Fw: GHG BACT briefing requested by inter -agency folks

Raj Rao to: Pam Long 08/10/2010 01:04 PM

Raj Rao, P.E.

Group Leader, NSRG

OAQPS/AQPD(MD- C504-03)

109 TW Alexander Drive

RTP, NC 27709

919-541-5344

919-541-5509 fax

Note: Positions or views expressed here do not represent official EPA policy. Interagency deliberative

and Confidential.

----- Forwarded by Raj Rao/RTP/USEPA/US on 08/10/2010 01:04 PM -----

From: "Kymn, Christine J." <Christine

_ J.

_ Kymn@omb.eop.gov>

To: Raj Rao/RTP/USEPA/US@EPA

Cc: Anna Wood/DC/USEPA/US@EPA, Howard Hoffman/DC/USEPA/US@EPA, Lisa

Sutton/RTP/USEPA/US@EPA, Paul Balserak/DC/USEPA/US@EPA

Date: 07/28/2010 09:44 AM

Subject: RE: GHG BACT briefing requested by inter-agency folks

Thanks, Raj. Attached please find aggregated interagency comments. And so it

seems we are now ready to set up that second call!

Please let me know some times days that work for EPA, and we'll get things

moving.

Have a great day, everyone,

Christine

-----Original Message-----

From: Rao.Raj@epamail.epa.gov [mailto:Rao.Raj@epamail.epa.gov]

Sent: Wednesday, July 28, 2010 7:23 AM

To: Kymn, Christine J.

Cc: Wood.Anna@epamail.epa.gov; hoffman.howard@epamail.epa.gov;

Sutton.Lisa@epamail.epa.gov; Balserak.Paul@epamail.epa.gov

Subject: RE: GHG BACT briefing requested by inter-agency folks

Importance: High

Hi Christine,

Here is the list of 14 states that we have identified to date as deficient and

on our "A" list. The appropriate regional office is listed in parenthesis.

Of these except for Arizona's Pinal county, all other States have verbally

confirmed with the regional offices that they are deficient and should be on

the "A" list.

Alaska (R10)

Arizona's Pinal County (R9)

Arkansas (R6)

California's Sacramento Metro AQMD (R9)

Connecticut (R1)

Florida (R4)Idaho (R10)

Kansas (R7)

Kentucky (R4)

Louisiana (R6)

Nebraska (R7)

Nevada's Clark County (R9)

Oregon (R10)

Texas (R6).

I believe this completes all of the info requested by you.

Please let me know asap when we can schedule the follow-up call.

thanks

raj

Raj Rao, P.E.

Group Leader, NSRG

OAQPS/AQPD(MD- C504-03)

109 TW Alexander Drive

RTP, NC 27709

919-541-5344

919-541-5509 fax

Note: Positions or views expressed here do not represent official EPA policy.

Interagency deliberative and Confidential.

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|"Kymn, Christine J." <Christine_J._Kymn@omb.eop.gov>

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|Paul Balserak/DC/USEPA/US@EPA

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|Anna Wood/DC/USEPA/US@EPA, Howard Hoffman/DC/USEPA/US@EPA, Lisa

Sutton/RTP/USEPA/US@EPA, Raj Rao/RTP/USEPA/US@EPA |>----------------------------------------------------------------------------- ---------------------------------------------------------------|

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|07/27/2010 05:05 PM

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|RE: GHG BACT briefing requested by inter-agency folks

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Hi Paul,

Apologies, still working on it. Do we have the list of self-identified states

yet? I’ll let you all know as soon as I hear anything.

Have a great evening,

Christine

From: Balserak.Paul@epamail.epa.gov [

mailto:Balserak.Paul@epamail.epa.gov]

Sent: Tuesday, July 27, 2010 4:02 PM

To: Kymn, Christine J.

Cc: Wood.Anna@epamail.epa.gov; hoffman.howard@epamail.epa.gov;

Sutton.Lisa@epamail.epa.gov; Rao.Raj@epamail.epa.gov

Subject: RE: GHG BACT briefing requested by inter-agency folks

Was there ever a new date/time for a call set?

