To: "King, Heidi R." <Heidi_R._King@omb.eop.gov> From: Linda Chappell/RTP/USEPA/US Date: 05/10/2010 05:21PM cc: Ron Evans/RTP/USEPA/US@EPA, Jose ph Mangino/RTP/USEPA/US@EPA, Carrie Wheeler/RTP/USEPA/US@EPA, Linda Ch appell/RTP/USEPA/US@EPA, Michael Ling/RTP/USEPA/US@EPA, Paul Balserak/DC/USEPA/US@EPA Subject: Draft GHG Tailoring Rule RIA

Hi Heidi, Another draft of the GHG tailoring rule RIA is at tached. This draft is an improvement over the last version sent to you late last week. However, it still needs some edits from the editor such as revising the table of contents and formatting issu es. We are also still checking the regulatory relief estimates in the document to insure accuracy . If you have questions or comments, please let us know. Have a great evening, Linda

___________________ Linda M. Chappell PhD US EPA C-439-02 RTP, NC 27711 telephone: 919.541.2864 fax: 919.541.0839

(See attached file: RIAghgtailori ng 051010 report with omb edits.doc) Page 1 of 1

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# REGULATORY IMPACT ANALYSIS FOR THE FINAL PREVENTION OF SIGNIFICANT DETERIORIATION AND TITLE V GREENHOUSE GAS TAILORING RULE

Final Report

May 2010

Linda M. Chappell, PhD U.S. Environmental Protection Agency Office of Air Quality Planning and Standards Air Benefits and Cost Group 109 TW Alexander Drive Research Triangle Park, NC 27711

RTI International 3040 Cornwallis Road Research Triangle Park, NC 27709EPA 452/R-10-003 May 2010

Regulatory Impact Analysis for th e Final Greenhouse Gas Tailoring Rule

Final Report

Linda M. Chappell, PhD U.S. Environmental Protection Agency Office of Air Quality Planning and Standards Air Benefits and Cost Group

109 TW Alexander Drive Research Triangle Park, NC 27711

U.S. Environmental Protection Agency Office of Air Quality Planning and Standards Health and Environmental Impacts Division Research Triangle Park, NC1 CONTENTS Needs Updating Page

1. Executive Summary .......................................................................................................... ....... 3

1.1 Introduction..................................................................... Error! Bookmark not defined.

1.2 Organization of this Report............................................................................................ 15 2. Baseline Description, Regulatory Al ternatives and Affected Entities.................................... 18 3. Benefits - Regulatory Relief (Avoi ded Information Collection Costs) .................................. 30

3.1 Avoided Burden Costs for Title V................................................................................. 30

3.2 Avoided Information Collection Costs Associated with the PSD Program .................. 34 4 Impacts of Re gulatory Relief................................................................................................. . 40

4.1 Method for Analyzing Avoided Econo mic and Small En tity Impacts .......................... 49 4.1.1 Identifying Affected Sectors and Entities ........................................................... 49

4.1.2 Data Used to Characterize Affected Entities by Size.......................................... 50

4.2 Developing Economic and Small Entity Regulatory Relief Impact Measures.............. 64

4.3 Implementing the Sales Test to Measure Impacts on Industrial, Commercial, and Multifamily Reside ntial Sources ................................................................................... 64

4.4 Economic Relief to Permitting Authorities.................................................................... 66

5. Social Costs................................................................................................................ ............. 41

6. References.................................................................................................................. ............. 84 Attachment A: Source Categories Affected by the Rule with Industry Detail........................... 96 Attachment B: Technical Support Document for Greenhouse Gas Emissions Threshold Evaluation Attachment C: Summary of Methodology and Da ta Used to Estimate Burden Relief and Evaluate Resource Requirements at Alternative Greenhouse Gas Permitting Thresholds2 List of Tables Needs Updating Page

1.0. Phase-In Steps for Large Sources for the Final GHG Tailoring Rule Error! Bookmark not defined. 2.0. Phase-In Steps for Large Sources for the Final GHG Tailoring Rule .............................. 18 2.1. Qualitative Description of Benefits and Cost of the Tailoring Rule................................. 27 2.2. Estimated Number of Affected Sour ces Experiencing Regulatory Relief for Final Rule and Regulatory Alternatives..................................................................................... 27 3.0. Annual Title V Regulatory Relief (Avoided Cost) Estimates for Affected Sources of GHG and Permitting Authorities at Alternative Thresholds ........................................ 31 3.1 Steps 1 and 2 Title V Regulatory Relief (A voided Cost) Estimates for Affected Sources of GHG and Permitting Authorities at Alternative Thresholds.........................................19 3.2. Annual PSD Regulatory Relief (Avoi ded Costs) for Sources of GHG and Permitting Authorities at A lternative Thresholds............................................................. 20 3.3 Steps 1 and 2 PSD Regulatory Relie f (Avoided Cost) Estimates for Affected Sources of GHG and Permitting Authorities at Alternative Thresholds ...........................23 4.0. Number of Firms by Industry and Enterprise Size: 2002 ................................................. 51 4.1. Number of Establishments by Affected Industry and Enterpri se Size: 2002 .................. 53 4.2. Number of Employees by Affected Industry and Enterprise Size: 2002......................... 55 4.3. Receipts by Industry and Enterpri se Size: 2002 (in millions of 2007$).......................... 57 4.4. Number of Firms by Affected Industry a nd Enterprise Size in Co mmercial Sectors: 2002........................................................................................................................... ........ 59 4.5. Number of Establishments by Affected Industry and Enterpri se Size: 2002 .................. 60 4.6. Number of Employees by Affected I ndustry and Commercial Enterprise Size: 2002........................................................................................................................... ........ 62 4.7. Receipts by Affected Industry and En terprise Size: 2002 (Millions of 2007 $).............. 63 4.8. Avoided Title V Costs to Sales for Sm all Industrial Sources of GHG Emissions ........... 68 4.9. Avoided Costs to Sales for Small Modifying Industrial GHG PSD Emission Sources........................................................................................................................ ...... 71 4.10. Avoided Costs to Sales for Small New PSD Industrial GHG Sources............................. 73 4-11. Avoided Title V Permitting Costs to Sales for Permit Revisions Due to GHG ............... 75 4.12. Title V Avoided Costs for Small Ne w Commercial Sources of GHG Emissions Compared to Annual Sales Revenue................................................................................. 78 4.13. Avoided Costs for Small Modifyi ng Commercial PSD GHG Emission Sources Compared to Annual Sales Revenue................................................................................. 80 4.14. Avoided Costs to Small PSD Ne w Commercial GHG Emission Sources........................ 82 A-1. Title V Sources Expected to Experien ce Regulatory Relief at Alternative Threshold Levels by Industry Category............................................................................................. 96 A-2. New PSD Sources Expected to Experience Regulatory Relief ........................................ 98

List of Figures

Page

1.0. Alternative States of Regulation Relating to the GHG Tailoring Rule .............................. 93 Section 1 Executive Summary

1.0 Summary This Regulatory Impact Analysis (RIA) ex amines the benefits, costs, and economic impacts of the Final Prevention of Signifi cant Deterioration and Title V Greenhouse Gas Tailoring Rule for affected entities and society as a whole. The tailoring ru le lifts, for a period of beginning January 2, 2011 through April 30, 2016 (re ferred to as phase-in period), the burden to obtain a title V operating permit required by the Clean Air Act (CAA or Act) for many small existing sources of greenhouse gas (GHG) a nd the burden of Prevention of Significant Deterioration (PSD) requirements for small new or modifying sources of GHG. Thus, this rule may be viewed as providing regulatory relief rather than regulatory requirements for these smaller GHG sources for a period of at least the phase-in period. For la rger sources of GHG,

there are no direct economic burdens or costs as a result of this rule, because requirements to obtain a title V operating permit or to adhere to PSD requirements of the CAA are already mandated by the Act and by existing rules and are not imposed as a result of this rulemaking.
In this final rule, the Environmental Protec tion Agency (EPA) is relieving overwhelming permitting burdens that would, in the absence of this rule, fall on permitting authorities and sources. We accomplish this by tailoring the ap plicability criteria th at determine which GHG emission sources become subject to the PSD and title V programs of the CAA. In particular, EPA is establishing with this rulemaking a phase -in approach for PSD and title V applicability, and is establishing the first two steps of the pha se-in for the large emitters of GHGs. We also commit to certain follow-up actions regarding fu ture steps beyond the first two, discussed in

more detail later. For the first step of this Tailoring Rule, whic h will begin on January 2, 2011, PSD or title V requirements will apply to sources’ GHG emissions only if the sources are subject to PSD or title V anyway due to their non-GHG conventional pollutants. Therefore, EPA will not require

sources or modifications to evaluate whether th ey are subject to PSD or title V requirements solely on account of their GHG emissions. Specifi cally, for PSD, Step 1 requires that as of January 2, 2011, the applicable requirements of PSD, most notabl y, the best available control technology (BACT) requirement, will apply to pr ojects that increase net GHG emissions by at least 75,000 tpy carbon dioxi de equivalent (CO 2 e), but only if the proj ect also significantly4 increases emissions of at least one non-GHG pollu tant. For the title V program, only existing sources with, or new sources obtaining, title V permits for non-GHG pollutants will be required to address GHGs during this first step. This first st ep of the tailoring rule is referred to as Step 1 or ‘anyway’ threshold throughout this RIA. The second step of the tailoring rule, that be gins on July 1, 2011, will phase-in additional large sources of GHG emissions. New sources as well as existing sources not already subject to title V that emit, or have the poten tial to emit, at least 100,000 tpy CO 2 e will become subject to the PSD and title V requirements. In addition, so urces that emit or have the potential to emit at least 100,000 tpy CO 2 e and that undertake a modification that increases net emissions of GHGs by at least 75,000 tpy CO 2 e will also be subject to PSD requirements. For both steps, we also

note that if sources or modifications exceed these CO 2 e-adjusted GHG triggers, they are not covered by permitting requirements unless their GHG emissions also exceed the corresponding mass-based triggers (i.e., unadjusted for CO 2 e.) This second step of the phase-in period is referred to as Step 2 or 100,000 tpy CO 2 e threshold throughout this report. Although the thresholds established by the tailoring rule are levels set that apply to sources at or above the
threshold, this RIA examine the sources obtaini ng regulatory relief. By definition the sources obtaining regulatory relief are those sources with GHG potential to emit emissions below a particular threshold

EPA believes that the costs to the sources and the administrative burdens to the permitting authorities of PSD and title V permitting will be manageable at the levels in these initial two steps, and that it woul d be administratively infeasible to subject additional sources to PSD and title V requirements at those times. However, we also intend to issue a supplemental notice of proposed rulemaking (SNPR) in 2011, in which we will propose or solicit comment on a third step of the phase-in that would include more sources, beginning by July 1, 2013. In the same rulemaking, we may propose or solicit comment on a permanent exclusion from permitting for some category of sources. We are establishing an enforceable commitment that we will complete this rulemaking by July 1, 2012, which will allow for 1 year's notice before step 3 would take effect. In addition, we commit to explore streamlining techniques that may well make the permitting programs much more efficien t to administer for GHGs, and that therefore may allow their expansion to smaller sources. We expect that the initial streamlining techniques will take several years to develop and implement.5 We are also including in this action a rule that no source with emissions below 50,000 tpy

CO 2 e, and no modification resulting in ne t GHG increases of less than 50,000 tpy CO 2 e, will be subject to PSD or title V permitting before at least, April 30, 2016. This is because we are able to conclude at the present time that the admi nistrative burdens that would accompany permitting sources below this level will be so great that ev en the streamlining actions that EPA may be able to develop and implement in the next several y ears, and even with the increases in permitting resources that we can reasonably expect th e permitting authorities to acquire, it will be impossible to administer the permit program s for these sources until at least 2016. Further, we are establishing 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 GHG-emitting sources, including progress in developing streamlin ing techniques; and (ii) complete further rulemaking 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. This tailoring rulemaking is necessary because without it, PSD and title V would apply to all stationary sources that emit or have the potential to emit more than 100 or 250 tons of GHGs per year (tpy) beginning on January 2, 2011. This is the date when EPA’s recently promulgated Light Duty Vehicle Rule (LDVR) 1 takes effect, imposing contro l requirements for the first time on carbon dioxide (CO 2 ) and other GHGs. If this January 2, 2011 date were to pass without this tailoring rule being in effect, PSD and title V requirements would apply at the 100/250 tpy CO 2 e potential to emit (PTE) applicabil ity levels provided under a literal reading of the CAA as of that date. From that point forward, a source owner proposing to construct any new major source that emits at or higher than the applicability levels (and which therefore may be referred to as a “major” source) or modify any existing majo r source in a way that would increase GHG emissions would need to obtain a permit under th e PSD program that addresses these emissions

before construction or modificati on could begin. Similarly, t itle V would apply to a new or existing source exceeding the 100 tpy applicability le vel in the Act, if th e source did not already have a title V permit.

1 EPA–HQ–OAR–2009–0472; NHTSA-2010-0059 RIN 2060-AP58; RIN 2127-AK50. April 1, 2010 Light-Duty Vehicle Greenhouse Gas Emission St andards and Corporate Average Fuel Economy Standards; Final Rule http://www.epa.gov/otaq/climate/regulations/ldv-ghg-final-rule.pdf6 Under these circumstances, many small sour ces would be burdened by the costs of the individualized PSD control technology require ments and permit applications that the PSD provisions, absent streamlining, require. Addi tionally, state and local permitting authorities would be burdened by the extraordinary number of these permit applications, which are orders of magnitude greater than the current inventory of permits and would vastly exceed the current administrative resources of the permitting author ities. Permit gridlock would result with the permitting authorities able to issue only a tiny fraction of the permits requested. This rulemaking provides permitting thresholds for sources of GHG exceeding levels contained in the CAA, and these levels are pha sed in steps based on le gal considerations of absurd results and administrative necessity discusse d in the preamble to this rule. In the phase-in period following promulgation of this rule, we estim ate that, compared to baseline estimates that
do not include the effects of this rule, over six million sources of GHG emissions will be allowed to operate without a title V opera ting permit and tens of thousands of new sources or modifying sources per year will not be subject to PSD requirements for GHG. The emissions from these sources amount to approximately 11 percent of all GHG emissions from stationary sources (100,000 CO 2 e tpy threshold) equating to approximately 630 million short tons CO 2 e, but represent 95 percent of the total number of stationary sources. For this large number of smaller
GHG sources, this rule alleviates the regulatory burden associated with obtaining an operating or PSD permit or complying with PSD BACT requireme nts. Therefore, this final action may be

considered beneficial to these small sources as it provides relief from regulation that would otherwise be required. We estimate that the regulatory relief benefits from this rule amount to $193.6 billion for the final rule Steps 1 and 2 of the phase-in period (January 2, 2011 through July 1, 2013). There will be some costs to society during this time from the potential loss of GHG emission reductions from small sources that could occur during the Step s 1 and 2 phase-in period. We are not able to quantify or monetize thes e potential foregone emission reductions resulting from this final rule.

1.1 Summary of Analytical Approach for the Analysis Our analysis of the GHG tailoring rule includes several key elements including:

• specification of the baseline that requires title V and PSD permitting statutory thresholds of 100/250 tpy CO 2 e potential to emit (PTE),

• development of alternative regulatory relief thresholds including those authorized7 by this final rule,

• estimation of sources affected by alternative regulatory relief thresholds,

• estimation of the benefits of this rule in terms of permitting burden costs avoided,

• qualitative discussion of social co sts or potential GHG emission reductions foregone due to this rule, and

• estimation of the economic impacts of this final rule. A brief synopsis of these analytical aspects of the final rule follows.

Analytical Baseline The baseline for this rulemaking is a state of regulation in which the statutory thresholds of 100/250 tpy CO 2 e apply for title V sources and new or modifying PSD sources beginning January 2, 2011 absent actions taken in the fina l tailoring rule. Figure 1.0 below depicts this analytical baseline in which GHG permitting is statutorily required by the CAA. Within this framework, there are two general pos sibilities – ‘no action’ or ‘regulatory relief action’ taken by EPA. Under the ‘no action’ case baseline, statutory limits become effective and permitting authorities are overwhelmed with permit applications. Millions of new sources in total many of which have not been regulated un der the Act would be re quired to obtain title V

sources and tens of thousands of these sources will face PSD permitting a nnually. In contrast, the EPA may take action as it has in this final rule to provide ‘regulatory relief’. As described, the ‘no action’ case is the analytical baseline for th is RIA. All alternatives analyzed in this RIA show the level of regulatory relief in comparison to a baseline in which statutory CAA thresholds of 100/250 tpy CO 2 e are required.

Regulatory Alternatives, Affected Sources , and Avoided Permitting Cost Estimates All regulatory alternatives evaluated in th is RIA, except the ‘no action’ alternative, represent regulatory relief possibilities that establish title V permitting thresholds and PSD permitting thresholds and significance levels above the statutory 100/250 tpy CO 2 e requirements. Due to the phase-in nature of this rule, EPA analyzes the benefits and costs of the tailoring rule for three different time periods. We analyze the ne t benefits of the rule annually to allow for a comparison of the final rule Steps 1 and 2 to be made with regulatory alternatives. We also

evaluate the net benefits of the rule for the 21⁄2 years period of Steps 1 and 2 of the phase-in8 period (January 2, 2011 through July 1, 2013) , and fo r the approximate five year period of Step 1, 2, and 3 of the phase-in period January 2, 2011 through April 30, 2016. Table 1.0 shows the final rule and regulatory alternatives analyzed in this RIA for these differing time periods of the phase-in. The benefits of this rule are the regulatory relief in the form of avoided permitting burdened cost for smaller sources of GHG and permitting authorities. Avoided permitting costs to these smaller GHG sources and permitting author ities are calculated by estimating the number9 Figure 1.0. Alternative Stat es of Regulation Relating to the GHG Tailoring Rule

of sources and related permits avoided as a result of this rule. We then place a dollar value on these avoided permits by estimating the burden co st per permit. The pr oduct of the avoided permits and the per permit costs represents the re gulatory relief for this rule. Thus the annual regulatory relief for the rule is equal to the number of annual s ources (number of permits) above statutory thresholds of 100/250 tpy and below fina l rule thresholds multiplied by per permit costs GHG Permitting Triggered

No Tailoring Rule Tailoring Rule

No Action Case Baseline



### * Statutory limits become effective



### * Permitting authorities overwhelmed with permit applications, millions of

new sources required to obtain permits Action Taken With Permit Trigger



### * RIA analyzed regulatory alternatives



### * Significant reduction in facilities required to obtain permit and permitting authority burdens *Limited foregone GHG emission reductions10 for sources and permitting authorities, respectively. We use these annual estimates to calculate multiple year regulatory relief for Steps 1 and 2 of the phase-in and for the five years beginning
January 2, 2011. Table 1.0 Time Periods and Regulatory Alternatives Analyzed in the RIA

Time Period of Analysis Regulatory Alternatives Thresholds Analyzed for Each Time Period 1
Annual 1. Anyway 2. 100,000 tpy CO 2 e 3. 50,000 tpy CO 2 e 4. 25,000 tpy CO 2 e 2.5-Year (Jan. 2, 2011- July 1, 2013) Corresponds to Steps 1 and 2 of the Phase-In Alternatives assuming threshold remain in effect for the entire 21⁄2 years of the Step 1 and 2 phase-in period): 1. 25,000 tpy CO 2 e (25,000 tpy CO 2 e significance level) 2. 50,000 tpy CO 2 e (50,000 tpy CO 2 e significance level) 3. 100,000 tpy CO 2 e 4. Anyway Other alternatives involving thre sholds that change during the phase-in period are: 5. Step 1 Anyway for 6 months/ Step 2 100,000 tpy CO 2 e for 2
years 6. Step 1 Anyway threshold for 6 months / Step 2 50,000 tpy CO 2 e for 2 years 7. Step1 Anyway threshold for 6 months/ Step 2 25,000 tpy CO 2 e for 2 years 5-year (Five years beginning January 2, 2011) Corresponds to Steps 1-3 of the Phase-In 1. Step 1 Anyway for 6 months/ Step2 100,000 tpy CO 2 e for 2 years/ Step 3 100,000 tpy CO 2 e for 21⁄2 years 2. Step 1 Anyway for 6 months/ Step 2 100,000 tpy CO 2 e for 2 years/ Step 3 50,000 tpy CO 2 e for 21⁄2 years

1 Regulatory relief relates to those sources with the potential to emit annual emissions below the threshold levels. Threshold 100,000 tpy CO 2 e has significance level of 75,000 tpy CO 2 e. Threshold 50,000 tpy CO 2 e has significance level of 50,000 tpy CO 2 e, and threshold 25,000 tpy CO 2 e has significance level of 25,000 tpy CO 2 e

Estimates of sources afforded regulatory relief under the alternative re gulatory thresholds are based upon an analysis completed by EP A that is included as Attachment B Technical
Support Document for Greenhouse Gas Emissions Threshold Evaluation of this report. This analysis supports EPA's assessm ent of the administrative burden created by adding GHGs to the PSD and title V programs. It was necessary to develop information on the number of affected facilities at both the current perm itting major source thresholds (100 tons per year for title V and 100 or 250 tons per year for PSD depending on the source category clas sification) and at alternative higher thresholds in existing PSD and title V permitting programs. An affected11 facility would be one who's annual emissi ons of GHG equal or exceed the major source threshold being evaluated. The number of s ources allowed regulatory relief by this rule represents the difference in the number of sources at the baseline 100/250 tpy CO 2 e PTE threshold and at the higher regulatory alternative thresholds. Regulatory relief or avoided permit burden estimates are based upon permitting cost estimates developed by EPA and discu ssed extensively in Attachment C Summary of
Methodology and Data Used to Estimate Burden Relief and Evaluate Resource Requirements at

Alternative Greenhouse Gas Permitting Thresholds. . EPA conducted an assessment of the estimated resource requirements for sources to obtain title V operating permits, for new and modifying sources to obtain PSD permits, a nd for permitting authorities to include GHG in permit actions at several possible major source permitting thresholds. EPA developed the burden reduction and costs savings for permitting authori ties and sources as a re sult of requiring the inclusion of GHG in the title V and PSD permitti ng programs at thresholds greater than the current statutory requirements. Time and costs associated with permit activities are derived from existing Information Collection Requests (ICRs) for the title V and PSD programs. Regulatory

relief avoided cost estimates do not include th e costs for new and modifying PSD sources to comply with BACT requirements due to lack of sufficient data to estimate the BACT requirements and associated costs.

We discuss the costs of this rule in terms of foregone environmental benefits qualitatively in this report. There will be some costs to soci ety during this phase-in period from the potential

loss of GHG emission reductions from small sources that could occur during the Steps 1, 2, and 3. We are not able to quantif y or monetize these potential fore gone emission reductions resulting from this final rule. We also provide in this RIA an estimate of the economic impact of the regulatory relief to affected sour ces by developing avoided-cost-to- sales ratios for the affected sources by comparing avoided permitting costs to average industry sales revenue or average revenue by firm size.

Limitations and Uncertainties of the Analysis The benefits, costs and economic impacts estimat ed in this RIA are subject to limitations

and uncertainties. The benefits of this rule are the regulatory relief provi ded to small sources of GHG and permitting authorities. Regul atory relief estimates are provided for the final rule Steps12 1, 2 and 3 on an annual basis as well as for th e full phase-in period. The benefits or avoided permitting costs are based upon the best data availa ble currently regarding sources affected and burden cost estimates but are subject to uncertainties.

Benefit Estimate Limitations and Uncertainties

Uncertainties exist in the affected source counts at different thresholds used to estimate regulatory relief due to the absence of a comprehe nsive data set of fac ility-level GHG emissions

across all sectors on which to base the number of facilities subject to title V and PSD permitting at alternative regulatory thresholds. These a ffected source counts are multiplied by the permit burden cost estimates to derive the benefit (re gulatory relief) estimates for the rule. Although there are different levels of uncertainty in our facility level estimates across sectors, we do believe that the data are sufficiently robust to use in the aggregate to assess national permitting level impacts. The threshold analysis also conservatively assumes that no GHG PTE limits are in place for any of the affected sources. Some sources may use PTE limits to avoid being classified as major, which would reduce burden. The number of PTE limits is uncertain. We

assume there will be a limited number in the immediate stages of GHG permitting for affected sources, but this assumption is subject to some uncertainty. There is also significant uncertainty in bot h our modification rate for newly major GHG

sources and in our estimate of m odification activity at existing major sources that will become subject to PSD review for GHG emission increa ses. The general uncertainty results from inherent uncertainty in pred icting not only how many major sources will elect to undergo physical or operational changes in any given year, but also whic h of those changes would result

in GHG emissions increases that would exceed a proposed GHG significance level. First,

information is not available across sectors a nd source categorie s on the types and numbers of specific physical and operationa l changes that would result in GHG emissions increases in

amounts that can be estimated and that theref ore can be compared to various GHG emissions significance levels. Second, there is uncertainty in how many project modifications will occur within any given year because decisions on these pr ojects are driven by facility- and sector-based growth patterns and business planning decisions. Lastly, some source categories and units that emit GHGs have not previously been subject to any type of permitting or reporting requirements;
as a result, for these sources, ther e is very little hist orical record for use in estimating the number13 and types of projects that would occur at these sources and, in turn, es tablish an appropriate significance level for GHGs. The permit burden estimates that are multip lied by the source counts to derive the benefits of the rule are also subject to uncer tainty. The primary reference sources for our estimate of burden hours and costs for permitting GHGs are the most recent ICRs for the PSD and title V programs. There a number of uncertainties introduced in using these references for costing GHG permitting activities. First, we are assuming that the average, conventional pollutant per-permit costs will be similar fo r GHGs. We do recognize the likelihood that residential and commercial permits would be si mpler and have a lower per-permit burden than traditional industrial sources, and have made adjustments for this: however, for industrial sources we assume per-permit costs on par with what are es timated in the latest ICRs for PSD and title V programs. There is uncertainty in applying these average ICR-based costs to GHG permitting, even for industrial sources, because the best source of this cost information is permitting experience and there is no historical track r ecord for permitting these GHG sources and thus any cost efficiencies that have been realized over the years for conventional pollutant permitting, and thus reflected in the current ICRs, may not be initially realized for GHG permitting.
As mentioned above, in our burden scenario analyses we do discount the ICR-based perpermit costs for residential and commercial sources to reflect what we believe will generally be simpler permits, involving primarily uniform com bustion type equipment. For PSD we discount the per-permit cost by 30%, and for title V we di scount the per-permit cost by 50%. There is significant uncertainty in these estimated discounts since we have no track record for permitting these smaller commercial and residential sources. However, we do believe that, based solely on the type and uniformity of the GHG emission units that would be subject to permitting at these
facilities under lower GHG threshold scenarios, th at average per-permit costs would be less than those currently experienced by more complex indus trial facilities, with numerous emission units, for currently regulated pollutants. Current avoided permitting cost or regulatory relief estimates also do not include the avoided costs to comply with PSD BACT require ments due to lack of available data. This omission will tend to reduce the amount of regulat ory relief that smaller sources of GHG will experience during the phase-in period. In addition to the avoided BACT costs that we are unable to quantify, there are likely gene ral economic costs associated with requiring permitting for these14 smaller sources of GHG. Numerous public comments on the proposed rule spoke to the economic burden permitting would place on sources above the actual costs to obtain a permit. These costs might include delays or impediments to entering a new market or to expand existing facilities to accommodate increased demand for produc ts or services. These avoided costs might be viewed as additional costs of doing business or barriers to entry for these smaller sources of GHG. The avoided economic costs of these possi ble additional costs or barriers to doing

business have not been considered in the regulatory relief estimates provided for this final rule

due to lack of sufficient information about th ese potential impacts. If such avoided cost
estimates were available, these estimates woul d tend to increase the regulatory relief burden reported for the final rule. For the phase-in period regulatory relief multiyear estimates, we assume that the annual estimates are representative for each year of the phase-in period. This presumes that permitting activity would be constant over time. It is qu ite possible that permit activity for these smaller sources may grow over time with economic growth in the general economy and will likely vary from year to year due to differences in busin ess activity. However, we do not have sufficient information about these year to year variations nor expected growth in permitting to develop more precise estimates. Given the uncertainty in the annual relief estimates and the short time frame analyzed (five years), we feel it reasonable to not cons ider these potential yearly fluctuations for the phase-in period. Consideration of growth in permits over time would tend to increase the regulatory relief estimates reported for the final rule.
In a similar manner, we do not discount the phase-in regulatory relief to the present in this final report. Since the time period evaluated va ries from annual to five years, we feel this is a reasonable approach. Discounting the regulatory relief estimates to present values would tend to lower the total present value amount of regulatory relief reported.

Social Cost Limitations and Uncertainties

The social costs of this rule are the fore gone environmental benefits that might occur during the phase-in period absent this rulemaking. This subject is discussed in Section 4 of the

RIA. We are unable to estimate the PSD BACT requirements that would likely occur for the

smaller sources of GHG at this time. Because BACT is a case- by-case decision and evolves over time, because we do not at this time have historical experience with the available controls for15 small-source GHG emissions, and because of the i nherent uncertainty in describing the types of sources that would have triggered BACT abse nt this rule, we cannot quantify the emission reductions that might be feasible or the associat ed pollution control costs. For this reason, the social costs of this rule are discussed qualitatively in this RIA.

Economic Impact Limitations and Uncertainties As previously discussed there is uncertainty in the estimates of sources affected by this final rule and the permitting burden costs used to estimate the benefits (regulatory relief) of this

rule. These uncertainties also affect the economic impact analysis conducted. In the economic impact analysis, we compare the avoided perm it burden cost estimates to average industry revenues in order to gauge the magnitude of regu latory relief for affected sources. We used average industry revenue, and average revenue estimates by firm size to estimate avoided-costto-sales ratios due to lack of data specific to th e sources actually obtaining regulatory relief. The

actual benefits to individual firms affected by this rule may differ from industry averages.

1.2 Benefits, Cost, and Net Benefits of the Final Tailoring Rule
In the RIA, we estimated the benefits, cost s and net benefits of the final rule. This rulemaking provides regulatory relief for a phase-i n period of approximately 5 years to smaller sources of GHG by phasing in the statutory pe rmitting threshold at levels above statutory requirements. This final rule establishes thre sholds and PSD significance levels for Steps 1 and 2 of the phase-in period (the 21⁄2 year period be tween January 2, 2011 and July 1, 2013), commits to considering a further Step 3, and indicates floo r title V and PSD threshold levels from July 1, 2013 through April 30, 2016. While the EPA co mmits to undertake a rulemaking for a further Step 3, the ultimate outcome for sources of GHG from this additional rulemaking is unknown at

this time. Annual estimates for the final rule Steps 1 and 2 and regul atory alternatives are presented in Table 1.1. As Table 1.1 indicates, the annual net benefits associated with the final rule Step 1 are $77,530.2 million + B-C and for Step 2 are $77,416.2 + B-C million annually,

where B denotes the unquantified benefits and C the quantified costs of this final rule. These unquantified benefits and costs are discussed in more detail in the pr eceding limitations and uncertainties section of this executive summary. Table 1.2 shows the final rule Steps 1 and 2 with regulatory alternatives for the two and one-half year phase-in period January 2, 201116 through July 1, 2013. The net benefits of the final rule for Steps 1 and 2 are $193,592.3+ B-C million for the two and one-half year period. Fi nally, Table 1.3 presents the final rule net benefits with two alternatives for Step 3, one in which Step 3 remains at the Step 2 level and one in which Step 3 becomes the minimum threshold of at least 50,000 tpy CO2e threshold previously discussed. These alternatives for St ep 3 bound the net benefit es timates for the entire phase in period. If Step 3 remains at the Step 2 level, net benefits for the five year period are $387,153.4 +B-C million. This net benefit estimate becomes $386,719.4 + B-C million if Step 3 becomes the minimum level of 50,000 tpy threshold for the five year phase-in period. Given the short time frame of the impact of this final rule , we did not consider the time value of money or

discount the benefit and cost estimat es provided in this report to pr esent values, rather we assume these benefit and cost estimates are occurring currently. All dollar estimates shown are based upon 2007$.151.1 Annual Net Benefits for GHG Tailoring Rule Regulatory AlternativesAnnual Benefits and Costs for Regulatory Alternatives(millions of 2007$)Final Rule Step 1 Final Rule Step 2Anyway 100,000 tpy CO2e 50,000 tpy CO2e 25,000 tpy CO2eBenefits - Regulatory ReliefSourcesTitle V1$49,457.3 $49,447.4 $49,403.8 $49,334.2PSD2$5,488.8 $5,411.2 $5,326.0 $4,707.6Total Source Regulatory Relief$54,946.1 $54,858.6 $54,729.8 $54,041.8Permitting AuthorityTitle V1$21,077.6 $21,072.4 $21,052.8 $21,014.9PSD2$1,506.5 $1,485.2 $1,461.8 $1,291.7Total Permitting Authority$22,584.1 $22,557.6 $22,514.6 $22,306.6Total Regulatory Relief$77,530.2+B $77,416.2+B $77,244.4+B $76,348.4+BCosts - Foregone GHG Emission ReductionsTitle V & PSD C C C CNet Benefits3$77,530.2+B-C $77,416.2+B-C $77,244.4+B-C $76,348.4+B-CBenefits relate to regulatory relief for sources with annual potential to emitlevels below the thresholds shown.B - unquantified benefits of the rule include regulatory relief from BACT requirements for PSD sourcesC - unquantified social costs of tailoring rule represents economic value of foregone environmental benefits (possible GHG emissionreductions) during Step 1 and 2 of the phase in period. Potential foregone GHG emission reductions during the phase-in periodare notknown at this time. See Chapter 4of the RIA for a qualitative discussionof the social costs of the rule.1Reflects estimates of regulatory relief or avoided permit burden costs for title V GHG sources and permitting authorities.2 Shows estimates of regulatory reliefor avoided permit burden costs for GHG PSD sourcesand permitting authorities.3 Totals may not sum due to rounding.16Table 1.2. Net Benefits for the Final Rule and Regulatory Alternatives for Steps 1 and 2 of the Phase-In PeriodBenefits and Cost s for Step 1 and 2 Phase-In Period (January 2, 2011- July 1, 2013)For Regulatory Alternatives (millions of 2007$)Anyway3100,000 tpyCO2e350,000 tpy CO2e325,000 tpyCO2e3Anyway/ 50,000tpy CO2e4Anyway/25,000tpy CO2e5Final Rule6Benefits - Regulatory ReliefSourcesTitle V1$123,643.3 $123,618.5 $123,509.5 $123,335.5 $123,536.3 $123,397.1 $123,623.5PSD2$13,722.0 $13,528.0 $13,315.0 $11,769.0 $13,396.4 $12,159.6 $13,566.8Total Source Regulatory Relief$137,365.3 $137,146.5 $136,824.5 $135,104.5 $136,932.7 $135,556.7 $137,190.3Permitting AuthorityTitle V1$52,694.1 $52,681 $52,631.9 $52,537.3 $52,639 $52,563.4 $52,678.3PSD2$3,766.3 $3,713.0 $3,654.5 $3,229.3 $3,676.9 $3,336.7 $3,723.7Total Permitting Authority$56,460.4 $56,393.9 $56,286.3 $55,766.7 $56,315.8 $55,900.1 $56,402.0Total Regulatory Relief$193,825.6+B$193,540.4+B$193,110.9+B$190,871.1+B$193,248.6+B$191,456.7+B$193,592.3+BCosts - Foregone GHG EmissionReductionsTitle V & PSDC C C C C C CNet Benefits $193,825.6+B-C$193,540.4+B-C$193,110.9+B-C$190,871.1+B-C$193,248.6+B-C$191,456.7+B-C$193,592.3+B-CBenefits represent regulatoryrelief for those sources with the annual potential to emit less than the threshold shown.B - unquantified benefits of the rule include regulatory relief from BACT requirements for PSD sourcesC - unquantified social costsof tailoring rule represents economic value of foregone environmental benefits(potential GHG emission reductions) during Step 1 and 2 of the phase in period. Foregone GHG emission reductions are not knownat this time.See Chapter 4 of the RIA fora qualitative discussion of the social costs of the rule.1Reflects estimates of regulatory relief or avoided permit burden costs for title V GHG sources and permitting authorities.2 Shows estimates of regulatory reliefor avoided permit burden costs for GHG PSD sourcesand permitting authorities.3 Shows alternative as single step for the 21⁄2.year phase-in period for 'anyway', 100,000 tpy CO2e, 50,000 tpy CO2e, and 25,000tpy CO2 e thresholds respectively.4 Includes Step 1 for one-half year and 50,000 tpy CO2e threshold for two years.5 Includes Step 1 for one-half year and 25,000 tpy CO2e threshold for two years.6 Phase-in period for final rule includes 1/2 year ofStep 1 thresholds and 2 years of Step 2 threshold.1716 Table 1.3 Net Benefits of the Final Rule and Step 3 Regulatory Alternatives

Regulatory Alternative (millions 2007$) Final Rule + Possible Step 3 of 100, 000 tpy CO2e 3 50, 000 tpy CO2e 4
Benefits - Regulatory Relief Sources

Title V 1 $247,253.6 $247,145.3

PSD 2 $27,094.7 $26,881.8 Total Source Regulatory Relief $274,348.3 $274,027.1 Permitting Authority Title V 1 $105,368.5 $105,318.8
PSD 2 $7,436.61 $7,378.1 Total Permitting Authority $112,805.1 $112,696.8 Total Regulatory Relief $387,153.4+ B $386,719.4+ B

Costs - Foregone GHG Emission Reductions Title V & PSD C C

Net Benefits $387,153.4+ B-C $386,719.4+ B-C Benefits represent regulatory relief for sources with the annual potential to emit below the thresholds shown. B - unquantified benefits of the rule include regulat ory relief from BACT requirements for PSD sources C - unquantified social costs of tailoring rule re presents economic value of foregone environmental benefits (potential GHG emission reductions) during Step 1, 2,and 3 of the phase in period. Foregone GHG emission reductions are not known at this time. See Chapter 4 of the RIA for a qualitative discussion of the social costs of the rule. 1Reflects estimates of regulatory relief or avoided permit burden costs for title V GHG sources and permitting authorities. 2 Shows estimates of regulatory relief or avoided permit burden costs for GHG PSD sources and permitting authorities. 3 Includes 1⁄2 year of Step 1 (anyway threshold), 4 1⁄2 years of Step 2 (100,000 threshold), 4 Includes 1⁄2 year of Step 1 (anyway threshold), 2 years of Step 2 (100,000 threshold), and 2 1⁄2 years Step 3 alternative of 50,000.

1.3 Organization of this Report The remainder of this report supports and de tails the methodology and the results of this

illustrative RIA.

 Section 2 presents a discussion of the regulat ory baseline, regulatory alternatives and affected entities.

 Section 3 describes the be nefits of the rule.17  Section 4 provides a qualita tive description of soci al costs of the rule.

 Section 5 presents the benefits, cost s, and net benefits of the rule.

 Section 6 describes the methodology and th e estimated economic impacts of the regulatory relief.

 Section 7 discusses small business impact s, unfunded mandates, and effects of the rule on energy supply

 Section 8 describes limitations a nd uncertainties of the analysis

 Section 9 lists the references for the analyses included in this RIA.18 Section 2 Baseline Description, Regulatory Al ternatives, and Affected Entities

As previously stated, this final rule is e ssentially providing regula tory relief and does not include direct regulatory provisi ons for any industrial, commercial , or residential entities. An analysis is presented for smaller sources that experience regulatory relief. This rule increases the GHG applicability threshold for title V from 100 tpy CO 2 e and for new and modifying sources of GHG emissions from the CAA mandated 100 or 250 tpy CO 2 e major source applicability threshold in a phased-in step proc ess described in Table 2.0.

Table 2.0. Phase-In Steps for Large Sources for the Final GHG Tailoring Rule 1

PSD Title V Step 1: Phase-in of Large Sources (January 2, 2011 – June 30, 2011) (referred to as ‘anyway’ threshold or Step 1) Permitting based on emissions of non-GHG pollutants and, for BACT applicability with GHG emissions or GHG emission increases above 75,000 tpy CO 2 e Sources with title V permits for nonGHG pollutants will address GHG as part of title V permitting

Step 2: Phase in for Large Sources (July 1, 2011 – June 30, 2013) (referred to as 100,000 tpy CO 2 e threshold or Step 2) Sources above 100,000 tpy (new) and 75,000 tpy (major modifications) of CO 2 e (and not already subject to PSD based on non-GHG) Sources that exceed 100,000 tpy GHG threshold will be required to obtain a title V permit if they do not already have one

Step 3: Phase in for Large Sources (July 1, 2013 – April 30, 2016) Effective only after additional regulatory
process An enforceable commitment to assess experience from Steps 1 and 2; commit to propose, consider comments, and promulgate potential Step 3 (level will not go below 50,000 tpy CO 2 e [new] and 50,000 tpy CO 2 e [major modifications]) An enforceable commitment to assess experience from Steps 1 and 2; commit to propose, consider comments, and promulgate potential Step 3 (level will not go below 50,000 tpy CO 2 e)

Final Phase Effective only after additional regulatory
process EPA will take rulemaking action in 2016 or before to address small sources in light of the 5-year study EPA will take rulemaking action in 2016 or before to address small sources in light of the 5-year study

1 Thresholds/significance levels are based on PTE.

The rules also sets GHG significance levels for ea ch step under PSD to determine applicability

as it relates to GHG emissions or emission increases for projects at major sources. The baseline for this rulemaking is a state of regulation in which the statutory thresholds of 100/250 tpy CO 2 e apply for title V sources and new or modifying PSD sources beginning January 2, 2011 absent actions taken in the final tailoring rule. Within th is framework, there are19 two general possibilities – ‘no action’ or ‘regulatory relief action’ taken by EPA. Under the ‘no action’ case baseline, statutory limits become effective and permitting authorities are overwhelmed with permit applications. Millions of new sources in total many of which have not been regulated under the Act are required to obtain title V sources and tens of thousands of these sources will face PSD permitting annually. In contra st, the EPA may take action as it has in this final rule to provide ‘regulator y relief’. As described, the ‘no action’ case is the analytical baseline for this RIA. All alternatives analyzed in this RIA show the level of regulatory relief in comparison to a baseline in which statutory CAA thresholds of 100/250 tpy CO 2 e are required. In order to analyze the baseline admini strative burden created by adding GHGs to existing PSD and title V permitting programs, it was necessary to develop information on the

number of affected facilities at the current permitting major source thresholds (generally, 100 tons per year for Title V and 100 or 250 tons per year for PSD depending on the source category classification). An affected facility would be one who's annual emissions of the GHG equal or exceed the major source threshold, based on a PTE basis. Detailed descriptions of the methodologies used are provided in Attachments B and C of the RIA. An explanation of the uncertainties associated with this methodology is discussed in Section 8 of this report. The following are the basic steps used in the methodol ogy to estimate affected sources and permitting

actions under the baseline scenario.
1) Identify GHG source categories . EPA evaluated the same range of stationary source types with direct GHG emissions as identifie d in EPA’s proposed a nd final GHG mandatory reporting rule (MRR) 2 . The GHG MRR source categories were based on a comprehensive review of all U.S. source categories with GHG emissions from EPA’s national inventory of GHG

emissions 3 . The stationary sources evaluated in this an alysis can be grouped in the sectors shown

below:

● Electricity Gene ration (facilities with fossil fuel-f ired electric generating units);

2 74 FR 68, pp. 16447 – 16731 and 74 FR 209, pp. 56260-56519, respectively.

3 U.S. Environmental Protection Agency (EPA), Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990 – 2007 , April 2009, US EPA 430-R-09-004. http://www.epa.gov/climatechange/e missions/usinventoryreport.html20 ● Industry (range of industries with process and combustion GHG emissions);

● Energy (oil and gas extracti on, transport, and processi ng; underground coal mining);

● Waste Treatment (landfills and municipal solid waste incinerators);

● Agriculture (stationary fuel combustion units);

● Commercial (variety of establishments includi ng office, retail, hospitals, lodging, etc.);

● Residential (single-family and multi-family housing). A small number of direct emission source ty pes included in the GHG MRR analysis were not included in the tailoring rule analysis b ecause the GHG emissions from these sources were primarily fugitive emissions. Fugitive emissions are generally defined as emissions which are not released, or could not be reasonably collect ed and released, through a stack or vent. Under the PSD rules, fugitive emissions are only included in potential to emit estimates if the source is one of 28 listed PSD source categories. The excl uded categories included electrical equipment fugitive SF 6 emissions; wastewater treatment plant fug itive emissions not associated with one of 28 listed PSD source categories; and, agricultural manure management fugitive emissions.
2) Estimate Actual Facility Level GHG Emissions. We started with estimates of facility emissions based on actual operating conditions, not PTE, since this is the standard format of the EPA’s national inventory of GHG emissions. Ac tual emissions for each source category were obtained from earlier analyses performed to deve lop emission thresholds for the proposed and
final GHG MRR, or we used the same data sour ces when additional analyses were required. EPA generally relied on published research and p ublicly available government data, such as EPA's eGRID database of electric generating so urce emissions, Economic and Housing Census data, and Energy Information Agency (EIA) data on energy consumption. See Attachment B for full descriptions of the methodologies used to estimate emissions for each source category.
3) Estimate PTE-based Facility Level GHG Emissions. It was necessary to convert
actual emissions to a PTE basis, because as not ed earlier, that is the basis for determining applicability under PSD and title V. PTE is generally defined as the amount of emissions that can be emitted from a source operating at full equipment capacity, 24 hours per day, 365 days per year. Capacity information and annual GHG emi ssions were available for some of the source categories from analyses performed to support the GHG MRR. In some cases the supporting analyses had already calculated GHG emissions on a full capacity basis, in which case EPA directly used those estimates as PTE estimates. Alternatively, some data from the supporting21 analysis estimated actual annual emissions using a baseline year. If capacity and baseline year production information was provided in the supporting data, EPA adjusted the source actual emissions estimate by the ratio of annual capacit y to baseline production to estimate PTE. If capacity information was not available, EPA used capacity factors from other data sources to adjust actual emission estimates to PTE estimates. These capacity factors add varying uncertainty to the PTE estimate. Detailed de scriptions of the diffe rent PTE calculation methodologies are included in the sour ce descriptions in Attachment B.
4) Count Facilities that Exceed the Baseline GHG Thresholds. After compiling facility level PTE-based emission under Step 3, these es timates were evaluated against the threshold

levels in order to determine whether or not a f acility would be included in the baseline threshold

count. The number of facilities exceeding the baseline threshold based on a PTE basis were then identified as ‘major sources’ for the purpos es of GHG permitting under PSD and title V. Our facility counts include both existing sources that would exceed the baseline GHG

thresholds and newly constructed sources. Newly constructed s ources only represent a small fraction (less than 2 percent for the baseline scenario) of the total population of GHG major sources in a given year. Growth rates used to estimate new construction were based on a variety of sources including Economic Census data , EIA energy survey data, and various EPA regulatory impact analyses and information co llection requests which require source population

estimates. In some cases there was sufficient in formation to distribute new sources to different thresholds based on emission information specifi c to the new sources (electric generating, municipal solid waste combustors, and commercial stationary fuel combustion). 5) Estimate total permitting actions for PS D and title V based on facility counts . The next basic step was to estimate permitting actions th at result from the baseline facility counts. For PSD, this required an estimate of modificati ons at existing facilities in addition to the estimate of newly constructed facilities from step 4. Our estimate for modifications at existing

facilities is based on calculati ng how many of the facilities iden tified as major sources would undergo a modification project that would exceed our baseline GHG thresholds. The methodology for estimating modifications is descri bed in detail in Attachment C. The basic methodology for estimating modifications at exis ting, but newly classified GHG major sources, under PSD was to apply a 4 percent modification ra te to the population of facilities that exceed the threshold. For title V, any facility, existi ng or newly constructed, th at exceeded the baseline22 thresholds for GHG permitting (i.e., 100 tpy CO2e) wa s considered to be required to get a title V permit under the baseline scenario.
6) Calculate costs for permitting actions . The total permitting actions calculated under step 5 above, were then combined with average permitting costs for each type of permitting activity for PSD and title V to calculate overall permitting burden. See Attachment C for full description on assumptions regarding permitting costs and how these were applied to different permitting actions under PSD and title V.
7) Adjustments based on public comment on proposal . We made three main adjustments to our basic methodology based on public comment s received on our proposal. Two of these

affected the estimate of modifications under PSD . Many commenters indicated that they felt

EPA had underestimated the number of modificati on permitting actions associated with PSD. Our proposed general modification rate (2 percent of the newly major facil ity population) used to estimate modifications at existing, but newly ne wly major GHG sources did not appear to have caught the extent to which facility level cha nges could result in proj ects that exceed the GHG permitting threshold. In reassessing this modifica tion rate, we determined that we had not fully accounted for all possible PSD modifications relative to the major source population in calculating this modification rate. Based on this reassessment we revised our general modification rate to 4 percent (as noted above in step 5) that is used to estimate the annual modification activity at existing, but newly major GHG sources. Another adjustment to the PSD modifi cations methodology was based on public comments on the proposal that we did not fully account for the number of major modification projects at existing major sources because we did not capture the number of existing projects that avoid major PSD review (by either taking lim its—synthetic based modifications—or by netting out) for existing pollutants but that would not be able to avoid PSD for GHGs. Our modifications methodology, as described in Att achment C, now specifically includes additional modifications for these projects that would not be able to avoid PSD review because of their

GHG emissions.

