Document ID: EPA-R05-OAR-2010-1024-0001
Agency: epa
Document Type: Proposed Rule
Title: Proposed Approval of the Indiana PSD Greenhouse Gas Tailoring Rule
Posted Date: 2011-06-17T04:00Z

[Federal Register Volume 76, Number 117 (Friday, June 17, 2011)]
[Proposed Rules]
[Pages 35380-35383]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-15102]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R05-OAR-2010-1024; FRL-9320-4]

Approval and Promulgation of Air Quality Implementation Plans; 
Indiana; Prevention of Significant Deterioration Greenhouse Gas 
Tailoring Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to approve a draft revision to the Indiana 
State Implementation Plan (SIP), submitted by the Indiana Department of 
Environmental Management (IDEM) to EPA on December 3, 2010, for 
parallel processing. The proposed SIP revision modifies Indiana's 
Prevention of Significant Deterioration (PSD) program to establish 
appropriate emission thresholds for determining which new stationary 
sources and modification projects become subject to Indiana's PSD 
permitting requirements for their greenhouse gas (GHG) emissions. EPA 
is proposing approval of Indiana's December 3, 2010, SIP revision 
because the Agency has made the preliminary determination that this SIP 
revision is in accordance with the Clean Air Act (CAA) and EPA 
regulations regarding PSD permitting for GHGs.

DATES: Comments must be received on or before July 18, 2011.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R05-
OAR-2010-1024, by one of the following methods:
    1. http://www.regulations.gov: Follow the on-line instructions for 
submitting comments.
    2. E-mail: blakley.pamela@epa.gov.
    3. Fax: (312) 692-2450.
    4. Mail: Pamela Blakley, Chief, Air Permits Section, Air Programs 
Branch (AR-18J), U.S. Environmental Protection Agency, 77 West Jackson 
Boulevard, Chicago, Illinois 60604.

[[Page 35381]]

    5. Hand Delivery: Pamela Blakley, Chief, Air Permits Section, Air 
Programs Branch (AR-18J), U.S. Environmental Protection Agency, 77 West 
Jackson Boulevard, Chicago, Illinois 60604. Such deliveries are only 
accepted during the Regional Office normal hours of operation, and 
special arrangements should be made for deliveries of boxed 
information. The Regional Office official hours of business are Monday 
through Friday, 8:30 a.m. to 4:30 p.m., excluding Federal holidays.
    Instructions: Direct your comments to Docket ID No. EPA-R05-OAR-
2010-1024. EPA's policy is that all comments received will be included 
in the public docket without change and may be made available online at 
http://www.regulations.gov, including any personal information 
provided, unless the comment includes information claimed to be 
Confidential Business Information (CBI) or other information whose 
disclosure is restricted by statute. Do not submit information that you 
consider to be CBI or otherwise protected through http://www.regulations.gov or e-mail. The http://www.regulations.gov Web site 
is an ``anonymous access'' system, which means EPA will not know your 
identity or contact information unless you provide it in the body of 
your comment. If you send an e-mail comment directly to EPA without 
going through http://www.regulations.gov, your e-mail address will be 
automatically captured and included as part of the comment that is 
placed in the public docket and made available on the Internet. If you 
submit an electronic comment, EPA recommends that you include your name 
and other contact information in the body of your comment and with any 
disk or CD-ROM you submit. If EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, EPA 
may not be able to consider your comment. Electronic files should avoid 
the use of special characters, any form of encryption, and be free of 
any defects or viruses. For additional instructions on submitting 
comments, go to Section I of the SUPPLEMENTARY INFORMATION section of 
this document.
    Docket: All documents in the docket are listed in the http://www.regulations.gov index. Although listed in the index, some 
information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly available only in hard copy. 
Publicly available docket materials are available either electronically 
in http://www.regulations.gov or in hard copy at the Environmental 
Protection Agency, Region 5, Air and Radiation Division, 77 West 
Jackson Boulevard, Chicago, Illinois 60604. This facility is open from 
8:30 a.m. to 4:30 p.m., Monday through Friday, excluding Federal 
holidays. We recommend that you telephone Sam Portanova, Environmental 
Engineer, at (312) 886-3189 before visiting the Region 5 office.

