
[Federal Register Volume 81, Number 191 (Monday, October 3, 2016)]
[Proposed Rules]
[Pages 68110-68147]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-21475]



[[Page 68109]]

Vol. 81

Monday,

No. 191

October 3, 2016

Part II





Environmental Protection Agency





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40 CFR Parts 51, 52, 60, et al.





Revisions to the Prevention of Significant Deterioration (PSD) and 
Title V Greenhouse Gas (GHG) Permitting Regulations and Establishment 
of a Significant Emissions Rate (SER) for GHG Emissions Under the PSD 
Program; Proposed Rule

  Federal Register / Vol. 81 , No. 191 / Monday, October 3, 2016 / 
Proposed Rules  

[[Page 68110]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 51, 52, 60, 70 and 71

[EPA-HQ-OAR-2015-0355; FRL-9951-79-OAR]
RIN 2060-AS62


Revisions to the Prevention of Significant Deterioration (PSD) 
and Title V Greenhouse Gas (GHG) Permitting Regulations and 
Establishment of a Significant Emissions Rate (SER) for GHG Emissions 
Under the PSD Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing to 
revise provisions applicable to greenhouse gases (GHG) in the EPA's 
Prevention of Significant Deterioration (PSD) and title V permitting 
regulations. This action is in response to the June 23, 2014, U.S. 
Supreme Court's decision in Utility Air Regulatory Group (UARG) v. EPA 
and the April 10, 2015, Amended Judgment by the United States Court of 
Appeals for the District of Columbia Circuit (D.C. Circuit) in 
Coalition for Responsible Regulation v. EPA. The proposed PSD and title 
V revisions involve changes to several regulatory definitions in the 
PSD and title V regulations, revisions to the PSD provisions on GHG 
Plantwide Applicability Limitations (PALs), and revisions to other 
provisions necessary to ensure that neither the PSD nor title V rules 
require a source to obtain a permit solely because the source emits or 
has the potential to emit (PTE) GHGs above the applicable thresholds. 
In addition, the EPA is also proposing a significant emissions rate 
(SER) for GHGs under the PSD program that would establish an 
appropriate threshold level below which Best Available Control 
Technology (BACT) is not required for a source's GHG emissions.

DATES: Comments must be received on or before December 2, 2016.
    If anyone contacts us requesting to speak at a public hearing by 
October 13, 2016, we will hold a public hearing. Additional information 
about the hearing would be published in a subsequent Federal Register 
notice.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2015-0355, at http://www.regulations.gov. Follow the online 
instructions for submitting comments. Once submitted, comments cannot 
be edited or removed from Regulations.gov. The EPA may publish any 
comment received to its public docket. Do not submit electronically any 
information you consider to be Confidential Business Information (CBI) 
or other information whose disclosure is restricted by statute. 
Multimedia submissions (audio, video, etc.) must be accompanied by a 
written comment. The written comment is considered the official comment 
and should include discussion of all points you wish to make. The EPA 
will generally not consider comments or comment contents located 
outside of the primary submission (i.e., on the Web, Cloud, or other 
file sharing system). For additional submission methods, the full EPA 
public comment policy, information about CBI or multimedia submissions, 
and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Questions concerning this proposed 
rule should be addressed to Ms. Carrie Wheeler, U.S. Environmental 
Protection Agency, Office of Air Quality Planning and Standards, Air 
Quality Policy Division, (C504-01), Research Triangle Park, NC 27711, 
telephone number (919) 541-9771, email at wheeler.carrie@epa.gov.
    To request a public hearing or information pertaining to a public 
hearing on this proposal, contact Ms. Pamela Long, U.S. Environmental 
Protection Agency, Office of Air Quality Planning and Standards, Air 
Quality Policy Division, (C504-01), Research Triangle Park, NC 27711; 
telephone number (919) 541-0641; fax number (919) 541-5509; email at: 
long.pam@epa.gov (preferred method of contact).

SUPPLEMENTARY INFORMATION: Throughout this document wherever ``we,'' 
``us,'' or ``our'' is used, we mean the EPA.
    The information in this Supplementary Information section of this 
preamble is organized as follows:

I. General Information
    A. To whom does this action apply?
    B. Where To Get a Copy of This Document and Other Related 
Information
    C. What acronyms, abbreviations and units are used in this 
preamble?
II. Overview of the Proposed Rule
III. Background
    A. PSD Program
    B. Title V Program
    C. Application of PSD and Title V Programs to GHG Emissions
    1. Regulation of the Pollutant GHGs
    2. Revisions to PSD and Title V Regulations in the Tailoring 
Rule
    3. Actions After the Tailoring Rule
IV. Revisions to the PSD and Title V GHG Permitting Regulations
    A. What revisions to the PSD and title V GHG permitting 
regulations is the EPA proposing with this action?
    1. Revisions to the PSD Regulations
    2. Revisions to the PSD PAL Regulations
    3. Revisions to State-Specific PSD Regulations
    4. Revisions to the Title V Regulations
    5. Revisions to State-Specific Title V Regulations
    B. What additional regulatory revisions is the EPA proposing 
with this action?
V. Establishment of a GHG SER
    A. What is the legal basis for establishing a GHG SER?
    B. What is the regulatory context for the de minimis exception 
proposed in this rule?
    C. Historical Approaches to Establishing a De Minimis Level in 
the PSD Program
    D. What is the technical basis for the proposed GHG SER?
    1. Summary of Technical Support Information
    2. Review of PSD Permitting and GHG Emission Sources
    a. GHG Permitting Under Step 1 of the Tailoring Rule
    b. RBLC Permitting Information
    3. GHG Emissions Levels for Combustion Units
    4. Non-Combustion Related GHG Emissions
    5. Potential BACT Techniques Applicable to GHG Emission Sources
    a. Energy Efficiency Measures
    b. Carbon Capture and Storage
    c. Gas Recovery and Utilization
    d. Leak Detection and Repair Measures
    6. Costs of GHG BACT Review
    E. Proposed GHG SER and Request for Comment
VI. What would be the economic impacts of the proposed rule?
VII. How should state, local and tribal authorities adopt the 
regulatory revisions included in this action?
VIII. Environmental Justice Considerations
IX. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and 
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act (PRA)
    C. Regulatory Flexibility Act (RFA)
    D. Unfunded Mandates Reform Act (UMRA)
    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 CAA Section 307(d)
X. Statutory Authority

[[Page 68111]]

I. General Information

A. To whom does this action apply?

    This proposal potentially affects owners and operators of sources 
in all industry groups, such as the owners and operators of proposed 
new and modified major stationary sources. The majority of potentially 
affected categories and entities include:

------------------------------------------------------------------------
             Industry group                         NAICS \a\
------------------------------------------------------------------------
Mining.................................  21.
Utilities (electric, natural gas, other  2211, 2212, 2213.
 systems).
Manufacturing (food, beverages,          311, 312, 313, 314, 315, 316.
 tobacco, textiles, leather).
Wood product, paper manufacturing......  321, 322.
Petroleum and coal products              32411, 32412, 32419.
 manufacturing.
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              3271, 3272, 3273, 3274, 3279.
 manufacturing.
Primary and fabricated metal             3311, 3312, 3313, 3314, 3315,
 manufacturing.                           3321, 3322, 3323, 3324, 3325,
                                          3326, 3327, 3328, 3329.
Machinery manufacturing................  3331, 3332, 3333, 3334, 3335,
                                          3336, 3339.
Computer and electronic products         3341, 3342, 3343, 3344, 3345,
 manufacturing.                           4446.
Electrical equipment, appliance, and     3351, 3352, 3353, 3359.
 component manufacturing.
Transportation equipment manufacturing.  3361, 3362, 3363, 3364, 3365,
                                          3366, 3366, 3369.
Furniture and related product            3371, 3372, 3379.
 manufacturing.
Miscellaneous manufacturing............  3391, 3399.
Waste management and remediation.......  5622, 5629.
------------------------------------------------------------------------
\a\ North American Industry Classification System.

    Potentially affected entities also include state, local and tribal 
permitting authorities \1\ responsible for implementing the PSD and 
title V permitting programs.
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    \1\ Under the PSD regulations, the entities that implement the 
program are referred to as ``reviewing authorities,'' while under 
the title V program the implementing entities are referred to as 
``permitting authorities.'' For simplicity, in this preamble we 
refer to both as ``permitting authorities.''
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    As noted, the potentially affected entities could be in any 
industry group. Thus, the earlier table is not intended to be 
exhaustive, but rather provides a guide for readers regarding likely 
affected entities. The EPA believes this table lists the most typical 
types of affected entities. Other types of entities not listed in the 
table could also be regulated. To determine if an entity is regulated 
by this action, the applicability criteria found in the PSD and title V 
regulations (and which are briefly described in Sections III.A and B of 
this preamble) should be consulted.

B. Where To Get a Copy of This Document and Other Related Information

    In addition to being available in the docket, an electronic copy of 
this proposal notice will also be available on the World Wide Web. 
Following signature by the EPA Administrator, a copy of this notice 
will be posted in the regulations section of our New Source Review 
(NSR) Web site, under Regulatory Actions, at http://www.epa.gov/nsr/nsr-regulatory-actions and the title V Web site, under Current 
Regulations and Regulatory Actions, at http://www.epa.gov/title-v-operating-permits/current-regulations-and-regulatory-actions. A ``track 
changes'' version of the full regulatory text that incorporates and 
shows the full context of the changes in this proposed action is also 
available in the docket for this rulemaking. In addition to the 
proposal and regulatory text documents, other relevant documents are 
located in the docket, including technical support documents referenced 
in this preamble.

C. What acronyms, abbreviations and units are used in this preamble?

APA Administrative Procedures Act
AQRV[s] Air Quality Related Value[s]
BACT Best Available Control Technology
CAA or Act Clean Air Act
CCS Carbon Capture and Sequestration
CFR Code of Federal Regulations
CH4 Methane
CO Carbon Monoxide
CO2 Carbon Dioxide
CO2e Carbon Dioxide Equivalent
D.C. Circuit United States Court of Appeals for the District of 
Columbia Circuit
EGU Electric Generating Unit
EIA Economic Impact Analysis
EPA U.S. Environmental Protection Agency
FIP Federal Implementation Plan
FR Federal Register
GHG[s] Greenhouse Gas[es]
GHGRP Greenhouse Gas Reporting Program
GWP Global Warming Potential
HP Horsepower
HFC[s] Hydrofluorocarbons
IC Internal Combustion
ICR Information Collection Request
LAER Lowest Achievable Emission Rate
LDAR Leak Detection and Repair
LDVR Light-Duty Vehicle Rule
NAAQS National Ambient Air Quality Standard
NESHAP National Emission Standard for Hazardous Air Pollutants
NHTSA National Highway Transportation Safety Administration
NOX Nitrogen Oxides
NO2 Nitrogen Dioxide
NSPS New Source Performance Standard
NSR New Source Review
OMB Office of Management and Budget
PAL[s] Plantwide Applicability Limitation[s]
PFC[s] Perfluorocarbons
PM Particulate Matter
PSD Prevention of Significant Deterioration
PTE Potential To Emit
RACT Reasonably Available Control Technology
SER Significant Emissions Rate
SF6 Sulfur Hexafluoride
SIP State Implementation Plan
SO2 Sulfur Dioxide
TCEQ Texas Commission on Environmental Quality
TIP Tribal Implementation Plan
Tpy Tons Per Year
UARG Utility Air Regulatory Group
UMRA Unfunded Mandates Reform Act
VOC Volatile Organic Compound

II. Overview of the Proposed Rule

    The EPA is proposing revisions to the provisions applicable to GHGs 
in its PSD and title V permitting regulations in order to conform those 
regulations with the U.S. Supreme Court's decision in UARG v. EPA, 134 
S.Ct. 2427 (2014), and the April 10, 2015, Amended Judgment by the D.C. 
Circuit in Coalition for Responsible Regulation v. EPA, Nos. 09-1322, 
10-073, 10-1092 and 10-1167 (D.C. Cir. April 10, 2015) (Amended 
Judgment). Some of these provisions were promulgated as part of

[[Page 68112]]

the June 3, 2010, regulation titled ``Prevention of Significant 
Deterioration and Title V Greenhouse Gas Tailoring Rule'' \2\ 
(hereinafter ``Tailoring Rule''). The D.C. Circuit Amended Judgment 
ordered that: (1) The regulations under review be vacated to the extent 
they require a stationary source to obtain a PSD or title V permit 
solely because the source emits or has the potential to emit GHG above 
the applicable thresholds and (2) that the EPA consider whether any 
further revisions to its regulations are appropriate in light of UARG 
v. EPA and, if so, that it undertake to make such revisions. The 
proposed revisions to the PSD and title V GHG permitting regulations 
include changes to certain regulatory definitions and the PSD PAL 
provisions applicable to GHGs. In addition, we are proposing to 
establish a SER for GHGs \3\ under the PSD air permitting program to 
establish an appropriate threshold level below which BACT review is not 
required for GHG emissions from a source that is required to obtain a 
PSD permit.
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    \2\ 75 FR 31514, June 3, 2010.
    \3\ In this document, we reserve the abbreviations ``GHG'' and 
``GHGs'' to refer to the air pollutant ``greenhouse gases,'' which 
is defined as the aggregate of six individual greenhouse gases as 
discussed in Section III C.2 of this preamble. We spell out 
``greenhouse gas'' where we refer more broadly to compounds that 
trap heat in the atmosphere.
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    The EPA published an initial set of revisions in light of the UARG 
v. EPA decision and the D.C. Circuit's Amended Judgment on August 19, 
2015.\4\ These revisions removed entire sections and paragraphs that 
were readily severable from other provisions in the PSD and title V 
regulations and specifically identified in the D.C. Circuit's Amended 
Judgment. These removed provisions required a stationary source to 
obtain a PSD permit solely on the basis of the source's GHG emissions 
and required that the EPA study and consider further phasing-in the PSD 
and title V permitting requirements at lower GHG emissions thresholds. 
Because of the nature of the D.C. Circuit's Amended Judgment, these 
earlier revisions were ministerial in nature and exempt from notice-
and-comment rulemaking procedures under the ``good cause'' exception of 
the Administrative Procedure Act (APA).
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    \4\ 80 FR 50199, August 19, 2015.
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    In this action, the EPA is proposing a second set of regulatory 
revisions that we believe are necessary to fully implement the UARG 
decision and D.C. Circuit Amended Judgment and further revisions that 
are appropriate in light of UARG. The revisions proposed in this action 
were not included in the August 19, 2015, rule because the revisions 
proposed in this action amend, rather than completely remove, text that 
remains pertinent to the PSD and title V programs as a whole and their 
continued application to GHGs. As a result, these revisions are not 
ministerial in nature and not exempt from notice-and-comment rulemaking 
procedures under the ``good cause'' exception of the APA. Therefore, 
this action gives the public an opportunity to comment on how the EPA 
proposes to revise other parts of its regulations to conform to the 
Amended Judgment as further explained in Section IV.
    In general, this action proposes revisions to the PSD definitions 
at 40 Code of Federal Regulations (CFR) sections 51.166 and 52.21 for 
the following terms: ``major stationary source,'' ``major 
modification,'' ``significant,'' and ``subject to regulation.'' This 
action also proposes to revise the title V definitions at 40 CFR parts 
70 and 71 for the terms ``major stationary source'' and ``subject to 
regulation.'' In addition, this action proposes to add a definition of 
``greenhouse gases'' to these PSD and title V regulations, which 
contains content that was previously part of the definition of 
``subject to regulation'' in each set of regulations. The EPA believes 
these revisions are appropriate to fully implement the Amended 
Judgment. We are also proposing to revise the PSD GHG PAL provisions at 
40 CFR part 52 to reflect the UARG decision, which stated that sources 
that only emit or have the potential to emit GHGs above the applicable 
thresholds are no longer required to obtain a PSD permit. Furthermore, 
we are proposing to revise certain provisions under 40 CFR part 60, 
which the EPA wrote to ensure that the existing GHG applicability 
threshold for the PSD BACT requirement continues to apply on an interim 
basis after this pollutant became regulated under standards set forth 
in those parts. Finally, we are proposing to revise a few state-
specific PSD or title V permitting provisions that, in general, 
established permitting requirements for sources that only emit or have 
the potential to emit GHGs above the major source thresholds. We are 
proposing the revisions listed in this paragraph in response to the 
D.C. Circuit's directive in the Amended Judgment.
    In addition, the EPA is proposing to establish a SER for the 
pollutant GHGs under the PSD permitting program in response to the UARG 
decision. The U.S. Supreme Court recognized that the EPA did not 
justify on de minimis grounds the 75,000 tons per year (tpy) carbon 
dioxide equivalent (CO2e) threshold that currently 
determines whether GHG BACT is required for ``anyway sources.'' \5\ 134 
S.Ct. at 2438 n. 3. The U.S. Supreme Court also expressly did not 
address whether 75,000 tpy CO2e necessarily exceeds a true 
de minimis level, holding only that the EPA must justify its selection 
of such a level on proper grounds. 134 S.Ct. at 2449. An ``anyway 
source'' in this context refers to a facility or emission source that 
is otherwise required to obtain a PSD permit based on its emissions of 
one or more regulated NSR pollutants other than GHG. The U.S. Supreme 
Court limited the scope of the PSD permitting program to ``anyway 
sources'' and added that the EPA may exempt an ``anyway source'' from 
the GHG BACT requirement if the source emits a de minimis amount of 
GHGs. 134 S.Ct. at 2449.
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    \5\ Under existing regulations, a threshold level of 75,000 tpy 
CO2e is contained in the definition of a ``subject to 
regulation'' to determine the applicability of the GHG PSD 
permitting requirements to ``anyway sources.'' 40 CFR part 
51.166(b)(48)(iv); 40 CFR part 52.21(b)(49)(iv). This value was 
based principally on addressing potential permitting burdens, but it 
was not proposed or promulgated as a permanent GHG SER (75 FR 
31560).
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    In response to the outcome of the UARG decision, this rulemaking 
action proposes a GHG SER that represents a de minimis level of GHG 
emissions for the purposes of determining the applicability of the GHG 
BACT requirement at ``anyway sources,'' new and modified sources that 
trigger PSD permitting obligations on the basis of their emissions of 
air pollutants other than GHGs. If not for provisions that remain in 
the EPA's definition of ``subject to regulation'' at this time, any GHG 
emissions increase at an ``anyway source'' would be considered 
``significant'' and thus require a newly constructed major source, or a 
major modification at an existing major source, to undergo PSD BACT 
review for GHGs.\6\
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    \6\ Definition of ``significant,'' 40 CFR part 51.166(b)(23)(ii) 
and 40 CFR part 52.21(b)(23)(ii).
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    In July 2014, following the UARG decision, the EPA issued a 
memorandum titled, ``Next Steps and Preliminary Views on the 
Application of Clean Air Act (CAA) Permitting Programs to Greenhouse 
Gases Following the U.S. Supreme Court's Decision in UARG v. EPA'' 
(Preliminary Views Memo).\7\ In that memorandum

[[Page 68113]]

the EPA explained that, among other things, it would consider whether 
to promulgate a de minimis level.\8\ The EPA also explained that, with 
respect to new ``anyway sources,'' we preliminarily ``intend to 
continue applying the PSD BACT requirements to GHG if the source emits 
or has the potential to emit 75,000 tpy or more of GHG on a 
[CO2e] basis.'' \9\ With respect to modified sources, we 
said that initially ``the EPA intends to continue applying the PSD BACT 
requirements to GHG if both of the following circumstances are present: 
(1) The modification is otherwise subject to PSD for a pollutant other 
than GHG; (2) the modification results in a GHG emissions increase and 
a net GHG emissions increase equal to or greater than 75,000 tpy 
CO2e and greater than zero on a mass basis.'' \10\
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    \7\ Next Steps and Preliminary Views on the Application of Clean 
Air Act (CAA) Permitting Programs to Greenhouse Gases Following the 
Supreme Court's Decision in UARG v. EPA, Memorandum from Janet G. 
McCabe, Acting Assistant Administrator, Office of Air and Radiation, 
and Cynthia Giles, Assistant Administrator, Office of Enforcement 
and Compliance Assurance, U.S. EPA, to Regional Administrators, July 
24, 2014. Available at http://www.epa.gov/sites/production/files/2015-12/documents/20140724memo.pdf.
    \8\ Id. at 4.
    \9\ Id. at 3.
    \10\ Id. at 3.
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    In this proposed rule, based on our technical and legal analyses as 
described in Section V of this preamble, we are proposing to establish 
a 75,000 tpy CO2e SER. We propose to determine that this 
level represents a de minimis level of GHG emissions for purposes of 
determining whether the GHG BACT review should be required as part of 
an ``anyway source'' PSD permit. A 75,000 tpy CO2e GHG SER, 
based on our technical analysis, represents a level of GHGs, below 
which there is trivial or no value in conducting a BACT analysis for 
GHGs because we would not expect to obtain meaningful GHG reductions 
from requiring application of BACT at all such sources. In addition, 
there does not appear to be a basis to set a GHG SER level above 75,000 
tpy CO2e based on our review of the GHG permitting 
experience to date and the fundamental principles for establishing a de 
minimis exception to a statutory requirement as described in Section V 
of this preamble. Therefore, we are not considering a GHG SER level 
greater than 75,000 tpy CO2e. Finally and although our 
analysis supports a SER at 75,000 tpy CO2e, we are 
soliciting comments on (and associated supporting documentation for) 
establishing a GHG SER level below 75,000 tpy CO2e and at or 
above 30,000 tpy CO2e. Based on our current understanding, 
we do not believe there is any basis for a SER level to be established 
below 30,000 tpy CO2e, and we are not considering SER values 
below this level.

III. Background

A. PSD Program

    Part C of title I of the CAA contains the requirements for the PSD 
program. The primary element of this program is a preconstruction 
review and permitting requirement for new and modified stationary 
sources of air pollution locating in areas meeting a national ambient 
air quality standard (NAAQS) (``attainment'' areas) and areas for which 
there is insufficient information to classify the area as either 
attainment or nonattainment (``unclassifiable'' areas). Under the CAA, 
the PSD preconstruction permitting requirement applies to any ``major 
emitting facility'' that commences construction or undertakes a 
``modification.'' CAA 165(a) and CAA 169(2)(C). The Act defines the 
term ``major emitting facility'' as a stationary source that emits or 
has the potential to emit any air pollutant in the amount of at least 
100 or 250 tpy, depending on the source category. CAA section 169(1). 
The Act also defines ``modification'' as any physical or operational 
change that increases the amount of any air pollutant emitted by the 
source. CAA section 111(a)(4).
    The EPA's regulations reflect these requirements.\11\ Under the 
regulations, PSD applies to any ``major stationary source'' that begins 
actual construction on a new facility or undertakes a ``major 
modification'' in an area designated as attainment or unclassifiable 
for a NAAQS. 40 CFR 52.21(a)(2)(i)-(iii). The regulations define a 
``major stationary source'' as a stationary source that emits, 
depending on the source category, at least 100 or 250 tpy, of a 
``regulated NSR pollutant.'' 40 CFR part 52.21(b)(1)(i)(a)-(b). A 
``regulated NSR pollutant'' is defined as any of the following: (1) In 
general, any pollutant subject to a NAAQS, (2) any pollutant subject to 
a standard of performance for new sources under CAA section 111, (3) 
any of a certain type of stratospheric ozone depleting substances, or 
(4) any pollutant that otherwise is subject to regulation under the 
Act. 40 CFR part 52.21(b)(50)(i)-(iv). Regulated NSR pollutants do not 
include hazardous air pollutants listed under CAA section 112. 40 CFR 
part 52.21(b)(v).
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    \11\ The EPA's PSD regulations are found in two parts of 40 CFR, 
part 51 and part 52. The part 52 regulations at 40 CFR 52.21 
constitute the federal PSD program that applies in any state or 
other area, such as Indian country, that does not have an approved 
PSD program in its implementation plan. The part 51 regulations at 
40 CFR 51.166 spell out the requirements that must be met for the 
EPA to approve a PSD program into an implementation plan. The 
language in the regulations is nearly identical, with small 
differences reflecting their different purposes. For simplicity, we 
cite only the 40 CFR part 52 regulations in this section, but the 
part 51 regulations contain analogous provisions in 40 CFR 51.166.
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    Construction of a new major stationary source \12\ is subject to 
preconstruction review under PSD if the source has the potential to 
emit any regulated NSR pollutant in the amount of at least 100 or 250 
tpy, depending on the source category. The PSD permitting requirements 
then apply to each regulated NSR pollutant that the source would have 
the potential to emit in ``significant amounts.'' 40 CFR parts 
52.21(j); 52.21(m)(1)(i). PSD does not apply to pollutants for which 
the area in which the source would be located is a nonattainment area 
(often referred to as ``nonattainment pollutants'') 40 CFR part 
52.21(i)(2). The amount of emissions of each pollutant that is 
considered significant is specified in the definition of the term 
``significant.'' 40 CFR part 52.21(b)(23)(i). Because these values are 
expressed as a rate of emissions in tpy, the EPA often refers to each 
value as a ``significant emissions rate'' or ``SER.'' For any regulated 
NSR pollutant for which no SER is specified, any emissions rate is 
considered significant. 40 CFR part 52.21(b)(23)(ii).
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    \12\ A new major stationary source can be either a newly 
constructed facility or a physical change at an existing minor 
source that would qualify as a major stationary source by itself. 40 
CFR 52.21(b)(1)(i)(c).
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    The PSD program also applies to an existing major stationary source 
when there is a planned ``major modification'' to the source, which is 
a physical change or change in the method of operation that would 
result in both a significant emissions increase and a significant net 
emissions increase of one or more regulated NSR pollutants, other than 
nonattainment pollutants.\13\ The SERs are the measure that is used to 
determine whether projected emissions increases of regulated NSR 
pollutants are significant.
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    \13\ There is a two-step process for determining whether a 
planned physical or operational change at an existing major 
stationary source qualifies as a major modification that is subject 
to PSD. First, the change itself must be projected to result in a 
significant increase in a regulated NSR pollutant. If so, the change 
must also be projected to result in a significant net emissions 
increase of that pollutant when other contemporaneous, creditable 
increases and decreases of that pollutant at the source are taken 
into account. This process is spelled out at 40 CFR 52.21(a)(2)(iv); 
the definition of ``major modification'' is at 40 CFR 52.21(b)(2) 
and the definition of ``net emissions increase'' is at 40 CFR 
52.21(b)(3).
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    One principal PSD requirement is that a permit authorizing 
construction of a new major source or major modification must contain 
emissions limitations based on application of the BACT for each 
regulated NSR pollutant. BACT is

[[Page 68114]]

determined on a case-by-case basis, taking into account, among other 
factors, the energy, environmental, and economic impacts. 40 CFR part 
52.21(b)(12) and (j). To ensure these criteria are satisfied in 
individual permitting decisions, the EPA has developed a ``top-down'' 
approach for BACT review that the EPA applies and recommends to state 
permitting authorities. This involves a decision process that includes 
identification of all available control technologies, elimination of 
technically infeasible options, ranking of remaining options by control 
and cost effectiveness, and then selection of BACT. In re Prairie State 
Generating Company, 13 E.A.D. 1, 13-14 (EAB 2006). Under PSD, once a 
source is determined to be major for any regulated NSR pollutant, a 
BACT review is performed for each attainment pollutant that is 
projected to increase over its PSD significance level as a result of 
new construction or a modification project at an existing major source.
    In addition to complying with the BACT requirements, the source 
must analyze impacts on ambient air quality and demonstrate that the 
construction will not cause or contribute to a violation of any NAAQS 
or PSD increments. However, this requirement is not applicable to GHGs 
because there are no NAAQS or PSD increments for GHGs. A permit 
applicant must also analyze impacts on soil, vegetation and visibility. 
In addition, new sources or modifications that would impact Class I 
areas (e.g., national parks) may be subject to additional requirements 
to protect air quality related values (AQRVs) that have been identified 
for such areas (e.g., visibility). Under PSD, if a source's proposed 
project may impact a Class I area, the Federal Land Manager is notified 
and is responsible for evaluating a source's projected impact on the 
AQRVs. Because it is not possible with current climate change modeling 
to quantify the impacts at particular locations attributable to a 
specific GHG source, the EPA considers the reduction of GHG emissions 
to the maximum extent achievable under the BACT requirement to be the 
best technique to satisfy the additional impacts analysis and Class I 
area requirements related to GHGs. PSD and Title V Permitting Guidance 
for Greenhouse Gases at 47-49.\14\
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    \14\ U.S. EPA, Document No. EPA-457/B-11-001, March 2011. http://www2.epa.gov/nsr/new-source-review-policy-and-guidance-document-index.
---------------------------------------------------------------------------

    State or local air pollution control agencies issue most PSD 
permits. The EPA establishes the basic requirements for the PSD program 
in two sections of its regulations--40 CFR part 51.166 and 52.21. Under 
40 CFR part 51.166, which sets out the minimum requirements for 
obtaining the EPA's approval of the PSD program in a State 
Implementation Plan (SIP), states may develop unique PSD requirements 
and procedures tailored for the air quality needs of each area as long 
as the program is at least as stringent as the EPA requirements. 
Because a state's SIP is required to contain a PSD program, states with 
PSD programs approved under 40 CFR part 51.166 are typically referred 
to as ``SIP-approved states.'' Some local air pollution agencies have 
also developed their own PSD programs that have been approved, so 
typically they are also referred to as SIP-approved. To date, no tribes 
have developed PSD programs under Tribal Implementation Plans (TIP). In 
cases where state, tribal or local air pollution control agencies do 
not have a SIP-approved or TIP-approved PSD program, as applicable, the 
federal PSD program at 40 CFR part 52.21 applies. In these areas, such 
state, tribal or local air pollution control agencies can be delegated 
the federal law authority to issue permits on behalf of the EPA, and 
those programs are often referred to as ``delegated programs.'' To 
date, no tribes have requested delegation of the federal PSD program 
and, therefore, the EPA is the permitting authority in those areas. The 
EPA is also the permitting authority in all areas where no other entity 
has requested delegation of the federal program or has requested 
approval of its own PSD program under a SIP or a TIP (e.g., Puerto 
Rico, other U.S. Territories, and the jurisdictions of several local 
agencies in California).

