6560-50-P

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-HQ-OAR-2010-0107; FRL-xxxx-x]

RIN-2060-AQ45

Action to Ensure Authority to Issue Permits under the Prevention of
Significant Deterioration Program to Sources of Greenhouse Gas
Emissions:  Federal Implementation Plan

AGENCY:  Environmental Protection Agency (EPA).

ACTION:  Proposed rule.

SUMMARY:  In this rulemaking, EPA is proposing a federal implementation
plan (FIP) to apply in any state that is unable to submit, by its
deadline, a corrective state implementation plan (SIP) revision to
ensure that the state has authority to issue permits under the Clean Air
Act's (CAA or Act) New Source Review Prevention of Significant
Deterioration (PSD) program for sources of greenhouse gases (GHGs). 
This proposal is a companion rulemaking to "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," which is being signed and published on the
same schedule.  In that action, EPA is proposing to make a finding of
substantial inadequacy and proposing to issue a SIP call for 16 states
on grounds that their SIPs do not appear to apply the PSD program to
GHG-emitting sources.

DATES:  Comments.  Comments must be received on or before [INSERT DATE
30 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER].

Public Hearing:  One public hearing concerning the proposed regulation
will be held before the end of the comment period.  The date, time and
location will be announced separately.  Please refer to SUPPLEMENTARY
INFORMATION for additional information on the comment period and the
public hearing.

ADDRESSES:  Submit your comments, identified by Docket ID No.
EPA-HQ-OAR-2010-0107 by one of the following methods:

 HYPERLINK "http://www.regulations.gov/" www.regulations.gov :  Follow
the online instructions for submitting comments.

E-mail:   HYPERLINK "mailto:a-and-r-docket@epa.gov" 
a-and-r-docket@epa.gov .

Fax: (202) 566-9744

Mail:  Attention Docket ID No. EPA-HQ-OAR-2010-0107, U.S. Environmental
Protection Agency, EPA West (Air Docket), 1200 Pennsylvania Avenue, NW,
Mail code: 6102T, Washington, DC 20460.  Please include a total of 2
copies. 

Hand Delivery:  U.S. Environmental Protection Agency, EPA West (Air
Docket), 1301 Constitution Avenue, Northwest, Room 3334, Washington, DC
20004, Attention Docket ID No. EPA-HQ-OAR-2010-0107.  Such deliveries
are only accepted during the Docket's normal hours of operation, and
special arrangements should be made for deliveries of boxed information.

Instructions.  Direct your comments to Docket ID No.
EPA-HQ-OAR-2010-0107.  EPA's policy is that all comments received will
be included in the public docket without change and may be made
available online at  HYPERLINK "http://www.regulations.gov"
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  HYPERLINK
"http://www.regulations.gov/" www.regulations.gov  or e-mail.  The 
HYPERLINK "http://www.regulations.gov/" 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  HYPERLINK "http://www.regulations.gov/"
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, avoid any form of encryption, and be free of any defects or
viruses.  For additional information about EPA's public docket, visit
the EPA Docket Center homepage at  HYPERLINK
"http://www.epa.gov/epahome/dockets.htm" www.epa.gov/epahome/dockets.htm
.  For additional instructions on submitting comments, go to section I.C
of the SUPPLEMENTARY INFORMATION section of this document.

Docket.  All documents in the docket are listed in the  HYPERLINK
"http://www.regulations.gov/" 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  HYPERLINK
"http://www.regulations.gov/" www.regulations.gov  or in hard copy at
the U.S. Environmental Protection Agency, Air Docket, EPA/DC, EPA West
Building, Room 3334, 1301 Constitution Ave., NW, Washington, DC.  The
Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding legal holidays.  The telephone number for the Public
Reading Room is (202) 566-1744, and the telephone number for the Air
Docket is (202) 566-1742. 

FOR FURTHER INFORMATION CONTACT:  Ms. Lisa Sutton, Air Quality Policy
Division, Office of Air Quality Planning and Standards (C504-03),
Environmental Protection Agency, Research Triangle Park, NC 27711;
telephone number: (919) 541-3450; fax number: (919) 541-5509; e-mail
address:    HYPERLINK "mailto:sutton.lisa@epa.gov"  sutton.lisa@epa.gov
.

SUPPLEMENTARY INFORMATION:

For questions related to a specific state, local, or tribal permitting
authority, or to submit information requested in this action, please
contact the appropriate EPA regional office:

EPA Regional office	Contact for regional office (person, mailing
address, telephone number)	Permitting authority

I	Dave Conroy, Chief, Air Programs Branch,

EPA Region 1, 5 Post Office Square, Suite 100, Boston, MA  02109-3912,
(617) 918-1661.	Connecticut, Massachusetts, Maine, New Hampshire, Rhode
Island, and Vermont.

II	Raymond Werner, Chief, Air Programs Branch, EPA Region 2, 290
Broadway, 25th Floor, New York, NY  10007-1866, (212) 637-3706.	New
Jersey, New York, Puerto Rico, and Virgin Islands.

III	Kathleen Anderson, Chief, Permits and Technical Assessment Branch,
EPA Region 3, 1650 Arch Street, Philadelphia, PA  19103-2029, (215)
814-2173. 	District of Columbia, Delaware, Maryland, Pennsylvania,
Virginia, and West Virginia.

IV	Dick Schutt, Chief, Air Planning Branch, EPA Region 4, Atlanta
Federal Center, 61 Forsyth Street, SW, Atlanta, GA  30303-3104, (404)
562-9033.	Alabama, Florida, Georgia, Kentucky, Mississippi, North
Carolina, South Carolina, and Tennessee.

V	J. Elmer Bortzer, Chief, Air Programs Branch (AR-18J), EPA Region 5,
77 West Jackson Boulevard, Chicago, IL  60604-3507, (312) 886-1430.
Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin.

