. 30, 2009), which added 

monitoring requirements for additional GHGs not covered in the Part 75 regulations. Further, 

EPA is poised to finalize by the end of March 2010 the LDV Rule that will establish controls on 

GHGs that take effect in Model Year 2012, which starts as early as January 2, 2011. Thus, these 

actions make it important that EPA immediately apply its final interpretation of the PSD 

regulations on this issue (as refined in this action). Furthermore, even if EPA modified the text 

of the federal rules, many states may continue to proceed under an interpretation of their rules. 

EPA thus believes overall implementation of PSD permitting programs is facilitated by this 

notice that describes how existing requirements in federal regulations at 40 CFR 52.21 are 

interpreted by EPA and how similar state provisions may be interpreted by states.

EPA finds merit in most of the points raised by commenters, but necessarily has to 

reconcile these competing considerations. EPA agrees that codification of the Agency’s 

interpretation in the regulatory text, while not necessary, would provide some measure of 

additional certainty to all stakeholders (including regulated sources that must obtain PSD 

permits). Although not necessarily required here, we also agree that it is preferable that EPA 

publish specific regulatory language for review and comment. However, regardless of whether 
8

codification of this interpretation is ultimately desirable, the Agency does not believe the 

national interest is served by delaying final action on the issues addressed in this notice pending 

additional procedural steps or by deferring the applicability of EPA’s final interpretation. See, 5 

U.S.C. §553(d). EPA is still considering the option of codifying its interpretation at a later date.

2.2. Issuance of Memorandum without Notice and Comment Process

According to one environmental group commenter (0095), EPA chose not to respond to 

petitioners’ early procedural challenges to the Memo (see 74 FR 51538 at n.3), and describes 

these notice and comment procedures as voluntary (Id. at 51548), a characterization that the 

commenter strongly disagrees with. These comments incorporate the Petition for 

Reconsideration, which argues that the PSD Interpretive Memorandum was a substantive rule 

and not an interpretive rule. To illustrate the nature of an interpretive rule, the Petition for 

Reconsideration quotes the following passage from a court decision:

Interpretative rules “simply state[ ] what the administrative agency thinks the 

statute means, and only remind[ ] affected parties of existing duties.” General 

Motors Corp. v. Ruckelshaus, 742 F.2d 1561, 1565 (D.C. Cir. 1984) (en banc) 

(internal quotation marks omitted). Interpretative rules may also construe 

substantive regulations. See Syncor Internat’l Corp. v. Shalala, 127 F.3d 90, 94 

(D.C. Cir. 1997).

Assoc. of Amer. RR v. Dept. of Transp., 198 F.3d 944 at 947 (D.C. Cir. 1999) (emphasis added). 

The Petition argues that the PSD Interpretive Memo is a substantive rule, and not an interpretive 

one, because it reverses a formal agency interpretation, overturns an EAB decision, and amends 

the substance of the PSD program.

Another commenter (0087) incorporated by reference the arguments put forth in that 

Petition and in the Amended Petition for Reconsideration filed by Sierra Club on January 6, 

2009. 

Two industry commenters (0051, 0053) disagree with petitioners that claimed the PSD 

Interpretive Memo is invalid because EPA issued it without undergoing notice-and-comment 

procedures. The commenter states that EPA is undergoing notice-and-comment procedures and 

is thereby curing any possible procedural faults in the memorandum’s issuance, and that the 

Memorandum is an interpretative action that is exempt from notice-and-comment procedures, 

rather than a substantive rulemaking.

Eight industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) notes 

that the petitioners raised procedural issues in their Petition for Reconsideration, arguing that the 

actual control interpretation established in the PSD Interpretive Memorandum represents a 

change in EPA’s historical interpretation of the phrase “subject to regulation” and thus required a 

public notice-and-comment proceeding to alter that interpretation. The commenters disagree 

with arguments that the PSD Interpretive Memorandum represents a change in EPA’s historical 

interpretation or practice, and noted that, in any event, EPA in the present rulemaking proceeding 
9

is supplying the process petitioners argued is required, allowing all interested parties to provide 

comments on the established interpretation and various proposed alternative interpretations and 

providing a statement of basis and purpose for the actual control interpretation.

Response:

The PSD Interpretive Memo is not a substantive rule promulgated under section 307(d) 

of the CAA, but rather an interpretation of the terms of a regulation at 40 CFR 52.21(b)(50). An 

interpretive document is one that explains or clarifies, and is consistent with, existing statutes or 

regulation. See National Family Planning and Reproductive Health Ass’n v. Sullivan, 979 F.2d 

227, 236-37 (D.C. Cir. 1992). The PSD Interpretive Memo explains and clarifies the meaning of 

the definition of “regulated NSR pollutant” in section 52.21(b)(50) of the existing NSR 

regulations, and does not alter the meaning of the definition in any way that is inconsistent with 

the terms of the regulation. The memorandum construes substantive regulations and explains

what EPA thinks sections 165(a)(4) and 169(3) of the CAA mean in the context of various other 

provisions of the statute. See, Assoc. of Amer. RR v. Dept. of Transp., 198 F.3d 944 at 947 (D.C. 

Cir. 1999). In addition, since the memorandum does not require sources or permit writers to 

address a category of pollutants that have not been previously addressed in PSD permits, it 

functions only to remind affected parties of existing duties. As such, the Memo qualifies as an 

interpretive rule under the APA. 

The three main arguments made in the Petition for reconsideration to support the view 

that the PSD Interpretive Memorandum is a substantive rule do not demonstrate that the PSD 

Interpretive Memorandum is not “interpretive” in nature. Even if the primary premise of these 

arguments was correct – that EPA’s action reverses a prior interpretation and overturns an 

adjudication of the EAB – these points address only the question of whether the EPA 

Administrator may revise an interpretation without following a notice and comment process or 

adopt an interpretation in manner that does not strictly follow instructions or recommendations 

that the EAB gave to Region 8 upon remand of a particular permit. These two arguments do not 

address whether the memorandum in fact clarifies the meaning of the regulation or explains what 

EPA thinks the statute means. While the third argument – that EPA has substantively amended 

the requirements of the PSD program – does have bearing on the question of whether the 

memorandum contains any substantive rules, EPA does not agree that the memorandum 

establishes any new substantive requirements. The responses that follow address these three 

arguments from the Petition in more detail.

Since the PSD Interpretive Memo is interpretive in nature, EPA was not required to go 

through a notice and comment rulemaking process to issue the document. EPA’s authority to 

make rules and interpret them derives from the CAA. Along with the APA, section 307(d) of the 

CAA establishes procedures for the exercise of rulemaking authority and exceptions to those 

procedures. Section 307(d) of the CAA establishes procedures for, among other things, “the 

promulgation or revision of any regulations under part C of subchapter I of this chapter (relating 

to prevention of significant deterioration of air quality and protection of visibility).” However, 

that section of the CAA states clearly that it “shall not apply in the case of any rule or 

circumstance referred to in subparagraphs (A) or (B) of subsection 553(b) of title 5 of the United 

States Code.” Under 5 U.S.C. 553(b)(A), interpretive rules are exempt from notice and comment 
10

requirements. Thus, section 307(b) of the CAA preserves the Agency’s authority to establish 

interpretations of regulations promulgated under the Act without engaging in a notice and 

comment rulemaking process that is otherwise required for the promulgation and revision of 

PSD regulations. Courts have frequently recognized that interpretive rules are exempt from 

notice and comment. See, e.g., Devon Energy v. Kempthorne, 551 F.3d 1030, 1040 (D.C. Cir. 

2008). 

Finally, EPA has now completed a notice and comment process with respect to the 

content of the PSD Interpretive Memorandum. Thus, even if EPA had in fact erred in its 

assessment of the procedural obligations associated with issuance of the memorandum, EPA has 

taken action that would cure this alleged error. The only procedural question remaining after the 

completion of this reconsideration process is whether EPA should codify its interpretation in the 

regulatory text. As discussed above, EPA has elected not to codify its interpretation at this time, 

but EPA has not ruled out the possibility of amending the regulations at a later date to explicitly

reflect EPA’s interpretation of the CAA.

 

2.2.1. Effect and Meaning of Previous EPA Interpretation Issued in 1978

The environmental group commenter (0095) emphasizes that the Agency’s prior legally 

binding interpretation of the phrase “subject to regulation” (established in 1978) remains in 

effect until such time that the EPA completes a formal rulemaking procedure establishing a new 

interpretation. The commenter (0095) states that the Administrator’s decision to conduct notice 

and comment rulemaking on the issues raised in the Memo does not change the status of the law 

until this rulemaking procedure is complete and a new legal interpretation has been finalized and 

taken effect, and cites a D.C. Circuit ruling that when an agency’s purported interpretation of a 

statute or regulation “constitutes a fundamental modification of its previous interpretation,” the 

agency “cannot switch its position” without following appropriate procedures. Paralyzed 

Veterans of Am. v. D.C. Arena L.P., 117 F.3d 579, 586 (D.C. Cir. 1997). 

The commenter (0095) further states that the interpretation of the phrase “subject to 

regulation under this Act” has been established since 1978. At that time, EPA clearly stated in a 

Federal Register preamble that the phrase “‘subject to regulation under this Act’ means any

pollutant regulated in Subchapter C of Title 40 of the Code of Federal Regulations for any

source type.” See 43 FR at 26388, 26397 (June 19, 1978). This earlier interpretation has never 

been withdrawn or modified and directly conflicts with both the interpretation the Memo 

purported to adopt and that proposed by EPA in its reconsideration. Because the Subchapter C 

regulations include, inter alia, regulations that require monitoring and reporting of CO2

emissions, the logical implication of the 1978 Preamble is that BACT applies to CO2 emissions. 

The Agency’s effort to establish a different interpretation precluding consideration of CO2 must 

be conducted via notice and comment rulemaking and until that process is complete the prior 

interpretation remains in effect. 

The Petition for Reconsideration interprets EPA’s position in the PSD Interpretive Memo 

to be that the Agency is free to adopt a wholly new definition of the term “regulated in” because 

the 1978 preamble does not “amplify the meaning” of this term. The Petition contends EPA 
11

seeks to evade the procedures mandated by Paralyzed Veterans by disguising a revision of 

governing law as an interpretation of its previous interpretation. According to the Petition, the 

PSD Interpretive Memo claims that the phrase “regulated in” as it appears in the 1978 preamble 

is ambiguous and thus subject to clarification by the Agency, such that the 1978 Preamble may

be understood to mean “regulated by actual control of emissions” by use of the term “regulated.”

The Petitioner argues that this is a newly-proposed understanding of the words “regulated in”

that fits unnaturally with the text of the 1978 Federal Register. According to the Petition, this 

reading would impose an enormously substantive and restrictive qualification by use of the 

words “regulated in,” while dismissing the far more prominent reference to “Subchapter C of 

Title 40 of the Code of Federal Regulations” as irrelevant verbiage. 

The Petition argues that the words “regulated” and “regulation” appear pervasively

throughout the 1978 Federal Register and always describe “any act of regulating

or regulation.” The Petitioners believe that the Agency used “regulation” and “regulate” in 1978 

to encompass all forms of regulation and contends that, in the PSD Interpretive Memo, EPA 

departs from a standard-English definition of these terms. According to the Petition, the only

plausible reading of the 1978 Federal Register preamble is that it described all the regulations 

contained “in Subchapter C of Title 40 of the Code of Federal Regulations.” The Petitioners 

argue that EPA believes it can freely substitute its definition of “regulation” as “regulation 

requiring actual control of emissions” for the word “regulation” in whatever form the latter 

appears in any regulatory document. 

The Petitioners also believe that various aspects of the EAB’s decision in the Desert 

matter confirmed that EPA intended to apply the Petitioners’ meaning of the term “regulated.” 

The Petition argues that in the dispute before the EAB in the Deseret matter, EPA offices 

assumed that the 1978 preamble used the word “regulated” to describe any provision in the 

application portion of the CFR, which is why EPA tried limit the meaning of this phrase to just 

the types of pollutants listed in the 1978 rule preamble. The Petitioners also contend that the 

PSD Interpretive Memo continues to rely on a premise rejected by the Deseret decision that the 

list of specific categories of regulations in the 1978 preamble establishes a binding limitation on 

the meaning of the phrase “any pollutant regulated in Subchapter C of title 40 of the Code of 

Federal Regulations”

Response:

EPA agrees that the interpretation reflected in the 1978 preamble remains applicable, but 

disagrees with the meaning that these commenters and Petitioners ascribe to the Agency’s 1978 

statement. The PSD Interpretive Memorandum clearly and persuasively explains why the 1978 

interpretive statement did not determine whether monitoring or reporting requirements make a 

pollutant “subject to regulation under the Clean Air Act.” The 1978 preamble did not address 

whether any pollutant subject to a monitoring requirement promulgated in the appropriate part of 

the CFR is in fact “regulated in Subchapter C of Title 40 of the Code of Federal Regulations.” 

The PSD Interpretive Memorandum and this final action on reconsideration add interpretive 

statements that speak to more particular questions not addressed in 1978 statement. These 

additional interpretations apply in parallel with the 1978 interpretation and are not inconsistent 

with the latter. In light of these considerations, the PSD Interpretive Memorandum did not 
12

purport to change or supersede the 1978 statement, nor did EPA propose to supersede or change 

that interpretation in the October 7 notice of reconsideration. 

The meaning these commenters and Petitioners assign to the 1978 interpretation is not 

supported by the terms of the interpretive statement or EPA’s action since issuing the statement. 

The commenter argues that EPA impermissibly changed the 1978 interpretive statement because 

the commenter recognizes only one potential meaning of the term “regulation” or “regulate” and 

therefore assumes that the 1978 notice must have intended to applying this single meaning of the 

term “regulation” or “regulate.” These commenters and Petitioners neglect to consider the 

ambiguity of the term “regulated” as a form of the word “regulate,” and the primary dictionary

meaning of the terms “regulation” and “regulate” cited by EPA. Each of the sections of the 1978 

Federal Register document cited by the Petition uses the term “regulation” in the context of a 

sentence that describes a provision in the CFR. See, 43 FR at 26389 (“The regulations made 

final today apply to any source . . .”), 26398 (“In the regulations adopted today, EPA’s 

assessment of the air quality impacts of new major sources and modifications will be based on”

certain EPA guidelines), 26401 (“Such offsets have always been acceptable under the agency’s 

PSD regulations . . . .”), 26402 (“Environmental groups pointed out that the proposed regulations 

did not specifically require Federal Land Managers to protect “affirmatively” air quality related 

values . . . .”). The context in which EPA used the term “regulation” in these sentences does not 

demonstrate that EPA intended the term “any pollutant regulated in Subchapter C of Title 40 of 

the Code of Federal Regulations for any source type” to mean what the Petitioner argues it 

necessarily must mean (any pollutant covered for any reason in a regulation promulgated in 

Subchapter C of Title 40 of the CFR). The Petitioners charge EPA with neglecting to consider 

the standard English definitions of the term “regulation” and “regulate,” but EPA considered 

commonly used meanings of these terms and applied the meaning that appears as the primary

meaning of the term “regulate” that is used in Webster’s dictionary. 

Consequently, EPA does not agree that the PSD Interpretive Memo applies a substantive 

and restrictive qualification on the use of the words “regulated in.” EPA has only applied an 

accepted meaning of the term regulate and not added any restriction or qualification that is not 

already inherent in the meaning of this term. EPA does not believe it can substitute any meaning 

for term “regulation,” but rather that it may reasonably apply accepted meanings of terms found 

in standard English dictionaries that fit the context of the sentence in which the terms are used. 

The Petitioners do not substantiate their conclusion that the reference to “Subchapter C of Title 

40 of the Code of Federal Regulations” is more prominent in the context of this sentence than the 

term “regulated in.” It is unclear whether the Petitioner believes prominence is determined by 

the number of words in each phrase or some other criteria. Considering the full context of the 

sentence at issue, it is not obvious that the term “regulated in” is any less prominent or 

significant than other parts of that sentence. EPA does not agree that its identification of an 

unresolved question in the meaning of this sentence from the 1978 preamble makes the reference 

to Subchapter C of the Title 40 of the CFR meaningless. The BACT requirement still applies to 

any pollutant regulated in this portion of the CFR, but the question still remains what pollutants 

are in fact “regulated” through provisions in this portion of the CFR. 
13

Commenters also appear to assume that this 1978 interpretative statement is the only

example of EPA’s past practice with respect to whether pollutants covered by, but not controlled 

under, regulations in the CFR make the PSD permitting requirements applicable to a pollutant. 

These commenters have not provided any additional information to demonstrate that EPA 

(or another other PSD permitting authority) has in fact acted in accordance with the meaning that 

the commenters assign to the 1978 interpretation. The record shows that EPA has not in practice 

given the 1978 statement the meaning used by the commenter. A review of numerous federal 

PSD permits shows that EPA has been applying the actual control interpretation in practice –

issuing permits that only contained emissions limitations for pollutants subject to regulations 

requiring actual control of emissions under other portions of the Act. If EPA had given the 1978 

interpretation the meaning the commenter uses, the Agency would have previously issued PSD 

permits containing BACT emission limitations on CO2 and oxygen. The argument that EPA’s 

failure to do so was wrong does not establish that it has in fact been EPA’s position since 1978 

that PSD permits should cover pollutants subject to monitoring and reporting requirements that 

are promulgated anywhere in Subchapter C of the Title 40 of the CFR. Furthermore, in 1998, 

well after promulgation of the initial CO2 monitoring regulations in 1993, EPA’s General 

Counsel concluded that CO2 would qualify as an “air pollutant” that EPA had the authority to 

regulate under the CAA, but the General Counsel also observed that “the Administrator has 

made no determination to date to exercise that authority under the specific criteria provided 

under any provision of the Act.” Memorandum from Jonathan Z. Cannon, General Counsel to 

Carol M. Browner, Administrator, entitled EPA’s Authority to Regulate Pollutants Emitted by

Electric Power Generation Sources (April 10, 1998). 

 

Furthermore, with respect to the EAB’s conclusion in the Deseret matter, the PSD 

Interpretive Memo highlights portions of the EAB decision that describe the ambiguity in the 

phrase “regulated in Subchapter C of Title 40 of the Code of Federal Regulations” and the term 

“regulation.” The PSD Interpretive Memorandum references the “specific categories of 

regulations identified in the second sentence” of the passage quoted from the 1978 preamble only 

to illustrate that the PSD Interpretive Memorandum is not inconsistent with that 1978 statement. 

Consistent with the statements in the PSD Interpretive Memo, EPA agrees with and accepts the 

EAB’s reasoning that the enumerated categories of pollutants do not establish a controlling 

limitation on the scope of pollutants subject to regulation. However, that reasoning still does not 

establish whether monitoring or reporting requirements make pollutants subject to regulation or 

whether a pollutant is “regulated in” the CFR when the code contains only a requirement to 

monitor and report, but not control, emissions of a pollutant. This has remained an open 

question since 1978 that EPA was free to address in the PSD Interpretive Memorandum without 

changing any prior EPA interpretive statement or acting inconsistent with the reasoning of the 

EAB’s Deseret opinion. 

2.2.2. Argument that PSD Interpretive Memo Overturns an EAB Decision

Comment:
14

The Petition for Reconsideration (which is incorporated in public comments) contends 

that the PSD Interpretive Memo supersedes the EAB’s decision in the Deseret matter. The 

Petition contends, based on the terms of 40 CFR 124.2(a), that the Administrator has no 

jurisdiction to undo a statutory interpretation adopted in an EAB ruling or substitute his 

judgment for that of the Board. According to the Petitioners, the EAB held in its Deseret opinion 

that EPA must undertake a notice and comment process to adopt a new interpretation of the PSD 

regulatory program. The Petition asserts that the EAB is the final agency decision-maker as to 

PSD permits, and the EAB has already determined that a notice and comment process is required 

for EPA to address the appropriate scope of analysis in PSD permits. The Petitioners argued that 

the EAB clearly anticipated that EPA would follow a notice and comment process when it 

suggested that “[t]he Region should consider whether interested persons, as well as the Agency, 

would be better served by the Agency addressing the interpretation of the phrase ‘subject to 

regulation under this Act’ in the context of an action of nationwide scope, rather than through 

this specific permitting proceeding.”

Response:

EPA does not agree that the PSD Interpretive Memorandum overturns or is in any way

precluded by the EAB’s decision in the Deseret matter. The record supports the conclusion that 

the PSD Interpretive Memorandum achieved its purpose to “build on the Board’s Deseret 

opinion” and not to supersede it. Memo at 2. 

The PSD Interpretive Memorandum does not undo any statutory interpretation adopted in 

the EAB ruling. In addressing the meaning of the CAA, the EAB concluded only that the 

meaning of the term “subject to regulation” in CAA sections 165 and 169 is not so clear and 

unequivocal that it precludes EPA from exercise its discretion to interpret the statute. Deseret at 

63. The EAB also concluded there was “no evidence of Congressional intent to compel EPA to 

apply BACT to pollutants that are subject only to monitoring and reporting requirements.” 

Deseret at 63. The EAB remanded the PSD permit in that case on the grounds that “the Region’s 

rationale for not imposing a CO2 BACT limit in the Permit – that is lacked the authority to do so 

because of an historical Agency interpretation of the phrase ‘subject to regulation under this Act’

as meaning ‘subject to a statutory or regulatory provisions that require actual control of 

emissions of that pollutant’ is not supported by the administrative record.” Thus, the grounds for 

remand were not based on any statutory interpretation that EPA was compelled to apply BACT 

to pollutants subject to monitoring or reporting requirements. Furthermore, the Board’s opinion 

did not discuss any specific procedural requirements of the Administrative Procedure Act or 

section 307(d) of the Clean Air Act. 

EPA does not read the EAB’s Deseret decision to contain any statutory interpretation or 

instructions that required the Administrator to undertake a notice and comment process to 

address the appropriate scope of analysis in PSD permits. The Deseret permit appeal involved 

the review of the rationale supplied by Region 8 to justify a decision not to establish emission 

limitations for CO2 in a permit and the merits of EPA’s contention that it had already established 

an interpretation of the applicable law that precluded such an action. The EAB’s specific 

instructions in its remand order were directed to Region 8, which has not yet acted on those 

instructions in the context of the permit for the Deseret facility. Because the Board found the 
15

record for this permit inadequate to support the rationale provided, the Board directed Region 8 

to “reconsider whether or not to impose a CO2 BACT limit in the Permit” and “develop an 

adequate record for its decision, including reopening the record for public comment.” Id. at 64. 

In addition, the Board said that the Region should consider whether interested persons and EPA 

would “be better served by the Agency addressing the interpretation of the phrase ‘subject to 

regulation in an action of nationwide scope, rather than through this specific permit proceeding.” 

Id. The Board also said this analysis should “address whether an action of nationwide scope may

be required in light of the Agency’s prior interpretive statements made in various memoranda 

and published in the Federal Register and the Agency’s regulations.” The Board did not 

explicitly direct the Region or any other EPA office to take public comment on any action of 

nationwide scope that may result from this analysis. The Board’s instructions regarding public 

comment applied to the record for Region 8’s decision on the question of whether or not to 

impose a CO2 BACT limit in the permit for the Deseret facility. EPA does not dispute that one 

might draw the inference that the EAB anticipated a subsequent EPA action of nationwide scope 

on this issue would entail a notice and comment process, but that was not an express instruction 

of the Board’s order.

The instructions to EPA Region 8 in the Deseret opinion did not preclude the 

Administrator from taking subsequent action to adopt an interpretation of PSD regulations in 

accordance with the procedure that Administrator deemed appropriate under the circumstances. 

In the defining the term “Environmental Appeals Board,” section 124.2(a) of EPA’s regulations 

explains that “[t]he Administrator delegates authority to the Environmental Appeals Board to 

issue final decisions in RCRA, PSD, UIC, or NPDES permit appeals filed under this subpart.” 

While this delegation implies some degree of authority on the EAB to interpret EPA regulations 

and the CAA, the Part 124 regulations do not divest the Administrator of the power to 

promulgate regulations to implement the PSD program or to interpret those regulations. Section 

124(a) only delegates the power to adjudicate appeals PSD permits to the EAB and issue final 

decisions in those matters. This provision does not say that the Administrator has the delegated 

the authority to promulgate regulations under the PSD program to the EAB. The Administrator 

retains the authority to interpret the CAA and to promulgate and amend PSD program 

regulations. By extension, the Administrator also retains the authority to interpret those 

regulations and to determine the appropriate procedure to be followed when establishing a given 

interpretation. The fact that the EAB issues final decisions on particular PSD permit appeals 

does not mean that the EAB also issues final decisions on all matters relating to the PSD 

permitting requirements.

Furthermore, the Board did not clearly conclude that the prior interpretative statements of 

the Agency required that the Agency undertake a notice and comment process to address the 

issues covered in the PSD Interpretive Memorandum. The Board did say that the Region’s 

analysis on remand “should address whether an action of nationwide scope may be required in 

light of the Agency’s prior interpretive statements made in various memoranda and published in 

the Federal Register and the Agency’s regulations.” However, this was simply an instruction to 

assess the issue described, not a conclusion that Region 8’s rationale in that case was inconsistent 

with any prior interpretive statements or that a notice and comment process was required to 

adopt such an interpretation in an action of nationwide scope. In addition, as discussed in the 

PSD Interpretive Memorandum, the EAB did appear to question whether subsequent EPA 
16

memorandum could result in a change the interpretation set forth in the 1978 Federal Register

notice. Deseret at 52. But the Board did not make a finding that the cited court cases in fact 

precluded EPA from issuing an additional memorandum that addressed the issue under 

consideration by the Board. The Board’s analysis was specific to two particular memoranda that 

lacked characteristics that are present in the PSD Interpretive Memorandum, which references 

the relevant provisions of the CAA, announces an EPA interpretation of the PSD provisions, and 

discusses the Administrator’s prior interpretive statement on this issue from the 1978 Federal 

Register. 

Finally, even if the EAB had made a determination that notice and comment process was 

required to address this issue in an action of nationwide scope, EPA has now completed a notice 

and comment process before making a final decision to continue applying the PSD Interpretive 

Memorandum, as modified in this action. 

2.2.3. Contention that PSD Interpretive Memo Amends the Substance of 

the PSD Program

The Petition for Reconsideration argues that the PSD Interpretive Memorandum seeks to 

substantively amend EPA regulations to establish new legal rights, restrictions, and/or 

obligations under the Act’s PSD program. The Petition lists the following actions that are 

alleged to be newly established: (1) exempting pollutants that are subject to regulation under the 

Act through state implementation plans (“SIPs”) (Memo at 15). On this point, the Petition 

acknowledged EPA’s view that it has adopted a similar approach under the NSR program for the 

regulation of ammonia as a PM2.5 precursor, but the Petition contends that EPA was required to 

follow the model in that instance of adopting the position in the PSD Interpretive memo through 

a notice and comment rulemaking process; (2) Establishing Regional Office responsibilities with 

regard to future SIP submittals (Memo at 3 n.1); (3) determining how pollutants will become 

subject to PSD permitting in the future on enactment of new congressionally-mandated emission 

limits (Memo at 6 n.5); (4) imposing requirements that address when pollutants for which EPA 

has made a regulatory endangerment determination must be treated as PSD pollutants (Id. at 14); 

and (5) defining when and how import restrictions will trigger PSD for a pollutant. The Petition 

asserts the breadth of issues addressed in the memo (regarding what the Petitioner contend are 

numerous and disparate regulatory programs) rebuts the view that the PSD Interpretive Memo is 

an interpretive rule.

Response:

EPA does not agree that these portions of the memorandum established new legal rights, 

restrictions, or obligations under the PSD program. The memorandum does not require any 

additional emissions limitations or impose any additional criteria that a permit applicant must 

satisfy to obtain a permit. Likewise, the memorandum did not eliminate any permit terms or 

conditions that had previously been required by EPA. The memorandum preserved the status 

quo regarding the criteria for obtaining a PSD permit and the required terms and conditions of 

any permit. 
17

The five examples of new matters addressed in the memo are each matters on which EPA 

explains and clarifies existing rights, restrictions, or obligations under the PSD program. These 

portions of the memo do not add requirements or limitations, but rather explain and clarify how 

EPA intends to apply existing requirements in the face of the uncertainty created by the EAB’s 

decision in the Deseret case and related actions. The Agency’s discussion of the significance of 

State Implementation Plan provisions that require controls on a pollutant not regulated outside 

the state follows an interpretation previously established by EPA in a prior rulemaking regarding 

precursors to PM2.5. The fact that EPA initially established this interpretation through a notice 

and comment rulemaking process did not necessitate that EPA employ the same process to apply

this established approach to a comparable situation. Furthermore, the additional reasoning for 

this position supplied in the PSD Interpretation did not itself establish a new right, restriction, or 

obligation. The footnote on page 3 of the memorandum addressing EPA Regional office 

responsibilities with regard to SIP submittals merely explains how the Region’s should handle 

this existing responsibility to review SIP submissions after the EAB’s determination that EPA 

had not previously established the interpretation later adopted in the PSD Interpretive 

Memorandum. Another explanatory element is the discussion of the EPA’s view that existing 

statutory instructions for EPA to promulgate emission limitations of various types do not trigger 

the PSD requirements until EPA promulgates the required limitations. This portion of the memo 

clarifies EPA’s view of what the statute and regulations mean with respect to when a pollutant 

becomes subject regulation under such requirements. Likewise, the memo’s discussion of the 

significance of an endangerment finding that is not accompanied by direct regulatory

requirements is a variation on this same question regarding the particular stage in the regulatory

process when a pollutant becomes “subject to regulation.” This part of the memo does not create 

a limitation that is not already inherent in one accepted meaning of the term “regulation” used in 

the existing statute and regulations. Since the definition of “regulated NSR pollutant” in the PSD 

regulations expressly incorporates the pollutants covered by the production and import 

restrictions under Title VI of the CAA, the discussion of these import restrictions in the 

memorandum does not add new rights, obligations, or limitations on the application of the PSD 

program to these pollutants. At most, this portion of the memo clarifies and explains the time at 

which the PSD requirements are invoked by the application of these requirements to particular 

pollutants. Moreover, each of these issues pertains to one regulatory program – the PSD 

permitting. Each of these topics is an element or variation of the same basic question regarding 

the applicability of the phrase “subject regulation” to particular pollutants based on the EPA’s 

implementation of other programs under the CAA. 

2.3. Relevance of Related Public Participation Opportunities

Comment:

The Petition for Reconsideration argues that public participation in the specific 

adjudicatory proceeding regarding the Deseret plant or public participation in EPA’s advanced 

notice of proposed rulemaking (“ANPRM”) on regulation of GHGs under the CAA is legally

insufficient to cure the procedural failures of the PSD Interpretive Memo. The Petition argues 

that the EAB case not an adequate substitute for notice and comment on a rule of nationwide 

scope because it addressed only a single facility, and the adjudicatory process associated with an 
18

individual permit proceeding cannot substitute for notice and comment on a legislative rule of 

broad national significance. The Petition argues that the ANPRM never indicated EPA’s 

intention to take imminent final action establishing new parameters for the PSD regulatory 

program, nor specific intent to reinterpret agency policy articulated in the 1978 preamble. 

Response:

EPA has never asserted that the opportunities for public input provided in the EAB 

appeal and the ANPRM were sufficient to cure any perceived procedural deficiency in the 

manner EPA issued the Memo. Since EPA maintains that the PSD Interpretive Memo is an 

interpretation that the Agency was authorized to issue without a notice and comment rulemaking 

process, there was no procedural deficiency that needed to cured by referencing these particular 

opportunities for the public to provide EPA with their views on this issue. Since EPA 

recognized that there was significant public interest in the issue addressed in the PSD 

Interpretive Memo, EPA’s purpose in referencing the previous public comment opportunities 

was simply to illustrate that, even though public comment was not required by law, EPA had 

nevertheless considered the views of several interested stakeholders and all information available 

to EPA at that time. Even in circumstances where quick action by EPA is warranted and a 

formal public comment opportunity is not mandatory, EPA recognizes that the Agency is 

accountable to the citizens of the United States and should be responsive to public concerns. 

Furthermore, EPA understands that the best decisions are those that are well-informed and reflect 

an evaluation of all relevant considerations. EPA thus referenced these earlier opportunities for 

public input to show that the Agency’s action was responsive to public concerns and reflected 

consideration of all information available to the Agency at that time. 

2.4. Interpretation of Statute and Revisions Thereto

Comment:

The Petition for Reconsideration argues that PSD Interpretive Memo is not entitled to 

deference because the regulation simply parrots the language of the statute. The Petition quotes 

the following statement from a Supreme Court decision: 

[T]he existence of a parroting regulation does not change the fact that the

question here is . . . the meaning of the statute. An agency does not

acquire special authority to interpret its own words when, instead of using

its expertise and experience to formulate a regulation, it has elected

merely to paraphrase the statutory language.”

Gonzales v. Oregon, 546 U.S. 243, 257 (2006).

Response: 

EPA does not contend that it can interpret the PSD regulations in a manner that is 

inconsistent with the requirements of the CAA. The PSD Interpretive Memorandum explains in 
19

detail why the Agency’s interpretation of the language in the regulation is not precluded by the 

language in the CAA that the regulation is modeled upon. EPA need not address the question of 

whether its interpretation of the regulation is entitled judicial deference to reach the conclusion 

that its interpretation of the regulation is permissible under the CAA. 

Comment:

One state commenter (0057) asserts that a tenet of administrative law is that, if an agency

seeks to change a previous, formal interpretation of the meaning and/or the implementation of a 

rule or statute, it must go through a rulemaking to do so. 

The Petition for Reconsideration contends that the D.C. Circuit has held that “when an 

agency’s purported interpretation of a statute or regulation constitutes a fundamental 

modification of its previous interpretation, the agency cannot switch its position without 

following appropriate procedures.” Petition at 5 (citing Paralyzed Veterans of Am. v. D.C. Arena 

L.P., 117 F.3d 579, 586 (D.C. Cir. 1997) (internal quotations omitted). According to the 

Petition, “[o]nce an agency provides an interpretation of a statute – as EPA did here, in 1978 – ‘it 

can only change that interpretation as it would formally modify the regulation itself: through the 

process of notice and comment rulemaking.’” Petition at 5. 

Response: 

These comments overextend the reach of this line of case law. The Paralyzed Veterans

line of cases holds only that regulatory agencies cannot change a long-standing, definitive, and 

authoritative interpretation of its regulations without going through a notice and comment 

process. See, Paralyzed Veterans of America v. D.C. Arena L.P., 117 F.3d 579, 586 (D.C. Cir. 

1997); Alaska Professional Hunters Ass’n Inc. v. FAA, 177 F.3d 1030, 1033-34 (D.C. Cir. 1999). 

To EPA’s knowledge, no court has required a rulemaking procedure when the Agency seeks to 

issue or change its interpretation of a statute. Nevertheless, EPA has completed this notice and 

comment proceeding before deciding to adopt the revised interpretation of the CAA described in 

this final action.

2.5. Revisions to Interpretation in PSD Interpretive Memo

Comment:

One state commenter (0057) asserts that a tenet of administrative law is that, if an agency

seeks to change a previous, formal interpretation of the meaning and/or the implementation of a 

rule or statute, it must go through a rulemaking to do so. Based on this principle, the commenter 

argues that EPA cannot merely “re-interpret” its previous interpretation; it must undergo a 

rulemaking process and formally change the federal PSD rules to legally effect the change.

Response:
20

The commenter does not specify any specific change in interpretation that the commenter 

is concerned about. Since EPA’s interpretation of the PSD program regulations is unchanged in 

most respects by this action, it is not clear that the particular refinement to that interpretation that 

EPA is making in this action would invoke the doctrine described by the commenter. Even if 

this refinement is viewed as a fundamental change, EPA has completed the revision to the 

interpretation in the PSD Interpretive Memo after a notice and comment process. Furthermore, 

since EPA initiated a process of reconsidering and soliciting comment on the PSD Interpretive 

Memo within three months of its issuance, the memorandum had not yet become particularly

well-established or long-standing. See Metwest v. Secretary of Labor, 560 F.3d 506, 511 n.4 

(D.C. Cir. 2009). Thus, the case law referenced by the commenter does not preclude the action 

EPA has taken here to refine its interpretation of the regulations. 

As noted above, while this doctrine has been applied to some types of changes in the 

interpretation of a rule, EPA does not agree that any court has established a principle of 

administrative law that requires a notice and comment process before an agency can change its 

interpretations of a statute. 
21

Chapter 3. Actual Control of Emissions

3.1. Overview of Comments on Actual Control Interpretation

Comment:

Forty industry and commerce commenters (0050, 0051, 0053, 0055, 0056, 0059, 0060, 

0061, 0063, 0065, 0066, 0067, 0068, 0070, 0071, 0073, 0074, 0076, 0080, 0081, 0083, 0085, 

0086, 0089, 0090, 0092, 0093, 0096, 0097, 0098, 0103, 0104, 0105, 0106/0107, 0108, 0109, 

0110, 0112, 0115, 0116, 0118), one legal commenter (0084), and six state/local agency

associations (0054, 0058, 0062, 0077, 0091, 0109) support EPA’s position that the “actual 

control interpretation” established in the PSD Interpretive Memo is the proper interpretation of 

the phrase “subject to regulation.”

Four industry and commerce commenters (0051, 0053, 0068, 0074) state that EPA must 

retain the “actual control” interpretation set forth in the PSD Interpretive Memo because the 

“actual control” interpretation is supported by the statutory text, is consistent with past EPA 

practice, and is sound public policy. These commenters said that alternatives to the “actual 

control” interpretations are not legally supportable, are contrary to past practice, and/or are 

contrary to public policy considerations.

The industry commenter (0118) reiterates the arguments made in the PSD Interpretive 

Memo and proposed PSD Interpretation notice, and states that the arguments strongly support the 

“actual control” interpretation, and asserts that the “actual control” interpretation is consistent 

with the EPA’s longstanding interpretation of the phrase “subject to regulation” and is supported 

by legal and compelling policy reasons. 

One of the industry commenters (0109) believes that this interpretation is consistent with 

EPA’s longstanding practice, is reasonable and logical, and is supported by strong policy and 

legal rationales, while the other alternative interpretations examined by EPA are not required by

law, are neither reasonable nor consonant with sound public policy, and could implicate 

retroactive liability concerns. 

Industry commenter (0105) supports EPA’s preferred interpretation of “subject to 

regulation” based on an EPA regulation requiring “actual control” of emissions of a pollutant, 

and agrees this interpretation is supported by EPA’s past policy and practice and is in keeping 

with the language and structure of the CAA. 

Three industry commenters (0067, 0073, 0083) similarly state that this interpretation is 

consistent with EPA’s longstanding practice, is consistent with the language and structure of the 

CAA, and is supported by important policy concerns. These commenters (0067, 0073, 0083) 

believe that the alternative interpretations are fundamentally flawed for the reasons articulated by

EPA in the proposed PSD Interpretation. 
22

Under the circumstance that a lack of Congressional action essentially forces EPA to 

move forward with regulation of CO2 under the CAA, an industry commenter (0097) supports 

and endorses the EPA’s previous interpretation which is the “actual control interpretation” under 

a final national rule, agreeing that this interpretation best reflects past policy and practice, is in 

keeping the structure and language of the statute and regulations, best reflects Congressional 

intent in the CAA and best allows for the necessary coordination of approaches to controlling 

emissions of newly identified pollutants. 

Ten of the industry commenters (0089 and others incorporating this submission (0065, 

0067, 0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) believe that this interpretation is 

consistent with EPA’s longstanding practice, is reasonable and logical, and is supported by

strong policy and legal rationales, while the other alternative interpretations examined by EPA, 

or put forward by other parties, are not required by law, are neither reasonable nor consonant 

with sound public policy, and could implicate retroactive liability concerns. 

Three commenters (0092, 0093, 0098) representing several groups of companies 

(industry) and several other industry commenters recommend that EPA reaffirm the PSD 

Interpretive Memo’s position (and also EPA’s long-standing interpretation) that an air pollutant 

becomes “subject to regulation” at the point that regulations requiring actual controls of 

emissions are in place. These commenters believe the “actual control” interpretation is the only

reasonable and rationale approach, and that other interpretations of “subject to regulation” would 

result in an unworkable and unreasonable PSD program. 

One industry group commenter (0070) expresses support for the “actual control 

interpretation” because it best reflects EPA’s past policy and practice and is keeping with the 

structure and language of the CAA and its regulations.

One industry group commenter (0071) states that the PSD interpretive memo is a logical 

and reasonable interpretation of the PSD regulations and the CAA. The approach in the 

Interpretive Memo is a reasonable one, and the other approaches proposed would be 

unreasonable.

For all the reasons stated in the PSD Interpretive Memorandum, nine other industry

commenters (0065, 0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) fully agree with 

EPA’s determination, as proposed to be reaffirmed in the proposed PSD Interpretation, that the 

“actual control” interpretation is, and should continue to be, the controlling interpretation on this 

issue. 

Four commenters (0087, 0095, 0099, 0101), representing numerous environmental 

organizations, are opposed to EPA’s “actual control” approach.

Although one environmental commenter (0087) applauds EPA’s work in finalizing the 

Mandatory Reporting of Greenhouse Gas Rule; the effort and care EPA has taken in responding 

to the Supreme Court’s mandate in Massachusetts v. EPA; and the Proposed and Final 

Endangerment and Contribution Findings and proposed CAFE standards for mobile sources; 

they express disappointment that, in the proposal, EPA has reaffirmed what the commenter 
23

termed an unlawful decision made by the previous administration. The commenter (0087) then 

states that the positions taken by EPA in the Proposed Reconsideration are in contrast to the 

mandates of the CAA. 

One environmental organization commenter (0095) asserts that EPA’s Reconsideration of 

the PSD Interpretive Memo suffers from the same defects of the original Memo, and introduces 

new areas of concern. According to the commenter, the reconsideration proposal simply restates 

the policy preferences of the original Memo, while offering no legal support for EPA’s decision 

to ignore the plain language of the CAA, and instead, it reiterates the agency’s position that “past 

policy and practice” and a variety of administrative preferences somehow support the idea that 

Congress meant the term “regulation” in section 165 of the CAA to mean “actual control of 

emissions,” even though Congress distinguished between “control” of emissions and 

“regulation” throughout the CAA.

Response:

EPA has made a final decision to continue applying (with one limited refinement) the 

Agency’s existing interpretation of 40 CFR 52.21(b)(50) that is articulated in the PSD 

Interpretive Memo. For reasons explained further below, EPA has concluded that the “actual 

control interpretation” is a permissible interpretation of the CAA and is the most appropriate 

interpretation to apply given the policy implications. EPA has not been persuaded that the 

Agency is compelled by the CAA, the terms of EPA regulations, or prior EPA action to apply

any of the four alternatives to its preferred interpretation described in the October 7, 2009 notice 

– monitoring and reporting requirement, EPA-approved SIP, endangerment finding, or CAA 

section 209 waiver. EPA has likewise not been persuaded that all of the alternative 

interpretations are precluded by the CAA. However, since Congress has not precisely spoken to 

this issue, EPA has the discretion to choose among the range of permissible interpretations of the 

statutory language. Since EPA’s interpretation of the regulations is not precluded by the 

statutory language, we are electing to maintain that interpretation on policy grounds. We have 

concluded that the “actual control” interpretation is not only consistent with decades of past 

practice, but provides the most reasonable and workable approach to developing an appropriate 

regulatory scheme to address newly identified pollutants of concern. Thus, except as to the one 

element that EPA proposed to modify, EPA is reaffirming the PSD Interpretive Memo and its 

establishment of the actual control interpretation as EPA’s definitive interpretation of the phrase 

“subject to regulation” under the PSD provisions in the CAA and EPA regulations. 

The actual control interpretation is supported by the language and structure of the 

regulations and is consistent with past practice in the PSD program and prior EPA statements 

regarding pollutants subject to the PSD program. The CAA is most effectively implemented by 

making PSD emissions limitations applicable to pollutants after a considered judgment by EPA 

(or Congress) that particular pollutants should be subject to control or limitation. The actual 

control interpretation promotes the orderly administration of the permitting program by allowing 

the Agency to first assess whether there is a justification for controlling emissions of a particular 

pollutant under relevant criteria in the Act before applying the requirements of the PSD 

permitting program to a pollutant.
24

EPA responds to more specific points raised by these commenters elsewhere in this 

document.

3.2. Interpretation of the Clean Air Act

Comment:

One commenter (0110) states that they generally agree with the conclusions EPA draws 

in the Reconsideration and those originally made by former EPA Administrator Stephen Johnson 

in his December 18, 2008 memorandum interpreting the applicability of CAA regulations that 

determine when pollutants become covered by the PSD permit program (PSD Interpretive 

Memorandum). Both documents appropriately interpret the phrase “subject to regulation” in 

sections 165(a)(4) and 169 of the CAA, and in the definition of “regulated [New Source Review 

(NSR)] pollutant” in 40 CFR 52.21(b)(50). 

Commenter (0107) stated that, in Massachusetts v. EPA, the Supreme Court ruled that the 

definition of “pollutant” under the CAA is extremely broad and encompasses many substances 

that may or may not be necessary for EPA to regulate unless the Administrator determines that 

they endanger the public or the environment. Commenter (0107) further stated that, unless a 

pollutant has been subject to “actual controls,” there would be no regulatory basis for 

determining that emissions of the pollutant should be reduced under another regulatory program 

such as PSD. 

Another industry commenter (0080) supports the legal and policy rationales proffered by

EPA in the proposed PSD Interpretation, but added that the legal rationale should focus more 

broadly on the meaning of the phrase “subject to regulation” within the PSD statutory program 

and the CAA as a whole. Referring to Crandon v. U.S., 494 U.S. 152, 158 (1990), citing K Mart

Corp. v. Carrier, Inc., 486 U.S. 281, 291 (1988); Dolan v. United States Postal Service, 546 U.S. 

481, 486 (2006); and Holloway v. U.S., 526 U.S. 1, 6 (1999), this commenter (0080) indicated 

that a basic maxim of statutory construction is that one must look not only at the particular 

statutory language, but also consider the purpose and context of the whole statute. The 

commenter (0080) also noted that the purpose of the CAA is to “protect and enhance the quality 

of the Nation’s air resources so as to promote public health and welfare and the productive 

capacity of its population.” CAA section 101(b)(1). 

The commenter (0080) asserts that interpreting the phrase “subject to regulation” as 

“subject to regulation that restricts emissions” fits within the statute because EPA is only

authorized to restrict emissions of air pollutant where the EPA has made an endangerment 

finding (or where Congress has implicitly done so, as in the case of Title VI). 

This industry commenter (0080) states that Massachusetts v. EPA confirmed the basic 

structure of the CAA under which first there is an EPA endangerment finding and then there is 

regulation. The commenter (0080) added that under Massachusetts, EPA may not regulate 

GHGs simply because they are “air pollutants” under the Act; it must first find a danger to public 

health or welfare. The commenter (0080) indicates that the Massachusetts v. EPA Petitioners 
25

(which included some of the Petitioners in this reconsideration) specifically recognized the

requirement for an endangerment finding under section 202, but now the Petitioners seek to 

convince EPA that EPA should engage in GHG regulation even without an endangerment 

finding. Considering the context of the PSD program and the CAA as a whole, the commenter 

(0080) finds absurd the Petitioners’ contention that various actions taken by EPA, even before 

EPA determined that CO2 endangers health or welfare and even before EPA decided to require 

that any emitter should be required to reduce emissions, should be interpreted as triggering CO2

BACT for a potentially very large number CO2 emitters. 

One industry group commenter (0071) states that the placement of the phrase “subject to 

regulation” within the statute requiring BACT limits strongly suggest that the phrase refers to 

presently controlled (and thus “regulated”) pollutants. See CAA §§165(a)(4), 169(3), 42 U.S.C. 

7475(4), 7479(3). The commenter states that the approach that EPA has taken to implement the 

statutory PSD program in the PSD Interpretive Memo is well within the scope of EPA’s 

authority to implement the PSD program (cited Alabama Power Co. v. Costle, 606F. 2

nd 1068, 

1077 (D.C. Cir 1979) (describing the “flexibility” and “latitude” EPA has in fashioning PSD 

regulations); and Envtl. Def. v. Duke Energy Corp., 127 S. Ct. 1423, 1433-1434 (2007) 

(legislative history does not suggest Congress “had details of regulatory implementation in mind 

when it imposed PSD requirements on modified sources”).

A commenter (0093) points out that the term “subject to regulation” should not be 

applied more broadly than where referenced in the CAA at 42 U.S.C. §7475(a)(4) which applies 

to the determination of BACT for sources that have otherwise triggered PSD applicability. The 

commenter refers EPA to the comments of the American Petroleum Institute (API), the Texas 

Industry Project (TIP) and the National Environmental Development Association Clean Air 

Project (NEDA/CAP) for further discussion of the inferiority and unreasonableness of alternate 

potential interpretations of “subject to regulation.”

One commenter (0086), representing several groups of companies (industry), states that 

the “actual control” interpretation is the most plausible reading to “subject to regulation” and 

gave counter-arguments to some other textual constructions. 

One industry commenter (0056) states that the petitioners misread the decision by the 

U.S. EAB in the matter of the PSD permit appeal for the Deseret Power Plant, arguing that EPA 

lacked the authority to interpret the phrase “subject to regulation” in Subpart C of Title I of the 

CAA. Petitioners demanded that EPA reconsider and retract the PSD Interpretive Memo 

because it was inconsistent with the plain language of the CAA and it had not been issued 

consistent with public participation procedures in the law. This commenter states that petitioners 

also argue that when EPA’s EAB reviewed the same issue in the permit proceeding for a 

construction of a new EGU at the Deseret power plant in Utah, EAB found that the EPA did not 

have discretion to make the “actual control” interpretation. The permit was remanded back to 

the permitting authority in Region 8 because EAB found that EPA improperly cited an 

interpretation for historical precedent which did not support a finding that EPA had historically

interpreted the phrase as a pollutant subject to “actual control.”
26

Ten industry commenters (0089 and others incorporating this submission (0065, 0067, 

0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) note that the only judicial decisions addressing 

this issue have adopted or affirmed EPA’s actual control interpretation and have rejected other 

interpretations advanced by litigants that challenged application of that interpretation. See, e.g., 

Longleaf Energy Associates v. Friends of the Chattahoochee, 681 S.E.2d 203 (Ga. Ct. App. 

2009) (reversing a lower court’s decision to the contrary), cert. denied, Case No. S09C1879 (Ga. 

S. Ct., Sept. 28, 2009); Appalachian Voices v. State Air Pollution Control Bd., Case No.: CL08-

3530 (Cir. Ct. City of Richmond, Aug. 10, 2009), appeal pending, Appalachian Voices v. State 

Air Pollution Control Bd., No. 2199-09-2 (Va. Ct. App., filed Oct. 1, 2009).

Response:

EPA agrees that the interpretation of the CAA described in the PSD Interpretive 

Memorandum is a permissible reading of the Act, considering the context of the PSD provisions 

within the Act as whole. 

The PSD Interpretive Memo reasonably applies a common meaning of the term 

“regulation” to support a permissible interpretation that the phrase “pollutant subject to 

regulation” means a pollutant subject to a provision in the CAA or a regulation issued by EPA 

under the Act that requires actual control of emissions of that pollutant. Public comments have 

not demonstrated the dictionary meanings of the term “regulation” described in the Memo are no 

longer accepted meanings of this term. In light of the different meanings of the term 

“regulation,” EPA has not been persuaded by public comments that the CAA plainly and 

unambiguously requires that EPA apply any of the other interpretations described in the October 

7, 2009 notice. 

Moreover, the Memo carefully explains how the actual control interpretation is consistent 

with the overall context of the CAA in which sections 165(a)(4) and 169(3) are found. After 

consideration of public comment, EPA continues to find this discussion persuasive. The “subject 

to regulation” language appears in the BACT provisions of the Act, which themselves require 

actual controls on emissions. The BACT provisions reference the New Source Performance 

Standards (NSPS) and other control requirements under the Act, which establish a floor for the 

BACT requirement. See 42 U.S.C. §7479(3). Other provisions in the CAA that authorize EPA 

to establish emissions limitations or controls on emissions provide criteria for the exercise of 

EPA’s judgment to determine which pollutants or source categories to regulate. Thus, it follows 

that Congress expected that pollutants would only be regulated for purposes of the PSD program 

after: (1) the EPA promulgated regulations requiring control of a particular pollutants on the 

basis of considered judgment, taking into account the applicable criteria in the CAA, or (2) EPA 

promulgates regulations on the basis of Congressional mandate that EPA establish controls on 

emissions of a particular pollutant, or (3) Congress itself directly imposes actual controls on 

emissions of a particular pollutant. In addition, considering other sections in the Act that require 

reasoned decision-making and authorize the collection of emissions data prior to establishing 

controls on emissions, it is also consistent with the Congressional design to require BACT 

limitations for pollutants after a period of data collection and study that leads to a reasoned 

decision to establish control requirements. Public commenters did not demonstrate that it was 
27

erroneous for EPA to interpret the PSD provisions in this manner, based on the context of the 

Act. 

3.2.1. Arguments that Plain Language of Act Precludes Actual Control 

Interpretation

Comment:

The commenter (0087) states the proposed Reconsideration, like the original PSD 

Interpretive Memo, is devoid of legal support as it ignores the intent of Congress as evidenced by 

the plain language of the CAA. 

One environment organization commenter (0095) claims that EPA’s position is 

inconsistent with the plain language of the CAA. EPA proposes to adopt an interpretation of a 

regulation that parrots the CAA phrase, “pollutant subject to regulation under this Act.” The 

commenter states that interpretation would “exclude pollutants for which EPA regulations only

require monitoring or reporting but . . . include each pollutant subject to either a provision in the 

CAA or regulation adopted by EPA under the CAA that requires actual control of emissions of 

that pollutant.” The commenter (0095) continues that section 165(a)(4) of the CAA requires 

BACT “for each pollutant subject to regulation under this chapter emitted from . . . such 

facility.” 42 U.S.C. §7475(a)(4). CO2 is regulated under “this chapter” because section 821 of 

the CAA Amendments of 1990 required EPA to “promulgate regulations” requiring major 

sources, including coal-fired power plants, to monitor CO2 emissions and report their monitoring 

data to EPA. In 1993, EPA promulgated these regulations, which require sources to monitor 

CO2 emissions, 40 CFR 75.1(b), 75.10(a)(3), prepare and maintain monitoring plans, id. §75.53, 

maintain records, id. §75.57, and report monitoring data to EPA, id. §75.60-64. 

The commenter (0101) states that attempting to distinguish the overwhelming evidence 

showing that CO2 is now regulated under the CAA, EPA concludes that “subject to regulation 

under the Act” is best interpreted as those pollutants subject to a nationwide standard, binding in 

all states, that EPA promulgates on the basis of its CAA rulemaking authority.” See 74 FR at 

51543. The commenter (0101) opines that with each iteration of its position, EPA moves further 

away from the clear import of the CAA’s language and structure. Neither the plain meaning of 

section 165(a)(4) nor the intent and purpose of the CAA permit such redefinition. This 

commenter believes that EPA should correct – not reaffirm – Administrator Johnson’s erroneous 

interpretation. In accordance with the plain language of the statute, the PSD program becomes 

applicable to GHGs and other pollutants whenever they become “subject to regulation.” The 

commenter (0101) opines that this already has occurred as a result of Massachusetts v. EPA. In 

the case of the PSD program, the statute mandates that permitting be required for any pollutant 

that is subject to regulation under this Act.” CAA §165(a)(4), 42 U.S.C. §7475(a)(4); see also 

40 CFR 52.21(b)(50)(iv) (a “regulated NSR pollutant” is “[a]ny pollutant that otherwise is 

subject to regulation under the Act”). Under Massachusetts v. EPA, GHGs are “subject to 

regulation” under the CAA in any normal sense of the phrase. Indeed, given that EPA has 

already “regulated” GHGs in a number of ways, the statute plainly requires that permitting for 

GHGs commence immediately. EPA has already regulated GHG in the various ways outlined in 
28

the Petition: through a regulation to monitor or report emissions; through a regulation that 

approves the inclusion of regulatory requirements in a SIP; through a finding that pollutants 

endanger public health or welfare; or through a regulation that grants a section 209 waiver. By

any of these measures, GHGs already are “subject to regulation” under the CAA, and the time to 

begin issuing PSD permits for these pollutants already has passed.

