-< t-- U~~ - _- Administrator Lisa P. Jackson Office of the Urninistrator Environmental Protection AL!enc~ Room3000, Ariel Rios Buildinu 1200 Pennsylvania A~eNW, Washington. DC?000~ CC: Correspondence Control Unit Office of General Counsel (231 1) U.S. En%ironmental Protection Agency 1?00 Pennsylvania Avenue, N%V N'ashinoon. DC?0=160 Joseph hlangino Air Qualit~ Policy Division Office of Air Quality Planninc and Standards (C504-03) Environmental Protection Agency Research Triangle Park. NC 27711 

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## BEFORE'THE I mrrED,,,r.krEs ENVIRONNIE1"fAL PIZOIECTION AGENCY

1 National Alliance of Forest O\~~ners~ ) Petition to Reconsider EPA's 1 Dkt. No. EPA-HQ-OAR-'_009-0517 Prevention of Significant Deterioration and ) Title V Greenhouse Gas Tailoring Rule ) 1 NA'r 10\A1 . ALLIANCE OF HO12F:S~r O\1 \EltS' PETHION TO RECONSIDER

THE PREVENTION OF SIGNIFIC:"\'r DE"1'F:RIC)RATIOV AND-1'1'rLE V GREENI-IOl'SE (, :XS TAILORING RI'LE AND'r0STAY THE RULE PF .NDlN( . RECONSIDERATION Pursuant to Clean Air Act § 307(d)(7)(B) . the National Alliance of Forest Owners ("NAFO") petitions the Environmental Protection Agency ("EPA") to reconsider and stay the implementation ofthe Prevention of Significant Deterioration and Title \' Greenhouse Gas Tailoring Rulr i."railorine Rule") . 75 fed. ReL .:. 3) I .>14 ( .lun . 3. 2010) .NAFOPetition to Reconsider and Stay the Tailoring Rule

July 30 . 1-010 Page 2 of' 17 In a stark and unannounced reversal of established government precedent and practice, EPA's final Tailoring Rule declares, f'or the first time and without any prior proposal or notice to industry, that it %Nill count carbon dioxide ("CO,") emissions fromcombustion of biomass to\%ard the applicabilit\thresholds that it announces for the Prevention of Significant Deterioration (PSD) and Title V permitting programs ofthe Clean Air Act (CAA) . C :PA's proposed rule, in line ~N Ith the past practice oi' l':PA and other agencies of the federal government, had provided f~)r the appropriate and opposite conclusion: that carbon dioxide emissions fromcombustion ofbiomass should not be counted. Given the unjustified reversal fromthe proposed to the final rule, and the resultant adverse impacts the Final rule tivill have on realizing the nation's rene~sable enerL:N 2oak. NAFOhereb~ petitions EPA to reconsider the final PSDTailoring Rule and stay the implementation ofthe Rule pending reconsideration. As explained belo\ti . this about face makes the Tailoring Rule arbitrary and capricious for two reasons. First. I:PA has not offered a reasoned explanation for reversing the position it took in the proposed Tailoring Rule, for ignoring NAFO's comments that it should maintain that position, or for rejecting the past practice of EPA and other federal agencies re~arding carbon dioxide emissions fromthe combustion ol' biomass. Second. EPA's une\pccted chany-of= course in the final T ailorino Rule is not a logical outerowh of its proposed Tailoring Rulc. Both ofthese fatal faults onl~ emerged in the final failoring Rule's decision to rexerse past precedent and count emissions fi~om biomass. The final Tailoring Rule %Nas published on June 3. 2010. Thus. this objection First arose after the period for public comment . Mhich closed on December ?8, 2010. Furthermore. as explained below, these objections go to the heart of the Rule's Nalidits . and are thus central to the outcome of the rule. Consequently, under CAAN.AFO Petition to Reconsider and Stay the Tailoring Rule

Jul) 30 . ?010 Page 3 of 17 § 3U7(d)(7)(B) . tile Administrator must convene a proceedinu fi)r reconsideration ofthe Tailoring Rule. :%ItGI-~IF\'(' I . The Tailoring Rule Reverses EPA's l .ongstanding Position \i ithout :1n% Explanation It Is Well understood that when most fuels are burned for energy. they emit carbon dioxide. It is eyuallN %+ell established that carbon emitted in the combustion of biomass comes fromcarbon dioxide that \tias originall\ sequestered fromthe air by the biomass teedstock. thus resulting in a carbon neutral cycle. For this reason, tile government until noN% has never counted emissions ofcarbon dioxide fromcombustion ol~biomass ~%hen estimating carbon dioxide emissions. But in EPA's final Tailorina Rule it brinLs these emissions, N\hich before had not been counted, into its ambitious Clean Air Act permitting programs--the PSI) and Title V programs. A. 13iomass Carbon Neutralit\ There is near-uni\ ersal recognition that greenhouse l :ases emitted in combustion of fuels derived frombiomass should be excluded Fromgreenhouse gas regulations because production and combustion of such fuels does not increase atmospheric carbon dioxide levels. As EPA is aware, growing plants absorb significant amounts of carbon dioxide fromthe atmosphere. Forest;, in particular . secluester massive amounts ofcarbon dioxide. The process of sequestration and storage is a natural by-product oftree cro%ith. Through the process of photos,.nthesis. tree, take up carbon dioxide fromthe air and in the presence of light. water, and nutrients. release oxygen and manufacture carbohydrates that are used for metabolismandNAFOPetition to Reconsider and Stay the Tailoring Rule

July 30, ?O10 Pa~_,e -1 of I ? growth of above and belowuround organs. All plant materials are ultimately derived fromthis carbon dioxide, \+hich is dra"n fromtile atmosphere. When plant biomass materials, such as biol'ucls made fromforest biomass. are burned, the carbon dioxide emitted contains the same carbon that k%as sequestered b\ the plant feedstocks. Thus. the combustion of biofuels daes not result in net carbon dioxide emissions. All carbon dioxide emitted is a product of carbon dioxide absorbed, making the carbon dioxide released back to the atmosphere a net zero %%ith respect to the natural carbon cycle. In this manner, biofuels fromforest biomass are fundamentally different from conventional fuels. Once coal . natural gas. or oil is extracted and combusted. it cannot be replaced. In contrast, the sustainable forest management practiced by the United States forest products industry ensures that there is no temporal imbalance between biogenic CO- etnissiMnS and C0= sequestration and thus no effect on the atmospheric GI IG inventor~. Indeed, as EPA is a\%are. carbon stocks in United States forests have been, and continue to, increase.' ~I~hus, the lorest bioenerg) industry is truly carbon dioxide neutral . E3. 13iomass Carbon Neutralit\ Is Recounized Both Dornesticall\ a.nd InternationalIv The concept of biomass carbon dioxide ncutralitN is %%idel\ recognired internationally. The Intergovernmental Panel on Climate Change I'uidance and United Nations I-ramc\.kork Con\ention on Climate Chanoe reportinL, protocols b0th recognize the carbon neutrality of

' EPA has explained that "improved forest management practices. the regeneration of pretiiously cleared forest areas. and timber harvesting and use have resulted in net uptake (i .e., net sequestration) of [carbon] each )car from 1990 through '?008." EPA. lttl~eiir~rrt cif! S Gr-afnhutr.ce Cias F .mtssic,rls arrc~Sntks 1491)-?rlO~S at 7-13 f :lpril I~. ?0101 ( .,[PA ?010 Imentorn") . tit lii!lrhi< <tt http~ epa ec,~ elimate, :lt3.i_' ., eiiti's,ions c1w,~;iloads1(l L S-GHGlnventory-_' 010 Report .pdt:Nr1F0 Petition to Reconsider and Stay the Tailoring Rule