VI	Jeff Robinson, Chief, Air Permits Section, EPA Region 6, Fountain
Place 12th Floor, Suite 1200, 1445 Ross Avenue, Dallas, TX  75202-2733,
(214) 665-6435.	Arkansas, Louisiana, New Mexico, Oklahoma, and Texas.

VII	Mark Smith, Chief, Air Permitting and Compliance Branch, EPA Region
7, 901 North 5th Street, Kansas City, KS  66101, (913) 551-7876.	Iowa,
Kansas, Missouri, and Nebraska.

VIII	Carl Daly, Unit Leader, Air Permitting, Monitoring & Modeling Unit,
EPA Region 8, 1595 Wynkoop Street, Denver, CO  80202-1129, (303)
312-6416.	Colorado, Montana, North Dakota, South Dakota, Utah, and
Wyoming.

IX	Gerardo Rios, Chief, Permits Office, EPA Region 9, 75 Hawthorne
Street, San Francisco, CA  94105, (415) 972-3974.	Arizona; California;
Hawaii and the Pacific Islands; Indian Country within Region 9 and
Navajo Nation; and Nevada.

X	Nancy Helm, Manager, Federal and Delegated Air Programs Unit, EPA
Region 10, 1200 Sixth Avenue, Suite 900, Seattle, WA  98101, (206)
553-6908.	Alaska, Idaho, Oregon, and Washington.



I.	General Information

A.	Does this action apply to me?

Entities potentially affected by this rule include states, local
permitting authorities, and tribal authorities.  Any SIP-approved PSD
air permitting regulation that is not structured such that it includes
GHGs among pollutants subject to regulation under the Act will
potentially be found substantially inadequate to meet CAA requirements,
under CAA 110(k)(5), and the state will potentially be affected by this
rule.  For example, if a state's PSD regulation identifies its regulated
NSR pollutants by specifically listing each individual pollutant and the
list omits GHGs, then the regulation is inadequate.

Entities potentially affected by this rule also include sources in all
industry groups, which have a direct obligation under the CAA to obtain
a PSD permit for GHGs for projects that meet the applicability
thresholds set forth in the Tailoring Rule.  This independent obligation
on sources is specific to PSD and derives from CAA 165(a).  Any source
that is subject to a state PSD air permitting regulation not structured
to apply to GHG-emitting sources will potentially rely on this rule to
obtain a permit that contains emission limitations that conform to
requirements under CAA 165(a).  The majority of entities potentially
affected by this action are expected to be in the following groups:

Industry Group	NAICSa

Utilities (electric, natural gas, other systems)	2211, 2212, 2213

Manufacturing (food, beverages, tobacco, textiles, leather)	311, 312,
313, 314, 315, 316

Wood product, paper manufacturing	321, 322

Petroleum and coal products manufacturing	32411, 32412, 32419

Chemical manufacturing	3251, 3252, 3253, 3254, 3255, 3256, 3259

Rubber product manufacturing	3261, 3262

Miscellaneous chemical products	32552, 32592, 32591, 325182, 32551

Nonmetallic mineral product manufacturing	3271, 3272, 3273, 3274, 3279

Primary and fabricated metal manufacturing	3311, 3312, 3313, 3314, 3315,
3321, 3322, 3323, 3324, 3325, 3326, 3327, 3328, 3329

Machinery manufacturing	3331, 3332, 3333, 3334, 3335, 3336, 3339

Computer and electronic products manufacturing	3341, 3342, 3343, 3344,
3345, 4446

Electrical equipment, appliance, and component manufacturing	3351, 3352,
3353, 3359

Transportation equipment manufacturing	3361, 3362, 3363, 3364, 3365,
3366, 3366, 3369

Furniture and related product manufacturing	3371, 3372, 3379

Miscellaneous manufacturing	3391, 3399

Waste management and remediation	5622, 5629

Hospitals/nursing and residential care facilities	6221, 6231, 6232,
6233, 6239

Personal and laundry services	8122, 8123

Residential/private households	8141

Non-residential (commercial)	Not available.  Codes only exist for
private households, construction and leasing/sales industries.

a	North American Industry Classification System.



B.	Where can I get a copy of this document and other related
information?

In addition to being available in the docket, an electronic copy of this
proposal will also be available on the World Wide Web.  Following
signature by the EPA Administrator, a copy of this notice will be posted
on the EPA's NSR Web Site, under Regulations & Standards, at   HYPERLINK
"http://www.epa.gov/nsr"  www.epa.gov/nsr .

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

1.  Submitting CBI.  Do not submit this information to EPA through  
HYPERLINK "http://www.regulations.gov"  www.regulations.gov  or e-mail. 
Clearly mark the part or all of the information that you claim to be
CBI.  For CBI information in a disk or CD ROM that you mail to EPA, mark
the outside of the disk or CD ROM as CBI and then identify
electronically within the disk or CD ROM the specific information that
is claimed as CBI.  In addition to one complete version of the comment
that includes information claimed as CBI, a copy of the comment that
does not contain the information claimed as CBI must be submitted for
inclusion in the public docket.  Information so marked will not be
disclosed except in accordance with procedures set forth in 40 CFR part
2.  Send or deliver information identified as CBI only to the following
address: Roberto Morales, OAQPS Document Control Officer (C404-02), U.S.
EPA, Research Triangle Park, NC 27711, Attention Docket ID No.
EPA-HQ-OAR-2010-0107.

2.  Tips for preparing your comments.  When submitting comments,
remember to:

Identify the rulemaking by docket number and other identifying
information (subject heading, Federal Register date and page number).

Follow directions - The agency may ask you to respond to specific
questions or organize comments by referencing a Code of Federal
Regulations (CFR) part or section number.

Explain why you agree or disagree; suggest alternatives and substitute
language for your requested changes.

Describe any assumptions and provide any technical information and/or
data that you used.

If you estimate potential costs or burdens, explain how you arrived at
your estimate in sufficient detail to allow for it to be reproduced.