Lastly, based on public on public comments we revised our estimate of capacity utilization used for estimating PTE-based em issions for the general manufacturing source category (referred to as ‘unspecified stationary combustion’ in the GHG th reshold analysis TSD)23 and the oil and gas industry. In our proposal, the range for capac ity utilization for ‘unspecified stationary combustion’ varied from 70 to 90 percent depending on manuf acturing category, and for the oil and gas industry we used 90 percent. Based on comme nts received indicating that these utilization rates are higher than what is normally achieved in real-world conditions, particularly for smaller manufact uring type facilities, we used a 50 percent capacity utilization rate for both of these source categories. We believe that these assumptions better reflect what can be deemed reasonable operation under normal conditi ons for facilities in these source categories. All regulatory alternatives evaluated in th is RIA, except the ‘no action’ alternative, represent regulatory relief possibilities that establish title V permitting thresholds and PSD permitting thresholds and significance levels above the statutory 100/250 tpy CO 2 e requirements. In this RIA, EPA analyzes the benefits and costs of the tailoring rule for thresholds finalized in this rule for Steps 1 and 2 of the phase-in period, as well as, the proposal thresholds of 25,000
tpy CO 2 e and a possible Step 3 minimum threshold level of 50,000 tpy CO 2 e. The annual levels of regulatory relief associated with these regula tory alternatives are ev aluated, as well as, two and one-half year estimates that cover the Steps 1 and 2 phase-in period and for the full phase-in period of approximately 5 years. For the initial phase-in Step 1, only title V and new PSD sources already applying for permits due to air pollutants other than GHG emis sions are required to obtain a permit. New PSD sources required to obtain permits for GHG mu st also comply with BACT requirements for GHG. However, under Step 1, only modification projects or sources with GHG emissions or

emission increases that e qual or exceed 75,000 tpy CO 2 e PTE are required to comply with BACT requirements for GHG emissions. During Step 2 of the phase-in, sources at or above 100,000
tpy CO 2 e PTE are required to a obtain title V permit. Likewise, new sources at or above the
100,000 tpy CO 2 e PTE and modifying sources with PTE at or above 75,000 tpy CO 2 e are required to comply with the requirements of PSD. After the initial two steps of the phase-in, EPA will determine whether a Step 3 that lowers thresholds below 100,000 tpy CO 2 e PTE beginning July 2013 is feasible. However, in this final rule, the Agency is making an enforceable commitment to conduct a regulatory- setting process to consider the experience during the initial steps prior to lowering the thres hold in a further Step 3. EPA also commits to not lowering the threshold below 50,000 tpy CO 2 e PTE until 2016. EPA will also conduct a study of permitting processes at existing levels in the next 5 years and determine whether24 thresholds cans be lowered below 50,000 tpy CO 2 e PTE after another regulatory process. At proposal, EPA identified as the pollutants subject to PSD and title V the group of up to six GHG emissions, each one weighted for its global warm ing potential (GWP), that are included in regulations for their control under the CAA. EPA also proposed to c onform its action on PSD state implementation plans (SIPs) and title V programs to match the proposed Federal applicability requirements. In its proposed rule, EPA provided temporary regulatory relief for

sources of GHG emissions below a leve l of 25,000 tons per year (tpy) CO 2 e (carbon dioxide equivalents) potential to emit (PTE). Public comments and other information received by EPA during the comment period following proposal confirmed EPA’s findings th at applying the statutory PSD and title V thresholds for greenhouse gases (GHGs) may produ ce absurd results and is administratively infeasible during the next 6 years. After caref ul consideration of the numerous public comments

and other information on the excessive burden of the proposal regulatory relief threshold for sources of GHGs and permitting authorities, this final rule establishes a stepped phase-in plan establishing thresholds and signi ficance levels for title V and PSD applicability as shown in

Table 2.0.

The information on the number of affected sources enumerated in this RIA is based on emission estimates that represent a facility’s PTE. PTE is defined as the maximum capacity of a stationary source to emit a pollu tant under its physical and opera tional design, including certain legal limitations, for example, on emissions or ho urs of operation. PSD and title V programs both use PTE for defining major sources. This is a particularly relevant concern for determining

the number of facilities in the commercial and re sidential sectors that may be affected, where

CO 2 emissions are primarily due to space heating/appliance usage and the combustion units are not likely to be used constant ly at their maximum rated capac ity. Our basis for these PTE adjustments in the residential and commercial se ctors is information on heating equipment and appliance usage in these sectors, and resulted in a range of upwards adjustment of six to ten

times the actual-based emission values. A full desc ription of the basis of these PTE adjustments

can be found in Attachment B. In all cases wher e thresholds and significance levels are discussed in this report, these emission levels are based on PTE. The rationale for finalizing the previously de scribed thresholds in the tailoring rule is based in part on our review of the costs and bene fits associated with the different thresholds25 evaluated and described in this RIA. Howeve r, the primary basis for choosing the threshold

enumerated in Table 2.0 is to ensure consiste ncy with the legal doctrines set forth in the preamble of the tailoring rule. To apply the statut ory PSD and title V applicability thresholds to

sources of GHG emissions would create immediat e and insuperable administrative burdens for permitting authorities and perhaps absurd results. By establishing the applicability thresholds at the levels for the first and second steps of the phase-in period, we would avoid an administratively impossible scenario where each year tens of thousands of new sources and modifications would become subject to PSD revi ew, and, in total, millions of sources would require title V operating permits. We used the results of this RIA to support the threshold
decisions, which we believe would result in a variance from existing statutory permitting thresholds that would—consistent with the supp orting legal rationale—be as limited as possible and with consideration give n to costs and benefits as described in this RIA.

Table 2.1 below shows EPA estimates of the total number of title V sources and the

annual estimate of new PSD sources that would be required to obtain permits absent this Table 2.1. Baseline Sources Subject to Statutory Permit Requirements

Notes: Title V sources are the total nu mber of sources estimated to require an operating permit under statutory CAA thresholds. PSD sources are new sour ce estimates anticipated to require compliance with permitting annually. Estimates for PSD sources are for newly constructed facilitie s and do not include modifications at existing facilities that may also be subject to PSD requirements.

tailoring rule in a world where EPA takes ‘no action’. These affected source estimates provide a baseline on which to estimate the regulatory relief allowed by EPA in this final rule and possible at alternative regulatory thresholds. We compar e these baseline affected source counts to the sources counts at alternative regulatory relief thresholds to determine the number of sources likely to obtain regulatory relief due to the tailoring rule. Baseline Number of Sources Requiring Permits 100/250 tpy CO2e Thresholds Sector Title V New PSD Electricity 2,237 93 Industrial 178,037 604 Energy 5,000 48 Waste Treatment 4,206 2 Agriculture 37,351 299 Commercial 1,355,921 12,041 Residential 4,535,500 6,915 Totals 6,118,252 20,00226 Table 2.2 describes qualitativel y the benefits, costs, and economic impacts analyzed for regulatory alternatives in this RIA. As s hown in Table 2.1, leaving the CAA thresholds unchanged for sources of GHG emissions is the ba seline or ‘no action’ alternative that will render this tailoring rule as having no impact on sources or permitting authorities beyond the current CAA requirements. In this ‘no action’ case, we are simply comparing the baseline to itself. Thus, this is a regulatory alternativ e with zero benefits and zero costs. Under this alternative, small and large sources of GHG emis sions will be required to obtain title V operating and PSD permits as mandated by the Act. Although this alternative is considered for analytical completeness, its impact is essentially th e same as no GHG tailoring rule and no further

discussion of this alternative is considered in this document. In addition to the ‘no action’ alternative, this RIA examines Step 1 and 2 thresholds of the phase-in final rule, as well as a less than 50,000 tpy CO 2 e threshold (meaning sources below 50, 000 tpy obtain regulatory relief and this is the minimum level for potential Step 3) and a less than 25,000 tpy CO 2 e threshold (meaning sources below 25,000 tpy obtain regulator y relief and this is the proposed rule threshold level) regulatory alternatives. The benefits of this rule (a nd the alternatives considered ) are the permit burden costs avoided due to increasing the th reshold levels above current CAA requirements as reflected in
Table 2.1. Under this final rule, millions of title V sources in total and thousands of PSD sources annually are afforded regulatory relief. For each of the regulatory alte rnatives increasing the threshold above statutory levels, the benefits of this tailoring rule are primarily the avoided permitting costs for affected small sources of GHG emissions. The permitting costs avoided by small sources are quantified for the final rule Step 1 and 2 thresholds and each of the regulatory

alternatives in Section 3 of this document. Th e avoided costs associated with compliance with BACT requirements for PSD new and modifying s ources are not addressed in this RIA because

of lack of sufficient data to estimate BA CT requirements for affected GHG sources. The industry categories for sources anticipat ed to experience regulatory relief at the threshold levels finalized in this regulation are s hown in Table 2.3. As Table 2.3 shows, this27 Table 2.2. Qualitative Description of Be nefits and Cost of the Tailoring Rule

Description No Action Alternative (Thresholds Remain at 100/250 tpy) 1 Alternative (Proposal) 25,000 tpy GHG Emission

Threshold 2 Alternative 50,000 tpy GHG Emission

Threshold 2 Step 2 100,000 tpy GHG Emission

Threshold 2 Step 1 Anyway Threshold 2

Benefits (Regulatory relief—avoided permitting requirements and associated costs) No avoided permitting costs (i.e., over 6 million title V sources in total and over 80 thousand PSD small new and modifying GHG sources annually (over 240 thousand PSD sources during Steps 1 and 2) remain subject to programs) Avoid permitting costs for 6.098 million title V sources in total and for 72.3 thousand new and modifying PSD sources annually (or 216.9 thousand PSD sources during the Steps 1 and 2 time period) Avoid permitting costs for 6.102 million sources in total and for 79.7 thousand new and modifying PSD sources annually (or 239.1 thousand PSD sources during the Steps 1 and 2 time period) Avoid permitting costs for 6.105 million sources in total and for 80.7 thousand new and modifying PSD sources annually (or 242.1 thousand PSD sources during the Steps 1 and 2 time period) Avoid permitting costs for 6.106 million sources in total and for 81.6 thousand new and modifying PSD sources annually (or 244.8 thousand PSD sources during the Steps 1 and 2 time period)

Social Costs (Foregone emission reductions due to regulating GHG sources) No foregone emission reductions Foregone GHG emission reductions for affected sources (addressed qualitatively) Foregone GHG emission reductions for affected sources (addressed qualitatively) Foregone GHG emission reductions for affected sources (addressed qualitatively) Foregone GHG emission reductions for affected sources (addressed qualitatively)
Economic Impacts (Avoided costs compared to annual sales or revenue data for affected sources) No avoided costs Impact of avoided costs (benefits) compared to annual sales revenues of affected sources Impact of avoided costs (benefits) compared to annual sales revenues of affected sources Impact of avoided costs (benefits) compared to annual sales revenues of affected sources Impact of avoided costs (benefits) compared to annual sales revenues of affected sources

1 This table recognizes that triggering for GHG permitti ng has occurred with promulgation of the LDVR. Because of this event, sources with the potential to emit 100 tpy CO 2 e are required to obtain a title V permit and new or modifying sources with the potential to emit 250 tpy are required to obtain a PSD permit as mandated by the CAA. If current threshold levels in the CAA remain unchanged for GHG emissions, the tailoring rule has no effect on sources or permitting authorities and provides no regu latory relief to sources or permitting authorities.
2 Promulgated Steps 1 and 2 thresholds and alternative regula tory thresholds are shown. Threshold levels represent PTE levels for affected sources. Sources affected, e numerated above, represent sources, permits, or actions. Alternative 50,000 tpy CO 2 e is the minimum threshold level to be considered for a possible Step 3.

Table 2.3. Estimated Number of Affected Sources Experiencing Regulatory Relief for Final Rule and Regulatory Alternatives 1, 2, 3

Number of Sources Experiencing Regulatory Relief 25,000 CO 2 e tpy 50,000 CO 2 e tpy Final Rule: Step 2 Final Rule: Step 128 100,000 CO 2 e tpy Anyway Threshold
Sector Title V New PSD Title V New PSD Title V New PSD Title V New PSD Electricity 161 20 285 29 285 33 285 93
Industrial 166,908 574 168,976 586 170,654 599 170,910 604 Energy 2,401 23 2,513 38 2,536 44 2,588 48
Waste Treatment 1,431 0 2,448 1 3,165 1 3,358 2 Agriculture 37,351 299 37,351 299 37,351 299 37,351 299
Commercial 1,354,760 12,034 1,355,321 12,038 1,355,870 12,039 1,355,921 12,041
Residential 4,535,340 6,912 4,535,480 6,915 4,535,500 6,915 4,535,500 6,915
Totals 6,098,352 19,862 6,102,374 19,906 6,105,361 19,930 6,105,913 20,002
% Emissions Covered 4 3% 8% 11% 13%

1 Number of sources is determined on a PTE basis. Es timates for PSD sources are for newly constructed facilities and do not include modifications at existing facilities that may also be subject to PSD requirements. Source estimates shown above represent the total number of title V sources potentially afforded regulatory relief during Step 1 and 2 of the phase-in period. In contrast, for new PSD sources, the estimates shown are the annual estimates of permits avoided for new small PSD GHG sources.
2 See Attachment B for more details of how thresholds and sources affected were developed.
3 The “no action” alternative is not included since the numb er of sources experiencing regulatory relief for this regulatory alternative is by definition zero.
4 Percentage of emissions covered represents estimate d actual emissions from sources expected to experience regulatory relief as a percentage of total stationary source GHG emissions.

action lifts permitting requirements for over 6 million potential title V sources in total and tens of thousands of potential PSD new and modifying sources annually otherwise required by the CAA to obtain permits. The estimates for title V sources represent the total number of sources afforded regulatory relief by this rule and for regulatory alternatives. In contrast, the estimates shown for PSD represent the annual estimate of new PSD sour ces expected to experience regulatory relief from this rule. For additional industry detail s including applicable affected industry North American Classification System (NAICS) codes see Attachment A “Source Categories Affected by the Rule with Industry Detail.”

EPA considered a number of factors involvi ng administrative burden and necessity in finalizing the thresholds for this rule, includi ng comments received in response to the proposed rule. After considering the comments regardi ng the number of affected sources at various
thresholds, EPA revised its estimates of sour ces potentially required to obtain permits significantly increasing the number of affected so urces at the alternative threshold/significance

levels. When comparing the regulatory alternatives for revised affected sources at alternative
thresholds as discussed above, there are differences between th em. The reason the thresholds and significance levels are chosen as shown in Table 2.0 for Steps 1 and 2 of the phase-in period29 with an additional Step 3 to be considered only after a subsequent regulatory process is because permitting authorities cannot immediately accomm odate a huge increase in permitting. The thresholds chosen for Steps 1 and 2 are chos en over the proposal level of 25,000 tpy CO 2 e, because evidence suggests that permitting auth orities can run programs for the levels of permitting that would be required Steps 1 and 2, and EPA believes legal doctrine requires the threshold to be as low as administratively feasible . The choice of a threshold is a balancing act

of administrative considerations between threshold levels that EP A feels are not administratively feasible at this time (i.e., 25,000 tpy CO 2 e potential to emit threshold) compared to threshold levels that are not impossible such as the Step 1 ‘anyway’ threshold a nd the Step 2 100,000 tpy

CO 2 e threshold achieving a reasonable balance. For more information on the process used to determine the appropriate threshol ds/significance levels for Steps 1 and 2 of the phase-in period,

see Attachment B. Uncertainties associated with this threshold analysis are discussed in Section

8 of the RIA.30 Section 3 Benefits (Regulatory Relief or Avoided Permit Burden Costs)

EPA estimated the regulatory relief or avoided title V and PSD permitting costs for small sources of GHG that will be postponed as a result of this rulemaking. This analysis focuses on the burdens that are being lifted for smaller source s as a result of this rule. In addition, an accounting of the avoided costs to State, local, and tribal perm itting authorities is provided. These avoided costs relate specifically to inform ation collection costs or burden costs for sources of GHG emissions that would have been requir ed to obtain an operating permit under title V or required to modify an existing permit to address GHG if not for this rule. Avoided costs shown

also include information collec tion requirements for additional PSD permits required for new or modifying sources of GHG, as well as the costs to State, local, and trib al permitting authorities for extending their existing permitting programs to include sources of GHG. These avoided costs do not include the cost of modifying a nd new source compliance with BACT because of

the lack of available data. Time and costs associated with permit activ ities are derived from existing Information Collection Request (ICR) EPA documents for title V and PSD as described below. Significant uncertainties exist in the following estimates b ecause of the lack of historical record and permitting experience on which to base resource needs to consider sources of GHG emissions in permitting and are discussed more fully in Section 8 of this RIA.

3.1 Avoided Burden Costs for Title V Under Step 1 of the phase-in, major sources of GHG that would otherwise be required to obtain an operating permit due to emissions of non-GHG pollutants are required to include GHG in permit requests. During this period, sour ces other than those obtaining permits for non-GHG pollutants will experience regulatory relief. Under Step 2, sources below 100,000 tpy CO 2 e PTE will experience regulatory relief, while sources a bove this threshold will be required to obtain operating permits. Table 3.0 shows the estimate d annual permitting cost or burden cost avoided for sources subject to title V experiencing regu latory relief during the period January 2, 2011, through June 30, 2013, as well as for two other re gulatory alternatives. The alternatives shown are a threshold of 50,000 tpy CO 2 e PTE (the minimum threshold for a possible Step 3) and
25,000 tpy CO 2 e PTE (the proposal threshold level). Estimates shown are31Table 3.0. Annual Title V Regulatory Relief (Avoided Cost) Estimates for Affected Sources of GHG and PermittingAuthorities at Alternative Thresholds1,2,3Regulatory Alternative25,000 CO2e tpyRegulatory Alternative50,000 CO2e tpyFinal Rule: Step 2100,000 CO2e tpyFinal Rule: Step 1Anyway ThresholdActivityCost perPermit(2007$)NumberofPermitsAvoidedCosts(millions2007$)NumberofPermitsAvoidedCosts(millions2007$)Number ofPermitsAvoidedCosts(millions2007$)NumberofPermitsAvoidedCosts(millions2007$)SourcesNew Industrial $46,350 69,726 $3,231.8 70,848$3,283.8 71,657 $3,321.3 71,829 $3,329.3New Commercial/Residential $23,175 1,985,504 $46,014.1 1,985,740 $46,019.5 1,985,930 $46,023.9 1,985,948 $46,024.3Permit Revisions due to GHG $1,677 52,639 $88.3 59,930 $100.5 60,921 $102.2 61,836 $103.7Source Total 2,107,869 $49,334.1 2,116,518 $49,403.8 2,118,508 $49,447.4 2,119,613 $49,457.3Permitting AuthorityNew Industrial $19,688 69,726 $1,372.8 70,848$1,394.9 71,657 $1,410.8 71,829 $1,414.2New Commercial/Residential $9,844 1,985,504 $19,545.3 1,985,740 $19,547.6 1,985,930 $19,549.5 1,985,948 $19,549.7Permit Revisions due to GHG $1,840 52,639 $96.9 59,930 $110.3 60,921 $112.1 61,836 $113.8Permitting Authority Total 2,107,869 $21,014.9 2,116,518 $21,052.8 2,118,508 $21,072.4 2,119,613 $21,077.6Total Title V Regulatory Relief$70,349$70,456.6 $70,519.8$70,534.9Percentage of Emissions Covered33%8% 11%13%Sums may not add due to rounding.1Avoided costs shown represent the annual estimates of the regulatory burden relief from this ruleand for regulatory alternatives for over 2 million sources ofGHGs (about 1/3 of the total number oftitle V sources expected to obtain regulatory relief). See Appendix B and C for more details. Sources experiencingregulatory relief are those withthe potential to emitless than the threshold levels annually.2These estimates are explained in more detail in Attachment C “Summary of Methodology and Data Used to Estimate Burden Relief and Evaluate ResourceRequirements at Alternative Greenhouse Gas Permitting Thresholds.”3Percentage of emissions covered represents estimated actual emissions from sources expected to experience regulatory relief asa percentage of total stationarysource GHG emissions.32 the annual portion of regulatory relief expected to occur for small GHG sources and permitting authorities due to this final rule and equate to regulatory relief for approximately 2 million title V

sources. As shown on Table 3.0, the cost for a new i ndustrial source to obtain an operating permit for GHG is $46,350 per permit. Over 71,000 industri al sources are likely to benefit from this rule because of the postponement of permitting requirements under Steps 1 and 2 of the phase-in period annually. Approximately 61,836 industrial sources annually will be allowed to postpone permit revisions for GHG at an avoided cost of $1,677 per permit revision under the ‘anyway’ threshold Step 1. The estimate of industria l sources avoiding permit revisions becomes 60,921 annually under Step 2, the less than 100,000 tpy CO 2 e threshold. The burden cost to obtain a new commercial or multifamily residential ope rating permit is approximately $23,175 per permit with about 2.0 million of these sources annually benefiting from this rule by avoiding these costs for the phase-in period. The total regulatory relief or benefits for smaller sources of GHG amount to approximately $49.5 billion per year unde r Steps 1 and 2 of the phase-in period. All

estimates are shown in 2007 dollars. Avoided costs fo r sources at regulatory alternative threshold levels of 50,000 tpy and 25,000 tpy CO 2 e are also presented in Table 3.0. State, local, and tribal permitting authorities wi ll also benefit from this rule by avoiding the administrative burden of processing over 2 million title V operating permits for small
industrial, commercial, and residential sources of GHG annually. Avoided permitting cost estimates for permitting authorities and sources are calculated based on information obtained from the April 2007 Information Collection Request for State Operating Permit Regulations 4
Annual values are derived from Tables 7 and 8 of this document. For consistency, the permitting authority labor costs are update d to 2007 dollars using the 2007 General Schedule Salary Table from the Office of Personnel Management. For th e purposes of this analysis, we assume that

commercial/residential sources that exceed th e major source threshold due to GHG emissions will not likely have as substantial applicable permitting cost requirements as industrial sources. We assumed that permits for such sources will require only one half the time to prepare
and issue as those for industrial sources, which have applicable requirements in addition to GHG. Therefore, it is estimated that new commercial/residential permits require 50 percent of the time

4 Information Collection Request for St ate Operating Permit Regulations (R enewal), EPA ICR Number 1587.07, OMB Control Number 2060-0243, 2007.33 needed for new industrial permits, or 214 hours compared to 428 hours for permitting authorities. For significant revisions and permit renewals, it is assumed that incorporating GHG information adds 40 hours, or an additional 10 percent to th e current updating and processing time. For more

information on the methods used to calculate permit processing costs for permitting authorities for title V permitting, see Attachment C, “Summary of Methodology and Data Used to Estimate Burden Relief and Evaluate Resource Requirements at Alternative Greenhouse Gas Permitting

Thresholds.” The cost savings for permitting authorities rela ting to title V are summarized in Table 3.0 and are estimated to exceed $21 billion annually. Costs avoided annually for permitting

authorities at alternative threshold levels other than Steps 1 and 2 are also shown on Table 3.0.

All avoided cost estimates are stated in 2007 dollars. This rule specifies a phased-in step approach to establish title V a nd PSD thresholds. For this reason, it is appropriate to assess the regula tory relief during the various steps of the phase-in period in addition to looking at regulatory relief on an annual basi s as previously discussed. Since thresholds for only Steps 1 and 2 are promul gated in this rulemaking with a potential Step 3 to be considered only after subsequent rulema king, we calculate the regulatory relief possible for a two and one-half year period, the approximate time period covered by Steps 1 and 2 of this tailoring rule. Considering the regulatory relief for the 21⁄2 year period allows us to evaluate alternative regulatory relief based not only on th reshold levels, but also based upon the timing of the steps of the phase-in period. Table 3-1 presents the Steps 1 and 2 regulatory relief for title V based upon alternative regulatory thresholds and the timing of the phase-in steps. Alternatives of
25,000 tpy CO 2 e, 50,000 tpy CO 2 e, 100,000 tpy CO 2 e, and the ‘anyway’ thresholds are evaluated as if they were implemented for the en tire Step 1 and 2 period. The 25,000 tpy CO 2 e and the ‘anyway’ threshold regulatory re lief shown represent the bounding es timates for regulatory relief

for these threshold alternatives as well as altern ative timings of the step s. If the 25,000 tpy CO 2 e threshold were imposed for Steps 1 and 2 of the phase-in, regulatory re lief or avoided title V permitting costs for sources and permitting authorities would amount to approximately $175.8 billion for a Steps 1 and 2 phase-in period. Al ternatively if the ‘anyway’ based threshold were imposed for a 21⁄2 year period, the regulatory relief would be $176.3 billion for sources and permitting authorities during the first two steps of the phase-in period. The final tailoring rule promulgated, establishes the ‘anyway’ threshold for Step 1 and 100,000 tpy CO 2 e threshold for34 Step 2. The total regulatory relief for the final rule for the 21⁄2 year period for title V is estimated to be $176.3 billion. Altering Step 2 to be 25,000 tpy CO 2 e and 50,000 tpy CO 2 e with Step 1 as the ‘anyway’ threshold would result regulatory re lief estimates for the three year period of $176 billion and $176.2 billion, respectiv ely. All estimates are in 2007$.

3.2 Avoided Information Collection Costs Associated with the PSD Program This rulemaking limits the new sources requir ing PSD permits for Step 1 to those that would be required to comply with PSD for non-GHG emissions. For modifying sources, the significance level requiring permits is 75,000 or greater tpy CO 2 e PTE. In Step 2 of the phase-in period, the threshold becomes 100,000 tpy CO 2 e PTE or greater for new sources and the significance level for modifying sources remains at 75,000 or greater tpy CO 2 e. Table 3.2

summarizes the estimated benefits to small GHG sources resulting from this final rule. Annual regulatory relief for Steps 1 and 2 of the phase -in period, as well as additional alternative regulatory thresholds, are depicted on Table 3.2. The estimated annual burden or permit-related costs avoided by small GHG sources amount to ar ound $5.5 billion annually during Step 1 and $5.4 billion during Step 2 with the burden cost s per permit expected to be $131 thousand for new
sources, $84.5 thousand for modified industrial sources, $82.3 thousand for new commercial or residential sources, and $59.2 thousand for modifyi ng commercial and residential sources. State, local, and tribal permitting authorities are expected to avoid administrative costs of $1.5 billion under Step 1 and $1,485 million under Step 2 annually. Burden estimates for the PSD program permitting authorities are calculated based on

listed values obtained from Tables 6-1 and 6-2 on pages 18-19 in the Information Collection
Request for Prevention of Significant Deteri oration and Nonattainment New Source Review August 2008 (ICR). 5 As shown in Table 3.2, State, local, and tribal permitting authorities are estimated to expend $23,243 per permit to process a new GHG industrial PSD

5 Prevention of Significant Deterioration and Non-Attainment Area New Source Review (Renewal), EPA ICR Number 123.23, OMB Control Number 2060-0003, 2008.35Table 3-1. Steps 1 and 2 Title V Regulatory Relief (AvoidedCost) Estimates for Affected Sources of GHG and PermittingAuthorities at Alternative Thresholds1,2Regulatory Relief Estimates for Step 1 and 2 of the Phase-In Period (January 2, 2011 through July 1, 2013)Activity Regulatory Alternatives (Avoided Permitting Costs in million 2007$)Sources 25,000 CO2e tpy 50,000 CO2e tpy 100,000 CO2e tpyAnywayThreshold Anyway/ 50,000 Anyway/25,000Final RuleAnyway/100,000New Industrial $8,079.5 $8,209.5 $8,303.3 $8,323.3 $8,232.3 $8,128.3 $8,307.3NewCommercial/Residential $115,035.3 $115,048.8 $115,059.8 $115,060.8 $115,051.2 $115,040.4 $115,060.0Permit revisions due toGHG $220.8 $251.3 $255.5 $259.3 $252.9 $228.5 $256.3Source Total $123,335.5 $123,509.5 $123,618.5 $123,643.3 $123,536.3 $123,397.1 $123,623.5Permitting AuthorityNew Industrial $3,431.9 $3,487.2 $3,527 $3,535.4 $3,496.8 $3,452.6 $3,528.7NewCommercial/Residential$48,863.3 $48,869.1 $48,873.7.0 $48,874.2 $48,870.1 $48,865.4 $48,873.8Permit revisions due toGHG$242.1 $275.7 $280.2 $284.5 $277.4 $250.6 $281.1Permitting AuthorityTotal$52,537.3 $52,632 $52,680.9 $52,694.1 $52,644.3 $52,568.6 $52,683.6Total Title V RegulatoryRelief$175,872.8 $176,141.5 $176,299.4 $176,337.48 $176,180.6 $175,965.7 $176,307.1Benefits represent regulatory relief or avoided costs for sources with the potential to emitbelow the thresholds shown.1Avoided costs shown represent the 21⁄2 year estimates of the regulatory burden relief from this rule and for regulatory alternatives for Steps 1 and 2 forthe period Jan. 2, 2011 through July 1, 2013. Alternatives 25,000 CO2e tpy, 50,000 CO2e tpy, 100,000 CO2e tpy, and non-GHG based assume thesethresholds remain in effect for entire 21⁄2 years. Alternatives Anyway/50,000 and Anyway/25,000 assume the Anyway threshold forStep 1 and 50,000CO2e tpy and 25,000 CO2e tpy thresholds for Step 2, respectively.Finally the final rule estimates shown in the last column ofthe table assume theAnyway threshold for Step 1 (one half year) and the 100,000 CO2e tpy threshold for Step 2 (two years).Sums may not add due to rounding.2These estimates are explained in more detail in Attachment C “Summary of Methodology and Data Used to Estimate Burden Relief and EvaluateResource Requirements atAlternative Greenhouse Gas Permitting Thresholds”36Table 3.2. Annual PSD Regulatory Relief (Avoided Costs) forSources of GHG and PermittingAuthorities at AlternativeThresholds1,2Regulatory Alternative25,000 CO2e tpyRegulatory Alternative50,000 CO2e tpyStep 2100,000 CO2e tpyThreshold,75,000 CO2e tpySignificance LevelStep 1Anyway75,000 CO2e tpySignificance LevelActivityCostperPermit(2007$)NumberofPermitsAvoidedCosts(millions2007$)NumberofPermitsAvoidedCosts(millions2007$)Numberof PermitsAvoidedCosts(millions2007$)NumberofPermitsAvoidedCosts(millions2007$)SourcesNew Industrial $84,530 16,892 $1,427.9 24,183$2,044.2 25,174 $2,128.0 26,089 $2,205.3New Commercial/Residential $59,152 55,446 $3,279.7 55,481 $3,281.8 55,505 $3,283.2 55,509 $3,283.5Source Total 72,338 $4,707.6 79,664 $5,326.0 80,679 $5,411.2 81,598 $5,488.8Permitting AuthorityNew Industrial $23,243 16,892 $392.6 24,183 $562.1 25,174 $585.1 26,089 $606.4New Commercial/Residential $16,216 55,446 $899.155,481 $899.7 55,505 $900.1 55,509 $900.1Permitting Authority Total 72,338$1,291.7 79,664 $1,461.8 80,679 $1,485.2 81,598 $1,506.5Total PSD Regulatory Relief$5,999.4$6,787.8 $6,896.4$6,995.31Avoided costs shown represent annual estimates of the regulatory burden relief for this rule and for regulatory alternatives for sources with the potential to emitbelow the threshold. Sums may not add due to rounding.2Attachment C: “Summary of Methodology and Data Used to Estimate Burden Relief and Evaluate Resource Requirementsat Alternative Greenhouse GasPermitting Thresholds.37 permit and $16,216 per permit for a new commercial or residential PSD permit. It is assumed that permit preparation and issu ance for commercial/residential permits require less time to prepare and issue than industrial source permits since commercial/residential sources would likely be somewhat less complex in terms of nu mbers and types of emission sources and control requirements. Estimates obtained are additional burden and costs to those currently experienced by permitting authorities and sources. For more information on the estimates of burden costs for PSD permits, see Attachment C. Avoided costs estimates for regulatory alternatives of 25,000 tpy (proposal level) and 50,000tpy CO 2 e PTE are also shown in Table 3.2. The PSD estimated costs on Table 3.2 represent annual estimates of costs avoided for sources and permitting

authorities. Regulatory relief alternatives for Steps 1 and 2 for PSD are shown on Table 3.3. Evaluating regulatory alternatives for the approx imate 21⁄2 year time period covered by Steps 1 and 2 provides comparisons of the threshold leve ls and the impacts of timing choices for the steps. As shown on Table 3.3, re gulatory alternatives of 25,000 tpy CO 2 e, 50,000 tpy CO 2 e, 100,000 tpy CO 2 e, and the ‘anyway’ thresholds are evalua ted as if they were implemented for the entire two step phase-in period. The 25,000 tpy CO 2 e and the ‘anyway’ thresholds represent the bounding alternatives over the thr ee year period with the 25,000 tpy CO 2 e alternative providing the least regulatory reli ef and the ‘anyway’ threshold th e greatest. If the 25,000 tpy

CO 2 e were implemented for Steps 1 and 2, the re gulatory relief for PSD sources would amount to approximately $14,998.3 million during the Step1 and 2 phase-in period. This regulatory relief would be $17,488.3 million over the same pe riod with the ‘anyway’ threshold. All other

alternatives shown and combinations of regulatory alternatives within the 2.5 year time frame lie within the 25,000 tpy CO 2 e threshold and the ‘anyway’ thres hold. The final rule ‘anyway’ threshold for Step 1 and 100,000 tpy CO 2 e threshold for Step 2 results in PSD regulatory relief of $17,290.5 million for the 2.5 year phase-in period. This rule also alleviates the regulatory burden associated with complying with PSD BACT requirements for small new and modifyi ng sources. The BACT costs foregone are not

estimated or shown in Tables 3.2 or 3.3 because of the significant uncertainties involved in these requirements for affected sources and lack of sufficient information to estimate these costs currently. Likewise, the foregone emission reducti ons associated with these BACT requirements

for small sources are not estimated. This issue is discussed further in Section 4 of this RIA. The38 benefits estimates for this rule are subject to li mitations and uncertainties that are discussed in

Section 8 of this RIA. Table 3.4 presents the title V and PSD regul atory relief for the full phase-in period of approximately five years. The final rule benefits are shown fo r two alternatives for Step 3, one in which Step 3 remains at the Step 2 level and one in which Step 3 becomes the minimum threshold of at least 50,000 tpy CO 2 e previously discussed. Thes e alternatives for Step 3 bound the net benefit estimates for the entire phase in period. If Step 3 remains at the Step 2 level, net benefits for the five year period are $387,153.4 +B million. This benefit estimate becomes $386,719.4 + B million if Step 3 becomes the minimum level of 50,000 tpy for the five year phase-in period. The letter B represents the benefits we are not able to quantify in this analysis and are discussed in section 8 of this report. Give n the short time frame of the impact of this final
rule, we did not consider the time value of m oney or discount the bene fit and cost estimates provided in this report, rather we assume these benefit and cost estimates are occurring currently. All dollar estimates shown are based upon 2007$.39Table 3.3 Step 1 and 2 PSD RegulatoryRelief (Avoided Costs) for Sources of GHGand Permitting Authorities at AlternativeThresholds1,2Benefits are regulatory relief or avoided costs for sources with the potential to emit below the thresholds shown.1Avoided costs shown represent the 21⁄2 year estimates of the regulatory burden relief from this rule and for regulatory alternatives for Steps 1 and 2 of the phasein period January 2, 2011 through July 1, 2013. Alternatives 25,000 CO2e tpy, 50,000 CO2e tpy,100,000 CO2e tpy, and ‘anyway’assume these thresholdsremain in effect for 21⁄2 years. Alternatives Anyway/50,000 and Anyway/25,000 assume the Anyway threshold for Step 1 and 50,000CO2e tpy and 25,000CO2e tpy thresholds for Step 2, respectively. Finally the final rule estimates shownin the last column ofthe table show theAnyway threshold for Step 1 (onehalf year), and the 100,000 CO2e tpy threshold for Step 2 (two years). Sums may not add due to rounding.2Attachment C: “Summary of Methodology and Data Used to Estimate Burden Relief and Evaluate Resource Requirementsat Alternative Greenhouse GasPermitting Thresholds.”Regulatory Relief for Step 1 and 2 Phase-in Period ( January 2, 2011 through July 1, 2013)Regulatory Alternatives (Avoided Permitting Costs in millions 2007$)Activity25,000 CO2e tpy 50,000 CO2e tpy 100,000 CO2e tpyAnywayThresholdAnyway/50,000 Anyway/25,000Final RuleAnyway/100,000SourcesNew Industrial $3,569.8 $5,110.5 $5,320.0$5,513.3 $5,191.1 $3,958.5 $5,358.7New Commercial/Residential $8,199.3 $8,204.5 $8,208.0 $8,208.8 $8,205.4 $8,201.2 $8,208.2Source Total $11,769.0 $13,315.0 $13,528.0 $13,722.0 $13,396.4 $12,159.6 $13,566.8Permitting AuthorityNew Industrial $981.5 $1,405.3 $1,462.8$1,516.0 $1,427.4 $1,088.4 $1,473.4New Commercial/Residential $2,247.8 $2,249.3 $2,250.3 $2,250.3 $2,249.5 $2,248.3 $2,250.3Permitting Authority Total $3,229.3 $3,654.5 $3,713.0 $3,766.3$3,676.9 $3,336.7 $3,723.7Total PSD Regulatory Relief $14,998.3 $16,969.5 $17,241.0 $17,488.3 $17,073.3 $15,496.3 $17,290.540 Table 3.4 Benefits of the Final Rule and Step 3 Regulatory Alternatives

Regulatory Alternative (millions 2007$) Final Rule + Possible Step 3 of Benefits for the Five Year Period Beginning January 2, 2011 100, 000 tpy CO2e 3 50, 000 tpy CO2e 4
Benefits - Regulatory Relief Sources

Title V 1 $247,253.6 $247,145.3

PSD 2 $27,094.7 $26,881.8 Total Source Regulatory Relief $274,348.3 $274,027.1 Permitting Authority Title V 1 $105,368.5 $105,318.8
PSD 2 $7,436.61 $7,378.1 Total Permitting Authority $112,805.1 $112,696.8 Total Regulatory Relief $387,153.4+ B $386,719.4+ B Benefits are regulatory relief for sources with the potential to emit below the thresholds shown. B - unquantified benefits of the rule include regulatory relief from BACT requirements for PSD sources 1Reflects estimates of regulatory relief or avoided permit burden costs for title V GHG sources and permitting authorities. 2 Shows estimates of regulatory relief or avoided permit burden costs for GHG PSD sources and permitting authorities. 3 Includes 1⁄2 year of Step 1 (anyway threshold), 4 1⁄2 years of Step 2 (100,000 threshold), 4 Includes 1⁄2 year of Step 1 (anyway threshold), 2 1⁄2 years of Step 2 (100,000 threshold), and 2 1⁄2 years of Step 3 alternative of 50,000.41 Section 4 Social Costs

EPA examined the social costs of this final ru le. For this rule, the social costs represent the foregone environmental benefits that would occu r if regulatory relief was not offered to small

sources of GHG emissions. This action is one of regulatory relief since it increases the emissions thresholds for the title V and PSD programs, as they apply to sources of GHG, to levels above

those in the CAA. Previous sections have discu ssed the avoided cost of such relief, but there is also a social cost imposed by such relief because this rule may forego some of the possible

benefits associated with title V and PSD programs for sources of GHG emissions below Step 1 and 2 phase-in thresholds but a bove the statutory 100/250 tpy levels . These benefits are those attributed to title V and PSD permitting programs in general. These benefits are based on the relevance of these programs to policymaking, tr ansparency issues, and market efficiency and, therefore, are very difficult to qu antify and monetize. For title V, they include the benefits of improved compliance with CAA requirements that stem from (1) improved clarity regarding applicability of requirements; (2) discovery and required correc tion of noncompliance prior to receiving a permit; (3) improving monitoring, recordkeeping, and reporting concerning compliance status; (4) self-certification of complia nce with applicable requirements initially and annually, and prompt reporting of deviations from permit requirements; (5) enhanced opportunity for the public to understand and moni tor sources’ compliance obligations; and (6) improved ability of EPA, permitting authorities, and the public to enforce CAA requirements. However, it is important to remember that a title V permit does not add new requirements for pollution control itself but rather collects a ll of a facility’s applicable requirements under the CAA in one permit. Therefore, the compliance benefits above are less when title V permits contain few or no CAA applicable requirements. During the first two steps of this phase-in period, we expect that the vast majority of sources excluded from title V would be sources that have no CAA applicable requirements for GHG em issions and few or no requirements for other pollutants because their emissions of those pollutant s are so small. For this reason, although it is extremely difficult to measure the degree of im proved compliance, if any, that would be foregone or to quantify the social costs that w ould be imposed, we expect that they would be negligible.42 For PSD, the primary social cost imposed by the tailoring rule stem s from the foregone benefit of applying BACT to the tens of thousa nds of small new sources and modifications that will be below our thresholds during the first phase. This social cost potentially weighs against the cost savings described above that stem (in part) from avoiding the ad ministrative and control costs of applying BACT to thes e sources. The BACT requirement ensures that when new and modified sources increase their emissions they ar e using state-of-the-art emission controls and afford the public an opportunity to comment on the control decision. It does not prohibit
increases, but it ensures that such controls ar e applied. Delaying the BACT requirement for numerous small sources during the first phase of this rule could allow increases from these smaller sources that are greater than they would be if BACT were a pplied. A detailed analysis of this difference is beyond the scope of this rule because we do not have detailed information on

the universe of these tens of thousands of small PSD actions, the candidate BACT technologies for each of them, how permitting authorities would make the BACT decisions, and how the BACT limit would compare to what would othe rwise be installed absent BACT. Below we present an illustrative example of how BACT im pacts might be determined for sources that would be excluded from review under the tailoring rule. This example illustrates the difficulty in quantifying the social costs of avoided BACT but helps explain the nature of such costs.
To assess the effect of avoided BACT, we would identify the universe of source types that are affected by the tailoring rule. More spec ifically, we would have to project the number of various source types (within t hose affected by the tailoring rule) that would actually be constructing or modifying. We have generally char acterized these sources as part of the tailoring

rule threshold evaluation and have determined a large proportion of thes e to consist of small

commercial and residential sources. This dete rmination was based on rough energy usage data, but to assess BACT, we would require more sp ecific information about the proposed equipment that will actually be emitting GHG (e.g., water h eaters, furnaces, cooking equipment, dryers), and more specific characterization would be s ubject to a very high degree of uncertainty. Following characterization of new and modified sources, we would need to determine, for each category of source, what GHG control tec hnologies are available for such equipment. For commercial sources, we may have to determin e commercial availability of a range of lower emitting processes, more efficient technologi es, and other techniques for improving energy efficiency. Next, we would assess affected sources’ capital and opera ting costs of control43 options and determine energy and environmental im pacts. Finally, we would need to apply judgment (as the permitting authority would do in each case) to select the technology that represented the maximum degree of control taking the costs, energy, and environmental impacts

into account. The social cost component of the impact of foregoing BACT for sources that construct or modify during the first phase would be represented by the difference between the increased

emissions that would result from such sources absent BACT and the increase that would be allowed under the BACT requirement. However, although we can point to the existence of such differences, we cannot quantify them (though as expl ained below we expect that overall they will be very limited in scope and magnitude). Si nce there has been no regulatory experience with controlling GHG emissions from these sources, and limited permitting experience of any kind with mandatory control requirements on smaller commercial and residential sources, we are not in a position at this point to identify the specifi c control technologies a nd quantify this difference to estimate the greater increases that might occu r in the absence of appl ying the BACT process to these sources across the country. In addition, si nce the PSD BACT review and selection process is implemented on a case-by-case basis, there is additional uncertainty in predicting programwide reductions because even for similar source s, permitting authorities may ultimately weigh the BACT factors differently and ad opt different control measures. For all these reasons, it is not possible at this time to quantify the social costs of avoided
BACT. However, we note that the universe of possible emissions that would be regulated by sources excluded under the tailoring rule is small compared to thos e that would remain subject to PSD. The sources excluded in the first steps of this phased-in rule comprise only 11 percent of total stationary source GHG emissions, while 68 percent remain subject to regulation. The remaining fraction of stationary GHG source emi ssions come from sources below statutory CAA thresholds of 100/250 tons per year. Furthermore, we expect the emissions differences due to BACT controls for sources excluded by the tailori ng rule to be relatively small because of the lack of available cost-effective capture and control technologies for GHG at such sources that are

akin to those that exist for conventional pollutants and large sources, as well as the likelihood

that even in the absence of BACT such sources would already be installing relatively efficient GHG technologies to save on fuel costs. Thus , although potential benefits would be foregone by excluding smaller sources from the permitting programs, these benefits are likely to be small.44 Under the tailoring rule, we will work during the 6-year period to greatly improve our understanding of both the administra tive costs of regulating and the so cial costs of not regulating
smaller sources under PSD and title V, and we will rely on that information to support our future threshold analyses called for under the rule. Since EPA is unable to quantify these GHG em ission reductions foregone at this time

because of these uncertainties involved in this estimation, it is also not possible to provide a monetized estimate of the foregone benefits or so cial costs of this ru le. If such emission reductions foregone were quantified, EPA could us e the social cost of carbon benefit estimates such as those used in the “Rulemaking to Establish Light Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards” 6 recently published to compute the dollar value associated with the social costs of this rule. Nonetheless, we expect
that the value would be small because, as discus sed above, the emissions differences from which this value would be computed are small. In reaching the decisions for this GHG tailo ring rule, EPA recognizes the GHG emissions can remain in the atmosphere for decades to cent uries, meaning that thei r concentrations become well mixed throughout the global atmosphere regard less of emission origin, and their effects on climate are long lasting and significant. A detaile d explanation of climate change and its impact on health, society, and the envi ronment is included in EPA’s t echnical support document for the endangerment finding (Docket ID No. EPA-HQ-OAR-2009-0171). EPA recognizes the importance of reducing climate change emissi ons for all sources of GHG emissions, including those sources afforded regulatory relief in this rule, and plans to address potential emission reductions from these small sources using volun tary and energy efficiency approaches.
Elsewhere, we have discussed EPA’s intere st in continuing to use regulatory and/or nonregulatory tools for reducing emissions from smaller GHG sources because we believe that these tools will likely result in more efficient and cost-effective regulation than would case-bycase permitting.