B. Title V Program

    Title V of the CAA establishes requirements for an operating permit 
program for major sources of air pollutant emissions and certain other 
sources. CAA section 502. The operating permit requirements under title 
V are intended to ensure that sources comply with CAA applicable 
requirements. CAA section 504; 40 CFR parts 70.1(b) and 71.1(b). The 
title V program is implemented through regulations contained in 40 CFR 
part 70 for the EPA-approved programs implemented by state and local 
agencies and tribes, and 40 CFR part 71 for the federal program 
generally implemented by the EPA in jurisdictions without a program 
approved under part 70 (e.g., much of Indian country).
    The title V program requires major sources and certain other 
sources to apply for operating permits. The EPA has interpreted the 
term ``major source'' to include stationary sources that emit or have a 
potential to emit (PTE) of 100 tpy or more of any air pollutant subject 
to regulation, as now reflected in the regulatory definition of ``major 
source'' in 40 CFR parts 70.2 and 71.2. 75 FR 31521. In general and 
under the EPA's longstanding interpretation, a pollutant is ``subject 
to regulation'' for purposes of title V if it is subject to a CAA 
requirement establishing actual control of emissions and it is first 
considered ``subject to regulation'' for title V purposes when such a 
requirement ``takes effect.'' \15\ Title V generally does not add new 
pollution control requirements, but it does require that each permit 
contain emission limitations and other conditions as are necessary to 
assure compliance with all ``applicable requirements'' required by the 
CAA, and it requires that certain procedural requirements be followed. 
``Applicable requirements'' for title V purposes include stationary 
source requirements (e.g., New Source Performance Standards (NSPS), and 
SIP requirements, including PSD). Procedural requirements include 
providing review of permits by the EPA, states, and the public, and 
requiring permit holders to track, report, and annually certify their 
compliance status with respect to their permit requirements.
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    \15\ A more detailed definition of the term ``subject to 
regulation'' can be found in 40 CFR 70.2 and 71.2.
---------------------------------------------------------------------------

C. Application of PSD and Title V Programs to GHG Emissions

1. Regulation of the Pollutant GHGs
    On April 2, 2007, the U.S. Supreme Court held that GHGs fit within 
the definition of the term ``air pollutant'' under CAA section 302(g). 
Massachusetts v. EPA, 549 U.S. 497 (2007). As a result, the EPA was 
required to determine, under CAA section 202(a) whether: (1) GHGs from 
new motor vehicles cause or contribute to air pollution which may 
reasonably be anticipated to endanger public health or welfare, or (2) 
the science is too uncertain to make a reasoned decision.\16\ After 
issuing a proposal and receiving comment, the EPA Administrator signed 
two distinct findings regarding GHGs under CAA section 202(a), which 
were subsequently published in the Federal Register on December 15, 
2009:\17\
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    \16\ This background is also summarized in the Tailoring Rule. 
75 FR 31519.
    \17\ 74 FR 66496.
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     Endangerment Finding: The Administrator found that the 
current

[[Page 68115]]

and projected atmospheric concentrations of the mix of six long-lived 
and directly emitted GHGs are reasonably anticipated to endanger the 
public health and welfare of current and future generations. The six 
gases are carbon dioxide (CO2), nitrous oxide 
(N2O), methane (CH4), hydrofluorocarbons (HFCs), 
perfluorocarbons (PFCs) and sulfur hexafluoride (SF6) 
(referred to as ``well-mixed greenhouse gases'' in the endangerment 
finding).
     Cause or Contribute Finding: The Administrator found that 
the emissions of the single air pollutant defined as the aggregate 
group of six ``well-mixed greenhouses gases'' from new motor vehicles 
and new motor vehicle engines contributes to the GHG air pollution that 
threatens public health and welfare.
    These findings did not themselves impose any requirements on 
industry or other entities. However, they triggered a requirement for 
the EPA to issue standards under CAA section 202(a) ``applicable to'' 
emissions of the air pollutant that the EPA found causes or contributes 
to the air pollution that endangers public health and welfare. 
Accordingly, the EPA and the Department of Transportation's National 
Highway Traffic Safety Administration (NHTSA) finalized the Light-Duty 
Vehicle Rule (LDVR) as a joint rule on May 7, 2010. 75 FR 25324. 
Consistent with the Cause or Contribute Finding, the LDVR contains 
standards and other regulations applicable to the emissions of the air 
pollutant defined as the aggregate group of six greenhouse gases: 
CO2, N2O, CH4, HFCs, PFCs and 
SF6. 40 CFR part 86.1818-12(a).
    When controls on GHGs in the LDVR took effect, the pollutant GHGs 
became a pollutant ``subject to regulation under the Act,'' and 
therefore subject to PSD and title V requirements. 75 FR 17004. The EPA 
identified January 2, 2011, as the date when GHGs first became subject 
to regulation and subject to the stationary source permitting programs 
under the CAA. Id.
2. Revisions to PSD and Title V Regulations in the Tailoring Rule
    Prior to promulgation of the LDVR, the EPA recognized that the 
regulation of GHGs under the PSD and title V programs would radically 
increase the number of sources subject to the program at the 100 or 250 
tpy major source applicability thresholds provided under the CAA. 74 FR 
55292. This is primarily because combustion sources emit GHGs 
(specifically CO2) at levels that may be from several 
hundred times to over 1,000 times the emissions of other combustion 
pollutants that are subject to permitting under the longstanding PSD 
and title V major source applicability thresholds.
    Under these circumstances, the EPA estimated that thousands of 
sources, mostly smaller sources that would otherwise not be subject to 
PSD permitting, would become subject to PSD review each year, thereby 
incurring the costs of the permit applications and individualized PSD 
BACT requirements that the PSD provisions require. We also estimated 
that millions of new and existing sources, mostly existing commercial 
and residential sources that had never before been required to obtain 
an air permit, would become subject to title V, and would incur the 
costs of obtaining title V permits. Additionally, state and local 
permitting authorities would be burdened by the large number of these 
permit applications, which would be orders of magnitude greater than 
the current inventory of applications and permits and would vastly 
exceed the administrative resources of the permitting authorities.
    Therefore, to relieve the overwhelming permitting burdens that 
would have fallen on permitting authorities and sources under the Act 
in the absence of the EPA action, we promulgated the Prevention of 
Significant Deterioration and Title V Greenhouse Gas Tailoring Rule 
(Tailoring Rule).\18\ This rule limited the scope of permitting 
requirements that would have otherwise applied under the EPA's 
understanding of the CAA by including applicability criteria 
specifically ``tailored'' for GHGs. These criteria determined which GHG 
emission sources initially became subject to the PSD and title V 
programs when controls of GHG under the LDVR became effective. Thus, 
the rule established a phase-in approach for PSD and title V 
applicability, with the first two steps of the phase-in only applicable 
to the largest emitters of GHGs, and also included enforceable 
commitments for the EPA to study and consider further phasing-in the 
PSD and title V permitting requirements under the Act for sources 
emitting at lower GHG emissions thresholds.
---------------------------------------------------------------------------

    \18\ 75 FR 31514, June 3, 2010.
---------------------------------------------------------------------------

    Under Step 1, which went into effect on January 2, 2011, only 
``anyway sources'' required a PSD permit and were subject to PSD 
requirements for their GHG emissions based on an applicability 
threshold of 75,000 tpy CO2e.\19\ For a Step 1 PSD ``anyway 
source'' that met or exceeded the GHG emissions threshold, the primary 
additional requirement, beyond the PSD permitting requirements already 
applicable to pollutants other than GHGs, was to determine and 
implement BACT for GHGs.\20\ The EPA explained that the establishment 
of a significance level--which, in effect, is a BACT threshold--[wa]s 
appropriate and . . . decided [at that time] to establish this level at 
75,000 tpy CO2e. 75 FR 31568. The EPA also described this 
value as a ``significance level'' for convenience because it was 
intended to function in a manner similar to the significance levels for 
other pollutants. 75 FR 31559. However, the EPA did not add a GHG value 
to the definition of ``significant'' in the regulations or attempt to 
determine a de minimis level for GHGs. 75 FR 31560. The EPA selected 
the 75,000 tpy CO2e level for this purpose in Step 1 because 
it was the same as one that the EPA established for Step 2, based on a 
judgment that the administrative burdens of addressing GHGs in the PSD 
program would be manageable using that value as an applicability level. 
75 FR 31568.
---------------------------------------------------------------------------

    \19\ In addition to the applicability thresholds established in 
the Tailoring Rule on a CO2e basis, in order for a 
source's GHG emissions to trigger PSD or title V requirements, the 
quantity of the GHGs also had to equal or exceed the statutory 
thresholds of 100 or 250 tpy on a mass basis. 75 FR 31523, June 3, 
2010.
    \20\ Shortly after Step 1 went into effect, the EPA issued 
guidance on permitting, including BACT determinations, for GHGs 
titled ``PSD and Title V Permitting Guidance for Greenhouse Gases,'' 
EPA Document No. EPA-457/B-11-001, March 2011. http://www3.epa.gov/nsr/ghgdocs/ghgpermittingguidance.pdf.
---------------------------------------------------------------------------

    For the title V program under Step 1, no sources were subject to 
title V permitting solely as a result of their GHG emissions. Only 
existing sources with, or new sources obtaining, title V permits based 
on pollutants other than GHGs were required to address GHGs as part of 
their title V permitting to the extent necessary to assure compliance 
with GHG applicable requirements established under other CAA programs. 
For a Step 1 title V ``anyway source,'' the only additional 
requirement, beyond the already-applicable title V permitting 
requirements for the pollutants other than GHGs, was to apply any title 
V requirements to its GHG emissions when it applied for, renewed or 
revised its permit. These requirements included incorporating any GHG 
applicable requirements (e.g., GHG BACT requirements from a PSD permit) 
and associated monitoring, recordkeeping and reporting. This also 
included a requirement to identify GHG emissions and other information 
to the extent required under the title V regulations.
    Step 2, which went into effect on July 1, 2011, allowed PSD 
applicability

[[Page 68116]]

under the Act to extend beyond ``anyway sources'' to new stationary 
sources that emit or have a PTE of 100,000 tpy CO2e or more. 
Step 2 also covered modifications at existing major stationary sources 
that emit or have a PTE of 100,000 tpy CO2e or more that 
would increase GHG emissions by 75,000 tpy CO2e or more, 
even though the modification would not otherwise be subject to PSD 
based on emissions of any pollutant other than GHGs. A Step 2 source 
was required to obtain a PSD permit, with the associated procedural 
requirements, but the primary substantive requirement for GHGs was 
again to determine and implement BACT. Once PSD was triggered by GHG 
emissions, these Step 2 PSD sources also were subject to the applicable 
PSD requirements for any new or increased emissions of regulated NSR 
pollutants other than GHGs at or above of the applicable SERs.
    Step 2 also extended the applicability of title V beyond ``anyway 
sources'' to new and existing sources that emitted or had a PTE of 
100,000 tpy CO2e or more, even if the new or existing source 
would not otherwise be subject to title V based on emissions of any 
pollutant other than GHGs. These Step 2 title V sources incurred the 
procedural expenses of obtaining a title V permit, but the requirement 
to apply for a permit did not, in itself, trigger any additional 
substantive requirements for control of GHGs. These permits also 
incorporated any applicable CAA requirements that applied to the source 
for any other air pollutants.
    In addition, the Tailoring Rule made clear that the pollutant 
regulated in the PSD and title V programs was the same as the one 
regulated in the LDVR--the single air pollutant defined as the 
aggregate group of the six well-mixed GHGs. 75 FR 31522. To reflect 
this, the Tailoring Rule adopted a definition of the term ``greenhouse 
gases'' or ``GHGs'' in revisions to the PSD and title V regulations 
that describes this aggregate air pollutant (as opposed to the 
individual gases). We use a similar convention regarding GHGs in this 
preamble, using the abbreviation ``GHG'' or ``GHGs'' to refer to the 
aggregate air pollutant.
    In the existing regulations adopted in the Tailoring Rule, this 
aggregate pollutant is measured in terms of ``carbon dioxide 
equivalent'' or ``CO2e'' emissions, which is a metric that 
allows all the compounds comprising GHGs to be evaluated on an 
equivalent basis despite the fact that the different compounds have 
different heat-trapping capacities. The Global Warming Potential (GWP) 
that has been determined for each compound reflects its heat-trapping 
capacity relative to CO2. The mass of emissions of a 
constituent compound is multiplied by its GWP to determine the 
emissions in terms of CO2e. A source's emissions of all 
compounds in terms of CO2e are summed to determine the 
source's total GHG emissions.
3. Actions After the Tailoring Rule
    After the Tailoring Rule was completed, in accordance with the 
phase-in process begun in that rule, on July 12, 2012, the EPA 
completed a Step 3 rulemaking. In this rule, the EPA determined that 
the Tailoring Rule Step 1 or Step 2 permitting thresholds did not need 
to be revised at that time. The EPA also improved the usefulness of 
PALs for GHG emissions by allowing GHG PALs to be established on a 
CO2e basis, in addition to the already-available mass 
basis.\21\ The action revised the regulations to allow a source 
emitting only GHGs in major amounts (i.e., an existing Step 2 source) 
to submit an application for a CO2e-based GHG PAL while also 
maintaining its minor source status.\22\
---------------------------------------------------------------------------

    \21\ Under the EPA's existing regulations, a PAL is an emissions 
limitation for a single pollutant expressed in tpy that is 
enforceable as a practical matter and is established source-wide in 
accordance with specific criteria. 40 CFR 52.21(aa)(2)(v). Sources 
may, but are not required to, apply for a PAL, and the decision to 
issue a PAL to particular source is at the discretion of the 
permitting authority. 77 FR 41060. PALs offer an alternative method 
for determining major NSR applicability by allowing sources to make 
a change without triggering PSD review, as long as the source can 
maintain its overall emissions of the PAL pollutant below the PAL 
level. Therefore, PALs allow sources to make the changes necessary 
to respond rapidly to market conditions, while generally assuring 
the environment is protected from adverse impacts from the change. 
Id.
    \22\ 77 FR 41051, July 12, 2012.
---------------------------------------------------------------------------

    The United States courts also resolved several challenges to the 
Tailoring Rule and other EPA actions regarding GHGs. On June 26, 2012, 
the D.C. Circuit upheld in all respects the Endangerment Finding, LDVR, 
Tailoring Rule, and other actions pertinent to the regulation of GHGs 
under the PSD and title V programs. After an appeal of this case, on 
June 23, 2014, the U.S. Supreme Court issued a decision in UARG v. EPA 
addressing only the application of stationary source permitting 
requirements to GHGs.
    The U.S. Supreme Court held that the EPA may not treat GHGs as an 
air pollutant for the specific purpose of determining whether a source 
is a major source (or a modification thereof) and thus required to 
obtain a PSD or title V permit. However, the U.S. Supreme Court also 
said that the EPA could continue to require that PSD permits, otherwise 
required based on emissions of pollutants other than GHGs pollutants, 
contain limitations on GHG emissions based on the application of BACT. 
That is, the ruling effectively upheld PSD and title V permitting 
requirements for GHG emissions under Step 1 of the Tailoring Rule for 
``anyway sources,'' and invalidated the application of PSD and title V 
permitting requirements to Step 2 sources to the extent that these 
sources triggered permitting requirements solely because they had GHG 
emissions above the applicable thresholds.
    The U.S. Supreme Court also noted that BACT applied to GHGs under 
provisions in the Tailoring Rule only if a source emits GHGs in excess 
of 75,000 tpy CO2e, but that the EPA had not arrived at that 
number by determining that the impacts of emissions below that level 
were de minimis. 134 S.Ct. at 2449. The U.S. Supreme Court recognized 
that the ``EPA may establish an appropriate de minimis threshold below 
which BACT is not required for a source's greenhouse gas emissions,'' 
but said that the EPA would need to justify such a threshold on proper 
grounds. Id. The U.S. Supreme Court had earlier noted that the EPA's 
75,000 CO2e tpy threshold was not an exercise of its 
authority to establish de minimis exceptions. 134 S.Ct. at 2438 n. 3. 
To address this part of the U.S. Supreme Court's decision, the EPA is 
now proposing to exercise that authority. This action proposes a GHG 
SER, which represents a de minimis exception level, for purposes of 
determining the applicability of the BACT requirement in PSD 
permitting.
    To communicate the EPA's preliminary views on the effect of the 
UARG v. EPA decision to the public, on July 24, 2014, the EPA issued 
the previously-described Preliminary Views Memo. In that memorandum, 
the EPA explained that, with respect to ``anyway sources,'' we 
initially intended ``to continue applying the PSD BACT requirements to 
GHG if the source emits or has the potential to emit 75,000 tpy or more 
of GHG on a [CO2e] basis.'' \23\ With respect to modified 
sources, we said that initially ``the EPA intends to continue applying 
the PSD BACT requirements to GHG if both of the

[[Page 68117]]

following circumstances are present: (1) The modification is otherwise 
subject to PSD for a pollutant other than GHG; (2) the modification 
results in a GHG emissions increase and a net GHG emissions increase 
equal to or greater than 75,000 tpy CO2e and greater than 
zero on a mass basis.'' Id. at 3. The EPA based this initial approach 
on the 75,000 tpy CO2e applicability level that remained in 
the EPA's regulations pending further action by the courts. However, 
the EPA also explained that it would consider whether to promulgate a 
de minimis level, which the EPA is now proposing to do in this action. 
Id. at 4.
---------------------------------------------------------------------------

    \23\ Next Steps and Preliminary Views on the Application of 
Clean Air Act (CAA) Permitting Programs to Greenhouse Gases 
Following the Supreme Court's Decision in UARG v. EPA, Memorandum 
from Janet G. McCabe, Acting Assistant Administrator, Office of Air 
and Radiation, and Cynthia Giles, Assistant Administrator, Office of 
Enforcement and Compliance Assurance, U.S. EPA, to Regional 
Administrators, p. 3, July 24, 2014.
---------------------------------------------------------------------------

    Because the UARG v. EPA decision affirmed in part and reversed in 
part the earlier decision of the D.C. Circuit in Coalition for 
Responsible Regulation v. EPA, 684 F.3d 102 (D.C. Cir. 2012), the 
matter was returned to the D.C. Circuit to determine whether particular 
parts of the regulations adopted by the EPA in the Tailoring Rule 
should be struck down (vacated) or left in place with instructions that 
the EPA revise them (remanded). On April 10, 2015, the D.C. Circuit 
issued an Amended Judgment, which provided a more specific remedy 
reflecting the UARG v. EPA U.S. Supreme Court decision.
    In the Amended Judgment, the D.C. Circuit ordered that the EPA 
regulations under review (including 40 CFR parts 51.166(b)(48)(v) and 
52.21(b)(49)(v)) be vacated to the extent they require a stationary 
source to obtain a PSD permit if GHGs are the only pollutant (i) that 
the source emits or has the potential to emit above the applicable 
major source thresholds, or (ii) for which there is a significant 
emissions increase from a modification. The D.C. Circuit also ordered 
that the regulations under review be vacated to the extent they require 
(i) a stationary source to obtain a title V permit solely because the 
source emits or has the potential to emit GHGs above the applicable 
major source thresholds and (ii) the EPA to consider further phasing-in 
the GHG permitting requirements at lower GHG emission thresholds (in 
particular 40 CFR part 52.22 and 40 CFR parts 70.12 and 71.13). The 
Court did not vacate the provisions implementing Step 1 of the 
Tailoring Rule (in particular, for the PSD program, 40 CFR parts 
51.166(b)(48)(iv) and 52.21(b)(49)(iv)).\24\ However, the D.C. Circuit 
ordered that the EPA take steps to rescind and/or revise the applicable 
provisions of the CFR as expeditiously as practicable to reflect the 
relief granted in the Amended Judgment and to consider whether any 
further revisions are appropriate in light of UARG and, if so, to 
undertake such revisions.
---------------------------------------------------------------------------

    \24\ Without these provisions in the definition of ``subject to 
regulation'' at this time, any GHG emissions increase would require 
a newly constructed major source, or a major modification at an 
existing facility, to undergo PSD BACT review for GHGs. 40 CFR 
51.166(b)(23)(ii); 40 CFR 52.21(b)(23)(ii).
---------------------------------------------------------------------------

    Consistent with the Amended Judgment, on August 12, 2015, the EPA 
issued a final rule that removed from the PSD and title V regulations 
entire sections and paragraphs that were readily severable from other 
provisions in the PSD and title V regulations and specifically 
identified in the D.C. Circuit's Amended Judgment. These removed 
provisions required a stationary source to obtain a PSD permit solely 
on the basis of the source's GHG emissions and required the EPA to 
study and consider further phasing-in of GHG permitting requirements 
into the PSD and title V permitting programs at lower GHG emissions 
thresholds. 80 FR 50199. Because of the nature of the D.C. Circuit's 
Amended Judgment, these revisions were ministerial in nature and exempt 
from notice-and-comment rulemaking procedures under the ``good cause'' 
exception of the APA. In that rulemaking, we also announced that we 
intended to further revise the PSD and title V regulations to fully 
implement the Amended Judgment in a separate rulemaking, and the 
present action initiates that separate rulemaking. This action proposes 
revisions to several regulatory definitions in the PSD and title V 
permitting regulations, revisions to the PSD GHG PALs and revisions to 
other provisions necessary to ensure that neither the PSD nor title V 
rules require a source to obtain a permit solely because the source 
emits or has the potential to emit GHGs above the applicable 
thresholds. These latter revisions include revisions to the title V 
regulations that were vacated in the Amended Judgment case--those that 
require a stationary source to obtain a title V permit solely because 
the source emits or has the potential to emit GHGs above the applicable 
major source thresholds. They also include revisions to state-specific 
GHG PSD or title V permitting regulations that, in general, the EPA 
believes are no longer necessary in light of the other proposed 
revisions in this action and that the EPA considers no longer 
appropriate to the extent that they might have the effect of 
establishing federal permitting requirements for sources that only emit 
or have the potential to emit GHGs above the major source thresholds. 
These additional revisions to the PSD and title V regulations, although 
necessary to implement the Amended Judgment, are not purely ministerial 
in nature because they amend, rather than completely remove, text that 
remains pertinent to the PSD and title V programs as a whole and their 
continued application to GHGs. As a result, we are addressing them in 
this separate notice-and-comment rulemaking to give the public an 
opportunity to comment on how the EPA proposes to address those 
portions of the Amended Judgment.

IV. Revisions to the PSD and Title V GHG Permitting Regulations

A. What revisions to the PSD and title V GHG permitting regulations is 
the EPA proposing with this action?

1. Revisions to the PSD Regulations
    In this action, the EPA is proposing to revise certain definitions 
in the PSD permitting regulations to fully implement the Amended 
Judgment. The first revision would add an exemption clause to the 
definitions of ``major stationary source'' and ``major modification'' 
to ensure that the PSD rules do not require a source to obtain a permit 
solely because the source emits or has the potential to emit GHGs above 
the major source thresholds or significance level. In other words, a 
new stationary source that emits, or has the potential to emit, 100 or 
250 tpy or more, as applicable, of any regulated NSR pollutant except 
for GHGs would be required to obtain a PSD permit before it is 
constructed. Furthermore, a physical change or change in the method of 
operation at an existing major source that would result in a 
significant increase in emissions of any regulated NSR pollutant except 
for GHGs and a significant net emission increase of that regulated NSR 
pollutant would be a major modification required to obtain a permit.
    The EPA is proposing to establish a freestanding definition of the 
term ``greenhouse gases'' in the PSD regulations at 40 CFR parts 
51.166(b)(31) and 52.21(b)(32) to facilitate the application of the 
exemptions clauses described earlier. Previously, the definition of 
this pollutant was located within the definition of the term ``subject 
to regulation'' and we are now proposing to simply move the language 
that defined GHGs in this context into an independent definition for 
the term ``greenhouse gases.'' This proposed definition of GHGs does 
not change the meaning of the term; we are proposing to use the same 
language as in the existing regulations.

