Document ID: EPA-HQ-OAR-2009-0517-19130
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2010-03-02T05:00Z

Final Summary

of the 

Discretionary RFA Small Business Outreach

for

EPA’s Proposed GHG Regulations 

and their 

NSR and Title V Impacts

February 5, 2010

Final Summary of the RFA Small Business Outreach

for

EPA’s Proposed GHG Regulations and their NSR and Title V Impacts

INTRODUCTION

	The Environmental Protection Agency (EPA) is currently developing a
group of regulatory actions for regulation of greenhouse gases (GHG). 
One of these actions is a rule which was proposed on October 27, 2009,
entitled the Prevention of Significant Deterioration and Title V
Greenhouse Gas Tailoring Rule (74 FR 55292), otherwise known as the
Tailoring Rule.  This regulation is intended to tailor the major source
applicability thresholds for GHG emissions under the Prevention of
Significant Deterioration (PSD) and Title V programs of the Clean Air
Act and to set a PSD significance level for GHG emissions.  

	While this proposed rule does not have a Significant Impact on a
Substantial Number of Small Entities (SISNOSE) and therefore does not
obligate EPA to convene a formal Small Business Advocacy Review (SBAR)
panel, EPA is aware that many small entities may be interested in the
various GHG rulemakings currently under development.  As a result, in
collaboration with the Small Business Administration (SBA), EPA
conducted an outreach meeting designed to exchange information with
small entities that may be interested in these regulations.  The
outreach effort was organized and led by representatives from EPA’s
Office of Air Quality Planning and Standards within the Office of Air
and Radiation, EPA’s Office of Policy Economics and Innovation, the
Office of Information and Regulatory Affairs within the Office of
Management and Budget (OMB), and the Office of Advocacy of the Small
Business Administration.

	This summary includes the following:  

Background information on the proposed rule under development;

A summary of the outreach meeting; and 

The written comments and responses of the Small Entity Representatives
(SERs).

Once completed, the final summary for this outreach meeting will be
included in the rulemaking record for the Tailoring Rule.  In light of
the final summary, the Agency will make changes to the proposed rule
where appropriate.

	This document includes a summary of the advice and recommendations
received from the SERs identified for the purposes of this process
during the Outreach meeting.  Written comments submitted by the
representatives are provided in Appendix B to the summary.  

	It is important to note that the findings and discussion in this
summary are based on the information available at the time this summary
was drafted.  EPA is continuing to conduct analyses relevant to the
proposed rule, and additional information may be developed or obtained
during the remainder of the rule development process and from public
comments on the proposed rule.  

	This summary begins with a background section that describes the
purpose of the rule and any relevant regulatory history.  The next
section describes the small entity Outreach conducted by the EPA
workgroup.  The core of the summary collects the comments and
recommendations received from the SERs.  

BACKGROUND

On April 2, 2007, the Supreme Court found that GHGs, including carbon
dioxide, are air pollutants covered by the CAA.  Massachusetts v. EPA,
549 U.S. 497 (2007).  The Supreme Court found that EPA was required to
determine whether or not emissions of GHGs from new motor vehicles cause
or contribute to air pollution which may reasonably be anticipated to
endanger public health or welfare, or whether the science is too
uncertain to make a reasoned decision. In April 2009, EPA responded to
the Court by proposing a finding that emissions of GHGs from new motor
vehicles and engines contribute to air pollution that may reasonably be
anticipated to endanger both public health and welfare. On December 7,
2009, the Administrator signed two distinct findings regarding GHG under
section 202(a) of the Clean Air Act:

Endangerment Finding: The Administrator found that the current and
projected concentrations of the six key well-mixed GHG--carbon dioxide
(CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs),
perfluorocarbons (PFCs), and sulfur hexafluoride (SF6)--in the
atmosphere threaten the public health and welfare of current and future
generations. 

Cause or Contribute Finding: The Administrator found that the combined
emissions of these well-mixed GHG from new motor vehicles and new motor
vehicle engines contribute to the greenhouse gas pollution which
threatens public health and welfare. 