Jul% 30 . 2010 Pa2e 5 of 17 biomass. Similark, the European Union ("E( :") directiNe on carbon trading specifies "Biomass is considered as C02-neutral ."~ Biomass CO, neutrality has also been the loundation of American policN. As the ITA has concluded. there is "[sJcientific consensus . . . that the CO, emitted fromburning biomass will not increase total atmospheric CO, if this consumption is done on a sustainable basis."' EPA's Mandatory Gf IG Reporting Rule uses an expansive definition ofbiomass and does not include biogenic CO, in its reporting threshold. Similarly, the Department of Energy's (1)OE's) VoluntarN Reporting of Greenhouse Gases Program . authorized by Section 160>(b) of the Eneruv PolicN Act of 1992. pro%ide; Icrr e\elusion ofcombustion of biornass fuels.' Thus, a strong consensus exists that treating comhustion ofbiomass as carbon neutral is scientiticallN ,OunJ . C

. The Proposed Tailoring Rule rppropriatek Recognized That l ;iomass Em issions Are Carbon Neutral and Did Not Count ThemTo%%ard Permittin<, Thresholds EPA's Tailoring Rule Proposal maintained the government's traditional rule at~ainst counting carbon dioxide emissions fromcombustion of biomass toward the applicabilit., thresholds it proposed for the PSDand Title V permitting programs. It dictated that for "the applicable [global warmin~ potentials] G%'1"Ps" of individual ;reenhouse gases and "for guidance on ho%k to calculate a source's GI IG emissions in tp~ CO?e." sources should relN on "FP ,A's

' EU ouidelines for the monitoring and reporting ofgrcenhousegas emissions. Annex I . 4? .? 1 .6. civailuble al http inni .paci nst .or~~ inni ctimate chanec EL Gui deli nesGHG Jan'_o0-t_o0-t ~

. 'Environmental Protection :1gencN Combined lleat and PoN%er Partnership, 13iomass Combined lleurcrrrd Poll er Cululelg qJTecltnolcrgies. 96 (Sept . ?007), .jrciil .rhle af t,% +~e .ega .ra~ 'hp documents hiomass Chp calali}i ; [+df ' See DOE. Technical Gradelrnzs. 1'olhrruco,t Repur;irrg u/ Grefnirot01' i+cu"A IlClijlhp 1'rugrcrrn at 77 t-Reporters that operate sehicles usin- pure biofuels ~tiithin their cntit% should not add the carbon dio\ide emissions fromthose fuels to their im-entorN of mobile source emissions be:ause such em :s;ions are considered bio4_enic and the rec%cling of the carbon is not credited elsewhere.") .NAF0 Petition to Reconsider and Stay the Tailoring Rule

Jul% 30, ?010 Page 6 of 17 "lnvzntory of U.S. Greenhouse Gas Emissions and Sinks."' ; The inventory correctl\ excludes emissions from"combustion of biomass and biomatis-based fuels," based on the principle of carbon neutralit)-"[iJt is assumed that the Creleased during the consumption ofbiomass is recycled as U.S. forests and crops reuenerate. causing no net addition of C02 to the atmosphere."" The Mentory elaborates on this reasoning in the context of %soody biomass. stating "in the long run the C02 emitted frombioma;s consumption does not increase atmospheric C02 concentrations. assuming that the bi~~genic Cemitted is offset b% the uptake of C02 that results fromthe uro~slh of neks biomass."' Thus. "C02 emissions fi-om biomass combustion have been estimated separatel\ fromfossil fuel-based emissions and are not included in the U.S. totals."' In comments submitted on the proposed Tailoring Rule. NAFOrecognized that EPA had appropriately provided that biomass emissions would not be counted to%%ard applicability thresholds. In accord %\ ith NAFO's aimof "develop[int;J a strong collaborati%e relationship" \sith I :PA." NAFOsupported this pro` ision. N:1F0 noted that a shift to "treating combustion of biul~uels similar to combustion ohfossil fuels \wald ha\' : cerious negatiNe consequences.

' Prevention of Significant Deterioration and Title 1' Greenhouse Gas Tailorin_g Rule, 74 Fed. Reg. 55.292, _55, ;51, 55,352, 55?61 (Oct. 27, 2009) . ` EPA, Inventor) of U-S. Greenhouse Gas Emissions and Sinks: 1990-1997 at Energti 3-I-3-? . ' !d. at Enerpy 3-59. a ld. " National .allian-e of Fore,t 0%, tiers' Comments on Prevention of Significant Deterioration and Title ~' Greenhouse Gas Tailoring Rule, EPA-H(,)-O :" R-2009-05 17-5070, Attachment at 1, '° ld. at 6-7.NAFO Petition to Reconsider and StaN the Tailoring Rule

JuI~ 30 . 2010 Pat'e 7 of 17 Given the importance ofthis provision. NAFOrequested that EPA further affirmand articulate the provision in the preamble to the final rule." D . The Final Tailorine Rule Reversed Course ~~~ithout Any Reasoned Explanation The Final Tailoring Rule reversed course without explanation, severing the threshold calculations fromthe inventory's rule against counting emissions fromcombustion of biomass. EPA removed the inventorN entirely fromthe final rule. N+ithout explaining why this was appropriate. Instead, in the final rule. EPA simplv stated that the G1ti'Ps of individual greenhouse gases. which are alsocontained in the in4entor\ . should instead be codified by EPA . 11 EPA gave no explanation at all \\h\ it had decided not to use the in~entor\ for the other purpose identified bv the proposed rulc--L'uid:rnce on ho\s tocalculate a source's GI-IG emissions in tp) C02e."" EPA simpl\ ignored NAFO's comments. It made no reierence to NAF()'s support for the proposed rule's incorporation of the ; ;o\ ernml'nt's preexisting and longstanding polic\ against counting carbon dioxide emissions frombiomass as embodied in the inventory. Nor did EPA give any reasons for its about-face. Instead. EPA completely mischaracterized NAFO's argument . Rather than addressing the proposed rule's provision for treating biomass in accordance \ti ith the inventory and the go%ernment's longstanding rule. EPA instead only addressed a "request that EPA t.Te117p emissions frombiogenic activities or biomass combustion." 1 ' NA1~0did not request that I :PAexcnrpwbiomass emissions fromtile PSI)



### ~~ rd. '- 75 Fed. Reg. at 31 .5.12 " Proposed Tailoring Rule at 7-t Fed Reg. at 55.?51 . 55,152. 55.361 . " 75 Fed. Reg. at 31 .590 (emphasis added),N:\F0 Petition to Reconsider and Stay the Tailoring Rule

July 30 . 2010 Page 8 of 17 program ; there was no need to request such an exemption because. Under the proposed rule, and under Ion-standing government policN. such emissions \\ere not counted. To the contrary. NAFO's comments merel\ soueht to reinforce the then long standing status quo. not to request EPA create ne\\ exemptions. Ultimately, EPA attempted to address the question of biomass neutralit~ onl~ indirectl\ in the final rule. but ultimately made a decision wth significant newimpacts. Having first removed the reference to the inventory's proeision for biornass neutrality, and thus. for the first tirne, including biomass emissions in the pennitting program . EPA next purported to consider whether biomass should be exernInecl fromthe permitting program .'' EPA stated that it was "mindful of the role that biomass or biogenic fuels and feedstocks could play in reducing anthropogenic GHG emissions, and [did] not dispute the commcnters' observations that man\ state, federal, and international rules and policies treat biogenic and fossil sources ofCO2 emissions differently.-'6 EPA then concluded that the doctrines it used toset tile tailoring Rule's permitting thresholds-the '**absurd results.' 'administrative necessity.' and one-step-ata-time"' doctrines-did not support an exemption lor biomass emissions of carbon dioxide. and so determined that biomass emissions should be counted to%~~ard these thresholds.' This is not reasoned and informed decisiontnaking on an issue of critical importance to the nation's rene\s able energy goals.', EPA ne\ er gave an\ reason at all for coufuing biomass