 

According to several other commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 

0109), those opposing the “actual control” interpretation incorrectly assert that this interpretation 

is precluded by the CAA. To the contrary, as the EAB stated in Deseret, this interpretation is a 

reasonable construction of an ambiguous phrase, and no contrary interpretation is in any way

legally compelled. See Deseret at 29. This is clearly an area where EPA has discretion to 

interpret the statute in a reasonable way, consistent with well-established historical practice, to 

make PSD implementation manageable and effective. Rejection of the “actual control”

interpretation would cause the PSD program to apply in a way that frustrates the objectives and 

purposes of the CAA.

Response:

EPA has concluded that the plain language of the CAA does not preclude EPA from 

applying the actual control interpretation. EPA finds the EAB’s reasoning of in the Deseret 

opinion to be the most persuasive and adopts that reasoning here. The EAB concluded that a 

statutory plain meaning cannot be ascertained from looking solely at the word “regulation” to 

determine whether Congress, in enacting the statute in 1977, intended “subject to regulation” to 

apply narrowly to mean a provision that prescribes actual control of emissions of the pollutant, or 

more broadly to embrace requirements for monitoring of pollutant emissions, among other 

things. It does not appear that, when it enacted CAA sections 165 and 169 in 1977, Congress 

considered this precise issue, or more significantly, drafted language sufficiently specific to 

address it. The phrase “subject to regulation under this Act” is not as clear and unequivocal as 

commenters argue. 

The use of similar, but not identical, language in section 821 of the 1990 Public Law, 

which requires the Agency to promulgate “regulations,” does not constrain the Agency’s ability

to interpret sections 165 and 169. Commenters argue that the only supportable reading of 

sections 165 and 169 mandates that PSD regulatory authority extends to any pollutant subject to 

“a” or “any” regulation promulgated in the CFR because that is the meaning of section 821’s 

direction to promulgate regulations. The statutory language does not compel this meaning. 

The argument that sections 165 and 169 have only one proper interpretation, ignores the 

fact that Section 821 uses different terminology, “regulations,” from that used in the PSD 

provisions of sections 165 and 169, “subject to regulation.” The difference in terminology is 

potentially significant. When read in the context of the phrases in which they are used, possible 

alternative meanings of “regulation” and “regulations” become apparent. In the phrase “the 

Administrator * * * shall promulgate regulations * * * to require [sources to monitor CO[2]]” in 

section 821, the term “regulations” is understood to be the end product of the administrative rule 

making process. Thus, Congress’ direction that EPA promulgate “regulations” found at various 

places in the CAA and in section 821 is most naturally read to mean that Congress directed EPA 
29

to use its legislative rule making authority to implement the statutory requirements, filling in 

necessary specificity and detail. Section 112 of the Act uses the term “subject to regulations,”

referring to “regulations” in the plural. CAA sections 112(r)(3) and 112(r)(7)(F). This evidences 

that Congress may not have meant “subject to regulation” (singular) to have the same meaning.

The Supreme Court has observed in other contexts that the same or similar words may be 

construed differently “not only when they occur in different statutes, but when used more than 

once in the same statute or even in the same section.” Envtl. Def. v. Duke Energy Corp., 549 

U.S. 561, slip op. at 9 (2007) (quoting Atl. Cleaners & Dyers, Inc. v. United States, 286 U.S. 

427, 433 (1932)). In reviewing the meaning of the phrase “subject to regulation under this Act”

we do not confine ourselves “to examining a particular statutory provision in isolation.” FDA v. 

Brown & Williamson Tobacco Corp., 529 U.S. 120, 132 (2000). Rather, “[t]he meaning -- or 

ambiguity -- of certain words or phrases may only become evident when placed in context * * *. 

It is a ‘fundamental canon of statutory construction that the words of a statute must be read in 

their context and with a view to their place in the overall statutory scheme.’” Id. at 132-33.

We find no evidence that Congress’s addition of section 821 in 1990 was an attempt to 

interpret or constrain the Agency’s interpretation of the broader phrase “subject to regulation” as 

used in sections 165 and 169. See 136 Cong. Rec. H2915, 2934 (1990) (statement of Rep. 

Moorhead), reprinted in S. Comm. on Env’t and Public Works, Legislative History of Clean Air 

Act Amendments of 1990, at 2986-87 (1993); 136 Cong. Rec. H2511, 2578 (1990) (statement of 

Rep. Cooper), reprinted in S. Comm. on Env’t and Public Works, Legislative History of Clean 

Air Act Amendments of 1990, at 2652-53 (1993); 136 Cong. Rec. H2511, 2561-62 (1990) 

(statement of Rep. Moorhead), reprinted in S. Comm. on Env’t and Public Works, Legislative 

History of Clean Air Act Amendments of 1990, at 2612-14 (1993). Section 821 bears no facial 

relationship to the PSD provisions of sections 165 and 169. Congress’s subsequent use of the 

word “regulations” in a section of the 1990 Public Law that bears no explicit relationship with 

the earlier-enacted sections would not appear sufficient, on its own, to implicitly constrain EPA’s 

authority to interpret the PSD provisions of section 165 and 169. This is particularly true where, 

as here, the two sections were enacted 13 years apart, bear no obvious relationship, and are not 

even placed in close proximity. Moreover, the Agency did determine, in 1978 that the phrase 

“subject to regulation under this Act” used in the PSD provisions requires interpretation to 

properly implement the PSD program, and Congress did not evidence an intent in section 821 to 

alter the Agency’s determination. Normally, more express terminology would be expected if 

Congress intended to alter an established meaning. 

Moreover, since section 821 was enacted 13 years after sections 165 and 169, Congress’

use of the term “regulations” in enacting section 821 in 1990 ordinarily would not be looked to 

as informative of what Congress intended when much earlier in 1977 it enacted the BACT 

requirement. Int’l Bhd. of Teamsters v. Daniel, 439 U.S. 551, 571 (1979) (Burger, C.J., 

concurring) (understanding of draftsman of amendment in 1970 “would have little, if any, 

bearing” on “construction of definitions enacted in 1933 and 1934”); United States v. Price, 361 

U.S. 304,332(1960) (“The views of a subsequent Congress form a hazardous basis for inferring 

the intent of an earlier one.”)
30

3.2.2. Meaning of the Term “regulation”

Comment:

One industry group commenter (0071) opines that an agency’s interpretation of a statute 

should focus first on the ordinary dictionary meaning of the terms used (see, e.g., MCI 

Telecommunications Corp. v. AT&T, 512 U.S. 218, 225-28 (1994). This commenter states that 

monitoring emissions does not fit within any of the types of activities understood to constitute 

“regulation” of those emissions in the ordinary meaning of that term, and nothing in the phrase 

“subject to regulation” compels a contrary reading to the “actual control” interpretation. 

A state/local agency association (0058) who agrees with EPA’s position notes that the 

PSD Interpretive Memo relies in part on the Black’s Law Dictionary definition of “regulation.” 

The commenter (0058) reconciles that while EPA’s CO2 monitoring rule is a “regulation” in the 

second sense, the pollutant CO2 is not “subject to” regulation because EPA’s regulation does not 

in any way limit CO2; instead, the source operator is the one subject to regulation because he is 

required to monitor CO2 emissions. The commenter notes that while other EPA regulations may 

also take the form of applying to the source operator rather than to the pollutant, the difference is 

that in those cases the pollutant itself is in some way controlled, and thus “subject to” the 

regulation.

Response:

EPA agrees that its interpretation of the CAA should be informed by ordinary and 

accepted dictionary meanings of the applicable terms. As discussed in the PSD Interpretive 

Memo, the term “regulation” can be used to describe a rule contained in a legal code, such as the 

CFR, or the act or process of controlling or restricting an activity. The primary meaning of the 

term “regulation” in Black’s Law Dictionary (8th Ed.) is “the act or process of controlling by rule 

or restriction.” However, an alternative meaning in this same dictionary defines the term as “a 

rule or order, having legal force, usu. issued by an administrative agency or local government.” 

The primary meaning in Webster’s dictionary for the term “regulation” is “the act of regulating: 

the state of being regulated.” Merriam-Webster’s Collegiate Dictionary 983 (10th ed. 2001). 

Webster’s secondary meaning is “an authoritative rule dealing with details of procedure” or “a 

rule or order issued by an executive authority or regulatory agency of a government and having 

the force of law.” Webster’s also defines the term “regulate” and the inflected forms “regulated”

and “regulating” (both of which are used in Webster’s definition of “regulation”) as meaning “to 

govern or direct according to rule” or to “to bring under the control of law or constituted 

authority.” Id. EPA thus agrees that monitoring of emissions does not necessarily fit within one 

ordinary meaning of the term regulation.

Comment:

The Petition for Reconsideration contends that, in the PSD interpretive Memo, EPA is 

interpreting the terms “regulation”, “regulate,” and “regulated” to mean anything the 

Administrator wants them to mean, wherever they might appear in any environmental statute or 

EPA regulation.
31

Response: 

To the contrary, EPA has applied common and accepted meanings of these terms (based 

on several dictionaries), and EPA has carefully considered the context in which these terms are 

used in the CAA and EPA regulations. EPA does not purport to have the authority to define 

words to mean whatever EPA chooses. 

3.2.3. Ambiguity of Statutory Language and EPA Discretion

One environmental group commenter (0101) states that EPA’s redefinition of the phrase 

“subject to regulation” is unsupported and contrary to the CAA’s purpose and intent. Confronted 

with a statute that requires it to take action more expeditiously than it would otherwise prefer, the 

commenter claims that EPA has found a regulatory ambiguity where none exists, and in the 

process has attempted to avail itself of a degree of discretion that the statute does not confer—

and in fact precludes. The commenter (0101) states that the phrase “subject to regulation” is not 

ambiguous and it cannot be redefined to enlarge EPA’s authority beyond the scope of the statute. 

EPA’s interpretation—that a pollutant is not “subject to regulation” until EPA decides to subject 

it to nationwide, binding, numerical emissions control limits — effectively would allow the 

agency complete and exclusive control over whether and how GHGs are to be regulated under 

the Act. The commenter (0101) continues that although EPA might prefer an interpretation that 

would allow it to proceed only if and when it sees fit, the statute does not confer any such wideranging authority. 

The commenter (0101) further provides definitions from multiple dictionaries in support 

of their interpretation of “subject to” and notes that of four definitions, only one even partially

conveys immediate and actual control. The commenter (0101) continues that EPA has sought to 

avoid this conclusion by claiming that the term “regulation” is ambiguous and that the claim is 

incorrect. In the PSD Interpretive Memo, former EPA Administrator Johnson turned to 

dictionary definitions of “regulation” to support the claim of ambiguity, including “a rule 

contained in a legal code,” “a rule or order, having legal force, [usually] issued by an 

administrative agency or local government,” and “to bring under the control of law or constituted 

authority”. The commenter contends that none of these definitions suggests that the term 

“regulation” is ambiguous or contradictory.

An industry commenter (0059) states that the EPA has argued successfully before EPA’s 

EAB in the Deseret Permit Proceeding, that §§165(a)(4) and 169 of the PSD provisions in Part C 

of the CAA that refers to when a pollutant becomes “subject to regulation” are amenable to many 

interpretations. They assert that this is clearly the case where a Court reviewing the EPA’s 

interpretation should find under the Supreme Court’s decision in Chevron USA v. Natural 

Resource Defense Council that Congress did not speak on the issue that it will not disturb such 

an interpretation unless it finds that it is unreasonable. They opine that it is reasonable for EPA 

to interpret “subject to regulation” to mean when GHGs become subject to “actual control.”
32

An industry commenter (0107) states that the Environmental Appeals Board (EAB) in the 

Deseret Permit Proceeding concluded that the phrase “subject to regulation” is ambiguous and 

that EPA’s construing the term to mean when GHGs became subject to actual control was both 

“reasonable” and “permissible,” and that EAB remanded the interpretation back to Region 8 

(which had justified the interpretation based on historical EPA interpretations that EAB found 

were not supportive of that position). The commenter asserts, therefore, that under Chevron, the 

question before EPA in this action is whether it is reasonable to construct the statute to trigger 

PSD for GHGs when a requirement requires “actual control” of GHGs. The commenter (0107) 

believes that the “actual control” interpretation of the phrase “subject to regulation” in sections 

165(a) (4) and 169 is consistent with the CAA and reasonable.

Several other commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) said 

that starting from the premise that the statutory phrase is ambiguous, a finding supported by the 

EAB in its Deseret decision, EPA has discretion to interpret the phrase in a manner that is 

reasonable and consistent with the Act and its implementation of the PSD program. Deseret at 

29; see also Chevron v. Natural Res. Def. Council, Inc., 467 U.S. 837, 843 (1984). According to 

the EAB’s Deseret decision, EPA’s interpretation is “reasonable” and “‘permissible’ in light of 

the [statutory] ambiguity,” and no contrary interpretation is compelled by the statute. Deseret at 

29. 

Response:

The presence of alternative meanings of the terms in the applicable phrase from the CAA

illustrates ambiguity rather than establishing a plain meaning. Because the term “regulation” is 

susceptible to more than one meaning (described above), there is ambiguity in the phrase “each 

pollutant subject to regulation under the Act” that is used in both sections 165(a)(4) and 169(3) 

of the CAA. Commenters have not demonstrated that the different meanings of the term 

“regulation” considered by the EPA are not in fact accepted and commonly-applied meanings of 

this term. In addition, the term “subject to” is also susceptible to multiple meanings. One 

commenter (0101) cited several meanings of the latter term that give it a conditional or potential 

state, but also acknowledged the following meaning of the term “subject to”: “being in a 

position or in circumstances that place one under the power or authority of another or others.” 

There are also additional dictionary meanings similar to this last one, which incorporate the idea 

of “control.” Several were cited by parties in briefs to the EAB in the Deseret matter. See

Response Brief of Permittee Deseret Power Electric Cooperative, In re: Deseret Power Electric 

Cooperative, PSD Appeal No. 07-03, Page 8. Since neither the term “regulation” or “subject to”

has a consistent and plain meaning, the combination of both these terms in the phrase “subject to 

regulation under the Act” results in an ambiguous phrase.

After considering the different dictionary meanings of the term “regulation,” the EAB 

was likewise persuaded that “a statutory plain meaning cannot be ascertained from looking 

solely at the word ‘regulation.’” Deseret, Slip Op. at 28-29. EPA continues to finds the EAB’s 

opinion to be thoughtful and well-reasoned. Thus, EPA adopts that reasoning here. Commenters 

have not provided any information that demonstrates any error in the EAB’s analysis or 

illustrates a plain meaning that was overlooked by the EAB or the Administrator. 
33

3.2.4. Pollutants “Subject To” Regulation Are Pollutants That EPA Has the 

Authority to Regulate

Comment:

One environmental group commenter (0101) argues that GHGs are presently subject to 

regulation because EPA has the authority to regulate them. The Supreme Court has determined 

that EPA “has the statutory authority to regulate the emission” of GHGs. Massachusetts v. EPA, 

549 U.S. at 532 (emphasis added). At a minimum, then, EPA is authorized to regulate GHGs. 

Where such authorization exists, it must be exercised “within defined statutory limits,” and all of 

EPA’s “reasons for action or inaction must conform to the authorizing statute.” Id., at 532-33. In 

the case of the PSD program, the statute mandates that permitting be required for any pollutant 

that is subject to regulation under this Act.” CAA §165(a)(4), 42 U.S.C. §7475(a)(4); see also 40 

CFR 52.21(b)(50)(iv) (a “regulated NSR pollutant” is “[a]ny pollutant that otherwise is subject to 

regulation under the Act”). Under Massachusetts v. EPA, GHGs are “subject to regulation”

under the CAA in any normal sense of the phrase. The commenter (0101) further provides 

definitions from multiple dictionaries in support of their interpretation of “subject to” and notes 

that of four definitions, only one even partially conveys immediate and actual control. The 

commenter (0101) continues that EPA has sought to avoid this conclusion by claiming that the 

term “regulation” is ambiguous and that the claim is incorrect. 

In contrast, one state/local agency association (0062) argues that interpretation of the 

phrase “subject to” regulation advocated by some goes too far – EPA has very broad authority

under section 309 of the CAA to regulate pollution in whatever form it may occur if there is an 

imminent and substantial endangerment, and so under section 309 one could argue that all 

pollutants are “subject to” regulation; however, Congress could not have intended the BACT 

obligation to apply today to all pollutants that EPA might theoretically have reason to regulate in 

the future. The commenter (0062) believes that this concept is reinforced by the language of the 

statute that appears to use the terms “subject to regulation” and “regulated” interchangeably. 

An industry group commenter (0071) states that it is necessary to make the PSD program 

workable and to avoid adverse consequences. One of the most important practical implications 

of the PSD Interpretive Memo is that it relieves facility owners and permitting authorities from 

having to consider a virtually limitless set of chemicals that might be emitted by a source, but 

that are not subject to any emission limitation or other controls under the CAA.

Response:

In the context of the PSD provisions of the CAA, EPA believes it would be unworkable 

and contrary to Congressional intent for EPA to interpret the phrase “pollutants subject to 

regulation under the Act” to describe any pollutant that EPA has the authority to regulate. EPA 

does not dispute that, when read in isolation, the statutory language is susceptible to this meaning 

if one applies the particular dictionary definitions of “subject to” cited by Commenter 0101. In 

certain contexts, this meaning of “subject to regulation” may be appropriate. However, this is 

not plainly the meaning that Congress intended for EPA to apply in the context of CAA sections 

165 and 169. Indeed, EPA believes that applying this meaning would frustrate Congressional 
34

intent for reasoned decision making and a considered judgment by EPA before regulating a 

pollutant (see discussion above). 

Under this reading of the phrase “subject to regulation,” any emissions that could be 

considered an air pollutant, and thus could potentially be subject to regulation under the CAA at 

any time in the future, would require an emissions limitation under the PSD program now. This 

is clearly inconsistent with the EAB’s previous observation that “[n]ot all air pollutants are 

covered by the federal PSD review requirements.” Knauf Fiber Glass, 8 E.A.D. at 162. If 

section 165(a)(4) were interpreted to require EPA to establish PSD emission limits for all 

pollutants merely capable of regulation in the future, this would result in an administratively

unworkable program. There would be almost no bounds to the substances for which permitting 

authorities would be required to set PSD limits, especially in light of the Supreme Court’s 

reading of what constitutes an “air pollutant” under the Act. See Massachusetts v. EPA, 127 S. 

Ct. at 1460 (finding that the Act’s “sweeping definition” of air pollutant “embraces all airborne 

compounds of whatever stripe”). 

The decision in Massachusetts v. EPA did not instantly render CO2 “regulated” under the 

CAA, hold that CO2 was already regulated, or direct EPA to regulate CO2 and other GHG

emissions under section 202 or any other section of the Act. The Supreme Court simply

concluded that CO2 and other GHG emissions are “air pollutants” under section 302(g) of the 

Act, 127 S. Ct. at 1460, and therefore found that EPA was not precluded from regulating these 

substances under section 202 of the Act, id. at 1462-63. The Court clearly indicated that the 

Agency would have to take additional steps on remand, including making a finding of 

endangerment to public health or welfare, before CO2 could become regulated under CAA 

section 202. Id. at 1363. 

In addition, we find it informative that Congress titled section 122 of the Act “listing of 

certain unregulated pollutants.” 42 U.S.C. §7422 (emphasis added). In this section, Congress 

directs the Administrator to review relevant information on radioactive pollutants, cadmium, 

arsenic, and polycyclic organic matter, in the ambient air, to determine whether the pollutant will 

“cause or contribute to air pollution which may reasonably be anticipated to endanger public 

health.” If the Administrator makes this endangerment type of finding, the Act directs the 

Administrator to add the pollutant to a list under Section 108(a)(1), 112(b)(1)(A), or 

111(b)(1)(A). Section 122 shows that Congress recognized the existence of air pollutants that 

are “unregulated” and set forth a scheme wherein the pollutants would first be subject to an 

endangerment type finding, then a listing, and then promulgation of regulations under the 

appropriate sections of the Act. This process in Section 122, is entirely consistent with EPA’s 

interpretation in the PSD Interpretive Memorandum. If any pollutant that EPA had the authority 

to regulate were in fact “subject to regulation,” then the pollutants listed in section 122 would not 

have been “unregulated” at the time section 122 was enacted. 

In order to carry out their administrative functions, federal agencies are often afforded 

broad discretion in interpreting the statutory requirements and setting regulatory priorities. 

Sierra Club v. Thomas, 828 F.2d 783, 798 (D.C. Cir. 1987) (finding that given Congress’ broad 

mandate to EPA under the CAA, “the Agency cannot avoid setting priorities” in carrying out its 

regulatory duties). Interpreting sections 165 and 169 to invoke PSD requirements for any
35

substance that EPA could regulate, would usurp EPA’s discretion to interpret and implement the 

PSD program under the CAA in an orderly and reasoned manner. See generally, Environmental 

Defense v. Duke Energy Corp., 127 S. Ct. 1423 (2007) (finding that EPA has discretion to define 

relevant statutory terms in the context of implementing the overall PSD program). This is an 

unworkable interpretation of the Act that would have EPA establish emissions limitations under 

the PSD program on the basis of presumed decisions under other provisions of the Act that the 

Administrator has not yet made or developed a record to support. 

Comment:

Commenter (0095) argues, to the extent EPA’s references to past practice are referring to 

how it has interpreted the phrase “subject to regulation” elsewhere in the CAA, EPA -- by

regulation -- has previously given the same phrase its plain meaning, a meaning that is in direct 

conflict with the interpretation EPA unlawfully promotes here. Section 209(e)(1) of the CAA 

provides:

No state or political subdivision thereof shall adopt or attempt to enforce any standard or 

other requirement relating to the control of emissions from either of the following new 

nonroad engines or nonroad vehicles subject to regulation under this chapter - (A) New 

engines which are used in construction equipment or vehicles or used in farm equipment 

or vehicles and which are smaller than 175 horsepower. (B) New locomotives or new 

engines used in locomotives.

According to the commenter (0095), if “subject to regulation” means “subject to actual control of 

emissions” as EPA asserts it does here, then section 209(e)(1) must means that states (or 

localities) are preempted from imposing emission standards on these engines only after EPA 

imposes “actual control of emissions “ from those engines. But in its regulations implementing 

section 209(e), EPA has repeatedly taken the position that states and localities are categorically 

preempted from regulating those engines, regardless of whether EPA has already subjected those 

engines to “actual control” of emissions.

Commenter (0095) adds that under section 209(e), all states are preempted from adopting 

emissions standards for ``[n]ew engines which are used in construction equipment or vehicles or 

used in farm equipment or vehicles and which are smaller than 175 horsepower’’ or for ``[n]ew 

locomotives or new engines used in locomotives.” 59 FR 36969, 36970 (July 20, 1994). This 

position is the justification for the formal regulatory definition (id. at 36986-87):

Sec. 85.1603 Application of definitions; scope of preemption.

(a) For equipment that is used in applications in addition to farming or construction 

activities, if the equipment is primarily used as farm and/or construction equipment or 

vehicles, as defined in this subpart, it is considered farm or construction equipment or 

vehicles.

(b) States are preempted from adopting or enforcing standards or other requirements 

relating to the control of emissions from new engines smaller than 175 horsepower, that 
36

are primarily used in farm or construction equipment or vehicles, as defined in this 

subpart.

(c) States are preempted from adopting or enforcing standards or other requirements 

relating to the control of emissions from new locomotives or new engines used in 

locomotives.

(d) No state shall enforce any standards or other requirements relating to the control of 

emission from new nonroad engines or vehicles except as provided for in this subpart.

EPA then repeated this interpretation of that phrase three years later:

Under section 209(e): (1) All states are preempted from adopting emission standards and 

other requirements for new nonroad engines used in construction or farm equipment or 

vehicles which are smaller than 175 horsepower and for new locomotives and new 

engines used in locomotives;

62 FR at 67733, 67734; December 30, 1997. At no point in either of these rulemakings did EPA 

discuss the phrase “subject to regulation” or in any way even hint that preemption of state 

authority hinged on whether EPA itself had imposed “actual control” of emissions from these 

sources. In fact, EPA did not promulgate emission controls or any other standard or control for 

these engines until years later: June 17, 1994 for the farm and construction equipment standards 

(59 FR 31306), and April 16, 1998 for locomotives. See 63 FR at 18978.

And, as currently codified in the CFR:

States and localities are preempted from adopting or enforcing standards or other 

requirements relating to the control of emissions from new engines smaller than 175 

horsepower that are primarily used in farm or construction equipment or vehicles, as 

defined in this part. For equipment that is used in applications in addition to farming or 

construction activities, if the equipment is primarily used as farm and/or construction 

equipment or vehicles (as defined in this part), it is considered farm or construction 

equipment or vehicles.

40 CFR Sec. 1074.10(a).

Response:

EPA’s discussion of past practice was in reference to its application of the PSD 

permitting requirements, not this prior interpretation of CAA section 209(e). EPA does not 

dispute the commenters summary of EPA’s previous interpretation of the phrase “subject to 

regulation” in the particular context of the preemption provision in CAA section 209(e). 

However, EPA does not agree that EPA’s reading of section 209 establishes a plain meaning of 

the term “subject to regulation” that must be applied each time that phrase appears in the CAA. 

Although there is often a presumption that identical words used in different parts of the 

same statute have the same meaning – see, e.g., Merrill Lynch, Pierce, Fenner & Smith, Inc. v. 

Dabit, 547 U.S. 71, 86 (2006); Comm’r v. Lundy, 516 U.S. 235, 249-50 (1996) – courts 
37

recognize that this presumption can yield to a different interpretation in appropriate 

circumstances. EPA may interpret the same word differently based on statutory context. See 

Envtl. Def. v. Duke Energy Corp., 549 U.S. 561, 127 S.Ct. 1423, 1433 (2007). The Supreme 

Court observed that the same or similar words may be construed differently “not only when they

occur in different statutes, but when used more than once in the same statute or even in the same 

section.“ Id. (quoting Atl. Cleaners & Dyers, Inc. v. United States, 286 U.S. 427, 433 (1932)).

In reviewing the meaning of the phrase “subject to regulation under this Act” EPA has not 

confined itself “to examining a particular statutory provision in isolation.” See FDA v. Brown &

Williamson Tobacco Corp., 529 U.S. 120, 132 (2000). Rather, “[t]he meaning -- or ambiguity --

of certain words or phrases may only become evident when placed in context * * *. It is a 

‘fundamental canon of statutory construction that the words of a statute must be read in their 

context and with a view to their place in the overall statutory scheme.’” Id. at 132-33 (quoting 

Davis v. Mich. Dep’t of Treasury, 489 U.S. 803, 809 (1989).

The context in which “subject to regulation” is used in section 209 and in sections 165 

and 169 of the CAA are clearly distinguishable and support the different interpretations that EPA 

has applied in each case. 

The CAA section 209(e) preemption provision addresses specific categories of nonroad 

engines and nonroad vehicles that EPA had the authority to regulate under section 213 of the Act 

and was required to regulate by a specific time. EPA read the preemption of state authority in 

209(e)(1) as applying prior to issuance of EPA regulation, in a context where Congress had 

allocated authority to regulate to EPA, not to states, and where EPA was required to issue 

regulations for locomotives, and had just issued regulations the month before for farm and 

construction equipment. In the context of these provisions (sections 213 and 209(e)) allocating 

authority to EPA instead of the states, it naturally follows that the use of “subject to regulation”

in section 209(e) would address something that EPA has the authority to regulate as opposed to 

something that EPA has in fact regulated. 

In contrast, the phrase “subject to regulation” appears in the PSD provisions in a context 

that requires BACT emissions limitations for any pollutants that are “subject to regulation” under 

the Act. As discussed above, this provision appears in the context of other CAA provisions that 

establish specific criteria that governs the exercise of the Administrator’s judgment as to whether 

to establish emissions limitations on particular pollutants or source categories. In this latter 

context, it is more appropriate to read the term “subject to regulation” to address whether 

something is actually covered by a control requirement or emissions limitations, rather than to 

describe something that EPA has the authority to regulate. As discussed above, reading “subject 

to regulation” to describe pollutants that EPA has the authority to regulate would lead to an 

unworkable situation in which the PSD program applied to any substance that could theoretically 

be regulated at some point in the future.

In comparison, the application of the actual control interpretation in CAA section 

209(e)(1) would lead to peculiar result --- that Congress allowed temporary state controls that 

would later be totally preempted by mandatory EPA regulations. Section 209(e)(1) provides for 

total preemption, without any chance for a waiver, for the applicable subset of nonroad 
38

equipment. This contrasts with the preemption under 209(e)(2) for the rest of nonroad, where 

EPA could issue a waiver of preemption and there was no reference to “subject to regulation.” 

3.2.5. Distinction Between Term “Control” and “Regulations” In Other 

Portions of the Clean Air Act

Comment:

An environmental group commenter (0087) states that EPA’s interpretation conflates the 

concept of quantitative “control” or emissions “standards” with the more expansive term “subject 

to regulation.” The commenter asserts that Congress clearly knew how to distinguish between 

pollutants subject to “control” or direct emissions standards and pollutants “subject to 

regulation” under the CAA. CO2 is “regulated” under “this chapter” (i.e., Chapter 85 of Title 42) 

because section 821 of the CAA Amendments of 1990 require EPA to “promulgate regulations”

requiring major sources to monitor CO2 emissions and report them to EPA, and EPA has done 

so. The commenter cites as an example of Congress’ deliberate distinction between emissions 

standards and “controls” of air pollutants is illustrated by section 307(b)(1), which provides for 

venue in the D.C. Circuit for actions challenging:

any emission standard or requirement under section 7412 of this title, any standard of 

performance or requirement under section 7411 of this title, any standard under section 

7521 of this title (other than a standard required to be prescribed under section 7521(b)(1) 

of this title), any determination under section 7521(b)(5) of this title, any control or 

prohibition under section 7545 of this title, any standard under section 7571of this title, 

any rule issued under section 7413, 7419, or under section 7420 of this title, or any other 

nationally applicable regulations promulgated, or final action taken, by the Administrator 

under this chapter . . . .

42 U.S.C. §7607(b) (emphasis added). According to this commenter, this section makes clear 

that Congress knew how to distinguish – and did distinguish – quantitative “controls” or 

“standards” of air pollutants with other types of regulations to which air pollutants may be 

subject, including monitoring and reporting requirements.

Similarly, another commenter (0095) claims EPA ignores the fact that throughout the 

CAA, Congress carefully differentiated “regulation” from “control,” and indeed from numerous 

other terms that describe various types of agency actions. Instead, EPA seems to suggest that 

when Congress used the word “regulation” in section 821, Congress overlooked what it had 

written in section 165(a)(4). However, according to the commenter, if Congress had intended 

BACT to apply only when a pollutant was subject to “actual control,” it would have said so. In 

fact, Congress uses the word “control” dozens of times in the CAA, including right there in 

section 165(a)(4), when it requires “best available control technology” for each such pollutant 

“subject to regulation under this chapter.” 42 U.S.C. 7475(a)(4). Notably, Congress did not limit 

the requirement to impose “control” technology to only those pollutants that were already

“subject to control” elsewhere in the CAA; Congress required “control” technology for any

pollutants that were “subject to regulation.”
39

The commenter (0095) also states that Congress was equally nuanced in section 

307(d)(1), which established rulemaking procedures for certain agency actions and that section 

307(d)(1) carefully and repeatedly distinguishes between “standards,” “emission standard or 

limitation,” “standards of performance,” “requirement,” and “regulations.” Yet despite this, EPA 

insists that Congress used “regulation” in section 165(a)(4) to mean “control” of emissions:

(A) the promulgation or revision of any national ambient air quality standard under 

section 7409 of this title,* * *

(C) the promulgation or revision of any standard of performance under section 7411 of 

this title, or emission standard or limitation under section 7412(d) of this title, any

standard under section 7412(f) of this title, or any regulation under section 7412(g)(1)(D) 

and (F) of this title, or any regulation under section 7412(m) or (n) of this title,

(D) the promulgation of any requirement for solid waste combustion under section 7429 

of this title,

(E) the promulgation or revision of any regulation pertaining to any fuel or fuel additive 

under section 7545 of this title,

(F) the promulgation or revision of any aircraft emission standard under section 7571 of 

this title, etc.

42 U.S.C. 7607. In particular, it is worth noting how Congress treats section 7545 in these two 

different provisions of section 307; after specifically limiting the applicability of 307(b)(1) to 

only a “control or prohibition” promulgated under section 7545, Congress made section 307(d) 

applicable to “any regulation pertaining to any fuel or fuel additive” under section 7545. Thus, 

Congress clearly knew how to distinguish between “control” and “regulation” – and did so when 

it wanted to.

Response:

EPA does not contend that Congress clearly and unequivocally intended to use the term 

“regulation” in section 165(a)(4) and 169(3) to describe a control or emissions limitation. Rather 

EPA’s view is that sections 165(a)(4) and 169(3) are ambiguous and that Congress left EPA with 

a gap to fill. EPA agrees that if Congress had clearly intended for EPA read “subject to 

regulation” to mean “subject to control,” Congress certainly could have used language to this 

effect. However, the fact that Congress did not use particular terms in sections 165(a)(4) and 

169(3) that it used elsewhere does not demonstrate that Congress intended to preclude the 

meaning that EPA has applied to the words Congress did use, considering the potential meanings 

of various terms and the context in which they are used. Nor does Congressional failure to use 

particular words that would have plainly established the meaning EPA applies demonstrate the 

opposite proposition -- that Congress clearly intended for section 165(a)(4) and 169(a)(3) of the 

Act to mean what commenters argues these provisions mean. The logic employed by 

commenters -- that Congress knew how to use particular terms and could have used those terms 

in the PSD provisions if that is how Congress intended for EPA to read them – can also be 

applied to demonstrate that Congress did not clearly intend the PSD provisions to mean that PSD 

is triggered by a monitoring or reporting requirement or the promulgation of any regulation of 
40

any type that covers a particular pollutant. Thus, this exercise simply leaves one with an 

ambiguous statutory provision that has no readily apparent plain meaning. 

In all but one of the contrasting examples cited by commenters of Congressional usage of 

the term “regulation,” Congress in fact used the plural term “regulations” rather than the singular 

“regulation.” There are many examples in the CAA where Congress uses the plural term 

“regulations” in a context with the verb “promulgate” or a similar verb to describe the product of 

the rulemaking process. See, e.g., CAA section 110(5)(B) (authorizing the Administrator to 

“promulgate, implement and enforce regulations” for indirect source review); Section 

111(b)(1)(B) (requiring the Administrator to propose “regulations” establishing Federal 

standards of performance for new sources); Section 111(d) (directing the Administrator to 

promulgate “regulations” for categories of air pollutants); Section 165(e)(1) (describing 

“regulations” implementing analytical requirements of the PSD program); Section 166 (directing 

the Administrator to “promulgate regulations” to prevent the significant deterioration of air 

quality by specific pollutants); Section 301(a) (requiring the Administrator to “promulgate 

regulations” setting forth the general criteria for regional officers and employees). This 

Congressional direction that EPA promulgate “regulations” found at various places in the CAA 

and in section 821 of the 1990 amendments is most naturally read to mean that Congress directed 

EPA to use its legislative rule making authority to implement the statutory requirements, filling 

in necessary specificity and detail. Likewise, section 112 of the Act uses the term “subject to 

regulations,” referring to “regulations” in the plural. CAA sections 112(r)(3) and 112(r)(7)(F). 

In the one example cited by commenters where Congress used the singular form of the term 

“regulation,” Congress added the word “any” in front of the word “regulation.” 

If, as commenters argue, Congress could have used the term “control” in section 

165(a)(4) or 169(3) of the Act, it certainly would not have been any harder for Congress to add 

an “S,” “A,” or “ANY” to the phrase “subject to regulation,” as it did elsewhere in the Act to 

establish a particular meaning, if Congress had intended for EPA to read sections 165(a)(4) and 

169(3) to apply to any pollutant covered by a regulation promulgated by EPA. The phrase 

“promulgate regulations” fits best with the adoption of a “rule or practice” or “rule of order,” as 

used in the dictionary meanings from Black’s and Webster’s cited by Petitioners. Pet. at 6. The 

phrasing “subject to regulations under the Act” or “subject to a regulation under the Act” would 

have been more consistent with the dictionary meanings that describe a regulation as a “rule”

such as would be contained in the CFR. 

Following commenters reasoning, the language in section 307(d)(1)(E) of the Act can be 

read to show that Congress did not clearly intend for the PSD provisions to apply to any 

regulation pertaining to any pollutant. If Congress had specifically intended for sections 165 and 

169(3) to apply to “the promulgation of any regulation” covering any pollutant, then Congress 

could have written sections 165(a)(4) and 169(3) of the Act to use the same or similar language 

as section 307(d)(1)(E). Congress did not in fact write language that applies the BACT 

requirement to a pollutant upon “the promulgation or revision of any regulation pertaining to”

that pollutant. If this is what Congress had clearly intended, it could have just as easily included 

this language in section 165(a)(4) and 169(3) as it could have used the term “control” or 

“emissions limitation”
41

Instead, Congress used the term “regulation” in a context that is ambiguous, but that 

permits the application of the dictionary meaning applied by EPA that refers to an “act or 

process” rather than a “rule.” In context, the “subject to regulation” terminology reflected in 

sections 165(a)(4) and 169(3) may be read to describe an “act or process,” which supports EPA’s 

application of the meaning from Black’s Law Dictionary (8th Ed.) that emphasizes “controlling 

by rule or restriction.” 

Thus, EPA has not been persuaded by this line of argument that the PSD Interpretive 

Memorandum is inconsistent with the plain meaning of the Act or Congressional intent. 

3.2.6. EPA Elevates Policy Preference Over Plain Statutory Meaning

According to the commenter (0087), EPA does not ground its proposed interpretation in 

the language of the CAA, at all. Rather, after making a cursory reference to statutory text at the 

outset of the proposal, the commenter opines that EPA offers only that its position “best reflects 

our past policy and practice” and “allows for a more practical development for regulations and 

guidance concerning control of pollutants once they are determined to endanger public health or 

welfare.”

Finally, the commenter (0087) states that EPA’s suggestion that its proposed 

interpretation will allow for a more practical approach to determining whether emissions of air 

pollutants endanger health and human welfare amounts only to a policy preference. Given the 

clear Congressional intent to distinguish between air pollutants “subject to regulation” and air 

pollutants subject to quantitative controls, EPA’s policy preference must be subordinate.

One environmental group commenter (0101) notes that EPA’s primary justification for 

the preference for the current definition of the phrase “subject to regulation” is not the statutory

language, as nothing there can be found to support it. Rather, according to the commenter, it is 

clear that EPA’s argument is almost entirely grounded in a practical desire to go about regulating 

GHGs in a particular manner. This commenter states that EPA, long prone to ignoring deadlines 

explicitly spelled out in the CAA until finally forced to proceed by court decree, cannot avail 

itself of additional, non-statutory de facto extensions of time to fulfill its statutory obligations. 

Nor can the agency simply choose by fiat to implement mandatory CAA requirements seriatim 

when the statute requires that they be contemporaneous and complementary.

Response:

Where the governing statutory authority is susceptible to more than one interpretation, it 

is not impermissible for EPA to apply policy preferences when determining which interpretation 

to apply, so long as the interpretation EPA elects to follow is a permissible one. The PSD 

Interpretive Memo provides a persuasive explanation for why the interpretation reflected in that 

memorandum is consistent with the terms of the CAA and Congressional intent. In this instance, 

EPA’s policy preferences are fully consistent with that intent. Congress intended for EPA to 

gather data before establishing controls on emissions and to make reasoned decisions. 
42

3.3. Interpretation of Regulations

Comment:

Ten industry commenters (0089 and others incorporating this submission (0065, 0067, 

0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) believe that EPA reasonably construes the 

definition of the phrase “regulated NSR pollutant,” as contained in the Agency’s regulations, to 

require actual control of emissions in light of the fact that 40 CFR 52.21(b)(50)(i)-(iii) describes 

pollutants that are subject to actual emission control requirements under the CAA’s NAAQS, 

NSPS, and stratospheric ozone programs and that the phrase “otherwise is subject to regulation”

in 40 CFR 52.21(b)(50)(iv) is therefore properly understood to require actual control of 

emissions by regulations promulgated under other provisions of the CAA that are not described 

in the first three clauses. See 74 FR 51539-51540; In re: Deseret Power Electric Cooperative, 

Brief Amicus Curiae of the Utility Air Regulatory Group in Support of Respondent 

Environmental Protection Agency (“UARG Amicus Brief”) at 31 & n.21.

Another commenter (0080) asserts that interpreting the phrase “subject to regulation” as 

“subject to regulation that restricts emissions” fits within the statute because EPA is only

authorized to restrict emissions of air pollutant where the EPA has made an endangerment 

finding (or where Congress has implicitly done so, as in the case of Title VI). The commenter 

(0080) adds that defining the term “regulated NSR pollutant” at 40 CFR 52.21(b)(50) as a 

pollutant that is actually subject to emission controls makes sense for the same reason. 

Response:

EPA agrees that the actual control interpretation is consistent with the terms of the 

regulations EPA promulgated in 2002. See 67 FR 80186-80289. EPA continues to find the 

reasoning of the PSD Interpretive Memo to be persuasive. The structure and language of EPA’s 

definition of ‘regulated NSR pollutant’ at 40 CFR 52.21(b)(50) supports the actual control 

interpretation. The first three parts of the definition describe pollutants that are subject to 

regulatory requirements that mandate control or limitation of the emissions of those pollutants, 

which suggests that the use of “otherwise subject to regulation” in the fourth prong of the 

definition also intended some prerequisite act or process of control. The definition’s use of 

“subject to regulation” should be read in light of the primary meanings of “regulation” described 

above, which each use or incorporate the concept of control. 

Comment:

The Petition for Reconsideration criticizes EPA’s application of a canon of statutory

construction known as ejusdem generis, which provides that “where general words follow the 

enumeration of particular classes of things, the general words are most naturally construed as 

applying only to things of the same general class as those enumerated.” Am. Mining Cong. v. 

EPA, 824 F.2d 1177, 1189 (D.C. Cir. 1987). Petitioners argue that the PSD Interpretive Memo 

conflicts with the Deseret decision because the EAB explicitly held that it is not appropriate to 

use ejusdem generis to interpret a parroting regulation “[w]ithout a clear and sufficient 

supporting analysis or statement of intent in the regulation’s preamble.” Deseret at 46 
43

(emphasis added). The Petition states analysis in a memo is an inadequate substitute for the 

missing analysis in the rulemaking itself. In addition, the Petitioners argue that this ejusdem 

generis canon of construct is inapplicable in this situation because the dispute concerns the 

meaning of a provision of the CAA, not the nearly identical language of a subsection of the 

regulation. Finally, the Petition argues that the first three subsections of the regulation at 40 CFR 

52.21(b)(50) are more dissimilar than similar and that the “otherwise” language in the fourth part 

of the definition suggests a contrast to the other three parts rather than a similarity. 

Ten industry commenters (0089 and others incorporating this submission (0065, 0067, 

0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) believe that EPA may apply the canon of 

statutory interpretation that states that general words that follow a description of a particular 

class of things are naturally construed as applying to things in the same class that is enumerated. 

PSD Interpretive Memorandum at 8-9. Although the EAB in Deseret declined to apply this 

canon, it did so in the absence at that time of any clear, definitive evidence of Agency intent to 

so cabin the terms of the regulation. See Deseret at 45. In the PSD Interpretive Memorandum, 

EPA provided the necessary analysis and statement of intent.

The commenter (0080) states that the use of esjudem generis in construing the meaning 

of 40 CFR 52.21(b)(50)(iv) is appropriate (contrary to the assertion of the Petitioners) because it 

advances the purposes of the statute as a whole – to interpret it otherwise would confound the 

purpose of the statute to require emission reductions where there is endangerment.

Response: 

The Petition for Reconsideration correctly notes that the EAB decision in Deseret

declined to apply this canon of statutory construction in part based on the absence of a statement 

of intent in regulation’s preamble. However, the EAB did not have before it the question of 

whether an after-the-fact memorandum of the Administrator, could supply sufficient intent to 

apply this principle. Thus, the EAB decision itself does not definitely preclude the approach 

applied in the PSD Interpretive Memo to supply a clearer statement of EPA intent. It is also not 

clear that this portion of the EAB’s decision was grounded on any controlling judicial decision. 

This part of EAB decision in Deseret does, however, support the commenters argument that this 

doctrine is not appropriately applied to regulations that parrot the statutory language, since EPA 

has the power to write the regulations in more explicit terms. Thus, upon reconsideration, EPA 

agrees that this element of the PSD interpretive memorandum is not particularly persuasive. 

However, we do not consider the weakness in this part of the memorandum significant enough to 

undermine the merits of the memorandum as a whole. The discussion of the dictionary meanings 

of the term regulation and the context in which this term is used in the regulations is sufficiently

persuasive to justify continuing to apply that interpretation, even without application of the 

ejusdem generis principle. 

The Petitioners argument that the use of the term “otherwise” is intended to convey a 

contrast rather than a similarity, even if plausible, does not demonstrate that the reasoning of the 

PSD Interpretive Memo is erroneous. At most, Petitioners have presented an alternative reading 

of this same language. Petitioners have provided no additional information to demonstrate that 

EPA in fact intended the regulation to be interpreted in this manner when that regulation was 
44

adopted in 2002. The factual record does not reflect that EPA has ever interpreted “otherwise”

in the fourth part of this definition to mean that the PSD BACT requirement applies to pollutants 

that were not subject to a control requirement. 

Comment:

One commenter (0086) presents detailed arguments that the regulatory history of the PSD 

program can only be squared with the “actual control” interpretation in which the commenter 

discusses the 1978 preamble to the PSD regulations, the Wegman and Cannon memoranda, the 

MSW NSPS, the 2002 regulation defining “regulated NSR pollutant,” the 2008 GHG ANPR, and 

longstanding EPA permitting practices.

Four industry and commerce commenters (0051, 0053, 0068, 0074) assert that the 

primary regulation is the most plausible textual reading of sections 165 and 169 which suggests 

that BACT limits are required for pollutants subject to requirements that actually control or limit 

emissions. This commenter cites the 1978 preamble to PSD regulations, the 1980 Regulatory

Impact Analyses (RIA), the 2008 ANPR on whether and how GHGs might be regulated under 

the CAA, and regulatory history, policy and permitting practices to support their position.

Response:

The EAB discussed this regulatory history cited by the commenters at length in the 

Deseret decision. The PSD Interpretive Memo described the EAB’s opinion as thoughtful and 

well-reasoned and built on that reasoning. EPA continues to find the EAB decision thoughtful 

and well-reasoned. With regard to the significance of the regulatory history cited by

commenters, EPA adopts the reasoning of the EAB’s Deseret decision. With respect to the 

significant of the 1978 to preamble to the PSD regulations, EPA is applying the reasoning of the 

EAB’s Deseret decision and the additional analysis provided in the PSD Interpretive 

Memorandum. 

Comment:

The Petition for Reconsideration asserts that the PSD Interpretive memo “attempts to 

revive a definition that the EAB found was not supported by any prior EPA interpretation of the 

statute.” Petition at Pages 9-10. 

Response:

The EAB’s conclusion that EPA had not previously adopted the particular interpretation 

does not itself preclude EPA from taking subsequent action to do so. The record for the PSD 

Interpretive Memorandum supports the interpretation reflected there. 

3.4. Policy Considerations Raised by Actual Control Interpretation
45

3.4.1. Orderly and Deliberative Decision Making Process

One (0109) states that each of the other proposed alternative interpretations would short 

circuit what the CAA envisions as an orderly process, starting with information gathering about 

emissions of a pollutant, determinations regarding the effect of the pollutant on public health and 

welfare, and if determined to be necessary, the issuance of proposed control regulations, 

followed by final regulatory controls on emissions of the pollutant. 

Another commenter (0110) opines that the alternative interpretations (to the “actual 

control” interpretation) contemplated by EPA in the Reconsideration proposal would not allow 

for the agency to gather emissions information on GHG air pollutants in an orderly way, nor 

assess that information adequately to determine whether to impose controlling regulations of 

those emissions under the CAA. 

One commenter (0085) adds that the “actual control” interpretation comports with the 

deliberate process of evaluation and eventual regulation that is contemplated by the CAA.

Another commenter (0105) adds that this interpretation provides the agency with much 

needed flexibility to review a pollutant’s effects without triggering PSD, and also ensures the 

PSD is not triggered until EPA has truly determined that a pollutant should be controlled by

regulation. 

Three commenters (0067, 0073, 0083) state that any of the alternatives would be 

damaging to the efficient and orderly operation of the Act, and an efficient and orderly transition 

to regulation of GHGs under the CAA is essential for both regulated sources and permitting 

authorities. 

Another commenter (0097) also agrees with the important policy concerns stated in the 

proposed reconsideration (and in the original PSD Interpretive Memo) that support application of 

PSD requirements only after actual control requirements are in place under another part of the 

Act. According to this commenter, to deviate from the “actual control interpretation” would 

actually create much more difficulty in determining if it is appropriate to regulate other 

compounds. 

One commenter (0070) notes that the “actual control interpretation” is the only

interpretation that provides EPA with a meaningful opportunity to collect and analyze crucial 

data and information before subjecting sources to PSD permitting requirements for newly 

identified pollutants.

Industry commenter (0090) believes this is the correct interpretation because it allows for 

EPA to gather emissions data on air pollutants through monitoring and reporting.

A commenter (0104) representing a group of industry associations, generally agrees with 

EPA’s approach and also supports the “actual control” interpretation outlined in the PSD 

Interpretive Memo over the four other possible interpretations outlined in the EPA proposal. 

This commenter concurs with EPA that this interpretation is the most reasonable because it 
46

allows for a more practical development of regulations and guidance concerning control of 

pollutants. 

Ten industry commenters (0089 and others incorporating this submission (0065, 0067, 

0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) said that the “actual control” interpretation 

safeguards the Administrator’s authority to require such controls on individual pollutants under 

other portions of the Act before triggering PSD requirements. In other words, EPA has and 

should retain flexibility “to address whether and how a pollutant should be ‘subject to regulation’

based on the promulgation of more general control requirements.” See 74 FR 51541. 

Some commenters (0095) who opposed the actual control interpretation argued that this 

deliberate approach leads to “analysis paralysis” and is subject to political manipulation.

Response:

EPA continues to prefer the actual control interpretation because it ensures an orderly and 

manageable process for incorporating new pollutants into the PSD program after an opportunity

for public participation in the decision making process. EPA agrees with the commenters who 

identified these considerations as important reasons that EPA should continue applying the 

“actual control” interpretation. As discussed persuasively in the PSD Interpretive Memo, under 

this interpretation, EPA may first assess whether there is a justification for controlling emissions 

of a particular pollutant under relevant criteria in the Act before imposing controls on a pollutant 

under the PSD program. In addition, this interpretation permits the Agency to provide notice to 

the public and an opportunity to comment when a new pollutant is proposed to be regulated 

under one or more programs in the Act. It also promotes the orderly administration of the 

permitting program by providing an opportunity for EPA to develop regulations to manage the 

incorporation of a new pollutant into the PSD program, for example, by promulgating a 

significant emissions rate (or de minimis level) for the pollutant when it becomes regulated. See

40 CFR 52.21(b)(23). Furthermore, this interpretation preserves the Agency’s ability to gather 

data on pollutant emissions to inform their judgment regarding the need to establish controls on 

emissions without automatically triggering such controls. This interpretation preserves EPA’s 

authority to require control of particular pollutants through emissions limitations or other 

restrictions under various provisions of the Act, which would then trigger the requirements of the 

PSD program for any pollutant addressed in such an action. 

While this analysis may sometimes take more time than some commenters would prefer, 

a deliberative and orderly approach to regulation is in the public interest and consistent with 

Congressional intent. It would be premature to impose the BACT requirement on a particular 

pollutant if neither EPA nor Congress has made a considered judgment that a particular pollutant 

is harmful to public health and welfare and merits control. 

3.4.2. Public Participation Concerns 

One commenter (0050) observed that the “actual control” interpretation best implements 

the procedures and requirements for regulating pollutants under the CAA and the public 
47

participation requirements of the APA. Section 202(a)(1) of the CAA provides that the 

Administrator shall “by regulation” prescribe standards applicable to motor vehicle emissions 

“which, in his judgment cause, or contribute to, air pollution which may reasonably be 

anticipated to endanger public health and welfare.” This section reinforces the two required 

findings —the finding of endangerment, and the finding that the pollutant from the source “cause 

or contribute” to the pollution that is the subject of the proposed regulation. The “actual control”

approach is the only alternative considered that incorporates both of these requirements. Further, it is 

the only approach being considered that provides for public participation under the APA on both 

endangerment and cause or contribute. Because PSD and Title V affect all sectors of the 

economy, the commenter asserts that transparency and public participation are extremely 

important elements of the regulatory process.

Industry commenter (0090) believes this is the correct interpretation because it provides 

the opportunity for public notice and comments associated with a proposed new regulated 

pollutant.

Ten industry commenters (0089 and others incorporating this submission (0065, 0067, 

0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) said that the “actual control” interpretation 

provides an opportunity for public notice and comment when a new pollutant is proposed to be 

regulated under other provisions of the CAA, which is very important to allow the potentially

regulated entities and other affected members of the public to participate in the development of 

any emission control regulations, including by submitting comments on the potential impacts of 

the regulations and the timeframe necessary to allow compliance before the regulations could 

take effect. 

One industry commenter (0050) observed that if the EPA were to adopt any interpretation 

other than “actual control,” it would completely change the regulatory design for GHGs and 

likely cause severe economic disruption. Adoption of any of the other options would 

automatically make PSD and Title V applicable to GHGs without public notice or opportunity 

for public comment, and without agency analyses of the economic or small business impacts. 

The commenter states that such an outcome would violate both the letter and spirit of the notice 

and comment requirements of the Administrative Procedures Act (APA). 