These findings, which were published December 15, 2009 (74 FR 66496), do
not themselves impose any requirements on industry or other entities. 
However, they are a prerequisite to finalizing the EPA’s proposed
greenhouse gas emission standards for light-duty vehicles, which were
proposed by EPA in September 2009.  Under the Agency’s current
interpretation of existing regulations, Clean Air Act permitting
requirements under the PSD and title V programs for GHG emissions would
be triggered upon finalization of the light-duty vehicle rule, and thus
would be the first time GHGs emissions would be subject to either of
these Clean Air Act permitting programs. 

 	As explained in the Tailoring Rule proposal, State permitting
authorities would be paralyzed by enormous numbers of permit
applications from sources with GHG emissions if PSD and Title V
requirements were applied at the applicability levels provided under the
CAA.  Without the Tailoring Rule, EPA estimates that permitting
authorities would receive approximately 40,000 PSD permit applications
each year; currently, they receive approximately 300.  In addition, they
would be required to issue Title V permits for approximately six million
sources; currently, their Title V inventory is some 15,000 sources. 
These estimated permitting burdens are orders of magnitude greater than
the current inventory of permits and would vastly exceed the current
administrative resources of permitting authorities.  In addition, EPA
recognizes that under the applicability levels, an enormous number of
new sources that have not previously been subject to PSD or Title V
would have to get permits due to their GHG emissions.  

	This rulemaking proposed to raise the permitting thresholds for sources
of GHG’s.  Specifically, EPA proposed that sources with the potential
to emit less than 25,000 tons per year of CO2 equivalent (CO2e) are not
required to obtain a Title V permit or PSD permit for a period of at
least five years, during which time, EPA will conduct a study of
permitting burdens and possible streamlining methods.  Under the
proposed rule, EPA would revisit the appropriate applicability
thresholds after the sixth year.  In the six years following
promulgation of this rule, the EPA estimates 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 the need for
a title V permit, and 40 thousand new sources or modifying sources will
not be subject to NSR requirements for GHGs.  For this larger number of
smaller sources, this rule alleviates the regulatory burden associated
with obtaining a title V or PSD permit or complying with NSR Best
Available Control Technology (BACT) requirements.  Therefore, this
proposed action may be considered beneficial to these small entities as
it provides relief from regulation that would otherwise be required. 
Given that these smaller sources of GHG account for only about 7 percent
of the total GHG CO2e emissions in the United States, while representing
over 95 percent of the total number of sources potentially requiring a
PSD permit for GHGs emissions under the permitting thresholds contained
in the CAA, the EPA believes the regulatory scheme proposed in the
Tailoring Rule represents a prudent path forward in addressing GHG
emissions under the Clean Air Act.

SMALL ENTITY REPRESENTATIVES

	The SERs that participated in this Outreach effort included the
following:

Small Entity Representatives In Person

Ben Brandes, National Mining Association (NMA)

Shannon Crawford, National Solid Waste Association (NSWA)

Bradford Frisby, National Mining Association (NMA)

Rhea Hale, American Forest and Paper Association (AFPA)

Jeff Hannapel, American Foundry Society (AFS)

Rick Krouse, Farm Bureau (FB)

Beth Milito, National Federation of Independent Business (NFIB)

Susan Miller, The Brick Industry Association (BIA)

Dan Moss, Synthetic Organic Chemical Manufacturers Association (SOCMA)

Theresa Pugh, American Public Power Association (APPA)

Ed Repa, National Solid Waste Association (NSWA)

Small Entity Representatives Via Teleconference

Sally Allen, Gary-Williams Energy Cooperation and Small Business
Refiners

Leslie Bellas, National Lime Association (NLA)

Jeff Brediger, City of Orville, OH

Brian Brendle, National Association of Manufacturers (NAM)

Terri Gerlach, Hartzell Hardwoods, Inc.

John Hopewell, National Paint and Coatings Association (NPCA)

Brittany Jablonsky, National Farmers Union (NFU)

Kathleen Lockhart, Sugar Cane Growers Cooperative (SCGC)

Bob Neufeld, Wyoming Refining Company

Karen Penafiel, Building Owners and Managers Association (BOMA)

Steve Sherk, American Refining Group, Small Business Refiners

Bill Wenhauf, National Rural Electric Cooperative Association (NRECA)

OUTREACH MEETING

The EPA, in collaboration with the SBA, conducted an outreach meeting
designed to exchange information with small entities that may be
affected by various rulemakings that EPA is developing for GHGs.  The
meeting focused, in particular, on the proposed Tailoring Rule.  Small
entity representatives participating in person and via conference call
were briefed on the rulemaking proposal and given the opportunity to
provide input that the EPA will consider as the rulemaking is further
developed. 

