14226 Federal Register / Vol. 77, No. 46 / Thursday, March 8, 2012 / Proposed Rules 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Parts 51, 52, 70 and 71 

[EPA–HQ–OAR–2009–0517; FRL–9643–8] 

RIN 2060–AR10 

Prevention of Significant Deterioration 

and Title V Greenhouse Gas Tailoring 

Rule Step 3, GHG Plantwide 

Applicability Limitations and GHG 

Synthetic Minor Limitations 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Proposed rule. 

SUMMARY: This proposal concerns the 

third step (Step 3) in the EPA’s 

Tailoring Rule. We are proposing to 

maintain the applicability thresholds for 

greenhouse gas (GHG)-emitting sources 

at the current levels. We are also 

proposing two streamlining approaches, 

which will improve the administration 

of GHG Prevention of Significant 

Deterioration (PSD) and title V 

permitting programs. The first proposal 

addresses the implementation of GHG 

plantwide applicability limitations 

(PALs). We propose to allow permitting 

authorities to issue GHG PALs on either 

a mass-basis (tpy) or a carbon dioxide 

equivalent (CO2e)-basis and to allow 

PALs to be used as an alternative 

approach for determining whether a 

project is a major modification and 

whether GHG emissions are subject to 

regulation. The second proposal would 

create the regulatory authority for the 

EPA to issue synthetic minor limitations 

for GHGs in areas subject to a GHG PSD 

Federal Implementation Plan (FIP). We 

also discuss our progress in evaluating 

the suitability of other streamlining 

approaches and solicit further comment. 

DATES: Comments must be received on 

or before April 20, 2012. 

Public Hearing. One public hearing 

will be held on March 20, 2012. For 

additional instructions on the public 

hearing, go to the SUPPLEMENTARY

INFORMATION section of this document. 

ADDRESSES: Submit your comments, 

identified by Docket ID No. EPA–HQ– 

OAR–2009–0517, by one of the 

following methods: 

• http://www.regulations.gov: Follow 

the online instructions for submitting 

comments. 

• Email: a-and-r-docket@epa.gov. 

Attention Docket ID No. EPA–HQ– 

OAR–2009–0517. 

• Fax: (202) 566–9744. 

• Mail: Attention Docket ID No. EPA– 

HQ–OAR–2009–0517, Air and Radiation 

Docket and Information Center, 

Mailcode: 2822T, U.S. Environmental 

Protection Agency, 1200 Pennsylvania 

Avenue NW., Washington, DC 20460. 

Please include a total of two copies. In 

addition, please mail a copy of your 

comments on the information collection 

provisions to the Office of Information 

and Regulatory Affairs, Office of 

Management and Budget, Attn: Desk 

Officer for EPA, 725 17th Street NW., 

Washington, DC 20503. 

• Hand Delivery: Air and Radiation 

Docket and Information Center, EPA/ 

DC, EPA West, Room 3334, 1301 

Constitution Avenue NW., Washington, 

DC 20004, Attention Docket ID No. 

EPA–HQ–OAR–2009–0517. Such 

deliveries are only accepted during the 

Docket Center’s normal hours of 

operation, and special arrangements 

should be made for deliveries of boxed 

information. 

Instructions: Direct your comments to 

Docket ID No. EPA–HQ–OAR–2009– 

0517. The EPA’s policy is that all 

comments received will be included in 

the public docket without change and 

may be made available online at www.

regulations.gov, including any personal 

information provided, unless the 

comment includes information claimed 

to be Confidential Business Information 

(CBI) or other information whose 

disclosure is restricted by statute. Do 

not submit information that you 

consider to be CBI or otherwise 

protected through www.regulations.gov 

or email. The www.regulations.gov Web 

site is an ‘‘anonymous access’’ system, 

which means the EPA will not know 

your identity or contact information 

unless you provide it in the body of 

your comment. If you send an email 

comment directly to the EPA without 

going through www.regulations.gov your 

email address will be automatically 

captured and included as part of the 

comment that is placed in the public 

docket and made available on the 

Internet. If you submit an electronic 

comment, the EPA recommends that 

you include your name and other 

contact information in the body of your 

comment and with any disk or CD–ROM 

you submit. If the EPA cannot read your 

comment due to technical difficulties 

and cannot contact you for clarification, 

the EPA may not be able to consider 

your comment. Electronic files should 

avoid the use of special characters, any 

form of encryption, and be free of any 

defects or viruses. For additional 

instructions on submitting comments, 

go to section I.C of the SUPPLEMENTARY

INFORMATION section of this document. 

Docket: All documents in the docket 

are listed in the www.regulations.gov 

index. Although listed in the index, 

some information is not publicly 

available, e.g., CBI or other information 

whose disclosure is restricted by statute. 

Certain other material, such as 

copyrighted material, will be publicly 

available only in hard copy. Publicly 

available docket materials are available 

either electronically in www.regulations.

gov or in hard copy at the Air and 

Radiation Docket and Information 

Center, EPA/DC, EPA West, Room 3334, 

1301 Constitution Avenue NW., 

Washington, DC. The Public Reading 

Room is open from 8:30 a.m. to 4:30 

p.m., Monday through Friday, excluding 

legal holidays. The telephone number 

for the Public Reading Room is (202) 

566–1744, and the telephone number for 

the Air and Radiation Docket and 

Information Center is (202) 566–1742. 

Public Hearing: One public hearing 

will be held on this proposed rule. The 

hearing will be held on March 20, 2012, 

at the DoubleTree Hotel—Crystal City, 

300 Army Navy Drive, Arlington, 

Virginia 22202; phone number (703) 

416–4100. The public hearing will 

convene at 10 a.m. and continue until 

7 p.m. (local time) or later, if necessary, 

depending on the number of speakers 

wishing to participate. The EPA will 

make every effort to accommodate all 

speakers that are registered and arrive 

before 7 p.m. A lunch break is 

scheduled from 1 p.m. until 2 p.m. and 

a thirty minute break is scheduled from 

4:30 p.m. until 5 p.m. during the 

hearing. The EPA Web site for the 

rulemaking, which includes the 

proposal and information about the 

public hearing, can be found at: www.

epa.gov/nsr. 

FOR FURTHER INFORMATION CONTACT: 

Michael S. Brooks, Air Quality Policy 

Division, Office of Air Quality Planning 

and Standards (C504–05), 

Environmental Protection Agency, 

Research Triangle Park, North Carolina 

27711; telephone number (919) 541– 

3539; fax number (919) 541–5509; email 

address: brooks.michaels@epa.gov. The 

public hearing will provide interested 

parties the opportunity to present data, 

views, or arguments concerning these 

proposed rules. Persons interested in 

presenting oral testimony should notify 

Ms. Long at least 1 day in advance of the 

public hearing. To register to speak, 

attend or for information pertaining to 

the public hearing on this document, 

contact Ms. Pamela S. Long, Air Quality 

Policy Division, Office of Air Quality 

Planning and Standards (C504–01), 

Environmental Protection Agency, 

Research Triangle Park, North Carolina 

27711; telephone number (919) 541– 

0641; fax number (919) 541–5509; email 

address: long.pam@epa.gov. 

SUPPLEMENTARY INFORMATION: The 

information in this SUPPLEMENTARY

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Federal Register / Vol. 77, No. 46 / Thursday, March 8, 2012 / Proposed Rules 14227 

1 ‘‘Prevention of Significant Deterioration and 

Title V Greenhouse Gas Tailoring Rule; Final Rule,’’ 

75 FR 31,514 (June 3, 2010) (the Tailoring Rule). 

INFORMATION section of this preamble is 

organized as follows: 

I. General Information 

A. Executive Summary 

1. Purpose of the Regulatory Action 

2. Summary of Major Provisions 

B. Does this action apply to me? 

C. Where can I get a copy of this document 

and other related information? 

D. What should I consider as I prepare my 

comments for the EPA? 

1. Submitting CBI 

2. Tips for Preparing Your Comments 

E. How can I find information about the 

public hearing? 

F. What acronyms, abbreviations and units 

are used in this preamble? 

II. Overview of the Proposed Rule 

III. Background 

A. Statutory and Regulatory Background 

for PSD and Title V 

B. How does the Tailoring Rule address 

GHG emissions under PSD and Title V? 

C. In the Tailoring Rule, what 

commitments did the EPA make for Step 

3? 

D. In the Tailoring Rule, what plan did the 

EPA announce for developing 

streamlining measures? 

E. In the Tailoring Rule, what 

commitments did the EPA make for 

subsequent action? 

IV. Available Information on GHG Permitting 

A. GHG Permitting Activity to Date 

B. Consultations With States 

C. Additional Technical Support for the 

Step 3 Rule 

V. Proposed Step 3 Rule 

A. Overview 

B. Have states had adequate time to ramp 

up their resources? 

C. What is the ability of permitting 

authorities to issue timely permits? 

D. Has the EPA developed streamlining 

methods? 

E. Limited Benefit From Lowering 

Thresholds in Step 3 

F. Conclusion 

VI. Streamlining for PSD and Title V 

Permitting of GHGs 

A. Plantwide Applicability Limitations for 

GHGs 

1. What is the EPA proposing? 

2. What is a PAL? 

3. Why are we proposing to amend the 

regulations? 

4. Options for Allowing GHG-Only Sources 

To Obtain a GHG PAL 

5. Extending PALs to GHGs on a CO2e 

Basis and Using PALs To Determine 

Whether GHG Emissions Are ‘‘Subject to 

Regulation’’ 

6. Can a GHG source that already has a 

mass-based GHG PAL obtain a CO2ebased PAL once we issue final changes 

to the PAL rules? 

7. How would we change the regulatory 

provisions to implement PALs for GHGonly major sources? 

B. Synthetic Minor Source Permitting 

Authority for GHGs 

1. What is the EPA proposing? 

2. What is synthetic minor limitation, and 

what is its function? 

3. What is a ‘‘subject to regulation’’ 

limitation? 

4. Why does the EPA need authority to 

issue synthetic minor source permits? 

5. What are the benefits to a federal GHG 

synthetic minor permit program? 

6. What is the legal rationale for EPA’s 

GHG synthetic minor source permitting 

authority? 

7. What changes would EPA make to the 

PSD regulations to allow EPA to issue 

GHG synthetic minor permits? 

C. Redefining Potential To Emit and Source 

Category Specific PTE 

D. General Permitting for GHGs 

1. What is a general permit? 

2. What is the legal authority for general 

permits? 

3. Have the states used general permits? 

4. What steps has the EPA made toward 

developing general permits? 

5. General Permits and Title V 

E. Presumptive BACT for GHGs 

1. Definition of BACT 

2. What is presumptive BACT? 

3. How the EPA Could Consider 

Implementing Presumptive BACT 

4. Possible Impediments to Presumptive 

BACT 

F. Title V Empty Permits 

VII. Request for Comment 

A. Solicitation of Comment on Proposed 

Step 3 

1. General 

2. Call for Additional Information 

Concerning State Burdens 

B. Solicitation of Comment on 

Streamlining Techniques 

1. Plantwide Applicability Limitations for 

GHGs 

2. Synthetic Minor Source Permitting 

Authority for GHGs 

3. Redefining PTE and Source Category 

Specific PTE 

4. General Permits for GHGs 

5. Presumptive BACT for GHGs 

VIII. Statutory and Executive Order Reviews 

A. Executive Order 12866: Regulatory 

Planning and Review and Executive 

Order 13563: Improving Regulation and 

Regulatory Review 

B. Paperwork Reduction Act 

C. Regulatory Flexibility Act 

D. Unfunded Mandates Reform Act 

E. Executive Order 13132: Federalism 

F. Executive Order 13175: Consultation 

and Coordination With Indian Tribal 

Governments 

G. Executive Order 13045: Protection of 

Children From Environmental Health 

and Safety Risks 

H. Executive Order 13211: Actions That 

Significantly Affect Energy Supply, 

Distribution or Use 

I. National Technology Transfer and 

Advancement Act 

J. Executive Order 12898: Federal Actions 

To Address Environmental Justice in 

Minority Populations and Low-Income 

Populations 

K. Determination Under Section 307(d) 

IX. Statutory Authority 

I. General Information 

A. Executive Summary 

1. Purpose of the Regulatory Action 

The purpose of this ‘‘Step 3’’ rule is 

to continue the process of phasing in 

GHG permitting requirements under the 

PSD and title V programs begun in Steps 

1 and 2 of the Tailoring Rule.1 As a 

result of actions to regulate GHGs under 

other Clean Air Act (CAA or ‘‘the Act’’) 

programs, GHGs are required to be 

addressed under the major source 

permitting requirements of the Act’s 

PSD and title V programs. The Tailoring 

Rule is necessary because the statutory 

definitions that have been used for other 

air pollutants to determine which 

sources are ‘‘major sources’’ subject to 

permitting under these programs are 

based on annual emission rates of 100 

or 250 tpy which, if implemented 

immediately for GHGs, would bring so 

many sources into the programs as to 

overwhelm the capabilities of state 

permitting authorities to issue permits 

and potentially impede the ability of 

sources to construct or modify their 

facilities. 

To prevent this outcome, the EPA 

promulgated the Tailoring Rule to create 

a higher major source threshold for 

GHGs. In the Tailoring Rule, we 

explained that ‘‘[t]hese impacts * * * 

are so severe that they bring the judicial 

doctrines of ‘absurd results,’ 

‘administrative necessity,’ and ‘onestep-at-a-time’ into the Chevron twostep analytical framework for statutes 

administered by agencies.’’ Tailoring 

Rule, 75 FR at 31517. We further 

explained that on the basis of this legal 

interpretation, we would phase-in the 

applicability of PSD and title V to GHGemitting sources so that those 

requirements would apply ‘‘at least to 

the largest sources initially, at least to as 

many more sources as possible and as 

promptly as possible over time * * * 

and at least to a certain point.’’ Id. In the 

Tailoring Rule, we went on to 

promulgate the first two steps of the 

phase-in program, which we call Steps 

1 and 2, and we made commitments for 

subsequent action. 

Under Step 1 of the Tailoring Rule, 

which began on January 2, 2011, sources 

above the GHG threshold that are 

required to obtain a PSD or title V 

permit anyway due to emissions of 

other pollutants (referred to as 

‘‘anyway’’ sources) are required also to 

address their GHG emissions in the 

permit. Under Step 2, which became 

effective on July 1, 2011, sources with 

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14228 Federal Register / Vol. 77, No. 46 / Thursday, March 8, 2012 / Proposed Rules 

GHG emissions above the Tailoring Rule 

threshold also are required to obtain a 

PSD or title V permit, even if they 

would not be subject to these programs 

based on emissions of other pollutants. 

In the Tailoring Rule, the EPA also 

committed to this Step 3 rulemaking. 

For this rulemaking we have evaluated 

whether it is now possible to lower the 

GHG major source threshold to bring 

additional sources into the CAA 

permitting programs without 

overwhelming state permitting 

authorities. In addition, we have 

continued our identification and 

evaluation of potential approaches to 

streamline permitting so as to enable 

permitting authorities to permit more 

GHG-emitting sources without undue 

burden. The specific actions being 

proposed today are briefly described in 

the following paragraphs. 

2. Summary of Major Provisions 

The EPA is proposing to leave the 

GHG major source thresholds 

unchanged from the Step 2 level at this 

time. We have found that the 

capabilities of the state permitting 

authorities have not improved to the 

extent necessary for additional sources 

to be brought into the system. This 

proposal is discussed further in section 

V of this preamble. 

We are also proposing to revise the 

PSD regulations to provide for GHG 

PALs. A PAL establishes a site-specific 

plantwide emission level for a pollutant 

that allows the source to make changes 

at the facility without a PSD permit, 

provided that emissions to not exceed 

the PAL level. Such PALs are already 

available under PSD for other 

pollutants, and we are proposing to 

create provisions to allow for GHG PALs 

as well. We believe that this action will 

streamline PSD permitting programs by 

allowing sources and permitting 

authorities to address GHGs one time for 

a source and avoid repeated subsequent 

permitting actions. This action is 

discussed further in section VI.A of this 

preamble. 

We are proposing regulatory 

provisions as well to allow for 

‘‘synthetic minor’’ permits for GHGs 

under the federal PSD program. 

Applicability under PSD and title V is 

triggered when a source ‘‘emits, or has 

the potential to emit’’ a pollutant at a 

level greater than the major source 

threshold. Under this system, there are 

some sources that have the potential to 

emit a pollutant above the threshold 

(e.g., if the source were to operate 24 

hours per day, 7 days per week), but do 

not have actual emissions above the 

threshold, due to physical or 

operational limitations, and do not plan 

to ever have emissions that great. The 

EPA has long allowed for such sources 

to voluntarily accept enforceable limits 

on their emissions to keep them below 

the major source threshold; such 

sources are referred to as ‘‘synthetic 

minor’’ sources. However, synthetic 

minor permits are typically issued by 

states under their minor source NSR 

programs, and there is no generally 

applicable federal minor NSR program. 

To allow for issuance of synthetic minor 

permits for GHGs in all areas subject to 

the federal PSD program, we are 

proposing to add GHG synthetic minor 

provisions to the federal PSD program. 

We believe that permitting synthetic 

minor GHG sources under these 

provisions will reduce the number of 

sources subject to PSD and title V, 

reducing the burden on state permitting 

authorities and the sources. This action 

is discussed further in section VI.B of 

this preamble. 

B. Does this action apply to me? 

Entities affected by this action include 

sources in all sectors of the economy, 

including commercial and residential 

sources. Entities potentially affected by 

this action also include states, local 

permitting authorities and tribal 

authorities. The majority of categories 

and entities potentially affected by this 

action are expected to be in the 

following groups: 

Industry group NAICSa

Agriculture, fishing, and hunting ................................................................................... 11 

Mining ........................................................................................................................... 21 

Utilities (electric, natural gas, other systems) .............................................................. 2211, 2212, 2213 

Manufacturing (food, beverages, tobacco, textiles, leather) ........................................ 311, 312, 313, 314, 315, 316

Wood product, paper manufacturing ............................................................................ 321, 322 

Petroleum and coal products manufacturing ............................................................... 32411, 32412, 32419 

Chemical manufacturing ............................................................................................... 3251, 3252, 3253, 3254, 3255, 3256, 3259 

Rubber product manufacturing ..................................................................................... 3261, 3262 

Miscellaneous chemical products ................................................................................ 32552, 32592, 32591, 325182, 32551 

Nonmetallic mineral product manufacturing ................................................................. 3271, 3272, 3273, 3274, 3279 

Primary and fabricated metal manufacturing ............................................................... 3311, 3312, 3313, 3314, 3315, 3321, 3322, 3323, 3324, 

3325, 3326, 3327, 3328, 3329 

Machinery manufacturing ............................................................................................. 3331, 3332, 3333, 3334, 3335, 3336, 3339 

Computer and electronic products manufacturing ....................................................... 3341, 3342, 3343, 3344, 3345, 4446 

Electrical equipment, appliance, and component manufacturing ................................ 3351, 3352, 3353, 3359 

Transportation equipment manufacturing .................................................................... 3361, 3362, 3363, 3364, 3365, 3366, 3366, 3369 

Furniture and related product manufacturing ............................................................... 3371, 3372, 3379 

Miscellaneous manufacturing ....................................................................................... 3391, 3399 

Waste management and remediation .......................................................................... 5622, 5629 

Hospitals/Nursing and residential care facilities .......................................................... 6221, 6231, 6232, 6233, 6239 

Personal and laundry services ..................................................................................... 8122, 8123 

Residential/private households .................................................................................... 8141 

Non-Residential (Commercial) ..................................................................................... Not available. Codes only exist for private households, 

construction and leasing/sales industries. 

a North American Industry Classification System. 

C. Where can I get a copy of this 

document and other related 

information? 

In addition to being available in the 

docket, an electronic copy of this 

proposed rule will also be available on 

the World Wide Web. Following 

signature by the EPA Administrator, a 

copy of this proposed rule will be 

posted in the regulations and standards 

section of our New Source Review 

(NSR) Web site, under Regulations & 

Standards, at http://www.epa.gov/nsr. 

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Federal Register / Vol. 77, No. 46 / Thursday, March 8, 2012 / Proposed Rules 14229 

D. What should I consider as I prepare 

my comments for the EPA? 

1. Submitting CBI 

Do not submit this information to the 

EPA through www.regulations.gov or 

email. Clearly mark the part or all of the 

information that you claim to be CBI. 

For CBI information in a disk or CD– 

ROM that you mail to the EPA, mark the 

outside of the disk or CD–ROM as CBI 

and then identify electronically within 

the disk or CD–ROM the specific 

information that is claimed as CBI. In 

addition to one complete version of the 

comment that includes information 

claimed as CBI, a copy of the comment 

that does not contain the information 

claimed as CBI must be submitted for 

inclusion in the public docket. 

Information so marked will not be 

disclosed except in accordance with 

procedures set forth in 40 CFR Part 2. 

Send or deliver information identified 

as CBI only to the following address: 

Roberto Morales, OAQPS Document 

Control Officer (C404–02), 

Environmental Protection Agency, 

Research Triangle Park, NC 27711, 

Attention Docket ID No. EPA–HQ– 

OAR–2009–0517. 

2. Tips for Preparing Your Comments 

When submitting comments, 

remember to: 

• Identify the rulemaking by docket 

number and other identifying 

information (subject heading, Federal 

Register date and page number). 

• Follow directions—The agency may 

ask you to respond to specific questions 

or organize comments by referencing a 

Code of Federal Regulations (CFR) part 

or section number. 

• Explain why you agree or disagree; 

suggest alternatives and substitute 

language for your requested changes. 

• Describe any assumptions and 

provide any technical information 

and/or data that you used. 

• If you estimate potential costs or 

burdens, explain how you arrived at 

your estimate in sufficient detail to 

allow for it to be reproduced. 

• Provide specific examples to 

illustrate your concerns, and suggest 

alternatives. 

• Explain your views as clearly as 

possible, avoiding the use of profanity 

or personal threats. 

• Make sure to submit your 

comments by the comment period 

deadline identified. 

E. How can I find information about the 

public hearing? 

Persons interested in presenting oral 

testimony should contact Ms. Pamela 

Long, Air Quality Policy Division 

(C504–01), Environmental Protection 

Agency, Research Triangle Park, NC 

27711; telephone number (919) 541– 

0641 or email long.pam@epa.gov at least 

1 day in advance of the public hearing. 

Persons interested in attending the 

public hearing should also contact Ms. 

Long to verify the time, date and 

location of the hearing. The public 

hearing will provide interested parties 

the opportunity to present data, views 

or arguments concerning these proposed 

rules. 

F. What acronyms, abbreviations and 

units are used in this preamble? 

The following acronyms, 

abbreviations and units are used in this 

preamble: 

AFUE .. Annual Fuel Utilization Efficiency 

BACT .. Best Available Control Technology 

CAA or 

Act.

Clean Air Act 

CFR ..... Code of Federal Regulations 

CH4 ...... Methane 

CO2 ...... Carbon Dioxide 

CO2e .... Carbon Dioxide Equivalent 

DOE ..... U.S. Department of Energy 

EPA ..... U.S. Environmental Protection 

Agency 

ECOS ... Environmental Council of the 

States 

FIP ....... Federal Implementation Plan 

FR ........ Federal Register 

GHG .... Greenhouse Gas 

GP ........ General Permit 

GWP .... Global Warming Potential 

HFCs ... Hydrofluorocarbons 

ICR ...... Information Collection Request 

LDVR ... Light-Duty Vehicle Rule 

N2O ..... Nitrous Oxide 

NAAQS National Ambient Air Quality 

Standard 

NACAA National Association of Clean Air 

Agencies 

NRDC .. Natural Resources Defense Council 

NSR ..... New Source Review 

NTTAA National Technology Transfer and 

Advancement Act 

OMB .... Office of Management and Budget 

PAL ..... Plantwide Applicability Limitation 

PFCs .... Perfluorocarbons 

PSD ..... Prevention of Significant Deterioration 

PTE ...... Potential to Emit 

RFA ..... Regulatory Flexibility Act 

SBA ..... Small Business Administration 

SF6 ....... Sulfur Hexafluoride 

SIP ....... State Implementation Plan 

SNPR ... Supplemental Notice of Proposed 

Rulemaking 

TSD ..... Technical Support Document 

tpy ....... Tons Per Year 

UMRA Unfunded Mandates Reform Act 

II. Overview of the Proposed Rule 

In the Tailoring Rule, we included an 

enforceable commitment to propose or 

solicit comment on what we call Step 3 

of the process for phasing in, or 

tailoring, the applicability thresholds at 

which GHG emission sources are subject 

to the CAA PSD and title V permitting 

requirements. We also stated in that rule 

that we would lower the Tailoring Rule 

thresholds only after we determined 

that the states have had enough time to 

develop the necessary infrastructure and 

increase their GHG permitting expertise 

and capacity to efficiently manage the 

expected increase in administrative 

burden, and only after we had the 

opportunity to expedite GHG permit 

issuance through streamlining 

measures. In addition, in the Tailoring 

Rule, we committed to complete action 

on the Step 3 rulemaking by July 1, 

2012, and to make the Step 3 rule 

effective on July 1, 2013. In the short 

period of time since the EPA 

promulgated the Tailoring Rule, the 

states and we have made progress in 

GHG permitting capacity and 

streamlining in some areas, but not 

enough to justify lowering the 

thresholds at this time. As a result, in 

this rulemaking, we propose to maintain 

Step 3 of the Tailoring Rule at current 

levels. 

In section III of this proposal, we 

discuss background information, 

including the potential numbers of 

permit actions, amounts of GHG 

emissions, and administrative costs of 

permit actions for the sources that are 

potentially subject to GHG permitting 

for Step 3. 

In section IV, we discuss the available 

information regarding the impact that 

GHG permitting is having on permitting 

authorities. In section V, we discuss our 

proposal to maintain the current 

applicability requirements for GHG PSD 

and title V permitting at the levels 

established under Steps 1 and 2 of the 

Tailoring Rule—which are the first two 

steps in the Tailoring Rule’s phase-in 

program for PSD and title V 

applicability—which we generally refer 

to as the 100,000/75,000 levels. Our 

basis for maintaining the current 

applicability requirements stems from 

the Tailoring Rule itself, in which we 

determined that with the Step 1 and 2 

thresholds, permitting authorities would 

be required to handle a large number of 

GHG permitting actions that would 

impose significant administrative 

burdens on the permitting authorities, 

and that lowering those thresholds in 

Step 3 would bring in more permitting 

actions that in turn would add more 

burden. Accordingly, we stated we 

would lower the GHG thresholds only if 

certain criteria are met. The criteria are: 

(i) The development of what we call 

streamlining measures that would make 

GHG permitting more efficient, (ii) 

whether permitting authorities had the 

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2 75 FR 31559. 

3 ‘‘Endangerment and Cause or Contribute 

Findings for Greenhouse Gases Under Section 

202(a) of the Clean Air Act,’’ 74 FR 66,496 

(December 15, 2009) (the Endangerment and Causeor-Contribute Findings); ‘‘Light-Duty Vehicle 

Greenhouse Gas Emission Standards and Corporate 

Average Fuel Economy Standards; Final Rule,’’ 75 

FR 25,324 (May 7, 2010) (the Light-duty Vehicle 

Rule); ‘‘Interpretation of Regulations that Determine 

Pollutants Covered by Clean Air Act Permitting 

Programs,’’ 75 FR 17,004 (April 2, 2010) (the 

Timing Decision or the Johnson Memo 

Reconsideration). In the ‘‘Endangerment Finding,’’ 

which is governed by CAA section 202(a) in 

December 2009 the Administrator exercised her 

judgment to conclude that ‘‘six greenhouse gases 

taken in combination endanger both the public 

health and the public welfare of current and future 

generations.’’ The Administrator also found ‘‘that 

the combined emissions of these greenhouse gases 

from new motor vehicles and new motor vehicle 

engines contribute to the greenhouse gas air 

pollution that endangers public health and welfare 

under CAA section 202(a).’’ 74 FR 66496. This 

Endangerment Finding led directly to promulgation 

of what we call the ‘‘Light-duty Vehicle Rule’’ or 

the ‘‘LDVR,’’ also governed by CAA section 202(a), 

in which EPA set standards for the emission of 

greenhouse gases for new motor vehicles built for 

model years 2012–2016. The Johnson Memo 

Reconsideration provided EPA’s interpretation of a 

pre-existing definition in its PSD regulations 

delineating the ‘‘pollutants’’ that are taken into 

account in determining whether a source must 

obtain a PSD permit and the pollutants each permit 

must control. Regarding the Vehicle Rule, the 

Johnson Memo Reconsideration stated that such 

regulations, when they take effect on January 2, 

2011, will, by operation of the applicable CAA 

requirements, subject GHG-emitting sources to PSD 

requirements. 

4 ‘‘Action to Ensure Authority to Issue Permits 

under the Prevention of Significant Deterioration 

Program to Sources of Greenhouse Gas Emissions: 

Finding of Substantial Inadequacy and SIP Call— 

Final Rule,’’ 75 FR 77,698 (December 13, 2010) (the 

GHG PSD SIP Call); ‘‘Action to Ensure Authority to 

Issue Permits Under the Prevention of Significant 

Deterioration Program to Sources of Greenhouse 

Gas Emissions: Federal Implementation Plan; Final 

Rule,’’ 75 FR 82246 (December 30, 2010) (the GHG 

PSD SIP Call FIP). 

5 ‘‘Limitation of Approval of Prevention of 

Significant Deterioration Provisions Concerning 

Greenhouse Gas Emitting Sources in State 

Implementation Plans; Final Rule,’’ 75 FR 82535 

(December 30, 2010) (the PSD Narrowing Rule); 

‘‘Action to Ensure Authority to Implement Title V 

Permitting Programs Under the Greenhouse Gas 

Tailoring Rule; Final Rule,’’ 75 FR 82254 (December 

30, 2010) (the Title V Narrowing Rule). 

6 42 U.S.C. 7475(a), 7479(1). 

time needed to ramp up their resources, 

and (iii) the ability of sources to meet 

the requirements of the PSD program 

and the permitting authorities’ ability to 

issue timely permits.2 Information 

currently available indicates that the 

permitting authorities are not 

significantly better positioned now to 

process more GHG permits than they 

were at the time we promulgated Steps 

1 and 2 in the Tailoring Rule. We also 

note that lowering the thresholds to 

include the relatively low-emitting 

sources currently under consideration 

for Step 3 would result in a very small 

addition to the amount of GHG 

emissions subject to permitting 

requirements while potentially adding 

thousands of sources to the permitting 

process. For these reasons, we propose 

in Step 3 to maintain, and not lower, the 

current applicability thresholds. 

