Staff Report – December 20, 2011 Public Hearing (Rules 900, 903 & 904) Page 4

inspection of the aforementioned sources to ensure that they comply with all applicable 

requirements. In addition to this program that applies to all sources, the District 

implements and enforces requirements of the California Air Resources Board (CARB), 

and federal requirements from the CAA and its implementing regulations. 

The CAA requires that certain large industrial sources (referred to as “Major Sources”) 

of air pollution obtain and maintain federally enforceable operating permits under Title V 

of the Act. The 1990 Amendments to the federal Clean Air Act establish a national 

requirement for a federally enforceable operating permit program under the Title V 

program. Requirements for Title V permits are found under 40 CFR Part 70. The 

District implements an U.S. EPA-approved Title V permitting program through its Rule 

900. These permits are intended to incorporate all applicable requirements, and they 

must meet standards specified by U.S. EPA in terms of form and content1. They are 

renewed on a five year cycle, and the renewal is subject to the review of U.S. EPA, as 

well as formal public comment. Because of the complexity and cost associated with the 

federal standards and process, these permits are required only of sources that meet the 

federal definition of “Major Source” which is emissions-based and is intended to include 

large industrial operations. 

As mentioned above, federal Title V permitting requirements are set forth in District Rule 

900. Rule 900 applies to any stationary source with the potential to emit at least 100 

tons per year of any regulated air pollutant, or at least 10 tons per year of any 

hazardous air pollutant (HAP)2, or 25 tons per year of any combination of HAPs. A Title 

V permit includes any limitations, monitoring, testing, recordkeeping, and reporting, that 

apply to the source as a result of preconstruction review (e.g., PSD), or from other 

regulations adopted by the U.S. EPA, and the state or local air agency with jurisdiction. 

In California, the permit must therefore include the rules and regulations of the CARB 

and those regulations that have been approved into the State Implementation Plan 

(SIP) of the local air district. Unlike other local operating permits, these permits are 

enforceable by the U.S. EPA and by independent, third parties resulting from an action 

in federal court. However, sources with a potential to emit above the major source 

thresholds but actual emissions below fifty percent of the major source threshold may 

be able to avoid Title V requirements by complying with the recordkeeping and reporting 

requirements of Rule 903. Many of the permits issued by the district are exempt from 

Title V permit requirements as a result of this rule. Rule 903 enables permit holders to 

electively limit their emissions in a federally enforceable manner to avoid Title V permit 

requirements. 

Federal Regulatory Changes

In 2009, following a decision by the U.S. Supreme Court3, U.S. EPA issued an 

“Endangerment Finding” for GHGs under the CAA. This was the first step towards 

regulating this group of pollutants under the Act. Then in April of 2010, the 

 

1 Reference 40 CFR Part 70

2 Hazardous air pollutants are listed pursuant to Section 112(b) of the CAA.

3 Massachusetts v. EPA, 549 U.S. 497 (2007)
Staff Report – December 20, 2011 Public Hearing (Rules 900, 903 & 904) Page 5

Administrator of the U.S. EPA signed new regulations under the CAA with emission 

standards for GHGs from motor vehicles. At the same time, U.S. EPA issued an 

Interpretive Ruling to clarify that GHGs would not become “regulated pollutants” under 

the Act until the first compliance date of the effective emission standard. 

In May of 2010, the Administrator signed another rule, commonly referred to as the 

“Tailoring Rule” which adjusted, or “tailored” the applicability thresholds for federal 

permitting requirements for GHGs and provided an implementation schedule. The 

Tailoring Rule was needed because the primary GHG, carbon dioxide (CO2) is emitted 

at vastly higher rates from most operations and processes than the pollutants 

historically regulated under the CAA. Specifically, the emission threshold for “other 

regulated pollutants” is 100 tons per year for Title V, and is “any emission rate 

whatsoever” for other sources under the PSD program. Because of this language even 

a household water heater would emit CO2 at levels that would trigger Title V and PSD 

permitting. Obviously household water heaters are clearly not large industrial sources. 

The Tailoring Rule specifically does three things: (1) it establishes the list of GHG 

pollutants, along with their global warming potential (GWP), regulated as CO2

equivalents (CO2e); (2) it establishes thresholds for permitting requirements to apply; 

and (3) it establishes schedules for the requirements to apply.