6 U.S. EPA 2010. Rulemaking to Establish Light Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards. EPA-HQ-OAR-2009-0472. http://www.epa.gov/otaq/climate/regulations/ghg-preamble-regs.pdf.45 Section 5

Net Benefits

The net benefits of this GHG tailoring rule re present the difference between the benefits and costs of this rule to society. This chapter pr esents the net benefits of the final rule and other regulatory alternatives. As discussed in Chapter 3, this rule is one of regulatory relief and the benefits to society are estimates the regulatory relief (avoided permit burden costs) to sources and permitting authorities for Steps 1 and 2 of the phase-in period. The social costs of the rule are the foregone environmental benefits in th e form of potential GHG emission reductions that could occur during the phase-in period and are discussed in Chapter 4.

This rulemaking provides regulat ory relief for a phase-in period of approximately 5 years to smaller sources of GHG by phasing in the stat utory permitting threshold at levels above statutory requirements. This final rule establ ishes thresholds and PSD significance levels for Steps 1 and 2 of the phase-in period (the 21⁄2 ye ar period between January 2, 2011 and July 1, 2013), commits to considering a further Step 3, and indicates floor title V and PSD threshold levels from July 1, 2013 through April 30, 2016. While the EPA commits to undertake a rulemaking for a further Step 3, the ultimate outcome for sources of GHG from this additional rulemaking is unknown at this time. Annual estim ates for the final rule Steps 1 and 2 and regulatory alternatives are presented in Table 5.1. As Table 5.1 indicates, the annual net benefits associated with the final rule Step 1 are $77,530.2 million + B-C and for Step 2 are $77,416.2 + BC

million annually, where B denotes the unquantified benefits and C the quantified costs of this final rule. These unquantified benefits and costs are discussed in more detail in the preceding

limitations and uncertainties section of this execu tive summary. Table 5.2 shows the final rule Steps 1 and 2 with regulatory alternatives for th e two and one-half year phase-in period January 2, 2011 through July 1, 2013. The net benefits of the final rule for Steps 1 and 2 are $193,592.3+ B-C million for the two and one-half year pe riod. Finally, Table 5.3 presents the

final rule net benefits with two alternatives for St ep 3, one in which Step 3 remains at the Step 2 level and one in which Step 3 becomes the mi nimum threshold of at least 50,000 tpy CO2e previously discussed. These alternatives for St ep 3 bound the net benefit es timates for the entire phase in period. If Step 3 remains at the Step 2 level, net benefits for the five year period are $387,153.4 +B-C million. This net benefit estimate becomes $386,719.4 + B-C million if Step 346 becomes the minimum level of 50,000 tpy CO 2 e threshold for the five year phase-in period. Given the short time frame of the impact of this final rule, we did not consider the time value of money or discount the benefit and cost estimates pr ovided in this report, rather we assume these benefit and cost estimates are occurring curr ently. All dollar estimates shown are based upon
2007$.

5.1 Annual Net Benefits for GHG Tailoring Rule Regulatory Alternatives

Annual Benefits and Costs for Regula tory Alternatives (millions of 2007$) 3
Final Rule Step 1 Final Rule Step 2 Anyway 100,000 tpy CO2e 50,000 tpy CO2e 25,000 tpy CO2e Benefits - Regulatory Relief Sources
Title V 1 $49,457.3 $49,447.4 $49,403.8 $49,334.2
PSD 2 $5,488.8 $5,411.2 $5,326.0 $4,707.6 Total Source Regulatory Relief $54,946.1 $54,858.6 $54,729.8 $54,041.8 Permitting Authority Title V 1 $21,077.6 $21,072.4 $21,052.8 $21,014.9
PSD 2 $1,506.5 $1,485.2 $1,461.8 $1,291.7 Total Permitting Authority $22,584.1 $22,557.6 $22,514.6 $22,306.6 Total Regulatory Relief $77,530.2+B $77,416.2+B $77,244.4+B $76,348.4+B

Costs - Foregone GHG Emission Reductions Title V & PSD C C C C

Net Benefits 3 $77,530.2+B-C $77,416.2+B-C $77,244.4+B-C $76,348.4+B-C Benefits are regulatory relief or avoided permit costs for sources with the annual potential to emit less than the threshold sh own. B - unquantified benefits of the rule include regulatory relief from BACT requirements for PSD sources C - unquantified social costs of tailoring rule represen ts economic value of foregone environmental benefits (possible GHG emission reductions) during Step 1 and 2 of the phase in period. Potential foregone GHG emission reductions during the phase-in period are not known at this time. See Chapter 4 of the RIA for a qualitative discussion of the social costs of the rule. 1Reflects estimates of regulatory relief or avoided permit burden costs for title V GHG sources and permitting authorities. 2 Shows estimates of regulatory relief or avoided permit burden costs for GHG PSD sources and permitting authorities. 3 Totals may not sum due to rounding.47Table 5.2. Net Benefits of the Final GHGTailoring Rule and Regulatory AlternativesStep 1 and 2 Phase-In Period (January 2, 2011- July 1, 2013)Regulatory Alternatives(millions of 2007$)Anyway3100,000 tpyCO2e350,000 tpyCO2e325,000 tpyCO2e3Anyway/50,0004Anyway/25,0005Final Rule6Benefits - Regulatory ReliefSourcesTitle V1$123,643.3 $123,618.5 $123,509.5 $123,335.5 $123,536.3 $123,397.1 $123,623.5PSD2$13,722.0 $13,528.0 $13,315.0 $11,769.0 $13,396.4 $12,159.6 $13,566.8Total Source Regulatory Relief$137,365.3 $137,146.5 $136,824.5 $135,104.5 $136,932.7 $135,556.7 $137,190.3Permitting AuthorityTitle V1$52,694.1 $52,681 $52,631.9 $52,537.3 $52,639 $52,563.4 $52,678.3PSD2$3,766.3 $3,713.0 $3,654.5 $3,229.3 $3,676.9 $3,336.7 $3,723.7Total Permitting Authority $56,460.4 $56,393.9 $56,286.3 $55,766.7 $56,315.8 $55,900.1 $56,402Total Regulatory Relief$193,825.6+B$193,540.4+B$193,110.9+B$190,871.1+B$193,248.6+B$191,456.7+B$193,592.3+BCosts - Foregone GHG EmissionReductionsTitle V & PSD C C C C C C CNet Benefits $193,825.6+B-C$193,540.4+B-C$193,110.9+B-C$190,871.1+B-C$193,248.6+B-C$191,456.7+B-C$193,592.3+B-CBenefits represent regulatoryrelief for those sources with the annual potential to emit less than the threshold shown.B - unquantified benefits of the rule include regulatory relief from BACT requirements for PSD sourcesC - unquantified social costs oftailoring rule represents economicvalue of foregone environmental benefits (potential GHG emission reductions) during Step 1 and 2 of the phase inperiod. Foregone GHG emission reductions are not known at thistime. See Chapter 4 of the RIA for a qualitative discussion ofthe social costs of the rule.1Reflects estimates of regulatory relief or avoided permit burden costs for title V GHG sources and permitting authorities.2 Shows estimates of regulatory reliefor avoided permit burden costs for GHG PSD sourcesand permitting authorities.3 Shows alternative as single step for the 21⁄2.year phase-in period for 'anyway', 100,000 tpy CO2e, 50,000 tpy CO2e, and 25,000tpy CO2 e thresholds respectively.4 Includes Step 1 for one-half year and 50,000 tpy CO2e threshold for two years.5 Includes Step 1 for one-half year and 25,000 tpy CO2e threshold for two years.6 Phase-in period for final rule includes 1/2 year ofStep 1 thresholds and 2 years of Step 2 threshold.48 Table 5.3 Net Benefits of the Final Rule and Step 3 Regulatory Alternatives

Regulatory Alternatives (millions 2007$) Final Rule + Possible Step 3 (five year period) 100, 000 tpy CO2e 3 50, 000 tpy CO2e 4 Benefits - Regulatory Relief Sources

Title V 1

- $247,145.3
PSD 2 $27,094.7 $26,881.8 Total Source Regulatory Relief $274,348.3 $274,027.1 Permitting Authority Title V 1 $105,368.5 $105,318.8
PSD 2 $7,436.61 $7,378.1 Total Permitting Authority $112,805.1 $112,696.8 Total Regulatory Relief $387,153.4+ B $386,719.4+ B

Costs - Foregone GHG Emission Reductions Title V & PSD C C

Net Benefits $387,153.4+ B-C $386,719.4+ B-C Benefits are regulatory relief for sources with the annual potential to emit less than the thresholds shown. B - unquantified benefits of the rule include regulat ory relief from BACT requirements for PSD sources C - unquantified social costs of tailoring rule represen ts economic value of foregone environmental benefits (potential GHG emission reductions) during Step 1, 2,and 3 of the phase in period. Foregone GHG emission reductions are not known at this time. See Chapter 4 of the RIA for a qualitative discussion of the social costs of the rule. 1Reflects estimates of regulatory relief or avoided permit burden costs for title V GHG sources and permitting authorities. 2 Shows estimates of regulatory relief or avoided permit burden costs for GHG PSD sources and permitting authorities. 3 Includes 1⁄2 year of Step 1 (anyway threshold), 2 years of Step 2 (100,000 threshold), and 21⁄2 years of Step 3 (alternative of 100,000 threshold). Covers five year period beginning January 2, 2011. 4 Includes 1⁄2 year of Step 1 (anyway threshold), 2 years of Step 2 (100,000 threshold), and 21⁄2 years of Step 3 (alternative of 50,000 threshold). Covers five year period beginning January 2, 2011.49 Section 6 Impacts of Regulatory Relief

This final rulemaking does not impose economic impacts on any sources or permitting authorities but should instead be viewed as regu latory relief for smaller GHG emission sources. This RIA illustrates the burden impacts avoided as a result of this rule. The avoided impacts of extending these programs for State, local, and tribal permitting authorities are also reported. To estimate the avoided economic impacts, which in clude small business impacts, EPA estimated cost-to-sales ratios by comparing the estimated total annualized compliance cost per permit per source avoided to industry averag e revenues per establishment. EP A also evaluated cost-to-sales ratios by comparing avoided burden costs to revenues of firms at different firm size categories, recognizing that the sources requ ired to comply with these CAA permit provisions during the phase-in period are larger emissions sources and more likely to be large business entities. 6.1 Method for Analyzing Avoided Ec onomic and Small Entity Impacts EPA used cost-to-sales comparisons to evalua te the potential impacts to sources affected by this rule. Since this regulat ory action provides regulatory reli ef, these cost-to-sales ratios represent the economic impacts th at are avoided or postponed fo r small GHG sources as a result of this rule. For all regulatory actions, EPA must determine whether a rule will have a significant impact on a substantial number of small entities (SISNOSE). This rule provides regulatory relief to small sources and thus does not have a significant impact on a substantial number of small entities. The approach fo r estimating the postpone d or avoided economic impacts and the small entity analysis are the same for this analysis. The steps followed include gathering data to characterize the affected enti ties by size, selecting and describing the measures and economic impact thresholds used in the analys is, and determining cost-t o-sales ratios for the affected industrial, commercial, and residential categories.

6.1.1 Identifying Affected Sectors and Entities

The industrial, commercial, and residential se ctors covered by the rule were identified during the development of the cost analysis for the rule. For the industria l sector, these sources are summarized with applicable NAICS codes in Tables 6.0 through 6.3. For commercial and
residential sources, the sources are lis ted in Tables 6.4 through 6.7.50 6.1.2 Data Used to Characterize Affected Entities by Size

The Census Bureau’s Statistics of U.S. Businesses (SUSB) data provide national information on the distribution of economic variables by industry and size. 7 Specifically, the tables report data for each industry on the number of firms (Table 6.0), number of establishments (Table 6.1), employment (Table 6.2), and receip ts (Table 6.3) by enterprise size category in

affected sectors. Similar results are shown for commercial and residential sources in Tables 6.4 through 6.7. The census definitions in these data elements are as follows:

 establishmen t: An establishment is a single phys ical location wh ere business is conducted or where services or indus trial operations are performed.

 employment : Paid employment consists of full- and part-time employees, including salaried officers and executives of corpor ations, who were on the payroll in the pay period including March 12. Included are em ployees on sick leave, holidays, and vacations; not included are proprietors and partners of unincorporated businesses.

 receipts : Receipts (net of taxes) are define d as the revenue for goods produced, distributed, or services provided, including revenue earned from premiums, commissions and fees, rents, interest, divi dends, and royalties. Receipts exclude all revenue collected for local, state, and federal taxes.

 enterprise : An enterprise is a business organi zation consisting of one or more domestic establishments that were specifi ed under common ownership or control. The enterprise and the establishment are the sa me for single-establishment firms. Each multiestablishment company forms one enterprise—the enterprise employment and annual payroll are summed from the asso ciated establishmen ts. Enterprise size designations are determined by the su mmed employment of all associated establishments. 8

The SBA small business size standard (s) is provided for each industry group in order to facilitate comparisons and different thresholds. The receipt data are reported in 2002 dollars. Therefore, to adjust to 2007 dollars for comparison to costs, EPA used the U.S. Bureau of Labor Statistics’ consumer price index (CPI). Using the annual U.S. city average price index for all consumer goods, EPA adjusted revenues to

2007 dollars.

7 These data were developed in cooperation with, and pa rtially funded by, the Offi ce of Advocacy of the Small Business Administration (SBA).
8 Because the SBA’s business size defin itions (SBA, 2008c) apply to an estab lishment’s “ultimate parent company,” we assume in this analysis that the “enterprise” definition above is consistent with the concept of ultimate parent company that is typically used for Small Business Re gulatory Enforcement Fairness Act (SBREFA) screening analyses and the terms are used interchangeably.51Table 6.0. Number of Firms by Industry and Enterprise Size: 2002Sector Source Category NAICSSBA SizeStandardTotalFirms<20Employees20 to 99Employees100 to 499Employees500 to 749Employees750 to 999Employees1,000 to1,499EmployeesElectricityGeneratingUnitsElectricity Generating Units 2217,603 5,636 901 288 26 18 19Industrial Adipic Acid Production 325199 1,000 443 157 95 59 16 3 10IndustrialAluminum Production 331312 1,000 43 28 2 3 1 1 NAIndustrialAmmonia Manufacturing 325311 1,000 130 78 18 6 2 1 7IndustrialCement Production 327310 750 136 67 21 12 6 3 4IndustrialElectronics Manufacturing 334213,833 7,698 3,291 1,149 150 80 86IndustrialFerroalloy Production 331112 750 14 3 NA 5 NA 1 1IndustrialGlass Production 327 500–1,000 11,395 7,108 2,553 590 57 51 32IndustrialHCFC-22 Production 325120 1,000 87 45 12 8 NA 3 2IndustrialHydrogen Production 325120 1,000 87 45 12 8 NA 3 2IndustrialIron and Steel Production 331111 1,000 1,135 687 166 53 9 12 11IndustrialLead Production 3314 750–1,000 760 384 161 74 14 8 5IndustrialLime Manufacturing 327410 500 41 16 10 4 1 2 1IndustrialMagnesium Production 3314 750–1,000 760 384 161 74 14 8 5IndustrialNitric Acid Production 325311 1,000 130 78 18 6 2 1 7IndustrialPetrochemical Production 3251 500–1,000 1,145 475 277 131 29 14 20IndustrialPetroleum Refineries 3241103202 84 24 23 6 3 3IndustrialPhosphoric Acid Production 325312 500 35 12 5 6 1 NA 2IndustrialPulp and Paper Manufacturing 3221 750 338 96 55 72 7 12 12IndustrialSilicon Carbide Production 327910 500 299 161 94 25 2 NA NAIndustrialSoda Ash Manufacturing 325181 1,000 25 10 5 2 NA 1 1IndustrialTitanium Dioxide Production 325188 1,000 367 139 92 43 11 6 3IndustrialZinc Production 3314 750–1,000 760 384 161 74 14 8 5IndustrialEthanol Production 325193 1,000 60 19 16 3 1 NA 3IndustrialFood Processing 311 500–1,000 21,384 13,645 3,935 1,247 147 63 96Energy Underground Coal Mines 21211 500 802 387 246 67 6 6 3Energy Oil and Natural Gas Systems 211 500 6,317 5,184 354 89 13 11 5(continued)52Table 6.0. Number of Firms by Industry and Enterprise Size: 2002 (continued)Sector Source Category NAICSSBA SizeStandardTotalFirms<20Employees20 to 99Employees100 to 499Employees500 to 749Employees750 to 999Employees1,000 to1,499EmployeesEnergy Oil and Natural Gas Systems 4864244 110 22 16 8 3 2WasteTreatmentLandfills 562 $12.5million14,184 10,726 1,616 258 22 11 15WasteTreatmentMWCs 562 $12.5million14,184 10,726 1,616 258 22 11 15The Census Bureau defines an enterprise as a business organization consisting of one or more domestic establishments that werespecified under commonownership or control. The enterprise and the establishment are the same for single-establishment firms. Each multiestablishmentcompany forms one enterprise—the enterprise employment and annual payroll are summed from the associated establishments. Enterprise size designations are determined by the summedemployment of all associated establishments.Since the SBA’s business size definitions (http://www.sba.gov/size) apply to an establishment’s ultimate parent company, we assume in this analysis that theenterprise definition above is consistent with the concept of ultimate parent companythat is typically usedfor SBREFA screening analyses. SBA size standardsas of 8/11/08.1NAICS codes 221111, 221112, 221113, 221119, 221121, 221122: A firmis small if, including its affiliates, it is primarily engaged in the generation,transmission, and/or distributionof electric energy for sale and its total electric output for the preceding fiscal year did not exceed 4 million megawatt hours.2NAICS Subsectors 333, 334, 335 and 336: For rebuilding machinery or equipment on a factory basis, or equivalent, use the NAICScode for a newlymanufactured product. Concernsperforming major rebuilding or overhaul activitiesdo not necessarily have to meet the criteriafor being a “manufacturer”although the activities may be classified under a manufacturing NAICS code. Ordinary repair services or preservation are not considered rebuilding.3500 to 1,500. For NAICS code 324110: For purposes of Governmentprocurement, the petroleum refiner must be a concern that has1,500 employees or feweror has 125,000 barrels per calendar day orless total Operable Atmospheric Crude Oil Distillation capacity. Capacity includes owned or leased facilities as well asfacilities under a processing agreement or an arrangement such asan exchange agreement or a throughput. The total product to be delivered under the contractmust be at least 90 percent refined by the successfulbidder from either crude oil or bona fide feedstocks.4Subsector 486: Pipeline Transportation (486110Pipeline Transportation of Crude Oil 1,500, 486210 Pipeline Transportation of Natural Gas $7.0 million,486910 Pipeline Transportation of Refined Petroleum Products 1,500, 486990 All Other Pipeline Transportation $34.5 million).53Table 6.1. Number of Establishments byAffected Industry and Enterprise Size: 2002Sector Source Category NAICSSBA SizeStandardTotalEstablishments<20Employees20 to 99Employees100 to 499Employees500 to 749Employees750 to 999Employees1,000 to1,499EmployeesElectricityGeneratingUnitsElectricity Generating Units 22118,432 5,715 1,423 1,126 282 144 209Industrial Adipic Acid Production 325199 1,000 640 157 99 78 24 4 17IndustrialAluminum Production 331312 1,000 50 28 2 4 1 1 NAIndustrialAmmonia Manufacturing 325311 1,000 157 78 18 15 5 1 12IndustrialCement Production 327310 750 253 67 29 22 11 9 20IndustrialElectronics Manufacturing 334215,883 7,709 3,435 1,497 282 130 174IndustrialFerroalloy Production 331112 750 17 3 NA 7 NA 1 1IndustrialGlass Production 327 500–1,000 16,674 7,161 3,302 1,788 306 438 337IndustrialHCFC-22 Production 325120 1,000 551 45 20 20 NA 30 55IndustrialHydrogen Production 325120 1,000 551 45 20 20 NA 30 55IndustrialIron and Steel Production 331111 1,000 1,242 690 169 62 9 19 18IndustrialLead Production 3314 750–1,000 958 386 174 108 24 14 11IndustrialLime Manufacturing 327410 500 77 18 13 6 7 19 4IndustrialMagnesium Production 3314 750–1,000 958 386 174 108 24 14 11IndustrialNitric Acid Production 325311 1,000 157 78 18 15 5 1 12IndustrialPetrochemical Production 3251 500–1,000 2,287 478 316 231 68 63 97IndustrialPetroleum Refineries 3241103349 85 29 28 10 7 3IndustrialPhosphoric Acid Production 325312 500 50 12 5 6 2 NA 2IndustrialPulp and Paper Manufacturing 3221 750 628 97 55 88 13 34 21IndustrialSilicon Carbide Production 327910 500 347 161 100 42 2 NA NAIndustrialSoda Ash Manufacturing 325181 1,000 38 10 5 4 NA 1 1IndustrialTitanium Dioxide Production 325188 1,000 611 141 111 69 38 25 6IndustrialZinc Production 3314 750–1,000 958 386 174 108 24 14 11IndustrialEthanol Production 325193 1,000 66 20 16 5 1 NA 4IndustrialFood Processing 311 500–1,000 25,698 13,719 4,254 1,951 370 211 319Energy Underground Coal Mines 21211 500 1,194 390 279 138 23 20 24(continued)54Table 6.1. Number of Establishments by Affected Industry and Enterprise Size: 2002 (continued)Sector Source Category NAICSSBA SizeStandardTotalEstablishments<20Employees20 to 99Employees100 to 499Employees500 to 749Employees750 to 999Employees1,000 to1,499EmployeesEnergy Oil and Natural Gas Systems 211 500 7,629 5,239 456 292 60 64 31Energy Oil and Natural Gas Systems 48642,701 110 59 79 115 5 42WasteTreatmentLandfills 562 $12.5million17,698 10,775 1,839 612 86 63 58WasteTreatmentMWCs 562 $12.5million17,698 10,775 1,839 612 86 63 58The Census Bureau defines an enterprise as a business organization consisting of one or more domestic establishments that werespecified under commonownership or control. The enterprise and the establishment are the same for single-establishment firms. Each multiestablishmentcompany forms oneenterprise—the enterprise employment andannual payroll are summed from the associated establishments. Enterprise size designations are determined by thesummed employment of all associated establishments.Since the SBA’s business size definitions (http://www.sba.gov/size) apply to an establishment’s ultimate parent company, we assume in this analysis that theenterprise definition above is consistent with the concept of ultimate parent companythat is typically usedfor SBREFA screening analyses. SBA Small Entitystandards as of 8/11/08.1NAICS codes 221111, 221112, 221113, 221119, 221121, 221122: A firm is small if, including its affiliates, it is primarily engaged in the generation,transmission, and/or distributionof electric energy for sale and its total electric output for the preceding fiscal year did not exceed 4 million megawatt hours.2NAICS Subsectors 333, 334, 335 and 336: For rebuilding machineryor equipment on a factory basis, or equivalent, use the NAICScode for a newlymanufactured product. Concernsperforming major rebuilding or overhaul activitiesdo not necessarily have to meet the criteriafor being a “manufacturer”although the activities may be classified under a manufacturing NAICS code. Ordinary repair services or preservation are not considered rebuilding.3500 to 1,500. For NAICS code 324110: For purposes of Government procurement, the petroleum refiner must be a concern that has1,500 employees or fewerand has 125,000 barrels or lessper calendar day total OperableAtmospheric Crude Oil Distillation capacity. Capacity includesowned or leased facilities aswell as facilities under a processing agreement or an arrangement such asan exchange agreement ora throughput. The total product to be delivered under thecontract must be at least 90 percent refined by the successful bidder from either crude oil or bona fide feedstocks.4Subsector 486: Pipeline Transportation (486110 Pipeline Transportation of Crude Oil 1,500, 486210 Pipeline Transportation of Natural Gas $7.0 million,486910 Pipeline Transportation of Refined Petroleum Products 1,500, 486990 All Other Pipeline Transportation $34.5 million).55Table 6.2. Number of Employees by Affected Industry and Enterprise Size: 2002Sector Source Category NAICSSBA SizeStandardTotalEstablishments<20Employees20 to 99Employees100 to 499Employees500 to 749Employees750 to 999Employees1,000 to1,499EmployeesElectricityGeneratingUnitsElectricity Generating Units 221648,254 24,257 39,391 46,942 12,042 6,519 14,653Industrial Adipic Acid Production325199 1,000 73,342 1,023 2,412 3,232 NA 754 NAIndustrialAluminum Production 331312 1,000 10,158 38 NA NA NA NA NAIndustrialAmmonia Manufacturing 3253111,000 4,949 363 210 NA NA NA NAIndustrialCement Production 327310 750 16,905493 418 1,157 NA NA 2,051IndustrialElectronics Manufacturing 33421,300,411 50,279 139,966 186,77253,138 33,589 43,361IndustrialFerroalloy Production 331112 750 2,266 NA NA NA NA NA NAIndustrialGlass Production 327 500–1,000 475,476 47,315 98,637 85,569 17,516 17,946 17,512IndustrialHCFC-22 Production 325120 1,000 9,557 88 294 510 NA NA NAIndustrialHydrogen Production 325120 1,000 9,557 88 294 510 NA NA NAIndustrialIron and Steel Production 331111 1,000 124,703 1,434 6,235 3,227 1,456 NA NAIndustrialLead Production 3314 750–1,000 64,2032,421 6,680 10,407 NA NA 1,337IndustrialLime Manufacturing 327410 500 4,393 33 227 NA NA NA NAIndustrialMagnesium Production 3314 750–1,000 64,2032,421 6,680 10,407 NA NA 1,337IndustrialNitric Acid Production 325311 1,000 4,949 363 210 NA NA NA NAIndustrialPetrochemical Production 3251 500–1,000 172,964 3,171 10,392 16,5255,548 3,354 5,001IndustrialPetroleum Refineries 324110362,132 454 942 2,870 2,903 NA NAIndustrialPhosphoric Acid 325312 500 6,288 27 NA NA NA NA NAIndustrialPulp and Paper 3221 750 162,988 537 2,279 12,554 2,782 7,707 7,121IndustrialSilicon Carbide Production 327910 500 16,079 1,237 3,637 3,536 NA NA NAIndustrialSoda Ash Manufacturing 3251811,000 4,483 56 NA NA NA NA NAIndustrialTitanium Dioxide Production 3251881,000 49,845 566 881 1,839 NA NA NAIndustrialZinc Production 3314 750–1,000 64,203 2,421 6,680 10,407 NA NA 1,337IndustrialEthanol Production 325193 1,000 64,2032,421 6,680 10,407 NA NA 1,337IndustrialFood Processing 311 500–1,000 1,735 NA NA NA NA NA NAEnergy Underground Coal Mines 21211500 1,443,766 85,850 156,158218,041 67,104 30,099 72,262(continued)56Table 6.2. Number of Employees by AffectedIndustry and Enterprise Size: 2002 (continued)Sector Source Category NAICSSBA SizeStandardTotalEstablishments<20Employees20 to 99Employees100 to 499Employees500 to 749Employees750 to 999Employees1,000 to1,499EmployeesEnergy Oil and Natural Gas Systems 211 500 74,915 2,801 10,205 11,576 NA 1,773 NAEnergy Oil and Natural Gas Systems 486488,280 19,336 12,113 11,656 2,421 3,551 1,061WasteTreatmentLandfills 562 $12.5million300,580 56,529 59,245 37,5305,122 3,401 3,645WasteTreatmentMWCs 562 $12.5million300,580 56,529 59,245 37,5305,122 3,401 3,645The Census Bureau defines an enterprise as a business organization consisting of one or more domestic establishments that werespecified under commonownership or control. The enterprise and the establishment are the same for single-establishment firms. Each multi-establishment company forms oneenterprise—the enterprise employment andannual payroll are summed fromthe associated establishments. Enterprise size designations are determined by thesummed employment of all associated establishments.Since the SBA’s business size definitions (http://www.sba.gov/size) apply to an establishment’s ultimate parent company, we assume in this analysis that theenterprise definition above is consistent with the concept of ultimate parent companythat is typically usedfor SBREFA screening analyses. SBA small entitydefinitions as of 8/11/08.1NAICS codes 221111, 221112, 221113, 221119, 221121, 221122: A firm is small if, including its affiliates, it is primarily engaged in the generation,transmission, and/or distributionof electric energy for sale and its total electric output for the preceding fiscal year did not exceed 4 million megawatt hours.2NAICS Subsectors 333, 334, 335 and 336: For rebuilding machineryor equipment on a factory basis, or equivalent, use the NAICScode for a newlymanufactured product. Concernsperforming major rebuilding or overhaul activitiesdo not necessarily have to meet the criteriafor being a “manufacturer”although the activities may be classified under a manufacturing NAICS code. Ordinary repair services or preservation are not considered rebuilding.3500 to 1,500. For NAICS code 324110: For purposes of Government procurement, the petroleum refiner must be a concern that has 1,500 employees orfewer or 125,000barrels or less per calendar day total OperableAtmospheric Crude Oil Distillation capacity. Capacity includesowned or leased facilities aswell as facilities under a processing agreement or an arrangement such asan exchange agreement ora throughput. The total product to be delivered under thecontract must be at least 90 percentrefined by the successful bidder from either crude oilor bona fide feedstocks.4Subsector 486: Pipeline Transportation (486110 Pipeline Transportation of Crude Oil 1,500, 486210 Pipeline Transportation of Natural Gas $7.0 million,486910 Pipeline Transportation of Refined Petroleum Products 1,500, 486990 All Other Pipeline Transportation $34.5 million).57Table 6.3. Receipts by Industry and Enterprise Size: 2002 (in millions of 2007$)Sector Source Category NAICSSBA SizeStandardTotalReceipts($)<20Employees20 to 99Employees100 to 499Employees500 to 749Employees750 to 999Employees1,000 to1,499EmployeesElectricityGeneratingUnitsElectricity Generating Units 221456,494 10,324 28,259 29,1118,522 5,211 11,027Industrial Adipic Acid Production 325199 1,000 54,024 437 880 2,117 NA 984 NAIndustrialAluminum Production 331312 1,000 4,165 7 NA NA NA NA NAIndustrialAmmonia Manufacturing 325311 1,000 3,844 152 60 NA NA NA NAIndustrialCement Production 327310 750 8,358 207 120 526 NA NA 992IndustrialElectronics Manufacturing 3342437,886 9,887 26,268 41,65314,340 8,589 12,994IndustrialFerroalloy Production 331112 750 1,008 NA NA NA NA NA NAIndustrialGlass Production 327 500–1,000 110,002 7,43017,700 16,967 4,154 4,000 4,366IndustrialHCFC-22 Production 325120 1,000 6,662 25 337 82 NA NA NAIndustrialHydrogen Production 325120 1,000 6,662 25 337 82 NA NA NAIndustrialIron and Steel Production 331111 1,000 54,363 275 1,237 1,192 639 NA NAIndustrialLead Production 3314 750–1,000 24,584 582 2,391 3,007 NA NA 364IndustrialLime Manufacturing 327410 5001,173 7 64 NA NA NA NAIndustrialMagnesium Production 3314 750–1,000 24,584582 2,391 3,007 NA NA 364IndustrialNitric Acid Production 325311 1,000 3,844 152 60 NA NA NA NAIndustrialPetrochemical Production 3251500–1,000 123,343 1,603 4,722 7,974 3,990 2,048 3,819IndustrialPetroleum Refineries 3241103225,612 538 2,903 5,186 10,094 NA NAIndustrialPhosphoric Acid Production 325312 500 4,607 7 NA NA NA NA NAIndustrialPulp and Paper Manufacturing 3221 750 81,766 146 719 5,269 805 3,294 2,833IndustrialSilicon Carbide Production 327910 500 3,861 206 561 715 NA NA NAIndustrialSoda Ash Manufacturing 325181 1,000 2,386 12 NA NA NA NA NAIndustrialTitanium Dioxide Production 3251881,000 18,803 199 267 685 NA NA NAIndustrialZinc Production 3314 750–1000 24,584 582 2,391 3,007 NA NA 364IndustrialEthanol Production 325193 1,000 2,416 NA NA NA NA NA NAIndustrialFood Processing 311 500–1000 527,312 14,59737,198 65,304 26,627 11,533 25,216(continued)58Table 6.3. Receipts by Industry and EnterpriseSize: 2002 (in Millions of 2007$) (continued)Sector Source Category NAICSSBA SizeStandardTotalReceipts($)<20Employees20 to 99Employees100 to 499Employees500 to 749Employees750 to 999Employees1,000 to1,499EmployeesEnergy Underground Coal Mines 21211 500 22,873 501 2,415 3,328 NA 506 NAEnergy Oil and Natural Gas Systems 211 500185,420 8,465 7,826 11,0755,312 4,600 3,233Energy Oil and Natural Gas Systems 486451,926 1,163 158 258 NA NA NAWasteTreatmentLandfills 562 $12.5million55,557 7,451 8,366 5,940 965 858 586WasteTreatmentMWCs 562 $12.5million55,557 7,451 8,366 5,940 965 858 586The Census Bureau defines an enterprise as a business organization consisting of one or more domestic establishments that werespecified under commonownership or control. The enterprise and the establishment are the same for single-establishment firms. Each multi-establishment company forms oneenterprise—the enterprise employment andannual payroll are summed fromthe associated establishments. Enterprise size designations are determined by thesummed employment of all associated establishments.Since the SBA’s business size definitions (http://www.sba.gov/size) apply to an establishment’s ultimate parent company, we assume in this analysis that theenterprise definition above is consistent with the concept of ultimate parent companythat is typically usedfor SBREFA screening analyses. SBA SmallBusiness categorization as of 8/11/08.1NAICS codes 221111, 221112, 221113, 221119, 221121, 221122: A firm is small if, including its affiliates, it is primarily engaged in the generation,transmission, and/or distributionof electric energy for sale and its total electric output for the preceding fiscal year did not exceed 4 million megawatt hours.2NAICS Subsectors 333, 334, 335 and 336: For rebuilding machineryor equipment on a factory basis, or equivalent, use the NAICScode for a newlymanufactured product. Concernsperforming major rebuilding or overhaul activitiesdo not necessarily have to meet the criteriafor being a “manufacturer”although the activities may be classified under a manufacturing NAICS code. Ordinary repair services or preservation are not considered rebuilding.3500 to 1,500. For NAICS code 324110: For purposes of Government procurement, the petroleum refiner must be a concern that has 1,500 employees or fewerand 125,000 barrels or less per calendar day total Operable Atmospheric Crude Oil Distillation capacity. Capacity includes owned or leased facilities as well asfacilities under a processing agreement or an arrangement such asan exchange agreement or a throughput. The total product to be delivered under the contractmust be at least 90 percent refined by the successfulbidder from either crude oil or bona fide feedstocks.4Subsector 486: Pipeline Transportation (486110 Pipeline Transportation of Crude Oil 1,500, 486210 Pipeline Transportation of Natural Gas $7.0 million,486910 Pipeline Transportation of Refined Petroleum Products 1,500, 486990 All Other Pipeline Transportation $34.5 million)59Table 6.4. Number of Firms by Affected Industryand Enterprise Size in Commercial Sectors: 2002Sector Source Category NAICSSBA SizeStandardin Millionsof DollarsTotalFirms<20Employees20 to 99Employees100 to 499Employees500 to 749Employees750 to 999Employees1,000 to1,499EmployeesCommercial Education 61$7.035.0 65,933 40,824 12,379 3,071 289 174 187CommercialEnclosed Mall 531120 7.0 28,241 22,509 1,077 329 43 32 30CommercialFood Sales NA NA NA NA NA NA NACommercialFood Service 722 7.020.5 376,637 248,494 67,549 6,629 447 191 223CommercialInpatient Health C are 622 34.5 4,548 427 487 1,590 384 237 333CommercialLaboratory 541380 12.0 4,708 3,335 680 148 22 6 12CommercialLaboratory 5417 7.0 11,418 7,365 1,478 532 72 29 39CommercialLodging 721 7.0 51,168 33,3267,968 1,428 135 70 77CommercialNonrefrigerated Warehouse 49311 25.5 3,152 2,005 514 199 15 10 19CommercialNursing 623 7.013.5 32,720 14,6328,486 5,836 418 179 174CommercialOffice 531120 7.0 28,241 22,509 1,077 329 43 32 30CommercialOther 81 7.025.0 675,218 568,28541,363 4,449 290 164 165CommercialOutpatient Health Care621 7.034.5 424,694 351,54027,991 4,699 428 216 238CommercialPublic Assembly 71 7.0 103,04364,915 12,227 2,292 153 82 95CommercialPublic Order and Safety NA NA NA NA NA NA NACommercialRefrigerated Warehouse 49312 25.5 608 358 138 34 3 2 4CommercialReligious Worship 813110 7.0 172,311147,505 15,942 1,213 39 21 19CommercialRetail Other than Mall 44-45 7.029.0736,130 579,905 59,639 8,723 577 289 338CommercialService 81 7.025.0 675,218 568,28541,363 4,449 290 164 165CommercialStrip Shopping Mall 531120 7.0 28,24122,509 1,077 329 43 32 30ResidentialResidential 531110 7.0 52,190 44,477 1,799 441 55 29 30The Census Bureau defines an enterprise as a business organization consisting of one or more domestic establishments that werespecified under commonownership or control. The enterprise and the establishment are the same for single-establishment firms. Each multi-establishment company forms oneenterprise—the enterprise employment andannual payroll are summed fromthe associated establishments. Enterprise size designations are determined by thesummed employment of all associated establishments.Since the SBA’s business size definitions (http://www.sba.gov/size) apply to an establishment’s ultimate parent company, we assume in this analysis that theenterprise definition above is consistent with the concept of ultimate parent companythat is typically usedfor SBREFA screening analyses. SBA size categoriesas of 8/11/08.60Table 6.5.Number of Establishments by AffectedIndustry and Enterprise Size: 2002Sector Source Category NAICSSBA SizeStandard Total Firms<20Employees20 to 99Employees100 to 499Employees500 to 749Employees750 to 999Employees1,000 to 1,499EmployeesCommercialEducation 61 7.0–35.0 73,701 41,13613,925 5,604 864 398 501CommercialEnclosed Mall 531120 7.0 30,777 22,706 1,313 597 123 180 141CommercialFood Sales NA NA NA NA NA NA NACommercialFood Service 722 7.0–20.5 503,354 249,88979,906 31,769 7,297 4,524 6,819CommercialInpatient Health Care 622 34.5 7,569 441 513 1,725 442 294 420CommercialLaboratory 541380 12.0 5,962 3,371 972 488 67 41 195CommercialLaboratory 5417 7.0 13,944 7,462 1,836 996 228 112 150CommercialLodging 721 7.0 61,795 33,6139,057 2,962 761 249 663CommercialNonrefrigeratedWarehouse49311 25.5 4,893 2,057 805 529 311 97 87CommercialNursing 623 7.0–13.5 67,900 14,824 11,701 18,516 3,717 1,898 2,043CommercialOffice 531120 7.0 30,777 22,706 1,313 597 123 180 141CommercialOther 81 7.0–25.0 740,118 573,318 54,021 16,431 2,960 1,850 2,317CommercialOutpatient HealthCare621 7.0–34.5 487,747 357,221 41,65019,182 3,021 2,087 1,933CommercialPublic Assembly 71 7.0 110,37565,195 13,408 3,715 566 591 394CommercialPublic Order andSafetyNA NA NA NA NA NA NACommercialRefrigeratedWarehouse49312 25.5 970 367 204 96 20 13 36CommercialReligious Worship 813110 7.0 172,562147,510 16,009 1,272 115 25 27CommercialRetail Other than Mall 44-457.0–29.0 1,125,693 594,655 98,11651,814 12,028 8,897 13,004CommercialService 81 7.0–25.0 740,118 573,318 54,021 16,431 2,960 1,850 2,317CommercialStrip Shopping Mall 531120 7.0 30,77722,706 1,313 597 123 180 141(continued)61Table 6.5.Number of Establishments by Affected Industry and Enterprise Size: 2002 (continued)Sector Source Category NAICSSBA SizeStandard Total Firms<20Employees20 to 99Employees100 to 499Employees500 to 749Employees750 to 999Employees1,000 to 1,499EmployeesResidentialResidential 531110 7.0 57,748 45,104 2,992 2,491 479 132 205The Census Bureau defines an enterprise as a business organization consisting of one or more domestic establishments that werespecified under commonownership or control. The enterprise and the establishment are the same for single-establishment firms. Each multi-establishment company forms oneenterprise—the enterprise employment andannual payroll are summed fromthe associated establishments. Enterprise size designations are determined by thesummed employment of all associated establishments.Since the SBA’s business size definitions (http://www.sba.gov/size) apply to an establishment’s ultimate parent company, we assume in this analysis that theenterprise definition above is consistent with the concept of ultimate parent companythat is typically usedfor SBREFA screening analyses. SBA small businesscategories as of 8/11//08.62Table 6.6.Number of Employees by Affected Industry and Commercial Enterprise Size: 2002Sector Source Category NAICSSBA SizeStandardTotalEstablishments<20Employees20 to 99Employees100 to 499Employees500 to 749Employees750 to 999Employees1,000 to1,499EmployeesCommercial Education 61 7.0–35.0 2,701,675 223,695 516,135535,272 148,370 121,656 190,930CommercialEnclosed Mall 531120 7.0 163,501 73,31132,364 22,319 5,066 3,583 4,095CommercialFood Sales NA NA NA NA NA NA NACommercialFood Service 722 7.0–20.5 8,352,1741,622,740 2,551,714 1,184,119 232,483 134,402 216,606CommercialInpatient Health Care 622 34.5 5,121,5842,374 30,243 389,501 220,984 192,908 385,312CommercialLaboratory 541380 12.0 100,797 18,415 25,714 19,918 3,920 2,677 4,786CommercialLaboratory 5417 7.0 399,213 35,669 60,951 84,936 22,983 9,641 15,808CommercialLodging 721 7.0 1,696,701 202,509 292,528 232,976 56,837 37,156 53,296CommercialNonrefrigeratedWarehouse49311 25.5 94,316 11,294 18,39221,859 3,802 2,144 2,654CommercialNursing 623 7.0–13.5 2,770,665 92,274409,004 965,200 172,278 91,599 132,119CommercialOffice 531120 7.0 163,501 73,311 32,36422,319 5,066 3,583 4,095CommercialOther 81 7.0–25.0 5,420,0872,547,460 1,482,350 640,068 84,297 61,553 74,082CommercialOutpatient Health Care 621 7.0–34.5 4,917,156 1,829,546 1,029,355751,711 134,712 89,264 107,577CommercialPublic Assembly 71 7.0 1,800,991315,475 496,962 380,688 65,678 NA 72,282CommercialPublic Order and Safety NA NA NA NA NA NA NACommercialRefrigeratedWarehouse49312 25.5 28,100 2,238 5,427 5,010 NA NA 1,545CommercialReligious Worship 813110 7.0 1,638,915 722,630 607,209 197,037 20,211 13,453 14,081CommercialRetail Other than Mall 44–45 7.0–29.0 14,819,904 2,889,481 2,204,1041,267,733 213,518 138,205 200,867CommercialService 81 7.0–25.0 5,420,087 2,547,4601,482,350 640,068 84,297 61,553 74,082CommercialStrip Shopping Mall 531120 7.0 163,501 73,31132,364 22,319 5,066 3,583 4,095ResidentialResidential 531110 7.0 281,250152,350 59,796 42,104 7,627 NA NAThe Census Bureau defines an enterprise as a business organization consisting of one or more domestic establishments that werespecified under commonownership or control. The enterprise and the establishment are the same for single-establishment firms. Each multi-establishment company forms oneenterprise—the enterprise employment andannual payroll are summed fromthe associated establishments. Enterprise size designations are determined by thesummed employment of all associated establishments.Since the SBA’s business size definitions (http://www.sba.gov/size) apply to an establishment’s ultimate parent company, we assume in this analysis that theenterprise definition above is consistent with the concept of ultimate parent companythat is typically usedfor SBREFA screening analyses. SBA small businesssizes as of 8/11/08.63Table 6.7. Receipts by Affected Industry and Enterprise Size: 2002 (Millions of 2007 $)Sector Source Category NAICSSBA SizeStandardin Millionsof DollarsTotalReceipts<20Employees20 to 99Employees100 to 499Employees500 to 749Employees750 to 999Employees1,000 to1,499EmployeesCommercial Education 61 7.0–35.0 207,779 15,586 30,849 38,207 10,456 7,620 11,997Commercial Enclosed Mall 531120 7.0 52,79621,467 8,090 6,609 2,148 2,145 3,281Commercial Food SalesNA NA NA NA NA NA NACommercial Food Service 7227.0–20.5 373,666 79,827 98,91649,500 9,774 5,742 9,036Commercial Inpatient Health Care 622 34.5575,286 845 2,892 33,554 20,075 18,448 41,167Commercial Laboratory 541380 12.0 11,8542,018 2,763 2,091 478 319 574Commercial Laboratory 5417 7.0 72,013 6,419 10,785 15,439 4,422 1,942 2,802Commercial Lodging 721 7.0141,193 15,159 18,413 15,0474,287 2,869 4,431Commercial NonrefrigeratedWarehouse49311 25.5 10,705 1,546 2,199 2,281 508 286 301Commercial Nursing 623 7.0–13.5 145,529 4,624 18,714 49,332 9,058 4,989 7,319Commercial Office 531120 7.0 52,796 21,4678,090 6,609 2,148 2,145 3,281Commercial Other 81 7.0–25.0 491,097 215,897 120,283 67,821 10,225 5,946 5,999Commercial Outpatient HealthCare 621 7.0–34.5 582,829 229,611 118,216 73,667 12,923 8,277 10,556Commercial Public Assembly 71 7.0 170,062 35,446 31,146 35,130 6,972 NA 7,610Commercial Public Order and Safety NA NA NA NA NA NA NA NA NACommercial Refrigerated Warehouse 4931225.5 4,889 325 765 586 NA NA 233Commercial Religious Worship 813110 7.0 95,55837,076 34,178 13,933 1,681 1,165 1,025Commercial Retail Other thanMall 44–45 7.0–29.0 3,612,583 577,700 662,037 441,243 65,923 34,570 49,386Commercial Service 81 7.0–25.0 491,097 215,897 120,283 67,821 10,225 5,946 5,999Commercial Strip Shopping Mall531120 7.0 52,796 21,467 8,0906,609 2,148 2,145 3,281Residential Residential531110 7.0 57,365 32,3279,943 6,854 1,366 NA NAThe Census Bureau defines an enterprise as a business organization consisting of one or more domestic establishments that werespecified under commonownership or control. The enterprise and the establishment are the same for single-establishment firms. Each multi-establishment company forms oneenterprise—the enterprise employment andannual payroll are summed fromthe associated establishments. Enterprise size designations are determined by thesummed employment of all associated establishments.Since the SBA’s business size definitions (http://www.sba.gov/size) apply to an establishment’s ultimate parent company, we assume in this analysis that theenterprise definition above is consistent with the concept of ultimate parent companythat is typically usedfor SBREFA screening analyses. SBA small businesssizes as of 8/11.08.64 Because the SBA’s business size definitions (SBA, 2008c) apply to an establishment’s “ultimate parent company,” we assume in this an alysis that the “enterpri se” definition above is consistent with the concept of ultimate parent company that is typically used for SBREFA screening analyses, and the terms are used interchangeably. We also report the SBA size standard(s) for each industry group to facilita te comparisons and different thresholds. 6.2 Developing Economic and Small Entity Regulatory Relief Impact Measures We measured the postponed impacts of the rule on small entities in each sector using methods presented in EPA’s Final SBREFA Gu idance (EPA, 2006). Because the rule covers a large number of sectors and primarily covers busine sses, the analysis genera ted a set of sales tests (represented as cost-to-receipt ratios) 9 for NAICS codes associated with the affected sectors. Although the appropriate SBA size definition sh ould be applied at the parent company (enterprise) level, data limitations allowe d us only to compute and compare ratios for a model

establishment for six enterprise size ranges (i.e., all categories, enterprises with 1 to 20 employees, 20 to 99 employees, 100 to 499 employees, 500 to 999 employees, and 1,000 to 1,499 employees). This approach allowed us to accoun t for differences in establishment receipts between large and small enterprises and differences in small business definitions across affected

industries. It is also a conser vative approach, because an esta blishment’s parent company (the “enterprise”) may have other economic resources th at could be used to cover the costs of the reporting program. 6.3 Implementing the Sales Test to Measu re Impacts on Industria l, Commercial, and Multifamily Residential Sources To implement the recommended sales test, EPA computed cost-to-sales ratios for affected sectors at the establishment (or facility) level. 10 The ratios examine the ratio of the average

