Document ID: EPA-HQ-OAR-2009-0597-0032
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2009-10-07T04:00Z

Results of Preliminary Review of Comments Received on the ANPR for
Greenhouse Gases (73FR44354, July 30, 2008) for Comments Addressing
Whether CO2 is Currently a Pollutant “Subject to Regulation” under
the CAA 

The following table and attachment presents the results of EC/R’s
preliminary search of available comments on the ANPR for Greenhouse
Gases Under the Clean Air Act (as submitted to Docket No.
EPA-HQ-OAR-2008-0318) concerning whether the greenhouse gas CO2 is
currently “subject to regulation” under the Clean Air Act.  Note
that the assessment of the subject docket items was confined to
documents that were uploaded to the docket (in both draft and final
form) as of December 11, 2008.  Utilizing Adobe® software, key search
words were used to identify comments, and several of the significant
comment letters were reviewed individually that were determined not to
be searchable under Adobe.  Note that not all documents were reviewed
individually and that Air Docket has reported that many documents (100s)
have not yet been reviewed and uploaded to the relevant docket as of
December 11, 2008 (public comment period ended at the end of November). 
Therefore, it is highly likely that additional relevant comments, not
identified in preliminary search, will be identified in later searches.

	As shown in the table and attached comment excepts, several commenters
addressed the “subject to regulation” question directly, several
commenters provided comments that indicate a presumption that CO2 is not
currently a regulated pollutant under the CAA, and some commenters
referred to the Deseret case without specific argument.  All of these
comment types have been included in the table and attachments that
follow.AttachmentDocket ID No.	Commenter	Major Thrust of Comment
Relevant to “Subject to Regulation” Issue

@1221.1	Chamber of Commerce of the U.S.	Comments suggest CO2 is not
currently subject to regulation.

@1273	Food Industry Environmental Council	We believe that EPA can
exercise its discretion to define “regulated NSR pollutant” further
to include only those GHGs that are specifically regulated at a Section
111 source, and only to the extent the GHGs are emitted from regulated
source categories.

@1423	Council of Industrial Boiler Owners	Even while CO2 is not
regulated, permitting decisions are being delayed and others are being
challenged based on CO2 (e.g., Deseret case)

@1440.1	New York Attorney General’s Office	In light of the recent
ruling the the EPA EAB, EPA can no longer take the position that past
agency interpretations constrain its ability to interpret the phrase
“subject to regulation”  (Deseret case)

@DRAFT-2173	Center for Biological Diversity on EPA’s CAA	EPA currently
asserts that CO2 is not currently “subject to regulation.”  This
position is incorrect. (refers to Deseret and other cases)

@DRAFT-2257	American Public Power Association	APPA agrees with EPA that
CO2 does not become a “regulated pollutant: under NSR and Title V
until the pollutant is “tied to a control technology.”  Refers to
Deseret and urges Congress to amend the Act to clarify that CO2 is not
regulated under the NSR program.

@DRAFT-2271	Climate Solutions	EPA should implement a moratorium on the
construction of new coal-fired power plants without proven controls to
reduce and sequester GHG emissions.  Refers to Deseret.

@DRAFT-2285.1	UARG	EPA believes – and UARG agrees – that PSD does
not currently apply to GHGs.

@DRAFT-2371	Clean Air Implementation Project	PSD permits have not been
required to contain a BACT emissions limit for GHGs because GHGs (and
CO2 in particular) have not been subject to any provisions of the Act or
EPA regulations that require actual control of emissions.  EPA properly
interprets “subject to regulation” to apply only to pollutants
subject to actual controls on emissions.  Refers to Deseret.

@DRAFT-2401.1	Californians for Renewable Energy (CARE)	Refers to Deseret
and other cases, and Part 75 requirements-Section 821 of the Public Law
as support that CO2 is “subject to regulation” under the CAA.  EAB
determined that the administrative record of the permitting decision did
not support the EPA’s position that it did not have the authority to
impose CO2 BACT limits because of its historical interpretation.  

@DRAFT-2404	National Tribal Air Association	EPA should halt the approval
and construction of proposed coal-fired power plants until the Agency
establishes a BACT standard specific to GHG emissions.  Refers to
Deseret.

@DRAFT 2538.1	LA Department of Water and Power – footnote.	While EAB
did not specifically rule on whether CO2 limits must be included in the
Deseret PSD Permit, the opinion requires the Region to reconsider
whether to impose CO2 BACT limits on the unit and to develop an adequate
record for its decision.

@DRAFT-2559.1	Environmental Defense Fund	The ANPR sets forth the same
incorrect position about the meaning of the phrase “subject to
regulation” under the Act that the OAR has taken in Desert Rock and
other permit proceedings before the EAB.  The EPA should reverse the
incorrect position that OAR has taken in Deseret and Desert Rock (and
repeated in the ANPR).  EPA should make clear that applicants for PSD
permits must use BACT to limit their CO2 emissions.

Comments Identified in Preliminary Search of Docket EPA-HQ-OAR-2008-0318
Relevant to Whether CO2 is Currently a Regulated Pollutant under the
CAAATTACHMENT A – Comment Excerpts Relevant to Issue of Whether CO2
is Currently “Subject to Regulation” (bolding added to emphasize
relevance)

Comment #1221.1, Chamber of Commerce of the U.S.