	The meeting took place in Arlington, Virginia on November 17, 2009, and
included representatives from EPA, SBA, OMB, as well as the SERs listed
above.  Slides from the meeting are attached as Appendix A.

	EPA invited SERs to give their focused feedback on concerns that they
may have regarding this rulemaking.  The following questions were
e-mailed to each SER before the meeting and were discussed during this
outreach meeting:

	Are you a small business that would exceed the proposed 25,000 CO2e
threshold?

	Can you provide data showing this? If you are in excess of the
threshold, do you already have a title V or PSD permit due to other
pollutants?

	How many other small entities in your industry would have to get a new
permit?    How many would have to revise an existing permit?

	If we lowered the threshold, how would it affect your industry?  What
if we raised the threshold?

	What would the economic impacts of the current threshold be on your
business?  For a higher or lower threshold?

In addition, EPA requested that any written response to these questions
be submitted by December 1, 2009, which EPA later extended until
December 4, 2009.  The written responses that EPA received are provided
in Appendix B.  There were three respondents:  The American Forest and
Paper Association, the American Public Power Association, and the Small
Business Refiners.

	At the outreach meeting, EPA gave an overview of the suite of GHG
rulemakings being considered by EPA, followed by more specific
information regarding the proposed Tailoring Rule.  The slides from
these presentations are included in Appendix A.  After the
presentations, EPA opened the meeting to a more general discussion of
the questions presented above, as well as other general concerns
regarding GHG regulation under the PSD program.   Throughout the
outreach meeting, the SERs present, both in person and via
teleconference, openly discussed their comments and concerns with the
EPA representatives.  A summary of key comments from the outreach
meeting, many of which were made during discussions of EPA’s questions
for the SERs, as well as preliminary responses from the EPA
representatives present at the meeting, are provided below:

Section 424 of the Interior Environment Appropriations Act

The Farm Bureau representative commented that Section 424 of the
Interior Environment Appropriations Act states that, notwithstanding any
other provision of law, none of the funds made available in this Act or
any other Act may be used to promulgate or implement any regulation
requiring the issuance of permits under Title V of the Clean Air Act for
carbon dioxide, nitrous oxide, water vapor or methane emissions
resulting from biological processes associated with livestock
production.  The Farm Bureau representative was concerned that the light
duty vehicle rule will trigger Title V permits for livestock operations
involving biological processes.  He asked how the enactment of this
provision that has been signed into law will affect the promulgation of
the Light Duty Vehicle Rule.  The BIA representative also inquired as to
whether Section 424 has any exceptions for biofuels.

EPA responded that the EPA was aware of Section 424 of the Interior
Environment Appropriations Act and that an internal EPA workgroup has
been formed to evaluate what this provision will mean for various EPA
rulemakings.  EPA stated that it had not yet reached a conclusion on
what Section 424 will mean with regards to the Tailoring Rule or other
EPA rulemakings.

Timing of the PSD Reconsideration Rule with the Tailoring Rule

The Farm Bureau representative commented that the Stephen Johnson PSD
Applicability Reconsideration rulemaking comment period closes prior to
the proposed Tailoring Rule.  He expressed concern that, conceivably,
the Stephen Johnson PSD Applicability Reconsideration rulemaking may
become final before the Tailoring Rule.  He expressed that if the
EPA’s preferred option regarding PSD applicability is not maintained,
such a gap could result in unintended small GHG emission sources being
subject to PSD.  The Farm Bureau representative requested that EPA
consider finalizing these two rulemakings at the same time so this gap
does not occur.  The American Public Power Association representative
further expressed that they considered requesting an extension of the
comment period for the Tailoring Rule but that they did not want to
increase that potential “gap.”  

EPA responded that it is aware of the gap concern that the Farm Bureau
referred to and that the Administration and EPA have committed to
sequencing the GHG rulemakings in a common sense way.