9 The following metrics for other small entity economic impact measures (if applicable) would potentially include

 Small governments (if applicable): “Revenue” test—annualized compliance cost as a percentage of annual government revenues

 Small nonprofits (if applicable): “Expenditure” test—a nnualized compliance cost as a percentage of annual operating expenses
10 Typically, SBREFA impact assessments are conducted at the ultimate parent company level. As noted above, we assume that Census definition of enterprise is equivalent to ultimate parent company. Theoretically, the comparison of compliance costs to sales should be conducted at the enterprise level. Because Census only provides data for typical establishments within various enterprise size categories, EPA chose to compute the cost-to-sales ratio at the establishment (or facility level). The same ratio could be computed at the enterprise level by multiplying both the numerator and the denominator by the typical number of establishments per enterprise in65 establishment’s total annualized mandatory reporting costs to the average establishment receipts for enterprises within several employment categories. 11 The average entity costs used to compute

the sales test are the same across al l of these enterprise size categories. As a result, the sales test will overstate the cost-to-receipt ratio for estab lishments owned by small businesses, because the reporting costs are likely lower than average en tity estimates provided by the engineering cost analysis. Cost-to-sales ratios for industrial categorie s are reported in Tables 6.9 through 6.12. Table 6.8 shows impacts avoided for small sources of GHG for title V. In Tables 6.9 and 6.10, impacts avoided for new and modifying PSD sour ces, respectively, are presented. Table 6.11 shows the avoided costs compared to sales for ti tle V permitting. These ratios are calculated using data on the average avoided cost of compliance per facility and data on the average sales per establishment obtained from the Census Bu reau. Cost-to-sales or revenue ratios for commercial and residential categories are reporte d in Tables 6.12 through 6.14. Table 6.12 shows impacts avoided for small commercial and residen tial sources of GHG for title V. Tables 6.13 and 6.14 show impacts avoided for modifying a nd new PSD commercial and residential sources, respectively. The burden avoided per-entity co sts of the rule are shown in Table 3.0 for title V. The avoided burden cost associated with obtaining an operating permit is $46.4 thousand per source

for industrial sources of GHG emissions and a pproximately $23 thousand for commercial and
residential sources. An avoided cost of $1, 677 is estimated for s ources requiring title V permitting revision. For modifying PSD sources , the avoided burden costs with obtaining a permit is $84.5 thousand per source for industr ial sources of GHG emissions and approximately 59 thousand per source for commercial and reside ntial sources. Finally, for new PSD sources,

the avoided burden costs are the sum of the avoide d title V and modifying PSD costs. Thus, the avoided burden costs are approximately $130.8 thous and per source for new industrial sources of GHG emissions and approximately $82 thousand per source for new commercial and residential

sources.

the appropriate enterprise si ze categories. Using the SUSB data on typi cal establishments m eans that the cost-tosales ratios are identical, whether co mputed at the establishment leve l or at the enterprise level.
11 For the one to 20 employee category, we excluded SUSB data for enterprises with zero employees. These enterprises did not operate the entire year.66 The cost-to-sales estimates show that the avoided costs for industrial sources typically are zero up to 1.5 percent of their sales, but they can be as high as 19 per cent for certain sources (e.g., aluminum plants with less than 20 employe es). For PSD, the avoided ICR cost-to-sales ratios range from zero to2.7 per cent for modifying and from zero to 4.2 percent of sales for new

industrial sources. These avoide d cost-to-sales ratio for PSD do not consider avoided BACT costs due to lack of sufficient data currently. For commercial sources, the average avoided co st to sales ratios range from 0.5 to 4.2 percent for title V. These average avoide d cost-to-sales ranges increase for PSD to approximately from 1.2 to 10.7 percent of their sales or revenues for modifying commercial and multifamily residential sources and 1.6 to 14.9 for new commercial and residential PSD sources. 6.4 Economic Relief to Permitting Authorities In this final rule, the thresholds for requiri ng title V and PSD permits are increased above statutory CAA levels resulting in millions of poten tial title V sources and tens of thousands of new and modifying PSD sources being able to postpone obtaining a permit for a phase-in period of about 5 years. This action will provide si gnificant regulatory reli ef to States, local government, and tribal permitting authorities. The magnitude of permits that would need to be

addressed and the dollar estimate of the additio nal costs in labor and administrative costs permitting authorities would othe rwise incur if GHG are a regulat ed pollutant absent this rulemaking are shown in Tables 3.0 and 3.1 in Section 3. For title V permits, permitting authorities will experience avoided costs of approximately $21 billion relating to approximately 2 million ne w operating permits annually that otherwise would need to be processed. Although this admi nistrative burden represents a huge burden to these agencies, Part 70 of the CAA does provi de for a mechanism for the affected permitting authorities to recoup the costs of operation asso ciated with administering this expanded permit program. EPA recognizes in this tailoring rule that the sheer magnitude and burden of these additional small GHG sources cannot feasibly be met by these permitting authorities on administrative burden grounds for a period of at leas t 5 years regardless of the ability to include these increased costs in fees charged to sour ces. However, the economic consequences to permitting authorities of this permitting program are offset in the fee structure these authorities are allowed to charge sources obtaining title V permits.67 For PSD permitting authorities, no such mitigating fee structure currently exists. Thus, the funding for administering a PSD permitting pr ogram to include tens of thousands of additional new and modifying PSD sources annually would need to be met by these permitting authorities from current revenue sources. At pres ent, there are approximately 58 State, local, and tribal PSD permitting programs operating in the United States and approximately 49 additional State, local, or tribal government authoritie s that are administering federal programs under delegation from EPA. It is difficult to estimat e the economic consequences of the regulatory relief afforded to the individual permitting authorities, because the number of PSD permits processed each year varies by permitting author ity over time depending on the number of new and modifying sources occurring in a given loca tion. However, the National Association of Clean Air Agencies (NACAA) has, through a me mber survey, broadly assessed the additional

resource and burden considerations of EPA treating GHG as a regulated pollutant. NACAA provided this information to EPA to help improve our understanding of agencies’ burdens. 12
Under the current PSD program requirements, thes e permitting authorities process an average of 8 PSD permits for new and modifying sources each year (range of 0 to 56 for individual respondents). These surveyed permitting authori ties indicate they would need an average of 12 new full-time employees (range of 1 to 63) costing an average of $1.1 million annually (range $60 thousand to $6.3 million) with a 10-fold in crease in permits occurring as a result of including GHG as a regulated pollutant. Some of these permitting authorities indicated that hiring new employees is not possible at this time because of budget constraints and hiring freezes. All respondents indica ted that new training would be needed to address GHG permitting. Rather than the 10-fold increase in permits postulated in NACAA’s survey, EPA estimates the increase would more likely be 100-fold making these estimates a significant understatement of the potential impacts on permitti ng authorities. For more information about the sources affected by alternative thresholds and currently covered by title V and PSD, see Appendices B and C.

12 Memorandum from Mary Stewart Douglas NACAA, to Juan E. Santiago, Group Leader, Operating Permits Group, U.S. EPA OAQPS. September 3, 2009.68Table 6.8. Avoided Title V Costs to Sales for Small Industrial Sources of GHG EmissionsSector Source Category NAICSSBA SizeStandardAverageCost PerEntity(2007$)Cost per entityfor AllEstablishments(%)Cost perEntity for<20Employees(%)Cost perEntity for20 to 99Employees(%)Cost perEntity 100to 499Employees(%)Cost perEntity for500 to 749Employees(%)Cost perEntity for750 to 999Employees(%)Cost perEntity for1,000 to1,499Employees(%)ElectricityGeneratingUnitsElectricityGenerating Units221$46,350 0.2% 2.6% 0.2% 0.2% 0.2% 0.1% 0.1%Industrial Adipic AcidProduction325199 1,000 $46,350 0.1% 1.7%0.5% 0.2% NA 0.0% NAIndustrialAluminumProduction331312 1,000 $46,350 0.1% 19.0% NA NA NA NA NAIndustrialAmmoniaManufacturing325311 1,000 $46,350 0.2% 2.4% 1.4% NA NA NA NAIndustrialCement Production 327310 750 $46,3500.1% 1.5% 1.1% 0.2% NA NA 0.1%IndustrialElectronicsManufacturing3342$46,3500.2% 3.6% 0.6% 0.2%0.1% 0.1% 0.1%IndustrialFerroalloyProduction331112 750 $46,3500.1% NA NA NA NA NA NAIndustrialGlass Production 327 500–1,000 $46,3500.7% 4.5% 0.9% 0.5%0.3% 0.5% 0.4%IndustrialHCFC-22Production325120 1,000 $46,3500.4% 8.3% 0.3% 1.1% NA NA NAIndustrialHydrogenProduction325120 1,000 $46,3500.4% 8.3% 0.3% 1.1% NA NA NAIndustrialIron and SteelProduction331111 1,000 $463500.1% 11.6% 0.6% 0.2% 0.1% NA NAIndustrialLead Production 3314 750–1,000 $46,350 0.2%3.1% 0.3% 0.2% NA NA 0.1%IndustrialLimeManufacturing327410 500 $46,3500.3% 12.8% 0.9% NA NA NA NAIndustrialMagnesiumProduction3314 750–1,000 $46,3500.2% 3.1% 0.3% 0.2% NA NA 0.1%IndustrialNitric AcidProduction325311 1,000 $46,3500.2% 2.4% 1.4% NA NA NA NAIndustrialPetrochemicalProduction3251 500–1,000 $46,3500.1% 1.4% 0.3% 0.1%0.1% 0.1% 0.1%IndustrialPetroleumRefineries3241103$46,3500.0% 0.7% 0.0% 0.0% 0.0% NA NA(continued)69Table 6.8. Avoided Title V Costs to Sales for Small Industrial Sources ofGHG Emissions (continued)Sector Source Category NAICSSBA SizeStandardAverageCost PerEntity(2007$)Cost per entityfor AllEstablishments(%)Cost perEntity for<20Employees(%)Cost perEntity for20 to 99Employees(%)Cost perEntity 100to 499Employees(%)Cost perEntity for500 to 749Employees(%)Cost perEntity for750 to 999Employees(%)Cost perEntity for1,000 to1,499Employees(%)IndustrialPhosphoric AcidProduction325312 500 $46,3500.1% 7.8% NA NA NA NA NAIndustrialPulp and PaperManufacturing3221 750 $46,3500.0% 3.1% 0.4% 0.1%0.1% 0.0% 0.0%IndustrialSilicon CarbideProduction327910 500 $46,3500.4% 3.6% 0.8% 0.3% NA NA NAIndustrialSoda AshManufacturing325181 1,000 $46,3500.1% 3.8% NA NA NA NA NAIndustrialTitanium DioxideProduction325188 1,000 $46,3500.2% 3.3% 1.9% 0.5% NA NA NAIndustrialZinc Production 3314 750–1,000 $46,3500.2% 3.1% 0.3% 0.2% NA NA 0.1%IndustrialEthanol Production 325193 1,000 $46,3500.1% NA NA NA NA NA NAIndustrialFood Processing 311 500–1,000 $46,3500.2% 4.4% 0.5% 0.1%0.1% 0.1% 0.1%Energy Underground CoalMines21211 500 $46,3500.2% 3.6% 0.5% 0.2% NA 0.2% NAEnergy Oil and Natural GasSystems211 500 $46,3500.2% 2.9% 0.3% 0.1%0.1% 0.1% 0.0%Energy Oil and Natural GasSystems4864$46,3500.2% 0.4% 1.7% 1.4% NA NA NAWasteTreatmentLandfills 562 $12.5million$46,3501.5% 6.7% 1.0% 0.5%0.4% 0.3% 0.5%WasteTreatmentMWCs 562 $12.5million$46,3501.5% 6.7% 1.0% 0.5%0.4% 0.3% 0.5%Since the SBA’s business size definitions (http://www.sba.gov/size) apply to an establishment’s ultimate parent company, we assume in this analysis that theenterprise definition above is consistent with the concept of ultimate parent companythat is typically used for Small BusinessRegulatory Enforcement FairnessAct (SBREFA) screening analyses.1NAICS codes 221111, 221112, 221113, 221119, 221121, 221122 – A firm is small if, including its affiliates, it is primarily engaged in the generation,transmission, and/or distributionof electric energy for sale and its total electric output for the preceding fiscal year didnot exceed 4 million megawatt hours.2500 to 1,500. For NAICS code 324110: For purposes of Government procurement, the petroleum refiner must be a concern that hasno more than 1,500employees nor production greater than 125,000 barrels per calendar day total Operable Atmospheric Crude Oil Distillation capacity. Capacity includes owned orleased facilities as well as facilities under aprocessing agreement or anarrangement such asan exchange agreement or a throughput. The totalproduct to bedelivered under the contract must be at least 90 percent refinedby the successful bidder from either crude oil or bona fide feedstocks.3NAICS Subsectors 333, 334, 335 and 336: For rebuilding machineryor equipment on a factory basis, or equivalent, use the NAICScode for a newlymanufactured product. Concernsperforming major rebuilding or overhaul activitiesdo not necessarily have to meet the criteriafor being a “manufacturer”70Sector Source Category NAICSSBA SizeStandardAverageCost PerEntity(2007$)Cost per entityfor AllEstablishments(%)Cost perEntity for<20Employees(%)Cost perEntity for20 to 99Employees(%)Cost perEntity 100to 499Employees(%)Cost perEntity for500 to 749Employees(%)Cost perEntity for750 to 999Employees(%)Cost perEntity for1,000 to1,499Employees(%)although the activities may be classified under a manufacturing NAICS code. Ordinary repair services or preservation are not considered rebuilding.4Subsector 486: Pipeline Transportation (486110 Pipeline Transportation of Crude Oil 1,500, 486210 Pipeline Transportation of Natural Gas $7.0million, 486910Pipeline Transportation of Refined Petroleum Products 1,500, 486990 All Other Pipeline Transportation $34.5 million)71Table 6.9. Avoided Costs to Sales for SmallModifying Industrial GHG PSD Emission SourcesSector Source Category NAICSSBA SizeStandard(effectiveAugust 11,2008)AverageCost PerEntity(2007$)Cost perEntity forAllEstablishments (%)Cost perEntity for<20Employees(%)Cost perEntity for20 to 99Employees(%)Cost perEntity 100to 499Employees(%)Cost perEntity for500 to 749Employees(%)Cost perEntity for750 to 999Employees(%)Cost perEntity for1,000 to1,499Employees(%)ElectricityGeneratingUnitsElectricity GeneratingUnits221$84,530 0.3% 4.7% 0.4%0.3% 0.3% 0.2% 0.2%Industrial Adipic AcidProduction325199 1,000 $84,530 0.1% 3.0%1.0% 0.3% NA 0.0% NAIndustrialAluminum Production 331312 1,000 $84,5300.1% 34.6% NA NA NA NA NAIndustrialAmmoniaManufacturing325311 1,000 $84,5300.3% 4.3% 2.5% NA NA NA NAIndustrialCement Production 327310 750 $84,5300.3% 2.7% 2.0% 0.4% NA NA 0.2%IndustrialElectronicsManufacturing3342$84,5300.3% 6.6% 1.1% 0.3%0.2% 0.1% 0.1%IndustrialFerroalloy Production 331112 750 $84,5300.1% NA NA NA NA NA NAIndustrialGlass Production 327 500–1,000 $84,5301.3% 8.1% 1.6% 0.9%0.6% 0.9% 0.7%IndustrialHCFC-22 Production 325120 1,000 $84,5300.7% 15.1% 0.5% 2.1% NA NA NAIndustrialHydrogen Production 325120 1,000 $84,5300.7% 15.1% 0.5% 2.1% NA NA NAIndustrialIron and SteelProduction331111 1,000 $84,5300.2% 21.2% 1.2% 0.4% 0.1% NA NAIndustrialLead Production 3314 750–1,000 $84,5300.3% 5.6% 0.6% 0.3% NA NA NAIndustrialLime Manufacturing 327410 500 $84,5300.6% 23.3% 1.7% NA NA NA 0.3%IndustrialMagnesiumProduction3314 750–1,000 $84,5300.3% 5.6% 0.6% 0.3% NA NA NAIndustrialNitric Acid Production 325311 1,000 $84,5300.3% 4.3% 2.5% NA NA NA 0.3%IndustrialPetrochemicalProduction3251 500–1,000 $84,5300.2% 2.5% 0.6% 0.2% 0.1% 0.3% NAIndustrialPetroleum Refineries 3241103$84,5300.0% 1.3% 0.1% 0.0% 0.0% NA NAIndustrialPhosphoric AcidProduction325312 500 $84,5300.1% 14.2% NA NA NA NA NAIndustrialPulp and PaperManufacturing3221 750 $84,5300.1% 5.6% 0.6% 0.1%0.1% 0.1% 0.1%IndustrialSilicon CarbideProduction327910 500 $84,5300.8% 6.6% 1.5% 0.5% NA NA NAIndustrialSoda AshManufacturing325181 1,000 $84,5300.1% 6.9% NA NA NA NA NA(continued)72Table 6.9. Avoided Costs to Salesfor Small Modifying Industrial GHGPSD Emission Sources (continued)Sector Source Category NAICSSBA SizeStandard(effectiveAugust 11,2008)AverageCost PerEntity(2007$)Cost perEntity forAllEstablishments (%)Cost perEntity for<20Employees(%)Cost perEntity for20 to 99Employees(%)Cost perEntity 100to 499Employees(%)Cost perEntity for500 to 749Employees(%)Cost perEntity for750 to 999Employees(%)Cost perEntity for1,000 to1,499Employees(%)IndustrialTitanium DioxideProduction325188 1,000 $84,5300.3% 6.0% 3.5% 0.9% NA NA NAIndustrialZinc Production 3314 750–1,000 $84,5300.3% 5.6% 0.6% 0.3% NA NA 0.3%IndustrialEthanol Production 325193 1,000 $84,5300.2% NA NA NA NA NA NAIndustrialFood Processing 311 500–1,000 $84,5300.4% 7.9% 1.0% 0.3%0.1% 0.2% 0.1%Energy Underground CoalMines21211 500 $84,5300.4% 6.6% 1.0% 0.4% NA 0.3% NAEnergy Oil and Natural GasSystems211 500 $84,5300.3% 5.2% 0.5% 0.2%0.1% 0.1% 0.1%Energy Oil and Natural GasSystems4864$84,5300.4% 0.8% 3.2% 2.6% NA NA NAWasteTreatmentLandfills 562 $12.5million$84,5302.7% 12.2% 1.9% 0.9%0.8% 0.6% 0.8%WasteTreatmentMWCs 562 $12.5million$84,5302.7% 12.2% 1.9% 0.9%0.8% 0.6% 0.8%Since the SBA’s business size definitions (http://www.sba.gov/size) apply to an establishment’s ultimate parent company, we assume in this analysis that theenterprise definition above is consistent with the concept of ultimate parent companythat is typically used for Small BusinessRegulatory Enforcement FairnessAct (SBREFA) screening analyses.1NAICS codes 221111, 221112, 221113, 221119, 221121, 221122 – A firm is small if, including its affiliates, it is primarily engaged in the generation,transmission, and/or distributionof electric energy for sale and its total electric output for the preceding fiscal year didnot exceed 4 million megawatt hours.2500 to 1,500. For NAICS code 324110: For purposes of Government procurement, the petroleum refiner must be a concern that hasno more than 1,500employees nor production greater than 125,000 barrels per calendar day total Operable Atmospheric Crude Oil Distillation capacity. Capacity includes owned orleased facilities as well as facilities under aprocessing agreement or anarrangement such asan exchange agreement or a throughput. The totalproduct to bedelivered under the contract must be at least 90 percent refinedby the successful bidder from either crude oil or bona fide feedstocks.3NAICS Subsectors 333, 334, 335 and 336: For rebuilding machineryor equipment on a factory basis, or equivalent, use the NAICScode for a newlymanufactured product. Concernsperforming major rebuilding or overhaul activitiesdo not necessarily have to meet the criteriafor being a “manufacturer”although the activities may be classified under a manufacturing NAICS code. Ordinary repair services or preservation are not considered rebuilding.4Subsector 486: Pipeline Transportation (486110 Pipeline Transportation of Crude Oil 1,500, 486210 Pipeline Transportation of Natural Gas $7.0 million, 486910Pipeline Transportation of Refined Petroleum Products 1,500, 486990 All Other Pipeline Transportation $34.5 million)73Table 6.10. Avoided Costs to Sales for Small New PSD Industrial GHG SourcesSector Source Category NAICSSBA SizeStandard(effectiveAugust 11,2008)AverageCost perEntity(2007$)Cost perEntity forAllEnterprisesCost perEntity for<20EmployeesCost perEntity for20 to 99EmployeesCost perEntity 100to 499EmployeesCost perEntity for500 to 749EmployeesCost perEntity for750 to 999EmployeesCost perEntity for1,000 to1,499EmployeesElectricityGeneratingUnitsElectricity GeneratingUnits221$130,880 0.5% 7.2% 0.7%0.5% 0.4% 0.4% 0.2%Industrial Adipic Acid Production 325199 1,000$130,880 0.2% 4.7% 1.5%0.5% NA 0.1% NAIndustrialAluminum Production 331312 1,000$130,880 0.2% 53.6% NA NA NA NA NAIndustrialAmmoniaManufacturing325311 1,000 $130,880 0.5% 6.7% 3.9% NA NA NA NAIndustrialCement Production 327310 750 $130,880 0.4%4.2% 3.2% 0.5% NA NA 0.3%IndustrialElectronicsManufacturing3342$130,880 0.5% 10.2% 1.7%0.5% 0.3% 0.2% 0.2%IndustrialFerroalloy Production 331112 750$130,880 0.2% NA NA NA NA NA NAIndustrialGlass Production 327 500–1,000 $130,880 2.0% 12.6% 2.4% 1.4% 1.0% 1.4% 1.0%IndustrialHCFC-22 Production 325120 1,000 $130,8801.1% 23.3% 0.8% 3.2% NA NA NAIndustrialHydrogen Production 325120 1,000 $130,8801.1% 23.3% 0.8% 3.2% NA NA NAIndustrialIron and SteelProduction331111 1,000 $130,8800.3% 32.9% 1.8% 0.7% 0.2% NA NAIndustrialLead Production 3314 750–1,000 $130,8800.5% 8.7% 1.0% 0.5% NA NA 0.4%IndustrialLime Manufacturing 327410 500 $130,8800.9% 36.1% 2.7% NA NA NA NAIndustrialMagnesium Production 3314 750–1,000 $130,8800.5% 8.7% 1.0% 0.5% NA NA 0.4%IndustrialNitric Acid Production 325311 1,000 $130,8800.5% 6.7% 3.9% NA NA NA NAIndustrialPetrochemicalProduction3251 500–1,000 $130,8800.2% 3.9% 0.9% 0.4%0.2% 0.4% 0.3%IndustrialPetroleum Refineries 3241103$130,8800.0% 2.1% 0.1% 0.1% 0.0% NA NAIndustrialPhosphoric AcidProduction325312 500 $130,8800.1% 22.0% NA NA NA NA NAIndustrialPulp and PaperManufacturing3221 750 $130,8800.1% 8.7% 1.0% 0.2%0.2% 0.1% 0.1%IndustrialSilicon CarbideProduction327910 500 $130,8801.2% 10.2% 2.3% 0.8% NA NA NAIndustrialSoda AshManufacturing325181 1,000 $130,8800.2% 10.7% NA NA NA NA NAIndustrialTitanium DioxideProduction325188 1,000 $130,8800.4% 9.3% 5.4% 1.3% NA NA NAIndustrialZinc Production 3314 750–1,000 $130,8800.5% 8.7% 1.0% 0.5% NA NA 0.4%(continued)74Table 6.10. Avoided Costs to Sales for Small New PSD Industrial GHG Sources (continued)Sector Source Category NAICSSBA SizeStandard(effectiveAugust 11,2008)AverageCost perEntity(2007$)Cost perEntity forAllEnterprisesCost perEntity for<20EmployeesCost perEntity for20 to 99EmployeesCost perEntity 100to 499EmployeesCost perEntity for500 to 749EmployeesCost perEntity for750 to 999EmployeesCost perEntity for1,000 to1,499EmployeesIndustrialEthanol Production 325193 1,000 $130,8800.4% NA NA NA NA NA NAIndustrialFood Processing 311 500–1,000 $130,8800.6% 12.3% 1.5% 0.4%0.2% 0.2% 0.2%Energy Underground CoalMines21211 500 $130,8800.7% 10.2% 1.5% 0.5% NA 0.5% NAEnergy Oil and Natural GasSystems211 500 $130,8800.5% 8.1% 0.8% 0.3%0.1% 0.2% 0.1%Energy Oil and Natural GasSystems4864$130,8800.7% 1.2% 4.9% 4.0% NA NA NAWasteTreatmentLandfills 562 $12.5million$130,8804.2% 18.9% 2.9% 1.3%1.2% 1.0% 1.3%WasteTreatmentMWCs 562 $12.5million$130,880 4.2% 18.9% 2.9% 1.3% 1.2% 1.0% 1.3%Since the SBA’s business size definitions (http://www.sba.gov/size) apply to an establishment’s ultimate parent company, we assume in this analysis that theenterprise definition above is consistent with the concept of ultimate parent companythat is typically used for Small BusinessRegulatory Enforcement FairnessAct (SBREFA) screening analyses.1NAICS codes 221111, 221112, 221113, 221119, 221121, 221122 – A firm is small if, including its affiliates, it is primarily engaged in the generation,transmission, and/or distributionof electric energy for sale and its total electric output for the preceding fiscal year didnot exceed 4 million megawatt hours.2500 to 1,500. For NAICS code 324110: For purposes of Government procurement, the petroleum refiner must be a concern that hasno more than 1,500employees nor production greater than 125,000 barrels per calendar day total Operable Atmospheric Crude Oil Distillation capacity. Capacity includes owned orleased facilities as well as facilities under aprocessing agreement or anarrangement such asan exchange agreement or a throughput. The totalproduct to bedelivered under the contract must be at least 90 percent refinedby the successful bidder from either crude oil or bona fide feedstocks.3NAICS Subsectors 333, 334, 335 and 336: For rebuilding machineryor equipment on a factory basis, or equivalent, use the NAICScode for a newlymanufactured product. Concernsperforming major rebuilding or overhaul activitiesdo not necessarily have to meet the criteriafor being a “manufacturer”although the activities may be classified under a manufacturing NAICS code. Ordinary repair services or preservation are not considered rebuilding.4Subsector 486: Pipeline Transportation (486110 Pipeline Transportation of Crude Oil 1,500, 486210 Pipeline Transportation of Natural Gas $7.0 million, 486910Pipeline Transportation of Refined Petroleum Products 1,500, 486990 All Other Pipeline Transportation $34.5 million)75Table 6-11. Avoided Title V Permitting Costs to Sales for Permit Revisions Due to GHGSector Source Category NAICSSBA SizeStandard(effectiveAugust 11,2008)Average CostPer Entity(2007$/entity)Cost perEntity forAllEnterprisesCost perEntity forSize<20EmployeesCost perEntity forSize20 to 99EmployeesCost perEntity forSize100 to 499EmployeesCost perEntity forSize500 to 749EmployeesCost perEntity forSize750 to 999EmployeesCost perEntity ForSize1,000 to 1,499EmployeesElectricityGeneratingUnitesElectricity GeneratingUnits221$1,677 0.0% 0.1% 0.0% 0.0% 0.0% 0.0% 0.0%Industrial Adipic AcidProduction325199 1,000$1,677 0.0% 0.1% 0.0%0.0% NA 0.0% NAIndustrial Aluminum Production 331312 1,000$1,677 0.0% 0.7% NA NA NA NA NAIndustrial AmmoniaManufacturing325311 1,000$1,677 0.0% 0.1% 0.1% NA NA NA NAIndustrial Cement Production 327310 750$1,677 0.0% 0.1% 0.0%0.0% NA NA 0.0%Industrial ElectronicsManufacturing3342$1,677 0.0% 0.1% 0.0% 0.0% 0.0% 0.0% 0.0%Industrial Ferroalloy Production 331112 750$1,677 0.0% NA NA NA NA NA NAIndustrial Glass Production 327 500–1,000$1,677 0.0% 0.2% 0.0% 0.0% 0.0% 0.0% 0.0%Industrial HCFC-22 Production 325120 1,000$1,677 0.0% 0.3% 0.0% 0.0% NA NA NAIndustrial Hydrogen Production 325120 1,000$1,677 0.0% 0.3% 0.0% 0.0% NA NA NAIndustrial Iron and SteelProduction331111 1,000$1,677 0.0% 0.4% 0.0%0.0% 0.0% NA NAIndustrial Lead Production 3314 750–1,000$1,677 0.0% 0.1% 0.0%0.0% NA NA 0.0%Industrial Lime Manufacturing 327410 500$1,677 0.0% 0.5% 0.0% NA NA NA NAIndustrial MagnesiumProduction3314 750–1,000$1,677 0.0% 0.1% 0.0%0.0% NA NA 0.0%Industrial Nitric Acid Production 325311 1,000$1,677 0.0% 0.1% 0.1% NA NA NA NAIndustrial PetrochemicalProduction3251 500–1,000$1,677 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Industrial Petroleum Refineries 3241103$1,677 0.0% 0.0% 0.0%0.0% 0.0% NA NA(continued)76Table 6.11. Avoided Title V Permitting Costs toSales for Permit Revisions Due to GHG (continued)Sector Source Category NAICSSBA SizeStandard(effectiveAugust 11,2008)Average CostPer Entity(2007$/entity)Cost perEntity forAllEnterprisesCost perEntity forSize<20EmployeesCost perEntity forSize20 to 99EmployeesCost perEntity forSize100 to 499EmployeesCost perEntity forSize500 to 749EmployeesCost perEntity forSize750 to 999EmployeesCost perEntity ForSize1,000 to 1,499EmployeesIndustrial Phosphoric AcidProduction325312 500$1,677 0.0% 0.3% NA NA NA NA NAIndustrial Pulp and PaperManufacturing3221 750$1,667 0.0% 0.1% 0.0% 0.0% 0.0% 0.0% 0.0%Industrial Silicon CarbideProduction327910 500$1,677 0.0% 0.1% 0.0% 0.0% NA NA NAIndustrial Soda AshManufacturing325181 1,000$1,677 0.0% 0.1% NA NA NA NA NAIndustrial Titanium DioxideProduction325188 1,000$1,677 0.0% 0.1% 0.1% 0.0% NA NA NAIndustrial Zinc Production 3314 750–1,000$1,677 0.0% 0.1% 0.0%0.0% NA NA 0.0%Industrial Ethanol Production 325193 1,000$1,677 0.0% NA NA NA NA NA NAIndustrial Food Processing 311 500–1,000$1,677 0.0% 0.2% 0.0% 0.0% 0.0% 0.0% 0.0%Energy Underground CoalMines21211 500$1,677 0.0% 0.1% 0.0%0.0% NA 0.0% NAEnergy Oil and Natural GasSystems211 500$1,677 0.0% 0.1% 0.0% 0.0% 0.0% 0.0% 0.0%Energy Oil and Natural GasSystems486 4$1,677 0.0% 0.0% 0.1% 0.1% NA NA NAWasteTreatmentLandfills562 $12.5million$1,677 0.1% 0.2% 0.0% 0.0% 0.0% 0.0% 0.0%(continued)77Table 6.11. Avoided Title V Permitting Costs toSales for Permit Revisions Due to GHG (continued)Sector Source Category NAICSSBA SizeStandard(effectiveAugust 11,2008)Average CostPer Entity(2007$/entity)Cost perEntity forAllEnterprisesCost perEntity forSize<20EmployeesCost perEntity forSize20 to 99EmployeesCost perEntity forSize100 to 499EmployeesCost perEntity forSize500 to 749EmployeesCost perEntity forSize750 to 999EmployeesCost perEntity ForSize1,000 to 1,499EmployeesWasteTreatmentMWCs562 $12.5million$1,677 0.1% 0.2% 0.0% 0.0% 0.0% 0.0% 0.0%Since the SBA’s business size definitions (http://www.sba.gov/size) apply to an establishment’s ultimate parent company, we assume in this analysis that theenterprise definition above is consistent with the concept of ultimate parent companythat is typically used for Small BusinessRegulatory Enforcement FairnessAct (SBREFA) screening analyses.1NAICS codes 221111, 221112, 221113, 221119, 221121, 221122 – A firm is small if, including its affiliates, it is primarily engaged in the generation,transmission, and/or distributionof electric energy for sale and its total electric output for the preceding fiscal year didnot exceed 4 million megawatt hours.2500 to 1,500. For NAICS code 324110: For purposes of Government procurement, the petroleum refiner must be a concern that hasno more than 1,500employees nor production greater than 125,000 barrels per calendar day total Operable Atmospheric Crude Oil Distillation capacity. Capacity includes owned orleased facilities as well as facilities under aprocessing agreement or anarrangement such asan exchange agreement or a throughput. The totalproduct to bedelivered under the contract must be at least 90 percent refinedby the successful bidder from either crude oil or bona fide feedstocks.3NAICS Subsectors 333, 334, 335 and 336: For rebuilding machineryor equipment on a factory basis, or equivalent, use the NAICScode for a newlymanufactured product. Concernsperforming major rebuilding or overhaul activitiesdo not necessarily have to meet the criteriafor being a “manufacturer”although the activities may be classified under a manufacturing NAICS code. Ordinary repair services or preservation are not considered rebuilding.4Subsector 486: Pipeline Transportation (486110 Pipeline Transportation of Crude Oil 1,500, 486210 Pipeline Transportation of Natural Gas $7.0 million, 486910Pipeline Transportation of Refined Petroleum Products 1,500, 486990 All Other Pipeline Transportation $34.5 million)78Table 6.12. Title V Avoided Costs forSmall New Commercial Sources of GHG Emissions Compared to Annual Sales RevenueSector Source Category NAICSSBA SizeStandard(effectiveAugust 11,2008)Average CostPer Entity($1,000/entity)AvoidedCost toAverageSalesRevenuesfor AllEnterprisesAvoidedCost toSalesRevenuesSize <20EmployeesAvoidedCost toSalesRevenuesSize20 to 99EmployeesAvoidedCost toSalesRevenuesSize100 to 499EmployeesAvoidedCost toSalesRevenuesSize500 to 749EmployeesAvoidedCost toSalesRevenuesSize750 to 999EmployeesAvoided Costto SalesRevenuesSize1,000 to 1,499EmployeesCommercial Education 61 7.0–35.0 $23,175 0.82% 6.12% 1.05%0.34% 0.19% 0.12% 0.10%Commercial Enclosed Mall 531120 7 $23,175 1.35%2.45% 0.38% 0.21% 0.13% 0.19% 0.10%Commercial Food Sales$23,175 NA NA NA NA NA NA NACommercial Food Service 722 7.0–20.5 $23,175 3.12% 7.25% 1.87%1.49% 1.73% 1.83% 1.75%Commercial Inpatient Health Care 622 34.5 $23,175 0.03% 1.21% 0.41% 0.12% 0.05% 0.04% 0.02%Commercial Laboratory 541380 12 $23,175 1.17% 3.87% 0.82% 0.54% 0.32% 0.30% 0.79%Commercial Laboratory 5417 7 $23,175 0.45% 2.69% 0.39% 0.15% 0.12% 0.13% 0.12%Commercial Lodging 721 7 $23,175 1.01% 5.14% 1.14% 0.46% 0.41% 0.20% 0.35%Commercial NonrefrigeratedWarehouse49311 25.5 $23,175 1.06% 3.08% 0.85%0.54% 1.42% 0.79% 0.67%Commercial Nursing 623 7.0–13.5 $23,175 1.08% 7.43% 1.45%0.87% 0.95% 0.88% 0.65%Commercial Office 531120 7 $23,175 1.35% 2.45%0.38% 0.21% 0.13% 0.19% 0.10%Commercial Other 81 7.0–25.0$23,175 3.49% 6.15% 1.04% 0.56% 0.67% 0.72% 0.90%Commercial Outpatient HealthCare 621 7.0–34.5 $23,175 1.94% 3.61%0.82% 0.60% 0.54% 0.58% 0.42%Commercial Public Assembly 71 7 $23,175 1.50% 4.26% 1.00% 0.25% 0.19% NA 0.12%Commercial Public Order andSafety$23,175 NA NA NA NA NA NA NACommercial RefrigeratedWarehouse49312 25.5 $23,175 0.46% 2.62%0.62% 0.38% NA NA 0.36%Commercial Religious Worship 813110 7 $23,175 4.19%9.22% 1.09% 0.21% 0.16% 0.05% 0.06%Commercial Retail Other thanMall 44–45 7.0–29.0 $23,175 0.72% 2.39% 0.34% 0.27% 0.42% 0.60% 0.61%Commercial Service 81 7.0–25.0 $23,175 3.49% 6.15% 1.04%0.56% 0.67% 0.72% 0.90%Commercial Strip Shopping Mall531120 7 $23,175 1.35% 2.45% 0.38%0.21% 0.13% 0.19% 0.10%(continued)79Table 6.12. Title V Avoided Costs forSmall New Commercial Sources of GHG Emissions Compared to Annual Sales Revenue(continued)Sector Source Category NAICSSBA SizeStandard(effectiveAugust 11,2008)Average CostPer Entity($1,000/entity)AvoidedCost toAverageSalesRevenuesfor AllEnterprisesAvoidedCost toSalesRevenuesSize <20EmployeesAvoidedCost toSalesRevenuesSize20 to 99EmployeesAvoidedCost toSalesRevenuesSize100 to 499EmployeesAvoidedCost toSalesRevenuesSize500 to 749EmployeesAvoidedCost toSalesRevenuesSize750 to 999EmployeesAvoided Costto SalesRevenuesSize1,000 to 1,499EmployeesResidential Residential 531110 7 $23,175 2.33% 3.23%0.70% 0.84% 0.81% NA NAThe Census Bureau defines an enterprise as a business organization consisting of one or more domestic establishments that werespecified under common ownership or control.The enterprise and the establishment are the same for single-establishment firms. Each multi-establishment company forms one enterprise—the enterpriseemployment and annualpayroll is summed from the associated establishments. Enterprise size designations are determined by the summed employment of all associated establishments.Since the SBA’s business size definitions (http://www.sba.gov/size) apply to an establishment’s ultimate parent company, weassume in this analysis that the enterprise definitionabove is consistent with the concept ofultimate parent company that is typically used for SBREFAscreening analyses.NAICS code 611519: Job Corps Centers. For classifying a Federal procurement, the purpose of the solicitation must be for the management and operation ofa U.S. Department ofLabor Job Corps Center. The activities involved include admissionsactivities, life skills training, educational activities, comprehensive career preparation activities, careerdevelopment activities, career transition activities, as well as the management and support functions and services needed to operate and maintain the facility. For SBA assistance assmall business concern, other than for Federal Government procurements, a concern mustbe primarily engaged in providing the services to operate and maintain Federal Job CorpsCenters.NAICS code 541711 and 541712: For researchand development contracts requiring the delivery of a manufactured product, the appropriate size standard is that of themanufacturing industry.80Table 6.13. Avoided Costs for Small Modifying Commercial PSD GHG Emission Sources Compared to Annual Sales RevenueSector Source Category NAICSSBA SizeStandard(effectiveAugust 11,2008)Average CostPer Entity($1,000/entity)AvoidedCost toAverageSalesRevenuesfor AllEnterprisesAvoidedCost toSalesRevenuesSize <20EmployeesAvoidedCost toSalesRevenuesSize 20 to99EmployeesAvoidedCost toSalesRevenuesSize 100 to499EmployeesAvoidedCost toSalesRevenuesSize500 to 749EmployeesAvoidedCost toSalesRevenuesSize750 to 999EmployeesAvoided Costto SalesRevenuesSize1,000 to 1,499EmployeesCommercial Education 61 7.0–35.0 $59,152 2.10% 15.61% 2.67%0.87% 0.49% 0.31% 0.25%Commercial Enclosed Mall 531120 7 $59,152 3.45%6.26% 0.96% 0.53% 0.34% 0.50% 0.25%Commercial Food Sales$59,152 NA NA NA NA NA NA NACommercial Food Service 722 7.0–20.5 $59,152 7.97% 18.52% 4.78%3.80% 4.42% 4.66% 4.46%Commercial Inpatient Health Care 622 34.5 $59,152 0.08% 3.09% 1.05% 0.30% 0.13% 0.09% 0.06%Commercial Laboratory 541380 12 $59,152 2.98% 9.88% 2.08% 1.38% 0.83% 0.76% 2.01%Commercial Laboratory 5417 7 $59,152 1.15% 6.88% 1.01% 0.38% 0.31% 0.34% 0.32%Commercial Lodging 721 7 $59,152 2.59% 13.12% 2.91% 1.16% 1.05% 0.51% 0.89%Commercial NonrefrigeratedWarehouse49311 25.5 $59,152 2.70% 7.87% 2.17%1.37% 3.62% 2.01% 1.71%Commercial Nursing 623 7.0–13.5 $59,152 2.76% 18.96% 3.70%2.22% 2.43% 2.25% 1.65%Commercial Office 531120 7 $59,152 3.45% 6.26%0.96% 0.53% 0.34% 0.50% 0.25%Commercial Other 81 7.0–25.0$59,152 8.91% 15.71% 2.66% 1.43% 1.71% 1.84% 2.28%Commercial Outpatient HealthCare 621 7.0–34.5 $59,152 4.95% 9.20%2.08% 1.54% 1.38% 1.49% 1.08%Commercial Public Assembly 71 7 $59,152 3.84% 10.88% 2.55% 0.63% 0.48% NA 0.31%Commercial Public Order and Safety $59,152 NA NA NA NA NA NA NACommercial Refrigerated Warehouse 49312 25.5 $59,152 1.17% 6.69%1.58% 0.97% NA NA 0.92%Commercial Religious Worship 813110 7 $59,152 10.68%23.53% 2.77% 0.54% 0.40% 0.13% 0.16%Commercial Retail Other thanMall 44-45 7.0–29.0 $59,152 1.84% 6.09%0.88% 0.69% 1.08% 1.52% 1.56%Commercial Service 81 7.0–25.0 $59,152 8.91% 15.71% 2.66%1.43% 1.71% 1.84% 2.28%Commercial Strip Shopping Mall531120 7 $59,152 3.45% 6.26% 0.96%0.53% 0.34% 0.50% 0.25%(continued)81Table 6.13. Avoided Costs for Small Modifying Commercial PSD GHG Emission Sources Compared to Annual Sales Revenue(continued)Sector Source Category NAICSSBA SizeStandard(effectiveAugust 11,2008)Average CostPer Entity($1,000/entity)AvoidedCost toAverageSalesRevenuesfor AllEnterprisesAvoidedCost toSalesRevenuesSize <20EmployeesAvoidedCost toSalesRevenuesSize 20 to99EmployeesAvoidedCost toSalesRevenuesSize 100 to499EmployeesAvoidedCost toSalesRevenuesSize500 to 749EmployeesAvoidedCost toSalesRevenuesSize750 to 999EmployeesAvoided Costto SalesRevenuesSize1,000 to 1,499EmployeesResidential Residential 531110 7 $59,152 5.95% 8.25%1.78% 2.15% 2.07% NA NAThe Census Bureau defines an enterprise as a business organization consisting of one or more domestic establishments that werespecified under common ownership or control.The enterprise and the establishment are the same for single-establishment firms. Each multi-establishment company forms one enterprise—the enterpriseemployment and annualpayroll is summed from the associated establishments. Enterprise size designations are determined by the summed employment of all associated establishments.Since the SBA’s business size definitions (http://www.sba.gov/size) apply to an establishment’s ultimate parent company, we assume in this analysis that the enterprise definitionabove is consistent with the concept ofultimate parent company that is typically used for SBREFAscreening analyses.NAICS code 611519: Job Corps Centers. For classifying a Federal procurement, the purpose of the solicitation must be for the management and operation of a U.S. Department ofLabor Job Corps Center. The activities involved include admissionsactivities, life skills training, educational activities, comprehensive career preparation activities, careerdevelopment activities, career transition activities, as well as the management and support functions and services needed to operate and maintain the facility. For SBA assistance assmall business concern, other than for Federal Government procurements, a concern mustbe primarily engaged in providing the services to operate and maintain Federal Job CorpsCenters.NAICS code 541711 and 541712: For researchand development contracts requiring the delivery of a manufactured product, the appropriate size standard is that of themanufacturing industry.82Table 6.14. Avoided Costs to Small PSD New Commercial GHG Emission SourcesSector Source Category NAICSSBA SizeStandard(effectiveAugust 11,2008)Average CostPer Entity($1000/entity)AvoidedCost toAverageSalesRevenuesfor AllEnterprisesAvoidedCost toSalesRevenuesSize <20employeesAvoidedCost toSalesRevenuesSize20 to 99employeesAvoidedCost toSalesRevenuesSize100 to 499employeesAvoidedCost toSalesRevenuesSize500 to 749employeesAvoidedCost toSalesRevenuesSize750 to 999employeesAvoided Costto SalesRevenuesSize1,000 to 1,499employeesCommercial Education 61 7.0–35.0 $82,327 2.92% 21.74% 3.72%1.21% 0.68% 0.43% 0.34%Commercial Enclosed Mall 531120 7 $82,327 4.80%8.71% 1.34% 0.74% 0.47% 0.69% 0.35%Commercial Food Sales$82,327 NA NA NA NA NA NA NACommercial Food Service 722 7.0–20.5 $82,327 11.09% 25.78% 6.65%5.29% 6.15% 6.49% 6.21%Commercial Inpatient Health Care 622 34.5 $82,327 0.11% 4.30% 1.46% 0.42% 0.18% 0.13% 0.08%Commercial Laboratory 541380 12 $82,327 4.14% 13.76% 2.90% 1.92% 1.15% 1.06% 2.80%Commercial Laboratory 5417 7 $82,327 1.59% 9.57% 1.40% 0.53% 0.42% 0.48% 0.44%Commercial Lodging 721 7 $82,327 3.60% 18.26% 4.05% 1.62% 1.46% 0.71% 1.23%Commercial NonrefrigeratedWarehouse49311 25.5 $82,327 3.76% 10.96% 3.02%1.91% 5.04% 2.79% 2.38%Commercial Nursing 623 7.0–13.5 $82,327 3.84% 26.40% 5.15%3.09% 3.38% 3.13% 2.30%Commercial Office 531120 7 $82,327 4.80% 8.71%1.34% 0.74% 0.47% 0.69% 0.35%Commercial Other 81 7.0–25.0$82,327 12.41% 21.87% 3.70% 2.00% 2.38% 2.56% 3.18%Commercial Outpatient HealthCare 621 7.0–34.5 $82,327 6.89% 12.81%2.90% 2.14% 1.93% 2.08% 1.51%Commercial Public Assembly 71 7 $82,327 5.35% 15.15% 3.55% 0.87% 0.67% NA 0.43%Commercial Public Order andSafety $82,327 NA NA NA NA NA NA NACommercial Refrigerated Warehouse 49312 25.5 $82,327 1.63% 9.31%2.20% 1.35% NA NA 1.28%Commercial Religious Worship 813110 7 $82,327 14.87%32.77% 3.86% 0.75% 0.56% 0.18% 0.22%Commercial Retail Other thanMall 44-45 7.0–29.0 $82,327 2.57% 8.48%1.22% 0.97% 1.50% 2.12% 2.17%Commercial Service 81 7.0–25.0 $82,327 12.41% 21.87% 3.70%2.00% 2.38% 2.56% 3.18%Commercial Strip Shopping Mall531120 7 $82,327 4.80% 8.71% 1.34%0.74% 0.47% 0.69% 0.35%(continued)83Table 6.14. Avoided Costs to Small PSD NewCommercial GHG Emission Sources (continued)Sector Source Category NAICSSBA SizeStandard(effectiveAugust 11,2008)Average CostPer Entity($1000/entity)AvoidedCost toAverageSalesRevenuesfor AllEnterprisesAvoidedCost toSalesRevenuesSize <20employeesAvoidedCost toSalesRevenuesSize20 to 99employeesAvoidedCost toSalesRevenuesSize100 to 499employeesAvoidedCost toSalesRevenuesSize500 to 749employeesAvoidedCost toSalesRevenuesSize750 to 999employeesAvoided Costto SalesRevenuesSize1,000 to 1,499employeesResidential Residential 531110 7 $82,327 8.29% 11.49%2.48% 2.99% 2.89% NA NAThe Census Bureau defines an enterprise as a business organization consisting of one or more domestic establishments that werespecified under common ownership or control. Theenterprise and the establishment are the same for single-establishment firms. Each multi-establishment company forms one enterprise—the enterprise employment and annual payroll issummed from the associated establishments. Enterprise size designations are determined by the summed employment of all associated establishments.Since the SBA’s business size definitions (http://www.sba.gov/size) apply to an establishment’s ultimate parent company, we assume in this analysis that the enterprise definition aboveis consistent with the concept of ultimate parent company that is typically used for SBREFA screening analyses.NAICS code 611519: Job Corps Centers. For classifying a Federal procurement, the purpose of the solicitation must be for the management and operation of a U.S. Department ofLabor Job Corps Center. The activities involved include admissionsactivities, life skills training, educational activities, comprehensive career preparation activities, career developmentactivities, career transition activities, as well as the management and support functionsand services needed to operate and maintain the facility. For SBA assistance as small businessconcern, other than for Federal Government procurements, a concern must be primarily engaged in providing the services to operate and maintain Federal Job Corps Centers.NAICS code 541711 and 541712: For researchand development contracts requiring the delivery of a manufactured product, the appropriate size standard is that of the manufacturingindustry.84 Section7