Thanks,

~~~~~~~~~~~~~~~~~~~~~~~~~~~

Paul Balserak

Office of Policy, Economics, and Innovation Environmental Protection Agency

1200 Pennsylvania Ave, NW Ariel Rios, Rm 3512-S (1804-A) Washington, DC 20460

202-566-0072 (phone)

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Anna Wood, Howard

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Paul Balserak

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Image removed by sender.Thanks, Raj. I'm still waiting on time confirmation and will let you know as

soon as I hear anything.

Have a great evening!

Christine

-----Original Message-----

From: Rao.Raj@epamail.epa.gov [mailto:Rao.Raj@epamail.epa.gov]

Sent: Monday, July 26, 2010 6:17 PM

To: Kymn, Christine J.

Cc: Wood.Anna@epamail.epa.gov; hoffman.howard@epamail.epa.gov;

Sutton.Lisa@epamail.epa.gov; Balserak.Paul@epamail.epa.gov

Subject: RE: GHG BACT briefing requested by inter-agency folks

Importance: High

Christine,

Attached is a revised GHG BACT briefing that includes your suggested edits.

(See attached file: OMB_GHG_GUIDANCE_Update_7_15_10.final rev 1.ppt)

Also attached are several examples of parallel processing of SIPs. that you

requested

(See attached file: EPA Region 6 Parallel Processing Federal Registers

published 2001 to 2005.pdf)

All the Federal Registers listed are available in the EPA Federal Register -

Environmental Documents database at http://www.epa.gov/fedrgstr/

I will send you the list of self identified states tomorrow morning.

Please let me know which times are convenient for OMB for tomorrow's call and

I will send the scheduler invite.

Pl give me a call if you have any questions.

thanks

raj

Summary of Interagency Working Comments on under EO 12866 Interagency Review_ 07 28 2010.docxSummary of Interagency Working Comments on Draft Language under EO 12866 Interagency Review.

Subject to Further Policy Review.

Page 1 of 4 Federal Implementation Plan

General:

1. The commenter finds the FIP proposal is responsive and flexible.

Specific:

1. Page 13: sentence needs an [are] added: As a result, larger GHG

‐ emitting sources in those states—

which under EPA's "Tailoring Rule" (discussed elsewhere in this preamble) are the only ones subject

to PSD for their GHG emissions in the near future—INSERT[are] unable to obtain a PSD permit that

covers GHG emissions and therefore potentially unable to undertake construction or modification

projects on and after January 2, 2011

2. p. 31 (top), proposed language edits in red: “...The proposed FIP constitutes the EPA regulations

found in 40 CFR 52.21, including the PSD applicability provisions, with a limitation to assure that the

FIP does not apply to [##need to select one of the following: (i) those pollutants already subject to

PSD requirements under the SIP; or (ii) non

‐ GHGs]

.

In addition EPA could exempt GHG emissions from biogenic sources in part or in whole from the

applicability provisions of 40 CFR 52.21(b)(50). EPA notes that several commenters on the October

27, 2009 (74 FR 55292) proposed Tailoring Rule request ed that EPA exempt emissions from biogenic

activities or biomass combustion or oxidation activities, including solid waste landfills, waste

‐ to

‐

energy projects, fermentation processes, combustion of renewable fuels, ethanol manufacturing,

biodiesel production, and other alternative energy production that uses biomass feedstocks (e.g.,

crops or trees). For example, commenters urged that EPA exclude emissions from biomass

combustion in determining the applicability of PSD to GHGs based on the notion that such

combustion is “carbon neutral” (i.e., that combustion or oxidation of such materials would cause no

net increase in GHG emissions on a lifecycle basis).

The Tailoring Rule did not address this issue of exemptions for biomass combustion or biogenic

emissions. We are mindful of the role that biomass or biogenic fuels and feedstocks could play in

reducing anthropogenic GHG emissions, and we do not dispute the commenters’ observations that

many state, federal, and international rules and policies treat biogenic and fossil sources of CO2

emissions differently. For example, the recently promulgated EPA and DOT joint Light

‐ Duty Vehicle

Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards rule discusses

lifecycle CO2 emissions from biofuels and treats them differently than CO2 emissions from

conventional fuels.

In the Tailoring Rule, we determined that our application of the “absurd results, “administrative

necessity,” and one

‐ step

‐ at

‐ a

‐ time legal rationales that support ed that rule, did not provide

sufficient basis to exclude emissions of CO2 from biogenic sources in determining permitting

applicability provisions at this that time. That decision does not foreclose EPA’s ability to either (1)

provide this type of an exclusion at a later time when we have additional information about

