```

[Federal Register Volume 75, Number 249 (Wednesday, December 29, 2010)]
[Rules and Regulations]
[Pages 81868-81874]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-32664]

[[Page 81868]]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R04-OAR-2010-0691-201069, FRL-9244-6]

Approval and Promulgation of Implementation Plans; Kentucky: 
Prevention of Significant Deterioration; Greenhouse Gas Permitting 
Authority and Tailoring Rule Revision

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is taking final action to approve a revision to the State 
Implementation Plan (SIP), submitted by the Commonwealth of Kentucky's 
Energy and Environment Cabinet, through the Kentucky Division for Air 
Quality (KDAQ), to EPA on August 5, 2010, for parallel processing. KDAQ 
submitted the final version of this SIP revision on December 13, 2010. 
The SIP revision, which incorporates updates to KDAQ's air quality 
regulations, includes two significant changes impacting the regulation 
of greenhouse gas (GHG) under Kentucky's New Source Review (NSR) 
Prevention of Significant Deterioration (PSD) program. First, the 
revision provides the Commonwealth with authority to issue PSD permits 
governing GHGs. Second, the SIP revision establishes appropriate 
emission thresholds for determining which new stationary sources and 
modification projects become subject to Kentucky's PSD permitting 
requirements for their GHG emissions. The first change is necessary 
because the Commonwealth of Kentucky is required to apply its PSD 
program to GHG-emitting sources, and unless it does so (or unless EPA 
promulgates a Federal implementation plan (FIP) to do so), such sources 
will be unable to receive preconstruction permits and therefore may not 
be able to construct or modify. The second change is necessary because 
without it, on January 2, 2011, PSD requirements would apply at the 100 
or 250 tons per year (tpy) levels otherwise provided under the Clean 
Air Act (CAA or Act), which would overwhelm Kentucky's permitting 
resources. EPA is approving the Commonwealth of Kentucky's December 13, 
2010, SIP revision because the Agency has made the determination that 
this SIP revision is in accordance with the CAA and EPA regulations, 
including regulations pertaining to PSD permitting for GHGs. 
Additionally, EPA is responding to adverse comments received on EPA's 
November 5, 2010, proposed approval of Kentucky's August 5, 2010, SIP 
revision.

DATES: Effective Date: This rule will be effective January 3, 2011.

ADDRESSES: EPA has established a docket for this action under Docket 
Identification No. EPA-R04-OAR-2010-0691. All documents in the docket 
are listed on the http://www.regulations.gov Web site. Although listed 
in the index, some information is not publicly available, i.e., 
Confidential Business Information or other information whose disclosure 
is restricted by statute. Certain other material, such as copyrighted 
material, is not placed on the Internet and will be publicly available 
only in hard copy form. Publicly available docket materials are 
available either electronically through http://www.regulations.gov or 
in hard copy at the Regulatory Development Section, Air Planning 
Branch, Air, Pesticides and Toxics Management Division, U.S. 
Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., 
Atlanta, Georgia 30303-8960. EPA requests that if at all possible, you 
contact the person listed in the FOR FURTHER INFORMATION CONTACT 
section for further information. The Regional Office's official hours 
of business are Monday through Friday, 8:30 a.m. to 4:30 p.m., 
excluding Federal holidays.

FOR FURTHER INFORMATION CONTACT: For information regarding the Kentucky 
SIP, contact Ms. Twunjala Bradley, Regulatory Development Section, Air 
Planning Branch, Air, Pesticides and Toxics Management Division, U.S. 
Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., 
Atlanta, Georgia 30303-8960. Ms. Bradley's telephone number is (404) 
562-9352; e-mail address: bradley.twunjala@epa.gov. For information 
regarding the Tailoring Rule, contact Ms. Heather Abrams, Air Permits 
Section, at the same address above. Ms. Abrams' telephone number is 
(404) 562-9185; e-mail address: abrams.heather@epa.gov.

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. What is the background for today's final action?
II. What is EPA's response to comments received on this action?
III. What is the effect of today's final action?
IV. When is today's action effective?
V. Final Action
VI. Statutory and Executive Order Reviews