Response:

EPA agrees that one significant benefit of the actual control interpretation is that it 

permits the Agency to provide notice to the public and an opportunity to comment when a new 

pollutant is proposed to be regulated under one or more programs in the Act. This was one of the 

important policy considerations that EPA cited in its justification for the interpretation adopted in 

the PSD Interpretive Memo, and it remains an important ground for EPA’s decision to continue 

following the interpretation reflected in that memorandum. EPA thus agrees that it would not be 

good policy to allow automatic triggering of PSD permitting requirements for additional 

pollutants without an opportunity for public comment on EPA’s initial decision to regulate a 

pollutant. 
48

3.4.3. Development of Control Strategies

One commenter (0110) emphasizes that regulated entities need adequate time to analyze 

and implement technologies and strategies to comply with new requirements. The requirement 

for entities seeking permits for new construction of major stationary sources or for major 

modifications to existing stationary sources to install BACT for regulated pollutants imposes 

significant costs and burdens on those entities. The commenter states that EPA’s “actual 

control” interpretation is the most reasonable option considered by EPA in the Reconsideration 

in terms of allowing permitting authorities and regulated entities appropriate time to implement 

appropriate controls. The commenter also discusses the need to allow permitting authorities time 

to rationally and adequately develop emission control programs for regulated pollutants prior to 

subjecting facilities to PSD requirements. 

Another commenter (0107) argues that until actual control measures are required, there is 

no requisite information about a pollutant for a permit authority to issue a PSD permit or 

evaluate alternative pollution controls that may represent BACT. The proposed PSD 

Interpretation and companion proposed PSD/Title V Tailoring rule both underscore the need to 

provide the EPA, state permitting authorities, and industries with the time necessary to develop 

controls and establish control strategies for GHGs. Before a pollutant has been subject to “actual 

controls,” there would have been no examination of the technological feasibility and capabilities 

that are appropriate to reduce such a pollutant. This information is critical before a source can be 

subject to BACT review. Once a control requirement is effective, however, and an affected 

source has time to evaluate compliance with the requirement, purchase or design the control 

required, and install and test it, it would be reasonable to require BACT for that pollutant. As 

evidenced by EPA’s creation of the GHG BACT Workgroup and other efforts, EPA has only

begun to evaluate potential available technologies for the control of GHGs from various 

industries that emit GHGs, the cost of such technologies, and whether the application of such 

technologies will have a positive impact on the build-up of GHGs in the atmosphere. Congress 

did not intend for EPA to impose economic hardships on businesses and their customers if 

regulations of a pollutant did not yield an environmental benefit.

Another commenter (077) agrees that the “actual control” interpretation allows for 

sensible development of regulations and guidance following an endangerment finding – control 

options can be better evaluated and BACT can be explored in an orderly and efficient manner. 

Ten industry commenters (0089 and others incorporating this submission (0065, 0067, 

0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) said that EPA has underscored that it needs 

time to gather information on emissions of an air pollutant and to research and evaluate various 

emission control options and technologies for that pollutant before any PSD requirements for the 

pollutant are imposed. This concern is important not only for EPA and states, but also for the 

sources of emissions of that pollutant that will have to comply with the PSD requirements 

because the PSD program imposes potentially very costly and burdensome requirements 

(including but not limited to BACT requirements). Thus, it is vital that any interpretation by

EPA of the phrase “subject to regulation” provide the Agency, states, and affected sources with 

the time necessary to establish appropriate compliance strategies and to prepare to satisfy

compliance obligations. 
49

One environmental group commenter (0095) states that EPA’s desire to have “time to 

study and evaluate the emissions characteristics and control options for new pollutants prior to 

making emissions of those pollutants subject to PSD permitting requirements” (74 FR 51541)

flies in the face of both the language and purpose of the BACT requirement. The case-by-case 

BACT requirement does not contemplate waiting years for EPA to conduct analyses and

“develop” control options. See 74 FR at 51541. Rather, BACT must be based on control options 

that are available, and it applies “immediately to each type of pollutant regulated for any purpose 

under any provision of the Act.” Alabama Power v. Costle, 636 F.2d 323, 403 (D.C. Cir. 1979). 

And, permitting agencies are instructed to make this “case-by-case” determination “taking into 

account energy, environmental, and economic impacts and other costs” and thereby ensuring that 

the decision is informed by the available solutions, their efficacy and costs. See CAA §169(3).

Response:

Once the Agency has made a determination that a pollutant should be controlled using 

one or more of the regulatory tools provided in the CAA and those controls take effect, a BACT 

analysis must then be completed based on available information. As one commenter (0095) 

points out, the BACT process is designed to determine the most effective control strategies 

achievable in each instance, considering energy, environmental, and economic impacts. Thus, 

EPA agrees that the onset of the BACT requirement should not be delayed in order for 

technology or control strategies to be developed. Furthermore, EPA agrees with the commenter 

that delaying the application of BACT to enable development of guidance on control strategies is 

not necessarily consistent with the BACT requirement. The BACT provisions clearly 

contemplate that the permitting authority will develop control strategies on a case-by-case basis. 

Thus, EPA is not in this final action relying on the need to develop guidance or control strategies 

for BACT as a justification for choosing to continue applying the actual control interpretation. 

However, in the absence of guidance on control strategies from EPA and other regulatory

agencies, the BACT process may be more time and resource intensive when applied to a new 

pollutant. Under a mature PSD permitting program, successive BACT analyses establish 

guidelines and precedents for subsequent BACT determinations. However, when a new 

pollutant is regulated, the first permit applicants and permitting authorities that are faced with 

determining BACT for a new pollutant must invest more time and resources in making an 

assessment of BACT under the statutory criteria. Given the potentially large number of sources 

that could be subject to the BACT requirement when EPA regulates GHGs, the absence of 

guidance on BACT determinations for GHGs presents a unique challenge for permit applicants 

and permitting authorities. EPA intends to partially address this challenge under the Tailoring 

Rule by deferring the applicability of the PSD permitting program for various categories of 

sources that would become major based solely on GHG emissions. EPA is also developing 

guidance on BACT for GHGs.

3.4.4. Past Policy and Practice

Comment:
50

According to the commenter (0095), the Deseret decision rejects the idea that “past 

policy and practice” is a sufficient justification for EPA’s position, and in any event, such policy

preferences cannot trump the clearly expressed intent of Congress. Engine Mfrs. Ass’n, 88 F.3d 

1075, 1089 (D.C. Cir. 1996) (EPA cannot “avoid the Congressional intent clearly expressed in 

the text simply by asserting that its preferred approach would be better policy.”). 

One industry commenter (0055) agrees with EPA’s current policy and preferred 

interpretation that GHGs are not currently “regulated NSR pollutants” that are “subject to 

regulation” under the CAA. This commenter (0055) states that EPA has historically and 

consistently interpreted PSD regulations to apply to only those pollutants subject to actual 

emission limitations or control measures, without previous objection, is significant justification 

for the current proposal to continue in that regard.

One industry commenter (0050) supports the “actual control” interpretation because it 

best reflects EPA’s past policy and practice.

Another of the industry commenters (0090) believes this is the correct interpretation 

because it is consistent with past policy and practice.

One industry group (0070) commenter expresses support for the “actual control 

interpretation” for because it best reflects EPA’s past policy.

Ten industry commenters (0089 and others incorporating this submission (0065, 0067, 

0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) states that the “actual control” interpretation is 

also reasonable because it “best reflects [EPA’s] past policy and practice, as applied consistently

over the years.” See 74 FR 51541; PSD Interpretive Memorandum at 10-13. The EPA is 

correct that it has never taken the position that CO2 or other GHGs are “subject to regulation”

under the CAA. The commenter cites EPA discussion at 74 FR 51540 & n.6 (discussing 

Memorandum from Jonathan Z. Cannon, EPA General Counsel, to Carol M. Browner, EPA 

Administrator (Apr. 10, 1998)), and Deseret UARG Amicus Br. at 24-27 (citing statements by

EPA officials in testimony and memoranda that the Agency had not decided to regulate CO2

emissions). This history is fully consistent with the legislative history of the CAA and its 1990 

amendments, in which Congress clearly declined to take any action that would have required 

EPA to establish or impose any emission controls for CO2 under the CAA at that time. (The 

commenter provided several citations to the legislative history of the 1990 CAA Amendments.) 

Response:

While the record continues to show that the actual control interpretation is consistent with 

EPA’s historic practice under the PSD program, EPA agrees that continuity with past practice 

alone does not justify maintaining a position when there is good cause to change it. In this case, 

however, EPA has not found cause to change an interpretation that is consistent with 

Congressional intent and supported by the policy considerations described earlier. Thus, EPA is 

not retaining the actual control interpretation simply to maintain continuity with historic practice. 

The record reflects that EPA’s past practice was grounded in a permissible interpretation of the 
51

law and supported by rational policy considerations. Public commenters have not otherwise 

persuaded EPA to change its historic practice in this area. 

A review of numerous federal PSD permits shows that EPA has been applying the actual 

control interpretation in practice – issuing permits that only contained emissions limitations for 

pollutants subject to regulations requiring actual control of emissions under other portions of the 

Act. Furthermore, in 1998, well after promulgation of the initial CO2 monitoring regulations in 

1993, EPA’s General Counsel concluded that CO2 would qualify as an “air pollutant” that EPA 

had the authority to regulate under the CAA, but the General Counsel also observed that “the 

Administrator has made no determination to date to exercise that authority under the specific 

criteria provided under any provision of the Act.” Memorandum from Jonathan Z. Cannon, 

General Counsel to Carol M. Browner, Administrator, entitled EPA’s Authority to Regulate 

Pollutants Emitted by Electric Power Generation Sources (April 10, 1998).

Comment:

An environmental group commenter (0095) claims that EPA’s interpretation of “subject 

to regulation” does not reflect EPA’s past policy and contradicts its own regulations. The 

commenter disagrees with EPA’s assertion that its preferred interpretation of “subject to 

regulation” to mean “actual control of emissions” is justified on the basis that it “best reflects our 

past policy and practice”. According to the commenter, EPA’s interpretation repudiates the 

Agency’s most direct previous statement interpreting “subject to regulation.” In the preamble to 

the Agency’s 1978 Federal Register rulemaking, 43 FR at 26388, 26397 (June 19, 1978), the 

Administrator established that “‘subject to regulation under this Act’ means any pollutant 

regulated in Subchapter C of Title 40 of the Code of Federal Regulations for any source type.” 

43 FR at 26397. This interpretation is the sole instance of past practice identified by the EAB as 

“possess[ing] the hallmarks of an Agency interpretation that courts would find worthy of 

deference.” Deseret at 39. The commenter states that as the Board recognized, that preamble 

offers no support for an interpretation applying “BACT only to pollutants that are ‘subject to a 

statutory or regulatory provision that requires actual control of emissions of that pollutant.” 

Instead (again, as expressly noted by the Board) it implies that “CO2 became subject to 

regulation under the Act in 1993 when the Agency included provisions relating to CO2 in 

Subchapter C.” Id. at 42 n.43. Under the 1978 preamble definition, CO2 is “subject to 

regulation” for BACT purposes because it is regulated under Subchapter C of Title 40 of the 

CFR. In its 1993 rulemaking to revise the PSD regulations, EPA did not withdraw its 1978 

interpretation of “subject to regulation.” See Deseret at 42; see also Acid Rain Program: General 

Provisions and Permits, Allowance System, Continuous Emissions Monitoring, Excess 

Emissions and Administrative Appeals, 58 FR at 3590, 3701 (Jan. 11, 1993) (final rule 

implementing §821’s CO2 monitoring and reporting regulations). Nor has any subsequent 

rulemaking, including the 2002 rulemaking on which the PSD Interpretive Memo relies, 

disturbed the 1978 interpretation. See Deseret at 46. Thus, the only existing EPA interpretation 

of the phrase “subject to regulation” in section 165(a)(4), 42 U.S.C. §7465(a)(4), affirms that 

BACT is required for CO2 emissions because it is regulated under the Act’s implementing 

regulations. In both the Memo and the Reconsideration, the Agency suggests that the “actual 

control” interpretation is not inconsistent with the 1978 preamble “because actual control could 

be inferred by the specific list of regulated pollutants that followed reference to 40 CFR.” See 74 
52

FR at 51540. Deseret directly refutes that claim: “Nothing in the 1978 preamble . . . indicates 

that the Agency intended to depart from the normal use of ‘includes’ as introducing an 

illustrative, and nonexclusive, list of pollutants subject to regulation under the Act.” Deseret at 

40 (holding that “we must reject” the “conten[tion] that only the pollutants identified in the 

preamble by general category defined the scope of the Administrator’s 1978 interpretation.) 

Under any plausible reading, the 1978 Federal Register preamble used “regulated in” to describe 

all the regulations contained “in Subchapter C of Title 40 of the Code of Federal Regulations.”

See Deseret at 41-42 & n.43 (noting that “plain and more natural reading of the preamble’s 

interpretative statement suggests a different unifying rule” than a rule that would limit 

“regulation” to actual control of emissions). 

Ten industry commenters ((0089 and others incorporating this submission (0065, 0067, 

0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) dispute the argument that EPA’s interpretation 

of “subject to regulation” in the 1978 PSD rulemaking is clear that any regulations found in 40 

CFR Subchapter C, including those implementing section 821 of Public Law 101-549, are 

thereby “subject to regulation.” The EPA has properly clarified that the 1978 statement does not 

support this interpretation because that statement referred to specific categories of pollutants for 

which emission controls existed as of that date, a clarification that is consistent with the EAB’s 

decision in Deseret. To adopt petitioners’ view would irrationally elevate procedure – the mere 

fortuity of future placement of a newly promulgated regulatory provision in a particular part of a 

codification of a large body of rules – over substance.

Response:

The 1978 Federal Register notice promulgating the initial PSD regulations stated that 

pollutants “subject to regulation” in the PSD program included “any pollutant regulated in 

Subchapter C of Title 40 of the Code of Federal Regulations.” Commenters argue this statement 

illustrates that EPA has in fact applied the PSD BACT requirement to any pollutant subject to 

only a monitoring requirement codified in this portion of the CFR. However, this comment 

overlooked the discussion in the PSD Interpretive Memo regarding the differing meanings of the 

term “regulation” and “regulate.” The 1978 preamble did not amplify the meaning of the term 

“regulated in.” Thus, commenters have not demonstrated that EPA had concluded in 1978 that 

monitoring requirements equaled “regulation” within the meaning of sections 165(a)(4) and 

169(3) of the CAA, nor have commenters provided any examples of permits issued by EPA after 

1978 that demonstrate EPA’s interpretation was inconsistent with the practice described in the 

PSD Interpretive Memo. 

Commenters assume that this 1978 interpretative statement is the only example of EPA’s 

past practice with respect to whether pollutants covered by, but not controlled under, regulations 

in the CFR make the PSD permitting requirements applicable to a pollutant. These commenters 

have not provided any additional information to demonstrate that EPA (or another other PSD 

permitting authority) has in fact acted in accordance with the meaning that the commenters 

assign to the 1978 interpretation. The record shows that EPA has not in practice given the 1978 

statement the meaning used by the commenter. 
53

A review of numerous federal PSD permits shows that EPA has been applying the actual 

control interpretation in practice – issuing permits that only contained emissions limitations for 

pollutants subject to regulations requiring actual control of emissions under other portions of the 

Act. If EPA had given the 1978 interpretation the meaning the commenter uses, the Agency 

would have previously issued PSD permits containing BACT emission limitations on CO2 and 

oxygen. Commenters have provided no information that contradicts the following analysis from 

the PSD Interpretive Memorandum:

As a matter of practice, EPA has not issued PSD permits containing emissions limitations 

for pollutants that are only subject to monitoring and reporting requirements. PSD 

permits issued by the Agency (and delegated states authorized to issue federal permits on 

EPA’s behalf) have only contained emissions limitations for pollutants subject to 

regulations requiring actual control of emissions. EPA staff have reviewed permits 

issued under this program and have not identified any federal PSD permits that establish 

limitations on the emissions of pollutants that were only subject to monitoring and 

reporting requirements established under the Act at the time the permit issued. Since 

1993, EPA has had regulations in place requiring monitoring and reporting of carbon 

dioxide emissions. See Acid Rain Program: General Provisions and Permits, Allowance 

System, Continuous Emissions Monitoring, Excess Emissions and Administrative 

Appeals (final rule), 58 FR at 3590 (Jan. 11, 1993). I am not aware of any PSD permits 

containing emissions limitations for carbon dioxide issued by either the Agency or its 

delegates since that time. During at least part of this time period, EPA made clear that it 

considered CO2 to be an air pollutant under the Act. See Memorandum from Jonathan Z. 

Cannon, General Counsel to Carol M. Browner, Administrator, entitled EPA’s Authority 

to Regulate Pollutants Emitted by Electric Power Generation Sources (April 10, 1998) 

(“Cannon Memo”). ... The record of permits compiled to support this memorandum is 

sufficient to demonstrate that EPA has not in practice issued PSD permits establishing 

emissions limitations for pollutants that are subject to only monitoring and reporting 

requirements.

 

The argument that EPA’s failure to do so was wrong does not establish that it has in fact been 

EPA’s position since 1978 that PSD permits should cover pollutants subject to monitoring and 

reporting requirements that are promulgated anywhere in Subchapter C of the Title 40 of the 

CFR. 

Furthermore, in 1998, well after promulgation of the initial CO2 monitoring regulations in 

1993, EPA’s General Counsel concluded that CO2 would qualify as an “air pollutant” that EPA 

had the authority to regulate under the CAA, but the General Counsel also observed that “the 

Administrator has made no determination to date to exercise that authority under the specific 

criteria provided under any provision of the Act.” Memorandum from Jonathan Z. Cannon, 

General Counsel to Carol M. Browner, Administrator, entitled EPA’s Authority to Regulate 

Pollutants Emitted by Electric Power Generation Sources (April 10, 1998). 

With respect to the EAB’s conclusion in the Deseret matter, the PSD Interpretive Memo 

highlights portions of the EAB decision that describe the ambiguity in the phrase “regulated in 

Subchapter C of Title 40 of the Code of Federal Regulations” and the term “regulation.” The 
54

PSD Interpretive Memorandum references the “specific categories of regulations identified in the 

second sentence” of the passage quoted from the 1978 preamble only to illustrate that the PSD 

Interpretive Memorandum is not inconsistent with that 1978 statement. Consistent with the 

statements in the PSD Interpretive Memo, EPA agrees with and accepts the EAB’s reasoning 

that the enumerated categories of pollutants do not establish a controlling limitation on the scope 

of pollutants subject to regulation. However, that reasoning still does not establish an EPA’s 

historic position has been that monitoring or reporting requirements make pollutants subject to 

regulation or “regulated in” the CFR when the code contains only a requirement to monitor and 

report, but not control, emissions of a pollutant. 

Comment:

According to one commenter (0095), to the extent EPA’s reference to “past policy and 

practice” is referring to its previous failure to impose the BACT requirement for pollutants only

subject to monitoring and reporting, that assertion is irrelevant and, moreover, its “actual control 

of emissions” interpretation was first put forth by Region 8 in the Deseret permitting proceeding 

and, as the EAB found, was entirely unsupported by past policy and practice. Deseret at 37-54. 

Commenter (0087) notes that the EAB in re Deseret Power Electric Cooperative, PSD 

Appeal No. 07–03 (EAB Nov. 13, 2008) (‘‘Deseret’’) found nothing in the administrative record

supporting EPA’s position that the agency’s historical interpretation mandated EPA’s 

interpretation of the statutory term. 

Response: 

EPA’s reference to past practice was supported in the proposal by the record of PSD 

permits that EPA compiled to support the PSD Interpretive Memo. EPA has not identified any

permits that contain an emissions limitation for a pollutant subject only to a monitoring and 

reporting requirement, nor has any public commenter produced such a permit. Commenters have 

not substantiated their conclusory assertion that EPA’s previous failure to impose irrelevant 

consideration. Extensive evidence of EPA’s past practice is available in the permits issued under 

the PSD program. EPA does not rely upon arguments made in the Deseret permit proceeding to 

support its conclusion that the actual control interpretation is consistent with past practice. 

In the Deseret matter, the EAB held “the Region’s rationale for not imposing a CO2

BACT limit in the Permit -- that it lacked the authority to do so because of an historical Agency

interpretation of the phrase “subject to regulation under this Act” as meaning “subject to a 

statutory or regulatory provision that requires actual control of emissions of that pollutant” -- is 

not supported by the administrative record.” This analysis pertained to the administrative record 

for the particular permit at issue, and it did constitute a conclusion that no such record could be 

found anywhere. The EAB decision did not prevent EPA from developing a more thorough 

record to show the agency’s traditional practice under the PSD program, as EPA did when it 

issued the PSD Interpretive Memorandum. Despite the weakness of the particular administrative 

record for the Deseret permit, the EAB observed that broad statements in the 1998 memorandum 

cited above by the Agency’s then General Counsel suggested that the Agency has not, as a 
55

matter of practice, treated CO2 as a “regulated” pollutant under any provisions of the Act, 

including those establishing the PSD program. Slip op. at 53-54. 
56

Chapter 4. Monitoring and Reporting Requirement

4.1. Overview of Comments on Monitoring and Reporting 

Interpretation

Comment:

Twenty-nine industry and commerce commenters (0050, 0051, 0053, 0056, 0059, 0065, 

0066, 0067, 0068, 0070, 0071, 0073, 0074, 0076, 0079, 0081, 0083, 0085, 0086, 0089, 0090, 

0092, 0096, 0098, 0105, 0106/0107, 0108, 0109, 0118) and six state/local agency associations 

(0054, 0058, 0062, 0091, 0102, 0103) agree with EPA’s position that the “monitoring and 

reporting interpretation” is not the proper interpretation of the phrase “subject to regulation” for 

purposes of PSD. 

Ten of the industry commenters (0089 and others incorporating this submission (0065, 

0067, 0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) agree that the EPA should reject the 

“monitoring and reporting” interpretation for all of the reasons stated in the PSD Interpretive 

Memorandum and the proposed PSD Interpretation. 

Three commenters (0087, 0095, 0101) representing several environmental organizations 

support applying PSD to CO2 at the present time on the basis of regulations that require 

monitoring of CO2. These commenters argue that the CAA requires this outcome. 

Response:

EPA is not persuaded that the monitoring and reporting interpretation is compelled by the 

CAA, and the Agency remains concerned that application of this approach would lead to odd 

results and make the PSD program difficult to administer. EPA continues to find the reasoning 

of the PSD Interpretive Memo persuasive. EPA responds to more specific points raised by these 

commenters elsewhere in this document.

4.2. Statutory Interpretation

4.2.1. Meaning of the Term Regulation

Comment:

The Petition for Reconsideration argues that CO2 is regulated under Section 821 of the 

Clean Air Act Amendments of 1990. According to the Petition, Section 821 requires EPA to 

“promulgate regulations” requiring major sources, including coal-fired power plants, to monitor 

CO2 emissions and report their monitoring data to EPA. 42 U.S.C. §7651(k) note; Pub. L. 101-
57

549; 104 Stat. 2699 (emphasis added). In 1993, EPA promulgated these regulations, which 

require sources to monitor CO2 emissions, 40 CFR 75.1(b), 75.10(a)(3), prepare and maintain 

monitoring plans, id. §75.33, maintain records, id. §75.57, and report monitoring data to EPA, id. 

§75.60-64. The regulations prohibit operation in violation of these requirements and provide that 

a violation of any Part 75 requirement is a violation of the Act. Id. §75.5. Not only do the 

regulations require that polluting facilities “measure . . . CO2 emissions for each affected unit,”

id. §75.10(a), they also prohibit operation of such units “so as to discharge or allow to be 

discharged, emissions of . . . CO2 to the atmosphere without accounting for all such emissions . . . 

. “ Id. §75.5(d).

One environmental commenter (0101) notes that EPA has issued monitoring and 

reporting regulations for CO2 in 40 CFR 75, promulgated pursuant to section 821 of the CAA. 

See 42 U.S.C. §7651(k) note; Pub. L. 101-549; 104 Stat. 2699 (1990). Under the definitions 

advanced in the PSD Interpretive Memo, these monitoring and reporting rules are “regulation”: 

they are contained in a legal code, have the force of law, and bring the subject matter under the 

control of law and the EPA. EPA itself has characterized these monitoring and reporting 

requirements as “regulations.” Id. 

The state/local agency association (0062) notes that EPA has broad authority under 

sections 114 and 208 of the CAA to require monitoring of emissions, by regulation or otherwise, 

and has historically done so well in advance of any decision to limit emissions of any pollutant. 

The commenter opines that such monitoring requirements do not regulate emissions of 

pollutants; instead, they govern other conduct by the operator in a way that does not constrain 

emissions, just as the obligation to identify a contact person at a facility may be required of a 

Title V source, but does not constitute an emissions limitation. 

Two industry commenters (0051, 0053) opine that the text of the CAA refutes a 

“monitoring and reporting” interpretation. This commenter asserts that, contrary to the view of 

some (who believe that regulations requiring monitoring and reporting of CO2, promulgated 

pursuant to section 821 of the CAA, cause CO2 to be “subject to regulation” under the PSD 

program), because section 821 of the CAA does not call for controls of emissions, it does not 

subject CO2 or other GHGs to regulation for purposes of the PSD program.

Response:

Each of these commenters focuses on only one of the two potential meanings of the term 

“regulation” described elsewhere in this document. The commenter that favors the “monitoring 

and reporting” interpretation appears to focus only on the dictionary meanings that describe a 

rule contained in a legal code. The commenter has not demonstrated that it is impermissible for 

EPA to construe the CAA on the basis of another common meaning of the term “regulation.” In 

the context of construing the Act, the EAB observed in the Deseret case that a plain meaning 

could not be ascertained from looking solely at the word “regulation.” The Board reached this 

conclusion after considering the dictionary definitions of the term “regulation” cited above. 

Deseret slip op. at 28-29. EPA continues to find the reasoning of the EAB and the PSD 

Interpretive Memo to be persuasive. The EAB found “no evidence of Congressional intent to 
58

compel EPA to apply BACT to pollutants that are subject only monitoring and reporting 

requirements.” See Deseret at 63. 

4.2.2. Effect of Section 821 of the Clean Air Act

Comment:

The Petition for Reconsideration contends that monitoring and reporting requirements

clearly constitute regulation. Against the backdrop of Section 165’s use of “regulation,”

Congress explicitly used that exact same word in Section 821 to refer solely to

monitoring and reporting requirements. 

Ten commenters (0089 and others incorporating this submission (0065, 0067, 0081, 

0083, 0090, 0096, 0106/0107, 0108, 0109)) add that this interpretation should be rejected 

specifically with regard to CO2 because the legislative histories of the CAA and of Public Law 

101-549, which enacted, among other things, amendments to the CAA, clearly demonstrate that 

Congress did not intend monitoring and reporting requirements for CO2 to have any 

consequences in terms of triggering emission control requirements under any part of the CAA. 

According to these commenter, the legislative history of Public Law 101-549 shows that 

Congress simply intended the CO2 monitoring and reporting provisions to allow EPA to gather 

scientific evidence of U.S. contributions to GHGs, to establish a baseline to allow utilities to seek 

credit for emission reductions in any possible future regulatory program, and to inform the 

United States’ position in international negotiations. The commenters assert that the legislative 

history demonstrates that Congress did not intend those provisions to have any further regulatory

impact. (See, e.g., 103rd Cong., 1st Sess., S. Print 103-38, Legis. Hist. at 2612, 2652, 2987. 

Members of Congress expressly referred to section 821 as a “simple data collection” provision 

that was not intended to “force any reductions” of CO2 emissions. Legis. Hist. at 2651-52, 2653, 

2985; see also UARG Amicus Brief at 12-15.). Congress clearly declined to take any action that 

would have required EPA to establish or impose any emission controls for CO2 under the CAA 

at that time. 

One industry commenter (0107) said that section 821 does not make CO2 subject to 

permitting. According to this commenter, it is hard to believe that such monitoring, in a 

provision titled “Information Gathering on Greenhouse Gases Contribution to Global Climate 

Change,” was added to the Act for the purpose of regulating GHGs under PSD. In fact, 

Congress rejected attempts by senators to require control of GHGs as part of the 1990 CAA 

Amendments. As EPA discussed, the collection of data about a pollutant is necessary before 

EPA can make decisions about “regulating” that pollutant under any CAA program that requires 

controls. This means that Congress did not intend BACT for CO2 to apply before collection of 

monitoring information for CO2 or other GHGs took place. Given that Congress rejected control 

requirements for GHGs in 1990 on the basis that not much was then known about climate 

change, it would be unreasonable to conclude that Congress intended such sources including 

multi-unit apartment buildings, shopping malls, and hospitals to obtain PSD and/or Title V

permits.
59

One of the commenters (0086) presented detailed arguments that the monitoring and 

reporting interpretation cannot be squared with the legislative or regulatory history .

Response:

EPA agrees with the analysis of the EAB (summarized below) that section 821 of the 

CAA does not compel EPA to apply the monitoring and reporting interpretation. The use of 

similar, but not identical, language in section 821 of the 1990 Public Law, which requires the 

Agency to promulgate “regulations,” does not constrain the Agency’s ability to interpret sections 

165 and 169 to exclude monitoring and reporting requirements. 

The argument that sections 165 and 169 have only one proper interpretation based on 

section 821, ignores the fact that Section 821 uses different terminology, “regulations,” from that 

used in the PSD provisions of sections 165 and 169, “subject to regulation.” The difference in 

terminology is potentially significant. When read in the context of the phrases in which they are 

used, possible alternative meanings of “regulation” and “regulations” become apparent. In the 

phrase “the Administrator * * * shall promulgate regulations * * * to require [sources to monitor 

CO[2]]” in section 821, the term “regulations” is understood to be the end product of the 

administrative rule making process. Thus, Congress’ direction that EPA promulgate 

“regulations” found at various places in the CAA and in section 821 is most naturally read to 

mean that Congress directed EPA to use its legislative rule making authority to implement the 

statutory requirements, filling in necessary specificity and detail. Section 112 of the Act uses the 

term “subject to regulations,” referring to “regulations” in the plural. CAA sections 112(r)(3) and 

112(r)(7)(F). This evidences that Congress may not have meant “subject to regulation”

(singular) to have the same meaning.

The Supreme Court has observed in other contexts that the same or similar words may be 

construed differently “not only when they occur in different statutes, but when used more than 

once in the same statute or even in the same section.” Envtl. Def. v. Duke Energy Corp., 549 U.S. 

561, slip op. at 9 (2007) (quoting Atl. Cleaners & Dyers, Inc. v. United States, 286 U.S. 427, 433 

(1932)). In reviewing the meaning of the phrase “subject to regulation under this Act” we do not 

confine ourselves “to examining a particular statutory provision in isolation.” FDA v. Brown & 

Williamson Tobacco Corp., 529 U.S. 120, 132 (2000). Rather, “[t]he meaning -- or ambiguity --

of certain words or phrases may only become evident when placed in context * * *. It is a 

‘fundamental canon of statutory construction that the words of a statute must be read in their 

context and with a view to their place in the overall statutory scheme.’” Id. at 132-33.

We find no evidence that Congress’s addition of section 821 in 1990 was an attempt to 

interpret or constrain the Agency’s interpretation of the broader phrase “subject to regulation” as 

used in sections 165 and 169. See 136 Cong. Rec. H2915, 2934 (1990) (statement of Rep. 

Moorhead), reprinted in S. Comm. on Env’t and Public Works, Legislative History of Clean Air 

Act Amendments of 1990, at 2986-87 (1993); 136 Cong. Rec. H2511, 2578 (1990) (statement of 

Rep. Cooper), reprinted in S. Comm. on Env’t and Public Works, Legislative History of Clean 

Air Act Amendments of 1990, at 2652-53 (1993); 136 Cong. Rec. H2511, 2561-62 (1990) 

(statement of Rep. Moorhead), reprinted in S. Comm. on Env’t and Public Works, Legislative 

History of Clean Air Act Amendments of 1990, at 2612-14 (1993). Section 821 bears no facial 
60

relationship to the PSD provisions of sections 165 and 169. Congress’s subsequent use of the 

word “regulations” in a section of the 1990 Public Law that bears no explicit relationship with 

the earlier-enacted sections would not appear sufficient, on its own, to implicitly constrain EPA’s 

authority to interpret the PSD provisions of section 165 and 169. This is particularly true where, 

as here, the two sections were enacted 13 years apart, bear no obvious relationship, and are not 

even placed in close proximity. Moreover, the Agency did determine, in 1978 that the phrase 

“subject to regulation under this Act” used in the PSD provisions requires interpretation to 

properly implement the PSD program, and Congress did not evidence an intent in section 821 to 

alter the Agency’s determination. Normally, more express terminology would be expected if 

Congress intended to alter an established meaning. 

Since section 821 was enacted 13 years after sections 165 and 169, Congress’ use of the 

term “regulations” in enacting section 821 in 1990 ordinarily would not be looked to as 

informative of what Congress intended when much earlier in 1977 it enacted the BACT 

requirement. See Int’l Bhd. of Teamsters v. Daniel, 439 U.S. 551, 571 (1979) (Burger, C.J., 

concurring) (understanding of draftsman of amendment in 1970 “would have little, if any, 

bearing” on “construction of definitions enacted in 1933 and 1934”); United States v. Price, 361 

U.S. 304,332 (1960) (“The views of a subsequent Congress form a hazardous basis for inferring 

the intent of an earlier one.”)

4.2.3. Effect of 2008 Consolidated Appropriations Act and Mandatory

Greenhouse Gas Reporting Rule

Comment:

The Petition for Reconsideration also suggests that GHGs are regulated because Congress 

has specifically required monitoring of all GHGs, including CO2, economy-wide, in the 2008 

Consolidated Appropriations Act. H.R. 2764; Public Law 110-161, at 285 (enacted Dec. 26, 

2007). As a result, CO2 monitoring and reporting is required under the Act separate and apart 

from Section 821. According to Petitioner, the PSD Interpretive Memo, attempts to evade the 

consequences of the Appropriations Act requirement by, among other things, opining that a 

pollutant is not “subject to regulation” when Congress specifically tells EPA to regulate it, but 

only when EPA actually adopts regulations. 

The commenter (0107) believes for the same reasons as describe above for section 821 of 

the 1990 Clean Air Act Amendments that it would be unreasonable to conclude that Congress 

intended EPA to regulate GHGs under PSD or other provisions of the Act for establishing 

standards when it charged EPA in the 2008 Omnibus Budget Amendment to require GHG 

monitoring and reporting from the largest sources of GHG by 2010. This statute states that it 

intended EPA to use the information collection authority in the CAA, not any of the Act’s 

substantive regulatory authorities for setting emission standards, to collect and analyze GHG 

emissions data from the largest sources.

Eight industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) note 

that, while they are not aware that environmental advocacy groups or others have expressly
61

argued that EPA’s promulgation of the Mandatory Reporting of Greenhouse Gases Final Rule 

(“GHG Reporting Rule”), 74 FR 56260 (Oct. 30, 2009) makes GHGs subject to the PSD 

program, they have argued that the statute that authorized promulgation of that rule, the Fiscal 

Year 2008 Consolidated Appropriations Act, Pub. L. No. 110-161 (“Appropriations Act”), 

triggered PSD for GHGs. The commenters assert that that argument, and any related argument 

that the GHG Reporting Rule triggered PSD requirements, should be rejected for the same 

reasons the PSD Interpretive Memorandum rejected – and the proposed PSD Interpretation 

would continue to reject – the monitoring and reporting interpretation discussed above. 

The industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) also 

argue that any such argument is meritless for an additional reason: the Appropriations Act is not 

the CAA, and the GHG Reporting Rule was not promulgated under the CAA. Thus, even if the 

GHG Reporting Rule did constitute “regulation,” it still could not be considered regulation 

“under the Act.”

Response:

Similar to section 821 of the CAA, the 2008 Omnibus Budget Amendment contains a 

directive that EPA promulgate regulations that establish monitoring and reporting requirements 

for GHGs. As with section 821 and the regulations promulgated to satisfy this law (Part 75), 

EPA does interpret the 2008 Omnibus Budget Amendment or the EPA regulation promulgated to 

implement this law to be sufficient to make GHGs subject to regulation for the purposes of CAA 

sections 165(a)(4) and 169(3). EPA’s reasoning for this conclusion is the same as for section 

821, because the 2008 enactment does not require any controls on emissions. Furthermore, since 

EPA has now promulgated GHG reporting regulations to address its responsibilities under the 

2008 law, the Petitioners criticism of EPA’s conclusion that a pollutant becomes subject to 

regulation upon EPA promulgation of rules mandated by Congress is no longer material. In this 

Reporting Rule (which became effective in December 2009 and required monitoring to begin in 

January of this year), EPA established monitoring and reporting requirements for CO2 and other 

GHGs under CAA sections 114 and 208. Thus, there can be no dispute that monitoring and 

reporting of CO2 (as well as other GHGs) is now occurring under the CAA, regardless of the 

status of the 2008 Omnibus Budget Amendment. 

4.2.4. Effects Threshold for PSD Permitting

Comment:

One environmental group commenter (0095) claims that EPA ignores the 

Congressionally-established purpose of PSD to protect public health and welfare from actual and 

potential adverse effects. Specifically, this commenter states that to limit BACT (as described in 

the PSD Interpretive Memo and favored by EPA in the reconsideration) ignores the broad, 

protective purpose of the PSD program as explicitly stated by Congress (the purpose of the PSD 

program is to “protect public health and welfare from any actual or potential adverse effect 

which in the Administrator’s judgment may reasonably be anticipate[d] to occur from air 

pollution notwithstanding attainment and maintenance of all national ambient air quality
62

standards.” 42 U.S.C. §7470(1) (emphasis added). In contrast, Congress required EPA to make 

an endangerment finding before establishing generally applicable standards such as the NSPS or 

motor vehicle emissions standards. Each of these programs expressly require EPA to find that 

emissions of a pollutant “cause or contribute to air pollution which may reasonably be 

anticipated to endanger public health or welfare” as a prerequisite to regulation. Id.

§7408(a)(1)(A); id. §7521(a)(1); see also id. §7411(b)(1). This commenter opines that the policy

arguments cited in the reconsideration are not consistent with the statutory purpose of PSD. It is 

the emphasis on “potential adverse effect[s]” that distinguishes PSD from the national ambient 

air NAAQS and NSPS programs that EPA looks to bolster its “actual control” position. As new 

pollutants are identified, BACT’s case-by-case approach provides the dynamic flexibility

necessary to implement an emission limitation appropriate to each particular source and 

pollutant. PSD’s Congressionally-enacted power to address potential adverse effects is 

dramatically hindered by EPA’s suggestion that endangerment determinations and actual control 

limits must be first established. The PSD Interpretive Memo’s focus on endangerment – see, 

e.g., Memo at 18 – and EPA’s consistent position in the reconsideration improperly limit the 

scope of the PSD program and the BACT requirement. The commenter asserts that the “actual 

control” view ignores the broader purpose of the PSD program by limiting the scope of the PSD 

program and the BACT requirement. According to the commenter, the congressional directive

that BACT be no less stringent than those other control requirements is a further indication that 

BACT is meant to be more protective and apply more broadly. Further, commenter states that 

the PSD Interpretive Memo and EPA’s reconsideration demonstrates a fundamental 

misperception of the role of the PSD program and its BACT requirement within the CAA.

Ten industry commenters (0089 and others incorporating this submission (0065, 0067, 

0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) argue that the Petitioners incorrectly assert 

that the CAA provides a “lower threshold” for regulation under the PSD program than it does 

under the Act’s NAAQS and NSPS provisions. To the contrary, the criteria for regulation under 

the NAAQS and NSPS provisions are, in effect, imported by reference into EPA’s definition of 

“regulated NSR pollutant.” Moreover, evidence does not exist that Congress intended to create –

or that EPA established by regulation – a subset of potential regulated NSR pollutants for which 

similar regulatory preconditions would not have to be met before they could become subject to 

PSD requirements. In fact, in the preamble to its proposed Tailoring Rule, EPA appropriately 

cited legislative history supporting the view that Congress designed the PSD program to address 

conventional criteria pollutants and to promote and safeguard attainment of the NAAQS. See 74 

FR 55308/2-55309/3.

Response:

EPA does not agree that the terms of section 160 compel EPA to read sections 165(a)(4) 

and 169(3) to apply to a pollutant before the Agency has established control requirements for the 

pollutant. Section 160(1) describes PSD’s purpose to “protect public health and welfare from 

any actual or potential adverse effect which in the Administrator’s judgment may reasonably be 

anticipated to occur from air pollution.” Thus, this goal contemplates an exercise of judgment by 

EPA to determine that an actual or potential adverse effect may reasonably be anticipated from 

air pollution. In that sense, this goal is consistent with NAAQS and NSPS programs, which 

contemplate that regulation of a pollutant will not occur until a considered judgment by EPA that 
63

a substance or source category merits control or restriction. The commenter has not persuasively

established that the “potential adverse effect” language in section 160(1) makes this provision 

markedly different than the language used in sections 108(a)(1)(A) and 111(b)(1)(A). All three 

sections use the phrase “may reasonably be anticipated” Furthermore, section 160 contains 

general goals and purposes and does not contain explicit regulatory requirements. The 

controlling language in the PSD provisions is the “subject to regulation” language in sections 

165(a)(4) and 169(3). As discussed earlier, the “actual control” interpretation is based on a 

common and accepted meaning of the term “regulation.” To the extent the goals and purpose in 

section 160 are instructive as to the meaning of other provisions in Part C of the Act, section 

160(1) is just one of several purposes of the PSD program that Congress specified. The Act also 

instructs EPA to ensure that economic growth occurs consistent with the preservation of existing 

clean air resources. CAA §160(3). EPA’s interpretation is consistent with this goal because it 

allows EPA to look at the larger picture by coordinating control of an air pollutant under the PSD 

program with control under other CAA provisions. 

EPA finds the logic of the PSD Interpretive Memo more persuasive. The Memo 

considers the full context of the CAA, including the health and welfare criteria that generally

must be satisfied to establish control requirements under other parts of the Act, information 

gathering provisions that contemplate data collection and study before pollutants are controlled, 

and requirements for reasoned decision making. While some commenters presented arguments 

for why it might be possible or beneficial to apply the BACT requirement before a control 

requirement is established for a pollutant elsewhere under the Act, these arguments do not 

demonstrate that the contextual reading of the CAA described in the PSD Interpretive Memo is 

erroneous. Thus, the comments have at most provided another permissible reading of the Act, 

but they do not demonstrate that EPA must require BACT limitations for pollutants that are not 

yet controlled but only subject to data collection and study. 

4.3. Policy Considerations Raised by Monitoring and Reporting 

Interpretation

Comment:

One commenter (0062) agrees with the policy arguments advanced by EPA and others 

that EPA’s critical information gathering activities will be constrained, with likely adverse 

environmental and public health consequences, if monitoring requirements are necessarily

associated with the potentially significant implementation and compliance costs and resource 

constraints of the PSD and Title V programs.

Another commenter (0102) expresses concern that without the ability to gather data or 

investigate unregulated pollutants, for fear of triggering automatic regulation under the CAA, 

EPA will not have the flexibility to review the validity of controlling additional or fewer GHGs.

A state agency commenter (0102) also expresses concern that a permitting program 

triggered by a monitoring and reporting requirement with no established federal emission 

standard would be subject to continuous legal challenges based on the concept of the program 
64

and the restrictions of individual permits. The commenter (0102) believes that such a program 

could not be effectively administered.

Commenters (0092, 0067, 0081, 0083, 0089, 0096, 0090, 0106/0107, 0108, 0109) 

representing several companies (industry), state that an interpretation of “subject to regulation,”

that would be applied to pollutants based on monitoring and reporting requirements would 

effectively eliminate the ability of EPA to conduct investigative monitoring, necessary if the 

EPA wishes to develop informed, appropriate, and legally defensible regulations for controlling 

emissions, and could prevent EPA from monitoring unregulated surrogate emissions, which are 

monitored to demonstrate compliance with emission standards of associated regulated pollutants. 

Ten industry commenters (0089 and others incorporating this submission (0065, 0067, 

0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) state that subjecting a pollutant to the PSD 

program because of a requirement to gather information on emissions would reverse the logical 

order of CAA regulation, requiring sources to control a pollutant through BACT even before 

Congress or EPA could determine whether that pollutant should be subject to emission controls 

at all. The commenters stress that Congress established the PSD program for the purpose of 

preventing emissions of pollutants that are already subject to CAA regulation from degrading air 

quality that meets the NAAQS. The commenters indicate that EPA has consistently rejected the 

“monitoring and reporting” interpretation, and cite as an example a memorandum issued 

contemporaneously with its 1993 section 821 regulations (the Wegman memorandum). The 

commenters also agree with EPA that adopting the “monitoring and reporting” interpretation 

would hamper EPA’s consideration of whether to adopt emission control regulations for any

additional pollutant in the future if a requirement merely to measure and report emissions of that 

pollutant subjected those emissions to PSD requirements.

Ten industry commenters (0089 and others incorporating this submission (0065, 0067, 

0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) seek to rebut Petitioners argument that EPA 

has failed to demonstrate that there is anything “unworkable” about requiring PSD to be met for 

pollutants that are subject only to monitoring and reporting requirements. The EPA has 

demonstrated that this would pose serious problems of administrability, e.g., by hampering the 

gathering of information to allow factually grounded determinations of whether and how

emission control requirements should be developed and imposed.

One industry commenter (0085) agrees with EPA that monitoring and reporting are 

normal preceding steps to actual regulation under the CAA. The commenter (0085) adds that if 

EPA were to adopt the interpretation that gathering information triggered PSD, the Agency

would clearly be reluctant to even begin the information gathering process for a pollutant. 

One of the commenters (0086) agrees with EPA’s rationale for this conclusion and that 

the monitoring and reporting interpretation would create perverse incentives.

One industry commenter (0050) states that the CAA allows EPA to promulgate 

requirements for monitoring and reporting emissions of pollutants prior to a finding of 

endangerment, and that the Greenhouse Gas Reporting Rule was recently finalized by the EPA. 

This commenter opines that the application of PSD/Title V upon implementation of monitoring 
65

and reporting requirements would stifle the collection of data necessary to make informed 

decisions. In addition, applying PSD/Title V would render the statutorily-required endangerment 

finding unnecessary. This commenter also believes that adoption of the “monitoring and 

reporting requirement” option would deter EPA from further studying the possible impacts of a 

substance on public health and welfare, thereby preventing the agency from much needed 

information on addressing possible health or welfare effects. 

One industry commenter (0059) submits that it would be unreasonable to conclude that 

requiring monitoring of GHG emissions on January 1, 2010 or reporting of GHGs on March 31, 

2011 under the Mandatory GHG Reporting Rule, subjects GHGs to the PSD program. They

assert that collection of such information is intended to help the EPA determine which industry 

sources should be regulated and how, and to construe that collection as subjecting GHGs to 

regulation under PSD did not make sense.

This industry commenter (0050) states that the “monitoring and reporting requirement”

option was not acceptable from the standpoint of the regulated community because they believed 

it would subject all sectors of the economy burdensome PSD and Title V requirements for 

substances that may not cause problems for public health or welfare and thus should not be 

subject to regulation.

One industry commenter (0097) argues that if an interpretation that a monitoring 

requirement triggered control standards, every request for data or monitoring requirement, 

excepting a program which is established to demonstrate compliance with an existing regulation, 

would be expected to be challenged in court because of the potential outcome that such actions 

would constitute a control requirement and set in motion a further chain of regulatory action. On 

this point, the commenter argues that if, as now seems the case, regulation of environmental 

matters occurs via the judicial system, the analyses and demonstration of need through the use of 

scientific information and policy decisions will be lost. Further, the commenter claims this could 

include information collection requests (ICR) under section 114 of the CAA. The potential for 

this to occur is a circumstance that must be recognized and considered.

One industry group (0071) commenter opines that industry would be much more resistant 

to proposed monitoring requirements and EPA would be less likely to impose monitoring 

requirements if they would trigger PSD BACT requirements.

Response:

The monitoring and reporting interpretation would make the substantive requirements of 

the PSD program applicable to particular pollutants based solely on monitoring and reporting 

requirements (contained in regulations established under section 114 or other authority in the 

Act). This approach would lead to the perverse result of requiring emissions limitations under 

the PSD program while the Agency is still gathering the information necessary to conduct 

research or evaluate whether to establish controls on the pollutant under other parts of the Act. 

Such a result would frustrate the Agency’s ability to gather information using section 114 and 

other authority and make informed and reasoned judgments about the need to establish controls 

or limitations for particular pollutants. If EPA interpreted the requirement to establish emissions 
66

limitations based on BACT to apply solely on the basis of a regulation that requires collecting 

and reporting emissions data, the mere act of gathering information would essentially dictate the 

result of the decision that the information is being gathered to inform (whether or not to require 

control of a pollutant). 

We agree that a monitoring and reporting interpretation would hamper the Agency’s 

ability to conduct monitoring or reporting for investigative purposes to inform future 

rulemakings involving actual emissions control or limits. In addition, it is not always possible to 

predict when a new pollutant will emerge as a candidate for regulation. In such cases, the 

Memo’s reasoning is correct in that we would be unable to promulgate any monitoring or 

reporting rule for such a pollutant without triggering PSD under this interpretation. 

Comment:

According to an environmental organization commenter (0095), requiring BACT for 

pollutants subject to monitoring and reporting regulations does not impair EPA’s ability to gather 

information about pollutants. The EPA can gather such information without triggering BACT 

because neither section 114 nor the general regulations governing agency information collection 

efforts require EPA to promulgate regulations in order to collect information. See, e.g., 5 CFR 

1320.5(c),1320.8(d) (indicating that information may be collected with or without a formal

rulemaking). 

Response:

EPA understands that the monitoring and reporting interpretation would not result in 

application of the PSD BACT requirement when EPA exercises its section 114 authority to 

collect information without promulgating a regulation. However, EPA’s ability to gather 

information by rulemaking would still be hampered by the application of the monitoring and 

reporting interpretation. EPA wishes to preserve all its potential information gathering tools, 

even those that may be used less frequently. 

Comment:

This commenter (0095) further asserts that as a practical matter, EPA has still not 

identified even one pollutant other than GHGs that would become “subject to regulation” as a 

result of monitoring or reporting requirements. In the reconsideration, EPA attempts to provide a 

single example, claiming that certain stationary sources “must” monitor oxygen gas (O2) or CO2

– at 74 FR 51542 – citing 40 CFR 60.49Da(b) and (c). According to the commenter, EPA is 

simply wrong: one of these subsections (40 CFR 60.49Da(c)) deals solely with NOx monitoring, 

and says nothing about O2, and the other permits -- but does not require -- such monitoring. 40 

CFR 60.49Da(b)(4) provides that:

If the owner or operator has installed and certified a SO2 continuous emissions 

monitoring system (CEMS) according to the requirements of Sec.75.20(c)(1) of this 

chapter and appendix A to part 75 of this chapter, and is continuing to meet the ongoing 

quality assurance requirements of Sec. 75.21 of this chapter and appendix B to part 75 of 
67

this chapter, that CEMS may be used to meet the requirements of this section, provided 

that: (i) A CO2 or O2 continuous monitoring system is installed.

One of the state agency commenters (0102) responds to the Petitioners contention that 

EPA has not identified a pollutant other than CO2 that would be affected by the monitoring and 

reporting interpretation by noting that EPA’s endangerment finding covers six GHGs, not just 

CO2. 

Further, commenter (0071) says that EPA has, in the past, imposed monitoring and/or 

reporting requirements for chemicals that EPA does not intend to regulate, nor is likely to want 

to do so in the future. For example, monitoring O2 in the stack of a boiler, which EPA provides 

at 74 FR at 51542, is a very real example that demonstrates that monitoring and reporting 

requirements alone cannot reasonably be interpreted to trigger PSD and BACT requirements.

A state agency commenter (0091), citing the example described by EPA of the NSPS 

subpart Da requirement to “measure” O2 or CO2, states that since EPA is not considering the 

measuring of O2 as “subject to regulation,” it should therefore not interpret CO2 to be regulated 

in this manner. The commenter also states that this interpretation would not preserve the EPA’s 

ability to collect emissions data on other pollutants for research or other purposes such as 

evaluating the need for emissions controls or limitations.

One industry group commenter (0070) argues that adopting a “monitoring and reporting 

interpretation” could prevent EPA from monitoring unregulated surrogate emissions, which are 

monitored to demonstrate compliance with emission standards of associated regulated pollutants. 

Under such a scenario, the mere monitoring of environmentally-benign surrogate emissions 

could require pointless control of their emissions.

Commenter (0097) states that if compounds such as oxygen are measured or monitored to 

allow quantification of emissions, that gas would also be “regulated” under this policy, which the 

commenter does not believe is the desire of EPA or in the best interest of the Country. 

Response:

EPA’s GHG Reporting Rule covers six GHGs, not just CO2. Further, EPA has 

promulgated regulations that require monitoring of oxygen (O2) in the stack of a boiler under 

certain circumstances. See 40 CFR 60.49Da(d). In the proposal, EPA mistakenly cited 

60.49Da(c) of this regulation. As the commenter points out, this provision does not address O2 

monitoring. However, section 60.49Da(d) says that “[t]he owner or operator of an affected 

facility not complying with an output based limit shall install, calibrate, maintain, and operate a 

CEMS, and record the output of the system, for measuring the O2 or carbon dioxide (CO2) 

content of the flue gases at each location where SO2 or NOx emissions are monitored.” These 

examples help demonstrate why monitoring and reporting requirements alone should not be 

interpreted to trigger PSD and BACT requirements. Even if EPA only establishes monitoring 

and reporting requirements for only a small number of pollutants, this does not alter the 

undesirable outcome of the PSD program requiring emissions limitations on the basis of 

regulations designed for information gathering. 
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4.4. Monitoring Equipment Captures and Controls Emissions

Comment:

Even if EPA’s “preferred” interpretation of “actual control of emissions” is applied to its 

monitoring and reporting regulations, the commenter (0101) states that the processes that must 

be utilized to monitor and report on CO2 emissions require actual and physical “control” of them, 

as the amount of emissions cannot be determined unless the gases are first in some way captured 

and controlled.

Commenter (0095). The Part 75 regulations prohibit operation in violation of these 

requirements and provide that a violation of any Part 75 requirement is a violation of the Act. Id. 

§75.5. Not only do the regulations require that polluting facilities “measure . . . CO2 emissions 

for each affected unit,” id. §75.10(a), they also prohibit operation of such units “so as to 

discharge or allow to be discharged, emissions of . . . CO2 to the atmosphere without accounting 

for all such emissions . . . . “ Id. §75.5(d). According to the commenter (0095), in arguing that 

these regulations do not make CO2 “subject to regulation” because they do not require “actual 

control of CO2 emissions”, EPA appears to really mean “quantitative control” or “limitation” of 

emissions, as opposed to “actual control.” In fact, this commenter (0095) asserts that one cannot 

accurately monitor emissions without “controlling” them. 

Ten industry commenters (0089 and others incorporating this submission (0065, 0067, 

0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) argue that this contention that any monitoring 

requires some level of “control” would, without any basis in logic, simply erase the distinction 

between monitoring and emission controls.

Response:

The actual control interpretation contemplates a regulatory action that serves to limit or 

restrict emissions of a pollutant. The containment of emissions in a stack or a monitoring device 

for the purposes of monitoring does not function to limit or restrict emissions. Even if some 

small percentage of emission are captured for purposes of analysis, a monitoring requirement 

provides no assurance that pollutants captured for purposes of monitoring alone will not 

eventually be emitted to the ambient air without limitation after the necessary analysis is 

complete. Thus, EPA is not persuaded by the argument that monitoring devices are equivalent to 

emissions control devices or techniques and would actually control emissions.
69

4.5. Applicability of Title V Requirements Based on Monitoring and 

Reporting

Comment:

One of the industry commenters (0067) and two of the state/local agency associations 

(0054, 0062) added that monitoring and reporting obligations also do not give rise to permitting 

obligations under Title V of the CAA. 