The term “CO2e” means that all GHGs are expressed in CO2 equivalents based on their 

global warming potential, or GWP, relative to CO2. CO2 has a GWP of 1. Methane is 

twenty-one times more effective at warming the atmosphere when compared to CO2, so 

it has a GWP of 21. To determine the CO2e emissions from a source, the mass 

emissions of the individual GHG are multiplied by the GWP of that GHG; this is done for 

each GHG and then all are added together. To complete the example, a source with 1 

ton of CO2 and 1 ton of methane emissions is said to emit 22 tons of CO2e.

Under the Tailoring Rule, GHG permitting happens in two phases, as follows:

I. Beginning on January 2, 2011, only sources currently subject to the PSD 

permitting program would be subject to GHG permitting requirements.

Specifically, the applicable requirements of PSD, most notably, GHG BACT 

requirement, will apply to projects if GHG emissions have the potential to exceed 

75,000 tons per year CO2e. 

Similarly, any source that is required to have a Title V permit, due to non-GHG 

emissions, must comply with GHG requirements. Sources must include GHG 

emission data in their applications and address any applicable GHG 

requirements when they apply for, renew, or revise their operating permits.

II. Beginning on July 1, 2011, in addition to the thresholds above, a source must 

have a PSD permit based solely on its GHG emissions if it is a new source that 

has the potential to emit at least 100,000 tons per year of CO2e, or if it is an 

existing source with potential emissions of 100,000 tons per year of CO2e that 

undertakes a modification with a potential emissions increase of 75,000 tons per 
Staff Report – December 20, 2011 Public Hearing (Rules 900, 903 & 904) Page 6

year. Further, any existing source with potential emissions of 100,000 CO2e 

must also have a Title V permit. The Title V permit must include all applicable 

GHG requirements. 

Note: There is also a “mass-basis” requirement. This is a separate threshold for 

GHG emissions that does NOT consider GWP. In addition to meeting the CO2e 

thresholds above, the source must also have potential to emit at least 100 tons 

per year of total GHGs without considering GWP in order to need a PSD or Title 

V permit if the source is in a specifically listed category, and 250 tons per year if 

the source is not in one of those special categories4.

On July 20, 2011 the U.S. EPA issued its final ruling deferring, for a period of three 

years, the application of the PSD and Title V permitting requirements to carbon dioxide 

(CO2) emissions from biogenergy and other biogenic stationary sources (biogenic CO2). 

Biogenic CO2 emissions are defined as emission of CO2 from a stationary source 

directly resulting from the combustion or decomposition of biologically-based materials 

other than fossil fuels and mineral sources of carbon. Examples of the combustion or 

decomposition of CO2 are but not limited to:

CO2 generated from the biological decomposition of waste in landfills, wastewater 

treatment or manure management processes;

CO2 from the combustion of biogas collected from biological decomposition of 

waste in landfills, wastewater treatment or manure management processes;

CO2 from fermentation during ethanol production’

CO2 from combustion of the biological fraction of municipal solid waste or biosolids;

CO2 from combustion of the biological fraction of tire-derived fuel; and

CO2 derived from combustion of biological material, including all types of wood and 

wood waste, forest residue, and agricultural material.

Currently, as adopted Rule 904 does not exempt biogenic CO2 process from PSD 

permitting requirements for GHG. Therefore, the District is submitting Rule 904 for readoption effectively changing the adoption date. Because Rule 904 incorporates by 

reference all the applicable sections of the CFR which pertain to the PSD permitting 

program the re-adoption action will effectively incorporate the three year deferral for 

biogenic CO2 processes.