As we committed to do in the 

Tailoring Rule, we have been exploring 

a variety of approaches that could be 

used to streamline PSD and title V 

permitting for sources of GHGs. In 

section VI, we discuss streamlining 

techniques with the potential to make 

the PSD and title V permitting programs 

more efficient to administer for GHGemitting sources, and propose two 

streamlining techniques. In section 

VI.A, we propose to add provisions to 

the PSD regulations at 40 CFR 51.166 

and 52.21 to better address PALs for 

GHGs. More specifically, we propose 

regulatory changes to implement GHG 

PALs on either a mass-basis (tpy) or a 

CO2e-basis, including for existing 

sources that are not yet currently major 

for any regulated NSR pollutants and 

are not major sources because of their 

GHG emissions, and we also propose 

allowing PALs to be used as an 

alternative approach for determining 

both whether a project is a major 

modification and whether GHG 

emissions are subject to regulation. In 

section VI.B, we propose to add 

provisions to the PSD regulations at 40 

CFR 52.21 to create GHG synthetic 

minor source permitting authority, in 

areas subject to a GHG PSD FIP. In 

doing so, we propose changes to create 

the regulatory authority for the EPA to 

issue synthetic minor limitations for 

GHG emissions to allow sources to 

restrict emissions below the PSD 

applicability thresholds. A synthetic 

minor limit may also allow sources to 

restrict emissions below the title V 

permitting applicability threshold on a 

source-wide basis. We also request 

comment on whether any states with 

approved SIPs lack authority to issue 

GHG synthetic minor limitations. 

In the rest of section VI, we discuss 

our progress in evaluating the suitability 

of other streamlining options and 

request further comment, for the 

purposes of both PSD and title V 

permitting, on potential-to-emit 

calculations and the use of general 

permits; and for PSD permitting, on the 

use of presumptive best available 

control technology (BACT). 

In section VII, we solicit comment on 

the full range of topics discussed in this 

proposal. In addition, we call for 

additional information from states as to 

their current and expected air permit 

budgets as well as their current and 

expected future levels of permitting 

based on the current thresholds and the 

possibility of lower thresholds in the 

future. 

III. Background 

This section describes key aspects of 

the background for this rulemaking. For 

other background information, such as a 

description of GHGs and their sources, 

the regulatory backdrop to the Tailoring 

Rule, and the EPA’s GHG PSD and title 

V programs, see the Tailoring Rule, the 

related actions that the EPA took shortly 

before finalizing the Tailoring Rule,3

and the GHG PSD and title V 

implementation rules that we call the 

GHG PSD SIP Call and GHG FIP,4 as 

well as the GHG PSD and title V 

Narrowing Rules.5 For purposes of this 

proposal, we assume that the reader is 

familiar with the above-referenced 

materials. In the following paragraphs 

we provide a brief summary of key 

statutory and regulatory background for 

the PSD permit and title V programs. 

A. Statutory and Regulatory Background 

for PSD and Title V 

Under the CAA, new major stationary 

sources of certain air pollutants, defined 

as ‘‘regulated NSR pollutants,’’ and 

major modifications to existing major 

sources are required to, among other 

things, obtain a PSD permit prior to 

construction or major modification. We 

refer to the set of requirements that 

determine which sources and 

modifications are subject to PSD as the 

‘‘applicability’’ requirements. Once 

major sources become subject to PSD, 

these sources must, in order to obtain a 

PSD permit, meet the various PSD 

requirements. For example, they must 

apply BACT, demonstrate compliance 

with air quality related values and PSD 

increments, address impacts on special 

Class I areas (e.g., some national parks 

and wilderness areas), and assess 

impacts on soils, vegetation, and 

visibility. These PSD requirements are 

the subject of Sections III and IV of this 

document. 

In this section, we discuss how the 

CAA and relevant EPA regulations 

describe the PSD applicability 

requirements. The CAA applies the PSD 

requirements to any ‘‘major emitting 

facility’’ that constructs (if the facility is 

new) or undertakes a modification (if 

the facility is an existing source).6 The 

term ‘‘major emitting facility’’ is defined 

as a stationary source that emits, or has 

a PTE of, at least 100 TPY, if the source 

is in one of 28 listed source categories, 

or, if the source is not, then at least 250 

TPY, of ‘‘any air pollutant.’’ 42 U.S.C. 

7479(1). For existing facilities, the CAA 

adds a definition of modification, 

which, in general, is any physical or 

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7 42 U.S.C. 7479(1), 7411(a)(4). 

8 40 CFR 52.21(b)(11). 

9 40 CFR 52.21(a)(2). 

10 40 CFR 52.21(b)(1)(i). 

11 40 CFR 52.21(b)(2)(i) and the term ‘‘net 

emissions increase’’ as defined at 40 CFR 

52.21(b)(3). 

12 40 CFR 52.21(b)(23)(i)–(ii). 

13 40 CFR 52.21(b)(50). 

14 40 CFR 52.21(b)(2)(iii). 

15CAA § 501(2). 

16CAA § 302(j). 

17We include this discussion of the Tailoring 

Rule for background purposes only. We do not 

reopen for comment any of the determinations 

made in the Tailoring Rule or our rationale for 

them. 

operational change that ‘‘increases the 

amount’’ of any air pollutant emitted by 

the source.7

The EPA’s regulations implement 

these PSD applicability requirements 

through use of different terminology, 

and, in the case of GHGs, with 

additional limitations. Specifically, the 

regulations apply the PSD requirements 

to any major stationary source that 

begins actual construction 8 (if the 

source is new) or that undertakes a 

major modification (if the source is 

existing).9 The term major stationary 

source is defined as a stationary source 

that emits, or has a PTE of, at least 100 

TPY if the source is in one of 28 listed 

source categories, or, if the source is not, 

then at least 250 TPY, of regulated NSR 

pollutants.10 We refer to these 100- or 

250-TPY amounts as the major source 

limits or thresholds. A major 

modification is defined as ‘‘any physical 

change in or change in the method of 

operation of a major stationary source 

that would result in: a significant 

emissions increase [ ] of a regulated NSR 

pollutant [ ]; and a significant net 

emissions increase of that pollutant 

from the major stationary source.’’ 11

EPA rules specify what amount of 

emissions increase is ‘‘significant’’ for 

listed regulated NSR pollutants (e.g., 40 

TPY for sulfur dioxide, 100 TPY for 

carbon monoxide), but for any regulated 

NSR pollutant that is not listed in the 

regulations, any increase is 

significant.12

A pollutant is a ‘‘regulated NSR 

pollutant’’ if it meets at least one of four 

requirements, which are, in general, any 

pollutant for which EPA has 

promulgated a NAAQS or a new source 

performance standard (NSPS), certain 

ozone depleting substances, and ‘‘[a]ny 

pollutant that otherwise is subject to 

regulation under the Act.’’ 13 PSD 

applies on a regulated-NSR-pollutantby-regulated-NSR-pollutant basis. The 

PSD requirements do not apply to 

regulated NSR pollutants for which the 

area is designated as nonattainment. 

Further, some modifications are exempt 

from PSD review (e.g., routine 

maintenance, repair and replacement).14

Under the CAA, title V applies to a 

‘‘major source,’’ which is defined to 

include any stationary source that is a 

‘‘major stationary source’’ under section 

302 of the Act.15 CAA § 501(2). Under 

section 302, a ‘‘major stationary source’’ 

is defined as any stationary facility or 

source of air pollutants which directly 

emits, or has the potential to emit, 100 

tpy or more of any air pollutant.16 The 

title V regulations define a ‘‘major 

source’’ in 40 CFR 70.2. 

In the Tailoring Rule, the EPA 

promulgated, for the first time, a 

regulatory definition of the term 

‘‘subject to regulation’’ for purposes of 

the PSD regulations, and included that 

term, as defined, in the title V 

regulations. Under the Tailoring Rule 

regulations, a pollutant is ‘‘subject to 

regulation’’ if, in general, the pollutant 

is subject to actual control of the 

quantity of emissions (as opposed to, for 

example, being subject only to 

monitoring requirements). E.g., 40 CFR 

51.166(b)(48), 40 CFR 70.2. In addition, 

the Tailoring Rule also provides a 

special rule for GHGs, which provides 

that GHGs become pollutants ‘‘subject to 

regulation,’’ and therefore subject to 

PSD and title V, if they meet the 

following two-step phase-in thresholds. 

Step 1 applies the applicable 

requirements of PSD, including the 

BACT requirement to projects that 

increase net GHG emissions by the 

applicable threshold (75,000 tpy CO2e) 

provided these projects would be 

subject to PSD anyway by significantly 

increasing emissions of at least one nonGHG pollutant. Under Step 1, for the 

title V program, only sources with 

current title V permits for non-GHG 

pollutants will have to address GHGs. 

Step 2 then expands the program by 

phasing in additional large sources of 

GHG emissions that are not already 

subject to PSD or title V permitting 

requirements due to non-GHG 

emissions. In Step 2, PSD and title V 

requirements will apply to new sources 

that emit, or have the potential to emit, 

at least 100,000 tpy CO2e. For existing 

sources, Step 2 applies title V 

requirements to existing sources that 

emit, or have the potential to emit, 

100,000 tpy CO2e and that are not 

already subject to title V requirements, 

and also applies PSD requirements to 

those sources that emit, or have the 

potential to emit, 100,000 tpy CO2e and 

undertake a modification that increases 

net emissions by at least 75,000 tpy 

CO2e. See 75 FR 31516. 

In the Tailoring Rule, the EPA 

explained that ‘‘we selected the ‘subject 

to regulation’ mechanism’’ as the legal 

mechanism for establishing the phase-in 

thresholds because we had received 

information that states could more 

expeditiously adopt those thresholds 

through that mechanism. The EPA 

added that ‘‘our action in this 

rulemaking [in establishing the phase-in 

thresholds] should be interpreted to rely 

on any of several legal mechanisms to 

accomplish this result * * * [including] 

revising the meaning of several terms in 

the [PSD] definition [ provisions].’’ 75 

FR 31582. In this manner, EPA 

identified several legal bases within the 

definitional previsions of the PSD 

regulations to support the phase-in 

approach. 

B. How does the Tailoring Rule address 

GHG emissions under PSD and Title 

V? 17

In the Tailoring Rule, the EPA 

explained that the rulemaking was 

necessary because without it, the CAA 

PSD preconstruction review permitting 

program and the title V operating permit 

program would, under a literal reading 

of those provisions, apply to all 

stationary sources that emit or have the 

potential to emit more than 100 or 250 

tpy of GHGs beginning on January 2, 

2011. This was the date when the EPA’s 

recently promulgated Light Duty 

Vehicle Rule (LDVR) took effect, 

imposing control requirements for the 

first time on carbon dioxide (CO2) and 

other GHGs, thereby making them 

subject to regulation and triggering the 

PSD and title V permitting 

requirements. Therefore, a source owner 

proposing to construct any new major 

source that would emit or have the 

potential to emit at or higher than the 

100/250 tpy applicability levels (and 

which therefore may be referred to as a 

‘‘major’’ source) or modify any existing 

major source in a way that would 

increase GHG emissions, would need to 

obtain a permit under the PSD program 

that addresses these emissions before 

construction or modification could 

begin. Similarly, title V would apply to 

a new or existing GHG source exceeding 

the 100 tpy applicability threshold in 

the Act. 

In the Tailoring Rule, we further 

explained that under these 

circumstances, and in the absence of 

streamlining methods, state and local 

permitting authorities would be 

burdened by the need to issue PSD 

permits to tens of thousands of small 

sources (including, for example, many 

commercial sources and small industrial 

sources) and to issue title V permits to 

millions of small sources (including, for 

example, many residential sources). 

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18 75 FR 31540 (Table V–1). 

These extraordinary numbers of permit 

applications are orders of magnitude 

greater than the current inventory of 

annual applications and would vastly 

exceed the current administrative 

resources of the permitting authorities. 

Permit gridlock would result with the 

permitting authorities able to issue only 

a tiny fraction of the permits requested. 

In the Tailoring Rule, we further 

explained that ‘‘[t]hese impacts * * * 

are so severe that they bring the judicial 

doctrines of ‘absurd results,’ 

‘administrative necessity,’ and ‘onestep-at-a-time’ into the Chevron twostep analytical framework for statutes 

administered by agencies.’’ Tailoring 

Rule, 75 FR at 31517. We further 

explained that on the basis of this legal 

interpretation, we would phase-in the 

applicability of PSD and title V to GHGemitting sources so that those 

requirements would apply ‘‘at least to 

the largest sources initially, at least to as 

many more sources as possible and as 

promptly as possible over time * * * 

and at least to a certain point.’’ Id. In the 

Tailoring Rule, we went on to 

promulgate the first two steps of the 

phase-in program, which we call Steps 

1 and 2, and we made commitments for 

subsequent action. 

In the Tailoring Rule, we closely 

reviewed the numbers of additional 

permitting actions for GHG-emitting 

sources, and the resulting 

administrative burdens, that would 

occur at various permitting thresholds. 

For example, we estimated the 

following permitting burdens associated 

with the Step 1 and Step 2 thresholds, 

compared to the administrative burdens 

of the then-current PSD and title V 

programs (that is, before applicability to 

GHG-emitting sources): 

Step 1: 

Number of sources subject to PSD and 

title V permitting: The same as prior 

to Step 1 

Additional workload hours PSD 

program: 34,000 at a cost of $3 

million 

Additional workload hours title V 

program: 27,468 at a cost of $1 

million 

Step 2: 

Number of additional sources subject 

to PSD permitting: 2 new sources, 

915 modified sources 

Additional workload hours PSD 

program: 310,655 at a cost of $24 

million 

Number of additional sources subject 

to title V permitting: 190 sources for 

each of the first 3 years 

Additional workload hours title V 

program: 141,322 at a cost of $7 

million 

75 FR 31541. 

We further estimated that the 

combined additional PSD and title V 

permitting burdens after 

implementation of Steps 1 and 2 would, 

on an annual basis, mean a 42 percent 

increase in costs over the then-current 

PSD and title V program. 75 FR 31540, 

Table V–1. 

C. In the Tailoring Rule, what 

commitments did the EPA make for 

Step 3? 

In the Tailoring Rule, we noted that 

‘‘following implementation of the first 

phase of PSD and title V applicability to 

GHG sources, generally at the 

[proposed] threshold, additional action 

would be required over time to assure 

full compliance with the statute.’’ 75 FR 

31571. Accordingly, we included in the 

Tailoring Rule an enforceable 

commitment to issue a notice of 

proposed rulemaking in which we 

would propose or solicit comment on a 

third step of the phase-in, which we call 

Step 3. We committed to complete Step 

3 by July 1, 2012, and to make Step 3 

effective by July 1, 2013. We committed 

to solicit comment on lowering the 

thresholds, so that more sources would 

be subject to PSD and title V 

requirements, 40 CFR 52.22(b)(1), 40 

CFR 70.12(b)(1), but we did not commit 

to either propose or finalize lower 

thresholds. We further stated that in 

light of the administrative burdens, we 

would not, in Step 3, lower the 

thresholds below the 50,000/50,000 tpy 

CO2e levels. 

In the Tailoring Rule, we recognized 

that lowering the thresholds in Step 3, 

and thereby bringing more sources into 

PSD and title V permitting, would mean 

that the permitting authorities would 

confront even greater administrative 

burdens. For example, we estimated that 

lowering the thresholds to the 50,000/ 

50,000 level would increase 

administrative costs by 40 percent above 

administrative costs associated with 

Step 2.18 Accordingly, we explained 

that whether we could lower the 

thresholds in Step 3 depended on (i) 

whether the EPA could develop 

streamlining measures, (ii) the time that 

permitting authorities need to ramp up 

their resources, and (iii) sources’ 

abilities to meet the requirements of the 

PSD program and permitting authorities’ 

ability to issue timely permits. 75 FR 

31524. We elaborated: 

(2) Criteria for Establishing Phase-in 

Schedule 

The specific phase-in schedule under the 

tailoring approach will depend on several 

things. The first is our progress in developing 

streamlining methods that will render the 

permitting authority workload more 

manageable by taking some sources off the 

table (through regulations or guidance 

interpreting ‘‘potential to emit’’), and by 

allowing for more efficient permit processing 

(through general permits and presumptive 

BACT). At the same time, streamlining 

techniques will lower permitting costs to 

sources or even eliminate some sources’ 

obligations to obtain permits altogether. The 

second is the time that permitting authorities 

need to ramp up their resources in an orderly 

and efficient manner to manage the 

additional workload. The third is information 

we have as to the sources’ abilities to meet 

the requirements of the PSD program and the 

permitting authorities’ ability to process 

permits in a timely fashion. That information 

will be based on the real-world experience 

the permitting authorities will accumulate as 

they proceed to process permit application 

for the larger GHG sources. 

Thus, under our present approach, we will 

develop streamlining techniques, we expect 

the permitting authorities to ramp up 

resources in response to the additional 

demands placed upon them in the first two 

steps, and we will gather real worldinformation about the GHG permitting 

process; and based on all that, we will 

address expanding the PSD program in a 

step-by-step fashion to include more sources 

over time. We intend to follow this process 

to establish * * * the PSD applicability 

thresholds * * *. 

75 FR 31559. With respect to the third 

criterion, we note that in the Tailoring 

Rule, we made clear that sources’ 

abilities to meet the requirements of the 

PSD and title V programs depend at 

least in part on the ability of the states 

to develop, as part of the state programs, 

outreach and educational efforts to 

facilitate source compliance. 

Accordingly, for present purposes, we 

think this component concerning 

sources may be examined by a review of 

the states’ progress in developing state 

GHG permitting programs. We also note 

that permitting authorities’ abilities to 

issue timely GHG permits may be 

measured by the extent of any 

permitting backlog, and depend in large 

part on the permitting authorities’ 

development of expertise. In this 

rulemaking, we seek information from 

the states as to their ability to issue 

timely permits, including data 

concerning their backlog, but we also 

are examining, more broadly, the states’ 

progress in developing expertise in GHG 

permitting. 

D. In the Tailoring Rule, what plan did 

the EPA announce for developing 

streamlining measures? 

In the Tailoring Rule, we announced 

a plan to explore streamlining 

techniques that could make the 

permitting programs more efficient to 

administer for GHGs, and that therefore 

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19 In the title V program, the responsible 

permitting agency is referred to as the ‘‘permitting 

authority,’’ while in the PSD program, this entity is 

referred to as the ‘‘reviewing authority.’’ We use the 

two terms interchangeably in this preamble. 

could allow expanding those programs 

to smaller sources. Streamlining 

techniques to be evaluated include: 

(1) Defining PTE for various source 

categories, (2) establishing source 

category emission limits for 

presumptive BACT, (3) establishing 

general permits and permits-by-rule, (4) 

establishing a process for electronic 

permitting, and (5) establishing a 

process for lean techniques for more 

efficient permitting processes. We 

believe that these techniques have the 

potential to streamline the PSD and title 

V permitting programs for GHGs to 

‘‘allow the expeditious expansion of 

PSD and title V applicability to more 

GHG-emitting sources while protecting 

those sources and the permitting 

authorities from undue expenses.’’ 75 

FR 31526. 

While we intend to move forward and 

develop streamlining approaches, we 

also stated in the Tailoring Rule that we 

did not expect to develop and 

implement any of these prior to Step 2. 

We also stated in the rule that several 

of these streamlining approaches will 

take several years to develop, requiring 

separate rulemaking both at the federal 

level, and then through state and local 

processes. We, nonetheless, committed 

to explore a number of possible 

streamlining actions prior to the Step 3 

rulemaking. 

In addition, with respect to title V, in 

the Tailoring Rule we noted that 

commenters on the proposal for that 

rule stated that the EPA should apply 

the title V program only to sources that 

are subject to applicable requirements, 

so that sources should not be required 

to hold ‘‘empty permits’’ (e.g., permits 

issued to a source that is not subject to 

any applicable requirement for any 

pollutant). In the Tailoring Rule, we 

recognized that not requiring sources to 

hold such ‘‘empty permits’’ is a 

potential means for relieving title V 

permitting burdens. [75 FR 31566.] We 

also stated that— 

We need to gather more information 

concerning the potential number and utility 

of ‘‘empty permits’’ for GHG sources, in light 

of the fact that the need for requirements in 

title V permits will vary based on the 

requirements of each SIP, and the fact that 

some SIPs contain broadly applicable 

requirements. 

75 FR 31566. We added that in the Step 

3 rulemaking, ‘‘we may consider 

whether to limit title V applicability to 

GHG sources in order to minimize the 

number of GHG sources with ‘empty’ 

permits.’’ Tailoring Rule, 75 FR 31567. 

E. In the Tailoring Rule, what 

commitments did the EPA make for 

subsequent action? 

In addition, in the Tailoring Rule, we 

established an enforceable commitment 

that we will (i) complete a study by 

April 30, 2015, to evaluate the status of 

PSD and title V permitting for GHGemitting sources, including progress in 

developing streamlining techniques; 

and (ii) complete further rulemaking 

(which we refer to as Step 4), based on 

that study by April 30, 2016, to address 

the permitting of smaller sources. That 

rulemaking may also consider 

additional permanent exclusions based 

on the ‘‘absurd results’’ doctrine, where 

applicable. 

In the Tailoring Rule, we also 

included a provision assuring that no 

source with emissions or potential to 

emit below 50,000 tpy CO2e, and no 

modification resulting in an increase 

and a net GHG increases of less than 

50,000 tpy CO2e, would be subject to 

PSD or title V permitting before April 

30, 2016. We included this provision on 

the basis of our conclusion that the 

administrative burdens that would 

accompany permitting sources below 

the 50,000 tpy threshold would be so 

great that it would be impossible to 

administer the permit programs for 

these sources until at least 2016, even 

with the streamlining actions that the 

EPA may be able to develop, and the 

increases in permitting resources that 

we reasonably expect the permitting 

authorities to acquire. 

IV. Available Information on GHG 

Permitting 

To support this Step 3 rulemaking, 

the EPA has gathered additional 

information on the impact that GHG 

permitting is having on permitting 

authorities at the current threshold 

levels and the potential impact that 

would result from a reduction in the 

GHG permitting thresholds to levels as 

low as 50,000 tpy CO2e. Section IV.A 

discusses the actual permitting that has 

occurred since January 1, 2011. Section 

IV.B discusses information gathered 

through preliminary consultations with 

eight state PSD permitting authorities, 

as well as, experience garnered from the 

EPA regional offices that are the PSD 

permitting authorities for certain 

states.19 Section IV.C presents 

information from an analysis of the 

number of existing and new sources that 

would be potentially major sources of 

GHGs at a range of thresholds between 

the current level of 100,000 tpy CO2e 

and 50,000 tpy CO2e. 

A. GHG Permitting Activity to Date 

As of December 1, 2011, the EPA and 

state permitting authorities had issued 

18 PSD permits with GHG requirements. 

We also estimate that as of that date, the 

EPA and state permitting authorities 

had received an additional 50 GHG PSD 

permit applications. The types of source 

categories for which permitting 

authorities have issued GHG permits 

include: biofuel production, cement 

plants, electric generating units, lime 

production facilities, outer continental 

shelf exploration, pulp and paper mills, 

and refineries. Eleven states and three 

EPA regions issued these permits. In 

most cases, no permitting authority 

issued a permit for the same source 

category more than once. We discuss in 

section V the extent to which these 

permitting actions have provided 

information relevant to Step 3. 

B. Consultations With States 

To obtain additional information on 

the current status of GHG permitting 

based on the implementation of Step 1 

and Step 2 and the potential impact of 

reducing the GHG thresholds in Step 3, 

we consulted with eight state permitting 

authorities—Iowa, Louisiana, Michigan, 

New Jersey, North Carolina, 

Pennsylvania, South Dakota and Utah— 

all of which have experience with GHG 

permitting, and which represent a crosssection of state programs geographically 

and in terms of population and types of 

sources. In addition, we reviewed the 

experience of the EPA regional offices 

that act as PSD permitting authorities in 

state jurisdictions: Region 4, which 

issues PSD permits for GHG emissions 

in Florida and for all regulated pollutant 

emissions from outer continental shelf 

sources in the eastern portion of the 

Gulf of Mexico; Region 6, which issues 

PSD permits for GHG emissions in 

Arkansas and Texas; and Region 9, 

which issues PSD permits for all 

regulated pollutants in many of the local 

air quality management districts in 

California. For additional information 

concerning responses to the survey, 

please refer to the Docket ID No. EPA– 

HQ–OAR–2009–0517. 

These states and regional offices 

confirm that they have not yet 

experienced the increase in the number 

of major source permitting actions that 

was predicted to result from the 

implementation of Step 1 and Step 2. 

They generally do not believe that 2011 

has been representative of the 

permitting burdens that they expect will 

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20See Technical Support Document ‘‘Summary of 

Methodology and Data Used to Evaluate Resource 

Requirements at Alternative Greenhouse Gas (GHG) 

Permitting Thresholds’’ (December 2011). 

21See ‘‘Technical Support Document for 

Greenhouse Gas Emissions Thresholds Evaluation,’’ 

March 29, 2010, Docket No. EPA–HQ–OAR–2009– 

0517–19158. 

22See ‘‘Summary of Methodology and Data Used 

to Evaluate Resource Requirements at Alternative 

Greenhouse Gas (GHG) Permitting Thresholds,’’ 

December 2011. 

23We note that none of the challenges to the 

Tailoring Rule have addressed these burden 

estimates; we have not revisited them for purposes 

of this rule, nor are we are re-opening them for 

comment. 

24This level refers to new sources as well as 

existing sources that are not ‘‘anyway’’ sources and 

that emit, or have the potential to emit, at least 

100,000 tpy CO2e, as well as existing sources that 

emit or have the potential to emit at least 100,000 

tpy CO2e and that undertake a modification that 

increases net emissions of GHGs by at least 75,000 

tpy CO2e. 

ultimately occur under the current 

Tailoring Rule. 

In addition, the states confirmed that 

to this point, they have not been able to 

build up their GHG permitting 

infrastructure. For example the 

permitting activity to date has provided 

limited, if any, opportunity to build 

internal capacity to handle GHG 

permitting for a diverse set of sources or 

more efficiency for any particular source 

category. Similarly, the lack of 

permitting experience greatly 

diminished the opportunity to develop 

meaningful streamlining approaches to 

address GHG permitting. As a result, 

states indicated that they have made 

little or no progress in implementing 

streamlining measures, and have not 

adopted any such measures specifically 

to address GHGs. 

C. Additional Technical Support for the 

Step 3 Rule 

To support the decision-making 

process for this Step 3 rule, the EPA 

carried out an analysis to estimate the 

number of facilities that would exceed 

different GHG emissions threshold 

levels.20 This analysis built upon 

analysis the EPA included in the 

Tailoring Rule to support the threshold 

decisions in that action.21 In the 

Tailoring Rule analysis, the EPA 

evaluated eight different PTE thresholds 

between 100 and 100,000 tpy CO2e, 

including 50,000 tons per year. For this 

Step 3 analysis, the EPA evaluated nine 

additional thresholds between 50,000 

and 100,000 tpy CO2e in 5,000 tpy 

increments (that is, 55,000 through 

95,000 tpy CO2e). The EPA considered 

stationary sources in the following 

sectors: 

• Electricity Generation (facilities 

with fossil fuel-fired electric generating 

units); 

• Industrial sources (14 subcategories 

of industries with process and 

combustion GHG emissions); 

• Energy (oil and gas extraction, 

transport, and processing; underground 

coal mining); 

• Waste Treatment (landfills and 

municipal solid waste incinerators); 

• Agriculture (stationary fuel 

combustion); 

• Commercial (stationary fuel 

combustion); and 

• Residential (stationary fuel 

combustion). 

For each sector, the analysis estimated 

the number of sources that would 

become major sources for GHGs at each 

of the different threshold levels and the 

number of new major sources projected 

to be added each year. The study found 

that at a Step 3 major source threshold 

of 50,000 tpy CO2e, approximately 4,650 

additional sources would become major 

sources of GHGs (increasing from 5,326 

at 100,000 tpy CO2e, to 9,980 at 50,000 

tpy). About half of these would be in the 

‘‘unspecified industrial stationary 

combustion’’ subcategory of industrial 

facilities; 16 percent in the waste 

treatment sector, landfill subcategory; 

14 percent in the energy sector, oil and 

gas subcategory; 12 percent in the 

commercial/stationary fuel combustion 

sector; 4 percent in the electricity 

generation sector and the remaining 4 

percent scattered among the remaining 

sectors and industrial subcategories. At 

a threshold of 80,000 tpy CO2e the 

number of commercial sources that 

become major sources of GHGs 

significantly increases (compared to 

100,000 tpy CO2e) and at a threshold of 

55,000 tpy CO2e, some multi-family 

residential sources become major 

sources. The analysis found that no 

sources in the agricultural or single 

family residential categories would 

become major sources of GHGs at a 

threshold of 50,000 tpy CO2e. Note that 

this analysis did not differentiate 

between sources that become major only 

because of the source’s GHGs emissions 

from sources that are already major for 

one or more other pollutants. 

The EPA’s analysis identified sources 

that would become subject to permitting 

requirements because of GHG emissions 

alone.22 Based on this analysis, we 

estimate that a reduction from the 

current Step 2 threshold to 50,000 tpy 

CO2e would result in nearly 3,000 

sources becoming major sources due to 

their GHG emissions alone (increasing 

from 552 sources at 100,000 tpy CO2e, 

to 3,539 at 50,000 tpy). In addition, we 

estimate that 1,014 additional 

modifications would be subject to PSD 

permitting based on GHG emissions at 

50,000/50,000 tpy CO2e versus the Step 

2 thresholds of 100,000/75,000 

(increasing from 917 per year to 1,931). 

In addition to determining the amount 

of potential additional permit actions 

associated with the various thresholds, 

the EPA also determined the 

administrative burdens associated with 

those actions. To do so, the EPA relied 

on the same per-permit administrative 

cost figures used in the Tailoring Rule 

for both PSD and title V permitting, for 

both commercial/residential sources 

and industrial sources, as well as for 

both new construction and 

modifications.23 The EPA also 

determined the amount of GHG 

stationary source emissions associated 

with the sources potentially affected by 

the various thresholds. 