I. What is the background for today's final action?

    EPA has recently undertaken a series of actions pertaining to the 
regulation of GHGs that, although for the most part distinct from one 
another, establish the overall framework for today's final action for 
the Kentucky SIP. The first four of these actions include, as they are 
commonly called, the ``Endangerment Finding'' and ``Cause or Contribute 
Finding,'' which EPA issued in a single final action,\1\ the ``Johnson 
Memo Reconsideration,'' \2\ the ``Light-Duty Vehicle Rule,'' \3\ and 
the ``Tailoring Rule.'' \4\ Taken together, these actions established 
regulatory requirements for GHGs emitted from new motor vehicles and 
new motor vehicle engines; determined that such regulations, when they 
take effect on January 2, 2011, will subject GHGs emitted from 
stationary sources to PSD requirements; and limited the applicability 
of PSD requirements to GHG sources on a phased-in basis. In a separate 
action, EPA called on the Commonwealth of Kentucky and 12 other States 
with SIPs that do not provide authority to issue PSD permits governing 
GHGs to revise their SIPs to provide such authority (the ``GHG PSD SIP 
Call'').\5\ EPA established a deadline of March 31, 2011, for Kentucky 
(including the entire State, except for the Louisville Metro Air 
Pollution Control District) to submit its GHG PSD SIP. Finally, in the 
most recent action, EPA proposed to implement a FIP authorizing PSD 
permitting for GHGs for those States that are unable to revise their 
SIPs to provide that authority by the applicable deadline (the ``GHG 
PSD FIP'').\6\ By a notice signed December 23, 2010, EPA finalized the 
FIP for seven States:

[[Page 81869]]

Arizona, Arkansas, Florida, Idaho, Kansas, Oregon, and Wyoming.
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    \1\ ``Endangerment and Cause or Contribute Findings for 
Greenhouse Gases Under Section 202(a) of the Clean Air Act.'' 74 FR 
66496 (December 15, 2009).
    \2\ ``Interpretation of Regulations that Determine Pollutants 
Covered by Clean Air Act Permitting Programs.'' 75 FR 17004 (April 
2, 2010).
    \3\ ``Light-Duty Vehicle Greenhouse Gas Emission Standards and 
Corporate Average Fuel Economy Standards; Final Rule.'' 75 FR 25324 
(May 7, 2010).
    \4\ Prevention of Significant Deterioration and Title V 
Greenhouse Gas Tailoring Rule; Final Rule.'' 75 FR 31514 (June 3, 
2010).
    \5\ ``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 77698 (December 13, 2010).
    \6\ ``Action to Ensure Authority to Issue Permits Under the 
Prevention of Significant Deterioration Program to Sources of 
Greenhouse Gas Emissions: Federal Implementation Plan: Proposed 
Rule.'' 75 FR 53883 (September 2, 2010).
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    On August 5, 2010,\7\ in response to the Tailoring Rule and earlier 
GHG-related EPA rules, and in anticipation of the GHG PSD SIP Call 
rulemaking, KDAQ submitted a draft revision to EPA for approval into 
the Kentucky SIP to: (1) Provide the Commonwealth with the authority to 
regulate GHGs under its PSD program; and (2) establish appropriate 
emission thresholds for determining which new or modified stationary 
sources become subject to Kentucky's PSD permitting requirements for 
GHG emissions.\8\ Subsequently, on November 5, 2010, EPA published a 
proposed rulemaking to approve a portion of Kentucky's August 5, 2010, 
SIP revision under parallel processing. 75 FR 68272. Specifically, 
Kentucky's August 5, 2010, draft SIP revision includes changes to 
Kentucky's Air Quality Regulations, 401 KAR 51:001--Definitions for 401 
KAR Chapter 51.\9\ The changes include incorporating by reference the 
Federal definition for ``subject to regulation'' (as amended in the 
Tailoring Rule at 51.166(b)(48)) and revising the definition for 
``regulated NSR pollutant'' to provide authority for the Commonwealth 
to regulate GHG and apply the Tailoring Rule's thresholds for GHG 
permitting applicability. Detailed background information and EPA's 
rationale for the proposed approval are provided in EPA's November 5, 
2010, Federal Register notice.
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    \7\ While the transmittal letter for Kentucky's submission (the 
subject of this action) is dated July 15, 2010, EPA did not 
officially receive Kentucky's request for parallel processing until 
August 5, 2010.
    \8\ Although Kentucky's August 5, 2010, draft SIP revision 
included provisions (i.e., 401 KAR 51:001 Section 1(80)(b) and (c)) 
to incorporate changes pursuant to EPA's Fugitive Emissions Rule (73 
FR 77882, December 19, 2008), the Commonwealth's final submission 
did not include these provisions. Kentucky's December 14, 2010, 
final SIP revision did include changes to exclude facilities that 
produce ethanol through a natural fermentation process from the 
definition of ``chemical process plants'' in the major NSR source 
permitting program (i.e., 401 KAR 51:001 Section 1 (118)). However, 
in today's final rulemaking, EPA is not taking any action on 
Kentucky's provisions to exclude facilities that produce ethanol 
through a natural fermentation process from the definition of 
``chemical process plants'' in the major NSR permitting program.
    \9\ Kentucky's submittal also revises definitions for 401 KAR 
52:001--Definitions for 401 KAR Chapter 52; however, these 
definitions relate to title V and are not included in the SIP. As 
such, EPA is not taking final action to approve Kentucky's update to 
these definitions in this rulemaking.