III. PROPOSED REGULATORY CHANGES

The District is proposing to revise Rules 900, 903 and 904 to implement Title V 

permitting requirements and PSD requirements for GHG emissions. On June 28, 2011 

the district adopted Rule 904 effectively incorporating by reference the PSD Permit 

Program. The proposed revisions include several changes to the above referenced

 

4

Although it may seem unlikely that a source could emit less than 100 tons per year of GHGs on a mass 

basis and emit more than 100,000 tons of CO2e, it is in fact possible. Some of the GWP factors are 

significantly higher than 1,000, especially the refrigerants. So a source could emit 5 tons per year of 

sulfur hexafluoride (SF6) on a mass-basis, and have 119,500 tons per year of CO2e emissions, because 

the GWP of SF6 is 23,900.
Staff Report – December 20, 2011 Public Hearing (Rules 900, 903 & 904) Page 7

rules. It is important to note that only major sources of air pollutants will be affected by 

the revisions to these rules. These affected major sources will be required to comply 

with GHG permitting requirements. Currently, the only applicable requirement for 

affected sources is the reporting requirement. Because these requirements are

incorporated during the time of permit renewal or other action, the District does not 

anticipate opening existing Title V permits for the sole purpose of incorporating these 

requirements. The GHG requirements will be incorporated when a new Title V permit is 

issued, or when an existing permit is renewed or amended for other reasons. Sources 

otherwise required to hold Title V permits must still incorporate GHG requirements. In 

addition, any exiting source with the potential to emit at least 100,000 tons per year of 

CO2e must obtain a Title V permit regardless of whether emissions of other pollutants 

trigger the permitting requirement. Existing major sources of GHGs which currently do 

not have a Title V permit will be required to submit an application for a Title V permit by 

July 1, 2012. The district has not identified any major source of solely GHGs emissions 

which will need to comply with this requirement. As an alternative, any sources with 

actual GHGs emissions below fifty percent of the major source thresholds may be able 

to avoid Title V requirements by complying with the recordkeeping and reporting 

requirements of Rule 903. Under Rule 903, if a source maintains records that its 

actual emissions are below 50,000 tons per year of CO2e and submits an annual report 

to the District demonstrating this, the source does not have to obtain a Title V permit 

even if its PTE exceeds 100,000 tons per year. In addition, under district Rule 902, 

Request for Synthetic Minor Source Status, any major source of GHGs with actual 

GHGs emissions below the major source threshold may be able to avoid Title V 

permitting requirements by accepting conditions in the Authority to Construct permit 

limiting their potential to emit below the GHGs major source threshold. Rule 902 is not 

proposed for revision; the existing version of this rule is already applicable to GHGs 

requirements. 

A. The proposed revisions for this rule action related to greenhouse gas emissions 

are discussed in more detail below. Revisions related to PM10 and PM2.5 is

discussed in section B.

1. Rule 900 Procedures for Issuing Permits to Operate for Sources Subject to Title 

V of the Federal Clean Air Act Amendments of 1990.

Revisions to Rule 900 appear in Section B, Definitions. The definitions in this Section 

apply throughout Rule 900, Rule 902, and Rule 903, and are derived from related 

provisions in Part 70 Code of Federal Regulations (CFR), State Operating Permit 

Programs. GHGs are added as follows:

a. A new definition of CO2 Equivalent (CO2e) is being added (please see B.10). 

This definition is substantially the same as the definition provided by U.S. EPA in 

their Tailoring Rule revision, 40 CFR Part 71.2, Definitions.
Staff Report – December 20, 2011 Public Hearing (Rules 900, 903 & 904) Page 8

b. A new definition of Global Warming Potential (GWP) is being added (please see 

B.18). This definition is conceptually the same as the definition provided by U.S. 

EPA in their Tailoring Rule.

c. A new definition of Greenhouse Gases is being added (please see B.19). This 

definition is substantially the same as the definition provided by U.S. EPA in their 

Tailoring Rule revision, 40 CFR Part 71.2, Definitions.

d. The definition of Major Source is being revised (please see B.23). This definition 

was revised to add a provision for the definition of major source to include GHG’s 

that are subject to regulation as defined in 40 CFR, Part 70.2. This change 

makes our Title V program applicable to any major source of GHGs.5 

e. The definition of Regulated Air Pollutant is being revised (please see B.30). This 

definition was revised to add a provision to include GHGs, which are subject to 

regulation as defined in 40 CFR, Part 70.2, to the list of regulated air pollutants.

f. Other editorial changes as applicable.