Provide specific examples to illustrate your concerns, and suggest
alternatives.

Explain your views as clearly as possible, avoiding the use of profanity
or personal threats.

Make sure to submit your comments by the comment period deadline
identified.

D.	How can I find information about the public hearing?

The EPA will hold one public hearing on this proposal.  The date, time,
and location of the public hearing will be announced separately.  The
EPA encourages commenters to provide written versions of their oral
testimonies either electronically or in paper copy.  If you would like
to present oral testimony at the public hearing, please notify Ms.
Pamela S. Long, New Source Review Group, Air Quality Policy Division
(C504-03), U.S. EPA, Research Triangle Park, NC 27711, telephone number
(919) 541-0641, or email:   HYPERLINK "mailto:long.pam@epa.gov" 
long.pam@epa.gov .  Persons interested in presenting oral testimony
should notify Ms. Long at least 2 days in advance of the public hearing.
 Persons interested in attending the public hearing should also contact
Ms. Long to verify the time, date, and location of the hearing.  The
public hearing will provide interested parties the opportunity to
present data, views, or arguments concerning the proposed rule.

E.	How is the preamble organized?

The information presented in this preamble is organized as follows:

I.	  HYPERLINK \l "_Toc244070332"  General Information 

A.	Does this action apply to me? 

B.	Where can I get a copy of this document and other related
information? 

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

  HYPERLINK \l "_Toc244070336"  D.	How can I find information about the
public hearing?  

  HYPERLINK \l "_Toc244070337"  E.	How is the preamble organized?  

  HYPERLINK \l "_Toc244070338"  II.	Background and Context of Proposed
Rule 

A.	Introduction

B.	CAA and Regulatory Context

C.	SIP Inadequacy and Corrective Action; Federal Implementation Plans

D.	States that Do Not Apply the PSD Program to GHG Sources; PSD GHG SIP
Call

III.	Proposed Federal Implementation Plan

A.	Timing for FIP

B.	Substance of FIP

IV.	Statutory and Executive Order Reviews

A.	Executive Order 12866 – Regulatory Planning and Review

B.	Paperwork Reduction Act

C.	Regulatory Flexibility Act

D.	Unfunded Mandates Reform

E.	Executive Order 13132 – Federalism

F.	Executive Order 13175 – Consultation and Coordination with Indian
Tribal Governments

G.	Executive Order 13045 – Protection of Children from Environmental
Health Risks and Safety Risks

H.	Executive Order 13211 – Actions Concerning Regulations that
Significantly Affect Energy Supply, Distribution, or Use

I.	National Technology Transfer and Advancement Act

J.	Executive Order 12898 – Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income Populations

K.	Determination under Section 307(d)

V.	Statutory Authority

II.	Background and Context of Proposed Rule

A.	Introduction

In this rulemaking under the CAA, EPA is proposing a FIP for 16 states
for which, in a companion action, EPA is proposing a finding of SIP
substantial inadequacy and is proposing to issue a SIP Call because the
states' PSD SIP programs do not appear to apply to sources of GHGs. 
"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" (the "PSD
GHG SIP Call" or "SIP Call").  These two rulemakings address states
whose permitting regulations and SIPs appear to fail to apply the PSD
program to sources of GHGs in those states.  As a result, larger
GHG-emitting sources in those states—which under EPA's "Tailoring
Rule" (discussed elsewhere in this preamble) are the only ones subject
to PSD for their GHG emissions in the near future—unable to obtain a
PSD permit that covers GHG emissions and therefore potentially unable to
undertake construction or modification projects on and after January 2,
2011.

The states for which we are proposing a FIP are listed in table II-1,
"States with SIPs that Do Not Appear to Apply PSD to GHG Sources
(Presumptive SIP Call List)."  If any of these states are not in a
position to submit to EPA a corrective SIP revision by its deadline, EPA
will promulgate a FIP that will apply the PSD program to the appropriate
GHG sources in the state, thereby allowing them to apply for PSD permits
for their GHG emissions that will authorize their construction and
modifications.

Table II-1.  States with SIPs that Do Not Appear to Apply PSD to GHG
Sources (Presumptive SIP Call List)

 

State (or Area)	EPA Region

Alaska	X

Arizona: Pinal County	IX

Arkansas	VI

California: Sacramento Metropolitan AQMD	IX

Connecticut	I

Florida	IV

Idaho	X

Louisiana	VI

Maine	I

Montana	VIII

Nevada: Clark County	IX

New Hampshire	I

Oklahoma	VI

Oregon	X

Texas	VI

Utah	VIII



The rest of the states with approved SIP PSD programs (meaning each of
those not listed in table II-1) are listed in table II-2, "States with
SIPs that Appear to Apply PSD to GHG Sources (Presumptive Adequacy
List)."  For each of the states listed in table II-2 (as well as for any
states with approved SIP PSD programs that we may have inadvertently
omitted from table II-2), EPA is soliciting comment in the SIP Call
companion notice on whether their SIPs do or do not apply the PSD
program to GHG-emitting sources.  We are not at this time proposing a
FIP for the states listed in table II-2.  However, if EPA concludes, on
the basis of information EPA receives, that such a state's SIP does not
apply the PSD program to GHG-emitting sources, then EPA will proceed to
issue for that state a finding of substantial inadequacy and a SIP Call
on the same schedule as for the states listed in table II-1 (the
presumptive SIP Call list).  If a state that receives a SIP Call is not
able to submit to EPA, by the deadline required in the SIP Call, a
corrective SIP revision that applies the PSD program to GHG sources,
then EPA will, without further notice and comment, promulgate a FIP that
will apply the PSD program to GHG sources in the state, so that sources
can apply for PSD permits that will authorize their construction and
modifications.  Accordingly, interested parties in a state for which we,
in the companion SIP Call rulemaking, solicit comment on the adequacy of
its SIP to apply PSD to GHG-emitting sources should consider the comment
period for the present notice to be their opportunity to comment on the
FIP that EPA would implement in their state (should EPA ultimately
determine to issue a SIP Call for their state in EPA's final action on
the companion SIP Call rulemaking).