Statutory and Executive Order Reviews

1.1 Executive Order 12866 - Regulatory Planning and Review Under EO 12866 (58 FR 51735, October 4, 1993), this action is a "significant regulatory action" because it raises novel legal or policy is sues involves regulatory and leads to an annual effect exceeding $100 million annually. This ta iloring rule includes annual net benefits exceeding $100 million. Accordingly, EPA subm itted this action to OMB for review under EO 12866 and any changes made in response to OMB recommendations have been documented in

the docket for this action. In a ddition, EPA prepared an analysis of the potential benefits and

costs of this action in this RIA.
1.2 Paperwork Reduction Act This action does not impose any new informa tion collection burden. Instead, this action will significantly reduce costs incurred by sources and permitting authorities relative to the costs

that would be incurred if EPA did not revise th e rule. Based on our revised GHG threshold data analysis, we estimate that over 80,000 new and modi fied facilities per year would be subject to PSD review based on applying a GHG emissi ons threshold of 100/250 tpy using a CO 2 e metric. This is compared to 280 PSD permits currently issued per year, which is an increase of more than 280-fold. Similarly, for title V, we es timate that over six million new sources would be affected at the 100-tpy thre shold for GHGs using the CO 2 e metric. By increasing the volume of permits by over 400 times, the administrative burden would be unmanageable without this rule. However, OMB has previously approved the information collection requirements contained in the existing regulations for PSD (see, e.g. , 40 CFR 52.21) and title V (see 40 CFR parts 70 and 71) under the provisions of the Paperwork Reduction Act , 44 U.S.C. 3501 et seq

. and has assigned OMB control number 2060-00 03 and OMB control number 2060-0336. The OMB control numbers for EPA’s regulations in 40 CFR are listed in 40 CFR part 9. 1.3 Regulatory Flexibility Act The Regulatory Flexibility Act (RFA) gene rally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the APA or any ot her statute unless the agency cer tifies that the rule will not have a significant economic impact on a substan tial number of small entities. Small entities include small businesses, small organizati ons, and small governmental jurisdictions.85 For purposes of assessing the impacts of this final action on small entities, small entity is defined as: (1) a small business that is a small in dustrial entity as defined in the U.S. 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 popul ation of less than 50,000; or (3) a small organization that is a ny not-for-profit enterprise that is independently owned and operated and is not dominant in its field. After considering the economic impacts of this final rule on small entities, the

Administrator certifies that this final action will not have a significant economic impact on a

substantial number of small enti ties. 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 entitie s, since the primary purpose of the regulatory flexibility analyses is to identify and address regulator y alternatives “which minimize any significant economic impact of the rule on small entities. ” 5 USC 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 re gulatory burden, or otherwise has a positive economic effect on all of the small entities subject to the rule.

We have therefore concluded that this fina l rule will relieve the regulatory burden for most affected small entities associated with the major PSD and title V operating permits programs for new or modified major sources that emit GHGs, including small businesses. This is because this rule raises the major source applicability thresholds for these programs for the sources that emit GHGs. As a result, the program changes provided in this rule are not expected to result in a significant econom ic impact on a substantial nu mber of small entities.

1.4 Unfunded Mandates Reform Act

This rule does not contain a federal manda te that may result in expenditures of $100 million or more for state, local, and tribal government s, in the aggregate, or the private sector in any 1 year. Only those few states whose permitting authorities do not implement the federal PSD and title V rules by reference in their SIPs will have a small increase in burden. These states will have to amend their corresponding SIPs to incorporate the new applicability thresholds, since the burden reducing thresholds that we are finalizing with this rule will not otherwise apply to the PSD and title V programs. Thus, this rule is not subject to the requirements of sections 202 or 205 of UMRA.86 This rule is also not subject to the re quirements of section 203 of UMRA because it contains no regulatory require ments that might significantly or uniquely affect small governments. As discussed earlier, this rule is expected to result in cost savings and an administrative burden reduction for all permitting authorities and permittees, including small

governments.

1.5 Executive Order 13132 – Federalism This action does not have federalism implicatio ns. 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. These fi nal amendments will ultimately simplify and reduce the burden on state and local agencies as sociated with implementing the PSD and title V operating permits programs, by providing that a source whose GHG emissions are below the proposed levels will not have to obt ain a PSD permit or title V permit. Thus, Executive Order 13132 does not apply to this action. In the spirit of Executive Or der 13132, and consistent with EPA policy to promote

communications between EPA and state and lo cal governments, EPA specifically solicited comment on the proposed rule from state and local officials.

1.6 Executive Order 13175 - Consultation and Coordination with Indian Tribal

Governments Subject to the Executive Or der 13175 (65 FR 67249, November 9, 2000) EPA may not issue a regulation that has tribal implications, th at imposes substantial direct compliance costs, and that is not required by statute, unless the federal government provides the funds necessary to pay the direct compliance costs incurred by tribal governments, or EPA consults with tribal officials early in the process of developing the proposed regulation and develops a tribal summary impact statement. EPA has concluded that this action may have tr ibal implications. However, it will neither impose substantial direct compliance costs on tribal governments, nor preempt Tribal law. There are no tribal authorities currently issuing majo r NSR permits; therefore, it will not currently impose direct compliance costs on tribal governments. EPA consulted with tribal officials early in the process of developi ng this regulation to allow them to have meaningful and timely input into its development by publishing an ANPR87 that included PSD GHG tailoring options for regulating GHGs under the CAA. (73 FR 44354, July 30, 2008) As a result of the ANPR, EPA received several comments from tribal officials on differing PSD GHG tailoring options presented in the ANPR which were considered in the proposal and this final rule. Additionally, we also specifically solicited comment from tribal officials on the proposed rule ( 74 FR 55292, October 27, 2009). As required by section 7(a) of Executive Order 13175, EPA’s Tribal Consultation Official has certified that the requirements of the Executive Order have been met in a meaningful and timely manner. A copy of the certification is included in the docket for this action.

1.7 Executive Order 13045 - Pr otection of Children from Environmental Health and Safety Risks EPA interprets EO 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 EO has the potential to influence the regulation. This action is not subject to EO 13045 because it does not esta blish an environmental standard intended to mitigate health or safety risks.

1.8 Executive Order 13211 - Actions That Significantly Affect Energy Supply,
Distribution, or Use This action is not a “significant energy ac tion” 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, dist ribution, or use sectors. 1.9 National Technology Transfer and Advancement Act Section 12(d) of the Nati onal Technology Transfer and Advancement Act of 1995 ("NTTAA"), Public Law No. 104-113, 12(d) (15 U. S.C. 272 note) directs EPA to use voluntary consensus standards in its regul atory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Volunt ary consensus standards are technical standards (e.g. , materials specifications, test methods, sampli ng procedures, and busine ss practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.88 This action does not involve technical standard s. Therefore, EPA did not consider the use of any voluntary consensus standards.

1.10 Executive Order 12898 – Federal Action s to Address Enviro nmental Justice in Minority Populations and Low-Income Populations Executive Order 12898 (59 FR 7629 (Feb. 16, 1994)) establishes federal executive policy on environmental justice. Its main provision dire cts 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, disp roportionately high and adverse human health or environmental effects of their programs, policie s, and activities on minority populations and lowincome populations in the United States.

EPA has determined that this final rule will not have disproportionately high and adverse

human health or environmental effects on mi nority or low-income populations because it

increases the level of environm ental protection for all affected populations without having any disproportionately high and adverse human health or environmental effects on any population, including any minority or low-income population

. Any impact that this final rule will have will be global in nature and will increase the level of protection provided to all human health and the

environment. 1.11 Congressional Review Act The Congressional Review Act, 5 U.S.C. 801 et seq ., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, genera lly provides that before a rule may take effect, the agency promulgating the rule must su bmit 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 rule and othe r required information to the U.S. Senate, the U.S. House of Representatives, and the Comptr oller 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 a “major rule” as defined by 5 U.S.C. 804(2).89 Section 8

Limitations and Uncertainties

Limitations and Uncertainties of the Analysis The benefits, costs and economic impacts estimat ed in this RIA are subject to limitations

and uncertainties. The benefits of this rule are the regulatory relief provi ded to small sources of GHG and permitting authorities. Regul atory relief estimates are provided for the final rule Steps
1, 2 and 3 on an annual basis as well as for th e full phase-in period. The benefits or avoided permitting are based upon the best data available currently regarding sources affected and burden cost estimates but are subject to uncertainties.
Benefit Estimate Limitations and Uncertainties

Uncertainties exist in the affected source counts at different thresholds used to estimate regulatory relief due to the absence of a comprehe nsive data set of fac ility-level GHG emissions

across all sectors on which to base the number of facilities subject to title V and PSD permitting at alternative regulatory thresholds. These a ffected source counts are multiplied by the permit burden cost estimates to derive the benefits (r egulatory relief) estimates for the rule. Specific

uncertainties in the estimates of affected source s, burden estimates and other limitations of the benefits analysis are discussed below.

a. Uncertainties in Estimates of Affected Sources

In order to estimate the number of facilitie s that exceed a given GHG threshold (such as a 100 or 250 tpy CO2e emission threshold for baseline analysis), it is necessary to have emissions inventory data at the facility or building level, including, and particularly for lower threshold
scenarios, numerous small sources in the resi dential and commercial sectors (e.g., apartment buildings and office buildings). Historically , however, EPA has not collected sector-wide, facility-level information for GHG emissions unde r the CAA (with the ex ception of information from electric generating units required to repo rt CO2 emissions under the Acid Rain Program reporting requirements). To date, national EPA inventories of GHG sources have primarily focused on ‘top-down’ estimates of GHG emissions from sectors and sources, and not facilitylevel estimates. As a result, many of the uncertain ties described here result from the absence of a comprehensive data set of facility-level GHG emissions across all sectors.90 For residential, commercial, and smaller ma nufacturing operations, our current analysis relies on sample facility datase ts and ‘top-down’ sector data (e.g., national fuel consumption statistics and/or building characteristics). Th ere are inherent uncertainties in developing source

counts from the allocation of these nationally aggregated stat istics. The allocation factors we used, based on U.S. Energy Information Admini stration statistical sampling procedures and energy consumption statistics, are likely the best available to estimate the population of
residential, commercial, and sm all manufacturing sources exceed ing different GHG thresholds. However, uncertainties may result in either overestimating or underestimating GHG emissions for a given individual facility. It is worth noting that our estimates for the largest GHG emitting
sources, such as electric utilities and refineri es, are derived from bottom-up calculations of individual facility/build ing emissions so that there is increased certainty in evaluating and comparing the facility counts at the higher GHG threshold scenarios where residential and commercial sources are not highly a ffected. Although there are differe nt levels of uncertainty in our facility level estimates across sectors, we do believe that the data are sufficiently robust to use in the aggregate to assess national permitting level impacts.

EPA’s estimate of affected sources is base d on their potential to emit emissions, as opposed to actual emission levels. PTE is defi ned as the maximum capacity of a stationary source to emit a pollutant under it s physical and operational de sign, including certain legal limitations, for example, on emissions or hours of operation. PSD and Title V programs both use PTE for defining and identifying major sources. Although we have attempted to identify reasonable adjustments to account for PTE in our methodology, there are significant uncertainties in our PTE-based estimates, partic ularly for the commercial, residential and small manufacturing sectors that have not traditionally b een subject to any form of air permitting. In practice, for example, for the residential sector and for many of the facilities in the commercial sector, where CO2 emissions are primarily due to space heating/appliance usage, the combustion units are not likely to be used constantly at th eir maximum rated capacity because heating is not needed year-round and heating systems have ther mostats. However, for our analysis we do assume full PTE-based estimates for the residential and commercial sectors, using PTE adjustment factors of 10 and 6.6, respectively to adjust actual emissions to PTE level. Absent industry specific data, for small manufacturing source categories we as sume a PTE adjustment
factor of 2; individual manufactur ing facilities may operate their combustion equipment at levels91 above and below this capacity utilization rate, but we believe this PTE adjustment reflects a reasonable average rate across the variety of small manufacturing fac ilities included in the threshold analysis. Ultimately, the number of s ources brought into either the or Title V programs due solely to their PTE would depend on how EPA interprets PTE for various types of emitting equipment (e.g., space-heating furnaces in residential and commercial buildings), and the extent

to which streamlined mechanisms are made availa ble for sources to obtain legal limits on their PTE so that the programs are not applicable. No such decisions or interpretations have been made at this point and, as mentioned in the preamble, they will require significant time to develop. As a result, our threshold analysis uniformly assumes that no PTE limits are in place for any of the affected sectors, which may likel y be the case in the immediate stages of GHG permitting for affected sources. There is significant uncertainty in both our modification rate for newly major GHG

sources and in our estimate of m odification activity at existing major sources that will become subject to PSD review for GHG emission increa ses. The general uncertainty results from predicting not only how many major sources will undergo physical or opera tional changes in any given year, but also which of those changes woul d result in GHG emissions increases that would exceed a proposed GHG significance level. First, information is not available across sectors and source categories on the types and numbers of specific physical and operational changes that

would result in GHG emissions increases in amounts that can be estimated and that therefore can be compared to various GHG emi ssions significance levels. Second, there is uncertainty in how many project modifications will occur within any given year because decisions on these projects are driven by facility- and sector-based growth patterns and business planning decisions. Lastly, some source categories and units that emit GHGs have not previously been s ubject to any type of permitting or reporting requirements; as a result, for these sources, there is very little historical record for use in estimating the number and types of projects that would occur at these sources and, in turn, establish an appropr iate significance level for GHGs. b. Uncertainties in Permitting Costs The permit burden cost estimates that are multiplied by the source counts to derive the benefits of the rule are also subject to uncerta inty. As noted Attachment C to the RIA, the primary reference sources for our estimate of burden hours and costs for permitting GHGs are the most recent ICRs for the PSD and title V programs. There a number of uncertainties92 introduced in using these references for cos ting GHG permitting activities. First, we are assuming that the average, convent ional pollutant per-permit costs will be similar for GHGs. We do recognize the likelihood that residential and co mmercial permits would be simpler and have a lower per-permit burden than tradi tional industrial source s, and have made adjustments for this: however, for industrial sources we assume per-perm it costs on par with what are estimated in the latest ICRs for PSD and title V programs. Ther e is uncertainty in applying these average ICRbased costs to GHG permitting, even for industrial sources, because there is no historical track record for permitting these GHG sources and thus any cost efficiencies that have been realized over the years for conventional pollutant permitting, and thus reflected in the current ICRs, may not be initially realized for GHG permitting. Fo r example, we assume the same public hearing

estimate as included in the ICR for current PSD permits (i.e., that 1 in 50 major PSD permits require a hearing)—for GHG sources this number may be higher initially if there ends up being significantly more public interest in these permits. We do believe overall, however, that larger facilities, especially those affected at higher threshold levels, will have had sufficient permitting experience such that out ICR-based costs s hould reasonably reflect the added burden of including GHGs.
As mentioned above, in our burden scenario analyses we do discount the ICR-based perpermit costs for residential and commercial sources to reflect what we believe will generally be simpler permits, involving primarily uniform com bustion type equipment. For PSD we discount the per-permit cost by 30%, and for title V we di scount the per-permit cost by 50%. There is significant uncertainty in these estimated discounts since we have no track record for permitting these smaller commercial and residential sources. However, we do believe that, based solely on the type and uniformity of the GHG emission units that would be subject to permitting at these
facilities under lower GHG threshold scenarios, th at average per-permit costs would be less than those currently experienced by more complex indus trial facilities, with numerous emission units, for currently regulated pollutants. c. Additional uncertainties and limitations of the benefits analysis Current avoided permitting cost or regulatory relief estimates also do not include the avoided costs to comply with PSD BACT require ments due to lack of available data. This omission will tend to reduce the amount of regul atory relief that smaller sources of GHG reported in this RIA will expe rience during the phase-in period. In addition to the avoided93 BACT costs we are unable to quantify, there ar e likely general economic costs associated with requiring permitting for these smaller sources of GHG. Numerous public comments on the proposed rule spoke to the economic burden pe rmitting would place on sources above the actual costs to obtain a permit. These costs might in clude delays or impediments to entering a new market or to expand existing facilities to acco mmodate economic growth. These avoided costs might be viewed as additional costs of doing bus iness or barriers to entry for these smaller

sources of GHG. The avoided economic costs of th ese possible additional costs or barriers to doing business have not been considered in the re gulatory relief estimates provided for this final

rule due to lack of available information on the nature and value of such avoided impacts. If such avoided cost estimates were available, these estimates would tend to increase the regulatory relief burden reported for the final rule. For the multiple year regulatory relief estimates, we assume that the annual estimates can be extrapolated to multiple years without adjustment. This presumes that permitting activity would be constant over time. It is quite possi ble that permit activity for these smaller sources may grow over time with economic growth and will likely vary from year to year due to differences in business activity. However, we do not have sufficient information about these year to year variations nor expected growth in permitting to develop more precise estimates. Given the uncertainty in the annual relief estimat es and the short time frame analyzed (five years), we feel it reasonable to not consider th ese potential yearly fluctuations for the phase-in period. Consideration of growth in permits over ti me would tend to increase the regulatory relief estimates reported for the final rule.
In a similar manner, we do not discount the phase-in regulatory relief to the present in this final report. Since the time period evaluate d varies from annual up to five years, we feel this is a reasonable approach. Discounting the regulatory relief estimat es to present values

would tend to lower the total amount of regulatory relief reported.

Social Cost Limitations and Uncertainties

The social costs of this rule are the fore gone environmental benefits that might occur during the phase-in period absent this rulemaking. This subject is discussed in Section 4 of the

RIA. We are unable to estimate the PSD BACT requirements that would likely occur for the

smaller sources of GHG at this time. Because BACT is a case- by-case decision and evolves over time, because we do not at this time have historical experience with the available controls for94 small-source GHG emissions, and because of the i nherent uncertainty in describing the types of sources that would have triggered BACT abse nt this rule, we cannot quantify the emission reductions that might be feasible or the associat ed pollution control costs. For this reason, the social costs of this rule are discussed qualitatively in this RIA.
Economic Impact Limitations and Uncertainties As previously discussed there is uncertainty in the estimates of sources affected by this final rule and the permitting burden costs used to estimate the benefits (regulatory relief) of this

rule. These uncertainties also affect the economic impact analysis conducted. In the economic impact analysis, we compare the avoided perm it burden cost estimates to average industry revenues in order to gauge the magnitude of regu latory relief for affected sources. We used average industry revenue, and average firm reve nue estimates by firm size to estimate avoidedcost-to-sales ratios due to lack of data specific to the sources actually obtai ning regulatory relief.

The actual benefits to in dividual firms affected by this rule may differ from industry averages.95 Section 9 References

U.S. Census Bureau. Statistics of U.S. Businesses: 2002.

U.S. Department of Labor, Bureau of Labor Statistics. Consumer Price Index 2002-2007. http://www.bls.gov/cpi/.

U.S. Environmental Protection Agency. April 2010. Summary of Methodology and Data Use to Estimate Burden Relief and Evaluate Res ource Requirements at Al ternative Greenhouse Gas Permitting Thresholds. (Appendix C)

U.S. Environmental Protection Agency. Ap ril 2010. Technical Support Document for Greenhouse Gas Emissions Thres hold Evaluation. (Appendix B)

U.S. Environmental Protection Agency. November 2006. Final Guidance for EPA Rulewriters: Regulatory Flexibility Act as Amended by the Small Business Regulatory Enforcement Fairness Act. http://www.epa.gov/sbrefa /documents/rfaguidance11-00-06.pdf.

U.S. Small Business Administration. Table of Small Business Size Standards. Accessed 8/11/08. http://www.sba.gov/idc/groups/public/documen ts/sba_homepage/serv_sstd_tablepdf.pdf.96 Attachment A Source Categories Affected by the Rule with Industry Detail

Table A-1. Title V Sources Expected to Ex perience Regulatory Relief at Alternative Threshold Levels by Industry Category 1

Title V Sources Experiencing Regulatory Relief at Alternative Thresholds

Source Category 25,000 tpy 50,000 tpy Final Rule Step 2 100,000 tpy Final Rule Step 1 Anyway Electricity Generating Units 161 285 285 285 Adipic Acid Production 0 0 0 0
Aluminum Production 0 0 0 0 Ammonia Manufacturing 0 0 0 0
Cement Production 0 0 0 0 Electronics Manufacturing 134 145 177 190 Ferroalloy Production 0 0 0 0
Glass Production 247 247 247 247
HCFC-22 Production 0 0 0 3 Hydrogen Production 33 37 43 61
Iron and Steel Production 0 0 0 0
Lead Production 4 4 4 4 Lime Manufacturing 3 23 29 37 Magnesium Production 0 0 0 0
Nitric Acid Production 1 2 3 18
Petrochemical Production 0 0 0 0
Petroleum Refineries 3 3 3 3 Phosphoric Acid Production 0 0 0 0 Pulp and Paper Manufacturing 0 3 15 160
Silicon Carbide Production 0 0 0 0 Soda Ash Manufacturing 0 0 0 0
Titanium Dioxide Production 0 0 0 0
Zinc Production 3 3 3 3
Ethanol Production 54 54 97 119 Food Processing 3,438 3,438 3,438 3,438 Unspecified Industrial Stationary Combustion (Other Manufacturing and Industrial Facilities) 163,054 165,083 166,661 166,693

Underground Coal Mines 135 160 183 235 Oil and Natural Gas Systems 2,266 2,353 2,353 2,353 Landfills 1,430 2,447 3,164 3,357

MWCs 1 1 1 1 (continued)97 Table A-1. Title V Sources Expected to Ex perience Regulatory Relief at Alternative Threshold Levels by Industry Category (continued)

Title V Sources Experiencing Regulatory Relief at Alternative Thresholds

Source Category 25,000 tpy 50,000 tpy Final Rule Step 2 100,000 tpy Final Rule Step 1 Anyway Stationary Combustion Equipment (Generators) 37,351 37,351 37,351 37,351

All Commercial

— Stationary Fuel Combustion 1,354,760 1,355,321 1,355,870 1,355,921

Multi-Family Fuel Combustion 610,340 610,480 610,500 610,500 Single-Family Fuel Combustion 3,925,000 3,925,000 3,925,000 3,925,000
Total 6,098,352 6,102,374 6,105,361 6,105,913

1 Thresholds are shown as tpy CO 2 e. Attachment B U.S. Environmental Protection Agency. April 2010. “Technical Support Document for Greenhouse Gas Emissions Threshold Evaluation.” See docket at EPA-HQ-OAR-2009- 0517.
2 Modifying PSD sources are also expected to experience regulatory relief, but these estimates are not reflected in this table.98 Table A-2. New PSD Sources Expect ed to Experience Regulatory Relief at Alternative Threshold Levels by Industry Category

New PSD Sources Sources Experiencing Regulatory Relief at Alternative Thresholds 1,2

Source Category 25,000 tpy 50,000 tpy Final Rule Step 2 100,000 tpy Final Rule Step 1 Anyway Electricity Generating Units 20 29 33 93

Adipic Acid Production 0 0 0 0

Aluminum Production 0 0 0 0

Ammonia Manufacturing 0 0 0 0

Cement Production 0 0 0 0
Electronics Manufacturing 0 0 0 0

Ferroalloy Production 0 0 0 0

Glass Production 1 1 1 1
HCFC-22 Production 0 0 0 0 Hydrogen Production 0 0 0 0

Iron and Steel Production 0 0 0 0

Lead Production 0 0 0 0 Lime Manufacturing 0 0 0 0 Magnesium Production 0 0 0 0

Nitric Acid Production 0 0 0 0

Petrochemical Production 0 0 0 0

Petroleum Refineries 0 0 0 0

Phosphoric Acid Production 0 0 0 0

Pulp and Paper Manufacturing 0 0 0 0

Silicon Carbide Production 0 0 0 0

Soda Ash Manufacturing 0 0 0 0

(continued)99 Table A-2. New PSD Sources Expect ed to Experience Regulatory Relief at Alternative Threshold Levels by Industry Category (continued)

New PSD Sources Sources Experiencing Regulatory Relief at Alternative Thresholds 1,2

Source Category 25,000 tpy 50,000 tpy Final Rule Step 2 100,000 tpy Final Rule Step 1 Anyway
Titanium Dioxide Production 0 0 0 0

Zinc Production 0 0 0 0
Ethanol Production 4 4 7 10 Food Processing 41 47 47 47 Unspecified Industrial Stationary Combustion (Other Manufacturing and Industrial Facilities) 529 534 544 546

Underground Coal Mines 0 0 0 0

Oil and Natural Gas Systems 23 38 44 48

Landfills 0 0 0 0

MWCs 0 1 1 2 Stationary Combustion Equipment (Generators) 299 299 299 299

All Commercial - Stationary Fuel Combustion 12,034 12,038 12,039 12,041

Multi-Family Fuel Combustion 6,397 6,400 6,400 6,400

Single-Family Fuel Combustion 515 515 515 515

All 19,863 19,906 19,930 20,002

1 Regulatory alternatives reflect tons per year CO 2 e potential to emit. Attachment B U.S. Environmental Protection Agency. April 2010. “Technical Support Document for Greenhouse Gas Emissions Threshold Evaluation.” See docket at EPA-HQ-OAR-2009-0517.
2 Modifying PSD sources are also expected to experience regulatory relief, but these estimates are not reflected in this table.United States Environmental Protection Agency Office of Air Quality Planning and Standards Health and Environmental Impacts Division Research Triangle Park, NC Publication No. EPA452/R-10-003 April 2010

# Attachment B

Technical Support Document for Greenhouse Gas Emissions Thresholds Evaluation

Air Quality Policy Division Office of Air Quality Policy and Standards

U.S. Environmental Protection Agency

March 29, 2010i Table of Contents

Page

1. Purpose.................................................................................................................... ................... 4

2. Overview................................................................................................................... ................. 4

3. Emissions-based Threshold Analysis ........................................................................................ 5

3.1 General Description of Overall Approach ......................................................................... 5

3.1.1 Threshold Levels ................................................................................................... 5

3.1.2 Greenhouse Gases ................................................................................................. 6

3.1.3 Source Sectors....................................................................................................... 7 3.1.4 Potential to Emit Methodology ............................................................................. 8

3.1.5 New and Modified Sources ................................................................................... 9

3.2 Threshold Summary Results.............................................................................................. 9

3.3 Electricity Generating Sector........................................................................................... 12

3.4 Industrial Sector......................................................................................................... ...... 14

3.4.1 Data Sources........................................................................................................ 17

3.4.2 Potential to Emit.................................................................................................. 17 3.4.3 Methodology for New Units ............................................................................... 17

3.5 Methodology for Existing Unspecified Industrial Stationary Combustion Source Category Emissions ....................................................................................................... 18

3.6 Methodology for Existing Specific Indus trial Sectors Considering Combustion, Process, and Fugitive Emissions.................................................................................... 20ii 3.6.1 Adipic Acid Production....................................................................................... 21

3.6.2 Aluminum Production ......................................................................................... 23

3.6.3 Ammonia Production .......................................................................................... 25

3.6.4 Cement Production.............................................................................................. 26

3.6.5 Electronic Production.......................................................................................... 27

3.6.6 Ethanol Production.............................................................................................. 29 3.6.7 Ferroalloy Production.......................................................................................... 31 3.6.8 Food Processing .................................................................................................. 33 3.6.9 Glass Manufacturing ........................................................................................... 34

3.6.10 HCFC-22 Production......................................................................................... 35 3.6.11 Hydrogen Production ........................................................................................ 37 Table of Contents (cont.)

Page

3.6.12 Iron and Steel Production.................................................................................. 38

3.6.13 Lead Production ................................................................................................ 41

3.6.14 Lime .................................................................................................................. 4 2 3.6.15 Magnesium Production and Processing ............................................................ 43

3.6.16 Nitric Acid Production ...................................................................................... 45

3.6.17 Petrochemical Production ................................................................................. 46

3.6.18 Petroleum Refineries ......................................................................................... 48 3.6.19 Phosphoric Acid Production.............................................................................. 50 3.6.20 Pulp and Paper Manufacturing.......................................................................... 51 3.6.21 Silicon Carbide Manufacturing ......................................................................... 52

3.6.22 Soda Ash Production......................................................................................... 54

3.6.23 Titanium Dioxide Production............................................................................ 55

3.6.24 Zinc Production................................................................................................. 56

3.7 Energy Sector............................................................................................................. ...... 57

3.7.1 Oil and Gas Systems ........................................................................................... 57iii 3.7.2 Underground Coal Mining .................................................................................. 58

3.8 Waste Sector .............................................................................................................. ...... 61

3.8.1 Landfills .............................................................................................................. 6 1 3.8.2 Municipal Solid Waste Combustors.................................................................... 63

3.9 Agriculture (Stationary Fuel Combustion) ...................................................................... 64

3.10 Commercial Stationary Fuel Combustion...................................................................... 66

3.11 Residential Buildings.................................................................................................... . 69

3.11.1 Single-Family Homes........................................................................................ 70 3.11.2 Multi-Family Residential Buildings.................................................................. 71

References..................................................................................................................... ................ 76

Appendix A..................................................................................................................... .............. 81

Appendix B ..................................................................................................................... .............. 824 Technical Support Document for Permit Thresholds for Greenhouse Gases

1. Purpose

The purpose of this document is to provide the background information that was used to support EPA's decision process on evaluating a nd selecting greenhouse gas (GHG) major source applicability thresholds for Prevention of Significant Deterioration (PSD) and Title V permitting for EPA’s final rule “Prevention of Signifi cant Deterioration and Title V Greenhouse Gas Tailoring Rule”. The document describes the analysis used to estimate the number of existing and new facilities (e.g., industrial plant or comm ercial building) that would exceed different GHG emission threshold levels. The document also summarizes the results of this analysis for each sector. The results of this analysis served as one of the fundamental bases for evaluating administrative burdens at both existing permitting thresholds and for evaluating and selecting proposed alternative permitting thresholds to address administrative necessity concerns.

2. Overview

In order to support EPA's assessment of th e administrative burden created by adding GHGs to existing Prevention of Significant Deterioration (PSD) and Title V permitting programs, it was necessary to deve lop information on the number of affected facilities at both the current permitting major source thresholds (gener ally, 100 tons per year for Title V and 100 or 250 tons per year for PSD depending on the source category classification) and at alternative higher thresholds. An affected facility would be one who's annual emissions of the GHG equal or exceed the major source threshold being evaluated.

Eight threshold levels rangi ng from 100 to 100,000 tons per year of GHG emissions were evaluated. Some of the altern ative thresholds evaluated are th e same as ones (e.g., 25,000 tons per year CO 2 -equivalents) considered in previous studi es and in support of EPA's proposed and final GHG mandatory reporting rules (GHG M RR, 74 FR 68, pp. 16447 – 16731 and 74 FR 209, pp. 56260-56519, respectively). One key differen ce between the emissions data developed for this analysis and the emissions data develope d to support the proposed GHG MRR is that this analysis is based on a facility's "potential to emit" (PTE) while the proposed GHG reporting rule was based on "actual" emissions (i.e., the emissions a facility actually emits in a given year). PTE is defined as the maximum capacity of a stationary source to emit a pollutant under its physical and operational design, including certain legal limitations , for example, on emissions or hours of operation. NSR and Title V programs both use PTE for defining major sources. The end result is generally that more facilities will exceed a given threshold on a PTE basis than on an actual basis. This is an important differen tiation in terms of both ev aluating the thresholds under this rule and when compari ng the results to other threshold analysis, such as the supporting data for the EPA's GHG MRR.5 Although the primary focus of this analys is was on the potential administrative burden associated with different GHG permitting emission levels as represented in terms of number of facilities potentially subject to permitting, inform ation on GHG emissions from affected facilities was also collected to assess the relative covera ge of national stationary source GHG emissions at the different threshold levels. While the environmental impact associated with the different GHG permitting levels was not used as the basis fo r the GHG applicability thresholds identified in the final GHG tailoring rule, the information on national emissions coverage provides a useful measure to consider the potential scope of the pr oposed alternative thresh olds, their coverage of key GHG emission source categories, and whether th ey promote the environmental purposes of the PSD and Title V programs.

3. Emissions-based Threshold Analysis

3.1 General Descriptio n of Overall Approach

This section presents a general description of the overall approach EPA used to evaluate a range of permitting thresholds in terms of the number of sources affected, and amount of emissions covered.

EPA made use of earlier analyses performed to develop emission thresholds for the proposed and final GHG MRR, or used the same data sources when additional analyses were required. EPA did not conduct primary research fo r this analysis, but instead relied on published research and publicly available government data, such as EPA's eGRID database of electric generating source emissions, Economic and Hous ing Census data, and Energy Information Agency (EIA) data on energy consumption.

3.1.1 Threshold Levels

EPA evaluated eight different GHG emission thresholds:

GHG Thresholds (tons per year )

100 250 1,000 5,000 10,000 25,000 50,000 100,000

The first two thresholds are the current Clean Air Act major source criteria pollutant thresholds for the federal operating permit progr am under Title V (generally, 100 tpy for major6 source applicability), and the PSD constructi on permit program under T itle I. Under PSD, a "major stationary source" is a ny source belonging to a specifie d list of 28 source categories which emits or has a PTE of 100 tpy or more, or any other source type which emits or has the potential to emit such pollutants in amount s equal to or grea ter than 250 tpy.

The six additional thresholds cover the range of thresholds evaluated for the proposed GHG MRR, and add two additional thresholds at 5,000 and 50,000 tons per year. Like the Clean Air Act, the permit thresholds are based on U.S. s hort tons (tons) instead of metric tons (mtons).

There is a three-orders-of-magnitude range in the thresholds which reflects the much higher quantity of GHG emissions compared to cr iteria pollutant emissions from the primarysource of GHG emissions, fossil fuel combustion. For example, an uncontrolled natural gasfired boiler that emits 100 tons of NO x annually would at the same time emit about 100,000 tons of CO 2
. The threshold analysis of source counts a nd emissions was done on a "potential to emit" basis, because that is the basis that is re levant for the permitting requirements under PSD and title V. Potential emissions (in short tons) from each source were evaluated against the threshold levels in order to determine whether or not a source would be included in the threshold count. When a source was identified as being cove red by a given threshold level, the actual emissions from that source were included to determine the emissions covered by the threshold. In other words, where summary tables present "Tg GHG Emissions Covered per Year" these are the actual emissions that would be covered by the thre shold level, given the source count arrived at considering potential to emit emission levels.

3.1.2 Greenhouse Gases

EPA evaluated emissions of the major GHGs that are directly emitted by human activities at the eight threshold levels. The GHGs evaluated are shown below in Table 1. For purposes of this analysis emissions were evaluated on both an individual GHG mass basis and CO 2 - equivalent basis (CO 2 e). CO 2 e normalizes the different heat tr apping capacities of the different GHGs to that of CO 2 . A quantity of a GHG is converted to a CO 2 e basis by multiplying the mass of the compound emitted by its Global Warming Pote ntial (GWP). The GWP is a metric that incorporates both the heat-trapping ability a nd atmospheric lifetime of each GHG relative to CO 2
.7 Table 1 Major GHGs Directly Emitte d by Human Activities

Greenhouse Gas Chemical Formula or Acronym Global Warming Potential (GWP)*

Carbon dioxide CO 2 1

Methane CH 4 21

Nitrous oxide N 2 O 310
Perfluorocarbons PFCs Varies by compound
Hydrofluorocarbons HFCs Varies by compound

Sulfur hexafluoride SF 6 23,900

* GWP values as codified in the EPA’s final GHG mandatory

reporting rule: Table A-1 to Subpart A of Part 98 – Global Warming Potentials, FR, Vol.74, No. 209, p. 56395.

Sector descriptions contai ned in this document include a discussion of GHGs evaluated for each sector. If the analys is included more than one GHG, the description includes gasspecific counts as well as a CO 2 e count. The threshold analyses for stationary fossil fuel combustion were simplified by excluding CH 4 and N 2 O emissions, because CO 2 comprises over 99 percent of GHG emissions fr om fossil fuel combustion.

3.1.3 Source Sectors

In this analysis EPA evaluated the same range of stationary source types with direct GHG emissions as identified in the proposed and final GHG MRR. The proposed GHG MRR source categories were based on a comprehensive revi ew of all U.S. sour ce categories with GHG emissions, to include the categories that emit the most significant amount of GHG emissions. The stationary sources evaluated in this analys is can be grouped in th e sectors shown below:

● Electricity Generation (facilities with fossil fuel-fired electric generating units);

● Industry (range of industries with process and combustion GHG emissions);

● Energy (oil and gas extracti on, transport, and processi ng; underground coal mining);

● Waste Treatment (landfills and municipal solid waste incinerators);

● Agriculture (stationary fuel combustion);

● Commercial (stationary fuel combustion); and

● Residential (stationary fuel combustion).8 A number of direct emission source types included in the GHG MRR analysis were not included in the potential to emit analysis becau se the GHG emissions from these sources were primarily fugitive emissions. Fugitive emissions are emissions which are not released, or could not be reasonably released, through a stack or ve nt. Under the PSD rules, fugitive emissions are only included in potential to emit estimates if the source is one of 28 listed PSD source categories. Excluded fugitive emissions sources are listed below:

● Electrical equipment SF 6 emissions;

● Wastewater treatment plants not associated with one of 28 liste d PSD source categories (combustion is captured in the co mmercial sector analysis); and

● Agricultural manure management.

3.1.4 Potential to Emit Methodology

As noted earlier, the potentia l to emit (PTE) is the amount of emissions that can be emitted from a source operating at full capacity. The annual PTE is based on operation at full equipment capacity, 24 hours per day, 365 days per ye ar (8,760 hours per year). For example, if a boiler has a maximum rated heat input capacity of ten million Btu per hour, the annual PTE for that boiler is the amount of emissions from burning 87,600 million Btu of fuel:

10 mmBtu/hr x 8,760 hrs/yr = 87,600 mmBtu/yr

Capacity information and annual GHG emissions were available for some of the source categories from analyses performed to support the GHG MRR. In some cases the supporting analyses had already calculated GHG emissions on a full capacity basis, in which case EPA directly used those estimates as PTE estimates. Alternatively, some data from the supporting analysis estimated actual annual emissions using a baseline year. If capacity and baseline year production information was provided in the supporting data, EPA adjusted the source actual emissions estimate by the ratio of annual capacit y to baseline production to estimate PTE. If capacity information was not available, EPA used capacity factors from other data sources to adjust actual emission estimates to PTE estimates. These capacity factors add varying uncertainty to the PTE estimate. Detailed de scriptions of the diffe rent PTE calculation methodologies are included in the source descriptions in the following section.

Removal by pollution control equipment was considered in the PTE estimates, though control equipment removal was re levant in only a few cases (t hermal oxidation of HPCs and CH 4 ). Also, as noted earlier, fugitive emissions, were only included in the PTE estimates if the source was one of the 28 listed PSD source categories. For example, fugitive CH 4 emissions from oil and gas transmission stations were not included in CH 4 or CO 2 e emissions when comparing to the different thresholds, but were included for iron and steel plants.9 3.1.5 New Construction

The source population data from the analyses supporting the GHG MRR, and other data sources provide information on existing sources and their emissions. The PSD and title V program requirements and applicability determinations, however, also apply to newly constructed sources.

The general approach for estimating the annua l number of newly constructed sources was to apply growth rates in the number of units or f acilities in a source category to the number of existing facilities at the different thresholds. Growth rates were available from a variety of sources including Economic Census data, EIA en ergy survey data, and various EPA regulatory impact analyses and information collection requ ests which require source population estimates. In some cases there was sufficient information to distribute new sources to different thresholds based on emission information specific to the new sources (electric generating, municipal solid waste combustors, and commercial stationary fuel combustion). Otherwise EPA assumed the same size and threshold distribution for new units as for existing units. For example, if the annual growth rate in a category was one percen t, the number of existing facilities above a threshold were multiplied by the fractional growth ra te to estimate the numbe r of new facilities at that threshold per year.

EPA did not develop estimates for modificat ions to exsiting sources (which can be potentially subject to PSD requirements) as pa rt of this threshold study; estimates for modifications were prepared under a separate burden analysis prepared for the final GHG tailoring rule and located in the final docket for the rulemaking 13

. 3.2 Threshold Summary Results

The resulting counts of affected stationary source facilities and the amount of actual GHG emissions covered at different PTE thresholds for all sectors are shown in the tables below. GHG emissions covered at each thres hold are in Tg, which is equiva lent to million metric tons. SI units were used for the cove red emissions to be consistent with the EPA’s official U.S. GHG Inventory so that comparions could be made to the inventory in terms of emissions coverage at different applicability thresholds. The complete data for the sectors a nd subsectors are provided in supporting spreadsheets that accompany this report. These spreadsh eets are identified in Appendices A and B.

13 See “Summary of Methodology and Data Used to Estimat e Burden Relief and Evaluate Resource Requirements at Alternative Greenhouse Gas (GHG) Permitting Thresholds” contained in the public docket for the final tailoring rule at EPA-HQ-OAR-2009-0517.10 Table 2 CO 2 e Threshold Summary -- All Stationary Source Sectors

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 e Emissions Covered (Tg per year)

100 6,118,252 67,469 3,867

250 1,079,483 19,755 3,786

1,000 302,863 4,430 3,723

5,000 59,140 549 3,622

10,000 30,341 313 3,564

25,000 16,564 140 3,493

50,000 9,980 96 3,387

100,000 5,326 72 3,267

Table 3 CO 2 Threshold Summary -- All Stationary Source Sectors

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 Emissions Covered (Tg per year)

100 6,113,861 67,469 3,651

250 1,075,078 19,755 3,570

1,000 298,527 4,430 3,513

5,000 55,313 549 3,413

10,000 26,836 313 3,357

25,000 13,637 139 3,293

50,000 8,109 96 3,212

100,000 4,226 72 3,11411 Table 4 CH 4 Threshold Summary -- All Stationary Source Sectors

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CH 4 Emissions Covered (Tg per year)

100 4,201 0 7.807

250 3,851 0 7.759

1,000 2,887 0 7.321

5,000 1,042 0 4.740

10,000 466 0 3.697

25,000 138 0 2.234

50,000 34 0 1.185

100,000 3 0 0.211

Table 5 N 2 O Threshold Summary -- All Stationary Source Sectors

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year N 2 O Emissions Covered (Tg per year)

100 47 0 0.074

250 46 0 0.074

1,000 31 0 0.068

5,000 5 0 0.022

10,000 0 0 0

25,000 0 0 0

50,000 0 0 0

100,000 0 0 012 Table 6 High GWP Gases Threshold Summary -- All Stationary Source Sectors

GHG GHG Threshold* (tons per year) Number of Existing Sources Number of New Facilities Added per Year GHG Emissions Covered (Tg per year)

HFC 100 3 0 0.001

HFC 250 3 0 0.001

HFC 1,000 1 0 0.001

HFC 5,000 and above 0 0 0

PFC 100 and above 0 0 0

SF 6 100 and above 0 0 0

* Where a threshold is not listed for a particular GHG, threshold counts for that threshold and any higher

thresholds can be assumed to be zero.