Response:

Title V requires, among other things, that any “major source” – defined, as relevant here, 

under CAA sections 302(j) and 501(2)(b), as “any stationary facility or source of air pollutants 

which directly emits, or has the potential to emit, one hundred tons per year or more of any air 

pollutant...” – apply for a Title V permit. EPA interprets this requirement to apply to sources of 

pollutants “subject to regulation” under the Act. EPA previously articulated its interpretation 

that this Title V permitting requirement applies to “pollutants subject to regulation” in a 1993 

memorandum from EPA’s air program. Memorandum from Lydia N. Wegman, Deputy 

Director, Office of Air Quality Planning and Standards, U.S. EPA, “Definition of Regulated Air 

Pollutant for Purposes of Title V” (Apr. 26, 1993) (“Wegman Memo”). EPA continues to 

maintain this interpretation. The interpretation in this memorandum was based on: (1) EPA’s 

reading of the definitional chain for “major source” under Title V, including the definition of “air 

pollutant” under section 302(g) and the definition of “major source” under 302(j); (2) the view 

that Congress did not intend to require a variety of sources to obtain Title V permits if they are 

not otherwise regulated under the Act (see also CAA section 504(a), providing that Title V 

permits are to include and assure compliance with applicable requirements under the Act); and 

(3) consistency with the approach under the PSD program. While the specific narrow 

interpretation in the Wegman Memo of the definition of “air pollutant” in CAA section 302(g) is 

in question in light of Massachusetts (finding this definition to be “sweeping”), EPA believes the 

core rationale for its interpretation of the applicability of Title V remains sound. EPA continues 

to maintain its interpretation, consistent with CAA sections 302(j), 501, 502 and 504(a), that the 

provisions governing Title V applicability for “a major stationary source” can only be triggered 

by emissions of pollutants subject to regulation. This interpretation is based primarily on the 

purpose of Title V to collect all regulatory requirements applicable to a source and to assure 

compliance with such requirements – see, e.g., CAA section 504(a) – and on the desire to 

promote consistency with the approach under the PSD program.

In applying this interpretation under Title V, the Wegman Memo also explains that EPA 

does not consider CO2 to be a pollutant subject to regulation based on the monitoring and 

reporting requirements of section 821 of the Clean Air Act Amendments of 1990. As articulated 

in numerous orders issued by EPA in response to petitions to object to Title V permits, EPA 

views the Title V operating permits program as a vehicle for ensuring that air quality control 

requirements are appropriately applied to facility emission units and that compliance with these 

requirements is assured. See, e.g., In the Matter of Fort James Camas Mill, Petition No. X-1999-

1 at 3-4 (Dec. 22, 2000); In the Matter of Cash Creek Generation, LLC, Petition Nos. IV-2008-1 
70

& IV-2008-2 at 2 (Dec. 15, 2009). The Wegman Memo points out that section 821 involves 

reporting and study of emissions, but is not related to actual control of emissions. Since the 

reporting requirements of section 821 have no connection to existing air quality control 

requirements, it is appropriate not to treat them as making CO2 “subject to regulation” for 

purposes of Title V. Cf. Section 504(b) (providing EPA authority to specify requirements for 

“monitoring and analysis of pollutants regulated under this Act.”).

4.6. Practice of Distinguishing Pollutants Covered by Control 

Requirements and Monitoring Requirements 

Comment:

One industry commenter (0079) states that it is a long standing practice in the air 

pollution community to distinguish between those pollutants subject to control requirements –

NAAQS, NSPS, NESHAP, and SIP requirements – versus those pollutants that are subject only

to generic emission inventory or similar reporting requirements. The first set of pollutants is 

considered “subject to regulation.” The second set of pollutants is “potentially” subject to 

regulation in the future. 

The commenter (0062) indicates that EPA has issued fairly clear guidance over the years 

concerning what constitutes an emissions limitation, as opposed to a monitoring requirement, 

and states that EPA should incorporate those concepts in its final guidance.

Response:

EPA agrees there is a distinction between pollutants subject to control requirements and 

pollutant subject only to emissions inventory and monitoring requirements. This distinction 

illustrated by commenters supports EPA’s final action to continue applying the actual control 

interpretation under the PSD program. 

4.7. Enforceability of Monitoring Regulations

Comment:

The Petition for Reconsideration says that, just like regulations restricting emissions

quantities, the regulations EPA promulgated implementing Section 821 have the force

of law, and violation results in severe sanctions. 40 CFR 75.5; 42 U.S.C. §7413(c)(2) (punishable 

by imprisonment of up to six months or fine of up to $10,000 for making false statement or 

representation or providing inaccurate monitoring reports under CAA).

Ten industry commenters (0089 and others incorporating this submission (0065, 0067, 

0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) argue that fact that EPA may enforce the 

section 821 regulations using enforcement mechanisms authorized by the CAA does not support 

petitioners’ interpretation. Section 821 expressly incorporates by reference the CAA’s 
71

enforcement mechanisms, but neither that incorporation nor the use of those mechanisms 

transforms the section 821 requirement for monitoring and reporting into an actual emission 

control under the CAA. See In Re: Deseret Power Electric Cooperative, Response of Amicus 

Curiae Utility Air Regulatory Group to the Board’s Request for Supplemental Briefing, at 3-10 

(Sept. 12, 2008) (“UARG Supplemental Amicus Brief”); see also infra Section VII.

Response:

EPA agrees that the Part 75 regulations are enforceable and that a violation of these 

requirements could lead to the imposition of penalties where appropriate. However, this 

similarity with other EPA regulations that restrict emissions does not demonstrate that 

monitoring and reporting requirements themselves restrict emissions or constitute “regulation”

within the meaning of that term that EPA has applied considering the context of the CAA. EPA 

agrees with the second set of commenters that the particular enforcement mechanism of the Part 

75 regulations does not transform these regulations into actual control requirements. 
72

Chapter 5. EPA-Approved State Implementation Plan (SIP)

5.1. Overview of Comments on the SIP Interpretation 

Comment:

Thirty industry commenters (0050, 0051, 0053, 0056, 0059, 0065, 0066, 0067, 0068, 

0070, 0071, 0073, 0074, 0076, 0079, 0081, 0083, 0085, 0086, 0089, 0090, 0092, 0096, 0097, 

0098, 0105, 0106/0107, 0108, 0109, 0118) and four state/local agency associations (0058, 0062, 

0091, 0102) agree with EPA’s position that the “SIP interpretation” is not the proper 

interpretation of the phrase “subject to regulation” for purposes of PSD. 

Ten of these industry commenters (0089 and others incorporating this submission (0065, 

0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109)) express full support for the rationale 

provided by EPA in the PSD Interpretive Memorandum and the proposed PSD Interpretation for 

rejecting the SIP interpretation as unwarranted and unreasonable. These commenters assert that 

the petitioners’ arguments in favor of the SIP interpretation (i.e., that the Delaware SIP is 

enforceable under the CAA, that the SIP interpretation is supported by the plain language of the 

CAA, and that the approved SIP’s provisions are codified under 40 CFR Subchapter C) are not 

significantly different from those raised under the monitoring and reporting interpretation, and 

that this interpretation should be rejected for the same reasons.

Environmental group commenters (0095, 0101) who incorporate the Petition for 

Reconsideration in their comments support the SIP interpretation. 

Response:

After reconsidering the legal and policy issues, we decline to adopt the SIP interpretation. 

Since the meaning of the term “subject to regulation” is ambiguous and susceptible to multiple 

interpretations, the SIP interpretation is not compelled by the structure and language of the Act. 

Furthermore, there would be negative policy implications if EPA adopted this interpretation. 

EPA responds to more specific points in the responses that follow. 

5.2. Consistency with the Statute and Congressional Intent

Comment:

Several commenters expressed that the SIP interpretation is inconsistent with the CAA. 

One commenter (0079) opines that the SIP interpretation belies 35 years of practice to the 

contrary, and is inconsistent with section 110(a)(1) of the CAA, which limits the effect of a SIP 

to “air quality control regions” “within such state.” 42 U.S.C. §7410(a)(1). States are only 

required to prevent interference with other states’ compliance with NAAQS or measures required 

to be included in the PSD portions of their SIP. 42 U.S.C. §7410(a)(2)(D). Section 126 of the 
73

CAA is similar in limiting its effects to NAAQS and the required elements of the PSD program. 

See 42 U.S.C. §7426. Commenter (0085) also states that the SIP interpretation would ignore 

extensive provisions in the CAA for addressing interstate air pollution by allowing one state to 

create national policy. Three commenters (0059, 0097, 0058, 0107) point to CAA section 116 as 

evidence that a state can set more stringent CAA regulations in its jurisdiction to advance the 

state’s own public policy goals and Congress expressed no intent that such state regulations 

would trigger nationwide requirements. Commenters argue that the SIP interpretation 

establishes a situation that would allow the actions in a single state to define policy in other 

states and nationally, which may be contrary to the best interests of the nation or other states.

Three commenters (0070, 0086, 0092, 0098) state that the SIP interpretation conflicts 

with the core principle of cooperative federalism on which the CAA is based, and that this 

interpretation would strip Congress and EPA of their authority to set the minimum standards and 

instead, would allow individual states to control the federal permitting program’s baseline 

requirements. Commenter 0086 notes that although EPA-approved SIP requirements become 

enforceable by EPA and citizens under certain provisions of the CAA, it does not follow that 

such enforcement authority renders the pollutant subject to regulation under the CAA. Rather, 

this enforcement authority promotes the CAA of providing federal assistance to States in 

preventing air pollution under their own programs. Moreover, Section 304 that provides for 

citizen enforcement specifically defines the term “emission standard or limitations” to include 

SIP requirements, but Congress limited the application of this definition to only Section 304. 

This suggests that Congress meant for a different definition that does not include SIP 

requirements, to apply for other purposes under the CAA. Another industry commenter (0068) 

opines that the SIP interpretation would unconstitutionally delegate authority to States to 

substitute their judgment for EPA’s when the CAA clearly gives States authority to only address 

local air quality concerns. Finally, commenter 0086 notes that courts have already recognized 

that the CAA does not require a state to “respect its neighbor’s air quality standards (or design its 

SIP to avoid interference therewith) if those standards are more stringent than the requirements 

of federal law.” Connecticut v. EPA, 656 F.2d 902, 909 (2d Cir. 1981). 

Several industry commenters (0089 and others incorporating this submission (0065,0067, 

0083, 0089, 0090, 0096, 0106/0107, 0108, 0109)) add that no interpretation is defensible 

whereby a state’s SIP provision would establish national regulatory policies and bind EPA and 

other states. One state’s SIP provisions cannot impose on EPA an obligation to regulate all other 

states the same way. See Vermont v. Thomas, 850 F.2d 99, 102-04 (2d Cir. 1988) (holding that 

Vermont cannot, through inclusion of a state ambient air quality standard in a revision to a SIP, 

impose that standard on upwind states). Rather, EPA establishes the rules, based on the CAA, 

which states then implement through their SIPs. 

Another commenter (0085), while ceding that that SIP regulations become federallyenforceable once approved by EPA, asserts that such approval does not constitute an affirmative 

decision to subject GHGs to regulation under the Act; rather, EPA’s criteria for approving SIPs 

is wholly different from the criteria required to establish national regulations. Another 

commenter (0059) states that EPA would be required to analyze the impacts from a state SIP 

amendment on a national scale because the impacts of PSD/Title V would be national in scope. 
74

This would create an unwarranted and unnecessary burden on the agency and could lead to 

significant delays in the approval of SIP amendments. 

Another commenter (0086) notes that although, EPA-approved SIP requirements become 

enforceable by EPA and citizens under certain provisions of the CAA, it does not follow that 

such enforcement authority renders the pollutant subject to regulation under the CAA. Rather, 

this enforcement authority promotes the CAA purpose of providing federal assistance to States in 

preventing air pollution under their own programs.

One industry commenter (0068) opines that, to delegate, unconstitutionally, the power of 

federal regulation to the states by enabling one state to take action triggering the regulation of a 

pollutant on a nation-wide scale would be contrary to the structure of the CAA, which clearly 

gives states autonomy to tailor their programs to achieve local air quality requirements but only

limited authority for states to substitute their judgment for EPA’s.

Some environmental commenters, who incorporate the Petition for Reconsideration in 

their comments (95, 101) and support the SIP interpretation, fault the Agency’s rejection of this

interpretation by stating that neither the Act, nor the PSD Interpretive Memo, provides a basis for 

a position that regulation by a single state is not enough to constitute “regulation under the Act”

on a nationwide basis for purpose of section 165. Petitioners and another commenter also assert 

that CO2 is already “subject to regulation under the Act” and take the position that any

requirement EPA adopts and approves in an implementation plan makes the covered pollutant 

“subject to regulation under the Act” because it is approved by the EPA “under the Act,” and 

because it becomes enforceable by the state, by EPA and by citizens “under the Act” upon 

approval. 

Response:

While EPA does not agree that the SIP interpretation is inconsistent with the CAA, we 

nonetheless decline to adopt the interpretation. We believe that the actual control interpretation 

better unifies the multiple purposes of the CAA and the concept of cooperative federalism. 

Congress allowed individual states to create and apply some regulations more stringently than 

federal regulations within its borders, without allowing individual states to set national 

regulations that would impose those requirements on all states. See Ellis v. Gallatin Steel Co., 

390 F.3d 461, 467 (6th Cir. 2004). 

EPA continues to believe that the CAA and our implementing regulations are intended to 

provide states flexibility to develop and implement SIPs to meet the air quality goals of their 

individual state. Each state’s implementation plan is a reflection of the air quality concerns in 

that state, allowing a state significant latitude in the treatment of specific pollutants of concern 

(or their precursors) within its borders based on air quality, economic, and other environmental 

concerns of that state. As such, pollutant emissions in one state may not present the same 

problem for a state a thousand miles away. As expressed in the PSD Interpretive Memo, we 

continue to have concerns that the SIP interpretation would improperly limit the flexibility of 

states to develop and implement their own air quality plans, because the act of one state to 

establish regulatory requirements for a particular pollutant would drive national policy. If EPA 
75

determined that a new pollutant becomes “subject to regulation” nationally within the meaning 

of section 165 based solely on the provisions of an EPA-approved SIP, then all states would be 

required to subject the new pollutant to PSD permitting whether or not control of the air pollutant 

was relevant for improving that state’s air quality. Whether one state, five states, or 45 states 

make the decision that their air quality concerns are best addressed by imposing regulations on a 

new pollutant, we do not think those actions should trump the cooperative federalism inherent in 

the CAA. While several states may face similar air quality issues and may choose regulation as 

the preferred approach to dealing with a particular pollutant, we are concerned that allowing the 

regulatory choices of some number of states to impose PSD regulation on all other states would 

do just that. 

EPA disagrees with the commenters and petitioners who contend that a pollutant 

regulated in one SIP approved by EPA must automatically be regulated through the PSD 

program nationally. In fact, Congress demonstrated intent, in the language and structure of the 

Act, for SIP requirements to have only a local or regional effect.

In CAA section 102(a), Congress directs EPA to encourage cooperative activities among 

states, and the adoption of uniform state and local laws for the control of air pollution “as 

practicable in light of the varying conditions and needs.” This language informs the issue of 

whether SIP requirements have nationwide applicability in two ways. First, there would be no 

need for EPA to facilitate uniform adoption of standards in different air quality control regions, if 

the regulation of an air pollutant by one region would automatically cause that pollutant to be 

regulated in another region. Second, Congress bounded its desire to promote uniformity by

recognizing that addressing local air quality concerns may preempt national uniformity of 

regulation. 

Indeed, section 116 of the CAA grants States the right to adopt more stringent standards 

than the uniform, minimum requirements set forth by EPA. See 42 U.S.C. 7416. The legislative 

history of the 1977 CAA Amendments shows that Congress understood that States may adopt 

different and more stringent standards then the federal minimum requirements. See, e.g., 122 

Cong. Rec. S12456 (daily ed. July 26, 1976) (statement of Sen. Randolph) (“[T]he States are 

given latitude in devising their own approaches to air pollution control within the framework of 

broad goals. ... The State of West Virginia has established more stringent requirements than 

those which, through the Environmental Protection Agency, are considered as adequate...”); 122 

Cong. Rec. S12458 (daily ed. July 26, 1976) (statement of Sen. Scott) (“The states have the right, 

however, to require higher standards, and they should have under the police powers.”) Congress 

could not have intended states to have latitude to implement their own approaches to air 

pollution control, and simultaneously, require that air pollutants regulated by one State 

automatically apply in all other States.

Importantly, the legislative history also shows that Congress intended to limit the EPA’s 

ability to disapprove a State’s decision to adopt more stringent requirements in setting forth the 

criteria for approving state submissions under section 110. This intent is supported by the 

following passage:
76

State implementation plans usually contain a unified set of requirements and frequently 

do not make distinctions between the controls needed to achieve one kind of ambient 

standard or another. To try to separate such emission limitations and make judgments as 

to which are necessary to achieving the national ambient air quality standards assumes a 

greater technical capability in relating emissions to ambient air quality than actually 

exists.

A federal effort to inject a judgment of this kind would be an unreasonable intrusion into 

protected State authority. EPA’s role is to determine whether or not a State’s limitations 

are adequate and that State implementation plans are consistent with the statute. Even if 

a State adopts limits which may be stricter than EPA would require, EPA cannot second 

guess the State judgment and must enforce the approved State emission limit.2

123 Cong. Rec. S9167 (daily ed. June 8, 1977) (statement of Sen. Muskie). 

This Congressional intent is reflected within the statutory language. Under section 

110(k)(3), the EPA Administrator “shall approve” a state’s submittal if it meets the requirements 

of the Act, and under section 110(l) “shall not” approve a plan revision “if the revision would 

interfere with any other applicable requirement of this Act.” Courts have similarly interpreted 

this language to limit EPA’s discretion to approve or disapprove SIP requirements. See, e.g.,

State of Connecticut v. EPA, 656 F.2d 902, 906 (2d. Cir. 1981) (“As is illustrated by Congress’s 

use of the word ‘shall,’ approval of an SIP revision by the EPA Administrator is mandatory if the 

revision has been the subject of a proper hearing and the plan as a whole continues to adhere to 

the requirements of section 110(a)(2)”) (referencing Union Electric Co. v. EPA, 427 U.S. 246, 

257 (1976); and Mission Indus., Inc. v. EPA, 547 F.2d 123 (1st Cir. 1976)). These provisions of 

the statute do not establish any authority or criteria for EPA to judge the approvability of a 

state’s submission based on the implications such approval would have nationally. The absence 

of such authority or criteria in the applicable standard argues against nationwide applicability of 

SIP requirements and the SIP interpretation.

Moreover, under section 307(b) of the CAA, Congress assigns review of specific 

regulations promulgated by EPA and “any other nationally applicable regulations promulgated or 

final action taken, by the Administrator under this Act” only to the U.S. Court of Appeals for the 

District of Columbia Circuit (“D.C. Circuit”). In contrast, “the Administrator’s action in 

approving and promulgating any implementation plan under Section 110 ... or any other final 

action of the Administrator under this Act ... which is local or regionally applicable may be filed 

only in the United States Court of Appeals for the appropriate circuit.” 42 U.S.C. §7607(b) 

(emphasis added). Thus, Congress set forth its intended applicability of these regulations in 

assigning judicial venue and clearly articulated that requirements in a SIP are generally “local or 

regionally applicable.”

We agree that EPA’s approval of a state requirement into that State’s implementation 

plan has the effect of making that requirement enforceable under the CAA. In addition, we agree 

 

2

 Notably, the legislative record refers to “State” emission limit, and makes no note of this State 

emission limitation having broader applicability. 
77

with the commenter who notes that the enforcement provisions of the Act further the concept of 

federalism by providing federal support to States’ unique programs, and do not necessarily 

define the scope of the PSD permitting program. However, the fact that EPA has authority to 

enforce SIP provisions against regulated entities in one state does not establish that EPA has the 

power to enforce these provisions against entities in other states that are not subject to the state 

laws incorporated into the SIP. Thus, it does not follow that the enforceability of particular SIP 

provisions by EPA makes a pollutant regulated under such state’s laws into a pollutant that is 

subject to regulation on a nationwide basis. 

5.3. Implications of Applying State-specific Decisions to the Nation

Comment:

Several commenters indicate that state actions to regulate local air quality concerns 

should not establish national pollution control policy. One State commenter (0091) expressed 

that States should have flexibility in their implementation plans to take action, but that one 

state’s decision to regulate GHG emissions does not obligate another state to do so. Several 

industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) argue that no 

interpretation is defensible whereby a state’s SIP provision would establish national regulatory

policies and bind EPA and other states. One state’s SIP provisions cannot impose on EPA an 

obligation to regulate all other states the same way. See Vermont v. Thomas, 850 F.2d 99, 102-

04 (2d Cir. 1988) (holding that Vermont cannot, through inclusion of a state ambient air quality 

standard in a revision to a SIP, impose that standard on upwind states.)

Two commenters (0107, 0105) state that EPA’s approval of a SIP revision only approves 

that state developing and implementing its own regulations and only allows EPA to enforce the 

regulation in a state as part of that state’s overall effort to attain it policies within its own 

jurisdiction. Commenter (0059, 0107) believes it would be unreasonable to interpret the CAA as 

requiring PSD permitting of a source that emitted GHGs in Montana simply because Delaware 

chose to regulate emissions from combustion turbines locally. Commenter 0059 notes that CAA 

clearly recognizes in section 116 that a state can set more stringent CAA regulations in its 

jurisdiction to advance the state’s own public policy goals. Another industry commenter (0050) 

states that States often apply to EPA to add substances to their SIP that may be an issue within 

the state. The commenter (0050) opines that EPA’s consideration of these applications extends 

only to the impacts on the particular state, and not nationally, and that problems that one state 

seeks to address may not be problems in the other 49 states. A state/local agency association and 

industry commenter (0058, 0086) also concurs with EPA’s concern that taking the opposite view 

would set a precedent for other pollutants, such as ammonia, which EPA currently allows, but 

does not require, a state to treat as a precursor to PM2.5.

Several commenters (0062, 0102, 0059, 0085, 0051, 0053) noted that the process for 

EPA to approve an individual State’s SIP is not the appropriate process for establishing 

nationally applicable requirements. One state/local agency associations (0062) states that PSD 

and Title V applicability should arise only after a EPA makes a conscious decision to broadly 

regulate a pollutant under the CAA. Another state agency commenter (0102) states that it is 
78

appropriate and necessary that regulations, particularly those with significant economic effect, 

not be indiscriminately applied throughout an individual state or the nation.

Finally, two commenters (0051, 0053) state that because EPA’s approval of a SIP does 

not constitute a NAAQS, a NSPS, or a federal standard regulating ozone-depleting substances 

(see 40 CFR 52.21(b)(50)(i)-(iii)), and is merely an approval of state laws as meeting federal 

requirements, that approval does not make GHGs regulated pollutants under the CAA.

Response:

We are concerned that adopting the SIP interpretation would subject a pollutant to 

regulation before EPA finds that the pollutant warrants national regulation, and by-pass the 

opportunity for judicial review of that finding for each individual pollutant. As one commenter 

notes, the process for the Administrator to establish national regulations is different than the 

process for approving SIPs. For example, before establishing a new NAAQS, the Administrator 

must find that the pollutant “causes or contributes to air pollution which may reasonably be 

anticipated to endanger public health or welfare.” See 42 U.S.C 7408. The CAA requires the 

Administrator to make similar findings before regulating pollutants under other sections of the 

Act. See, for example, CAA sections 111, 112(b), 112(f) that require the Administrator to find 

that a pollutant “presents or may present... a threat of adverse human health effects;” or is 

“known to cause or may... cause death, injury, or serious adverse effects to human health and the 

environment.” 

In contrast, the statutory process for EPA to approve SIPs does not directly contemplate 

that EPA conduct a finding or national impact analysis of an individual state’s decision to 

regulate a new pollutant. Specifically, Congress limited the EPA’s ability to disapprove a State’s 

decision to adopt more stringent requirements in setting forth the criteria for approving state 

submissions under section 110. See CAA section 110(k)(3). Accordingly, under the SIP 

interpretation, a new pollutant could become nationally regulated upon EPA’s approval of a SIP, 

and the ability of any party to challenge the national implications of such approval would be 

limited. EPA believes such an outcome raises public policy concerns because it by-passes these 

meaningful steps in the regulatory development process. 

Even if the Act could be read to support EPA review of the national implications of state 

SIP submissions, such an approach would be undesirable for policy reasons. As we highlighted 

in our reconsideration notice, one practical effect of allowing state-specific concerns to create 

national regulation is that EPA’s review of SIPs would likely be much more time-consuming, 

because we would have to consider each nuance of the SIP as a potential statement of national 

policy. Thus, we would have heightened oversight of air quality actions in all states – even those 

regarding local and state issues that are best decided by local agencies. Our approval of SIPs 

would be delayed, which would in turn, delay state’s progress toward improving air quality. 

And, EPA would be required to defend challenges to the approval of a SIP with national 

implications in the D.C. Circuit Court of Appeals rather than the local Circuit Court of Appeals. 

The potential increased burden of reviewing and approving SIPs to analyze the national 

implications of each SIP, and the associated delay in improving air quality, creates a compelling 

policy argument against adoption of the SIP interpretation.
79

The Memo reasons that application of the SIP interpretation would convert EPA’s 

approval of regulations applicable only in one state into a decision to regulate a pollutant on a 

nationwide scale for purposes of the PSD program. The Memo explains that the establishment of 

SIPs is better read in light of the “cooperative federalism” underlying the Act, whereby Congress 

allowed individual states to create and apply some regulations more stringently than federal 

regulations within its borders, without allowing individual states to set national regulations that 

would impose those requirements on all states. See Ellis v. Gallatin Steel Co., 390 F.3d 461, 467 

(6th Cir. 2004). In rejecting the SIP interpretation, the Memo also explains that EPA adopted a 

similar position in promulgation of the NSR regulations for fine particulate matter (or “PM2.5”), 

without any public comments opposing that position. See Memo at 15-16.

5.4. Content of “Applicable Implementation Plan”

Comment:

Several industry commenters (0089 and others incorporating this submission (0065, 

0067, 0083, 0090, 0096, 0106/0107, 0108, 0109) argue that only those portions of EPAapproved state regulations that implement CAA requirements can be part of an applicable 

implementation plan under the CAA. (See CAA section 302(q) (defining the “applicable 

implementation plan” as “the portion (or portions) of the implementation plan, or most recent 

revision thereof, which has been approved under section 110 of this Act, . . . and which 

implements the relevant requirements of this Act”) (emphasis added).) Because emission 

controls for CO2 and other GHGs have not been established as relevant requirements of the Act 

to be implemented through SIPs, any state regulation that imposes emission controls on these 

substances would not be an applicable implementation plan under the CAA. Thus, the fact that 

Delaware established emission controls for CO2 in state regulations and included those state-law 

provisions in a document that it labeled a SIP, which subsequently was approved by EPA, does 

not thereby render CO2 subject to regulation for PSD purposes. In fact, in its submittal 

information to EPA, Delaware made clear it had included CO2 provisions solely as a matter of 

state law and those provisions were not within the scope of the state’s implementation of the 

federal CAA (Doc. No. EPA-R03-OAR-2007-1188-0002.7). 

An environmental group commenter (0101) argues that approval of a regulation into a 

SIP makes that requirement part of the “applicable implementation plan.” The commenter’s 

notes that EPA has approved a SIP revision submitted by the State of Delaware that directly 

establishes emissions limits for CO2. See Approval and Promulgation of Air Quality

Implementation Plans; Delaware; Control of Stationary Generator Emissions, 73 FR 23101 

(April 29, 2008). Specifically, Delaware’s SIP revision imposed CO2 limits on new and existing 

distributed generators. Section 110 of the CAA mandates that EPA approve or disapprove SIPs; 

upon EPA’s approval, these CO2 emission control requirements became part of an “applicable 

implementation plan” under the Act, and thus enforceable “regulations” under the Act. 

Response:
80

EPA did not propose in this action to reconsider whether it should have approved the 

Delaware CO2 provisions included in the state’s SIP submission. Thus, it would not be 

appropriate for EPA to revisit that determination here. Furthermore, since we have otherwise 

declined to interpret the PSD provisions to apply to pollutants regulated in a SIP, it is not 

necessary for EPA to address the commenter’s argument that the Delaware CO2 provisions are 

not a part of the applicable implementation plan notwithstanding EPA’s approval of a SIP 

submission that included those provisions. Under the interpretation affirmed by EPA in this 

action, the Delaware CO2 provisions are insufficient to trigger PSD requirements for CO2 on a 

nationwide basis. 

5.5. Implementation Considerations of a SIP Interpretation for GHGs

Comment:

One industry group (0071) noted that the SIP interpretation would lead to unacceptable 

consequences. Specifically the commenter states that if States are allowed to decide that the 

CAA PSD subtitle, and their SIP provisions implementing the PSD subtitle, apply to GHGs even 

before GHGs are subject to any emission limitation or other control requirement, then the 

adverse consequences of overloading the PSD permitting system, causing unacceptable delays in 

processing PSD permits and thereby impeding economic development, efficiency and other 

improvements, and innovation, would be felt despite EPA’s intention to try and avoid such 

permitting gridlock.

Response:

We agree that the SIP interpretation could cause a delay in obtaining preconstruction 

permits for major stationary sources that emit GHGs. Moreover, we agree that we do not know 

what consequences any of our proposed interpretation would have on PSD permitting for future 

pollutants. The potential for a delay in obtaining PSD permits, while undesirable, does not, by

itself, necessitate that we reject the SIP interpretation or any other proposed interpretation. 

Nonetheless, we decline to adopt the SIP interpretation in favor of the actual control 

interpretation for all the reasons summarized above and in our Federal Register notice. 

5.6. Reliance on Connecticut Decision

Comment:

An environmental group commenter (0095), who incorporated by reference the Petition 

for Reconsideration, faults EPA’s reliance on Connecticut v. EPA, 656 F.2d 902 (2d Cir. 1981), 

and asserts that this case has nothing to do with the issue of whether a pollutant is “subject to 

regulation under the Act.” 

Another commenter (0086) notes that courts have already recognized that the CAA does 

not require a state to “respect its neighbor’s air quality standards (or design its SIP to avoid 
81

interference therewith) if those standards are more stringent than the requirements of federal 

law.” Connecticut v. EPA, 656 F.2d 902, 909 (2d Cir. 1981).

Response:

In the PSD Interpretive Memo, EPA cited Connecticut to support the notion that while a state is 

free to adopt air quality standards more stringent than required by the NAAQS or other federal 

law provisions, Congress precludes those stricter requirements from applying to other states. 

The Agency agrees with commenter 0095 that the circumstances involved in that case are not 

directly analogous, but, nevertheless, the case supports the inference that EPA has drawn from it. 

The Court concluded that “[n]othing in the Act, however, indicates that a state must respect its 

neighbor’s air quality standards (or design its SIP to avoid interference therewith) if those 

standards are more stringent than the requirements of federal law.” If a state is not required to 

respect the more stringent requirements of a neighboring State in developing its own 

implementation plan, then by inference, the state would also not be compelled to follow the more 

stringent standards. 
82

Chapter 6. Finding of Endangerment

6.1. Appropriateness of Triggering PSD Requirements from an 

Endangerment Finding

Comment: 

Twenty-nine industry commenters (0050, 0051, 0053, 0056, 0059, 0065, 0066, 0067, 

0068, 0070, 0071, 0073, 0074, 0076, 0081, 0083, 0085, 0086, 0089, 0090, 0092, 0096, 0098, 

0100, 0105, 0106/0107, 0108, 0109, 0118) and four state/local agency associations (0058, 0062, 

0091, 0102) agree with EPA’s proposed position that the “endangerment finding interpretation”

is not the proper interpretation of the phrase “subject to regulation” for purposes of PSD. One of 

the state/local agency associations (0062.1) added that an endangerment finding also does not 

give rise to permitting obligations under Title V of the CAA. Eight industry commenters (0067, 

0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) note that the Petition for Reconsideration also 

disavows the endangerment finding interpretation, and agrees with EPA’s analysis showing that 

the endangerment finding interpretation would be inconsistent with the other parts of the 

definition of “regulated NSR pollutant” at 40 CFR 52.21(b)(50)(i) and (ii). The industry

commenter (0085) adds that EPA’s conclusion in prior actions that endangerment finding alone 

does not trigger PSD should be reaffirmed in this action.

The commenters believe that subjecting the pollutant to PSD requirements, including 

imposition of BACT emission limits, before the Agency has taken regulatory action to establish 

emission controls would turn the CAA process on its head. The industry commenter (0067) 

similarly indicated that endangerment finding interpretation clearly undermines the orderly 

process created by Congress for regulation of new air pollutants. A state agency (0102) 

commenter (0102) adds that establishing controls without having a standard to be achieved leads 

to uncertainty in the permitting program.

Three industry commenters (0067, 0092, 0098) representing several groups of companies 

(industry), states that an interpretation of “subject to regulation” that would be applied to 

pollutants simply because they have been subject to an “endangerment finding” would be 

completely irrational and unworkable since an endangerment finding is only the first of many

necessary steps when developing NSPS under section 111 of the CAA and thus it would be 

premature and inappropriate to subject sources to PSD permitting requirements for pollutants 

after only undergoing the very first step in the NSPS development process.

One environmental groups commenter (0101) contends that an endangerment finding is 

sufficient to make a pollutant subject to regulation. In particular, they point to the December 

2009 endangerment and cause or contribute findings under section 202(a), and argue that 

because control requirements under section 202(a) are mandatory (e.g., inevitable) for a 

particular air pollutant (here, greenhouse gases) once EPA has made a positive endangerment 

finding for an air pollutant, at that point the air pollutant becomes “subject to” regulation.
83

Response:

EPA maintains its view that the terms of EPA’s regulations and the relevant provisions of 

the CAA do not compel EPA to conclude that an air pollutant becomes “subject to regulation”

when EPA finds that it endangers public health or welfare without contemporaneously 

promulgating control requirements for that pollutant. 

As explained in EPA’s Endangerment and Cause or Contribute Findings for GHGs under 

section 202(a) of the CAA, there are actually two separate findings involved in what is often 

referred to as an endangerment finding. See 74 FR 66496 (Dec. 15, 2009). The first finding 

addresses whether air pollution may reasonably be anticipated to endanger public health or 

welfare. The second finding involves an assessment of whether emissions of an air pollutant 

from the relevant source category cause or contribute to this air pollution. In this action, EPA 

uses the phrase “endangerment finding” to refer to EPA findings on both of these questions. The 

EPA interpretation described here applies to both findings regardless of whether they occur 

together or separately. 

As explained in the proposed reconsideration, and as several commenters noted, an 

interpretation of “subject to regulation” that does not include endangerment findings is consistent 

with the first three parts of the definition of “regulated NSR pollutant” in section 52.21(b)(50) of 

EPA’s regulations. Unlike the first three parts of the definition, an endangerment finding does 

not itself contain any restrictions (e.g., regarding the level of air pollution or emissions or use). 

Moreover, two parts of the definition involve actions that can occur only after an endangerment 

finding of some sort has taken place. In other words, other parts of the definition already bypass 

an endangerment finding and apply the PSD trigger to a later step in the regulatory process. 

Specifically, under the first part of that definition, PSD regulation is triggered by

promulgation of a NAAQS under CAA section 109. However, in order to promulgate NAAQS 

standards under section 109, EPA must first list, and issue air quality criteria for a pollutant 

under section 108, which in turn can only happen after EPA makes an endangerment finding and 

a version of a cause or contribute finding, in addition to meeting other requirements. CAA 

sections 108(a)(1) and 109(a)(2). Thus, if EPA were to conclude that an endangerment finding, 

cause or contribute finding, or both would make a pollutant “subject to regulation” within the 

meaning of the PSD provisions, this would read all meaning out of the first part of the “regulated 

NSR pollutant” definition because a pollutant would become subject to PSD permitting 

requirements well before the promulgation of the NAAQS under section 109. See 40 CFR 

52.21(b)(50)(i).

Similarly, the second part of the definition of “regulated NSR pollutant” includes any 

pollutant that is subject to a standard promulgated under section 111 of the CAA. Section 111 

requires EPA to list a source category, if in his or her judgment, “it causes, or contributes 

significantly to, air pollution which may reasonably be anticipated to endanger public health or 

welfare.” See CAA section 111(b)(1)(A). After EPA lists a source category, it promulgates 

NSPS for that source category. For a source category not already listed, if EPA were to list it on 

the basis of its emissions of a pollutant that was not previously regulated, and such a listing made 

that pollutant “subject to regulation” within the meaning of the PSD provisions, this chain of 
84

events would result in triggering PSD permitting requirements for that pollutant well in advance 

of the point contemplated by the second prong of the regulated NSR pollutant definition. See 40 

CFR 52.21(b)(50)(ii).

Furthermore, waiting to apply PSD requirements at least until the actual promulgation of 

control requirements that follow an endangerment finding is sensible. When promulgating the 

final regulations establishing the control requirements for a pollutant, EPA often makes decisions 

that are also relevant to decisions that must be made in implementing the PSD program for that 

pollutant. For example, EPA often does not make a final decision regarding how to identify the 

specific pollutant subject to an NSPS standard until the NSPS is issued, which occurs after both 

the endangerment finding and the source category listing. 

Finally, we disagree with commenters who argue that EPA must adopt an interpretation 

of its regulations that has PSD triggered by a positive endangerment finding. While such an 

interpretation may be available to EPA, given the ambiguity in the statute and the language 

“subject to” and “regulation,” it is not mandated by the statutory or regulated text. See section 

3.2.4 of this document for response to comments regarding “subject to regulation.” Section6.3 

below contains EPA’s response to comments regarding whether a final endangerment finding is 

“regulation.” In addition, as noted above, it would be inconsistent with other parts of the 

definition of “regulated NSR pollutant,” which are linked to action that can occur only after (or 

concurrently with) an endangerment finding is made. Moreover, also as noted above, relevant 

considerations for implementation of the PSD program often do not occur until the actual control 

requirements are finalized, and establishing a PSD trigger before this last step would deprive the 

PSD program of potentially important and necessary information. For these and other reasons 

provided in the final notice and this Response to Comments document, EPA reasonably 

interprets the regulations to include each pollutant subject to a regulation adopted by EPA under 

the Clean Air Act that requires actual control of emissions of that pollutant.

6.2. Endangerment Finding Must be Specific to Stationary Sources to 

Trigger PSD Requirements 

 

Comment:

One commenter (0068) suggests that EPA should make a “cause and contribute” finding, 

specific to stationary sources, before GHGs are considered “subject to regulation.” This 

commenter stated that the endangerment and cause or contribute finding process for vehicles, 

regulated under Title II of the CAA did not consider whether emissions from stationary sources 

also cause and contribute to the endangerment from GHGs. They assert that to comply with the 

APA and ensure constitutional safeguards, a “cause and contribute” process for stationary

sources, regulated under Title I of the CAA must be followed. 

Response:
85

Absent specific Congressional direction, we do not believe EPA is compelled to conduct 

a “cause or contribute” finding for stationary sources before applying PSD requirements to a 

pollutant that is otherwise subject to regulation under the Act. In contrast to the specific 

inclusion of a “cause and contribute” finding requirement in Section 202 of the CAA, Congress 

did not include a similar requirement within the definition of major emitting facility (section 169 

of the CAA) such that the term would be necessarily limited to only those stationary sources 

found to “cause or contribute.” Likewise, Congress did not include a “cause or contribute” 

requirement directly in Section 165. For reasons discussed in section 9.8 of this document, EPA 

is unable in this action to change its interpretation that the regulation of a pollutant under Title II 

of the Clean Air Act is sufficient to make a pollutant subject to regulation under the Act for PSD 

purposes. 

We disagree with commenter that the APA and constitutional safeguards compel EPA to 

make a “cause or contribute” finding for stationary sources before regulating stationary sources 

under the PSD provisions in Title I of the CAA. As discussed elsewhere in this document, the 

actual control interpretion applied by EPA ensures that there is an opportunity for public 

comment before EPA establishes controls on a pollutant that trigger PSD permitting 

requirements. 

6.3. Endangerment Finding as Prerequisite to Regulation or as a 

Regulation Itself

Comment:

One industry commenter (0105) that supports EPA’s preferred interpretation of “subject 

to regulation” states that although a finding of endangerment may be one of the first steps in 

EPA regulating a pollutant it can not trigger PSD; the finding in itself is not even a regulation 

and certainly does not impact or regulate the pollutant.

One commenter (0050) expresses that EPA acknowledges that the petition for 

reconsideration does not propose that a pollutant be considered “subject to regulation” upon a 

finding of endangerment. They express that EPA has repeatedly stated (as it does in the 

proposed endangerment finding for GHG) that it does not consider the endangerment finding as a 

“regulation” under the CAA. The commenter (0050) asserts that an endangerment finding has 

been construed as requiring regulation under the CAA, and not the regulation itself. 

One state/local agency association (0058) and one state agency commenter (0102) states 

that it seems self-evident that an endangerment finding does not by itself make a pollutant 

“subject to regulation” because it is a prerequisite to regulation. 

Industry commenters (0067, 0083, 0089, 0090, 0106/0107, 0108, 0109) note that the 

CAA sets out a process under which EPA first makes a determination whether emissions of a 

pollutant should be regulated (a determination that, under several provisions of the CAA, 

includes an endangerment determination) and later promulgates regulations regarding control of 
86

emissions of that pollutant. Industry commenters (0105, 0050) assert that an endangerment 

finding requires regulation under the CAA, but is not itself a regulation.

Response:

EPA agrees that the fact that an endangerment finding is not a codified regulation in the 

Code of Federal Regulations further supports the view that an endangerment finding does not 

make an air pollutant “subject to regulation.” The PSD Interpretive Memo explains that an 

endangerment finding should not be construed as “regulating” the air pollutant(s) at issue 

because there is no actual regulatory language applicable to the air pollutant at this time in the 

CFR. Rather, the finding is a prerequisite to issuing regulatory language that imposes control 

requirements. This is true even if the endangerment finding is a “rule” for purposes of 

administrative processes; that does not alter the fact that there is no regulation or regulatory text 

attached to the endangerment finding itself. Since an endangerment finding does not establish 

“regulation” within the common meaning of the term applied by EPA, we do not believe the 

CAA compels EPA to apply PSD requirements to a pollutant on the basis of an endangerment 

finding alone. 

As noted elsewhere in this document, the existence of a regulation or rule covering a 

pollutant in the Code of Federal Regulation is also not determinative of whether a pollutant is 

“subject to regulation” within the meaning of the PSD provisions in the Clean Air Act and EPA 

regulations.

6.4. Consistency with Supreme Court Ruling

Comment:

Industry commenters (0085, 0070, 0107,0105, 0050, 0067, 0092, 0098) and one 

state/local agency association commenter (0058) and two state agency commenter (0102,0091) 

state that an endangerment finding does not by itself make a pollutant “subject to regulation”

because it is a prerequisite to regulation. Commenter (0107) notes that the Supreme Court 

acknowledged the difference between a finding of endangerment and regulation in 

Massachusetts v. EPA, in which Justice Stevens, writing for the majority, observed that while the 

judgment to find that an air pollutant “causes(s) or contribute(s) to air pollution which may

reasonably be anticipated to endanger public health or welfare (cite omitted),” is not a “roving 

license to ignore the Agency’s responsibility to regulate, EPA “has significant latitude as to the 

manner, timing, content and coordination of its regulations with those of other agencies.” The 

commenter (0107) believes that this shows that the Supreme Court clearly distinguished between 

a finding of endangerment and ensuing regulations which subject pollutants to control. 

Response:

We agree with commenters that EPA’s interpretation is also consistent with the Supreme 

Court’s decision in Massachusetts. In its decision, the Court acknowledged that EPA “has 

significant latitude as to the manner, timing, content and coordination” of the regulations that 
87

would result from a positive endangerment finding under section 202(a). See 549 U.S. at 532. 

Just as EPA has discretion regarding the timing of the section 202(a) control regulations that 

would flow from an endangerment finding under that section, it also has some discretion 

regarding the timing of the triggering of PSD controls that the statute requires based on those 

section 202(a) regulations. EPA has reasonably determined that PSD controls should not 

precede any other control requirements. 
88

Chapter 7. Granting of Section 209 Waiver

7.1. Granting Waiver of State Preemption

Comments: 

As summarized below, a majority of commenters agreed with EPA’s proposal to find that 

neither the CAA nor the Agency’s PSD regulations require that EPA’s grant of a waiver of 

preemption to state standards under section 209 of the CAA result in the application of the PSD 

program to pollutants subject to those state standards. These commenters agreed that the 

Agency’s decision to grant a section 209 waiver to the state of California to establish its own 

GHG emission standards for new motor vehicles does not trigger PSD requirements for GHGs. 

While two commenters disagreed with that proposal, EPA has not been persuaded to change its 

proposed position based on these comments, as explained below.

Twenty-seven industry commenters (0050, 0051, 0053, 0056, 0059, 0065, 0067, 0068, 

0070, 0071, 0073, 0074, 0076, 0079, 0081, 0083, 0085, 0086, 0089, 0090, 0096, 0097, 0105, 

0106/0107, 0108, 0109, 0118) and two state/local agency association (0058, 102) agree with 

EPA’s position that a decision to grant a CAA section 209 waiver to the State of California to 

adopt and enforce establish GHG emission standards for new motor does not trigger PSD 

requirements for GHGs. Most of the industry commenters state that California standards are not 

regulations under the CAA, and therefore do not trigger PSD for pollutants regulated under 

California standards.

Eight of the industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 

0109) expressly concur with EPA’s analysis and conclusions regarding this issue as presented in 

the proposed PSD Interpretation. One of these commenters (0089) also noted that his 

organization had submitted detailed comments on this issue in comments on EPA’s proposed 

reversal of its 2008 denial of California’s request for a section 209 waiver to enforce state 

regulatory limits on GHG emissions from new motor vehicles, which can be found in Docket ID 

No. EPA-HQ-OAR-2006-0173-8960.1.

One industry commenter (0085) supports EPA’s reasoning and added that it is wellestablished that if Congress intends to accord a state law the status of a federal law (or allow an 

agency like EPA to do so), it must state its intentions clearly. The commenter (0085) asserts that 

Congress made no such plain statement here; therefore section 209(b) of the Act does not 

convert an EPA-approved state emissions standard into federal law.

One industry commenter (0118) and one commenter representing several groups of 

companies (industry) (0086) agrees with EPA’s position that a decision to grant a CAA section 

209 waiver to the State of California to establish GHG emission standards for new motor does 

not trigger PSD requirements for GHGs. This commenter provides detailed analyses of the 

statutory text and Congressional intent to support EPA’s position.
89

One industry commenter (0105) that supports EPA’s preferred interpretation of “subject 

to regulation” states that the granting of a section 209 waiver allows a state to develop its own 

regulations, but does not in itself regulate any pollutant.

One industry commenter (0107) supports the reasoning EPA provided when rejecting the 

SIP interpretation in the proposal. The commenter added that this was a state choice and for the 

same reasons that Delaware’s SIP particulars do not establish that a pollutant is subject to federal

regulation, California law and policy does not extend to other jurisdictions. The industry

commenter (0107) asserts that under our federalist system, not only may a state regulate a 

pollutant that is not regulated elsewhere in the country under its autonomous authority, but the 

provision of the CAA allowing EPA to grant a waiver from a national vehicle emissions program 

to California does not subject other sources to a national emission control requirement.

A couple of the industry commenters (0050, 0070) opine that granting a waiver merely 

removes a barrier to allowing a state to set its own standard in a particular area, and only applies in 

and to the state that requests it, and should not be construed as applying or creating a federal 

standard. 

One industry commenter (0079) states that EPA’s decision to grant a CAA section 209 

waiver to the State of California to establish GHG emission standards for new motor does not 

trigger nation-wide PSD requirements for GHGs for the same reasons that adoption of such a 

standard in a state SIP does not trigger those requirements. 

One commenter (0097) states that regulation upon issuance of a section 209 waiver is 

inappropriate because the granting of a waiver does not establish any federal emission standards 

or other federal requirement, and the action of one state or political jurisdiction should not direct 

the actions of other states or jurisdictions.

One state/local agency association (0058) notes that CAA section 209(b)(3) provides that 

where a state is subject to rules which have been granted a waiver, “compliance with such State 

standards shall be treated as compliance with applicable Federal standards for purposes of this 

subchapter,” but does not say that such state standards actually become the federal standards, 

which would have been easy to say had it been Congress’s intent. The commenter (0058) adds 

that a contrary interpretation would mean that California had the power to dictate what pollutants 

are subject to PSD throughout the entire nation, which could not have been the intent of 

Congress in adopting the waiver provision.

One commenter (0101) notes several instances that support GHGs as already being 

“subject to regulation,” including EPA’s authorization for California to implement its own CO2

emissions limitations under section 209(b) of the Act, 42 U.S.C. §7509(b). See California State 

Motor Vehicle Pollution Control Standards; Notice of Decision Granting a Waiver of CAA 

Preemption for California’s 2009 and Subsequent Model Year Greenhouse Gas Emission 

Standards for New Motor Vehicles; 74 FR at 32744 (July 8, 2009). The commenter argues that 

this authorization immediately allowed California and 10 other states to “regulate” CO2 under 

the Act. In this case, “regulation” entails not only the control, but the drastic curtailment of CO2

emissions. The commenter (0101) also argues that throughout years of litigation, EPA has 

vehemently insisted that California is prohibited from controlling GHG emissions unless EPA 
90

first issues a “regulation” (the waiver) permitting those emissions controls. This commenter 

states that EPA has now issued the waiver, and thus stopped claiming, as it did in the proposed 

reconsideration notice, that it has not actually controlled these emissions.

Another environmental organization commenter (0099) contends that even under the 

“actual control” theory, a waiver under section 209 triggers BACT. The EPA authorized the 

state of California to implement its motor vehicle GHG emission standards pursuant to section 

209(b) of the CAA, 42 U.S.C. §7543(b), on July 8, 2009. See 74 FR 32744. As a result, CO2

was immediately subject to emission limits not only in California, but also in ten of the 14 other 

states that have imposed these same standards pursuant to their independent authority under 

Section 177 of the Act, 42 U.S.C. §7507. Therefore, according to the commenter, even under 

EPA’s unduly narrow interpretation of the phrase “subject to regulation” in CAA section 

165(a)(4) to mean “subject to actual control of emissions,” CO2 is now “subject to regulation”

and, accordingly, CO2 emissions from major emitting facilities are now unambiguously subject 

to BACT. 

The commenter (0099) adds that two federal courts have found that these very CO2 

emission limits are indeed federal CAA standards (citations provided with comment). When 

confronted with these two decisions, EPA turns again to its touchstone of congressional 

confusion, opining that what those courts actually held was that Congress intended that such 

standards be federal regulations under the CAA for purposes of Energy Policy and Conservation 

Act, but nonetheless they remain state standards for purpose of the CAA. See 74 FR 51544 n. 7. 

EPA has made its reluctance to have states determine what additional pollutants -- even ones 

subject to “actual control” -- are “subject to regulation” clear in its discussion of the Delaware 

SIP. Id. at 51542-43. But EPA’s reluctance should not stand in the way of clear congressional 

intent in the case of California’s emission standards. In 1970, Congress specifically carved out a 

regulatory role for California vehicle emission standards under the CAA, and over the years has 

endorsed and expanded that role by allowing other states to adopt California standards. Given 

how Congress has enshrined this role in the Act, it is hard to see how pollutants regulated under 

these provisions are somehow not regulated “under the Act.” (Even more telling is the fact that 

each time California has chosen to regulate a pollutant under this provision, EPA has followed 

suit. (e.g., for carbon monoxide (CO), Nitrogen Oxide (NOx), hydrocarbons, and evaporative 

emissions), the exact same scenario as with CO2. The commenter adds that apropos of these 

specific standards, EPA’s position is doubly unfounded, because these standards are an integral 

part of EPA’s own proposed GHG vehicle emission standards. In fact, by agreement between 

California and EPA, EPA’s has proposed regulations that explicitly incorporate these standards 

in order to create “a single, nationwide program to reduce light duty vehicle GHG emissions.”

See 74 FR 49460. Commenter (0091) concludes that EPA should interpret pollutants “subject to 

regulation” in both CAA §165(a)(4) and 40 CFR 52.21(b)(50)(iv) (a) to include pollutants that 

are regulated by California and other states pursuant to §§177 and 209(b) of the CAA.

Response:

EPA is affirming its position that an Agency decision to grant a waiver to a state under 

section 209 of the CAA does not make the PSD program applicable to pollutants that may be 

regulated under state authority following a grant of such a waiver. For the reasons discussed 
91

below, the granting of a waiver does not make the pollutants that are regulated by a state after 

obtaining a section 209 waiver into pollutants regulated under the CAA. Furthermore, EPA is 

also affirming the position that PSD requirements are not applicable to a pollutant in all states 

when a handful of states besides the one obtaining the waiver adopt identical standards under 

section 177 of the CAA that are then approved into state SIPs by EPA. EPA agrees with the 

majority of commenters on this issue that this final interpretation is consistent with the statutory

and regulatory structure of the waiver program and is also consistent with the position that we 

previously explained to Congress. As the Administrator stated last year, “a decision to grant a 

waiver under section 209 of the Act removes the preemption of state law otherwise imposed by 

the Act. Such a decision is fundamentally different from the decisions to establish requirements 

under the CAA that the Agency and the [EAB] have considered in interpreting the provisions 

governing the applicability of the PSD program.” Letter from Lisa P. Jackson, EPA 

Administrator, to Senator James M. Inhofe (March 17, 2009). 

With regard to the commenters that disagreed with EPA’s proposed position on the 

section 209 waiver provisions, and assert that EPA’s granting of the waiver results in “actual 

control,” EPA has not been persuaded to change its proposed position based on these comments. 

EPA does not disagree that the regulations promulgated by the state pursuant to the waiver will 

require control of emissions and thus constitute “regulation” of GHGs under the meaning applied 

by EPA. However, the principal issue here is whether this regulation occurs under the authority 

of the Clean Air Act (i.e., “under the Act.”). As explained in our reconsideration notice, a 

waiver granted under CAA section 209(b)(1) simply removes the prohibition found in section 

209(a) that forbids states from adopting or enforcing their own standards relating to control of 

emissions from new motor vehicles or new motor vehicle engines. Thus, the grant of the waiver 

does not lead to regulation “under the Act” because it simply allows California to exercise the 

same authority to adopt and enforce state emissions standards for new motor vehicles that 

California could have exercised without the initial prohibition in section 209(a). 

Consistent with a number of the comments that support our position and reasoning with 

regard to the section 209 waiver, we note that a waiver constitutes a withdrawal of federal 

preemption that allows a state to develop its own state standards to regulate vehicle emissions; 

the waiver does not transform the pollutants regulated by these state standards into pollutants 

regulated under the CAA for purpose of sections 165 and 169. As a number of the comments 

summarized above note, there is nothing in the legislative history that supports a conclusion that 

Congress intended section 209 waivers to result in application of PSD requirements. The 

opposing comments have not convincingly articulated a mechanism through which EPA’s action 

granting the waiver in fact requires control of emissions (as opposed to the states action under 

state law). If EPA granted the waiver alone and the state ultimately decided not to implement its 

regulation, there would be no control requirement in effect under the CAA. 