'' 75 Fed. Reg. at 31 .590-91- II 1,1. ; Id. ",tfotor I eiti~le .111rs :iss'n v Stutz l~arrn .11u .11110 Ins Co., 463 U.S. ?9, 93 (1983) (an ac;ency must "articulate a satisfactory explanation for its action including a rational connection bet~Neen the facts foundand the choice made." (internal quotation omitted)l

.NAF0Petition to Reconsider and Sta\ the tailoring Rule

July 30,'010 Pa~ze 9 of 17 emissions for the first time. While oenerally eapressitnc uncertaint\ about the propriety of counting biomass emissions. the only arguments that EPA actually accepted on the issue militated against counting biomass emissions-EPA acknowledued that -many state, federal . and international rules and policies" do not count biomass emissions in the way that I'ossil fuel emissions are counted and that biomass fuel could play a role "in reducing anthropogenic GHG

. ;y cmissions.' EPA's stated reason for not excluding carbon dioxide emissions frombiomass is that its absurd results, admini,trati\e necessit\ . and one-step-at-a-time doctrines do notjustifN such an exclusion. But EPA offers no rational basis for its Unpt"ecedentod decision to includc such emissions. After all . EPA's proposed rule did not cite these doctrines ill Support 0l'thC inventory's proN ision not tocount bromass emissions, I_hese emissions \\ere not left out of the proposed Tailoring Rule because of its unique supporting doctrines: they NNere left out because that is the general rule for calculating greenhouse gas emissions. as reflected in EPA's "InventorN of U.S. Greenhouse Gas Emissions and Sinks." EPA did not explain why that rule should no longer appl\ l'undamentallN. EPA never explained its decision to reverse course. In particular : " I-PA ne\er explained \khy the in\entory should no longer be used for guidance on how to calculate a source's emissions or responded to \AfO~s comments that the inventor\ . and its provision for not counting biamass emissions, should be maintained. Cctnsequentl~ . EPA's final rule is arbitrar\ and caprici0us.-~)

" 7; Fed Reg. at 31 .590 ': I `o See :trn Mining C'ongress r F'P .-t, 907 I~ .2d 1179, 1190-91 (D.C. C ir. 1990) I"[ f]he azencq's tailure to respond to . . . specific challenges in the record is fatal here, since 'the points raised in the comments were sufficientl)NAFOPetition to Reconsider and Stay the -I~ailoring Rule

July 30, 2010 Pa2e 10 of 17 EPA never explained why it %%as altering the treatment of biomass emissions that it had proposed. hhis also means its rule is ;trbitrarN and capricious.-' EPA ne%er explained ~~hN it ~Nas rejecting the "man~ state. 1cderal . and international rules and policies" %Nhich it acknoMedged did not include biomass emissions. 75 Fed. Reg. at 3 1 .590-91 . Nor did EP'~ explain MhN it decided to re%erse the position it took on biomass emissions in the 61-ICJ Reporting Rule. Again, this makes EPA's rule arbitrar~ and capricious. An avency must treat "similar cases in a similar manner unless it can provide a legitimate reason for failing, to doso.""' EPA ne~er responded to the comments submitted bN N:1f=0 and other groups on this topic, necessitating EPA reconsider its decision in a transparent and public process Mhere it fullN considers stakeholder input . EPA's Call for Information Does Not Cure the Deficiencies in the Final Tailoring RulC On Jul . 15. 2010. EPA issued a "Call Ivr Iniurmation" on the appropriate treatment of emissions fromthe combustion o!'biomass.~' But the call fur information. ofcourse. does not satisfy EPA's dutNto "articulate a satisfactory explanation for its action" in the 7(rilurir7g 161e.

central that agency silence . . demonstratels) the rufemaking to be arbitrary and capricious."') ; seealso Home Box U(lice, Inc % FCC, 567 F.?d 9. 35-36 (D.C. Cr . 1977) . -' CAA§ 307(d)(6)1A)1"The promulgated rule shall be accompanied bN . . (ii) an explanation ofthe reasons for any major changes in the promulgated rule fromthe proposed rule,") . SeeXso Uotor Vehicle Ifirs .-1ss'n, 463 L.S. at 43 . -' Br;rcco Diagnostics v Shakifa. 963 F. Supp 30. 27 (Dt) .C. 19971 (enjoining FDA fromtreating ane product as a new drug when FDA had classified similar product as a devicej . '' Call for Information: Information on Greenhouse Gas 1=missions Associated With t3ioenergy and Other Biogenic Sources "Call for Information" . 75 Fed. Reg. -t1 .173 IJiil~ I>,'_010) . The Call for Information, unlike the Tailorin4_ Rule, at least mentioned the inventor . and requested comment on whether it was appropriate to apply the inventorN to the PSI) program 1.L at -11 .17-3-7z~ ''Motor (ehicle tliis .Ass'n .-I63 L .S, at 43. 10NAfOPetition to Reconsider and 5ta)the -I ailoring Rule

Jul-, 30, 2010 Ia~~e I 1 o1' 17 That action must stand or fall on its own terms. Perhaps anticipating this problem . I :PA, in the call for Information, asserted that '-the Tailoring Rule did not take final action one way or another concerning such an eXclusion [for biomass emissions] .-2i But EPA has finally adopted the Tailoring Rule: its provisions are no%\ codified in the Code oi~Federal Regulations. And. as noted. the final Tailoring Rule eliminates the proposed Tailoring Rule's reliance on the inventory, which embodies the government's traditional stance on emissions frombiomass. \Vhile NAFOhas no ob,jection to EPA's dccision to studN this issue further in the call li~r information. it must restore the status quo in the interimto its prior position until it can articulate a defensible and rational basis for changing such position. Whether or not EPA e\entuall~ alters tile PSI) prograrn's treatment ol~ biomass emissions. as of no%s, it has rejected the proposed rule's pro%ision for carbon neutrality, and NAFO's comments supporting that proposed rule. And ofcourse. the Tailoring Rule is slated to go into effect regardless of what happens to the call for information. EPA has not given anN timeline for responding to the call for information. nor has it made the Tailoring Rule's treatment of biomass emissions contingent upon responding to the call for information before the failoring Rule makes greenhouse gases part ofthe PSD programonJanuary 2. 2011 .''' Consequently, the call lor information cannot cure the deficiencies in the final "I-ailorinu, Rule. IL The Final Tailoring Rule Is Not :X Logical Outkro%+th (it' tile I'l-oposed Rule ii ~1s noted. tile proposed fail~~ring Rulc had pro%ide~i tllat c~~n1busti~~n t1f hiomass %soul~ continue it) be regarded as carbon neutral . in line ~tiith 1:P,1 and the government's consistcnt

-' Call for Information, 75 Fed. Rev. at 41 .173. -' 40 C1 : .12- `§ 5??t(b)(49')('v) . 51 16G(b)(-t8)(v) . 40 CFA_ $ 70?.