FOR FURTHER INFORMATION CONTACT: Sam Portanova, Environmental Engineer, 
Air Permits Section, Air Programs Branch (AR-18J), Environmental 
Protection Agency, Region 5, 77 West Jackson Boulevard, Chicago, 
Illinois 60604, (312) 886-3189, portanova.sam@epa.gov.

SUPPLEMENTARY INFORMATION: Throughout this document whenever ``we,'' 
``us,'' or ``our'' is used, we mean EPA. This supplementary information 
section is arranged as follows:

I. What should I consider as I prepare my comments for EPA?
II. Indiana's Submittal for Parallel Processing
III. What is the background for this proposed action?
IV. What is EPA's analysis of Indiana's proposed SIP revision?
V. What action is EPA taking?
VI. Statutory and Executive Order Reviews

I. What should I consider as I prepare my comments for EPA?

    When submitting comments, remember to:
    1. Identify the rulemaking by docket number and other identifying 
information (subject heading, Federal Register date and page number).
    2. Follow directions--EPA may ask you to respond to specific 
questions or organize comments by referencing a Code of Federal 
Regulations (CFR) part or section number.
    3. Explain why you agree or disagree; suggest alternatives and 
substitute language for your requested changes.
    4. Describe any assumptions and provide any technical information 
and/or data that you used.
    5. If you estimate potential costs or burdens, explain how you 
arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
    6. Provide specific examples to illustrate your concerns, and 
suggest alternatives.
    7. Explain your views as clearly as possible, avoiding the use of 
profanity or personal threats.
    8. Make sure to submit your comments by the comment period deadline 
identified.

II. Indiana's Submittal for Parallel Processing

    On December 3, 2010, IDEM submitted a draft SIP revision request to 
EPA to establish appropriate emission thresholds for determining which 
new or modified stationary sources become subject to Indiana's PSD 
permitting requirements for GHG emissions. Final approval of this SIP 
revision request will be consistent with the provisions of EPA's 
Tailoring Rule,\1\ which established appropriate GHG emission 
thresholds for determining the applicability of PSD requirements to 
GHG-emitting sources, ensuring that smaller GHG sources emitting less 
than these thresholds are not subject to permitting requirements. 
Pursuant to section 110 of the CAA, EPA is proposing to approve this 
revision into the Indiana SIP.
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    \1\ ``Prevention of Significant Deterioration and Title V 
Greenhouse Gas Tailoring Rule; Final Rule.'' 75 FR 31514 (June 3, 
2010).
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    Because this draft SIP revision is not yet state-effective, Indiana 
requested that EPA ``parallel process'' the SIP revision. Under this 
procedure, the EPA Regional Office works closely with the state while 
developing new or revised regulations. Generally, the state submits a 
copy of the proposed regulation or other revisions to EPA before 
concluding its rulemaking process. EPA reviews this proposed state 
action and prepares a proposed rulemaking action. EPA publishes this 
proposed rulemaking in the Federal Register and solicits public comment 
in approximately the same timeframe during which the state finalizes 
its rulemaking process.
    After Indiana submits the formal state-effective SIP revision 
request, EPA will prepare a final rulemaking action for the SIP 
revision. If changes are made to the SIP revision after EPA's proposed 
rulemaking, such changes must be acknowledged in EPA's final rulemaking 
action. If the changes are significant, then EPA may be obliged to 
repropose the action.

III. What is the background for this proposed action?

    This section briefly summarizes EPA's recent GHG-related actions 
that provide the background for this proposed action. More detailed 
discussion of the background is found in the preambles for those 
actions. In particular, the background is contained in what we call the 
GHG PSD SIP Narrowing Rule,\2\ and in the preambles to the actions it 
cites.
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    \2\ ``Limitation of Approval of Prevention of Significant 
Deterioration Provisions Concerning Greenhouse Gas Emitting-Sources 
in State Implementation Plans; Final Rule.'' 75 FR 82536 (December 
30, 2010).