As we explained in our reconsideration notice, we also find it instructive that 

enforcement of any emission standard by the State after we grant a section 209 waiver would 

occur pursuant to state enforcement authority, not federal authority. EPA would continue to 

enforce the federal emission standards we promulgate under section 202. EPA does not enforce 

the state standard. EPA only conducts testing to determine compliance with the federal 

standards promulgated by EPA, and any enforcement would be for violation of EPA standards, 
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not the state standards. As noted in some of the comments, CAA section 209(b)(3) provides that 

where a state has adopted standards that have been granted a waiver “compliance with such State 

standards shall be treated as compliance with applicable Federal standards for purposes of this 

subchapter,” but does not say that such state standards actually become EPA standards. A 

review of the relevant legislative history reveals nothing that would indicate that Congress 

intended for such state standards to generally become EPA standards under the CAA when it 

gave EPA the authority to grant a section 209 waiver, especially in light of the fact that if a 

manufacturer fails to comply with a state standard adopted pursuant to a section 209 waiver, 

EPA only has authority to bring an enforcement action if the EPA standards are violated. Simply

put, while compliance with a state standard adopted pursuant to a section 209 waiver may be 

treated as compliance with the EPA standard, violation of the state standard is not enough to 

show violation of the EPA standard. Accordingly, we find the absence of legislative history 

supporting the contrary position and the language in section 209(b)(3) instructive, as they

indicate that Congress clearly recognized the co-existence of the EPA and state standards. This 

shows Congress did not intend that state regulations replace, or transform state standards into 

EPA regulations “under the Act.” 

Contrary to the commenter’s assertions, this position is also consistent with the two 

federal court decisions noted in the comments. As EPA explained in the preamble to the 

proposed reconsideration, these Courts did not examine whether California standards were EPA

standards under the specific provisions of the CAA. Rather, those decisions turned on an

interpretation of the corporate average fuel economy (CAFE) standard setting and preemption 

provisions found in the Energy Policy and Conservation Act (EPCA). These courts determined 

that the California GHG emissions standards are a type of “other motor vehicle standards of the 

Government” as that term is used in EPCA such that NHTSA had to consider the effect of these 

state standards on fuel economy in determining the appropriate CAFE standard. The Court 

relied on legislative history indicating Congress specifically intended to include California 

emissions standards in this EPCA provision for setting CAFE standards, and NHTSA had 

historically treated California emissions standards as included in this provision. Based on this 

legislative history and past practice, the Court concluded that California’s GHG emissions 

standards are not included in the scope of EPCA’s preemption provision. Nothing in the 

comments has persuaded EPA to change its position that these determinations apply only to these 

EPCA preemption provisions and do not apply to an interpretation of very different provisions, 

sections 165 and 169 of the CAA. EPA continues to believe that these courts’ interpretations of 

an EPCA provision did not change the California standards into EPA standards under the CAA 

regulatory program, and thus should not trigger PSD permitting.

It is important to note that in this action EPA is not interpreting EPCA, the standard 

setting or preemption provisions of EPCA, or the interplay between GHG standards adopted by

EPA under section 202(a) of the CAA, state GHG standards that receive a waiver under section 

209(b) of the CAA, and consideration by NHTSA of “other motor vehicle standards of the 

Government” under EPCA. While those issues were before the District Courts discussed by

commenters, EPA is interpreting a different and separate provision, section 165, and the 

relationship of that specific CAA provision and state GHG standards that receive a waiver under 

CAA section 209(b). That is a very different issue than the EPCA issues before the District 

Courts, and EPA is not in any way intending to imply or indicate that the interpretation 
93

announced today is based on or is in any way related to the very different issues considered in 

those District Court cases. 

Moreover, EPA is not aware of any position in previous litigation that is inconsistent with 

this position, and the commenter fails to site any specific litigation, statements, or positions to 

the contrary. While EPA agrees that it was required to grant the section 209 waiver before 

standards regulating GHGs emissions from new motor vehicles could be enforced in California, 

EPA did not assert that the grant of such a waiver would constitute “regulation under the Act” or 

impose control of GHG emissions pursuant to federal emissions standards. Rather, as explained 

above, EPA’s grant of the section 209 waiver simply removed a federal prohibition and thereby

allowed California to impose state regulations that control GHG emissions pursuant to state law.

Finally, EPA finds no merit in commenter’s assertion that GHGs are clearly “subject to 

regulation” as a matter of the federal PSD program after the grant of the section 209 waiver 

because the California standards are an integral part of EPA’s own proposed GHG emission 

standards for light duty vehicles (LDV) or because there is an asserted agreement between EPA 

and California regarding such integration. At the outset, the “agreement” to which the 

commenter is referring are several individual commitments made by various vehicle 

manufacturers, trade associations, and California that are conditional in nature. There is no 

“agreement” between these parties. Instead each of these commitment letters states the 

intentions of the signatory and states that if certain things occur then they will take certain 

actions. Many of the conditions relate to future actions that were under consideration by EPA, 

such as the then pending reconsideration of the California waiver and EPA’s intention to propose 

GHG standards for LDV. EPA made no “commitments” or “agreement” and had no obligation 

to take any action. Instead EPA announced that it planned to conduct a notice and comment 

rulemaking proposing GHG emissions from LDV. The various parties announced their support 

for such a proposed rule, and their intention to take various actions if EPA in fact finalized such 

GHG standards. Nothing in the actions by these various parties somehow transformed or 

changed the legal effect of a waiver of emissions standards under section 209. 

Moreover, EPA has not incorporated California’s GHG standards into our proposed LDV 

Rule. EPA’s proposed standards are in fact very different from the California standards, and do 

not incorporate or duplicate California’s regulations. EPA did not propose to adopt the 

California standards as federal standards in the LDV Rule. EPA’s actions in adopting such a 

LDV Rule would not have any relevance to whether the prior grant of the 209 waiver made 

GHG “subject to regulation” under federal law. In fact, promulgation of an EPA standard in the

LDV Rule would itself establish a federal “regulation” of GHG emissions under the CAA, which 

was not achieved through issuance of the waiver. 

Furthermore, as explained in the proposed LDV Rule, once EPA’s rule is promulgated, 

California will make a final decision on whether it will accept a manufacturer’s compliance with 

the federal GHG standards as compliance with the California standards. California’s acceptance 

of this compliance approach under California’s regulations is not because California’s standards 

are incorporated into the federal standards but would be based on California’s view that the 

federal standards would achieve comparable performance to the California standards. As 

discussed elsewhere in this RTC, EPA agrees that issuance of final GHG emissions standards in 
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a LDV Rule will make GHGs subject to regulation under the Act. However, we emphasize that 

this result would occur regardless of whether California was granted a section 209 waiver for 

GHG regulations and regardless of how standards and regulations in the California state 

program take into account any federal GHG standards established in the LDV Rule. 

7.2. Adoption of California Standards by Other States

Comment:

The commenter (0099) states that the CO2 emission limits are in effect not only in 

California, but also in ten other states that have also promulgated these standards for Model 

Years 2009 or 2010: Connecticut, Maine, Massachusetts, New Jersey, New York, Oregon, 

Pennsylvania, Rhode Island, Vermont, and Washington. Each of these states adopted the CO2

Emission Limits pursuant to section 177 of the CAA, 42 U.S.C. §7507, which expressly grants 

other states the authority to adopt California’s vehicle emission standards. Commenter (0099) 

notes that states have been exercising their section 177 authority for almost two decades; the first 

to do so was New York, adopting California’s original Low Emission Vehicle standards in 1992, 

and adds that in three more states and the District of Columbia, these standards will come into 

effect in subsequent model years. Once incorporated into a SIP, the commenter notes that 

numerous provisions authorize both EPA and citizens to enforce such requirements, e.g., 42 

U.S.C. §7413; 42 U.S.C. §7604(a)(1), (f)(3). Because the CO2 Emission Limits are no different 

than any other vehicle emission standards that states have been adopting and enforcing under the 

CAA for decades, it is clear that CO2 is now “subject to regulation” under the CAA. 

Response:

EPA has also concluded that the adoption of identical standards by several states under 

section 177 does not make a pollutant covered by those standards “subject to regulation under 

the Act” in all states. Like section 209, section 177 only grants States authority to regulate under 

state authority by removing federal preemption. Adoption of California standards by other States 

does not change the fact that those standards are still state standards enforced under state law and 

federal law is approved in a SIP. While EPA agrees that when a state adopts alternate vehicle 

standards into its SIP pursuant to section 177, and EPA approves the SIP, these standards 

become enforceable by EPA and citizens under the CAA, we do not agree that this compels an 

interpretation that any pollutant included in an individual state SIP requirement becomes “subject 

to regulation” in all states under the CAA. As discussed in response to comments above, EPA 

rejects the theory that a regulation of a pollutant in one or more states in an EPA-approved 

implementation plan necessarily makes that pollutant subject to regulation in all states. Such an 

approach is inconsistent with the fundamental principle of cooperative federalism embodied in 

the CAA. 
95

Chapter 8. Timing of Regulation

EPA received many comments on the appropriate interpretation of “subject to regulation”

as it relates to the actual date by which PSD permitting requirements will be triggered. As 

discussed more fully below (and also in Chapter 9 of this RTC), those comments suggested 

trigger dates ranging from promulgation of the underlying actual control regulation (0099) to 

more than two years after that event (0067, 0073). Overall, many commenters agreed with 

EPA’s proposal to change from an interpretation of “subject to regulation” under which PSD 

permitting requirements would become applicable upon the promulgation date of the underlying 

“actual control” regulation to an interpretation in which PSD requirements would become 

applicable on the effective date of that regulation. However, a majority of the commenters 

argued that EPA had improperly limited the proposal of “effective date” to the end of the 60 day

review period afforded by the Congressional Review Act (CRA). Instead, they argued that a 

more natural reading of “subject to regulation – as supported by the CAA, various policy and 

implementation concerns, and the CRA itself – was that the underlying “actual control”

regulation does not become effective until it “takes effect” for the sources affected by that 

regulation. 

The specific basis for the various interpretations and trigger dates, as provided for in the 

comments, will be discussed in more detail below. However, we note that in arguing for a 

specific interpretation of the triggering date, many commenters discussed how various 

implementation concerns supported that interpretation. Some of those concerns are summarized 

below in order to provide the context in which the specific timing interpretation comments were 

provided, but we primarily address the various implementation concerns in Chapter 9 of this

RTC. 

8.1. Effective Date of Control Requirements

8.1.1. Legal analysis for the “takes effect” reading for the effective date 

interpretation:

Comments: 

Eight of the industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 

0109) agree with EPA’s statement in the proposed PSD Interpretation that PSD requirements 

should not be considered to apply to emissions of a pollutant before an actual emission control 

regulation for that pollutant has become “final and effective.” However, the commenters 

believes that such a regulation would have to have become actually effective, in the sense that 

actual legal obligations created by the regulation have become currently applicable for regulated 

sources and are no longer merely prospective obligations, before that regulation could make a 

pollutant subject to actual control and thus be “subject to regulation” for PSD purposes. The 

commenters therefore state that if EPA promulgates its proposed motor vehicle GHG rules in 

final form, those rules could not have any PSD triggering effect before the beginning date of the 
96

first model year to which those rules apply (i.e., October 1, 2011). (A second industry

commenter (0067) concurs with this interpretation of when the motor vehicle rules should be 

considered to “become effective.”) The commenters provide an extensive legal analysis of this 

issue, which is presented below.

The industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) state 

that the date a regulation becomes “final and effective” and the date it actually “takes effect”

may differ, and that the “take effect” date may occur after the “final and effective” date. See 

Liesegang v. Sec’y of Veterans Affairs, 312 F.3d 1368, 1374-75 (Fed. Cir. 2002) (recognizing 

that the two dates are not necessarily the same and stating that “[t]he ordinary meaning of ‘take 

effect’ is ‘[t]o be in force; go into operation’” (quoting Black’s Law Dictionary at 1466 (7th ed. 

1999)), amended on reh’g in part on other grounds, 65 Fed. Appx. 717 (Fed. Cir. 2003). The 

commenters argue that a regulation may “take effect” subsequent to its stated “effective date”

where it has been published in final form but does not require immediate implementation by the 

agency or compliance by regulated entities. The commenters note that in this situation, a 

regulated entity has no immediate compliance obligations and cannot be held in violation of the 

regulation until such a legal obligation becomes applicable to them on the “takes effect” date. 

See, e.g., Natural Res. Def. Council v. Abraham, 355 F.3d 179, 201-02 (2d Cir. 2004) (“takes 

effect” means the point at which the “rule becomes applicable,” a point that may not be reached 

until “several years” after the final rule is issued); Liesegang, 312 F.3d at 1376 (agency must 

wait for rule to become operative before it can implement it); cf. Natural Res. Def. Council v.

EPA, 22 F.3d 1125, 1137-39 (D.C. Cir. 1994) (recognizing that where a provision of the CAA 

(section 182(c)(3)(B)) required a program of emission controls to “take effect” by a given date, it 

did not thereby require the program to “be fully implemented” by that date).

The industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) went 

on to state that under the CRA, a major rule does not necessarily “take effect” on the date that the 

rule or authorizing statute states as the “effective date.” See Abraham, 355 F.3d at 201-02 (“take 

effect” under the CRA signifies when a rule becomes applicable, even if that occurs several years 

after the rule is prescribed in final form); Liesegang, 312 F.3d at 1375 (recognizing that the CRA 

affects the date when a rule is operative, i.e., enforceable). 

The industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) note 

that section 202(a)(2) of the CAA uses the “takes effect” formulation, stating that a regulation 

under that provision “shall take effect after such period as the Administrator finds necessary to 

permit the development and application of the requisite technology, giving appropriate 

consideration to the cost of compliance within such period” (emphasis added). Thus, the 

commenters believe, even if EPA issues final motor vehicle GHG rules by the end of March 

2010, those standards would not take effect on that date or 60 days after publication of those 

rules in the Federal Register because EPA is both authorized and, given the mandatory “shall” in 

section 202(a)(2), required to ensure that the rules’ requirements will not “take effect” until after 

motor vehicle manufacturers have had an adequate period of time to develop and apply the 

technology necessary to meet those requirements, giving appropriate consideration to 

compliance costs within that lead-time period. See Am. Motors Corp. v. Blum, 603 F.2d 978, 

981 (D.C. Cir. 1979) (EPA’s Administrator is “bound by section 202(a)(2) to allow such lead 

time as he finds necessary to satisfy the requirements of section 202(a)(2).”). 
97

The industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) point 

out that the proposed motor vehicle GHG rules do not require actual compliance until model year 

2012, which does not begin until October 1, 2011; thus, by the very nature of EPA’s proposed 

motor vehicle rules, and consistent with section 202(a)(2), the rules’ compliance obligations 

would begin several months later than 60 days after the rules’ Federal Register publication date. 

The commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) believe that it would 

make no sense for EPA to subject stationary sources to immediate regulation of GHG emissions, 

based on a regulation promulgated for automobile manufacturers, at a time when the regulation 

is not yet even operative for those primarily regulated entities.

Based on points discussed above, the industry commenters (0067, 0083, 0089, 0090, 

0096, 0106/0107, 0108, 0109) indicate that EPA should clarify that PSD for GHGs could not be 

triggered by EPA’s motor vehicle GHG rules before those rules “take effect” within the meaning 

of section 202(a)(2). The commenter states that this conclusion not only is required by the clear 

implication of the PSD provisions’ “subject to regulation” language, as EPA’s statements in the 

proposed PSD Interpretation reflect, but also is supported by compelling policy reasons: major 

stationary sources would need time to prepare to meet any newly applicable PSD compliance 

obligations in a cost-effective way, and EPA and state permitting authorities would need time to 

prepare to satisfy their permitting obligations. Other industry commenters (0067, 0073) concur 

with this policy rationale and added that the Agency needs time to develop its own technical 

capability and provide guidance to the regulated community and permitting authorities.

Response:

EPA has reviewed the federal court decisions and other arguments presented in the 

comments above, and we agree that they support the idea that the date a regulation becomes 

“final and effective” and the date it actually “takes effect” may differ. The federal court 

decisions referenced in the comments that suggest the date that the terms of a regulation become 

effective can take more than one form. In one case involving the Congressional Review Act 

(CRA), the United States Court of Appeals for the Federal Circuit observed that the date a 

regulation may “take effect” in accordance with the CRA is distinct from the “effective date” of 

the regulation. See Liesegang v. Sec’y of Veterans Affairs, 312 F.3d 1368, 1374-75 (Fed. Cir. 

2002), amended on reh’g in part on other grounds, 65 Fed. Appx. 717 (Fed. Cir. 2003). In this 

opinion, the court observed that “[t]he ordinary meaning of ‘take effect’ is ‘[t]o be in force; go 

into operation.’” Id. at 1375 (quoting Black’s Law Dictionary at 1466 (7th ed. 1999). Based on 

this, the court reasoned that the CRA does not “change the date on which the regulation becomes 

effective” but rather “only affects the date when the rule becomes operative.” Id. In another 

case, the Second Circuit Court of Appeals described a distinction between the date a rule may

“take effect” under the CRA, the “effective date” for application of the rule to regulated 

manufacturers, and the “effective date” for purposes of modifying the CFR. See Natural 

Resources Defense Council v. Abraham, 355 F.3d 179, 202 (2d Cir. 2004).

The Office of Federal Register (OFR) uses the term “effective date” to describe the date 

that amendments in a rulemaking document affect the current CFR. See Federal Register 

Document Drafting Handbook, at p. 2-10 (Oct. 10, 1998). However, OFR draws a contrast 
98

between such a date and the compliance or applicability date of a rule, which is described as “the 

date that the affected person must start following the rule.” Id. at 2-11. Thus, the “effective 

date” of a regulation is commonly used to describe the date by which a provision in the CFR is 

enacted as law, but it is not necessarily the same as the time when provision enacted in the CFR

is operative on the regulated activity or entity. The latter may be described as the “compliance,”

“applicability,” or “takes effect” date. 

The terms of the CAA also recognize a similar distinction in some instances. Section 

112(i)(3)(A) of the CAA provides that “after the effective date of any emissions standard, 

limitation or regulation promulgated under this section and applicable to a source, no person may

operate such source in violation of such standard, limitation, or regulation except, in the case of 

an existing source, the Administrator shall establish a compliance date or dates for each category

or subcategory of existing sources, which shall provide for compliance as expeditiously as 

practicable, but in no event later than 3 years after the effective date of such standard.” Another 

example is section 202 of the Act, which is discussed in more detail in section 9.2 below. 

Another formulation may be found in Section 553(c) of the APA (5 U.S.C. §553(c)), 

which provides, with some exceptions, that “[t]he required publication or service of a substantive 

rule shall be made not less than 30 days before its effective date.” The APA does not define the 

term “effective date” or make precisely clear whether it is referring to the date a regulation has 

the force of law or the date by which a regulatory requirement applies to a regulated entity or 

activity. The APA also separately recognizes the concept of finality of Agency action for 

purposes of judicial review. See 5 U.S.C. §704. 

In the October 7, 2009 notice, EPA did not clearly distinguish between the various forms 

of the date when a regulatory requirement may become effective. One commenter observed that 

the EPA analysis in the proposed reconsideration appeared to blur the distinction between the 

“effective date” set by EPA and the date that Congress allows a regulation to become effective 

under the CRA. EPA in fact discussed all of these concepts in its notice, with part of the 

discussion focused on the date a regulation becomes “final” and “effective” and a part on when a 

regulation may “take effect” under the CRA. EPA viewed these forms of the date when a 

regulation becomes “effective” to be essentially the same, but the case law suggests that 

administrative agencies do not necessarily need to harmonize the date that regulatory

requirements take effect with the “effective date” of a regulation, meaning the date a regulation 

has the force of law and amends the CFR. Since these are distinct concepts, the effective date of 

a regulation for purposes of amending the CFR may precede the date when a regulatory

requirement “takes effect” or when a regulated entity must comply with a regulatory

requirement. A regulation may “take effect” subsequent to its stated “effective date” where it 

has been published in final form but does not require immediate implementation by the agency

or compliance by regulated entities. 

The key issue raised by EPA in the October 7, 2009 notice was determining which date 

should be determined by EPA to be the date when a pollutant becomes “subject to regulation”

and, thus, the date when the requirements of the PSD permitting program apply to that pollutant. 

In recognition of the distinction between the “effective date” of the regulation for purposes of 

amending the CFR and the point at which a regulatory restriction may “take effect,” EPA has 
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considered whether it is permissible to construe section 165(a)(4) and 169(3) of the CAA to 

mean that a pollutant becomes “subject to regulation” at the point that a regulatory restriction or 

control “takes effect.” In the October notice, EPA observed that the use of “subject to” in the 

Act suggests that PSD requirements are intended to be triggered when those standards become 

effective for the pollutant. We also said that no party is required to comply with a regulation 

until it has become final and effective. Prior to that date, an activity covered by a rule is not in 

the ordinary sense “subject to” any regulation. Regardless of whether one interprets regulation 

to mean monitoring or actual control of emissions, prior to the effective date of a rule there is no 

regulatory requirement to monitor or control emissions.

The same reasoning applies to the date that a regulation “takes effect,” as that term is 

used in the judicial decisions described above. Regulated entities are not required to comply

with a regulatory requirement until it takes effect. Prior to the date a regulatory requirement 

takes effect, the activity covered by a rule is not in the ordinary sense subject to any regulation. 

As discussed in the PSD Interpretive Memo, as used in the context of the PSD provisions 

in EPA regulations and the CAA, EPA interprets the term “regulation” in the context of sections 

165(a)(4) and 169 of the CAA to mean the act or process of controlling or restricting an activity. 

This interpretation applies a common meaning of the term regulation reflected in dictionaries. 

Thus, EPA agrees with the commenters above that the term “subject to regulation” used 

in both the CAA and EPA’s regulations may be construed to mean the point at which a 

requirement to control a pollutant takes effect. The CAA does not necessarily preclude 

construing a pollutant to become subject to regulation upon the promulgation date or the date 

that a regulation becomes final and effective for purposes of amending the CFR or judicial 

review. However, EPA has been persuaded by public comments that the phrase “subject to 

regulation” may also be interpreted to mean the date by which a control requirement takes effect.

Indeed, EPA has concluded that the latter interpretation is more consistent with the actual 

control interpretation reflected in the PSD Interpretive Memo. As one commenter observed, a 

regulation would have to have become actually effective, in the sense that actual legal 

obligations created by the regulation have become currently applicable for regulated entities and 

are no longer merely prospective obligations, before that regulation could make a pollutant 

subject to actual control. Another commenter noted that a regulated entity has no immediate 

compliance obligations and cannot be held in violation of the regulation until a legal obligation 

becomes applicable to them on the “takes effect” date. Thus, based on this reasoning, EPA has 

decided that it will construe the point at which a pollutant becomes “subject to regulation” within 

the meaning of section 52.21(b)(50)(iv) of EPA’s regulations to be when a control or restriction 

is operative on the activity regulated. EPA agrees with commenters that there is generally no 

legally enforceable obligation to control a pollutant when a regulation is promulgated or, in some 

instances, even when a regulation becomes effective for some purposes.

Thus, in this final action, EPA chooses to adopt an interpretation of “subject to 

regulation” in section 52.21(b)(50)(iv) under which a pollutant becomes a “regulated NSR 

pollutant at the time when a control or restriction on emissions of the pollutant takes effect or 

becomes operative on the regulated activity. 
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EPA has also concluded that it is appropriate to extend the reasoning of this interpretation 

across all parts of the definition of the term “regulated NSR pollutant.” The reasoning described 

above is equally applicable to the regulation of additional pollutants under the specific sections 

of the Act delineated in the first three parts of the definition of “regulated NSR pollutant.” 

8.1.2. General comments on the effective date interpretation:

Comment:

Seventeen commenters (0050, 0051, 0053, 0064, 0067, 0069, 0070, 0074, 0081, 0083, 

0089, 0090, 0096, 0105, 0106/0107, 0108, 0109) believe the interpretation of “subject to 

regulation” is most naturally interpreted as when a regulation becomes “final and effective”, and 

that entities should thus be subject to the proposed regulation no earlier than the date by which 

the underlying “actual control” regulations apply to sources covered by the regulations (i.e., for 

the GHG Light Duty Vehicle Rule, this is model year 2012 [the first model year to which the 

regulation applies]).

Ten commenters (0067, 0071, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109, 0110) 

state that the time frame for “final and effective” and when a regulation actually “takes effect”

may be different, and that the “takes effect” date may occur well after the “final and effective”

date. Eight of these commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) 

suggest that EPA confirm that PSD requirements do not begin to apply before the latter of a) the 

date when the actual control requirement is “final and effective” or 2) the date when the control 

requirement “takes effect”, i.e., the requirement becomes operative with current applicable 

compliance obligations for the regulated sources.

Two commenters (0080, 0100) disagreed with EPA’s proposed interpretation that a 

pollutant become “subject to regulation” upon the CRA effective date of the “actual control”

regulation, citing policy and implementation concerns. One commenter (0080) states that EPA’s 

interpretation of when the LDV Rule is final and effective (i.e., 60 days after promulgation as per 

the Congressional Review Act) is wrong because it will result in stationary sources reducing 

GHG emissions almost a year and a half in advance of when motor vehicles begin reducing 

emissions. 

Another commenter (0100) disagrees with EPA’s decision to make GHGs “subject to 

regulation” upon the effective date of the proposed LDV Rule. The commenter (0100) states that 

by the time the tailpipe standards are adopted (presumably March 2010), EPA will not have been 

able to decide that PSD review for stationary sources of GHG is appropriate, as no information 

has been presented by EPA on this issue (such as available BACT for GHGs), nor has EPA 

provided an opportunity for public comment on the costs and benefits of regulating GHGs 

through the permit process. The commenter (0100) further asserts that including GHG emissions 

in the PSD permit program will be highly disruptive to state permitting programs. 

One industry commenter (0050) states that the appropriate timing for application of 

PSD/title V should be no earlier than the effective date that the regulation is applied. To that 
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extent, the commenter agrees with EPA that “the term ‘subject to regulation’ is most naturally

interpreted to mean that PSD requirements apply when the regulation addressing a pollutant 

becomes final and effective.” The commenter notes however, that a regulation becoming “final”

and becoming “effective” can mean two different dates. A regulation can become “effective” 60 

days after publication in the Federal Register. The Congressional Review Act (5 U.S.C. 801 et 

seq) (CRA) allows Congress 60 days to review major regulations and to disapprove them within 

that time. Regulations not acted upon by Congress within that time can go into effect, and in a 

great many cases the end of the review period is the effective date. Thus, the commenter argues 

that the interpretation of “subject to regulation” should be a regulation that is “final and 

effective” and not one in which the review period under the CRA has ended. The commenter 

(0050) also states that the proposed rule would be “final” after the CRA period has ended and 

“effective,” at the earliest, in the fall of 2011, as the Administrator states that model year 2012 is 

the time when it is “necessary to permit the development and application of the requisite 

technology, giving appropriate consideration to the cost of compliance within such a period.”

One industry commenter (0085) believes that an air pollutant should not become “subject 

to regulation” for purposes of the PSD program until the regulation providing actual control of 

emissions become effective and enforceable. The commenter states that this date would be with 

the MY 2012 compliance date for the section 202 regulations, not the issuance of those 

regulations. The commenter (0085) states that just as manufacturers need time to produce 

compliant cars, stationary sources need time to prepare for applicability. The commenter (0085) 

points out that many facilities have applications for PSD permits pending at this time, and such 

sources are largely at the mercy of the resources available to the state permitting authority in 

terms of the timing of permit issuance. The commenter (0085) holds that it is unreasonable to 

impose the PSD BACT requirements suddenly upon issuance of a wholly separate regulation, 

such as the GHG motor vehicles regulations. If EPA adopts an interpretation that applies upon 

the date the underlying regulation is effective and enforceable, the commenter (0085) believes 

that in most cases, facilities will have sufficient notice and time for compliance with PSD 

requirements.

The commenter representing several groups of companies (0086) states that EPA’s 

language – about when rules become “final and effective” – dovetails with the lead time 

requirement in section 202(a)(2), that tailpipe regulations do not “take effect” until the model 

year to which the standards apply. The commenter (0086) believes that this interpretation is also 

dictated by policy considerations, i.e., to delay implementation of the PSD requirements for 

GHGs to account for administrative difficulties (as was done for PM2.5 as a result of adequate 

modeling techniques).

A state agency commenter (0091), while agreeing that EPA has the leeway to interpret 

“subject to regulation” as the effective date (not the promulgation date), believes other more

fitting interpretation options exist. In particular, the commenter believes EPA could also 

interpret the full implementation date, or the date controls must be in place and operational as a 

trigger for PSD applicability. According to the commenter, this could mean the PSD 

applicability date could be extended 15-19 months for the proposed mobile source tailpipe 

standards, and for several years in the case of an NSPS, giving states the time they need to adjust 

state regulations, statutes if needed, and fee structures, and also give time for cost effective GHG 
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control technologies to be explored and put in practice. This commenter also believes EPA can 

use exemptions and approaches similar to the 1992 exemption for sources subject to the risk 

management program made in the title V program (see 40 CFR 70.3(a)(3)), and the clarification 

in the recent Mandatory Reporting of Greenhouse Gases rule preamble (74 FR 56288) that this 

monitoring and reporting requirement is not an “applicable requirement” under title V, to lessen 

the PSD and title V permitting burden from regulating GHG, by excluding or exempting 

stationary sources from being affected by the promulgation of the “tailpipe rule.” This 

commenter notes that EPA has a long history of giving states and the regulated community time 

to implement resource intensive programs, citing examples such as the three years given to states 

to develop and submit title V operating programs for approval, the three years given to SIP 

approved states in 2008 to develop state rules and begin implementing the PM2.5 NSR 

Implementation rule, and the NESHAP program where existing sources are given up to three 

years to comply with a control standard. The commenter suggests EPA could take a similar 

approach for GHG emissions by issuing an interim policy (similar to the 1997 PM10 surrogate 

policy for PM2.5) that would temporarily define the “presumptive BACT” for GHG emissions 

from combustion sources while EPA takes the time to develop essential GHG guidance through 

rulemaking and state make adjustments to their state rule.

An industry commenter (0105) states that the timing of PSD being triggered should be 

based on when the control regulation first actually controls emissions of the pollutant. In 

addition to the EPA view in Federal Register notice EPA that the regulation must be final and 

effective, the commenter states that determining the timing of PSD being triggered should also 

be based upon the language at 40 CFR 52.21(b) (50) (iv): “[a]ny pollutant that otherwise is 

subject to regulation under the Act...” Expanding on the concept that a control regulation must 

be final and effective, the commenter (105) suggests that EPA should also consider a more 

flexible interpretation and make clear that PSD would be triggered at the time when the rule first 

actually controls emissions of the pollutant, and a pollutant should not be considered subject to a 

regulation until the time that the rule actually controls the pollutant of concern. This commenter 

notes that depending on the specific rule in question, this may or may not coincide with the 60 

day review period for congressional review, and in the case of EPA’s proposed mobile source 

rule, this date would coincide with the production of model year 2012 vehicles that are subject to 

the EPA’s mobile source rules.

One industry commenter (0108) believes that the applicability interpretation (when the 

LDVR takes effect) would not lead to an inappropriate delay because if EPA actually decided to 

regulate GHG emissions from major stationary sources directly, rather than through the PSD 

program, it presumably would allow these sources more than 60 days to comply following 

publication of a final rule, given the inherent complexities that would be involved in terms of 

implementation and compliance. Consequently, the commenter (0108) asserts that EPA should 

either amend its proposed interpretation to use the language “takes effect” rather than “final and 

effective,” or use both and clarify that the PSD program begins to apply with the later of the two 

periods, which would resolve the issue for regulations not only under section 202 of the CAA but 

also for other CAA provisions where EPA could decide to postpone the date of compliance 

beyond the date of the regulation’s publication. 
103

One of the industry commenters (0109) states that the “takes effect” interpretation is 

within EPA’s discretion under the CAA, would provide more certainty, and would provide more 

time for permitting authorities to structure their programs than EPA’s proposed interpretation. 

The commenter (0109) also adds that “subject to regulation” should also be defined as when the 

regulation providing actual control of emissions is effective and enforceable. The commenter 

(0109) states that this definition provides more certainty and allows more time for regulating 

agencies to structure (or re-structure) their permitting programs.

One industry commenter (0110) urges EPA to amend its proposed interpretation to clarify

that PSD program requirements begin to apply when GHG regulations “take effect” and not 

automatically when the regulations become “final and effective” 60 days after publication of the 

rule. This will allow time for EPA to resolve the significant PSD issues that will be created for 

major stationary sources if the motor vehicle regulations are finalized. The EPA has not 

adequately analyzed the implications the motor vehicle proposal and the proposed PSD tailoring 

rule will have on major stationary sources. Adopting an interpretation that allows for the most 

time and flexibility for all parties is reasonable and consistent with key policy goals.

Response:

As discussed in response to the legal comments above, we are persuaded that EPA should 

interpret that time that a pollutant becomes a “regulated NSR pollutant” under section 

52.21(b)(50)(iv) to be the time when a control or restriction on emissions of the pollutant takes 

effect or becomes operative on the regulated activity. The general comments summarized above 

provide additional support for that interpretation. EPA has reviewed these general comments in 

light of that interpretation and finds no issues raised in these comments that must be addressed 

through further refinement of that interpretation, although we do believe a few points of 

clarification are necessary.

A number of the comments argue that the “takes effect” interpretation is appropriate 

because it will allow for more time to prepare for implementation of the PSD program for newly 

regulated pollutants, including GHGs. As discussed in response to comments in section 9.1(a) 

above, we do not construe the language of the CAA to provide the Agency with the discretion to 

choose a date when PSD program requirements apply based on the implementation 

considerations for the PSD program. Accordingly, we are re-iterating that our adoption of this 

interpretation is based on the specific language of the PSD provisions and structure of the PSD 

program as provided for in the CAA and our corresponding implementing regulations, as 

described above, and not on the implementation concerns noted in these comments.

With regard to the comment that “subject to regulation” should also be defined as when 

the regulation providing actual control of emissions is effective and enforceable, we note that 

there is generally no legally enforceable obligation to control a pollutant when a regulation is 

promulgated or, in some instances, even when a regulation becomes effective for some purposes. 

Consistent with our interpretation, the enforceable obligation to control a newly regulated 

pollutant only exists when the regulation of the pollutant takes effect or becomes operative on 

the regulated activity. Until that time, regulated entities are generally not required to comply 
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with the control requirements and thus cannot be found in violation of those requirements. See 

generally, CAA section 113(a)(3) (prohibiting violation of a “requirement” of a rule). 

To the extent that the comments above have suggested specific interpretations of when 

regulations “take effect” under the language of CAA section 202 or have provided specific dates 

upon which they believe control requirements for GHG emissions would “take effect” under the 

proposed LDV Rule, EPA provides a response to these specific section 202 timing issue in 

Chapter 9 of this RTC.

8.2. Compliance Date 

Comments:

Three commenters (0051, 0053, 0074) state that PSD should not become applicable to a 

pollutant until controls are actually required by an EPA regulation, i.e., model year 2012 for the 

proposed rule. The three commenters (0051, 0053, 0074) refer to section 202 regulations, which 

do not take effect immediately upon promulgation, although the PSD Interpretive Memo states 

that “a pollutant becomes a regulated NSR pollutant at an earlier point upon promulgation of a 

regulation that requires actual control of emissions,” similarly to the proposed PSD tailoring rule. 

The two commenters (0051, 0053) state that to use this interpretation of “subject to regulation”

would “directly conflict with the [CRA]”. The commenters (0051, 0053) state that “subject to 

regulation” is most naturally interpreted to mean that PSD requirements apply when a regulation 

becomes “final and effective”, which in the case of the proposed Light Duty Vehicle (LDV) rule, 

is the first compliance date for model year 2012 standards. Three commenters (0051, 0053, 

0081) also state precedence in delaying implementation of PSD requirements, such as 

enforcement of BACT requirements for PM2.5 due to the lack of adequate modeling techniques.

Other industry commenters (0069, 0096, 0106/0107) state that that EPA should use its 

discretion to determine that a pollutant becomes “subject to regulation” when the regulated entity

must actually comply with an emission limit or other emission standard for control, not when a 

regulation becomes effective. The commenters made the following points in support of this 

position:

 Under the CAA there is generally no legally enforceable obligation to control a pollutant 

when a regulation is promulgated or even when it becomes effective; instead, a great deal 

of consideration is given to how long it will take a facility to evaluate the applicability of 

the requirement, to design and engineer or purchase the equipment, to install the 

equipment, and to operate the source until it shakes down and can be tested for 

compliance. It is only at that point that an affected source becomes “subject to the 

regulation” in the sense that it is legally obligated by the Act to effect “actual control.” 

Therefore, consistent with EPA’s interpretation in the proposed PSD Interpretation, a 

pollutant is regulated when a source must actually comply with such regulation – not 

when the regulation becomes effective for purposes of judicial review.

 There are very important logistical and other policy reasons for delaying the applicability

of PSD to municipal utilities and other sources. The EPA is obligated to provide sources 
105

with more information on available control technologies and provide the market a 

reasonable opportunity to bring such technologies to market. An additional 7 months to a 

year-and-a-half may help this nation, in a deep economic crisis, more adequately address 

the technical and financial challenges of controlling GHGs.

 The EPA’s assertions regarding why the doctrines of “absurd results” and “administrative 

necessity” support phasing in PSD over 6 years compel the Administrator to delay regulation 

of GHGs under the PSD program as long as is reasonable. Unfortunately for the members 

of the commenter’s association, nearly all of our cities’ electric utilities both have the 

PTE greater than 25,000 tons of GHGs annually and are small businesses that meet the 

Small Business Regulatory Enforcement Fairness Act (SBREFA). These sources need 

the relief that EPA suggests that it is providing to small sources in the PSD Tailoring 

Rule. The commenter urges EPA to provide further and more effective relief from PSD 

by not only interpreting the phrase “subject to regulation” in this rulemaking to when a 

regulated entity must “actually comply” with GHG emission standards, but by also 

deferring regulation under the PSD program. The commenter asks that these comments 

be considered by the EPA and OMB under UMRA, Executive Order 12866, and 

SBREFA.

One commenter (0050) states that the proposed rule would be “final” after the CRA 

period has ended and “effective,” at the earliest, in the fall of 2011, as the Administrator states 

that model year 2012 is the time when it is “necessary to permit the development and application 

of the requisite technology, giving appropriate consideration to the cost of compliance within 

such a period.”

One commenter (0056) states there is a substantial difference between a finding that PSD 

is applicable to GHGs on the “first substantive compliance date of a regulation” and a finding 

that PSD is applicable on the “effective date” of a regulation. The commenter (0056) 

emphasizes that a source becomes “subject to regulation” specifically after the “first substantive 

compliance date” in an effort to provide some temporal relief to sources and allowing EPA to 

provide technical and permitting assistance to sources and permitting authorities. The 

commenter (0056) also states that the Interpretation memo on the meaning of “subject to 

regulation” does not need to be re-proposed as there is adequate basis for such an interpretation 

in the October 7th proposal. 

One local agency commenter (0062) states that the need for more time to facilitate 

implementation of the GHG Tailoring Rule for PSD and title V requirements justifies the MY 

2012 compliance date for the GHG mobile source regulations. 

One industry commenter (0076) states that in the maximum achievable control 

technology (MACT) program, EPA uses the “first substantive compliance date” for a standard to 

distinguish when a source may become an area source after the effective date of a control 

requirement. This commenter asserts that the use of the “first substantive compliance date”

would be a logical way to define when “actual control” of a pollutant occurs.

Another of the industry commenter (0080) states that interpreting “actual control” to 

occur at the beginning of MY 2012 harmonizes the requirements that will be triggered by the 
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GHG motor vehicle rule with the requirements that will be triggered under the PSD program. 

The industry commenter (0080) asserts that EPA’s proposed interpretation would create the 

anomalous result that stationary sources would have to begin reducing GHG emissions as much 

as a year-and-a-half in advance of the time when motor vehicles begin reducing emissions, even 

though it is the regulation of motor vehicles that triggers the requirements for stationary sources.

One commenter (0088), while generally agreeing with the December 18, 2008 EPA 

Memorandum, states the “actual control of emissions” date should be established by the actual 

compliance date of any pertinent regulatory requirement. The commenter states that, if this is 

the LDVR, the date should be the actual implementation of the MY 2012 requirements (in 

Calendar Year 2011 or 2012). 

Commenters (0092, 0098) representing several groups of companies state that EPA 

should adopt a more reasonable approach to the timing of PSD applicability and conclude that 

PSD does not apply until the compliance date (not the promulgation date) of a regulation 

requiring emission controls.

One commenter (0097) states that while the “effective date” of a rule is better than the 

promulgation date, it still does not properly identify the date on which a pollutant is actually 

controlled. Rather, “actual control” is the first compliance date for achieving a standard or 

implementation of control equipment under a formal national rule. Consistent with EPA, this 

commenter (0097) believes that this interpretation best reflects past policy and practice, is in 

keeping the structure and language of the statute and regulations and best allows for the 

necessary coordination of approaches to controlling emissions of newly identified pollutants.

One state agency commenter (0102) notes that the LDVR provides a certain amount of 

time for those vehicles to come into compliance and asserts that this compliance date also should 

determine the effective date that the pollutant must be regulated under the CAA.

Two commenters (0115, 0116) encourage EPA to maintain the interpretation that PSD 

permitting requirements would be triggered only when compliance is required with a final 

regulation requiring actual control of the pollutant’s emissions.

One industry commenter (0118) and one commenter representing several groups of 

companies (industry) (0086) urges EPA to interpret “actual control” as the date that a source has 

an actual compliance obligation under a regulation, that is, when controls must first be in place 

for the pollutant. One of these commenters (0118) indicate that allowing additional time after a 

regulation is adopted before BACT must be determined in PSD permitting will provide a more 

reasonable period for sources to identify and evaluate control options for the newly regulated 

pollutant, which the commenter (0118) believes is particularly desirable when, as is the case with 

GHGs, the initial regulation will require controls that are not appropriate for stationary sources.

One industry commenter (0083) states that the CAA regulations contain many examples 

where active controls are deferred for many months or years after the effective date of a 

regulation. However, the comments did not provide any specific examples.
107

Response: 

As discussed in response to the legal comments above, we are persuaded that EPA should 

interpret that time that a pollutant becomes a “regulated NSR pollutant” under section 

52.21(b)(50)(iv) to be the time when a control or restriction on emissions of the pollutant takes 

effect or becomes operative on the regulated activity. In so doing, we generally note that date at 

which a regulation “takes effect” and “becomes operative” is functionally equivalent to the 

“compliance date” for that regulation. As such, EPA acknowledges that the general “compliance 

date” comments above provide additional support for the interpretation we are adopting in this 

final action. We have also reviewed these general comments in light of that interpretation and 

find no issues raised in these comments that must be addressed through further refinement of that 

interpretation, although we do believe a few points of clarification are necessary.

A number of comments note that under EPA’s regulatory program for HAP pollutants, 

EPA uses the “first substantive compliance date” to determine when a new MACT standard 

becomes applicable for the purpose of applying an area source designation. While our response 

to the legal comments in section 8.1.1. above discussed how CAA section 112(i)(3)(A) requires 

the Administrator to establish a date for compliance with a new HAP emission standard within 3 

years after the effective date of the standard, it did not use the term “first substantive compliance 

date” because it is not contained in the language of CAA section 112. Rather, “first substantive 

compliance date” is the term EPA has used in policy documents relating to the timing of 

application of particular HAP regulatory requirements. See Memorandum from John S. Seitz, 

Director OAQPS, to Regional Air Directors, “Potential to Emit for MACT Standards – Guidance 

on Timing Issues” (May 16, 1995). As used in this guidance, the term is equivalent to the use of 

“takes effect” or “becomes operative” as used in the interpretation EPA is adopting here.

Similar to the comments received for the “takes effect” interpretation above, a number of 

the comments here argue that the “compliance date” interpretation is appropriate because it will 

allow for more time to prepare for implementation of the PSD program for newly regulated 

pollutants, including GHGs. However, our adoption of the “takes effect” interpretation is based 

on the specific language of the PSD provisions and structure of the PSD program as provided for 

in the CAA and our corresponding implementing regulations, as described above, and not on the 

implementation concerns noted in these comments.

As explained above, we agree with the comment that there is generally no legally 

enforceable obligation to control a pollutant when a regulation is promulgated or, in some 

instances, even when a regulation becomes effective for some purposes. Consistent with our 

interpretation, the enforceable obligation to control a newly regulated pollutant only exists when 

the regulation of the pollutant takes effect or becomes operative on the regulated activity. Until 

that time, regulated entities are generally not required to comply with the control requirements 

and thus cannot be found in violation of those requirements. See generally, CAA section 

113(a)(3) (prohibiting violation of a “requirement” of a rule). 

To the extent that the comments above have suggested specific interpretations of the 

applicable “compliance date” under the language of CAA section 202 or have provided specific 

dates upon they believe auto manufacturer would have to comply with control requirements for
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GHG emissions under a final LDV Rule, EPA provides a response to these specific section 202 

timing issue in section 9.2 below.

8.3. Promulgation Date

Comment:

An environmental organization commenter (0099) claims that even under the “actual 

control” theory, CO2 will be “subject to regulation” upon Federal Register publication of the 

appropriate standards. The commenter (0099) states that EPA should interpret the phrase 

“subject to regulation” to mean that pollutants become so regulated on the date of Federal 

Register publication of EPA’s section 209(b) determination (for section 209(b) pollutants) or 

EPA regulations. The commenter (0099) opposes EPA’s proposal to interpret “subject to 

regulation” to mean that PSD requirements apply when the regulations addressing a particular 

pollutant become final and effective, as opposed to their date of promulgation. The commenter 

(0099) argues that the reasons EPA gives for choosing effective date are not persuasive. First, 

the commenter (0099) argues that there is no need to “harmonize” the PSD requirements with the 

Congressional Review Act (CRA), because Congress has used the CRA process exactly once to 

overturn a regulation. Second, the environmental commenters notes that EPA incorrectly finds 

that the “effective date” interpretation best fits the regulatory language describing two of the 

other three categories of “regulated NSR pollutant” in 40 CFR 52.21(b)(50), because EPA’s 

rationale ignores the language of section 111(b)(1)(B) of the CAA, which specifically provides 

that “Standards of performance or revisions thereof shall be effective upon promulgation.” Thus, 

the commenter argues that both the section 111 and the NAAQS regulatory categories supports 

the better interpretation that a pollutant becomes “subject to regulation” upon promulgation, not 

the effective date. 

This environmental organization commenter (0099) also argues against a later 

interpretation of the triggering date – such as “takes effect” or compliance date – by noting that 

such an interpretation would potentially postpone, for many years, PSD regulation of a pollutant 

that EPA had already determined threatened health or welfare. The commenter (0099) also notes 

that if the PSD regulatory requirements are triggered at the time a source must comply with the 

actual control regulations, there is no such “actual control” until the source begins operation and 

emitting that pollutant, which not only adds additional years to the delay, but there is no way for 

anyone else to know when this would happen as the “actual control” status would be known only

to the operator of a single source in one state. According to the commenter (0099), even worse is 

the suggestion that the “actual control” trigger be defined not by the imposition of such 

emissions limits, but only when the source is subsequently required to demonstrate compliance 

with that limit. The commenter notes that for a stationary source, such an interpretation would 

(presumably) mean when it reports its emissions, which could easily be months or even years 

after it begins operations, and for mobile sources, this would mean at the final determination of 

compliance with fleet average standards may, which not occur until several years after the close 

of the model year in which the standards apply. 

Response:
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The regulatory language of 40 CFR 52.21(b)(50)(iv) does not specify the exact time at 

which the PSD requirements should apply to pollutants in the fourth category of the definition of 

“regulated NSR pollutant.” While the PSD Interpretive Memo states that EPA interprets the 

language in this definition to mean that the fourth part of the definition should “apply to a 

pollutant upon promulgation of a regulation that requires actual control of emissions,” Memo at 

14, EPA proposed to modify that interpretation in the reconsideration notice after continuing to 

consider the underlying statutory requirement in the CAA and the language in all parts of the 

regulatory definition more closely. EPA acknowledges, and the comment does not dispute, that 

the regulatory language of 40 CFR 52.21(b)(50)(iv) could be interpreted to apply PSD 

requirements to a newly regulated pollutant at either the date the underlying control regulation is 

promulgated or the date which the control requirement takes effect. After considering the 

comments received on this timing issue, as well as other issues and policy concerns raised in the 

reconsideration notice, EPA has determined that the term “subject to regulation” in the statute 

and regulation is most naturally interpreted to mean that PSD requirements apply at the point in 

time when a control or restriction that functions to limit pollutant emissions takes effect or 

becomes operative to control or restrict the regulated activity, as explained above, and nothing in 

the comment has persuaded us to change that interpretation.

With regard to the comment’s first point – that harmonization of the PSD requirements 

with the Congressional Review Act (CRA) is unnecessary because Congress has only used the 

CRA once to overturn a regulation – we note that the commenter only finds reliance on the CRA 

unpersuasive but does not argue that such reliance is prohibited by the regulatory or statutory

language. As explained in the response to comments provided above, the potential for the CRA 

process to affect the date at which a rule requiring control of a new pollutant becomes operative, 

or takes effect, is relevant to determining when PSD requirements shall apply to newly regulated 

pollutants. 

With regard to the commenter’s argument that EPA incorrectly tries to rely on the 

NAAQS and NSPS categories of “regulated NSR pollutant” found in 40 CFR 52.21(b)(50)(i) 

and (ii) to interpret PSD requirements as applying at a point later than promulgation of 

underlying regulation to which the new pollutant is subject, we are also unpersuaded. We find 

that the reasoning we provide in section 8.1 above in applying the “takes effect” interpretation 

for timing of PSD requirements for new pollutants “subject to regulation” under 40 CFR 

52.21(b)(50)(iv) is equally applicable to the regulation of additional pollutants under the specific 

sections of the Act delineated in the first three parts of the definition. While the date a control 

requirement may take effect could vary across sections 109, section 111, and Title VI, we do not 

see any distinction in the applicability of the legal reasoning above to these provisions of the 

CAA. There should be less variability among rules promulgated under the same statutory

section, so EPA does not expect that it will be necessary for EPA to identify the date that a new 

pollutant becomes subject to regulation each time EPA regulates a new pollutant in a NAAQS or 

NSPS. EPA can more readily identify the specific dates when controls under such rules take 

effect. 

With specific regard to the NSPS concerns raised in the comments, we note that the 

NSPS under section 111 of the Act preclude operation of a new source in violation of such a 
110

standard after the effective date of the standard. See 42 U.S.C. §7411(e). Thus, an NSPS takes 

effect on the effective date of the rule. Once such a standard takes effect and operates to 

preclude operations in violation of the standards, then EPA interprets the statute and EPA’s PSD 

regulations to also require that the BACT requirement apply to a pollutant that is subject to 

NSPS. Consistent with our October 7, 2009 proposal, EPA has determined that the existing 

language in section 52.21(b)(50)(ii) of its regulations may be construed to apply to a new 

pollutant upon the effective date of an NSPS. This part of the definition covers “[a]ny pollutant 

that is subject to any standard promulgated under section 111 of the Act.” 40 CFR 

52.21(b)(50)(ii). While the word “promulgated” appears in this part of the definition, term 

modifies the term “standard” and does not directly address the timing of PSD requirements. 

Under the language in this part of the definition, the PSD requirements apply when a pollutant 

becomes “subject to” the underlying standard, which is “promulgated under” section 111 of the 

Act. Thus, section 52.21(b)(50)(ii) can be interpreted to make an NSPS pollutant a regulated 

NSR pollutant upon the effective date of an NSPS. Accordingly, the effective date of an NSPS 

is also that date when the controls in an NSPS “take effect.”

Likewise, with regard to the NAAQS pollutant arguments raised in the comments, under 

section 169(a)(3) of the Act, a source applying for a PSD permit must demonstrate that it will not 

cause or contribute to a violation of the NAAQS in order to obtain the permit, as required by 

section 169(a)(3) of the Act. Once a NAAQS is effective with respect to a pollutant, the 

standard operates through section 169(a)(3) of the Act and section 52.21(k) of EPA’s regulations 

to preclude construction of a new source that would cause or contribute to a violation of such 

standard. Using the effective date of a NAAQS to determine when a pollutant covered by a 

NAAQS becomes a regulated NSR pollutant is more consistent with EPA’s general approach for 

determining when a new NAAQS applies to pending permit applications. EPA generally 

interprets a revised NAAQS that establishes either a lower level for the standard or a new 

averaging time for a pollutant already regulated to apply upon the effective date of the revised 

NAAQS. Thus, unless EPA promulgates a grandfathering provision that allows pending 

applications to apply standards in effect when the application is complete, a final permit decision 

issued after the effective date of a NAAQS must consider such a NAAQS. As described above, 

the effective date of the NAAQS is also the date a NAAQS takes effect through the PSD 

permitting program to regulate construction of a new or modified source.

EPA does not agree that a NAAQS would not take effect until the time a state first 

promulgates limitations for the pollutant in a SIP. Since a NAAQS covering a new pollutant 

would operate through the PSD permitting program to control emissions of that pollutant from 

the construction or modification of a major source upon the effective date of the NAAQS, a 

NAAQS covering a new pollutant takes effect on the effective date of the regulation 

promulgating the NAAQS. Under section 165(a)(3) of the Act and the federal PSD permitting 

regulations at 52.21(k), to obtain a PSD permit, a major source must demonstrate that the 

proposed construction will not cause or contribute to a violation of a NAAQS. Due to these 

requirements, the PSD program operates to incorporate the NAAQS as a governing standard for 

permitting construction of large sources. Thus, under the federal PSD program regulations at 

least, a new pollutant covered by a NAAQS becomes subject to regulation at a much earlier date. 

These PSD provisions require emissions limitations for the NAAQS pollutant before 

construction at a major source may commence and thereby function to protect the NAAQS from 
111

new source construction and modifications of existing major sources in the SIP development 

period before a completion of the planning process necessary to determine whether additional 

standards for a new NAAQS pollutant need to be developed. The timing when the NAAQS 

operates in this manner under SIP-approved programs is potentially more nuanced and depends 

on whether state laws are sufficiently open-ended to call for application of a new NAAQS as a 

governing standard for PSD permits upon the effective date. EPA believes that state laws that 

use the same language as in EPA’s PSD program regulations at 52.21(k) and 51.166(k) are 

sufficiently open-ended and allow such a NAAQS to “take effect” through the PSD program 

upon the effective date of the NAAQS. Notwithstanding this complexity in SIP-approved 

programs, the applicability of the federal PSD program regulations to a new NAAQS pollutant 

upon the effective date of the NAAQS is sufficient to determine that a new pollutant is subject to 

regulation on this date. 

In the October 7, 2009 notice, EPA observed that one portion of its existing regulations 

was not necessarily consistent with this reading of the CAA. For the first class of pollutants 

described in the definition of “regulated NSR pollutant,” the PSD requirements apply once a 

“standard has been promulgated” for a pollutant or its precursors. See 40 CFR 52.21(b)(50)(i). 