To determine the impacts of lowering 

the thresholds in Step 3, the EPA 

compared the amounts of administrative 

costs and GHG inventory covered at the 

various cut-points to the amounts at the 

100,000/75,000 Step 2 levels.24 For 

example, with respect to the PSD 

administrative costs, as we stated in the 

Tailoring Rule, 75 FR 31540 (Table V– 

1), at the 100,000/75,000 Step 2 levels, 

we expect annual PSD permitting 

actions for GHG-emitting sources to 

include 242 newly constructed sources 

and 1,365 modifications (917 for GHG 

emissions alone plus 448 for anyway 

sources) and we expect that these PSD 

GHG permitting actions would increase 

permitting authority administrative 

burdens by 42 percent above existing 

total air permitting burdens (including 

permitting for conventional (i.e., nonGHG pollutants under Tailoring Rule 

Step 1), because these actions would 

trigger permitting requirements for both 

PSD and title V. In total, we estimate the 

facilities meeting the Step 2 major 

source applicability thresholds account 

for approximately 67 percent of the total 

national stationary source GHG 

emissions. At the 50,000/50,000 levels, 

the EPA estimates annual PSD 

permitting actions involving GHGemitting sources to include 243 newly 

constructed sources and 2,379 

modifications (1 more newly 

constructed source and 1,014 more 

modifications than at the 100,000/ 

75,000 level). While the EPA estimates 

these GHG permitting actions to 

increase permitting authority 

administrative burdens by 40 percent 

above the total burdens at Step 2 levels 

(and 99% above the administrative 

burdens without GHG permitting), we 

estimate the facilities meeting these 

major source applicability thresholds to 

account for approximately 70 percent of 

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25We refer to these sources as ‘‘anyway’’ sources 

because they will become subject to PSD for their 

GHG emissions if they undergo PSD permitting 

anyway, either for new construction or for 

modification projects, based on emissions of nonGHG pollutants; and, by the same token, the will 

become subject to title V for their GHG emissions 

if they are subject to title V anyway due to their 

non-GHG emissions. 

total national stationary source GHG 

emissions, just three percent more than 

currently covered under Step 2. For a 

more complete description of the EPA’s 

analysis and an explanation, see the 

Technical Support Document titled, 

‘‘Summary of Methodology and Data 

Used to Evaluate Resource 

Requirements at Alternative Greenhouse 

Gas (GHG) Permitting Thresholds’’ 

(December 2011). 

V. Proposed Step 3 Rule 

A. Overview 

The Tailoring Rule’s phase-in 

approach is based on data concerning 

the numbers of GHG permitting actions 

the permitting authorities would have to 

undertake and the costs of those 

actions—both absolute and in 

comparison to their current budgets—at 

various different thresholds for the 

applicability of PSD and title V to GHGemitting sources. In the Tailoring Rule, 

we began the phase-in by establishing 

Steps 1 and 2, which applied PSD and 

title V to ‘‘anyway’’ sources 25 and 

sources emitting GHGs at the 100,000/ 

75,000 tpy CO2e level. To do so, we 

determined that permitting authorities 

could handle the hundreds of additional 

permitting actions that would occur 

under Steps 1 and 2, even though the 

authorities’ administrative costs would 

increase by 42 percent over their thencurrent administrative costs for both 

PSD and title V programs. 

The present rulemaking represents the 

fulfillment of our commitment in the 

Tailoring Rule to undertake Step 3 of 

the GHG PSD and title V phase-in 

process. At this time, because of the 

limited amount of new construction and 

modifications that sources have 

undertaken in the past year, we believe 

state permitting authorities have not had 

sufficient time and opportunity to 

develop the necessary infrastructure and 

increase their GHG permitting expertise 

and capacity, which makes it 

administratively infeasible to apply PSD 

and title V permitting requirements to 

additional sources. Accordingly, we are 

proposing to leave the applicability 

thresholds for GHGs unchanged. 

In the Tailoring Rule, we committed 

to undertake future rulemaking, 

including this Step 3 rulemaking, to 

examine whether we could lower the 

thresholds to, potentially, as low as 

50,000/50,000, and thereby apply PSD 

and title V to more sources. We 

recognized that lowering the thresholds 

would add more administrative costs on 

top of those added by Steps 1 and 2, and 

as a result, we stated that whether and 

when we would lower the thresholds 

would depend on the pace at which the 

EPA and permitting authorities could 

develop streamlining measures to 

expedite permit program administration 

and permitting authorities could hire 

and train staff, as well as gain 

experience with GHG permitting. 

Specifically, we indicated that further 

phase-in of GHG applicability would 

depend on three criteria: (i) Whether the 

EPA could develop streamlining 

measures, (ii) the time that permitting 

authorities need to ramp up their 

resources, and (iii) sources’ abilities to 

meet the requirements of the PSD 

program and permitting authorities’ 

abilities to issue timely permits. 

As described in the following, the 

states and the EPA have made some 

progress in these areas. For example, the 

states have issued some GHG permits 

and we are proposing streamlining 

measures in this rulemaking. However, 

neither the states nor the EPA have had 

the opportunity to make significant 

progress in these areas. First, the states 

have had only limited experience in 

GHG permitting and therefore have not 

had the opportunity to develop 

significant expertise. The main reasons 

for this are the unexpectedly low 

number of PSD permit applications 

submitted to date and the short amount 

of time since GHG permitting began. As 

the volume of PSD permit applications 

increases, EPA expects that more 

permitting authorities will further 

develop the necessary specialized 

expertise required for case-by-case 

review of GHG permit applications, 

including the establishment of a robust 

GHG BACT record. Second, the states 

have not been able to develop their GHG 

permitting infrastructure—e.g., hiring 

additional personnel, establishing 

policies and conducting outreach 

programs to sources unfamiliar with the 

permitting process—largely because 

their permitting resources have not 

increased and, in fact, in some cases 

have decreased and may decrease 

further in the near future. Similarly, for 

title V, applications for title V permits 

are not generally due until a year after 

title V becomes applicable to a source. 

Thus, for Step 2 title V sources, permit 

applications are generally not due until 

July 1, 2012, and states have not gained 

title V permitting experience. Third, we 

have not had the opportunity to develop 

significant streamlining approaches, 

largely because, as we stated in the 

Tailoring Rule, certain streamlining 

approaches require a longer process. 

Because of these reasons and following 

the criteria, described in the Tailoring 

Rule, we are establishing Step 3 at the 

current levels. 

The following discusses these criteria, 

beginning with the ability of states to 

ramp up and build infrastructure, and 

notes the states’ and our experience 

with GHG permitting to date under the 

current Step 1 and Step 2 applicability 

thresholds. We also address the 

additional two criteria noted above and 

the environmental benefits potentially 

associated with any further reduction in 

the GHG PSD permitting thresholds. 

B. Have states had adequate time to 

ramp up their resources? 

A criterion that we described in the 

Tailoring Rule for whether to lower the 

thresholds in Step 3 was whether the 

permitting authorities could increase 

their resources. As discussed previously 

in the background section, we stated in 

the Tailoring Rule that we expected 

Steps 1 and 2 to result in an increase in 

PSD permits for new construction and 

modifications and in title V permits. We 

estimated that Steps 1 and 2 would 

result in a 42 percent increase in 

administrative burdens for permitting 

authorities. We expected that some 

increase in state permitting resources 

would be needed to accommodate, at 

least in part, those new demands. 

As noted, to this point states have not 

been confronted with the amount of 

GHG permit applications that we had 

expected in the Tailoring Rule for Steps 

1 and 2. EPA estimates that the 

unexpected small number of permit 

applications to this point reflect the 

economic downturn, which has 

depressed new construction and 

modifications. The number of permit 

applications in a given year is based on 

individual business decisions which we 

believe are directly linked to the 

economic situation. The Agency expects 

that this situation will be short-lived, 

and that the pace of permitting will pick 

up as economic conditions improve and 

as GHG permitting becomes better 

established. Thus, it is prudent for states 

to continue to plan on confronting 

additional administrative demands 

expected as part of Steps 1 and 2. As 

discussed in the following, they have 

confronted other administrative burdens 

as well and if the thresholds are lowered 

in Step 3, they will confront still more 

administrative burdens. Importantly, 

based on our consultations with a 

limited number of states, we do not 

believe that states have had the 

opportunity to obtain the necessary 

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26S. Brown, A. Fishman, ‘‘The Status of State 

Environmental Agency Budgets, 2009–2011,’’ 

Steven Brown, Executive Director, and Adam 

Fishman, Intern. 

27As discussed in the preamble to the final 

Tailoring Rule (75 FR 31581), we participated in 

teleconferences with 1 local and 6 state agency 

permitting authorities on this topic, and they 

generally agreed that this approach would better 

facilitate state incorporation of the limitations in 

the final rule. We therefore concluded that it was 

likely that the state rules were sufficiently openended to apply EPA’s approach by interpretation 

(although some states might elect to pursue 

rulemaking in addition to or instead of 

interpretation). 

28 ‘‘The Status of State Environmental Agency 

Budgets, 2009–2011,’’ p. 3. 

29S. William Becker to Honorable Michael 

Simpson, Chairman Subcommittee on Interior, 

Environment, and Related Agencies, and Honorable 

James Moran Ranking Member, Subcommittee on 

Interior, Environment, and Related Agencies. 

30As noted above, this criterion may be measured 

by the period of time permitting authorities need to 

issue permits, and it also encompasses the sources’ 

ability to meet GHG permitting requirements. 

resources and to develop their 

infrastructure to accommodate the level 

of permitting expected in Steps 1 and 2. 

In addition, an August 2011 report by 

the Environmental Council of the States 

(ECOS) 26 emphasizes the continued 

need for additional resources before full 

implementation of the program can 

begin. It also notes that permitting 

authorities expect workloads to double 

or triple as a result of applications for 

synthetic minor limits to sources who 

wish to avoid GHG permitting. 

Further, as quantified in the Tailoring 

Rule, lowering the thresholds would 

increase those burdens. We have 

estimated that lowering the thresholds 

to 60,000/60,000 would increase 

administrative burdens by 20 percent 

above the total burdens at Step 2 levels 

(and 40 percent above the pre-GHG 

permitting burdens). As noted above, 

lowering them to 50,000/50,000 would 

increase administrative burdens by 40 

percent above the total burdens at Step 

2 levels (and 99 percent above the preGHG permitting burdens). As we 

discussed in the Tailoring Rule, 

lowering applicability thresholds would 

trigger requirements for more sources 

that never before have been regulated 

under the PSD and title V permitting 

programs. As a result, permitting 

agencies will need to conduct an 

education and outreach program to raise 

awareness and understanding of the 

regulatory requirements for these 

smaller sources. Absent this outreach 

effort, we believe that many sources will 

not understand, and perhaps may not 

even be aware of, their new regulatory 

obligations. 

Finally, we note that certain 

procedural aspects of the GHG 

permitting process have proved to be 

more resource- and time-intensive for 

states than anticipated at the time of the 

Tailoring Rule. In the final Tailoring 

Rule, we finalized the applicability 

thresholds within the definition of 

‘‘subject to regulation,’’ instead of 

within the ‘‘major stationary source’’ 

definition. We made this change in 

regulatory approach because we 

received information indicating that 

many states could adopt the applicable 

thresholds through a regulatory 

interpretation of the term ‘‘subject to 

regulation,’’ instead of a SIP revision.27

Since finalizing the Tailoring Rule, we 

discovered that in fact, very few states 

were able to adopt the applicable 

thresholds by interpretation alone, and 

instead needed SIP revisions to be able 

to regulate GHGs under their approved 

PSD programs at the levels of the final 

Tailoring Rule. Moreover, some states 

were obliged to invoke emergency 

procedures to expedite revision of their 

state laws. This unexpected, additional 

state process required for adopting the 

Tailoring Rule thresholds may have 

delayed some states in developing their 

permitting program infrastructure. 

By the same token, for title V 

programs, we believed that many states 

could adopt the Tailoring Rule 

thresholds through a regulatory 

interpretation of the term ‘‘subject to 

regulation,’’ and that this approach 

would allow permitting authorities to 

implement title V for GHGs quickly 

with little rulemaking burden. However, 

as it has happened, most states need to 

change the state laws and/or regulations 

governing their title V programs to be 

able to permit GHGs at the Tailoring 

Rule threshold levels. In fact, it turned 

out that only 5 state programs and 

numerous local districts in California, 

did not need to enact program revisions. 

In the Tailoring Rule, we expected 

that over time, permitting authorities 

would have the opportunity to increase 

their resources to allow them to process 

more GHG permit applications in a 

timely fashion. To this point, we see 

little evidence that permitting 

authorities could increase resources 

and, in fact, permitting authorities 

generally are facing fewer resources. 

Reductions in state environmental 

agency budgets are fully consistent with 

the overall reductions in state budgets 

recently seen in the United States. 

The August 2010 ECOS report, noted 

previously,28 concluded that state 

budgets decreased by an average of 

approximately $21 million per state 

from 2009 to 2011. On June 28, 2011, 

the National Association of Clean Air 

Agencies (NACAA) sent a letter to the 

U.S. House of Representatives detailing 

the status of 40 state and local air 

quality agencies.29 The NACAA letter 

indicates that 80 percent of air agencies 

experienced a decline in staffing levels 

in the last 4 years. Over the years 2008– 

2010, the average loss of staff per agency 

was 16.7 percent. In addition to staffing 

losses, 48 percent of air agencies 

experienced furloughs, and the majority 

faced significant declines in budgets. 

These cutbacks resulted in curtailing 

core air program activities including 

permit issuance, and education and 

outreach programs. In our recent 

consultations with states most 

confirmed that they have seen their 

budgets and staffs reduced in recent 

years as the states have responded to the 

economic downturn and budget 

shortfalls. For the previously described 

reasons, states have not had the 

opportunity to build capacity and 

resources to handle GHG permitting. 

Accordingly, this criterion of state 

resources supports maintaining the 

current thresholds. 

C. What is the ability of permitting 

authorities to issue timely permits? 

The second criterion we address is 

whether permitting authorities have the 

ability to issue timely permits based on 

efficiencies resulting from GHG 

permitting implementation 

experience.30 In describing this criterion 

in the Tailoring Rule, we expected that 

permitting authorities, by acting on the 

anticipated volume of GHG PSD permit 

actions, would have the opportunity to 

establish efficient methods for resolving 

issues and processing permits, 

including developing expertise within 

their staff. This would allow them to 

achieve efficiencies that, in turn, would 

create capacity for processing more GHG 

permit applications. Thus, with this 

criterion, we based our commitment to 

complete the Step 3 rulemaking in part 

on the assumption that Steps 1 and 2 

would provide us with the necessary 

information to determine whether and 

when it has become possible for states 

to administer GHG permitting programs 

for additional sources. This has not yet 

happened. 

While we recognize that we have not 

yet completed a full year of 

implementation for Steps 1 and 2, GHG 

permit applications are fewer than we 

had expected. As of December 1, 2011, 

the EPA and state permitting authorities 

have issued only 18 GHG PSD permits. 

As noted, these 18 permit actions have 

been spread among 11 states and the 

EPA. Almost all of the states have 

issued only one GHG permit, and only 

Michigan has issued as many as three 

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permits. This activity has simply been 

too limited to allow States to build 

internal capacity to handle GHG 

permitting for a diverse set of sources, 

to develop more efficient techniques for 

permitting any particular source 

category, or to develop streamlining 

approaches to address GHG permitting. 

In our consultations with the states, 

some have confirmed that they have not 

been able to build up their GHG 

permitting infrastructure. However, they 

generally have added that they do not 

believe that 2011 has been 

representative of the permitting burdens 

that they expect will ultimately occur 

under the current Tailoring Rule. In 

sum, the states’ experiences to date do 

not provide a basis for us to conclude 

that permitting authorities in fact have 

the ability to issue timely permits based 

on GHG permitting experience thus far. 

D. Has the EPA developed streamlining 

methods? 

In the final Tailoring Rule, we 

indicated that implementation of permit 

streamlining approaches would assist 

permitting authorities by removing 

some sources from the permit program, 

or allowing more efficient processing of 

applications. As we indicated in the 

final Tailoring Rule, however, we 

expected it would take several years for 

the EPA to develop and for States to 

gain authority to implement effective 

streamlining methods. We did not 

anticipate that streamlining approaches 

would be available by the time of the 

Step 3 rulemaking. We also note that in 

the previously described consultations, 

the states reported that they have made 

little progress in implementing 

streamlining measures, and none have 

adopted measures specifically to 

address GHGs. This information is 

consistent with EPA’s estimate, in 

general, that it would take at least 3 

years for EPA to develop, and for states 

to adopt and implement streamlining 

methods, so that sufficient progress on 

streamlining would likely not occur 

before the Step 3 rulemaking deadline. 

We are proposing requirements for 

PALs and synthetic minor limitations 

for sources, and these also constitute 

streamlining methods that can be 

expected to free up administrative 

resources. However, these methods will 

not be available in time to enhance the 

state’s ability to manage the GHG 

permitting programs during Step 3. The 

benefits of a PAL will not be seen until 

the States adopt these requirements into 

their SIPs and sources apply for and 

receive permits that reflect PALs. For 

the previously-described reasons, 

although we are making progress in 

developing streamlining measures, the 

current status of streamlining measures 

supports maintaining the thresholds for 

Step 3. 

In addition, as noted, we are 

continuing to consider other 

streamlining approaches, including 

limits on potential-to-emit, general 

permits, and presumptive BACT. For 

the most part, these other streamlining 

methods even if further developed, 

would have limited benefit for 

improving permitting administration for 

the source categories currently subject 

to GHG PSD permitting or that are under 

consideration for Step 3. We discuss our 

progress in developing these other 

streamlining methods, and their limited 

utility for Step 3, in section VI. This 

rulemaking provides a good opportunity 

to provide the EPA with input on 

additional streamlining ideas for 

implementation of the GHG permitting 

programs. More specifically, in section 

VII.B we request comment on other 

potential streamlining techniques that 

may hold promise to reduce PSD and/ 

or title V permitting burden for sources 

of GHGs and permitting authorities. 

E. Limited Benefit From Lowering 

Thresholds in Step 3 

The fact that PSD would apply to the 

great bulk of GHG emissions at the 

Tailoring Rule thresholds was a factor in 

our decision to establish the thresholds 

at the 100,000/75,000 levels. For the 

current rulemaking, we have conducted 

further analysis, which shows that 

reducing the thresholds in Step 3 to as 

low as 60,000/60,000 would bring 

within the potential ambit of the PSD 

program less than an additional 1 

percent of all GHG emissions from all 

stationary sources above the statutory 

thresholds while potentially adding a 

significant number of sources into the 

permitting programs. This is because of 

the large amount of GHG emissions that 

come from very large sources, coupled 

with the relatively small number of 

additional sources that emit between the 

100,000/75,000 and the 60,000/60,000 

levels. Lowering the thresholds to 

50,000/50,000 would bring within the 

ambit an additional 3 percent, above the 

100,000/75,000 levels, of all GHG 

emissions from all stationary sources 

above the statutory thresholds. Please 

refer to the following Chart. Of course, 

in any year, only a fraction of those 

emissions would actually become 

subject to PSD controls, which would be 

the fraction emitted by sources that 

undertake modifications or new 

construction. Thus, the additional 

reductions in GHG emissions from 

lowering the thresholds in Step 3 would 

be small under any circumstances even 

if the thresholds were lowered to 

50,000/50,000. This small amount of 

environmental benefit is an additional 

factor that, along with the additional 

burden associated with permitting these 

sources supports not lowering the 

thresholds in Step 3. 

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F. Conclusion 

In the Tailoring Rule, we recognized 

that the Step 1 and 2 thresholds we 

promulgated would create significant 

administrative burdens on permitting 

authorities. We stated that we would 

lower the thresholds, and thereby create 

additional administrative burdens, only 

after: (i) We had the opportunity to 

develop efficiencies in GHG permitting 

through streamlining measures; (ii) the 

states had the opportunity to build up 

their GHG permitting infrastructure and 

to develop GHG permitting expertise; 

and (iii) sources have the ability to meet 

the requirements of the PSD program 

and permitting authorities have the 

ability to issue timely permits. These 

things have not happened, as the 

preceding discussion has made clear. As 

a result, consistent with the 

commitment we made in the Tailoring 

Rule, lowering the thresholds is not 

feasible at this time. 

Importantly, because, as noted above, 

permit activity is linked to macroeconomic conditions, we consider the 

relative lull in permit activity due 

largely to the recent economic downturn 

to be temporary, and we expect that the 

pace of permit applications will 

increase. In fact, because of the link to 

macro-economic conditions, it is 

difficult to predict whether the increase 

in permit activity under Step 2 will 

occur incrementally or rapidly. If it 

occurs rapidly, it would be particularly 

burdensome for states. As a result, even 

a modest increase in permitting burden 

that could result from lowering 

thresholds in Step 3 could overwhelm 

state permitting capacity and result in 

substantial delays in processing permit 

applications. 

All told, these considerations support 

maintaining the Tailoring Rule 

thresholds through Step 3. Additional 

time is required to develop streamlining 

measures to expedite permit program 

administration, and permitting 

authorities need additional time to 

secure resources, hire and train staff, 

and gain experience with GHG 

permitting before we move toward full 

implementation of the program. 

Accordingly and consistent with our 

Tailoring Rule commitment, we propose 

to maintain the thresholds of 100,000/ 

75,000 tpy CO2e. 

We note that maintaining PSD and 

title V applicability for GHG sources at 

the current thresholds for Step 3 does 

not have implications for whether we 

will lower the thresholds in Step 4, 

which we describe above, or afterwards. 

Our actions in Step 4 will depend on 

our evaluation of the criteria and other 

factors described above. If those criteria 

and other factors point in the direction 

of lowering the thresholds, we will do 

so, and we will lower them to whatever 

level indicated. A decision not to lower 

the thresholds in Step 3 does not 

foreclose a decision to lower them in 

Step 4. 

VI. Streamlining for PSD and Title V 

Permitting of GHGs 

In the Tailoring Rule, the EPA 

committed to explore streamlining 

measures as an integral part of the 

phase-in approach to permitting 

requirements for GHG emissions under 

PSD and title V. Streamlining 

techniques would allow permitting 

authorities to be more efficient in 

administering their GHG permit 

programs by reducing the overall 

resources required to administer the 

PSD permitting program now and in the 

future. By implementing effective 

streamlining techniques permitting 

authorities could move more rapidly 

toward regulating a larger set of GHG 

sources. In the Tailoring Rule, we 

identified potential streamlining 

options. We also acknowledged that it 

will take us several years to develop, 

and for states to gain authority to 


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31A GHG-only source is a source that emits or has 

the potential to emit 100/250 tpy GHG on a massbasis, and emits or has the potential to emit 100,000 

tons per year of CO2e or more, but does not emit 

or have the potential to emit any other regulated 

NSR pollutant at or above the applicable major 

source threshold. 

32For an explanation of ‘‘subject to regulation,’’ 

see the background section in the Tailoring Rule at 

75 FR 31516. 

implement effective streamlining 

methods. We committed to continue to 

explore the identified options, and to 

request comment on these and any 

additional streamlining approaches in 

the Step 3 rulemaking. 

Today, we propose to adopt two 

regulations: One that streamlines the 

PSD permit program, and one that 

potentially streamlines both the PSD 

and the title V permit program. As 

explained more fully below, the first 

regulation expands the existing PAL 

provisions to allow reviewing 

authorities to establish GHG PALs on 

either a mass-basis (tpy) or a CO2e-basis, 

including for existing sources that are 

not yet GHG major sources, and allows 

PALs to be used as an alternative 

approach for determining both whether 

a project is a major modification and 

whether GHG emissions are subject to 

regulation. As discussed below, the 

second regulation establishes a 

mechanism that allows individual 

sources to obtain synthetic minor 

limitations (potential to emit (PTE) 

limitations) for GHG emissions in areas 

subject to a GHG PSD FIP, which would 

allow certain sources or projects that 

might otherwise be required to obtain a 

GHG PSD permit to obtain a permit with 

an emissions limitation that would 

restrict the source’s GHG emissions 

below the GHG PSD permitting 

threshold. 

We previously had not identified 

PALs as a viable streamlining technique. 

Since we finalized the Tailoring Rule, 

we recognized that the existing PAL 

regulation has limited value for GHG 

sources, and that revising the current 

PAL regulations to address the unique 

applicability aspects associated with 

GHGs could streamline PSD permitting 

for more sources and make PALs for 

GHGs more useful for all source 

categories. Specifically, by amending 

the regulations, we hope to encourage 

greater use of GHG PALs, which in turn 

would encourage sources to reduce 

existing GHG emissions through 

efficiency improvements and other 

measures to maximize the operational 

flexibility provided by the PAL. 

In contrast, our proposed Tailoring 

Rule discussed the synthetic minor— 

PTE mechanism we now propose, but 

expressed concerns that this approach 

might overwhelm permitting authorities 

based on the sheer number of sources 

that could apply for individual 

synthetic minor permits. Since 

finalizing the Tailoring Rule, we have 

continued to evaluate this. We have 

concluded that offering a mechanism to 

establish PTE limits for individual 

sources provides environmental benefit, 

and helps streamline the PSD and title 

V permit programs, at least in the short 

term. 

Accordingly, today we propose to 

amend the federal PSD regulations to 

create authority for (i) reviewing and 

permitting authorities to issue PALs to 

major and potentially-major GHG 

stationary sources on either a mass-basis 

or a CO2e basis and also to allow such 

PALs to be used as an alternative 

approach for determining whether a 

project is a major modification and 

subject to regulation for GHGs by 

amending regulations in 40 CFR 51.166 

and 52.21, and (ii) federal reviewing 

authorities to issue GHG synthetic 

minor permits by amending regulations 

in 40 CFR 52.21. We also discuss our 

progress in evaluating the suitability of 

other streamlining options that we 

identified in the final Tailoring Rule 

including: 

(1) Defining PTE for various source 

categories, 

(2) Establishing emission limits for 

various source categories that constitute 

presumptive BACT, 

(3) Establishing procedures for use of 

general permits. 

Although we propose two 

streamlining regulations on a more 

rapid schedule than we originally 

envisioned, we do not project that these 

approaches will provide a sufficient 

reduction in the immediate permit 

workload to justify a decrease from the 

Step 1 and Step 2 applicability levels. 

The PAL rule, in fact, may increase the 

immediate short term workload by 

requiring development of PAL 

provisions and potential SIP revisions, 

as well as gaining experience in issuing 

PALs, but will reduce the long term 

workload on reviewing authorities and 

sources. The GHG synthetic minor 

permit program will reduce the short 

term workload by providing a less 

burdensome permitting process, and it 

may allow some sources to avoid PSD 

and title V permitting at the current 

Step 1 and Step 2 applicability levels. 

We believe that these streamlining 

regulations will offer advantages to 

industry, permitting authorities and the 

environment. They will provide 

operational flexibility to sources and 

will also provide incentives for sources 

to install good emission control systems 

to maximize operational flexibility. 

These streamlining regulations also help 

build GHG permitting capacity, because 

both regulations still require the 

reviewing authority to gain an 

understanding of GHG emissions for the 

individual source in context of 

establishing appropriate emission 

limitations and monitoring, 

recordkeeping and reporting 

requirements. Accordingly, we believe 

implementation of both regulations 

should decrease overall administrative 

burdens and thus could enable us to 

reduce the GHG applicability thresholds 

at some time in the future. 

The following discussion outlines our 

two streamlining proposals, and then 

discusses the viability of other 

streamlining options. 

A. Plantwide Applicability Limitations 

for GHGs 

1. What is the EPA proposing? 

Our proposal intends to provide 

permitting authorities with the authority 

to issue GHG PALs to sources at which 

GHG emissions could become subject to 

regulation, and which then must 

undertake a major modification NSR 

applicability determination. We provide 

a summary of several approaches for 

amending the regulatory language to 

implement a GHG PALs program, and 

request comment on possible changes to 

the regulations, any of which we may 

finalize. 

We propose three changes to the 

existing PSD regulations in 40 CFR 

51.166 and 52.21. These changes allow 

reviewing authorities to issue PALs to 

both existing major and potentially 

major GHG stationary sources on either 

a mass-basis or a CO2e basis and to 

allow GHG PALs to be used as an 

alternative approach for determining 

whether a project is a major 

modification and subject to regulation 

for GHGs. The proposed changes would 

continue to protect the environment 

from adverse impacts from projects that 

would increase emissions. The changes 

would also streamline GHG 

preconstruction permitting as part of 

our overall efforts to tailor the PSD 

applicability provisions to include 

regulation of GHG emissions. 

Specifically, we propose to amend the 

regulations to allow reviewing 

authorities to (1) issue PALs to GHGonly sources 31; (2) issue either a massbased (tpy) or a CO2e-based PAL to a 

particular source; and (3) allow 

compliance with a GHG PAL to be used 

as an alternative applicability approach 

for determining whether a project is a 

major modification and subject to 

regulation 32 for GHGs. We believe these 

changes are appropriate to enable the 

use of PALs for GHG, given the unique 

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14240 Federal Register / Vol. 77, No. 46 / Thursday, March 8, 2012 / Proposed Rules 

33 40 CFR 52.21(aa)(2)(v). 

34 40 CFR 52.21(aa)(1). 

35 40 CFR 52.21(b)(1)(i)(a)–(b). 

36For the purpose of this rule, we term such 

sources ‘‘GHG-only sources.’’ 

37There can be alternative state PAL provisions 

or they may simply adopt EPA’s regulations. 

38 40 CFR 52.21(b)(49)(v)(b). 

39Because an anyway source emits or has the 

potential to emit another regulated NSR pollutant 

in amounts at or above the major source thresholds, 

it is a major stationary source, and it may apply for 

a PAL for its GHG emissions on a mass basis at any 

time under the current regulations as long as it 

otherwise qualifies (e.g., has sufficient emissions 

data to establish a PAL). 

characteristics of GHGs and the subject 

to regulation applicability approach 

adopted for GHGs in the Tailoring Rule. 

We request comment on each aspect of 

this proposal. 

2. What is a PAL? 

Under the EPA’s regulations, a PAL is 

an emissions limitation expressed in 

tons per year for a pollutant that is 

enforceable as a practical matter and is 

established source-wide in accordance 

with specific criteria.33 PALs are 

voluntary in the sense that sources may, 

but are not required, to apply for a PAL, 

and whether to issue a PAL to particular 

source is at the discretion of the 

reviewing authority. PALs offer an 

alternative method for determining 

major NSR applicability. If the overall 

emissions at a source remain below the 

PAL level, the source can make changes 

at the source that do not trigger major 

NSR. This allows sources to respond 

rapidly to market conditions, while 

assuring there is no adverse impact to 

the environment from the change. A 

PAL also results in significant 

environmental benefit, by providing the 

community with an understanding of 

the long-term emissions impact from a 

facility, preventing emissions creep (i.e., 

a series of unrelated individual 

emissions increases that are below 

major NSR applicability thresholds), 

and requiring enhanced monitoring, 

recordkeeping and reporting to 

demonstrate compliance with the PAL. 

3. Why are we proposing to amend the 

regulations? 

The EPA reads its current PAL and 

PSD regulations as restricting permitting 

authorities from issuing certain kinds of 

GHG PALs. We interpret our current 

regulations to restrict sources that can 

obtain GHG PALs to existing major 

stationary sources, 34 and to not allow 

sources to rely on the PALs emissions 

limitation in determining whether GHG 

emissions are ‘‘subject to regulation.’’ 