[[Page 68118]]

    In this action we are also proposing to simplify the definition of 
``subject to regulation'' in other ways. In the Tailoring Rule, the EPA 
placed the GHG applicability thresholds in a new definition of the term 
``subject to regulation'' in an effort to enable states with approved 
PSD programs to rapidly apply the Tailoring Rule limitations without 
necessarily having to revise state regulations. 75 FR 31580-81. The EPA 
intended to enable states to immediately read rules that already 
contained the term ``subject to regulation'' in a manner consistent 
with the definition of this term adopted by the EPA in the Tailoring 
Rule. Id. at 31581. However, after the Tailoring Rule, most states 
concluded that it was still necessary to revise their regulations to 
incorporate the limitations on PSD applicability reflected in the 
Tailoring Rule. Also, experience has shown that this mechanism for 
implementing the GHG applicability thresholds is confusing and 
cumbersome. Thus, the EPA is proposing to eliminate this mechanism and 
revert to a more traditional approach of placing the value that 
determines applicability of BACT within the definition of the term 
``significant.'' This approach also enables the EPA to eliminate the 
Tailoring Rule Step 1 thresholds in 40 CFR parts 51.166(b)(48)(iv) and 
52.21(b)(49)(iv) that were not vacated but that nevertheless, as the 
U.S. Supreme Court noted, lacked a de minimis rationale.
    The EPA thus is proposing to repeal all parts of the definitions of 
``subject to regulation'' except for the first paragraph, which simply 
served to codify our interpretation of the term ``subject to 
regulation'' that was reflected in prior actions. 75 FR 31582. Those 
prior actions are the following: (1) A Memorandum from Administrator 
Stephen Johnson titled ``EPA's Interpretation of Regulations that 
Determine Pollutants Covered by Federal Prevention of Significant 
Deterioration (PSD) Permit Program'' \25\ and (2) An action titled 
Reconsideration of Interpretation of Regulations That Determine 
Pollutants Covered by Clean Air Act Permitting Programs.\26\ This 
second action was subsequently described as the ``Timing Decision'' in 
Court proceedings. The EPA is not proposing to change or reconsider the 
interpretation of its regulations and the CAA reflected in these 
actions. Thus, we are retaining the first paragraph in the definition 
``subject to regulation'' at 40 CFR parts 51.166(b)(48) and 
52.21(b)(49) that codify this interpretation of the term ``subject to 
regulation'' that is used elsewhere in the PSD regulations.
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    \25\ 75 FR 80300, December 31, 2008.
    \26\ 75 FR 17004, April 2, 2010.
---------------------------------------------------------------------------

    Finally, consistent with deleting most of the remaining parts of 
the definition of ``subject to regulation,'' we are proposing to amend 
the definition of ``significant'' to add the proposed value for the GHG 
SER. With these revisions to the PSD regulations, GHG will only be 
subject to BACT review under the PSD permitting requirements at 40 CFR 
parts 52.21(j) and 51.166(j) if the source has been classified as a 
major stationary source or a major modification for another regulated 
NSR pollutant first and there is a significant net emissions increase 
of the source's GHGs emissions equal to or greater than the GHG SER 
that is being proposed in this action.
2. Revisions to the PSD PAL Regulations
    The EPA is proposing a number of revisions to the PSD PAL 
provisions at 40 CFR 52.21(aa) to address the UARG decision and Amended 
Judgment. Because a PSD PAL permit is only available to an existing 
major stationary source, and a source is no longer subject to PSD 
solely because of its emissions of GHGs, we are proposing to revise the 
PSD PAL provisions to remove the ability for a source that would be 
``major'' \27\ only for GHGs to obtain a GHG PAL and the ability of a 
source establishing a GHG PAL to retain its minor NSR status. We are 
proposing to make refinements to the PSD PAL provisions whereby an 
existing ``anyway source'' could still apply for and obtain a GHG PAL, 
but only for the limited purpose of relieving the source from having to 
address the BACT requirement for GHGs when triggering PSD for another 
NSR pollutant.\28\ The EPA has previously observed that the PAL 
provisions may still have relevance for this purpose after the U.S. 
Supreme Court decision.\29\ A PAL may be issued for this purpose if all 
requirements for obtaining a GHG PAL are met. As a result of our 
proposed revisions, a GHG PAL would be established and function in this 
narrower context in much the same way as a PAL for any other regulated 
NSR pollutant. The main difference will be that a GHG PAL would not be 
issued on a mass basis, but rather on a CO2e basis since the 
regulated pollutant GHGs is the aggregate of six individual gases 
calculated on a CO2e basis. Finally, all PALs must include 
enforceable requirements for the monitoring system to accurately 
determine plantwide emissions of the PAL pollutant. As current 
monitoring systems do not measure tpy CO2e, we would also 
like to clarify that permitting authorities can specify in each 
individual GHG PAL permit, much as they already do for GHG PSD permits, 
the type of mass-based monitoring to be carried out for each individual 
gas and require the applicant to perform the applicable CO2e 
calculations.
---------------------------------------------------------------------------

    \27\ Assuming GHGs could still be considered in defining a 
source as ``major.'' The EPA recognizes they cannot be after the 
U.S. Supreme Court decision. If the proposed changes in this rule 
are enacted, no source will be considered major for GHGs.
    \28\ We are not proposing similar revisions to 40 CFR 51.166 
because the June 29, 2012, final rule that adopted the GHG PAL 
provisions under 40 CFR 52.21 did not adopt these changes into the 
existing PAL provisions contained in 40 CFR 51.166. 77 FR 41051. 
However, nothing in that 2012 action was intended to restrict 
states, tribes or local permitting authorities from adopting changes 
into their SIP-approved PAL program to allow for the issuance of 
PALs on a CO2e basis if they choose to do so. Moreover, 
the revisions we are proposing in this action do not preclude a 
state, local or tribal program from applying construction permitting 
requirements equivalent to the PSD GHG PAL requirements for Step 2 
sources under state law, although such provisions are no longer 
approvable parts of a PSD or title V program under federal law.
    \29\ 79 FR 70095; 80 FR 14062; 80 FR 23245; 80 FR 28901.
---------------------------------------------------------------------------

3. Revisions to State-Specific PSD Regulations
    The EPA is also taking this opportunity to propose to remove 
elements in a specific SIP-approved program that are no longer needed 
as a result of the Amended Judgment. The EPA is proposing to remove the 
provisions at 40 CFR 52.2305, which establish the Federal 
Implementation Plan (FIP) requirements for the issuance of PSD permits 
for GHG emissions in the state of Texas.
    On November 10, 2014, the EPA approved the revisions to the Texas 
PSD program for GHG emissions which provided the state of Texas the 
authority to regulate GHGs in the Texas PSD program and to issue GHG 
PSD permits to ``anyway sources.'' 79 FR 66626. However, to avoid 
delays to some permit applicants, we retained limited authority under 
the Texas GHG PSD FIP at 40 CFR part 52.2305 to issue GHG PSD permits 
in certain circumstances. We retained the authority to: (1) Issue 
permits to those permit applicants who elected to continue their permit 
application with the EPA by May 15, 2014; (2) issue permits to those 
permit applicants who did not request a transfer to the Texas 
Commission on Environmental Quality prior to the date of final permit 
decision; and (3) complete the permit action for all GHG PSD permits 
issued by the EPA for which the time for filing an

[[Page 68119]]

administrative appeal had not expired or all administrative and 
judicial appeals processes had not been completed by November 10, 2014. 
The EPA proposes to find that all three circumstances for limited 
authority to issue GHG PSD permits in Texas have now been satisfied; 
therefore, we no longer need to retain the authorities provided to us 
in 40 CFR part 52.2305 and propose to remove that section.
    For questions on whether federally approved SIPs or TIP would need 
to be revised to address the regulatory revisions in this proposal, see 
Section VII of this preamble.
4. Revisions to the Title V Regulations
    The EPA is proposing to revise certain definitions in the title V 
permitting regulations at 40 CFR parts 70 and 71 to fully implement the 
Amended Judgment. Specifically, we are proposing to revise the 
definition of ``major source'' in 40 CFR parts 70.2 and 71.2 to clarify 
that GHGs are no longer considered in determining whether a stationary 
source is a major source and thus subject to major source permitting 
requirements under the title V program. We are also proposing to remove 
paragraphs from the definition of ``subject to regulation'' to remove 
those provisions that incorporated the Tailoring Rule CO2e 
applicability thresholds into the title V regulations. Those provisions 
are no longer necessary or appropriate, in light of the proposed 
revisions to the definition of ``major source'' in 40 CFR parts 70.2 
and 71.2 described immediately above. Furthermore, we are proposing to 
move the definition of ``GHGs'' from the definition of ``subject to 
regulation'' to its own definition under the title V regulations at 
both 40 CFR parts 70.2 and 71.2. By moving this definition, the EPA 
does not intend to make any material changes in how the air pollutant 
GHGs is defined, but rather intends to clarify that the definition 
applies throughout the title V regulations and that it continues to 
include a description of CO2e and how it is calculated.
    While the EPA is proposing to revise its title V regulations so 
that they no longer require that a source obtain a title V permit 
solely because it emits or has the potential to emit GHGs above major 
source thresholds, the agency does not read the UARG decision or the 
Amended Judgment to affect other grounds on which a title V permit may 
be required or the applicable requirements that must be addressed in 
title V permits. The proposed revisions are not intended to change the 
existing title V requirements in that regard.
5. Revisions to State-Specific Title V Regulations
    On December 30, 2010, we issued a final rule that narrowed the 
EPA's previous approval of state title V operating permit programs that 
apply (or may apply) to GHG-emitting sources under 40 CFR part 70, and, 
in a few instances, under 40 CFR part 52. 75 FR 82254. For most states, 
title V programs are federally-approved only under 40 CFR part 70, but, 
in some cases, states have chosen to submit their title V programs as 
part of their SIPs. The EPA has approved provisions related to the 
operating permit program into the SIP as codified in 40 CFR part 52 for 
three states that were addressed in the December 2010 rule: Arizona 
(Pinal County Air Quality Control District), Minnesota, and Wisconsin.
    In that December 2010 final rule, we narrowed our previous approval 
of certain state permitting thresholds for GHG emissions so that only 
sources that equal or exceed the GHG thresholds established in the 
Tailoring Rule would be covered as major sources by the EPA-approved 
programs in the affected states. For most of the affected states, this 
was accomplished by amending our approvals under 40 CFR part 70, 
Appendix A. For Minnesota, and Wisconsin, which had title V 
applicability provisions that were federally approved under both 40 CFR 
part 70 and 40 CFR part 52, we amended our title V program approval in 
both 40 CFR part 70 and 40 CFR part 52 to ensure that the scope of the 
approved title V program was consistent. In Arizona (Pinal County Air 
Quality Control District), we amended our approval under 40 CFR part 
52. In this proposal, however, we are proposing to remove those 
provisions from all the applicable state title V operating permit 
programs except for Arizona (Pinal County Air Quality Control 
District), which we intend to address in a separate action. For 
Minnesota and Wisconsin, we are proposing to remove the narrowing 
provisions under both 40 CFR parts 52 and 70 to ensure consistency.
    We are proposing to remove those provisions from the applicable 
title V programs because they no longer seem necessary after the UARG 
decision, the Amended Judgment, and the EPA's actions to implement that 
decision and the Amended Judgment, since a source would no longer be 
required to obtain a title V permit solely because it emits or has the 
potential to emit GHGs above the major source threshold.
    For questions regarding whether title V program approvals would 
need to be revised to address these regulatory revisions, see Section 
VII of this preamble.

B. What additional regulatory revisions is the EPA proposing with this 
action?

    The EPA is also proposing to repeal provisions in its 40 CFR parts 
60 regulations that the EPA considered advisable to ensure that the 
75,000 tpy CO2e applicability threshold for the GHG BACT 
requirement continued to apply on an interim basis after GHGs became 
regulated under section 111 of the CAA. These provisions were included 
in the Carbon Pollution Emission Guidelines for Existing Stationary 
Sources: Electric Generating Units,\30\ the Standards of Performance 
for GHG Emissions from New, Modified, and Reconstructed Stationary 
Sources: Electric Generating Units,\31\ and the Standards of 
Performance for Crude Oil and Natural Gas Facilities for which 
Construction, Modification or Reconstruction Commenced after September 
18, 2015.\32\
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    \30\ 80 FR 64662, October 23, 2015. On February 9, 2016, the 
U.S. Supreme Court stayed this rule pending judicial review before 
the U.S. Court of Appeals for the D.C. Circuit and any subsequent 
proceedings in the U.S. Supreme Court.
    \31\ 80 FR 64510, October 23, 2015.
    \32\ 81 FR 35823, June 3, 2016.
---------------------------------------------------------------------------

    As we explained previously, under 40 CFR parts 51.166(b)(49) and 
52.21(b)(50), we define a ``regulated NSR pollutant'' to include, among 
other requirements, ``any pollutant subject to a new source standard of 
performance under CAA section 111'' and ``any pollutant that otherwise 
is subject to regulation under the Act.'' This definition first applied 
to GHGs in 2011 under the fourth part of this definition because this 
pollutant was then ``otherwise subject to regulation under the Act'' in 
the LDVR. However, because the EPA chose to include the Tailoring Rule 
thresholds in the definition of the term ``subject to regulation,'' 
some question arose as to whether those thresholds would continue to 
apply after GHGs also became a regulated NSR pollutant when this 
pollutant became subject to a standard of performance under section 
111. Thus, the EPA adopted provisions in 40 CFR part 60 that made clear 
that promulgation of CAA section 111 requirements for GHGs under these 
rules would not result in BACT applying to GHGs at an ``anyway source'' 
that increased GHGs by any amount below 75,000 tpy CO2e. To 
ensure this was clear, the final regulatory text for these rules said 
that ``the pollutant that is subject to the standard promulgated under 
section 111 of the Act'' shall be considered to be the

[[Page 68120]]

pollutant that otherwise is ``subject to regulation'' under the Act as 
defined under the respective ``subject to regulation'' definitions 
under the PSD and title V provisions. With the addition of a SER for 
GHGs, these 40 CFR part 60 provisions are no longer needed to ensure 
that a BACT applicability threshold remains applicable to GHGs after 
the regulation of GHGs under section 111 of the Act. Thus, we are 
proposing to remove the provisions at 40 CFR parts 60.5360a(b), 
60.5515(b) and 60.5705(b).

V. Establishment of a GHG SER

A. What is the legal basis for establishing a GHG SER?

    In the UARG decision, the U.S. Supreme Court observed that the EPA 
may limit application of the BACT requirement for GHGs to those 
situations where a source has the potential to emit ``more than a de 
minimis amount of greenhouse gases.'' 134 S.Ct. at 2449. The Court also 
acknowledged the EPA's past practice of establishing de minimis levels 
for other pollutants that determine whether individual pollutants are 
subject to the BACT requirement. Id. at 2435 n. 1. In both of these 
parts of its opinion, the U.S. Supreme Court cited the D.C. Circuit's 
decision in Alabama Power Co. v. Costle.\33\ The D.C. Circuit's opinion 
in that case provides the foundational legal principles upon which the 
EPA has previously established the de minimis levels in the NSR program 
that are known as ``significant emission rates.'' In light of the U.S. 
Supreme Court's favorable citation of the Alabama Power case, the EPA 
continues to look to this case as providing the controlling legal 
principles for an agency to establish a de minimis exception to a 
statutory requirement.
---------------------------------------------------------------------------

    \33\ 636 F.2d 323, D.C. Cir. 1979.
---------------------------------------------------------------------------

    Agencies have inherent authority ``to overlook circumstances that 
in context may fairly be considered de minimis'' and need not ``apply 
the literal terms of a statute to mandate pointless expenditures of 
effort.'' Alabama Power, 636 F.2d at 360. ``Unless Congress has been 
extraordinarily rigid, there is likely a basis for an implication of de 
minimis authority to provide an exemption when the burdens of 
regulation yield a gain of trivial or no value.'' Id. at 360-361. 
Determining when matters are truly de minimis depends on the particular 
circumstances and the agency bears the burden of making the required 
showing. Id. Thus, the de minimis authority is ``tightly bounded by the 
need to show that the situation is genuinely de minimis or one of 
administrative necessity'' Id. at 361. De minimis authority is not a 
mechanism to ``depart from the statute, but rather a tool to be used in 
implementing the legislative design'' and cannot be used where there 
are acknowledged benefits but the agency concludes they ``are exceeded 
by the costs.'' Id.\34\
---------------------------------------------------------------------------

    \34\ See also 44 FR 51937, September 5, 1979 (the EPA proposal 
to establish SERs stating that it would not be appropriate to base a 
SER on ``a cost-effectiveness rationale'').
---------------------------------------------------------------------------

    As the U.S. Supreme Court noted, the CAA does not specify how much 
of a given regulated pollutant a major source must emit before it is 
subject to the BACT requirement for that pollutant. 134 S.Ct. 2427 n. 
1. The Act requires application of BACT to ``each pollutant subject to 
regulation'' under the Act but does not address whether the EPA has 
discretion not to apply the BACT requirement to pollutants emitted 
below a particular level. CAA section 169(3). The EPA has previously 
recognized that sources that trigger PSD can emit some pollutants at 
levels below which application of the BACT requirement would be a 
pointless expenditure of effort. Accordingly, the EPA's regulations 
specify that the BACT requirement need only be applied to pollutants 
that: (1) A new major source has ``the potential to emit in significant 
amounts'' and (2) will increase by a ``net significant'' amount as a 
result of a major modification at an existing major source. 40 CFR 
parts 51.166(j)(2)-(3) and 52.21(j)(2)-(3).
    After acknowledging these existing regulations, the U.S. Supreme 
Court specifically recognized in UARG that the EPA could establish ``an 
appropriate de minimis threshold below which BACT is not required.'' 
134 S.Ct. at 2449. Inherent in this aspect of the UARG decision is a 
judgment by the U.S. Supreme Court that Congress has not been 
``extraordinarily rigid'' with respect to application of the PSD BACT 
requirement to pollutants emitted in lower amounts. The U.S. Supreme 
Court has now recognized, consistent with the principles of Alabama 
Power, that the PSD statutory scheme includes the inherent authority 
for the EPA to overlook de minimis levels of pollutant emissions when 
applying the BACT requirement in the PSD permitting program.
    However, the U.S. Supreme Court also emphasized that the EPA must 
justify its selection of a de minimis threshold ``on proper grounds,'' 
citing the discussion at page 405 of Alabama Power. This part of the 
Alabama Power decision consists of two paragraphs expressly addressing 
the application of de minimis principles to BACT. The Court said that a 
``de minimis exception must be designed with the specific 
administrative burdens and the specific statutory context in mind'' and 
then specifically considered the BACT context. Id. at 405. The Court 
recognized that de minimis principles could be used to address ``severe 
administrative burdens on the EPA, as well as severe economic burdens 
on the construction of new facilities.'' 636 F.2d at 405. A rational 
approach to the application of BACT, the Court continued, would 
consider ``the danger posed by increases in'' emissions and ``the 
degree of administrative burden posed by enforcement at various de 
minimis threshold levels.'' Id.
    At first, there may appear to be an internal tension in Alabama 
Power between the language describing general parameters for the 
exercise of de minimis exemption authority and the BACT discussion. The 
Court's recognition that a de minimis exemption cannot be based simply 
on a conclusion that a requirement's costs outweigh its benefits, 636 
F.2d at 361, was paired with explicit acknowledgement that a de minimis 
threshold could be ``rationally designed to alleviate severe 
administrative burdens.'' 636 F.2d at 405. The Court also observed that 
a rational approach would consider the following factors: ``the 
administrative burden with respect to each statutory context;'' 
``whether the de minimis threshold should vary depending on the 
specific pollutant and the danger posed by increases in its 
emissions;'' and ``the degree of administrative burdens posed by 
enforcement at various de minimis threshold levels.'' Id. While the 
degree of burden might be viewed as part of a cost-benefit analysis, 
EPA believes it is possible to harmonize these parts of the Court's 
opinion by treating each of these elements as factors for the Agency to 
consider in a rational approach to determining a de minimis threshold.
    Considering all the relevant parts of the Alabama Power opinion, 
the EPA believes that it need not focus solely on the programmatic 
advantages of regulation and disregard implementation burdens when 
establishing a de minimis exception. Where the record shows that the 
burdens of regulation are high relative to a small gain that is 
achievable by regulation, the EPA reads Alabama Power to allow an 
agency to consider such gains to be de minimis if the Agency finds this 
appropriate after considering the statutory context, the nature of 
pollutant, and the danger caused by increases of that pollutant. 
However, where the gains of regulation

[[Page 68121]]

are greater, the EPA reads Alabama Power to preclude the agency from 
declining to regulate on the basis of a judgment that the costs simply 
exceed achievable benefits that further the regulatory objectives.
    In sum, therefore, to justify a de minimis exemption by regulation, 
an agency must show that the benefits of regulating an activity below 
the level set forth in the exemption are trivial or of no value. The 
supporting analysis must consider the regulatory context, including the 
nature of the pollutant and the dangers caused by increases in that 
pollutant, the nature and purposes of the regulatory program, the 
administrative and implementation burdens of, and the gain achieved 
from, regulating the activities at or below a certain level. Based on 
that analysis, the agency must make a reasoned judgment whether, in 
light of the regulatory context, the gains from regulating an activity 
below the exemption level can fairly be characterized as being trivial 
or of no value. In developing the SER for GHGs proposed in this action, 
the EPA has considered the factors laid out by the Court in Alabama 
Power.

B. What is the regulatory context for the de minimis exception proposed 
in this rule?

    The Alabama Power opinion said that a ``de minimis exception must 
be designed with . . . the specific statutory context in mind.'' Id. at 
405. The SER for GHGs that the EPA is proposing in this rule will apply 
only in the particular context of determining whether the BACT 
requirement applies to GHG emissions from a new source or modification 
that requires a PSD permit based on emission of pollutants other than 
GHGs.
    Because GHGs are a regulated NSR pollutant under the applicable 
definition, the BACT provisions in 40 CFR parts 51.166(j) and 52.21(j) 
apply to GHGs when an ``anyway source'' triggers the obligation to 
obtain a PSD permit. Under the specific terms of 40 CFR parts 
51.166(j)(2)-(3) and 52.21(j)(2)-(3) of the EPA's regulations, the SER 
adopted in this rule will determine whether the BACT requirement 
applies to GHGs.
    Because of the U.S. Supreme Court's decision, the requirement to 
obtain a PSD permit does not apply to a source that emits only GHGs in 
major amounts. Likewise, the modification of an existing major source 
cannot trigger the requirement to obtain a PSD permit based solely on a 
significant increase in the amount of GHGs. In order to qualify as a 
major modification under the revisions proposed in this rule, a 
modification of an existing major source must result in a significant 
net emissions increase of a regulated NSR pollutant other than GHGs. If 
a modification triggers PSD on this basis, then the SER proposed in 
this rule will apply to determine whether the PSD permit for that 
modification must contain a BACT limit for GHGs. But the SER proposed 
in this rule will not determine whether a modification at an existing 
major source requires a PSD permit in the first instance.
    This contrasts with the 75,000 tpy CO2e value the EPA 
identified as a ``significance level'' in parts of the Tailoring Rule. 
During Step 2 of the Tailoring Rule phase-in, this value was used to 
determine whether a PSD permit was required based solely on an increase 
in GHG emissions resulting from a modification at an existing major 
source that did not increase any other pollutants above the 
significance levels. In this context, the EPA said that if the agency 
were to establish a de minimis level for GHGs, ``that amount could be 
below--perhaps even well below--the `major emitting facility' 
thresholds established in this rulemaking on the grounds of 
`administrative necessity' and other doctrines.'' 75 FR 31560. 
Paraphrasing this statement, the U.S. Supreme Court noted that the 
``EPA stated . . . that a truly de minimis level might be `well below' 
75,000 tons per year [CO2e].'' 134 S. Ct at 2427 n.3. At the 
time of the Tailoring Rule, the EPA read the definition of ``major 
emitting facility'' in section 169(1) of the CAA to require that the 
agency apply the 100 or 250 tpy major source threshold to all regulated 
pollutants, including GHGs. In that light, the EPA believed it would be 
difficult for the agency to justify a value substantially greater than 
the statutory major source thresholds as a de minimis or trivial level 
of emissions. Thus, the EPA said that a de minimis level for GHGs could 
perhaps be ``well below'' 75,000 tpy CO2e based on its 
understanding at the time that the EPA's de minimis exception authority 
was constrained by the Congressional determination that it was worth 
regulating any source emitting more than 100 or 250 tpy of a regulated 
pollutant. The U.S. Supreme Court has since clarified that the EPA 
cannot apply the 100 or 250 tpy levels to GHGs, or even consider the 
pollutant GHGs in defining a major source (or modification thereof) 
that requires a PSD permit. The Court's reasoning suggests that 
Congress has not determined that 100 or 250 tpy is a major amount of 
GHGs. Thus, the EPA no longer views the 100 and 250 tpy thresholds as a 
constraint on the level of GHGs that the EPA may identify as de minimis 
in the PSD program context. Furthermore, in this proposed rule, the EPA 
is considering the application of a de minimis level in a PSD program 
context that is narrower than the one the EPA was addressing in the 
Tailoring Rule. The SER the EPA proposes in this rule will apply only 
to determine whether BACT applies to GHGs and not to determine whether 
a source is required to obtain a PSD permit.
    In addition, because there is no NAAQS for GHGs, the SER for GHGs 
proposed in this rule will not determine whether a PSD permit 
application is required to include an ambient air quality analysis for 
this pollutants. 40 CFR parts 51.166(m)(1)(i) and 52.21(m)(1)(i). In 
the absence of a NAAQS or PSD increment for GHGs, a permit applicant 
need not make an air quality demonstration for GHGs, as required for 
other pollutants under section 165(a)(3) of the Act and 40 CFR parts 
51.166(k) and 52.21(k) of the EPA's regulations.\35\
---------------------------------------------------------------------------

    \35\ ``PSD and Title V Permitting Guidance for Greenhouse 
Gases,'' EPA, Office of Air Quality Planning and Standards, Research 
Triangle Park, NC, EPA-457/B-11-001, pp. 47-48, March 2011.
---------------------------------------------------------------------------

    Accordingly, in light of the Court direction that an agency 
consider the particular context for a de minimis exception, the EPA has 
based the proposed SER for GHGs on an evaluation of the benefits and 
burdens of applying the BACT requirement to GHGs when an ``anyway 
source'' emits this pollutant at various levels. Under section 169(3) 
of the CAA, BACT is an emissions limitation based on ``the maximum 
degree of reduction . . . which the permitting authority . . . 
determines is achievable'' through application of pollutant control 
technology. CAA section 169(3). Thus, in assessing the value of 
regulating GHG emissions under the PSD BACT requirement at sources 
emitting GHGs at various emissions levels, the EPA has focused on the 
degree of emission reduction that would be expected to be achieved at 
individual sources emitting GHGs below the levels under consideration. 
Furthermore, since the regulation the EPA is proposing will apply 
across the PSD program as a whole, the EPA has also considered the 
potential for GHG emissions reduction, principally through the 
characterization of affected sources and units, that one would expect 
to achieve at ``anyway sources'' emitting (or modifications increasing) 
GHGs below prospective de minimis levels as compared in relation to the 
potential for GHG emissions

[[Page 68122]]

reductions expected from the population of sources that would be 
subject to the BACT requirement because they emit GHGs above that 
level.
    While the dangers caused by increases in GHGs are relevant under 
the factors discussed in the preceding section, since the SER for GHGs 
will not be used to determine what sources must apply for a PSD permit 
or whether an ambient air quality analysis must be conducted for GHG, 
the EPA does not believe it is necessary for the Agency to attempt to 
identify the specific nature or degree of environmental impact 
predicted from various levels of GHG emissions from ``anyway sources'' 
that are required to obtain a PSD permit. Likewise, EPA does not 
believe it is necessary for the Agency to try to distinguish specific 
environmental impacts at a given level from those expected at other 
levels. As the EPA has noted, climate change modeling and evaluations 
of risks and impacts of GHG emissions is typically conducted for 
changes in emissions that are orders of magnitude larger than the 
emissions from individual projects that might be analyzed in PSD permit 
reviews.\36\ In the context of PSD permitting, the EPA is continuing to 
use the level of GHG emissions from a stationary source as the more 
credible and appropriate means for assessing the potential 
environmental impact of such a source. This aligns with the 
Congressional direction in the BACT provision to achieve the maximum 
degree of emissions reduction of each pollutant. Congress established a 
separate requirement in the PSD program to demonstrate that the air 
quality impact of a source does not cause a violation of air quality 
standards, but that requirement is not applicable to GHGs at this time.
---------------------------------------------------------------------------

    \36\ ``PSD and Title V Permitting Guidance for Greenhouse 
Gases,'' EPA, Office of Air Quality Planning and Standards, Research 
Triangle Park, NC, EPA-457/B-11-001, p. 48, March 2011.
---------------------------------------------------------------------------

    Considering this context and Congressional intent that BACT reflect 
a ``degree of reduction'' that is achievable, the SER that the EPA 
proposes to establish for GHGs represents a level of GHG emissions 
below which application of the BACT requirement would be expected to 
yield a ``degree of emissions reduction'' that has trivial or no value. 
In this proposed rule, the EPA's analysis shows that the proposed SER 
is de minimis only as applied in the particular context of determining 
whether application of the BACT requirement to GHGs would be of value 
in reducing GHG emissions from ``anyway sources'' that trigger the 
requirement to obtain a PSD permit. The proposed SER is not a level of 
GHGs below which the EPA has concluded there is a de minimis impact on 
the global climate. Rather, the de minimis level proposed in this rule 
reflects only a level of GHG emissions from an ``anyway source'' below 
which the EPA is proposing to find that there would be trivial or no 
value in applying the BACT requirement to GHGs in the context of 
preparing a PSD permit.