IINr'1F0 Petition to Reconsider and Stay the Tailoring Rule

July 30, 2010 Paiz,e 12 of 17 practice. ETA did not give anN %tiarning that it might change course. EPA did not suggest that it might, for tile first time. Subject biomass emissions ofcarbon dioxide to the same controls as fossil fuel emissions. Nor did EPA request comment on whether its proposal not to count these emissions was appropriate. Indeed, the preamble to the proposed Tailoring Rule made no mention of emissions frombiomass at all I h. only pro%ision on biomass %%as the pro%ision of the reLulations that dictated that emissions be calculated b~ reference to EPA's "Inventory of U.S. Greenhouse Gas Emissions and Sinks." which directs that biomass emissions of carbon dioxide not be counted. ConsequentlN. EPA's final rule is not a logical outgromh of its proposal . Interpreting the Clean Air Act, the D.C. Circuit had noted that. "Given the strictures ofnotice-and-comment rulemaking. an agency's proposed rule and its final rule may differ only insofar as the latter is a 'loaical outeromh' of the former."-' This rule exists because the public "must be able to trust an agency's representations about \\hich particular aspects of its proposal are up lor consideration.""' Consequentl~ . courts will strike dLMn that avency action that seeks to "use the rulemaking process to pull a surprise s\%itcheroo on regulated entities."-' EPA gave no indication that the federal government's lone-standing treatment of biomass emissions. embodied in its inventor\ and its proposal . ~'`as suddenl\ up for grabs. In this respect. this rule is much like the one rejected :1-utioncit .1liiring .-1ssociation t". Mine SaJety und 1-Itnltft .1,,1miai,ircrtiufl .'~ in «hich the U.C. Circuit rejected an aync., argument that final rules that

=' Envrl . Inlegri(ti~Project v EPA, 425 F .-id 993, 9961D.C. Cir ?005) . -' Id. at 998. '" Id. 3u ) IG F .3d -520, 5.3 1 1 D.C' . Cir 1997) . 12NAF0Petition to Reconsider and Stay the l ailoring Rule

Jull, 30 . 2010 Pat:e 13 of 17 changed longstanding preshift examination requirement for miners could be a logical out~ro%tith ofa proposal that left that aspect of the rules unchanged. The D.C. Circuit elaborated on this rule in another analogous decision. Enviromnentcr1 Irrtegriti~ Proiect v. EPA. In that case, EPA ar1,1ued that it met its notice-and-comment obligations "because its final interpretation %sas also mentioned (albeit negatively) in the Aeenc~ ~s proposal .-' ' The Court emphatically rejected this argument :

I lo~sever. this argument pro%es tot) much. ll~the AP .-N's notice requirements mean anything. they require that a reasonable commenter must be able to truSt an agency's representations about Which Inuriiculcar aspects of its proposal are open for consideration. :'1 contrary rule \Wuld alloNs an agencN to rejei:t innumerable alternati~es in its Notice ol~Proposed Rulemaking only trr justity urrv final rule it miaht be able to de~ ise b\ Mhimsically ric4,ittu and ' choosing \s ithin the four corners ofa lenvthy "notice.-3- The court concluded that "Whatever a 'logical outgro%sth' of [EPA's] proposal may include. it certainly does not include the AgencN's decision to repudiate its proposed interpretation and adopt its inverse.-'3 The same is true in this case, EPA's complete about-face on carbon neutrality was not a logical outgrowth of its proposal to followthe government's traditional carbon neutral policy. particularly \\hcn I :PA ~tave no ~\arnintt that it was considering a different tack. Ill . EPA Nlust Convene A Proceeding For Ilecmusideration ol~ the Tailoring Rule and Sta,% Implementation Or the Tailoring lit,le 1'ending Reconsideratiun

31 Envfl Irr1egritY Proiect v LP :1, a?5 F.3d at 998 '- /d. (internal citations and quotationsomitted) :3 Id. 13NAF0 Petition to Reconsider and Stay the Tailoring Rule

July 30, ?010 Pat;e 1-l of 17 In general . administratke reconsideration rrauires balancing the desirabilit" ol'finalit% versus the public interest in reachin2 the r,,-,ht result.'-' In this instance. (:P:'1 has acknoMedged that there is no pressing need for finalit%-in its call for information. EPA aftirmativel% asserted that it had taken no final action on emissions frombiomass combustion because it "did not have sul~licient inf'ormation to address the issue of* the carbon neutrality ofbio-genic energN ."`' Thus. the only relevant consideration is the public interest in reaching the right result . As noted abo%e. the public interest in reaching the right result weighs hea%il~ in favor of reconsideration. EPA has changed the pre-existing status quo regarding carbon neutralit\ in ignorance ofcomments of direct relevance to the Tailoring Rule's treatment ofbiomass emissions. which is an area of central importance to the Tailoring Rule's GI 1Ci permitting regime. These comments demonstrate that EPA's about-t'ace on carbon neutrality is unjustified as a matter o(' lawor policy. Rather than prejudge this issue. as t:P:\ has done in the Final Rule. it should restore the status quo ante on this issue to the position articulated in the Proposed Rule. Furthermore, NAFC) has satisfied the Clean Air Act's standard l~or administrati\1e reconsideration and a sta\ . Both ofthese laults onl~ emerged for the lirst time in the final Tailoring Rule's decision to reNerse course and count emissions frombiomass. The final Tailorina Rule \%as published on June 3, 2010. Thus. this objection first "arose after the period for public comment," ;1 Mhieh closed on December 28. 2010. Furthermore. as noted, these objections go to the heart otthe rule's validit\. and are thus "of central relevance to the outcome

) . "C'ivil .-ierurratrlics Board ". Uelryt .-trr Lines Lrc 367 U.S 316. i31 41961 '' Call for Information, 75 Fed. Reg. at -11 .173, `` 42 U.S.C ; 76t)7(d)(7)(H) 14'slAFOPetition to Reconsider and Stav the Tailoring Rule

July 30 . 2010 Pai4e 15 of 17 of the rule."" Consequently. under CAA § 3b7(d)(7)(B) . the Administrator must convene a proceeding for reconsideration of the Tailoring Rule. Pending reconsideration. the Administrator should stay the application ofthe PSDand Title V permitting programs to emissions of carbon dioxide frombiomass.38 Under the Administrati%c Procedure Act ("APA") . 1hen an agency finds thatjustice so requires. it tna,% postpone the etfecti%e date of acti«n taken h~ it, ponding judicial re% standard to Clean Air ;1ct cases. EPA applies this

The standard ior such an administrati%c sta% is signiticantl% different fromthe standard for a stay used by the courts because it does not require a demonstration of' irreparable harm . '['his is clear fromthe text ofAPA:

When an agency finds that justice so requires. it may postpone the el'fectiNe date of action taken bN it. pendingjudicial revie« . On such conditions as mav be required and to the extent necessar% to prekent irreparable injur~. the re%ie\~~inv cOurt . . . . maN~ issue all nccessar~ and appropriate process to postpone the effective date of an agency action or to preser%: status or rights pending conclusion ofthe revie\~

~ procecdini,,_s. Thus. the .1P:N deliberately contrasts ~~hat is required for an administrative sta\= justice so requires"-and ajudicial stay-"conditions as tnay be required'' and "irreparable harm ." Such