The use of “has been” in the regulation indicates that a pollutant becomes a “regulated NSR 

pollutant,” and hence PSD requirements for the pollutant are triggered, on the date a NAAQS is 

promulgated. Thus, EPA observed in the October 7, 2009 notice that it may not be possible for 

EPA to read the regulatory language in this provision to make PSD applicable to a NAAQS 

pollutant upon the effective date of the NAAQS. EPA did not propose to modify the language in 

40 CFR 52.21(b)(50)(i) in the October 2009 notice because EPA had not yet reached a final 

decision to interpret the CAA to mean that a pollutant is subject to regulation on the date a 

regulatory requirement becomes effective. Since EPA was not proposing to establish a NAAQS 

for any additional pollutants, the timing of PSD applicability for a newly identified NAAQS 

pollutant did not appear to be of concern at the time. No public comments on the October 2009 

notice addressed this issue. Since EPA is now adopting a variation of the proposed interpretation 

with respect to the timing of PSD applicability, we believe it will be appropriate to propose a 

revision of the regulatory language in section 52.21(b)(50)(i) at such time as EPA may consider 

promulgation of a NAAQS for an additional pollutant. Until that time, EPA will continue to 

apply the terms of section 52.21(b)(50)(i) of the regulation. This is permissible because, even 

though EPA believes the better reading of the Act is to apply PSD upon the date that a control 

requirement “takes effect,” the Agency has not determined in this action that the Clean Air Act 

precludes applying PSD requirements upon the promulgation of a regulation that establishes a

control requirement (as a NAAQS does through the PSD provisions).

However, we do not believe that this present limitation prohibits us from applying such 

an interpretation to non-NAAQS pollutants covered by the 40 CFR 52.21(b)(50)(iv).

As described above, EPA has chosen a “takes effect” interpretation of when a pollutant 

becomes “subject to regulation” under the PSD program because it is a permissible interpretation 

of the relevant statutory and regulatory language. EPA recognizes that the fourth part of the 

definition of “regulated NSR pollutant” as used in 52.51(b)(50) functions as a catch-all provision 

and may cover a variety of different types of control requirements established by EPA under the 

CAA. These different types of regulations may contain a variety of different mechanisms for 
112

controlling emissions and have varying amounts of lead time before controls take effect under 

the particular regulatory framework. Thus, in order to avoid the type of uncertainty and potential 

delay that concern the commenter, EPA anticipates that it will be helpful to states and regulated 

sources for EPA to identify the date when a new pollutant becomes subject to regulation 

whenever the Agency adopts controls on a new pollutant under a portion of the CAA covered by

the fourth part of the definition. With regard to GHGs, the Agency has determined that date to 

be January 2, 2011, or a similar date as finalized in the LDV rulemaking, as described in section 

9.2 below. Accordingly, the adoption of the “takes effect” interpretation will not result in the 

uncertainty regarding the exact date of PSD applicability or the prolonged delay of such 

applicability described by the commenter. 

EPA is not adopting the view that a pollutant becomes subject to regulation at the time 

that an individual source engages in the regulated activity. EPA does not believe such a reading 

is consistent with the “subject to regulation” language in the CAA. Even if no source is actually

engaged in the activity, once a standard or control requirement has taken effect, no source may

engage in the regulated activity without complying with the standard. At this point, the regulated 

activity and the emissions from that activity are controlled or restricted, thus being subject to 

regulation within the common meaning of the term regulation used in EPA’s regulations and 

section 165(a)(4) and 169(3) of the CAA.

Likewise, EPA does not accept the view that a pollutant does not become subject to 

regulation until the date when a source must certify compliance with regulatory requirements or 

submit a compliance report. In some instances, a compliance report or certification of 

compliance may not be required until well after the point that a regulation operates to control or 

restrict the regulated activity. Thus, EPA does not feel that it would be appropriate as a general 

rule to establish the date when a source certifies compliance or submits its compliance report as 

the date that a pollutant becomes subject to regulation.

8.4. Apply PSD only after Significance Level has been promulgated

One commenter (0072) requests that EPA revise the PSD regulations to prevent 

application of PSD to a pollutant until EPA has developed a significance level for that pollutant 

for the following reasons: 

 Both potentially regulated facilities and state and federal permitting agencies would know 

which pollutants they had to consider in determining whether there would be a new major 

emitting facility or a major modification.

 It would give permit writers and sources preparing permit applications some criteria to 

apply to emissions of a pollutant, rather than asking them to start applying PSD 

permitting to a pollutant without any guidance as to when that pollutant’s emissions are 

significant enough that they should be analyzed in greater detail.

 It would avoid the current PSD regulations from considering any increase significant for 

a pollutant EPA has never evaluated for significance under the PSD program.

Response:
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EPA does not construe the CAA or existing regulations to permit the agency to prevent

applicability of PSD requirements to a pollutant based on the absence of a significance level. 

Significance levels identify de minimis levels of emissions that do not warrant scrutiny in 

permitting reviews. They do not serve to “regulate” or require control of the pollutant for which 

they are established. EPA’s regulations contemplate the application of PSD requirements in the 

absence of a significance level. See 40 CFR 52.21(b)(23)(ii). However, as discussed elsewhere 

in this document, one of the policy reasons EPA prefers the actual control interpretation is that it 

provides the opportunity for EPA to promulgate significance levels in a timely manner when the 

agency proposes to regulate an additional pollutant. In the Tailoring Rule, EPA took comment 

on significance levels for GHGs. As explained above, we fully expect the Tailoring Rule to be 

promulgated prior to the GHG LDV Rule’s “take effect” date of January 2, 2011. 

8.5. Timing Based on Economic and Technical Feasibility of Controls

Comments:

One industry commenter (0083) asserts that certain statutory provisions require EPA to 

defer the application of controls until economically or technically feasible. Another industry

commenter (0081) made the same point specifically for GHG sources. 

Response:

The economic and technical feasibility of available control options are assessed in setting 

the BACT limit for each specific facility under review. See CAA §169(3); 40 CFR 52.21(b)(12). 

Thus, EPA does not believe this would be a permissible basis for deferring the applicability of 

the BACT requirements in the first instance. 
114

Chapter 9. Regulation of Greenhouse Gases

9.1. GHG and CO2 are Air Pollutants

Comment:

Commenter (0101) argues that it is now beyond dispute that GHGs are “pollutants” under 

the CAA. The CAA defines “air pollutant” as “[a]ny air pollution agent or combination of such 

agents, including any physical, chemical, biological, [and] radioactive . . . substance or matter 

which is emitted into or otherwise enters the ambient air.” CAA §302(g), 42 U.S.C. §7602(g). In 

Massachusetts v. EPA, the Supreme Court held that greenhouse gases, including CO2, are 

“without a doubt” physical chemical substances emitted into the ambient air and thus pollutants. 

Id., 549 U.S. at 529. Similarly, in its final “Endangerment and Cause or Contribute Finding for 

Greenhouse Gases” (Dec. 7, 2009) (“Endangerment Finding”), EPA has stated unequivocally

that GHGs are air pollutants.

One industry commenter (0069) expresses that comments on the PSD Interpretive 

Memorandum should not be construed as admitting that GHGs are, individually or in 

combination, a “pollutant” subject to regulation under the CAA.

Response:

EPA recognizes that the Supreme Court has held that GHGs fit within the definition of 

“air pollutant” under CAA section 302. Massachusetts v. EPA, 549 U.S. 497 (2007). 

9.2. Date When PSD Permitting Requirements Apply to GHGs

Comments:

Several commenters discussed the specific date upon which PSD requirements for GHG 

should be triggered based on the GHG standards in EPA’s proposed motor vehicle regulations, 

which are proposed to begin with the 2012 model year (MY 2012), including:

 The beginning of MY 2012 (Commenter 0080)

 MY 2012, as being either Spring 2011 or Late 2011 (Commenter 0076)

 At the earliest January 2, 2011 and at the latest by March 30, 2013 (0056, 0059, 0064, 

0096, and 0106/0107)

 March 2011 (0062)

 Summer 2011, while acknowledging possibility as early as January 2, 2011 (0062)

 Fall of 2011 (0050)

 October 2011 (0067, 0073, 0083, 0089, 0090, 0096, 0106/0107, 0108, and 0109)

 Late 2011 (0081)
115

 May 1, 2012 (0067, 0073)

Eight industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109), in 

asserting that EPA should clarify it is adopting the “takes effect” interpretation, state that if EPA 

promulgates its proposed motor vehicle GHG rules in final form, those rules could not have any

PSD triggering effect before the beginning date of the first model year to which those rules apply 

(i.e., October 1, 2011). 

Some industry commenters (0069, 0096, 0106/0107) note that U.S. automakers are not 

required to comply with the MY 2012 GHG mobile vehicle regulations before an LDV is 

manufactured on January 2, 2011, and because compliance with these regulations is based on 

fleet averaging, automakers will not have to certify compliance until March 2013. For these 

reasons, it is more reasonable to conclude that GHGs are not actually controlled until 2011 at the 

earliest and 2013 at the latest. Because this is the logical construction of EPA’s own 

interpretation, the commenters (0069, 0096, 0106/0107) assert that EPA can take final action and 

conclude that one of these dates and not the effective date of the GHG mobile vehicle regulations

is when GHGs become subject to regulation for purposes of triggering PSD without additional 

rulemaking.

One commenter (0058) requests that EPA establish an effective date for the PSD and title 

V programs for GHGs no earlier than one year after the effective date of the LDVR. The 

commenter (0058) states that EPA has the authority for such a postponement under the legal 

doctrine of “administrative necessity” and “absurd results.” The commenter (0058) also requests 

that EPA postpone applicability for non-CO2 GHGs for at least another year to allow for further 

understanding of workload impacts of PSD and title V applicability to those non-CO2 GHG 

pollutants.

One of the industry commenters (0064) notes that, in the case of the regulation of GHG 

emissions from motor vehicles, the compliance obligation occurs when manufacturers introduce 

into commerce vehicles that are required to comply with GHG standards, which will begin with 

MY 2012 and will not occur before January 2, 2011. The commenter (0064) also indicates that 

another interpretation on the timing for the compliance obligation in the context of the GHG 

motor vehicle regulations could be when the manufacturer is required to meet the fleet-wide 

average, which occurs for the first time at the close of MY 2012 and is based on actual 

production figures for each model and on model-level emissions data collected through testing 

over the course of the model year. Thus, the commenter (0064) believes that some point after 

the end of MY 2012 could be considered the date there is a compliance obligation or “actual 

control” of GHG pollutants for purposes of the GHG motor vehicle regulations. The commenter 

believes that these are reasonable interpretations of an ambiguous statute, entitling EPA 

deference under Chevron. Other industry commenters (0067, 0073) use a similar rationale to 

arrive at alternative dates of October 2011 and May 1, 2012.

One commenter (0067) supports EPA’s proposal that the “effective” date is the date 

sources are obliged to meet the requirements for new pollutants in PSD and title V permit 

applications. No actual control obligations will be imposed until at least October 2011. One 

commenter (0067) states that delaying the effective date until October 2011 will provide 
116

adequate time to receive information from the first year of EPA’s GHG reporting rule, develop 

additional information for the RACT/BACT/LAER clearinghouse, and supplement other 

necessary information sources.

Response:

A majority of the comments EPA received in this action, as summarized above and 

elsewhere in this RTC, addressed the specific issue of when GHG-PSD permitting requirements 

would be applied under the various interpretations discussed above. EPA has determined that 

GHGs will initially become “subject to regulation” under the CAA on January 2, 2011 based on 

the following considerations: (1) the overall interpretation reflected in the PSD Interpretive 

Memo; (2) EPA’s conclusion in this notice that a pollutant becomes subject to regulation when 

controls “take effect,” and (3) the assumption that the agency will establish emissions standards 

for model year 2012 vehicles when it completes the proposed LDV Rule. 

As proposed, the LDV Rule consists of two kinds of standards — fleet average standards 

determined by the emissions performance of a manufacturer’s fleet of various models, and 

separate vehicle standards that apply for the useful life of a vehicle to the various models that 

make up the manufacturer’s fleet. CAA section 203(a)(1) prohibits manufacturers from 

introducing a new motor vehicle into commerce unless the vehicle is covered by an EPA-issued 

certificate of conformity for the appropriate model year. Section 206(a)(1) of the CAA describes 

the requirements for EPA issuance of a certificate of conformity, based on a demonstration of 

compliance with the emission standards established by EPA under section 202 of the Act. A 

certification demonstration requires emission testing, and must be done for each model year. 

The certificate covers both fleet average and vehicle standards, and the manufacturer has 

to demonstrate compliance with both of these standards for purposes of receiving a certificate of 

conformity. The demonstration for the fleet average is based on a projection of sales for the 

model year, and the demonstration for the vehicle standard is based on emissions testing and 

other information. 

Both the fleet average and vehicle standards in the LDV Rule will require that 

automakers control or limit GHG emissions from the tailpipes of these vehicles. As such, they

clearly constitute “regulation” of GHGs under the interpretation in the PSD Interpretive Memo. 

This view is consistent with the position originally expressed by EPA in 1978 that a pollutant 

regulated in a Title II regulation is a pollutant subject to regulation. See 42 FR at 57481. 

However, the regulation of GHGs will not actually take effect upon promulgation of the LDV 

Rule or on the effective date of the LDV Rule when the provisions of the rule are incorporated 

into the CFR. 

Under the LDV Rule, the standards for GHG emissions are not operative until the 2012 

model year, which may begin as early as January 2, 2012. In accordance with the requirements 

of Title II of the CAA and associated regulations, vehicle manufacturers may not introduce a 

model year 2012 vehicle into commerce without a model year 2012 certificate of conformity. 

CAA Section 203(a)(1). A model year 2012 certificate only applies to vehicles produced during 

that model year, and the model year production period may begin no earlier than January 2, 
117

2011. See CAA section 202(b)(3)(A) and implementing regulations at 40 CFR 85.2302 through 

85.2305. Thus a vehicle manufacturer may not introduce a model year 2012 vehicle into 

commerce prior to January 2, 2011 

There will be no controls or limitations on GHG emissions from model year 2011 

vehicles. The obligation on an automaker for a model year 2012 vehicle would be to have a 

certificate of conformity showing compliance with the emissions standards for GHGs when the 

vehicle is introduced into commerce, which can occur on or after January 2, 2011. Therefore the 

controls on GHG emissions in the Light Duty Rule will not take effect until the first date when a 

2012 model year vehicle may be introduced into commerce. In other words, the compliance 

obligation under the LDV Rule does not occur until a manufacturer may introduce into 

commerce vehicles that are required to comply with GHG standards, which will begin with MY 

2012 and will not occur before January 2, 2011. Since section 203(a)(1) of the CAA prohibits 

manufacturers from introducing a new motor vehicle into commerce unless the vehicle is 

covered by an EPA-issued certificate of conformity for the appropriate model year, as of January

2, 2011, manufacturers will be precluded from introducing into commence any model year 2012 

vehicle that has not been certified to meet the applicable standards for GHGs. 

This interpretation of when the GHG controls in the LDV Rule take effect, and therefore, 

make GHGs subject to regulation under the Act for PSD purposes, is consistent with the 

statutory language in section 202(a)(2) of the CAA. This section provides that “any regulation 

prescribed under paragraph (1) of this subsection (and any revision thereof) shall take effect after 

such period as the Administrator finds necessary to permit the development and application of 

the requisite technology, giving appropriate consideration to the cost of compliance within such 

period.” See 42 U.S.C. 7521(a)(2) (emphasis added). The final LDV Rule will apply to model 

years 2012 through 2016. The time leading up to the introduction of model year 2012 is the time 

that EPA “finds necessary to permit the development and application of the requisite technology, 

giving appropriate consideration to the cost of compliance within such period.” Model year 

2012 is therefore when the GHG standards in the rule “take effect.” 

EPA does not agree with several commenters who have suggested that the GHG 

standards in the proposed LDV Rule would not take effect until October 1, 2011. The latter date 

appears to be based on how the National Highway Traffic Safety Administration (NHTSA) 

determines the beginning of the 2012 model year under the Energy Policy and Conservation Act 

(EPCA). Under EPCA, a more stringent CAFE standard must be prescribed by NHTSA at least 

18 months before the beginning of the model year. For purposes of this EPCA provision, 

NHTSA has historically construed the beginning of the model year to be October 1 of the 

preceding calendar year. See 49 U.S.C. §32902(g)(2); 74 FR 49454, 49644 n.447 (Sep. 28, 

2009). Although EPA has endeavored to harmonize its section 202(a) standards with the 

NHTSA CAFE standards, EPA’s standards are promulgated under distinct legal authority in the 

CAA. Thus, the section 202(a) standards promulgated in the LDV Rule are not subject to EPCA 

or NHTSA’s interpretation of when a model year begins for purposes of EPCA. Under EPA’s 

planned LDV regulations, model year 2012 vehicles may be introduced into commerce as early 

as January 2, 2011. Although as a practical matter, some U.S. automakers may not begin 

introducing model year 2012 vehicles into commerce until later in 2011, they may nevertheless 

do so as early as January 2, 2011 under EPA’s regulations. Consistent with the discussion 
118

above, EPA construes the phrase “subject to regulation” in section 165(a)(4) and 169(3) of the 

Act to mean that the BACT requirement applies when controls on a pollutant first apply to a 

regulated activity, and not the point at which an entity first engages in the regulated activity. In 

this instance, the regulated activity is the introduction of model year 2012 vehicles into 

commerce. As of January 2, 2011, a manufacturer may not engage in this activity without 

complying with the applicable GHG standards. 

Likewise, EPA does not agree with commenters who argued that EPA should not 

consider the GHG controls in the LDV Rule to take effect until automakers have to demonstrate 

compliance with the fleet average standards at the end of the model year, based on actual vehicle 

model production. As discussed above, the LDV Rule includes both fleet average standards and 

vehicle standards that apply to individual vehicles throughout their useful lives, and both of these 

standards for GHG emissions are operative on model year 2012 vehicles introduced into 

commerce on or after January 2, 2011. Thus, controls on GHG emissions from automobiles will 

take effect prior to the date that a manufacturer must demonstrate compliance with the fleet 

average standards. The fact that the manufacturer demonstrates final compliance with the fleet 

average at a later date, based on production for the entire year, does not change the fact that their 

conduct was controlled by both the fleet average and the vehicle standards, and subject to 

regulation, prior to that date. 

With regard to the comment suggesting that EPA rely on the doctrines of administrative 

necessity and absurd results to delay PSD implementation for GHG emissions beyond January 2, 

2011, EPA has proposed to apply these doctrines in a separate EPA rulemaking, known as the 

Tailoring Rule, to at least temporarily limit the scope of GHG sources covered by the PSD 

program to ensure that permitting authorities can effectively implement it. EPA will be taking 

additional action in the near future in the context of that rule to address GHG-specific 

circumstances that will exist beyond January 2, 2011.

In addition to the specific comments regarding PSD applicability for GHGs based on 

finalization of the proposed LDV Rule, we also received general comments arguing that a 

pollutant does not become “subject to regulation” until the date when a source must certify

compliance with regulatory requirements or submit a compliance report. For the same reasons as 

provided in response to specific comments addressing the LDV Rule compliance demonstrations 

– namely the delay between the demonstration and the requirement to operate the underlying 

control or restrict the regulated activity – EPA declines to adopt this general interpretation. 

Likewise, EPA does not agree with general comments suggesting that EPA determine that a 

pollutant does not become subject to regulation until the time that an individual source engages 

in the regulated activity. EPA does not believe such a reading is consistent with the “subject to 

regulation” language in the CAA. Even if no source is actually engaged in the activity, once a 

standard or control requirement has taken effect, no source may engage in the regulated activity

without complying with the standard. At this point, the regulated activity and the emissions from 

that activity are controlled or restricted, thus being subject to regulation within the common 

meaning of the term regulation used in EPA’s regulations and section 165(a)(4) and 169(3) of 

the CAA.

Comment:
119

One commenter (0091) states that for the proposed LDVR, an interpretation of timing of 

PSD requirements could be the full implementation date (or the date controls must be in place 

and operation), which would extend the PSD applicability date by 15 to 19 months. For the 

NSPS for GHG emissions triggering PSD applicability, an interpretation of the full 

implementation date could extend the PSD applicability date by several years. 

Response:

Insofar as the commenter requests that EPA adopt an interpretation which applies PSD 

requirements on the “full implementation date” of the underlying control regulation, we believe 

this interpretation is substantively identical to the interpretation using the “takes effect” PSD 

implementation date that we are adopting in this final action. However, as described above, we 

have identified that date as January 2, 2011, or a similar date applicable under the final LDV 

Rule, which is less than the 15 to 19 months extension of applicability stated in the comment. To 

the extent that timeframe is based upon a misunderstanding of the LDV Rule applicability or the 

reliance on some other applicability event, we direct the commenter to our response provided to 

similar comments above. As for the comment that an NSPS for GHG emissions would delay

PSD implementation for several years, we find no reason that an NSPS would produce such a 

delay in PSD applicability. As we have explained in section 8.3, we find the NSPS effective date 

and takes effect date to be functionally equivalent such that PSD requirements for a pollutant 

covered by an NSPS would apply once such a standard takes effect and precludes operation of 

any stationary source in violation of the standard.

Comment:

One commenter (0104) agrees with EPA that the term “subject to regulation” in the CAA 

and corresponding regulations is most naturally interpreted to mean that PSD requirements apply

when the regulations addressing a particular pollutant become final and effective. According to 

the commenter, neither the effective date, nor the promulgation date, are the appropriate 

interpretations for the term “subject to regulation.” From the commenter’s perspective, 

regulations are final and effective at such time when all legal challenges to a proposed regulation 

have been exhausted through the court system. 

Response:

EPA rejects the argument that a pollutant does not become “subject to regulation” until 

all legal challenges to the underlying control regulation for that pollutant have been exhausted. 

The commenter does not provide (and EPA is not aware of) any legal authority or past agency 

guidance that would require such an interpretation, and we find it inconsistent with the actual 

control interpretation we are upholding in this action. We also note such an interpretation would 

add uncertainty with regard to the timing of PSD applicability for new pollutants. There is no 

way of knowing whether an underlying regulatory requirement to control a new pollutant will be 

the subject of a legal challenge, and even if such a regulation were challenged, the length of time 

that would be necessary to resolve the case is also unknown. Challenges to agency regulations 

can take months, if not years, to be “exhausted” by the courts based on a variety of issues, 
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including the complexity of the arguments in the case and whether additional appeals are sought, 

including Supreme Court review. Under the interpretation suggested in the comment, even if the 

underlying control regulation where upheld on appeal, the applicability of PSD requirements for 

the new pollutant subject to that requirement could be delayed until many years after those 

emissions have been controlled under other CAA programs. Not only would such an 

interpretation have the perverse effect of encouraging legal challenges to control requirements in 

other CAA programs in order to delay or avoid application of PSD requirements for stationary

sources, but it is inconsistent with the policy grounds EPA has articulated in upholding the actual 

control interpretation, namely orderly administration of the PSD program following considered 

judgment by Congress or EPA that a particular pollutant should be subject to control 

requirements. Accordingly, EPA declines to adopt an interpretation of PSD applicability timing 

which is determined by the possibility of a legal challenge to the underlying control regulation.

9.3. Need More Time Before PSD/Title V Applies to GHGs

In addition to providing specific comments on the appropriate interpretation of “subject 

to regulation” as it relates to the actual date by which PSD permitting requirements will be 

triggered, many comments also expressed a general need for more time before PSD permitting 

requirements are triggered for GHGs and specifically set-out what they believe the appropriate 

time should be. 

9.3.1. Impacts from GHG Regulation Support Actual Control Interpretation

One commerce commenter (0074) asserts that the most important policy-based reason 

against the trigger of PSD by other interpretations set out in the proposal is the impact those 

interpretations would on the millions of small and medium-sized stationary sources that surpass 

the statutory “major source” threshold for GHGs (cited U.S Chamber of Commerce statistics 

under a report entitled “A Regulatory Burden: The Compliance Dimension of Regulating CO2 as 

a Pollutant”). Even with the proposed Tailoring Rule (which they opine rests on shaky legal 

ground), tens of thousands of entities will become exposed to PSD (cites statistics set out in the 

Tailoring Rule proposal preamble).

Another commenter (0080) states that the necessity of adopting the proposed 

interpretation is emphasized by the very large number of small emitting sources who could 

otherwise be required to control CO2 emissions.

One industry commenter (0112) believes that EPA’s “actual control” interpretation is 

necessary to avoid the premature and ill-considered application of PSD requirements to sources 

in the commenter’s industry that would result under the other interpretations under EPA 

consideration. The commenter adds that their process (semiconductor manufacturing) is far 

more complex than those traditionally regulated under the PSD permit program and further, new 

manufacturing processes are typically introduced every two years with expansions or upgrades in 

between to respond to changing market conditions or resolve process problems. Because 

frequent permitting actions would impede their ability to make needed changes at the times 
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necessary to meet market demand, the commenter’s company has invested considerable money 

and effort over the years through design for the environment (DfE) and other programs to 

eliminate or minimize criteria pollutant emissions and keep our emissions below PSD/NSR and 

title V permitting thresholds. As a result, emissions of criteria pollutants from this commenter’s 

facilities have held steady or in some cases declined over the years in spite of substantial growth 

in manufacturing capacity during that time. The commenter states that EPA’s current “actual 

control” interpretation is therefore necessary to avoid “blindsiding” sources like theirs with 

unforeseen PSD requirements for GHG emissions and reversing years of planning and extensive 

resources devoted to managing regulatory obligations.

Two commenters (0115, 0116) representing industry and a state chamber of commerce 

(both from South Carolina), do not believe it is proper for the EPA to attempt to regulate GHGs 

under the CAA with respect to either the PSD or the title V programs; however, for the purposes 

of responding to EPA’s request for comments on the various options for when a pollutant can 

become “subject to regulation,” they encourage EPA to maintain the interpretation that PSD 

permitting requirements would be triggered only when an EPA rule is promulgated requiring 

control of emissions of a pollutant in the form of a final national rule. These commenters (0115, 

0116) believe the other interpretations suffer from multiple flaws. Specifically, the commenters 

feel that EPA has grossly underestimated the number and types of facilities that will be impacted 

by the LDVR standards proposal by becoming subject to NSR pollutants and the Title V and 

NSR/PSD permitting requirements. The commenters note that their state agency has identified 

over 800 of the currently permitted small sources that would subject to title V and NSR 

permitting as soon as GHGs are regulated under LDVR Standards as compared to 281 title V 

currently permitted facilities. In addition to this impact, the commenters contend that even the 

smallest modification or expansion activity may trigger a PSD technology review and modeling 

analysis. The technology review would encompass all of the triggered NSR pollutants, not just 

GHG. Economically, these facilities would have no choice but to abandon any new project or 

modification.

One commenter (0100) representing industry claims that the PSD Interpretive Rule 

Reconsideration proposal demonstrates that the “actual control interpretation” is insufficient 

because (according to the commenter) even with it in place, EPA had to do substantial rewriting 

of the CAA in order to allow it to proceed with an endangerment finding and the car rules 

without causing even more problems under the PSD program. The commenter (0100) contends 

that at a minimum, EPA should endorse the meaning of “subject to regulation” that best 

forestalls “absurd results.” However, the commenter states that if EPA were to proceed, it 

should do so as slowly as possible by forestalling as long as possible the conclusion that GHGs 

have become “subject to regulation.” Of the ranges of timing possibilities laid out in the 

proposal, this commenter believes the “actual control interpretation” currently favored by EPA is 

“the least of these evils,” but believes that EPA could do better.

One state/local agency association (0058) states that if EPA adopts any of the alternatives 

to the actual control interpretation, the results would be disastrous because PSD and title V 

would already be applicable throughout the nation for GHGs. The commenter (0058) cites 

EPA’s estimates of the permitting burden absent the Tailoring Rule and states that it is 

unreasonable to assume that state and local permitting agencies could absorb such an increase in 
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workload. The commenter (0058) concludes that EPA needs to adopt an interpretation which 

would avoid this result by allowing sufficient time to implement federal and local mechanisms to 

scale down this anticipated workload to something both more reasonable and manageable.

One state agency commenter (0077) believes that EPA has provided sound policy and 

practical reasons for the actual control interpretation. The commenter (0077) states that were 

EPA to adopt any of the alternative interpretations, it would unleash a hasty, inefficient, and 

unpredictable sequence of events that would impose impossible administrative burdens on state 

and local permitting authorities nationwide, and especially in California (the commenter’s state). 

The commenter adds that EPA’s legal rationale for the actual control interpretation is reasonable 

in light of the EAB’s Deseret ruling, and should withstand legal scrutiny.

One industry group (0063) commenter states that it is imperative that EPA adopt the 

interpretation contained in the “Actual Control” Memorandum, as amended, to provide that a 

pollutant does not become “subject to regulation” under the PSD program until a regulation 

actually controlling that pollutant takes effect through compliance at applicable sources. This 

commenter explains that exposing natural gas pipelines to PSD permitting for GHGs would 

disrupt project schedules and their underlying commercial, legal, financial, engineering and 

operational arrangements. Prevention of Significant Deterioration permits for critical gas 

pipeline projects could be delayed by a year or more as state permitting authorities struggle with 

an influx of new PSD applications. 

Response:

For the reasons discussed in Chapter 3 of this RTC, EPA is continuing to apply the 

“actual control” interpretation. EPA addresses the broader concerns with regard to incorporating 

GHGs into the PSD program in the following response.

9.3.2. Implementation Concerns Warrant More Time

Comments:

Several commenters, including many representing state and local agencies, (0054, 0056, 

0058, 0064, 0083, 0089, 0091, 0102, 0108, 0109, 0112) generally express the need for more time 

before PSD and/or title V permitting requirements are triggered for “regulated pollutants”/GHGs.

A local agency commenter (0054) supports EPA’s preferred option under normal 

circumstances when EPA is considering the adoption of emissions standards for pollutants for 

which EPA has adopted a NAAQS under CAA section 108 or a standard under section 112. 

However, this commenter questions the triggering of PSD (and title V) permitting requirements 

at the time of EPA’s promulgation of emissions standards for GHG for mobile sources, 

anticipated for about March 30, 2010. According to this commenter, the impact of such a 

triggering will be overwhelming with little, if any, environmental benefits, stating that permitting 

agencies will be inundated with permit responsibilities, industries will be faced with significant 
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delays in permit processing, and the lack of effective controls will make the BACT 

determination process fraught with legal challenges. 

This state and local agency commenter (0054) states that they are not confident that the 

EPA’s tailoring rule will succeed in avoiding the burden that it aims to avoid, especially in SIPapproved states, which will need up to two years to change state definitions for major sources. 

This commenter suggests that EPA find a legally-defensible method to defer for at least two 

years, or even to totally exempt, the triggering of PSD and title V requirements for stationary

sources of CO2 until such time as is necessary for Congress to address the issue.

One industry commenter (0056) submits that there are many significant logistical and 

other policy reasons for delaying the applicability of PSD to GHGs. The commenter’s industry

members report that there is a critical difference to the successful implementation of the PSD 

regulations for GHGs between a finding that PSD is applicable to GHGs on the “first substantive 

compliance date of a regulation” and a finding that is applicable on the “effective date” of 

regulation. The commenter asserts that the proposed “PSD and Title V Tailoring Rule” is based 

on avoiding some of the impacts on businesses, a goal that could be achieved by adopting a 

trigger date that delays these impacts through reasonable interpretation of the CAA.

Two state/local agency associations (0058, 0062) made similar assertions. One of these 

commenters (0062) notes that the proposed tailoring rule would not modify PSD and Title V 

programs that are SIP-approved and argued that states must be provided a sufficient opportunity

to modify those state programs under applicable state laws so that they will be consistent with 

EPA’s final tailoring rule; otherwise, there is a substantial risk that the overwhelming number of 

permitting actions forecast by EPA will be required. 

Two commenters (0056, 0058) request additional time before promulgation. One 

commenter (0056) states that an additional six months to a year and a half delay in the 

applicability of PSD to GHGs is necessary for sources to more adequately address the technical 

and financial challenges of controlling their GHG emissions. One commenter (0058) requests an 

additional year. The commenter (0058) felt EPA may have significantly underestimated the 

increased PSD workload resulting from the promulgation of the proposed Tailoring Rule, 

especially considering the workload the commenter has faced with the current PSD regulations. 

The commenter (0058) requests that EPA fully examine the effect of including non-CO2 GHGs 

in the PSD and title V programs before the programs become applicable.

Two commenters (0056, 0058) state that additional time for the implementation of title V

to GHG sources will be necessary. One commenter (0056) stated that additional time will be 

necessary as thousands of sources will be newly subject to title V. Both commenters (0056, 

0058) assert that states will need additional time to tailor their administrative and/or statutory

requirements for PSD and title V permitting. 

One state/local agency association (0062) states that EPA should consider adopting 

different interpretations of the “subject to regulation” provisions for the title V program as 

distinct from the PSD program, as EPA asserted that it could in its implementation of programs 

regulating PM2.5. The commenter (0062) indicates that the administrative burden and 
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environmental benefit associated with incorporating GHGs are substantially different in these 

programs and may provide a basis for establishing a priority in application of these programs to 

GHG emissions. The commenter also suggests that deferring implementation of the PSD and title 

V GHG programs until after the GHG emission reports are received under the new GHG 

reporting requirements (i.e., March 2011) will also greatly facilitate implementation of those 

programs by state and local permitting authorities. 

Another second state/local agency association (0058) indicates that EPA may have 

seriously underestimated the permitting workload associated with PSD and title V for GHGs, 

even with the Tailoring Rule, and gave illustrative estimates from two local agencies in 

California. Accordingly, this commenter (0058) believes immediate applicability at the time the 

GHG mobile sources regulations are finalized will overwhelming. On this basis, the commenter 

(0058) urges EPA to establish an effective date for the PSD and title V programs for GHGs at no 

earlier than 1 year after the effective date of a rule controlling GHG emissions under the CAA 

(i.e. EPA’s motor vehicle rule) and to postpone applicability for GHGs other than CO2 for at 

least another year. Regarding the latter, the commenter (0058) does not believe EPA or 

permitting agencies currently have sufficient information to accurately assess the impact of and 

implement a program applicable to relatively small sources of high global warming potential 

pollutants. The commenter asserted that EPA has authority to postpone applicability of the PSD 

and title V programs to GHGs, for a limited period of time, under the same theories as it has 

proposed to adopt higher interim thresholds of applicability than that provided by statute: the 

legal doctrines of “administrative necessity” and “absurd results.”

Another industry commenter (0064) believes that it is imperative that EPA give states the 

time to put in place staff and allocate resources needed to handle the additional permitting that 

will be necessary once GHG emissions are regulated pollutants for PSD purposes and resolve 

fundamental programmatic issues such as what constitutes BACT for GHGs.

One state agency commenter (0077) agrees that while EPA has the latitude to make PSD 

requirements for GHGs apply on the effective date of the GHG motor vehicle regulations rather 

than on its promulgation, EPA should apply the “absurd results” and “administrative necessity”

doctrines to provide the implementation onset and phase-in periods, and stated that comments to 

that effect would be submitted on the Tailoring Rule proposal.

Another state agency commenter (0102) supports allowing the necessary time to study and 

evaluate emissions characteristics and control options before making a pollutant subject to PSD 

requirements through promulgation of control requirements – they assert that this is the only way

meaningful emissions limits and BACT are developed, creating regulatory certainty and ensuring 

an enforceable permitting program. The commenter (0102) also states that individual permit 

reviews would take an inordinate amount of time due to the necessity for developing emissions

standards and controls for individual facilities.

Several additional reasons are cited by a state agency commenter (0091) as to why additional 

time is needed before implementing PSD and title V requirements for GHG:
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 Many existing facilities may be willing to take federally-enforceable limits to avoid being 

subject to PSD and title V permitting, citing as an example the options provided to states 

by EPA in the early stages of the title V program for limiting potential to emit of 

stationary sources that greatly reduced the number of facilities needing title V permits. 

States will need time to process these types of permit applications before title V and PSD 

applications are due.

 Facilities subject to the Mandatory Reporting of GHG rule will submit their first annual 

reports in March 2011. The commenter asks EPA to consider delaying any GHG 

permitting requirements until there is accurate monitoring and reporting data and states 

have additional time (at least one year after March 2011, but preferably 3 years) to assess 

the reporting data and plan for any additional permitting needs. This data will also be 

critical for conducting PSD netting analyses and BACT determinations.

 Like many states, the commenter needs time to adjust their regulations to increase the 

major source thresholds for Title V and PSD to be consistent with the Tailoring Rule, if 

finalized.

 Time is needed to create new fee structures more suitable for GHG. The state’s current 

mandatory fee is $43.75 per ton of each “regulated pollutant” which, without an 

adjustment to the current state fee statute, would result in excessive fees applied to 

hundreds of small businesses in the state.

 Prior to putting in place any new permitting program for CO2 and other GHG, states will 

need time to educate and train small and medium size businesses newly subject to title V 

and PSD permitting requirements. EPA also needs time to develop compliance 

assistance tools.

 Regulatory changes in the state require a lengthy stakeholder involvement process, 

agency board review and approval, and legislative approval. This normally takes about 

18 months.

 As a result of significant budget issues over the last 11⁄2 years, their state budget has been 

decreased by over 40%, requiring a reduction in the number of permitting positions. 

Positions are carefully controlled by a board under the state’s appropriations act, and the 

creation of new positions is difficult in tough economic times. 

The end result for this commenter (0091) is that their state will not be ready to implement title V 

and PSD programs for GHG emissions by March or May 2010, and strongly urge EPA to 

explore and find ways to give states the time they need to plan, prepare, and begin permitting 

GHG emissions in an orderly and timely manner. The commenter believes that if EPA interprets 

the PSD applicability date to be triggered by the promulgation or effective date of the final 

mobile source GHG tailpipe standards, many states will be forced to default their permitting 

programs to the EPA Regional Offices until state statutes or regulations are adjusted and more 

resources can be obtained.

Nine industry commenters (0067, 0081, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) 

state that EPA should carefully consider the timeframe in which it seeks to impose PSD 

requirements on major stationary sources of any newly regulated pollutants where actual 

emission controls may trigger such requirements and should structure its plans to allow 

permitting authorities and sources the maximum time available to prepare for compliance with 

any such requirements. These commenters also state that the need for flexibility in timing of 
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triggering PSD for GHGs is critical because major stationary sources need an appropriate period 

of time to develop the requisite technologies to meet BACT standards in a cost-effective way, 

and the Agency needs time to develop its own technical capacity and provide guidance to the 

regulated community and to states with permitting authority. 

One of the industry commenters (0109) believes that in the case of CO2, having this 

additional time will be critically important to all stakeholders involved considering that EPA has 

expressed concerns about having adequate time to assess emissions of a pollutant and determine 

appropriate controls before PSD and BACT requirements are required for a pollutant.

This industry commenter (0112) is also concerned that adding a large number of newly

covered sources to the PSD program would create substantial administrative and resource 

burdens for state and local air permit control agencies, which are not staffed to handle such an 

exponential increase in workload. Also, according to the commenter, there are important 

unanswered questions that would have to be addressed by these state and local agencies in 

issuing PSD permits. The commenter cites as an example that EPA’s recently promulgated 

Mandatory Reporting of Greenhouse Gases Final Rule did not set recordkeeping and reporting 

requirements for PFCs emitted from semiconductor operations and as such, state and local 

agencies would be forced to take on this challenge of defining recordkeeping and reporting 

requirements on a case-by-case basis in PSD and title V permits. Commenter adds that similarly, 

the PSD permitting program would require the application of BACT for GHG emissions and to 

date, there are few, if any BACT analyses of GHG emissions. While recognizing that EPA has 

proposed some options to address some of these concerns in the Tailoring Rule, the commenter 

believes EPA should for purposes of “administrative necessity” and avoiding “absurd results,”

maintain its current “actual control” interpretation to allow time to resolve these critical 

implementation issues. Finally, the commenter notes that opportunities their industry provides 

for key building blocks for the energy-efficient and “green” technologies the Administration 

suggests will launch our economic recovery and create new jobs could be lost if EPA does not 

maintain its current “actual control” interpretation.

Response:

EPA agrees that application of PSD program requirements to GHGs presents several 

significant implementation challenges for EPA, states and other entities that issue permits, and 

the sources that must obtain permits. Indeed, many of the public comments summarized above 

have illustrated the magnitude of the challenge beyond what is described in the notices on 

reconsideration of the PSD Interpretive Memo and the proposed Tailoring Rule. In recognition 

of the substantial challenges associated with incorporating GHGs into the PSD program, EPA’s 

preference would be to establish a specific date when the PSD permitting requirements initially

apply to GHGs based solely on these practical implementation considerations. However, EPA 

has not been persuaded that it has the authority to proceed in this manner. While EPA may have 

discretion as to the manner and time for regulating GHG emissions under the CAA, once EPA 

has determined to regulate a pollutant in some form under the Act and such regulation is 

operative on the regulated activity, the terms of the Act make clear that the PSD program is 

automatically applicable. See Alabama Power Co. v. Costle, 636 F.2d 323, 403-406 (C.A.D.C., 
127

1979) (rejecting arguments that Section 165 should not automatically apply to all pollutants 

subject to regulation under the Act.). 

Nonetheless, given the substantial magnitude of the PSD implementation challenges 

presented by the regulation of GHGs, EPA proposed in the Tailoring Rule to at least temporarily 

limit the scope of GHG sources covered by the PSD program to ensure that permitting 

authorities can effectively implement it. EPA based the proposal primarily on two legal 

doctrines: the “absurd results” doctrine, which we proposed to apply on the basis that Congress 

did not envision that the PSD program would apply to the many small sources that emit GHGs; 

and the “administrative necessity” doctrine, which we proposed to apply because of the 

extremely large administrative burdens that permitting authorities would confront in permitting 

the GHG sources. In comment on that action, as well as in comments on the PSD Interpretive 

Memo reconsideration notice, EPA received numerous suggestions that it is necessary to limit 

the scope of sources covered at the time GHGs become subject to regulation. These comments 

make clear that more time will be needed beyond January 2, 2011 before permitting of many 

GHG stationary sources can begin. Thus, EPA will be taking additional action in the near future 

in the context of the Tailoring Rule to address GHG-specific circumstances that will exist 

beyond January 2, 2011.

In addition, to the extent that commenters are specifically arguing that additional time is 

necessary for development of guidance regarding application of PSD requirements, including 

BACT, to GHG emissions, we recognize that the BACT process may be more time and resource 

intensive when applied to a new pollutant the absence of guidance on control strategies from 

EPA and other regulatory agencies. Under a mature PSD permitting program, successive BACT 

analyses establish guidelines and precedents for subsequent BACT determinations. However, 

when a new pollutant is regulated, the first permit applicants and permitting authorities that are 

faced with determining BACT for a new pollutant must invest more time and resources in 

making an assessment of BACT under the statutory criteria. Given the potentially large number 

of sources that could be subject to the BACT requirement when EPA regulates GHGs, the 

absence of guidance on BACT determinations for GHGs presents a unique challenge for permit 

applicants and permitting authorities. EPA intends to address this challenge in part by deferring, 

under the Tailoring Rule, the applicability of the PSD permitting program for sources that would 

become major based solely on GHG emissions. EPA is also developing guidance on BACT for 

GHGs. 

In the context of the Tailoring Rule, EPA is considering whether additional time may

therefore be justified for some sources due in part to the administrative implications that would 

be caused by an absence of additional BACT guidance specific to GHGs. The issuance of 

further guidance will assist with, and potentially ease the burden of, incorporation of GHGs into 

the existing PSD program, including the BACT determination process. We believe that GHG 

emissions present unique issues that may not have been previously addressed in Agency 

guidance and development of further guidance may be necessary. Accordingly, EPA is currently 

working to develop such guidance and is committed to issue it in advance of January 2, 2011.3 

 

3

 For example, EPA has already assembled a workgroup consisting of members of the Clean 

Air Act Advisory Committee (CAAAC) to discuss and identify the major issues and potential 
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(We also note, however, that our existing BACT guidance for currently regulated pollutants has 

addressed many facets of PSD permitting that will not be unique to its application to GHG 

emissions.) Furthermore, as the comments note, there may be additional information available in 

future that could assist in those determinations. 

Nonetheless, for reasons described elsewhere in this document, except under the 

rationales that will be discussed in the tailoring rule, the EPA does not believe that we would 

have the discretion to delay the application of BACT for all sources beyond the date that a 

control requirement takes effect. This would be true even if were not committing to issue 

guidance, and even though it will initially be harder to make GHG BACT determinations that 

will become easier over time. Moreover, if the EPA determines in the tailoring rule that some 

sources will not be excluded from the BACT requirement as of January 2, 2011, it would not be 

appropriate to further delay the BACT reductions for such sources simply because more 

guidance or experience could be helpful in applying it. BACT process is itself designed to 

determine the most effective control strategies achievable in each instance, considering energy, 

environmental, and economic impacts.

9.3.3. Provide More Time by Delaying Final Action on the GHG LDV Rule

Comments:

Three industry commenters (0067, 0073, 0083) indicate that EPA could address its stated 

policy goals to have sufficient time to formulate an efficient approach to GHG stationary source 

regulation by using its available discretion to delay final action on the section 202 GHG motor 

vehicle regulations rulemaking, thereby putting off the “triggering” event. The commenters 

(0067, 0073, 0083) summarized their organizations’ prior comments to this effect on the 

proposed GHG motor vehicle regulations, and one (0073) attached those comments to this 

comment letter.

One commenter (0084) states that Massachusetts v. EPA is clear that EPA has substantial 

discretion regarding the timing of issuing rules and, thus, is under no obligation to issue the 

 

barriers to implementing the PSD program for GHGs, with a focus on the BACT determination. 

The workgroup presented their initial recommendations to the CAAAC at the CAAAC’s 

February 3, 2010, meeting, and the CAAAC unanimously voted to pass the recommendations on 

to EPA. EPA is currently reviewing those recommendations and developing guidance 

addressing the issues raised therein. The workgroup is continuing to meet to assess issues that 

were deferred in their initial recommendations, including GHG-specific consideration of netting

similar to that identified in the comments above, and EPA anticipates that the we will also issue 

guidance in accordance with the additional recommendations that arise from the workgroup’s 

continued deliberations, as well as other issues that it might be necessary to address that arise 

from inquiries by permitting authorities and the regulated community. (Additional information 

regarding the workgroup and its work in this area are available at 

http://www.epa.gov/air/caaac/climatechangewg.html.) 
129

LDVR. Therefore, the commenter (0084.1) opposes EPA’s attempt to move GHGs into the 

category of “actual control” via regulatory action. The commenter (0084) believes that finalizing 

the LDVR will trigger a massive bureaucratic nightmare that EPA cannot avoid because the 

Tailoring Rule rests on flimsy legal foundations. Instead, the commenter (0084) believes that 

EPA should hold all the proposed GHG actions in abeyance until Congress determines whether it 

will formulate a new and appropriate statutory framework for GHG regulations.

One state agency commenter (0102) states that promulgation of any rules triggering PSD 

for GHG (such as the LDVR) should only be pursued after EPA has comprehensively resolved 

all issues necessary for states to implement the GHG control rules, especially issues surrounding 

proper BACT review.

Response:

As discussed elsewhere in this RTC and in the October 7 reconsideration notice, EPA 

acknowledges that the final light duty vehicle (LDV) rule, if finalized to require control of GHG 

emissions from light duty vehicles, it will have the effect of triggering PSD requirements for 

GHGs under the interpretation of “subject to regulation” described in this action. However, 

EPA’s present reconsideration action is merely finalizing the agency’s interpretation of a specific 

provision of the PSD rules and is not the proper forum for addressing the issue raised in the 

comment. In this reconsideration action, EPA is not making any decisions or taking any action 

with respect to the issuance of a LDV Rule - the content and timing of the LDV Rule is the 

subject of a separate rulemaking action, and that rulemaking is the proper place to address 

comments on the timing of any final LDV Rule. In addition, we did, in fact, receive similar 

comments in response to the proposed light duty vehicle rulemaking. Thus, EPA will respond to 

this issue in the record for that rule.

9.4. Identifying the Greenhouse Gases “Subject to Regulation”

Under LDV Rule

Comment: 

One commenter (0056) submits for the Tailoring Rule, that regulating GHG compounds 

for those compounds that EPA has not yet established an emission standard would be 

unreasonable and inconsistent with the “subject to regulation”/”actual control” test. In the 

Mandatory GHG Reporting rule, the EPA stated that they cannot presently give guidance to 

industries with regard to calculating sulfur hexafluoride (SF6), hydrofluorocarbons (HFC), or 

perfluorocarbons (PFC) emissions and deferred mandatory GHG reporting obligations on 

industries for these pollutants. Further, because the EPA has not established or proposed any 

“regulation” for SF6, HFC, and PFC, it is difficult to interpret that the statutory language in the 

PSD BACT provision or elsewhere is applicable to these compounds since they are not (and will 

not be on the effective date of the LDVR) “subject to regulation.”

Response:
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As identified by the commenter, this issue is specifically addressed in the Tailoring Rule 

proposal and will be resolved in EPA’s final action on that rule, consistent with the regulations 

contained in the final LDV Rule.

9.5. Permit Application Transition

Comment:

Eight industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) state 

that EPA also should be prepared to clarify what the “takes effect” date means, in practical 

terms, for implementation of requirements for PSD permit applications. The commenters believe 

that EPA should, for example, confirm that if a PSD permit application is submitted in complete 

form before the date on which PSD begins to apply to a pollutant, then that permit application is 

not subject to any requirement to address that pollutant (regardless of the date on which the 

submitted permit application is determined to be complete) and that such an application could 

not be deemed “incomplete” on the grounds that it does not address that pollutant.

Another industry commenter (0067) stated that if EPA determines that the legal 

“effective date” of its proposed motor vehicle GHG rule should be used, then a specific transition 

period should be adopted that at least will allow applications submitted prior to the date 

Administrator Jackson granted reconsideration of the PSD Interpretive Memo to be processed 

without consideration of GHGs. (The commenter (0067) notes that another period may be more 

appropriate and reserved the right to submit additional comments on this issue as part of the 

tailoring rule.) The commenter (0067) indicates that a similar process should also be provided 

for incorporating GHGs into the title V permitting program.

One industry commenter (0072) requests that if EPA decides to finalize the 

interpretations of PSD applicability reflected by the PSD Interpretive Memo and GHG Tailoring 

Rule, that EPA make clear that source owners who have already obtained construction permits 

for a proposed stationary source or modification under a SIP-approved permitting program will 

not now need to obtain a PSD permit due solely to their emissions of GHGs, so long as the 

source owner commences construction within 18 months from the date when GHGs become 

subject to regulation under the CAA or any earlier date as may be required by the SIP. This 

commenter stated that EPA has historically provided clear relief upon promulgating new 

requirements under PSD which would cause facilities that had already applied for or obtained 

valid permits either to become subject to PSD for the first time or, if already subject to PSD, to 

become subject to new or additional requirements. Failing to provide the requested transitional 

relief would jeopardize the continued viability of a substantial number of “shovel-ready”

construction projects at a time when the U.S. economy is in crisis and unemployment rates are 

high.

The industry commenters (0067, 0073) similarly indicates that whatever date is finally

established for “actual control,” the requirement to conduct BACT for GHGs should not attach to 

projects (1) that have a completed permit application before the effective date of GHG 
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regulation, or (2) for which a determination has already been made before the effective date of 

GHG regulation that a PSD permit was not required.

One commenter (0071) suggests that EPA should make clear in the PSD Interpretive 

Memo that once a GHG becomes subject to PSD permitting requirements, those requirements are 

applied prospectively. 

Another commenter (0058) requests that when GHGs become subject to regulation, EPA 

allow permitting authorities a chance to adopt a method of limiting a source’s potential to emit 

(PTE) (when the source’s actual emissions are lower than the applicable thresholds) and thus 

keep it out of the PSD and title V program, rather than adopt this method after authorities have 

begun implementing the title V and PSD.

Response:

In light of EPA’s conclusion that pollutants become subject to regulation for PSD 

purposes when control requirements on that pollutant take effect and that such requirements will 

not take effect for GHGs until January 2, 2011 if EPA finalizes the proposed LDV Rule as 

anticipated, EPA does not see any grounds to establish a transition period for permit applications 

that are pending before GHGs become subject to regulation. As a general matter, permitting and 

licensing decisions of regulatory agencies must reflect the law in effect at the time the agency

makes a final determination on a pending application. See Ziffrin v. United States, 318 U.S. 73, 

78 (1943); State of Alabama v. EPA, 557 F.2d 1101, 1110 (5th Cir. 1977); In re: Dominion 

Energy Brayton Point, LLC, 12 E.A.D. 490, 614-616 (EAB 2006); In re Phelps Dodge Corp., 10 

E.A.D. 460, 478 n.10 (EAB 2002). Thus, in the absence of an explicit transition or 

grandfathering provision in the applicable regulations (and assuming EPA finalizes the LDV 

Rule as planned), each PSD permit issued on or after January 2, 2011 would need to contain 

provisions that satisfy the PSD requirements that will apply to GHGs as of that date.

Under certain circumstances, EPA has previously allowed proposed new major sources 

and major modifications that have submitted a complete PSD permit application before a new 

requirement becomes applicable under PSD regulations, but have not yet received a final and 

effective PSD permit, to continue relying on information already in the application rather than 

immediately having to amend applications to demonstrate compliance with the new PSD 

requirements. In such a way, these proposed sources and modifications were “grandfathered” or 

exempted from the new PSD requirements that would otherwise have applied to them.

For example, EPA adopted a grandfathering provision when it changed the indicator for 

the particulate matter NAAQS from total suspended particulate matter (TSP) to particulate 

matter less than 10 microns (PM10). The federal PSD regulations at 40 CFR 52.21(i)(1)(x) 

provide that the owners or operators of proposed sources or modifications that submitted a 

complete permit application before July 31, 1987, but did not yet receive the PSD permit, are not 

required to meet the requirements for PM10, but could instead satisfy the requirements for TSP 

that were previously in effect.
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 In addition, EPA has allowed some grandfathering for permit applications submitted 

before the effective date of an amendment to the PSD regulations establishing new maximum 

allowable increases in pollutant concentrations (also known as PSD “increments”). The federal 

PSD regulations at 40 CFR 52.21(i)(10) provide that proposed sources or modifications that 

submitted a complete permit application before the effective date of the increment in the 

applicable implementation plan are not required to meet the increment requirements for PM10, 

but could instead satisfy the increment requirements for TSP that were previously in effect. 

Also, 40 CFR 52.21(i)(9) provides that sources or modifications that submitted a complete 

permit application before the provisions embodying the maximum allowable increase for 

nitrogen oxides (NOx)

4

took effect, but did not yet receive a final and effective PSD permit, are 

not required to demonstrate compliance with the new increment requirements to be eligible to 

receive the permit.

Under the particular circumstances presented by the forthcoming application of PSD 

requirements to GHGs, EPA does not see a justification for adopting an explicit grandfathering 

provision of the nature described above. Permit applications submitted prior to the publication 

of this notice should in most cases be issued prior to January 2, 2011 and, thus, effectively have a 

transition period of nine months to complete processing before PSD requirements become 

applicable. Additional time for completion of action on applications submitted prior to the onset 

of PSD requirements for GHGs therefore does not appear warranted to ensure a smooth 

transition and avoid delays for pending applications. To the extent any pending permit review 

cannot otherwise be completed within the next nine months based on the requirements for 

pollutants other than GHGs, it should be feasible for permitting authorities to begin incorporating 

GHG considerations into permit reviews in parallel with the completion of work on other 

pollutants without adding any additional delay to permit processing. 

Furthermore, the circumstances surrounding the onset of requirements for GHGs are 

distinguishable from prior situations where EPA has allowed grandfathering of applications that 

were deemed complete prior to the applicability new PSD permitting requirements. First, this 

action and the PSD Interpretive Memo do not involve a revision of the PSD permitting 

regulations but rather involves clarifications of how EPA interprets the existing regulatory text. 