Potential to Emit

OMB clarified that the proposed Tailoring Rule thresholds were based on
potential to emit and not actual emissions.  This clarification is
important because the GHG Mandatory Reporting Rule thresholds and draft
legislation in the Senate and House are based on actual emissions.  OMB
further stated that this means that a source that may not have to report
under the GHG Mandatory Reporting Rule may be subject to PSD and Title V
due to its potential to emit.  OMB requested whether EPA could provide
an example as to how potential to emit is calculated.

In response, an EPA representative stated that the docket provides
support (in the Technical Support Document) for their potential to emit
emissions thresholds selection.  He explained that EPA looked at actual
emissions, economic data, and operational information by industry sector
and made assumptions.  EPA stated that, for example, for residential
units, it is believed that most GHG emissions result from space and
water heating and that most emissions will occur in colder months. 
Therefore, EPA calculated emissions and made adjustments to account for
greater heating needs in colder months and made similar extrapolations
for other sectors.  

The American Public Power Association representative stated that most of
their equipment is designed to have far greater potential to emit than
actual emissions and that equipment is often not run at full capacity,
and that therefore, EPA has underestimated the regulatory impact of some
types of combustion equipment.  She opined that she is sure that they
are not the only industry sector whose operations do not run at full
capacity (e.g., batch chemical manufacturers, small refiners).  APPA is
not sure what their recommendation might be to EPA (e.g., it maybe to
base applicability emissions thresholds calculations on the number of
hours equipment is run or they may suggest the addition of some rule
clarification).  As proposed, the APPA representative stated that even a
12 MW boiler that does not run more than 600 hours per year would not
get below the PSD/Title V threshold because of emissions thresholds
being based on potential to emit.

Legal Basis of the Rule

The National Federation of Independent Business representative inquired
whether there were other rules where the “absurd results” and
“administrative necessity” arguments were used to support a
rulemaking and whether they were challenged.   The Farm Bureau
representative commented that in the “administrative necessity”
discussion, the court did not rule in favor of those seeking to apply
the doctrine in any of the cases cited.  

EPA stated that there is an extensive discussion in the preamble to the
proposed Tailoring Rule regarding previous use of and court decisions
about these arguments.

Carbon Neutrality of Biomass

The American Forest and Paper Association representative commented that
the difference between EPA’s proposed Tailoring Rule and the Mandatory
Reporting Rule and other EPA rulemakings is that the Tailoring Rule does
not uphold the principle of carbon neutrality of biomass and does not
differentiate between biogenic emissions and fossil fuel emissions when
calculating whether a source would be major under this rule.  She
expressed that this is against all EPA precedent.  The AFPA
representative inquired whether EPA’s calculations included biogenic
emissions or just biofuel emissions (which is the usual case), and
whether there was a deliberate consideration to include biogenic
emissions in this case when EPA has not previously.  The AFPA
representative stated that an example of biogenic emissions would be the
combustion of wood residuals.  She explained that international and
Federal principles have upheld that emissions calculations were to
include all fossil fuel emissions but that biogenic emissions (i.e.,
combustion of wood residuals) did not need to be included.  The AFPA
representative explained that her association represents less than 50
percent of her industry sector and proportionately larger businesses and
that she imagined that there are a lot of smaller wood products
facilities that would be subject to PSD/title V under the proposed
rulemaking.  She estimated that about 5 mills would be subject to
PSD/title V under the proposed rule if EPA did not require the inclusion
of biogenic emissions and about 150 mills if EPA did require the
inclusion of biogenic emissions.

An EPA representative responded that he did not know whether biogenic
emissions were included in the calculations.  He added that EPA did not
look at distinct source categories at the proposed threshold level as
EPA’s goal was to establish the level at which the administrative
burden that would result from the triggering of PSD/Title V with the
promulgation of the Light Duty Vehicle rule would be manageable.  EPA
encouraged the AFPA to provide written comments and directed her to the
docket for the proposed rulemaking for the technical support document
that details the emissions analysis/calculations.