2. Rule 903 Potential to Emit

Revisions to Rule 903 appear in different Sections of this rule. GHGs are added as 

follows:

a. Section A.2, Stationary Source with De Minimis Emissions, is being revised to 

exclude some recordkeeping and reporting requirements for sources with GHGs 

emissions less than or equal to 20,000 tons per year in a 12-month period.

b. Section B, Definitions. The definition of Actual Emissions is being revised to add 

a provision specifying that the calculation methods, including emission factors 

and assumptions, used to evaluate actual emission should be those approved by 

U.S. EPA, CARB, or the district (please see B.2).

c. The definition of Major Source of Regulated Air Pollutants is being revised 

(please see B.7). This definition was revised to add a provision for the definition 

of major source to include GHG’s that are subject to regulation as defined in 40 

CFR, Part 70.2. This change makes our Title V program to be applicable to any 

major source of GHGs.6 

 

5

Effective July 20, 2011, the U.S. EPA issued a final ruling deferring the application of the PSD and Title 

V permitting requirements from CO2 emissions, for up to three years, from bioenergy and other biogenic 

stationary sources. In order to capture this change in legislation and any future change related to GHG 

emissions the District has placed a condition within the definition conditioning applicability of the program 

as subject to regulation as defined in 40 CFR 70.2. If the GHG program is cancelled or delayed further 

then GHG requirements will, accordingly, not take effect.

6 Currently there is legislation (HR1) which may impact the applicability of the entire Greenhouse Gas 

program. Therefore, the District has placed a condition within the definition to reflect any future legislative 

change by conditioning applicability of the program as subject to regulation as defined in 40 CFR 70.2 
Staff Report – December 20, 2011 Public Hearing (Rules 900, 903 & 904) Page 9

d. The definition of Regulated Air Pollutant is being revised (please see B.12.e.4).

This definition was revised to add a provision to include GHGs that are subject to 

regulation as defined in 40 CFR, Part 70.2, to the list of regulated air pollutants.

e. Section C, Emission Limitations, sets the maximum quantity of emissions allowed 

for a federal enforceable emission limit. These levels are fifty percent of the 

major source thresholds. Section C.1.a is being revised to set a threshold for 

applicability of this rule of 50,000 tpy of CO2e. In addition, Section C.2 is being 

revised to add a provision specifying that in absence of valid continuous 

emissions monitoring data or source test data, the calculation methods, including 

emission factors and assumptions, used to evaluate actual emission should be 

those approved by U.S. EPA, CARB, or the district.

f. Section E, Reporting Requirements. Section E requires sources to submit an 

annual process statement. Section E.2 is being revised to include an exemption 

for sources with annual emissions less than or equal to 24,999 tons of GHGs.

g. Section F, Alternative Operational Limit and Requirements. Section F contains 

the list of emission units for which an exemption from Title V applicability is 

granted, provided that at least 90 percent of the source’s annual emissions are 

covered by an alternative operational limit. These exemptions were granted 

evaluating primarily emissions of criteria pollutants. The district will extend these 

exemptions provided GHGs emissions are below the 50 percent major source 

thresholds. Section F.1.f, describes the alternative operational limit for diesel 

fueled emergency engines operating at ozone “moderate” nonattainment area. 

According to district’s evaluation, emergency engines of less than 1,000 bhp 

which operate no more than 5,200 hours per year and use no more than 265,000 

gallons of diesel per year generate approximately 30,000 tons per year of CO2

[265000 gal x 7.1 lb/gal x 19300 Btu/lb x 1 MMBtu/1000000 x 165 lb/MMBtu7x 1 

ton/2000 lb = 30,000 ton]. Since GHGs emissions are below the 50 percent 

annual threshold, the alternative operational limits can be use for the emergency 

engines equal to or less than 1,000 bhp.

h. Appendix A, Table 1, Affected Greenhouse Gases Pollutants and Their Global 

Warming Potential, has been added to this rule. 

i. Other editorial changes as applicable.

3. Rule 904 Prevention of Significant Deterioration (PSD) Permit Program

 

which is in effect August 2, 2010. If the GHG program is cancelled or delayed then GHG requirement will 

not take effect.