This action articulates what has, in most respects, been EPA’s longstanding practice. It has been 

EPA’s consistent position since 1978 that regulation of a pollutant under Title II triggers PSD 

requirements for such a pollutant. See 42 FR 57481. Thus, permitting authorities and permit 

applicants could reasonably anticipate that completion of the LDV Rule would trigger PSD and 

prepare for this action. Many commenters interpreted EPA’s October 7, 2009 notice as 

proposing to trigger PSD requirements within 60 days of the promulgation of the LDV Rule 

rather than the January 2, 2011 date that EPA has determined to be the date the controls in that 

rule take effect. Second, there are presently no regulatory requirements in effect for GHGs. On 

the other hand, at the time EPA moved from using TSP to using PM10 as the indicator for the 

particulate matter NAAQS, grandfathered sources were still required to satisfy PSD requirements 

for particulate matter based on the TSP indicator. Likewise, when EPA later updated the PSD 

 

4

 The increments for emissions of the various oxides of nitrogen are expressed as 

concentrations of nitrogen dioxide (NO2). 
133

increment for particulate matter to use the PM10 indicator, the grandfathered sources were still 

required to demonstrate that they would not cause or contribute to a violation of the particulate 

matter increment based on TSP. In the case of the adoption of the NO2 increment, grandfathered 

sources were still required to demonstrate that they would not cause or contribute to a violation 

of the NO2 NAAQS. In contrast, for GHGs, there are no measures currently in effect that serve 

to limit emission of GHGs from stationary sources.

For these reasons, EPA does not intend to promulgate a transition or grandfathering 

provision that exempts pending permit applications from the onset of GHG requirements in the 

PSD program. As discussed above, in the absence of such a provision, PSD permits that are 

issued on or after January 2, 2011 (in accordance with limitations promulgated in the upcoming 

Tailoring Rule) will be required to contain provisions that fulfill the applicable program 

requirements for GHGs.

In addition, to the extent commenters are raising specific applicability and 

implementation issues regarding PSD requirements for GHGs, as discussed in section 9.3.2, EPA 

is currently working to develop general guidance on key PSD-GHG issues and will continue to 

develop guidance as necessary to address issues that arise from inquiries by permitting 

authorities and the regulated community. 

9.6. Potential Retroactive Liability

Comment:

Nine industry commenters (0067, 0080, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) 

raise the possibility of retroactive liability under the alternative interpretations other than the 

actual control interpretation. 

Specifically, eight of the industry commenters (0067, 0083, 0089, 0090, 0096, 

0106/0107, 0108, 0109) indicate that the monitoring and reporting interpretation (and the other 

alternative interpretations) could unfairly result in retroactive liability. The commenters note 

that if CO2 were “subject to regulation” based on EPA’s 1993 regulations implementing section 

821, any source of GHG emissions at or above the statutory PSD threshold of 100 to 250 tons 

per year that underwent construction or a major modification since that time might theoretically 

(putting aside the statute of limitations) be considered in violation of PSD requirements. The 

commenters state that this is not mere conjecture; environmental advocacy groups filed one 

citizen suit alleging this exact sort of violation. See Sierra Club v. Otter Tail Power Corp., CIV 

08-1012 (D.S.D., filed June 10, 2008), Complaint at ¶¶ 92-96. (The case was dismissed on other 

grounds, 608 F. Supp. 2d 1120 (D. S.D. 2009), and has been appealed by plaintiffs, see No. 09-

2862 (8th Cir., filed Aug. 10, 2009).) 

The other industry commenter (0080) notes that the proposed Tailoring Rule is not 

retroactive and asked whether a ruling in favor of the Petitioners would mean that any source that 

undertook activity after passage of the 1990 CAA Amendments that made it a new or modified 

major source for CO2 (under the statutory definition) is in violation of the CAA because it did 
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not apply for a PSD permit. The commenter (0080) notes that a very large number of sources 

could be at risk.

Response:

Given that EPA is finalizing an interpretation in which GHG emissions would not be 

“subject to regulation” for the purposes of PSD until the specific GHG emission control 

requirements in the final LDV Rule take effect, there is not an issue of retroactivity that is raised 

by this final action.

9.7. Clean Air Act Is Poorly Suited to Greenhouse Gas Regulation

Comment: 

Sixteen industry and commerce commenters (0061, 0066, 0067, 0071, 0073, 0074, 0081, 

0085, 0097, 0100, 0102, 0104, 0105, 0115, 0116, 0117) and one legal commenter (0084) believe 

that the CAA is poorly suited to GHG regulation.

One industry group (0085) believes that comprehensive climate legislation is far 

preferable to using the existing CAA case-by-case permitting programs to address GHG 

emissions because these permitting programs are resource-intensive for both regulated entities 

and regulators. The industry group (0085) states that, in an arena in which efficiency is the key

to reducing impacts, the case-by-case nature of the Prevention of Significant Deterioration (PSD) 

and title V programs indicates that they are perhaps the least efficient mechanisms to mitigate the 

effects of climate change.

One legal commenter (0084) believes that the CAA was not designed (and is poorly

equipped) to accommodate the regulation of GHGs, and that it is incumbent on Congress, not 

EPA, to craft original legislation. The commenter (0084) urges EPA to halt issuance of all new 

regulations pertaining to GHGs, and argues that this reconsideration action will somehow shield 

EPA from litigation regarding its other GHG regulations (i.e., Endangerment Finding, GHG 

Motor Vehicle Rule, and Tailoring Rule).

Commenter (0086) added that national and international issues related to GHGs should 

be settled in a comprehensive legislative or administrative proceeding, not through individual 

permitting decisions. 

One commenter (0104) strongly disagrees that the CAA is the appropriate mechanism to 

regulate GHGs and adamantly oppose the regulation of GHG emissions under the PSD program 

or any other federal permitting program authorized under the CAA. 

An industry commenter (0105), referring to its comments to EPA relative to its Advanced 

Notice of Proposed Rulemaking (ANPR) for regulating GHGs under the CAA, believes that the 

CAA is clearly unsuitable for reducing GHGs, and that the best approach to address climate 

change is new legislation for a market-driven program to reduce GHGs, and that a cap and trade 
135

program must be carefully designed to avoid disproportionate impacts on the manufacturing 

sector in general, and the chemical sector in particular. 

One commenter (0116) believes that (if EPA regulates GHG emissions under the PSD or 

title V programs) many existing facilities will need new title V or PSD permits to replace, repair 

or improve the efficiency of aging equipment, including energy efficiency projects, and that 

permitting delays will force facilities to evaluate the possibility of shutting down domestic 

operations and relocating to beyond the U.S. borders. Furthermore, small businesses, such as 

asphalt and concrete batch plants, metals manufacturing, the remaining textile industry, food 

packaging, wood products, even hospitals will be subject to many more requirements than they

currently are (not just GHGs but also all other new source review [NSR] pollutants), and it will 

be significantly more costly for them to receive a permit and they will experience significant 

permit delays, discontinued construction and loss of jobs. The commenter predicts that the 

permitting process will grind economic development and industrial growth to a halt causing 

adverse consequences to an already struggling economy.

One industry group (0061) comment letter expresses that the CAA is flawed and new 

national legislation is the best mechanism for GHGs. They assert that regulation under the CAA 

has historically focused on control of criteria and hazardous air pollutants (HAP) to address local 

or regional human health, welfare and environmental impacts. The architecture of the CAA is 

thus premised on the concept that state, regional and federal control of emissions will improve 

air quality in the corresponding area. The GHG effect is global – and localized emissions 

reduction will not result in environmental benefits to the U.S. in absence of corresponding 

international action.

One commerce commenter (0074) expresses belief that EPA has ignored options to avoid 

a regulatory cascade through piecemeal regulation of GHGs under the CAA. They state that they

suggested that EPA not undertake an endangerment finding; suggested that EPA use a 

combination of corporate average fuel economy (CAFE) standards and title VI of the CAA in its 

response to the Light Duty Vehicle Rule (LDVR) proposal; and suggested potential approaches 

to regulation under section 115 of the CAA, as well as the “no PSD without a National Ambient 

Air Quality Standards (NAAQS)” and “GHGs are not subject to regulation” approaches in these 

comments. The commenter requests that EPA avoid the CAA’s regulatory cascade and instead 

allow Congress to craft comprehensive climate legislation. This commenter provides copies of 

comment letters submitted to EPA from the other EPA GHG-related rulemakings.

One industry commenter (0097) believes that first and foremost, the CAA in its current 

form was not designed to regulate GHGs, including CO2, for various reasons. This commenter 

argues that consequently, national legislation is the best mechanism for regulating GHGs, 

including CO2, because “absurd results” can be avoided and concerns addressed in a fashion that 

provides the most certainty that the regulations can move forward in a fashion which can be 

defended in the judicial process. This commenter believes that this is properly the work of 

Congress through comprehensive market-based climate legislation, although the commenter 

recognizes that the Supreme Court’s decision in Massachusetts v. EPA may require the Agency

to commence regulatory action for CO2 in absence of, or in the face of delayed, Congressional 

action.
136

One state agency commenter (0102) states that the CAA is not an appropriate vehicle for 

the regulation of GHGs and that such regulation will result in significant impacts on the 

economy without measurable environmental benefits. The commenter (0102) notes that the 

endangerment finding and subsequent proposals of the PSD Interpretation, the GHG mobile 

sources regulations, and the Tailoring Rule interconnected, and asserted that the piecemeal GHG 

proposals prevent adequate opportunity to evaluate and effectively comment on the proposals. 

The commenter (0102) states that EPA should withdraw all the GHG proposals.

Commenters (0092, 0098) representing several groups of companies state that, with 

regard to all of EPA’s recent GHG rulemakings under the CAA, the Agency should proceed with 

caution going forward by allowing both the international community and Congress time to 

develop a comprehensive and sensible approach to the global problem of climate change.

Response:

Regardless of whether the CAA is the preferred mechanism for GHG regulation, the U.S. 

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

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

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

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

the CAA and proposed corresponding GHG controls for light duty vehicles. As explained in 

various responses above, a final vehicle rule will trigger PSD requirements for GHGs. Thus, 

EPA is taking appropriate action in this reconsideration and the proposed Tailoring Rule to 

ensure a common sense and efficient approach to GHG regulation. This reconsideration action is 

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

opining on potential Congressional action with regard to GHG regulation. 

9.8. Arguments That PSD Cannot Apply to Pollutants Regulated Only 

Under Title II of Clean Air Act

Comment: 

Twenty-six industry and commerce commenters (0051, 0053, 0056, 0060, 0061, 0066, 

0067, 0068, 0069, 0071, 0072, 0073, 0074/0075, 0076, 0085, 0086, 0088, 0092, 0093, 0096, 

0098, 100, 0104, 0106/0107, 0111, 0118) opine that a GHG NAAQS is a prerequisite for PSD to 

be triggered based solely on emissions of GHGs and EPA must interpret the CAA and PSD 

regulations consistent with this requirement.

One commenter (0086), representing several groups of companies, believes that the PSD 

Interpretive Memorandum and the Reconsideration Proposal reflect a major oversight on EPA’s 

part in that EPA has been focused on whether the phrase “subject to regulation” in section 165(a) 

refers only to actual control, concluding in the end that it does and then merely assuming, 

without analysis, that the “any pollutant” component of the total phrase “any pollutant subject to 

regulation” has no bounds and therefore potentially includes GHGs. However, the commenter 
137

believes that the 100/250 TPY thresholds in the statute must have some meaning, as EPA has 

recognized, because they are an integral part of the statutory fabric, and they cannot be 

reconciled programmatically with an unbounded reading of “any pollutant subject to regulation.” 

The commenter states that, while EPA has chosen to try to weave new thresholds into that fabric 

specifically for GHGs, it has ignored the possibility that the 100/250 TPY thresholds actually 

signal that the 95th Congress intended applicability of the section 165(a) PSD program to be 

based on conventional pollutants, and that the 95th Congress did not mean to authorize EPA to 

base section 165(a) PSD applicability on GHG emissions. The commenter urges EPA, at a 

minimum, to address that probability through a detailed and thoughtful legal analysis, because 

without such an analysis, any final decision to base PSD on GHG emissions can have no 

legitimacy. The commenter states that if EPA fails to adopt the interpretation that PSD intended 

only to apply to conventional pollutants, its PSD Interpretive Memorandum, along with the LDV 

rule, will be arbitrary and capricious for failure to adequately consider their consequences. The 

commenter (0086) adds that failure to account for the PSD and title V implications of EPA’s 

actions also violates the Regulatory Flexibility Act (RFA), the Unfunded Mandates Act (UMA), 

and the Paperwork Reduction Act (PRA).

According to one commenter (0094) representing an industry trade association, EPA’s 

reconsideration proposal does not reflect the robust legal analysis required to support an 

interpretation with such far-reaching legal, policy, technical and economic consequences. The 

commenter notes that the proposal begins with the starting premise that the phrase in section 

165(a)(4) -- “subject to regulation under this Act” -- operates as an independent and powerful 

PSD permitting trigger. According to the commenter, the proposal rests on the proposition that 

treating this phrase as a permitting trigger accords with longstanding Agency practice, but the 

Deseret case found otherwise, and besides, longstanding Agency practice alone cannot provide 

sufficient legal basis for the interpretation. This commenter contends that the reconsideration 

proposal offers no evidence to indicate that U.S. EPA, in arriving at the interpretation, evaluated 

any of the following:

(1) The entire statutory provision at issue in the context of the CAA and with reference 

to its legislative and regulatory history;

(2) A potentially more appropriate triggering phrase -- “in any area to which this part 

applies” -- at the beginning of section 165(a); and

(3) Other potential meanings of the “subject to regulation under this Act” phrase in 

section 165(a)(4), including based upon comparison to other provisions with similar scope and 

status to section 165(a)(4) -- i.e., sections 165(a) (1), (2), (3), (5), (6), (7) and (8). The 

commenter claims that the absence of such evaluation is material, and concludes that the 

Reconsideration Proposal, therefore, does not satisfy the Agency’s obligation for rational, fully 

reasoned and explained analysis.

One industry commenter (0100) claims that adherence to the statute will save everyone a 

lot of trouble. The commenter, referring to the Tailoring Rule proposal, states that EPA leans 

most heavily on Alabama Power to support its claim of authority to adjust the statute out of 

“impossibility” or “administrative necessity,” but asserts that this case instructs EPA not to do 

exactly what it proposes to do with the regulation of GHGs. According to the commenter, what 

Alabama Power tells us is that EPA cannot create its own “administrative necessity” by ignoring 

one provision of the CAA, and then solve that manufactured necessity by ignoring another. 
138

Commenter cites resolution of the “potential to emit” issue in Alabama Power, and EPA’s 

attempt (then) to exempt from PSD review any source with actual (controlled) emissions below 

50 tons over year. Commenter claims that this attempt at a tailoring rule ignored the very same 

specific 100/250 ton-per-year thresholds set by statute and was an ‘expansion’ of the limited 

exemption provided in section 165(b) of the Act. Further, commenter argues that EPA tried to 

defend its tailoring of the PSD thresholds in 1979 the same way it now tries 30 years later, 

claiming that EPA’s present plans with respect to CAA regulation of GHG are little different 

from those found defective and remanded in Alabama Power in that EPA intends to (1) 

manufacture CAA overbreadth in direct violation of CAA language, structure, and legislative 

history, in this case by declaring GHGs to be an air pollutant that endangers public health and 

welfare, (2) adopt rules to limit such emissions from mobile sources, and (3) in this Docket, 

conclude that these limits on mobile source emissions instantly trigger air permitting 

requirements for stationary sources.

This industry commenter (0100) argues that EPA should decide to leave GHGs out of the 

PSD program (at least before completing the process required by section 166) and states that 

such a decision would not only comport with the law, but with good policy in that the currently 

proposed decisions do not reflect a policy that a rational legislature would have intended (e.g., it 

makes no sense to have a pollutant regulated for one purpose, from one category of sources, 

under one section of the statute, based on one set of findings, to cause that pollutant 

automatically to become regulated for an entirely different purpose, from a wholly separate 

category of sources, under a totally different regulatory scheme.

This industry commenter (0100) states that proper “tailoring” could be undertaken in the 

design of a future PSD program for GHGs. In support, this commenter states that Congress left 

EPA relatively free to fashion — by rule — a sensible PSD program for those unknown future 

pollutants and, consequently, EPA — in the event EPA could justify and promulgate a NAAQS 

for GHGs — has the freedom to craft a PSD program appropriate to GHGs. Section 166(c) tells 

EPA that it may choose some other means of technology-forcing appropriate to GHGs. Further, 

commenter points out that section 166(e) also would be handy in that unlikely future, as it leaves 

EPA without the obligation to undertake any geographical classifications that are rather pointless 

for GHGs and that EPA arguably even could set the permitting thresholds at a sensible level, as 

section 166(c) allows. The commenter claims that EPA proceeds at odds with the statute with 

any rule that declares GHGs “subject to regulation” under Part C by any means other than the 

one prescribed in section 166. 

The commenter (0100) argues that the proper interpretation of Part C (if followed by

EPA as commenter claims it must) allows for orderly administration respectful of the State 

Implementation Planning process, and that another major advantage of complying with the 

statute is that it allows for orderly implementation.

The commenter (0100) asserts that EPA’s request for comments posits only a very

limited range of possibilities, asking narrowly and only about the meaning of the section 

165(a)(4) phrase, “subject to regulation,” and then suggesting a range of nuances in that phrase 

having to do with whether the pollutant is regulated by monitoring, by constituent, or by numeric 

limit, and whether by the date of adoption of the limit or its effective date. This commenter 
139

points out that section 165(a)(4) is but one sub-subsection of an entire part of the CAA, 

“Prevention of Significant Deterioration of Air Quality, “ states that the entirety of the statute 

should be examined to find a sensible interpretation that gives full effect to the purpose of the 

Act, to each of its provisions, and avoids “absurd results.”

The commenter (0100) asserts that the “absurd results” documented in the proposed 

Tailoring Rule establish that Congress did not intent for GHG to be regulated under Part C. The 

commenter notes that EPA makes quite clear its intent to ignore clear statutory thresholds and 

state prerogatives in the implementation of the PSD program, all out of a claimed need to avoid 

the “absurd results” and impossible burdens befalling the PSD program as a result of EPA’s 

choice to invite GHGs into it, overnight. The commenter suggests that EPA’s view is incorrect, 

and that the statute — at section 166 — prescribes a very different, longer and more thoughtful 

path to possible regulation of GHGs under the PSD program. Further, the commenter contends 

that the statute does not compel the “absurd results” that cause EPA to propose rules that violate 

the statute. The commenter notes that the phrase “subject to regulation” appears in the 

subsection of section 165 that enumerates the criteria for review and issuance of PSD permits, 

notes that section appears in a Part of the Act enacted in 1977 to prevent significant deterioration 

of air quality, and so claims that the meaning of that one subsection should be understood in the 

context in which it was adopted. The commenter states that the PSD provisions were enacted to 

address a limited number of criteria pollutants – those “subject to regulation” to regulation in 

1977 – certainly not including “greenhouse gases.”

The commenter (0100), based on their review of the PSD program (Part C of Title I) 

statute and legislative history, contends that everything about Part C was drafted with the 

intention of governing emissions of the criteria pollutants regulated at the time of enactment (in 

1977) and that nothing about Part C suggests an intent to apply PSD to anything other than 

criteria pollutants, or to pollutants that might be regulated in the future, after enactment. 

Commenter notes that the PSD program was established in 1977 as reaction to concerns about 

the possibility that areas cleaner than the national ambient air quality standards might be allowed 

to degrade to bare compliance with those standards. The PSD provisions of the CAA establish in 

detail the requirements for EPA to establish the maximum amount of degradation allowed from 

“baseline” air quality relative to the existing NAAQS, at least for two out of the six criteria 

pollutants, sulfur dioxide and particulate matter. Commenter also observes that Part C is 

extremely prescriptive, not only in its quantification of allowable deterioration of the two 

covered pollutants (the “increments”), but also in its designation of geographic areas of 

applicability, and its special concern for national parks and visibility, and notes one criteria for 

issuance of a required permit is the imposition of BACT for “each pollutant subject to 

regulation.” The commenter also points out that throughout Part C, it completely relies on state 

implementation. To this commenter it is no surprise that none of the Part C provisions make any 

sense as applied to emissions of GHG, especially for the purpose of regulating those emissions 

so as to minimize a trace, natural, uniformly distributed constituent of clean air presumed to be 

associated with modulating global temperatures. The commenter provides a review of sections 

161 through 172 to support the contention that everything about Part C was drafted with the 

intention of governing emissions of the criteria pollutants regulated at the time of enactment, 

with detailed instructions on SO2 and PM, and generalized instructions to adapt a PSD program 

for the others of the time (hydrocarbons, carbon monoxide, photochemical oxidants, and nitrogen 
140

oxides) and that nothing about Part C suggests an intent to apply PSD to anything other than 

criteria pollutants, or to pollutants that might be regulated in the future, after enactment.

Further, the commenter (0100) claims that before EPA can add a new pollutant subject to review 

under Part C, it must undertake a rulemaking to create a PSD program appropriate to that 

pollutant. 

The commenter (0100) further contends that EPA’s pending proposals to sweep GHGs 

into the PSD program on the day of its regulation under section 202(a) of the CAA could not 

more clearly violate Congress’ instructions on how to handle “other pollutants” under Part C: 

Section 166(a) limits PSD to new criteria pollutants, and, as to those, it requires rules specific to 

that new pollutant to be developed within two years after adopting its NAAQS. 

One commenter (0104) representing industry states that they support EPA’s “actual 

control alternative,” but that, in addition, the PSD Interpretive Memo should be amended to 

clarify that the process for PSD regulation under the “actual control” interpretation must include 

a determination that a pollutant is a criteria pollutant and the establishment of corresponding 

NAAQS. The commenter further states that that only criteria pollutants with an established 

NAAQS are subject to PSD, and in cases where there is no NAAQS for a pollutant, PSD is not 

triggered because there is no “attainment” or “unclassifiable” determination to be made. The 

commenter believes that regulation of any pollutant under the PSD program without first 

determining that the pollutant is a criteria pollutant and establishing a corresponding NAAQS 

would be a violation of the rule of law as outlined in the CAA. In the alternative, the commenter 

urges EPA to revise the memo to make it clear that GHGs are not pollutants “subject to 

regulation” under the PSD permitting program. 

One commenter (0111) states that the CAA limits PSD applicability for GHGs to (1) 

areas designated as attainment or unclassifiable under a GHG NAAQS or (2) sources that require 

a PSD permit based on emissions of a criteria pollutant that also will experience a significant 

increase in GHG emissions. According to the commenter, a NAAQS for GHGs is necessary for 

PSD to be triggered solely on the basis of a source’s GHG emissions (i.e., for GHGs emitted 

from otherwise minor sources, or for significant increases of GHGs from major sources that are 

not otherwise experiencing a significant increase of a NAAQS pollutant for which the area is 

designated attainment or unclassifiable). Importantly, CAA sections 161 and 165 precondition 

applicability of the PSD program to those areas designated as attainment or unclassifiable under 

section 107. Section 161 provides that EPA is to promulgate regulations “to prevent significant 

deterioration of air quality in each region . . . designated pursuant to section 107 [NAAQS 

designations] as attainment or unclassifiable.” Section 165(a) prohibits construction of a major 

emitting facility “in any area to which this part applies” unless the PSD permit requirements are 

met. National Ambient Air Quality Standard designations are made on a pollutant-by-pollutant 

basis. The applicability of the PSD program in a given area must be based on the attainment 

status of the area for the pollutant in question. If there is no NAAQS, there can be no attainment 

status and therefore the fact that a source has major emissions of a non-NAAQS pollutant does 

not make it a PSD major source.

The commenter (0111) argues that the existence of section 166 supports the conclusion 

that the applicability of PSD under the CAA is based on the existence of a NAAQS for the 
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pollutant in question. This section requires EPA to develop PSD regulations within two years of 

establishing a new NAAQS. Under section 166, EPA is also required to approve plan revisions 

for the new regulations within 25 months after EPA promulgates applicable rules. Thus, under 

Section 166, PSD is triggered by adoption of a NAAQS, not by a pollutant becoming subject to 

regulation. Through this section, Congress recognized the need for a mechanism for 

incorporating new pollutants into the PSD program. This more reasonable approach to 

regulation can be compared to EPA’s interpretation that BACT for GHGs would be determined 

under section 165(a)(4) without reference to any standard for calculating the impact of GHGs on 

local air quality. The existence of both sections 166 and 165 of the CAA strongly suggests that 

PSD applicability is not “triggered” by a new pollutant becoming “subject to regulation” under 

the CAA. Rather, the more reasonable interpretation of both these provisions suggests that PSD 

is only applicable after the establishment of a new NAAQS pursuant to sections 108 and 109 of 

the CAA and the designation of new areas for that NAAQS under section 107.

The commenter (0111) continues that the only part of the PSD statutory scheme that 

imposes requirements broadly on pollutants “subject to regulation” is the requirement for BACT. 

Thus, if a source makes a modification that increases emissions significantly of a NAAQS 

pollutant, all pollutants “subject to regulation” must be controlled. Those facilities that trigger 

PSD for a non-GHG NAAQS pollutant would also have to consider BACT for GHGs if a 

significant increase in GHG emissions occurs. However, if a major source does not have a 

significant increase of a NAAQS pollutant in an area designated attainment or unclassifiable, 

nothing in the statute requires the source to be subject to the significance levels for non-NAAQS 

pollutants.

One industry commenter (0085) states that EPA is incorrect in assuming that that the 

section 202 rule will automatically trigger PSD permitting for sources solely based on their 

emissions of GHGs. The commenter believes that the text of the statute is more naturally read to 

limit PSD applicability to sources that are major for a NAAQS pollutant only and, then, within 

that group, to those projects that result in a significant net emissions increase of a NAAQS 

pollutant – only when PSD is triggered by a major NAAQS pollutant source for a NAAQS 

pollutant would the statute impose BACT on pollutants “subject to regulation.” The commenter 

indicates that EPA’s approach is inconsistent with the statutory and regulatory language because 

it completely bypasses the core applicability provisions and renders their inclusion in the statute 

superfluous. The commenter argues that sections 161 and 165(a) of the CAA limit PSD 

applicability based on the location of the source and case law confirms this limitation, as follows:

 The text of sections 161 and 165(a) plainly limits application of PSD to certain areas –

those designated attainment or unclassifiable pursuant to section 107 of the CAA, which 

applies only to NAAQS pollutants. It is only section 165(a)(4) – defining the pollutants 

subject to BACT once PSD permitting is already required – that uses the phrase 

“pollutants subject to regulation.”

 This plain language reading is also consistent with the holding in Alabama Power Co. v. 

Costle, 636 F.2d 323 (D.C. Cir. 1979), where the court found that location is the key

determinant for PSD applicability and rejected EPA’s contention that PSD should apply

in all areas of the country, regardless of attainment status.
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 The EPA gave this ruling only grudging effect by an interpretation of PSD requirements 

in the preamble to the 1980 PSD regulations. 45 FR 52675, 52,676 (Aug. 7, 1980). The 

1980 preamble stated that PSD requirements still apply to any area that is “designated . . . 

as ‘attainment’ or ‘unclassifiable’ for any pollutant for which a national ambient air 

quality standard exists.” 

 This interpretation of the “location-limiting language” of the statute results in no 

limitation at all since every area of the country is and always has been in attainment with 

at least one criteria pollutant. Congress must be presumed to have been aware of this fact 

when it enacted the PSD provisions, making EPA’s construction inconsistent with canons 

of statutory construction requiring all words in the statute to be given meaning.

 While this reading was inconsistent with the CAA, industry had no reason at the time to 

challenge it. There were very few regulated pollutants that were not subject to NAAQS 

at that time and even for those, it was unlikely that those pollutants would be the sole 

reason that a PSD permit would be required.

 Now, with EPA’s decision to regulate GHGs, this interpretation could trigger a host of 

results that contravene congressional intent. The EPA has itself recognized that the 

practical result of the 1980 interpretation is not desirable, specifically soliciting comment 

on an approach in which BACT would be applied to GHGs only in those cases where 

PSD permits are otherwise required for a source. See Proposed Tailoring Rule, 74 FR 

55327.

 The EPA can only rely on the “administrative necessity” rationale in its proposed PSD 

Tailoring Rule so long as it is strictly necessary to avoid absurd consequences that result 

from “the literal application of a statute.” United States v. Ron Pair Enterprises, 489 

U.S. 235, 242 (1989). Here the “absurd results” are not driven by the statute, but rather 

by an EPA interpretation that is not consonant with the statutory language. Where a 

statute can be interpreted to avoid “absurd results,” it must be so interpreted rather than 

relying on judicially created exceptions. (Numerous citations given.)

 Accordingly, to give effect to unambiguous terms of the statute (and regulations), EPA 

cannot require a source to undergo PSD permitting solely on the basis of emissions of a 

pollutant for which there is no NAAQS. Chevron, U.S.A. v. NRDC, 467 U.S. 837, 842 

(1984) (agency must give effect to the unambiguously expressed intent of Congress).

The industry commenter (0085) adds that EPA can implement the interpretation 

advocated above without changing its regulations because 40 CFR 52.21(a)(2) includes the 

location limitation of the statutory provisions and EPA’s historic interpretation is contained only

the preamble to the 1980 PSD rules. The commenter (0085) believes that all that is necessary is 

for EPA to announce its new interpretation in the Federal Register, which is sufficient because it 

is a logical outgrowth of the request for comments on this issue (in this action and in the 

companion GHG proposals) and the comments received. 

One industry commenter (0118) states that the PSD program only applies to those 

pollutants for which EPA has promulgated a NAAQS, not to all pollutants “subject to 

regulation” under the CAA. Citing the language of sections 161 and 165 of the Act, the 

commenter argues that the Act limits applicability of the PSD program to new and existing major 

sources that trigger PSD for NAAQS pollutants in areas designated as “attainment” or 

“unclassifiable.” Thus, the commenter believes that a change resulting in a significant increase 
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of a non-NAAQS pollutant (such as GHGs) that does not trigger PSD for a NAAQS pollutant is 

not subject to PSD preconstruction requirements.

The industry commenter (0118) notes that, in its 1979 PSD regulations, EPA initially

interpreted part C of title I of the Act to require PSD permitting for nonattainment pollutants, but 

the Court rejected this interpretation in Alabama Power. The commenter further explained that, 

in the 1980 PSD regulations, EPA excluded nonattainment pollutants from PSD but took the 

position that PSD applies to any regulated pollutant (other than a nonattainment pollutant) as 

long as an area is attainment or unclassifiable for any pollutant. The commenter (0118) urges 

EPA to reinterpret the PSD regulations to be consistent with the Court’s decision and rule that 

PSD applies only to major new or existing sources that trigger PSD for a NAAQS pollutant in an 

attainment or unclassifiable area.

The industry commenter (0118) concedes that under section 164(a)(4) of the CAA, if a 

major source or major modification is subject to PSD for a NAAQS pollutant, BACT is to be 

installed to control emissions of all pollutants “subject to regulation” under the Act. Thus, the 

commenter states that even though the full range of PSD requirements do not apply to a nonNAAQS pollutant “subject to regulation” under the Act, BACT is required for such a pollutant 

when the construction is otherwise subject to the PSD preconstruction requirements. The 

commenter notes that by so interpreting the CAA, the regulation of non-NAAQS pollutants will 

not increase the number of PSD permits that will be required, which alleviates greatly one of the 

“absurd results” that the proposed Tailoring Rule is intends to address. However, the commenter 

believes that the BACT requirement for those sources that do require PSD permits would still be 

an enormous burden. Also, the commenter (0118) notes that this changed interpretation of PSD 

applicability would not affect the applicability of title V permitting to the approximately 6.1 

million sources of GHGs estimated by EPA.

Three industry commenters (0069, 0096, 0106/0107) contend that, based on the language 

of sections 161 and 165(a), the CAA only applies PSD review for pollutants that have the 

potential to result in deterioration of air quality in an area that meets a NAAQS or is 

undesignated. One commenter (0107) adds that if applicable at all, the only possible 

interpretation of the applicability of PSD would be limited to situations when criteria pollutants 

or their precursors might cause significant deterioration of air quality and BACT would apply to 

other pollutants “subject to regulation” if a significant increase would be projected to result from 

the project. On this basis, one commenter (0107) asserts that EPA’s intent to regulate GHGs 

under the PSD program by requiring PSD review and permitting of new “major” GHG emitting 

facilities and “major modifications” of major GHG emitting facilities based on GHG emission 

increases alone violates Title I of the CAA. Commenter (0096) also states that PSD rules apply

only to pollutants for which a NAAQS exist and certainly not to a Title II motor vehicle standard 

for which there is no NAAQS.

Commenters (0092, 0098) representing several groups of companies (industry) contend 

that the plain language of the CAA and EPA’s corresponding regulations condition PSD 

applicability in the first instance on emissions of a pollutant for which there is a NAAQS. The 

commenters state that EPA should correct this error and state that whether a pollutant is “subject 

to regulation” is relevant only to whether a source that is subject to PSD requirements for a 
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NAAQS-pollutant must install BACT for other pollutants. Alternatively, the commenters 

recommend that EPA exercise its discretion by interpreting “subject to regulation” to exclude 

CAA section 202 regulation of GHG emissions from motor vehicles. The commenters contend 

that Alabama v. Costle supports the NAAQS prerequisite interpretation of the CAA, and that 

EPA’s response to this decision misinterpreted the Court’s opinion. The commenters further 

claim that even if the statutory language were ambiguous, EPA could not apply PSD to GHGs, 

because such an interpretation does not represent a reasonable balancing of the goals Congress 

established for the PSD program, and the “absurd results” of EPA’s proffered interpretation 

show that the language must be interpreted to require a GHG NAAQS before GHGs can be the 

sole trigger for PSD. The commenters add that to the extent EPA applies the “absurd results”

doctrine to support the PSD Tailoring Rule, the Agency’s approach is inconsistent with the law 

because it applies PSD to GHGs notwithstanding the absurdity of doing so. 

One commerce commenter (0074) states that revising the PSD Interpretive Memo to state 

that PSD is not triggered without a NAAQS would be consistent with the plain meaning of 

sections 161 and 165 of the CAA, section 52.52 of the regulations, and the holding in Alabama 

Power Co. v. Costle (where the court found that location is the key determinant for PSD 

applicability and rejected EPA’s contention that PSD should apply in all areas of the country, 

regardless of attainment status). CAA sections 161 and 165 precondition applicability of the 

PSD program to those areas designated as attainment or unclassifiable under section 107 for a 

NAAQS. This and other commenters opine that PSD permitting requirements can only be 

triggered in the first instance by pollutants for which there is a NAAQS. Section 52.21(a)(2) of 

the regulations provides “applicability procedures” for PSD, stating that PSD applies to “the 

construction of any new major stationary source (as defined in paragraph (b)(1) of this section) 

or any project at an existing major stationary source in an area designated as attainment or 

unclassifiable under sections 107(d)(1)(A)(ii) or (iii) of the Act.” It is only in defining and 

requiring BACT that the statute imposes requirements on pollutants “subject to regulation.” The 

commenter opines that nothing in the statute or regulations requires a source that is major to be 

subject to the significance levels for non-NAAQS pollutants if there is no significant increase of 

a NAAQS pollutant for which the source is designated attainment or unclassifiable.

One industry group commenter (0066) requests that EPA revise the interpretive memo to 

clarify that PSD is limited to criteria pollutants for which a NAAQS has been set.

Two commenters (0051, 0053) request that EPA interpret PSD applicability provisions of 

the statute and regulations to avoid triggering PSD for the vast majority of sources rather than 

relying on the “absurd results” and “administrative necessity” doctrines to rewrite statutory

thresholds. This commenter states that the GHG-PSD problem is created by interpreting the 

statute and regulations to require that PSD applicability as being dictated solely through the 

phrase “subject to regulation.” Prior to resorting to the “administrative necessity” and “absurd 

results” doctrines to rewrite statutory thresholds, they opine that EPA is obliged to consider 

statutory interpretations that eliminate the GHG-PSD problem. The statute does not state that 

PSD applies to all pollutants subject to regulation; the statute only requires BACT apply to all 

pollutants subject to regulation fro sources that trigger PSD. Under the suggested interpretation, 

sources and modifications will not be classified as major requiring a PSD permit based on GHG 

emissions unless: (1) EPA issues a NAAQS for GHGs; or (2) a facility is already major for 
145

traditional pollutants triggers PSD for a non-GHG pollutant (e.g., for ozone (O3, SO2)(and the 

facility experiences a significant GHG emissions increase). Under this approach, GHG 

emissions would still be regulated. Any new or existing source that triggers PSD for a non-GHG 

pollutant will also be subject to BACT, if the source also experiences a significant GHG 

emission increase. This would limit the number of PSD permits and BACT determinations for 

GHGs to larger sources that trigger PSD for other pollutants. Nothing in the statute requires a 

source that is major to be subject to significance levels for non-NAAQS pollutants if there is no 

significant increase of a NAAQS pollutant for which the area is designated attaining in the 

statute requires a source that is major to be subject to significance levels for non-NAAQS 

pollutants if there is no significant increase of a NAAQS pollutant for which the area is 

designated attainment or unclassifiable. The commenter asserts that there are no “absurd results”

under their suggested NAAQS prerequisite approach, and it is consistent with Alabama Power v. 

Costle.

One industry commenter (0068) states that based on the requirements outlined in the 

statute regarding the applicability of PSD and the decision in Alabama Power, PSD would not be 

triggered solely on the basis of GHG emissions. The commenter opines that such an approach 

would prevent the EPA from having to rely on the “administrative necessity” and “absurd 

results” legal doctrines which are exceptions to a statutory mandate as fewer sources would be 

subject to permit requirements and states would not be forced to handle massive increases in the 

number of PSD permits and could still require BACT in PSD permits that are triggered for 

attainment pollutants.

One industry commenter (0056) believes that PSD review is only triggered by the 

emissions/emissions increases of pollutants for which a NAAQS has been established. They

state that the CAA prohibits applying PSD to a GHG unless PSD review is triggered by a 

significant increase in a NAAQS pollutant that could contribute to a violation of a NAAQS or a 

NAAQS increment. Since there is no NAAQS for a GHG, PSD applicability to a proposed 

project cannot be triggered by GHG emissions alone. If a BACT review is allowed for a GHG, it 

is only if a criteria pollutant triggers PSD review and the projected actual emissions of GHGs

exceeded the major source threshold or the definition of a “significant emissions increase.” This 

commenter asserts that their statutory construction is consistent with the purposes of the Act and 

provides a technology-forcing function for regulated pollutants for which EPA has not 

established a NAAQS or an increment.

One industry commenter (0060) believes that section 161 and 165 of the CAA clearly

limit the applicability of the PSD program in such a way to reflect the most basic aspect of 

applicability of the PSD program: Prevention of Significant Deterioration review is triggered 

only for pollutants for which a NAAQS has been established. As an example, they state that if 

EPA were to establish an emission control requirement for a previously unregulated substance 

pursuant to an NSPS standard, then the substance would be “subject to regulation under the Act.”

But because the substance is not a criteria pollutant for which a NAAQS has been established, 

the level of the substance’s emissions is not a factor in determining whether a source is a major 

source or whether a project is a major modification under the PSD program. Only the pollutants 

for which there are NAAQS may be used to make that determination. They opine that if a 

project is not major for any NAAQS pollutant, and it has emissions of a previously unregulated 
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substance, it should not be subject to PSD, regardless of the amount of the substance emitted by 

the project.

One industry group commenter (0061) states that section 161 of the CAA and section 

52.21(a)(2) of the CFR limit applicability of the PSD program to those areas “designated” as 

attainment or unclassifiable pursuant to section 107 of the CAA. See also, section 165(a) 

(requiring demonstration that air quality requirements are met). Section 107 applies only to 

sources that are major for a NAAQS pollutant and those major sources that have modifications 

that result in a significant net emissions increase of a NAAQS pollutant. Stated differently, this 

commenter (0061) asserts that emissions of a non-NAAQS pollutant cannot trigger PSD 

applicability.

One industry commenter (0072) urges EPA to adopt an “alternative interpretation” of the 

existing stationary and regulatory provisions, so PSD is not triggered for a source by its 

emissions of a regulated NSR pollutant for which no NAAQS has been promulgated. They

assert that, because section 161 and 165 of the CAA make clear that the PSD program only

applies to construction projects in an area designated as attainment or unclassifiable for a 

NAAQS, PSD applicability should not be triggered by emissions of a pollutant for which no 

NAAQS has been promulgated. Once a source becomes subject to PSD due to emissions of any

NAAQS pollutant in excess of the statutory major source thresholds of 100 or 250 TPY, the 

source must achieve BACT for every pollutant “subject to regulation” under the CAA that will 

be emitted in significant amounts, which, for GHGs, would be any amount (absent promulgation 

of a higher de minimis threshold, as proposed by the GHG Tailoring Rule). As other 

commenters opine, this commenter believes that EPA could completely avoid the “absurd 

results: and “administrative necessity” it claims as the basis for establishing a higher PSD 

applicability threshold in the GHG Tailoring Rule. By modifying this interpretation, so that a 

source does not trigger PSD based on its emissions of non-criteria pollutants, the commenter 

states that EPA could begin requiring BACT for GHGs under existing PSD rules, without any

resulting negative impacts. The commenter asserts that this interpretation is consistent with 

Alabama Power v. Costle, 636 F.2d 232 (D.C. Cir. 1979).

An industry commenter (0093) urges EPA to clarify that the applicability of PSD to 

pollutants “subject to regulation” properly triggers a BACT analysis for sources that otherwise 

trigger requirements of the existing PSD program, but does not trigger PSD applicability, in and 

of itself, for pollutants which do not have, nor are precursors to, a NAAQS.

One state agency commenter (0102) believes that the PSD applies only to pollutants or 

precursors for which a NAAQS exists, and not to non-NAAQS emissions regulated by a Title II 

motor vehicle standard. The state agency commenter indicates that EPA’s policy should state 

that PSD is not triggered automatically or otherwise upon GHGs becoming controlled under title 

II of the CAA because PSD applies only to pollutants for which a NAAQS has been established. 

The PSD program and the NAAQS assume that some areas of a state or the country have higher 

concentrations of a criteria pollutant than another (hence attainment and nonattainment areas), 

but GHG concentrations are generally uniform throughout the world. Thus, the commenter 

believes that preventing deterioration of an area’s GHG concentrations below a certain ambient 

air quality standard through permitting controls is virtually impossible where the standard to 
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achieve is a global one. The commenter concludes that EPA’s interpretation that PSD is 

applicable to GHGs at any time is not legally supportable and no amount of tampering with the 

Tailoring Rule or ordering of federal actions will change this.

Nine industry and commerce commenters (0051, 0053, 0066, 0072, 0074, 0076, 0079, 

0085, 0086) suggest that EPA clarify in the PSD Interpretive Memo that the term “Pollutants 

Subject to Regulation” exclude GHGs. They assert that Congress did not intend such pollutants 

to trigger PSD. In order to secure passage in 1977, supporters of the PSD program stressed that 

it would not impact smaller sources, such as residential, commercial, or agricultural facilities.

One commenter (0111) noted that EPA should construe the phrases “any pollutant” in 

section 169(1) and “any pollutant subject to regulation” in section 165(a) to refer only to 

conventional pollutants whose emissions have regional or local impact, rather than any pollutant 

subject to regulation under the CAA. Such an interpretation would automatically exclude GHGs, 

which are “global in nature because the GHG emissions emitted from the United States . . . 

become globally well-mixed.” In the PSD Tailoring Rule, EPA’s own analysis—which 

demonstrates that Congress could not have intended those CAA sections to require PSD 

applicability for GHGs, because, if they did, the number of sources requiring PSD permits would 

rise to absurd and unanticipated levels— supports this interpretation. EPA proposes only one 

solution to avoid the absurdity of triggering PSD for GHGs: rewriting the statutory PSD and title 

V applicability thresholds and significance levels.

The commenter (0111) states that strong evidence supports an interpretation of the CAA 

that excludes GHGs from PSD. First, the original 28 source categories listed by Congress 

constitute the sources EPA regarded as posing the greatest potential for air quality degradation 

due to conventional pollutants. The 100 TPY threshold for these source categories makes sense 

only in terms of conventional pollutants. Second, the air quality monitoring and impact analysis 

provisions of CAA sections 165(a) and (e) focus on local and regional impacts. For example, 

Section 165(e)(1) requires an analysis of “the ambient air quality at the proposed site and in areas 

which may be affected by emissions from [the proposed] facility for each pollutant subject to 

regulation under the [CAA] which will be emitted from such facility.” The focus on the 

“proposed site” and affected areas implies that Congress was focused on regional and local 

concerns.

In addition, according to the commenter (0111), the legislative history of sections 165(a) 

and 169(l) under the 1977 CAA amendments makes clear that Congress had only conventional 

pollutants in mind when creating those provisions. Both the Senate and the House were engaged 

primarily in continuing the work that a prior Congress had begun, through the 1970 CAA, to rid 

the Nation, especially urban areas, of unhealthy levels of smog, particulates, sulfur dioxide, and 

other conventional pollutants. The air quality problems of concern to the 95th Congress in 1977 

simply did not include global warming. It is simply not possible, in light of this legislative 

history and the legislative history EPA references, to make a credible argument that the 95th

Congress intended that GHG emissions could be a basis for applicability of the PSD permitting 

program as defined by sections 165(a) and 169(1). Additional evidence of Congress’ intent for 

the CAA not to apply to GHGs is Section 166, which provides EPA with a separate mechanism 

for adding pollutants for PSD applicability. The commenter (0111) notes that the consequences 
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of applying PSD to GHGs are perhaps the best evidence that such an interpretation runs contrary

to congressional intent. If PSD applies to GHG emissions, EPA estimates that 40,000 new PSD 

permits will be required annually, including permits for small entities not previously subject to 

PSD, such as hospitals, churches, schools, and small businesses. This vast and unprecedented 

expansion in permitting will halt the nation’s economic growth with little if any improvement in 

local air quality.

One industry commenter (0085) argues that the endangerment finding under title II is 

distinctly different from the air quality purposes of the PSD program – the former is triggered 

where, in the Administrator’s judgment, such emissions “may reasonably be anticipated to 

endanger public health or welfare” (CAA section 202(a)(1)), while the latter is specifically 

directed towards the protection of “air quality” (CAA section 161), i.e., the air that people 

breathe. Consequently, the commenter asserts that the regulation of CO2 emissions – where it is 

intended to address the effects that CO2 has on global climate change, rather than its effect on 

local “air quality” – does not constitute a measure to control CO2 emissions which is “necessary”

to “prevent significant deterioration” of local “air quality” (CAA section 161); therefore, it does 

not follow from an endangerment finding under title II that EPA is thereby authorized, much less 

compelled, to regulate CO2 emissions from stationary sources under the PSD program.

Rather than seeking to justify rewriting the CAA’s 100/250 TPY thresholds for PSD 

applicability, the industry commenter (0085) believes that EPA could rely on the fact that 

Congress never intended the PSD program to apply to emissions of a substance such as CO2 that, 

while it may constitute an “air pollutant” under the broad definition of CAA section 302(g), does 

not pose any threat to “air quality.” To that end, the commenter (0085) asserts that EPA should 

recognize that the CAA’s PSD provisions, including the Best Available Control Technology

(BACT) requirement “for each pollutant subject to regulation” under the Act, must be 

understood in the context of the fundamental purpose and scope of the PSD program, as is made 

clear on the face of CAA section 161; that is, the BACT requirement should be read as applying 

only to regulated pollutants that have an adverse impact on “air quality” – i.e., air that people 

breathe.

The industry commenter (0085) observes that the preamble to the proposed Tailoring 

Rule is replete with statements by the EPA that point out how inconsistent with Congressional 

intent would be the regulation of thousands of small stationary sources of CO2, and opines that 

EPA has drawn the wrong conclusion as to how it should proceed in the face of this anomalous 

situation. The commenter asserts that, rather than attempting to rewrite the PSD threshold limits, 

which are set forth in the Act in unambiguous terms, EPA should instead conclude that Congress 

never intended the regulation of CO2 under the PSD program because emissions of CO2 do not 

degrade air quality. 

Another commenter (0086), representing several groups of companies, asserts that (in 

absence of the alternative to applying PSD only to pollutants for which there is a national 

ambient air quality standard [NAAQS]) EPA should interpret the phrases “any pollutant” in 

section 169(1) and “any pollutant subject to regulation” in section 165(a) to refer only to 

pollutants whose emissions have local or regional impacts, and hence not GHGs. The 

commenter believes that EPA should find that Congress intended applicability to be based only 
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on “conventional” pollutants, i.e., pollutants whose emissions have predominantly local or 

regional impact such as pollutants subject now to NAAQS and new source performance 

standards (NSPS) for the following reasons:

 The 28 source categories that Congress listed in section 169(1) in 1977 are the ones EPA 

regarded at the time as posing the greatest potential for air quality degradation due to 

conventional pollutants. The only way to explain the selection of those particular 

categories is to posit a concern only with conventional pollutants. Indeed, the only way

to understand the 100/250 TPY cutoffs is also in terms of conventional pollutants.

 The provisions of sections 165(a) and (e) that call for air quality monitoring and air 

quality impact analysis in connection with PSD permitting are oriented on their face to 

local or regional impacts.

 Other relevant provisions of the CAA demonstrate the same mindset. An example is the 

system for area designations in section 107(d) and the underlying system for establishing 

air quality control regions in section 107(b), which make sense only from the standpoint 

of managing emissions of conventional pollutants, in particular NAAQS pollutants. The 

objective of the PSD program, to prevent significant deterioration of air quality in areas 

designated as attainment or unclassifiable under section 107(d), makes sense only from 

the standpoint of emissions having a local or regional impact, not emissions of GHGs.

 Congress kept the door open for a PSD program geared to other pollutants, such as 

GHGs, through section 166. That section requires EPA, in the event it creates a NAAQS 

for a “new” pollutant (i.e., a pollutant not subject to a NAAQS in 1977), to create a PSD 

system that is tailored to that pollutant’s unique profile, but that need not necessarily 

conform to the blueprint of sections 165(a) and 169(1). Thus, EPA potentially could 

create for GHGs a PSD permitting system with a 25,000 TPY CO2 equivalent cutoff, but 

it would first have to establish a NAAQS for GHGs.

 The legislative history of the CAA Amendments of 1977, the origin of sections 165(a) 

and 169(1), reveals that Congress had in mind only conventional pollutants. Both the 

Senate and the House saw themselves as engaged primarily in continuing the work that a 

prior Congress had begun, through the 1970 CAA, to rid the Nation, especially urban 

areas, of unhealthy levels of smog, particulates, sulfur dioxide, and other conventional 

pollutants. The air quality problems of concern to the 95th Congress in 1977 did not 

remotely include global warming.

One industry commenter (0079), and others, express that section 163, as enacted by the 

1977 Amendments, addresses baseline concentrations and increments for sulfur dioxide (SO2) 

and particulate matter (PM), see §163(b), and to any other pollutant for which a national primary

or secondary NAAQS exists, see §163(c). This emphasis, the commenter opines, is carried on in 

CAA section 169, which provides:

Not later than one year after the date of enactment of this Act, the Administrator shall 

publish a guidance document to assist the States in carrying out their functions under part 

C of title I of the Clean Air Act (relating to prevention of significant deterioration of air 

quality) with respect to pollutants, other than sulfur oxides and particulates, for which 

national ambient air quality standards are promulgated. Such guidance document shall 
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include recommended strategies for controlling petrochemical oxidants on a regional or 

multistate basis for the purpose of implementing part C and section 110 of such Act.

§169(c). This subsection omits consideration of additional pollutants beyond the NAAQS. The 

commenter asserts that section 166 of the CAA also provides further limiting of “pollutants 

subject to regulation under the Act” to those pollutants subject to NAAQS. See §166(a) & (e). 

This commenter asserts that the only condition that suggests a broader reading is in §165(a)(3):

The owner or operator of such facility demonstrates that emissions from construction or 

operation of such facility will not cause, or contribute to, air pollution in excess of any 

(A) maximum allowable increase or maximum allowable concentration for any pollutant 

in any area to which this part applies more than one time per year, (B) national ambient 

air quality standard in any air quality region, or (C) any other applicable emission 

standard or standard of performance under this Act;

The commenter asserts that (A) and (B) apply to NAAQS pollutants, consistent with the 

argument outlined above. (C) applies to “any other applicable emission standard or standard of 

performance under the Act.” This language is susceptible to a broader reading, though 

§169(a)(3) clarifies that the “applicable emission standards” are those issued pursuant to 

subsection 111 or 112 of the CAA. This commenter adds that in the 1990 CAA Amendments, 

Congress provided evidence of its intent not to broaden the NAAQS and NSPS focus of the PSD 

program by specifically mandating that HAPs are not “subject to regulation” under the CAA for 

purposes of the PSD program. See 42 U.S.C. §7412(b)(6).

This commenter (0079) further states that the legislative history of the PSD program also 

supports “pollutants subject to regulation under the Act” as being limited to NAAQS pollutants 

and NSPS pollutants (cites discussion by The House Committee on Interstate and Foreign 

Commerce, in its discussion of a bill that ultimately became part of the CAA Amendments of 

1977.

In addition to statute and legislative support for limiting “pollutants subject to regulation 

under the Act,” this commenter (0079) asserts that there are practical economic and burden 

considerations to limiting the PSD program to NAAQS and NSPS pollutants.

Another state agency commenter (0103) agrees with the “actual control” interpretation to 

the extent that it excludes pollutants subject only to monitoring or reporting requirements, but 

does not believe that the interpretation goes far enough. The commenter advocates an 

interpretation that requires EPA to establish an NSPS or NAAQS for the pollutant (if the 

pollutant is not considered a HAP subject to section 112 of the CAA) and also requires the 

ability to control the pollutant by means of an add-on control device. 

One commenter (0088), while generally agreeing with the December 18, 2008 EPA 

Memorandum, states that interpretation must be further clarified to state that the PSD permitting 

program should only apply to air pollutants with NAAQS.

Response:
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We agree with these commenters that the appropriate scope of the PSD program is an 

important issue in evaluating the level of administrative necessity and the need to tailor the PSD 

program with respect to GHG emissions, but comments on this topic are beyond the scope of this 

action. This reconsideration action sought comment on EPA’s interpretation of the phrase 

“subject to regulation under the Act” used the fourth part of an existing regulatory definition of 

“Regulated NSR Pollutant” at 40 CFR 52.21(b)(50). EPA requested comment on whether this 

part of the regulation (and similar provisions in the CAA) should apply to any pollutant that may

be subject to a monitoring and reporting requirement, SIP provision, endangerment finding, or a 

waiver under section 209 of the Act. While this raised issues of how EPA’s definition should be 

interpreted in light of a variety of statutory provisions, EPA did not propose to amend or remove 

from this definition the description of the categories of pollutants listed in the first three parts. 