The American Public Power Association representative agreed with AFPA
regarding the need to exclude biogenic emissions from PSD/Title V
emissions calculations for purposes of applicability.  She reported that
many utilities have added biomass as a way of meeting state renewable
electrical/energy standards and that she would not be surprised if
Congress were to adopt national standards.  Based on her read, an
electric utility facility that is a completely renewable facility that
burns biomass could trigger PSD/Title V permitting requirements.  She
represents a 70 MW power plant that has no fossil generation at the
plant except for emergency storm management and, if it needed to
increase operations to meet load requirements, would trigger PSD and
Title V permit requirements for CO2, and possibly NOx, if biogenic
emissions are included in the final PSD and Title V GHG Tailoring Rule
applicability emissions threshold calculations.  Trying to meet
renewable standards in the Southeast is limited to the use of biomass. 
She suggested that EPA make further BACT or Tailoring Rule decisions
that would exclude the CO2 content from biomass usage.

A representative from AFPA added that, from a heating value perspective,
fossil fuel is more efficient.  If fossil fuel and biomass are treated
equally under the proposed Tailoring Rule, there would not be any reason
for industry to use biomass over fossil fuel.  She opined that this is
contrary to National Climate Change Policy which encourages the use of
renewable fuels, and international policy, which is universally
accepted.

Process Emissions 

The National Lime Association representative inquired whether EPA took
into account process emissions in its emissions analysis.  The NLA
representative stated that the lime production industry is comprised
mostly of small businesses, and the major modification proposed PSD
threshold level may prevent or delay facilities from doing energy
efficiency projects.  She explained that half of the emissions from lime
production are inherent in the process of manufacturing lime.  Many
facilities engage in energy efficiency programs to reduce fuel
consumption but allow them to increase production which could possibly
cause an increase in CO2 that could trigger PSD.  She explained that
making lime is done by heating limestone to a very high temperature
which causes a release of CO2.  For eight years they have been part of
Climate VISION to improve energy efficiency.  She requested that there
be some kind of exemption for those process emissions, as there would be
no Best Available Control Technology (BACT) for that and if they are
required to go through PSD review every time they do an energy
efficiency project, it would substantially burden small businesses.  

In response, an EPA representative stated that all of the industry
specific comments have been useful.  He reiterated the purpose of the
proposed rulemaking and stated that all comments will be taken into
consideration.  

Differences between Mandatory Reporting Rule and Tailoring Rule Metrics

The BIA representative commented that there are three differences
between the GHG Mandatory Reporting Rule and EPA’s proposed Tailoring
Rule.  The first difference is that the Reporting Rule requires
emissions calculations to be based on actual emissions and the Tailoring
Rule requires emissions calculations to be based on potential to emit. 
The BIA representative stated that though her industry would like their
actual emissions and potential emissions to be closer together
(reflecting operations closer to capacity) this is not where they are
now, given the economy.  The second difference is that the proposed
Tailoring Rule emissions measurement is in short tons versus metric
tons.  She explained that when a source is close to the threshold line,
that 10 percent is important.  The third difference is that their
industry, under the Mandatory Reporting Rule, only needs to include
combustion emissions where the proposed Tailoring Rule would require all
of their emissions when determining whether they are a major source.  

State Laws in conflict with Tailoring Rule

The Farm Bureau representative raised a concern regarding state laws. 
He stated that though the Tailoring Rule will meet Federal requirements,
sources will still be subject to state laws.  States will likely not
address changes to their laws until the Tailoring Rule is final and
there may be a gap in coverage between the lower and the proposed higher
thresholds for GHGs.  The Farm Bureau representative inquired whether
EPA has a list of States that need to change their laws and regulations
and what they need to change to be consistent with the Tailoring Rule. 
He added that such a list would be helpful when engaging States to
change either their statutes or regulations.  The Farm Bureau
representative commented that, until the state law issue is addressed,
there will be no impact from the proposed Tailoring Rule.  

EPA acknowledged that some States may need to change their regulations
and laws to be consistent with EPA’s proposed rule.  An agency
representative reported that EPA has been speaking to a number of States
and are encouraging States to move forward now rather than later, and
that some States are already taking action on this.

Burden Estimates

Referring to slide 15 of EPA’s presentation, the National Farm Union
representative inquired whether EPA has estimated the cost associated
with those sources that would still be subject to PSD and Title V under
the proposed Tailoring Rule thresholds and requested that, if possible,
she receive a follow-up e-mail referring her to this information.  The
National Farm Union also inquired how EPA was defining small entity.