At page 14:  

3. Prevention of Signficant Deterioration (PSD)

a. Mandatory Trigger

PSD is triggered the moment CO2 becomes a “regulated pollutant”
under the 

CAA.  It happens instantaneously—sooner, even, than a NAAQS orNSPS.14 
 Under

the CAA, should CO2 be deemed regulated under the Act—even if the
regulation is

for vehicles or fuels and is specifically not directed at stationary
sources—no new or

existing “ major” stationary source of CO2can be built or modified
(if the modification increases net emissions) without first obtaining a
PSD permit. Like Nonattainment NSR, “major sources” are defined as
either a source in one of 28 listed categories (mostly industrial
manufacturers and energy producers) that emits at least 100 tons per
year (tpy) of an air pollutant, or an other source with the potential to
emit 250 tpy of an air pollutant.

14 The U.S. Chamber does not believe an endangerment finding alone would
trigger PSD. However, because so

many provisions in the CAA are tied to endangerment, the moment
regulation occurs through one of those

programs, PSD applies.

At page 23:

EPA argues it can circumvent the PSD program through several regulatory

options, such as: subjective interpretation of potential to emit;
general permits;

streamlined BACT; phase-in of applicability of PSD; and raising the
threshold for

exposure to the PSD program. Environmental groups play along, too: on
September

23, 2008, David Bookbinder, Chief Climate Counsel for the Sierra Club
(and a

Petitioner in Massachusetts) told the Senate Environment and Public
Works Committee

that even if PSD were triggered, he did not expect that his organization
or others

would seek to enforce PSD program requirements on anything but the
largest

emitters. However, EPA has never, under any circumstances, attempted to
use any of

the aforementioned methods to limit applicability of PSD. Although
convenient, it is

hard to imagine that the judges who wrote Massachusetts and North
Carolina would

tolerate EPA’s attempts to re-interpret the text of the CAA. At that
point, the only

thing standing in the way of widespread application of PSD is the word
of Mr.

Bookbinder that PSD would not exploited—a statement that should be
viewed with

informed skepticism, given that Sierra Club, NRDC and others are arguing
in several

pieces of active litigation, as well as a challenge to Delaware’s SIP,
that greenhouse

gases are already regulated under the CAA and PSD already applies.

In the past year alone, environmental groups have actively pursued the
trigger and enforcement of PSD for greenhouse gases in the following
cases:  In re: Deseret Power (before EPA’s Environmental Appeals Board
(“EAB”), PSD Appeal No. 07-03);  In re: Sevier Power Company Power
Plant (case before the Utah Air Quality Board, No. DAQE-AN 2529001 -

04, decided January 9, 2008); In re: ConocoPhillips (case before the
EAB, PSD Appeal No. 07-02); Desert Rock Energy and Dine Power Authority
v.EPA ( case filed in S.D. Tex, No. 08-0872); Environmental Defense Fund
v. North Carolina Dept. of Env. & Nat. Res. (case before the NC Office
of Administrative Hearings, No. filed March 27, 2008); and In re:
Christian County Generation, LLC ( case before the EAB, PSD Appeal No.
07-01, decided January 28, 2008).  On November 14, 2008—the day after
the EAB remanded the Deseret Power case back to EPA Region 8 for a
determination of whether PSD has been triggered and CO2 BACT is
required—Mr. Bookbinder’s organization, the Sierra Club, ran a
front-page story on its website championing the decision, with a
statement that “ all new and proposed coal plants nationwide must go
back and address their carbon dioxide emissions.”

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---------------------------------------------

1273, Food Industry Environmental Council

At page 11:  

(2) EPA has discretion to include only GHG emissions from Section 111
sources in the preconstruction permit program

If no climate change legislation is forthcoming, we suggest that EPA
decline to impose a preconstruction permit program on small sources
using one of the following two methods.  First, the federal
preconstruction permitting program regulates only sources that emit a
“pollutant subject to regulation.”  EPA takes the position that the
phrase “pollutant subject to regulation” is inherently ambiguous,
and is therefore subject to EPA interpretation.  And at least one
adjudicative body has agreed with EPA.  EPA’s most recent formal
definition of the phrase states that a “regulated NSR pollutant”
includes, among other things, “[a]ny pollutant that is 30 See 42
U.S.C. § 7475(a)(4).  31 See In re Deseret Power Electric Cooperative,
PSD App. No. 07-03, slip op. at 28–29, (Envt’l App. Bd. Nov. 13,
2008).  32 See id. at 29) subject to any standard promulgated under
section 111 of the Act.”  At first glance, this definition would
appear to cover all GHGs if any GHG sources are regulated under a
Section 111 standard.  However, we believe that EPA can exercise its
discretion to define “regulated NSR pollutant” further to include
only those GHGs that are specifically regulated at a Section 111 source,
and only to the extent the GHGs are emitted from regulated source
categories.  For example, if EPA promulgated a GHG standard of
performance for coal-fired boilers, the “regulated NSR pollutant”
would only be GHGs emitted at the coal-fired boilers covered by the
standard, and not GHGs emitted by other sources not subject to the
standard.  In this way, EPA and others could focus their permitting and
enforcement resources on the largest and most significant sources of
GHGs, without inefficiently (and largely ineffectively) requiring
smaller sources to comply with the burdensome preconstruction permit
requirements.  Second, even if the definition of “regulated NSR
pollutant” were not modified, EPA has in the past exercised its
discretion to not impose preconstruction permitting requirements at
facilities emitting more than de minimis amounts of a regulated NSR
pollutant.  For example, in a 1998 guidance document that still informs
the permitting of new sources, EPA concluded that CFCs—though
technically listed as a regulated NSR pollutant—did not have to be
included in a source’s NSR analysis.  Similarly, EPA could declare 33
67 Fed. Reg. 80,186, 80,240 (2002).  Instead of amending the PSD
regulations—and as outlined below, the Title V regulations—EPA could
state as it promulgated each new source performance standard that only
those pollutants emitted by sources subject to the standard of
performance are defined as a “regulated pollutant.”  This approach
would leave intact EPA’s current approach to non-GHG regulated
pollutants.  If EPA lists GHGs as a criteria pollutant, its discretion
to exempt GHGs from regulation as a “regulated NSR pollutant” is
severely constrained.  This is another reason why we urge EPA not to
list GHGs as a criteria pollutant.  See Letter from John S. Seitz to
Kevin Tubbs (Mar. 19, 1998), available at   HYPERLINK
"http://www.epa.gov/Region7/programs/artd/air/nsr/nsrmemos/rfrigrnt.pdf"
 www.epa.gov/Region7/programs/artd/air/nsr/nsrmemos/rfrigrnt.pdf . that
GHGs need not be regulated in practice as a part of a source’s
preconstruction review.  In summary, we believe that EPA has sufficient
discretion to exclude GHGs from regulation under the new source review
program through either a refined definition of “regulated NSR
pollutant” or by simply not regulating GHGs in permitting practice. 