C. Historical Approaches to Establishing a De Minimis Level in the PSD 
Program

    The EPA has previously established de minimis levels for several 
pollutants in the PSD program that are reflected in the definition of 
``significant'' in existing PSD regulations. 40 CFR parts 
51.166(b)(23)(i) and 52.21(b)(23)(i). In this section of the preamble, 
we discuss the approaches the EPA has previously used to establish de 
minimis emissions levels. We then examine the extent to which these 
approaches can be employed to support the development of a de minimis 
emissions level for GHGs. The EPA's judgment at this time is that the 
approaches we have previously used to establish SERs are not workable 
for the establishment of a GHG SER due the unique nature of GHG 
emissions.
    The EPA first established SERs in 1980 as part of the revised PSD 
regulations that the EPA completed following the Alabama Power 
decision. 45 FR 52676 (1980 PSD Rule). The 1980 PSD Rule included the 
current approach for defining ``major'' modifications, based on the use 
of SERs to define ``significant'' increases in emissions. As discussed 
previously, a modification must be ``major'' to trigger the PSD 
permitting requirement. The EPA determined the level of these SERs 
following the principles regarding de minimis exceptions that the Court 
provided in Alabama Power.
    In the preamble to the 1980 PSD Rule, the EPA identified the 
primary objectives the Agency sought to meet in selecting de minimis 
values: (1) Provide effective Class I area protection, (2) guard 
against excessive un-reviewed consumption of the Class II or III PSD 
increments, and (3) assure meaningful permit reviews. 45 FR 52676, 
52706. ``Meaningful'' in this context meant that there would be a 
possibility of obtaining useful air quality information or obtaining 
greater emission reductions as a result of BACT analysis than would be 
expected from otherwise-applicable state permit or NSPS/national 
emission standards for hazardous air pollutants (NESHAP) processing. 
Id.
    Within this framework, the de minimis levels finalized for each 
pollutant in the 1980 PSD Rule were based on consideration of both 
environmental impacts and administrative burden. The Administrator 
chose to specify de minimis level cutoffs in terms of emissions rate 
(i.e., tpy). The derivation of the de minimis levels are described in 
preambles published in the Federal Register and two technical support 
documents to the 1980 rulemaking.\37\ In setting the de minimis levels 
for each pollutant, the EPA relied on existing ``data on sources 
permitted under the PSD program'' to predict the environmental/air 
quality impacts associated with regulating emissions above that level, 
and a measure of the number of PSD permitting actions that might result 
from a particular de minimis level. 45 FR 52676, 52707.
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    \37\ One report is titled ``Impact of Proposed and Alternative 
De Minimis Levels for Criteria Pollutants,'' EPA-450/2-80-072; the 
other report is a staff paper titled ``Approach to Developing De 
Minimis Levels for Noncriteria Air Pollutants.'' Both papers have a 
June 1980 publication date.
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    The EPA assessed the air quality impacts differently for criteria 
and non-criteria pollutants.\38\ For criteria pollutants, where there 
was extensive health and welfare documentation based on ambient 
concentration data used in setting NAAQS, the EPA based the de minimis 
emission levels on ambient air impacts. For non-criteria pollutants, 
for which no ambient air quality standards existed, the EPA based the 
de minimis emission levels on emission rates embodied in NSPS and 
NESHAP, which are national emission standards developed under CAA 111 
and CAA 112, respectively. The bases for the de minimis emissions rates 
are summarized below.
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    \38\ ``Criteria pollutants'' are those pollutants listed by the 
EPA under CAA section 108 for study and subsequent development of 
NAAQS under CAA section 109. ``Non-criteria'' pollutants are other 
pollutants that are subject to regulation under the Act.
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    For the criteria pollutants (all except carbon monoxide (CO), as 
discussed later), the final de minimis levels were based on 2 to 4 
percent of the primary NAAQS for the pollutant. 45 FR 52676, 52708. To 
develop these SERs in tpy, the EPA first established a range of 
potential air quality ``design values'' \39\ representing percentages 
of the then-current primary NAAQS and, for particulate matter (PM) and 
sulfur dioxide (SO2), percentages of the Class

[[Page 68123]]

II PSD increments.\40\ These design values were then converted to 
annual emissions rates in accordance with the EPA modeling procedures 
using data on sources permitted under the PSD program. 45 FR 52676, 
52707. Since at that time there was only an annual NAAQS for nitrogen 
dioxide (NO2), the EPA elected to set the de minimis 
emissions rate for nitrogen oxides (NOX) at the level 
corresponding to 2 percent of the annual NAAQS. Id. For CO, the 
emissions rates corresponding to all the evaluated percentages of the 
NAAQS were in excess of the major stationary source threshold of 100 
tpy that applies to many source categories, so the EPA set the SER at 
100 tpy. Id. The pollutant volatile organic compounds (VOC) is not a 
criteria pollutant in itself but was, and is, designated as a precursor 
to the formation of the criteria pollutant ozone in the atmosphere. The 
EPA set the SER for VOC at the same level as that for NOX in 
recognition of the link between VOC and NOX emissions in the 
formation of ozone. Id.
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    \39\ These ``design values'' are to be distinguished from the 
design values calculated from ambient air quality data as part of 
determining compliance with certain of the NAAQS.
    \40\ At the time, increments had been established only for PM, 
which at that time was expressed as total suspended particulate 
(TSP), and SO2.
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    For other non-criteria pollutants, the de minimis emissions rates 
were generally based on 20 percent of the NSPS or 10 percent of the 
NESHAP that imposed limits on their emissions. For example, for 
sulfuric acid, the SER in tpy was determined based on 20 percent of a 
model sulfuric acid production plant's annual emissions using the NSPS-
based emission standard. A model plant is considered a typical plant 
affected by the NSPS. 45 FR 52676, 52709.
    Since no NAAQS has been set for GHGs, the EPA cannot use the 
approach based on a percentage of the NAAQS to identify a de minimis 
level for GHGs. In addition, current climate modeling tools are not 
capable of isolating the precise correlations between singular, 
incremental facility-specific GHG emissions changes, ambient 
CO2 concentrations, and climate impacts. Thus, because of 
the absence of a NAAQS for GHGs and the inherent uncertainties and 
limitations in modeling climate-related impacts from incremental 
project-level GHG emission increases, the EPA's judgment at this time 
is that an ambient-air quality impact-based approach is not workable 
for setting a GHG SER.
    Regarding the historical ``20 percent of NSPS'' approach for non-
criteria pollutants, we believe that this would result in a GHG SER 
that would be inconsistent with the de minimis principles described 
earlier. The only NSPS containing a GHG emissions limit that EPA had 
finalized as of the date of our analysis \41\ was the rule that limits 
CO2 emissions from new electric generating units (EGUs).\42\ 
Based on the modeled emissions profile for the EGU NSPS emissions 
limit, the ``20 percent of NSPS'' approach would result in a de minimis 
value of approximately 320,000 tpy CO2e when applied to the 
standard for a 600 megawatt natural gas combined cycle EGU.\43\ For 
comparison purposes, this level of GHG emissions is four times greater 
than the current interim GHG BACT applicability level of 75,000 tpy 
CO2e. As described later in Section V.D.1 of this preamble, 
the 75,000 tpy CO2e permitting level has been successfully 
implemented and is achieving meaningful GHG emission reductions through 
BACT review at larger, industrial GHG emission sources and units, some 
of which would not have GHG emission increases large enough to be 
subject to GHG BACT review at a 320,000 tpy CO2e permitting 
level.
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    \41\ EPA has since completed other standards that contain GHG 
emission limits, but these were not available at the time of our 
analysis.
    \42\ Final Rulemaking titled ``Standards of Performance for 
Greenhouse Gas Emissions from New Stationary Sources: Electric 
Utility Generating Units'' (80 FR 64510, October 23, 2015).
    \43\ ``Regulatory Impact Analysis for the Final Standards of 
Performance for Greenhouse Gas Emissions from New, Modified, and 
Reconstructed Stationary Sources: Electric Utility Generating 
Units.'' Chapter 5, Table 5-1. EPA-452/R-15-005, August 2015, 
(http://www2.epa.gov/sites/production/files/2015-08/documents/cps-ria.pdf.
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    In addition, using the ``model plant'' approach for establishing a 
de minimis level for GHGs is problematic because GHGs are emitted from 
such a diverse group of sources, in terms of both type and size. Even 
if NSPS that regulated GHG emissions for source categories other than 
EGUs had been available for analysis, the diversity of sources and the 
differences in GHG emissions contribute to eliminate the viability of 
the ``model plant'' approach for setting a SER. The model plant 
approach worked for other non-criteria pollutants because there was a 
much narrower set of industrial source categories from which the 
pollutant of interest was emitted in quantities of any concern (e.g., 
fluoride emissions from aluminum production plants).
    Following the approach used for CO (i.e., applying the major source 
threshold of 100 tpy as a SER level) would result in a GHG threshold 
that would exclude only very small emissions units. However, it may 
still require GHG BACT for what still can be considered relatively 
small units in terms of GHG emission increases for which, under any 
reasonable viewpoint, there would be trivial value in conducting a GHG 
BACT review. This would impose unreasonable administrative burdens for 
implementation and enforcement. As discussed previously, after the U.S. 
Supreme Court's UARG decision, PSD review is limited to only ``anyway 
sources,'' where emissions of a regulated pollutant other than GHGs 
triggers major stationary source or major modification status under 
PSD. Thus, the GHG BACT requirement will only apply to such sources. In 
this context, the term ``small unit'' is a relative term because the 
smallest units or modifications will be excluded from PSD entirely 
because they do not emit or increase any pollutant in major amounts. 
Cases where a new major stationary source or a major modification 
involves combustion units with emissions of other pollutants large 
enough to trigger PSD generally would be associated with large 
CO2 emission increases as well, and thus would focus GHG 
BACT review on the larger emitting units. However, in cases where major 
stationary source or major modification status is triggered by non-
combustion emissions units, such as large VOC emitters, there may be 
collateral GHG emission increases that are very small. In addition, 
CO2 is emitted in much greater quantities than CO; the 
CO2 emission factor for natural gas boilers is 1,400 times 
that of CO, meaning that a boiler triggering PSD for emissions of 100 
tpy CO would emit 140,000 tpy CO2.\44\ Very small combustion 
units can emit 100 tpy CO2, such as small stationary 
internal combustion (IC) engines, water heaters, and heating, 
ventilation and air conditioning units. Thus, a 100 tpy GHG SER may 
trigger BACT review for very small units or modifications. However, as 
will be discussed later in this preamble, the EPA believes applying the 
BACT requirement to such small combustion units would provide emission 
reductions gains of trivial or no value.
---------------------------------------------------------------------------

    \44\ U.S. EPA, Compilation of Air Pollutant Emission Factors, 
Document No. AP-42, Volume I, Chapter 1, Section 1.4 ``Natural Gas 
Combustion,'' Tables 1.4.1 and 1.4.2, July 1998.
---------------------------------------------------------------------------

    In addition, it should be noted that the SER for CO was set at 100 
tpy in deference to the statutory definition of ``major stationary 
source'' that applies to many source categories, in spite of the fact 
that the emissions rates corresponding to all the percentages of the 
NAAQS that were evaluated as potential de minimis levels were in excess 
of 100 tpy. As a criteria

[[Page 68124]]

pollutant, CO is clearly covered by this statutory major source 
definition. However, the U.S. Supreme Court made clear in UARG that the 
major source levels are not applicable to GHG emissions. Thus, for the 
reasons discussed earlier, setting a SER for GHGs need not be limited 
by the major source thresholds in the same manner that the EPA viewed 
it as a limitation for CO.

D. What is the technical basis for the proposed GHG SER?

1. Summary of Technical Support Information
    In this section, we summarize the key findings from our data 
reviews and how they support our proposed GHG SER value. Following this 
summary, Sections V.D.2 to V.D.5 of this preamble provide more detailed 
information on each of the individual reviews and analyses, the 
findings from each, and references to applicable supporting documents. 
Section V.E of this preamble then presents our proposed GHG SER, an 
overall summary of our findings that support our propose GHG SER level, 
and a request for comments.
    It is important to note that no single review or analysis by itself 
constitutes the basis for the proposed GHG SER value of 75,000 tpy 
CO2e. Instead, we based our proposed GHG SER on the 
collective findings from these technical reviews, some quantitative in 
nature and some qualitative, that sought to evaluate the potential 
coverage of GHG sources, and the opportunities for achieving meaningful 
GHG emissions reductions from the BACT review as part of projects at 
``anyway sources'' under the PSD permitting program.
    Information obtained from the following four categories of data 
reviews supports the proposed GHG SER level: (1) A review of recent PSD 
permitting information for ``anyway sources,'' including those subject 
to GHG BACT review since GHGs became subject to regulation in 2011; (2) 
a calculation of the equivalent GHG emissions corresponding to a 40 tpy 
NOX SER level for different combustion unit types that could 
be expected to be part of ``anyway sources;'' (3) an analysis of non-
combustion related GHG source category emissions data; and (4) a review 
of control strategies that have been or would likely be applied for GHG 
BACT reviews. In addition, the EPA considered the burdens of applying 
the GHG BACT requirement to sources emitting (or modifications 
increasing) GHGs in relatively small amounts. The following paragraphs 
summarize the key findings from each of these reviews that informed our 
decision on the proposed GHG SER.
    Under the first category of data review, we examined existing PSD 
permitting information to determine the types and size of GHG emission 
units that are likely to be part of PSD ``anyway sources.'' We looked 
at two sources of permitting information for this review. First, we 
looked at GHG permitting information from the EPA Regional offices and 
states as part of the EPA's effort under the phase-in process 
established in the Tailoring Rule to collect information on actual 
permits issued that included GHG BACT limits. This information provided 
actual, historical information on the type of emissions units 
undergoing GHG BACT review at a 75,000 tpy CO2e permitting 
applicability level. This was the effective applicability level for 
determining whether GHG BACT review applied to ``anyway sources'' that 
were otherwise subject to PSD permitting based on conventional (non-
GHG) pollutants under Step 1 of the Tailoring Rule. It is also the 
current effective applicability level for determining if GHG BACT 
review applies to ``anyway sources.'' \45\ The second data source we 
looked at as part of this permitting review was information from the 
EPA's Reasonably Available Control Technology (RACT)/BACT/Lowest 
Achievable Emission Rate (LAER) Clearinghouse (RBLC). The RBLC is a 
voluntary, national reporting database containing PSD permit 
information, including permits for which no GHG BACT review was 
conducted after GHGs became regulated in 2011. We reviewed the RBLC 
data to further characterize PSD permits in regards to potential GHG-
emitting sources and to specifically identify the likelihood of new PSD 
``anyway sources'' emitting (or a modified ``anyway source'' 
increasing) GHG emissions in an amount less than 75,000 tpy 
CO2e. Such a source would not have been subject to GHG BACT 
review under Step 1 of the Tailoring Rule. Because all of this PSD 
permitting information was from a period when 75,000 tpy 
CO2e was used as the effective BACT applicability level for 
GHGs, this value serves as a key reference point throughout each part 
of our analysis.
---------------------------------------------------------------------------

    \45\ Next Steps and Preliminary Views on the Application of 
Clean Air Act (CAA) Permitting Programs to Greenhouse Gases 
Following the Supreme Court's Decision in UARG v. EPA, Memorandum 
from Janet G. McCabe, Acting Assistant Administrator, Office of Air 
and Radiation, and Cynthia Giles, Assistant Administrator, Office of 
Enforcement and Compliance Assurance, U.S. EPA, to Regional 
Administrators, p. 3, July 24, 2014.
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    Our review of this permit information produced a number of 
important findings. First, we found that, using a 75,000 tpy 
CO2e applicability level, BACT review for GHGs was triggered 
for the largest sources of GHGs from a national perspective. This was 
evidenced by the fact that the source categories represented in the 
``anyway sources'' with PSD permits addressing GHGs correlated very 
well with the largest GHG-emitting source categories identified through 
the EPA's GHG Reporting Program (GHGRP).\46\ The GHGRP emissions 
reports are submitted by stationary sources to the EPA on a yearly 
basis. Almost all of the PSD permits since 2011 that contained GHG BACT 
limits were issued to sources in categories that collectively represent 
over 92 percent of the 2013 reported emissions under the GHGRP. These 
GHGRP categories include power plants (66 percent of GHGRP emissions 
for 2013), petroleum and natural gas systems (7 percent), petroleum 
refineries (5.6 percent), organic and inorganic chemicals manufacturing 
(5.5 percent), minerals production (3.5 percent), metals production 
(3.4 percent) and pulp and paper manufacturing facilities (1.2 
percent). The percentages provided above reflect the portion of the 
total nationally-reported GHG emissions, on a CO2e basis, 
emitted from facilities in the particular source category. The 
distribution of ``anyway source'' permits containing a GHG BACT limit 
was similar: Power plants made up the largest percentage (47 percent) 
followed by the chemical production sector (20 percent), the oil and 
gas sector (10 percent), metals production (8 percent), refineries (6 
percent), minerals production (6 percent) and the pulp and paper 
industry (3 percent). These same categories also contributed over 92 
percent of the GHG emissions, based on CO2e, as reported 
under the EPA's GHGRP.\47\
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    \46\ ``A Summary Analysis of the GHG Permitting Experience 
between 2011 and 2014,'' prepared by EPA Staff, March 2015.
    \47\ 2013 GHGRP Overview Report, http://www.epa.gov/sites/production/files/2015-07/documents/ghgrp-overview-2013.pdf.
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    This correlation between source categories subject to the GHG BACT 
requirement and the source categories contributing the most reported 
GHG emissions confirms that at the current applicability level of 
75,000 tpy CO2e, the categories of sources contributing the 
most to national stationary source GHG emissions are included in the 
population of sources that were subject to the BACT requirement for 
GHGs. We did not see any prominent, high-ranking

[[Page 68125]]

GHG reporting source categories, in terms of their national GHG 
emissions contributions, that were not included in the ``anyway 
sources'' that obtained PSD permits with GHG BACT limits at the 75,000 
tpy CO2e level. This is one consideration in evaluating 
whether there is value in applying BACT to GHGs at sources emitting (or 
modifications increasing) this pollutant below the 75,000 tpy 
CO2e level. Other parts of the EPA's analysis show that the 
potential for achieving meaningful GHG reductions from BACT review is 
highest at the GHG reporting source categories that are responsible for 
most of the national GHG emissions.
    A second key finding from our review of past permitting actions was 
that the emissions from large, fossil-fueled combustion units were 
generally the principle cause for ``anyway sources'' requiring PSD 
permits based on emissions of pollutants other than GHGs. Across all 
industry categories, we found that ``anyway sources'' have been 
triggering PSD primarily because of the addition or modification of 
combustion units. Most of these projects involved some combination of 
turbines, boilers, process heaters/furnaces, and stationary IC engines 
that were principally fired with either diesel fuel or natural or 
process gas, with smaller numbers of biomass-fueled units. We found 
that even for a specific sector such as the oil and gas industry, where 
there are a variety of fugitive emission sources, combustion emissions 
still dominate the emission profile and are the primary driver of PSD 
applicability for new construction and major modification projects.
    This finding that combustion units dominate the population of PSD 
permits that contain GHG BACT limits to date is also consistent with 
the general composition of the sources in the national GHG emissions 
inventory. Nationally, CO2 is the GHG emitted in the largest 
quantities from stationary sources.\48\ The 2.9 billion metric tons of 
CO2 emissions reported by stationary sources under the EPA's 
GHGRP for the year 2013 represent 91.4 percent of the total reported 
GHGs, in terms of percent of total CO2e emissions, from 
reporting stationary sources in 2013.\49\ Of the reported 2.9 billion 
metric tons of CO2 emissions, approximately 90 percent 
results from fossil fuel-fired combustion units.\50\
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    \48\ 2013 GHGRP Overview Report, http://www.epa.gov/sites/production/files/2015-07/documents/ghgrp-overview-2013.pdf.
    \49\ 2013 GHGRP Overview Report, http://www.epa.gov/sites/production/files/2015-07/documents/ghgrp-overview-2013.pdf.
    \50\ 2013 GHGRP Reporting Dataset, http://www.epa.gov/ghgreporting/ghg-reporting-program-data-sets.
---------------------------------------------------------------------------

    The fact that combustion units dominate the reported GHG emissions 
for industrial stationary sources and are to date the most prevalent 
units triggering the requirement to obtain a PSD permit at these same 
types of industrial sources is another important consideration in our 
development of a GHG SER. The EPA has no reason to believe that 
economic conditions or other factors will dramatically alter the nature 
of industrial activity triggering PSD permitting in the future. Thus, 
we expect that new and modified combustion units of a similar profile 
will continue to make up most of the potential ``anyway sources'' and 
modifications requiring a PSD permit, regardless of the GHG SER level 
that applies to determine whether BACT applies to GHGs at such sources
    A third finding, resulting from our review of the RBLC permitting 
information, was that very few ``anyway sources'' obtaining permits 
experienced GHG emission increases less than 75,000 tpy 
CO2e. From the RBLC dataset, we identified 20 PSD permits 
issued to ``anyway sources'' between 2011 and 2014 that included 
permitted combustion units that did not contain BACT limits for GHGs. 
All of these permits authorized modifications of an existing major 
source, and typically included some type of smaller, ancillary 
combustion units, such as a flare, an IC engine or process heater. It 
is possible that each of the projects authorized by these permits 
increased GHG emissions in an amount less than 75,000 tpy 
CO2e (but greater than zero tpy). We use the term 
``possible'' because our analysis is based on emissions unit 
information available for the permit from the RBLC database, or from 
individual permit documents in cases where those were available. The 
unit types and/or fuel used suggest the presence of GHG emission 
sources, but without a full site-specific PSD applicability 
determination prepared specifically for GHGs (accounting for all 
contemporaneous increases and decreases of GHG emissions), these 
occurrences should only be considered possible instances where there 
may have been GHG emission increases. These 20 permits represent 5 
percent out of a total of about 400 PSD permits in the RBLC dataset 
occurring over a 4-year period. Although the RBLC dataset is based on 
voluntary reporting and, due to incomplete participation, does not 
represent a complete dataset of PSD permits issued nationally, we 
believe that this relatively small percentage of ``anyway source'' 
permits that we identified in the RBLC dataset reflects the 
unlikeliness of a significant number of ``anyway source'' PSD permits 
requiring GHG BACT review below a 75,000 tpy CO2e SER level.
    Given the nature and number of these permits that we identified, we 
would not expect to add many additional GHG BACT reviews nationwide at 
a GHG SER level below 75,000 tpy CO2e. In addition, any 
additional BACT reviews would likely only be for modifications of 
existing major sources. The past permitting information shows that any 
wholly-new ``greenfield facilities'' would be expected to trigger the 
PSD BACT requirement at GHG SER level of 75,000 tpy CO2e. 
Any new major stationary source that emits pollutants other than GHGs 
above the major source thresholds would be expected to emit GHGs in 
amounts of at least 75,000 tpy CO2e or more. Thus, our 
technical analysis of past PSD permitting activity indicates that GHG 
SER values below 75,000 tpy CO2e are only potentially 
meaningful for modification projects that trigger PSD at existing major 
sources. Modification projects may include both additions of new 
emissions units at existing facilities and physical changes to existing 
emissions units that result in increases in emissions.
    The last key finding from our review of PSD permit information was 
that applying BACT to GHGs at the 75,000 tpy CO2e permitting 
level has been administratively feasible for both sources and 
permitting authorities over the 4 years it has been in place. The EPA's 
analysis showed effective and timely implementation of the BACT 
requirement for GHGs. A knowledge base on BACT review and design for 
GHGs at source categories and units triggering the BACT requirement at 
the 75,000 tpy CO2e level has also been developed over this 
permitting period that will facilitate future permit reviews.
    Based on the finding, supported by our review of past PSD permit 
actions, that construction or modification of combustion units is the 
dominant form of activity that triggers the requirement to obtain a PSD 
permit, our second category of data review involved identifying the 
specific level of increased GHG emissions resulting from the 
construction or modification of combustion units most likely to trigger 
PSD in the future. As discussed earlier, the EPA projects that GHG SER 
values below 75,000 CO2e would only be meaningful for 
modifications of existing major sources that trigger PSD review.