The PSD provisions generally define a 

‘‘major stationary source’’ as a stationary 

source which emits or has the potential 

to emit 100 or 250 tpy or more of a 

regulated NSR pollutant, depending on 

the type of source.35 A GHG-only source 

is a source that emits or has the 

potential to emit 100/250 tpy GHG on a 

mass-basis, and emits or has the 

potential to emit 100,000 tons per year 

of CO2e or more, but does not emit or 

have the potential to emit any other 

regulated NSR pollutant at or above the 

applicable major source threshold.36

Regardless of the amount of GHGs 

currently emitted, a GHG-only source is 

a minor source for purposes of PSD, and 

only becomes major for PSD when it 

proposes to undertake a change that 

increases GHG emissions by at least 

75,000 tpy CO2e. Currently, reviewing 

authorities using the federal PAL 

provisions 37 can only issue a PAL to a 

GHG-only source when the source 

proposes to undertake such a change, 

thus becoming a major stationary 

source.38 As a result, GHG-only sources 

may not currently use the alternate 

major NSR applicability provisions 

provided by a PAL in the same way that 

existing major stationary source of other 

regulated NSR pollutants may. Instead, 

GHG-only sources must wait to obtain a 

PAL until they actually propose to make 

a change that qualifies the source as a 

major stationary source under the PSD 

program.39

Moreover, under current regulations 

any EPA-issued PAL can only be massbased. This requirement is due to the 

fact that PALs are an alternative for 

NSR, which is triggered by mass-based 

changes in emissions. Consequently, 

GHG sources use tpy CO2e to determine 

whether a change causes GHG emissions 

to be subject to regulation, but tpy of 

mass emissions of the pollutant to 

determine whether a change results in a 

major modification. Thus, under the 

current regulations, sources using the 

PAL provisions must still monitor both 

metrics to ultimately determine whether 

a change triggers major NSR review. 

We believe changing the regulations 

to remove these mass-based restrictions 

will provide sources with additional 

operational flexibility, and reduce GHG 

workload burdens on reviewing 

authorities by decreasing the number of 

PSD permit applications reviewing 

authorities must process for these 

sources over the long term. Providing an 

option that allows a source to use a GHG 

PAL will help streamline the major NSR 

permitting program and provide more 

operational flexibility to sources. Being 

able to establish a PAL would provide 

planning certainty to sources, and 

would relieve the current time pressure 

to issue a PAL permit concurrent with 

authorization for a planned major 

modification which could potentially 

delay that project. We also believe that 

compliance with a GHG PAL generally 

assures that the environment remains 

protected from adverse air impacts 

resulting from changes a source 

undertakes in compliance with such a 

PAL, regardless of which metric is 

specified to measure GHG emissions in 

that PAL, because emissions cannot 

exceed this pre-established level 

without further review. PALs also 

provide an incentive for a source to 

minimize GHG emissions increases from 

future projects. 

A significant rate is a threshold for 

applying NSR to modifications. Only 

emissions rate increases above the 

significant rate trigger major NSR 

requirements. Currently, a reviewing 

authority may establish the PAL level 

for a pollutant by adding its significant 

rate to baseline actual emissions. Unless 

a significant emissions rate has been 

established, the significant rate is 

effectively zero, i.e., any increase in 

emissions would trigger NSR. 

The EPA did not promulgate a massbased significant emissions rate for GHG 

emissions in the final Tailoring Rule. 

Thus, if a reviewing authority 

establishes a mass-based GHG PAL, 

under our current interpretation of the 

regulations, the PAL may not include 

any margin above the baseline actual 

emissions for emissions growth. Absent 

this margin, a GHG PAL provides less 

flexibility to a source when compared to 

PALs for other regulated NSR 

pollutants. 

The proposed rules provides GHG 

PAL sources with the same kind of 

flexibility sources currently have for 

other regulated NSR pollutants by 

allowing sources to establish a CO2ebased PAL using the 75,000 tpy CO2e 

applicability threshold for GHGs. A 

reviewing authority could add the 

75,000 tpy CO2e to a source’s CO2e 

baseline actual emissions to establish 

the PAL level, because the Tailoring 

Rule established 75,000 tpy CO2e as the 

appropriate rate of emissions increase 

for the GHG applicability threshold for 

existing sources. Changing the 

regulations will also have the effect of 

streamlining future major NSR 

applicability determinations for sources 

that choose a CO2e PAL, by eliminating 

the need to evaluate GHG emissions on 

a mass basis for major NSR applicability 

as long as the source is complying with 

the CO2e PAL, because a CO2e PAL can 

function to assure both that GHG 

emissions are not subject to regulation, 

and that a change does not trigger a 

major modification. 

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Federal Register / Vol. 77, No. 46 / Thursday, March 8, 2012 / Proposed Rules 14241 

40A GHG-only source is a source that emits or has 

the potential to emit 100/250 tpy GHG on a massbasis, and emits or has the potential to emit 100,000 

tons per year of CO2e or more, but does not emit 

or have the potential to emit any other regulated 

NSR pollutant at or above the applicable major 

source threshold. 

In sum, we believe that the current 

PAL regulations are inconsistent with 

the outcome achieved when the PAL 

rules are applied to regulated NSR 

pollutants other than GHGs, and 

therefore are overly restrictive with 

respect to GHG-only sources. 

Accordingly, we are proposing to amend 

the major NSR regulations and PAL 

rules to allow reviewing authorities to 

(1) issue PALs to GHG-only sources; 40

(2) issue either a mass-based (tpy) or a 

CO2e-based PAL to a particular source; 

(3) allow CO2e-based PALs to include 

the 75,000 tpy CO2e rate of emissions 

increase applicability threshold; and (4) 

allow compliance with a GHG PAL to be 

used as an alternative applicability 

approach for determining both whether 

a project is a major modification and 

whether GHG emissions are subject to 

regulation. Provided a source complies 

with a GHG PAL, GHG emissions at the 

source will not be ‘‘subject to 

regulation,’’ and a project at the source 

will not result in a major modification. 

We request comment on each one of 

these proposals. 

In the Tailoring Rule the EPA 

amended the definition of ‘‘subject to 

regulation’’ to establish a threshold level 

of GHG emissions that a source must 

meet, on both a source and project basis, 

before GHGs to be considered an NSR 

regulated pollutant for PSD permitting 

purposes. However, the EPA also made 

clear that its action had the same 

substantive effect, and should be treated 

as if the EPA had revised other 

components of the definition of ‘‘major 

stationary source’’ to achieve the same 

effect. Thus, in addressing PALs for 

GHGs in this rule the EPA is continuing 

to focus on the thresholds incorporated 

into the ‘‘subject to regulation’’ 

provision, consistent with the approach 

in the Tailoring Rule. 

4. Options for Allowing GHG-Only 

Sources To Obtain a GHG PAL 

We request comment on two 

approaches for regulating GHG-only 

sources under a PAL. We call the first 

approach the Major Source Opt-in 

Approach. This approach is consistent 

with the current restriction that only 

allows reviewing authorities to issue 

PALs to existing major stationary 

sources, but the approach would 

provide GHG-only sources the ability to 

become existing major stationary 

sources, and thus receive PALs for 

GHGs and any other pollutant emitted 

by the source. A GHG-only source could 

become a major stationary source by 

agreeing to be considered an existing 

major stationary source, without having 

a specific qualifying project that 

increases CO2e emissions at the source 

by at least 75,000 tpy CO2e. 

We call the second approach the 

Minor Source Approach. In contrast to 

the Major Source Opt-in approach, 

under the Minor Source Approach a 

GHG-only source would remain a minor 

source. A reviewing authority could 

issue GHG PALs to the GHG-only 

sources without requiring the source to 

become an existing major stationary 

source, and thus could not include PAL 

limits for non-GHG pollutants. 

Under the Major Source Opt-in 

Approach, we would amend the 

regulations to allow any existing 

stationary source that emits or has the 

potential to emit GHGs in amounts 

above the first part of the ‘‘subject to 

regulation’’ applicability threshold 

(currently 100,000 tpy CO2e) and above 

the 100/250 tpy major stationary source 

threshold, to submit an application for 

a PAL, in which the source agrees to be 

considered an existing major stationary 

source for GHG emissions. As long as 

the source complies with the GHG PAL, 

it would not trigger the PSD permitting 

requirements for GHGs for any project, 

but the regulations would continue to 

require the source to evaluate whether 

the change triggers PSD applicability for 

other regulated NSR pollutants in the 

attainment or unclassifiable area. This is 

because PSD applies whenever a major 

stationary source undertakes a project 

that results in a significant net 

emissions increase of any regulated NSR 

pollutant. 

The EPA believes that allowing GHGonly sources to opt into major stationary 

source status is consistent with the Act. 

But for the Tailoring Rule, GHG-only 

sources qualify as ‘‘major emitting 

facilities,’’ because such sources emit or 

have the potential to emit 100 or 250 tpy 

GHG. Thus, these sources fall within the 

statutory scope of sources that, absent 

the Tailoring Rule, we would have 

authority to regulate for purposes of 

PSD. Although we took a limited 

interpretation of how to exercise this 

authority through the Tailoring Rule, we 

believe that the Major Source Opt-in 

Approach is consistent with the 

Tailoring Rule’s schedule for further 

phasing-in additional GHG sources into 

the PSD permitting program. 

In the final Tailoring Rule, we 

indicated that we would base our 

decision to include additional sources 

in the GHG permitting programs on an 

assessment of three criteria. These 

criteria are: (i) Whether the EPA could 

develop streamlining measures, (ii) the 

time that permitting authorities need to 

ramp up their resources, and (iii) 

sources’ abilities to meet the 

requirements of the PSD program and 

permitting authorities’ ability to issue 

timely permits. Each of these criteria 

supports expanding the PSD permit 

program to include a source that opts 

into the GHG PAL regulatory structure. 

First, while the Major Source Opt-in 

Approach has the potential to increase 

the total number of GHG major 

stationary sources, it does so in a 

manner that decreases the long-term 

permitting burden for both the source 

and the reviewing authority. This is 

because the source would likely require 

fewer permit actions over the life of a 

PAL. Thus, the Major Source Opt-in 

approach streamlines the PSD 

permitting program, which will assist 

permitting authorities when the EPA 

regulates additional GHG sources under 

the PSD program. Second, permitting 

authorities can gain valuable experience 

in issuing PAL permits that can build 

staff expertise. This, in turn, helps 

permitting authorities’ efforts to ramp 

up their PSD permitting programs in a 

more timely and efficient manner. 

Third, sources demonstrate an ability to 

comply with major stationary source 

permitting requirements by voluntarily 

seeking a PAL under the Major Source 

Opt-in provisions. If a source could not 

comply, then it would not seek a GHG 

PAL. Moreover, reviewing authorities 

likely would only agree to issue a PAL 

if they believe they have the necessary 

resources to issue the PAL(s), and doing 

so would not detrimentally affect their 

obligations to otherwise issue timely 

permits. In sum, if a source opts-into the 

program, and a reviewing authority 

agrees to permit the source, then we 

believe these sources are properly 

brought within the PSD permitting 

program. 

Under the Major Source Opt-in 

Approach, a source could also choose to 

establish PALs for its non-GHG 

regulated NSR pollutants to better 

manage applicability for all pollutants at 

the source, including those regulated 

NSR pollutants for which the source is 

not major. Under this approach, the 

source will continue to be considered a 

major source under PSD and title V at 

the expiration of the PAL (generally 10 

years after issuance). If the source is 

subject to the federal PSD program for 

GHG emissions, and to a state SIPapproved PSD program for its non-GHG 

regulated NSR pollutants, then whether 

a source can apply for, and receive, a 

PAL for its non-GHG regulated NSR 

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41The provisions in 40 CFR 51.166(b)(3)(iii) 

illustrate an exception to this general rule but we 

did not contemplate that exception in creating the 

PAL rules in 2002. 

pollutants will be governed by the 

applicable SIP-approved regulations and 

the state reviewing authority. Neither 

the EPA, nor its delegated authority, 

would issue PALs for non-GHG 

regulated NSR pollutants under 40 CFR 

52.21, unless a FIP would govern PSD 

applicability for that non-GHG 

pollutant. As with the current PAL 

regulations, the ultimate decision to 

issue a PAL remains with the reviewing 

authority, and individual permitting 

authorities will have to determine 

whether they will issue PALs for nonGHG pollutants also emitted from a 

source that receives a GHG PAL through 

the Major Source Opt-in Approach. 

We are concerned, however, about the 

potential impact on reviewing 

authorities of allowing GHG-only 

sources to obtain PALs for all their 

regulated NSR pollutants, as this could 

cause a short-term increase in regulatory 

burden on permitting authorities at a 

time when they are ramping up their 

programs to address other GHG major 

stationary sources. We request comment 

on this aspect of the Major Source Optin Approach and welcome suggestions 

for refining the approach to address 

concerns with short-term workload 

burdens for permitting authorities. 

Under the Minor Source Approach, 

we would amend the regulations to 

allow a GHG-only source to submit an 

application for a GHG PAL, and would 

also allow the source to maintain its 

minor source status. A GHG-only source 

that complies with its GHG PAL will not 

trigger PSD permitting requirements for 

GHGs, but could trigger PSD for other 

regulated NSR pollutant if it undertakes 

a change that increases emissions by a 

‘‘major’’ amount for any non-GHG 

regulated pollutant. See 40 CFR 

51.166(b)(1)(i)(c). That is, this approach 

would authorize permitting authorities 

to use the PAL program for minor 

sources only to regulate GHG emissions. 

Moreover, under the Tailoring Rule 

existing minor sources that emit only 

GHGs, but no other regulated pollutants 

in major amounts, must determine 

whether any project will result in GHG 

emissions that are subject to regulation 

(on a CO2e basis), and correspondingly 

will also result in a major modification 

(on a mass basis). Because GHG-only 

sources must undertake these 

determinations for any change, even 

those that would not make the source 

major for GHGs, we believe that 

extension of the PAL program to these 

sources through the Minor Source 

Approach is consistent with the 

purposes and design of the PAL 

program—to allow use of a PAL as an 

alternate major modification 

applicability approach. 

Issuing PALs to GHG-only sources 

that remain minor sources does not 

conflict with the basis for the current 

PAL rules. When we promulgated the 

PAL rules in 2002 (67 FR 80186), we 

limited the application of the PAL 

provisions to existing major stationary 

sources only. We included this 

provision based on our decision to limit 

PALs to sources that had historical 

emissions through which the reviewing 

authority could establish a baseline 

actual emissions level. New major 

stationary sources do not have historical 

actual emissions from which a 

reviewing authority can establish an 

actuals PAL, and so we declined to 

include these sources in the actuals PAL 

program. 

When we originally promulgated the 

PAL rules, we also chose not to extend 

the PAL program to minor (source) NSR 

permit programs, because PALs are an 

alternate major NSR applicability 

provision to determine whether a 

project results in a major modification, 

and we did not believe the program 

would be useful to minor sources. At 

that time, the rules generally required 

only existing major stationary sources to 

undertake a major modification 

applicability analysis to determine 

whether a change triggers PSD review.41

Given the unique ‘‘subject to regulation’’ 

PSD applicability requirement for 

GHGs, wherein an existing source that 

emits major amounts of GHGs is a major 

stationary source only at the time it 

proposes to undertake a project that will 

result in an emissions increase of 75,000 

tpy CO2e or more, we do not believe that 

extending the PAL provisions to GHGonly sources runs afoul of the reasoning 

we provided when initially limiting the 

PAL program to existing major 

stationary sources. 

As explained previously, we propose 

to limit the Minor Source approach to 

allow reviewing authorities to establish 

PALs only for GHG emissions, and not 

for other regulated NSR pollutants for 

which the source remains a minor 

source. Because the GHG-only source 

remains a minor source (absent any 

other PSD-triggering change) and, 

generally, will not trigger a major 

modification applicability analysis for 

increases in other regulated NSR 

pollutants, we believe it unnecessary to 

extend the PAL authority under this 

approach to other pollutants. Moreover 

we recognize that extending the PAL 

program in that way could place a 

burden on permitting authorities and 

redirect resources needed to issue 

permits to other GHG major stationary 

sources. 

The Minor Source Approach is 

consistent with the CAA in that it 

regulates sources that but for the 

Tailoring Rule would be major 

stationary sources based on the mass of 

their GHG emissions. This approach is 

also consistent with our Tailoring Rule 

principles. But unlike the Major Source 

Opt-in Approach, which defines the 

scope of pollutants included in the PAL 

based on an individual permitting 

authority’s discretion and ability to 

regulate a given source, under the Minor 

Source Approach, the EPA has 

determined that the scope of the 

program is limited only to a source’s 

GHG emissions and could not include 

PAL limits for non-GHG pollutants 

emitted in amounts below the major 

source levels. Again, as with the Major 

Source Opt-in Approach, the Minor 

Source Approach fulfills our 

streamlining goals by bringing more 

sources into the major NSR permitting 

provisions, in a manner that best 

manages reviewing authorities’ longterm permit burden. 

We request comment on both the 

Major Source Opt-in Approach and the 

Minor Source Approach. We also 

request comment on whether we should 

finalize both approaches. That is, 

sources would have the ability, 

consistent with the ultimate decision of 

its reviewing authority, either to opt 

into major stationary source status and 

establish PALs for all pollutants, or to 

maintain minor source status and obtain 

a PAL for GHG emissions only. 

5. Extending PALs to GHGs on a CO2e 

Basis and Using PALs To Determine 

Whether GHG Emissions Are ‘‘Subject 

to Regulation’’ 

Currently, the EPA reads the PAL 

regulations to allow reviewing 

authorities to establish a GHG PAL only 

on a mass basis. Today we propose to 

allow reviewing authorities to establish 

GHG PALs on either a mass basis or a 

CO2e basis. More specifically, we 

propose to allow reviewing authorities 

to establish a CO2e-based GHG PAL by 

adding up to an amount equal to the 

emissions increase contained in the 

‘‘subject to regulation’’ applicability 

threshold (e.g., 75,000 CO2e) to the 

source’s baseline actual emissions. We 

also propose to allow GHG PALs, either 

on a mass basis or a CO2e basis, to serve 

as an alternate applicability approach 

for determining whether GHG emissions 

are subject to regulation. That is, rather 

than applying the emissions increase 

tests (significant emissions increase and 

significant net emissions increase) 

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Federal Register / Vol. 77, No. 46 / Thursday, March 8, 2012 / Proposed Rules 14243 

currently contained in the ‘‘subject to 

regulation’’ definition, a source could 

demonstrate that GHG emissions are not 

‘‘subject to regulation’’ by complying 

with a GHG PAL. Compliance with a 

GHG PAL would be used as an 

alternative applicability approach for 

determining that the source neither 

causes GHG emissions to be subject to 

regulation, nor causes the GHG source 

to have a major modification. 

We further believe that it is necessary 

to allow the alternative applicability 

provision to be included in ‘‘subject to 

regulation’’ determinations for GHG 

PALs, because failing to do so would 

negate the flexibility gained by creating 

a GHG PAL. This is because without the 

changes EPA is proposing, sources 

would still be required to monitor 

individual emissions changes using the 

procedures in 40 CFR 52.21(a)(2)(iv) to 

determine whether a source triggers the 

subject to regulation definition. The 

determination of whether GHGs are 

‘‘subject to regulation’’ uses procedures 

that rely on an emissions-unit-byemissions-unit analysis, and a shorter 

contemporaneous period to measure 

emissions changes, neither of which are 

required under a PAL. We believe that 

the enhanced recordkeeping, reporting 

and monitoring burdens of a PAL, and 

the environmental benefits resulting 

from a PAL, warrant extension of the 

alternate applicability provisions to 

subject to regulation determinations to 

assure that the PAL provides the 

intended flexibility to sources. 

When we proposed the Tailoring 

Rule, we proposed to include 

applicability thresholds within the 

definitions of major stationary source 

and major modification, based on tpy 

emissions of CO2e. We also proposed to 

establish a CO2e-based significant 

emissions rate. In the final rule, we 

changed our regulatory approach and 

instead included these applicability 

thresholds within the ‘‘subject to 

regulation’’ definition, and we did not 

revise the definition of significant to 

include a CO2e-based emissions rate. 

We did so, in part, because we intended 

this change in regulatory structure to 

facilitate more rapid adoption of the 

rules by reviewing authorities. 

Nonetheless, we intended the definition 

of ‘‘subject to regulation’’ to function in 

tandem with the definitions of ‘‘major 

stationary source’’ and ‘‘major 

modification’’ to determine whether a 

given project triggers PSD 

preconstruction permit requirements. 

That is, if a source emits GHG emissions 

at a level that causes the emissions to 

become ‘‘subject to regulation,’’ that 

same level of emissions increase will 

likely cause the source to be a major 

stationary source and trigger PSD 

requirements as a major modification. 

Accordingly, since the 75,000 CO2e 

applicability threshold contained in the 

second part of the ‘‘subject to 

regulation’’ definition works in tandem 

with the ‘‘major modification’’ provision 

to determine whether major NSR 

applies we are proposing that a CO2ebased GHG PAL can be established by 

adding up to an amount equal to 75,000 

CO2e to the source’s baseline actual 

emissions as this is the appropriate 

applicability threshold for CO2e tpy 

GHG. 

In our proposed Tailoring Rule, we 

noted that, in rare instances, there may 

be an exception to this general 

principle, if a source emits very small 

amounts of a particular non-CO2 GHG 

that carries a very large GWP. 74 FR 

55330. We noted our concern that the 

proposed rule could cause sources, 

whose mass emissions do not meet the 

major stationary source tpy threshold, to 

nonetheless be regulated under the 

permit programs. When we finalized the 

Tailoring Rule using the subject to 

regulation approach, we resolved this 

concern by retaining both a mass-based 

threshold and a CO2e-based threshold. 

Our intent in retaining both thresholds 

was to assure that no source was subject 

to PSD that would not otherwise meet 

the statutory criteria for treatment as a 

major stationary source. 

This same regulatory structure creates 

the opposite effect for sources operating 

under a GHG PAL. Instead of providing 

GHG PAL sources with the ability to use 

either threshold to show that they are 

not a major stationary sources and that 

major NSR does not apply, sources must 

monitor both thresholds to prove this 

outcome under the current rules. This is 

because a mass-based GHG PAL cannot 

assure that there is no increase in CO2e 

tpy GHG. Expanding the GHG PAL 

program to allow GHG PALs to be used 

as an alternative applicability provision 

for both the major modification and 

‘‘subject to regulation’’ determinations 

resolves this dual threshold issue. We 

also believe that we may properly allow 

GHG PALs to be expressed on either a 

mass or CO2e-basis, because, in essence, 

we intended the subject to regulation 

determination to be functionally 

equivalent to making a major 

modification applicability 

determination for GHG sources. We 

resolve our previous concern that 

relying on a single metric might lead to 

over-inclusion of sources that do not 

meet the statutory threshold for the PSD 

program by limiting the GHG PALs 

program to GHG-only sources, which 

are defined as those sources that, by 

definition, meet the 100/250 tpy major 

stationary source threshold. We request 

comment on all aspects of this proposal. 

6. Can a GHG source that already has a 

mass-based GHG PAL obtain a CO2ebased PAL once we issue final changes 

to the PAL rules? 

We are proposing to add transition 

provisions to the PAL regulations that 

would allow a GHG source that has a 

mass-based GHG PAL to convert to a 

CO2e-based GHG PAL once, at the 

source’s option, and if agreed to by the 

reviewing authority. We intended these 

provisions to provide integrity to the 

PAL provisions, and assure that sources 

avoid casually opting out of the PAL 

program, rather than go through the 

rigorous procedures for increasing the 

level of the PAL. 

The current PAL regulations do not 

contain specific provisions for 

dissolving an established PAL during 

the PAL term, but contain provisions for 

when a PAL expires. It is inappropriate 

to apply these rigorous procedures to 

sources that would have elected to seek 

a CO2e-based PAL in lieu of a massbased PAL, had such an option been 

available. We propose to include 

regulatory language that the expiration 

of PAL provisions do not apply when a 

source elects to convert from a massbased GHG PAL to a CO2e-based PAL. 

Instead, a source could transition to a 

CO2e-based PAL and the permitting 

authority could dissolve the mass-based 

PAL without retaining the mass-based 

PAL level as a restriction on allowable 

emissions. 

We also propose to include provisions 

that allow the mass-based GHG PAL to 

be converted to a CO2e-based GHG PAL 

in the middle of the PAL effective 

period. Under the transition provision, 

the reviewing authority would propose 

to dissolve the existing mass-based PAL 

permit at the time it proposes the new 

CO2e-based PAL permit for public 

comment. The reviewing authority 

would establish the new CO2e-based 

GHG PAL following the standard 

procedures (10-year lookback for 

baseline actual emissions, 10-year PAL 

effective period, etc.) in the current PAL 

regulations. Once a final CO2e-based 

PAL permit is issued, the permitting 

authority may also finalize its proposed 

action to dissolve the mass-based PAL 

permit and remove any applicable 

requirements from the title V permit 

following the appropriate title V 

procedures. This would, in essence, 

create a new PAL and establish a new 

10 year term. 

We also propose to allow a reviewing 

authority to use a slightly different 

procedure for this conversion from the 

standard PAL procedures. If the baseline 

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actual emissions period the reviewing 

authority used to establish the massbased GHG PAL is no longer within the 

10 year lookback period currently 

available to the source, then the 

transition provisions would allow that 

source a one-time conversion of a massbased GHG PAL to a CO2e-based GHG 

PAL using the same baseline actual 

emissions period used to establish the 

mass-based GHG PAL. The new PAL 

effective period would be the remainder 

of the mass-based GHG PAL’s effective 

period. For example, if a reviewing 

authority issued a mass-based GHG PAL 

to a source that became effective in 

2011, that PAL’s effective period runs 

for 10 years through 2021. If the same 

source converts that mass-based GHG 

PAL to a CO2e-based PAL in 2014, and 

elects to use the expired, mass-based 

GHG PALs baseline actual emissions 

years, then the CO2e-based GHG PAL 

would be effective for the remaining 7 

years of the mass-based GHG’s PAL 

effective period. 

We request comment on these 

procedures for converting a mass-based 

GHG PAL to a CO2e-based GHG PAL. 

Specifically, we request comment on 

whether there are existing mass-based 

GHG PALs for which transition 

provisions are needed. More 

specifically, should we allow such a 

transition, or should we decline to 

provide transition provisions? If we 

decline to provide a transition should 

we instead require sources either to 

maintain both PALs, or require the 

sources to comply with a source wide 

emissions cap equal to the PAL level 

that functions as a synthetic minor 

limitation? We also request comment on 

whether we should provide a temporary 

transition provision to allow sources to 

convert from the mass-based GHG PAL 

to the CO2e-based GHG PAL only for a 

limited time after the effective date of 

the regulatory changes, or whether the 

procedures should remain available for 

the duration of the PAL provisions. 

Specifically, we request comment on 

whether there are implications for major 

NSR compliance if sources are allowed 

to switch from a mass-based PAL to 

CO2e-based PAL at any time, or whether 

providing the option for the duration of 

the program could encourage certain 

types of environmentally preferable 

projects. 

7. How would we change the regulatory 

provisions to implement PALs for GHGonly major sources? 

To implement our proposed changes, 

we would revise a number of existing 

regulatory provisions, depending on the 

specific approach selected. Under the 

Major Source Opt-in Approach, we 

propose to change the definition of 

major stationary source at 40 CFR 

52.21(b)(1) to add a paragraph that 

defines Major Source Opt-in GHG-only 

sources as major stationary sources. 

Under the Minor Source Approach, we 

propose to revise the applicability 

paragraph for the PAL provisions at 40 

CFR 52.21(aa)(1) to include GHG-only 

sources. 

In addition, under the Major Source 

Opt-in Approach, we propose to revise 

the PAL Permit Application 

Requirements provisions at 40 CFR 

52.21(aa)(3) and (4) and Contents of the 

PAL Permit provisions at 40 CFR 

52.21(aa)(7) to include provisions for 

opting into existing major stationary 

source status. 

Under either approach, we would: (1) 

Revise the PAL rules to add transition 

provisions to 40 CFR 52.21(aa) for 

converting from a mass-based PAL to a 

CO2e-based PAL including revisions to 

the PAL expiration provisions; (2) add 

a paragraph to the ‘‘subject to 

regulation’’ definition at 40 CFR 

52.21(b)(49) and the PAL applicability 

section at 40 CFR 52.21(aa)(1) to 

indicate that a source that complies 

with a GHG PAL is not subject to 

regulation for GHG emissions; (3) revise 

the PAL rules at 40 CFR 52.21(aa)(6) to 

allow CO2e-based PALs to include the 

75,000 tpy CO2e rate of emissions 

increase applicability threshold by 

adding this amount to a source’s 

baseline actual emissions; and (4) revise 

the definition of PAL and PAL pollutant 

at 40 CFR 52.21(aa)(2)(v) and (x) to 

include CO2e as a metric of GHG 

emissions. 

B. Synthetic Minor Source Permitting 

Authority for GHGs 

1. What is the EPA proposing? 

We are proposing to create synthetic 

minor permit authority, within the 

existing federal PSD regulations in 40 

CFR 52.21, for the purpose of issuing 

‘‘subject to regulation’’ synthetic minor 

permit limitations on a CO2e basis for 

GHGs. We are also proposing to amend 

the federal minor NSR program in 

Indian country for the purpose of 

issuing synthetic minor permit 

limitations for GHGs. These regulatory 

changes would allow certain sources or 

projects that might otherwise be 

required to obtain a GHG PSD permit, 

pursuant to 40 CFR 52.21, to obtain a 

‘‘subject to regulation’’ limitation that 

restricts the source’s GHG emissions 

below the ‘‘subject to regulation’’ 

threshold(s). That is, for sources located 

in a jurisdiction in which the federal 

PSD permitting program applies, we 

propose a mechanism that would allow 

the EPA, or its delegated agent, to issue 

a permit containing synthetic minor 

limitations for GHGs to any source that 

emits or has the potential to emit GHGs 

above the applicable subject to 

regulation thresholds and that 

voluntarily requests a restriction on its 

PTE. Although we would establish this 

program using our PSD permitting 

authority, a synthetic minor permit 

limitation issued under this authority 

could also effectively limit the source’s 

GHG PTE for purposes of title V 

applicability. As a general matter, we 

believe that synthetic minor limits for 

GHGs should be available as an option 

for sources that would prefer to take a 

legally and practicably enforceable 

limitation on GHG emissions in order to 

avoid major source permitting 

requirements. We believe that many 

state and local permitting authorities 

will already have mechanisms in place 

to issue such GHG synthetic minor 

limits to sources that request them, 

including title V permitting programs, 

state minor source permitting programs, 

or federally enforceable state operating 

permit programs. Nonetheless, we 

request comment on whether permitting 

authorities implementing SIP-approved 

PSD permitting programs lack 

mechanisms to create synthetic minor 

limitations for GHGs, and if so, how that 

gap in permitting authority or 

mechanism could best be filled. 