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---------------------------------------------

1423, Council of Industrial Boiler Owners

At pages 6 and 7:  

Already, even while CO2 is not regulated, permitting decisions are being
delayed and others are being challenged based on CO2.  Most recently,
the Environmental Appeals Board (EAB) remanded a permit for the Deseret
Power Electric Cooperative to EPA Region 8, directing it to reconsider
whether it should set a best available control technology (BACT) for CO2
and to develop a record for that decision.  Under the CAA, should CO2 be
regulated under the Act—even if the regulation is for vehicles or
fuels and is specifically not directed at stationary sources—no new or
existing “major” stationary source of CO2 can be built or modified
(if the modification increases net emissions) without first obtaining a
PSD permit. Given that the CAA specifies thresholds for PSD and Title V
permitting and given that emissions of CO2 are orders of magnitude
higher than those of conventional pollutants, and given that there is no
add-on control available for reducing CO2 emissions, the consequences of
PSD and Title V applicability for CO2 emissions would be devastating to
U.S. industry.  While EPA has analyzed the numbers of sources that would
exceed CAA thresholds and trigger PSD and Title V permitting for CO2,
EPA has not considered the even greater number of sources that trigger
modification provisions under PSD for CO2.  In order for businesses to
compete globally, they must continually improve products, quality,
efficiency, reliability and other factors.  Industry continually
improves operations with minor changes to conventional pollutants. 
However, should EPA proceed down the path (either willingly or be forced
to unwillingly by litigation) to make GHG a regulated pollutant under
the Act, the current low thresholds of PSD applied to CO2 would trigger
an untold number of PSD modifications.  As a result, continual
improvement options for U.S. businesses would be severely constrained
and U.S. industry would simply not be able to compete effectively in the
global economy. 

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---------------------------------------------

1440.1, New York Attorney General’s Office

At pages 11 and 12:  

1. “Subject to Regulation”

Under the CAA, a PSD permit must include a BACT emission limitation for
air pollutants that are “subject to regulation” under the Act. 42
U.S.C. § 7475(a)(4); see 40 C.F.R. § 52.21(b)(50)(iv) (BACT required
for “any pollutant that is otherwise subject to regulation under the
Act.”).  The statute defines BACT as “an emissions limitation . . .
based on the maximum degree of reduction for each pollutant subject to
regulation under the Act” that the Administrator determines is
achievable “on a case-by-case basis, taking into account energy,
environmental, and economic impacts and other costs.” 42 U.S.C. §
7479(3); see 40 C.F.R. § 52.21(b)(12). Given the language of the
statute and the regulations, pollution controls that meet the BACT
standard are required not only for criteria pollutants such as nitrogen
oxides and sulfur dioxide, but for “any pollutant that is otherwise
subject to regulation under the Act.”  In light of a recent ruling by
the EPA Environmental Appeals Board, EPA can no longer take the position
that past agency interpretations constrain its ability to interpret the
phrase “subject to regulation” to include GHG emissions.  In re
Deseret Power Electric Coop., PSD Permit Appeal No. 07-03 (EPA EAB, Nov.
13, 2008).  In the Deseret case, EPA Region 8 had issued a PSD permit
for a new coal-fired generating unit without requiring the facility
owner to implement BACT for CO2.  The EAB granted the Sierra Club’s
petition for review, rejecting EPA Region 8’s argument that it lacked
the authority to require a BACT limit for GHG emissions.  Specifically,
the EAB found unpersuasive EPA Region 8’s contention that previous
agency interpretations only authorized BACT where there was a regulation
in place requiring the control of the pollutant in question.  The EAB
remanded the PSD permit to Region 8, meaning that EPA must either
include a BACT emission limitation for GHG emissions from the unit or
provide a legally sound rationale for not including such limitation. 
Deseret, EAB Slip Op. at 63-64.  In response to the EAB remand in the
Deseret case, EPA should conclude that CO2 and other recognized GHG
emissions are “subject to regulation under the Act.”  Given the
Supreme Court’s decision last year in Massachusetts v. EPA, there is
no question that EPA possesses the authority to regulate CO2 emissions
under the Act.