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    EPA's November 5, 2010, proposed approval was contingent upon the 
Commonwealth of Kentucky providing a final SIP revision that was 
substantively the same as the revision proposed for approval by EPA in 
the November 5, 2010, proposed rulemaking. 75 FR 68272. Kentucky 
provided its final SIP revision on December 13, 2010. While there are 
minor differences between the draft and final regulations, EPA has 
determined that these differences do not warrant re-proposal of this 
action. Kentucky's draft regulations proposed some changes to certain 
definitions; however, Kentucky decided not to proceed with those 
changes and instead chose to retain the definitions set forth in 
Kentucky's regulations. The definitions retained from the prior version 
of Kentucky's regulations had previously been approved by EPA and 
incorporated into Kentucky's SIP. Kentucky's decision does not alter 
the portions of the SIP revision authorizing Kentucky to issue PSD 
permits governing GHGs and to implement the Tailoring Rule thresholds. 
Thus, EPA concludes that Kentucky's decision to retain certain 
definitions provided in its regulations does not warrant a new public 
comment period prior to EPA's final approval of the SIP revision.\10\
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    \10\ Kentucky's final rule also eliminates the draft provisions 
(at 401 KAR 51:001 Section 1(80)(b) and (c) of the draft rule) that 
would have incorporated changes pursuant to EPA's Fugitive Emissions 
Rule, 73 FR 77882 (December 19, 2008). As explained in the proposal, 
75 FR 68273, EPA did not propose to take action on those provisions 
because EPA has stayed the Fugitive Emissions Rule (and the 
associated amendments to 40 CFR part 51 and part 52) until October 
3, 2011, to allow the Agency time to propose, take comment and issue 
a final action regarding the inclusion of fugitive emissions in NSR 
applicability determinations. Therefore, Kentucky's decision not to 
include those provisions in its final submittal has no impact on 
this action.
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II. What is EPA's response to comments received on this action?

    EPA received two sets of comments on the November 5, 2010, proposed 
rulemaking to approve revisions to Kentucky's SIP. One set of comments, 
provided by the Sierra Club, was in favor of EPA's November 5, 2010, 
proposed action. The other set of comments, provided by the Air 
Permitting Forum, raised concerns with final action on EPA's November 
5, 2010, proposed action. A full set of the comments provided by both 
the Sierra Club and Air Permitting Forum (hereinafter referred to as 
``the Commenter'') is provided in the docket for today's final action. 
A summary of the adverse comments and EPA's responses are provided 
below.
    Generally, the adverse comments fall into six categories. First, 
the Commenter asserts that PSD requirements cannot be triggered by 
GHGs. Second, the Commenter objects to EPA's interpretation of the Act 
that Kentucky will face a construction ban absent this SIP revision. 
Third, the Commenter asserts that EPA's notice does not provide 
sufficient information on which particular regulatory provisions are 
proposed for approval in EPA's November 5, 2010, proposed action. 
Fourth, the Commenter expresses concerns regarding a footnote in the 
November 5, 2010, proposal describing EPA's previously announced 
intention to narrow its prior approval of some SIPs to ensure that 
sources with GHG emissions that are less than the Tailoring Rule's 
thresholds will not be obligated under Federal law to obtain PSD 
permits prior to a SIP revision incorporating those thresholds. The 
Commenter explains that the planned SIP approval narrowing action is 
``inapplicable to this action and, if applicable, is illegal.'' Fifth, 
the Commenter states that EPA has failed to meet applicable statutory 
and executive order review requirements. Lastly, the Commenter states: 
``EPA should explicitly state in any final rule that the continued 
enforceability of these provisions in the Kentucky SIP is limited to 
the extent to which the Federal requirements remain enforceable.'' 
EPA's response to these six categories of comments is provided below.
    Comment 1: The Commenter asserts that PSD requirements cannot be 
triggered by GHGs. In its letter, the Commenter reiterates EPA's 
statement that without the Tailoring Rule thresholds, PSD will apply as 
of January 2, 2011, to all stationary sources that emit or have the 
potential to emit, depending on the source category, either 100 or 250 
tons of GHG per year. The Commenter also reiterates EPA's statement 
that beginning January 2, 2011, a source owner proposing to construct 
any new major source that emits at or higher than the GHG applicability 
levels, or modify any existing major source in a way that would 
increase GHG emissions, would need to obtain a PSD permit that 
addresses these emissions before construction could begin. In raising 
concerns with the two aforementioned statements, the Commenter states: 
``[n]o area in the Commonwealth of Kentucky has been designated 
attainment or unclassifiable for greenhouse gases (GHGs), as there is 
no national ambient air quality standard (NAAQS) for GHGs. Therefore, 
GHGs cannot trigger PSD permitting.'' The Commenter notes that it made 
this argument in detail in comments submitted to EPA on the Tailoring 
Rule and other related GHG rulemakings. The Commenter attached those 
previously submitted comments to its comments on the proposed

[[Page 81870]]

rulemaking related to this action. Finally, the Commenter states that 
``EPA should immediately provide notice that it is now interpreting the 
Act not to require that GHGs trigger PSD and allow Kentucky to rescind 
that portion of its rules that would allow GHGs to trigger PSD.''