[[Page 68126]]

Thus, this portion of our analysis did not involve wholly new sources, 
but focused instead on projects involving the addition of new emissions 
units at an existing major source. Since GHG BACT review can only apply 
to a modification in cases where a pollutant other than GHGs is 
increased in significant amounts and is thus subject to BACT review for 
that pollutant, we used the existing PSD NOX SER value of 40 
tpy to calculate an equivalent level of increase in GHG emissions that 
we would expect to be associated with the combustion unit types most 
likely to be part of future modification projects that trigger the 
requirement to obtain a PSD permit. Using this approach, the GHG 
equivalency results simply provide an approximate measure of the 
theoretical minimum level of GHG emissions increase that could be 
associated with a project that adds a particular type of combustion 
unit that increases NOX by just more than the NOX 
SER level of 40 tpy. We then examined this equivalency level in 
relation to both the findings from our first technical review (the past 
actual permitting actions) and our fourth technical review, which 
evaluated the degree of reductions found to be achievable in GHG BACT 
reviews for these unit types.
    The results of our equivalency analysis ranged from 17,529 tpy 
CO2e for certain types of stationary IC engines, upwards to 
425,665 tpy CO2e for large power plant turbines. The average 
result across unit types was 98,333 tpy CO2e. The analysis 
confirmed that, for some unit types, GHG emissions increases would 
clearly exceed the current 75,000 tpy CO2e level if that 
unit increased NOX emissions over the NOX 40 tpy 
SER level. For example, a natural-gas fired combustion turbine, 
commonly added as part of a modification project at existing power 
plants, would have GHG emissions well in excess of 75,000 tpy 
CO2e. In projects involving a large power plant turbine unit 
such as this, a single unit can trigger the requirement to obtain a PSD 
permit.
    However, for other types of emissions units that might be added as 
part of a PSD triggering modification, we found it necessary to 
consider the results in light of the actual permitting experience. For 
example, our analysis showed equivalent GHG emissions increases below a 
20,000 tpy CO2e level for adding a stationary IC engine. In 
other words, an IC engine that just increases NOX emissions 
by 40 tpy or more could be expected to increase GHGs by less than 
20,000 tpy CO2e. However, addition of a single IC engine is 
not commonly a PSD triggering event. Our permitting review showed that 
most of the IC engines addressed in ``anyway source'' PSD permits are 
present for one of the following two reasons: (1) As associated 
equipment (e.g., emergency backup generator or fire pump engine) when 
the source is adding a large combustion unit (such as a turbine or 
boiler) that is principally responsible for triggering the requirement 
to obtain a permit; or (2) in multiple-unit configuration generator 
sets (e.g., 10 or more large IC engines linked together for electricity 
production). Also, in practice, there is a low likelihood that a PSD 
project involving the addition of a single unit, of any type, will just 
exceed the 40 tpy NOX SER level because, in such cases, the 
permit applicant very often accepts PTE emission limits to avoid 
triggering PSD if the project's NOX emission increase is 
close to the NOX SER level.
    Therefore, while our equivalency analysis resulted in possible 
theoretical occurrences of ``anyway source'' projects involving 
combustion units that may have emissions less than 75,000 tpy 
CO2e, we found very few actual PSD-triggering modification 
projects that involved adding a single combustion unit that would have 
total GHG emissions less than 75,000 tpy CO2e. We found it 
is much more likely that a PSD-permitted project would have 
NOX emissions well in excess of the 40 tpy NOX 
SER level due to the addition of multiple combustion units or the sheer 
size of the primary unit itself, such as a power plant turbine or 
steam-generating unit. Such projects will have GHG emissions multiple 
times greater than our theoretical equivalency results.
    Our third category of data review looked to identify any additional 
GHG emission sources, particularly non-combustion related units or 
processes that might be part of ``anyway sources'' PSD modification 
projects, which could potentially be subject to the BACT requirement 
for GHGs at applicability levels below 75,000 tpy CO2e. Our 
review of past PSD permits showed that the large majority of PSD 
permitted projects that involved GHG emission increases triggered PSD 
because of the addition of combustion units. In addition, most of these 
combustion unit projects had GHG emission increases in excess of 75,000 
tpy CO2e. Nevertheless, we also assessed the coverage of 
non-combustion related GHG sources that might trigger PSD to ensure 
that we did not miss meaningful reductions of GHGs that could be 
achieved by applying BACT to GHG at modification projects that increase 
GHGs in amounts less than the 75,000 tpy CO2e level that 
were used in prior permits. Using information from the EPA's GHGRP, we 
identified and evaluated emissions from GHG-emitting processes and 
units associated with non-combustion related GHG source categories 
relative to different GHG emission threshold levels.
    One main finding from this evaluation was that a high percentage of 
GHG emissions from non-combustion units or processes triggering PSD 
would be covered by the BACT requirement at a level of 75,000 tpy 
CO2e on a PTE basis. We found that at a 75,000 tpy 
CO2e PTE-based emission threshold level, non-combustion 
related units and processes responsible for approximately 89 percent of 
the GHG emissions, on a CO2e basis, all the non-combustion 
``anyway source'' categories included in our analysis would be 
captured, and thus conceivably subject to GHG BACT review if the GHG 
SER was set at a 75,000 tpy CO2e level. A construction 
project at a municipal waste landfill, for example, can trigger PSD 
applicability if its increased emissions exceed the PSD SER level of 50 
tpy for non-methane organic compounds (NMOC), the regulated NSR 
pollutant most commonly emitted from municipal waste landfills. A 
landfill increasing its emissions by just over 50 tpy NMOC would add 
over 190,000 tpy CO2e of GHG emissions (CH4 
expressed on a CO2e basis), which is well in excess of 
75,000 tpy CO2e.\51\ We found significant GHG emission 
source coverage at a 75,000 tpy CO2e level for other 
important source categories containing non-combustion related GHG-
emitting units and processes, including cement production, nitric acid 
production, refineries, and underground coal mines. The non-combustion 
related units and processes in these categories that emit GHGs in 
amounts greater than 75,000 tpy CO2e are responsible for 
over 90 percent of the non-combustion related GHG emissions from each 
of these source categories.
---------------------------------------------------------------------------

    \51\ Memorandum from H. Ward, EPA/SPPD, to J. Mangino, EPA/AQPD, 
re: Methane to NMOC ratio at landfills. June 17, 2014.
---------------------------------------------------------------------------

    Another important finding from our review of non-combustion sources 
that emit GHGs was that there is evidence that smaller GHG-emitting 
units that would not otherwise trigger PSD independently can be pulled 
into PSD when other emissions units are added in the same project. Once 
the BACT requirement is applicable to a given pollutant based on 
emissions in excess of the significance levels, the BACT review covers 
any associated processes emitting the same pollutants as the main units 
that are the principal reason for triggering PSD review. Because of the

[[Page 68127]]

definition of the GHG pollutant as the ``sum-of-six'' constituent 
gases, ancillary units that emit relatively small amounts of GHGs other 
than CO2 could become subject to GHG BACT requirement if a 
combustion unit added to the source at the same time emits GHGs in 
excess of the significance level that the EPA promulgates. Based on the 
actual experience of permitted sources using a 75,000 tpy 
CO2e level under Step 1 of the Tailoring Rule to determine 
GHG BACT applicability, we have seen smaller GHG-emitting units get 
pulled into PSD permits involving larger units at oil and gas 
production, processing and transmission facilities. At these 
facilities, projects that have triggered PSD involved addition of a 
large single or multiple smaller combustion units (such as large gas 
compressor turbines and engines that trigger PSD because of emissions 
of NOX or another pollutant besides GHG). These projects 
also had associated CH4 leaks from piping, valves, and gas 
storage equipment. The combustion unit(s) involved in such projects 
that triggered PSD had GHG emission increases exceeding 75,000 tpy 
CO2e, and thus subjecting the project to GHG BACT review 
under previous PSD regulations. In addition to evaluating controls for 
GHG emission from the combustion units, the GHG BACT review 
accompanying these projects included measures directed at the fugitive 
CH4 sources associated with the project because the GHG 
pollutant includes both CO2 and CH4 gases. By 
themselves, the CH4 emissions fell below the 75,000 tpy 
CO2e level, and the fugitive sources alone would not have 
triggered PSD based on pollutants other than GHGs. However, based on 
the definition of the GHG pollutant, because other emissions units at 
these sources triggered PSD and then also triggered BACT for GHGs based 
on emission in excess of 75,000 tpy CO2e, these ancillary 
units were pulled into the overall GHG BACT review.
    This finding explains in part why we did not find evidence of many 
``anyway source'' PSD permits with emission units that emit less than 
75,000 tpy CO2e. Our review of prior ``anyway source'' PSD 
permitting actions showed that a large majority of PSD permits for 
projects that would be most likely to involve GHG emission increases 
are triggered by the addition of large combustion units. In addition, 
we found that most of these larger combustion units would have GHG 
emission increases in excess of a 75,000 tpy CO2e GHG SER 
level. Thus, we can anticipate that setting a GHG SER below the 75,000 
tpy CO2e level would be unlikely to subject additional non-
combustion emissions to the GHG BACT review. If these non-combustion 
units are constructed independently, they will generally not emit 
regulated NSR pollutants other than GHGs in amounts that are high 
enough to trigger PSD review, or they will not involve GHG emissions at 
all. So establishing a GHG SER lower than 75,000 tpy CO2e 
would not likely cause these non-combustion sources to become subject 
to the GHG BACT requirement. Non-combustion GHG-emitting processes that 
are part of a project generally are not brought into the GHG BACT 
review without the contemporaneous addition of a combustion unit that 
serves as the PSD-triggering event. A GHG SER of 75,000 tpy 
CO2e would ensure that such projects will be subject to the 
GHG BACT requirement.
    Our fourth category of data review looked at the degree of GHG 
emissions reductions that one could expect to achieve by applying 
energy efficiency measures as BACT for GHGs at projects involving 
certain types and sizes of combustion units. Although we reviewed a 
variety of GHG reduction techniques focused on energy efficiency 
measures applied to combustion units since, as noted in our review of 
``anyway source'' permitting, the addition or modification of 
combustion units is, and likely will continue to be, the principal 
triggering event for most PSD permits involving GHGs. The EPA's GHG 
permitting experience has been that BACT for such sources will usually 
be energy efficiency measures. Therefore, in evaluating a possible GHG 
SER option, we focused on the implementation, effectiveness and value 
of energy efficiency measures at combustion sources that may be 
expected to trigger PSD.
    Our main finding from reviewing these energy efficiency measures is 
that the degree of emissions reductions achieved is greater at larger 
combustion units that would be subject to GHG BACT review at or above a 
75,000 tpy CO2e SER. We found that the maximum reduction 
potential from energy efficiency measures is approximately 7 percent 
\52\ from a baseline industrial boiler configuration. Emissions 
reductions on this scale are generally only obtainable where site-
specific design and construction criteria can be part of the combustion 
unit design and manufacture. Large industrial boilers, process heaters 
and furnaces of the size typically seen as part of ``anyway source'' 
PSD projects are custom-built and thus not generally purchased as 
``off-the-shelf'' items. Thus, these units can be site-designed and 
constructed in a way that considers and incorporates a combination of 
energy efficiency measures.\53\ The application of BACT review is thus 
particularly relevant to these types of units as it involves case-by-
case review of technology implementation and cost considerations.
---------------------------------------------------------------------------

    \52\ ``Available and Emerging Technologies for Reducing 
Greenhouse Gas Emissions from Industrial, Commercial, and 
Institutional Boilers,'' EPA Office of Air Quality Planning and 
Standards. October 2010. http://www.epa.gov/sites/production/files/2015-12/documents/iciboilers.pdf.
    \53\ ``Boiler Efficiency Projects-Development of Issues Papers 
for GHG Reduction Project Types: Boiler Efficiency Projects,'' 
Prepared for the California Climate Action Registry, January 7, 
2009. http://www.climateactionreserve.org/wp-content/uploads/2009/03/future-protocol-development_boiler-efficiency.pdf.
---------------------------------------------------------------------------

    If carbon capture and sequestration (CCS) is found to be achievable 
at such large industrial boilers, process heaters and furnaces, the 
degree of emissions reductions that could be achieved is significantly 
increased. Thus, whether energy efficiency or more effective controls 
are applied, the BACT requirement would be expected to yield a 
meaningful degree of GHG emissions reductions when applied to an 
individual source or modification that increases GHG emission by 75,000 
tpy CO2e or more.
    In contrast, when we consider emissions units that emit GHGs in 
amounts below 30,000 tpy CO2e, we generally see smaller 
``off-the-shelf'' type units, such as stationary IC engines. The 
ability to achieve additional GHG reductions from such units is limited 
or non-existent for several reasons. First, implementing the efficiency 
measures generally requires site-specific design and construction 
criteria, more typically associated with larger scale projects where 
these measures can be part of unit design and manufacture. Second, 
``off-the-shelf'' units such as IC engines typically cannot be 
substantially modified or tampered with in order to be guaranteed to 
meet their certified performance standards. Third, there is little 
variation, typically within 1 or 2 percentage points, in the efficiency 
of these types of engines sold by different vendors. The market demands 
that all such engines be highly-efficient across vendors, and thus 
offers little opportunity for GHG reductions from the purchase 
decision. Finally, given the relatively small capital cost of these 
units and the anticipated high cost of CCS, it is unlikely that CCS 
will even be found to be achievable when such a unit is installed by 
itself without a much

[[Page 68128]]

larger combustion unit that will trigger the PSD BACT requirement.
    It is worth recalling the definition of the word ``meaningful,'' as 
described earlier in Section V.C of this preamble where we discuss the 
historical background for de minimis levels under PSD. In the preamble 
to its 1980 PSD rule, the EPA defined ``meaningful'' reductions as 
greater emission reductions than one would expect to be achieved from 
otherwise-applicable regulatory requirements such as an NSPS or NESHAP. 
45 FR 52706. The EPA does not expect that BACT review for IC engines 
would produce any reductions for GHGs beyond that resulting from the 
NSPS compliance standards that already exist for these new units. Given 
the nature of these units, the EPA and permitting authorities have not 
identified controls at this time that can be added to these engines to 
further reduce their GHG emissions. Where IC engines have been part of 
``anyway source'' PSD projects to date, typically in association with a 
larger turbine or boiler units, the selection of high-efficiency 
engines that meet the requirements of the applicable NSPS has qualified 
as BACT. Therefore, the value for site-specific GHG BACT review on 
projects involving only one or two smaller combustion units of the type 
that might be implicated at GHG SER values less than 30,000 tpy 
CO2e is likely to be virtually non-existent. The EPA 
therefore does not view potential emission reductions from the BACT 
requirement at projects that increase GHG emissions by less than 30,000 
tpy CO2e as meaningful in the context of setting a de 
minimis level under PSD.
    For modifications at ``anyway sources'' that trigger PSD and 
increase GHG emissions by 30,000 tpy to 75,000 tpy CO2e, we 
found that it may be possible to apply energy efficiency measures to 
achieve some reductions in emissions, but there is reason to question 
whether the degree of reduction achieved would be meaningful. For 
example, we found that the current maximum reduction potential from 
energy efficiency measures for combustion units, mainly at boiler 
configurations, is around 7 percent.\54\ At smaller combustion units, 
there are reasons to question whether this maximum reduction potential 
could be achieved. However, assuming this percentage of reduction could 
be achieved by applying the most aggressive energy efficiency measures 
on an additional unit that emits at or near the current 75,000 tpy 
CO2e permitting threshold, the total amount of GHG emissions 
avoided would be limited considering the total amount of increased GHG 
emissions from such a unit. A 7 percent improvement in a baseline 
boiler unit efficiency could reduce a 74,999 tpy CO2e boiler 
unit's GHG emissions by approximately 5,500 tons CO2e per 
year. Another way to view this is that exempting such a source from the 
BACT requirement for GHGs would result in a marginal increase of 5,500 
tpy CO2e in GHG emissions. The modification would still 
increase GHG emissions by 69,500 tpy CO2e even after 
applying the most aggressive energy efficiency measures through the 
BACT requirement. In reality, the marginal emissions increase from not 
applying BACT to GHGs at such a source would likely be less than 5,500 
tpy CO2e because that increase is based on a PTE 
scenario.\55\
---------------------------------------------------------------------------

    \54\ ``Available and Emerging Technologies for Reducing 
Greenhouse Gas Emissions from Industrial, Commercial, and 
Institutional Boilers,'' EPA Office of Air Quality Planning and 
Standards. October 2010. http://www.epa.gov/nsr/ghgdocs/iciboilers.pdf.
    \55\ As this summary of our technical review demonstrates, our 
findings are based on an analysis of currently available 
information. The information considered as part of our analysis, 
such as the average GHG emissions reduction that can be achieved 
from the application of energy efficiency or the availability of CCS 
for smaller sources, may change in the future. Thus, after this rule 
is finalized, EPA may need to periodically consider if there are 
significant changes to the information considered in our analysis.
---------------------------------------------------------------------------

    In addition to considering the findings from the four categories of 
analysis described earlier, we also considered the GHGRP's reporting 
threshold for GHG emissions, which is 25,000 metric tpy CO2e 
for most reporting sources, based on actual emissions. Depending on 
utilization, the PTE-based emissions can be significantly greater than 
25,000 metric tpy CO2e. For example, a source actually 
emitting 25,000 tpy CO2e would have a PTE of 50,000 tpy 
CO2e if it were run at a 50 percent utilization rate over 
the course of the year. Also, the reporting rule does not require that 
those facilities above the reporting threshold take measures to control 
their GHG emissions; rather it only requires that sources monitor and 
report their emissions. So while the GHGRP illustrates a comparative 
level of GHG emissions associated with industrial type GHG-emitting 
facilities deemed significant for monitoring and reporting purposes, we 
did not see this threshold as a directly transferrable GHG metric for 
setting a GHG SER because of the different end-uses and requirements. 
However, the GHGRP reporting threshold did provide us a quantified GHG 
emission level for a relative frame of reference in evaluating our 
proposed GHG SER option as described in the sections of this preamble 
that follow.
    Sections V.D.2 to V.D.5 of this preamble provide more detail on 
each of the individual technical reviews and analyses and the findings 
obtained from each.
2. Review of PSD Permitting and GHG Emission Sources
    Under our first technical review, we examined existing PSD 
permitting information to determine the types and size of GHG emission 
sources that are likely to be part of PSD ``anyway sources.'' We looked 
at two sources of information for this review. First, we looked at GHG 
permitting information from the EPA Regional offices and states as part 
of an effort under the Tailoring Rule to collect information on actual 
PSD permits issued that included GHG BACT review. Second, we reviewed 
information from the EPA's RBLC, including permits for which no GHG 
BACT review was included. The subsections of this preamble that follow 
describe each review and the key findings.
a. GHG Permitting Under Step 1 of the Tailoring Rule
    The main purpose of this analysis was to assess and summarize the 
GHG permitting experience to date for ``anyway sources'' emitting GHGs 
at or above the 75,000 tpy CO2e GHG threshold level, the 
effective GHG permitting level for sources that were otherwise subject 
to PSD permitting for conventional non-GHG pollutants under Step 1 of 
the Tailoring Rule. The term ``anyway sources'' refers to sources that 
trigger PSD permitting requirements ``anyway'' based on pollutants 
other than GHGs, regardless of the amount of their project-related GHG 
emissions. We focused on these ``anyway source'' permits since they are 
the only GHG sources and projects that would potentially be subject to 
GHG permitting following the UARG decision that effectively limited GHG 
permitting to sources and projects that would otherwise be subject to 
permitting based on emissions of pollutants other than GHGs. We did not 
include in our review PSD permitting conducted under Step 2 of the 
Tailoring Rule since Step 2 required PSD permits and GHG BACT review 
for sources and modifications based solely on GHG emission increases. 
Such sources do not trigger PSD after the UARG decision and subsequent 
revisions to the EPA's regulations, including those proposed in this 
rule.
    By analyzing the types of GHG emission units and sources subject to

[[Page 68129]]

GHG BACT review during the past four years, we developed a historical 
profile of the source coverage and GHG BACT review process at the 
75,000 tpy CO2e GHG permitting level. Looking at this 
historical record, we can better assess to what extent the existing 
75,000 tpy CO2e permitting level subjects significant GHG-
emitting sources to BACT review, and whether GHG BACT review at that 
level yields emission reductions that were meaningful.
    For this analysis, we reviewed summary information on 200 PSD 
permits issued during the 2011-2014 timeframe that contained GHG BACT 
requirements after GHGs became a regulated NSR pollutant. We summarized 
the characteristics of the sources and types of units that have been 
subject to GHG BACT review. Some of the key findings from this review 
are presented here; more details on this analysis are included in the 
docket for this proposed rulemaking.\56\ Based on this review sample, 
approximately 90 percent of all the PSD permits with GHG BACT limits 
were issued to ``anyway sources,'' \57\ with the other 10 percent 
issued to sources that were subject to PSD permitting only because of 
their GHG emissions (and thus would not be captured at any SER level 
because they are not ``anyway sources'').
---------------------------------------------------------------------------

    \56\ ``A Summary Analysis of the GHG Permitting Experience 
between 2011 and 2014.'' Prepared by EPA Staff, March 2015.
    \57\ As discussed previously in Section V.D.1, the ``anyway 
source'' permits with GHG BACT limits all involved energy-intensive 
industries, emitting significant amounts of CO2 from the 
burning of fossil fuels in various types of combustion units.
---------------------------------------------------------------------------

    The importance and contribution of the power generating sector to 
GHG national emissions cannot be overstated when considering 
opportunities for GHG reductions and identifying where there is clear, 
non-trivial value in applying BACT review to obtain such reductions. 
Power plants are responsible for a majority of the country's total 
stationary source GHG emissions, approximately 66 percent of the 
reported 2013 GHG emissions under the EPA's GHGRP.\58\ Since combustion 
units, such as large gas turbines and steam boilers installed at power 
plants, consistently have GHG emission increases well in excess of 
75,000 tpy CO2e, a GHG SER at this level will ensure that 
permitting authorities continue to apply GHG BACT review to the largest 
and most prevalent GHG emission units in the power plant sector as part 
of ``anyway sources'' permitting actions.
---------------------------------------------------------------------------

    \58\ 2013 GHGRP Overview Report, http://www.epa.gov/sites/production/files/2015-07/documents/ghgrp-overview-2013.pdf.
---------------------------------------------------------------------------

    A 75,000 tpy CO2e level also does not overlook other 
significant units. In our review of GHG permitting at a variety of 
``anyway sources'' besides power plants, we found that GHG emissions 
for units subject to GHG BACT review were generally well above the 
75,000 tpy CO2e threshold. This is because of the greater 
level of GHG emissions associated with large fossil-fuel fired 
combustion units, such as turbines and boilers. The addition of these 
units was typically the triggering event that caused the need for a PSD 
permit for pollutants other than GHGs. It was also evident from the 
review that most newly constructed facilities (i.e., ``greenfield 
facilities'' as opposed to modifications of existing major sources) 
that obtain ``anyway source'' PSD permits will generally have GHG 
emissions well in excess of a 75,000 tpy CO2e threshold 
based on the cumulative, facility-wide total GHG emissions from all 
emission points in the facility fence line.
    As part of this same analysis, we also performed a more detailed 
review on a sample subset of 55 individual ``anyway source'' permits 
that included GHG BACT limits and represented PSD permits for different 
source category types. Key findings from these sample permit reviews 
are summarized here with more details of the review included in the 
docket for this proposed rulemaking.\59\ The source category types 
represented by these 55 permits included the following: Power plants; 
chemicals production facilities; oil and gas industry sources; metals 
and mineral production facilities; pulp and paper production 
facilities; ethanol production plants; and a municipal waste combustion 
facility.
---------------------------------------------------------------------------

    \59\ ``A Summary Analysis of the GHG Permitting Experience 
between 2011 and 2014.'' Prepared by EPA staff, March 2015.
---------------------------------------------------------------------------

    We found that the construction projects covered by these PSD 
permits included at least one, and in most cases multiple, large 
combustion units, such as large fossil fuel-fired turbines, boilers, 
process heaters, or furnaces, along with associated stationary IC 
engines for some facilities (generally as backup emergency generators 
or for associated equipment such as pumps and compressors). The GHG 
emission levels associated with these sample PSD projects were 
consistently over 100,000 tpy CO2e, with many facilities, 
particularly greenfield facilities, reporting much higher levels. The 
principal fuels used in the combustion units were natural gas for 
boilers, furnaces, and turbines and diesel or natural gas for large 
stationary IC engines. There were limited cases of biomass fuel used, 
principally in the pulp and paper sector. The emissions from these 
larger combustion units were in most cases the principal cause for 
these projects requiring PSD review for both non-GHG pollutants and 
GHGs. Over 90 percent of the permitted activities within the sample of 
reviewed permits involved combustion units of some type, primarily 
fossil fuel-fired boilers, turbines, or stationary IC engines.
    Some permits for these combustion unit projects also included 
ancillary, non-combustion related sources of GHGs for which GHG BACT 
review was conducted. These sources consisted principally of fugitive 
emission releases of CH4 from natural gas delivery, 
processing or storage units, and SF6 releases from circuit 
breaker equipment associated with power plants.\60\ There were isolated 
examples of other non-combustion related sources at two chemical 
production facilities: GHG emissions from a nitric acid production 
process and CO2 from a CO2 liquefaction process. 
These processes were both large GHG-emitting processes, emitting more 
than 90,000 tpy CO2e.
---------------------------------------------------------------------------

    \60\ ``A Summary Analysis of the GHG Permitting Experience 
between 2011 and 2014.'' Prepared by EPA staff, March 2015.
---------------------------------------------------------------------------

b. RBLC Permitting Information
    For this analysis, we reviewed information on PSD permits contained 
in the RBLC to understand the types of non-GHG emission sources that 
were subject to BACT review for other pollutants besides GHG but that 
may also be important from a GHG emission perspective. Since the UARG 
decision limited the scope of the PSD permitting program to ``anyway 
sources,'' it is important to understand the types of sources that are 
typically part of ``anyway sources'' PSD permitted projects and their 
potential to emit GHGs. This analysis differed from our review of 
historical GHG permitting data since the RBLC dataset also contains PSD 
permits that did not contain GHG BACT limits, and thus we could 
identify if there were other GHG emissions sources that could 
potentially be subject to GHG BACT review at permitting threshold 
levels below 75,000 tpy CO2e. A detailed report of this 
analysis is included in the docket for this rulemaking.\61\
---------------------------------------------------------------------------

    \61\ ``A Summary Review of Recent PSD Permitting Activity for 
``Anyway Source'' Categories and the Potential GHG-Emitting Units 
and Processes within Those Categories.'' Prepared by EPA staff, 
March 2015.