Based on the plain language of the statute, the Court held that the
Act’s definition of “air pollutant” “embraces all airborne
compounds of whatever stripe,” including CO2.  127 S.Ct. at 1460. 
Although the phrase “subject to regulation under the Act” is not
defined in the statute, that just means that EPA should give the phrase
its ordinary meaning.  See American Fed’n of Gov’t Employees v.
Glickman, 215 F.3d 7, 10 (D.C. Cir. 2000) (lack of a statutory
definition does not render a term ambiguous, but instead means it should
be given its ordinary meaning).  GHG emissions are “subject to
regulation under the Act” because not only does the Agency possess the
authority to regulate CO2, there can be no serious dispute that CO2
emissions from power plants and other major sources “may reasonably be
anticipated to endanger public health or welfare.”  As discussed
elsewhere in these comments, the scientific evidence regarding the pace
and harmful effects of global warming caused by CO2 and other greenhouse
gases is extraordinarily compelling.  In addition, harm from global
warming is already occurring, or is imminent. Massachusetts, 127 S.Ct.
at 1455  (“The harms associated with climate change are serious and
well-recognized.”).  Interpreting the term “subject to” regulation
in this fashion is further compelled by consideration of the purposes of
the PSD program.  For example, Section 160(1) states that one of the
program’s goals is “to protect the public health and welfare from
any actual or potential adverse effect which in the Administrator’s
judgment may reasonably be anticipated to occur from air pollution,”
i.e., to protect against anticipated threats to air quality, not waiting
until those threats become realized. 42 U.S.C. 7470(1).  Similarly,
Section 160(5) provides that another goal of the program is “to assure
that any decision to permit increased air pollution in any area . . . is
made only after careful evaluation of all the consequences of such a
decision and after adequate procedural opportunities for informed public
participation in the decision-making process.”  Id., 7470(5).  In
light of the overwhelming scientific evidence that GHGs harm public
health and welfare, and the fact that major stationary sources such as
power plants can be expected to operate for 50 or more years –
generating enormous amounts of greenhouse gases – it is imperative
that EPA require controls for CO2 emissions in PSD permits.  In the
Deseret decision, the EAB recognized that this individual
permit-by-permit approach may be cumbersome and that a national approach
to regulation of GHG emissions under the PSD program is preferable. 
Slip. Op. at 64.  EPA should heed the advice of the EAB by moving
forward expeditiously with a rulemaking to implement PSD permitting for
major emitting facilities.  At the same time, EPA should announce that
it will not grant or approve of any PSD permits for major stationary
sources that fail to include a BACT emission limitation for GHG
emissions.

The definition of “major emitting facility” applies to several
listed categories of sources, including power plants, that emit or have
the potential to emit one hundred tons per year or more of “any air
pollutant” and “any other source with the potential to emit two
hundred fifty tons per year or more of any air pollutant.” 42 U.S.C.
§ 7479(1).  Contrary to EPA’s statement in the ANPR that a major
emitting facility is one that emits or has the potential to emit 250
tons per year of a “regulated NSR pollutant,” 73 Fed. Reg. at
44,498, the plain language of this statute is even broader than the
definition of BACT because it covers “any air pollutant,” not just
an air pollutant that is “subject to regulation under the Act.”  See
Order Requesting Further Briefing at 4, Deseret, PSD Appeal No. 07-03
(EPA EAB, June 16, 2008) (noting the difference in statutory language in
these definitions). 

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DRAFT-2173, Center for Biological Diversity on EPA’s CAA.

At file pages 22 and 23:  

EPA currently asserts that CO2 is not currently “subject to
regulation” under the CAA.  This position is incorrect.  As the
petitioners in the Deseret case have explained, Part 75 of Title 40 of
the Code of Federal Regulations, which requires monitoring and reporting
of carbon dioxide emissions, renders carbon dioxide “subject to
regulation” under the Act.

The EPA’s position has already been overturned both by the EPA’s
Environmental Appeals Board104 and a Georgia state trial court.  In In
Re Deseret Power Electric Cooperative, the Sierra Club, supported by the
Center for Biological Diversity, challenged the EPA’s decision to
exclude CO2 from its BACT limits in approving a PSD permit for the
Bonanza coal plant.  The EAB rejected the EPA’s rationale for the
exclusion and remanded the permit to the EPA for reconsideration.  In
Friends of the Chattahoochee v. Couch, the Georgia Superior court
similarly overturned EPA’s issuance of a PSD permit for a 1200 MW
coal-fired power plant in Early County, Georgia.  The Court held that
CO2 is a pollutant “subject to regulation” under the Act, and
therefore EPA’s failure to set a BACT emission limit was unlawful.