An EPA representative stated that the presentation was focused on burden
reduction as a result of the proposed rule, but that the Regulatory
Impacts Assessment (RIA) developed for the proposed Tailoring Rule
includes the costs that would still be incurred by sources subject to
PSD and Title V under the proposed Tailoring Rule.  He added that there
is uncertainty in data and information, and that data on agricultural
operations were scarce and that the EPA would welcome more data to be
submitted with any written comments on the proposed rule and/or as part
of this outreach.  EPA responded to the “small entity” question by
clarifying that a small entity differs depending on industry sector, and
explained that when he referred to “small” entities, he meant small
with regards to their emissions profile.

The National Federation of Independent Business expressed that slide 14
(2nd bullet) states that facilities proposed for exclusion comprise only
7 percent but that EPA stated that those entities were covered
elsewhere.  

EPA responded by referring to slide 23 and explained that when you move
from a threshold of 25,000 CO2e to 100/250 CO2e, which would be the
threshold that would apply in absence of the proposed rule, there is an
incremental change in emissions that would be subject to PSD of about 7
percent (i.e., if the proposal is finalized, only 7 percent of GHG
emissions would be excluded from PSD applicability, though the number of
facilities excluded could be in the millions).  EPA also clarified that
those emissions may be covered under voluntary programs or energy
efficiency programs but not under another Federal permitting program. 

The representative from the American Foundry Society asserted that there
would be a huge burden associated with the permitting requirements and,
depending on BACT (e.g., switching fuels), this burden would be even
more significant.  He also asserted that he believed EPA’s estimate of
$45,000 to obtain a Title V permit is low and that he believes the costs
are doubled.  Additionally, he commented that the cost of permitting
authorities per permit, where States need to go to a fee program, will
be an added cost for facilities.

The American Public Power Association representative requested that EPA,
when conducting its impacts analysis, do a more thorough job accounting
for the economic downturn over the last 12 months (utilities have lost
20 percent industrial/commercial load in the last year) and the economic
fragility.  She asserted that, without consideration of these economic
times, entities will likely move offshore.

The NLA representative commented that impact considerations include more
than applying for a permit, and could include the burden of the
permitting agency needing to review applicability determinations filed
with these agencies to ensure they are not going to be subject to PSD or
open to enforcement action.

The American Foundry Society representative stated that the cost of
controls and the cumulative effect of these regulations are both big
issues for small businesses.  He commented that their industry uses
fuels to heat metals and requiring that their industry switch fuels
could result in significant impacts.

New Permits Needed Because of Regulation of GHGs

The NLA representative responded that most of their facilities already
have Title V permits and the most significant issue for her industry is
the PSD significance level for modifications.  She reiterated that a
number of energy efficiency programs would be triggered for CO2 but not
for other regulated pollutants.

The City of Orrville, Ohio representative responded that, of the
approximately 60 members, all have Title V permits but that they shared
a similar concern as the NLA representative regarding the proposed
modification significant level, which might inhibit any kind of
improvements.  

The representative from the American Foundry Society responded that
there are many large GHG emitters in his industry that were small
businesses, even more if applicability emissions thresholds are based on
potential to emit versus actual emissions.  He noted that 400-500
facilities in the metal casting industry, that would meet the definition
of small business, would exceed the 25,000 CO2e proposed threshold.  The
American Foundry Society representative clarified that his numbers were
based on the criteria given in the Reporting Rule and that these numbers
would need to be adjusted based on the criteria for the Tailoring Rule,
and that the adjusted numbers would be provided to EPA.  It was also
noted that most of these sources are area sources where EPA has
previously-determined it was not appropriate for these facilities to
have to obtain a Title V permit, though all have some type of
air/operating permit.  Under the proposed thresholds, these facilities
would be subject to Title V for the first time, and some would be
subject to PSD.  

The Brick Industry Association representative responded that one to
two-thirds of their facilities have Title V permits because of hazardous
air pollutants, but that she did not believe there are any that are
subject to the PSD program.  She stated that, using AP-42 emission
factors, they have as many as 8 out of approximately 180 plants that
could be major for PSD, and that there may be one or two existing PSD
avoidance permits out there.  The BIA representative clarified that
including all emissions (e.g., including biogenic emissions), over 100
plants would be major based on CO2.   Looking at significance levels,
the brick industry would most likely be hit for fluorides and
particulate matter, and possibly CO2.  She noted that, again, this
industry has never had to undergo this kind of PSD review.  Of the 70
member companies, she estimated that only 6 are considered large with
the remaining companies being small.  The BIA representative stated that
she would provide EPA with data.