Table II-2.  States with SIPs that Appear to Apply PSD to GHG Sources
(Presumptive Adequacy List)

 

State (or Area)	EPA Region

Alabama: Jefferson County; Huntsville; Rest of State	IV

Arizona: Rest of State (Excludes Pinal County and Indian Country)	VIII

California: Monterey Bay Unified APCD; North Coast Unified AQMD;
Northern Sonoma County APCD	IX

Colorado	VIII

Delaware	III

Georgia	IV

Indiana	V

Iowa	VII

Kansas	VII

Kentucky: Jefferson County; Rest of State 	IV

Maryland	III

Michigan	V

Mississippi	IV

Missouri	VII

Nebraska: Lincoln Lancaster; Omaha; Rest of State	VII

New Mexico: Albuquerque; Rest of State	VI

North Carolina: Forsythe County; Mecklenburg; Western NC; Rest of State
IV

North Dakota	VIII

Ohio	V

Pennsylvania: All except Allegheny County	III

Rhode Island	I

South Carolina	IV

South Dakota	VIII

Tennessee: Chattanooga; Nashville; Knoxville; Memphis; Rest of State	IV

Vermont	I

Virginia	III

West Virginia	III

Wisconsin	V

Wyoming	VIII



The background and context for this proposed rule is the same as for
the proposed PSD GHG SIP Call and other actions cross-referenced in that
action.  Familiarity with the proposed PSD GHG SIP Call is presumed.  As
a result, the background and context for this rule will be only briefly
summarized here.

B.	CAA and Regulatory Context

1.	SIP PSD Requirements 

Under the CAA PSD requirements, a new or existing source that emits or
has the potential to emit "any air pollutant" in specified quantities
cannot construct or modify unless it first obtains a PSD permit that,
among other things, imposes emission limitations that qualify as best
available control technology (BACT).  CAA 165(a)(1), 165(a)(4), 169(1). 
Longstanding EPA regulations have interpreted the term "any air
pollutant" narrowly so that only emissions of any "regulated NSR
pollutant" trigger PSD.  40 CFR 52.21(j)(2), (b)(50)(iv).  The term
"regulated NSR pollutant" is defined to include the following four
classes of air pollutants:

(i)  any pollutant for which a NAAQS has been promulgated;

(ii)  any pollutant subject to an NSPS promulgated under CAA 111;

(iii)  any pollutant subject to a standard promulgated under CAA title
VI; and

(iv)  "any pollutant that otherwise is subject to regulation under the
Act" (excluding HAPs listed under CAA 112).

The CAA contemplates that the PSD program be implemented in the first
instance by the states.  States are required to include PSD requirements
in their SIPs.  CAA 110(a)(2)(C).  Most states have PSD programs that
have been approved into their SIPs, and these states implement their PSD
program and act as the permitting authority.  For the most part, these
approved SIPs mirror EPA regulatory requirements, as found in 40 CFR
51.166 (except for the recently added revisions from the Tailoring
Rule).  As a result, most SIPs include the applicability requirement
that PSD apply to sources that construct or modify and thereby increase
their emissions of any "regulated NSR pollutant."  A number of states do
not have PSD programs approved into their SIPs; in those states, EPA's
regulations at 40 CFR 52.21 govern, and either EPA or the state as EPA's
delegatee acts as the permitting authority. 

2.	Recent EPA Regulatory Actions Concerning PSD Requirements for
GHG-emitting Sources

Beginning on January 2, 2011, certain stationary sources that construct
or undertake modifications will become subject to the CAA requirement to
obtain a PSD permit for their GHG emissions.  This is because of the
following EPA regulatory actions.

By notice dated December 15, 2009, pursuant to CAA 202(a), EPA issued,
in a single final action, two findings regarding GHGs that are commonly
referred to as the "Endangerment Finding" and the "Cause or Contribute
Finding."  In the Endangerment Finding, EPA found that six long-lived
and directly emitted GHGs—carbon dioxide (CO2), methane (CH4), nitrous
oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and
sulfur hexafluoride (SF6)—may reasonably be anticipated to endanger
public health and welfare.  In the Cause or Contribute Finding, the
Administrator "define[d] the air pollutant as the aggregate group of the
same six * * * greenhouse gases," 74 FR 66536, and found that the
combined emissions of this air pollutant from new motor vehicles and new
motor vehicle engines contribute to the GHG air pollution that endangers
public health and welfare.  

By notice dated May 7, 2010, EPA published what is commonly known as the
"Light-Duty Vehicle Rule" (LDVR), which for the first time established
federal controls on GHGs, those emitted from light-duty vehicles.  This
rule specifies, in its applicability provisions, the air pollutant
subject to control as the aggregate group of the six GHGs, including
CO2, CH4, N2O, HFCs, PFCs, and SF6.  75 FR 25686 (40 CFR 86.1818-12(a)).

By notice dated April 2, 2010, EPA promulgated what is commonly known as
the Johnson Memo Reconsideration.  The Johnson Memo Reconsideration
interpreted one of the regulatory triggers for PSD applicability—the
term "subject to regulation"—and concluded that promulgation of the
LDVR would render GHGs "subject to regulation" and thereby trigger PSD
applicability for GHG-emitting sources on January 2, 2011, which
according to EPA is the date upon which the LDVR takes effect.