It is important to note that we only 

propose to issue synthetic minor 

permits for GHG emissions, not for other 

regulated NSR pollutants, and we will 

only do so for sources located in areas 

where the EPA is the GHG permitting 

authority (including areas subject to a 

GHG FIP). These synthetic minor 

permits would also be available where 

the federal PSD program is implemented 

by a state permitting authority under a 

delegation agreement because delegated 

states issue PSD permits on behalf of the 

EPA in those areas under 40 CFR 52.21. 

We, however, are not proposing to issue 

synthetic minor source limits for nonGHG pollutants under this rule. States 

and some tribes operate minor source 

permitting programs that cover these 

other pollutants, and the EPA also 

operates a minor source permitting 

program in Indian country. If a source 

wishes to obtain a synthetic minor limit 

for any other pollutant, it should seek 

that limit under the applicable minor 

source program. 

The EPA has long recognized 

synthetic minor permits as a way to 

restrict a source’s PTE and thus avoid 

major source NSR and title V permitting 

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42See, e.g., Guidance on Limiting Potential to 

Emit in New Source Permitting (June 13, 1989); 

Guidance and Enforceability Requirements for 

Limiting Potential to Emit through SIP and § 112 

Rules and General Permits (Jan. 25, 1995). The rules 

proposed here for limiting potential to emit should 

be read in light of our extensive prior guidance on 

this issue. 

43As explained in the Tailoring Rule, while the 

statutory provision addresses any air pollutant, we 

have historically applied the PSD and title V 

programs only to pollutants subject to regulation. 

44 40 CFR 52.21(b)(4). Following two court 

decisions, National Mining Association v. EPA, 59 

F.3d 1351 (DC Cir.1995) and Chemical 

Manufacturers Ass’n v. EPA, No. 89–1514 (DC 

Cir.1995), we clarified that the term ‘‘federally 

enforceable’’ should be read to mean ‘‘federally 

enforceable or legally and practicably enforceable 

by a state or local air pollution control agency.’’ 

Release of Interim Policy on Federal Enforceability 

of Limitations on Potential to Emit, at 3 (Jan. 22, 

1996). 

45See Memo from Terrell E. Hunt, Associate 

Enforcement Counsel Air Enforcement Division 

Office of Enforcement and Compliance Monitoring, 

and John S. Seitz, Director Stationary Source 

Compliance Division Office of Air Quality Planning 

and Standards, June 13, 1989. 

requirements.42 While we discussed the 

use of synthetic minor permits for 

establishing PTE restrictions on GHG 

emissions in our proposed Tailoring 

Rule, we expressed concerns that 

establishing GHG synthetic minor 

limitations in individual permits could 

overwhelm reviewing and permitting 

authorities based on the sheer number 

of sources that we anticipated would 

apply for PSD permits. Thus, we 

proposed to focus our attention on 

developing category specific approaches 

for limiting PTE. 

Since finalizing the Tailoring Rule, 

we reconsidered this conclusion, and 

now believe that establishing synthetic 

minor limitations for individual sources 

could increase permitting authorities’ 

capacity to regulate GHG emissions by 

providing experience in addressing 

emissions limitations, and monitoring, 

recordkeeping and reporting 

requirements specific to GHG emissions. 

We also believe that it would lead to an 

overall reduction of permitting burden 

in that synthetic minor permits 

generally require fewer administrative 

resources than full PSD permitting and 

title V permitting, to which these 

sources could otherwise be subject. 

Moreover, streamlining ideas often 

result from repeat experiences. After 

issuing permits that share common 

features, a reviewing or permitting 

authority might formulate new ideas for 

effective streamlining techniques. We 

now believe that issuing synthetic 

minor permits is a key component of 

our overall efforts to gain experience in 

permitting GHG sources to phase 

additional sources into the GHG 

program, because it can help manage 

sources currently subject to the program 

and help identify opportunities for 

further streamlining the GHG permitting 

programs. Moreover, allowing sources to 

obtain a synthetic minor limitation, in 

lieu of triggering major NSR 

requirements, encourages sources to 

effectively minimize project emissions 

through efficiency improvements or 

other measures such that the total GHG 

emissions to the environment from the 

project are lower than might otherwise 

occur. 

We acknowledge that other 

mechanisms may currently exist to 

establish synthetic minor limitations for 

GHGs. We do not intend today’s 

proposal to supplant or supersede other 

available mechanisms for creating 

synthetic minor limitations. Rather, our 

intent is to ensure that we are able to 

issue GHG synthetic minor limits in the 

areas subject to the federal PSD 

permitting program for GHGs to avoid a 

potential gap in synthetic minor 

permitting authority and to ensure that 

we are able to efficiently manage our 

administrative resources for the federal 

PSD program. Notwithstanding today’s 

proposal, we encourage states to use 

appropriate existing mechanisms, or to 

create new authority if needed, to issue 

synthetic minor limitations for GHGs. 

2. What is synthetic minor limitation, 

and what is its function? 

A synthetic minor limitation is a 

legally and practicably enforceable 

restriction that a source voluntarily 

seeks to avoid major stationary source 

requirements, such as the PSD or title V 

permitting programs. Synthetic minor 

limitations allow sources to avoid these 

permit programs in two ways. First, a 

reviewing or permitting authority can 

issue a synthetic minor limitation to 

assure that a stationary source does not 

emit above the major stationary source 

threshold, and therefore, that the 

stationary source remains a minor 

source for either one or both permit 

programs. Second, a reviewing or 

permitting authority can issue a 

synthetic minor limitation to assure that 

emissions increases from a project 

remain below the relevant significant 

rate for a specific regulated NSR 

pollutant. 

As we explained in the Background 

Section, our regulations define a ‘‘major 

stationary source’’ for purposes of PSD 

as a stationary source that emits, or has 

a potential to emit, at least 100 tpy, if 

the source is in one of 28 listed source 

categories, or, if the source is not, then 

at least 250 tpy, of a regulated NSR 

pollutant. CAA section 169. A ‘‘major 

stationary source’’ for title V includes 

sources that emit or have the potential 

to emit above 100 tpy or more of any air 

pollutant subject to regulation. CAA 

sections 501, 302.43 We refer to these 

100 or 250 tpy amounts as the major 

source applicability thresholds. These 

thresholds are computed on a massbasis for each regulated NSR pollutant 

or title V air pollutant. 

Because the definition of major 

stationary source relies, in large part on, 

a source’s ‘‘potential to emit,’’ the 

definition of ‘‘potential to emit’’ is 

extremely important in determining the 

applicability of PSD and title V for a 

particular source. The PSD regulations 

define PTE as: 

The maximum capacity of a stationary 

source to emit a pollutant under its physical 

and operational design. Any physical or 

operational limitation on the capacity of the 

source to emit a pollutant, including air 

pollution control equipment and restrictions 

on hours of operation or on the type or 

amount of fuel combusted, stored or 

processed, shall be treated as part of its 

design if the limitation or the effect it would 

have on emissions is federally enforceable.44

40 CFR 52.21(b)(4), 51.165(a)(1)(iii), 

51.166(b)(4). The title V regulations are 

similar. 40 CFR 70.2. 

If a source has no practicably 

enforceable emissions limitations that 

restrict the amount of a pollutant the 

source may emit, and the source has no 

restrictions on its capacity utilization or 

hours of operation, we require the 

source to use its highest expected 

emissions rate and ‘‘assume operation at 

maximum design or achievable capacity 

(whichever is higher) and continuous 

operation (8760 hours per year)’’ to 

compute its potential to emit.45 Thus, if 

a source will actually emit below its 

maximum capacity to emit, a synthetic 

minor limitation can play an integral 

role in limiting the source’s PTE to a 

level below this maximum level. If the 

source accepts legally and practicably 

enforceable limits and requirements 

sufficient to limit its PTE, that source 

can be treated as a minor source, rather 

than a major source, for purposes of our 

regulations. 

Synthetic minor limitations are also 

important for determining whether a 

project will result in an emissions 

increase that exceeds the significant rate 

for a regulated NSR pollutant, thus 

triggering PSD permitting requirements. 

While the significant rate for GHGs is 

currently zero tpy, thus making this 

type of synthetic minor limit less 

practical for GHG sources, the methods 

used to determine such emission 

increases are applicable to GHGs 

because they are also used to determine 

whether GHGs are ‘‘subject to 

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46Previously in this preamble we refer to the twostep phase-in thresholds 75 FR 31516. 

47We may alter this policy in final response to 

address the Courts’ decisions in National Mining 

Association v. EPA, 59 F.3d 1351 (D.C. Cir.1995) 

and Chemical Manufacturers Ass’n v. EPA, No. 89– 

1514 (D.C. Cir.1995). 

48See 76 FR 38748 (2011) (promulgating Tribal 

minor source rule). 

49The EPA recently increased the number of 

areas in which it is the PSD permitting authority. 

On December 30, 2010, the EPA imposed a partial 

PSD FIP for GHGs in some jurisdictions in the 

Action to Ensure Authority to Issue Permits Under 

the Prevention of Significant Deterioration Program 

to Sources of Greenhouse Gas Emissions: Federal 

Implementation Plan. Once that FIP became 

effective, the EPA became the GHG PSD permitting 

authority for seven states: Arizona: Both Pinal 

County and Rest of State (excluding Maricopa 

County, Pima County, and Indian Country), 

Arkansas, Florida, Idaho, Kansas, Oregon, and 

Wyoming. In addition, the EPA has long been the 

PSD permitting authority in a few other states, in 

Indian country, and in some areas of the Outer 

Continental Shelf. 

regulation.’’ To compute whether a 

project will result in a ‘‘significant 

emissions increase’’ under the federal 

PSD regulations, a source has the option 

of using either ‘‘projected actual 

emissions,’’ or PTE to estimate postchange emissions. A source opting to 

use PTE can reduce the amount of its 

PTE by accepting legally and practicably 

enforceable limitations on its 

operations. To compute whether a 

project will result in a ‘‘significant net 

emissions increase,’’ a source must 

compute emissions increases from 

projects that occur during the 

contemporaneous period. A creditable 

emissions increase is computed by 

comparing ‘‘baseline actual emissions’’ 

to the unit’s post-change PTE. A 

permitting authority can use a synthetic 

minor limitation to limit an emissions 

unit’s post-change PTE to reduce the 

amount of emissions increase that is 

creditable in a net emissions increase 

analysis. In computing a creditable 

emissions decrease, a source may only 

take credit for an emissions decrease 

that is legally and practicably 

enforceable. Thus a reviewing authority 

can use a synthetic minor limitation to 

create a creditable emissions reduction. 

40 CFR 52.21(b)(3)(vi)(b). 

We call any permit used to restrict a 

source’s PTE below either the major 

stationary source threshold or below the 

significant rate a ‘‘synthetic minor 

permit.’’ We call a source that accepts 

limitations on its operations a 

‘‘synthetic minor source.’’ This is in 

contrast to a ‘‘true’’ or ‘‘natural minor’’ 

source, which is a source whose PTE 

remains below the threshold without 

any additional restrictions on the 

source. Again, because the major 

stationary source threshold and 

significant rate are mass-based for all 

non-GHG regulated NSR pollutants and 

title V air pollutants, synthetic minor 

limitations, historically, have reduced a 

source’s mass emissions. 

3. What is a ‘‘subject to regulation’’ 

limitation? 

A ‘‘subject to regulation’’ synthetic 

minor limitation is unique to the GHG 

permitting programs. Instead of 

allowing a source to avoid the PSD or 

title V permit programs by establishing 

PTE limitations that reduce tpy mass 

emissions, a ‘‘subject to regulation’’ 

limitation reduces CO2e-based GHG 

emissions. This unique type of limit is 

specific to GHGs, because of the unique 

way in which the EPA regulated GHG 

emissions through the Tailoring Rule. 

As we explained in the Background 

Section, a source must meet two 

applicability requirements to trigger 

PSD permitting requirements for GHGs: 

(1) It must emit GHGs in amounts— 

calculated on a CO2e basis—that make 

GHGs ‘‘subject to regulation,’’ 46 and (2) 

it must also emit GHGs in amounts— 

calculated on a mass basis—that qualify 

as a major stationary source (e.g., 100 or 

250 tpy) and, if relevant, qualify as a 

major modification (e.g., net emissions 

increase of more than 0 tpy). For title V, 

GHGs are ‘‘subject to regulation’’ at a 

stationary source that emits or has the 

potential to emit 100,000 tpy CO2e. A 

‘‘subject to regulation’’ limitation 

prevents a source from emitting GHGs 

in amounts that exceed the relevant 

‘‘subject to regulation’’ applicability 

threshold that we established in the 

final Tailoring Rule. Accordingly, just 

like other synthetic minor limitations, a 

source that complies with a ‘‘subject to 

regulation’’ limitation can avoid 

triggering PSD or title V GHG permitting 

requirements. 

As noted previously, in the Tailoring 

Rule, although the EPA amended the 

definition of ‘‘subject to regulation’’ to 

establish a level of GHG emissions that 

a source must meet, on both a source 

and project basis, before GHGs will be 

considered an NSR regulated pollutant 

for PSD permitting purposes, the EPA 

also made clear that its action had the 

same substantive effect, and should be 

treated, as having revised other 

components of the definition of ‘‘major 

stationary source’’ to achieve the same 

effect. Even so, because in the Tailoring 

Rule it was the ‘‘subject to regulation’’ 

provision that the EPA chose to 

incorporate the phase-in thresholds, in 

this proposal concerning PALs, the EPA 

is continuing to focus on the ‘‘subject to 

regulation’’ provision as the codification 

of the Tailoring Rule requirements, to be 

consistent with the approach in 

Tailoring Rule. 

Like the major stationary source 

applicability threshold, the ‘‘subject to 

regulation’’ threshold relies on the 

concept of PTE. And like the major 

modification significant rate, the subject 

to regulation threshold also relies on 

PTE to compute changes in GHG 

emissions at the source. Accordingly, 

the EPA proposes to create new 

regulatory language to affirm the EPA’s 

and other reviewing and permitting 

authorities’ ability to establish 

limitations on a source that prevent a 

source from emitting GHG emissions 

above subject to regulation thresholds 

on a source-wide basis or for individual 

modifications. 

Because we are not proposing to 

amend the regulatory definition of PTE, 

consistent with the EPA’s current 

policy, we will recognize legally and 

practicably enforceable restrictions for 

determining whether a source’s PTE is 

below the subject to regulation 

threshold and for determining whether 

an individual modification is below the 

subject to regulation threshold. As with 

limitations on ‘‘potential to emit’’ in 

traditional synthetic minor permits 

under our current policy, these 

restrictions need not be federally 

enforceable as long as they are 

enforceable by the permitting 

authority.47

4. Why does the EPA need authority to 

issue synthetic minor source permits? 

In general, the EPA does not have a 

federal permitting program for minor 

sources. Although the EPA recently 

finalized a minor NSR permitting 

program for Indian country, that 

program did not affect permitting 

outside of Indian country or include 

regulation of GHG emissions.48 The EPA 

is now the GHG permitting authority in 

areas subject to a PSD FIP, including 

Indian country, but does not have a 

generally applicable minor source 

permitting program that the EPA can 

use to restrict GHG PTE for sources that 

might want to request voluntary 

limitations to avoid PSD permitting for 

GHGs.49 In these areas it is not clear 

whether sources will be able to obtain 

synthetic minor limits for GHGs from 

states or local permitting authorities 

through other permitting mechanisms, 

or through any other cognizable 

mechanisms for establishing a synthetic 

minor limit. Without a federal synthetic 

minor permitting program for GHGs, a 

source that would be subject to PSD 

permitting requirements because of a 

project’s potential GHG emissions, but 

that would be willing to reduce 

emissions from the source or project to 

avoid those requirements, might not 

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50See FN 33 above. 

have a viable permit mechanism for 

committing to these emissions 

reductions and making them 

enforceable. Thus, we are proposing to 

fill this gap in federal regulatory 

authority, because we believe doing so 

is important to our GHG phase-in efforts 

and permitting authorities’ ability to 

manage their GHG permit workload 

(including our ability to efficiently issue 

GHG permits), and because we believe 

that synthetic minor limitations for 

GHGs can result in increased 

environmental benefit. 

We believe that synthetic minor limits 

for GHGs provide a valuable mechanism 

to help manage GHG permitting burden 

and potentially reduce GHG emissions, 

and that such limits should generally be 

available as an option for sources that 

would prefer to take a legally and 

practicably enforceable limitation on 

GHG emissions in order to avoid major 

source permitting requirements. Before 

the Tailoring Rule, state and local 

reviewing authorities predominantly 

issued synthetic minor permits to 

sources, even when the EPA was the 

permitting authority for the PSD 

permits. State and local agencies used 

their SIP-approved minor NSR permit 

authority, or in some instances their 

Part 70 permit authority or their 

federally enforceable state operating 

permit program, to issue permits to a 

source that requested synthetic minor 

permit restrictions. Recently, the EPA 

assumed GHG PSD permitting authority 

for a number of jurisdictions.50 In many 

of these jurisdictions, as well as 

jurisdictions in which the EPA has long 

been the PSD permitting authority, state, 

local and tribal agencies may lack 

mechanisms to create restrictions on a 

source’s potential to emit GHG 

emissions. This could occur if their 

minor NSR program regulations do not 

include GHG emissions or perhaps if it 

only includes GHG emissions on a mass 

basis, and if they do not have any other 

legal mechanism under which they 

could issue a synthetic minor limit for 

GHGs. As we noted in the proposed 

Tailoring Rule, states may but are not 

required to regulate GHG emissions 

through their minor NSR programs. 

Accordingly, if a gap in minor NSR 

permitting authority exists it may 

continue to exist. On the other hand, 

these states may have other viable 

mechanisms for issuing synthetic minor 

limits for GHGs, which might alleviate 

the potential synthetic minor permitting 

gap. 

To better understand the extent of 

state, local and tribal authorities’ 

synthetic minor GHG permitting 

authority, we request comment on 

whether there is a minor source 

permitting gap in areas subject to EPA 

permitting authority for PSD permits for 

GHG. For each state in which the EPA 

is the GHG PSD permitting authority, 

we request information on the states’ 

current efforts to interpret or amend 

their minor NSR permit authority to 

include GHG emissions, and on other 

mechanisms that may be available to 

create synthetic minor limitations on a 

source’s GHG emissions. If there is a gap 

in either permitting authority or 

available mechanisms for issuing 

synthetic minor permits for GHGs, we 

request input on how that gap could 

best be filled. We are also requesting 

comment on whether there are sufficient 

permitting mechanisms and permitting 

authority to create GHG synthetic minor 

limitations in areas subject to a SIPapproved PSD permit program for 

GHGs. If a gap exists outside of federal 

GHG PSD permitting areas, we request 

suggestions for ways to address that gap. 

5. What are the benefits to a federal 

GHG synthetic minor permit program? 

A federal GHG synthetic minor permit 

program will increase EPA’s GHG 

permitting capacity and provide 

valuable knowledge and experience that 

the EPA can use to develop effective 

streamlining methods that assist in the 

EPA’s phase-in of the GHG PSD and title 

V permit programs to statutory levels. It 

will also assist the EPA in managing the 

GHG permit workload for sources 

already potentially subject to permitting 

at existing applicability thresholds, and 

may result in enhanced environmental 

protection compared to permitting a 

source as a major source through PSD 

and/or title V. 

We believe that creating federal 

authority to issue synthetic minor 

permits to restrict a source’s GHG PTE 

will decrease the long term permit 

burden on the EPA (and eventually 

reviewing and permitting authorities if 

they assume the role for PSD and/or title 

V permit issuance) by allowing sources 

to avoid PSD permitting when their 

actual emissions will not exceed the 

major source applicability threshold and 

the subject to regulation thresholds. In 

addition, such federal authority could 

reduce state and federal title V 

permitting burdens, because a PTE limit 

may be structured in such a way that it 

also allows a source to avoid the need 

to undergo title V permitting. We 

believe that the cost and level of burden 

for sources applying for a synthetic 

minor permit, and for permitting 

authorities to issue the permit, are 

generally far lower than issuing either a 

PSD permit or a title V permit. We 

request information about permitting 

authorities’ and sources’ experiences in 

this regard. 

Moreover, the ability to apply for 

synthetic minor permits can result in 

greater environmental benefits than 

those obtained through a PSD permit, 

because it creates an incentive for 

sources to reduce emissions to levels 

below the applicability thresholds. For 

example, to accommodate a need for an 

increase in capacity, suppose a source 

has the option of either modifying an 

old, inefficient existing emissions unit 

to increase its capacity, or adding a new, 

high efficiency, lower emitting 

emissions unit. Under the federal PSD 

regulations, the post-change emissions 

for a new emissions unit are equal to 

that unit’s PTE, while the source may 

use the projected actual emissions to 

estimate post-change emissions for the 

existing emissions unit. Suppose the 

source only operates 16 hours a day. If 

the source modifies an existing 

emissions unit, it may project its 

emissions using the anticipated 16 

hours of operation. In contrast, unless 

the source can obtain a legally and 

practicably enforceable restriction on its 

hours of operation, to determine its PTE, 

it must calculate emissions for the new 

emissions unit assuming a full day (24 

hours) of operation. As a result, PSD 

may be triggered for the addition of the 

new emissions unit, while PSD may not 

be triggered for the modification of the 

existing unit. Depending on the cost of 

emissions controls, and the delay in 

obtaining the preconstruction permit, 

the source may choose to modify its 

existing emissions unit, rather than 

install the environmentally preferable 

new emissions unit if it cannot obtain 

a PTE limit. Providing the EPA the 

ability to issue synthetic minor permits 

for GHG emissions gives the EPA a tool 

to avoid this outcome. 

Finally, because we believe that 

synthetic minor permits generally 

require fewer administrative resources 

than full PSD permitting, establishing 

this synthetic minor program allows 

permitting authorities to focus greater 

resources on larger sources that, for 

whatever reason, cannot or do not want 

to restrict the emissions to lower levels. 

Accordingly, for all the reasons 

described here, as part of the EPA’s 

effort to phase-in the permitting 

requirements for GHGs, the EPA 

proposes to add authority to issue 

synthetic minor permits to sources for 

which the EPA, or its delegated agent, 

is the GHG PSD permitting authority. 

We propose to add the authority to issue 

CO2e-based synthetic minor permits to 

sources whose potential emissions are 

above the statutory major source 

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threshold (i.e., 100 or 250 tpy GHG) on 

a mass basis or the subject to regulation 

thresholds on a CO2e basis. 

We request comment on our 

conclusion that a federal synthetic 

minor permit program will assist in the 

EPA’s efforts to phase-in the GHG 

permit program and efficiently manage 

its GHG permitting resources. We also 

request comment on our conclusion that 

synthetic minor permits can achieve 

enhanced environmental protection. 

We also note that a synthetic minor 

limit on GHG emissions could further 

reduce administrative burdens under 

the title V permitting program for two 

reasons. First, as long as the title V GHG 

applicability threshold is equal to or 

higher than the PSD threshold, any 

synthetic minor limit that establishes 

GHG emissions below the PSD 

threshold would also prevent such 

sources from becoming title V sources 

based on their PSD major source status 

and/or applicable PSD requirements for 

GHGs. Second, if the synthetic minor 

permit restricts GHGs below the subject 

to regulation threshold for title V, such 

sources would not qualify as title V 

sources because of their GHG emissions 

alone. Of course, if such a source 

qualifies as a title V source based on 

their emissions of a non-GHG pollutant 

or based on title V applicable 

requirements, that source would still be 

required to comply with those title V 

obligations, regardless of the synthetic 

minor limit for GHGs. 

6. What is the legal rationale for EPA’s 

GHG synthetic minor source permitting 

authority? 

Our authority to issue GHG synthetic 

minor permits arises from the fact that, 

but for the Tailoring Rule, the sources 

eligible for this type of permit would 

qualify as ‘‘major emitting facilities’’ 

under CAA section 169 because they 

emit or have the potential to emit more 

than 100 or 250 tpy GHGs on a mass 

basis, depending on the source category. 

As a result, we interpret CAA section 

165 to convey to PSD permitting 

authorities, including the EPA, the legal 

authority to issue preconstruction 

permits to these sources. We note that 

we do not expect that sources at or near 

the 100/250 tpy levels would seek such 

permits at this time, since such sources 

are unlikely to trigger PSD under the 

current applicability tests. Instead, we 

expect that larger sources would avail 

themselves of this option. 

Although CAA section 165 by its 

terms authorizes the EPA to issue 

permits to major sources, and sources to 

whom we issue a GHG synthetic minor 

source permit are, in many instances, 

not major sources, we propose that 

under the present circumstances, CAA 

section 165 authorizes the EPA to issue 

these permits. As noted, these sources 

would be major sources but for the 

Tailoring Rule, and as explained in that 

rule, the administrative burden 

associated with immediately 

implementing the PSD program at 

statutory levels for GHGs would have 

crippled the program. Thus, we decided 

to tailor the program and phase-in the 

permitting requirements to ensure that 

the PSD permitting program would be 

administrable for GHGs. Similar to the 

approach in the Tailoring Rule, we view 

the GHG synthetic minor program as 

another tool to help ensure that the PSD 

program for GHGs can be administered 

in an effective and efficient manner. 

Because the GHG synthetic minor 

program will have those effects, CAA 

section 165 may be read to authorize it. 

CAA section 301(a)(1), which authorizes 

the Administrator ‘‘to prescribe such 

regulations as are necessary to carry out 

his functions under [the CAA],’’ 

provides additional authority. 

7. What changes would EPA make to the 

PSD regulations to allow EPA to issue 

GHG synthetic minor permits? 

We are proposing to change both the 

federal PSD permitting program in 40 

CFR 52.21 and the federal minor NSR 

program in Indian country in 40 CFR 

Part 49. For the federal PSD permitting 

program, we propose to add a new 

§ 52.21(dd) to the existing PSD 

regulations. The proposed regulatory 

provisions are similar to the 

requirements we established in Indian 

country in 40 CFR Part 49, most 

particularly at 40 CFR 49.158. The 

proposed provisions address permit 

application and permit content 

requirements, as well as requirements 

for monitoring, recordkeeping and 

reporting, and public participation. We 

request comment on any additional 

provisions that may be needed to 

establish a GHG synthetic minor 

permitting program in 40 CFR 52.21, 

and on any additional changes to the 

proposed regulatory text that might be 

required. In addition, we request 

comment on a number of specific 

provisions of the proposed regulatory 

language relating to the definition and 

use of an emissions limitation (using the 

phrase ‘‘which has the effect of 

limiting’’ instead of the terms limit(s) or 

limitation(s) in proposed provisions 

52.21(dd)(2)(i), (5)(ii)(b), and (5)(v)(a)); 

two options for addressing the 

determination of application 

completeness (see different deadlines 

and processes for finding completeness 

in proposed provisions 52.21(dd)(4)(ii) 

and (iii)); and the appropriate 

procedures, if any, to include for 

administrative review (see proposed 

provisions 52.21(dd)(4)(vii) and (7)(iv)). 

Finally, we would also amend the 

existing regulations in Part 49 to ensure 

that we have synthetic minor permitting 

authority for GHG sources located in 

Indian country. Amending our existing 

minor source authority for Indian 

country to add GHG synthetic minor 

authority would retain all synthetic 

minor authorities for Indian country 

within one rule. We believe this would 

be easier for sources in Indian country 

to implement, but we request comment 

on whether we should instead limit the 

proposed changes to only 40 CFR 52.21. 

C. Redefining Potential To Emit and 

Source Category Specific PTE 

This section discusses our current 

thinking on developing category specific 

PTE rules or guidance and requests 

comment on the appropriate categories 

and requirements. In addition we are 

also exploring a novel approach that 

would provide an individual source, in 

any of multiple source categories, a way 

to obtain streamlined, as well as legally 

and practicably enforceable restrictions, 

on the source’s hours of operation. We 

outline and request comment on a 

potential approach for creating such a 

rule; however, we do not intend to 

finalize this approach in this 

rulemaking. 

As explained in the Tailoring Rule, 

because the PSD and title V 

applicability are based on PTE, rather 

than on actual emissions, they could 

sweep enormous numbers of sources 

into the PSD and title V programs even 

though those sources’ actual emissions 

are far below the applicability 

thresholds. For example, sources that 

operate for only part of the year, but that 

have no legally and practicably 

enforceable limitation on their operating 

hours, must calculate their PTE on the 

basis of the amount of emissions that 

would result if those sources did 

operate, and therefore emit, on a yearround basis (8760 hours per year). Our 

proposed synthetic minor rule would 

give sources the option to accept legally 

and practicably enforceable limits on 

their operations by, for example, 

agreeing to limit the hours the sources 

operate and complying with 

recordkeeping, monitoring, and 

reporting requirements to ensure that 

these limits are enforceable as a 

practical matter. As we have explained, 

the issuance of synthetic minor permits 

to individual sources benefits the GHG 

phase-in program, but we would like to 

continue to explore methods that can 

reduce the number of individual 

permits a reviewing or permitting 

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authority need to issue. Therefore, in 

addition to individual minor source 

permitting, we continue to explore 

adopting, or encouraging state 

permitting authorities to adopt, rules for 

source categories that we expect include 

large numbers of sources whose actual 

GHG emissions are well below 

applicability thresholds, but which, 

absent legally and practicably 

enforceable limitations, have PTE above 

those thresholds. 

As we noted in our proposed 

Tailoring Rule, the first step necessary 

to develop a source specific PTE 

regulation or guidance is to identify 

source categories that are generally 

conducive to a streamlined PTE 

approach. 74 FR 55321. In selecting one 

or more source categories, one 

consideration is how to address the 

possibility that the GHG applicability 

thresholds could change in the future. 

Today, we have more information on 

sources with a potential to emit 100,000 

tpy or more CO2e, and may be better 

situated to propose a source category 

specific PTE rule for a one of these 

source categories, in the nearer term. We 

have less information about smaller 

sources, and developing a PTE rule will 

require significant additional 

information collection, and technical 

analysis. 

Source category PTE rules or guidance 

continue to offer the opportunity for 

reducing administrative and permitting 

burden related to sources of all sizes. 

We are broadly soliciting information on 

source categories with sources at all 

levels of emissions, ranging from 

sources with actual emissions below the 

PSD and title V statutory thresholds to 

those that are just below the Steps 1 and 

2 thresholds or the thresholds under 

consideration for this rulemaking. 