The EPA’s position that GHGs are not “subject to regulation” under
the Act cannot stand, even in the current absence of an endangerment
finding under Section 202 or other sections discussed herein.  Moreover,
as EPA notes in the ANPR, as soon as the EPA takes any one of the
required additional steps outlined here, there can be no question that
New Source Review will apply to GHG-emitting major sources.  The agency,
therefore, should save precious time and resources and avoid further
legal battles by immediately regulating GHGs under the PSD program. 
Doing so would allow EPA to quickly and effectively regulate GHGs from
the largest emitters like coal-fired plants that contribute extensively
to climate change and would avoid locking in unnecessarily high
emissions.  We note that doing so would also give additional certainty
to the regulated community.  While it is uncontroversial that EPA should
prioritize the largest pollution sources first, one of the reasons that
the NSR program will be such an effective tool for reducing GHG
emissions is that it applies to a wide array of sources that will emit
in excess of the applicable statutory thresholds of 250 or 100 tons per
year.  As the EPA notes, it is generally more effective and less
expensive to engineer and install controls at the time a source or major
modification is being designed and built as opposed to retrofitting
controls independently at an existing facility.  Instead of appreciating
this aspect of the act as the enormous opportunity that it is, the EPA
and the commenting agency heads instead have vastly exaggerated
procedural and administrative issues associated with an increase in
permitting. 

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DRAFT – 2257, American Public Power Association

At pages 37 and 38:  

E. NSR Should Not Apply to GHGs.

APPA agrees with EPA that CO2 does not become a “regulated
pollutant” under NSR and Title V until the pollutant is “tied to a
control technology.” See, 73 Fed. Reg. at 43504.  We discussed above
that we agree that the NSR program creates considerable legal and
economic risk to regulated industry and currently unregulated
facilities, businesses, residences, and public and private institutions
including schools and churches, etc.  Moreover, EPA attempts to amend
the current NSR regulations to redefine “a pollutant subject to
regulation under the [PSD program]” as suggested by EPA’s
Environmental Appeals Board in the Deseret PSD Permit Appeal decision do
not resolve the uncertainty and risk for sources in the next several
years, because both those EPA regulations and individual permit
decisions by states and EPA regions will continue to be challenged by
permit opponents and state and federal courts will likely continue to
issue conflicting decisions on this issue.  For these reasons, APPA
calls on the Agency to urge Congress immediately to amend the Act to
clarify that CO2 is not regulated under the NSR program.  The
“Environmental Appeals Board (EAB)” in In Re Deseret Power Electric
Cooperative PSD Permit No. PSD-OU-0002-04.00, PSD Appeal No. 07-03 (Slip
Opinion, November 13, 2008), directs EPA Region 8, the permitting
authority to “(R)econsider whether or not to impose a CO2 BACT limit
in light of the Agency’s discretion to interpret, consistent with the
CAA, what constitutes a “pollutant subject to regulation under the
Act.”  In addition, EAB urges the Region to “consider whether
interested persons, as well as the Agency, would be better served by the
Agency addressing the interpretation of the phrase in the context of an
action of nationwide scope, rather than through this specific permit
proceeding.“  (Slip Opinion at 63-64) 

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DRAFT-2271, Climate Solutions

At pages 3 and 4:  

B. EPA Needs to Act Promptly to Reduce GHG Emissions Under the Act

The Clean Air Act is clear: EPA must immediately issue the endangerment
finding, and act to reduce GHG emissions.  Specifically, EPA must
address new motor vehicle emissions and be ready to phase in a range of
stationary and mobile source controls well suited for implementation
under the Act.  These include a range of actions outlined in the ANPR,
such as adopting increased standards for mobile sources (the specific
subject of the Supreme Court’s decision) and actions to address major
emissions sources including Best Available Control Technology (BACT),
and New Source Performance Standards.  Indeed, EPA has the opportunity
to fast-track appropriate controls on mobile sources.  EPA should
immediately grant a waiver of preemption for automobile regulations to
allow the Northwest states of Washington and Oregon to implement
enhanced standards for vehicle efficiency, joining California and
fourteen other states.  The 2005 Washington Clean Cars Act required all
vehicles powered by gasoline and diesel fuels to match California’s
strict emissions management beginning with Model Year 2009.  Oregon
followed suit in 2007, passing clean car legislation.  EPA blocked these
efforts by failing to grant the required waiver under the Clean Air Act,
despite overwhelming precedent and factual evidence that the waiver
would reduce emissions and save energy and money in the affected states.
EPA should immediately reverse this decision, grant the waiver, and
begin working on national standards to reduce vehicle emissions. 
Another step that EPA should take immediately is to implement a
moratorium on the construction of new coal-fired power plants without
proven controls to reduce and sequester GHG emissions. As demonstrated
by the recent decision of the Environmental Appeals Board (EAB)
remanding the permit for the Bonanza power plant in Utah, EPA must
evaluate CO2 when determining what constitutes Best Available Control
Technology for new facilities.  In re: Deseret Power Electric
Cooperative, PSD Permit No. PSD-OU-0002-04.00 (Nov. 13, 2008).  EPA
needs to immediately apply this reasoning to all coal-fired power plants
throughout the country, avoiding the potential for lock-in of the most
polluting technologies while we move toward cleaner sources of energy. 
The Clean Air Act is a ready tool for lowering U.S. GHG emissions in the
short term.  While significant climate legislation is likely to be
debated in the next Congress, it may take several years to fully
implement GHG reduction measures under new legislation.  Climate
scientists agree that immediate action is needed to slow and reverse the
growth of GHGs in order to avoid the most dangerous effects of climate
disruption.  Failing to act now, using existing legal authorities, would
be perilous and costly.  Furthermore, the Supreme Court gave EPA a clear
mandate to use existing tools to address dangerous air pollutants rather
than waiting for new legislation. Once EPA makes the required
endangerment finding, it must act to address GHGs using the full range
of tools outlined in the ANPR.  As such, the Clean Air Act is ready to
be EPA’s interim framework for immediate GHG stabilization.
Implementing the program now will provide important lessons in crafting
a broader Congressional climate plan later, and jump-start the
regulatory infrastructure of transitioning to a low-carbon economy. 