By notice dated June 3, 2010, EPA published what is commonly known as
the "Tailoring Rule," which limits the applicability of PSD to certain
GHG-emitting sources through a multi-step phase-in approach.  In the
Tailoring Rule, EPA established the first two steps of the phase-in
approach as follows:

	For the first step of this Tailoring Rule, which will begin on January
2, 2011, PSD * * * requirements will apply to sources' GHG emission only
if the sources are subject to PSD * * * anyway due to their non-GHG
pollutants.  [We call these sources "anyway sources."]  Therefore, EPA
will not require sources or modifications to evaluate whether they are
subject to PSD * * * requirements solely on account of their GHG
emissions.  Specifically, for PSD, Step 1 requires that as of January 2,
2011, the applicable requirements of PSD, most notably, the best
available control technology (BACT) requirement, will apply to projects
that increase net GHG emissions by at least 75,000 tpy carbon dioxide
equivalent (CO2e) but only if the project also significantly increase
emissions of at least one non-GHG pollutant.

	The second step * * * beginning on July 1, 2011, will phase in
additional large sources of GHG emissions.  New sources * * * that emit,
or have the potential to emit, at least 100,000 tpy CO2e will become
subject to the PSD * * * requirements.  In addition, sources that emit
or have the potential to emit at least 100,000 tpy CO2e and that
undertake a modification that increases net emissions of GHGs by at
least 75,000 tpy CO2e will also be subject to PSD requirements.  [We
call this the 100,000/75,000 threshold.]  For both steps, we note that
if sources or modifications exceed these CO2e-adjusted GHG triggers,
they are not covered by permitting requirements unless their GHG
emissions also exceed the corresponding mass-based triggers (i.e.,
unadjusted for CO2e.)

75 FR 31516.  In the Tailoring Rule, EPA codified the Johnson Memo
Reconsideration interpretation of the term "subject to regulation" and
added a further interpretation of that term designed to expedite the
adoption of the phase-in approach by the states into their SIPs.  In
addition, in the Tailoring Rule, EPA identified the air pollutant as the
aggregate of the six GHGs, again, CO2, CH4, N2O, HFCs, PFCs, and SF6. 
The Tailoring Rule further provided that for purposes of determining
whether the amount of GHG emissions exceeds specified thresholds and
therefore triggers the application of PSD, the amount of emissions must
be calculated on both a mass basis and, as alluded to above, a carbon
dioxide equivalent (CO2e) basis.  With respect to the latter, according
to the rule, "PSD * * * applicability is based on the quantity that
results when the mass emissions of each of these gases is multiplied by
the Global Warming Potential (GWP) of that gas, and then summed for all
six gases."  75 FR 31518.  

Further information on the applicable CAA provisions, the Endangerment
and Cause or Contribute Findings, the LDRV, the Johnson Memo
Reconsideration, and the Tailoring Rule is contained in the Tailoring
Rule and the proposed PSD GHG SIP Call.

C.	SIP Inadequacy and Corrective Action; Federal Implementation Plans

The CAA provides a mechanism for the correction of SIPs that are
inadequate, under CAA 110(k)(5), which provides:  

(5)	Calls for plan revisions

	Whenever the Administrator finds that the applicable implementation
plan for any area is substantially inadequate to * * * comply with any
requirement of this Act, the Administrator shall require the State to
revise the plan as necessary to correct such inadequacies.  The
Administrator shall notify the State of the inadequacies and may
establish reasonable deadlines (not to exceed 18 months after the date
of such notice) for the submission of such plan revisions.

This provision by its terms authorizes the Administrator to "find[] that
[a SIP] * * * is substantially inadequate to * * * comply with any
requirement of this Act," and, based on that finding, "require the
State to revise the [SIP] * * * to correct such inadequacies."  This
latter action is commonly known as a "SIP call."  In addition, this
provision provides that EPA must notify the state of the inadequacies
and authorizes EPA to establish a "reasonable deadline[] (not to exceed
18 months after the date of such notice)" for the submission of the
corrective SIP revision. 

If the state fails to submit the corrective SIP revision by the
deadline, CAA 110(c) authorizes EPA to "find[] that [the] State has
failed to make a required submission."  CAA 110(c)(1)(A).  Once EPA
makes that finding, CAA 110(c)(1) requires EPA to "promulgate a Federal
implementation plan at any time with 2 years after the [finding] * * *
unless the State corrects the deficiency, and [EPA] approves the plan or
plan revision, before [EPA] promulgates such [FIP]."

D.	States that Do Not Appear to Apply the PSD Program to GHG Sources;
PSD GHG SIP Call

A number of states do not have an approved PSD SIP; as a result, in
these states the applicable regulatory authority is EPA's regulations,
found in 40 CFR 52.21, which constitute a FIP.  For sources in these
states, either the EPA Regional Office or the state acting as EPA's
delegatee is the permitting authority.  In these states, EPA's
regulations apply directly.  As a result, the regulations apply the PSD
program to any constructing or modifying source that emits the requisite
quantity of any "regulated NSR pollutant," 40 CFR 52.21(b)(50), which
includes any "pollutant subject to regulation," which, in turn, as
discussed earlier in this preamble, will cover GHG emissions on January
2, 2011.  

All of the other states administer their PSD programs through an
approved SIP and, as a result, they or their local entities are the PSD
permitting authority.  Of these states, most appear to have SIP PSD
applicability provisions that parallel EPA's regulatory PSD
applicability provisions and therefore apply PSD to any stationary
source that emits the requisite amount of any air pollutant "subject to
regulation."  As a result, and absent any other provision under state
law that limits the applicability of these provisions, these PSD SIPs
will cover GHG sources, just as the current FIPs do, in these states, on
and after January 2, 2011.  Therefore, these states or local authorities
will be able to act as the permitting authority for GHG sources in their
states.

