In The Matter Of: 

PROPOSED PSD AND TITLE V GREENHOUSE GAS 

TAILORING RULE STEP 3 

HEARING 

March 20, 2012

BRADFORD ASSOCIATES 

877-718-1850 

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Original File 03-20EPA.TXT 

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1

 1 AIR QUALITY DIVISION

 2

 3

 4

 5

 6

 7

 8 PUBLIC HEARING ON THE PROPOSED PREVENTION OF

 9 SIGNIFICANT DETERIORATION AND TITLE V

10 GREENHOUSE GAS TAILORING RULE STEP 3

11 Location

12 Doubletree Hotel

13 300 Army Navy Drive, 14th Floor

14 Arlington, Virginia, 22201

15 March 20, 2012

16 10:00 a.m.

17

18

19

20 Reported by: Lolita G. Morris, CCR

21
2

 1 APPEARANCES:

 2 JUAN SANTIAGO

 3 Office of Air Quality Planning and Standards

 4 U.S. Environmental Protection Agency

 5

 6 Christy Smith, Office of General Counsel

 7

 8 Howard J. Feldman, Director of Regulatory and

 9 Scientific Affairs at American Petroleum

10 Institute

11

12

13

14

15

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19

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21
3

 1 P R O C E E D I N G S

 2 MR. SANTIAGO: Good morning and thank you

 3 for attending this public hearing to take comment on

 4 EPA's proposed Prevention of Significant Deterioration

 5 and Title V Greenhouse Gas Tailoring Rule Step 3.

 6 My name is Juan Santiago, and I'm a Group

 7 Leader in EPA's Office of Air Quality Planning and

 8 Standards. I will be chairing today's hearing.

 9 Joining me on the panel is Christy Smith from our

10 Office of General Counsel.

11 We are here today to listen to your comments

12 on the next step of EPA's common-sense, phased-in

13 approach to greenhouse gas permitting under the Clean

14 Air Act. Before we move to the comment period, I

15 would like to briefly describe the proposed rule that

16 is the subject of today's hearing. The proposal was

17 published in the Federal Register on March 8, 2012.

18 In that notice, EPA proposed to keep greenhouse gas

19 (GHG) permitting thresholds at current levels. These

20 thresholds established under the GHG Tailoring Rule,

21 define when permits under the New Source Review
4

 1 Prevention of Significant Deterioration (PSD) and

 2 title V Operating Permit programs are required for new

 3 and existing industrial facilities.

 4 Currently new facilities with GHG emissions

 5 of at at least 100,000 tons per year (tpy) carbon

 6 dioxide equivalent (CO2e) and existing facilities with

 7 at least 100,000 tpy CO2e are required to obtain PSD

 8 permits. Facilities that must obtain a PSD permit

 9 anyway, to cover other regulated pollutants, must also

10 address GHG emissions increases of 75,000 tpy CO2e or

11 more. New and existing sources with GHG emissions

12 above 100,000 tpy CO2e must also obtain operating

13 permits.

14 After evaluating the progress of GHG

15 permitting so far, EPA believes that state permitting

16 authorities have not had sufficient time to develop

17 necessary program infrastructure, and to increase

18 their GHG permitting expertise, to make it

19 administratively feasible to apply PSD and Title V

20 permitting requirements to smaller sources.

21 EPA also is proposing two approaches to
5

 1 streamline the GHG permitting process. The first

 2 would increase flexibilities and improve the

 3 usefulness of plant-wide applicability limitations

 4 (PALs) for GHGs. A PAL is an emissions limit applied

 5 source-wide rather than to specific emissions points.

 6 With a PAL, a source can make changes to the facility

 7 without triggering PSD permitting requirements as long

 8 as emissions do not increase above the limit

 9 established by the PAL. This would allow companies to

10 respond rapidly to changing market conditions while

11 protecting the environment.