    Response 1: EPA established the requirement that PSD applies to all 
pollutants newly subject to regulation, including non-NAAQS pollutants, 
in earlier national rulemakings concerning the PSD program, and EPA has 
not re-opened that issue in this rulemaking. In an August 7, 1980, 
rulemaking at 45 FR 52676, 45 FR 52710-52712, and 45 FR 52735, EPA 
stated that a ``major stationary source'' was one which emitted ``any 
air pollutant subject to regulation under the Act'' at or above the 
specified numerical thresholds; and defined a ``major modification,'' 
in general, as a physical or operational change that increased 
emissions of ``any pollutant subject to regulation under the Act'' by 
more than an amount that EPA variously termed as de minimis or 
significant. In addition, in EPA's NSR Reform rule at 67 FR 80186 and 
67 FR 80240 (December 31, 2002), EPA added to the PSD regulations the 
new definition of ``regulated NSR pollutant'' (currently codified at 40 
CFR 52.21(b)(50) and 40 CFR 51.166(a)(49)); noted that EPA added this 
term based on a request from a commenter to ``clarify which pollutants 
are covered under the PSD program;'' and explained that in addition to 
criteria pollutants for which a NAAQS has been established, ``[t]he PSD 
program applies automatically to newly regulated NSR pollutants, which 
would include final promulgation of an NSPS [new source performance 
standard] applicable to a previously unregulated pollutant.'' Id. at 67 
FR 80240 and 67 FR 80264. Among other things, the definition of 
``regulated NSR pollutant'' includes ``[a]ny pollutant that otherwise 
is subject to regulation under the Act.'' See 40 CFR 
52.21(b)(50)(d)(iv); see also id. 40 CFR 51.166(a)(49)(iv).
    In any event, EPA disagrees with the Commenter's underlying premise 
that PSD requirements are not triggered for GHGs when GHGs become 
subject to regulation as of January 2, 2011. As just noted, this has 
been well established and discussed in connection with prior EPA 
actions, including, most recently, the Johnson Reconsideration and the 
Tailoring Rule. In addition, EPA's November 5, 2010, proposed 
rulemaking notice provides the general basis for the Agency's rationale 
that GHGs (while not a NAAQS pollutant) can trigger PSD permitting 
requirements. The November 5, 2010, notice also refers the reader to 
the preamble to the Tailoring Rule for further information on this 
rationale. In that rulemaking, EPA addressed at length the comment that 
PSD can be triggered only by pollutants subject to the NAAQS, and 
concluded such an interpretation of the Act would contravene Congress' 
unambiguous intent. See 75 FR 31560-31562. Further discussion of EPA's 
rationale for concluding that PSD requirements are triggered by non-
NAAQS pollutants such as GHGs appears in the Tailoring Rule Response-
to-Comments document (``Prevention of Significant Deterioration and 
Title V GHG Tailoring Rule: EPA's Response to Public Comments''), pp. 
34-41; and in EPA's response to motions for a stay filed in the 
litigation concerning those rules (``EPA's Response to Motions for 
Stay,'' Coalition for Responsible Regulation v. EPA, D. C. Cir. No. 09-
1322 (and consolidated cases)), at pp. 47-59, and are incorporated by 
reference here. These documents have been placed in the docket for 
today's action.
    Comment 2: The Commenter raised concerns regarding EPA's 
interpretation of the Act that Kentucky will face a construction ban 
absent this SIP revision. In its letter, the Commenter mentions that it 
provided comments on EPA's GHG PSD SIP Call and GHG PSD FIP rulemakings 
expressing that ``EPA's interpretation of the Act to impose a 
construction ban based on Section 165(a) is incorrect.'' Further, the 
Commenter states: ``No statutory language addressing implementation 
plan requirements can be construed to produce self-executing changes to 
SIPs or FIPs approved or promulgated under section 110 of the Act 
unless Congress enacts statutory provisions explicitly amending those 
SIPs or FIPs to incorporate new requirements, thereby obviating the 
need for rulemaking under section 110(a) or (c) of the Act to effect 
revisions to those implementation plans.'' The Commenter also contends 
that there is no support for EPA's ``permit moratorium'' interpretation 
because (in the Commenter's opinion) CAA section 165(a) is not self-
executing and approved SIPs and promulgated FIPs can only be changed 
through section 110 rulemakings to revise those plans. In support of 
its position, Commenter cites to United States v. Cinergy Corp., No. 
09-3344 (7th Cir. October 12, 2010). The Commenter further states that 
Kentucky would be able to issue PSD permits after January 2, 2011, even 
without GHG limits, because its current SIP is approved and it would be 
acting consistent with that approved SIP. Further, the Commenter states 
that ``EPA's rule contemplated that states have 3 years to revise their 
SIPs when an NSR-related change occurs and, assuming without conceding 
that EPA could impose PSD on GHGs, EPA should have followed that 
procedure in this case.''