As discussed in the PSD GHG SIP Call, it appears, on the basis of
preliminary research and information received that for 16 of the states
with approved PSD SIPs, the PSD programs do not apply to GHG-emitting
sources.  In many of these SIPs, the PSD applicability provisions do not
mirror EPA's regulatory provisions by applying PSD requirements to
sources of any air pollutant "subject to regulation."  Instead, the
applicability provisions specifically list the air pollutants to which
the PSD program applies and do not include GHGs on that list.  Although,
as discussed in the proposed PSD GHG SIP Call, these SIPs may have other
provisions that provide the state with general authority to issue
permits that meet CAA requirements, until EPA receives more information,
we will proceed on the basis that these SIPs do not apply their PSD
programs to GHG sources.  Also as discussed in the proposed SIP Call,
the state of Connecticut explicitly excludes GHGs from the state PSD
program.  In addition, as discussed in the proposed SIP Call, some
states with SIP PSD applicability provisions that do mirror EPA's
regulatory provisions by applying PSD requirements to sources of any air
pollutant "subject to regulation" nevertheless do not appear to apply
PSD to GHG-emitting sources because these states have other state law
constraints against applying state law or SIP requirements without
specific state action authorizing such application of law.

In the SIP Call, EPA proposed to find the SIPs for these 16 states to be
substantially inadequate, and EPA proposed a SIP Call under CAA
110(k)(5).  EPA stated that it intends to finalize the finding of
substantial inadequacy and the SIP Call by December 1, 2010.  EPA
further stated that it would allow states 12 months from the date of
signing the finding and the SIP Call for states to submit their
corrective SIP revisions, but that states could indicate to EPA that
they do not object to a shorter deadline, and in that event EPA would
impose that shorter deadline.  

In the proposed SIP Call, EPA also solicited comment on whether the
approved SIPs for those other states (listed in table II-2 of this
preamble, for which EPA was not proposing a SIP Call) do or do not apply
their PSD programs to GHG-emitting sources.  EPA asked the other states
to review their SIPs and, if their SIPs fail to apply PSD to
GHG-emitting sources, advise EPA by the end of the comment period of the
state's inadequacy and also inform EPA if they do not object to a
shorter deadline for submittal of the required corrective SIP revision.

In the proposed SIP Call, we stated that the required corrective SIP
revision could constitute a simple addition of GHGs to the list of
pollutants subject to PSD applicability, with GHGs defined as the
aggregate of six pollutants—CO2, CH4, N2O, HFCs, PFCs, and SF6.  

III.	Proposed Federal Implementation Plan

In this rulemaking, we propose a FIP, under CAA 110(c)(1)(A), for any
state—if ultimately there is any—for which we issue a finding of
failure to submit a SIP submission required under the PSD GHG SIP Call. 


A.	Timing for FIP

If any of the states for which we issue the SIP Call does not meet its
SIP submittal deadline, we will immediately issue a finding of failure
to submit a required SIP submission, under CAA 110(c)(1)(A), and
immediately thereafter promulgate a FIP for the state.  This timing for
FIP promulgation is authorized under CAA 110(c)(1), which authorizes us
to promulgate a FIP "at any time within 2 years after" finding a failure
to submit a required SIP submission.  We intend to take these actions
immediately in order to minimize any period of time during which
larger-emitting sources may be under an obligation to obtain PSD permits
for their GHGs when they construct or modify, but no permitting
authority is authorized to issue those permits.

After we have promulgated a FIP, it must remain in place until the state
submits a SIP revision and we approve that SIP revision.  CAA 110(c)(1).
 Under the present circumstances, we will act on a SIP revision to apply
the PSD program to GHG sources as quickly as possible.  Upon request of
the state, we will parallel-process the SIP submittal.  That is, if the
state submits to us the draft SIP submittal for which the state intends
to hold a hearing, we will propose the draft SIP submittal for approval
and open a comment period during the same time as the state hearing.  If
the SIP submittal that the state ultimately submits to us is
substantially similar to the draft SIP submittal, we will proceed to
take final action without a further proposal or comment period.  If we
approve such a SIP revision, we will at the same time rescind the FIP.  

B.	Substance of FIP

The proposed FIP constitutes the EPA regulations found in 40 CFR 52.21,
including the PSD applicability provisions, with a limitation to assure
that, strictly for purposes of this rulemaking, the FIP applies only to
GHGs.  Under the PSD applicability provisions in 40 CFR 52.21(b)(50),
the PSD program applies to sources that emit the requisite amounts of
any "regulated NSR pollutant[s]," including any air pollutant "subject
to regulation."  However, in states for which EPA would promulgate a FIP
to apply PSD to GHG-emitting pollutants, the approved SIP already
applies PSD to other air pollutants.  To appropriately limit the scope
of the FIP, EPA proposes in this action to amend 40 CFR 52.21(b)(50) to
limit the applicability provision to GHGs. 

We propose this FIP because it would, to the greatest extent possible,
mirror EPA regulations (as well as those of most of the states).  In
addition, this FIP would readily incorporate the phase-in approach for
PSD applicability to GHG sources that EPA has developed in the Tailoring
Rule and expects to develop further through additional rulemaking.  As
explained in the Tailoring Rule, incorporating this phase-in
approach—including Steps 1 and 2 of the phase-in as promulgated in the
Tailoring Rule—can be most readily accomplished through interpretation
of the terms in the definition "regulated NSR pollutant," including the
term "subject to regulation."  

In accordance with the Tailoring Rule, as described above, the FIP would
apply in Step 1 of the phase-in approach only to "anyway sources" (that
is, sources undertaking construction or modification projects that are
required to apply for PSD permits anyway due to their non-GHG emissions
and that emit GHGs in the amount of at least 75,000 tpy on a CO2e basis)
and would apply in Step 2 of the phase-in approach to both "anyway
sources" and sources that meet the 100,000/75,000-tpy threshold (that
is, (i) sources that newly construct and would not be subject to PSD on
account of their non-GHG emissions, but that emit GHGs in the amount of
at least 100,000 tpy CO2e, and (ii) existing sources that emit GHGs in
the amount of at least 100,000 tpy CO2e, that undertake modifications
that would not trigger PSD on the basis of their non-GHG emissions, but
that increase GHGs by at least 75,000 tpy CO2e).  