_ ;' Icy. 'g Id IFtheadministrator belie%es that the application ofthese permitting programs to biomass cmis,ions cannot be separately statied, the administrator must staN -30 CF .R. 5_''116)(-19)(~) . 51 .1661b)(48)(v) . and the %sords "unlcss, as of 1ul~ I . 2011 . the GHGemissions are at a stationar) source emitting or having the potential to ernit 100,000 tp)Cn'_ equivalent emissions" from40 CI- .R` 70? 'SS(.: .5.C§ 70; "Ohio ,-ipprovul and1'ronitiJgarioa7 oflirtPlernenration Pluru, -J6 Fed. ReB. 8,581, 8.58? n.l (Jan. 37, 1981)

.

lNAFOPetition to Reconsider and Stay the Tailorino Rule

Jul) 30. ?010 Pav-e 16 of 17 ditterences must be given eftect .4( so there is no irreparable hartn requirement for an administratiVe sta` . Justice requires a stay of the application ofthe PSI) and Title V permitting programs emissions ofcarbon dioxide frombiomass. I :PA has not asserted that there is any benefit from including such emissions; instead it has disclaimed making any decision on this question ."'' In fact, EPA's only statements on the specific issue suggest that applying the programs to such emissions is harmful . ;3 Indeed, applying the permitting programs to these emissions will cause the marketplace for biomass energy to stagnate. ]'his stagnation \Nill reduce overall renewable eneruv capacity and frustrate the federal polic\ of sustainabl\ producing a reliable suppl\ of rene\~~ablt energ~ . Finalk . as explained abo\e. I:P:1's decision to apply the permitting programs to such emissions is unlamful . CONCLUSION For the foregoing reasons. the Administrator mtist cun%et1r d procccJing 1<or reconsideration of the Tailoring Rule and stay implementation ofthe Tailoring Rule pending reconsideration.

" "[W]here Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is -generally presumed that Congress acts intentionalk and purposely in tlte disparate inclusionor exclusion." lrrossello r C :nitedS<<rl,?s, -t64 t.' .S. 16. 33 (19831 Iquotatuon marks and citation ornitted: alteration in original)- '2 Call ii)r Inlormation. %5 Fed. Keg . at 41 .173. °' 75 Fed. Re~ at ±1 .590-91 . 16NAF0Petition to Reconsider and Stay the ~failoring Rule

July 30, 2010 Page 17 of 17 Respectfull\ submitted.

David P. Tenny President and Chief 1--xecutive Officer National Alliance of Forest 0%\ners DfCotinsel Roger R. Martella, Jr. Rachel D

. Gra\ James W

. Coleman SIDLf:h' AU

~S FIN, LLP 1501 K Street, 1`A1' . Washin-ton. D.C. ?000> (202) 736-8000 (phone) (202) 736-871 i (facsimile) :1T'TACIiNIE1T: National Alliance of Forest Owners' Comments on Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule

# N/,~FO

December 28, 2009 Via electronic filing EPA Docket Center EPA West (Air Docket) Attention Docket ID No. EPA-HQ-OAR-2009-0517 Environmental Protection Agency Mailcode: 2822T 1200 Pennsylvania Avenue, NW Washington DC 20460 Re: National Alliance of Forest Owners' Comments on Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule Docket EPA-HQ-OAR-2009-0517 Dear Sir or Madam The National Alliance of Forest Owners ("NAFO") welcomes the opportunity to submit the following comments in response to the Environmental Protection Agency's ("EPA") Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule ("Tailoring Rule") 74 Fed. Reg. 55292 (Oct 27, 2009) . As described below, NAFO and its members bring unique perspectives and solutions to the discussion of howto address climate change. We hope to continue todevelop a strong collaborative relationship with policy makers in Congress and federal agencies as we explore together howour nation's private forests can play a significant role in reducing the nation's greenhouse gas (°GHG") footprint . NAFO's mission is to protect and enhance the economic and environmental values of private forests through targeted policy advocacy at the national level At the time of this submission, NAFO's members represent 74 million acres of private forests in 47 states. NAFOwas incorporated in March 2008 and has been working aggressively since then to sustain the ecological, economic, and social values of forests and to assure an abundance of healthy and productive forest resources for present and future generations In recent years, both domestically and abroad, there has been an increased focus on the role forests can play to address climate change. First, forests in the United States serve as the nation's most significant natural carbon sink capturing carbon dioxide ("CO2") through photosynthesis and sequestering CO : naturally. Second, responsibly managed forests and harvested wood products have the potential to provide further prospects for reducing atmospheric COZ by providing biomass for renewable energy such as electricity generation and transportation fuels, that have lower lifecycleCOz emissions than fossil fuels. Third GHG regulatory regimes can be developed to

allowoffset credits fromresponsibly managed forests and harvested wood products to be generated and traded, providing a flexible, cost effective way for regulators and industry to achieve net GHG reductions. Collectively, our nation's private forests are a fundamental means of helping our country reduce overall GHG concentrations through biogenic carbon storage, renewable, lowcarbon energy production, and the generation of emission offsets that provide greater flexibility toother industries NAFOlooks forvvard to the upcoming opportunities to share its expertise and capabilities with EPA and other decision makers to achieve a full array of GHG mitigation benefits Summary NAFOobserves that, in the Tailoring Rule, EPA has appropriately proposed a methodology that excludes biogenic emissions from EPA regulation of stationary sources under the PSDand Title V programs of the Clean Air Act ("CAA") . NAFO urges EPA to maintain this sound decision and policy in the final Rule. In Part I, NAFO explains why it is proper to exclude such emissions and respectfully suggests that EPA clarify this exclusion further in the final Rule. Part II explains why the CAAdoes not authorize EPA to regulate private forests as stationary sources under the CAA. It also describes why efforts to manage forests responsibly to achieve and enhance biogenic carbon capture and storage opportunities should be voluntary and collaborative. Finally, Part III reinforces NAFO's strong commitment towork collaboratively with the government to fashion climate change solutions EPA IN THE FINAL TAILORING RULE SHOULDCONFIRMITS PROPOSED METHODOLOGY THAT WOULD EXCLUDE BIOGENIC EMISSIONS FROM TRIGGERING PREVENTION OF SIGNIFICANT DETERIORATION PERMITTING REQUIREMENTS NAFO is well aware that EPA is embarking upon a complex regulatory regime that for the first time would authorize the Agency to regulate greenhouse gases from certain sources of those emissions Specifically, while EPA has proposed to directly regulate greenhouse gases fromcars and light duty trucks, at the same time EPA has taken the position that such reguiationwill trigger Title V and Prevention of Significant Deterioration ("PSD") permitting requirements for greenhouse gases at millions of stationary sources around the country. 74 Fed. Reg at 55294. NAFO recognizes that numerous commenters on these rules dispute EPA's conclusion that the regulation of greenhouse gases fromcars under Section 202 of the Clean Air Act necessarily will trigger PSD permitting requirements for such sources. However, NAFOin these comments focuses on reinforcing a particular conclusion that at a minimumis implicit, if not explicit, in EPA's proposed Tailoring Rule that biogenic emissions under no circumstances trigger PSD permitting requirements for sources of such emissions. In other words, NAFO respectfully urges EPA, should it decide to proceed with a final Tailoring Rule, to reaffirmand reinforce its position that any overall regulation of greenhouse gases frommobile and/or stationary sources does not inadvertently sweep in combustion of biomass fuels.A. EPA Should Not Regulate Greenhouse Gases FromCombustion of Biomass Fuels Because Production and Combustion of These Fuels Causes No Net Em