    Response 2: EPA notes that the Agency provided an extensive 
response in the final GHG SIP Call rulemaking to comments nearly 
identical to comments received on this rulemaking, 75 FR 77698, and EPA 
incorporates by reference those responses, as contained in the preamble 
and the Tailoring Rule Response to Comment document, into this 
rulemaking. The following gives examples of references in the GHG SIP 
Call rulemaking preamble and record in which EPA responded to these, or 
substantially similar, comments:
    With respect to the comments that (i) ``EPA's interpretation of the 
Act to impose a construction ban based on Section 165(a) is 
incorrect;'' (ii) ``No statutory language addressing implementation 
plan requirements can be construed to produce self-executing changes to 
SIPs or FIPs approved or promulgated under section 110 of the Act 
unless Congress enacts statutory provisions explicitly amending those 
SIPs or FIPs to incorporate new requirements, thereby obviating the 
need for rulemaking under section 110(a) or (c) of the Act to effect 
revisions to those implementation plans;'' and (iii) there is no 
support for EPA's ``permit moratorium'' interpretation because (in the 
Commenter's opinion) CAA section 165(a) is not self-executing and 
approved SIPs and promulgated FIPs can only be changed through section 
110 rulemakings to revise those plans, see, for example, 75 FR 77705 in 
footnote 16, and 75 FR 77710-77711. EPA notes further that the 
requirement of CAA section 165(a)(1) that stationary sources that emit 
the requisite quantity of pollutants subject to regulation obtain a 
pre-construction permit is mandated by the CAA and is automatically 
updated to apply to any pollutant newly subject to regulation; thus, 
contrary to the commenter's statement, EPA is not construing the CAA to 
``produce self-executing changes to SIPs * * *.'' In addition, today's 
action does not create what the Commenter calls a ``permit 
moratorium''; in fact today's rule puts in place a permitting authority 
for GHG-emitting sources for Kentucky only one day after GHG PSD 
permitting requirements go into effect. Further, no ``self-executing 
changes'' to Kentucky's SIP are made in today's action; EPA is simply 
approving Kentucky's submitted

[[Page 81871]]

December 13, 2010, SIP revision according to the proper process.
    With respect to the comment that a decision by Judge Posner (i.e., 
United States v. Cinergy Corp., No. 09-3344 (7th Cir. October 12, 
2010)) directly addresses this issue, see 75 FR 77705 in footnote 16.
    With respect to the comment that Kentucky would be able to issue 
PSD permits after January 2, 2011, even without GHG limits, because its 
current SIP is approved and it would be acting consistent with that 
approved SIP, EPA notes that it is true that Kentucky could issue such 
a permit to cover the non-GHG pollutants emitted by a source. If the 
source emits GHGs in at least the specified amount, however, then the 
source would need a PSD permit for its GHG emissions. Kentucky, absent 
an approved SIP revision applying the State's PSD program to GHGs, 
would not have the authority to issue such a permit.
    With respect to the comment that ``EPA's rule contemplated that 
States have 3 years to revise their SIPs when an NSR-related change 
occurs and, assuming without conceding that EPA could impose PSD on 
GHGs, EPA should have followed that procedure in this case,'' see 75 FR 
77707-77708. In any event, the proper length of time EPA must provide 
States to act is also irrelevant to this rule because this action deals 
with a SIP revision actually submitted by Kentucky to EPA for approval.
    Comment 3: The Commenter indicates that EPA's proposed action on 
Kentucky's draft rules is inconsistent with CAA section 110 because it 
does not provide for Federal notice and comment on the final State 
action.
    Response 3: EPA disagrees with the Commenter's assertion that EPA's 
proposed action is inconsistent with section 110 of the CAA because 
EPA's proposed approval was based on a draft form of the Commonwealth's 
regulations. As explained in our proposal at 75 FR 68273, EPA utilized 
a ``parallel processing'' procedure for this SIP revision. Under this 
procedure, EPA proposes rulemaking action concurrently with the State's 
procedures for approving a SIP submittal and amending its regulations 
(40 CFR part 51, appendix V, 2.3). EPA reviews that SIP submittal, even 
though the regulation is not yet adopted in final form by the State, as 
if it were a final, adopted regulation. In doing so, EPA evaluates the 
draft regulation against the same approvability criteria as any other 
SIP submittal. Thus, we have not used the ``parallel processing'' 
procedure to avoid any statutory requirements. In this case, as 
explained earlier in this notice, EPA has determined that the minor 
differences between the draft and final regulations are not significant 
and do not warrant re-proposal of this action. Accordingly, the 
proposal gave the public the appropriate opportunity to comment on the 
substance of the August 5, 2010, SIP revision for which EPA is today 
issuing a final approval.