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[[Page 35382]]

A. GHG-Related Actions

    EPA has recently undertaken a series of actions pertaining to the 
regulation of GHGs that, although for the most part distinct from one 
another, establish the overall framework for this proposed action on 
the Indiana SIP. Four of these actions include, as they are commonly 
called, the ``Endangerment Finding'' and ``Cause or Contribute 
Finding,'' which EPA issued in a single final action,\3\ the ``Johnson 
Memo Reconsideration,'' \4\ the ``Light-Duty Vehicle Rule,'' \5\ and 
the ``Tailoring Rule.'' Taken together and in conjunction with the CAA, 
these actions established regulatory requirements for GHGs emitted from 
new motor vehicles and new motor vehicle engines; determined that such 
regulations, when they took effect on January 2, 2011, subjected GHGs 
emitted from stationary sources to PSD requirements; and limited the 
applicability of PSD requirements to GHG sources on a phased-in basis. 
EPA took this last action in the Tailoring Rule, which, more 
specifically, established appropriate GHG emission thresholds for 
determining the applicability of PSD requirements to GHG-emitting 
sources.
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    \3\ ``Endangerment and Cause or Contribute Findings for 
Greenhouse Gases Under Section 202(a) of the Clean Air Act.'' 74 FR 
66496 (December 15, 2009).
    \4\ ``Interpretation of Regulations that Determine Pollutants 
Covered by Clean Air Act Permitting Programs.'' 75 FR 17004 (April 
2, 2010).
    \5\ ``Light-Duty Vehicle Greenhouse Gas Emission Standards and 
Corporate Average Fuel Economy Standards; Final Rule.'' 75 FR 25324 
(May 7, 2010).
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    PSD is implemented through the SIP system, and so in December 2010, 
EPA promulgated several rules to implement the new GHG PSD SIP program. 
Recognizing that some states had approved SIP PSD programs that did not 
apply PSD to GHGs, EPA issued a SIP call and, for some of these states, 
a Federal Implementation Plan (FIP).\6\ Recognizing that other states 
had approved SIP PSD programs that do apply PSD to GHGs, but that do so 
for sources that emit as little as 100 or 250 tons per year (tpy) of 
GHG, and that do not limit PSD applicability to GHGs to the higher 
thresholds in the Tailoring Rule, EPA issued the GHG PSD SIP Narrowing 
Rule. Under that rule, EPA withdrew its approval of the affected SIPs 
to the extent those SIPs covered GHG-emitting sources below the 
Tailoring Rule thresholds. EPA based its action primarily on the 
``error correction'' provisions of CAA section 110(k)(6).
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    \6\ Specifically, by notice dated December 13, 2010, EPA 
finalized a ``SIP Call'' that would require those states with SIPs 
that have approved PSD programs but do not authorize PSD permitting 
for GHGs to submit a SIP revision providing such authority. ``Action 
To Ensure Authority To Issue Permits Under the Prevention of 
Significant Deterioration Program to Sources of Greenhouse Gas 
Emissions: Finding of Substantial Inadequacy and SIP Call,'' 75 FR 
77698 (Dec. 13, 2010). EPA has begun making findings of failure to 
submit that would apply in any state unable to submit the required 
SIP revision by its deadline, and finalizing FIPs for such states. 
See, e.g., ``Action To Ensure Authority To Issue Permits Under the 
Prevention of Significant Deterioration Program to Sources of 
Greenhouse Gas Emissions: Finding of Failure To Submit State 
Implementation Plan Revisions Required for Greenhouse Gases,'' 75 FR 
81874 (December 29, 2010); ``Action To Ensure Authority To Issue 
Permits Under the Prevention of Significant Deterioration Program to 
Sources of Greenhouse Gas Emissions: Federal Implementation Plan,'' 
75 FR 82246 (December 30, 2010). Because Indiana's SIP already 
authorizes Indiana to regulate GHGs once GHGs become subject to PSD 
requirements on January 2, 2011, Indiana is not subject to the 
proposed SIP Call or FIP.
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B. Indiana's Actions