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

[[Page 68130]]

    We began our review of ``anyway source'' PSD permits by assessing 
the types of emission units and sources that triggered PSD actions for 
pollutants other than GHGs. We then identified which of the units would 
most likely emit GHGs. We reviewed detailed process level information 
from over 100 ``anyway source'' PSD permits issued in the last 4 years 
for source categories likely to have some amount of GHG emissions.\62\
---------------------------------------------------------------------------

    \62\ ``A Summary Review of Recent PSD Permitting Activity for 
``Anyway Source'' Categories and the Potential GHG-Emitting Units 
and Processes within Those Categories.'' Prepared by EPA staff, 
March 2015.
---------------------------------------------------------------------------

    We examined individual source category projects as represented in 
the RBLC dataset to see if there was evidence of any consistency in the 
type and/or size of combustion units across key source categories and 
the extent to which they appear to be the primary emissions unit that 
is installed or modified and triggers PSD for pollutants other than 
GHGs. To get a representative sample across different source 
categories, we reviewed permits from a variety of industrial 
classifications, including potentially important GHG-emitting 
categories such as metals production, chemical manufacturing, petroleum 
refineries, the oil and gas industry, pulp and paper industries, and 
waste industries.\63\ We did not include power plants in the RBLC 
sample set we reviewed because we knew with a high level of certainty 
that the PSD permitted projects for these facilities principally 
involved very large combustion units, such as large gas turbines, with 
GHG levels well in excess of the current 75,000 tpy CO2e 
threshold. Therefore, these permits would not provide any additional 
insight into the characterization of sources that obtained permits 
because of pollutants other than GHGs for purposes of evaluating a 
possible GHG SER option.
---------------------------------------------------------------------------

    \63\ ``A Summary Review of Recent PSD Permitting Activity for 
``Anyway Source'' Categories and the Potential GHG-Emitting Units 
and Processes within Those Categories.'' Prepared by EPA staff, 
March 2015.
---------------------------------------------------------------------------

    Across the sampled industry categories, we found that ``anyway 
sources'' triggered PSD for conventional pollutants primarily because 
of the addition or modification of combustion units, such as turbines, 
boilers, process heaters, furnaces, and stationary IC engines. For most 
facilities, combustion units or associated combustion unit-related 
emissions (e.g., flares, exhaust gas treatment systems) constituted the 
majority of the overall processes for which BACT limits were required 
for pollutants other than GHGs at any given facility. Most of the 
larger combustion units covered by PSD permits were fueled principally 
by either natural gas or process-related gas for industries (such as 
petroleum refineries) where such gas is generated. Some permits also 
included smaller, stationary engines (typically emergency generators or 
fire pumps) principally fueled by either diesel or natural gas.
    From a sample of about 400 PSD permits contained in the RBLC 
dataset for the years 2011 to 2014, we identified only 20 PSD permits 
for modification projects \64\ from the RBLC data set that included 
combustion units whose cumulative GHG emissions would likely not exceed 
75,000 tpy CO2e based on their fuel input data. Although we 
recognize that the RBLC dataset does not reflect a complete dataset of 
permitting actions due to its voluntary participation and under-
reporting, we reasonably expect, based on the overall characteristics 
of the other PSD permits we reviewed and the type of GHG source 
categories affected under PSD, that there are a relatively low number 
of ``anyway source'' PSD projects with GHG emissions likely to be less 
than 75,000 tpy CO2e.
---------------------------------------------------------------------------

    \64\ ``List of Permits Identified in RACT/BACT/LAER 
Clearinghouse that Likely Have Combustion-Related Emissions that are 
less than 75,000 tpy CO2e''. Prepared by EPA Staff, 
October 2015.
---------------------------------------------------------------------------

    We also found that where non-combustion processes were covered by a 
PSD permit, the emissions from these processes principally consisted of 
PM-related fugitive emissions, such as dust from material handling or 
roads. There were also some specific industries, such as oil and gas 
processing plants, refineries, chemical production plants and 
landfills, where VOC emissions, often fugitive in nature, from piping, 
pumps and storage tanks, were subject to BACT requirements. However, in 
most of these cases there were large combustion units included in the 
PSD-permitted project that appear to be the key source of the emissions 
of a pollutant other than GHGs that exceed the applicable pollutant 
significance level, and thus drive the requirement for a PSD 
permit.\65\
---------------------------------------------------------------------------

    \65\ ``A Summary Review of Recent PSD Permitting Activity for 
``Anyway Source'' Categories and the Potential GHG-Emitting Units 
and Processes within Those Categories.'' Prepared by EPA staff, 
March 2015.
---------------------------------------------------------------------------

    Working from our preliminary finding above regarding non-combustion 
sources, we took a closer look at the extent to which combustion units 
were the main component of PSD projects related to a particular source 
category that has significant non-combustion GHG emissions, namely, 
facilities in the oil and gas sector with CH4 emissions. The 
oil and gas industry is well represented in PSD permitting, with the 
third highest count of permits between 2011 and 2014, and is also the 
second largest emitting industrial sector for non-combustion related 
CH4 emissions.\66\ We were particularly interested in 
understanding the contribution of combustion units in triggering PSD 
``anyway'' at oil and gas sector facilities, and how this might 
influence GHG permitting at a proposed GHG SER level.
---------------------------------------------------------------------------

    \66\ ``Inventory of U.S. Greenhouse Gas Emissions and Sinks: 
1990-2013,'' Table ES-2. Document No. EPA 430-R-15-004. April 15, 
2015. http://www.epa.gov/climatechange/ghgemissions/usinventoryreport.html.
---------------------------------------------------------------------------

    We found that, for projects subject to PSD in the oil and gas 
industry, combustion units still dominate the GHG emission profile. We 
examined a sample of 16 PSD permits issued between 2011 and 2015 
associated with the oil and gas sector to determine whether PSD permits 
in the industry are principally and routinely required due to projects 
involving combustion units or if they are sometimes triggered by non-
combustion emissions units alone, and whether such non-combustion units 
might also be sources of GHG emissions. A detailed summary of this 
review of oil and gas sector PSD permits is provided in the docket for 
this proposed rulemaking, from which the following key findings are 
taken.\67\ In all the PSD permits that we evaluated for this oil and 
gas sector review, combustion sources were the primary driver of PSD 
applicability for the permitted new source or major modification. Based 
on available emissions data within the permits, we did not find a PSD 
permit that did not cover combustion units as the primary emitters of 
PSD pollutants, including GHGs. Of the 13 permits for which GHG 
emissions were provided or could be readily calculated, 12 of the 
projects involved GHG emissions greater than 75,000 tpy 
CO2e, with four of these over 500,000 tpy CO2e. 
The one project with less than 75,000 tpy CO2e was a 
modification project to increase flaring as a BACT control strategy for 
VOCs. Of the 10 permit actions with adequate data to estimate GHG 
emissions on a unit basis, combustion emissions accounted for more than 
70 percent of GHG emissions in all cases, more than 80 percent in 8 of 
the 10 cases, and more than 90 percent in 5 of the 10 cases.
---------------------------------------------------------------------------

    \67\ ``A Summary Review of Recent PSD Permitting Activity for 
``Anyway Source'' Categories and the Potential GHG-Emitting Units 
and Processes within Those Categories.'' Prepared by EPA staff, 
March 2015.

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

[[Page 68131]]

3. GHG Emissions Levels for Combustion Units
    Once we had an understanding of the characteristics of ``anyway 
source'' permitting actions specially, the prevalence of combustion 
units as the primary GHG-emitting sources in these PSD permits based on 
the permitting review described in Section V.D.2 of this preamble, we 
then focused on identifying the level of GHG emissions associated with 
the combustion units most likely to be part of future PSD-triggering 
projects. From our review of ``anyway source'' PSD permits, we found 
that most of the projects involved some combination of turbines, 
boilers, process heaters/furnaces, and stationary IC engines.\68\ Most 
of the units were either natural gas or diesel-fired, with a smaller 
number of biomass-fueled units. Natural gas-fired units predominated in 
the larger combustion categories of turbines and boilers. This finding 
is consistent with the projections from the EPA's Boiler maximum 
achievable control technology (MACT), which shows over 94 percent of 
projected industrial boilers and process heaters to be natural gas-
fired units.\69\
---------------------------------------------------------------------------

    \68\ ``A Summary Review of Recent PSD Permitting Activity for 
``Anyway Source'' Categories and the Potential GHG-Emitting Units 
and Processes within Those Categories.'' Prepared by EPA staff, 
March 2015.
    \69\ Memorandum from Eastern Research Group, Inc. to Brian 
Shrager, EPA, ``Revised New Unit Analysis Industrial, Commercial, 
and Institutional Boilers and Process Heaters National Emission 
Standards for Hazardous Air Pollutants--Major Source,'' November 
2011.
---------------------------------------------------------------------------

    In order to estimate the level of GHG emissions that correlated 
with the type and size of combustion units that are most likely to 
trigger PSD for ``anyway sources,'' we needed to equate GHG emissions 
with those from an appropriate non-GHG pollutant SER that would trigger 
PSD applicability. From our review of permit data, we identified that 
the combustion units most often occurring in ``anyway sources'' PSD 
permits were commonly triggering PSD for emissions of NOX. 
We determined that the use of the NOX SER would be a 
reasonable and appropriate value to use as the basis for estimating 
equivalent GHG emissions associated with these ``anyway source'' 
combustion units. A full description of this analysis is provided in 
the docket for this rulemaking.\70\
---------------------------------------------------------------------------

    \70\ ``Estimating Equivalent GHG Emissions Levels based on the 
PSD NOX SER Value.'' Prepared by EPA staff, September 
2015.
---------------------------------------------------------------------------

    The basic premise of this analysis was to identify a theoretical 
minimum GHG emissions level that equates to the existing NOX 
SER level (i.e., 40 tpy) for different combustion unit types. We could 
then consider the merits, in the context of meeting the de minimis 
principles, of aligning GHG BACT review on similar-sized combustion 
unit projects that would be otherwise requesting PSD review for non-GHG 
pollutants. From a theoretical standpoint alone, such an alignment 
would optimize the emissions-reduction benefits available through the 
BACT review process with a marginal increase in permitting burden 
program-wide for both permitting authorities and sources (the 
incremental increase in burden from the BACT review for an additional 
pollutant).
    We identified NOX as the most appropriate surrogate 
``anyway'' pollutant with which to compare the GHG emissions level. 
NOX is commonly emitted in significant quantities from the 
types of combustion units that are expected to be covered in most of 
the future PSD permits. These are new electricity generation, large 
natural gas and diesel-fired turbines, boilers, process heaters, 
furnaces, and IC engines. We did not consider coal-fired units in 
designing the surrogate analysis because projections of future boiler 
and process heater units from the EPA's Boiler MACT (78 FR 7138, 
January 31, 2013) and EGU NSPS (80 FR 64510, October 23, 2015) 
rulemakings show little, if any, new coal-fired capacity as part of 
projected new construction.\71\
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    \71\ Memorandum from Eastern Research Group, Inc. to Brian 
Shrager, EPA, ``Revised New Unit Analysis Industrial, Commercial, 
and Institutional Boilers and Process Heaters National Emission 
Standards for Hazardous Air Pollutants--Major Source,'' November 
2011.
---------------------------------------------------------------------------

    We investigated the possibility of using alternative surrogate 
pollutants for performing the equivalency analysis but found little 
value in pursuing these other options. For various reasons, these other 
pollutants did not correlate well with estimating equivalent GHG 
emissions from the combustion unit sources that represent the largest 
proportion of the sources that have been permitted for GHG. For 
example, CO is not a good surrogate since its emissions are typically 
inversely related to the amount of CO2 emitted from 
combustion, the former representing more incomplete combustion 
conditions and the latter more complete combustion. Also, since the CO 
SER level is relatively high compared to other pollutants (100 tpy), 
equating CO2 emissions to CO levels would result in a GHG 
SER level well above 100,000 tpy, which would not adequately capture 
significant projects that are otherwise subject to permitting for other 
non-GHG combustion pollutants based on our knowledge of GHG permitting 
for ``anyway sources'' that occurred under the GHG Tailoring Rule. PM 
is also a combustion pollutant, but it is emitted in very small 
quantities from natural gas units and PM often does not trigger PSD 
review on its own. Therefore, as a surrogate, PM would not adequately 
capture significant projects involving natural gas fired units, which 
are anticipated to comprise a large proportion of future PSD permitted 
units. Volatile organic compounds (VOCs) are emitted from a large 
variety of processes, many of which do not involve combustion units or 
have associated CO2 emissions, and therefore is not well 
suited as the basis for developing a representative, surrogate GHG 
level.
    Our equivalency analysis used the ratio of the emission factors of 
GHG to NOX for each applicable unit type.\72\ The ratio was 
then used to calculate the equivalent emissions of GHG, on a PTE) 
basis, for a 40 tpy NOX emission level for each unit type. 
The GHG-to-NOX ratio varied based on the unit types, which 
was expected since the emission factors for NOX, and to a 
lesser extent CO2, vary among the unit types and their 
control configurations. The underlying emission factors used for the 
surrogate analysis were selected to best represent the most likely 
configurations for newly installed units at PSD permitted facilities.
---------------------------------------------------------------------------

    \72\ Estimating Equivalent GHG Emissions Levels based on the PSD 
NOX SER Value.'' Prepared by EPA staff, September 2015.
---------------------------------------------------------------------------

    We estimated the following GHG emissions based on our equivalency 
analysis. For natural gas-fired turbines, the range was 50,346 to 
425,655 tpy CO2e, with an average of 186,537 tpy 
CO2e across configurations. For large (greater than 100 
MMBtu/hr) natural gas boiler/process heaters/furnaces, the range was 
34,302 to 63,188 tpy CO2e, with an average of 48,504 tpy 
CO2e across configurations. For small (less than 100 MMBtu/
hr) natural gas boilers/process heaters/furnaces, the range was 48,023 
to 150,072 tpy CO2e, with an average of 98,047 tpy 
CO2e across configurations. The resulting equivalency level 
for GHGs was greater for the smaller boiler category since the ratio of 
GHG to NOX in the emission rate was greater; in other words, 
for the small boiler category, each ton of NOX emissions 
correlated with more tons of GHG emissions than for the large boiler 
category. For biomass boilers, the result was 78,210 tpy 
CO2e based on average factor for wood residue, including 
bark and wet wood. For large (greater than 500 horsepower (HP)) natural 
gas-fired stationary IC engines, the result was

[[Page 68132]]

19,000 tpy CO2e. For large (greater than 750 HP) diesel-
fired stationary IC engines, the result was 17,529 tpy CO2e. 
The average result across all ranges and units was 98,333 tpy 
CO2e.\73\
---------------------------------------------------------------------------

    \73\ ``Estimating Equivalent GHG Emissions Levels based on the 
PSD NOX SER Value.'' Prepared by EPA staff, September 
2015
---------------------------------------------------------------------------

    It is important to note that the levels of GHG equivalency shown 
earlier provide an approximate measure of the theoretical minimum level 
of GHG emissions that could be associated with adding a particular type 
of combustion unit with emissions that just exceed the NOX 
SER level of 40 tpy. This does not necessarily mean that applying BACT 
for GHGs to projects of a certain size would yield greater than a de 
minimis benefit. This analysis is simply another data point to inform 
the identification of a SER level for GHGs where the confluence of 
``anyway source'' PSD projects and GHG reduction benefits is 
meaningful. The equivalent GHG emissions level represents emissions 
from a theoretical project that adds a combustion unit(s) that emits 
just over 40 tpy NOX. However, based on what we saw in our 
review of ``anyway source'' permits described in Section V.D.2 of this 
preamble, the likelihood of such a project is not high because, in 
cases where the NOX emission increase is close to the 
NOX SER level, and where it is considered a practical 
operating condition for the unit involved (such as smaller units), the 
applicant very often accepts PTE limits to avoid triggering PSD at all.
    Also, as we have seen in our review of actual permits, it is more 
likely that a PSD-permitted project would have NOX emissions 
well in excess of the 40 tpy NOX SER level, due to the 
addition of multiple combustion units or the sheer size of the unit 
itself, such as a power plant turbine or steam-generating unit. In 
these more typical PSD scenarios, GHG emissions would be multiple times 
higher than the values shown earlier. Although our review of actual 
samples of PSD permits revealed few cases where projects involving 
these units would have GHG emissions just above these equivalent 
NOX SER equivalent levels, these equivalency levels have 
value in helping us understand and establish a marker point for the 
theoretical minimum level of GHG emissions that would be associated 
with particular unit types. It is also useful to look at the results 
above in light of the type of unit involved. As shown earlier, 
stationary IC engines have an equivalent GHG emission ratio below the 
30,000 tpy CO2e level. Most of these IC engines units 
typically show up in one of two ways in ``anyway source'' PSD permits: 
(1) As associated equipment (e.g., emergency backup generator or fire 
pump engine) where there is a large combustion unit such as a turbine 
or boiler that is principally responsible for triggering the permitting 
action; or (2) in multiple-unit configuration generator sets (e.g., 10 
or more large IC engines linked together for electricity production). 
Unlike the addition or modification of a large turbine unit where a 
single unit can trigger a PSD action, it is a much less common scenario 
where a single IC engine would be the triggering event for a PSD permit 
since such units generally consume much less fuel and generate much 
lower emissions, non-GHG or GHG, than larger boiler and turbine units.
    Our reviews and analyses to this point have clearly identified the 
importance of combustion units as both a triggering event for ``anyway 
source'' permitting actions for conventional pollutants and also as a 
critical GHG emission component of these projects. The next section in 
this preamble describes our review of non-combustion related GHG 
emission sources, and how they may also contribute to GHG emissions for 
certain PSD projects associated with certain source categories.
4. Non-Combustion Related GHG Emissions
    We conducted an additional evaluation to identify any GHG source 
categories that we might not have identified in our review of 
permitting activity described in earlier sections of this preamble. We 
were particularly focused on process-related, GHG-emitting units which 
could potentially be subject to the GHG BACT requirement at de minimis 
levels below 75,000 tpy CO2e. Our review of PSD permits 
issued to date with GHG limits had shown a very small percentage of PSD 
permits and GHG BACT reviews that have been triggered based principally 
on non-combustion units or processes. We wanted to better understand 
the types and sizes of GHG-emitting units and processes that might 
possibly fall into non-combustion source categories to ensure that we 
did not miss potential non-trivial reductions at the proposed GHG SER 
level.
    One category we looked at specifically was landfills. Municipal 
waste landfills are important non-combustion, CH4-emitting 
sources, and are the third largest contributing source category to 
national CH4 emissions behind enteric fermentation and 
natural gas systems.\74\ A landfill project can trigger PSD 
applicability as an ``anyway source'' if its increased emissions exceed 
the PSD SER level of 50 tpy for NMOC, the applicable NSR regulated 
pollutant for municipal waste landfills. A landfill emitting just over 
50 tpy NMOC would emit just over 190,000 tpy of CH4 on a 
CO2e basis, well in excess of the current 75,000 tpy 
CO2e GHG permitting level.\75\ Thus, there is high 
confidence that any landfill project exceeding the PSD SER level for 
NMOC will likely exceed any GHG SER option below this 190,000 tpy 
CO2e level.
---------------------------------------------------------------------------

    \74\ ``Inventory of U.S. Greenhouse Gas Emissions and Sinks: 
1990-2013,'' Table ES-2. Document No. EPA 430-R-15-004. April 15, 
2015. http://www3.epa.gov/climatechange/ghgemissions/usinventoryreport.html.
    \75\ Memorandum from H. Ward, EPA/SPPD, to J. Mangino, EPA/AQPD, 
re: Methane to NMOC ratio at landfills. June 17, 2014.
---------------------------------------------------------------------------

    We analyzed other source categories with significant non-combustion 
related GHG emissions based on the EPA's national GHG inventory.\76\ 
The inventory included source categories with facilities that had a 
likelihood of triggering PSD based on our review of past permits. 
Unlike landfills, these categories do not have a source-specific, 
regulated NSR pollutant that can be equated with GHG emissions and 
compared to a GHG SER option. The categories we looked at included 
cement production, glass production, nitric acid production, 
electronics manufacturing, petroleum refineries, natural gas systems, 
underground coal mines and industrial wastewater treatment. For this 
effort, we analyzed GHG emissions data for these source categories that 
were submitted under the GHGRP. A technical support document describing 
the analysis and results is provided in the docket.\77\ In the 
following discussion, we summarize the analysis and some of our key 
findings.
---------------------------------------------------------------------------

    \76\ ``Inventory of U.S. Greenhouse Gas Emissions and Sinks: 
1990-2013,'' Table ES-2. EPA 430-R-15-004. April 15, 2015. http://www3.epa.gov/climatechange/ghgemissions/usinventoryreport.html.
    \77\ Memorandum from T. Parise and S. Edgerton, EC/R 
Incorporated, to J. Montanez and J. Mangino, EPA, ``Analysis of 
Greenhouse Gas Emissions Data Collected Under Selected Subparts of 
the Greenhouse Gas Reporting Rule,'' September 30, 2015.
---------------------------------------------------------------------------

    For this analysis, we characterized GHG emissions at the unit level 
where available (for some categories only facility level data were 
available) and compared these emissions to various actual emissions-
based thresholds (50,000 tpy CO2e, 37,500 tpy 
CO2e, 25,000 tpy CO2e, and 12,500 tpy 
CO2e) to provide an indication of the magnitude of emissions 
above each

[[Page 68133]]

threshold in the reporting population. We used actual emissions because 
that is the form in which emissions data are submitted under the GHGRP. 
We selected the actuals-based thresholds to represent possible PTE-
based levels if one were to assume something less than 100 percent 
capacity utilization. For example, at a 50 percent utilization rate, a 
37,500 tpy CO2e actuals-based level equates to a 75,000 tpy 
CO2e PTE-based level and a 25,000 tpy CO2e 
actuals-based level equates to a 50,000 tpy CO2e PTE-based 
level. Utilization rates can vary from site to site, and across and 
within industry types, but we believe the actuals-based thresholds we 
chose for the analysis provide a good representation of the possible 
range of equivalent PTE CO2e emissions levels.
    Our non-combustion unit analysis across all the source categories 
in the analysis showed a consistent profile of a high percentage of GHG 
emissions associated with a relatively small percentage of high-
emitting units and facilities. Also, the variation in the amount of 
total GHG emissions covered across the analysis thresholds was not 
great. Across all categories, this varied from 95 percent of GHG 
emissions at the 12,500 tpy CO2e actuals-based threshold to 
88 percent of GHG emissions at the 50,000 tpy CO2e actuals-
based threshold. We found that for a number of the source categories 
there are particular subcategories of processes or units that are 
responsible for a majority of the non-combustion related GHG emissions. 
Also, within those particular subcategories there tend to be a 
relatively small percentages of large emitting units that are 
responsible for most of those emissions. A summary of all the source 
category analyses is provided in the supporting technical document 
included in the docket for this rulemaking.\78\
---------------------------------------------------------------------------

    \78\ Memorandum from T. Parise and S. Edgerton, EC/R 
Incorporated, to J. Montanez and J. Mangino, EPA, ``Analysis of 
Greenhouse Gas Emissions Data Collected Under Selected Subparts of 
the Greenhouse Gas Reporting Rule,'' September 30, 2015.
---------------------------------------------------------------------------

    Overall, this analysis gave us an indication of the relative size 
of emissions from GHG- emitting processes and units in some key non-
combustion related GHG source categories. Our analysis showed that, 
even when not including direct combustion emissions from these sources 
and isolating only the non-combustion related GHG-emitting units or 
processes, a high percentage of GHG emissions would be covered at the 
current GHG permitting threshold level of 75,000 tpy CO2e on 
PTE basis. Most PSD projects involving sources in these non-combustion 
categories, such as refineries and cement production facilities, would 
also likely include combustion units with substantial associated GHG 
emissions. This would increase the overall GHG emissions from such 
projects.
5. Potential BACT Techniques Applicable to GHG Emission Sources
    To evaluate the value obtained through the BACT review process, we 
looked at the emission reduction potential of control techniques that 
might be considered as BACT for a particular type of unit/process. The 
following section describes the most common BACT techniques available 
for reducing GHG emissions from units that have been, and will continue 
to be, part of ``anyway source'' PSD projects.
    Under the CAA and applicable regulations, a PSD permit must contain 
emissions limitations based on application of BACT for each regulated 
NSR pollutant. CAA section 165(a)(4); 40 CFR 52.21(j). An analysis of 
BACT for GHGs should be conducted in the same manner as for any other 
PSD regulated pollutant. The CAA and corresponding implementing 
regulations require that a permitting authority conduct a BACT analysis 
on a case-by-case basis. The permitting authority must evaluate the 
amount of emissions reductions that each available emissions-reducing 
technology or technique would achieve, as well as the energy, 
environmental and economic impacts and other costs associated with each 
technology or technique. Based on this assessment, the permitting 
authority must establish a numeric emissions limitation that reflects 
the maximum degree of reduction achievable for each pollutant subject 
to BACT through the application of the selected technology or 
technique. However, if the permitting authority determines that 
technical or economic limitations on the application of a measurement 
methodology would make a numerical emissions standard infeasible for 
one or more pollutants, it may establish design, equipment, work 
practices or operational standards to satisfy the BACT requirement. 40 
CFR 52.21(b)(12).
    One overarching challenge to analyzing GHG emissions-reduction 
potential is the inherent difficulty in predicting the specific makeup 
of new construction and modification projects that will trigger PSD in 
general. Another challenge is that the BACT control requirement is 
determined on a case-by-case basis, based on site-specific factors at 
the source in question. Thus, even if we could roughly predict what 
sources are likely to be subject to PSD and required to get a permit, 
it is still challenging to calculate the emission reductions associated 
with application of BACT to GHG emissions from a particular source.
    The emissions-reduction benefits that may result from the 
application of BACT can vary widely, depending on the specific 
configuration of the project and source, and the results of the case-
specific BACT review. Thus, the variation in project composition and 
case-specific BACT review not only affects the ability to generate 
``typical'' emissions increases and reductions from BACT, but, in turn, 
also severely hinders any ability to relate this to health or 
environmental benefits. Further complicating the ability to quantify 
the benefit of BACT is that the emission reductions would have to be 
measured from some alternative baseline, i.e., what the facility would 
have emitted absent the application of the BACT technique selected 
through the review process. After predicting the project components 
subject to BACT review, establishing what the alternative baseline 
would have been absent application of a BACT technique requires 
specific information about each facility site, the source's development 
options and what the potential emissions would have been absent 
application of BACT. The alternative future baseline scenarios for any 
given facility can vary based on the planned operations and practices. 
Thus, it is difficult to project a future project's PTE level with any 
specificity within or across industries.
    In light of these challenges, we focused on the possible GHG 
control techniques that could apply to GHG-emitting units/processes 
that other parts of our analysis indicated would most likely be subject 
to GHG BACT review at ``anyway sources.'' This review informed our 
consideration of the meaningfulness of the GHG BACT review for units 
and sources that might be covered at various GHG SER levels.
    Recognizing that larger combustion units will likely be the most 
predominant GHG emission source type at ``anyway source'' PSD projects, 
one finding from this review was that energy efficiency measures are 
currently the most common BACT strategy for these units. In addition, 
we found that larger combustion units provide the best opportunity for 
achieving GHG reductions through case-by-case BACT review. Sources with 
small combustion units or other sources of GHGs provide limited 
opportunities for achieving additional GHG reductions through the BACT 
review.