12 The second approach would create the

13 regulatory authority for EPA to issue synthetic minor

14 permits for GHGs where EPA is the PSD permitting

15 authority. A GHG source could agree to an enforceable

16 GHG emissions limit set below a level that would

17 trigger PSD permitting requirements. The process for

18 obtaining a synthetic minor permit is generally less

19 complicated than the PSD permitting process for a

20 major source. This action would give facilities a

21 mechanism to keep themselves out of major source
6

 1 permitting requirements for GHG as long as the source

 2 minimizes its GHG emissions.

 3 We will accept comment on the specific

 4 elements of the proposal I described, as well as any

 5 other issues raised by the proposal through April 20,

 6 2012. We have a fact sheet available in the

 7 registration area that contains detailed information

 8 for submitting written comments.

 9 Now let me describe how this hearing will

10 operate and how to comment. Today we will be

11 accepting oral comments on our proposal and we will be

12 preparing a written transcript of this hearing. The

13 transcript will be available as part of the official

14 record for this rule and EPA will consider it as we

15 move forward.

16 For those who will be providing oral

17 comments today, I will call the scheduled speakers to

18 the microphone. When it is your turn to speak, please

19 state your name and your affiliation. It will help

20 our court reporter if you also spell your name.

21 In order to be fair to everyone, we are
7

 1 asking that you limit your testimony to five minutes

 2 each and to remain at the microphone until both

 3 speakers in a pair have finished. After you finish

 4 your testimony, a panel member may ask clarifying

 5 questions. If, in addition to the transcript of your

 6 comments, you would also like us to put additional

 7 comments or infomration into the docket, please be

 8 sure to give a copy of those items to our staff at the

 9 registration table.

10 We have a timekeeping system consisting of

11 Green, yellow and red lights. When you begin

12 speaking the green light will come on. You will have

13 five minutes to speak. The yellow light will signal

14 that you will have two minutes left to speak. I will

15 ask you to stop speaking when the red light comes on.

16 We intend to stay into the evening until

17 everyone has an opportunity to comment. If you would

18 like to testify but have not yet registered to do so,

19 please sign up at the registration table. For those

20 who have already registered to speak, we have tried to

21 accommodate your requests for specific time slots. We
8

 1 ask for your patience as we proceed through the list.

 2 We may need to make some adjustments as the day

 3 progresses.

 4 I would like to thank you all again for

 5 participating today. Let's get started.

 6 The first speaker is Howard J. Feldman

 7 MR. FELDMAN: Good morning. I am Howard J.

 8 Feldman, Director of Regulatory and Scientific Affairs

 9 at API. API represents nearly 500 member companies

10 involved in all aspects of the oil and natural gas

11 industry, and as you all know, we've been very active

12 in the Clean Air Act regulatory process through the

13 years.

14 I want to make three points today: First,

15 API, along with many other groups, does not believe

16 that the Clean Air Act is an effective mechanism to

17 address the emissions of greenhouse gases (GHGs). As

18 we indicated recently before the D.C. Circuit, we

19 question EPA's legal authority to modify the statutory

20 thresholds in the Clean Air Act in an effort to

21 regulate GHG emissions when alternative
9

 1 interpretations are available that would avoid the

 2 need to rewrite the statute in the first instance.

 3 Second, if the D.C. Circuit ultimately upholds the

 4 tailoring rule, and EPA remains wedded to this

 5 approach, then EPA should consider raising the

 6 tailoring thresholds. Third, and again, only if the

 7 Court upholds EPA's regulatory approach and EPA is

 8 determined to continue its regulatory course, EPA

 9 should establish presumptive BACT and determine that

10 carbon capture and sequestration need not be

11 considered, in order to save resources in the permit

12 process.

13 Regarding the first point, API believes that

14 the risk form climate change is a serious issue.

15 Should policymakers conclude that a GHG control

16 program is necessary, that would be best pursued with

17 legislation dedicated to the problem, rather than

18 through the existing structure of the Clean Air Act,

19 which clearly does not provide an effective mechanism

20 to address greenhouse gas emissions. Unless the Court

21 definitively upholds EPA's full suite GHG regulations,
10

 1 EPA should not proceed with this rule or the

 2 greenhouse gas regulations under consideration. EPA

 3 can avoid adding further complexity and uncertainty to

 4 its already complex GHG regulatory regime by awaiting

 5 the Court's imminent decision and reconciling any

 6 future rules to the relief ordered by the courts.