3.3 Electricity Generating Sector

Data Sources

The latest version of EPA's eGRID database (2006) was used to estimate the PTE of electricity generating facilities and counts of units above the diffe rent emission thresholds. The eGRID database includes year 2004 characteristics, operating information, and annual emissions (including CO 2 ) for U.S. facilities that have a genera tion capacity greater than one MW, and sell electric power to the grid.

A facility's PTE was estimated based on the eGRID generator table. The generator table, which is based on the 2004 EIA form 860 database , provides prime mover, generator nameplate capacity, and primary energy source (fuel type ) for each generator down to 0.1 MW. To calculate PTE, we combined the nameplate capacity and primary fuel for each of the fossil-fired units with average fuel based prime mover heat rates (Btu/kWh) published by EIA (EIA, 2007).13 Table 7 EGU Prime Mover Heat Rates (EIA Electric Power Annual, Table A7, 2007)

Prime Mover Fuel Average Heat Rate (Btu/kWh)

Coal 10,114

Gas 10,466 Steam turbine

Oil 10,400

Gas 11,459 Simple combustion turbine Oil 13,216

Gas 7,445 Combined cycle combustion turbine Oil 11,015

Gas 9,923 Internal combustion engine Oil 10,149

The eGRID database includes cogeneration plants and generating units at industrial plants that primarily supply electric power and steam to a host facility. We eliminated these units from the electric generation facility population based on North American Industry Classification System (NAICS) code, so that the on ly facilities included we re facilities with a NAICS code beginning with 22 (Utilities).

The generator-nameplate-heat-rate appr oach potentially underestimates PTE for cogeneration plants, where a por tion of the burner heat input pr ovides useful thermal energy in addition to electric output. This potential to underestimate PTE affects 321 of 2,237 or 14 percent of facilities evaluated.

Methodology for Existing Facilities

Fuel combustion was the only source of GH G emissions considered for the electricity generation sector. From the eGRID and EIA information EPA calculated a maximum annual fuel heat input based on 8,760 hours of operati on for the combustors associated with the generator. This calculated ma ximum annual heat input was used with fuel combustion emission factors from the GHG MRR for the primary fuel, to calculate the facility PTE. The calculations covered 10,487 fossil fuel-fired generators with nameplate capacities down to 0.1 MW or 100,000 kW.

EPA also did not evaluate fugitive CH 4 emissions from facility coal piles. Fossil fuelfired steam electric plants with heat input greater than 250 mmBtu /hr heat input are one of the 28 listed PSD source categories that include fugitiv e emissions when calculating PTE. However, the CO 2 PTE from combustion alone for this size facili ty is about 225,000 tons per year. This is14 well over all of the emission thresholds considered in this analysis without consideration of the contribution of fugitive CH 4
.

New Units

The eGRID generator table includes an online year field. To determine the number of new units per year at different thresholds EPA counted generators online each year and totaled the emissions associated with those generators at the facility level over the 15-year period from 1990 through 2004. Counts were made of the number of these facilities over the different PTE thresholds, and averaged over the 15 years to arrive at the number of new or modified facilities
per year.

Threshold Summary

The table below shows the facilities and emissions covered at the different emission thresholds based on the described methodology. There were a total of 2,237 facilities in the electric generation population, so all facilities and all emission s are covered up to the 5,000 ton PTE threshold. Almost all emissions (99.9 pe rcent), and about 75 percent of facilities are covered at the highest 100,000 ton PTE threshold.

Table 8 CO 2 Threshold Summary Results -- El ectricity Generating Sector

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 Emissions Covered (Tg per year)

100 2,237 93 2,373

250 2,237 93 2,373

1,000 2,237 93 2,373

5,000 2,237 91 2,373

10,000 2,195 86 2,373

25,000 2,076 73 2,373

50,000 1,911 64 2,373

100,000 1,721 60 2,371

3.4 Industrial Sector

The industrial sector comprises establishmen ts engaged in the mechanical, physical, or chemical transformation of materials, subs tances, or components into new products, and specifically includes businesses classified in Sectors 31 – 33 according to the North American15 Industry Classification System (NAICS). Industrial source greenhouse gases result from manufacturing processes as well as combustion pr ocesses. Because there is a great deal of variability within th e sector, this techni cal support document includes industry-specific discussions after a general sector overview.

For the industrial sector, EPA considered th e six individual greenhouse gases separately, and also prepared an analysis considering CO 2 e. In preparation of the GHG MRR, EPA identified 23 industrial sect ors where the GHG emissions were significant; these sectors are listed in Table 9.16 Table 9 Industrial Sectors and GHG Emissions

NAICS Code Industrial Sector CO 2 CH 4 N 2 O SF 6 HFC PFC
325199 Adipic Acid Production X X

331312 Aluminum Production X X

325311 Ammonia Production X

327310 Cement Production X
334 Electronics Manufacturing X X X X

325193 Ethanol Production X
331112 Ferroalloy Production X X
3116 Food Processing X

327 Glass Production X

325120 HCFC-22 Production X X
Hydrogen Production X

331111 Iron and Steel Production X X

3314 Lead Production X
327410 Lime Manufacturing X
3314 Magnesium Production X X

325311 Nitric Acid Production X X

3251 Petrochemical Production X X

324110 Petroleum Refineries X X
325312 Phosphoric Acid Production X
3221 Pulp and Paper Manufacturing X

327910 Silicon Carbide Production X X
325181 Soda Ash Manufacturing X

325188 Titanium Dioxide Production X

3314 Zinc Production X

In addition, there are a large number of i ndustrial establishments across all industrial sectors that emit less significant amounts of GHGs (primarily CO 2 ) from stationary source fuel combustion. Combustion emissions from thes e establishments were analyzed under the Unspecified Industrial Stationary Combustion source category.17 3.4.1 Data Sources

There were several primary data sources us ed in preparation of the permit threshold analysis. EPA consulted analyses prepared in support of the GHG MRR for the 23 industrial sectors for which combustion, process and fugitive emissions were significant. These documentscan be found in the docket numbered EPA-HQ-OAR-2008-0508. The TSDs contain industryspecific analyses of process, fugitive, and combustion emissions for industries. Supporting analyses used to prepare the TSDs are f ound in entries 0046.7 and 0046.8 of the GHG MRR docket. These emissions estimate details were helpful in breaking down TSD emission estimates to compare facility-specific emissions against th e additional threshold levels considered in the permit threshold analysis, including 100, 250, 5,000, and 50,000 tons per year.

Combustion emissions analyses for the Unsp ecified Industrial Stationary Combustion sectors used data from the 2002 Manufacturi ng Energy Combustion Survey (MECS) and the U.S. Census Bureau's 2002 Economic Census. MECS is a survey of manufacturing and industrial energy uses and cost s prepared by the EIA (EIA, 2007) . Data is collected by manufacturing establishment through mailed qu estionnaires. The 2002 MECS data reflects responses accounting for approximately 98 percen t of the manufacturing payroll, and reports separate energy use estimates for 48 NAICS in dustrial sector groups. The MECS provided information on the amount of fuel burned in 2002 by sector on an employment basis. The 2002 Economic Census data provided information on th e number of establishments sorted by threedigit NAICS code and disaggregated into specif ic size categories based on employment (U.S. Census, 2004).

3.4.2 Potential to Emit

As mentioned earlier in this document, perm it threshold analyses considered both actual emissions and PTE. When capacity informati on was not available, the analyses applied utilization rates from the I ndustrial Production and Capacity Utilization, Federal Reserve Statistical Release G-17 in order to adjust actual emissions to determine PTE emissions. These utilization rates are prepared quarterly with annual revisions, and are published on the web ( http://www.federalreserve.gov/releases/g17 ). The main data source for the industrial production and capacity utilization rates is the U.S. Cens us Bureau's Census of Manufactures. Data introduced from other Census Bureau publicatio ns include the Census of Services and the Services Annual Survey (for publishing) and se lected Current Industrial Reports. Additional government source data include new annual data on minerals from the U.S. Geological Survey (USGS) and updated deflators from the Bureau of Economic Analysis (BEA). In addition, the annual revisions include monthly production estimates that refl ect updated seasonal factors and the inclusion of monthly source data that became av ailable (or were revised) after the closing of the regular four-month reporting window.

3.4.3 Methodology for New Units18 To determine the number of new units per year, EPA compared the number of establishments by three-digit NAICS code in 1998 to the number of establishments by three-digit NAICS code in 2002, and determined an average annual growth rate for each three-digit NAICS code. The growth rates were applied to each th reshold count to determine the number of annual new establishments per industry per threshold. If the growth rate was determined to be negative, EPA assumed that no new establishments would be added; however, establishments were not reduced to reflect negative growth rates. EPA also supplemented these growth rates with agency estimates of expected new sources from vari ous information collection requests (ICR) and regulatory impact analyses (RIA) efforts.

3.5 Methodology for Existing Unspecified Industrial Stationary Combustion Source Category Emissions

In order to determine establishment count s and emissions totals for the unspecified industrial stationary combustion sources, EPA used 2002 Economic Census data showing manufacturing employment by NAICS code a nd Manufacturing Energy Consumption Survey (MECS) data published by EIA. Calculating greenhouse gas emissions required determining energy consumption per employee by industry and applying emission factors specific to the consumption profile derived from MECS data.

The Economic Census data (2002) provide a count of establishments by employment category, where employment category is define d by number of employees (e.g., 1 – 4, 5 – 9,...,500 – 999,...,more than 2,500). The MECS energy consumption data provide energy consumption by industry. Both the employment data and the energy consumption data are organized according to the NAICS codes.

As part of this analysis, EPA calculated industry-specific GHG emission factors. The factors were calculated by consid ering actual fuel consumption in 2002, as determined by EIA. Actual fuel consumed was multiplied by fuel-s pecific GHG emission factors to determine GHG emissions by fuel type by industry. To simplify the analysis, EPA only included CO 2 emissions and ignored CH 4 and N 2 O in the CO 2 e calculations. CO 2 makes up between 99.3 and 99.7 percent of estimated CO 2 e emissions. Emissions for each fuel type were combined to determine total emissions for a sector. Total emissi ons per sector were divided by total energy consumption per sector to determine a factor to calculate GHG emissions per mmBtu of energy consumption specific to the industrial sector.

The GHG emission factors were then multiplied by the energy consumption per employee in order to determine emissions per em ployee. Multiplying the result by the average number employees per establishment, EPA determ ined total GHG emissions per establishment. The total emissions numbers were used to dete rmine number of establishments and volume of emissions that would be caught by each of th e permit thresholds under consideration.

As discussed previously, a separate thres hold analysis was conduc ted for 23 industrial sectors determined to have significant GHG emi ssions in the GHG MRR analysis. In order to quantify the unspecified industr ial stationary com bustion source emissions, the combustion19 emissions and establishment counts from 19 of th ese sectors were subtracted from the total industrial MECS analysis. For the remaining four industries, HCFC-22 production, hydrogen production, magnesium production, and nitric acid production, EP A could not readily isolate combustion emissions. For these industries, their establishment counts were subtracted from the unspecified industrial so urce threshold counts based on proce ss emission threshold evaluations, assuming that any facility exceeding a threshold for process-based emissions would exceed the threshold regardless of their combustion CO 2 emissions.

Potential to Emit

In order to determine potential to emit from the MECS and Economic Census numbers, EPA assumed a capacity utilization factor of 50%. There is a wide variety of generally smaller manufacturing sources included under this general source ca tegory. Based on comments we received on the proposed GHG tailoring rule, we are using a 50% capacity util ization rate for this final analysis to better reflect what can be deemed reasonable operation under normal conditions for facilities in these source categories. Sour ces may operate their combustion equipment at levels above and below this capacity utilization rate, but we believe th e 50% utilization rate reflects a reasonable average rate across the variety of facilities represented in this category.

New Units

EPA applied industry-specific growth rates to each sector and summed across sectors in order to determine number of new units.

Threshold Summary20 Table 10 CO 2 e Threshold Summary -- Unspecified Industrial Stationary Combustion

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 e Emissions Covered (Tg per year)

100 172,142 546 372.307

250 112,659 319 367.636

1,000 64,535 239 357.855

5,000 20,785 83 318.759

10,000 12,215 61 289.198

25,000 5,875 18 245.579

50,000 3,272 12 206.881

100,000 958 2 145.106

3.6 Methodology for Existing Specific I ndustrial Sectors Considering Combustion, Process, and Fugitive Emissions

These analyses were based primarily on the GHG MRR TSDs and the supporting analyses, including facility spec ific emission information. The estimates considered each greenhouse gas separately. The GHG MRR TSDs included threshold counts and emissions calculations for 1,000, 10,000, 25,000, and 100,000 metric tons per year. Two steps were required for permit threshold consideration. Firs t, emissions were recalculated in order to conduct the analysis in short tons for comparison to the permit thresholds. Second, the emissions were considered against the finer threshold st ratification considered in the permit threshold analysis.

For the permit threshold analysis, EPA de termined that if the GHG MRR analysis showed all of the establishments exceeded a thres hold, after adjustment for short tons, all of the establishments exceeded any lower thresholds. However, where fewer than 100 percent of the establishments exceeded a threshold, additional analysis was required to compare emissions to the permit thresholds of 100, 250, 5,000, and 50, 000 tons per year. EPA used the supporting summaries for the GHG MRR which included faci lity-specific consumption, process, and fugitive emission reports in order to determin e counts and emissions for each of the permit thresholds.21 3.6.1 Adipic Acid Production

There are four Adipic Acid Production plants in the U.S., all of which are estimated to exceed the highest 100,000 metric tons per year emission threshold for CO 2 e on an actual emissions basis. Therefore all plants will also exceed all PTE thresholds on a CO 2 e basis. The CO 2 e emission estimate includes N 2 O process emissions that total about 5.9 million metric tons CO 2 e, and 3.4 million metric tons of CO 2 from stationary fuel combustion sources.

N 2 O

Individual plant production and emission estima tes were not made available because of confidential business information (CBI) claims. However, from the Technical Support Document for the Adipic Acid Production Sect or: Proposed Rule for Mandatory Reporting of Greenhouse Gases (EPA-HQ-OAR-2008-0508-0005), overall U. S. adipic acid production was estimated to total approximately one million metric tons in 2006. The smallest U.S. plant only produced about two percent of the total. This plant, however, is the only plant that is uncontrolled. The three larger plants with the bulk of production have control equipment with N 2 O control efficiencies that ra nge from 90 to 99 percent.

The uncontrolled N 2 O emission factor is 300 kg N 2 O/mton adipic acid. Based on the two percent production share, this uncontrolled plant emitted about 6,000 metric tons of N 2 O (no GWP adjustment). This leaves about 13,100 metric tons of N 2 O from the three larger controlled plants. Two plants representing about 64 percent of pr oduction have control efficiencies in the range of 90 to 95 percent, and one plant with a bout 34 percent of productio n has control close to 99 percent (EPA, 2001).

Assuming similar production shares today, the share of national production (which is assumed for this analysis to be equivalent to capacity) appears to range from 30 to 35 percent for the three plants. Therefore, emissions and P TE for the controlled plants range from to 4,000 metric tons to 4,700 metric tons of N 2 O per year.

CO 2

The CO 2 emissions from fuel combustion can similarly be apportioned to the four plants. The smallest plant, with only two percent of national production, is estimated at CO 2 emissions of 67,500 metric tons, and the next smallest, with 30 percent of national production, is estimated at 101,300 metric tons.

Potential to Emit

The PTE for each facility was assumed to be equivalent to the emissions based on the apportionment described above.

New Units

EPA assumed that no new plants woul d be constructed for this sector.22 Threshold Summary

Table 11 CO 2 Threshold Summary -- Adipic Acid Production

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 Emissions Covered (Tg per year)

100 4 0 3.376

250 4 0 3.376

1,000 4 0 3.376

5,000 4 0 3.376

10,000 4 0 3.376

25,000 4 0 3.376

50,000 4 0 3.376

100,000 3 0 3.309

Table 12 N 2 O Threshold Summary -- Adipic Acid Production

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year N 2 O Emissions Covered (Tg per year)

100 4 0 0.019

250 4 0 0.019

1,000 4 0 0.019

5,000 1 0 0.006

10,000 0 0 0

25,000 0 0 0

50,000 0 0 0

100,000 0 0 0

Table 13 CO 2 e Threshold Summary -- Adipic Acid Production23 GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 e Emissions Covered (Tg per year)

100 4 0 9.298

250 4 0 9.298

1,000 4 0 9.298

5,000 4 0 9.298

10,000 4 0 9.298

25,000 4 0 9.298

50,000 4 0 9.298

100,000 4 0 9.298

3.6.2 Aluminum Production

The primary aluminum production process results in emissions of CO 2 and PFCs. The reduction of the alumina occurs through electrolys is in a molten bath of natural or synthetic cryolite (Na 3 AlF 6 ). The reduction cells contain a carbon li ning that serves as the cathode. Carbon is also contained in the anode, which can be a carbon mass of paste, coke briquettes, or prebaked carbon blocks from petroleum coke. Duri ng reduction, most of the carbon in the anode is oxidized and released to the atmosphere as CO 2
.

Potential to Emit

CO 2

The Technical Support Document for Process Emissions from Primary Production of Aluminum: Proposed Rule for Mandatory Reporting of Greenhouse Gases (EPA-HQ-OAR2008-0508-0006) apportioned CO 2 emission estimates from the U.S. GHG inventory to the 13 operating smelters based on each smelters share of total capacity. Operating smelter emissions were all above 100,000 tons of CO 2 , so no PTE estimate was required. Capacity information for the two idle smelters shows that these smelters are also capable of emitting over 100,000 tons of CO 2 per year.

PFCs

The reduction cells also emit tw o PFCs: perfluoromethane (CF 4 ) and perfluoroethane (C 2 F 6 ). The GWPs of the two PFCs are 6,500 an d 9,200 respectively. During the smelting process, when the alumina ore content of the electrolytic bath falls below critical levels required for electrolysis, rapid voltage in creases occur, which are termed "anode effects." Anode effects24 cause carbon from the anode and fluorine from th e dissociated molten cryolite bath to combine, and produce fugitive emissions of CF 4 and C 2 F 6
. Anode effects released approximate ly 2.5 million metric tons of CF 4 and C 2 F 6 in 2006 as documented in the GHG MRR TSD. CF 4 made up at least 85 percent of the combined emissions in 2006 (Inventory of U.S. GHG Emissions a nd Sinks: 1990 – 2007). These emissions on a CO 2 e basis are equivalent to about 410 short tons of combined emissions as PFC. The proposed GHG MRR TSD estimated CO 2 e emissions from primary aluminum smelters at full capacity. The largest smelter has 11 percent of U.S. opera ting capacity. Therefore the largest smelter has a PTE of not more than 45 tons of PFC, and no facilities have a PTE greater than 100 tons.

New Units

No new primary aluminum facilities are expected to be built. The growth rate in primary metals from the Economic Census data is only about 0.4 percent.

Threshold Summary

Threshold summaries are displayed below for CO 2 and CO 2 e. All facilities have a PFC PTE less than 100 tons per year on a PFC basis.

Table 14 CO 2 Threshold Summary -- Primary Aluminum

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year GHG Emissions Covered (Tg per year)

100 15 0 3.800

250 15 0 3.800

1,000 15 0 3.800

5,000 15 0 3.800

10,000 15 0 3.800

25,000 15 0 3.800

50,000 15 0 3.800

100,000 15 0 3.80025 Table 15 CO 2 e Threshold Summary -- Primary Aluminum

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year GHG Emissions Covered (Tg per year)

100 15 0 3.951

250 15 0 3.951

1,000 15 0 3.951

5,000 15 0 3.951

10,000 15 0 3.951

25,000 15 0 3.951

50,000 15 0 3.951

100,000 15 0 3.951

3.6.3 Ammonia Production

EPA reviewed the proposed Supporting Data for Threshold Analysis Subpart E – W, Greenhouse Gas Mandatory Reporting Rulemaking , March 10, 2009 (EPA-HQ-OAR-2008- 0508-0046.7) to determine actual emissions and ca lculate the potential to emit for 24 ammonia plants in operation. The an alysis spreadsheet details CO 2 actual emission calculations for each plant based on ammonia producti on and urea production, and CO 2 , CH 4 , and N 2 O emission calculations for stationary fuel combustion base d on 2006 data. For purposes of permit threshold analysis, the CH 4 and N 2 O emissions from combusti on were not significant.

Potential to Emit

Capacity information in the spreadsheet is based on the engineering design capacity adjusted for 340 days per year of effective pr oduction capability, using information provided by the United States Geological Survey (USGS). The PTE estimates were made by multiplying the actual emission estimates by the ratio of annual ammonia capacity to annual ammonia production adjusted to 365 days a year of operati on instead of 340. EPA assumed that ratio also held for stationary combustion units at the plant.

New Units

EPA assumed that no new plants woul d be constructed for this sector.26 Threshold Summary

Table 16 CO 2 e Threshold Summary -- Ammonia Production

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 e Emissions Covered (Tg per year)

100 24 0 14.543

250 24 0 14.543

1,000 24 0 14.543

5,000 24 0 14.543

10,000 24 0 14.543

25,000 24 0 14.543

50,000 24 0 14.543

100,000 22 0 14.540

3.6.4 Cement Production

Process-related CO 2 emissions from cement production are the second largest source of industrial CO 2 emissions in the United States. Cement production is done in two stages. The first stage is clinker production. In clinker production, raw ma terials (primarily limestone) are heated to induce calcination and produce lime. Lime reacts with silica-containing materials and iron ore and aluminum to form c linker. During the process, CO 2 is generated as a byproduct and released to the atmosphere. Also during clinke r production, some of the clinker raw materials form partially or fully calcinated cement kiln dust instead of forming clinker, resulting in additional process-related CO 2 emissions. In the second stag e of the production process, the clinker is ground and mixed with gypsum and other materials to make cement.

Potential to Emit

The Technical Support Document for Process Em issions from Cement: Proposed Rule for Mandatory Reporting of Greenhouse Gases (EPA-HQ-OAR-2008-0508-0008) shows 107 cement facilities in the U. S., 106 of which exceed all permit thresholds for CO 2 (according to the TSD, the one facility that does not exceed the 100,000 tons per year threshold accounted for over 90,000 metric tons of CO 2 e and approximately one-tenth of one percent of the cement industry emissions in 2006).

New Units27 Growth for the industrial sector was estimated at 0.4 percent, and as such, no additional facilities were included in this analysis.

Threshold Summary

Table 17 CO 2 e Threshold Summary -- Cement Production

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 e Emissions Covered (Tg per year)

100 107 0 86.83

250 107 0 86.83

1,000 107 0 86.83

5,000 107 0 86.83

10,000 107 0 86.83

25,000 107 0 86.83

50,000 107 0 86.83

100,000 106 0 86.74

3.6.5 Electronic Production

The Technical Support Document for Process Em issions from Electronics Manufacture (Semiconductors, MEMs, Liquid Crysta l Displays, and Photovoltaics) (EPA-HQ-OAR-2008- 0508-0009) examined emissions of high GWP ga ses for semiconductor and related industry plants. Emissions from stationary fuel comb ustion were not included in the source category analysis, but were instead captured by the unspeci fied industrial stationary combustion analysis. EPA has followed this approach here as well.

Approximately one million metric tons of SF 6 as CO 2 e were emitted from the semiconductor industry in 2006 (Inventory of U. S. Greenhouse Gas Emissions and Sinks: 1990 – 2007). This is equivalent to 46 short tons of SF 6 . The semiconductor industry uses multiple long-lived fluorinated gases in plasma etching and plasma enhanced chemical vapor deposition (PECVD) processes to produce semiconductor produc ts. These include PFCs, which are also used as heat transfer fluids. Approximately 3.5 million metric tons of PFCs as CO 2 e were emitted from the semiconductor industry in 2006 (Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990 – 2007).28 Table 18 Electronic Production PFC Emissions

Semiconductor PFC 2006 CO 2 e Emissions (million mtons) PFC GWP 2006 PFC Emissions (tons)

CF 4 1.2 6,500 204

C 2 F 6 2.2 9,200 264

C 4 F 8 0.1 8,700 13

Total 3.5 -- 481

Potential to Emit

The Federal Reserve capacity ut ilization factor for the el ectronics industry in 2006 was 79.8 percent. Based on this capacity utilization fa ctor the PTE of all of the semiconductor plants combined is estimated at 56 tons of SF 6 and 600 tons of PFC.

EPA identified 216 facilities in the semiconductor-electronics sector. Of these, the largest facility emitted six percent of total semiconductor emissions on a CO 2 e basis (includes non-PFCs), which is a maximum of 30 tons of PFC. On a PTE basis, the largest facility would emit 36 tons, based on an assumption that the industry capacity is distributed similarly to emissions. Therefore no facility exceeds 100 tons per year on an actual or PTE basis for PFC.

New Units

Growth for the industrial sector was estimated at -1.8 percent, and as such, no additional facilities were included in this analysis.

Threshold Summary

Electronics industry emissions from plant processes only exceed emission thresholds on a CO 2 e basis. Facility stationary fuel combusti on emissions are not included in the threshold comparisons for the industry.29 Table 19 CO 2 e Threshold Summary -- Electronics Production

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 e Emissions Covered (Tg per year)

100 199 0 5.948

250 191 0 5.947

1,000 159 0 5.934

5,000 109 0 5.819

10,000 88 0 5.701

25,000 65 0 5.399

50,000 54 0 5.100

100,000 22 0 3.417

3.6.6 Ethanol Production

In the proposed GHG MRR, EPA determined that the sources of GHG emissions at ethanol production facilities that must be repor ted under the proposed rule are stationary fuel combustion, onsite landfills, and onsite wastew ater treatment. For the GHG MRR supporting analysis, data were unavailable to estimate facility emissions from these combined sources. Instead, data on stationary fuel combustion require ments for different plant capacities were used to estimate the minimum number of facilities that would meet each of the examined reporting rule facility-level thresholds. CO 2 emissions from combustion constitute the majority of the GHG emissions from ethanol production and ther efore provide an adequate measure for determining threshold counts.30 Table 20 Ethanol Fuel Combustion CO 2 e Emissions by Plant Size (from the Proposed GHG MRR TSD Spreadsheet)

Ethanol Produced (wet milling process) (million gallons) Coal Combustion Emissions (mtons CO 2 e/year) Natural Gas Combustion Emissions (mtons CO 2 e/year)

290 1,519,585 853,536

245 1,283,787 721,091

200 1,047,990 588,646

200 1,047,990 588,646

100 523,995 294,323

85 445,396 250,174

40 209,598 117,729

35 183,398 103,013

20 104,799 58,865

2.6 13,624 7,652

Table 21 Proposed Reporting Rule Threshold Analysis Results

Threshold CO 2 e (tons per year) Number of Existing Sources -- Actual Basis Percent of Existing National Sources*

1,000 101 72%

10,000 93 66%

25,000 86 61%

100,000 43 31%

* National ethanol production source populatio n was estimated at 140 plants nationwide.

Potential to Emit

The permit threshold PTE analysis relied on th is same approach and data. Therefore CH 4 emissions from onsite landfills and wastewater treat ment plant digesters were not included in the PTE analysis, and we did not estimate emission c overage at each threshold. Also, the analysis for the proposed GHG MRR did not evaluate thre sholds of 100, 250, 5,000, and 50,000 tons per year. EPA assumed that all existing plants w ould exceed the 100 and 250 ton per year thresholds31 based on fuel combustion associated with the wet milling process. For the 5,000 and 50,000 thresholds, EPA included the number of sources exceeding the next highest threshold. For example, the count of sources exceeding the 5,000 tons per year level only includes the sources exceeding the 10,000 ton threshold in the Technical Support Document for Ethanol Facilities: Proposed Rule for Mandatory Reporting of Greenhouse Gases (EPA-HQ-OAR-2008-0508- 0010).

New Units

EPA estimates that ten new ethanol producti on facilities will be built per year.

Threshold Summary

Table 22 CO 2 e Threshold Summary -- Ethanol

GHG Threshold (tons per year) Number of Existing Sources Number of New Sources Added per Year

100 140 10

250 140 10

1,000 101 7

5,000 101 7

10,000 93 7

25,000 86 6

50,000 86 6

100,000 43 3

3.6.7 Ferroalloy Production

In evaluating ferroalloy production in the U. S., EPA considered actual production at six facilities, as published in th e U.S. Inventory of Greenhouse Gas Emissions and Sinks: 1990 – 2007 for 2006, and the capacity to produce at thr ee facilities for which production information was not published due to competitive concerns.

Potential to Emit

EPA's PTE calculations consider the Federal Reserve's 2006 monthly industrial capacity utilization estimates for the primary metals indus try classification which shows utilization at 85.932 percent for 2006. The PTE calculations do not affect the threshold analysis , because all facilities emit over 100,000 metric tons of CO 2 e per year.

New Units

Applying the growth factor for the industrial s ector, 0.4 percent, resu lts in no additional facilities for the analysis.

Threshold Summary

Table 23 CO 2 Threshold Summary -- Ferroalloy Production

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 Emissions Covered (Tg per year)

100 9 0 1.717

250 9 0 1.717

1,000 9 0 1.717

5,000 9 0 1.717

10,000 9 0 1.717

25,000 9 0 1.717

50,000 9 0 1.717

100,000 9 0 1.717

Table 24 CH 4 Threshold Summary -- Ferroalloy Production

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CH 4 Emissions Covered (Tg per year)

100 3 0 0.0003

250 0 0 033 Table 25 CO 2 e Threshold Summary -- Ferroalloy Production

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 e Emissions Covered (Tg per year)

100 9 0 1.726

250 9 0 1.726

1,000 9 0 1.726

5,000 9 0 1.726

10,000 9 0 1.726

25,000 9 0 1.726

50,000 9 0 1.726

100,000 9 0 1.726

3.6.8 Food Processing

Food processing includes meat, poultry and frui t and vegetable processing. Emissions derive from combustion and fugitive methane related to wastewater treatment. For purposes of this permit threshold analysis, EPA did not cons ider the fugitive methane from wastewater treatment because these are the only greenhouse ga s emissions from the source category other than combustion, and food processing is not a listed PSD source category. Consequently, emissions from this subsector considered in th is analysis were limited to combustion emissions and were calculated using the MECS approach.

Potential to Emit

EPA used the Federal Reserve's 2004 capacity u tilization factor of 79.3 percent for the food industry to calculate PTE emissions.

New Units

In addition, new establishments were calcu lated assuming a conti nuation of the growth rate of 1.2 percent, as calcul ated using the methodology described earlier in this document.34 Threshold Summary

Table 26 CO 2 Threshold Summary -- Food Processing

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 e Emissions Covered (Tg per year)

100 3946 47 16.848

250 2281 27 16.709

1,000 1499 18 16.379

5,000 1030 12 15.723

10,000 749 9 14.354

25,000 482 6 12.257

50,000 10 0 0.596

100,000 0 0 0

3.6.9 Glass Manufacturing

EPA used the Supporting Data for Threshold Analysis Subpart E – W, Greenhouse Gas Mandatory Reporting Rulemaking , March 10, 2009 (EPA-HQ-OAR-2008-0508-0046.7), to analyze emissions for permit thresholds from gl ass manufacturing. Annual fuel combustion and glass production are estimated for each plan t based on 2004 estimated plant sales and 2002 MECS energy intensity (energy per sale s dollars). The spreadsheet shows CO 2 emission estimates from industrial processes and stationary fuel combustion, as well as CH 4 and N 2 O emission estimates from stationary fuel combustion.

Potential to Emit

Plant capacities are not available in the spread sheet. To estimate PTE, EPA divided the actual annual emissions by a capacity utilizati on factor of 0.50 or 50 percent.

New Units

EPA used an estimated annual growth rate of 0.4 percent for the nonmetallic mineral product manufacturing sector to determine the number of new units for this analysis.35 Threshold Summary

Table 27 CO 2 e Threshold Summary -- Glass Manufacturing

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 e Emissions Covered (Tg per year)

100 369 1 4.425

250 364 1 4.425

1,000 222 1 4.341

5,000 201 1 4.302

10,000 175 1 4.162

25,000 104 0 3.277

50,000 21 0 1.208

100,000 3 0 0.366

3.6.10 HCFC-22 Production

Chlorodifluoromethane (HCFC-22) is pr oduced for use in refrigeration and air conditioning systems and as a chemical feed stock for manufacturing synthetic polymers. Because HCFC-22 depletes stratospheric oz one, its production for non-feedstock uses is scheduled to be phased out by 2020 under the U. S. Clean Air Act. Feedstock production, however, is permitted to continue indefinitely.

A high global warming potential (GWP) gree nhouse gas, trifluoromethane (HFC-23), is generated as a byproduct during th e manufacture of HCFC-22. Emissions of HFC-23 in 2006 were estimated to be 13.8 million metric tons on a CO 2 e basis from three HCFC-22 production plants. Estimates were based on the plants oper ating at capacity. Annual emissions in terms of both metric tons CO 2 e and tons HFC-23 are summarized in Table 30 below.36 Table 28 HCFC-22 Production HFC-23 Emissions

HCFC-22 Production 2006 CO 2 e Emissions (million metric tons) HFC GWP 2006 HFC Emissions (short tons)

HFC-23 13.8 11,700 1,300

Source: Reporting Rule TSD

Potential to Emit

Confidential business information (CBI) clai ms on production information limited EPA's PTE analysis. The Technical Support Document for Emissions of HFC-23 from Production of HCFC-22: Proposed Rule for Mandatory Reporting of Greenhouse Gases (EPA-HQ-OAR2008-0508-0015) estimated that all three pl ants emit over 100,000 metric tons CO 2 e on a capacity basis by a factor of 85 or more, or a minimum of 800 short tons of HFC-23. These estimates did not account for HFC-23 capture and destruction at two of the three plants. Therefore, actual emissions at two of the pl ants will be lower, and can be limited through permitting. We assumed that all three plan ts exceed the 100 and 250 ton actual and PTE thresholds, and that one plan t (uncontrolled) exceeds th e 1,000 ton PTE threshold.

Because the TSD did not include estimates of CO 2 emissions from fuel combustion, and the CBI claims noted above, the PTE analysis does not quantify fuel combustion emissions specifically for the three plants. Stationary fu el combustion emissions from the plants were instead captured under the analysis for unspeci fied industrial stationary combustion.

New Units

U.S. production between 1990 and 2006 incr eased by 11 percent while emissions declined by 62 percent. The declines in emissi ons from control equipment and process changes offset the production increases. Therefore we did not estimate any new facilities or modifications that would increase facility emissions more than 100 tons per year.37 Threshold Summary

Table 29 HFC Threshold Summary -- HCFC-22 Production

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year HFC Emissions Covered (Tg per year)

100 3 0 0.001

250 3 0 0.001

1,000 1 0 0.001

5,000 0 0 0

Table 30 CO 2 e Threshold Summary -- HCFC-22 Production

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 e Emissions Covered (Tg per year)

100 3 0 13.848

250 3 0 13.848

1,000 3 0 13.848

5,000 3 0 13.848

10,000 3 0 13.848

25,000 3 0 13.848

50,000 3 0 13.848

100,000 3 0 13.848

3.6.11 Hydrogen Production

EPA estimated CO 2 emissions from merchant hydrogen production using the process and combustion ratio of 8.62 tons of CO 2 emissions per ton of hydrogen production. About 95 percent of all hydrogen (not just merchant hydrog en) produced in the U.S. today is made from natural gas via steam methane reforming. In steam methane reforming fueled by natural gas combustion, the process and combustion emissions go up the same stack from the boiler/reformer unit. Because the emissions ar e predominately process emissions and because38 the natural gas combustion products are emitted fr om the same stack, EPA has treated all the emissions as process emissions.

Potential to Emit

EPA developed estimates assuming hydrogen produc tion at capacity level. Therefore, no adjustment to the emissions estimates is needed to account for PTE emissions.

New Units

Based on the industry growth f actor of -0.1 percent for chemical manufacturing, EPA assumed that no new plants would be constructed.

Threshold Summary

Table 31 CO 2 Threshold Summary -- Hydrogen Production

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 e Emissions Covered (Tg per year)

100 75 0 15.227

250 75 0 15.227

1,000 74 0 15.226

5,000 62 0 15.202

10,000 51 0 15.130

25,000 42 0 15.007

50,000 38 0 14.890

100,000 32 0 14.441

3.6.12 Iron and Steel Production

EPA used the Supporting Data for Threshold Analysis Subpart E – W, Greenhouse Gas Mandatory Reporting Rulemaking , March 10, 2009 (EPA-HQ-OAR-2008-0508-0046.7) for the proposed GHG MRR threshold analysis to determine process and combustion CO 2 and process CH 4 . The iron and steel production source catego ry includes taconite iron ore processing facilities, integrated iron and steel making facilities, electr ic arc furnace (EAF) steelmaking facilities that are not located at integrated iron and steel facilities, and coke oven facilities that39 are not located at integrated iron and steel facili ties. Facility processes and facilities covered in the spreadsheet are shown in the table below. Table 32 Iron and Steel Processes, Facili ties, and Capacity Information

Iron and Steel Process Number of Facilities Capacity Information
Basic oxygen furnace (BOF) 18 Yes
Blast Furnace (BF) 17 Yes
Sintering 5 Yes

Coke ovens 18 Yes
Electric arc furnace (EAF) 92 No

Taconite furnace 8 Yes
Integrated steel plant fuel combustion* 19 No
Coke oven gas combustion* 9 No
EAF steel plant fuel combustion 92 No

* Six plants had emissions from coke oven gas combustion was included in integrated steel plant fuel

combustion.

Potential to Emit

The analysis covered 130 plants, and in al l cases, except for EAF plants, GHG emissions were estimated based on operations at plant capacity. For EAF plants, EPA used the 2007 Federal Reserve industrial capacity utilization percentage of 86 .6 percent for primary metal -- iron and steel production, to adjust estimated actual emissions to PTE.

The spreadsheet contained emission CO 2 e estimates which included CO 2 , CH 4 , and N 2 O emissions. Process CH 4 emissions were backed out of the CO 2 e totals using the process CH 4 emissions reported in the U.S. GHG Inventory, and apportioning these emissions to the different plants based on their capacity in those processes. N 2 O emissions are primarily related to fuel combustion and were not backed out for separate treatment.

New Units

No new iron and steel facilities are expected to be built. The growth rate in primary metals from the Economic Census data is only about 0.4 percent.40 Threshold Summary

Table 33 CO 2 Threshold Summary -- Iron and Steel Production

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added
per year CO 2 Emissions Covered (Tg per year)

100 130 0 85.150

250 130 0 85.150

1,000 130 0 85.150

5,000 129 0 85.148

10,000 128 0 85.141

25,000 123 0 85.057

50,000 116 0 84.831

100,000 113 0 84.655

Table 34 CH 4 Threshold Summary -- Iron and Steel Production

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CH 4 Emissions Covered (Tg per year)

100 18 0 0.034

250 17 0 0.033

1,000 17 0 0.033

5,000 3 0 0.011

10,000 0 0 041 Table 35 CO 2 e Threshold Summary -- Iron and Steel Production

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 e Emissions Covered (Tg per year)

100 130 0 85.151

250 130 0 85.151

1,000 130 0 85.151

5,000 130 0 85.151

10,000 128 0 85.141

25,000 123 0 85.058

50,000 116 0 84.832

100,000 114 0 84.656

3.6.13 Lead Production

According to the 2006 U.S. Geological Surv ey (USGS), lead production in the U.S. includes both the primary, direct smelting (one facility) and secondary lead production (16 facilities). Process emissions of CO 2 are a byproduct of the coke consumed during the smelting or reforming processes. EPA calculated total process emissions based on lead production as reported in the USGS.

In the Supporting Data for Threshold Analys is Subpart E – W, Greenhouse Gas Mandatory Reporting Rulemaking (EPA-HQ-OAR-2008-0508-0046.7), combustion emissions are combined with process emissions to determine total actual emissions.

Potential to Emit

In order to determine PTE emissions, EP A considered the Federal Reserve's 2006 monthly industrial capacity util ization estimates for primary metals industry classification which shows utilization at 85.9 percent for 2006, and ad justed to achieve 100 pe rcent utilization.

New Units

EPA assumed no new facilities would be a dded for the industry, given an expected growth rate of 0.4 percent per year for primary metal manufacturing industry.42 Threshold Summary

Table 36 CO 2 e Threshold Summary -- Lead Production

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 e Emissions Covered (Tg per year)

100 17 0 0.861

250 17 0 0.861

1,000 17 0 0.861

5,000 17 0 0.861

10,000 16 0 0.855

25,000 13 0 0.799

50,000 12 0 0.761

100,000 1 0 0.089

3.6.14 Lime

The Supporting Data for Threshold Analysis Subpart E – W, Greenhouse Gas Mandatory Reporting Rulemaking , March 10, 2009 (EPA-HQ-OAR-2008- 0508-0046.7) was also used to estimate GHG PTE for lime plants.

Potential to Emit

To estimate PTE, EPA divided annual actual CO 2 emissions from the calcining process and fuel combustion emissions of CO 2 , CH 4 , and N 2 O by regional capacity factors available in the spreadsheet for each plant. The cap acity factors ranged from 43 to 136 percent.

New Units

EPA assumed no new facilities would be added for the industry.43 Threshold Summary

Table 37 CO 2 Threshold Summary -- Lime Production

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 Emissions Covered (Tg per year)

100 89 0 27.262

250 89 0 27.262

1,000 89 0 27.262

5,000 89 0 27.262

10,000 89 0 27.262

25,000 86 0 27.237

50,000 66 0 26.533

100,000 60 0 26.180

3.6.15 Magnesium Production and Processing

The magnesium metal production (primary and secondary) and casting industry typically uses SF 6 as a cover gas to prevent th e rapid oxidation and burning of molten magnesium in the presence of air. A dilute gaseous mixture of SF 6 with dry air and/or CO 2 is blown over molten magnesium metal to induce and stabilize the forma tion of a protective crus t. A small portion of the SF 6 reacts with the magnesium to form a thin molecular film of mostly magnesium oxide and magnesium fluoride. The amount of SF 6 reacting in magnesium production and processing is being studied but presently assumed to be negligible, and therefore all SF 6 used is assumed to be emitted into the atmosphere.

For the proposed GHG MRR Technical Support Document for Process Emissions from Magnesium Production and Processing: Pr oposed Rule for Mandatory Reporting of Greenhouse Gases , EPA reported that national annual SF 6 emissions from magnesium production and processing totaled appr oximately 3.2 million metric tons CO 2 e in 2006. The facility population totaled 13 facilities that emitted 3. 0 million metric tons CO 2 e. The SF 6 emissions (no GWP adjustment) were 148 and 138 short tons respectively. Ten magnesium die casting facilities accounted for 29 percent (44 tons), and primary and secondary production accounted for 64 percent (96 tons) of the tota l emissions. Other small casting activities accounted for the remaining 7 percent (ten tons).44 Potential to Emit

EPA used the analysis in the TSD for the proposed GHG MRR, where EPA had evaluated thresholds of 1,000, 10,000, 25,000, and 100,000 metric tons per year. Facility-level information is not made publicly available becau se of confidential business information (CBI) claims. From that earlier analysis EPA estimated that the same number of facilities exceeded the 100, 250, and 1,000 tons CO 2 e per year PTE threshold as determined in the GHG MRR TSD for the 1,000 metric tons per year threshold. In a similar fashion, EPA used the GHG MRR TSD facility counts at 10,000 metric tons CO 2 e per year to estimate faciliti es at the 5,000 tons per year PTE threshold, and 100,000 metric tons per year for the 50,000 tons CO 2 e per year PTE threshold. The permit threshol d analysis did not include CO 2 emissions from fuel combustion. That information was not available in the TSD for the proposed GHG MRR.

On an SF 6 mass basis, the average emissions per facility are only 11 tons of SF 6 , well below 100 tons per year. Therefore we assumed th at none of the facilities have a potential to emit more than 100 tons per year of SF 6
.

New Units

EPA assumed no new units would be added for the sector.

Threshold Summary

Table 38 CO 2 e Threshold Summary -- Magnesium Production

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 e Emissions Covered (Tg per year)

100 13 0 2.955

250 13 0 2.955

1,000 13 0 2.955

5,000 11 0 2.94

10,000 11 0 2.94

25,000 11 0 2.94

50,000 9 0 2.781

100,000 9 0 2.78145 3.6.16 Nitric Acid Production

EPA used the 2006 nameplate cap acity (metric tons of HNO 3 100 percent acid basis) for 45 nitric acid plants and 2006 acid producti on from the GHG MRR TSD supporting spreadsheet (EPA-HQ-OAR-2008-0508-0046.7) to determine N 2 O emissions.

Potential to Emit

The GHG PTE was calculated by multiplying actual N 2 O emissions as CO 2 e by the ratio of nameplate capacity to 2006 production. Th e permit threshold analysis, based on the GHG MRR TSD, does not include GHG emissions from co -located stationary combustion units. Also the permit threshold analysis does not account for overlap between facilities in the Nitric Acid and Ammonia categories, which have both ammo nia and nitric acid production processes.

New Units

EPA assumed no new units would be constructed for this sector.

Threshold Summary

Table 39 N 2 O Threshold Summary -- Nitric Acid Production

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year N 2 O Emissions Covered (Tg per year)

100 43 0 0.055

250 42 0 0.055

1,000 27 0 0.049

5,000 4 0 0.016

10,000 0 0 0

25,000 0 0 0

50,000 0 0 0

100,000 0 0 046 Table 40 CO 2 e Threshold Summary -- Nitric Acid Production

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 e Emissions Covered (Tg per year)

100 45 0 17.732

250 45 0 17.732

1,000 45 0 17.732

5,000 45 0 17.732

10,000 45 0 17.732

25,000 44 0 17.724

50,000 43 0 17.706

100,000 42 0 17.667

3.6.17 Petrochemical Production

EPA determined that the portion of the petroc hemical production sector most relevant for permit threshold analysis includes the manufact ure and production of acrylonitrile, carbon black, ethylene, ethylene dichloride, ethylene oxide , and methanol, because the IPCC considers production of greenhouse gases from these pr ocesses significant compared to other petrochemical processes.

Emissions from the manufacturing processe s vary significantly and process emissions take many forms. Process emissions include direct oxidation of CO 2 , off-gassing of CH 4 and CO 2 , and the direct release of CO 2 and CH 4 from equipment leaks. Process emissions are the primary consideration for acrylonitrile, ethylene, and ethylene oxide processes. In addition, some processes require combustion of supplem ental fuel. Both process and combustion emissions are significant for carbon bl ack and methanol processes.

Potential to Emit

EPA's analysis assumed petrochemical productio n at the capacity level. Therefore, no adjustment to the emissions estimates is needed to account for PTE.