7

 U.S. EPA AP-42 Emission Factors, Chapter 3.4, Large Stationary Diesel and All stationary Dual-fuel 

Engines, Table 3.4-1.
Staff Report – December 20, 2011 Public Hearing (Rules 900, 903 & 904) Page 10

Revisions to Rule 904 appear in two Sections of the rule. GHG is incorporated into 

Rule 904 along with any exclusions and deferrals in the following manner.

a. Section C, Incorporation by Reference will change when the rule is adopted as a 

revision triggering an adoption date that will incorporate U.S. EPA’s final 

rulemaking on the Deferral for CO2 emissions from bioenergy and other biogenic 

sources

b. Section C, subsection C.2 clarifies the exemption of GHG analyses by removing 

a reference to a definition in Rule 903.

B. The proposed revisions for this rule action related to PM10 Major Source 

threshold update are discussed in more detail below. 

1. Revisions to Rule 900 appear in Section B, Definitions. The definitions in this 

Section apply throughout Rule 900, Rule 902, and Rule 903, and are derived 

from related provisions in Part 70 Code of Federal Regulations (CFR), State 

Operating Permit Programs. Rule 900 is updated as follows:

a. The definition of Major Source is being revised (please see B.23 of Rule 900) to 

reflect the re-designation from a “moderate” non-attainment area to a “serious” 

non-attainment area for PM10 in 2004 as ordered by the 9th US District Court of 

Appeals. The definition reflects the lowered PM10 major source threshold from 

100 tons per year to 70 tons per year which as required of “serious” PM10 nonattainment areas.

b. A new definition of PM2.5 Federal Nonattainment Areas is being added (please 

see B.27). This definition was added to specify the boundaries for the PM2.5

Nonattainment area within Imperial County.

IV. CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA)

There are currently no emission control technology options for directly reducing CO2

from combustion processes. Therefore BACT for sources such as power plant will likely 

include an efficiency analysis of the process, and of the facility operations. Examples 

include process heat/energy recovery, increased insulation, and high-efficiency lighting, 

heating, etc. at the facility. It should also be noted that projects subject to BACT for 

GHG emissions would most likely be required to mitigate impacts of GHG emissions 

under the California Environmental Quality Act. The bottom line, however, is that BACT 

is required as a matter of federal law and regulations.

Rule 900 also will require facilities to obtain Title V permits for GHG emissions, or 

address GHG-related requirements in their otherwise applicable Title V permits. Title V 

permits do not impose any additional environmental requirements; they consolidate all 

applicable air pollution-related requirements in one permit. There are, therefore, no 

anticipated environmental impacts associated with the revisions to all the 900 series 
Staff Report – December 20, 2011 Public Hearing (Rules 900, 903 & 904) Page 11

rules presented here as they relate to Title V permits. In any case, these permits would 

be required by U.S. EPA through its own permit program8if the District did not adopt the 

proposed changes.

Rule 904 incorporates by reference already required requirements under the PSD 

program. The revisions to Rule 904 simply incorporate the most recently adopted 

regulations by the U.S. EPA into the existing local rule. Therefore, no anticipated 

environmental impacts are associated with the revisions to Rule 904.

Overall, adoption of proposed revisions to Rule 900, 903 and Rule 904 will result in the 

same or slightly more positive impacts on the environment (i.e., lower emissions of 

GHGs) compared to impacts that would result if the rule were not adopted, and U.S. 

EPA implemented its own program instead. As mentioned above, the proposed 

revisions to Rules 900 and 903 will trigger Title V permitting if a new major source is 

identified or if an existing Title V permit is renewed or amended for reasons other than 

GHG. Existing major sources of GHGs which currently do not have a Title V permit 

will be required to submit an application for a Title V permit by July 1, 2012. The district 

has not identified any major source of solely GHGs emissions which will need to comply 

with this requirement. 

District staff finds that the proposed revisions to Rules 900, 903 and 904 are exempt 

from the California Environmental Quality Act as an action by the regulatory agency for 

protection of the environment (Class 8 Categorical Exemption, Section 15308, State 

CEQA Guidelines), and because it can be seen with certainty that there is no possibility 

that the activity in question may have a significant adverse effect on the environment 

(Section 15061(b)(3), State CEQA Guidelines).

The California Public Resources Code, Section 21159, requires District’s to perform at 

the time of the adoption of a rule or regulation requiring the installation of pollution 

control equipment, or a performance standard, or treatment requirement, an 

environmental analysis of the reasonably foreseeable methods of compliance. 