[[Page 68134]]

    The sections that follow discuss the most common types of BACT 
techniques that have been evaluated through GHG BACT review at ``anyway 
sources'' and implemented by sources that obtained permits. These are 
not intended to represent every possible category of BACT for GHGs but 
reflect the techniques most commonly evaluated and applied across a 
variety of ``anyway sources.'' In specialized cases, there are unique 
GHG control techniques available for industry-specific processes that 
emit GHGs, such as those that can be implemented at nitric acid plants 
to reduce nitrous oxide emissions from the ammonia oxidation step. 
However, based on our review of permitting data at ``anyway sources'' 
and considering the nature of units emitting GHGs below 75,000 tons per 
year, we expect for the near to medium term that energy efficiency 
measures will continue to be the most predominant GHG BACT mitigation 
strategy applicable to ``anyway sources'' that increase emissions of 
GHGs by less than 75,000 tons per year (on a CO2e basis). 
Therefore, the emissions-reduction achievable with this technique at 
sources that have the potential to emit less than 75,000 tons per year 
was an important consideration in developing our proposed GHG SER.
a. Energy Efficiency Measures
    While energy efficiency measures can reduce emissions of all 
combustion-related pollutants, they are particularly important for GHGs 
for two reasons: (1) GHG emissions from combustion sources 
(particularly CO2) make up a large majority of the GHG 
inventory from the industrial facilities most often subject to PSD 
permitting; and (2) the use of add-on controls to reduce GHG emissions 
is expected, for the foreseeable future, to be a viable BACT option at 
a only small set of the largest GHG emission sources. To date, most GHG 
BACT determinations for combustion sources have relied on some 
combination of energy efficiency measures. Therefore, it is important 
to consider the implementation, effectiveness and value of energy 
efficiency measures as applied through the BACT process to combustion 
sources that may trigger the GHG BACT requirement at different GHG SER 
option levels. The following is a description of efficiency improvement 
measures that have been applied to industrial combustion units.
    The EPA has identified a number of energy efficiency measures, many 
of which have been utilized to date to satisfy GHG BACT requirements in 
actual PSD permits. These procedures include: \79\
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    \79\ ``Available and Emerging Technologies for Reducing 
Greenhouse Gas Emissions from Industrial, Commercial, and 
Institutional Boilers,'' Office of Air Quality Planning and 
Standards, EPA. October 2010. http://www.epa.gov/nsr/ghgdocs/iciboilers.pdf.
---------------------------------------------------------------------------

     High efficiency burners.
     Combustion and boiler performance optimization.
     Combustion system instrumentation and controls.
     Air preheat and economizers.
     Turbulators for firetube boilers.
     Boiler insulation.
     Minimization of air infiltration.
     Boiler blowdown heat exchanger.
     Condensate return system.
     Refractory material selection.
     Minimization of gas-side heat transfer surface deposits.
     Steam line maintenance.
    In many cases, the impacts of these measures were highly site-
specific and the benefits varied based on the site-specific 
configuration and operational conditions of the unit. These measures 
were typically associated with a GHG emission limit, steam generation 
rate or required maximum fueling rate for the combustion units 
involved. For most of these measures, site-specific conditions and 
economic variables must be addressed to determine whether they would be 
technically and economically viable. Also, the absolute benefits for 
any given facility or project undergoing PSD BACT review will depend on 
the relative improvement over some baseline unit efficiency that might 
have been used absent the GHG BACT review process.
    To give some perspective on the potential benefits of these 
measures, a new natural gas-fired industrial boiler unit will generally 
have a baseline thermal efficiency in the 82 to 85 percent range.\80\ 
Implementing a mix of the additional measures above, it is possible to 
obtain thermal efficiencies close to 90 percent.\81\ Thus, looking at 
the difference between the baseline efficiency of a new boiler unit and 
a maximum efficiency around 90 percent, we can identify a maximum GHG 
reduction potential of approximately 7 percent.
---------------------------------------------------------------------------

    \80\ ``Evaluating Efficiency and Compliance Options for Large 
Industrial Boilers in California's Changing Local and State 
Regulatory Environment,'' 2009 ACEEE Summer Study on Energy 
Efficiency in Industry.
    \81\ ``Climate Leaders GHG Offset Protocol: Industrial Boiler 
Efficiency (Industrial Boiler Applications),'' EPA, Climate 
Protection Partnerships Division, August 2008, Version 1.
---------------------------------------------------------------------------

    In evaluating the value of BACT review, it is also helpful to look 
at the type and size of combustion unit involved. Industrial boilers, 
process heaters and furnaces of the size typically seen as part of 
``anyway source'' projects (e.g., greater than 50 MMBtu/hr heat input 
rating) are not generally purchased as an ``off-the-shelf'' item. These 
units can be site-designed in a way that enables consideration and 
incorporation of a combination of the measures shown earlier. The BACT 
review is particularly valuable for these types of units as it is based 
on case-by-case review of technology implementation and cost 
considerations. Manufacturers have models that they can construct based 
on the specifications provided by a facility design engineer. To 
achieve the desired performance, the engineer will specify the desired 
design output capacity, steam pressure and/or temperature requirements, 
and emission thresholds that the boiler unit must meet. The design 
engineer can then provide the project-specific boiler specifications to 
the boiler manufacturer who will then apply the correctly sized boiler 
components to its boiler plan and engineered specifications before 
running a computer model to estimate the resulting operational 
characteristics, including thermal efficiency and emissions of the 
resulting boiler.\82\
---------------------------------------------------------------------------

    \82\ ``Boiler Efficiency Projects-Development of Issues Papers 
for GHG Reduction Project Types: Boiler Efficiency Projects,'' 
Prepared for the California Climate Action Registry, January 7, 
2009. http://www.climateactionreserve.org/wp-content/uploads/2009/03/future-protocol-development_boiler-efficiency.pdf.
---------------------------------------------------------------------------

    Smaller combustion units, such as smaller industrial and commercial 
size boilers and stationary IC engines, are typically purchased ``off 
the shelf'' and meet manufacturer's efficiency standards. Minimum 
efficiency requirements for these boilers are mandated to manufacturers 
by the federal government (U.S. Department of Energy (DOE) and the 
EPA), and some states have minimum efficiency requirements for boilers 
that are allowed to be sold in the market. Stationary IC engines that 
are part of ``anyway source'' PSD projects typically have to meet NSPS 
requirements for non-GHG pollutants, which in many cases form the basis 
for the BACT requirement for those, resulting in purchase decisions 
that include newer, highly-efficient engines that are low-emitters for 
all combustion pollutants, including GHGs. The range in performance 
efficiency across manufacturers for these new engines is typically 
within a couple of percentage points.
    Beyond small differences in efficiencies between manufacturers and 
model types, the ability to achieve

[[Page 68135]]

additional GHG reductions at these smaller ``off-the-shelf'' type 
units, whether they are small boilers or IC engines, is difficult for a 
couple of reasons. First, implementing a number of the efficiency 
measures described previously requires site-specific design and 
construction criteria, more typically associated with larger scale 
projects where these measures can be part of unit design and 
manufacture. Second, ``off-the-shelf'' units typically cannot be 
substantially modified or tampered with in order to be guaranteed to 
meet their certified performance standards. Many of the energy 
efficiency measures described previously involve significant additions 
and/or modifications to the basic unit, which also may not be 
technically or economically viable for smaller unit applications.
b. Carbon Capture and Storage
    For the purposes of the initial step of a BACT analysis for GHGs, 
the EPA classifies CCS as an add-on pollution control technology that 
is ``available'' for facilities emitting CO2 in large 
amounts, including fossil fuel-fired power plants and industrial 
facilities with high-purity CO2 streams (e.g., hydrogen 
production, ammonia production, natural gas processing, ethanol 
production, ethylene oxide production, cement production and iron and 
steel manufacturing).\83\ CCS is a promising technology with the 
potential for substantially reducing CO2 emissions. In 
October 2015, EPA issued a final NSPS\84\ for new fossil-fueled power 
plants. The EPA found that a highly efficient supercritical boiler 
implementing partial CCS is the Best System of Emission Reduction 
(BSER) for newly constructed steam generating units.\85\ The final NSPS 
requires that newly constructed steam generating EGUs meet an emission 
standard consistent with the implementation of a CCS system capturing 
less than 30 percent of the CO2 emissions from the 
plant.\86\ This level of control is referred to as ``partial CCS.''\87\ 
For units subject to this standard, this NSPS standard sets the minimum 
requirements for a BACT emission limit. 42 U.S.C. 7479(3) (``In no 
event shall application of [BACT] result in emissions of any pollutants 
which will exceed the emissions allowed by any applicable standard 
established pursuant to section 7411 or 7412 . . .''). However, a PSD 
BACT analysis is a case-by-case analysis that considers several factors 
before determining the ``maximum degree of reduction'' that is 
achievable for a particular source. In the context of some PSD permit 
applications, such as those that predate the October 2015 NSPS or those 
for other types of sources, CCS has not been selected as BACT because 
it was not found to be technically feasible or the costs of CCS have 
made the application of the technology economically unachievable.\88\ 
CCS is most likely to be a viable BACT candidate for projects involving 
very large CO2 emission sources that already trigger GHG 
BACT review at the current 75,000 tpy CO2e GHG permitting 
level. CCS technologies may not be technically feasible or economically 
achievable for lower emitting stationary sources--i.e., those below the 
75,000 tpy CO2e GHG threshold--and for sources that emit 
CO2 in a dilute emission stream.
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    \83\ ``PSD and Title V Permitting Guidance for Greenhouse 
Gases,'' EPA, Office of Air Quality Planning and Standards, Research 
Triangle Park, NC, EPA-457/B-11-001, p. 32, March 2011.
    \84\ Final Rulemaking titled ``Standards of Performance for 
Greenhouse Gas Emissions from New Stationary Sources: Electric 
Utility Generating Units'' (80 FR 64513, October 23, 2015).
    \85\ For newly constructed intermediate and baseload stationary 
combustion turbines, the final NSPS requires meeting an emission 
standard consistent with the performance of modern, efficient 
Natural Gas Combined Cycle (NGCC) technology.
    \86\ EPA Fact Sheet on Carbon Dioxide Capture and Sequestration, 
http://www3.epa.gov/climatechange/ccs/.
    \87\ ``Partial CCS'' is the implementation of CCS technology to 
capture only a portion of the CO2 emission from a 
stationary source--typically some amount less than 90 percent of the 
CO2 and often by treating only a portion of the sources 
emission stream. ``Full CCS'' is the capture of more than 90 percent 
of the sources CO2--typically accomplished by treating 
the sources entire emission stream.
    \88\ However, this was not always the outcome in PSD permits 
that pre-date the October 2015 NSPS. For example, in November 2014, 
the EPA issued a PSD permit for GHGs for the Nuevo Midstream, LLC--
Ramsey Gas Plant in Orla, Reeves County, Texas that assumes use of 
partial CCS as BACT to capture 35 percent of the CO2 
emissions from the Ramsey IV and VI plants amine still vents.
---------------------------------------------------------------------------

c. Gas Recovery and Utilization
    The collection and combustion or utilization of either industrial 
process waste gas or biogas, both streams which can contain 
CH4, is a GHG BACT control technique that has been required 
as BACT in PSD permits addressing GHG emissions at oil and gas 
production facilities, refineries, landfills, and chemical plants. 
Flares are commonly used to control VOC emissions as part of ``anyway 
source'' PSD permits for projects that include a process that produces 
the waste gas emissions that must be controlled. Combustion of the 
waste gas stream avoids simply venting the VOC emissions to the 
atmosphere, and as described later in this preamble can also have a 
beneficial impact on the CO2e emissions profile for the 
sources. Flares are used extensively to dispose of: (1) Purged and 
wasted products from refineries, (2) unrecoverable gases emerging with 
oil from oil wells, (3) vented gases from blast furnaces, (4) unused 
gases from coke ovens, and (5) gaseous wastes from chemical industries. 
Id. From our review of ``anyway source'' PSD permitting activity for 
these types of industries, these waste gas streams are usually 
coincidental to a larger project component driving the PSD 
applicability for the project. As an example, for an iron and steel 
facility, the addition of a blast furnace would likely trigger 
applicability for PSD for a number of criteria pollutants, and also 
have significant GHG emissions in terms of direct combustion related 
CO2 emissions (large blast furnace units typically will 
exceed 75,000 tpy CO2e emissions). Associated with this 
furnace unit, however, are likely to be off-gas streams, possibly 
containing CH4 gas, which also then become subject to BACT 
review as part of the overall project.
    A common method for minimizing emissions from flares is through 
good combustion practices. When these waste gas streams are combusted 
in either a flare or a thermal oxidizer, CH4 in the waste 
gas stream is converted to CO2, typically at efficiency 
levels greater than 96.5 percent.\89\ Since CO2 is a GHG 
with less radiative force than CH4, this technique produces 
a lower overall GHG emissions increase on a CO2e basis. 
Assuming a combustion efficiency of 96.5 percent and CH4 
being the principal GHG of concern in the waste gas stream, the 
combustion process can result in reductions of CO2e 
emissions of approximately 86 percent (assumes a GWP value of 25 for 
CH4).
---------------------------------------------------------------------------

    \89\ AP-42, Fifth Edition, Volume I, Chapter 13: Miscellaneous 
Sources, Section 13.5 ``Industrial Flares,'' EPA, April 2015. http://www.epa.gov/ttn/chief/ap42/ch13/final/C13S05_4-20-15.pdf.
---------------------------------------------------------------------------

    Utilization of process waste gas, which often can contain 
CH4, for on-site energy or off-site sale and use can provide 
additional GHG benefits beyond simply flaring. Like flaring, the 
collection and utilization of the waste gas can serve as a BACT control 
technique that effectively converts CH4 to CO2 
through a combustion unit with the net benefits realized on a 
CO2e emissions basis. In addition, utilization of the gas 
has the potential to avoid additional GHG emissions associated with 
supplemental on-site fossil-fuel usage.
    For example, at sites such as natural gas processing plants, 
refineries, or at

[[Page 68136]]

other facilities where the collected waste gas can be used to fuel on-
site equipment or made available for sale or other uses, there may be 
alternatives to simply flaring the gas. In addition, the on-site use of 
the collected gas in lieu of additional fossil-fuel use can also lead 
to a reduction in the facility's GHG emissions, although GHG emissions 
from any off-site sale and use of the collected gas are completely 
excluded from the seller facility's calculated GHG emissions.
    Another example where gas collection and utilization has 
applications for GHG BACT is landfills, where large amounts of 
CH4 gas generated through waste decomposition can, at 
properly designed sites, be collected through biogas collection wells 
and used to run IC engines or microturbines that produce energy for 
onsite usage or sale to the electric grid. As mentioned earlier in 
Section V.D.4 of this preamble, landfills that are subject to PSD 
permitting for their NMOC emissions will likely have CH4 
emissions well in excess of 75,000 tpy CO2e, such that BACT 
strategies involving gas utilization and recovery may be found 
applicable for both non-GHG and GHG emissions from the landfill.
d. Leak Detection and Repair Measures
    Leak detection and repair (LDAR) systems have been used as GHG BACT 
controls for both fugitive CH4 losses and SF6 
emission losses from electrical equipment. Typically, and as previously 
described in more detail in the summary of our review of ``anyway 
source'' permits in Section V.D.2 of this preamble, these fugitive 
sources were associated with a PSD project that involved a larger 
stationary source unit or process, such as combustion unit 
installations at a power plant or a large gas or oil production/process 
unit that contained associated fugitive release points, such as piping 
or valves. The GHG reduction potential for LDAR systems can be highly 
variable depending on the site-specific design and implementation 
procedures. The EPA has identified VOC applications for LDAR systems 
that can achieve VOC emissions reductions in the 45 to 70 percent range 
for various equipment types (since CH4 would typically be 
part of the same waste gas stream, these level of reductions in 
fugitive VOC emissions would be expected for fugitive CH4 
emissions as well).\90\ The emission sources for CH4 where 
these methods are deployed are generally CH4 fugitive losses 
from associated piping and natural gas delivery networks, or equipment 
leaks at compressor or pumps that move natural gas product. These 
sources tend to be most commonly encountered at PSD-triggering projects 
involving the oil and gas sector, primarily in the production, 
processing and transmission subsectors. However, anywhere combustion 
units utilize natural gas as fuel, they can also have associated leaks 
in the piping network associated with the unit configuration. In both 
these general cases where LDAR has been selected as a BACT for GHG 
emissions dominated by CH4, the fugitive CH4 
losses have been ancillary to the main GHG emission points in the 
project, typically a single or combination of large fossil fuel 
combustion units. At all of the ``anyway source'' permits we have 
reviewed that required LDAR as GHG BACT, combustion units triggered the 
BACT requirement for conventional pollutants as well as GHGs 
(principally CO2 from combustion). The fugitive 
CH4 losses associated with the combustion unit projects were 
included in the BACT review for the GHG emissions increases for the 
project.
---------------------------------------------------------------------------

    \90\ ``Leak Detection and Repair: A Best Practices Guide.'' EPA-
305-D-07-001. EPA Office of Compliance, Office of Enforcement and 
Compliance Assurance, October 2007.
---------------------------------------------------------------------------

    Another application of LDAR has been in the power plant sector. In 
this sector, fugitive leaks of SF6 gas from ancillary 
circuit breaker equipment associated with power plant projects have 
been subject to GHG BACT review where the principle PSD-triggering 
event involved the installation of power-generating combustion units. 
SF6 is used as an electrical insulator and interrupter in 
equipment that transmits and distributes electricity.\91\ Fugitive 
emissions of SF6 can escape from gas-insulated substations 
and switchgear through seals, especially from older equipment. The gas 
can also be released during equipment manufacturing, installation, 
servicing and disposal. The EPA estimates that where consistently 
implemented in the power plant sector, applications of LDAR systems 
could reduce SF6 emissions by 20 percent.\92\
---------------------------------------------------------------------------

    \91\ ``Inventory of U.S. Greenhouse Gas Emissions and Sinks: 
1990-2013,'' Section 4.24. EPA 430-R-15-004. April 15, 2015. http://www3.epa.gov/climatechange/ghgemissions/usinventoryreport.html.
    \92\ SF6 Emissions Reduction Partnership for Electric 
Power Systems, http://www3.epa.gov/highgwp/electricpower-sf6/basic.html.
---------------------------------------------------------------------------

6. Costs of GHG BACT Review
    We have estimated that it costs an individual source approximately 
$24,000 to undergo GHG BACT review for a PSD modification project and 
the associated title V permit revision costs to include those 
requirements in the facility's title V permit.\93\ These costs include 
preparing the permitting application, supporting analyses and various 
other aspects of the review and submission of the permit application as 
it pertains to GHGs. These estimates do not include what can be 
significant additional costs for the GHG BACT control that is 
ultimately adopted and implemented by the permitted facility since 
BACT, and ultimately the costs, can vary from site to site based on 
site specific factors that are difficult to predict with any 
specificity or certainty in advance. We also estimate it costs the 
permitting authority approximately $5,000 for regulatory review and 
processing costs related to the GHG BACT review for a PSD modification 
project and the associated title V revisions costs to include those 
requirements in the facility's title V permit.
---------------------------------------------------------------------------

    \93\ Information related to the associated individual and 
programmatic burden at the proposed GHG SER level is provided in 
Section VI of this preamble.
---------------------------------------------------------------------------

E. Proposed GHG SER and Request for Comment

    After consideration of several factors, we are proposing to 
establish a GHG SER of 75,000 tpy CO2e. Establishing a de 
minimis exemption threshold requires both policy and legal judgments to 
determine what constitutes a ``gain of trivial value'' and ``pointless 
expenditure of effort.'' In an effort to identify an appropriate SER 
for GHGs, we considered the approaches that the EPA has previously used 
to identify de minimis levels for other pollutants in the PSD program, 
but we have found that a new approach is needed for GHGs. To develop 
this approach, we have considered the legal basis for establishing de 
minimis exemptions under the D.C. Circuit's Alabama Power opinion and 
the factors the Court called for the agency to consider. These include 
the context in which a SER for GHGs would apply to determine only 
whether BACT applies to the pollutant GHGs at a source that triggers 
PSD based on other pollutant emissions. Other factors we considered are 
the nature of the pollutant and the dangers caused by increases in that 
pollutant, the nature and purposes of the regulatory program, the gains 
achieved from regulating GHG emissions through the PSD program at or 
below a certain level, and administrative and implementation burdens of 
regulating at or below such levels. We developed findings relevant to 
these factors through a four-part technical analysis of GHG-emitting

[[Page 68137]]

sources, PSD permitting information, and GHG emissions reduction 
strategies likely to be considered in a BACT review for those sources.
    Based on all the information obtained from the various data reviews 
and analyses summarized in Section V.D.1 of this preamble, taking into 
account the factors mentioned previously, we are proposing a SER of 
75,000 tpy CO2e for GHGs. The following discussion describes 
how each of the key findings together led to and support our proposed 
GHG SER value of 75,000 tpy CO2e.
    First, our actual, historical experience of GHG BACT reviews 
occurring at a 75,000 tpy CO2e level for sources under Step 
1 of the Tailoring Rule provided us valuable insight into the affected 
sources and value of GHG BACT review at that permitting level. When 
considered in the context of individual sources and the collective 
population of sources subject to PSD, the degree of GHG reductions 
achievable through application of GHG controls to new sources and 
modifications that increase GHG emissions by more than 75,000 tpy 
CO2e is meaningful, and thus has more than ``trivial'' 
value. The current 75,000 tpy CO2e threshold has resulted in 
the PSD BACT requirement applying to GHGs in the vast majority of the 
actual ``anyway source'' PSD permits covering the type of units for 
which GHG BACT review would be expected to achieve meaningful emissions 
reductions. We also found that the types of GHG sources that have been 
addressed in those GHG BACT reviews represent the most important 
industry sectors in terms of national GHG emissions contribution. These 
include source categories such as power plants, refineries, chemical 
production facilities, and oil and gas production sites. While most of 
the GHG emissions from these sources, as well as the ``anyway source'' 
PSD triggering actions, are related to large, fossil-fueled combustion 
units, our investigation into non-combustion sources also revealed that 
the most important, non-combustion related GHG-emitting sources, such 
as landfills, cement plants, refineries, and nitric acid plants, have 
process emissions well in excess of the 75,000 tpy CO2e 
level. In summary, based on information from previous permitting 
decisions using the 75,000 tpy CO2e applicability level for 
GHG BACT review at ``anyway sources,'' we did not see any sources 
within major GHG source categories that were ``missing'' BACT limits 
for GHGs in permits issued to ``anyway sources,'' which would have been 
an indicator that there may be value in applying BACT to GHGs at a 
lower SER.
    In addition to finding broad coverage of sources in the major GHG 
emissions source categories using a 75,000 tpy CO2e 
threshold, we found that the ``anyway source'' permitting experience 
involving GHG BACT reviews to date since GHGs became subject to PSD has 
not imposed unreasonable administrative and enforcement burdens. State 
and local permitting authorities, as well as affected industries, have 
successfully implemented PSD permitting for GHGs at a 75,000 tpy 
CO2e threshold.
    Second, our investigation into ``anyway source'' PSD permits that 
did not go through GHG BACT review under the Tailoring Rule Step 1 
permitting level of 75,000 tpy CO2e revealed only a few 
cases where a GHG SER level below 75,000 tpy CO2e may have 
resulted in additional GHG BACT reviews. Considering the limited 
additional cases where GHG BACT review could apply at a GHG SER below 
75,000 tpy CO2e and the limited degree of emissions 
reductions that might be achieved in each case, we propose to conclude 
that the burdens of subjecting such projects to case-by-case BACT 
review for GHGs would yield a gain of trivial or no value.
    Our review revealed only a handful of PSD modification projects on 
a yearly basis nationwide that can be expected to increase GHG 
emissions in the range from 30,000 to 75,000 tpy CO2e. Based 
on our review of permitting data at ``anyway sources'' and considering 
the nature of units emitting GHGs between these values, we expect for 
the near to medium term that energy efficiency measures will continue 
to be the most predominant GHG BACT mitigation strategy that could be 
applicable to sources with the potential to emit between 30,000 and 
75,000 tpy CO2e. At a project scale, if we were to consider 
a single hypothetical, combustion-related project with a GHG emissions 
increase of 74,999 tpy CO2e (just under the 75,000 tpy 
CO2e proposed GHG SER level) and a maximum energy efficiency 
gain through GHG BACT review of 7 percent described above, the maximum 
marginal difference in GHG emissions that could result from applying 
BACT to GHGs is approximately 5,500 tpy CO2e. Given the 
limited number of projects expected in this 30,000 to 75,000 tpy 
CO2e range and the limited amount of emissions reductions 
that could theoretically be achieved at each source, from a 
programmatic perspective, there is little to be gained in terms of 
overall reduction in GHG emissions from applying GHG BACT review at a 
GHG SER level below 75,000 tpy CO2e. Thus, we propose to 
conclude that the burdens of regulation at a GHG SER level between 
30,000 and 75,000 tpy CO2e would yield a gain of trivial or 
no value from both a programmatic and individual project-level 
perspective.
    For PSD modification projects that increase GHGs by less than 
30,000 tpy CO2e, we found virtually no value in applying the 
GHG BACT requirement. We found through both our equivalency analysis 
and permitting reviews that these smaller emitting unit projects will 
typically not qualify as ``anyway source'' projects by themselves. In 
addition, we found that many smaller emissions units will often be 
pulled into the GHG BACT analysis because they are ancillary units to a 
larger combustion unit that emits well above 75,000 tpy 
CO2e; examples include emission units such as flares, 
thermal oxidizers, emergency generators, and fugitive emission leaks. 
Since the types of units adding GHGs in amounts less than 30,000 tpy 
CO2e would not likely trigger PSD at all or would already be 
covered because of other changes occurring at the same time, lowering 
the GHG threshold to 30,000 tpy CO2e would subject few, if 
any, additional projects to the GHG BACT requirements. In cases where a 
project theoretically could increase emissions of a pollutant besides 
GHGs enough to trigger PSD, the project would involve emission units 
such as IC engines. There is virtually no value obtained in conducting 
a GHG BACT review of such a unit. We found that ``off-the-shelf'' 
combustion units, such as IC engines, are generally meeting 
manufacturers' performance and efficiency compliance standards 
established by DOE and the EPA for new units with only marginal 
variations in efficiency ratings on newly purchased units. Also, we do 
not expect that GHG BACT review for IC engines would produce any 
reductions for GHGs beyond that resulting from the NSPS compliance 
standards that already exist for these new units. Thus, the gain from 
applying BACT to GHG emissions would yield a gain of virtually no value 
and be a pointless expenditure of effort. This is even more apparent 
when considered in light of the administrative burdens of conducting a 
case-by-case BACT analysis for GHGs at such sources. Thus, the EPA is 
not considering establishing a GHG SER level below 30,000 tpy 
CO2e.
    We are soliciting comment on the extent to which our proposed GHG 
SER level of 75,000 tpy CO2e reflects a level below which 
the burdens of applying the BACT requirement to GHGs would ``yield a 
gain of trivial or no value'' and