issions of Greenhouse Gas There is near-universal recognition that greenhouse gases emitted in combustion of fuels derived frombiomass should be excluded fromgreenhouse gas regulations because production and combustion of such fuels does not increase atmospheric carbon dioxide levels. Simply stated, the carbon emitted in the combustion of biomass comes fromcarbon dioxide that was originally sequestered fromthe air by the biomass feedstock, thus resulting in a carbon neutral cycle. As EPA is aware, growing plants absorb significant amounts of carbon dioxide fromthe atmosphere Forests, in particular sequester massive amounts of carbon dioxide. The process of sequestration and storage is a natural by-product of tree growth. Through the process of photosynthesis trees take up carbon dioxide fromthe air and in the presence of light, water, and nutrients release oxygen and manufacture carbohydrates that are used for metabolismand growth of above and belowground organs All plant materials are ultimately derived fromthis carbon dioxide, which is drawn fromthe atmosphere When plant biomass materials, such as biofuels made fromforest biomass. are burned, the carbon dioxide emitted contains the same carbon that was sequestered by the plant feedstocks. Thus, the combustion of biofuels does not result in net carbon dioxide emissions. All carbon dioxide emitted is a product of carbon dioxide absorbed, making the carbon dioxide released back to the atmosphere a net zero with respect to the natural carbon cycle. In this manner, biofuels fromforest biomass are fundamentally different from conventional fuels. Once coal, natural gas, or oil is extracted and combusted. it cannot be replaced. In contrast, the sustainable forest management practiced by the United States Forest Products Industry ensures that there is no temporal imbalance between biogenic C01 emissions and CO2 sequestration and thus noeffect on the atmospheric GHG inventory. Indeed, as the following EPA chart indicates, carbon stocks in United States forests have been, and continue to, increase. EPA acknowledged that "total carbon sequestration in the U.S. in 2006 removed approximately 13 percent of total U S emissions," and the graph indicates that forest biomass accounts for the bulk of that sequestration Thus, the biofuel industry is truly carbor dioxide neutral

## EstimatesofNetAnnual Changes inCarbonStocks for MajorCarbon Pools

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Q~ p~ C~ pf Cf Of O~ 01 O O O d O O O ~ r r r r r ~ r N N N N N N N EPA Inventory of U.S. Greenhouse Gas Emissions and Sinks 1990-2006.' As EPA approaches greenhouse gas regulation for various sources of emissions, the Agency should take care not to undercut the growth and appropriate management of these forests with ill-considered stationary source regulations that adversely impact private forests.The concept of biomass carbon dioxide neutrality is widely recognized internationally. The Intergovernmental Panel on Climate Change guidance and United Nations Framework Convention on Climate Change reporting protocols both recognize the carbon neutrality of biomass. Similarly, the European Union ("EU") directive on carbon trading specifies "Biomass is considered as C02-neutral ." EU guidelines for the monitoring and reporting of greenhouse gas emissions, Annex I, 4.2.2.1 .6, available at httpalinni pacinst orglinnilciimate ^hangeiEUGuidelinesGHGJan2004.pdf. Biomass CO_ neutrality has also been the foundation of American policy. The American Clean Energy and Security Act of 2009 ("ACESA' ), passed by the House of Representatives on June 26 . 2009would exclude certain biomass carbon dioxide from the cap See ACESA § 722(b) see also id at § 700(41) . And biomass has been explicitly exempted by agency actions as well . EPA's recently promulgated Mandatory GHG Reporting Rule uses an expansive definition of biomass and does not include biogenic CO2 in its reporting threshold. Similarly, the Department of Energy's (DOE's) ' Avaiiat=le at USEPA#430-R-08-005, nttp 'iw-war,a ecvl,iimatechangeiemissionslusa4rnventorV.html .Voluntary Reporting of Greenhouse Gases Program, authorized by Section 1605(b) of

the Energy Policy Act of 1992, provides for exclusion of combustion of biomass fuels See DOE, Technical Guidelines: Voluntary Reporting of Greenhouse Gases (1fi05(b)) Programat 77 ("Reporters that operatevehicles using pure biofuels within their entity should not add the carbon dioxide emissions fromthose fuels to their inventory of mobile source emissions because such emissions are considered biogenic and the recycling of the carbon is not credited elsewhere."). Thus, a strong consensus exists that treating combustion of biomass as carbon neutral is scientifically sound, and EPA's actions and policies support that consensus_ Any alternative policy conclusion would have extremely negative consequences on the ability of forests to mitigate the nation's overall carbon footprint It alsowould negatively impact the ability of industry and commercial . institutional and government entities to invest in projects that will benefit the environment and the climate. An alternative conclusion would remove one of the strongest incentives for production of low greenhouse gas lifecycle biofuels. Without this incentive, stakeholders such as NAFO's members could find it harder to maintain their forest stock for greenhouse gas reducing purposes. Given the massive potential of America's forests to play a positive role in climate change efforts, this would be an unfortunate consequence. B. EPA's Proposed Tailoring Rule Correctly Provides That Biogenic Emissions Are Excluded. Thankfully. EPAappears to have understood the danger of sweeping emissions fromcombustion of biomass into its PSD permitting program . Under EPA's proposed methodology for the Tailoring Rule. such emissions would be excluded fromtriggering or requiring a PSD permit . The Part 51 rule language EPA proposed in the Tailoring Rule Makes PSD applicability turn on whether a source emits, or has the potential to emit, at least 25.000 tpy C02e of greenhouse gases, as defined under paragraph (b)(58) of this section." 74 Fed. Reg. at 55351 . Paragraph (b)(58) reads

(b)(58) Carbon dioxide equivalent, or C02e, means a metric used to compare the emissions fromvarious greenhouse gases based upon their global warming potential (GWP) . The C02e for a gas is determined by multiplying the mass of the gas by the associated GWP. The applicable GWPs and guidance on how to calculate a source's GHGemissions in tpy C02e can be found in EPA's "Inventory of U S. Greenhouse Gas Emissions and Sinks," which is updated annually under existing commitment under the United Nations Framework Convention on Climate Change (UNFCCC) . Id. (emphasis added) . Other relevant PSD threshold language in the Tailoring Rule, as well as the Title V proposed language, also base carbon dioxide equivalent calculation on EPA's "Inventory of U S. Greenhouse Gas Emissions and Sinks." Id at 55352, 55361 . Thus, under the Tailoring Rule, all carbon dioxide equivalent calculations turn upon the guidance in that document .In turn, EPA's Inventory of U.S Greenhouse Gas Emissions and Sinks excludes

emissions from"combustion of biomass and biomass-based fuels." EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-1997 at Energy 3-1-3-2, available at http Owwvr epa govlclimatechanRe/emissionsldownloads09lGHG2007entire report508 pdf. EPA elaborates:

Carbon dioxide emissions fromthese activities . are not included in national emissions totals because biomass fuels are of biogenic origin. It is assumed that the C released during the consumption of biomass is recycled as U S. forests and crops regenerate, causing no net addition of C02 to the atmosphere. 1d. Later in the same document, EPA specifically applied this reasoning to wood biomass: The combustion of biomass fuels such as wood, charcoal,

and wood waste and biomass-based fuels such as ethanol fromcorn and woody crops generates C02 However, in the long run the C02 emitted frombiomass consumption does not increase atmospheric C02 concentrations assuming that the biogenic Cemitted is offset by the uptake of C02 that results fromthe growth of new biomass. As a resuit. C02 emissions frombiomass combustion have been estimated separately fromfossil fuel-based emissions and are not included in the U S totals. Id. at Energy 3-59. Consequently, EPA's proposed Tailoring Rule would exclude emissions from combustion of biomass fuels.' This is wise policy and correct science And EPA has long standing, unquestioned authority, and appropriate discretion to calculate greenhouse gas emissions in this manner-it has been doing sofor years in its Inventory of U.S. Greenhouse Gas Emissions and Sinks. Indeed, any shift fromthis policy would be both unwise, and reverse settled agency policy. C. Given The Serious Adverse Consequences That Would FollowFrom Regulating GHGs Under EPA's PSD Program, EPA Should Make It More Explicit That Bioqenic Emissicns Are Excluded As noted, treating combustion of biofuels similar to combustion of fossil fuels would have serious negative consequences It would deal a major setback to efforts to develop lower greenhouse gas lifecycle biofuels, such as those being pursued by NAFO's members. And it could hinder efforts to enlist America's forests in addressing climate change, by undercutting incentives to maintain those forests for greenhouse gas reducing purposes. Consequently, even though NAFOviews the Tailoring Rule as

' This exclusion is very similar to EPA's longstanding exclusion of certain volatile organic

. compounds fromthe otherwise appl :cable statutory definition. 40 C F R § 51 100(s)legally exempting combustion of biofuels, it respectfully requests EPAmake this

conclusion more prominent in the final Rule We urge EPAtoexplain in the preamble to its final rule the widespread consensus and consistent agency practice that dictate exclusion of combustion of biofuels fromthe PSDand Title Vthresholds and fromthe PSDsignificant emission rate. In addition, the exclusion should be explicit in the regulatory text itself. Not only would this constitute good regulatory practice by making plain the consequences of the agency's rule, it would also head off possible legal battles that could followif groups opposed to biofuels challenged the exemption for biofuels. Removing this litigation risk would benefit the agency and all stakeholders by increasing regulatory certainty And it would allowforest owners to pursue carbon fixing activities. secure in the knowledge that biofuels will not be treated inconsistent with the sound science and strong policy recognizing the carbon neutrality of combustion of such biofuels II . ALTHOUGH RESPONSIBLY MANAGED FORESTS PROVIDE OPPORTUNITIES TO REALIZE GHG REDUCTIONS, EPA LACKS AUTHORITY TOREGULATE THE FORESTRY SECTORAS A STATIONARY SOURCE UNDERTHE CLEANAIR ACT. As EPA continues to embark on a comprehensive regime for addressing greenhouse gases under the Clean Air Act, NAFOrespectfully takes this opportunity to reinforce its strongly held views that responsibly managed forests have a significant role in mitigating GHGlevels, and NAFOand its members look forward toa collaborative effort with EPA to utilize these forests to address climate change. At the same time. efforts to utilize and accommodate the advantages of carbon sequestration that forests provide must be voluntary and not force the forestry or the forest management sector to be regulated under the CAA In particular, NAFOdoes not believe EPA can, nor should, impose mandatory regulations on forests, or treat themas stationary sources under the CAA. While responsibly managed private forests can play their part in bringing solutions to the nation's climate change challenges it is important at the outset that EPA recoqnize the distinct nature of forests, which function as natural carbon sinks, and differer~tiate themfromthe stationary sources subject to CAA regulation In general, PSDand Title V permitting reqiirements apply to "major stationary sources. 42 U.S .C §§ 7479(1), 7602(j) . 7661(2) . Major stationary source,' in turn, is defined to include "any stationary facility or source of air pollutants which directly emits or has the potential to emit" a specified quantity of a pollutant . Id. Forests cannot be major stationary sources." No forest meets the description of a "facility." Forests were not regarded by Congress as sources of pollutants. Congress never intended the Clean Air Act's stationary source provisions to go beyond industrial or similar discrete pollution sources. Encompassing the forestry sector into a regulatory scheme designed for structures, facilities, and installations operated by industrial, commercial, or municipal entities is impractical and would not be an effective way of using forests to achieve GHG reductions.' Similarly, the statute's focus on "construction," id at § 7475(a), is another

' The legislative history of the Clean AirAct further affirms that CAA regulat ;on of forest management practices was never intended by Congress. The lawwas directed at automobiles and industrial sources of traditional air pollutants, such as soot and smog See e g. . 116 Cong Rec. H 19 212 (1970) ; The most dramatic evidence of air pollution is always to be found in dirty smekestacks in factories belching smoke across populated communities . 80 percent of theexample of how CAA regulation is not directed at the forestry sector While this termis commonly applied to the building or renovation of industrial facilities, it is completely foreign to forest management practices Further, the regulation of forest management practices does not comport with the CleanAir Act's stated goals for stationary sources, which are clearly aimed at reducing industrial source emissions through evolving pollution control technologies while minimizing economic harm Each of these goals is discussed throughout the Clean Air Act's legislative history.` None ofthese goals, or the methods enacted to achieve these goals, applies to the forestry sector . The CAA definition of "stationary source" was developed in the context of the New Source Performance Standards program, 42 U S.C. § 7411, which requires the EPA Administrator to promulgate standards of performance applicable to designated categories of newly constructed stationary sources. Id. § 7411(b) . EPA promulgated the original list of designated sources in 1971 5 The Administrator may add new source categories to this list upon an endangerment finding. The statutory definitions showthat regulation of the forestry sector is incompatible with the New Source Performance Standard (NSPS) . 6 First, Congress intended the NSPS to create uniformpollution control standards to prevent industry fromfleeing States with stringent pollution control laws to thosewith less regulation l This uniformity of pollution controls triggered whenever an older plant makes any modification, was alsocrafted to prevent competitive imbalances between newplants and existing plants.' This legislative nistory makes clear that Congress targeted industrial sources of pollution. Forests are not subject to pollution control poisons in our air come right out of the automobile exhaust pipe.') (statement of Rep Van Deerlin) ° See, e.g., H Rep. No. 95-294 at 184-86 (1977) ' List of Categories of Stationary Sources 36 Fed Reg. 5931 (Mar 31, 1971) ° See, e.g., Caminetti v . United States, 242 U.S. 470 485-86 (1917) ('Statutory words are uniformly presumed . . to be used in their ordinary and usual sense, andwith the meaning commonly attributed to thenn.' ) . ' See id. at 184 (uniformstandards "avoid favoring some areas of the country over others with respect to newsources") ; H . Rep_ No. 91-1146 at 3 (1970) ("The promulgation of Federal emission standards for newsources ._ will preclude efforts on the part of States to compete with each other in trying to attract new plants and facilities without assuring adequate control of extrahazardous or large-scale emissions therefrom .') 116 Cong. Rec S 32 902 (Sept 21, 1970) istatement of Sen Muskie) ('Those areas which have levels of air quality which are better than the national standards should not find their air quality degraded by the construction of new sources There should be no 'shopping around' for open sites."), 116 Cong Rec. H 19 218 (June 10, 1970) (Statement of Rep Vanik) ("A steel mill operating anywhere in Ohio or in tl^e Nation, should be required to make the same kind of effo^ to contro: the pollution emission of an oxygen steel furnace If we would insist on uniformapproaches for pollution control of this industry - wherever the plants are located - :he competitive benefits of a dirty plant would be eliminated. A steel plant in Youngstown. Massilon, or M ;ddletown would have to make the same effort to control pollution as a plant in Cleveland There would be no profit in pollution_ ) See. e g., 116 Cong Rec. H 19,212 (1970) (-MR ECKHART Therefore it would appear to me that for instance, an old steel plant which altered its production in a particular unit or operation even though that unit was an o!d unit, would be controlled just as its competitor, a newsteel plant, would be controlled. where new equipment plus newsources of emission occur? MR STAGGERS That is correct.')standards as they are not an air pollution emission source. Further, forests exist where