 7 Second, if the judicial process upholds

 8 EPA's approach to GHG regulation and, particularly,

 9 the tailoring rule, EPA should either leave the tailor

10 thresholds unchanged or even raise them. Quoting from

11 the EPA fact sheet, "After evaluating the progress of

12 GHG permitting so far, EPA believes that state

13 permitting authorities have not had sufficient time to

14 develop necessary program infrastructure, and to

15 increase their GHG permitting expertise, to make it

16 administratively feasible to apply PSD and Title V

17 permitting requirements to smaller sources." It's

18 apparent that EPA's approach to GHGs is adversely

19 impacting development.

20 Attachment C of EPA's May 2010 Regulatory

21 Impact Analysis for the Final Prevention of
11

 1 Significant Deterioration and Title V Greenhouse Gas

 2 Tailoring Rule indicated that, with tailoring rule

 3 thresholds at 100,000 tons per year, 688 PSD permit

 4 actions annually would be needed due to the inclusion

 5 of GHG permit requirements. In fact, according to

 6 EPA's web site, since January 2011, when the GHG-PSD

 7 rules became effective, there have been only about two

 8 dozen comment letters to permit applicants. This

 9 discrepancy between a one year projection of activity

10 and the actual permit activity to date cannot be due

11 simply as some have alleged "to the economy." We hear

12 about permit delays and we believe that the GHG-PSD

13 requirements have caused businesses to delay

14 investment and expansions, almost certainly with a

15 resulting adverse impact on jobs.

16 Given the current status of the GHG-PSD

17 program, EPA's acknowledgment that state permitting

18 authorities have not had sufficient time to develop

19 necessary program infrastructure demonstrates that

20 there is no basis to lower the tailoring thresholds

21 and create even more taxing demands on limited
12

 1 infrastructure, assuming the Courts uphold the concept

 2 at all. Instead, we suggest that EPA consider raising

 3 the thresholds to perhaps 250,000 tons per year. That

 4 would be more consistent with sources which are

 5 subject to the thresholds for criteria pollutants.

 6 Third, please also note that API has

 7 supported use of a presumptive BACT at the applicant's

 8 discretion and that EPA should issue a determination

 9 that carbon capture and sequestration need not be

10 considered in BACT analyses at this time. Both of

11 these positions would further the goal of streamlining

12 for both applicants and regulators by saving time and

13 resources with no environmental cost.

14 In our written comments we will address

15 these issues in greater depth and EPA's proposal for

16 plant-wide applicability limitations and regulatory

17 provisions to allow for "synthetic minor" permits for

18 GHGs under the federal PSD program.

19 Thank you.

20 MR. SANTIAGO: Thank you Mr. Feldman. Any

21 questions, Ms. Smith?
13

 1 MS. SMITH: No

 2 MR. SANTIAGO: At this time we don't have

 3 any other speakers signed in. We're going to close

 4 the hearing and wait for other speakers.

 5 (Recess at 10:10 a.m.)

 6 (Lunch recess 1:00 p.m. until 2:00 p.m.)

 7 MR. SANTIAGO: It is 7:00 o'clock. There

 8 are no additional speakers signed up. At this time

 9 we're closing the hearing.

10 (Hearing was concluded at 7:00 p.m.)