    Comment 4: The Commenter states that EPA's proposed rulemaking does 
not provide sufficient information on which particular revisions are 
included in the November 5, 2010, proposed action. Specifically, the 
Commenter mentions that EPA does not provide citations or other 
explicit reference to what EPA is actually approving. The Commenter 
states that ``this failure makes it impossible for the public to 
meaningfully assess and comment regarding the provisions on which EPA 
proposes to act.'' Further, the Commenter explains that the docket 
contained over 100 pages of underline/strikeout regulatory text, much 
of which is already in the Kentucky SIP.
    Response 4: EPA disagrees that the November 5, 2010, proposed 
rulemaking does not provide sufficient information on which particular 
regulatory provisions EPA was proposing for approval. To the contrary, 
in the section entitled ``V. What is EPA's Analysis of Kentucky's 
Proposed SIP Revision?'' of the November 5, 2010, proposal, EPA 
explains that the proposed rulemaking would approve changes to 
Kentucky's regulations, at 401 KAR 51:001--Definitions for 401 KAR 
Chapter 51, including an update to the definition of ``subject to 
regulation'' that provides the Commonwealth with authority to issue PSD 
permits governing GHGs and establishes appropriate GHG emission 
thresholds for PSD applicability. 75 FR 68278. Additionally, EPA's 
November 5, 2010, notice identifies those portions of Kentucky's 
submittal that are not being acted upon in this proceeding. See 75 FR 
68273 and 68278 n.10. Finally, as the Commenter notes, the docket for 
this action includes a marked up version of 401 KAR 51:001--Definitions 
for 401 KAR Chapter 51 showing the revisions under consideration. Thus, 
EPA sufficiently identified the particular SIP revisions at issue in 
this action.
    Comment 5: The Commenter expresses concerns regarding a footnote in 
which EPA describes its previously announced intention to narrow its 
prior approval of some SIPs to ensure that sources with GHG emissions 
that are less than the Tailoring Rule's thresholds will not be 
obligated under Federal law to obtain PSD permits during any gap 
between when GHG permitting requirements go into effect and when the 
SIP is revised to incorporate the Tailoring Rule thresholds. The 
Commenter explains that narrowing is ``inapplicable to this action and, 
if applicable, is illegal.''
    Response 5: While EPA does not agree with the Commenter's assertion 
that the narrowing approach discussed in EPA's Tailoring Rule is 
illegal, EPA does acknowledge that the narrowing approach is 
inapplicable to the action that EPA is today taking for Kentucky's 
December 13, 2010, SIP revision. In today's final action, EPA is acting 
to approve a SIP revision submitted by Kentucky, and is not otherwise 
narrowing its approval of prior submitted and approved provisions in 
the Kentucky SIP. Accordingly, the legality of the narrowing approach 
is not at issue in this rulemaking.
    Comment 6: The Commenter states that EPA has failed to meet 
applicable statutory and executive order review requirements. 
Specifically, the Commenter refers to the statutory and executive 
orders for the Paperwork Reduction Act, the Regulatory Flexibility Act 
(RFA), Unfunded Mandates Reform Act, and Executive Order 13132 
(Federalism). Additionally, the Commenter mentions that EPA has never 
analyzed the costs and benefits associated with triggering PSD for 
stationary sources in Kentucky, much less nationwide.
    Response 6: EPA disagrees with the Commenter's statement that EPA 
has failed to meet applicable statutory and executive order review 
requirements. As stated in EPA's proposed approval of Kentucky's 
December 13, 2010, SIP revision, this action merely approves State law 
as meeting Federal requirements and does not impose additional 
requirements beyond those imposed by State law. Accordingly, EPA 
approval, in and of itself, does not impose any new information 
collection burden, as defined in 5 CFR 1320.3(b) and (c), that would 
require additional review under the Paperwork Reduction Act. In 
addition, this SIP approval will not have a significant economic impact 
on a substantial number of small entities, beyond that which would be 
required by the State law requirements, so a regulatory flexibility 
analysis is not required under the RFA. Accordingly, this rule is 
appropriately certified under section 605(b) of the RFA. Moreover, as 
this action approves pre-existing requirements under State law and does 
not impose any additional enforceable duty beyond that required by 
State law, it does not contain any unfunded mandates or significantly 
or uniquely affect small governments, such that it

[[Page 81872]]

would be subject to the Unfunded Mandates Reform Act. Finally, this 
action does not have federalism implications that would make Executive 
Order 13132 applicable because it merely approves a State rule 
implementing a Federal standard, and does not alter the relationship or 
the distribution of power and responsibilities established in the CAA.
    In sum, today's rule is a routine approval of a SIP revision, 
approving State law, and does not impose any requirements beyond those 
imposed by State law. To the extent these comments are directed more 
generally to the application of the statutory and executive order 
reviews to the required regulation of GHGs under PSD programs, these 
comments are irrelevant to the approval of State law in today's action. 