The Farm Bureau representative responded that approximately 500 dairy
operations (25 percent of all milk production), 100 pork operations (25
percent of all pork production), and 200 beef operations (60 percent of
all beef feed operations) would be subject to Title V under a 25,000
CO2e threshold.  He reported that they were unsure about poultry
operations, but that it was about 50 or 60 operations under the
Mandatory Reporting Rule.  The Farm Bureau representative stated that a
good percentage of farm operations would likely get out of the PSD
program under the proposed 25,000 CO2e threshold.  In response to a
question from EPA regarding whether any of the operations that would be
subject to Title V would be small, the Farm Bureau representative
responded that the way they calculate greenhouse gas emissions estimates
for livestock operations come from USDA 1605(b) (Greenhouse Gas Registry
Guidelines), where it is estimated that dairy cows emit approximately 4
tons per year (tpy) GHGs, beef cows emit approximately 2 tpy GHGs, and
hogs emit approximately 0.5 tpy GHGs (based on methane).  He stated that
he would get the numbers to EPA. 

The American Public Power Association representative commented that her
association represents an estimated 2,000 State and Municipal electric
utilities, 95 percent of which qualify as small businesses under the
Small Business Regulatory Fairness Act (SBREFA) and 100 percent of which
are subject to the Unfunded Mandate Reduction Act (UMRA).  The UMRA’s
goal is to reduce regulatory requirements to State and Local
governments, where costs would be directly passed through to consumers. 
The APPA representative reported that there are an estimated 325
electric utilities that currently have Title V operating permits, and
she thinks there is one existing PSD permit in Delaware.  The vast
majority of their members have no PSD permitting experience.  She opined
that EPA underestimated the regulatory impacts and costs to the
electrical utility industry with regards to PSD because of the
triggering of other pollutants.  She noted that one EPA presentation
slide indicated that there were about 160 electric utilities that would
get relief from the proposed rule, but she believed that those
facilities are likely manufacturing cogeneration facilities and not the
kind of electric generation utility that you would call up when the
lights go out and that she does not believe that there would be any
change for the kind of electric generation facility that provides
service to the community.  

Fees

The American Public Power Association expressed concern regarding the
$43/ton Title V permit fee that States might want.  Some States cap
these fees at $4,000 per boiler or provide a facility cap, but that some
States do not.  This money would be money that would not be going back
to the city, which points to the Unfunded Mandates issue.  The APPA
representative explained that this money funds fire, policy, emergency
response personnel, and in some cases, teachers’ salaries.

Regarding Title V permit fees, an EPA representative explained that
States are not required to charge a minimum of $43/ton and that they are
required to make a determination of the funding needed to run their
Title V program, which must be approved by the EPA in order to collect
fees, and that funds from permit fees cannot be used for other purposes.
 He acknowledged APPA’s concern but explained that there are
provisions in the regulations that will minimize any abuse of Title V
fees in the program and noted that where abuses have been identified in
the past (i.e., Title V money used for other programs, such as
transportation), EPA has required return of the money.

The American Public Power Association representative requested that EPA
reissue the John Seitz memorandum on Title V operating permits to remind
States about the use of Title V fees.

The Farm Bureau representative inquired whether the use of Title V fees
to administer a State’s Title V permit program negates the
“administrative necessity” argument set out in the preamble.

EPA responded to the Farm Bureau representative by stating that a State
can administer their permitting program under the existing applicability
thresholds (e.g., because of a small number of sources),and collect fees
to do so if they can demonstrate to EPA that they can adequately
administer the program. Under such a scenario, EPA can approve an
alternative threshold limit to what EPA is proposing and part of that
could include State collection of fees.