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DRAFT-2285.1, UARG

At page 124:  

E. Implications for the PSD Program from Possible Regulation of GHGs
Under

the CAA

At the present time, EPA believes -- and UARG agrees -- that PSD does
not currently apply to GHGs.31 Id. at 44497/3.  If EPA decided to
propose and promulgate a rule establishing limits on emissions of GHGs
from mobile sources or stationary sources, PSD permits would need to
contain an emissions limit for those GHGs that reflects BACT. BACT is
“defined as the maximum achievable degree of emissions reduction for a
given pollutant (determined by the permitting authority on a
case-by-case basis), taking into account energy, environmental, and
economic impacts.”  Id.  ..

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DRAFT-2371, Clean Air Implementation Project

At pages 13 and 14:  

1 . GHGs Are Not Currently "Regulated Air Pollutants."

The PSD program applies to each air pollutant (other than a HAP) that is
"subject to regulation under the Act" within the meaning of sections
165(a)(4) and 169(3) of the Act and EPA's regulations.  As EPA points
out in the ANPR, it has historically interpreted the phrase "subject to
regulation under the Act" to describe air pollutants that require actual
control of emissions of that pollutant.  PSD permits have not been
required to contain a BACT emissions limit for GHGs because GHGs (and
C02 in particular) have not been subject to any provisions of the Act or
EPA regulations that require actual control of emissions.  EPA properly
interprets "subject to regulation" to apply only to pollutants subject
to actual controls on emissions.  It is clear that Congress did not
intend to regulate GHGs under the PSD program.  Although section 211(o)
of the Act now targets GHG emissions, Congress made clear that neither
it nor implementing regulations are to affect the regulatory status of
GHGs under the Act.  In the absence of statutory or regulatory
requirements to control GHG emissions under the Act, a stationary source
need not take into account those emissions when determining its major
source status or whether a major modification occurs when a change is
made at the source.  While Congress has required that GHGs be subject to
monitoring and reporting requirements under section 821 of the Act, EPA
has appropriately not interpreted BACT to apply to air pollutants that
are only subject to such requirements.  BACT should not apply to
pollutants unless a determination has been made by EPA or Congress that
such pollutants should in fact be controlled.  The intent of section 821
was clearly to gather information in anticipation of potential
regulation, rather than to trigger regulation itself.  If the gathering
of information alone is enough to make a pollutant subject to
regulation, this would lead to the nonsensical result that the simple
act of trying to determine whether regulation was appropriate or the
best scope for regulation would lead to premature controls before the
extent of the problem is even known.

Further, the Massachusetts decision did not make GHGs "subject to
regulation" under PSD.  As EPA has pointed out, not all air pollutants
are subject to regulation within the meaning of sections 165(a)(4) and
169(3).  The Court was clear that EPA would have to make an

endangerment finding before GHGs could be regulated under section 202. 
See Massachusetts v.EPA, 127 S .Ct. 1438, 1462 (2007)  ("If EPA makes a
finding of endangerment, the Clean Air Act requires the agency to
regulate emissions of the deleterious pollutant from new motor
vehicles.") (emphasis added).  EPA's Environmental Appeals Board (EAB)
recently ruled in the Deseret Electric Cooperative permit appeal that it
found no express statements in the administrative record to support
EPA's position that the phrase "subject to regulation" only applies to
pollutants subject to controls on emissions.  It ruled, however, that
the phrase is ambiguous and open to reasonable Agency interpretation and
remanded the permit decision for EPA to develop an administrative record
either supporting its interpretation or finding that C02 should be
treated as a regulated air pollutant.  Recognizing that the issue had
broad implications, the EAB recommended that EPA consider addressing the
question in an action of "nationwide scope."

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DRAFT-2401.1, Californians for Renewable Energy (CARE)

At file pages 6 through 10:  

The CAA requires the proponent of any new major stationary sources of
air pollution such as a fossil fuel fired power plant to obtain a
construction permit before commencing construction. 42 U.S.C § 7411. 
Carbon Dioxide, CO2, and Nitrous Oxide, N2O, are components of the
emissions expected from the combustion turbines (“CTs”).  The EPA
website recognizes the climate change impacts of these emissions and yet
they were not included as pollutants.  The United States Supreme Court
issued a decision over a year ago noting that the EPA has regulatory
authority to control these emissions and yet they are not even mentioned
in the permit.  The United States Supreme Court issued a landmark
decision on the subject of greenhouse gases and global warming in the
case of Massachusetts v. EPA, 549 U.S. 1438, 1455 (April 2, 2007),
affirming that “[t]he harms associated with climate change are serious
and well recognized."  The Court argued that “greenhouse gases fit
well within the Clean Air Act’s capacious definition of ‘air
pollutant’” (Massachusetts, at 1462).  On Nov. 13, 2008, the US
Environmental Protection Agency's (EPA) Environmental Appeals Board (EAB
or the Board) issued an order that denied review in part and remanded in
part a challenge to the Agency's issuance of a Prevention of Significant
Deterioration (PSD) permit to Deseret Power Electric Cooperative for
construction of a new electric generating unit in Utah (In re Deseret
Power Electric Cooperative, PSD Appeal No. 07-03 (Nov. 13, 2008)).