Therefore, we request comment on all 

source categories that would be 

candidates for creation of a PTE-specific 

rule or guidance. Candidates include 

source categories that currently have 

PTE substantially higher than their 

actual emissions, so that, if we were to 

revise the thresholds to fall below their 

PTE but remain above their actual 

emissions, a rule or guidance that 

adjusted how sources in those source 

categories calculate PTE could allow 

them to fall below the revised 

thresholds. For instance, we request 

comment on the usefulness of a PTE 

regulation for natural gas fired boilers 

that use a limited amount of fuel. As 

another example, we solicit comment on 

whether this approach might be useful 

for sources whose only emissions units 

are metered, natural-gas fired units with 

actual GHG emissions below the 

relevant applicability thresholds, which 

because of their metering are able to 

track and determine their GHG 

emissions on a continuous basis. This 

option would essentially allow sources 

to determine PTE with reference to their 

actual emissions based on actual fuel 

use. Conceptually, this option would 

likely be available for such metered 

sources that have historically always 

had emissions below the applicability 

thresholds and that will maintain and 

operate their meters on a going-forward 

basis. For such sources, actual GHG 

emissions can be continuously 

determined by monitoring their fuel use 

so that they remain below the 

applicability thresholds, as well as 

comply with recordkeeping and 

reporting requirements. 

For any source category identified in 

comments, we specifically solicit 

information on how the source category 

should be defined, typical hours of 

operation over a year and whether those 

vary by, for example, season, production 

cycle, or over a day, and information on 

typical emissions. We specifically 

request input on what sorts of GHGemitting source categories may only 

operate seasonally or otherwise have a 

limited production time—e.g., limited 

number of shifts, operate only during 

day-time hours, operate only in the 

evenings, or emit emissions only from 

heating during winter months—or have 

physical restrictions on their operations 

that might make them well suited for a 

PTE rule or guidance. We request 

comment on the time period that 

reflects these sources’ maximum 

historical operations, which we could 

use to establish, whether through 

guidance or rulemaking, the PTE for 

sources in those source categories. We 

also solicit comment on what type of 

documentation would be necessary to 

demonstrate that sources in a source 

category have a history of limited 

operations. For example, would it 

suffice for sources to demonstrate a 5 or 

10 year history of limited actual hours 

of operation? Suppose a representative 

set of sources in a source category has 

records documenting that they operated 

only two, 8-hour shifts at their facilities 

for the past 10 years, and that when 

workers are not working, emissions 

units are not running. Alternatively, 

suppose a representative set of sources 

in a source category has records that 

show that they only operate during 

summer months, and that the longest 

they have operated in the summer is for 

4 months. In such circumstances, could 

the EPA interpret, through guidance or 

rulemaking, PTE for sources in that 

source category to reflect that maximum 

level of actual operation? 

We are also exploring the 

development of a streamlined method 

that reduces the permitting burden for 

sources that have historically operated 

with reduced hours of operations and 

are willing to accept an hourly limit at 

or below the maximum level of 

historical operation. The purpose of 

such a rule would be to create a legal 

mechanism by which sources in at least 

certain types of source categories could 

take legally and practicably enforceable 

limits on hours of operation without 

having to go through the more 

burdensome process of obtaining 

individual synthetic minor permits. 

Rather, we contemplate that under such 

an approach, a source would report and 

document its historical maximum hours 

of operation to EPA in some way, and 

accept a legally and practicably 

enforceable limit to operate at or below 

that level, along with obligations 

designed to ensure enforceability, such 

as recordkeeping, reporting, and 

monitoring requirements. 

In order to develop our thinking on 

this new approach, we are asking for 

comment on several specific issues. We 

request comment on whether such a 

rule would be helpful to permitting 

authorities in reducing GHG permit 

burden. In addition, we request 

comment on whether hours of operation 

is an operating parameter that does not 

need source specific limitations to 

assure compliance. Have permitting 

authorities included hours of operation 

restrictions in numerous synthetic 

minor permits? What success or 

difficulties have permitting authorities 

experienced in enforcing hours of 

operation restrictions through synthetic 

minor permits? Have terms and 

conditions of such permits been 

uniform within or between source 

categories? 

Additionally, we are requesting input 

on whether such a rule should target 

specific source categories, or be made 

broadly available to all source 

categories, and on what types of GHGemitting source categories may only 

operate seasonally or have a limited 

production time. We request comment 

on the appropriate structure and 

requirements for such a rule. What sorts 

of application requirements, permit 

limits, and recordkeeping, monitoring, 

and reporting have permitting 

authorities required for such hourly 

limits? What time period adequately 

reflects maximum historical operations, 

for purposes of determining a restriction 

on future operations? 

We also request comment on 

mechanisms the rule should provide to 

ensure that the source does not exceed 

any limitation on hours of operations 

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51http://www.state.nj.us/dep/aqpp/downloads/ 

gp17.pdf. 

52The permittee shall not construct, reconstruct, 

install, or modify a significant source or control 

apparatus serving the significant source without 

first obtaining a preconstruction permit under 

N.J.A.C. 7:27–8. [N.J.A.C. 7:27–8.3(a)]. 

The permittee shall not operate (nor cause to be 

operated) a significant source or control apparatus 

serving the significant source without a valid 

operating certificate. [N.J.A.C. 7:27–8.3(b)]. 

that it agrees to accept. Finally, we 

request comment on whether such a 

process can be rigorous enough to 

maintain the necessary integrity in PTE 

calculations, and made legally and 

practicably enforceable through 

reporting, monitoring, and ongoing 

recordkeeping requirements, but 

streamlined when compared to the 

burden of issuing and obtaining an 

individual synthetic minor permit. 

Again, we are just requesting 

comment in this action on the idea of 

developing a rule to voluntarily restrict 

hours of operation across multiple 

source categories and we are not 

proposing a specific rule at this time. If, 

after reviewing comments, we 

determine that this is a viable approach 

for streamlining GHG permitting, we 

may proceed to propose a specific rule 

in the future. 

D. General Permitting for GHGs 

1. What is a general permit? 

A general permit is a permit that the 

permitting authority adopts once and 

then applies identically to each source 

that requests coverage and meets the 

specific eligibility requirements. 

General permits are best suited for the 

regulation of sources that perform the 

same or similar operations, emit similar 

air pollutants and are subject to the 

same limitations, standards and 

requirements. General permits are a 

mechanism that provides for greater 

efficiency in issuing required permits, 

thereby saving costs to both the source 

and the permitting authority. 

As noted in the following, some states 

have programs that authorize general 

permits. These programs show very 

clearly that there are benefits to using 

general permits. The issuance process 

for the permit is relatively simple and 

streamlined. The applicable 

requirements for these sources have 

already been identified for the applicant 

in both the application and the permit. 

The applicant knows, prior to 

application submittal, what conditions 

the permit will contain. In addition, 

public review is simplified. The public 

review process for general permits 

occurs before the general permit is 

finalized, rather than on a permit by 

permit basis. 

In the context of GHG, the issuance of 

PSD or title V general permits would 

promote more efficient treatment of 

GHG-emitting sources that would be 

subject to permitting, and allow the 

expeditious expansion to more GHGemitting sources while protecting those 

sources and the permitting authorities 

from undue burden. 

2. What is the Legal Authority for 

General Permits? 

The CAA gives the EPA the authority 

in section 504(d) to issue general 

permits for title V sources, and the EPA 

has regulations in place to create general 

permits for title V sources. Although 

there is no provision in the CAA that 

expressly authorizes the use of general 

permits in the PSD program, the DC 

Circuit, in the Alabama Power case, 

recognized that ‘‘[c]onsiderations of 

administrative necessity may be a basis 

for finding implied authority for an 

administrative approach not explicitly 

provided in the statute’’ and expressly 

identified general permits as an 

alternative to the exemptions that were 

at issue in that case. See 636 F.2d at 360. 

Further, courts have recognized the 

EPA’s authority to use general permits 

under section 402 of the Clean Water 

Act without an express provision 

authorizing such general permits. 

Environmental Defense Center v. EPA, 

344 F.3d 832, 853 (9th Cir. 2003) 

(‘‘General permitting has long been 

recognized as a lawful means of 

authorizing discharges.’’) (citing NRDC. 

v. Costle., 568 F.2d 1369, 1381 (DC Cir. 

1977)); NRDC. v. Train., 396 F. Supp. 

1393, 1402 (D.D.C. 1975) (The EPA has 

‘‘substantial discretion to use 

administrative devices, such as area 

permits, to make EPA’s burden 

manageable.’’). 

3. Have the states used general permits? 

Many states have taken advantage of 

the ability to use general permits. In 

reviewing state programs, we have 

found that though the concepts are 

similar, the structure and content of the 

various programs is quite diverse. For 

example, the New Jersey Department of 

Environmental Protection (NJDEP) has 

developed a general permit program 

(GP–017) 51 that allows for the 

construction, installation, 

reconstruction, modification and 

operation of boilers and heaters less 

than 5 MMBTU/hour. NJDEP defines a 

general permit as a pre-approved permit 

and certificate which applies to a 

specific class of significant sources. By 

issuing a general permit, NJDEP 

indicates that it approves the activities 

authorized by the general permit, 

provided that the owner or operator of 

the source registers with the Department 

and meets the requirements of the 

general permit. If a source belongs to a 

class of sources which qualify for a 

general permit and the owner or 

operator of the source registers for the 

general permit, the registration satisfies 

the requirements of NJAC 7:27–8.3 52 for 

a permit and certificate. 

Ohio’s Division of Air Pollution 

Control (DAPC) also has developed 

model general permits-to-intall and 

model general permits-to-install and 

operate for select sources in Ohio. The 

regulations for general permits can be 

found in OAC Rule 3745–31–29. Ohio 

states that a general permit is the same 

as any permit-to-install or permits-toinstall and to operate that DAPC issues; 

the only difference is that all the terms 

and conditions of the permit have been 

developed in advance. This is referred 

to as the ‘‘model general permit.’’ 

Potential applicants can review the 

model general permit qualifying criteria, 

terms and conditions, and if they 

believe they qualify, they can complete 

the application and sign the qualifying 

criteria document. The DAPC will 

review the applicants’ information to 

confirm that they meet the 

qualifications, and then issue the 

general permit to the applicants. 

4. What steps has the EPA made toward 

developing general permits? 

In the context of streamlining the 

permitting process for GHGs, the EPA is 

considering various methods for 

developing general permits. As a 

procedural matter, the EPA is evaluating 

the possibility of proposing an enabling 

rule to enable the development of PSD 

general permits for GHG emitting 

sources. This rule would enable the EPA 

to create and implement PSD general 

permits for GHG emissions only for 

selected source or emissions unit 

categories. The enabling rule would lay 

out the basic foundation for general 

permits. It would identify the general 

provisions that would be found in all 

EPA-issued general permits, the criteria 

and process for establishing a general 

permit, and discuss the rationale and 

legal basis for a PSD general permit for 

GHGs. The enabling rule would also 

establish the process for the creation of 

general permits for the EPA’s use where 

the EPA is the GHG permitting authority 

and define mechanisms by which states 

could leverage federal general permits to 

streamline the permitting processes for 

sources that would trigger PSD for only 

their emissions of GHGs. 

We are also considering the overall 

criteria for determining the source or 

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emissions unit categories for which we 

may develop the first general permits. 

Our initial inclination, on which we 

solicit comment, is that we should focus 

first on GHG-only sources, that is, GHGemitting sources that do not emit nonGHGs in amounts that would be subject 

to PSD requirements. This is because 

complying with PSD for non-GHG 

pollutants involves analyses and 

demonstrations, such as a requirement 

that the source demonstrate that the 

proposed project will not cause or 

contribute to a violation of any NAAQS, 

which inherently are facility and 

location specific. For GHGs, BACT is 

the primary substantive PSD permitting 

requirement, and we believe that BACT 

can more readily be established for a 

source or emissions unit category, thus 

making the general permit approach 

feasible for sources and modifications 

that are major only due to GHG 

emissions. 

We are considering what source and/ 

or emissions unit categories would be 

good candidates for the first general 

permits. Even though natural gas-fired 

boilers range from large high 

performance boilers for industrial 

applications to small commercial and 

residential units for space heating and 

hot water, sources for which the only or 

predominant source of GHG emissions 

are boilers may be good candidates for 

PSD GHG general permits. Because 

boilers are widely used throughout 

industrial and commercial source 

categories, and can readily be 

categorized by design, purpose, 

efficiency and emissions, they present 

opportunities for significant 

streamlining through the use of general 

permits and thereby reductions in 

administrative burden from PSD 

permitting. Because the controls for 

GHGs on natural gas-fired boilers are 

sufficiently uniform, it seems possible 

to identify standardized control 

requirements to include in a general 

permit without significantly 

compromising environmental 

protection. 

Even so, it is unclear whether a 

general permit rule, for boilers or other 

emissions units, would be a productive 

streamlining method for the source 

categories and projects affected by this 

Step 3 rulemaking. In many cases, 

boilers or other equipment located at a 

source or involved in a project will emit 

non-GHG pollutants in amounts great 

enough to trigger other significant CAA 

requirements such as minor NSR, 

NESHAP and/or NSPS, diminishing the 

streamlining utility of a PSD general 

permit for GHG only. We are also 

mindful that implementation of a 

general permit program would likely 

involve regulatory action and a SIP 

revision at the state or local permitting 

authority level, which in and of itself 

imposes administrative costs, and the 

limited benefits of a general permit 

program for the source categories and 

projects potentially covered in this Step 

3 rulemaking could be offset by the 

administrative costs of the SIP revision 

process. Although we are concerned 

that GHG general permits for boilers and 

other common emissions unit categories 

may not provide enough streamlining 

value for the source categories affected 

by this Step 3 rulemaking, we believe 

such permits may have significant value 

when we consider smaller sources, 

especially those with no other emissions 

units or non-GHG pollutants emitted at 

significant levels. We are also 

considering how to incorporate a 

general permit for GHGs into existing 

state permitting programs. We are 

mindful that reviewing agencies 

generally have construction permitting 

processes that address all applicable 

requirements, including minor NSR and 

major NSR/PSD in an integrated 

fashion. It would be important to 

structure the general permit program so 

as to avoid complicating or conflicting 

with established permitting processes. 

We are also considering further 

questions, including: (1) Should general 

permits be available to greenfield 

sources?; (2) When issuing a general 

permit for a project/modification what 

do we do with pollutants other than 

GHGs?; (3) Can general permits be 

utilized for projects at any major source 

or only at sources major only for GHGs?; 

(4) Are general permits available to both 

new and modified units?’’ (5) ‘‘Are 

general permits mandatory or optional 

for states?; (6) What is the process for 

establishing general permits?; (7) 

Should states or the public be able to 

request that the EPA propose general 

permits for source categories and 

emissions units, and if so, what is the 

process for this type of request?; (8) 

What should the public participation 

procedures be?; (9) What is the approval 

or denial process for sources to use a 

general permit?; (10) What would BACT 

for a general permit look like?; (11) How 

would BACT be established?; (12) How 

would BACT be updated?; (13) What are 

the Endangered Species Act and 

environmental justice implications of 

the general permit?; (14) Should there 

be a periodic review of the general 

permit’s provisions, and if so, what 

would it look like?, and (15) Could we 

develop a process for states to 

incorporate a general permit program 

into their SIPs in a way that minimizes 

the administrative costs of the SIP 

revision process? 

We commit to continue to explore the 

possibility of general permits by 

reviewing information that we expect to 

receive in response to this proposal and 

the information gathered by permitting 

authorities through the implementation 

of GHG permitting. We believe that 

establishing general permits will require 

collection of significant categoryspecific data for various source and 

emission unit types as well as those that 

have heretofore generally not been 

regulated by the CAA (e.g., small 

furnaces, water heaters, etc.), which 

could take a significant amount of 

resources and time. 

We request comment on, in addition 

to the issues described previously, 

possible sources and source categories 

that may benefit from general permits, if 

such permits were only created for 

addressing GHG emissions, as a 

streamlining method to assist in the 

phase-in of GHG permitting. We request 

comment on the appropriate approach 

for public review, in particular whether 

public review of individual uses of a 

PSD general permit can be satisfied 

through public participation in the 

development of the general permit itself 

or whether each individual use of the 

PSD general permit requires public 

participation. We also request comment 

on whether such a program should be a 

required minimum element for SIP 

approved PSD programs, as relevant. 

5. General Permits and Title V 

We expect many of the issues related 

to PSD general permits would also be 

relevant for title V general permits. For 

example, we would expect title V 

general permits to be most useful for 

GHG sources that trigger title V 

applicability due to boilers, but where 

sources are subject to other 

requirements, such as NSR, NESHAP 

and/or NSPS, the utility of general 

permits may be limited. 

We request comment on experience 

with title V general permits issued by 

state and local permitting authorities, 

including whether permitting 

authorities have altered application 

requirements pursuant to 40 CFR 

70.6(d)(2), and other means of ensuring 

that general permits met the goals of 

title V for streamlined procedures and 

assuring compliance. Finally, we 

request comment on whether such a 

program should be a required minimum 

element for state Part 70 title V 

programs, as relevant. 

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53See Memorandum, ‘‘BACT and LAER for 

Emissions of Nitrogen Oxides and Volatile Organic 

Compounds at Tier 2/Gasoline Sulfur Refinery 

Projects,’’ from John S. Seitz, Director, Office of Air 

Quality Planning and Standards, to Regional Air 

Division Directors (January 19, 2001). 

54For example, Wyoming has a minor source 

permitting program that includes a BACT analysis, 

and they use a presumptive BACT process for 

issuing minor source permits to a particular source 

category—oil and gas production facilities. See 

Permitting Guidance for Oil and Gas Production 

Facilities, Wyoming Dept. of Environmental 

Quality, Air Quality Division (August 2007 

revision). 

E. Presumptive BACT for GHGs 

1. Definition of BACT 

The Act defines BACT as: 

* * * an emission limitation based on the 

maximum degree of reduction of each 

pollutant subject to regulation under this Act 

emitted from or which results from any major 

emitting facility, which the permitting 

authority, on a case-by-case basis, taking into 

account energy, environmental, and 

economic impacts and other costs, 

determines is achievable for such facility 

through application of production processes 

and available methods, systems, and 

techniques, including fuel cleaning, clean 

fuels, or treatment or innovative fuel 

combustion techniques for control of each 

such pollutant. In no event shall application 

of ‘‘best available control technology’’ result 

in emissions of any pollutant which will 

exceed the emissions allowed by any 

applicable standard established pursuant to 

section 111 or 112 or this Act. Emissions 

from any source utilizing clean fuels, or any 

other means, to comply with this paragraph 

shall not be allowed to increase above levels 

that would have been required under this 

paragraph as it existed prior to enactment of 

the Clean Air Act Amendments of 1990. 

CAA section 169(3). 

Performing case-by-case BACT 

determinations can be complicated, 

resource-intensive and time-consuming. 

In brief, the top-down BACT process 

calls for all available control 

technologies for a given pollutant to be 

identified and ranked in descending 

order of control effectiveness. The 

highest-ranked (‘‘top’’) option(s) should 

be established as BACT unless the 

permit applicant demonstrates to the 

satisfaction of the permitting authority 

that technical considerations, or energy, 

environmental, or economic impacts 

justify a conclusion that the top-ranked 

technology is not ‘‘achievable’’ in that 

case. If the most effective control 

strategy is eliminated in this fashion, 

then the next most effective alternative 

should be evaluated, and so on, until an 

option is selected as BACT. This 

analysis should be conducted for each 

regulated NSR pollutant that is subject 

to the BACT requirement in a given 

case. The EPA has broken down this 

analytical process into the following 

five steps. 

Step 1: Identify all available control 

technologies. 

Step 2: Eliminate technically 

infeasible options. 

Step 3: Rank remaining control 

technologies. 

Step 4: Evaluate most effective 

controls and document results. 

Step 5: Select BACT. 

2. What is presumptive BACT? 

Presumptive BACT is a potential 

streamlining approach that involves the 

development of a standardized BACT 

for certain emissions units. Presumptive 

BACT would create ways for specific 

categories of permitted emissions units 

to move from a system under which 

determinations are made on individual 

permits on a case-by-case basis, to one 

where BACT is determined for common 

types of equipment, which could be 

applied to individual permits with little 

to no additional revision or analysis. In 

general, the EPA believes that 

presumptive BACT could be 

implemented on a broad basis for 

specific emissions units where there are 

well defined and similar types of 

emissions units, uniformity in process/ 

emissions unit design and function, and 

well defined GHG control technologies. 

Reviewing agencies could adopt 

presumptive BACT, possibly including 

model permit language and monitoring, 

reporting and recordkeeping 

requirements, to streamline the BACT 

analysis for GHGs within their own 

established permitting process. 

The EPA has previously introduced 

the concept of presumptive BACT to 

streamline permitting for 

desulfurization projects at refineries as 

well as in other instances,53 and some 

state permitting authorities have 

adopted similar approaches.54 Based on 

our understanding of the types of 

sources that will become subject to PSD 

if GHG emissions are regulated at levels 

below the thresholds currently 

contained in the Tailoring Rule, we 

believe the presumptive BACT process 

could offer significant streamlining 

benefits. Such streamlining benefits 

would arise because many of the 

sources that would become subject to 

BACT at lower GHG emission levels 

will likely have very similar emissions 

producing equipment, and we believe 

there would be little variation across 

sources with respect to the cost, energy 

and environmental considerations in the 

BACT decision. 

As discussed in the following, the 

EPA has expressed interest in soliciting 

comments on the potential use of 

presumptive BACT for GHG permitting. 

It should be understood that 

presumptive BACT would be only an 

optional means to streamline the topdown BACT process by pre-evaluating 

what could constitute BACT for specific 

categories of similarly-situated 

emissions units. It should also be 

understood that this would only be 

available to address the GHG emissions 

from those units, and that the preconstruction permitting process would 

not be affected in any other way. 

Presumptive BACT would add 

another option for sources to achieve 

BACT requirements and provides 

additional benefits for the source and 

the permitting authority through 

streamlining of the permit process. In 

actual implementation, the choice of a 

presumptive BACT option would 

reduce burdens currently associated 

with conducting individualized, topdown BACT analyses for each source 

requiring a PSD permit. Nonetheless, 

there are several considerations to 

explore before we can implement a 

presumptive BACT approach including 

the role of presumptive BACT in a caseby-case decision framework, the role 

and timing of public review, and 

preserving BACT’s technology-forcing 

role within a presumptive BACT 

framework. 

3. How the EPA Could Consider 

Implementing Presumptive BACT 

As noted previously, the CAA 

requirement for BACT, found in section 

165(a)(4), mandates that BACT 

determinations be made for each 

regulated pollutant on a ‘‘case-by-case 

basis.’’ Accordingly, the EPA would like 

to develop a process that benefits from 

the efficiencies that presumptive BACT 

would provide while allowing for 

issuance of individual PSD permits. In 

the proposed Tailoring Rule, the EPA 

discussed potential options to explore 

presumptive BACT as an alternative to 

the current case-by-case nature of 

conventional BACT. In that discussion 

and in subsequent consideration by the 

agency, two potential ways in which to 

implement a presumptive BACT 

program have emerged: As an 

alternative method of completing a 

BACT analysis in an individual 

permitting action or as a way to 

eliminate the need for an individualized 

BACT analysis for all permits in a 

particular category. 

The first approach would develop, 

through notice-and-comment 

rulemaking or through permitting 

guidance, a presumptive BACT level for 

sources in a particular source category 

that subsequently could be applied and 

assessed in individual permitting 

actions. Under such an approach, while 

the top-down analysis for an individual 

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permit would be fulfilled by a request 

to include the presumptive BACT limit, 

there would still be an opportunity for 

permitting authorities and the public to 

examine individual permits to assess 

whether there are significant casespecific energy, economic, and/or 

environmental impacts that would 

require adjustment of the presumed 

limit for that particular source. This 

form of presumptive BACT would create 

a rebuttable presumption that the 

emissions covered by the particular 

source’s BACT limit will, in fact, be 

controlled to the maximum degree that 

can be achieved. This presumption 

shifts the burden to the permitting 

authority or other interested parties to 

produce credible evidence that the 

application of presumptive BACT to 

that particular source would not comply 

with BACT requirements. If credible 

evidence were produced, then the 

source would either be required to 

produce evidence sufficient to show 

that the presumption is the best 

achievable control technology or to 

conduct an individualized top-down 

BACT analysis. Whatever mechanism 

the EPA may ultimately choose to 

implement presumptive BACT, if any, 

the critical and essential component of 

a successful BACT analysis will 

continue to be a strong record 

supporting the decisions reached by the 

permitting authority, as explained in the 

PSD and Title V Permitting Guidance 

for Greenhouse Gases (March 2011). 

While such an approach could 

streamline the BACT determination 

process to some extent, we are 

concerned that those streamlining 

benefits could be negated given the 

prospect that such presumptive BACT 

determinations would, as a result of 

permitting authority review and public 

comment, still have to be reviewed for 

numerous individual sources. 

Accordingly, the EPA has also 

considered a system in which 

presumptive BACT levels for a specific 

category of emissions units would be 

developed through notice-and-comment 

rulemaking but then applied to 

individual sources in that category 

without requiring permitting authorities 

to individualize the BACT 

determination or allowing for public 

comment on whether presumptive 

BACT levels should apply to an 

individual source. While, as noted in 

the following, some have argued that 

such an approach would not strictly 

adhere to the individual case-by-case 

BACT determinations envisioned in the 

CAA, even if that is the case, 

maintaining case-specific BACT 

determinations may well be impractical 

given the significant increase in new 

sources that would likely be brought 

into the PSD program when GHG 

permitting thresholds are reduced. 

Moreover, the DC Circuit, in the 

Alabama Power case previously 

discussed, stated that courts ‘‘frequently 

uphold streamlined agency [regulatory] 

approaches or procedures where the 

conventional course, typically case-bycase determinations, would, as a 

practical matter, prevent the agency 

from carrying out the mission assigned 

to it by Congress.’’ 636 F.2d at 358. The 

Court recognized that such nonindividualized streamlining measures 

may be needed when time or personnel 

constraints or other practical 

considerations ‘‘would make it 

impossible for the agency to carry out its 

mandate.’’ See id. at 359. A presumptive 

BACT approach that does not require 

individualized, source-specific 

determinations could well be an 

important tool to allow the EPA, state 

and local permitting authorities to carry 

out the PSD program in as timely and 

efficient manner as necessary to 

promote (rather than hinder) control of 

GHG emissions from the many new, 

small source categories that would be 

required to have PSD permits based on 

their GHG emissions. This approach 

would preserve opportunities for public 

participation by taking comment during 

the determination of presumptive BACT 

levels for a source category. Although 

here too, some have argued that this 

type of presumptive BACT approach, 

one that does not require 

individualized, source-specific 

determinations, would depart from a 

literal application of the statutory 

requirements for BACT, even if that is 

the case, it may nevertheless remain 

closer to the congressional intent for the 

PSD program in so far as it would 

reduce administrative burdens in each 

permitting action, thus allowing more 

overall sources to become subject to a 

PSD permitting program that moves 

applicability thresholds closer to the 

statutory levels. 

We received many comments on 

presumptive BACT during the public 

comment period for the Tailoring Rule. 

Many commenters supported the 

concept of presumptive BACT as a 

means to streamline PSD permitting. 

Some noted that it would promote 

consistency in BACT determinations as 

various permitting authorities gain 

experience with GHG permitting. Some 

suggested that it would be useful for 

common combustion sources, and at 

least one indicated that it would be 

particularly justified for natural gasfired equipment. Several included 

recommendations for specific industrial 

sectors. A number of the supportive 

commenters also recommended that the 

source have the option to use 

presumptive BACT or to conduct a caseby-case BACT determination. 

Some commenters opposed 

presumptive BACT. A few indicated 

that it would not be flexible enough to 

take into account source-specific factors. 

Others asserted that it is contrary to the 

requirements of the Act for a case-bycase BACT determination and 

opportunity for public review. Some 

noted that it would dampen the 

technology-forcing role of BACT, and at 

least one suggested a periodic update 

not less than every 5 years. 

The EPA requests comment on the 

possible approaches to presumptive 

BACT discussed previously. We request 

comment on whether the first approach, 

where each use of presumptive BACT 

would be subject to permitting authority 

review and public comment, would 

offer significant streamlining value. We 

also request comment on our legal 

authority to implement each approach, 

particularly on the applicability of 

Alabama Power principles to the second 

approach, which does not authorize 

individualized, source-specific 

determinations. 

4. Possible Impediments to Presumptive 

BACT 

a. Public Comment Processes for 

Presumptive BACT 

The provision of effective and 

meaningful opportunities for public 

comment on BACT determinations is an 

important element of air permitting 

process provided for in the CAA. In the 

context of the two presumptive BACT 

approaches explained previously, the 

EPA or a state agency could provide 

opportunity for public participation 

either in individual permitting actions 

to allow the public to rebut the 

presumption that a pre-determined 

BACT limit applies to the specific 

source under consideration, or in 

determining the presumptive BACT 

levels for a source category. The EPA 

requests comment on the public 

participation approaches that would be 

appropriate to support presumptive 

BACT determinations. For example, is it 

sufficient to provide for public review 

and comment only during the 

rulemaking to establish a presumptive 

BACT level or does the case-by-case 

nature of BACT require comment for 

individual permitting actions? Even if 

we follow the approach of establishing 

a presumptive BACT limit through 

notice-and-comment rulemaking and 

limiting public input on individual 

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55http://www1.eere.energy.gov/buildings/

appliance_standards/residential/furnaces_

boilers.html. 

56http://www.energystar.gov/

index.cfm?fuseaction=find_a_product.showProduct

Group&pgw_code=BO. 57http://www1.eere.energy.gov/buildings/

appliance_standards/residential/pdfs/furnaces_

boilers/furnaces_fr_111907.pdf. 

permitting actions, are there 

circumstances in which public 

comment might also be warranted for 

those individual permitting actions the 

presumptive BACT limit? If so, what are 

they? If we follow the approach of 

allowing public input on individual 

permitting actions that use presumptive 

BACT, are there ways in which the 

public comment might be limited to 

recognize more streamlining benefits? 

b. General Permits 

The EPA is particularly interested to 

consider pursuing presumptive BACT as 

a streamlining approach in cases where 

there would be similar BACT outcomes 

in multiple permits due to similar 

source characteristics and available 

control options. General permits, which 

are discussed in the previous section, 

provide one context to implement this. 

General permits are particularly useful 

in situations where source operations 

are highly consistent and relatively 

simple across a source category. General 

permits typically work best where 

sources in the category are subject to the 

same applicable air regulatory 

requirements, including those 

associated with criteria pollutant and air 

toxics regulatory programs. 