However, EPA provided an extensive response to similar comments in 
promulgating the Tailoring Rule. EPA refers the Commenter to the 
sections in the Tailoring Rule entitled ``VII. Comments on Statutory 
and Executive Order Reviews,'' 75 FR 31601-31603, and ``VI. What are 
the economic impacts of the final rule?,'' 75 FR 31595-31601. EPA also 
notes that today's action does not in-and-of itself trigger the 
regulation of GHGs. To the contrary, by putting in place higher PSD 
applicability thresholds for GHGs than would otherwise be in effect 
under the Act, this rulemaking, as well as EPA's Tailoring Rule, 
provides relief to smaller GHG-emitting sources that would otherwise be 
subject to PSD permitting requirements for their GHG emissions.
    Comment 7: The Commenter states that ``[i]f EPA proceeds with this 
action, it must condition approval on the continued validity of its 
determination that PSD can be triggered by or is applicable to GHGs.'' 
Further, the Commenter remarks on the ongoing litigation in the U.S. 
Court of Appeals for the DC Circuit. Specifically, regarding EPA's 
determination that PSD can be triggered by GHGs or is applicable to 
GHGs, the Commenter mentions that ``EPA should explicitly state in any 
final rule that continued enforceability of these provisions in the 
Kentucky SIP is limited to the extent to which the Federal requirements 
remain enforceable.'' The Commenter notes that if a stay is issued, 
these requirements should also be stayed.
    Response 7: EPA believes that it is most appropriate to take 
actions that are consistent with the Federal regulations that are in 
place at the time the action is being taken. To the extent that any 
changes to Federal regulations related to today's action result from 
pending legal challenges or other actions, EPA will process appropriate 
SIP revisions in accordance with the procedures provided in the Act and 
EPA's regulations. EPA notes that in an order dated December 10, 2010, 
the United States Court of Appeals for the DC Circuit denied motions to 
stay EPA's regulatory actions related to GHGs. Coalition for 
Responsible Regulation, Inc. v. EPA, Nos. 09-1322, 10-1073, 10-1092 
(and consolidated cases), Slip Op. at 3 (DC Cir. December 10, 2010) 
(order denying stay motions).

III. What is the effect of today's final action?

    Final approval of Kentucky's December 13, 2010, SIP revision will 
make Kentucky's SIP adequate with respect to PSD requirements for GHG-
emitting sources, thereby negating the need for a GHG PSD FIP. 
Furthermore, final approval of Kentucky's SIP revision will put in 
place the GHG emission thresholds for PSD applicability set forth in 
EPA's Tailoring Rule (75 FR 31514, June 3, 2010), ensuring that smaller 
GHG sources emitting less than these thresholds will not be subject to 
permitting requirements when these requirements begin applying to GHGs 
on January 2, 2011. Pursuant to section 110 of the CAA, EPA is 
approving a portion of the changes made in Kentucky's December 13, 
2010, proposed SIP revision into the Commonwealth's SIP.
    The changes to Kentucky's SIP-approved PSD program that EPA is 
approving today are to Kentucky's rules which have been formatted to 
conform to Kentucky's rule drafting standards for 401 KAR 51:001--
Definitions for 401 KAR Chapter 51, but in substantive content the 
rules that address the Tailoring Rule provisions are the same as the 
Federal rules. As part of its review of the Kentucky submittal, EPA 
performed a line-by-line review of Kentucky's proposed SIP changes and 
has determined that the provisions that EPA is approving today are 
consistent with the Tailoring Rule. Furthermore, EPA has determined 
that the December 13, 2010, revision to Kentucky's SIP is consistent 
with section 110 of the CAA. See, e.g., Tailoring Rule, at 75 FR 31561.

IV. When is today's action effective?

    EPA is making the effective date of today's final action the same 
day as the Commonwealth's effective date for its rulemaking. In 
accordance with 5 U.S.C. 553(d), EPA finds there is good cause for this 
action to become effective on January 3, 2011. This is because a 
delayed effective date is unnecessary due to the nature of the 
Commonwealth's changes to its PSD regulations, which provide the 
Commonwealth with the needed authority to regulate GHG-emitting sources 
for permitting purposes. Additionally, Kentucky's changes to its PSD 
regulations to establish appropriate emissions thresholds for 
determining PSD applicability with respect to new or modified GHG-
emitting sources in accordance with EPA's Tailoring Rule, thereby 
relieving the Commonwealth from certain CAA requirements that would 
otherwise apply to it. The January 3, 2011, effective date for this 
action is authorized under both 5 U.S.C. 553(d)(1), which provides that 
rulemaking actions may become effective less than 30 days after 
publication if the rule ``grants or recognizes an exemption or relieves 
a restriction,'' and section 553(d)(3), which allows an effective date 
less than 30 days after publication ``as otherwise provided by the 
agency for good cause found and published with the rule.'' The purpose 
of the 30-day waiting period prescribed in section 553(d) is to give 
affected parties a reasonable time to adjust their behavior and prepare 
before the final rule takes effect. Today's rule, however, does not 
create any new regulatory requirements such that affected parties would 
need time to prepare before the rule takes effect. Rather, today's rule 
provides sources emitting GHGs at or above the higher emissions 
thresholds with a permitting authority from which it can seek the 
permits which, prior to this rule, Federal and State law already 
required them to seek, and relieves the sources within the Commonwealth 
from considering the lower emissions thresholds for GHG permitting 
purposes. For these reasons, EPA finds good cause under 5 U.S.C. 