SISNOSE for Mines

The National Mining Association representative commented that his
association looked at EPA’s Technical Support Document for the
proposed rule under the coal mining section and were concerned that
there may be a SISNOSE on underground coal mines in the industry.  He
further stated that they are talking with The Mine Safety and Health
Administration (MSHA) to retrieve updated information (acknowledging
that EPA obtained their numbers from MSHA) which has reported that the
number of facilities that are considered gassy is about 148.  The NMA
representative stated that they are waiting for a list of these
facilities that breaks out the number of employees and will share that
information with EPA.  He requested that EPA look at these facilities
further as, for their industry, a small business is one that is based on
500 or less employees.  Based on EPA’s RIA, he stated that about 98
percent of their industry is small, with 15 facilities above the
proposed threshold, and the other 600 to 800 facilities falling below
the threshold.  The NMA representative also commented that EPA’s
analysis assumes that no new underground coal mines will be built,
reporting that though there may be some shrinkage of mines because of
the economy, new mines are opening all the time.  He further commented
on EPA data that indicates that 103 coal mine sources would exceed the
25,000 CO2e threshold for methane as not indicating whether those 103
sources are small or not.  He requested that EPA evaluate these 103
sources to discern whether they are small businesses.

The RFA for the Suite of GHG Regulations

The NMA representative commented that the proposed Tailoring Rule was
certified as having no SISNOSE because the proposal is relieving the
regulatory burden.  He inquired that, while he understood that
perspective, does that mean the Regulatory Flexibility Analysis (RFA)
will be done in the Light Duty Vehicle Rule, and, if not, where will it
be done?  He further inquired, that if it is not going to be done, how
does the Small Business Administration Advocacy Group feel about that?

EPA responded by stating that the Light Duty Vehicle Rule had also been
certified as not having a SISNOSE because it does not directly impact
any small entities.   

An SBA representative responded to NMA’s inquiry on this point by
stating that they had requested an RFA in the form of a panel and it did
not happen, and that they are in the process of preparing a comment
letter that addresses that issue.  He explained that though the outreach
meeting is part of an effort to educate small entities, in SBA’s
opinion it is not the same thing as having a panel.

The Farm Bureau representative agreed that the impacts of Title V and
PSD should be addressed before going forward, and though he agreed that
it should have been done under the Light Duty Vehicle Rule, he also
believed that it could be argued as necessary under this proposed
rulemaking.

BACT for CO2

The BIA representative asked what the controls for CO2 are, other than
energy efficiency.

EPA responded that the GHG BACT Work Group (a subgroup of the Clean Air
Act Advisory Committee) has been tasked by the Agency to look at this
issue for individual source categories and the Work Group’s goal is to
complete this effort by March, when the light duty vehicle rule is
scheduled to be finalized. 

The American Public Power Association representative commented that she
was at EPA a couple of weeks prior to this meeting where EPA invited
electric utilities to discuss and discern what is potentially BACT for
the electric utility industry with about 35 EPA staffers and
contractors.  The thinking at the meeting was that it would be geologic
sequestration to meet something parallel to a natural gas standard.  She
explained that the concept presented to them was that a power plant
could retrofit to meet a natural gas equivalent standard by gasifying
coal or by doing geological sequestration of CO2.  She asserted that,
although carbon sequestration has been commercially demonstrated by the
oil and gas industry, it is not commercially demonstrated in the U.S. or
the world for power plants (that neither have the infrastructure or
operations to make carbon sequestration a feasible option).  For most
industries, BACT over the next 25 years for CO2 will entail energy
efficiency or switching to natural gas, nuclear power, renewable, or
some combination of these.  

The American Public Power Association representative stated that in the
electric utility industry, they want to keep coal as one of their
options along with other options to maximize choices in fuel.  Even if
carbon sequestration is commercially demonstrated for power plants in
the next ten years, she opined that it would take ten to fifteen years
to obtain the proper Water Permits as it is a completely different
process than controlling air pollutants.  The American Public Power
Association representative offered EPA more information on this issue.  

The BIA representative added that their industry is also being hit by
additional Maximum Achievable Control Technology standards and are
having difficulty addressing how to deal will all these regulations in a
bad economy.  She reported that, for her industry, there is no offshore
option. 

	



Appendix A

Slides from the Outreach Meeting



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Appendix B

 Climate VISION (Voluntary Innovative Sector Initiatives:  Opportunities
Now) is a voluntary public-private partnership initiative to improve
energy efficiency and GHG intensity in energy-intensive industrial
sectors, by accelerating the transition to technologies, practices, and
processes that are cleaner, more efficient, and capable of reducing,
capturing or sequestering GHGs.  http://www.climatevision.gov

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