Although the Board rejected the grounds upon which the Agency declined
to include a Best Available Control Technology (BACT) limit on carbon
dioxide (CO2) in the PSD permit, it also rejected the petitioner's claim
that the Clean Air Act (CAA) requires a PSD permit to include such BACT
limits.  In remanding the PSD permit to the EPA, the board suggested the
EPA consider addressing the issue not in the context of this (and other)
individual permitting decisions, but on a national basis.  Deseret
sought a PSD permit for a new waste-coal-fired electric generating unit
at its existing facility near Bonanza, Utah.  The EPA issued a draft
permit in 2006; the Utah Chapter of the Sierra Club participated in the
permitting process, and submitted comments to the EPA suggesting that if
the Supreme Court were to rule in Massachusetts v. EPA that the Agency
did have the authority to regulate CO2 under the CAA, the agency might
be required to include BACT limits on CO2 emissions in the PSD permit. 
The EPA (Region 8) granted Deseret's permit application on Aug. 30, 2007
(after the Massachusetts v. EPA Supreme Court decision), and declined to
include BACT limits for CO2.  The Sierra Club sought review of the
Agency's permitting decision before the EAB, and raised two issues: (1)
whether the EPA impermissibly failed to consider alternatives to the
proposed power plant; and (2) whether the EPA was required to impose
BACT limits for CO2 because CO2 is a "pollutant subject to regulation
under [the Clean Air Act]."  In its Petition for Review, the Sierra Club
took the position that Sections 165(a)(4) and 169(3)--which require a
PSD permit contain BACT limits for "each pollutant subject to regulation
under this Act"--dictate the EPA must impose a BACT CO2 limit because
CO2 is a pollutant subject to regulation.  The Sierra Club argued that
the plain language of the statute precluded the EPA from interpreting
the language to exclude CO2.  In support of its position, the Sierra
Club cited the Massachusetts v. EPA decision, as well as the 40 CFR Part
75 regulations which impose monitoring and reporting requirements for
CO2 (arguing that such requirements render CO2 "subject to regulation").
 The Agency argued that the decision in Massachusetts v. EPA did not
require the EPA to set CO2 emission limits, and that it had historically
interpreted the phrase "subject to regulation" to mean only pollutants
that were subject to requirements that actually controlled emissions of
the pollutant at issue.  Because the Part 75 regulations cited by the
Sierra Club only required monitoring and reporting of CO2 emissions, and
not control of CO2 emissions, the EPA argued it was constrained by its
historical interpretation, which prevented the EPA from changing its
interpretation.  The Agency cited several sources as evidence of this
interpretation, including a 1978 Federal Register preamble, a 2002
rulemaking, and two internal Agency memos from Lydia Wegman and Jonathan
Cannon from 1993 and 1998, respectively.  The EPA also argued that even
if the Part 75 requirements were deemed to subject CO2 to regulation,
the source of the Part 75 requirements--Section 821 of the Public Law,
added in 1990 as part of the bill that amended the CAA--is not a part of
the CAA in the context of pollutants that are subject to regulation
"under this Act."  

The EAB evaluated each of the components of the Sierra Club's argument
that the plain meaning of "regulation" necessarily required that the
Board ignore the Agency's interpretation of that term, ultimately
rejecting the premise that the statutory language negates the EPA's
authority to interpret "subject to regulation" in the same manner as the
EPA.  The Board found "no evidence of a Congressional intent to compel
EPA to apply BACT to pollutants that are subject only to monitoring and
reporting requirements."  Slip op. at 63.  The Board found the statutory
language was broad enough to support several different meanings of the
phrase in the context of PSD permitting, thus leaving the door open to
agency discretion in interpreting whether CO2 is "subject to
regulation."  The Board analyzed the documents relied upon by the EPA in
its argument that it was precluded from imposing BACT limits on CO2 by
its own historical interpretations of the phrase "subject to
regulation."  In the absence of any document "expressly stating" that
"subject to regulation" means subject to a provision that requires
actual control of emission, the EAB determined the administrative record
of the permitting decision did not support the EPA's position that it
did not have the authority to impose a CO2 BACT limit because of its
historical interpretation.  The Board reviewed the documents cited by
the EPA and concluded that the series of Agency statements were "at
best, weak authorities upon which to anchor the region's conclusion" and
not "sufficiently clear and consistent articulations of an agency
interpretation" to prohibit the Agency from taking the position
advocated by the petitioners.  

The EAB also rejected the Agency's argument that Section 821 was not
part of the CAA, noting that while Section 821 "is not a model of
drafting clarity," it contains language that both supports and subverts
the EPA's position.  Pointing to differing interpretations offered by
the EPA in various contexts and proceedings regarding the specific issue
of Section 821 and its relationship to the CAA, the Board concluded it
could not accept the EPA's interpretation in the context of this appeal,
noting that it was unsure what degree of deference a reviewing court
would give to the Agency, where it had publicly indicated it was not
sure where Section 821 fit into the CAA structure.  The Board remanded
the permit to the EPA Region 8 to "reconsider whether or not to impose a
CO2 BACT limit in light of the agency's discretion to interpret,
consistent with the CAA, what constitutes a 'pollutant subject to
regulation under this Act.'"  Slip op. at 63.  The Board also noted,
however, that it was cognizant of the national scope of this issue, and
asked the EPA whether all parties would be "better served by the agency
addressing the interpretation of the phrase 'subject to regulation under
this Act' in the context of an action of nationwide scope."  Id.