overwhelming permitting burdens due to biomass sources, or (2) provide another type of exclusion

or other treatment based on some other rationale

, such as demonstration of carbon neutrality.

EPA recently released a “Call for Information”

(http://www.epa.gov/climatecha nge/emissions/pdf/Biomass_call

‐ for

‐ information.pdf) requestingSummary of Interagency Working Comments on Draft Language under EO 12866 Interagency Review.

Subject to Further Policy Review.

Page 2 of 4 technical information relevant to biogenic emissions of GHGs. EPA specifically solicits comment on

this proposed rule from state and local officials as well as other interested parties on the legal or

policy basis for treating lifecycle emissions of biogenic carbon dioxide differently than emissions of

GHG from fossil fuel combustion under the PSD program. In addition, EPA requests further comment

on technical information that supports alternative legal or policy bases for treating lifecycle

emissions of biogenic carbon dioxide differently than fossil fuel emissions of GHGs under the PSD

program and for developing BACT guidance specific to the lifecycle emissions of biogenic carbon

dioxide.

3. p. 31 (bottom), proposed language edits in red:

“... To appropriately limit the scope of the FIP, EPA proposes in this action to amend 40 CFR

52.21(b)(50) to limit the applicability provision to "regulated NSR pollutant[s]" except [##need to

select one of the following: (i) those pollutants already subject to PSD requirements under the SIP;

or (ii) non

‐ GHGs

– OGC?; and GHG emissions from biogenic sources ]

.

4. Page 31: The commenter suggests the language “those pollutants already subject to PSD

requirements under the SIP” be used rather than “non

‐ GHGs”

5. Page 33: The commenter suggests that under the FIP, EPA take responsibility for the entire PSD

permit for both the “anyway sources” and the 100,000/75,000 sources to ensure continuity.

6. p. 33 (bottom), proposed language edits in red:

“...We propose that the FIP consist of the regulatory provisions included in 40 CFR 52.21,

except that the applicability provision would include a limitation so that it does not apply to

[##to be decided whether to say (1) those pollutants already subject to PSD requirements under

the SIP or (2) non

‐ GHG emissions ; and GHG emissions from biogenic sources].

State Implementation Plan Call

General:

1. The commenter supports EPA’s proposal to find selected states with EPA SIP NSR PSD programs are

substantially inadequate to met CAA requirements because they do not appear to apply PSD

requirements to GHG

‐ emitting sources. This action will ensure that the selected states that do not

appear to have authority to issue PSD permits to GHG

‐ emitting sources at present, either the state

or EPA will have the authority to issue PSD permits by January 2, 2011. The commenter is glad EPA

is seeking comment from states on whether their PSD sources do or do not apply to GHG

‐ emitting

sources.

2. The commenter looks forward to reading what voluntary sanctions are applicable to states that fail

to submit a required SIP revision.

3. The draft language seems to use “source” and “pollutant” interchangeably at times and should be

adjusted for consistency. E.g. see summary p.1 relative to p. 7, General Information.

4. Please explain further the reasoning in finding SIPs “substantially inadequate” and how EPA came to

the designate SIPs in the two state lists?Summary of Interagency Working Comments on Draft Language under EO 12866 Interagency Review.

Subject to Further Policy Review.

Page 3 of 4 5. Several commenters request further discussion of how EPA anticipates permitting will work as a

practical matter. What will new/modifying sources do about GHG permits and BACT requirements

while EPA works on SIPs for 12 months?

6. Several commenters request expanded discussion of Title V.

Specific:

1. Page 18, is it necessary to ask stated to identify the SIP call deadline they choose (between 3 weeks

and 12 months)? Later in the draft, EPA notes the default assumption will be 12 months. Suggest

modifying language to state 12 months will be the default assumption unless states choose the

shorter deadline.

2. Page 21 (bottom), proposed language edits in red:

Footnote No. 7. In the Tailoring Rule, we noted that commenters argued, with some variations, that

the PSD provisions applied only to NAAQS pollutants, and not GHGs, and we responded that the PSD

provisions apply to all pollutants subject to regulation, including GHGs. See 75 FR 31560

‐ 62,

"Prevention of Significant Deterioration and Title V GHG Tailoring Rule: EPA's Response to Public

Comments," May 2010, pp.38

‐ 41. We maintain our position that the PSD provisions apply to all

pollutants subject to regulation, and we incorporate by reference our discussion of this issue in the