See 40 CFR 52.21(b)(50)(ii)-(vi). Nor did EPA propose to reconsider its interpretive statement 

in 1978 that a pollutant subject to regulation includes “all pollutants regulated under Title II of 

the Act.” See 43 FR at 26397. EPA requested comment only on whether it should amend the 

text of the definition to expressly incorporate EPA’s interpretation that pollutants subject to 

regulation are those subject to an actual control requirement, like those described in the first 

three parts of the definition. As discussed elsewhere in this document, EPA is not changing the 

regulatory definition in this action at this time. Because, for the reasons described below, we 

believe that the interpretations of the CAA advocated by these commenters are inconsistent with 

the plain language of the portions of the regulation that EPA did not propose to reconsider, we 

are therefore not addressing them as part of this action. We note, however, that to the extent that

these comments are directed at the need to tailor the PSD program with respect to GHGs, we 

believe these interpretive issues are more appropriately addressed in the context of the tailoring 

rule, where we received similar comments.

These commenters urged a variety of interpretations by focusing on the statute itself but 

largely ignore the applicable rules in the CFR, which govern PSD applicability until such time as 

they are changed pursuant to a rulemaking under Section 307 of the CAA. Moreover, those 

comments that do acknowledge that there are applicable regulations that govern which pollutants 

are subject to the PSD program only focus on the original EPA rules adopted in 1980 and ignore 

the comprehensive definition of “regulated NSR pollutant” adopted in 2002.The phrase 

“pollutants otherwise subject to regulation” is just one part of that definition. That definition 

provides that Regulated NSR pollutant includes:

(i) Any pollutant for which a national ambient air quality standard has been 

promulgated and any pollutant identified under this paragraph (b)(50)(i) as a 

constituent or precursor for such pollutant. Precursors identified by the 

Administrator for purposes of NSR are the following:

(ii) Any pollutant that is subject to any standard promulgated under section 111 

of the Act;

(iii) Any Class I or II substance subject to a standard promulgated under or 

established by title VI of the Act;
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(iv) Any pollutant that otherwise is subject to regulation under the Act; except 

that any or all hazardous air pollutants either listed in section 112 of the Act or 

added to the list pursuant to section 112(b)(2) of the Act, which have not been 

delisted pursuant to section 112(b)(3) of the Act, are not regulated NSR pollutants 

unless the listed hazardous air pollutant is also regulated as a constituent or 

precursor of a general pollutant listed under section 108 of the Act.

Based on the plain language of the first three parts of this provision (and other regulations that 

incorporate this definition), we are unable within the scope of this action to adopt the 

interpretations advocated by commenters. 

EPA’s regulations are not susceptible the interpretation that “pollutants subject to 

regulation” are limited to NAAQS pollutants. As NAAQS pollutants and precursors are spelled 

out as a specific line item in the definition of “Regulated NSR Pollutant,” this interpretation 

would render the remainder of the definition meaningless. Furthermore, this interpretation 

would be inconsistent with the plain language in parts (ii) and (iii) of the definition, which 

presently incorporate pollutants regulated in an NSPS and under Title VI of the Act that are not 

covered by a NAAQS. Accordingly, we decline to adopt this interpretation in this action. 

While some commenters present as a separate argument, based on section 166 of the Act, 

that the Agency should interpret “subject to regulation” as requiring that EPA undertake a PSD 

implementation rulemaking prior to regulating a pollutant under PSD, we do not view this as a 

distinct argument. As the commenters acknowledge, Section 166 requires certain actions be 

taken with respect to a new NAAQS, and thus this interpretation would act to ensure that “any 

future application of Part C is limited to criteria pollutants.” (commenter 100 page 8-9). In 

addition, the argument that pollutants are not subject to regulation for PSD purposes until EPA 

promulgates regulations for each pollutant under section 166 was previously rejected by the D.C. 

Circuit. Alabama Power Co. v. Costle, 636 F. 2d 323, 406 (D.C. Cir. 1979). 

Furthermore, the definition of regulated NSR pollutant affects more than just the 

applicability of the BACT requirements under the PSD regulations. The term “regulated NSR 

pollutant” is also incorporated in the definitions of “major stationary source” and “major 

modification.” 40 CFR 52.21(b)(1)-(2). Because of the references to “regulated NSR pollutant,”

both of those provisions contemplate that PSD may be triggered based upon non-NAAQS 

pollutants (e.g. a modification occurs if there is a significant increase in any “regulated NSR 

pollutant” not “any pollutant for which an area has been designated attainment.”). Accordingly, 

the interpretation urged by these commenters is inconsistent with the language and structure of 

the existing PSD regulations. 

EPA is not persuaded that it can limit the scope of PSD to NAAQS pollutants through an 

interpretation of 52.21(a)(2) on the ground that this provision limits the scope of PSD to areas 

that have been designated “attainment or unclassifiable.” As some of these commenters 

acknowledge, adopting this approach would require that the Agency reverse a long standing 

interpretation of 52.21(a)(2) that PSD applies if the source is locating in an area that is 

designated as attainment for any pollutant. Thus, commenters’ request that EPA adopt this 

interpretation of 52.21(a)(2) is beyond the scope of this immediate action as we did not seek 
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comment on this provision, or this long standing interpretation. However, as noted above, we do 

intend to address the underlying substantive claim in the tailoring rule. We do not agree with 

one commenter’s (0086) argument that 52.21(a)(2) unambiguously limits applicability of all PSD 

requirements to only those pollutants for which the area has been designated attainment or 

unclassifiable. The language of that provision in the regulation, that the “requirements of this 

section apply to the construction of any new major stationary source ... or any project at an 

existing major stationary source in an area designated as attainment or unclassifiable,” does not 

contain the express limitation “for that pollutant,” which commenters are reading into it. 

As with other commenters, the commenters that cite 52.21(a)(2) failed to address the 

adoption of the definition of “regulated NSR pollutant” in 2002 and instead chose to focus on 

provision enacted as part of the original 1980 PSD rulemaking. Accordingly, these commenters 

have made no attempt to show how the urged interpretation of 52.21(a) is consistent with the 

broader definitions of “major stationary source” and “major modification” which incorporate the 

definition of “regulated NSR pollutant,” and which we have explained above cannot be so 

narrowly construed as to be limited to NAAQS pollutants.

The claims of some commenters that these are new issues upon which they had no reason 

to comment in 1980 also ignores the existence of the 2002 rulemaking and the revisions to 

various parts of section 52.21 made therein. While the potential for regulation of GHGs, and the 

implications of such regulation, may have been outside of the commenters’ contemplation in 

1980, the potential for GHG regulation and the implication of the language that the agency was 

adopting was evident by 2002. Thus, commenters could have challenged the adoption of the 

definition at that time.

EPA is also unable to interpret the existing PSD provisions as being limited to pollutants 

whose effects are primarily local or that only affect “air quality” (defined by one commenter as 

the “air that people breathe”). Such a limitation does not appear in the definition of “regulated 

NSR pollutant.” Furthermore, the language of that definition in the current regulation 

demonstrates that EPA has already taken a position on this issue that is contrary to one 

commenters recommend. Specifically the inclusion of ozone depleting substances (ODS), which 

are regulated because of their global, not local, impacts, as a specific category of pollutants that 

are regulated NSR pollutants demonstrates EPA has previously rejected the local effects view. 

Thus, we believe that reading such a limitation into the fourth part of the definition would be 

inconsistent with the definition as a whole. The notice of reconsideration did not raise the issue 

of whether EPA should amend section 52.21(b)(50) to exclude ozone depleting substances. 

EPA is also unable in this action to adopt the interpretation that the phrase “subject to 

regulation” requires control only for sources that are regulated under a MACT or NESHAP (or 

similar regulation) covering the pollutant. This interpretation is inconsistent with portions of the 

existing definition of “regulated NSR pollutant” that EPA did not address in the reconsideration 

notice. First, MACT standards and NSPS are covered by specific provisions of the definition of 

“regulated NSR pollutant.” NSPS pollutants are covered in section 52.21(b)(50)(ii), while 

MACT pollutants are exempt under the last sentence in section 52.21(b)(50) due to a statutory

exemption of MACT pollutants from PSD (42 U.S.C. §7412(b)(6)). Second, the NSPS provision 

in the definition of “regulated NSR pollutant” provides that the definition includes “any pollutant 
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that is subject to any standard promulgated under section 111.” See 40 CFR 52.21(b)(50)(ii). 

Since it applies to any pollutant regulated in any NSPS, this provision is not susceptible to an 

interpretation that it means “any pollutant for which an NSPS has been promulgated for the 

source category of the source obtaining a PSD permit.”

Comments:

A state agency commenter (0091) supports EPA’s preferred option of “actual control” or 

a regulated NSR pollutant as being “subject to regulation under the Act,” and also supports EPA 

in their interpretation that the remaining four options are not viable. However, this commenter 

believes that the actual control should be the control of a stationary source, and not a mobile 

source tailpipe emissions limitation. The commenter understands that EPA is considering 

development of an NSPS for GHG emissions from several industry sectors, and states that 

promulgation of an NSPS for stationary sources would be the most appropriate trigger for PSD 

applicability.

Ten industry commenters (0089 and others incorporating this submission (0065, 0067, 

0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) said that the “actual control” interpretation 

safeguards the Administrator’s authority to require such controls on individual pollutants under 

other portions of the Act before triggering PSD requirements. This is important because it 

properly recognizes that promulgation of emission control requirements with respect to a 

pollutant (such as CO2) under another provision of the CAA (e.g., a provision in Title II of the 

Act) does not automatically trigger PSD. 

One commenter (0088), while generally agreeing with the December 18, 2008 EPA 

Memorandum, states that clearly the interpretation must be further clarified, and strongly 

suggests EPA’s interpretation must clarify that the PSD permitting program actions should be 

activated upon stationary source regulations and the actual control of stationary sources of 

missions – not a mobile source control rule such as the LDVR

Commenters (0092, 0098) representing several groups of companies (industry) argue that

the proposed reconsideration implicitly promotes EPA’s erroneous belief that the LDVR would 

automatically trigger PSD permitting requirements for stationary sources, and this is by no 

means the correct or the preferable interpretation of the CAA. According to these commenters, 

under a more logical interpretation of the CAA, the LDVR would not trigger PSD, eliminating 

the need for millions of new sources to obtain PSD permits and for much of the PSD Tailoring 

Rule. 

Response:

EPA has already established an interpretation that a pollutant “subject to regulation”

includes “all pollutants regulated under Title II of the Act regarding emission standards for 

mobile sources.” 43 FR at 26397. Thus, EPA has not previously considered PSD to be limited 

only to pollutants regulated in stationary source standards. Nor has EPA previously taken the 

position that Title II standards do not automatically trigger PSD. Since EPA’s reconsideration 
155

notice did not address this precedent, EPA is unable to modify this interpretation through this 

final action. 

The Agency interprets the provisions of Section 165 to apply to any pollutant that 

becomes “subject to regulation” under the Act. The D.C Circuit Court upheld this position. See 

Alabama Power Co. v. Costle, 636 F.2d 323, 403-406 (C.A.D.C., 1979) (rejecting arguments that 

Section 165 should not automatically apply to all pollutants subject to regulation under the Act.). 

We have continued to assert this position since this time. See, e.g., 67 FR 80240 (stating that 

The PSD program applies automatically to newly regulated NSR pollutants); 61 FR 38307 

(stating that the PSD regulations apply to all pollutants regulated under the Act), and Memo. 

From John S. Seitz, Director Office of Air Quality Planning and Standards to Regional Air 

Directors, “Interim Implementation of New Source Review Requirements for PM2.5,” April 5, 

2005 (stating that Section 165(a)(1) of the Act provides that no new or modified major source 

may be constructed without a PSD permit.). We are not changing our regulations, and did not 

open this interpretation for reconsideration in this action. 

9.9. Need for Additional Process and Analysis Before Regulating

Stationary Source GHG Emissions

9.9.1. Requests for More Orderly Process and Judgment Before EPA

Regulates GHGs Emissions from Stationary Sources

Comment:

Eight industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) state 

that the orderly regulatory process contemplated by the CAA starts with information-gathering 

concerning the pollutant’s emissions, continues with determinations (under the CAA’s non-PSD 

provisions) regarding the effect of the pollutant on public health and welfare and with 

development and issuance of proposed control regulations, and ultimately culminates in final 

regulatory controls on emissions of the pollutant, if justified and necessary. The commenters 

express concern that EPA’s recent proposals to regulate GHG emissions from major stationary

sources through PSD would undermine the orderly approach contemplated by the CAA. The 

commenters believe that establishing GHG emission control requirements for stationary sources 

through the back door of GHG rules for motor vehicles promulgated under Title II simply does 

not allow the time necessary to assess emissions and available controls and to prepare for 

compliance with any new regulatory requirements. Two of the commenters (0081, 0083) add 

that if EPA wants to establish GHG emission controls on stationary sources, it should do so 

through the orderly regulatory process set forth in the CAA, which would allow sufficient time to 

assess emissions and controls and provide sources the ability to work with the Agency in shaping 

the regulations and time to meet any new requirements.

One industry commenter (0109) state that the concerns expressed by EPA, that it have 

adequate time to assess emissions of a pollutant and determine appropriate controls before PSD 

and BACT requirements are required for a pollutant, would seem to be at odds with EPA’s 
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recent efforts to regulate GHG emissions from large stationary sources through the back door of 

GHG emission standards for motor vehicles promulgated under Title II of the CAA, an approach 

which would appear to skip all of the regulatory steps that EPA states are important. The 

commenter (0109) believes that if EPA believes it is necessary to establish emission controls on 

large stationary sources of GHGs, it should heed its own pronouncements and proceed directly 

through the orderly regulatory process set forth under the CAA, which would allow the Agency

sufficient time to assess emissions and available controls and provide major stationary sources 

with the ability to work with the Agency in shaping the regulation, as well as giving those 

sources the necessary time to meet any new requirements. 

Another industry commenter (0107) states that the PSD program is very different than 

new motor vehicle standards, and pollutants regulated under Title I have a different purpose than 

Title II national vehicle standards. On this basis, the commenter (0107) concludes that it is 

logical and reasonable to conclude that Congress could not have intended that a LDVR would 

operate as a trigger for the PSD program.

One industry commenter (0113) states that EPA’s proposed regulation of GHGs is one of 

the most consequential regulatory actions ever taken, and the agency has deliberately taken it 

without consideration of the consequences. EPA’s response is, in effect, that it did not and does 

not have to inform itself (or others) of the relevant environmental and economic facts because it 

has had and will have no opportunities to make use of facts— no opportunities for judgment and 

thus no need to inform that judgment. The outcome, under the CAA, was “triggered,”

“automatic” or “self-effectuating.” According to the commenter EPA’s opinion is that the statute 

made them do it. The agency’s defense, in effect, is that it made no choices—committed no acts 

of judgment— that would have benefited from facts and analysis with respect to the 

environmental and economic consequences of this historic, contentious, intrusive and inefficient 

new frontier in regulation. It was only doing what the law required. The commenter contends 

that the agency had innumerable opportunities to do other than what it has done. It could have 

shaped, conditioned delayed or phased this outcome. Or, it could have decided not to do this at 

all, and the Clean Air Act would not have stood in the way – so long as its judgment was 

considered and supported. Informed judgment has been needed from the first step on this 

regulatory path to PSD regulation, and the remaining steps likewise require it. Each of various 

EPA opportunities for judgment – opportunities for action or inaction – would have benefited 

from consideration of the environmental and economic consequences of their exercise. 

According to the commenter, an agency cannot decide whether to try to avoid, mitigate or 

prudentially delay a problem if it does not assess the problem, and it cannot take an action 

without considering its most fundamental aspects. The commenter concludes that even if that 

trigger operates just as automatically as the agency says it does (and it clearly does not), the 

agency is not excused from informing itself of the consequences of pulling the trigger. The 

alleged mechanistic and determinate character of that one step cannot be ascribed to the rest of 

the decisional process. At some point, before it effectuates it, the agency had and has obligation 

to consider the impact of the outcome.

Response: 
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EPA understands commenters’ concerns but disagrees with how commenters have 

characterized EPA’s efforts to implement the mandate delivered by the United States Supreme 

Court in Massachusetts v. EPA. EPA acknowledges that there are challenges to using the 

existing CAA to addressing the challenge of global climate change. EPA supports Congressional 

efforts to adopt comprehensive energy climate change legislation, but under the circumstances 

has exercised its judgment with great thought and care within the framework of the CAA to 

respond to the Court’s direction and the Act’s provisions. EPA is working within the constraints 

of the Act to promulgate an approach that addresses sources of GHGs in a common sense way

that responds to the policy and practical issues that have been raised in comments submitted on 

both this action and proposed tailoring rule.

EPA has an obligation to respond to the Supreme Court remand in Massachussetts v. 

EPA and make a determination regarding whether GHG emissions from motor vehicles (i.e., onhighway vehicles) endanger public health and welfare. In response to that obligation, EPA 

carefully reviewed the available science on climate change, proposed a determination for public 

comment, and made an affirmative determination after considering the information and 

comments provided by the public. Having made a determination, based on sound science, that 

GHG emissions from mobile sources endanger public health and welfare, EPA has an obligation 

under the relevant CAA provision (section 202(a)) to promulgate standards to address emissions 

from those sources. As discussed above, once GHGs are “subject to regulation under the Act,”

EPA does not believe it can wholly defer application of the PSD program to GHG emissions 

from stationary sources until EPA can address whether to promulgate categorical GHG standards 

for stationary sources under other provisions in the CAA. 

Under Title II or other provisions of the CAA, EPA is authorized to make decisions to 

control pollutants (and regulate various categories of sources) that the Agency (or Congress) has 

found endanger public health or welfare. The PSD program works to ensure that the same 

pollutants are controlled when new major stationary sources are constructed or major existing 

stationary sources are modified. The case-by-case nature of PSD control determinations ensures 

that these stationary source emissions are limited based on real-world considerations of 

technological availability, costs, energy impacts and other relevant factors. While there may be 

some advantages to PSD being triggered by a decision to control stationary source GHG 

emissions, the statute and practicality do not require it. In fact, best available control technology

determinations in PSD can provide information and experience that is useful in setting generally

applicable stationary source requirements under other CAA provisions. Moreover, given the 

wide variety of stationary sources that emit GHGs, it would take some time before the Agency

could promulgate national standards for all the potentially relevant source categories. PSD 

provides a basis for limiting emissions when a large emitting facility constructs or modifies in a 

way that significantly increases emissions, and so allows permitting authorities, permit 

applicants and the public to consider what controls make sense for that facility considering costs 

and other relevant factors.

9.9.2. Analysis of Effects on Large Stationary Sources

Comment:
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Nine industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109, 0080) 

assert that EPA has not adequately analyzed the impacts of GHG regulation on large stationary 

sources of GHG emissions.

Eight of these industry commenters (primary comment by 0089; incorporated or 

referenced by 0067, 0083, 0090, 0096, 0106/0107, 0108, 0109) assert that EPA should not 

proceed with actions that the Agency believes will trigger PSD requirements for GHG emissions 

in the absence of proper analysis of the effects of doing so, and public notice of opportunity for 

comment on that analysis. The commenters do not agree that the proposed motor vehicle GHG 

rules, if made final, would necessarily have PSD effects or that they would take place in the 

timeframe discussed in the Reconsideration proposal package (i.e., 60 days after publication of 

the final GHG vehicle rules). In addition, these industry commenters believe that none of EPA’s 

current proposed GHG-related rules addresses in any meaningful way how EPA believes those 

rules would affect large stationary sources of GHG emissions and why EPA believes it should 

use motor vehicle rules – rules that it has no statutory obligation to promulgate at this time – to 

trigger enormously complex, expensive, and burdensome PSD requirements. The commenters 

assert this is not good policy, and argue that the problem is compounded by EPA’s failure to 

assess what the Agency believes the effects of that policy will be on this nation’s large stationary

sources, including its electricity generating and manufacturing sectors, and on the nation’s 

economy and international competitiveness. 

These industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) state 

that, although EPA properly recognizes in the proposed PSD Interpretation that the need for 

adequate time to assess emission levels and determine appropriate emission controls supports 

reaffirmation of its actual control interpretation, EPA seems at the same time wholly to ignore 

the dramatic implications of its plan to impose – in the very near term – PSD requirements for 

GHGs on large stationary sources, in the absence of guidance on and without time to prepare for 

implementation of those requirements. The commenters believe that, at a minimum, EPA should 

make clear that any final motor vehicle GHG rules under section 202(a) of the Act do not trigger 

PSD requirements before those rules take effect, an event that would not occur before October 

2011.

Response:

EPA included an extended discussion on the economic impacts of PSD regulation for 

GHG emissions in the preamble to the proposed Tailoring Rule and also prepared a cost-benefit 

analysis under EO 12866 for that proposal. See 55292 FR at 55337-340, 55343. As part of the 

Tailoring Rule docket, EPA also conducted the appropriate analysis required by the RFA and 

undertook additional discretionary RFA outreach to further assess the impacts of that rule. See

id. at 55349 and docket EPA-HQ-OAR-2009-0517-19130 (summary of discretionary outreach 

available in the docket for the Tailoring Rule). These analyses were available for comment as 

part of the Tailoring Rule proposal. In that proposal, EPA also took comment regarding the final 

permitting thresholds that could be adopted for implementing the PSD program for GHG 

emissions, including matters related to the selection of those thresholds. Commenters that felt 

EPA’s analyses did not fully consider the costs and/or benefits of GHG regulation for large 
159

sources were able to address that issue in their comments on the proposed Tailoring rule. EPA 

will address concerns regarding the scope of these analyses in the final action on the Tailoring 

Rule.

For response to the concerns raised by commenters regarding EPA’s interpretation of 

“subject to regulation” as it relates to applicability of PSD regulation following promulgation of 

the light duty vehicle rule for GHG emissions, see EPA’s responses to related comments in 

Chapters 8 and 9 of this RTC.

9.10. Combustion of Biomass-Derived Fuels

Comment:

Two industry commenters (0055, 0071) request that EPA exempt CO2 emissions from the 

combustion of fuels derived from biomass (“biofuels”) from both counting towards the threshold 

for major emitting facilities or major modification status from BACT analyses for CO2

emissions. These commenters stated that CO2 emissions from combustion of biomass, because 

of the principle of carbon neutrality and best carbon accounting practices, do not contribute 

climate change and should not be counted as increasing emissions of a pollutant regulated under 

the CAA. Biomass CO2 neutrality is an inherent property of biomass based on the natural carbon 

cycle. The neutrality of CO2 emissions from biomass combustion has been recognized for many 

years by an abundance of studies and is widely accepted by agencies, institutions, regulations 

and legislation. This is true for IPCC Guidelines and Guidance for the UN Framework 

Convention on Climate Change UNFCCC reporting protocols and an innumerable other agencies 

and institutions (cites agencies and countries whose accounting practices quantify biomass as 

CO2 -neutral). EPA recently confirmed its position that the combustion of biomass should be 

considered CO2-neutral, regardless of the source of the biomass, in its proposed rule to 

implement the Energy Independence and Security Act of 2007 through a new Renewable Fuel 

Standard, RFS2. In EPA’s Mandatory GHG Reporting Rule, EPA clearly and intentionally

excludes biomass CO2 emissions for the calculation of thresholds for determining regulated 

facilities.

Another industry commenter (0071) stated that excluding CO2 emissions from the 

oxidation of biomass would: 

 Avoid imposing PSD requirements on emissions that do not cause or contribute to the air 

quality impact (increased CO2 concentration in the global atmosphere) that application of 

PSD permitting is supposed to be addressing, and

 Encourage substitution of renewable fuels for fossil fuels, which EPA is already seeking 

to accomplish through other measures, such as provisions in the proposed GHG tailpipe 

standards that give manufacturers extra credit for alternative fuel vehicles.

Response:
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As explained elsewhere in this RTC, this action reconsiders an interpretation of general 

regulatory text found in 40 CFR 52.21(b)(50) and is not the appropriate forum to address the 

specific PSD applicability and implementation issues presented by the regulation of GHGs. . 

Similar comments and issues were raised in the context of the Tailoring Rule. EPA will respond, 

as appropriate, to those comments in that forum and in guidance that EPA is developing to 

address issues raised by the CAAAC workgroup, permitting authorities, and the regulated 

community 
161

Chapter 10. State Program Implementation

10.1. Applicability of PSD Interpretive Memo to State PSD Programs

Comment: 

One industry commenter (0055) requests that EPA make the PSD interpretive memo 

binding on state PSD programs. They state that if states have the freedom to apply PSD 

permitting requirements to GHGs even before they are subject to control measures under the 

CAA, the harmful effects of overloading the PSD permitting system with thousands of new PSD 

permit applications would be realized anyway, despite EPA’s attempt to try to avoid the result.

One industry group (0071) commenter states that it is imperative to make the PSD 

Interpretive Memo binding on state PSD programs.

Eight industry commenter (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) said 

that EPA’s interpretation should apply both to administration of the federal PSD permitting 

program under 40 CFR 52.21 and to EPA approval of (or other action on) new or revised state 

PSD plans under 40 CFR 51.166.

Response:

EPA will apply the PSD Interpretive Memo, with the refinement described in this action, 

when implementing the federal permitting program under 40 CFR 52.21. Furthermore, we will 

expect that states that implement the federal PSD permit program under delegation from an EPA 

Regional Office will do the same. 

In addition, EPA will apply the interpretation reflected in this notice and the PSD 

Interpretive Memo in its oversight of existing state programs and review and approval of new 

program submissions. Many states implement the PSD program pursuant to state laws that have 

been approved by EPA as part of the SIP, pursuant to a determination by EPA that such laws 

meet the PSD program criteria set forth in 40 CFR 51.166. The EPA regulation setting forth 

PSD program requirements for SIPs also includes the same definition of the term “regulated 

NSR pollutant” as the federal program regulation. See 40 CFR 51.166(b)(49). Because this 

regulation uses the same language as contained in 40 CFR 52.21 and the same considerations 

apply to implementation of the PSD program under state laws, EPA will interpret section 

51.166(b)(49) in the same manner as section 52.21(b)(50). However, in doing so, EPA will be 

mindful that permitting authorities in SIP approved states have some independent discretion to 

interpret state laws, provided those interpretations are consistent with minimum requirements 

under the federal law. 

To the extent approved SIPs contain the same language as used in 40 CFR 52.21(b)(50) 

or 40 CFR 51.166(b)(49), SIP-approved state permitting authorities may interpret that language 

in state regulations in the same manner reflected in the PSD Interpretive Memo and this notice. 
162

However, EPA will not seek to preclude actions to address GHGs in PSD permitting actions 

prior to January 2, 2011 where a state permitting authority feels it has the necessary legal 

foundation and resources to do so. 

EPA has not called on any states to make a SIP submission that addresses the interpretive 

issues addressed in this notice and the PSD Interpretive Memo. As long as states are applying 

their approved program regulations consistent with the minimum program elements established 

in 40 CFR 51.166, EPA does not believe it will be necessary to issue a SIP call for all states to 

address this issue. However, permitting authorities in SIP-approved states do not have the 

discretion to apply state laws in a manner that does not meet the minimum federal standards in 

40 CFR 51.166, as interpreted and applied by EPA. Thus, if a state is not applying the PSD 

requirements to GHGs for the required sources after January 2, 2011, or lacks the legal authority 

to do so, EPA will exercise its oversight authority as appropriate to call for revisions to SIPs and 

to otherwise ensure sources do not commence construction without permits that satisfy the 

minimum requirements of the federal PSD program. 

To enable EPA to assess the consistency of a state’s action with any PSD program 

requirements for GHGs, states should ensure that the record for each PSD permitting decision 

addresses whether the state has elected to follow EPA’s interpretation or believes it is 

appropriate to apply a different interpretation of state laws that is nonetheless consistent with the 

requirements of EPA’s PSD program regulations. 

10.2. Need to Complete SIP Revision Process 

Comment:

One industry commenter (0086) states that, because the federal and state PSD 

rulemakings that established the regulatory language that is now being interpreted as requiring 

GHGs to be subject to PSD did not contemplate or address the massive impacts of that 

interpretation, the PSD Interpretive Memorandum is, in effect, a new rule that has important 

implications for timing and the CAA’s cooperative federalism. The commenter (0086) believes 

that EPA has overlooked the necessity of the SIP revision process in this case where the existing 

state PSD rules and EPA’s approval process for those rules did not construe the rules as applying 

to GHGs. The commenter (0086) believes, therefore, that the normal SIP pattern under section 

110 must be used: (1) 3 years for adoption and submission of the necessary SIP revisions; (2) 1-2 

years for EPA action on the submission; and (3) possible 40 CFR 52.21 FIP rulemakings. While 

the commenter (0086) believes that the CAA requires EPA to follow that pattern with respect to 

GHG emissions, the commenter believes it is beyond doubt that the CAA at least affords EPA 

discretion to follow it. The commenter (0086) states that the alternative would be for EPA to 

trigger a GHG-based PSD system initially in only those states subject to 40 CFR 52.21, which 

would create huge adverse differences between the states, at least for several years, an outcome 

Congress strongly disfavored in establishing the PSD program in its present form in 1977. The 

commenter (0086) urges EPA to adopt the usual section 110 pattern because the commenter 

believes it is the only lawful pattern, and would be more orderly.
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Another industry commenter (0100) states that no matter what federal pronouncements 

EPA may issue about whether and when it intends to subject a pollutant to PSD permitting, it 

cannot purport to make GHG emissions regulated until states have legally required time (through 

the SIP call process) to amend their construction and operating permit rules to include GHG as a 

regulated pollutant, and the process (in section 110(k) of the CAA) is followed for aligning state 

rules with changes in EPA rules. This commenter asserts that a change in federal law (i.e., 

adoption of the car rules) does not automatically result in a new “pollutant” called “greenhouse 

gases” to be governed by state permit rules and that further, any state rules that purport to 

regulate new pollutants at the will of EPA without intervention by or guidance from the state are 

unconstitutional because such provisions would delegate lawmaking powers to a federal agency. 

Response:

The applicability of PSD permitting requirements to a newly regulated pollutant under 

SIP-approved PSD programs depends on whether states have previously adopted laws that are 

sufficiently open-ended to apply to additional pollutants without subsequent action by the state. 

Many States do not need to revise their SIPs or state laws to begin implementing PSD for new 

pollutants. Absent a unique requirement of state law, EPA believes that state laws that use the 

same language that is contained in EPA’s PSD program regulations at 52.21(b)(50) and 

51.166(b)(50) are sufficiently open-ended to incorporate GHGs as a regulated NSR pollutant at 

the appropriate time consistent with EPA’s interpretation of these regulations. As noted above, 

SIP-approved state permitting authorities may interpret the same language in state regulations in 

the same manner reflected in the PSD Interpretive Memo and this notice. 

The Agency interprets the provisions of Section 165 to apply to any pollutant that 

becomes “subject to regulation” under the Act. The D.C Circuit Court upheld this position. See 

Alabama Power Co. v. Costle, 636 F.2d 323, 403-406 (C.A.D.C., 1979) (rejecting arguments that 

Section 165 should not automatically apply to all pollutants subject to regulation under the Act.). 

We have continued to assert this position since this time. See, e.g., 67 FR 80240 (stating that 

The PSD program applies automatically to newly regulated NSR pollutants); 61 FR 38307 

(stating that the PSD regulations apply to all pollutants regulated under the Act), and Memo. 

From John S. Seitz, Director Office of Air Quality Planning and Standards to Regional Air 

Directors, “Interim Implementation of New Source Review Requirements for PM2.5,” April 5, 

2005 (stating that Section 165(a)(1) of the Act provides that no new or modified major source 

may be constructed without a PSD permit.). We are not changing our regulations, and did not 

open this interpretation for reconsideration in this action. 

The provisions in section 110 of the Act must be reconciled with the requirements of 

section 165 of the Act, which preclude construction of a major emitting facility without 

obtaining a permit in compliance with the requirements of section 165. EPA does not interpret 

CAA section 110 to preclude states from applying state laws that are sufficiently open-ended to 

incorporate a pollutant that is subject to regulation at the time of a permitting decision. 

Furthermore, EPA has not promulgated a NAAQS for GHGs that would implicate many of the 

procedural requirements of section 110. At the same time, EPA does not interpret section 110 to 

mean that the requirements of 165 may be delayed for a pollutant that is subject to regulation. 

Thus, our approach provides maximum flexibility for states to expeditiously adopt our 
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interpretation of subject to regulation, but does not allow for interpretation of that phrase in a 

way that would circumvent section 165.

Specifically, as discussed above, EPA has not called on any states to make a SIP 

submission that addresses the interpretive issues addressed in this notice and the PSD 

Interpretive Memo. As long as states are applying their approved program regulations consistent 

with the minimum program elements established in 40 CFR 51.166, EPA does not believe it will 

be necessary to issue a SIP call under section 110(k) for all states to address this issue. However, 

EPA will exercise its oversight authority as appropriate to call for revisions to the PSD 

permitting provisions of SIPs and to otherwise ensure sources do not commence construction 

without permits that satisfy the minimum requirements of the federal PSD program. 

In those cases where state laws are not sufficiently open-ended to incorporate new PSD 

permitting requirements at the appropriate time, EPA has often recognized and provided time for 

States to revise their existing SIPs to implement new requirements. See 67 FR 80240. However, 

EPA has also worked with States by issuing interim transition policies that provide means for 

states to use existing state regulatory authorities to assure that CAA requirements are met in the 

period before any state that needs to do so may revise its SIP. The PSD Interpretive Memo and 

this final action on reconsideration of the memo does not involve a revision of the PSD 

permitting regulations but rather involves clarifications of how EPA interprets the existing 

regulatory text. These actions articulate what has, in most respects, been EPA’s longstanding 

practice. Thus, many states may continue to proceed under an interpretation of their rules after 

this action. In light of additional actions to be taken by EPA in the Tailoring Rule, states that 

issue permits in the near term may want to preserve the discretion to modify their approach after 

other EPA actions are finalized. In light of this contingency, one option states may consider is to 

establish that the state will not interpret its laws to require PSD permits for sources that are not 

required to obtain PSD permits under EPA regulations. 

Comment:

An industry commenter (110) claims that EPA cannot, as it proposes in its Tailoring 

Rule, retroactively change a SIP on the grounds that it is the correction of a mistake without 

following all applicable procedural requirements, citing a the Third Circuit decision in 

Concerned Citizens of Bridesburg v. EPA that held that, because a state must have an 

opportunity to pass first upon the mechanics of achieving compliance with air quality standards, 

EPA cannot unilaterally revise a SIP without following the CAA’s revision provisions.

Response: 

Since this action does not involve the action described, this comment is outside the scope 

of this reconsideration action.
165

Chapter 11. Other Issues

11.1. Combination of Interpretations 

Comment:

One private citizen commenter (0048) believes that there should be a combination of the 

proposed interpretations of “subject to regulation.” This commenter opines that monitoring and 

reporting is necessary to interpreting pollutants that are “subject to regulation.” They state that 

with a combination of monitoring and reporting, there should also be an EPA-approved SIP and 

a finding of endangerment to develop limits. 

Response:

For reasons discussed elsewhere in this document, EPA has decided to continue applying 

the actual control interpretation and has rejected the options of triggering PSD permitting 

requirements based solely on a finding of endangerment or on regulation of a pollutant in an 

EPA-approved SIP. Thus, EPA is not adopting the commenters suggestion to employ a 

combination of these interpretations. 

11.2. Municipal Solid Waste (MSW) Landfill Gas Emission Standards

Comment:

Eight industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) 

indicate that environmental advocacy groups have alleged in permit challenges that CO2 is

subject to regulation for purposes of the PSD program because CO2 is one of the constituents of 

MSW landfill emissions that are regulated by EPA under section 111 of the CAA and 40 CFR 

60.33c and 60.751. The commenters state that EPA made clear in its Deseret briefing that this 

argument has no merit. The commenters assert that both the regulatory text of, and the preamble 

to, the proposed section 111 rules for MSW landfill emissions explicitly address the issue and 

clarify that the term “MSW landfill emissions” refers to a single designated composite pollutant, 

not its various individual constituents, and that MSW landfill emissions is the only pollutant 

subject to regulation. See Deseret Surreply Brief of EPA Office of Air and Radiation and 

Region VIII at 1-6.

The industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) further 

note that the specific control options in the MSW landfill regulations focus on control of NMOC 

emissions, which are used as a surrogate for MSW landfill emissions, and that EPA recognized 

in issuing the standards that control options identified as reducing overall MSW landfill 

emissions may actually increase the secondary emissions of individual components, including 

CO2. Based on this, the commenters state that EPA did not intend for the MSW landfill emission 
166

regulations to address climate change considerations, but rather ambient ozone problems, air 

toxic concerns, and potential explosion hazards.

The industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) assert 

that EPA’s MSW landfill gas emission regulations do not make CO2 or other GHGs “subject to 

regulation” under the CAA for purposes of the PSD program, and that EPA in effect concurred 

with this conclusion in the PSD Interpretive Memorandum, where it stated that MSW landfill gas 

is an example of a pollutant regulated as a collective group of emissions, and not by its 

individual components. The commenters suggest that EPA reaffirm its position on this issue in 

its final action in the present proceeding.

Response:

The PSD Interpretive Memorandum contains the following statement in footnote 6 (page 

6) that relates to this issue:

This memorandum does not seek to further define the specific nature or scope of any 

individual “pollutant” that is subject to such controls. Any ambiguity as to whether some 

part, component, or constituent of a substance or category of substances is controlled 

under a regulation should be resolved in the context of interpreting the individual rule 

that gives rise to the issue. See, e.g., Regulating Greenhouse Gas Emissions Under the 

Clean Air Act, Advance Notice of Proposed Rulemaking (“ANPR”), 73 FR 44354 (July

30, 2008) at 44420-421 (describing the various consequences that could arise given the 

definition of the “pollutant” that EPA may establish in a regulation of one or many

GHGs). For example, in adopting the New Source Performance Standard (NSPS) for 

municipal solid waste (MSW) landfills, EPA was explicit that it was regulating only

MSW landfill emissions collectively, and not the individual components of those 

emissions. 56 FR at 24468, 24470 (May 30, 1991) (“The pollutant to be regulated under 

the proposed standards and guidelines is “MSW landfill emissions.”); id. at 24474 (“The 

EPA views these emissions as a complex aggregate of pollutants which together pose a 

threat to public health and welfare based on the combined adverse effects of the various 

components. . . . The EPA thus views the complex air emission mixture from landfills to 

constitute a single designated pollutant.”).

Since EPA is not withdrawing the PSD Interpretive Memorandum, EPA’s position on this issue

is unchanged by this action. 

11.3. Section 821 of Public Law 101-549

Comment:

Ten industry commenters (0067, 0073, 0083, 0085, 0089, 0090, 0096, 0106/0107, 0108, 

0109) asserts that section 821 of Public Law 101-549 is not part of the CAA, and section 821 

implementing regulations do not constitute regulation under the CAA. Eight of the commenters 

(0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) state that no basis exists for EPA to 
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change its carefully considered and well-supported determination that section 821 is not part of 

the CAA and that section 821 implementing regulations do not constitute regulation under the 

CAA. The commenters state that EPA should confirm that determination in this proceeding.

One industry commenter (0085) stated that section 821 was deliberately excluded from 

the Act even though it was part of the overall bill that amended the CAA in 1990. The 

commenter (0085) asserts that this exclusion was clearly intentional and cannot be ignored by 

interpreting the CAA to include section 821.

As a threshold matter, the industry commenters (0067, 0083, 0089, 0090, 0096, 

0106/0107, 0108, 0109) note that the section 821 issue is moot, assuming that EPA continues to 

maintain the actual control interpretation – this issue becomes relevant only if the Agency

determines that monitoring and reporting requirements alone can make a pollutant subject to the 

PSD program. Nevertheless, the commenters strongly disagree with any suggestion that EPA 

should change its position on the issue of whether section 821 is part of the CAA. The 

commenters believe that it is clear that Congress did not make and never intended to make 

section 821 part of the CAA. See In re Deseret Power Electric Coop., Response of EPA Office 

of Air and Radiation and Region VIII to Briefs of Petitioner and Supporting Amici, at 45-46 

(Mar. 21, 2008) (explaining why section 821 is not part of the CAA); Deseret UARG Amicus 

Brief at 7-11 (same). The commenters state that for several reasons, specifically discussed by 

EPA and UARG in their submissions to the EAB in Deseret, this conclusion is clear both from 

the language of section 821 itself, which refers to the CAA as separate legislation, and from 

contemporaneous Congressional statements. The commenters add that even a cursory review of 

the CAA makes clear that section 821 is not part of that statute; the CAA begins with section 101 

and continues through section 618 and no further; it includes no section 821. CAA sections 101-

618, 42 U.S.C. 7401-7671q. The industry commenters (0067, 0073) similarly note that the 

language of Public Law 101-549 and the legislative history clearly indicate that section 821 did 

not amend the CAA and is not part of the CAA.

The industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) state 

that no weight should be given to past assertions by EPA that section 821 is part of the CAA. 

The commenters note that those statements did not address the point that is germane here, i.e., 

whether the requirements of section 821 and section 821 regulations constitute regulation under 

the CAA that may trigger PSD obligations. In addition, the commenters (0067, 0083, 0089, 

0090, 0096, 0106/0107, 0108, 0109) believe that ill-considered, incorrect past Agency

characterizations of section 821 or its implementing regulations could not possibly form the basis 

for a new Agency interpretation concerning the effect of that section or those regulations. The 

industry commenters similarly noted EPA’s inconsistent references to the legal status of section 

821 cannot change the provisions of Public Law 101-549.

An environmental organization commenter (0095) states that EPA properly recognizes 

section 821 of the CAA. Commenter notes that the Reconsideration states that in light of EPA’s 

contradictory statements in assorted federal court proceedings as to this point, EPA is now “less 

inclined to maintain” the position that section 821 did not amend the CAA.. The commenter 

agrees that EPA should abandon this theory. The commenter adds that EPA has consistently

enforced the CO2 monitoring, reporting and recordkeeping obligations imposed by section 821 
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and EPA’s own Part 75 regulations through the enforcement provisions of the CAA. (Case 

references are included and attached.) In four of these five cases, EPA has used section 113 of 

the CAA to enforce the section 821 regulations. In three of those cases, it has assessed civil 

administrative penalties. Thus, in those three cases, EPA alleged that violations of section 821 

and the implementing regulations were violations of various parts “of this chapter”, i.e., the 

Clean Air Act, and then imposed hundreds of thousands of dollars in penalties for those 

violations. EPA also enforced section 821 under section 113(b)(2), wherein the Administrator is 

authorized “to commence a civil action for a permanent or temporary injunction, or to assess and 

recover a civil penalty of not more than $25,000 per day for each violation, or both.” And, 

consistent with its practice in the administrative penalty cases, in at least one instance of 

violations of section 821 (United States v. Block Island Power Co.), EPA duly invoked federal 

court jurisdiction for violations “of this chapter.”

Finally, commenter (0095) asserts that EPA has also invoked its right under Section 

304(c)(2) to intervene in an ongoing citizen suit that was, in turn, brought under Section 

304(a)(1)(A) for violations of “an emission standard or limitation under this chapter.” Thus EPA 

has consistently contended that Section 821 is a regulatory provision of the CAA and/or that 

violations of the Section 821 regulations are violations of the CAA.

Response:

In the October 7, 2009 notice, EPA solicited comment on the question of whether section 

821 of the CAA Amendments of 1990 is part of the CAA. EPA indicated that the Agency was 

inclined against continuing to argue that section 821 was not a part of the CAA, as the Office of 

Air and Radiation and Region VIII had done in briefs submitted to the EAB in the Deseret

matter. This question bears on the determination of whether the CO2 monitoring requirements in 

EPA’s Part 75 regulations are requirements “under the Act.” In the proposed reconsideration 

notice, EPA explained that it would be necessary to resolve whether or not the CO2 monitoring 

and reporting regulations in Part 75 were promulgated “under the Act” if EPA adopted the 

monitoring and reporting interpretation. 

EPA has not yet made a final decision on this question, and it is not necessary for the 

Agency to do so at this time. Since EPA is not adopting the monitoring and reporting 

interpretation, the status of section 821 is not material to the question of whether and when CO2

is “subject to regulation under the Act.” Because there are currently no controls on CO2

emissions, the pollutant is not “subject to regulation.” Given that the provisions in Part 75 do not 

“regulate” emissions of CO2, it is unnecessary determine whether such provisions are “under the 

Act” or not to determine PSD applicability. Furthermore, the promulgation of EPA’s Reporting 

Rule makes this issue even less material. In that rule, which became effective in December 2009 

and required monitoring to begin in January of this year, EPA established monitoring and 

reporting requirements for CO2 and other GHGs under sections 114 and 208 of the CAA. Thus, 

there can be no dispute that monitoring and reporting of CO2 (as well as other GHGs) is now 

occurring under the CAA, regardless of the status of section 821 of the 1990 amendments. At 

this point, the section 821 issue would only become relevant if a court were to find that the 

monitoring and reporting interpretation is compelled by the CAA and a party subsequently seeks 

to retroactively enforce such a finding against sources that had not obtained a PSD permit with 
169

any limit on CO2 emissions. If this situation were to arise, EPA will address the section 821 

issue as necessary.

11.4. Alternatives Analysis Under Section 165 of the CAA

Comment:

Eight industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) 

observe that EPA did not address in the proposed PSD Interpretation the argument that GHG 

emissions should be considered in the alternatives analysis for a PSD permit under CAA section 

165(a)(2), and petitioners did not raise it in their Petition for Reconsideration. The commenters 

note that EPA observed in the PSD Interpretive Memorandum (at 4 n.4) that the EAB disposed 

of this argument in the Deseret litigation. The commenters opine that no legal support exists for 

any argument that a PSD permit applicant or PSD permitting authority has an affirmative 

obligation at this time to consider GHGs in an alternatives analysis under section 165(a)(2) or 

EPA’s PSD regulations.

Response:

As noted in the October 7 notice for this reconsideration, EPA’s present action is focused 

on the interpretation of “subject to regulation” as contained in 40 CFR 52.21(b)(50) (iv) and 

CAA sections 165(a)(4) and 169. As such, this action is not the proper forum for deciding 

whether GHGs may or may not be considered in the alternatives analysis under CAA section 

165(a)(2) or EPA’s PSD regulations. While we are declining to resolve this issue in this 

reconsideration action, we want to clarify one aspect of the EAB Deseret decision referenced in 

the comment. The EAB’s decision found only that Region 8 was not required to consider a 

particular alternative that may have reduced GHG emissions on the grounds that this alternative 

was not identified in public comments and that there is no affirmative duty to consider an 

alternative not identified in public comments under section 165(a)(2) or EPA’s PSD regulations. 

EPA does not read the EAB’s decision to conclude that there is never a duty to respond to GHG 

issues associated with an alternative that is raised in public comments. If it becomes necessary, 

EPA will address the scope of consideration of GHG emissions in the alternatives analysis when 

such an issue arises in a permitting action or by issuing specific guidance on the issue.

11.5. Broad Focus of Proposal

Comment:

Two industry commenters (0065, 0067) state that EPA has properly focused on the 

application of the proposed interpretation to all pollutants, instead of limiting the applicability to 

CO2 or GHGs.

In contrast, one state/local agency association (0062) believes that PSD Interpretive 

Memo was crafted more narrowly than the proposed reconsideration. The commenter (0062) the 
170

proposed broadening of the interpretation is unwise and recommended that any future 

determinations of whether a pollutant is “subject to regulation” be made on a case-by-case basis, 

considering all of the relevant facts. The commenter (0062) states that in discussing the 

proposed PSD Interpretation, EPA has revived issues that were resolved (such as the ammonia 

PM2.5 issue) and seeks to address a number of issues that will be moot (such as the approval of 

the California waiver and the endangerment finding issue) or are unrelated to the current issues 

(such as whether a rule that only affects 49 states is sufficient to trigger PSD and title V 

permitting). The commenter (0062) believes that EPA’s proposed standard for when a pollutant 

is subject to regulation (“[t]hose pollutants subject to a nationwide standard, binding in all states, 

that EPA promulgates on the basis of its CAA rulemaking authority”) is at once too narrow and 

too broad. As an illustration, the commenter (0062) notes that California-certified vehicles do 

not have to meet federal emissions standards, so it could be argued that the federal motor vehicle 

GHG standard is not binding in all 50 states. On the other hand, the commenter (0062) asserts 

that it will likely be argued that such a standard is impermissible under the CAA because the 

statutory limitation would be too subject to gaming by the Agency (e.g., if EPA were to exempt a 

single state from an otherwise federally imposed national control strategy for a pollutant); that is, 

if PSD applicability for a pollutant is imposed only when EPA explicitly chooses to do so, CAA 

section 165(a)(4) has no meaning.

The state/local agency association (0062) agrees that PSD and title V applicability should 

only arise based on a conscious decision to broadly regulate emissions of a pollutant under the 

CAA, but expressed concern that attempting to limit the form of future regulation will have 

adverse consequences – one of the largest concerns is the amount of litigation it is likely to 

engender. The commenter (0062) asserts that EPA is far more likely to achieve what is needed 

under these circumstances by limiting its interpretation to the CO2 monitoring and light-duty 

vehicle GHG rules at issue rather than issuing a sweeping pronouncement that establishes a 

single factor that attempts to govern all future pollutants; decisions respecting such future 

pollutants are better left to a review at the time they arise based on all of the relevant facts at the 

time. The commenter (0062) believes that in the present circumstance – where EPA is pursuing 

a rulemaking that clearly would meet any reasonable reading of the term “subject to regulation”

– such a broad interpretation is not necessary, may produce inappropriate results in the future, 

and may delay the overall implementation of the program if it is challenged and overturned.

Response:

In accordance with the position taken in the PSD Interpretive Memo and supported by the 

first commenter above, EPA continues to believe it is best to determine the full scope of 

pollutants “subject to regulation” under the federal PSD program, in order to “resolve ambiguity 

and reduce confusion among permitting authorities, the regulated community, and other 

interested stakeholders.” See Memo at 2. Accordingly, this reconsideration action represents a 

broad consideration of the most appropriate legal interpretation and policy rationales for 

potentially applying PSD permitting requirements to all pollutants regulated under the CAA.

At the outset, we disagree with the comment above that characterizes the reconsideration 

as being broader than the original Memo. In fact, this reconsideration is seeking comment on 

issues specifically raised in the Memo itself, such as the effect of an endangerment finding, 
171

control of a pollutant in one SIP, and the interplay of this interpretation with our PM2.5 

rulemaking (see Memo at 14-16), and on related issues brought to EPA’s attention in other 

actions, such as comments in the California waiver action seeking clarification of the impact of a 

waiver on PSD implementation (see 74 FR 32744, 32783 (July 8, 2009). Accordingly, EPA 

disagrees that the issues addressed in this reconsideration have been resolved, will be moot, or 

are unrelated to the current issues. As the discussions in the notice of reconsideration and the 

resulting comments make clear, each of these issues could have important impacts on our 

consideration of PSD implementation for pollutants “subject to regulation” under the relevant 

regulatory and statutory provisions. 

With regard to the specific illustration raised in the comment, we note that the commenter 

has misconstrued the impact of the grant of a section 209 waiver in California. As explained in 

response to specific comments regarding whether a pollutant addressed by a section 209 waiver 

is “subject to regulation” above, while an automobile in compliance with state standards is 

treated as in compliance with federal standards under CAA section 209(a)(3), the federal 

standards are still applicable – if a manufacturer fails to comply with a state standard adopted 

pursuant to a section 209 waiver, EPA can still bring an enforcement action if the federal 

standards are violated.

EPA also disagrees that the interpretation presented in this action is either too narrow or 

too broad. Rather we believe that it is an interpretation that resolves general ambiguity in the 

PSD regulatory program. To the extent that the commenter requests that EPA interpret “subject 

to regulation” on a case-by-case basis to avoid speculated impacts of the chosen interpretation on 

future actions , we note that in adopting the “takes effect” interpretation regarding the timing of 

PSD implementation, the response to comments provided earlier in this document acknowledged 

that it will be helpful in some contexts for EPA to provide additional implementation information 

specific to each new pollutant that becomes subject to regulation and we have provided such 

information with regard to the forthcoming LDV Rule that is anticipated to establish the first 

controls on GHGs. Moreover, EPA has no desire to conduct a case-specific notice and comment 

process each time there is the potential for PSD requirements to apply to a newly regulated 

pollutant. We believe it is best to provide an overall interpretation that can used to provide 

future consistency in PSD regulatory actions, and reject the notion that we should limit the 

current action to consideration of GHGs. 

11.6. Adequacy of Comment Opportunity

Comment:

One industry commenter (0111) states that the close timing of the GHG Rulemakings 

made it difficult for them to submit meaningful comments on these rulemakings, particularly on 

the Motor Vehicle GHG Rule. Problematically, the GHG rulemakings were all published in the 

Federal Register within just one month of each other. Meanwhile, many stakeholders, including 

the commenter (0111), were focused on and have allocated substantial resources towards 

analyzing and preparing to comply with the final mandatory GHG Reporting Rule, which was 

finalized in the midst of all three GHG rulemaking comment periods, on October 30, 2009. 
172

Further compounding the already tight timeline, the GHG rulemaking comment deadlines fall 

within the holiday season—the Motor Vehicle GHG Rule comments were due during the 

Thanksgiving holiday and the PSD Tailoring Rule comments are due immediately after 

Christmas. The GHG rulemakings are legally and technically complex, with significant and 

likely unprecedented consequences for its members. Each rulemaking on its own requires 

significant time and resources to fully evaluate, develop data and analyses, and formulate 

appropriate comments. Given the close timing of the publication of the GHG rulemakings, the 

current comment periods were simply insufficient to allow the commenter (0111) a fair 

opportunity to do so.

One industry organization representing many industries (0049, 0114) requested an 

extension of the comment period for the LDVR, PSD and title V GHG Tailoring Rule on, and 

this proposed “PSD Interpretive Memo Reconsideration” on November 18, 2009 because the 

closing of the comment periods and close timing of the GHG rulemakings makes it difficult to 

fully analyze the rules, develop useful data, and submit comments on all relevant aspects of the 

rule. This commenter received a reply from EPA’s Assistant Administrator (on November 25, 

2009) denying the extension request in its entirety. The commenter (0114) requested, on 

December 22, 2009, that EPA reconsider its denial.

One industry commenter (0078/0094) adds that the Reconsideration Proposal, being 

framed as a stand alone section 307(d) rulemaking, but not containing any proposed regulations 

to implement the interpretation by force of law, may not be entitled to Chevron deference. The 

commenter claims that there is not sufficient opportunity to comment on the Reconsideration 

Proposal, claims that U.S. EPA’s process bifurcates the proposal from the proposed Tailoring 

Rule and any other rulemaking necessary for its implementation, and argues that such 

rulemaking is essential to evaluate and address the Reconsideration Proposal’s legal, policy, 

technical and economic implications. The commenter (0078/0094) concludes that as a result, the 

proposal, standing alone, does not embody the notice legally required to provide a fair 

opportunity for comment. 

Response:

As explained in the Nov. 25, 2009 response from Assistant Administrator Gina McCarthy 

to the National Association of Manufacturers (described above) we were not able to extend the 

normal comment period for this and the EPA’s other GHG actions. We have reviewed the 

comments on related actions and made every effort to understand comments on each of these 

important packages. In addition, as explained in Chapter 2 of this RTC, since the PSD 

Interpretive Memo is interpretive in nature, EPA was not required to go through a notice and 

comment rulemaking process to issue the document. EPA’s action to take comment on 

reconsideration of the memorandum was voluntary. Nevertheless, EPA has taken the appropriate 

steps to provide an adequate opportunity for comment on the issue raised in the PSD Interpretive 

Memorandum, including providing twice the amount of time for comment described in CAA 

section 307(h).