553(d)(3) for this action to become effective January 3, 2011.

V. Final Action

    EPA is taking final action to approve the Commonwealth of 
Kentucky's December 13, 2010, SIP revision, which includes updates to 
Kentucky's air quality regulations, 401 KAR 51:001--Definitions for 401 
KAR Chapter 51, relating to PSD requirements for GHG-emitting sources. 
Significantly, Kentucky's December 13, 2010, SIP revision: (1) Provides 
the Commonwealth with the authority to regulate GHGs under its PSD 
program, and (2) establishes appropriate emissions thresholds for 
determining PSD applicability with respect to new or modified GHG-
emitting sources in accordance with EPA's Tailoring Rule. EPA has made 
the determination that the December 13, 2010, SIP revision is

[[Page 81873]]

approvable because it is in accordance with the CAA and EPA 
regulations, including regulations pertaining to PSD permitting for 
GHGs.

VI. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP 
submission that complies with the provisions of the Act and applicable 
Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in 
reviewing SIP submissions, EPA's role is to approve State choices, 
provided that they meet the criteria of the CAA. Accordingly, this 
action merely approves State law as meeting Federal requirements and 
does not impose additional requirements beyond those imposed by State 
law. For that reason, this action:
     Is not a ``significant regulatory action'' subject to 
review by the Office of Management and Budget under Executive Order 
12866 (58 FR 51735, October 4, 1993);
     Does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
     Is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the CAA; and
     Does not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human health or environmental 
effects, using practicable and legally permissible methods, under 
Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, this rule does not have Tribal implications as specified 
by Executive Order 13175 (65 FR 67249, November 9, 2000), because the 
SIP is not approved to apply in Indian country located in the State, 
and EPA notes that it will not impose substantial direct costs on 
Tribal governments or preempt Tribal law.
    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this action and 
other required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. A major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2).
    Under section 307(b)(1) of the CAA, petitions for judicial review 
of this action must be filed in the United States Court of Appeals for 
the appropriate circuit by February 28, 2011. Filing a petition for 
reconsideration by the Administrator of this final rule does not affect 
the finality of this action for the purposes of judicial review nor 
does it extend the time within which a petition for judicial review may 
be filed, and shall not postpone the effectiveness of such rule or 
action. This action may not be challenged later in proceedings to 
enforce its requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Greenhouse gases, 
Incorporation by reference, Intergovernmental relations, and Reporting 
and recordkeeping requirements.

    Dated: December 20, 2010.
Gwendolyn Keyes Fleming,
Regional Administrator, Region 4.

0
40 CFR part 52 is amended as follows:

PART 52--[AMENDED]

0
1. The authority citation for part 52 continues to read as follows:

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

Subpart S--Kentucky

0
2. In Sec.  52.920(c) table 1 is amended by revising the entry for 
``401 KAR 51:001'' to read as follows:

Sec.  52.920  Identification of plan.

* * * * *
    (c) * * *

                                   Table 1--EPA-Approved Kentucky Regulations
----------------------------------------------------------------------------------------------------------------
                                                          State
         State citation              Title/subject      effective    EPA approval date         Explanation
                                                           date
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
               Chapter 51 Attainment and Maintenance of the National Ambient Air Quality Standards
401 KAR 51:001..................  Definitions for 401   01/03/2011  12/29/2010 [Insert   Except the phrase
                                   KAR Chapter 51.                   citation of          ``except ethanol
                                                                     publication].        production facilities
                                                                                          producing ethanol by
                                                                                          natural fermentation
                                                                                          under the North
                                                                                          American Industry
                                                                                          Classification System
                                                                                          (NAICS) codes 325193
                                                                                          or 312140,'' in 401
                                                                                          KAR 51:001 Section 1
                                                                                          (118)(a)(2)(a) and the
                                                                                          phrase ``except
                                                                                          ethanol production
                                                                                          facilities producing
                                                                                          ethanol by natural
                                                                                          fermentation under
                                                                                          NAICS codes 325193 or
                                                                                          312140,'' in 401 KAR
                                                                                          51:001 Section 1
                                                                                          (118)(3)(b)(20).
 
                                                  * * * * * * *
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* * * * *
[FR Doc. 2010-32664 Filed 12-28-10; 8:45 am]
BILLING CODE 6560-50-P
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