Tailoring Rule. We also noted that several commenters on the October 27, 2009 (74 FR 55292)

proposed Tailoring Rule requested that EPA exempt emissions from biogenic activities or biomass

combustion or oxidation activities, including solid waste landfills, waste

‐ to

‐ energy projects,

fermentation processes, combustion of renewable fuels, ethanol manufacturing, biodiesel

production, and other alternative energy production that uses biomass feedstocks (e.g., crops or

trees). The Tailoring Rule did not address this issue of exemptions for biomass combustion or

biogenic emissions.

3. Page 23 (top), proposed language edits in red:

In its applicability provisions, the LDVR specifies that it "contains standards and other

regulations applicable to the emissions of six greenhouse gases," including CO2, CH4, N2O,

HFCs, PFCs, and SF6. 75 FR 25686 (40 CFR 86.1818

‐ 12(a)).*FN

FN: EPA notes that the LDVR treats lifecycle CO2 emissions from biofuels differently than CO2

emissions from conventional fuels.

4. Page 21, bottom, Please clarify potential vs. actual emissions in the Tailoring Rule discussion.

5. Page 46, please expand on the discussion of EPA’s finding that it has provided a “reasonable

deadline” under section 110 of the CAA.

6. Pages 49

‐ 51, Suggested language and Model SIP language. Has EPA provided suggested language to

this degree before? What is the precedent and reasoning for providing such language?

7. Page 51, The commenter supports model SIP language being added on page 51.Summary of Interagency Working Comments on Draft Language under EO 12866 Interagency Review.

Subject to Further Policy Review.

Page 4 of 4 8. Page 51, section (v) State Adoption of “Regulated NSR Pollutants”. Is this section necessary? It

seems to go beyond the scope of the SIP call. Does this amount to consent to reductions of state

rights as granted by the statute?

9. Page 50 and 51, proposed language edits in red:

“...(iii) Thresholds

Once a state applies the PSD program to GHG

‐ emitting sources, the state must determine the

threshold for emissions from those sources that will trigger PSD. In the Tailoring Rule, EPA

promulgated a determination that the CAA thresholds of 100 or 250 tpy (depending on the

source category) would not apply as of January 2, 2011, or for a period of years thereafter, in

light of, in part, administrative concerns. Instead, EPA promulgated a phase

‐ in approach that

limits PSD applicability to only the largest GHG emitting sources for a period of time.

The state may adopt the Tailoring Rule phase

‐ in approach into its SIP or it may adopt lower

thresholds—as low as the 100/250 tpy statutory thresholds—but if it adopts lower thresholds, it

must show that it has "adequate personnel [and] funding * * * to carry out," that is, administer and

implement, the PSD program with those lower thresholds, in accordance with CAA §110(a)(2)(E)(i).

In the Tailoring Rule, EPA adopted a CO2e metric and use of short tons (as opposed to metric

tons) for calculating GHG emissions in order to implement the higher thresholds. 75 FR 31530,

31532. As noted above, a state retains the authority to adopt lower thresholds than in the Tailoring

Rule. As a result, the states are not obligated to adopt the CO2e metric or use of short tons;

however, the state must assure that its approach is at least as stringent as the thresholds in the

Tailoring Rule.

Further, EPA noted in the Tailoring Rule, that there was not sufficient basis to exclude emissions of

CO2 from biogenic sources in determining permitting applicability provisions at that time. EPA

recently released a “Call for Information”

(http://www.epa.gov/climatecha nge/emissions/pdf/Biomass_call

‐ for

‐ information.pdf) requesting

technical information relevant to biogenic emissions of GHGs. EPA specifically solicits comment on

this proposed rule from state and local officials as well as other interested parties on the legal or

policy basis for treating lifecycle emissions of biogenic carbon dioxide differently than emissions of

GHG from fossil fuel combustion under the PSD program. In addition, EPA requests further comment

on technical information that supports alternative legal or policy bases for treating lifecycle

emissions of biogenic carbon dioxide differently than fossil fuel emissions of GHGs under the PSD

program and for developing BACT guidance specific to the lifecycle emissions of biogenic carbon

dioxide.

10. Page 57, is there any precedent for the “parallel

‐ processing” of SIP review?

11. Page 58, H. Streamlining the State Process for SIP Development and Submittal, is this a reduction of

state procedural rights as granted under the Clean Air Act?

12. Page 61, If EPA is requesting additional information from states via the SIP call, this seems to imply

an increase in ICR burden. Please explain why EPA feels no burden change will occur.