PSDTailoringRulePublicHearingMarch20,2012TestimonyofHowardJ.FeldmanAmericanPetroleumInstituteGoodmorning.IamHowardJ.Feldman,DirectorofRegulatoryandScientificAffairsatAPI.APIrepresentsnearly500membercompaniesinvolvedinallaspectsoftheoilandnaturalgasindustry,andasyouallknow,we’vebeenveryactiveintheCleanAirActregulatoryprocessthroughtheyears.Iwanttomakethreepointstoday:First,API,alongwithmanyothergroups,doesnotbelievethattheCleanAirActisaneffectivemechanismtoaddresstheemissionsofgreenhousegases(GHGs).AsweindicatedrecentlybeforetheD.C.Circuit,wequestionEPA’slegalauthoritytomodifythestatutorythresholdsintheCleanAirActinanefforttoregulateGHGemissionswhenalternativeinterpretationsareavailablethatwouldavoidtheneedtorewritethestatuteinthefirstinstance..Second,iftheD.C.Circuitultimatelyupholdsthetailoringrule,andEPAremainsweddedtothisapproach,thenEPAshouldconsiderraisingthetailoringthresholds.Third,andagain,onlyiftheCourtupholdsEPA’sregulatoryapproachandEPAisdeterminedtocontinueitsregulatorycourse,EPAshouldestablishpresumptiveBACTanddeterminethatcarboncaptureandsequestrationneednotbeconsidered,inordertosaveresourcesinthepermitprocess.Regardingthefirstpoint,APIbelievesthattheriskfromclimatechangeisaseriousissue.ShouldpolicymakersconcludethataGHGcontrolprogramisnecessary,thatwouldbebestpursuedwithlegislationdedicatedtotheproblem,ratherthanthroughtheexistingstructureoftheCleanAirAct,whichclearlydoesnotprovideaneffectivemechanismtoaddressgreenhousegasemissions.UnlessthecourtdefinitivelyupholdsEPA’sfullsuiteGHGregulations,EPAshouldnotproceedwiththisruleorthegreenhousegasregulationsunderconsideration.EPAcanavoidaddingfurthercomplexityanduncertaintytoitsalreadycomplexGHGregulatoryregimebyawaitingtheCourt’simminentdecisionandreconcilinganyfuturerulestotherelieforderedbythecourts.Second,ifthejudicialprocessupholdsEPAsapproachtoGHGregulationand,particularly,thetailoringrule,EPAshouldeitherleavethetailoringthresholdsunchangedorevenraisethem.QuotingfromtheEPAfactsheet,‘AfterevaluatingtheprogressofGHGpermittingsofar,EPAbelievesthatstatepermittingauthoritieshavenothadsufficienttimetodevelopnecessaryprograminfrastructure,andtoincreasetheirGHGpermittingexpertise,tomakeitadministrativelyfeasibletoapplyPSDandtitleVpermittingrequirementstosmallersources.”ItisapparentthatEPA’sapproachtoGHGsisadverselyimpactingdevelopment.AttachmentCofPageI1FeldmantestimonyMarch20,2012EPA’s

May, 2010 REGULATORY

IMPACT ANALYSIS

FOR
THE FINAL PREVENTION

OF SIGNIFICANT DETERIORIATION

AND TITLE

V GREENHOUSE

GAS TAILORING

RULE indicated

that,

with tailoring

rule thresholds

at 100,000

tons

per year,

688 PSD permit actions annually

would

be needed

due

to the inclusion

of GHG permit requirements.

In fact, according

to EPA’s

web

site, since January

2011 when

the GHG-PSD

rules became effective,

there

have been

only about

two dozen comment

letters

to permit applicants.

This discrepancy

between

a one year projection

of activity

and

the actual permit activity

to date cannot

be due simply

as some

have alleged

to the economy.”

We hear about permit delays

and

we believe

that

the GHG PSD requirements

have caused businesses

to delay investment

and expansions,

almost certainly

with

a resulting
adverse

impact

on jobs. Given

the current

status

of the GHG

PSD program,

EPA’s acknowledgment

that state permitting authorities have

not had sufficient

time

to develop necessary

program infrastructure demonstrates

that there

is no basis

to lower

the tailoring thresholds

and create

even more taxing demands

on limited infrastructure,

assuming

the courts uphold

the concept

at all. Instead,

we suggest

that EPA consider

raising

the thresholds

to perhaps 250,000

tons

per year.

That would

be more consistent

with sources

which

are subject

to the thresholds

for criteria pollutants. Third, please

also note

that

API

has supported

use

of

a presumptive

BACT

at the applicant’s
discretion

and that EPA should

issue

a determination

that carbon capture

and sequestration

need

not

be considered

in BACT analyses

at this time.

Both

of these positions

would further

the goal

of streamlining

for both applicants

and regulators

by saving

time

and resources

with

no environmental

cost. In our written comments

we
will address

these issues

in greater

depth

and EPA’s proposal

for plant-wide applicability

limitations

and regulatory provisions

to allow

for “synthetic

minor” permits

for GHGs
under

the federal

PSD program.

Thank

you. a

g

e

I

2

Feldman testimony March

20, 2012