New Units

Based on an industry growth factor of -0.1 percent for chemical manufacturing, EPA assumed that no new plants would be constructed.47 Threshold Summary

Table 41 CO 2 Threshold Summary -- Petrochemical Production

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 Emissions Covered (Tg per year)

100 98 0 52.081

250 98 0 52.081

1,000 98 0 52.081

5,000 97 0 52.080

10,000 96 0 52.073

25,000 96 0 52.073

50,000 94 0 52.005

100,000 91 0 51.806

Table 42 CH 4 Threshold Summary -- Petrochemical Production

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CH 4 Emissions Covered (Tg per year)

100 55 0 0.130

250 52 0 0.129

1,000 37 0 0.121

5,000 5 0 0.035

10,000 1 0 0.010

25,000 0 0 0

50,000 0 0 0

100,000 0 0 048 Table 43 CO 2 e Threshold Summary -- Petrochemical Production

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 e Emissions Covered (Tg per year)

100 98 0 54.826

250 98 0 54.826

1,000 98 0 54.826

5,000 97 0 54.825

10,000 96 0 54.818

25,000 96 0 54.818

50,000 94 0 54.748

100,000 91 0 54.595

3.6.18 Petroleum Refineries

In developing the permit threshold analysis for petroleum refineries, EPA quantified CH 4 process emissions from wastewater, fugitive, flares, and storage tanks. Process CO 2 emissions derived from flares, hydrogen plant emissions, and su lfur plant emissions. In addition, on-site combustion emissions were calculated considering fuel consumed by type.

Potential to Emit

EPA assumed that petroleum refineries were operating at capacity level. Therefore, no adjustment to the emissions estimates was needed to account for PTE.

New Units

According to the ICR prepared for the Ne w Source Performance Standard (NSPS), EPA expects that no new refineries will be built over the next few years.49 Threshold Summary

Table 44 CO 2 Threshold Summary -- Petroleum Refineries

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 Emissions Covered (Tg per year)

100 150 0 202.947

250 150 0 202.947

1,000 150 0 202.947

5,000 150 0 202.947

10,000 149 0 202.938

25,000 146 0 202.887

50,000 137 0 202.575

100,000 129 0 202.065

Table 45 CH 4 Threshold Summary -- Petroleum Refineries

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CH 4 Emissions Covered (Tg per year)

100 129 0 0.083

250 109 0 0.080

1,000 31 0 0.042

5,000 0 0 050 Table 46 CO 2 e Threshold Summary -- Petroleum Refineries

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 e Emissions Covered (Tg per year)

100 150 0 204.897

250 150 0 204.897

1,000 150 0 204.897

5,000 150 0 204.897

10,000 149 0 204.888

25,000 146 0 204.835

50,000 137 0 204.513

100,000 129 0 203.988

3.6.19 Phosphoric Acid Production

Phosphoric acid is produced by combining sulfuric acid and phosphate rock. CO 2 is emitted when the limestone component of phosphate rock reacts with the sulfuric acid.

Potential to Emit

When these process emissions are combined with combustion emissions, all 14 plants have emissions that exceed the highest thresh old level; consequently, no PTE analysis was required.

New Units

Based on an industry growth factor of -0.1 percent for chemical manufacturing, EPA assumed that no new plants would be constructed.51 Threshold Summary

Table 47 CO 2 Threshold Summary -- Phosphoric Acid Production

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 e Emissions Covered (Tg per year)

100 14 0 3.838

250 14 0 3.838

1,000 14 0 3.838

5,000 14 0 3.838

10,000 14 0 3.838

25,000 14 0 3.838

50,000 14 0 3.838

100,000 14 0 3.838

3.6.20 Pulp and Paper Manufacturing

Permit threshold analysis for this sector is focused on the energy intensive, fugitive emitting pulp, paper, and paperboard manufacturi ng subsectors. Process emissions include CO 2 which is emitted in the recovery cycle at kraft a nd soda facilities associated with the chemical pulp process. The CO 2 emitted from kraft mill lime kilns orig inates from two sources: (1) fossil fuels burned in the kiln; and (2) conversion of calcium carbonate (or "lim e mud") generated in the recovery process to calcium oxide.

The bulk of the emissions considered derive from combustion. Many boilers use biomass fuel, and the burning of spent pulping liquors to produce steam for facility processes is considered biomass combustion for the GHG MRR. The emissions numbers considered for the permit threshold analysis are non-biogenic (net of any biogenic emissions). Considering only non-biogenic emissions, 96.5 percent of the facil ities and 99.7 percent of the emissions are captured by all of the thresholds proposed for consideration of the permit threshold rule.

Potential to Emit

Because 99.7 percent of emissions were cap tured at even the highest threshold, no additional PTE estimate was calculated in this analysis.52 New Units

Based on an industry growth factor of -2.5 pe rcent for paper manufact uring, and previous EPA analysis for the pulp and paper NSPS ICR, EPA assumed that no new plants would be constructed.

Threshold Summary

Table 48 CO 2 e Threshold Summary -- Pulp and Paper Manufacturing

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 e Emissions Covered (Tg per year)

100 425 0 57.700

250 425 0 57.700

1,000 425 0 57.700

5,000 425 0 57.700

10,000 425 0 57.700

25,000 425 0 57.700

50,000 422 0 57.688

100,000 410 0 57.527

3.6.21 Silicon Carbide Manufacturing

In 2006, one facility produced silicon carbide in the U.S. Silicon carbide is primarily an industrial abrasive manufactured from silica sand or quartz and petroleum coke. Approximately 35 percent of the carbon from the petroleum coke is retained with the silicon carbide, and the rest is emitted as both CO 2 and CH 4 . In addition, emissions from combustion account for approximately ten percent of total emissions.

Potential to Emit

Emissions from this plant exceed all permit threshold levels; as a result, EPA did not consider PTE calculations.

New Units

EPA assumed there would be no new facilities constructed.53 Threshold Summary

Table 49 CO 2 Threshold Summary -- Silicon Carbide Manufacturing

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 Emissions Covered (Tg per year)

100 1 0 0.101

250 1 0 0.101

1,000 1 0 0.101

5,000 1 0 0.101

10,000 1 0 0.101

25,000 1 0 0.101

50,000 1 0 0.101

100,000 1 0 0.101

Table 50 CH 4 Threshold Summary -- Silicon Carbide Manufacturing

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CH 4 Emissions Covered (Tg per year)

100 1 0 0.0004

250 1 0 0.0004

1,000 0 0 054 Table 51 CO 2 e Threshold Summary -- Silicon Carbide Manufacturing

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 e Emissions Covered (Tg per year)

100 1 0 0.109

250 1 0 0.109

1,000 1 0 0.109

5,000 1 0 0.109

10,000 1 0 0.109

25,000 1 0 0.109

50,000 1 0 0.109

100,000 1 0 0.109

3.6.22 Soda Ash Production

Soda Ash production emissions were nearly ev enly split between pr ocess and combustion emissions. Process emissions result from cal cining trona ore to produce soda ash.

Potential to Emit

PTE emissions were calculated based on the capacities of the production units.

New Units

In 2006, there was a glut of soda ash in the domestic market; EPA assumed no new units would be constructed.55 Threshold Summary

Table 52 CO 2 e Threshold Summary -- Soda Ash Production

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 e Emissions Covered (Tg per year)

100 5 0 3.121

250 5 0 3.121

1,000 5 0 3.121

5,000 5 0 3.121

10,000 5 0 3.121

25,000 5 0 3.121

50,000 5 0 3.121

100,000 5 0 3.121

3.6.23 Titanium Dioxide Production

EPA used USGS as the source for producti on capacity for the eight facilities that produced titanium dioxide in 2006.

Potential to Emit

Emissions were assumed to represent PTE operating levels.

New Units

EPA assumed that no new plants would be constructed.56 Threshold Summary

Table 53 CO 2 e Threshold Summary -- Titanium Dioxide Production

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 e Emissions Covered (Tg per year)

100 8 0 3.686

250 8 0 3.686

1,000 8 0 3.686

5,000 8 0 3.686

10,000 8 0 3.686

25,000 8 0 3.686

50,000 8 0 3.686

100,000 7 0 3.628

3.6.24 Zinc Production

The Zinc production emissions and facil ity count estimates include process and combustion emissions associated with primary sm elting and secondary recycling facilities.

Potential to Emit

For PTE estimates, EPA considered the Federal Reserve's 2006 monthly industrial capacity utilization estimates fo r primary metals industry classi fication which shows utilization at 85.9 percent for 2006, and adjusted to achieve 100 percen t utilization.

New Units

EPA assumed that no new units would be constructed.57 Threshold Summary

Table 54 CO 2 e Threshold Summary -- Zinc Production

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 e Emissions Covered (Tg per year)

100 9 0 0.852

250 9 0 0.852

1,000 9 0 0.852

5,000 9 0 0.852

10,000 8 0 0.843

25,000 5 0 0.802

50,000 5 0 0.802

100,000 5 0 0.802

3.7 Energy Sector

3.7.1 Oil and Gas Systems

In consideration of the permit thresholds, EPA considered the Fugitive Emissions Reporting from the Petroleum and Natural Ga s Industry: Background Technical Support Document (EPA-HQ-OAR-2008-0508-0023). This document details combustion emissions and fugitive emissions from offshore petroleum and natural gas facilities, onshore natural gas processors, onshore natural gas tr ansmission, underground natural ga s storage, and liquid natural gas storage. EPA determined that oil and ga s exploration, development, transmission, and distribution are not listed PSD source categories, and therefore fugitive emissions from these activities were not considered for PSD applicabil ity as it relates to major source thresholds. EPA's analysis focused on combustion emissions from these sources.

Potential to Emit

EPA used a capacity utilization figure of 50 percent to determine PTE emission estimates and counts. This rate is meant to reasonably repr esent an average utilizat ion rate across a variety of combustion equipment types used in the o il and gas industry subsec tors described above.

New Units58 EPA determined new units based on a growth factor of 1.0 percent for the sector.

Threshold Summary

Table 55 CO 2 e Threshold Summary -- Oil and Gas Systems

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 e Emissions Covered (Tg per year)

100 4762 48 88.264

250 4762 48 88.264

1,000 4762 48 88.264

5,000 3722 37 86.192

10,000 3095 31 83.619

25,000 2496 25 79.386

50,000 1045 10 56.949

100,000 387 4 32.750

3.7.2 Underground Coal Mining

GHG emissions from underground coal mining include CH 4 fugitive emissions released from the coal seam and surrounding rock dur ing mining and post-mining activities (coal bed CH 4 ), and fuel combustion emissions of CO 2 , CH 4 , and N 2 O. Fugitive CH 4 , emissions are captured and vented by ventilation systems a nd degassing systems. Captured and vented CH 4 emissions from active mines were considered in the PTE analysis. Because underground coal mining is not one of the 28 PSD source categories for which fugitive emissions were required to be included in the emissions determination, fugitive emissions from post mining operations, surface mines, and inactive mines were not included in the permit thresholds analysis.

The Technical Support Document for Underground Coal Mines: Proposed Rule for Mandatory Reporting of Greenhouse Gases (EPA-HQ-OAR-2008-0508-0032) identified 612 active underground coal mining facilities but analysis of CH 4 emissions was limited to 128 "gassy" mines where CH 4 monitoring was already in place (due to existing CH 4 emissions above Mine Safety and Health Administration (MSHA) threshold levels). The U.S. GHG Inventory (EPA, 2008) reports that 233 underground coal mi nes (including 133 gassy mines) ventilated CH 4 in 2007. Fuel combustion emission estimates for the GHG MRR TSD from all underground coal mines, based on U.S. Census energy use da ta, were found to comprise between one and59 three percent of total CO 2 e emissions, with coal bed CH 4 accounting for the bulk of GHG emissions.

In addition to the emissions data on th e 128 gassy mines contained in the GHG MRR TSD, EPA considered combustion emissions from 289 bituminous underground coal mines, using U.S. Census data from 2002.

Potential to Emit

CH 4

CH 4 emission estimates that were develope d for the GHG MRR TSD were used for both actual emissions and PTE emissions permit threshold analysis. EPA assumed that venting and degassing were continuous througho ut the year; therefore, actual emission estimates equal PTE emission estimates. The estimates considered 1 28 gassy mines, which were assumed to be the largest emitters of vented CH 4 . The smallest mine of this group had annual CH 4 emissions of 26 tons; therefore EPA assumed that the annual CH 4 emissions from the 105 vented mines that were not included in the TSD analysis were less than 26 tons.

CO 2

CO 2 emissions were estimated in the same ma nner as for other Unspecified Industrial Stationary Combustion categories, based on th e ICF analysis (ICF, 2007) using the MECS approach. Emissions were estimated based on Ce nsus information including fuel consumption per employee and the distribution of establishm ents by the number of employees. PTE was estimated by using a capacity ut ilization factor of 86.3 per cent as published by the Federal Reserve.

New Units

The number of underground bituminous coal mine s in the U.S. is on the decline. EIA data show that only Colorado had an increase in the number of underground coal mines between 2006 and 2007 (EIA, 2008). The EIA data show th at overall the number of underground coal mines decreased from 2006 to 2007 by eight percent; consequently, EPA assumed no new underground mines would be built. http://www.eia.doe.gov/cneaf/c oal/page/acr/table1.html

.60 Threshold Summaries

Threshold summary tables are shown below for CH 4 (vented fugitive emissions), CO 2 (fuel combustion), and CO 2 e (vented fugitive CH 4 and combustion CO 2 ).

Table 56 CO 2 Threshold Summary -- Underground Coal Mining

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 e Emissions Covered (Tg per year)

100 238 0 0.783

250 202 0 0.778

1,000 63 0 0.692

5,000 30 0 0.577

10,000 30 0 0.577

25,000 0 0 0

Table 57 CH 4 Threshold Summary -- Underground Coal Mining

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 e Emissions Covered (Tg per year)

100 110 0 1.586

250 110 0 1.586

1,000 110 0 1.586

5,000 53 0 1.420

10,000 38 0 1.361

25,000 24 0 1.147

50,000 13 0 0.784

100,000 1 0 0.10561 Table 58 CO 2 e Threshold Summary -- Underground Coal Mining

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 e Emissions Covered (Tg per year)

100 238 0 39.520

250 238 0 39.520

1,000 126 0 33.945

5,000 124 0 33.943

10,000 123 0 33.936

25,000 103 0 33.606

50,000 78 0 32.800

100,000 55 0 31.241

3.8 Waste Sector

3.8.1 Landfills

The landfill PTE analysis includes both municipal solid waste (MSW) landfills and onsite industrial landfills associated with pulp and pa per and food processing. The analysis used a modification of the landfill emission modeling approach used for the proposed GHG MRR threshold analysis. Like the GHG MRR analysis , the permit threshold PTE analysis did not include onsite industrial landfills for ethanol processing facil ities or industrial land application systems.

GHG Emissions

Decomposition of waste in landfills generates CH 4 and CO 2 . The amount of CH 4 generated from a given landfill is a function of several factors: the total amount of waste disposed in the landfill; the characteristics of th e waste; and the climatic conditions. The amount of CH 4 emitted is the amount of CH 4 generated minus the amount of CH 4 oxidized by aerobic microorganisms in the landfill cover material. Also subtracted fr om the total is the amount of CH 4 that is destroyed by combustion of the vented gas. The CO 2 produced by decaying waste is not considered an anthropogenic emission, and is not counted in GHG emi ssion totals. Likewise, CO 2 resulting from the combustion of landfill CH 4 is not accounted for as an anthropogenic emission under international accounting guidance.62 According to the 2008 U.S. Inventory, MS W landfills emitted 111.2 million metric tons CH 4 (CO 2 e basis) in 2006. The majority of the CH 4 emissions from on-site industrial landfills occurs at pulp and paper facilitie s and food processing facilities. In 2006, these landfills emitted 14.6 million metric tons CO 2 e

Potential to Emit

The methodology used for the proposed GHG M RR threshold analysis was also used to estimate CH 4 generation rates and emissions in 2006 for the PTE analysis. A landfill-specific model developed by EPA to support its proposed GHG MRR was used to estimate CH 4 generation and potential generation from muni cipal landfills. The generation estimate was adjusted with assumptions on oxidation in landfill cover, and destruction by combustion for energy recovery or flaring. The industrial la ndfill generation and emi ssion estimates are based on the U.S. GHG Inventory. Industrial landfills we re assumed not to have energy recovery or flaring, so there was no differen ce between generation and emissions.

New Units

EPA did not estimate the number of ne w facilities added each year with CH 4 emissions above the different thresholds due to the time delay between landfill construction and emission generation.

Threshold Summary

Table 59 CO 2 e Threshold Summary -- Landfills

GHG Threshold (tons per year) Number of Existing Sources CO 2 e Emissions Covered (Tg per year)

100 4,131 125.621

250 4,117 125.619

1,000 4,053 125.592

5,000 3,564 124.552

10,000 3,265 122.788

25,000 2,701 115.937

50,000 1,684 92.340

100,000 967 72.72263 Table 60 CH 4 Threshold Summary -- Landfills

GHG Threshold (tons per year) Number of Existing Sources CH 4 Emissions Covered (Tg per year)

100 3,885 5.973

250 3,562 5.931

1,000 2,692 5.539

5,000 981 3.274

10,000 427 2.326

25,000 114 1.087

50,000 21 0.401

100,000 2 0.106

3.8.2 Municipal Solid Waste Combustors

The threshold analysis for the propose d GHG MRR included municipal solid waste combustors (MWC) in the general stationary fuel combustion category. The analysis used the eGRID database, which is discussed in the P TE methodology description for electric generating units.

Data and Methodology

EPA used the latest version of the eGRID database (2006) to estimate the PTE of MWC facilities and counts of f acilities above the different emission thresholds. The eGRID database includes year 2004 characteristics, op erating information, and annual CO 2 emissions for U.S. facilities that have a generation capacity greater th an one MW and sell electric power to the grid. By using eGRID, EPA assumed that all MWC facilities sell power to the grid.

Potential to Emit

EPA identified 75 MWC facilities based on the generator primary fuel in the generator table (primary fuel equals MSW) in the eGRI D database. The eGRID database contains CO 2 annual emissions estimates fo r the facilities. For CO 2 emissions, eGRID uses a standard assumption that 70 percent of the heat value of the waste stream comes from renewable materials and 30 percent comes from nonrenewable materials. The renewable fraction has a CO 2 emission rate of zero; therefore, the PTE threshold analysis is based on the nonrenewable or fossil fraction assumption. EPA estimated PTE by dividing the annual emissions from eGRID by the eGRID plant capacity factor.64 New Units

To determine the number of new per year at different thresholds, EPA counted the number of generators online each year, and tota led the nameplate capacity for each online year. This information was compared to the total facility nameplate capacity, and the PTE for the increased capacity was calculated by multiplying the facility PTE by the fraction of nameplate capacity associated with the new generators. EP A counted the facilities that exceeded the PTE thresholds during each period, and computed a 15-year average to determine the number of new or modified facilities per year.

Threshold Summary

Table 61 CO 2 Threshold Summary -- Municipal Solid Waste Combustors -

GHG Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 Emissions Covered (Tg per year)

100 75 2 6.255

250 75 2 6.255

1,000 75 2 6.255

5,000 75 2 6.255

10,000 75 2 6.255

25,000 74 2 6.24

50,000 67 1 6.071

100,000 40 1 4.958

3.9 Agriculture (Stationary Fuel Combustion)

The analysis for the Agriculture sector was limited to stationary fuel combustion CO 2 emissions from internal combustion diesel engine generators. Fugitive emissions of CH 4 from enteric fermentation, and CO 2 , CH 4 , and N 2 O from manure management were not included because farms and related operations are not in the 28 PSD source categories that require quantification of fugitive emission PTE for determining major source status, and because of the large uncertainties and lack of informati on on determining what component of the noncombustion emissions at agricultural operations would be defined as non-fugitive for PSD purposes. Fuel combustion for building space heating and other farm purposes were not included in the estimates, but would be a component of farm PTE.65 Data and Methodology

EPA used the 2007 ICF analysis to estimate the number of farms covered by the different thresholds (ICF, 2007). Emissions from diesel generators on farms were estimated using data on the average generator size in Delaware (EEA, 2004), and data on energy use on farms for nontransport/non-machinery motors (Brown and N eal 2005). Using these data, EPA estimated the number of diesel generators on farms and apporti oned the generators across farm sizes, assuming no farm has more than one generator.

Potential to Emit

EPA assumed that a high proportion of farms would run the generators infrequently, and a smaller proportion would have a generator as th e only power source, requiring nearly constant operation. EPA used this distribution to dete rmine actual and potential emissions, with PTE emissions based on the assumption that the genera tors ran 24 hours per day, 365 days per year.

EPA recognizes that this appr oach underestimates the PTE for all farm stationary fuel combustion sources, because it is limited to diesel engine generators used primarily to run pumps and motors, and does not include additional sources such as fuel combustion for drying and curing, space heating, and water heating.

New Units

New generator installations were estimat ed based on information in the Regulatory Impact Analysis (RIA) for the spark igniti on stationary combustion engine NSPS and area NESHAPS (EPA, 2007). The on-farm engine populati on of diesel generators used for irrigation increased four percent between 1998 and 2003, or about 0.8 percent annually.66 Threshold Summary

Table 62 CO 2 Threshold Summary -- Farm Stationary IC Engines

CO 2 Threshold (tons per year) Number of Existing Sources Number of New Engines Added per Year CO 2 Emissions Covered (Tg per year)

100 37,351 299 0.512

250 37,351 299 0.512

1,000 0 0 0

5,000 0 0 0

10,000 0 0 0

25,000 0 0 0

50,000 0 0 0

100,000 0 0 0

3.10 Commercial Stationary Fuel Combustion

Data Source

EPA used EIA's Commercial Building Energy Consumption Survey (CBECS) to estimate commercial sector stationary fuel combustion GHG emissions and PTE. CBECS is a national sample survey that collects information on the stock of U.S. commercia l buildings, their energyrelated building characteristics, and their ener gy consumption and expenditures. Commercial buildings include all buildings in which at least half of the floor space is used for a purpose that is not residential, industrial, or agricultural; thus, the source cate gory includes building types that might not traditionally be considered "commerc ial," such as schools, correctional institutions, and buildings used for religious worship. The CBECS survey is conducted every four years and the most recent survey was completed for 2003.

The CBECS survey sample was designed so that survey responses could be used to estimate characteristics of the entire nationwid e commercial building stock. The 2003 survey selected 6,955 potential case buildings for samp ling. The sampling procedures resulted in 5,215 completed building interviews for a response rate of 82 percent. To make national estimates from the sample data, EIA calculated base sampli ng weights for each building (the reciprocal of the probability of that building being selected in to the sample). In other words, the base sampling weight is the number of national build ings represented by the sampled building. The base weight was further adjusted to account for nonresponsive bias.67 EIA publishes summary tables from the surv ey, and posts "microdata" files on the EIA website. The CBECS microdata consist of th e 5,215 sampled building records, which each correspond to a single sampled build ing. For each building, these files contain information such as the building size, climatic region, census regi on, year constructed, types of energy used, and energy consumption and expenditures. These indi vidual building microdata records are also the basis for the summary tables published by EIA.

Emissions Methodology

EPA used the CBECS microdata to estim ate commercial building emissions and populations above emission thresholds. Each of the 5,215 microdata records corresponds to a single sampled building. EIA has made available 20 different data files of the microdata records which contain a wide range of information on ch aracteristics and energy use for each building.

EPA's analysis relied on guidance provided by EIA on how to use the data. As noted above, the CBECS sample was designed so that survey responses could be used to estimate characteristics of the entire commercial build ing stock nationwide. The table below provides examples from EIA on how to calculate national commercial building characteristics from the sample building data.

Table 63 EIA Website Examples

To Find the National Estimate for: Do This... And You Should Get...
Total number of buildings Sum ADJWT8 (weight factor) 4,858,749.82 (or 4,859 thousand)

Total number of office buildings Sum ADJWT8 for cases where PBA8 (building code) = "02" 823,805.47 (or 824 thousand)
Total floor space Create a new variab le (weighted square footage) by multiplying ADJWT8 by SQFT8 (floor space) for each case, then sum this new variable 71,657,900,522 (or 71,658 million ft 2 )

Total floor space in buildings with air conditioning Sum the new weighted square footage variable (see above) for cases where COOL8 (a ir conditioning) = "1" 63,559,999,624 (or 63,560 million ft 2 )

Total electricity consumption in KWh Create a new variable (weighted electricity consumption) by multiplying ADJWT8 by ELCNS8 (electricity consumption) for each case, then sum this new variable 1,043,175,710,751 (or 1,043 billion kWh)

Source: http://www.eia.doe.gov/emeu/cbecs/cbecs2003/public_use_2003/cbecs_pudata2003.html

.

EIA calculated base sampling weights for each surveyed building (these are the reciprocal of the probability of that building being selected into the sample). Therefore, a building with a base weight of 1,000 represents itself and 999 similar but unsampled buildings in68 the total building stock. The ba se weight is further adjusted to account for non-response bias. The variable "ADJWT8" in the data file is the final weight. The ADJWT8 weight factor is used as described in Table 63 to extrapolate the survey sample to a national scale for any value. In order to obtain a national value each sample build ing's value must be multiplied by the building's weight (ADJWT8). All of the weighted values are then summed.

2003 CO 2 Emissions

EPA calculated the CO 2 emissions for each of the 5,215 buildings based on the annual natural gas and oil consumption reported for th e building. For national emission estimates and counts of buildings with annual CO 2 emissions over any threshold, EPA multiplied the base weights by the sample emission totals to determine the national estimate of buildings with emissions over the threshold.

Potential to Emit

EPA estimates that commercial buildings operate at 15 percent of capacity. EPA considered several sources in making the PTE factor determination:

● A report prepared by Energy and Environmen tal Analysis, Inc. for Oak Ridge National Laboratory describing the indus trial and commercial boiler population in the United States (EEA, 2005). The report estimated an average commercial boiler capacity factor of 16 percent.

● Reports on cooking equipment energy use by the Food Service Technology Center in California suggesting that the cooking equipment in food service establishments operate at about ten percent of a theoretical maximum capacity based on 8,760 hours per year (Pechan, et.al, 2008).

● A study of Los Angeles dry cleaners perfor med by the Pollution Prevention Education and Research Center (PPERC) in 2004 which demonstrates that dry cleaners operate boilers at about 10 to 15 per cent of maximum capacity over a normal year (Pechan, et al., 2008).

New Buildings

The CBECS data identifies the year the samp led buildings were constructed. We used the construction year information to identify th e number of new buildings built each year in the 1990 to 2003 period. Counts of the average number of these buildings built per year were then made at the different emi ssions and PTE thresholds.

Threshold Summary

The count of buildings and emissions at the threshold levels for th e entire sector are shown in the table below. Threshold result s by commercial building cat egories (e.g., offices, public assembly, schools) are provided in Appendix B.69 Table 64 CO 2 Threshold Summary -- Commercial Sector Stationary Fuel Combustion

CO 2 Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 Emissions Covered (Tg per year)

100 1,355,921 22,123 119.262

250 731,477 12,041 105.306

1,000 172,654 2,922 69.885

5,000 18,167 196 29.384

10,000 5,660 96 17.765

25,000 1,161 7 8.790

50,000 600 3 6.003

100,000 51 2 1.012

3.11 Residential Buildings

Data Sources

EPA used residential fuel consumption data from EIA's Residential Energy Consumption Survey, and multi-family building and unit data fr om U.S. Census (Census) surveys to estimate CO 2 emissions and PTE for fuel combustion at si ngle and multi-family residential properties. The RECS is a national area-probability sample survey that collects energy-related data for occupied primary housing units. The most r ecent 2005 survey collected data from 4,382 households in housing units statistically selected to represent the 111.1 million housing units in the United States. RECS data are tabulated fo r the four Census regi ons, the nine Census divisions, and for the four most populous States -- California, Florida, New York, and Texas.

The RECS sample was designed so that su rvey responses could be used to estimate characteristics of the national stock of occupied housing units. In order to arrive at national estimates from the RECS sample, EPA calculated base sampling weights for each housing unit as the reciprocal of the probability of that building being selected into the sample. Therefore, a housing unit with a base weight of 10,000 represen ts itself and 9,999 similar, but not sampled housing units in the total stock of occupied reside ntial housing units. The base weight is further adjusted to account for non-respons e bias. Ratio adjustments were also used to ensure that the RECS weights add up to Census Current Popu lation Survey estimates of the number of households.

The RECS data are provided at the housing uni t level, and not at th e building level. EPA used additional data from the Census on multi- family building population characteristics to estimate total property emissions and PTE for multi-u nit properties. Census data were from two70 sources: the Property Owner and Manager Surv ey (POMS, 1996) and the American Housing Survey (AHS, 2005).

3.11.1 Single-Family Homes

The RECS data was used directly to estimate CO 2 emissions from fossil fuel combustion at single-family housing units for space heating, water heating, and appliances. EPA assumed that each unit in an attached single-family building was a separate source, with combustion equipment under different ownership.

The annual energy consumption by fuel (1,000 Btus) for the surveyed unit was multiplied by the fuel CO 2 emission factor to estimate annual emissions. Total single-family unit emissions for the entire country were calculated by multiplying CO 2 emissions for each units by the base sampling weight.

Potential to Emit

The PTE for a single-family unit was calculated by dividing the CO 2 emissions from the unit by a capacity factor of 0.1. This factor was estimated by comparing the average annual CO 2 emissions per heated floor space area per hour by climate zone, to required heat input capacity. The required heat input capacity was based on rule of thumb heating system requirements for the different climate zones. The ta ble below shows the average Btu/ft 2 -hour from the RECS data and Heating Requirement (Btu/ft 2 ) by climate zone. A heating system efficiency of 80 percent was used to estimate the require d space heating capacity.

Table 65 Single-Family Detached and Attached Households with Fossil Fuel-Fired Space Heating (from RECS, 2005)

Households

(millions) Climate Zone(s) Heating Degree Day Range Average Annual Fuel Consumption (Btu/ft 2 -hour) Space Heating Requirement* (Btu/ft 2 )

6.8 5 > 7,000 4.8 50 – 60

16.7 4 5,500 – 7,000 5.4 45 – 50

17.0 3 4,000 – 5,499 4.6 40 – 45
18.9 1 and 2 < 4,000 3.8 Zone 2: 35 – 40 Zone 1: 30 – 35

* Heating requirement ranges are from www.acdirect.com/systemsize.php

.71 3.11.2 Multi-Family Residential Buildings

Emission Rates

As noted earlier in the Data Source section , the RECS data are on an individual unit basis, not building or property basis, so a diffe rent approach was required for multi-family units where EPA assumed common ownership of the propert y fuel combustion equipment. In order to estimate property emissions and the number of properties above different emission and PTE thresholds, EPA combined the RECS data with data from the POMS and AHS.

From the RECS data, EPA first calculated average residential unit CO 2 emissions for the two most common fuels (natural gas and oil) by multi-family category. These are shown in the table below.

Table 66 Multi-Family Residential Unit -- Average Annual CO 2 Emissions (from RECS, 2005)

Multi-Family Category (number of units) Natural Gas Space Heating (tons CO 2 /residential unit-year) Fuel Oil Space Heating (tons CO 2 /residential unit-year)

2 to 4 units 4.8 8.3

5 or more units 3.0 8.9

EPA also obtained annual CO 2 emission rates from an EPA analysis that was based on Lawrence Berkeley National Lab (LBNL) modeling studies. Those rates were estimated for old and new building units (see Table 67). The pre-1980 building estimate compares with the overall average from the RECS data. The post-1980 building estimates are much lower, particularly for units burning fuel oil.

Table 67 Multi-Family Residential Unit -- Average Annual CO 2 Emissions (from 2008 EPA Analysis based on LBNL, 1997)

Multi-Family Category (building age) Gas Serviced Units (tons CO 2 /residential unit-year) Fuel Oil Serviced Units (tons CO 2 /residential unit-year)
Pre-1980 building 4.75 7.17
Post-1980 building 2.65 3.8772 Existing Property Characteristics

Information on the distribution of multi-family properties by number of units per property was taken from the 1995 – 1996 POMS. The data are aggregated by different housing unit ranges. The table below shows the property size distribution from unpublished POMS data (NMHC Quick Facts -- Apartment Stocks ( http://www.nmhc.org )). The POMS data were for privately owned housing only and excluded public housing projects (about 13,500 buildings and 1,326,000 units). For our estimates, the building numbers were adjusted to current (2005) levels based on the RECS unit data (unit ratio of RE CS to POMS). EPA assumed the same unit distribution in the adjustment.

Table 68 Multi-Family Residential Pr operty Size Distribution (from National Multi-Housing Council tabul ation of unpublished POMS data 1995 – 1996)

Number of Rental Units on Property Number of Properties (1995 – 1996) Number of Units (1995 – 1996) Average Number of Units per

Property

2 1,558,700 3,093,200 2

3 336,030 1,025,900 3

4 341,350 1,436,800 4

5 – 9 281,500 1,897,700 7

10 – 14 70,390 862,280 12

15 – 19 36,780 602,260 16

20 – 29 38,000 916,750 24

30 – 39 18,166 604,240 33

40 – 49 14,431 702,790 49

50 – 99 26,694 2,009,400 75

100 – 199 19,804 2,952,300 149

200 – 299 7,775 1,948,400 251

300 – 399 2,966 1,058,800 357

400 – 499 1,307 605,130 463

500 – 749 723 431,360 597

Over 750 307 437,670 1,426

Total 2,754,923 20,584,98073 The adjusted POMS size distribution and av erage number of units in each category were combined with information from RECS on the percentage of units that use gas or oil for space heating. The gas and oil emission factors from th e previous tables were applied to the average number of units in each property size categ ory by fuel to estimate property annual CO 2 emissions.

For our final estimates we used the LBNL based emission factors for post-1980 buildings, over the RECS based factor. We foun d that these lower emission factors resulted in total emissions more in line with the total ba sed on all RECS units and residential sector estimates in the U.S. Greenhouse Gas Inventory. The RECS-based factors combined with the POMS property distribution data resulted in a larger overestim ate in overall category annual emissions. The lack of information on the building population over 50 units, and lack of information on the correlation between unit emi ssions and the building/property size are large sources of uncertainty in the estimates at thresholds above 1,000 tons.

Potential to Emit

PTE was estimated using the same ten percent capacity factor as used for the single family residential units

New Properties

The AHS data provided information on new construction used to estimate the number of new buildings and new units with natural gas sp ace heating that were constructed in the 1999 – 2005 period. To simplify the analysis, EPA ignored the limited use of fuel oil for space heating in new units.

The AHS data provided separately the num ber of new buildings with gas space heating per year, and a size distribution for all new bui ldings per year. The AHS size distribution stopped at 50 and larger, and was slightly differe nt in other categories from the POMS data. EPA adjusted the distribution based on the POMS distribution and then used the same emission and capacity factor approach as used for existing units.74 Table 69 American Housing Survey New Building Data

Building Size: Number of Units

per Building Number of New Buildings per Year (1999 – 2005) (thousands) Fraction of All New Buildings per Year (1999 – 2005) New Gas Buildings per Year (1999 – 2005) (thousands) Number of New Gas Buildings per Year

2 6.3 0.22 3,468

3 – 4 5.4 0.19 2,995

5 – 9 6.1 0.21 3,389

10 – 19 6.0 0.21 3,310

20 – 29 3.1 0.11 1,734

30 – 49 1.0 0.03 552

50 or more 1.0 0.03 16.0

552

Total 29.0 1.00 16.0 16,00075 Threshold Summary

Table 70 CO 2 Threshold Summaries -- Residential Sectors

Threshold (tons per year) Number of Existing Sources Number of New Facilities Added per Year CO 2 Emissions Covered (Tg per year)
Multi-Family Residential

100 610,500 11,300 54.285

250 137,000 6,400 42.192

1,000 51,200 1,100 32.399

5,000 7,800 120 14.934

10,000 1,400 20 4.933

25,000 160 3 1.392

50,000 20 0 0.006

100,000 0 0 0

Single-Family Residential

100 3,925,000 33,000 51.408

250 45,350 515 1.670

1,000 0 0 0

Total Residential Sector

100 4,535,500 44,300 105.693

250 182,350 6,915 43.862

1,000 51,200 1,100 32.399

5,000 7,800 120 14.934

100,00 1,400 20 4.933

25,000 160 3 1.392

50,000 20 0 0.006

100,000 0 0 076 References

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U.S. Energy Information Administration (EIA), 2002 Manufacturing Energy Consumption Survey , January 2007. http://www.eia.doe.gov/emeu/mecs/contents.html

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, December 2007, US EPA 452/R-07-015. http://www.epa.gov/ttn/atw/nsps/sinsps/sinspspg.html

U.S. Environmental Protection Agency (EPA), Draft U.S. Adipic Acid and Nitric Acid N 2 O Emissions 1990 – 2020: Inventories, Proj ections and Opportunities for Reductions , November 2001. http://www.epa.gov/nitrousoxide /pdfs/adipic_nitric_n2o.pdf78 U.S. Environmental Protection Agency (EPA), Climate Change Division, Fugitive Emissions Reporting from the Petroleum and Natural Ga s Industry: Background Technical Support Document, undated, FR publish date: March 26, 2009 (EPA-HQ-OAR-2008-0508-0023).

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U.S. Environmental Protection Agency (EPA), Office of Air and Radiation, Technical Support Document for Process Emissions from Primar y Production of Aluminum: Proposed Rule for Mandatory Reporting of Greenhouse Gases, February 4, 2009 (EPA-HQ-OAR-2008-0508- 0006).

U.S. Environmental Protection Agency (EPA), Office of Air and Radiation, Technical Support Document for the Ammonia Production Sector: Proposed Rule for Mandatory Reporting of Greenhouse Gases, January 22, 2009 (EPA-HQ-OAR-2008-0508-0007).

U.S. Environmental Protection Agency (EPA), Office of Air and Radiation, Technical Support Document for Process Emissions from Cement: Proposed Rule for Mandatory Reporting of Greenhouse Gases, January 28, 2009 (EPA-HQ-OAR-2008-0508-0008).

U.S. Environmental Protection Agency (EPA), Office of Air and Radiation, Technical Support Document for Process Emissions From Elect ronics Manufacture (Semiconductors, MEMs, Liquid Crystal Displays, and Photovoltaics), January 29, 2009 (EPA-HQ-OAR-2008-0508- 0009).

U.S. Environmental Protection Agency (EPA), Office of Air and Radiation, Technical Support Document for Ethanol Facilities: Proposed Rule for Mandatory Reporting of Greenhouse Gases, February 4, 2009 (EPA-HQ-OAR-2008-0508-0010).

U.S. Environmental Protection Agency (EPA), Office of Air and Radiation, Technical Support Document for the Ferroalloy Production Sector : Proposed Rule for Mandatory Reporting of Greenhouse Gases, January 22, 2009 (EPA-HQ-OAR-2008-0508-0011).

U.S. Environmental Protection Agency (EPA), Office of Air and Radiation, Technical Support Document for the Glass Manufacturing Sector: Proposed Rule for Mandatory Reporting of Greenhouse Gases, January 22, 2009 (EPA-HQ-OAR-2008-0508-0014).

U.S. Environmental Protection Agency (EPA), Office of Air and Radiation, Technical Support Document for Emissions of HFC-23 from Pr oduction of HCFC-22: Proposed Rule for Mandatory Reporting of Greenhouse Gases, February 06, 2009 (EPA-HQ-OAR-2008-0508- 0015).

U.S. Environmental Protection Agency (EPA), Office of Air and Radiation, Technical Support Document for the Hydrogen Production: Pr oposed Rule for Mandatory Reporting of Greenhouse Gases, August 5, 2008 (EPA-HQ-OAR-2008-0508-0016).79 U.S. Environmental Protection Agency (EPA), Office of Air and Radiation, Technical Support Document for the Iron and Steel Sector: Pr oposed Rule for Mandatory Reporting of Greenhouse Gases, September 9, 2008 (EPA-HQ-OAR-2008-0508-0017).

U.S. Environmental Protection Agency (EPA), Office of Air and Radiation, Technical Support Document for the Lead Production Sector: Pr oposed Rule for Mandatory Reporting of Greenhouse Gases, January 22, 2009 (EPA-HQ-OAR-2008-0508-0018).

U.S. Environmental Protection Agency (EPA), Office of Air and Radiation, Technical Support Document for the Lime Manufacturing Sector: Proposed Rule for Mandatory Reporting of Greenhouse Gases, January 22, 2009 (EPA-HQ-OAR-2008-0508-0019).

U.S. Environmental Protection Agency (EPA), Office of Air and Radiation, Technical Support Document for Process Emissions from Magnesi um Production and Processing: Proposed Rule for Mandatory Reporting of Greenhouse Gases
, February 10, 2009 (EPA-HQ-OAR-2008-0508- 0020).

U.S. Environmental Protection Agency (EPA), Office of Air and Radiation, Technical Support Document for the Petrochemical Production Sect or: Proposed Rule fo r Mandatory Reporting of Greenhouse Gases, September 9, 2008 (EPA-HQ-OAR-2008-0508-0024).

U.S. Environmental Protection Agency (EPA), Office of Air and Radiation, Technical Support Document for the Petroleum Refining Sector: Proposed Rule for Mandatory Reporting of Greenhouse Gases, September 9, 2008 (EPA-HQ-OAR-2008-0508-0025).

U.S. Environmental Protection Agency (EPA), Office of Air and Radiation, Technical Support Document for the Phosphoric Acid Production Sector: Proposed Rule for Mandatory Reporting of Greenhouse Gases, February 20, 2009 (EPA-HQ-OAR-2008-0508-0026).

U.S. Environmental Protection Agency (EPA), Office of Air and Radiation, Technical Support Document for the Pulp and Paper Sector: Proposed Rule for Mandatory Reporting of Greenhouse Gases, February 11, 2009 (EPA-HQ-OAR-2008-0508-0027).

U.S. Environmental Protection Agency (EPA), Office of Air and Radiation, Technical Support Document for the Silicon Carbide Production Se ctor: Proposed Rule for Mandatory Reporting of Greenhouse Gases, January 22, 2009 (EPA-HQ-OAR-2008-0508-0028).

U.S. Environmental Protection Agency (EPA), Office of Air and Radiation, Technical Support Document for the Soda Ash Manufacturing Sector : Proposed Rule for Mandatory Reporting of Greenhouse Gases, January 22, 2009 (EPA-HQ-OAR-2008-0508-0029).

U.S. Environmental Protection Agency (EPA), Office of Air and Radiation, Technical Support Document for the Titanium Dioxide Production S ector: Proposed Rule for Mandatory Reporting of Greenhouse Gases, January 22, 2009 (EPA-HQ-OAR-2008-0508-0031).80 U.S. Environmental Protection Agency (EPA), Office of Air and Radiation, Technical Support Document for Underground Coal Mines: Proposed Rule for Mandatory Reporting of Greenhouse Gases, February 4, 2009 (EPA-HQ-OAR-2008-0508-0032).

U.S. Environmental Protection Agency (EPA), Office of Air and Radiation, Technical Support Document for the Zinc Production Sector: Proposed Rule for Mandatory Reporting of Greenhouse Gases, January 22, 2009 (EPA-HQ-OAR-2008-0508-0033).81 Appendix A

Sector Permit Threshold Counts and Emissions by GHG

The listed electronic spreadsh eet files contain the permit th reshold counts and emissions for each sector and subsector by GHG. These liste d files are included in separate files in the docket (EPA-HQ-OAR-2009-0517). Please refer to the following file names for additional information on specific sectors and GHGs:

● GHG Data for Final Tailoring Rule Development - CO2e.xls

● GHG Data for Final Tailoring Rule Development - CO2.xls

● GHG Data for Final Tailoring Rule Development - CH4.xls

● GHG Data for Final Tailoring Rule Development - N2O.xls

● GHG Data for Final Tailoring Rule Development - HFC.xls

● GHG Data for Final Tailoring Rule Development - PFC.xls

● GHG Data for Final Tailoring Rule Development - SF6.xls82 Appendix B

Commercial Building Sector -- Permit Thres hold Results by Commercial Category

Please refer to the electronic file "Commercial Building Category CO 2 Permit Threshold Results.xls." in the docket for EPA-HQ-OAR-2009-051783 

# Attachment C Summary of Methodology and Data Used to Estimate Burden Relief and Evaluate Resource Requi rements at Alternative Greenhouse Gas (GHG) Permitting Thresholds

March 2010

1. Introduction

This paper summarizes an assessment of the estimated resource requirements for

permitting authorities to include GHG at several possible major source permitting thresholds and

the burden reduction and costs savings for permi tting authorities and s ources as a result of

requiring the inclusion of GHG in the title V an d Prevention of Significan t Deterioration (PSD)

permitting programs at thresholds greater than the current statutory requirements. A preliminary

analysis to support the tailoring ru le proposal resulted in an earl ier version of this Technical

Support Document, found at EPA-HA-OAR-2009-0517. 14 Based on comments received on the

proposal and updates to key assumptions, th is revised summary presents the updated

methodology and burden reduction estimates re sulting from several permitting threshold

alternatives considered for the final tailoring rule. The analys is was performed considering GHG

emissions on a carbon dioxide equivalent (CO 2 e) basis, which represents the sum of the six

primary GHG with their respective global warmi ng potentials (GWP) applied. Time and costs

associated with permit activities are derived from existing Information Collection Requests

(ICRs) for the title V and PSD programs. Estimate s for the number of affected sources used in

14 “Summary of ICR-based Data Used to Estimate Avoided Burden and Evaluate Resource Requirements at Alternative GHG Permitting Thresholds;” Prepared by EPA Staff; August 2009.84 this analysis were obtained from the GHG thre sholds evaluation, which can be found at EPAHQ-OAR-2009-0517. 15

2. Methodology for Estimating Permitting Burden Due to GHG Emission Sources

This section describes the basic methodology we used to estimate the different types and

quantities of permitting actions that would be affected by addressing GHGs under the PSD and

title V permitting programs. The final burden re sults summarized in Section 3 are based on the

methodologies described in this section. In developing our methodology, we established

different applicability options under which GHG emission sources would be regulated. These

GHG applicability thresholds range from the stat utory threshold levels (100 and 250 tpy) to

different combinations of major source and significance levels based on GHG emissions, and

finally, applicability based on GHG-related additi ons to otherwise occurring permitting actions

for non-GHGs (also referred to here and in the preamble for this action as the ‘anyway’ source

approach). We considered several differe nt major source/major modification threshold

combinations. We chose the combinations to re flect representative, incremental steps along the

possible range. Because it is time- and resource- intensive to develop estimates for a given step,

we chose intervals that best re flect representative points within the range given those time and

resource constraints. For example, as it becam e evident from the analysis that the 100,000 tpy

CO 2 e major source threshold would be a viable option under one of the phase-in steps in the

GHG tailoring rule, we needed to then evalua te different GHG significance level options in

combination with the 100,000 tpy CO 2 major source level to determine the ultimate impact on

PSD and title V permitting activity.

15 “Technical Support Document for Greenhouse Gas Emissions Thresholds Evaluation;” Office of Air Quality Policy and Standards; March 29, 2010.85 PSD Permits

Table 2-1 summarizes EPA’s estimate of modifications and new construction PSD

permitting actions potentially affected by the addition of GHG as a regulated air pollutant at

different GHG threshold options for PSD appli cability. These actions are broken down by type

of modification and ne w construction activity. Three types of modifications are included in this

analysis: major modifications triggered by incr eased conventional pollutant emissions, which

also exceed the significance level for GHG; modifications at exiting non-GHG major sources

previously considered minor but now are major modifications due to GHG emissions; and major

modifications due solely to GHG emissions exceed ing the significance leve l threshold. For new

construction, two types of sources are listed – those that are major sources due solely to the

emissions of GHG, and those which are classifi ed as major due to conventional pollutant

emissions, but also exceed the GHG signi ficance level (or ‘anyways’ sources).