    On July 23, 2010, Indiana provided a letter to EPA, in accordance 
with a request to all states from EPA in the Tailoring Rule, with 
confirmation that the state has the authority to regulate GHGs in its 
PSD program. The letter also confirmed that current Indiana rules 
require regulating GHGs at the existing 100/250 tpy threshold, rather 
than at the higher thresholds set in the Tailoring Rule. See the docket 
for this proposed rulemaking for a copy of Indiana's letter.
    In the SIP Narrowing Rule, published on December 30, 2010, EPA 
withdrew its approval of Indiana's SIP, among other SIPs, to the extent 
that SIP applies PSD permitting requirements to GHG emissions from 
sources emitting at levels below those set in the Tailoring Rule.\7\ As 
a result, Indiana's current approved SIP provides the state with 
authority to regulate GHGs, but only at and above the Tailoring Rule 
thresholds; and Federally requires new and modified sources to receive 
a PSD permit based on GHG emissions only if they emit at or above the 
Tailoring Rule thresholds.
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    \7\ ``Limitation of Approval of Prevention of Significant 
Deterioration Provisions Concerning Greenhouse Gas Emitting-Sources 
in State Implementation Plans; Final Rule.'' 75 FR 82536 (December 
30, 2010).
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    Indiana is currently in the process of amending its state 
regulations to also incorporate the Tailoring Rule thresholds, and has 
submitted its draft regulations to EPA for parallel processing. Indiana 
is seeking to revise its SIP to incorporate expected state regulatory 
changes adopted at the local level into the Federally-approved SIP. 
Doing so will clarify the applicable thresholds in the Indiana SIP.
    The basis for this SIP revision is that limiting PSD applicability 
to GHG sources to the higher thresholds in the Tailoring Rule is 
consistent with the SIP provisions that provide required assurances of 
adequate resources, and thereby addresses the flaw in the SIP that led 
to the SIP Narrowing Rule. Specifically, CAA section 110(a)(2)(E) 
includes as a requirement for SIP approval that states provide 
``necessary assurances that the State * * * will have adequate 
personnel [and] funding * * * to carry out such [SIP].'' In the 
Tailoring Rule, EPA established higher thresholds for PSD applicability 
to GHG-emitting sources on grounds that the states generally did not 
have adequate resources to apply PSD to GHG-emitting sources below the 
Tailoring Rule thresholds,\8\ and no state, including Indiana, asserted 
that it did have adequate resources to do so.\9\
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    \8\ Tailoring Rule, 75 FR 31,517/1.
    \9\ SIP Narrowing Rule, 75 FR 82,540/2.
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    In the SIP Narrowing Rule, EPA found that the affected states, 
including Indiana, had a flaw in their SIPs at the time they submitted 
their PSD programs, which was that the applicability of the PSD 
programs was potentially broader than the resources available to them 
under their SIP.\10\ Accordingly, for each affected state, including 
Indiana, EPA concluded that EPA's action in approving the SIP was in 
error, under CAA section 110(k)(6), and EPA rescinded its approval to 
the extent the PSD program applies to GHG-emitting sources below the 
Tailoring Rule thresholds.\11\ EPA recommended that states adopt a SIP 
revision to incorporate the Tailoring Rule thresholds, thereby (i) 
assuring that under state law, only sources at or above the Tailoring 
Rule thresholds would be subject to PSD; and (ii) avoiding confusion 
under the Federally-approved SIP by clarifying that the SIP applies to 
only sources at or above the Tailoring Rule thresholds.\12\
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    \10\ Id. at 82,542/3.
    \11\ Id. at 82,544/1.
    \12\ Id. at 82,540/2.
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IV. What is EPA's analysis of Indiana's proposed SIP revision?