Under the FIP, with respect to permits for "anyway sources," EPA will be
responsible for acting on permit applications for only the GHG portion
of the permit, and the state will retain responsibility for the rest of
the permit.  Likewise, with respect to permits for sources that meet the
100,000/75,000-tpy threshold, our preferred approach—for reasons of
consistency—is that EPA will be responsible for acting on permit
applications for only the GHG portion of the permit, that the state
permitting authorities will be responsible for the non-GHG portion of
the permit, and EPA will coordinate with the state permitting authority
as needed in order to fully cover any non-GHG emissions that, for
example, are subject to BACT because they exceed the significance
levels.  We recognize that questions may arise as to whether the state
permitting authorities have authority to permit non-GHG emissions; as a
result, we solicit comment on whether EPA should also be the permitting
authority for the non-GHG portion of the permit for these latter
sources.

We propose that the FIP consist of the regulatory provisions included in
40 CFR 52.21, except that the applicability provision would include a
limitation so that it applies for purposes of this rulemaking only to
GHGs.

IV.	Statutory and Executive Order Reviews

A.	Executive Order 12866 - Regulatory Planning and Review

Under Executive Order (EO) 12866 (58 FR 51735, October 4, 1993), this
action is a "significant regulatory action" because it raises novel
legal or policy issues.  Accordingly, EPA submitted this action to the
Office of Management and Budget (OMB) for review under EO 12866 and any
changes made in response to OMB recommendations have been documented in
the docket for this action.

B.	Paperwork Reduction Act

This action does not impose any new information collection burden.  This
proposed action would establish EPA as the permitting authority in
certain states for PSD GHG permits.  The OMB has previously approved the
information collection requirements contained in the existing
regulations for PSD (see, e.g., 40 CFR 52.21) and title V (see 40 CFR
parts 70 and 71) under the provisions of the Paperwork Reduction Act, 44
U.S.C. 3501 et seq. and has assigned OMB control number 2060-0003 and
OMB control number 2060-0336 respectively.  The OMB control numbers for
EPA's regulations in 40 CFR are listed in 40 CFR part 9.

C.	Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) generally requires an agency to
prepare a regulatory flexibility analysis of any rule subject to notice
and comment rulemaking requirements under the Administrative Procedure
Act or any other statute unless the agency certifies that the rule will
not have a significant economic impact on a substantial number of small
entities.  Small entities include small businesses, small organizations,
and small governmental jurisdictions.

For purposes of assessing the impacts of this notice on small entities,
small entity is defined as: (1) a small business that is a small
industrial entity as defined in the U.S. Small Business Administration
(SBA) size standards (see 13 CFR 121.201); (2) a small governmental
jurisdiction that is a government of a city, county, town, school
district, or special district with a population of less than 50,000; or
(3) a small organization that is any not-for-profit enterprise that is
independently owned and operated and is not dominant in its field.

After considering the economic impacts of this proposed rule on small
entities, I certify that this action will not have a significant
economic impact on a substantial number of small entities.  Although
this rule would lead to federal permitting requirements for certain
sources, those sources are large emitters of GHGs and tend to be large
sources.  We continue to be interested in the potential impacts of the
proposed rule on small entities and welcome comments on issues related
to such impacts.

D.	Unfunded Mandates Reform Act

This action contains no federal mandates under the provisions of Title
II of the Unfunded Mandates Reform Act of 1995 (UMRA, 2 U.S.C.
1531-1538) for state, local or tribal governments or the private
section.  The action imposes no enforceable duty on any state, local or
tribal governments or the private sector.  This action merely prescribes
EPA's action for states that do not meet their existing obligation for
PSD SIP submittal.  Thus, this proposed rule is not subject to the
requirements of sections 202 or 205 of UMRA.

This action is also not subject to the requirements of section 203 of
UMRA because it contains no regulatory requirements that might
significantly or uniquely affect small governments.  This action merely
prescribes EPA's action for states that do not meet their existing
obligation for PSD SIP submittal.

E.	Executive Order 13132 - Federalism

This action does not have federalism implications.  It will not have
substantial direct effects on the states, on the relationship between
the national government and the states, or on the distribution of power
and responsibilities among the various levels of government, as
specified in Executive Order 13132.  This action merely prescribes EPA's
action for states that do not meet their existing obligation for PSD SIP
submittal. 

In the spirit of Executive Order 13132, and consistent with EPA policy
to promote communications between EPA and state and local governments,
EPA specifically solicits comment on this proposed rule from state and
local officials.

F.	Executive Order 13175 - Consultation and Coordination with Indian
Tribal Governments

This action does not have tribal implications, as specified in Executive
Order 13175 (65 FR 67249, November 9, 2000).  This action does not
impose a FIP in any tribal area.  Thus, Executive Order 13175 does not
apply to this action.   

Although Executive Order 13175 does not apply to this proposed rule, EPA
specifically solicits additional comment on this proposed action from
tribal officials.  

G.	Executive Order 13045 - Protection of Children from Environmental
Health Risks and Safety Risks

	EPA interprets EO 13045 (62 FR 19885, April 23, 1997) as applying only
to those regulatory actions that concern health or safety risks, such
that the analysis required under section 5-501 of the EO has the
potential to influence the regulation.  This action is not subject to EO
13045 because it merely prescribes EPA's action for states that do not
meet their existing obligation for PSD SIP submittal.   

H.	Executive Order 13211 - Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use

	This action is not a "significant energy action" as defined in
Executive Order 13211 (66 FR 28355(May 22, 2001)), because it is not
likely to have a significant adverse effect on the supply, distribution,
or use of energy.  This action merely prescribes EPA's action for states
that do not meet their existing obligation for PSD SIP submittal.   