The first line items in Table 2-1 for modifi cations and new construction present estimates

of GHG-related permitting actions that would occur at ‘anyways’ sources ; these are labeled in

the table as “Current Modifications – Add Additional GHG” and “Newly Constructed Major

Sources – Add Additional GHG.” The August 2008 ICR for the New Source Review (NSR)

program estimates that 282 PSD and 519 non-atta inment NSR permits are issued annually. 16

EPA’s initial burden analysis co ncentrated solely on the 282 annua l PSD actions. If a source is

major for a pollutant for which an area is desi gnated non-attainment, all significant emissions or

16 Prevention of Significant Deterioration and Non-Atta inment Area New Source Revi ew (Renewal), EPA ICR Number 123.23, OMB Control Number 2060-0003, 2008.86 significant emissions increases of pollutants for which the area is in attainment are still subject to

PSD review. Thus, some of the facilities appl ying for nonattainment permits may also undergo

PSD actions at the same time. Although there is no way of accu rately predicting which of the87Table 2-1. Estimated Number of PSD Permit Actions Exceeding GHG17Threshold OptionsThreshold100/250tpymajor;100/250tpy sig.level25,000tpymajor;25,000tpy sig.level50,000tpymajor;50,000tpy sig.level100,000 tpymajor;50,000 tpysig. level100,000 tpymajor;75,000 tpysig. level100,000 tpymajor;100,000 tpysig. levelNonGHGCurrent Modifications – Add Additional GHG 448 448 448 448 448 448 448Minor Modifications Becoming Newly Major 17,894 8,947 1,789 1,789 895 0 0Modifications at Newly Major Sources 43,942 250 117 20 20 20 0Modifications Total 62,284 9,645 2,354 2,257 1,363 468 448Newly Constructed Major Sources - Add Additional GHG 240 240 240 240 240 240 240Newly Constructed Major Sources 19,649 10 3 2 2 2 0Newly Constructed Sources Total 19,889 250 243 242 242 242 240Total 82,173 9,895 2,597 2,499 1,605 710 68817GHG threshold options are all based on tpy CO2e. The Non-GHG option is based on a PSD action being triggered for a non-GHG, conventional pollutant(e.g., nitric oxides), where a GHG-related PSD review is only necessary whenassociated GHG emissions for the project exceed 75,000 tpy CO2e.88 519 nonattainment actions might also coincide w ith a PSD action related to GHG emissions, we

believe it is likely that most will since they typi cally involve large emission sources; thus, it is

assumed all nonattainment actions from the ICR a nnual estimate will also need a PSD permit.

Therefore, in this final analysis, to more accura tely depict the number of PSD permitting actions

occurring annually, it is assumed that all 801 permitting actions above involve a PSD action.

Based on feedback received from the National As sociation of Clean Air Agencies (NACAA) and

other commenters on the proposed tailoring rule and EPA program staff experience, 70% of

these permit actions are assumed to be modifications, or 560 of the 801. 18 Further, 80% of these

modifications are expected to involve combustion activ ities with GHG emission levels exceeding

the statutory thresholds, thus requiring the in clusion of GHG related requirements in a PSD

permit. 19 This equates to 448 modifications annually.

The 240 remaining annual permit actions—label ed in Table 2-1 as “Newly Constructed

Major Source- Add Additional GHG ”—are assumed to be construc tion of new major sources as

determined by emissions of one or more NAAQS pollutants. Due to the size and emissions of

sources currently subject to the PSD permitting program, it is believed all of these newly

constructed major sources will exceed a GHG th reshold and will also need to include GHGrelated requirements in the PSD permit. In total, all 688 major permitting actions mentioned

above will need to factor in GHG requirement s as indicated in Table 2-1. For permitting

authorities, 50 additional burden hours are estimated to incl ude the GHG requirements in a

18 Add citation to NACAA Survey
19 The 80% estimate was obtained by reviewing a sample of PSD modification permits to determine the number involving combustion that would emit GHGs.89 permit. 20 For affected sources, approximately 222 additional burden hours are needed, based on

the two line items in the current NSR ICR we expect to be impacted by the addition of GHG –

approximately 120 hours to “obtain guidance on data needs” and 102 hours for the “preparation

of BACT analysis.”

According to the NSR ICR, approximately 74,600 minor permitting actions occur

annually. 21 For this analysis, it is assumed that a numb er of projects that traditionally could take

limits or net out of review and obtain a minor permit will now be required to apply for a major

PSD permit, depending on the signif icance threshold set for GHG. Th ese projects are identified

in Table 2-1 under “Minor Modifications Becomi ng Newly Major.” Combining the number of

netting-based modifications and synthetic-based modifications (w hich was calculated from the

current NSR ICR as one-third of the entry for “n ew minor sources, new synthetic minor sources,

and synthetic-based modifications”) identified in the ICR, approximately 22,368 of these actions

could potentially become major modifications su bject to PSD review if their associated GHG

emissions increases exceed the se lected GHG significance level option. We did not count ‘new

minor sources’ and ‘new synthetic minors’ becau se we have already accounted for them as

potential major GHG sources if their PTE em issions exceed the selected GHG major source

threshold option.

Based on staff review of samples of minor s ource permits, it is estimated that 80% of the

current minor modification actions likely involve combustion sour ces - totaling 17,894 actions of

the total 22,368 minor modification actions. Some of these actions may trigger the requirements

20 A well-known gas with a familiar BACT process, such as NOx, requires an average of 20-30 burden hours to be included in a permit. As less is known regarding GHGs and the BACT decision process, expert staff judgment set the burden for permitting authorities to add GHG to permits at 50 hours.

21 The 74,591 minor modifications are broken down as follows: 30% involving new minor sources, new synthetic minor sources, and synthetic-based modifications; 30% involving true minor modifications; 20% involving netting-based minor modifications; and 20% minor/administrative permit revisions. See NSR ICR at 11.90 of the PSD program depending on their GHG emission increases and the selected GHG

significance threshold. We assumed the followi ng % of the total 17,984 actions would move to

a major modification status due to GHG increases for each of the GHG significance level options

considered in this analysis: 50% at 25,000 tpy CO 2 e; 10% at 50,000 tpy CO 2 e; 5% at 75,000 tpy

CO 2 e; and zero at 100,000 tpy CO 2 e. To determine these percentages, we considered the relative

emissions of CO 2 emissions to NOx emissions at the current major modification significance

level threshold for NOx (40 tpy). For example, for an average natural gas combustion boiler (a

common industrial combustion unit that is part of many modification projects), a 40 tpy NOx

emissions would coincide with a 56,000 tpy CO 2 e level. Since many com bustion related projects

keep just under the 40 tpy NOx level to avoid major modification status, we assume that the

CO 2 e emissions for a similar project will be around the 50,000 tpy CO 2 e level. Therefore, we

believe it is reasonable to expect that all thes e currently minor modifi cation projects involving

combustion units to exceed the 100 tpy GHG signif icance level under the ba seline scenario, and

progressively less as the GHG significance level increases. We assume that a decreasing

proportion of projects will be signi ficantly large enough, or they may be able to net-out for

GHGs like they can for NOx, as the significance level options rises from 25,000 tpy to 75,000

tpy CO2e. Ultimately, at a 100,000 tpy CO 2 e significance level we assume none of these

currently minor modification projects move in to a major modification status for GHGs.

In addition to sources becoming subject to PSD requirements because of GHG emissions

related to modifications, new construction will occur that will require a PSD permit solely due to

the source’s potential GHG emission levels, id entified in Table 2-1 as “Newly Constructed

Major Sources.” Based on the source data obtai ned from the GHG thresholds evaluation, these91 newly constructed major sources involve both in dustrial and commercial/residential facilities

. 22

The current NSR ICR notes that permitting authorities spend approximately 300 hours

processing and issuing a new c onstruction industrial source PSD permit. Sources spend almost

870 hours on average preparing for the same pe rmit. In the previous burden analysis,

commercial/residential permits were assumed to re quire only 20% of the time necessary for an

industrial permit. While it is still believed that these sources ar e less complex than their industrial

counterparts in terms of numbers and types of emissions sources and control requirements, EPA

now estimates the commercial/residential permits to take 70% of the time required to complete

an industrial permit. This is due to comments received and further evaluation of the additional

support and outreach activities for permitting au thorities to assist with applicability

determinations and emissions calculations, as vi rtually all commercial/residential sources will

have no experience with the PSD permitting process. There are also many permit preparation

activities that represent a fixed cost, such as pr eparation of notices and public hearings, Of the

sources falling in this category, the number requiring PSD permitting will vary depending on

where the thresholds for triggering PSD review (both major source and modifications thresholds)

are established.

Finally, an existing, but newly classifi ed major source for GHG, may undergo a

modification for which it will then be subject to PSD permitting requirements. This category of

PSD permitting activity is listed on Table 2-1 as “Modifications at Newly Major Sources.” With

this new major source status, these facilities must apply for and be issued a PSD permit, if they

undergo a major modification. See Appendix A fo r a list of newly major sources at different

major source GHG thresholds. We estimate that 4% of these newly major sources will undergo

22 “Technical Support Document for Greenhouse Gas Emissions Thresholds Evaluation;” Office of Air Quality Policy and Standards; March 29, 2010.92 modifications. This rate was obtained by di viding the current 560 annual PSD modificationrelated permit actions (i.e., 70% of 801 actions identifie d in the NSR ICR) by the existing major

source population of 14,700 major source title V pe rmits. This represents our best available

estimate of the rate of PSD modification activity at major sources, and we make the assumption

that this rate will also apply for newly major GHG sources. We recognize that there is some

level of uncertainty in applying this rate to GHG-only sources, particularly for sources in

unconventional sectors such as commercial and re sidential categories, however we believe at

higher GHG threshold levels, where large industrial sources predominate, that this modification

rate provides a reasonable estimate of modifica tion activity. As no data are yet available for

commercial/residential sources and we cannot conc lude that they will differ from industrial

sources, we select the same 4% rate for modification activity.

Title V Permits

Title V programs also complete severa l types of permitting actions annually, including processing and issuing new permits , permit revisions, and permit renewals. Newly constructed major sources or sour ces designated newly major due to a modification are required to apply for and be i ssued a title V permit in order to operate. In addition to sources new to title V, permitting authorities must add GHG terms to permits for sources exceeding the threshold set for GHG emissions. Permitting authorities may face burdens to update existi ng title V permits for GHG under two possible scenarios: (1) EPA promulgates or approves any applicable requirements for GHGs that would apply to such a source, which would generally require a permit reopening or renewal application, or (2) the source makes a change that would result in an applicable requirement for GHG to newly apply to the source, such as PSD review, which would generally require an application for a permit revision. Permitting authorities will also need to process permit renewal applications, generally on a five-year cycle, and such renewals would need to assure that the permit properly addresses GHG.93 The April 2007 Title V ICR estimates that 50 permits are completed every year for new

sources. 23 For this analysis, it is assumed that all 50 of these typically large industrial-type

sources will be capable of potentially em itting GHG and will need to add GHG-related

requirements to the permit. The estimated burden per title V permit in the ICR represents an

average of multiple pollutants; we estimate the addition of one pollutant will add an additional

10% of the time currently estimated for a new title V permit.

The ICR also identifies 3,267 permit renewals conducted on an annual basis. As not all

sources potentially emit GHG above a determined threshold, th is analysis examines the

estimated 80% involving combusti on activities that most likely ha ve the potential to emit GHG

above the series of poten tial thresholds evaluated. 24 Therefore, approximately 2,614 sources will

need to address GHG in the new version of the permit.

Revisions to title V permits will also be necessary based on the number of modifications

calculated for this analysis. Revisions occurri ng specifically due to GHG may involve significant

revisions, minor revisions, or ad ministrative actions to operating permits. EPA estimates that this

activity will require 40 hours per permit on aver age for permitting authorities to complete. 25 The

number of operating permit revisions will vary based on the number of previously minor

modifications now qualifying as major modifications , and modifications at newly major sources,

both listed in Table 2-1. At any level, it is assumed that the 448 modifications involving

combustion that occur annually will need to in clude any GHG requirements in the revision of

their respective title V permits. EPA estimates th at permitting authorities will spend, in addition

23 Information Collection Request for St ate Operating Permit Regulations (R enewal), EPA ICR Number 1587.07, OMB Control Number 2060-0243, 2007.
24 The 80% estimate was obtained through a review of existing title V permit source categorization.
25 The Title V ICR indicates the burdens associated with revi sions are as follows: 90 hours for a significant revision, 30 hours for a minor revision, and 5 hours for an administrative action. See Table 8 at 23 . It is not known which revision will be required for any modification that excee ds the GHG significance level threshold; therefore, EPA averages the three permitting burdens to obtain a value of 40 hours per permit.94 to the current burden to issue a title V permit re vision, an additional 10% of the 40 hours needed

to complete this process, or four hours per action.

Finally, new industrial and commercial/reside ntial sources will be entering title V

permitting programs annually due solely to thei r GHG emissions. These commercial/residential

sources that exceed the major source threshold so lely due to their GHG emissions will not likely

have substantial applicable requirements in the n ear term and/or will not require as much time to

process as those for industrial sources, which ha ve other applicable requirements in addition to

those related to their GHG emissions. However, upon further evaluation and in response to

comments from permitting authorities, EPA believes its initial estimate of one-tenth of the

burden hours required was considered too low. Pe rmitting authorities would confront substantial

challenges as they have little experience with such sources and their GHG emissions.

Commercial/residential sources themselves wi ll have no experience with the title V permitting

process, which will increase the time needed to assess GHG emissions, complete the application,

and respond to permitting authority comments, We also expect that in many cases the draft

permits will undergo high levels of public partic ipation through public comment periods, public

hearings, and petitions for rec onsideration. Therefore, EPA assumes preparing a permit for

affected commercial/residential sources will take 50% of the time a permitting authority

currently spends on issu ing a title V permit.

3. Evaluation of ICR-based Resource Requireme nts for Permitting Authorities at Different Possible GHG Permitting Thresholds

For the proposal, EPA examined resource requirements at the st atutory-based 100/250

tpy CO 2 e emission levels—referred to as the ‘baseline’ analysis in the following tables—as well95 as at 10,000 tpy, 25,000 tpy, and 50,000 tpy CO 2 e levels. Due to comments received on the

proposal and this improved burden analysis, the 10, 000 tpy threshold was eliminated as not being

a viable alternative since it did not adequately ad dress administrative necessity concerns. In this

analysis, in addition to the baseline analysis, EP A broadened the options to consider thresholds

ranging from a 25,000 tpy CO 2 e major source applicability leve l for PSD and title V up to a

100,000 tpy CO 2 e level, with associated PSD GHG significant levels of equal magnitude. EPA

also considered the impact on burden of differe nt PSD GHG significance levels combined with

the 100,000 tpy major source level, including 50,000 CO 2 e, 75,000 CO 2 e, and 100,000 CO 2 e.

The choice of a PSD significance le vel also has a direct impact on title V burdens since a greater

number of PSD permit requirements that result from modification activities will result in a

greater number of necessary title V revisions.

PSD Permits

Table 3-1 presents the estimated burden for permitting authorities at different possible

PSD GHG major source applicabilit y thresholds. Descriptions of the different thresholds

selected are provided below. Burden estimates for the PSD program are calculated based on

listed values obtained from Tables 6-1 and 6- 2 the NSR ICR. The ICR does not distinguish

between new construction and modification actions ; therefore, Table 3-1 combines the actions

into permit preparation issuance based sole ly on GHG emissions or the addition of GHG

requirements to permits being issued for convent ional sources, or “anyway” permits. PSD permit

preparation and issuance is further divided into industrial and commercial/residential sources

since less time is required for commercial/residential sources.96 Baseline

After receiving comments on the proposal and reevaluating the initial estimates, EPA has

determined the impact of regulating GHG emissi ons under current PSD statutory thresholds for

applicability. Baseline burden and cost were ca lculated at the 100 tpy and 250 tpy major source

permitting threshold (the 100 tpy threshold applies to the 28 source categories identified in the

Clean Air Act section 169(1)). At these thre sholds, the additional annual permitting burden for

permitting authorities is estimated at 19. 5 million hours at a cost of $1.5 billion.

Alternate Threshold Scenarios

After determining the baseline, additional annual burden was determined at six different

major stationary source threshold levels in order to evaluate the relative differences in impacts to

permitting authorities. Estimates represent the additional burden and costs due to GHG

permitting beyond to the burden currently experienced by permitting authorities and sources.

The first scenario is the threshold pro posed in the GHG Tailoring Rule of 25,000 tpy

CO 2 e. Results of this analysis indicate a total of 9,260 new permits, plus 688 permit actions to

include GHG related requirements into current PSD permitting actions (including both new

construction and modifications). This additi onal workload equates to 2.8 million hours for

permitting authorities at a cost of $217 million. Note this is an in crease over our initial results at

proposal of over 185,000 burden hours and $8.7 m illion. Again, increases are due to more

accurate estimates of annual modifications and burden associated with commercial/residential

permits.97 Table 3-1. Additional Permitting Au thority PSD Burden with GHG (Annual)

Activity Burden Hours

per Permit Affected Permits Total Burden (hours) Total Cost ($2007) a 100/250 tpy Major /100 tpy Significance Threshold (“Baseline”) PSD Permit Preparation and Issuance - Industrial 301 26,089 7,852,789 $606,392,367 PSD Permit Preparation and Issuance - Commercial/Residential b 210 55,509 11,656,890 $900,145,046 Additions to Current PSD Applications c 50 688 34,400 $2,656,368 Total Additional Burden 19,544,079 $1,509,193,780 25,000 tpy Major/ 25,000 tpy Significance Threshold PSD Permit Preparation and Issuance - Industrial 301 9197 2,768,297 $213,767,894 PSD Permit Preparation and Issuance - Commercial/Residential 210 63 13,230 $1,021,621 Additions to Current PSD Applications 50 688 34,400 $2,656,368 Total Additional Burden 2,815,927 $217,445,883 50,000 tpy Major/ 50,000 Significance Threshold PSD Permit Preparation and Issuance - Industrial 301 1906 573,706 $44,301,577 PSD Permit Preparation and Issuance - Commercial/Residential 210 28 5,880 $454,054 Additions to Current PSD Applications 50 688 34,400 $2,656,368 Total Additional Burden 613,986 $47,411,999 100,000 tpy Major/ 50,000 tpy Significance Threshold PSD Permit Preparation and Issuance - Industrial 301 1809 544,509 $42,046,985 PSD Permit Preparation and Issuance - Commercial/Residential 210 4 840 $64,865 Additions to Current PSD Applications 50 688 34,400 $2,656,368 Total Additional Burden 579,749 $44,768,218 100,000 tpy Major/ 75,000 tpy Significance Threshold PSD Permit Preparation and Issuance - Industrial 301 915 275,415 $21,267,546 PSD Permit Preparation and Issuance - Commercial/Residential 210 4 840 $64,865 Additions to Current PSD Applications 50 688 34,400 $2,656,368
Total Additional Burden 310,655 $23,988,779 100,000 tpy Major/ 100,000 tpy Significance Threshold PSD Permit Preparation and Issuance - Industrial 301 20 6020 $464,864 PSD Permit Preparation and Issuance - Commercial/Residential 210 4 840 $64,865 Additions to Current PSD Applications 50 688 34,400 $2,656,368 Total Additional Burden 41,260 $3,186,097
Non-GHG-Based Threshold PSD Permit Preparation and Issuance - Industrial 301 0 0 $0 PSD Permit Preparation and Issuance - Commercial/Residential 210 0 0 $0 Additions to Current PSD Applications 50 688 34,400 $2,656,368 Total Additional Burden 34,400 $2,656,368

a Labor cost of $77.22/hr from Prevention of Significant Deterioration and Non-Attainment Area New Source Review (Renewal), EPA I CR Number 1230.23, OMB Control Number 2060-0003, 2008.

b Assume permit preparation and issuance for co mmercial/residential permits takes 70% the amount of time needed to prepare and is sue an industrial permit.

c For current permit applications, assume it takes an a dditional 50 hours to include GHG requirements in the permit.98 Increasing the emission threshold to 50,000 tpy will lead to an estimated 614,000 hours

additional burden at a cost of $47.4 million. Th is scenario estimates 1,934 new construction or

modification activities will be subject to PSD permitting annually due to GHG.

Setting a threshold of 100,000 tpy with a si gnificance level of 50,000 tpy, permitting

authorities will spend an estim ated 580,000 hours preparing and i ssuing permits, at a cost of

$44.8 million. At this level, EPA estimates 1,813 new actions require PSD permits.

Next, at the 100,000 tpy threshold with a 75,000 tpy significance level, the annual

permitting authority burden will increase by 311,000 hours at a cost of $24 million. In this

scenario, 919 new permit acti ons will occur annually.

At a 100,000 tpy threshold, with a 100,000 t py significance level for modifications, EPA

estimates there are 20 new industrial PSD permit actions and four commercial/residential.

Permitting authorities will spend an estimated 41, 000 additional hours on permits at a cost of

$3.2 million.

The final scenario involves only sources that are required to get a PSD permit due to their

non-GHG emissions and then are further required to add GHG related requirements as a result of

GHG emissions increases from modi fications, or GHG emissions at newly constructed facilities,

exceeding a significance threshold of 75,000 tpy GHG. In this scenario, only the annual 688 PSD

permit actions derived from the NSR ICR are exp ected to need the inclusion of GHG related

requirements to the permits. The additional burden to permitting authorities under this scenario is

estimated at 34,000 hours at a cost of $2.7 million.99 Title V Permits

Table 3-2 presents the estimated burden for permitting authorities at different possible

title V GHG major source applicab ility thresholds. Descriptions of the different thresholds

selected are provided below. Burden estimates are calculated and annual values derived from

Tables 7 and 8 of the current Title V ICR. 26

Baseline

EPA reevaluated our estimates of the addi tional administrative burden and cost of

including GHG emitters in the title V program at th e current 100 tpy statutory threshold level. To

determine the impact of regulating GHG emi ssions under current title V program, baseline

burden and cost are calculated at the 100 tpy threshold level, which is the generally applied

major source applicability level under title V. At the statutory threshol d level, it is estimated that

over six million sources will become newly subject to title V. A source generally must apply for

a title V permit within one year of becoming s ubject to permitting, then the permitting authority

must take final action (issue or deny) on the permit applications within 18 months of receipt. We

expect these new permits will not be issued all at once, but rather will come in over a three-year

time frame based on the statutory requirements li sted above. Therefore, we assume that onethird of the newly subject sources will apply for and obtain a permit annually, requiring almost

460 million burden hours to prepare and issue ov er two million new operating permits at an

additional cost of $21.1 billion.

26 For consistency, the permitting authority labor costs are updated to 2007 dollars utilizing the 2007 General Schedule Salary Table from the Office of Personnel Management.100Table 3-2. Additional Permitting Authority Title V Burden with GHG (Annual)ActivityBurdenHour perPermitAffectedPermitsTotal Burden(hours) Total Cost ($2007)b100 tpy (associated with PSD 100/250 tpy maj./100 tpy sig.)New Permit Preparation and Issuance– Industrial 428 71,82930,742,812 $1,414,169,352Add GHG component to new Non-GHG Permitb43 50 2,150 $98,900New Permit Preparation and Issuance - Commercial/Residentialc214 1,985,948 424,992,872 $19,549,672,112Permit Revisions - due to GHG 40 61,836 2,473,440 $113,778,240Permit Revisions - add GHG to Current Non-GHG Permits 4 448 1,792 $82,432Permit Renewalsd9 2,614 23,526 $1,082,196Total Additional Burden458,236,592 $21,078,883,23225,000 tpy (associated with PSD25,000 tpy maj./25,000 tpy sig.)New Permit Preparation and Issuance – Industrial 428 2,103 899,941 $41,397,301Add GHG component to new Non-GHG Permit 43 50 2,150 $98,900New Permit Preparation and Issuance- Commercial/Residential 214 444 94,945 $4,367,455Permit Revisions - due to GHG 40 9,197 367,880 $16,922,480Permit Revisions - add GHG to Current Non-GHG Permits 4 448 1,792 $82,432Permit Renewals9 2,614 23,526 $1,082,196Total Additional Burden 1,390,234 $63,950,76450,000 tpy (associated with PSD50,000 tpy maj./50,000 tpy sig.)New Permit Preparation and Issuance – Industrial 428 981 419,868 $19,313,928Add GHG component to new Non-GHG Permit 43 50 2,150 $98,900New Permit Preparation and Issuance- Commercial/Residential 214 208 44,441 $2,044,271Permit Revisions - due to GHG 40 1,906 76,240 $3,507,040Permit Revisions - add GHG to Current Non-GHG Permits 4 448 1,792 $82,432Permit Renewals9 2,614 23,526 $1,082,196Total Additional Burden 568,017 $26,128,767100,000 tpy (associated with PSD 100,000 tpy maj./50,000 tpy sig.)New Permit Preparation and Issuance – Industrial 428 172 73,473 $3,379,773Add GHG component to new Non-GHG Permit 43 50 2,150 $98,900New Permit Preparation and Issuance- Commercial/Residential 214 18 3,781 $173,911Permit Revisions - due to GHG 40 1,809 72,360 $3,328,560Permit Revisions - add GHG to Current Non-GHG Permits 4 448 1,792 $82,432Permit Renewals9 2,614 23,526 $1,082,196Total Additional Burden 177,082 $8,145,772101Table 3-2 cont’d. Additional Permitting Authority Title V Burden with GHG (Annual)ActivityBurdenHour perPermitAffectedPermitsTotal Burden(hours)Total Cost ($2007)b100,000 tpy (associated with PSD 100,000 tpy maj./75,000 tpy sig.)New Permit Preparation and Issuance – Industrial 428 172 73,473 3,379,773Add GHG component to new Non-GHG Permit 43 50 2,150 $98,900New Permit Preparation and Issuance- Commercial/Residential 214 18 3,781 $173,911Permit Revisions - due to GHG 40 915 36,600 $1,683,600Permit Revisions - add GHG to Current Non-GHG Permits 4 448 1,792 $82,432Permit Renewals9 2,614 23,526 $1,082,196Total Additional Burden 141,322 $6,500,812100,000 tpy (associated with 100,000 tpy maj./ 100,000 tpy sig.)New Permit Preparation and Issuance – Industrial 428 172 73,473 $3,379,773Add GHG component to new Non-GHG Permit 43 50 2,150 $98,900New Permit Preparation and Issuance- Commercial/Residential 214 18 3,781 $173,911Permit Revisions - due to GHG 40 20 800 $36,800Permit Revisions - add GHG to Current Non-GHG Permits 4 448 1,792 $82,432Permit Renewals9 2,614 23,526 $1,082,196Total Additional Burden 105,522 $4,854,012Non-GHG Based ThresholdNew Permit Preparation and Issuance – Industrial 428 0 0 0Add GHG component to new Non-GHG Permit 43 50 2,150 $98,900New Permit Preparation and Issuance - Commercial/Residential 21 0 0 $0Permit Revisions - due to GHG 40 0 0 $0Permit Revisions - add GHG to Current Non-GHG Permits 4 448 1,792 $82,432Permit Renewals9 2,614 23,526 $1,082,196Total Additional Burden 27,468 $1,263,528aSalaries from Title V ICR adjusted to 2007 dollars using 2007 OPM General Schedule Salary Table available at: http://www.opm.gov/oca/07tables/index.aspbIncorporating GHG information/requirements into significant revisions and permit renewals adds an additional 10% of the currenttime (90 hours each)cNew commercial/residential permits require halfthe time needed for new industrial permitsdThe Title V ICR estimates that 3,267 permits annually undergo renewal - assume 80% of these involve combustion102 Alternate Threshold Scenarios

After determining the baseline, additional burden was determined at six different major

stationary source threshol d levels in order to evaluate the relative differences in impacts to

permitting authorities. Estimates represent the additional annual burden and costs due to GHG

permitting beyond the burden and costs currently experienced by permitting authorities and

sources.

The first scenario is the threshold pro posed in the GHG Tailoring Rule of 25,000 tpy

CO 2 e. Results of this analysis indicate a total of 2,547 new permits, as well as 50 permits that

would need to include GHG requirements in their permits. This additional workload equates to

1.4 million hours for permitting authorit ies at a cost of $64 million. No te that this is an increase

over our initial results at proposal of appr oximately 985,000 burden hours and $45 million. As

with PSD programs, increases are due to more complete estimates of annual modifications and

the revised burden associated with commercial/residential permits.

Increasing the emission threshold to 50,000 tpy will lead to an estimated 568,000 hours

additional burden at a cost of $26.1 million. This scenario estimates 1,189 new sources will be

subject to title V permitting annually due to GHG.

To examine the impact of significance leve ls on the overall burden, EPA considered the

impact on burden of different PSD GHG significance levels of 50,000 CO 2 e, 75,000 CO 2 e, and

100,000 CO 2 e combined with the 100,000 tpy majo r source level The choice of a PSD

significance level has a direct impact on title V burdens since a greater number of PSD permit

requirements that result from modification activi ties will result in a greater number of necessary

title V revisions. This effect is apparent in Table 3-2. Note that for all three scenarios, EPA103 estimates there are 172 indutiral and 18 commercial/ residential new title V permit actions due to

GHG.

Setting a threshold of 100,000 tpy with a PSD significance level of 50,000 tpy, permitting

authorities will spend an estimat ed 177,000 hours preparing and issui ng permits, at a cost of $8.1

million. Note that under this scenario, 1,809 re visions are estimated annually to update existing

operating permits due to modification activities. Utilizing a 75,000 tpy PSD significance level,

the annual permitting authority burden is estimated to increase by 161,000 hours at a cost of $7.4

million. At this significance level, 915 operati ng permit revisions will be necessary due to GHG.

This decrease from the previous scenario is due to fewer modifications exceeding the higher

significance level threshol d and requiring revisions to an operating permit. At a 100,000 tpy

threshold, with a 100,000 tpy PSD significance le vel for modifications, EPA estimates there are

only 20 permit revisions annually. Permitting authorities will spend an estimated 106,000

additional hours on permits at a cost of $4.9 million.

The final scenario involves only sources that are required to get a title V permit for

emissions other than GHG and that are required to add GHG related requirements. Under this

scenario, only the annual issuance of 50 permits not ed in the Title V ICR are expected to need

the inclusion of GHG related requirements to the permits. The additional burden to permitting

authorities under this scenario is estimate d at 27 million hours at a cost of $1.3 million.

4. Burden Relief Estimates for Permitting Authorities and Sources at Several Possible GHG Major Source Applicability Threshold for Title V and PSD

The following tables indicate the estimated burden relief when comparing the baseline

levels with several threshold levels for GHG appli cability as described in the previous sections.104 In Tables 4-1 through 4-4, the fi rst three columns indica te the cost per permit and total cost to

permitting authorities at a GHG thresh old level equal to the statutor y threshold levels for title V

and PSD (100 and 100/250 tpy, resp ectively). The next th ree columns reflect the estimated costs

for permitting authorities with the permitting thresholds (both for PSD and title V) set at the

specified levels. In the final three columns, th e burden relief is estimated – the time and costs

alleviated relative to the baseline levels by establishing several GHG permitting thresholds as

previously described.

The burden relief for sources at the different permitting thresholds is presented in Tables

4-5, 4-6, and 4-7 below. Table 4-8 estimates th e cost savings if a non-GHG based related trigger

is used. This information on burden relief was used to compile the final Regulatory Impact

Analysis (RIA) for the final GHG tailoring rule. Pl ease see the final RIA contained in the public

docket for this GHG tailoring rule for a full explanation and de scription of the burden relief

provided by the final GHG tailoring rule actions.105Table 4-1. Estimated Burden Relief for Permitting Authorities Utilizing a 25,000 tpy Major/ 25,000 tpy PSD Significance ThresholdAll Title V 100tpy and PSD 250 tpy 25,000 tpy or Greater Avoided BurdenActivityCost perPermit(2007$)NumberofPermitsTotal Cost(2007$)CostperPermit(2007$)NumberofPermitsTotal Cost(2007$)CostperPermit(2007$)NumberofPermitsTotal Cost(2007$)Title V PermitsNew Industrial - Due to GHG $19,688 71,829 $1,414,175,915 $19,688 2,103 $41,403,864 $19,688 69,726 $1,372,772,051Current Industrial - Add GHG $1,978 50 $98,900 $1,978 50 $98,900 $1,978 0 $0New Commercial/Residential $9,844 1,985,948 $19,549,672,112 $9,844 444 $4,370,736 $9,844 1,985,504 $19,545,301,376Permit Revisions - Due to GHG $1,840 61,836 $113,778,240 $1,840 9,197 $16,922,480$1,840 52,639 $96,855,760Permit Revisions - Add GHG $184 448 $82,432 $184 448 $82,432 $184 0 $0Permit Renewals $414 2,614 $1,082,196 $414 2,614 $1,082,196 $414 0 $0Total Permits Affected 2,122,725 14,856 2,107,869PSD PermitsNew Industrial $23,243 26,089 $606,386,627 $23,243 9,197 $213,765,871 $23,243 16,892 $392,620,756New Commercial/Residential $16,216 55,509 $900,133,944 $16,216 63 $1,021,608 $16,216 55,446 $899,112,336Current Applications - Add GHG $3,861 688 $2,656,368 $3,861 688 $2,656,368 $3,861 0 $0Total Permits Affected 82,286 9,948 72,338Total Permitting Authority Costs $22,588,066,734 $281,404,455 $22,306,662,279106Table 4-2. Estimated Burden Relief for Permitting Authorities Utilizing a 50,000 tpy Major/50,000tpy PSD Significance ThresholdAll Title V 100tpy and PSD 250 tpy 50,000 tpy or Greater Avoided BurdenActivityCost perPermit(2007$)Numberof PermitsTotal Cost(2007$)CostperPermit(2007$)NumberofPermitsTotal Cost(2007$)CostperPermit(2007$)NumberofPermitsTotal Cost(2007$)Title V PermitsNew Industrial - Due to GHG $19,688 71,829 $1,414,175,915 $19,688 981 $19,313,928 $19,688 70,848 $1,394,861,987Current Industrial - Add GHG $1,978 50 $98,900 $1,978 50 $98,900 $1,978 0 $0New Commercial/Residential $9,844 1,985,948 $19,549,672,112 $9,844 208 $2,047,552 $9,844 1,985,740 $19,547,624,560Permit Revisions - Due to GHG $1,840 61,836 $113,778,240 $1,840 1,906 $3,507,040 $1,840 59,930 $110,271,200Permit Revisions - Add GHG $184 448 $82,432 $184 448 $82,432 $184 0 $0Permit Renewals $414 2,614 $1,082,196 $414 2,614 $1,082,196 $414 0 $0Total Permits Affected 2,122,725 6,207 2,116,518PSD PermitsNew Industrial $23,243 26,089 $606,386,627 $23,243 1,906 $44,301,158 $23,243 24,183 $562,085,469New Commercial/Residential $16,216 55,509 $900,133,944 $16,216 28 $454,048 $16,216 55,481 $899,679,896Current Applications - Add GHG $3,861 688 $2,656,368 $3,861 688 $2,656,368 $3,861 0 $0Total Permits Affected 82,286 2,622 79,664Total Permitting Authority Costs $22,588,066,734 $73,543,622 $22,514,523,112107Table 4-3. Estimated Burden Relief for Permitting Authorities Utilizing a 100,000 tpy Major/75,000tpy PSD Significance ThresholdAll Title V 100tpy and PSD 250 tpy 100,000 tpy; 75,000 tpy or Greater Avoided BurdenActivityCost perPermit(2007$)Numberof PermitsTotal Cost(2007$)CostperPermit(2007$)NumberofPermitsTotal Cost(2007$)CostperPermit(2007$)NumberofPermitsTotal Cost(2007$)Title V PermitsNew Industrial - Due to GHG $19,688 71,829 $1,414,175,915 $19,688 172 $3,386,336 $19,688 71,657 $1,410,789,579Current Industrial - Add GHG $1,978 50 $98,900 $1,978 50 $98,900 $1,978 0 $0New Commercial/Residential $9,844 1,985,948 $19,549,672,112 $9,844 18 $177,192 $9,844 1,985,930 $19,549,494,920Permit Revisions - Due to GHG $1,840 61,836 $113,778,240 $1,840 915 $1,683,600 $1,840 60,921 $112,094,640Permit Revisions - Add GHG $184 448 $82,432 $184 448 $82,432 $184 0 $0Permit Renewals $414 2,614 $1,082,196 $414 2,614 $1,082,196 $414 0 $0Total Permits Affected 2,122,725 4,217 2,118,508PSD PermitsNew Industrial $23,243 26,089 $606,386,627 $23,243 915 $21,267,345 $23,243 25,174 $585,119,282New Commercial/Residential $16,216 55,509 $900,133,944 $16,216 4 $64,864 $16,216 55,505 $900,069,080Current Applications - Add GHG $3,861 688 $2,656,368 $3,861 688 $2,656,368 $3,861 0 $0Total Permits Affected 82,286 1,607 80,679Total Permitting Authority Costs $22,588,066,734 $30,499,233 $22,557,567,501108Table 4-4. Estimated BurdenRelief for Permitting Authorities Utilizing a Non-GHG TriggerAll Title V 100tpy and PSD 250 tpy Non-GHG Trigger Avoided BurdenActivityCost perPermit(2007$)Numberof PermitsTotal Cost(2007$)CostperPermit(2007$)NumberofPermitsTotal Cost(2007$)CostperPermit(2007$)NumberofPermitsTotal Cost(2007$)Title V PermitsNew Industrial - Due to GHG $19,688 71,829 $1,414,175,915 $19,688 0 $0 $19,688 71,829 $1,414,175,915Current Industrial - Add GHG $1,978 50 $98,900 $1,978 50 $98,900 $1,978 0 $0New Commercial/Residential $9,844 1,985,948 $19,549,672,112 $9,844 0 $0 $9,844 1,985,948 $19,549,672,112Permit Revisions - Due to GHG $1,840 61,836 $113,778,240 $1,840 0 $0 $1,840 61,836 $113,778,240Permit Revisions - Add GHG $184 448 $82,432 $184 448 $82,432 $184 0 $0Permit Renewals $414 2,614 $1,082,196 $414 2,614 $1,082,196 $414 0 $0Total Permits Affected 2,122,725 3,112 2,119,613PSD PermitsNew Industrial $23,243 26,089 $606,386,627 $23,243 0 $0 $23,243 26,089 $606,386,627New Commercial/Residential $16,216 55,509 $900,133,944 $16,216 0 $0 $16,216 55,509 $900,133,944Current Applications - Add GHG $3,861 688 $2,656,368 $3,861 688 $2,656,368 $3,861 0 $0Total Permits Affected 82,286 688 81,598Total Permitting Authority Costs $22,588,066,734 $3,919,896 $22,584,146,838109Table 4-5. Estimated Burden Relief forSources Utilizing a 25,000 tpy Major/25,000 tpy PSD Significance ThresholdAll Title V 100tpy and PSD 250 tpy 25,000 tpy or Greater Avoided BurdenActivityCost perPermit(2007$)NumberofPermitsTotal Cost(2007$)CostperPermit(2007$)NumberofPermitsTotal Cost(2007$)CostperPermit(2007$)NumberofPermitsTotal Cost(2007$)Title V PermitsNew Industrial - Due to GHG $46,350 71,829 $3,329,289,600 $46,350 2,103 $97,474,050 $46,350 69,726 $3,231,815,550Current Industrial - Add GHG $4,440 50 $222,000 $4,440 50 $222,000 $4,440 0 $0New Commercial/Residential $23,175 1,985,948 $46,024,344,900 $23,175 444 $10,289,700 $23,175 1,985,504 $46,014,055,200Permit Revisions - Due to GHG $1,677 61,836 $103,698,972 $1,677 9,197 $15,423,369$1,677 52,639 $88,275,603Permit Revisions - Add GHG $156 448 $69,888 $156 448 $69,888 $156 0 $0Permit Renewals $780 2,614 $2,038,920 $780 2,614 $2,038,920 $780 0 $0Total Permits Affected 2,122,725 14,856 2,107,869PSD PermitsNew Industrial $84,530 26,089 $2,205,303,170 $84,530 9,197 $777,422,410 $84,530 16,892 $1,427,880,760New Commercial/Residential $59,152 55,509 $3,283,468,368 $59,152 63 $3,726,576 $59,152 55,446 $3,279,741,792Current Applications - Add GHG $21,669 688 $14,908,272 $21,669 688 $14,908,272 $21,669 0 $0Total Permits Affected 82,286 9,948 72,338Total Source Costs $54,963,344,090 $921,575,185 $54,041,768,905110Table 4-6. Estimated Burden Relief forSources Utilizing a 50,000 tpy Major/50,000 tpy PSD Significance ThresholdAll Title V 100tpy and PSD 250 tpy 50,000 tpy or Greater Avoided BurdenActivityCost perPermit(2007$)NumberofPermitsTotal Cost(2007$)CostperPermit(2007$)NumberofPermitsTotal Cost(2007$)CostperPermit(2007$)NumberofPermitsTotal Cost(2007$)Title V PermitsNew Industrial - Due to GHG $46,350 71,829 $3,329,289,600 $46,350 981 $45,469,350 $46,350 70,848 $3,283,820,250Current Industrial - Add GHG $4,440 50 $222,000 $4,440 50 $222,000 $4,440 0 $0New Commercial/Residential $23,175 1,985,948 $46,024,344,900 $23,175 208 $4,820,400 $23,175 1,985,740 $46,019,524,500Permit Revisions - Due to GHG $1,677 61,836 $103,698,972 $1,677 1,906 $3,196,362 $1,677 59,930 $100,502,610Permit Revisions - Add GHG $156 448 $69,888 $156 448 $69,888 $156 0 $0Permit Renewals $780 2,614 $2,038,920 $780 2,614 $2,038,920 $780 0 $0Total Permits Affected 2,122,725 6,207 2,116,518PSD PermitsNew Industrial $84,530 26,089 $2,205,303,170 $84,530 1,906 $161,114,180 $84,530 24,183 $2,044,188,990New Commercial/Residential $59,152 55,509 $3,283,468,368 $59,152 28 $1,656,256 $59,152 55,481 $3,281,812,112Current Applications - Add GHG $21,669 688 $14,908,272 $21,669 688 $14,908,272 $21,669 0 $0Total Permits Affected 82,286 2,622 79,664Total Source Costs $54,963,344,090 $233,495,628 $54,729,848,462111Table 4-7. Estimated Burden Relief forSources Utilizing a 100,000 tpy Major/75,000 tpy PSD Significance ThresholdAll Title V 100tpy and PSD 250 tpy 100,000 tpy; 75,000 tpy or Greater Avoided BurdenActivityCost perPermit(2007$)NumberofPermitsTotal Cost(2007$)CostperPermit(2007$)NumberofPermitsTotal Cost(2007$)CostperPermit(2007$)NumberofPermitsTotal Cost(2007$)Title V PermitsNew Industrial - Due to GHG $46,350 71,829 $3,329,289,600 $46,350 172 $7,972,200 $46,350 71,657 $3,321,317,400Current Industrial - Add GHG $4,440 50 $222,000 $4,440 50 $222,000 $4,440 0 $0New Commercial/Residential $23,175 1,985,948 $46,024,344,900 $23,175 18 $417,150 $23,175 1,985,930 $46,023,927,750Permit Revisions - Due to GHG $1,677 61,836 $103,698,972 $1,677 915 $1,534,455 $1,677 60,921 $102,164,517Permit Revisions - Add GHG $156 448 $69,888 $156 448 $69,888 $156 0 $0Permit Renewals $780 2,614 $2,038,920 $780 2,614 $2,038,920 $780 0 $0Total Permits Affected 2,122,725 4,217 2,118,508PSD PermitsNew Industrial $84,530 26,089 $2,205,303,170 $84,530 915 $77,344,950 $84,530 25,174 $2,127,958,220New Commercial/Residential $59,152 55,509 $3,283,468,368 $59,152 4 $236,608 $59,152 55,505 $3,283,231,760Current Applications - Add GHG $21,669 688 $14,908,272 $21,669 688 $14,908,272 $21,669 0 $0Total Permits Affected 82,286 1,607 80,679Total Source Costs $54,963,344,090 $104,744,443 $54,858,599,647112Table 4-8. Estimated Burden Relief for Sources Utilizing a Non-GHG TriggerAll Title V 100tpy and PSD 250 tpy Non-GHG Trigger Avoided BurdenActivityCost perPermit(2007$)Numberof PermitsTotal Cost(2007$)CostperPermit(2007$)NumberofPermitsTotal Cost(2007$)CostperPermit(2007$)NumberofPermitsTotal Cost(2007$)Title V PermitsNew Industrial - Due to GHG $46,350 71,829 $3,329,289,600 $46,350 0 $0 $46,350 71,829 $3,329,289,600Current Industrial - Add GHG $4,440 50 $222,000 $4,440 50 $222,000 $4,440 0 $0New Commercial/Residential $23,175 1,985,948 $46,024,344,900 $23,175 0 $0 $23,175 1,985,948 $46,024,344,900Permit Revisions - Due to GHG $1,677 61,836 $103,698,972 $1,677 0 $0 $1,677 61,836 $103,698,972Permit Revisions - Add GHG $156 448 $69,888 $156 448 $69,888 $156 0 $0Permit Renewals $780 2,614 $2,038,920 $780 2,614 $2,038,920 $780 0 $0Total Permits Affected 2,122,725 3,112 2,119,613PSD PermitsNew Industrial $84,530 26,089 $2,205,303,170 $84,530 0 $0 $84,530 26,089 $2,205,303,170New Commercial/Residential $59,152 55,509 $3,283,468,368 $59,152 0 $0 $59,152 55,509 $3,283,468,368Current Applications - Add GHG $21,669 688 $14,908,272 $21,669 688 $14,908,272 $21,669 0 $0Total Permits Affected 82,286 688 81,598Total Source Costs $54,963,344,090 $17,239,080 $54,946,105,010C APPENDIX A

Table A-1. Newly Major Affected Source Estimates Based on Threshold Level Source Type 100/250 tpy PSD 100 tpy Title V 25,000 tpy 50,000 tpy 100,000 tpy EGUs 285 285 124 0 0 Industrial 141,160 170,910 4,002 1,934 256 Oil/Gas/Coal production 2,588 2,588 187 75 52 Waste Treatment 3,344 3,358 1,927 910 193 Commercial 731,477 1,355,921 1,161 600 51 Residential 182,350 4,535,500 160 20 0 Total 1,061,204 6, 068,562 7,561 3,539 552
Based on information contained in the “Technical Support Document for Greenhouse Gas Emi ssions Thresholds Evaluation;” Office of Air Quality Policy and Standards; March 29, 2010 and information retr ieved from EPA's enforcement a nd compliance history online (EC HO) database during January 2010. ECHO is a co mputer-data based created and maintained by the EPA that contains source-specific da ta submitted primarily by state and local environmental agenci es. See http://www.epa -echo.gov/echo/index.html.