    The regulatory revisions that IDEM submitted for parallel 
processing on December 3, 2010, establish thresholds for determining 
which stationary sources and modifications become subject to permitting 
requirements for GHG emissions under Indiana's PSD program. 
Specifically, the submittal includes changes to Indiana's PSD

[[Page 35383]]

regulations at 326 Indiana Administrative Code (IAC) 2-2-1 and 326 IAC 
2-2-4.\13\
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    \13\ Attachment A to the December 3, 2010, submittal includes 
revisions to 326 IAC 2-7 to add GHG provisions to Indiana's Title V 
regulations. However, these regulations are not part of the SIP and 
IDEM has not included 326 IAC 2-7 in the December 3, 2010, request 
for SIP approval. IDEM intends to make a separate submittal 
requesting approval of the 326 IAC 2-7 regulatory revisions.
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    Indiana is currently a SIP-approved state for the PSD program, and 
has incorporated EPA's 2002 NSR reform revisions (67 FR 80186) for PSD 
into its SIP (72 FR 33395). In a letter provided to EPA on July 23, 
2010, Indiana notified EPA of its interpretation that the state 
currently has the authority to regulate GHGs under its 326 IAC 2-2 PSD 
regulations. The current Indiana program (adopted prior to the 
promulgation of EPA's Tailoring Rule) applies to major stationary 
sources (having the potential to emit at least 100 tpy or 250 tpy or 
more of a regulated NSR pollutant, depending on the type of source) or 
modifications undertaken in areas designated attainment or 
unclassifiable with respect to the NAAQS.
    Indiana has revised 326 IAC 2-2-1 to add GHG-related language to 
the definitions of ``regulated NSR pollutant'' and ``significant'' and 
to add a new definition for ``subject to regulation.'' We find these 
revisions to be consistent with the Tailoring Rule.
    In 326 IAC 2-2-4, Indiana has added language that says the air 
quality analysis requirements of this section shall not apply with 
respect to GHGs. This does not affect the air quality-related 
requirements elsewhere in the PSD rule, including requirements for 
source information (326 IAC 2-2-10), additional impact analysis (326 
IAC 2-2-7), or additional requirements for sources impacting Federal 
Class I areas (326 IAC 2-2-14). We find this revision to be approvable.

V. What action is EPA taking?

    EPA is proposing to approve Indiana's December 3, 2010, SIP 
submittal, relating to PSD requirements for GHG-emitting sources in 326 
IAC 2-2-1 and 326 IAC 2-2-4. Specifically, Indiana's December 3, 2010, 
proposed SIP revision establishes appropriate emissions thresholds for 
determining PSD applicability to new and modified GHG-emitting sources 
in accordance with EPA's Tailoring Rule. EPA has made the preliminary 
determination that this SIP submittal is approvable because it is in 
accordance with the CAA and EPA regulations regarding PSD permitting 
for GHGs.
    If EPA does approve Indiana's changes to its air quality 
regulations to incorporate the appropriate thresholds for GHG 
permitting applicability into Indiana's SIP, then 40 CFR 52.773(k), as 
included in EPA's SIP Narrowing Rule, which codifies EPA's limiting its 
approval of Indiana's PSD SIP to not cover the applicability of PSD to 
GHG-emitting sources below the Tailoring Rule thresholds, is no longer 
necessary. In this proposed action, EPA is also proposing to amend 40 
CFR 52.773 to remove this unnecessary regulatory language.

VI. Statutory and Executive Order Reviews

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

In addition, this rule does not have Tribal implications as specified 
by Executive Order 13175 (65 FR 67249, November 9, 2000), because the 
SIP is not approved to apply in Indian country located in the state, 
and EPA notes that it will not impose substantial direct costs on 
Tribal governments or preempt Tribal law.

List of Subjects in 40 CFR Part 52

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

    Dated: June 9, 2011.
Susan Hedman,
Regional Administrator, Region 5.
[FR Doc. 2011-15102 Filed 6-16-11; 8:45 am]
BILLING CODE 6560-50-P