The Board clearly favors this approach, suggesting that (a) the Agency
should specifically evaluate and address whether the historical
interpretations offered by the Agency in fact mandate that the issue be
addressed in the broader context of a nationwide action; and (b) it may
be more efficient to tackle the issue at the national level rather than
seeking to develop the requisite factual record supporting the Agency's
position in not only this permitting process (which requires reopening
the public comment period), but in subsequent permitting proceedings as
well.  The Board's decision does not finally resolve the issue of
whether CO2 BACT limits must or should be included in PSD permits, a
result which does little to reduce the uncertainties that project
proponents will continue to face. By leaving the key question to Agency
discretion, the Board ensures that the debate over this issue will
continue.  The Board does provide some guidance for the Agency--if the
decision is made not to include CO2 BACT limits, the basis for that
decision must be supported by specific evidence developed for and
included in the administrative record, and not simply by general
references to broad Agency statements of policy.  Further, the Board
expressed a clear desire that the Agency consider addressing the issue
at the national level, presumably as part of the broader ongoing
discussion regarding the regulation of greenhouse gas emissions under
existing CAA authority.

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DRAFT-2404, National Tribal Air Association

At pages 2 and 3:  

A. Best Regulatory Options

As for other steps, the NTAA recommends that EPA take three specific
ones.  First, the EPA should halt the approval and construction of
proposed coal-fired power plants until the Agency establishes a best
achievable control technology standard specific to GHG emissions.  A
recent EPA Environmental Appeals Board decision helped moved the Agency
in such a direction, now requiring that the EPA or jurisdictions with
delegated authority under the CAA to conduct a carbon dioxide BACT
analysis for all future coal-fired power plants permitted under the
Act’s Prevention of Significant Deterioration (PSD) program (see In Re
Deseret Power Electric Cooperative, EPA, EAB, PSD Appeal No. 07-03,
11/13/08).  Second, the EPA should begin the process of proposing new
source performance standards (NSPS) under section 111 of the CAA for
GHGs emitted by coal-fired power plants, petroleum refineries, and
cement kilns.  Under this section, the Agency can use a pick-and-choose
approach as to which source categories to establish standards; it can be
selective in picking those categories with the greatest contribution of
GHG emissions with the Agency prescribing a rational emissions
threshold.  Some things that the EPA should consider for regulating GHGs
under this section are the magnitude of GHG emissions from a source
category; the potency of the particular GHGs emitted; whether the
emissions are continuous, seasonal or intermittent; the availability of
information regarding the category’s GHG emissions, and whether
regulating GHG emissions from the source category would be beneficial. 
Third, the EPA should begin a rulemaking on low-carbon fuels by
utilizing the Agency’s authority under section 211 of the CAA.  None
of these regulatory actions, however, should preempt the work being
conducted by such groups as the Regional Greenhouse Gas Initiative and
Western Climate Initiative which are already accomplishing much in
moving toward significant GHG emission reductions in the respective
regions that they serve. 

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DRAFT-2538.1, LA Department of Water and Power, page 8 footnote,
non-searchable file.

At page 8:  

Finally, the issue of whether BACT emissions limits for CO2 should be
imposed has been raised in several recent legal challenges regarding
whether New Source Review permitting requirements apply to new
coal-fired power plants, including one pending legal challenge in which
the EPA’s EAB remanded a NSR permit for failure to include a permit
limit for CO2 based on BACT.  In re: Deseret Power Electric Cooperative.
 While the EAB did not specifically rule on whether CO2 limits must be
included in the Deseret PSD permit, the opinion requires the Region to
reconsider whether to impose CO2 BACT limits on the unit and to develop
an adequate record for its decision.

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DRAFT-2559.1, Environmental Defense Fund (EDF)

At pages 18 and 19:  

In the ANPRM, the EPA sets forth the same incorrect position about the
meaning of the phrase “subject to regulation” under the Act that the
Office of Air and Regulation has taken in Desert Rock and other permit
proceedings before the EAB.  Since the Agency issued the ANPRM, the
Environmental Appeals Board has decisively rejected the reasoning behind
that position, in a permit proceeding about a proposed coal-fired plant
in Utah.  In Re: Deseret Power Electric Coop., PSD App. No 07-03, slip
op. (EAB Nov. 13, 2008) (remanding to EPA for further consideration). 
The EPA should reverse the incorrect position that OAR has taken in
Deseret and Desert Rock (and repeated in the ANPRM), and to satisfy
judicial requirements when an agency takes a new course provide a
careful explanation of why it is correcting that position.  Since the
EAB has rejected the reasoning behind the position taken by OAR to date,
the Agency should properly interpret the phrase “subject to regulation
under the Act” to encompass carbon dioxide and other appropriate
pollutants.  In doing so, the EPA should make clear that applicants for
PSD permits must use Best Available Control Technology to limit their
carbon dioxide emissions.

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