We are particularly interested to 

consider opportunities to develop 

presumptive BACT options to 

complement potential general 

permitting approaches addressing 

GHGs. In the absence of a presumptive 

BACT approach, general permits 

addressing GHGs may have limited 

streamlining value in light of case-bycase conventional BACT determination 

needs. Accordingly, we request 

comment on opportunities for using 

presumptive BACT approaches in the 

context of general permits. In addition, 

we request comment on potential source 

categories or types of emission units 

that may be particularly well-suited for 

a general permit and presumptive BACT 

approach due to similarities in source 

characteristics and available GHG 

control options. We also request 

comment on whether presumptive 

BACT approaches for GHGs should be 

considered for source categories and 

types of emission units that may not be 

feasible to address using a general 

permit approach. 

c. Updating of Presumptive BACT 

In general, case-by-case BACT 

determinations allow for the continual 

evolution of BACT requirements over 

time and are generally referred to as 

‘‘technology forcing,’’ in so much as 

available controls identified in prior 

permits are considered in each 

subsequent BACT determination and 

the specific facts of subsequent actions 

may support application of a top-ranked 

control technology that was eliminated 

in prior actions. However, the EPA 

recognizes that application of 

presumptive BACT to a category of 

sources over many permitting decisions 

may diminish the technology forcing 

effects of PSD. Updating of BACT is an 

important concept to consider in the 

context of developing a presumptive 

BACT option, and the EPA is interested 

in options that would help maintain 

advances in control technologies. 

As previously explained, the 

conventional top-down BACT process 

incorporates continual updating of the 

BACT for each type of emission unit 

through the analysis that occurs to 

ensure that the most current BACT is 

used. To provide streamlining 

opportunities, the presumptive BACT 

process would likely need to 

incorporate some form of updating 

mechanism to ensure that the BACT 

remains current over time. We have 

identified several different approaches 

by which such updating could be 

accomplished. One approach would be 

for the EPA or a state agency to 

periodically review and consider 

updates to the presumptive BACT 

option established for a certain source 

category or type of emission unit. For 

example, there could be a requirement 

to update presumptive BACT on a set 

time interval (such as every 3 or 5 

years). 

Another approach could be to link a 

presumptive BACT determination to a 

standard established through some 

respected standard-setting programs so 

that the presumptive BACT level would 

automatically update periodically in 

conjunction with updating process 

already used in established standardsetting programs, as discussed in the 

following examples. One option would 

be for the EPA or a state agency to set 

presumptive BACT at the same levels 

used in equipment energy efficiency 

standards established by government 

agencies or other respected standardsetting bodies. For example, the U.S. 

Department of Energy (DOE), pursuant 

to the Energy Policy and Conservation 

Act, promulgates energy efficiency 

standards for industrial and commercial 

boilers.55 These periodically-updated 

equipment energy efficiency standards 

could be used as the basis for 

presumptive BACT in cases where such 

standards exist. Similarly, it may be 

appropriate to use ENERGY STAR 

equipment certification as a basis for 

presumptive BACT. Whereas appliance 

and equipment energy efficiency 

standards usually provide the ‘‘ground 

floor’’ requirements for performance of 

new energy consuming equipment, 

ENERGY STAR certification 

specifications establish minimum 

performance requirements for highefficiency, lower emissions equipment 

within selected product categories. The 

ENERGY STAR program, administered 

by the EPA in partnership with the 

DOE, establishes voluntary product and 

equipment energy efficiency 

specifications for certain products and 

equipment in an effort to transform the 

market for manufactured goods by 

expanding the availability and visibility 

of energy-efficient products. 

Commercial and residential products 

can earn the ENERGY STAR label by 

meeting the energy efficiency 

requirements set forth in ENERGY 

STAR product specifications. 

Accordingly, ENERGY STAR 

equipment specifications include energy 

efficiency performance requirements 

that exceed DOE appliance and 

equipment standards. For example, to 

qualify for ENERGY STAR certification, 

residential boilers must have annual 

fuel utilization efficiency (AFUE) 

ratings of 85 percent or greater.56 This 

compares with DOE boiler energy 

efficiency standards established in 2007 

that range from 80 to 83 percent.57

The EPA requests comment on 

approaches for ensuring that 

presumptive BACT options are 

periodically reviewed and refreshed. We 

also request comments on the feasibility 

and potential configuration of 

approaches that connect presumptive 

BACT to equipment energy efficiency 

standards or certifications or other 

external factors. In particular, it would 

be helpful to receive comments on the 

role DOE industrial equipment and 

appliance energy efficiency standards 

and/or ENERGY STAR certification for 

industrial and commercial equipment 

play in the context of presumptive 

BACT. In addition to the specific 

comments requested previously, the 

EPA seeks overall comments on the use 

of presumptive BACT, including 

suggestions for how such limits could 

be established, updated and used 

consistently within the requirements of 

the CAA, including requirements for a 

top-down, case-by-case BACT 

determination process. The EPA invites 

comments on whether presumptive 

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58Empty permits are different from ‘‘hollow 

permits.’’ A ‘‘hollow permit’’ is a permit for a GHG 

major source that does not contain requirements for 

GHG emissions, but which contains other 

applicable requirements for pollutants for which 

the source is not major. 

59Although the Tailoring Rule has been 

challenged in the U.S. Court of Appeals for the DC 

Circuit, no party has challenged this methodology. 

BACT options should be advanced 

through rulemaking or through 

guidance. Comments would also be 

useful regarding considerations that 

should affect whether presumptive 

BACT approaches could be used to 

address only existing units or new units. 

The EPA also encourages comments on 

the respective roles of state, local and 

tribal air agencies relative to that of the 

EPA in establishing presumptive BACT 

options. 

F. Title V Empty Permits 

In the Tailoring Rule, we identified a 

possible exclusion for ‘‘empty permits’’ 

(which are, as noted, permits issued to 

a source that is not subject to any 

applicable requirement for any 

pollutant) as a potential means for 

alleviating the potential burden of title 

V permitting for GHG sources. In the 

Tailoring Rule we described an ‘‘empty 

permit’’ as ‘‘a permit issued to a source 

that is not subject to any applicable 

requirement for any pollutant.’’ 58

Empty permits may occur because the 

applicability for title V is in part based 

on major source status, yet there may 

not be any applicable requirements that 

apply. Since the principal purpose of 

title V is to collect the requirements 

applicable to the source and assure 

compliance with those requirements it 

is unclear whether Congress intended 

sources, particularly smaller sources, to 

be subject to title V permitting if there 

are no applicable requirements for the 

source. The EPA solicits comments on 

whether we may, and should, interpret 

title V as not requiring permits for 

sources that are not subject to any 

applicable requirements (as defined in 

40 CFR 70.2). The EPA also solicits 

comments on whether the EPA could 

adopt such an interpretation through 

guidance, an interpretative rule (without 

notice and comment), or only through 

notice and comment rulemaking, and 

whether states would, or should, be 

required to submit program revisions to 

the EPA for approval in order to exclude 

such sources from title V permitting. 

In the Tailoring Rule, the EPA noted 

that we anticipated very few if any 

‘‘empty permits’’ as a result of Step 2. 

However, there remains significant 

uncertainty as to the number of ‘‘empty 

permits’’ that would exist if the 

Tailoring Rule thresholds were 

significantly lowered. The EPA believes 

that several SIPs contain generally 

applicable requirements for sources that 

would constitute ‘‘applicable 

requirements’’ for many sources that 

would become subject to title V solely 

as a result of GHG emissions if the 

thresholds were significantly lowered. 

We noted in the final Tailoring Rule 

that: 

We need to gather more information 

concerning the potential number and utility 

of ‘‘empty permits’’ for GHG sources, in light 

of the fact that the need for requirements in 

title V permits will vary based on the 

requirements of each SIP, and the fact that 

some SIPs contain broadly applicable 

requirements. 

Tailoring Rule, 75 FR 31566. Thus, we 

solicit comments, particularly from 

states on these issues. For example: 

What, if any, SIP requirements would 

be applicable to sources that would 

become subject to title V permitting 

solely as a result of emitting GHG in 

excess of a lower threshold? 

What number (or proportion) of 

sources potentially subject to title V 

would be expected to have no 

applicable requirements under the SIP 

or other CAA programs? 

Is there a threshold below which the 

number of empty permits would 

increase significantly, as a result of a 

corresponding threshold in applicability 

of SIP requirements? 

VII. Request for Comment 

We have requested comment 

throughout this preamble on many 

aspects of the GHG permitting program 

and our proposed rulemaking. In this 

section, we provide a summary of the 

issues on which we are requesting 

comment and refer the reader to the 

preceding sections for our requests on 

more specific points. 

A. Solicitation of Comment on Proposed 

Step 3 

1. General 

We solicit comment on all issues 

described previously in section V of this 

preamble. In particular we solicit 

comment from the states as to their 

current and expected air permit budgets 

as well as their current and expected 

future levels of permitting. 

In addition, we solicit comment on 

promulgating lower GHGs thresholds for 

PSD applicability and on promulgating 

lower GHGs thresholds at any levels we 

have analyzed in this rulemaking for 

PSD and title V applicability. 

Commenters advocating lower 

thresholds should support their position 

with data demonstrating that the 

permitting authorities have developed 

the capacity to handle the current and 

future permitting volume under the 

existing thresholds, and will be able to 

handle the additional permitting 

volume, in a timely manner, that would 

be required at reduced thresholds. 

Commenters should also be able to 

support their positions with data 

demonstrating that sources have the 

ability to meet the requirements of the 

PSD program. 

We note that in this rulemaking, we 

are not re-opening or soliciting 

comment on the Tailoring Rule’s 

decision to phase in the thresholds, to 

begin with the Steps 1 and 2 levels, or 

the legal or policy basis for the Tailoring 

Rule. By the same token, as noted 

previously in section V, in this 

rulemaking, we are relying on the same 

methodology used in the Tailoring Rule 

to calculate administrative burdens, and 

we are not re-opening that methodology 

or soliciting comment on it.59 We are 

simply proposing action and soliciting 

comment on Step 3 of the phase-in 

approach. 

2. Call for Additional Information 

Concerning State Burdens 

As stated in the Tailoring Rule, the 

EPA is committed to tailoring the 

applicability criteria that determine 

which GHG emission sources become 

subject to the PSD and title V programs 

of the CAA. The following questions are 

structured to help the EPA best assess 

the status of GHG permitting programs 

based on the three criteria outlined in 

the Tailoring Rule, which forms the 

basis for this action. We request states 

submit responses to the following 

questions to the appropriate EPA 

Regional Administrator within 45 days 

after the date of publication of this 

proposal in the Federal Register. 

General Permitting Burden/Resources 

1. Does your state currently have the 

necessary resources (funding and staff) 

to run the PSD and title V permitting 

program as they exist today? 

a. If your state is strained for 

resources please describe the reasons for 

it? Please list all that apply and provide 

a short description of the problem 

providing specific information where 

possible (i.e., budget cuts of 10 percent 

during the last year; hiring freeze; loss 

3 FTE in last two years). 

i. GHG Permitting 

ii. Other Permitting Issues (SO2, NO2, 

etc) 

iii. Budget cuts 

iv. Lack of personnel 

v. Other (please specify) 

2. If permitting activity were to 

increase to levels closer to those 

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60See 75 FR 31540. 

originally anticipated in the Tailoring 

Rule,60 would your state have the 

necessary resources to manage the 

increased workload? 

a. If not, please estimate the level of 

additional resources (funding and staff) 

your state would require to handle the 

increased burden. 

3. In providing perspective on the 

PSD program, consider the following 

scenarios where your annual number of 

PSD permitting activity were to increase 

by 10, 20, 30, 50, 100, and 200 permit 

actions per year (both new permit 

applications and modifications 

included) due to the potential lowering 

of the current GHG applicability 

thresholds. When assessing the 

resources to permit these sources, 

consider that many of the newly 

permitted GHG sources under this 

scenario would likely consist of 

commercial and small industrial sources 

whose primary GHG emissions units are 

small, similarly configured combustion 

units: 

a. How many more full-time 

employees (FTEs) would your program 

need to address each of these potential 

permitting activity increases (i.e., 10, 20, 

30, 50, 100, and 200 permit actions per 

year) in PSD due to GHGs and still meet 

current PSD permit processing times? 

b. How many additional dollars 

annually to your staffing budget would 

these additional FTEs equate to? 

4. How has GHG permitting affected 

the permitting process in your state? 

Please consider the areas listed below 

and provide specific estimates of the 

impact GHG permitting has had on your 

program where possible (i.e., responded 

to 10 percent more permitting questions 

than usual). 

a. Number of source meetings. 

b. Number of daily permitting 

questions. 

c. Number of incomplete permit 

applications. 

d. Training for permitting staff to 

understand the GHG permitting process. 

e. Is your staff unsure of how and 

when to permit GHG sources? 

5. For states where PSD permits for 

GHG have been issued, how was the 

burden (monetary and man-hours) 

compared to a typical non-GHG permit? 

Please provide an estimate where 

possible (i.e., an additional 20 hours). 

6. In providing perspective on the title 

V program, consider the following 

scenarios where your annual number of 

title V permitting activity were to 

increase by 10, 20, 30, 50, 100, and 200 

permit actions per year (both new 

permit applications and modifications 

included) due to the potential lowering 

of the current GHG applicability 

thresholds. When assessing the 

resources to permit these sources, 

consider that many of the newly 

permitted GHG sources under this 

scenario would likely consist of 

commercial and small industrial sources 

whose primary GHG emissions units are 

small, similarly configured combustion 

units: 

a. How many more full-time 

employees (FTEs) would your program 

need to address each of these potential 

permitting activity increases (i.e., 10, 20, 

30, 50, 100, and 200 permit actions per 

year) in title V due to GHGs and still 

meet current title V permit processing 

times? 

b. How many additional dollars 

annually to your staffing budget would 

these additional FTEs equate to? 

7. Does your state have an active 

outreach initiative and the resources 

necessary to reach out to smaller 

sources that may not be aware of their 

obligation to apply for title V or PSD 

permits due to GHGs? 

a. If the GHG permitting thresholds 

were lowered resulting in additional 

sources being subject to the PSD and 

title V permitting programs, how would 

this affect such initiative? Please be 

specific about the level of resources 

necessary where possible. 

8. Have the GHG requirements created 

or added to a backlog of unissued 

permits? 

a. If so, by what amount? 

9. Has your state modified its title V 

fees to cover GHG permitting needs? If 

not, would your state need to do so if 

additional sources (i.e., 10, 20, 30, 50, 

100, and 200 actions per year) were 

added to the permitting programs as a 

result of lowered thresholds? 

Streamlining Specific Questions 

1. Is your state processing 

applications through any electronic 

permitting measures? If not do you plan 

on implementing an type of electronic 

permitting? 

2. Has your state implemented LEAN 

techniques to streamline the permitting 

process? If so, how has this improved 

the efficiency for permitting actions? If 

not, do you plan on doing this in the 

future? 

3. Is your state considering any other 

permitting streamlining technique to 

help improve the efficiency and reduce 

the burden associated with permitting of 

GHG sources? Please list all 

streamlining techniques under 

consideration and the expected 

implementation timelines. 

B. Solicitation of Comment on 

Streamlining Techniques 

In section VI of this preamble, we 

discuss a range of streamlining 

techniques for GHG permitting. In this 

action we propose rulemaking to 

implement two of these techniques at 

this time concerning PALs for GHGs and 

creation of federal synthetic minor 

source permits for GHGs. For the other 

techniques, we present information on 

the techniques but propose no 

rulemaking at this time. We request 

comment on all these potential 

streamlining techniques, as discussed in 

section VII and in the following 

sections. More broadly, we request 

comment on other approaches to 

streamlining that may hold promise to 

reduce PSD and/or title V permitting 

burden for sources of GHGs and 

permitting authorities. Please include as 

much detail as possible on how such an 

approach would work, the amount of 

burden reduction that could be 

achieved, the specific legal authority the 

EPA should rely upon for implementing 

the approach, and whether EPA 

rulemaking would be required for 

implementation. 

1. Plantwide Applicability Limitations 

for GHGs 

We request comment on our proposal 

to undertake rulemaking at this time to 

provide a more flexible approach for 

GHG PALs. We further request comment 

on which option we should pursue for 

this rulemaking, the Major Source Optin Approach or the Minor Source 

Approach, and on how, specifically, we 

should revise our rules to implement 

the preferred approach. In our 

discussion of, and rationale for, GHG 

PALs in section VI.A of this preamble, 

we requested comment on many 

specific, related issues. We again 

request comment on those issues here. 

2. Synthetic Minor Source Permitting 

Authority for GHGs 

We request comment on our proposal 

to create synthetic minor permit 

authority, within the existing federal 

PSD regulations, for the purpose of 

issuing synthetic minor permit 

limitations for GHGs. In addition, we 

request comment on our legal authority 

for implementing such a program. 

Finally, we again request comment on 

other specific, related issues on which 

we requested comment in the 

discussion of synthetic minor permit 

authority in section VI.B of this 

preamble. 

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3. Redefining PTE and Source Category 

Specific PTE 

We request comment on the 

discussion in this proposal of our 

current thinking on developing category 

specific PTE rules or guidance, and on 

categories for which such a rule or 

guidance would be appropriate. We also 

request comment on creating a rule that 

would allow a source to use historical 

hours of operation in determining an 

emissions unit’s PTE. In addition, we 

request comment on the other specific, 

related issues that we discussed and on 

which we requested comment in the 

discussion of approaches to PTE in 

section VI.C of this preamble. 

4. General Permits for GHGs 

We request comment on the idea of 

developing a rule that would allow use 

of general permits for GHG sources, and 

on possible sources and source 

categories that may benefit from general 

permits. We also request information on 

the experience of state and local 

permitting authorities with the use of 

general permits and their potential 

applicability to GHG sources. In 

addition, we request comment on the 

other specific, related issues that we 

discussed and on which we requested 

comment in the discussion of general 

permits in section VI.D of this preamble. 

5. Presumptive BACT for GHGs 

We request comment on the concept 

of developing presumptive BACT for 

sources of GHGs, and on possible source 

categories and emissions units that may 

be promising candidates for this 

approach. We request comment on how 

and when to update presumptive BACT 

determinations, on the use of 

presumptive BACT for general permits, 

and on the appropriate public 

participation for the development and 

application of presumptive BACT. In 

addition, we request comment on the 

other specific, related issues that we 

discussed and on which we requested 

comment in the discussion of 

presumptive BACT in section VI.E of 

this preamble. 

6. Title V Empty Permits 

We request comment on the extent to 

which SIPs contain requirements that 

would be applicable to sources that 

would be subject to title V solely as a 

result of emissions of GHGs below the 

current thresholds established by the 

Tailoring Rule, and whether a 

significant number of sources would 

have empty permits at different 

thresholds. We also solicit comment on 

whether the EPA can, and should, 

interpret the title V as not requiring 

‘‘empty permits,’’ and if so whether 

state program revisions, approved by the 

EPA, would, or should, be necessary to 

exclude such sources from title V permit 

requirements. In addition, we request 

comment on the other specific, related 

issues that we discussed and on which 

we requested comment in the 

discussion of empty permits in section 

VI.F of this preamble. 

VIII. Statutory and Executive Order 

Reviews 

A. Executive Order 12866: Regulatory 

Planning and Review and Executive 

Order 13563: Improving Regulation and 

Regulatory Review 

Under Executive Order 12866 (58 FR 

51735, October 4, 1993), this action is a 

‘‘significant regulatory action’’ because 

it raises novel legal or policy issues. 

Accordingly, the EPA submitted this 

action to the OMB for review under 

Executive Orders 12866 and 13563 (76 

FR 3821, January 21, 2011) and any 

changes made in response to OMB 

recommendations have been 

documented in the docket for this 

action. 

This proposed Step 3 of the Tailoring 

Rule would continue the phased-in 

approach begun in Steps 1 and 2. 

However, we have determined that it 

would not be appropriate at this time to 

expand the universe of large sources of 

GHG emissions that must comply with 

permitting requirements under the Act, 

and the proposed rule would not reduce 

the GHG applicability thresholds or 

bring more sources into the PSD or title 

V programs. Thus, the proposed rule 

would not impose any costs on sources 

of GHGs to obtain permits or on 

permitting authorities to issue permits. 

B. Paperwork Reduction Act 

This action does not impose any new 

information collection burden. The 

proposed rule would not change the 

existing GHG permitting thresholds, and 

therefore would not impose any 

additional burden on sources to obtain 

PSD or title V permits or on permitting 

authorities to issue such permits. The 

proposed provisions for GHG PALs and 

synthetic minor source permitting 

authority would have the effect of 

reducing permitting burden in that the 

burden associated with obtaining or 

issuing a PAL permit or synthetic minor 

permit would be more than offset 

through avoiding subsequent PSD 

permitting actions with greater 

associated burden. However, if in the 

context of the final rule we determine 

that the provisions for PALs and 

synthetic minors impose new 

information collection burden, we will 

adjust the information collection 

requirements accordingly. The OMB has 

previously approved the information 

collection requirements contained in the 

existing regulations for the NSR and 

title V programs under the provisions of 

the Paperwork Reduction Act, 44 U.S.C. 

3501 et seq. and has assigned OMB 

control number 2060–0003 to the NSR 

program and OMB control numbers 

2060–0243 and 2060–0336 to the title V 

program (40 CFR Part 70 and Part 71 

components, respectively). The OMB 

control numbers for EPA’s regulations 

in 40 CFR are listed in 40 CFR Part 9. 

C. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

generally requires an agency to prepare 

a regulatory flexibility analysis of any 

rule subject to notice and comment 

rulemaking requirements under the 

Administrative Procedures Act or any 

other statute unless the agency certifies 

that the rule will not have a significant 

economic impact on a substantial 

number of small entities. Small entities 

include small businesses, small 

organizations and small governmental 

jurisdictions. 

For purposes of assessing the impacts 

of this proposed action on small 

entities, small entity is defined as: (1) A 

small business that is a small industrial 

entity as defined in the U.S. Small 

Business Administration (SBA) size 

standards (see 13 CFR 121.201); (2) a 

small governmental jurisdiction that is a 

government of a city, county, town, 

school district or special district with a 

population of less than 50,000; or (3) a 

small organization that is any not-forprofit enterprise that is independently 

owned and operated and is not 

dominant in its field. 

After considering the economic 

impacts of this proposed action on small 

entities, I certify that this proposed 

action will not have a significant 

economic impact on a substantial 

number of small entities. In determining 

whether a rule has a significant 

economic impact on a substantial 

number of small entities, the impact of 

concern is any significant adverse 

economic impact on small entities, 

since the primary purpose of the 

regulatory flexibility analysis is to 

identify and address regulatory 

alternatives ‘‘which minimize any 

significant economic impact of the rule 

on small entities.’’ 5 U.S.C. 603 and 604. 

Thus, an agency may certify that a rule 

will not have a significant economic 

impact on a substantial number of small 

entities if the rule relieves regulatory 

burden, or otherwise has a positive 

economic effect, on all of the small 

entities subject to the rule. 

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14258 Federal Register / Vol. 77, No. 46 / Thursday, March 8, 2012 / Proposed Rules 

The proposed rule would not change 

the existing GHG permitting thresholds, 

and therefore would not impose any 

additional burden on any sources 

(including small entities) to obtain PSD 

or title V permits or on any permitting 

authorities (including small entities, if 

any) to issue such permits. The 

proposed provisions for GHG PALs and 

synthetic minor source permitting 

authority would have the effect of 

reducing permitting burden on all 

entities, including small entities, in that 

the burden associated with obtaining or 

issuing a PAL permit or synthetic minor 

permit would be more than offset 

through avoiding subsequent PSD 

permitting actions with greater 

associated burden. We have therefore 

concluded that this proposed rule will 

be neutral or relieve the regulatory 

burden for all affected small entities. We 

continue to be interested in the 

potential impacts of the proposed rule 

on small entities and welcome 

comments on issues related to such 

impacts. In addition while we propose 

to maintain the current thresholds in 

this rulemaking, we also solicit 

comment on lowering the thresholds. If 

we receive information that persuades 

us that we should take action to lower 

the thresholds, we will at that time 

reassess the applicability of the 

requirements of the Regulatory 

Flexibility Act. 

D. Unfunded Mandates Reform Act 

This rule does not contain a federal 

mandate that may result in expenditures 

of $100 million or more for state, local 

and tribal governments, in the aggregate, 

or the private sector in any 1 year. The 

proposed rule would not change the 

existing GHG permitting thresholds, and 

therefore would not impose any 

additional burden on sources to obtain 

PSD or title V permits or on permitting 

authorities to issue such permits. The 

proposed provisions for GHG PALs and 

synthetic minor source permitting 

authority would have the effect of 

reducing permitting burden in that the 

burden associated with obtaining or 

issuing a PAL permit or synthetic minor 

permit would be more than offset 

through avoiding subsequent PSD 

permitting actions with greater 

associated burden. Thus, this rule is not 

subject to the requirements of sections 

202 or 205 of UMRA. 

This rule is also not subject to the 

requirements of section 203 of UMRA 

because it contains no regulatory 

requirements that might significantly or 

uniquely affect small governments. As 

noted previously, the effect of the 

proposed rule would be neutral or 

relieve regulatory burden. 

E. Executive Order 13132: Federalism 

This proposed rule does not have 

federalism implications. It will not have 

substantial direct effects on the states, 

on the relationship between the national 

government and the states or on the 

distribution of power and 

responsibilities among the various 

levels of government, as specified in 

Executive Order 13132. This proposed 

rule would maintain the existing 

structure of the PSD and title V 

programs and would not, therefore, 

affect the relationship between the 

national government and the states or 

the distribution of power and 

responsibilities among the various 

levels of government. In addition, the 

proposed rule would not change the 

existing GHG permitting thresholds, and 

therefore would not impose any 

additional burden on state permitting 

authorities to issue PSD or title V 

permits or such permits. The proposed 

provisions for GHG PALs and synthetic 

minor source permitting authority 

would have the effect of reducing 

permitting burden in that the burden 

associated with issuing a PAL permit or 

synthetic minor permit would be more 

than offset through avoiding subsequent 

PSD permitting actions with greater 

associated burden. 

In the spirit of Executive Order 13132, 

and consistent with EPA policy to 

promote communications between the 

EPA and state and local governments, 

the EPA specifically solicits comment 

on this proposed rule from state and 

local officials. 

F. Executive Order 13175: Consultation 

and Coordination With Indian Tribal 

Governments 

This action does not have tribal 

implications. There are no tribal 

authorities currently issuing major NSR 

permits, one tribe is implementing a 

title V program based on a delegation 

agreement under 40 CFR Part 71 and 

one tribe has recently obtained approval 

of title V program under 40 CFR Part 70. 

However, the proposed rule would not 

change the existing GHG permitting 

thresholds, and therefore would not 

impose any additional burden on 

sources to obtain PSD or title V permits 

or on permitting authorities to issue 

such permits. The proposed provisions 

for GHG PALs and synthetic minor 

source permitting authority would have 

the effect of reducing permitting burden 

in that the burden associated with 

obtaining or issuing a PAL permit or 

synthetic minor permit would be more 

than offset through avoiding subsequent 

PSD permitting actions with greater 

associated burden. 

Although Executive Order 13175 does 

not apply to this proposed rule, the EPA 

specifically solicits additional comment 

on this proposed action from tribal 

officials. 

G. Executive Order 13045: Protection of 

Children From Environmental Health 

and Safety Risks 

The EPA interprets Executive Order 

13045 (62 FR 19885, April 23, 1997) as 

applying only to those regulatory 

actions that concern health or safety 

risks, such that the analysis required 

under section 5–501 of the Executive 

Order has the potential to influence the 

regulation. This action is not subject to 

Executive Order 13045 because it does 

not establish an environmental standard 

intended to mitigate health or safety 

risks. 

H. Executive Order 13211: Actions That 

Significantly Affect Energy Supply, 

Distribution or Use 

This action is not a ‘‘significant 

energy action’’ as defined in Executive 

Order 13211 (66 FR 28355, May 22, 

2001), because it is not likely to have a 

significant adverse effect on the supply, 

distribution or use of energy. Further, 

we have concluded that this rule is not 

likely to have any adverse energy effects 

because this action would not create any 

new requirements for sources in the 

energy supply, distribution or use 

sectors. 

I. National Technology Transfer and 

Advancement Act 

Section 12(d) of the National 

Technology Transfer and Advancement 

Act of 1995 (NTTAA), Public Law 104– 

113, 12(d) (15 U.S.C. 272 note) directs 

the EPA to use voluntary consensus 

standards in its regulatory activities 

unless to do so would be inconsistent 

with applicable law or otherwise 

impractical. Voluntary consensus 

standards are technical standards (e.g., 

materials specifications, test methods, 

sampling procedures and business 

practices) that are developed or adopted 

by voluntary consensus standards 

bodies. The NTTAA directs the EPA to 

provide Congress, through the OMB, 

explanations when the agency decides 

not to use available and applicable 

voluntary consensus standards. 

This proposed rulemaking does not 

involve technical standards. Therefore, 

the EPA did not consider the use of any 

voluntary consensus standards. 

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J. Executive Order 12898: Federal 

Actions To Address Environmental 

Justice in Minority Populations and 

Low-Income Populations 

Executive Order 12898 (59 FR 7629, 

February 16, 1994) establishes federal 

executive policy on environmental 

justice. Its main provision directs 

federal agencies, to the greatest extent 

practicable and permitted by law, to 

make environmental justice part of their 

mission by identifying and addressing, 

as appropriate, disproportionately high 

and adverse human health or 

environmental effects of their programs, 

policies and activities on minority 

populations and low-income 

populations in the United States. 

The EPA has determined that this 

proposed rule will not have 

disproportionately high and adverse 

human health or environmental effects 

on minority or low-income populations 

because it does not affect the level of 

protection provided to human health or 

the environment. The proposed rule 

would not change the existing GHG 

permitting thresholds, and therefore 

would not affect the universe of sources 

subject to permitting. 

K. Determination Under Section 307(d) 

Pursuant to sections 307(d)(1)(J) and 

307(d)(1)(V) of the CAA, the 

Administrator determines that this 

action is subject to the provisions of 

section 307(d). Section 307(d)(1)(J) 

specifies that the provisions of section 

307(d) apply to ‘‘promulgation or 

revision of regulations under [part] C of 

title I (pertaining to prevention of 

significant deterioration of air quality 

and protection of visibility).’’ This 

section clearly subjects the portions of 

this action that pertain to PSD to the 

provisions of section 307(d). Section 

307(d)(1)(V) provides that the 

provisions of section 307(d) apply to 

‘‘such other actions as the Administrator 

may determine.’’ Pursuant to this 

section, the Administrator determines 

that the portions of this action that 

pertain to title V are subject to the 

provisions of section 307(d). This 

determination allows for uniform 

treatment for all aspects of this action. 