11 - - -

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PROPOSED TITLE V GREENHOUSE GAS TAILORING 

RULE STEP 3

HEARING

March 20, 2012

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PROPOSED TITLE V GREENHOUSE GAS TAILORING 

RULE STEP 3

HEARING

March 20, 2012

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PROPOSED TITLE V GREENHOUSE GAS TAILORING 

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HEARING

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permits (5)

 3:21;4:8,13;5:14;

 12:17

permitting (17)

 3:13,19;4:15,15,18,20;

 5:1,7,14,17,19;6:1;

 10:12,13,15,17;11:17

phased-in (1)

 3:12

Planning (1)

 3:7

plant-wide (2)

 5:3;12:16

please (4)

 6:18;7:7,19;12:6

pm (3)

 13:6,6,10

point (1)

 9:13

points (2)

 5:5;8:14

policymakers (1)

 9:15

pollutants (2)

 4:9;12:5

positions (1)

 12:11

preparing (1)

 6:12

presumptive (2)

 9:9;12:7

PREVENTION (4)

 1:8;3:4;4:1;10:21

problem (1)

 9:17

proceed (2)

 8:1;10:1

process (6)

 5:1,17,19;8:12;9:12;

 10:7

program (6)

 4:17;9:16;10:14;

 11:17,19;12:18

programs (1)

 4:2

progress (2)

 4:14;10:11

progresses (1)

 8:3

projection (1)

 11:9

proposal (5)

 3:16;6:4,5,11;12:15

PROPOSED (4)

 1:8;3:4,15,18

proposing (1)

 4:21

protecting (1)

 5:11

provide (1)

 9:19

providing (1)

 6:16

provisions (1)

 12:17

PSD (11)

 4:1,7,8,19;5:7,14,17,

 19;10:16;11:3;12:18

PUBLIC (2)

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pursued (1)

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put (1)

 7:6

Q

QUALITY (2)

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Quoting (1)

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R

raise (1)

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raised (1)

 6:5

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rapidly (1)

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rather (2)

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recently (1)

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Recess (2)

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reconciling (1)

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 6:14

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Regarding (1)

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Register (1)

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registered (2)

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registration (3)

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regulation (1)

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regulations (2)

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 12:12

regulatory (8)

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relief (1)

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remain (1)

 7:2

remains (1)

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Reported (1)

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reporter (1)

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represents (1)

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requests (1)

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required (2)

 4:2,7

requirements (7)

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 11:5,13

resources (2)

 9:11;12:13

respond (1)

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resulting (1)

 11:15

Review (1)

 3:21

rewrite (1)

 9:2

risk (1)

 9:14

RULE (10)

 1:10;3:5,15,20;6:14;

 9:4;10:1,9;11:2,2

rules (2)

 10:6;11:7

S

SANTIAGO (5)

 3:2,6;12:20;13:2,7

save (1)

 9:11

saving (1)

 12:12

scheduled (1)

 6:17

Scientific (1)

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second (3)

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sequestration (2)

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 7:19

signal (1)

Min-U-Script® BRADFORD ASSOCIATES

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PROPOSED TITLE V GREENHOUSE GAS TAILORING 

RULE STEP 3

HEARING

March 20, 2012

 7:13

signed (2)

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SIGNIFICANT (4)

 1:9;3:4;4:1;11:1

simply (1)

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site (1)

 11:6

slots (1)

 7:21

smaller (2)

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Smith (3)

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Source (6)

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sources (4)

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source-wide (1)

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speak (4)

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speaker (1)

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speakers (5)

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speaking (2)

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specific (3)

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spell (1)

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staff (1)

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Standards (1)

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started (1)

 8:5

state (4)

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status (1)

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statute (1)

 9:2

statutory (1)

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stay (1)

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STEP (3)

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streamline (1)

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structure (1)

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subject (2)

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submitting (1)

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sufficient (3)

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suite (1)

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supported (1)

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sure (1)

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synthetic (3)

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system (1)

 7:10 T

table (2)

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tailor (1)

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TAILORING (9)

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testimony (2)

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Third (2)

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thresholds (9)

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TITLE (6)

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 11:1

today (5)

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today's (2)

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tons (3)

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tpy (4)

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transcript (3)

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under (5)

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Unless (1)

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up (2)

 7:19;13:8

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 12:1

upholds (4)

 9:3,7,21;10:7

use (1)

 12:7

usefulness (1)

 5:3 V

Virginia (1)

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W

wait (1)

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