I.	National Technology Transfer and Advancement Act

Section 12(d) of the National Technology Transfer and Advancement Act of
1995 ("NTTAA"), Public Law No. 104-113, 12(d) (15 U.S.C. 272 note)
directs EPA to use voluntary consensus standards in its regulatory
activities unless to do so would be inconsistent with applicable law or
otherwise impractical.  Voluntary consensus standards are technical
standards (e.g., materials specifications, test methods, sampling
procedures, and business practices) that are developed or adopted by
voluntary consensus standards bodies.  NTTAA directs EPA to provide
Congress, through OMB, explanations when the Agency decides not to use
available and applicable voluntary consensus standards. 

This proposed rulemaking does not involve technical standards. 
Therefore, EPA is not considering the use of any voluntary consensus
standards.

J.	Executive Order 12898 - Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income Populations

Executive Order 12898 (59 FR 7629, February 16, 1994) establishes
federal executive policy on environmental justice.  Its main provision
directs federal agencies, to the greatest extent practicable and
permitted by law, to make environmental justice part of their mission by
identifying and addressing, as appropriate, disproportionately high and
adverse human health or environmental effects of their programs,
policies, and activities on minority populations and low-income
populations in the U.S.

EPA has determined that this proposed rule will not have
disproportionately high and adverse human health or environmental
effects on minority or low-income populations because it does not affect
the level of protection provided to human health or the environment. 
This proposed rule merely prescribes EPA's action for states that do not
meet their existing obligation for PSD SIP submittal.

K.	Determination under Section 307(d)

Pursuant to sections 307(d)(1)(B) of the CAA, this action is subject to
the provisions of section 307(d).  Section 307(d)(1)(B) provides that
the provisions of section 307(d) apply to "the promulgation or revision
of an implementation plan by the Administrator under section 110(c) of
this Act."

V.	Statutory Authority

The statutory authority for this action is provided by sections
307(d)(7)(B), 101, 111, 114, 116, and 301 of the CAA as amended (42
U.S.C. 7401, 7411, 7414, 7416, and 7601).  This action is also subject
to section 307(d) of the CAA (42 U.S.C. 7407(d)).Page   PAGE  40  of  
NUMPAGES  41  – Action to Ensure Authority to Issue Permits under the
Prevention of Significant Deterioration Program to Sources of Greenhouse
Gas Emissions:  Federal Implementation Plan

List of Subjects in 40 CFR Part 52 

Air pollution control, Carbon dioxide, Carbon dioxide equivalents,
Carbon monoxide, Environmental protection, Greenhouse gases,
Hydrofluorocarbons, Intergovernmental relations, Lead, Methane, Nitrogen
dioxide, Nitrous oxide, Ozone, Particulate matter, Perfluorocarbons,
Reporting and recordkeeping requirements, Sulfur hexafluoride, Sulfur
oxides, Volatile organic compounds.

________________________ 

Dated: 

_________________________ 

Lisa P. Jackson, 

Administrator.

  SEQ CHAPTER \h \r 1 For the reasons set out in the preamble, title
40, chapter I of the Code of Federal Regulations is proposed to be
amended as follows:

PART 52 - [Amended]

	Each of the appropriate subparts of part 52, which are the subparts for
the states for which EPA proposes the FIP, will include the following
provision in the appropriate place among the subpart’s PSD
requirements:  

	§52.[XXX] The requirements of sections 160 through 165 of the Clean
Air Act are not met to the extent the [name of state] plan, as approved,
does not apply with respect to GHG emissions from certain stationary
sources.  Therefore, the provisions of §52.21 except paragraph (a)(1)
are hereby incorporated by reference and made a part of the [name of
state] plan for:

(a) beginning January 2, 2011, the pollutant GHGs from  stationary
sources described in §52.21(b)(49)(iv), and 

(b) beginning July 1, 2011, in addition to the pollutant described under
subsection (a), 

[Alternative 1] the pollutant GHGs from stationary sources described in
§52.21(b)(49)(v)

[Alternative 2] beginning July 1, 2011, stationary sources described in
§52.21(b)(49)(iv).

 EPA respects the unique relationship between the U.S. government and
tribal authorities and acknowledges that tribal concerns are not
interchangeable with state concerns.  However, for convenience, we refer
to "states" in this rulemaking to collectively mean states, local
permitting authorities, and tribal authorities.

 Prevention of Significant Deterioration and Title V Greenhouse Gas
Tailoring Rule; Final Rule.  75 FR 31514 (June 3, 2010).  The Tailoring
Rule is described in more detail later in this preamble.

 "Endangerment and Cause or Contribute Findings for Greenhouse Gases
Under Section 202(a) of the Clean Air Act."  74 FR 66496.  

 "Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate
Average Fuel Economy Standards; Final Rule," 75 FR 25324 (May 7, 2010).

 "Interpretation of Regulations that Determine Pollutants Covered by
Clean Air Act Permitting Programs" (April 2, 2010) (finalizing EPA
response to petition for reconsideration of "EPA's Interpretation of
Regulations that Determine Pollutants Covered by Federal Prevention of
Significant Deterioration (PSD) Permit Program" (commonly known as the
"Johnson Memo"), December 18, 2008).

 "Prevention of Significant Deterioration and Title V Greenhouse Gas
Tailoring Rule; Final Rule," 75 FR 31514.  

 In the following listed state or local jurisdictions, as well as in all
Indian country, EPA is the PSD permitting authority, implementing the
federal PSD regulation at 40 CFR 52.21:  American Samoa; Arizona (some
areas); California (most areas); District of Columbia; Guam;
Massachusetts; New Jersey; New York; Northern Mariana Islands; Puerto
Rico; Trust Territories; and the Virgin Islands.  In a smaller number of
areas, listed as follows, the state or local permitting authority is
delegated at least partial authority by EPA to implement the federal PSD
regulation:  Arizona (some areas); California (some areas); Hawaii;
Illinois; Minnesota; Nevada (most areas); Pennsylvania (some areas); and
Washington.

Page   PAGE  41  of   NUMPAGES  41 