IX. Statutory Authority 

The statutory authority for this action 

is provided by sections 101, 111, 114, 

116 and 301 of the CAA as amended (42 

U.S.C. 7401, 7411, 7414, 7416 and 

7601). 

List of Subjects 

40 CFR Part 49 

Environmental protection, 

Administrative practice and procedure, 

Air pollution control, Carbon dioxide, 

Carbon dioxide equivalents, Greenhouse 

gases, Hydrofluorocarbons, 

Intergovernmental relations, Methane, 

Nitrous oxide, Perfluorocarbons, 

Reporting and recordkeeping 

requirements, Sulfur hexafluoride. 

40 CFR Part 51 

Environmental protection, 

Administrative practice and procedure, 

Air pollution control, Carbon dioxide, 

Carbon dioxide equivalents, Greenhouse 

gases, Hydrofluorocarbons, 

Intergovernmental relations, Methane, 

Nitrous oxide, Perfluorocarbons, 

Reporting and recordkeeping 

requirements, Sulfur hexafluoride. 

40 CFR Part 52 

Environmental protection, 

Administrative practice and procedure, 

Air pollution control, Carbon dioxide, 

Carbon dioxide equivalents, Greenhouse 

gases, Hydrofluorocarbons, 

Intergovernmental relations, Methane, 

Nitrous oxide, Perfluorocarbons, 

Reporting and recordkeeping 

requirements, Sulfur hexafluoride. 

40 CFR Part 70 

Environmental protection, 

Administrative practice and procedure, 

Air pollution control, Carbon dioxide, 

Carbon dioxide equivalents, Greenhouse 

gases, Hydrofluorocarbons, 

Intergovernmental relations, Methane, 

Nitrous oxide, Perfluorocarbons, 

Reporting and recordkeeping 

requirements, Sulfur hexafluoride. 

40 CFR Part 71 

Environmental protection, 

Administrative practice and procedure, 

Air pollution control, Carbon dioxide, 

Carbon dioxide equivalents, Greenhouse 

gases, Hydrofluorocarbons, Methane, 

Nitrous oxide, Perfluorocarbons, 

Reporting and recordkeeping 

requirements, Sulfur hexafluoride. 

Dated: February 24, 2012. 

Lisa P. Jackson, 

Administrator. 

For the reasons stated in the 

preamble, title 40, chapter I of the Code 

of Federal Regulations is proposed to be 

amended as set forth below. 

PART 52—[AMENDED] 

1. The authority citation for part 52 

continues to read as follows: 

Authority: 42 U.S.C. 7401, et seq. 

Subpart A—[Amended] 

2. In § 52.21, add paragraph (dd) to 

read as follows: 

§ 52.21 Prevention of significant 

deterioration of air quality. 

* * * * * 

(dd) Synthetic minor permits. The 

provisions in paragraphs (dd)(1) through 

(dd)(7) of this section govern issuance 

of, and compliance with, synthetic 

minor permits that the Administrator 

may issue to owners or operators of 

GHG-emitting sources. 

(1) Authority to issue GHG synthetic 

minor permits. (i) The Administrator 

may issue a GHG synthetic minor 

permit, when requested by the owner or 

operator of a GHG-emitting source that 

contains one or more emissions 

limitations that have the effect of 

reducing the potential to emit GHGs to: 

(a) Below a level of GHG emissions 

(expressed as CO2e and computed in 

accordance with paragraph (b)(49)(ii) of 

this section) specified in the ‘‘subject to 

regulation’’ definition contained in 

paragraph (b)(49)(iv) of this section; 

(b) Below the major stationary source 

applicability thresholds contained in 

paragraph (b)(1) of this section; and/or 

(c) Below the significant rate 

contained in paragraph (b)(23)(i) of this 

section, or when no significant rate for 

GHG is contained in that paragraph, to 

a level of no net emissions increase as 

specified in paragraph (b)(23)(ii) of this 

section. 

(ii) The Administrator may issue a 

GHG synthetic minor permit for 

purposes of: 

(a) Allowing the GHG-emitting source 

to avoid applicability of paragraphs (j) 

through (r)(5) of this section, for that 

source’s GHG emissions, or 

(b) Establishing a creditable GHG 

emissions reduction on either a tpy 

mass basis, or on a CO2e basis (as 

computed in accordance with paragraph 

(b)(49)(ii) of this section). 

(iii) Such permits shall contain 

restrictions that are legally enforceable 

and enforceable as practical matter. 

(iv) Nothing in this paragraph relieves 

an owner or operator of a GHG-emitting 

source from complying with any federal 

or state requirements that otherwise 

apply to the source. 

(2) Definitions. For purposes of 

paragraph (dd) of this section, the 

definitions in paragraphs (dd)(2)(i) 

through (iv) of this section apply. When 

a term is not defined in these 

paragraphs, it shall have the meaning 

given in paragraph (b) of this section or 

in the Act. 

(i) Emissions limitation means a 

requirement established by the 

Administrator which limits the 

quantity, rate, or concentration of GHG 

emissions on a continuous basis, 

including any requirement relating to 

the operation or maintenance of one or 

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more emissions units to assure 

continuous emissions reduction, and 

any design standard, equipment 

standard, work practice, operational 

standard, or pollution prevention 

technique when the Administrator can 

compute the effect of such requirements 

on the potential to emit GHGs of the 

emission unit(s)o and such requirement 

is legally enforceable and enforceable as 

a practical matter. 

(ii) GHG-emitting source means any 

stationary source that emits or has the 

potential to emit GHGs in amounts that 

are at or above the major stationary 

source thresholds contained in 

paragraph (b)(1) of this section, and is 

also: 

(a) A major stationary source for any 

other regulated NSR pollutant; 

(b) A new major stationary that will 

emit or have the potential to emit 

100,000 tpy CO2e; or 

(c) A stationary source that emits or 

has the potential to emit 100,000 tpy 

CO2e. 

(iii) GHG synthetic minor permit 

means a permit that the Administrator 

issues to a GHG-emitting source that 

contains one or more emissions 

limitations that allows the source to 

become a GHG synthetic minor source; 

reduces potential to emit GHGs to a 

level below the significant rate 

contained in paragraph (b)(23) of this 

paragraph; reduces potential to emit 

GHGs to a level that assures that there 

is no net emissions increase from the 

GHG-emitting source, and/or creates a 

creditable emissions reduction for GHGs 

under paragraph (b)(3) of this section. 

(iv) GHG synthetic minor source 

means a GHG-emitting source that, in 

absence of the Administrator’s issuance 

of a synthetic minor permit, would have 

the potential to emit GHGs in amounts 

that are at or above the subject to 

regulation thresholds contained in 

paragraph (b)(49) of this section, and the 

major stationary source thresholds 

contained in paragraph (b)(1) of this 

section, but has obtained a synthetic 

minor permit to limit the potential to 

emit GHGs to below either of these 

amounts. 

(3) Permit application requirements. 

As part of a permit application 

requesting a GHG synthetic minor 

permit, the owner or operator of a GHGemitting source shall submit the 

following information to the 

Administrator for approval: 

(i) Identifying information, including 

the name and address of the owner or 

operator (and plant name and address if 

different), and the name and telephone 

number of the plant manager/contact. 

(ii) A description of any ongoing or 

future planned construction activity that 

involves or affects emission units 

identified in paragraph (dd)(3)(iii) of 

this section, or involves construction of 

new emissions unit(s); and the 

commencement date of construction, 

the anticipated completion date, and the 

anticipated date each emissions unit 

will resume or begin regular operations. 

(iii) A list of all emissions units that 

are located at the GHG-emitting source 

that emit GHGs; and any new emissions 

units identified in paragraph (dd)(3)(ii) 

of this section. 

(iv) For each emissions unit identified 

in paragraph (dd)(3)(iii) of this section, 

the unit’s potential to emit GHGs along 

with supporting calculations. 

(a) For purposes of this application, 

the potential to emit of each emissions 

unit shall be computed without 

considering any emissions limitations 

that might be established through the 

Administrator’s issuance of a GHG 

synthetic minor permit. 

(b) Such calculations shall include 

fugitive emissions, to the extent that 

they are quantifiable, if the emissions 

unit or GHG-emitting source belongs to 

one of the source categories listed in 

paragraph (b)(1)(iii) of this section. 

(v) An identification of each 

emissions unit for which the permit 

applicant requests that the 

Administrator establish an emissions 

limitation, along with the following 

information: 

(a) The proposed emissions limitation 

for each emissions unit and a 

description of its effect on the potential 

to emit of the emissions unit. The 

proposed emission limitations must be 

expressed over the shortest practicable 

time period, taking into consideration 

the operation of the source and the 

methods to be used for demonstrating 

compliance. 

(b) Proposed testing, monitoring, 

recordkeeping, and reporting 

requirements to be used to demonstrate 

and assure compliance with the 

proposed emissions limitation. 

(c) A description of the production 

processes. 

(d) Identification of the emissions 

units. 

(e) Type and quantity of fuels and/or 

raw materials used, if applicable. 

(f) Description and estimated 

efficiency of air pollution control 

equipment under present and 

anticipated operating conditions. 

(g) Estimates of the current actual 

emissions, including all calculations for 

the estimates. 

(h) Estimates of the potential to emit 

that would result from compliance with 

the proposed emissions limitation, 

including all calculations for the 

estimates. 

(i) An identification of other federal 

requirements with which the emissions 

unit must comply. 

(vi) Any other information 

specifically requested by the 

Administrator. 

(4) Procedures for obtaining a 

synthetic minor permit. (i) The owner or 

operator of the GHG-emitting source 

must submit a permit application to the 

Administrator. The application must 

contain the information specified in 

paragraph (dd)(3) of this section. 

Option 1 for paragraphs (dd)(4)(ii) and 

(iii): 

(ii) Within 60 days after receipt of an 

application, the Administrator will 

determine if it contains the information 

specified in paragraph (dd)(3) of this 

section. 

(iii) If the Administrator determines 

that the application is not complete, the 

Administrator will request additional 

information from the owner or operator 

as necessary to process the application. 

If the Administrator determines that the 

application is complete, the 

Administrator will notify the owner or 

operator in writing. The Administrator 

should postmark the completeness 

determination or request for additional 

information within 60 days of receipt of 

the permit application. The application 

is deemed complete if the Administrator 

does not request additional information, 

or send a notice of complete application 

postmarked within 60 days of receipt of 

the permit application. 

Option 2 for paragraphs (dd)(4)(ii) and 

(iii): 

(ii) Within 30 days after receipt of an 

application, the Administrator will 

determine if it contains the information 

specified in paragraph (dd)(3) of this 

section. 

(iii) If the Administrator determines 

that the application is not complete, the 

Administrator will request additional 

information from the owner or operator 

as necessary to process the application. 

If the Administrator determines that the 

application is complete, the 

Administrator will notify owner or 

operator in writing. The Administrator 

should postmark the completeness 

determination or request for additional 

information within 30 days of receipt of 

the permit application by the 

Administrator. 

(iv) The Administrator will prepare a 

draft synthetic minor permit that 

describes the proposed emissions 

limitation(s) and the effect of such 

emissions limitation(s) on the potential 

emissions from any projects identified 

in paragraph (dd)(3)(ii) of this section, 

and the potential to emit GHGs of both 

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the emissions units identified in 

paragraph (dd)(3)(iii) of this section and 

the GHG-emitting source. 

(v) The Administrator must provide 

an opportunity for public comment and 

public participation on the draft 

synthetic minor permit as set out in 

paragraphs (dd)(6) of this section. 

(vi) After the close of the public 

comment period, the Administrator will 

review all comments received and either 

prepare a final synthetic minor permit 

or a written explanation of the reasons 

for a decision to deny the application 

for the synthetic minor permit. 

(vii) The final synthetic minor permit 

is subject to administrative and judicial 

review as set out in paragraph (dd)(7) of 

this section. 

(5) Permit Content. The permit must 

include the requirements in paragraphs 

(dd)(5)(i) through (vii) of this section. 

(i) General Requirements. The 

following elements must be included in 

the permit: 

(a) The effective date of the permit, 

and an effective date for any terms and 

conditions of the permit, if such date 

differs from the effective date of the 

permit; and 

(b) An identification of the emissions 

units subject to the permit and each 

emissions unit’s associated emissions 

limitations. 

(ii) Emissions limitations. The permit 

must contain one or more emissions 

limitations. Each emissions limitation 

must meet the requirements of 

paragraphs (dd)(5)(ii)(a) through (d) of 

this section. 

(a) To effectively reduce the potential 

to emit of one or more emissions units 

at the GHG-emitting source, the permit 

must include an emissions limitation 

that is legally enforceable and 

enforceable as a practical matter, and is 

expressed over the shortest practicable 

time period, generally not to exceed a 

12-month rolling total. 

(b) Such emissions limitation must 

consist of one or more numerical 

limitations on the quantity, rate, or 

concentration of GHG emissions on 

either a mass or CO2e basis that is 

expressed over the shortest practical 

time period and that is legally 

enforceable and enforceable as a 

practical matter. If it is impracticable to 

impose a numerical limitation, then the 

Administrator may establish pollution 

prevention requirements, design 

standards, equipment standards, work 

practices, operational standards, or 

maintenance standards, when the 

Administrator can compute the effect of 

such restrictions on the emissions unit’s 

or GHG-emitting source’s potential to 

emit GHG and the requirements are 

legally enforceable and enforceable as a 

practical matter. The Administrator may 

also establish any combination of the 

above requirements. 

(c) A statement that the emissions 

limitation applies at all times including 

startup, shutdown, and malfunction 

unless a separate emissions limitation 

applies to these emissions, and such 

emissions are expressly excluded from 

an emissions limitations, or the 

Administrator directs otherwise in the 

permit. 

(d) The calculation procedure the 

owner or operator will use to convert 

the monitoring system data to emissions 

data to demonstrate compliance with 

the emissions limitation. 

(iii) Monitoring requirements. The 

permit must include monitoring 

requirements sufficient to assure 

compliance with the emissions 

limitations. The Administrator must 

require, as appropriate, any of the 

requirements in paragraphs 

(dd)(5)(iii)(a) and (b) of this section. 

(a) A requirement to monitor, 

including analysis procedures, test 

methods, periodic testing, instrumental 

monitoring, and non-instrumental 

monitoring. Such monitoring 

requirements shall assure use of test 

methods, units, averaging periods, and 

other statistical conventions consistent 

with the required emissions limitations. 

(b) As necessary, requirements 

concerning the use, maintenance, and 

installation of monitoring equipment or 

methods. 

(iv) Recordkeeping requirements. The 

permit must include recordkeeping 

requirements sufficient to assure 

compliance with the emissions 

limitations and monitoring 

requirements, and must require the 

elements in paragraphs (dd)(5)(iv)(a) 

through (c) of this section. 

(a) Records of required monitoring 

information that include the 

information in paragraphs 

(dd)(5)(iv)(a)(1) through (6) of this 

section, as appropriate. 

(1) The location, date, and time of 

sampling or measurements. 

(2) The date(s) analyses were 

performed. 

(3) The company or entity, and the 

name of the specific individuals that 

performed the analyses. 

(4) The analytical techniques or 

methods used. 

(5) The results of such analyses. 

(6) The operating conditions existing 

at the time of sampling or measurement. 

(b) Retention for 5 years of records of 

all required monitoring data and 

support information for the monitoring 

sample, measurement, report, or 

application. Support information may 

include all calibration and maintenance 

records, all original strip-chart 

recordings or digital records for 

continuous monitoring instrumentation, 

and copies of all reports required by the 

permit. 

(c) A copy of the synthetic minor 

permit application and any additional 

information requested by the 

Administrator to support the 

application. 

(v) Reporting requirements. The 

permit must include the reporting 

requirements in paragraphs (dd)(5)(v)(a) 

through (d) of this section. 

(a) Annual submittal of total GHG 

emissions and calculations for each 

emissions unit subject to an emissions 

limitation in the synthetic minor permit. 

Such calculations shall be based on the 

terms and conditions in the permit that 

limit GHG emissions. Where necessary 

for a calculation of annual GHG 

emissions, the permit must require 

reporting of actual hours of operation, 

material used, and other relevant 

metrics. 

(b) Prompt reporting of deviations 

from permit requirements, including 

those attributable to upset conditions as 

defined in the permit, the probable 

cause of such deviations, and any 

corrective actions or preventive 

measures taken. Within the permit, the 

Administrator must define ‘‘prompt’’ in 

relation to the degree and type of 

deviation likely to occur and the 

applicable emissions limitations. 

(c) For each requirement in the 

permit, an annual submission of a 

compliance certification signed by the 

owner or operator, attesting to the GHGemitting source’s compliance with such 

requirement, or a statement that the 

GHG-emitting source failed to comply 

with the requirement and an 

explanation of such non-compliance. 

For purposes of complying with this 

reporting requirement, the owner or 

operator may concurrently attest to all 

requirements with which it complied, 

but must address each requirement with 

which it failed to comply separately. 

(d) A requirement to notify the 

Administrator in writing within 30 days 

from the date the operator begins actual 

construction, and any construction 

activity completes, and when regular 

operations begin, for any project 

involving or affecting any emissions 

unit that is subject to a requirement in 

the synthetic minor permit. 

(e) A requirement to provide all 

reports electronically, unless the 

Administrator has not provided a 

system for such electronic reporting. 

(1) For projects involving or affecting 

multiple emissions units, the 

notification must be submitted within 

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30 days from when such activities first 

occur for any emissions unit. 

(2) If such activity was not already 

described in the permit application as 

required by paragraph (dd)(3) of this 

section, the notification shall identify 

the emissions units involved in or 

affected by the project, and describe the 

nature of the construction activity and 

any affect such activity will have on the 

potential to emit of an emissions unit, 

or on the GHG-emitting source, 

otherwise the notification should 

reference the permit application. 

(vi) Severability clause. A statement 

stating that the provisions of this 

synthetic minor permit are severable, 

and if any provision of the permit is 

held invalid, the remainder of the 

permit shall not be affected. 

(vii) Additional provisions. The 

permit must also contain provisions 

stating the requirements in paragraphs 

(dd)(5)(vii)(a) through (g) of this section. 

(a) You, as the permittee, must 

comply with all conditions of your 

permit, including emissions limitations 

that apply to the emissions units at your 

source. Noncompliance with any permit 

term or condition is a violation of the 

permit and may constitute a violation of 

the Act and is grounds for enforcement 

action and for a permit termination or 

revocation. 

(b) It is not a defense for you, as the 

permittee, in an enforcement action that 

it would have been necessary to halt or 

reduce the permitted activity in order to 

maintain compliance with the 

conditions of this permit. 

(c) The Administrator may reopen, 

revise, terminate or revoke the permit. 

The filing of a request by you, as the 

permittee, for a permit revision, 

revocation, or termination, or of a 

notification of planned changes or 

anticipated noncompliance does not 

stay any permit condition. 

(d) The permit does not relieve the 

permittee from complying with any 

federal or state requirements that 

otherwise apply to the source. 

(e) The permit does not convey any 

property rights of any sort or any 

exclusive privilege. 

(f) You, as the permittee, shall furnish 

to the Administrator, within a 

reasonable time, any information that 

the Administrator may request in 

writing to determine whether cause 

exists for reopening, revising, revoking, 

or terminating the permit or to 

determine compliance with the permit. 

For any such information claimed to be 

confidential, you must also submit a 

claim of confidentiality in accordance 

with part 2, subpart B of this chapter. 

(g) You, as the permittee, must allow 

a representative of the Administrator 

(who must comply with the safety 

requirements of the permittee) to: 

(1) Enter upon your premises where 

the source is located or emissionsrelated activity is conducted, or where 

records are required to be kept under 

the conditions of the permit; 

(2) Have access to and copy, at 

reasonable times, any records that are 

required to be kept under the conditions 

of the permit; 

(3) Inspect, during normal business 

hours or while the source is in 

operation, any facilities, equipment 

(including monitoring and air pollution 

control equipment), practices, or 

operations regulated or required under 

the permit; 

(4) Sample or monitor, at reasonable 

times, substances or parameters for the 

purpose of determining compliance 

with the permit or other applicable 

requirements; and 

(5) Record any inspection by use of 

written, electronic, magnetic, and 

photographic media. 

(6) Public participation requirements. 

This paragraph applies to the issuance 

of synthetic minor permits. 

(i) Public availability of documents. 

With the exception of any confidential 

information as defined in part 2, subpart 

B of this chapter, the Administrator 

must make available for public 

inspection the documents listed in 

paragraphs (dd)(6)(i)(a) through (d) of 

this section. The Administrator must 

make such information available for 

public inspection at the appropriate 

EPA Regional Office. 

(a) All information submitted as part 

of an application for a permit. 

(b) Any additional information 

requested by the Administrator. 

(c) The Administrator’s analysis of the 

application and any relevant, additional 

information submitted by the source. 

(d) A copy of the draft permit or the 

decision to deny the permit with the 

justification for denial. 

(ii) Public notice requirements. (a) 

Before issuing a synthetic minor permit, 

the Administrator must prepare a draft 

permit and must provide adequate 

public notice to ensure that the area 

affected has reasonable access to the 

application and draft permit 

information, as set out in paragraphs 

(dd)(6)(ii)(a)(1) and (2) of this section. 

The public notice must provide an 

opportunity for public comment, and 

may provide notice of a public hearing 

on the draft permit. 

(1) The Administrator must mail a 

copy of the notice to the GHG-emitting 

source, and the state, and local air 

pollution authorities having jurisdiction 

in the area in which the GHG-emitting 

source is located. 

(2) The Administrator will use 

appropriate means of notification, 

depending on such factors as the nature 

and size of your source, local air quality 

considerations, and the characteristics 

of the population in the affected area. 

Appropriate means include those listed 

in paragraphs (dd)(6)(ii)(a)(2)(i) through 

(v) of this section. 

(i) The Administrator may mail or 

email a copy of the notice to persons on 

a mailing list developed by the 

Administrator consisting of those 

persons who have requested to be 

placed on such a mailing list. 

(ii) The Administrator may post the 

notice on its Web site. 

(iii) The Administrator may publish 

the notice in a newspaper of general 

circulation in the area affected by the 

source. 

(iv) The Administrator may provide 

copies of the notice for posting at one 

or more locations in the area affected by 

the source, such as post offices, trading 

posts, libraries, tribal environmental 

offices, community centers, or other 

gathering places in the community. 

(v) The Administrator may employ 

other means of notification as 

appropriate. 

(b) The notice required pursuant to 

paragraph (dd)(6)(ii)(a) of this section 

must include the following information 

at a minimum: 

(1) Identifying information, including 

the name and address of the owner and 

operator of the GHG-emitting source 

(and plant name and address if 

different) and the name and telephone 

number of the plant manager/contact; 

(2) The name and address of the 

reviewing authority processing the 

permit action; 

(3) An explanation of any emissions 

changes that will result from the permit 

action; 

(4) A description of the proposed 

emissions limitation(s) and its effect on 

the potential to emit of a project, one or 

more emissions units, or the GHGemitting source; 

(5) Instructions for requesting a public 

hearing; 

(6) The name, address, and telephone 

number of a contact person in the 

reviewing authority’s office from whom 

additional information may be obtained; 

(7) Locations and times of availability 

of the information (listed in paragraph 

(dd)(6)(i) of this section) for public 

inspection; and 

(8) A statement that any person may 

submit written comments, a written 

request for a public hearing, or both, on 

the draft permit action and the time 

frames by which any person must take 

such action(s). 

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(iii) Public comment. (a) The 

Administrator must provide at least 30 

days from the date of public notice 

provided under paragraph (dd)(6)(ii) of 

this section for the public to submit 

comments on the draft permit. The 

Administrator may extend this period if 

he or she determines it is appropriate to 

do so. 

(b) Any person may submit written 

comments on the draft permit during 

the public comment period. These 

comments must raise any reasonably 

ascertainable issue with supporting 

arguments by the close of the public 

comment period. 

(c) The public comment period under 

paragraph (dd)(6)(iii)(a) of this section 

will not close before the date of any 

public hearing held in accordance with 

paragraph (dd)(6)(iv) of this section. The 

hearing officer may also extend the 

comment period by so stating at the 

hearing. 

(iv) Public Hearing. (a) Any person 

may request a public hearing on a 

permit, but such request must be 

submitted to the Administrator, in 

writing, and must state the nature of the 

issues proposed to be raised at the 

hearing, and must be postmarked no 

later than 15 days after the 

Administrator provides public notice of 

the draft permit under paragraph 

(dd)(6)(ii) of this section. 

(b) The Administrator must hold a 

hearing whenever there is, on the basis 

of requests and the issues raised therein, 

a significant degree of public interest in 

a draft permit. The Administrator may 

also hold a public hearing at the 

Administrator’s discretion whenever, 

for instance, such a hearing might 

clarify one or more issues involved in 

the permit decision. 

(c) The Administrator must provide 

notice, consistent with the requirements 

in paragraph (dd)(6)(ii) of this section, 

that the Administrator will hold a 

public hearing. Such notice must be 

provided at least 15 days before the date 

of the hearing. Public notice of the 

hearing may be concurrent with that of 

the draft permit, and the two notices 

may be combined. 

(d) The Administrator may set 

reasonable limits on the time allowed 

for oral statements at the hearing. 

(e) The Administrator must make a 

tape recording or written transcript of 

any hearing available to the public as 

part of the final administrative record 

for the permit under paragraph 

(dd)(7)(iii) of this section. 

(7) Final permit issuance and 

administrative and judicial review—(i) 

Notification of the final permit decision. 

The Administrator must notify the GHGemitting source of the final permit 

decision, in writing, and if the permit is 

denied, of the reasons for such denial. 

The Administrator must also provide 

adequate public notice of the final 

permit decision, consistent with the 

provisions in paragraph (dd)(6)(ii) of 

this section. 

(ii) Effective date of the permit. A 

final permit becomes effective 30 days 

after the Administrator issues the 

permit, unless: 

(a) A later effective date is specified 

in the permit; or 

(b) Review of the final permit is 

request under paragraph (dd)(7)(iv), in 

which case the effective date of the 

permit is stayed until the Administrator 

issues a notice of final agency action 

under paragraph (dd)(7)(iv)(b), unless 

the Administrator notifies the 

Environmental Appeals Board, and the 

applicant, and all of the interested 

parties, that the permit contains 

uncontested and severable conditions, 

in which case, these conditions shall 

become fully effective enforceable 

obligations of the permit as specified in 

paragraph (dd)(7)(ii)(a) of this section, 

but the remainder of the permit 

conditions will be stayed as specified in 

this paragraph; or 

(c) The Administrator may make the 

permit effective immediately upon 

issuance if no comments requested a 

significant change in the draft permit or 

provided a technical justification for 

why the Administrator should deny the 

permit. 

(iii) Administrative record. (a) The 

Administrator must base final permit 

decisions on an administrative record 

consisting of: 

(1) The application and any 

supporting data furnished by the 

applicant; 

(2) The draft permit or notice of intent 

to deny the application; 

(3) Other documents in the supporting 

files for the draft permit that the 

Administrator considered in the 

decisionmaking; 

(4) All significant comments received 

during the public comment period; 

(5) The tape or transcript or other 

electronic record of any hearing(s) held; 

(6) Any written material submitted at 

such hearing(s); 

(7) Any new materials placed in the 

record as a result of the Administrator’s 

evaluation of public comments; 

(8) The final permit; and 

(9) Other documents in the supporting 

files for the final permit that the 

Administrator considered in the final 

decisionmaking. 

(b) The Administrator must add the 

additional documents required under 

paragraph (dd)(7)(iii)(a) of this 

paragraph to the record as soon as 

possible after their receipt or 

preparation by the Administrator. The 

record is complete on the date the 

Administrator issues the final permit. 

(c) Material readily available or 

published materials that are generally 

available and that are included in the 

administrative record under the 

standards of paragraph (dd)(7)(iii)(a) of 

this paragraph need not be physically 

included in the same file as the rest of 

the record as long as it is specifically 

referred to in the that file. 

(iv) Appealing a permit decision. 

Permit decisions may be appealed 

according to the following provisions: 

(a) The Administrator delegates 

authority to the Environmental Appeals 

Board (the Board) to issue final 

decisions in permit appeals filed under 

this program. An appeal directed to the 

Administrator, rather than to the Board, 

will be forwarded to the Board for 

consideration. This delegation does not 

preclude the Board from referring an 

appeal or a motion under this program 

to the Administrator when the Board, in 

its discretion, deems it appropriate to do 

so. When an appeal or motion is 

referred to the Administrator by the 

Board, all parties shall be so notified 

and the provisions of this program 

referring to the Board shall be 

interpreted as referring to the 

Administrator. 

(b) Any person seeking to appeal a 

permit decision must follow the 

provisions for PSD permits in § 124.19 

of this chapter. 

(c) The final synthetic minor permit is 

subject to administrative and judicial 

review as set out in § 124.19 of this 

chapter. 

(v) Permit Revisions. (a) The 

Administrator may reopen, revise, 

terminate, or revoke requirements 

within the synthetic minor permit, or 

may take such action on the entirety of 

the synthetic minor permit. Such 

actions may be taken by the 

Administrator for cause on its own 

initiative, or at the request of the 

permittee. 

(b) Except for administrative permit 

revisions identified in paragraph 

(dd)(7)(vi) of this section, the 

Administrator shall follow all of the 

public participation requirements in 

paragraphs (dd)(6) of this section before 

revising, revoking, or terminating 

requirements in the synthetic minor 

permit. 

(c) All changes to a permit are subject 

to the effective date, and administrative 

review requirements contained in 

paragraph (dd)(7)(i) through (iv) of this 

section. 

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(vi) Administrative permit revision. 

The following provisions govern 

administrative permit revisions. 

(a) An administrative permit revision 

is a permit revision that makes any of 

the following changes: 

(1) Corrects typographical, calculation 

or other errors. 

(2) Identifies a change in the name, 

address, or phone number of any person 

identified in the permit, or provides a 

similar minor administrative change at 

the source. 

(3) Requires more frequent monitoring 

or reporting by the permittee. 

(4) Allows for a change in ownership 

or operational control of a GHG-emitting 

source when the Administrator 

determines that no other change in the 

permit is necessary, provided that a 

written agreement containing a specific 

date for transfer of permit responsibility, 

coverage, and liability between the 

current and new permittee has been 

submitted to the Administrator. 

(5) Incorporates any other type of 

change that the Administrator 

determines is similar to those in 

paragraphs (dd)(7)(vi)(a)(1) through (5) 

of this section. 

(b) An administrative permit revision 

is not subject to the permit application, 

issuance, public participation or 

administrative requirements of this 

program. 

[FR Doc. 2012–5431 Filed 3–7–12; 8:45 am] 

BILLING CODE 6560–50–P 

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