conditions support planting or growing forests-a forest owner cannot practicably move their forest lands to another state with more lenient regulation. And the notion that a 'new" forest could be economically disadvantaged through regulation when compared to "existing" forests is inapplicable. Second, the NSPS was structured to promote long-termeconomic growth by allowing the continued development of industrial hubs "If each large newpollution source were required to use best practicable control technology, then more new sources could locate in a given area. This in turn would permit morejobs, more production. and greater possibilities for long-termeconomic growth. ."s Again, applying Congress' goals for the NSPS toforest management practices reaches an irrational result Although privately owned forests are economically productive and providejobs they are not capable of being consolidated into dense areas the way industrial facilities often locate in and around major urban economic centers Third, the NSPS requires newindustrial facilities to install the required control technologies at the time of construction, which "will plainly be less costly then requiring retrofit when pollution ceilings are reached."" Forests of course, do not have to install any pollution controls and will never have to retrofit with newtechnologies whenever EPA lowers attainment levels. The NSPS goal of saving money by avoiding retrofit technologies makes no sense when applied to the forest sector. Fourth, the use and development of the best control technologies allowstationary sources to burn higher sulfur fuels, preventing an over-reliance on low-sulfur coal, lowsulfur fuel oil and natural gas." Obviously this goal of the NSPS has no application to forests as they are not industrial fuel-burning emission sources. Fifth. the NSPS was intended to create incentives for the development of new pollution control technologies.` Again, this goal has no applicability to forests."

5 H . Rep No. 95-294, at 184-85 (1977) "!d at 185. See also H Rep No 91-1146, at 16 (1970) ("The overriding purpose of this section [NSPS] would be to prevent newair pollution prcblems, and toward trnat end, maximum feas bie control of new

sources at the time of their construction is seen by the committee as the most effective and, in the long run the least expensive approach .`) . " H . Rep No 95-294 at 186 (1977) '2 See id. , H. Rep No 91-1146at 17 (1970) ('Industrial firms would be required to increase efforts to insure that newplants and equipment performin accordance with the promises and commitments made by plant designers and equipment builders New-source standards would thus provide maximumincentives to expand technology to insure adequate margins of safety ") "The legislative history is replete with references to industrial pollution sources See, e g 116 Cong Rec. S-, 91 Cong. Senate Debates 1970 32900, 32918 (1970) ( This provision requires that newsources that is, the industry plants, be certified by the Secretary before they begin operation. to insure they will meet the performance standards ._ ") (Statement of Sen. Cooper) ; 116 Cong Rec. H 91 Cong. House Debates 1970 19200, 19218 (1970) ('HEW could establish uniformpollution control standards for the chemical, oil refining foundnes, food processing. and cement-making industry and other industries . . . .) (Statement of Rep. Vanik) ; Bills to Amend the Clean Air Act Hearing Before the Subcomm . on Public Health and Welfare of the H . Comm on Interstate and Foreign Commerce, 91st Cong. House hearings 171, 281 (1970) (Statement of Robert H Finch, Sec'y Dep't of Health Education and Welfare) ('In the years ahead, however, marry potentially significant newstationary sources of air pollution will come mtoCongress never planned for the treatment of forests as stationary sources of

pollution. Indeed, in 38 years of developing regulations, EPA has never sought to regulate forest practices under the CAA, indicating a consistent interpretation fromthe outset that the CAA does not govern forests. Having made the point that the CAA never was intended nor could be implemented to regulate forests, NAFO looks forward to working collaboratively with EPA to develop solutions that contribute in a real and verifiable manner to reduce the nation's GHGcontributions. Responsible forest management provides a key opportunity to substantially reduce fossil-fuel based GHG emissions between nowand 2030. There are alternative means for EPA to work with forests owners, other government agencies, and other interested stakeholders to mutually develop strong voluntary programs to encourage forest management techniques aimed at reducing GHGs. EPA has a demonstrated history of success in voluntary programs such as Climate Partners and EnergyStar . NAFO looks forward to working jointly with the EPA, DOE, USDA, and interested stakeholders to develop market-based incentives to encourage the use of responsible forest management to address climate change. III . NAFOAND ITS MEMBERS BRING CRITICAL EXPERTISE TOWARD HELPING REGULATORS AND LAWMAKERS PROMOTE RESPONSIBLY MANAGED 'v%~~ORKING FORESTS TOADDRESS GLOBAL CLIMATE CHANGE Finally, NAFO believes that the federal government has a unique opportunity to build upon current efforts and develop a GHG programthat incorporates the benefits of what private forests can accomplish in this area. NAFO's members manage more than 74 million acres of private forest lands in the United States We do so with forest management practices, state-based best management practices, state forestry regulations, and standards that ensure we renewforests that have been harvested and protect ecosystemvalues. We are able to maintain this important land base due to the economic value of harvested forest products Protecting the ability to continue generating economic value fromthese forests will also enable their continued contribution to reducing GHG levels. This includes encouraging the development of new products, such as cellulosic biofuels, that will be needed in a lowcarbon economy. With members in all regions of the country working with numerous and diverse forests and the production of harvested forest products, NAFOis uniquely equipped to help regulators and lawmakers develop approaches that recognize the benefits of effective, economical forest management to reduce GHGemissions. As the EPA and other federal agencies work to reduce GHGemissions in the United States, they should consider opportunities to recognize all sources of potential GHG reductions Taking full advantage of those sources can best achieve our environmental goals without unnecessarily burdening the United States economy. being - to meet growing demands for electric power, manufactured goods. and other necessities and amenities of modemlife Large stationary sources. such as e~ectric generating plants iron and steel mills, and petroleumrefineries, cement plants, et cetera, often have adverse effects on air quality over broad geographic areas.') . The drafters of the NSPS vlewed forests as casualties of air pollution not causes of air pollution. See e cj Vanik at 19217 ("in addition to causing disease and death, air pollution cuts crop producticn destroys trees, and is estimated to cost the economy $30billion annuaily The type of darnage that can be done is well illustrated by the U S Forest Service estimate that 1 .3 million trees in the San Bernadino National Forest will die in the next 5 years because of smog on the freeways ") 10Private forest owners have a long history of working with the federal government

to create workable solutions for a variety of environmental issues, through regulatory and voluntary programs. For example, Oregon landowners instituted voluntary measures under the umbrella of The Oregon Plan for Salmon that have achieved significant improvements in salmon habitat on private lands In the South, the forest industry helped begin the Louisiana Black Bear Conservation Initiative, a long-term, broad-based coalition with the mission of promoting the restoration of the Louisiana black bear (an endangered species) in its historical range through education, research, and habitat management These are several of many instances where public-private partnerships have produced desirable, mutually beneficial outcomes. Climate change solutions present policy, technical, and economic challenges. We remain optimistic however, of the critical role that private forests can play in developing effective climate change solutions. The nation can best resolve these challenges by bringing key stakeholders together to develop solutions collaboratively . NAFO and its members clearly have the requisite policy, technical . and economic expertise to bring to the table. We are ready and willing to do all we can in this effort Thank you for this opportunity to provide our views at this critical time in considering the first GHG controls on stationary sources. We look forward to further discussion with EPA and other decision makers. Please feel free to contact me at 202- 367-1163 to discuss opportunities for NAFOto play its role in developing climate change solutions. Sincerely,

David P Tenny President and Chief Executive Officer

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