Compliance with the requirement of a Title V permit issued by the District will reduce 

emissions from sources and will not cause any significant adverse impact on the 

environment. Therefore, District staff has concluded that no adverse environmental 

impact will be caused by compliance with the proposed revisions to rules 900 and 903.

V. RULE DEVELOPMENT PROCESS

The District conducted a public workshop to collect comments on the proposed rule at 

the Farm Bureau in El Centro, California. The workshop was held on March 17, 2011. 

Comments provided by the public during the workshop were incorporated into the 

proposed revisions to rules 900, 903 and 904 as appropriate.

 

8

If the District fails to implement an approved program under 40 CFR Part 70, EPA implements one 

under Part 71.
Staff Report – December 20, 2011 Public Hearing (Rules 900, 903 & 904) Page 12

A Public notice for a public hearing inviting the community to review and comment on 

the proposed revisions to rules 900, 903 and 904 was published in the Imperial County 

local newspaper of greatest circulation, the Imperial Valley Press, on November 17, 

2011 and on the same day it was made available on the Distinct website.

VI. RECOMMENDATIONS3

A. APCD ADVISORY BOARD

The Air Pollution Control District Advisory Board met to discuss the proposed Rules 

revisions on December 07, 2011. The APCD Advisory Board recommended the 

approval of the proposed amended rules the staff report and its findings.

B. STAFF RECOMMENDATION

District staff recommends the adoption of the proposed revisions to Rule 900 

Procedures for Issuing Permits to Operate for Sources Subject to Title V of the Federal 

Clean Air Act Amendments of 1990, Rule 903 Potential to Emit, and Rule 904 

Prevention of Significant Deterioration (PSD) Permit program as they pertain to the 

addition of greenhouse gases (GHGs) to the list of regulated pollutants, as well as to 

revise Rule 900 to add a definition for major source which reflects the threshold for a 

PM10 “serious” nonattainment area. After considering public comments at today’s 

hearing, District staff recommends that this Air Board determine that the adoption of 

revised Rule 900, revised Rule 903 and revised Rule 904 are exempt from CEQA and 

adopt these rules for inclusion in the Imperial County’s State Implementation Plan (SIP).

VII. DECLARATION OF FINDING

The Imperial County Air Pollution Control District Board hereby finds as follows: 

The adoption of the proposed revised rules for the Imperial County, is considered a 

project within the meaning of Section §21065 of the California Environmental Quality 

Act (CEQA).

The adoption of the staff report and its findings are exempt from the requirements of 

Public Resources Code Section 21000 et seq. under the CEQA Guidelines, in the 

California Code of Regulations Section 15061 (b)(3).

The District is a regulatory agency and the public agency with the principle responsibility 

for carrying out projects related to air pollution and the control thereof.

Clean air is a valuable and essential natural resource.

The proposed revised rules will serve to reduce the amount of attainment air pollutants 

introduced into the ambient air.
Staff Report – December 20, 2011 Public Hearing (Rules 900, 903 & 904) Page 13

The adoption of the proposed revised rules will serve to enhance and protect the 

environment by controlling air pollutant sources of attainment pollutants.

There has been no evidence presented to suggest that the implementation of the 

proposed revised rules, the staff report, its findings or appendices will have an adverse 

effect on the environment.

There has been no evidence presented to suggest that the implementation of the 

proposed revised rules, the staff report, its findings and appendices will lead to or result 

in cumulative adverse impacts.

Health and Safety Code §40702 provides the authority to the District to enact and adopt 

the proposed revised Rules.

The requirements of the proposed revised rules, the staff report and its findings are 

clear and capable of being understood by those persons directly affected by it.

The proposed revised rules, the staff report and its findings do not conflict with or 

contradict any existing statute, court decision, or state or federal regulation.

The requirements of the proposed revised rules, the staff report and its findings are not 

duplicative of any existing state or federal regulation.

The proposed revised rules, the staff report, and its findings described herein will not 

significantly affect air quality or emissions limitations and therefore is exempt from 

California Health and Safety Code section §40728.5 (d), which requires a 

socioeconomic impact analysis of the proposed action to be performed. 

The Imperial County has a population of less than 500,000 people.