[[Page 68138]]

thus would be a ``pointless expenditure of effort'' when applied to all 
of the affected units and sources. We are also soliciting comment on 
whether a value between 30,000 and 75,000 tpy CO2e, 
specifically such as 30,000 tpy or 45,000 tpy CO2e, would 
better represent a de minimis threshold for applying the BACT 
requirement to GHGs. We encourage commenters to consider the following 
in submitting comments. Comments, arguments, and supporting data for a 
specific GHG SER level other than 75,000 tpy CO2e should 
identify a more appropriate level and explain why that specific level 
would be better. Commenters are encouraged to provide information as to 
the likely number and type of new or modified emission sources and 
units that would trigger PSD and be subject to the GHG BACT requirement 
at the suggested alternative GHG SER level. Comments should also 
address what source categories would be affected, what types of control 
technique would be considered in the GHG BACT review, the expected 
degree of GHG reductions achievable from such control techniques, and 
the anticipated burden to permitting authorities and sources of 
conducting a BACT analysis at the specific alternative level.
    In soliciting comment for a SER between 30,000 and 75,000 tpy 
CO2e, we recognize that sources and others in the public may 
have access to information that is not available to the Agency and that 
may inform an appropriate SER level. Therefore, we are specifically 
soliciting comment on and requesting data for areas in our technical 
analysis where commenters believe such information will provide support 
for adjusting our applied assumptions. However, commenters should keep 
in mind that the universe of future PSD permitting is constrained by 
the U.S. Supreme Court's decision limiting the program to ``anyway 
sources'' and modifications at ``anyway sources.'' The GHG BACT 
requirement is potentially applicable only to sources and modifications 
that would otherwise trigger PSD requirements based on emissions of 
pollutants other than GHGs.
    We are proposing a GHG SER value based on the GHG metric of 
CO2e, representing the single air pollutant defined as the 
aggregate group of the six well-mixed greenhouse gases (CO2, 
N2O, CH4, HFCs, PFCs and SF6). As 
explained earlier, this aggregate pollutant is measured in terms of 
``carbon dioxide equivalent'' or ``CO2e'' emissions, which 
is a metric that allows all the compounds comprising GHGs to be 
evaluated on an equivalent basis despite the fact that the different 
compounds have different heat-trapping capacities. The GWP that has 
been determined for each compound reflects its heat-trapping capacity 
relative to CO2. The mass of emissions of a constituent 
compound is multiplied by its GWP to determine the emissions in terms 
of CO2e. A source's emissions of all compounds in terms of 
CO2e are summed to determine the source's total GHG 
emissions.\94\ This construct differs from other pollutant SERs based 
solely on a mass basis; however, we believe, as we did in the Tailoring 
Rule, that the CO2e metric is consistent with the definition 
of the pollutant as defined in the Administrator's endangerment and 
contribution findings regarding GHGs (74 FR 66496) and that by 
incorporating the GWP values, best addresses the relevant environmental 
endpoint, which is the radiative forcing of the GHGs emitted. We also 
see no requirement for using a mass-based calculation method for the 
GHG SER, such as we determined necessary in the Tailoring Rule. The 
determination that a mass-based calculation method was a necessary 
first step under the Tailoring rule was due to the statutory 100 and 
250 tpy levels in the statutory definition of ``major emitting 
facility.'' \95\ The SERs are based on EPA's inherent authority to 
identify a de minimis level of GHG emissions for purposes of 
determination applicability of the statutory BACT provisions of the 
CAA. These provisions in the Act do not include a mass-based emissions 
applicability threshold. In addition, the emissions thresholds in the 
definition of major stationary source that influenced our reasoning in 
the Tailoring rule are no longer applicable to GHGs in light of the 
U.S. Supreme Court's decision in UARG.
---------------------------------------------------------------------------

    \94\ See the accompanying proposed regulatory text to this 
preamble at 40 CFR 51.666 (b)(31) and 40 CFR 52.21(b)(32) for 
further details on the calculation of CO2e emissions.
    \95\ See 75 FR 31531 for background on why this step was needed 
in Tailoring Rule.
---------------------------------------------------------------------------

    In addition to consistency with the Administrator's endangerment 
and contribution findings, there are programmatic and policy advantages 
to using the ``sum-of-six'' construct based on CO2e for 
purposes of the GHG SER BACT review. One significant advantage to this 
construct is that it allows more flexibility to sources for designing 
and implementing control strategies that maximize reductions across 
multiple GHGs. From a programmatic standpoint, the CO2e 
metric facilitates permitting authorities' review and consideration of 
the combined effect of the six individual GHGs when sources emit any 
one or combination of the individual gases. Also, given that Congress 
built in considerations of energy, environmental, and economic impacts 
into the BACT requirement, we think that allowing consideration of 
those factors across six gases will result in decisions that more 
appropriately account for those impacts at the source. In summary, we 
see no statutory requirement or programmatic advantages for considering 
a GHG SER value that incorporates a mass-based component; however, we 
welcome comments on whether such a need exists and how such a component 
would function for GHG BACT applicability purposes.
    Lastly, we are also requesting any specific comments related to the 
administrative and enforcement burdens associated with implementing GHG 
BACT review at the proposed GHG SER level (75,000 tpy CO2e), 
or at a suggested alternative GHG SER level. Due to the relatively 
short history of applying the BACT requirement to GHGs (as compared to 
PSD permitting overall), the limited experience in applying BACT to 
GHGs permitting in some sectors, and the overall uncertainties in 
predicting exact levels of future PSD activity, we solicit any comments 
pertaining specifically to the administrative and programmatic burdens 
associated with the proposed GHG SER and applying the BACT review 
process to GHGs emitted at that level or at a suggested alternative 
level. We also solicit comments from all parties, including the 
regulated community and permitting authorities, as well as commenters 
supporting an alternative threshold, as to the administrative and 
enforcement burdens of establishing a de minimis threshold at the 
suggested alternative level.

VI. What would be the economic impacts of the proposed rule?

    The main focus of the Economic Impact Analysis (EIA) is the cost 
savings to permitting authorities and affected sources due to ``anyway 
sources'' that are below the proposed de minimis GHG SER not having to 
go through GHG BACT review. If not for provisions we are proposing to 
remove in this proposal and that currently remain in the EPA's 
definition of ``subject to regulation'' at this time, under the present 
definition of ``significant'' in the PSD regulations, any GHG emissions 
increase would require a newly constructed major source of another 
regulated NSR pollutant, or a major modification at an existing 
facility significantly increasing another pollutant, to undergo PSD GHG

[[Page 68139]]

BACT review.\96\ Therefore, the EIA includes estimated costs relative 
to a ``no-action'' scenario where the current functioning GHG 
permitting level of 75,000 tpy CO2e would no longer be 
applicable and any increase in GHG emissions at sources otherwise 
subject to PSD would trigger the requirement for a GHG BACT analysis. 
The proposed rule would remove the requirement of conducting the GHG 
BACT review, as well as the need to include the requirements resulting 
from this GHG BACT review in a source's title V permit, for sources 
with GHG emissions increases less than the proposed GHG SER. A summary 
of the avoided costs relative to the ``no-action'' scenario for both 
PSD and title V programs based on the proposed 75,000 tpy 
CO2e GHG SER is described in the following paragraphs. 
Details related to the EIA are documented in the report titled 
``Economic Impact Analysis for Revisions to the Prevention of 
Significant Deterioration and Title V Greenhouse Gas Permitting 
Regulations and Establishment of a Significant Emissions Rate for 
Greenhouse Gas Emissions Under the Prevention of Significant 
Deterioration Program: Proposed Rule.'' This report is available in the 
rulemaking docket.
---------------------------------------------------------------------------

    \96\ Definition of ``significant,'' 40 CFR 51.166(b)(23)(ii) and 
40 CFR 52.21(b)(23)(ii).
---------------------------------------------------------------------------

    For affected sources, the avoided permitting cost or savings for 
PSD permits is approximately $23,532 per permit (in 2014 dollars). 
Total annual avoided cost program-wide is under $870,000 for sources 
that would not have to go through GHG BACT review. State, local and 
tribal permitting authorities are estimated to expend $4,400 per permit 
to conduct a GHG BACT review in the context of reviewing a PSD permit 
application for a source with GHG emissions in the applicable range. 
Thus, annual savings for permitting authorities program-wide are less 
than $165,000 at a 75,000 tpy CO2e GHG SER.
    We anticipate sources subject to title V will experience avoided 
regulatory costs because they will not have to add requirements to 
their title V permit resulting from a GHG BACT review. Avoided cost is 
estimated at approximately $2,470 per permit for addressing GHG 
requirements in a new permit, and $520 per permit for revising an 
existing permit to include requirements related to a GHG BACT limit. 
Total program-wide savings for title V permitting related to the 
proposed GHG SER of 75,000 tpy CO2e is less than $20,000 
dollars per year for sources. Regulatory cost avoided relative to no 
GHG SER for state, local, and tribal permitting authorities is 
estimated at $2,632 per permit for adding GHG requirements to a new 
permit, and $504 per permit for revisions to existing permits. At the 
proposed GHG SER of 75,000 tpy CO2e, title V program-wide 
avoided costs for permitting authorities totals approximately $20,000 
per year.
    Total annual regulatory cost avoided relative to no GHG SER for 
sources for both PSD and title V programs together amounts to less than 
$890,000 at the proposed 75,000 tpy CO2e GHG SER level. 
Total annual avoided costs for permitting authorities for both PSD and 
title V programs together is expected to be less than $185,000 at the 
proposed 75,000 tpy CO2e GHG SER level. This rulemaking does 
not impose economic impacts on any sources or permitting authorities, 
but should instead be viewed as leading to savings for ``anyway 
sources'' and permitting authorities. Because no businesses or 
governmental entities are expected to incur positive costs as a result 
of this rule, there is not a significant impact on a substantial number 
of small entities. Because the savings are small and spread among many 
sources, the market impacts of this rule will be minimal.

VII. How should state, local and tribal authorities adopt the 
regulatory revisions included in this action?

    Consistent with the PSD regulations for SIP-approved programs at 40 
CFR 51.166 and the title V regulations for title V program approvals at 
40 CFR part 70, the EPA expects that many state, local and tribal 
permitting authorities will amend their respective PSD and title V 
permitting regulations and seek revisions of their SIPs, TIPs or title 
V program approvals, as applicable, to incorporate (once finalized) the 
regulatory changes consistent with those contained in this proposal.
    For PSD, 40 CFR part 51.166(a)(6)(i) states that ``any state 
required to revise its implementation plan by reason of an amendment to 
section [51.166]. . . shall adopt and submit such plan revision to the 
Administrator for approval no later than three years after such 
amendment is published in the Federal Register.'' Therefore, any 
implementation plan that defines a source or modification as major 
based solely on GHGs emissions will require a revision to conform to 
the amendments to 40 CFR part 51.166 proposed in this rule. However, 
states may elect not to incorporate a significant emissions rate for 
GHGs into their program if they wish to apply BACT to GHGs at sources 
emitting or increasing this pollutant by any amount.
    We request comment on what we described in our Preliminary Views 
Memo as the ``most efficient and least burdensome way to accomplish 
such revisions to state, [local], or tribal programs'' to meet the SIP 
or TIP submittal requirements, as applicable.\97\ Furthermore, we ask 
for comments on whether the Administrator should shorten the 3-year 
time period required under 40 CFR part 51.166(a)(6) (and section 
110(a)(1) of the CAA, to the extent applicable), for each state, or 
local permitting authority to revise its SIP or TIP (or make a new 
submission).
---------------------------------------------------------------------------

    \97\ Next Steps and Preliminary Views on the Application of 
Clean Air Act (CAA) Permitting Programs to Greenhouse Gases 
Following the Supreme Court's Decision in UARG v. EPA, Memorandum 
from Janet G. McCabe, Acting Assistant Administrator, Office of Air 
and Radiation, and Cynthia Giles, Assistant Administrator, Office of 
Enforcement and Compliance Assurance, U.S. EPA, to Regional 
Administrators, p. 5, July 24, 2014.
---------------------------------------------------------------------------

    For purposes of the title V program, 40 CFR part 70.4(a) states in 
relevant part that: ``If part 70 is subsequently revised such that the 
Administrator determines that it is necessary to require a change to an 
approved State program, the required revisions to the program shall be 
submitted within 12 months of the final changes to part 70 or within 
such a period as authorized by the Administrator.'' Since we believe 
that the changes being proposed, once finalized, may require changes to 
many EPA-approved state title V programs, we also ask for comments on 
the most efficient way to accomplish those title V program revisions 
and what time period would be appropriate for those revisions.
    Furthermore, SIP revisions for the PSD program and revisions to 
title V programs that still include the Step 2 provisions may be needed 
if any permitting authorities prefer to retain under state law the 
construction or operating permit requirements equivalent to the PSD and 
title V permitting requirements for Step 2 sources that are no longer 
approvable parts of a PSD or title V program under federal law. In the 
Preliminary View Memo, we stated that ``we do not read the [UARG v EPA] 
U.S. Supreme Court decision to preclude states from retaining 
permitting requirements for sources of GHG emissions that apply 
independently under state law even when those requirements are no 
longer required under federal law'' \98\ and that

[[Page 68140]]

``similar to state-law construction permitting requirements, the [UARG 
v EPA] U.S. Supreme Court decision does not preclude states from 
continuing to require that certain types of sources obtain operating 
permits meeting requirements that apply independently under state 
law.'' \99\ Therefore, state, local, or tribal programs wishing to 
retain construction or operating permit requirements equivalent to the 
PSD and title V permitting requirements for Step 2 sources as a matter 
of state, local or tribal law should consult with the EPA Regional 
offices on how best to retain those requirements as appropriate, while 
excluding them from the EPA-approved SIPs, TIPs or title V 
programs.\100\
---------------------------------------------------------------------------

    \98\ Next Steps and Preliminary Views on the Application of 
Clean Air Act (CAA) Permitting Programs to Greenhouse Gases 
Following the Supreme Court's Decision in UARG v. EPA, Memorandum 
from Janet G. McCabe, Acting Assistant Administrator, Office of Air 
and Radiation, and Cynthia Giles, Assistant Administrator, Office of 
Enforcement and Compliance Assurance, U.S. EPA, to Regional 
Administrators, p. 4, July 24, 2014.
    \99\ Id. at 5.
    \100\ As noted previously, while the UARG decision and the 
Amended Judgment determined that the EPA may no longer require a 
source to obtain a title V permit solely because it emits or has the 
potential to emit GHGs above major source thresholds, the agency 
does not read the UARG decision or the Amended Judgment to affect 
other grounds on which a title V permit may be required or the 
applicable requirements that must be addressed in title V permits. 
Thus, as explained previously, the EPA's proposed revisions are not 
intended to change the existing title V requirements in that regard 
and the EPA would not expect proposed revisions to the EPA-approved 
programs to change those requirements, either.
---------------------------------------------------------------------------

    In cases where state, tribal or local air pollution control 
agencies incorporate the federal regulations by reference or do not 
have an approved SIP or TIP for the PSD program or a title V program 
approval for the title V permitting requirements, the federal PSD 
program at 40 CFR 52.21 and the title V program at 40 CFR part 71 
apply, respectively. Therefore, the EPA anticipates that the revisions 
included in this proposal will likely apply automatically to these 
programs once finalized.

VIII. Environmental Justice Considerations

    This action proposes certain revisions to the PSD and title V GHG 
permitting regulations in response to the June 23, 2014, UARG v. EPA 
U.S. Supreme Court decision and the April 10, 2015, Amended Judgment by 
the D.C. Circuit in Coalition for Responsible Regulation v. EPA. To 
comport with these decisions, the proposed revisions would ensure that 
neither PSD nor title V rules require a source to obtain a permit 
solely because the source emits or has the PTE GHGs above the 
applicable thresholds. It also establishes a SER for GHGs that would 
serve to determine when a source otherwise subject to PSD would be 
required to conduct a BACT analysis for GHGs. Therefore, this proposed 
action itself does not compel any specific changes to our permitting 
public participation requirements nor does it finalize a particular 
permit action that may affect the fair treatment and meaningful 
involvement of all people. Rather, it ensures that the Coalition 
Amended Judgment is implemented and makes clear in the EPA's PSD 
regulations that sources are no longer required to submit a PSD permit 
application if GHGs are the only pollutant that the sources emits above 
the applicable major source thresholds or that will increase in major 
amounts due to a modification of an existing major sources. Similarly, 
this proposed rule clarifies in the EPA's title V regulations that a 
source is not required to apply for title V permit solely because it 
emits or has the PTE GHGs above the major source threshold.

IX. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review and Executive 
Order 13563: Improving Regulation and Regulatory Review

    This action is a significant regulatory action that was submitted 
to the Office of Management and Budget (OMB) for review because it 
raises novel legal or policy issues. Any changes made in response to 
OMB recommendations have been documented in the docket. The EPA 
prepared an EIA of the potential costs and benefits associated with 
this action, which is discussed in Section VI of this preamble. This 
analysis, ``Economic Impact Analysis for the Revisions to the 
Prevention of Significant Deterioration and Title V Greenhouse Gas 
Permitting Regulations and Establishment of a Significant Emissions 
Rate for Greenhouse Gas Emissions under the Prevention of Significant 
Deterioration Program; Proposed Rule,'' is available in the rulemaking 
docket.

B. Paperwork Reduction Act (PRA)

    This action does not impose any new information collection burden 
under the PRA. The OMB has previously approved the information 
collection activities contained in the existing regulations and has 
assigned OMB control number 2060-0003 for the PSD program and OMB 
control numbers 2060-0243 and 2060-0336 for the title V part 70 and 
part 71 programs, respectively.
    This action does not impose an information collection burden 
because it does not impose a new or revised information collection 
burden for stationary sources of air pollution. Instead, the regulatory 
revisions reduce the number of sources that may be subject to the PSD 
and title V program due to the sources' GHG emissions. Specifically, 
this proposed action revises several regulatory provisions under the 
federal and state-specific PSD and title V regulations and establishes 
a GHG SER for the PSD program.

C. Regulatory Flexibility Act (RFA)

    I certify that this action will not have a significant economic 
impact on a substantial number of small entities under the RFA. In 
making this determination, the impact of concern is any significant 
adverse economic impact on small entities. An agency may certify that a 
rule will not have a significant economic impact on a substantial 
number of small entities if the rule relieves regulatory burden, has no 
net burden or otherwise has a positive economic effect on the small 
entities subject to the rule. This rule relieves regulatory burden 
because it reduces the number of sources that may be subject to the PSD 
and title V program due to the sources' GHG emissions. We have, 
therefore, concluded that this action will relieve regulatory burden 
for all directly regulated small entities.

D. Unfunded Mandates Reform Act (UMRA)

    This action does not contain an unfunded mandate of $100 million or 
more as described in UMRA, 2 U.S.C. 1531-1538, and does not 
significantly or uniquely affect small governments. The EPA expects 
that many state, local and tribal permitting authorities will amend 
their respective PSD and title V permitting regulations and seek 
revisions of their SIPs, TIPs or title V program approvals, as 
applicable, to incorporate, once finalized, the regulatory changes 
consistent with those in this proposed action. This will result in a 
small increase in burden to these entities. However, as discussed in 
Section VI of this preamble, this proposed action is expected to result 
in cost savings and an administrative burden reduction for permitting 
authorities. We have therefore concluded that there are no unfunded 
mandates greater than $100 million or any significant or unique effect 
on small governments.

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

[[Page 68141]]

distribution of power and responsibilities among the various levels of 
government.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    This action does not have tribal implications, as specified in 
Executive Order 13175. The proposed rule would not impose substantial 
direct compliance costs on Indian tribal governments nor preempt tribal 
law. There are no tribal agencies currently implementing the PSD 
program under a tribal implementation plan under 40 CFR part 51.166 or 
delegation of the federal PSD program at 40 CFR part 52.21. Only two 
tribes are implementing the title V program, one through the approval 
of its title V program under 40 CFR part 70 and one through a 
delegation agreement under 40 CFR part 71. In addition and as explained 
previously, this proposed action relieves regulatory burden because it 
reduces the number of sources that may be subject to the PSD and title 
V program due to the sources' GHG emissions. Specifically, this action 
revises several regulatory provisions under the federal and state-
specific PSD and title V regulations and establishes a GHG SER for the 
PSD program. If the current PSD GHG permitting level of 75,000 tpy 
CO2e were to not be applicable, as described in the 
Preliminary Views Memo, any increase in GHG emissions at sources 
otherwise subject to PSD would trigger the requirement for a GHG BACT 
analysis and thus increase the permitting costs and burden for both 
permittees (including entities in tribal areas) and permitting 
authorities (including any tribal agencies). Tribal programs may need 
to make minor changes to their title V program approvals and their 
implementing regulations, as applicable, to incorporate, once 
finalized, the regulatory changes being proposed in this action. 
Nevertheless, we expect the burden of undertaking those revisions to be 
minimal as compared to the burden of applying and reviewing the permits 
for GHG-emitting sources that would otherwise be subject to title V 
program without the regulatory revisions included in this proposed 
action. Thus, Executive Order 13175 does not apply to this action.

G. Executive Order 13045: Protection of Children From Environmental 
Health Risks and Safety Risks

    The EPA interprets Executive Order 13045 as applying only to those 
regulatory actions that concern environmental health or safety risks 
that the EPA has reason to believe may disproportionately affect 
children, per the definition of ``covered regulatory action'' in 
section 2-202 of the Executive Order. This action is not subject to 
Executive Order 13045 because it does not concern an environmental 
health risk or safety risk.

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

    This action is not a ``significant energy action'' because it is 
not likely to have a significant adverse effect on the supply, 
distribution or use of energy. Further, we have concluded that this 
rule is not likely to have any adverse energy effects because to the 
extent that this action would affect PSD and title V permit applicants 
in the energy supply, distribution or use sectors, it would reduce the 
permitting burden for such sectors.

I. National Technology Transfer and Advancement Act

    This rulemaking does not involve technical standards.

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

    The EPA believes the human health or environmental risk addressed 
by this action will not have potential disproportionately high and 
adverse human health or environmental effects on minority, low-income 
or indigenous populations. The results of this evaluation are contained 
in Section VIII of this preamble titled, ``Environmental Justice 
Considerations'' for this action.

K. Determination Under CAA Section 307(d)

    Pursuant to CAA 307(d)(1)(J) and 307(d)(1)(V), the Administrator 
determines that this action is subject to the provisions of section 
307(d). Section 307(d)(1)(J) provides that the provisions of section 
307(d) apply to promulgation or revision of regulations under part C of 
title I of the CAA (relating to PSD and protection of visibility), and 
section 307(d)(1)(V) of the CAA provides that the provisions of section 
307(d) apply to such other actions as the Administrator may determine.

X. Statutory Authority

    The statutory authority for this action is 42 U.S.C. 7401-7671q.

List of Subjects

40 CFR Part 51

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Carbon monoxide, Greenhouse gases, 
Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate 
matter, Reporting and recordkeeping requirements, Sulfur oxides, 
Transportation, Volatile organic compounds.

40 CFR Part 52

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

40 CFR Part 60

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Greenhouse gases, Intergovernmental relations, 
Reporting and recordkeeping requirements.

40 CFR Part 70

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Greenhouse gases, Intergovernmental relations, 
Reporting and recordkeeping requirements.

40 CFR Part 71

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Greenhouse gases, Reporting and recordkeeping 
requirements.

    Dated: August 26, 2016.
Gina McCarthy,
Administrator.

    For the reasons stated in the preamble, title 40, Chapter I of the 
Code of Federal Regulations is proposed to be amended as follows:

PART 51--REQUIREMENTS FOR PREPARATION, ADOPTION, AND SUBMITTAL OF 
IMPLEMENTATION PLANS

0
1. The authority citation for part 51 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

Subpart I--Review of New Sources and Modifications

0
2. Section 51.166 is amended by:
0
a. Revising paragraphs (b)(1)(i)(a) and (b);
0
b. Revising paragraph (b)(2)(i);
0
c. Revising paragraph (b)(23)(i);
0
d. Adding paragraph (b)(31); and
0
e. Revising paragraph (b)(48).

[[Page 68142]]

    The revisions and addition read as follows:


Sec.  51.166  Prevention of significant deterioration of air quality.

* * * * *
    (b) * * *
    (1) * * *
    (i) * * *
    (a) Any of the following stationary sources of air pollutants which 
emits, or has the potential to emit, 100 tons per year or more of any 
regulated NSR pollutant (except the pollutant greenhouse gases as 
defined in paragraph (b)(31) of this section): Fossil fuel-fired steam 
electric plants of more than 250 million British thermal units per hour 
heat input, coal cleaning plants (with thermal dryers), kraft pulp 
mills, Portland cement plants, primary zinc smelters, iron and steel 
mill plants, primary aluminum ore reduction plants (with thermal 
dryers), primary copper smelters, municipal incinerators capable of 
charging more than 250 tons of refuse per day, hydrofluoric, sulfuric, 
and nitric acid plants, petroleum refineries, lime plants, phosphate 
rock processing plants, coke oven batteries, sulfur recovery plants, 
carbon black plants (furnace process), primary lead smelters, fuel 
conversion plants, sintering plants, secondary metal production plants, 
chemical process plants (which does not include ethanol production 
facilities that produce ethanol by natural fermentation included in 
NAICS codes 325193 or 312140), fossil-fuel boilers (or combinations 
thereof) totaling more than 250 million British thermal units per hour 
heat input, petroleum storage and transfer units with a total storage 
capacity exceeding 300,000 barrels, taconite ore processing plants, 
glass fiber processing plants, and charcoal production plants;
    (b) Notwithstanding the stationary source size specified in 
paragraph (b)(1)(i)(a) of this section, any stationary source which 
emits, or has the potential to emit, 250 tons per year or more of a 
regulated NSR pollutant (except the pollutant greenhouse gases as 
defined in paragraph (b)(31) of this section); or
* * * * *
    (2) * * *
    (i) Major modification means any physical change in or change in 
the method of operation of a major stationary source that would result 
in: A significant emissions increase (as defined in paragraph (b)(39) 
of this section) of a regulated NSR pollutant (as defined in paragraph 
(b)(49) of this section) other than the pollutant greenhouse gases (as 
defined in paragraph (b)(31) of this section); and a significant net 
emissions increase of that regulated NSR pollutant from the major 
stationary source.
* * * * *
    (23) * * *
    (i) Significant means, in reference to a net emissions increase or 
the potential of a source to emit any of the following pollutants, a 
rate of emissions that would equal or exceed any of the following 
rates:

Pollutant and Emissions Rate

Carbon monoxide: 100 tons per year (tpy)
Nitrogen oxides: 40 tpy
Sulfur dioxide: 40 tpy
Particulate matter: 25 tpy of particulate matter emissions
PM10: 15 tpy
PM2.5: 10 tpy of direct PM2.5 emissions; 40 tpy of sulfur 
dioxide emissions; 40 tpy of nitrogen oxide emissions unless 
demonstrated not to be a PM2.5 precursor under paragraph 
(b)(49) of this section
Ozone: 40 tpy of volatile organic compounds or nitrogen oxides
Lead: 0.6 tpy
Fluorides: 3 tpy
Sulfuric acid mist: 7 tpy
Hydrogen sulfide (H2S): 10 tpy
Total reduced sulfur (including H2S): 10 tpy
Reduced sulfur compounds (including H2S): 10 tpy
Greenhouse gases: 75,000 tpy CO2e
Municipal waste combustor organics (measured as total tetra- through 
octa-chlorinated dibenzo-p-dioxins and dibenzofurans): 3.2 x 
10-\6\ megagrams per year (3.5 x 10-\6\ tons per 
year)
Municipal waste combustor metals (measured as particulate matter): 14 
megagrams per year (15 tons per year)
Municipal waste combustor acid gases (measured as sulfur dioxide and 
hydrogen chloride): 36 megagrams per year (40 tons per year)
Municipal solid waste landfill emissions (measured as nonmethane 
organic compounds): 45 megagrams per year (50 tons per year)
* * * * *
    (31) Greenhouse gases (GHGs) means the air pollutant defined in 
Sec.  86.1818-12(a) of this chapter as the aggregate group of six 
greenhouse gases: Carbon dioxide, nitrous oxide, methane, 
hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride. To 
represent an amount of GHGs emitted, the term tpy CO2 equivalent 
emissions (CO2e) shall be used and computed as follows:
    (a) Multiply the mass amount of emissions (tpy), for each of the 
six greenhouse gases in the pollutant GHGs, by the gas's associated 
global warming potential published at Table A-1 to subpart A of part 98 
of this chapter--Global Warming Potentials.
    (b) Sum the resultant value for each gas to compute a tpy 
CO2e.
* * * * *
    (48) Subject to regulation means, for any air pollutant, that the 
pollutant is subject to either a provision in the Clean Air Act, or a 
nationally-applicable regulation codified by the Administrator in 
subchapter C of this chapter, that requires actual control of the 
quantity of emissions of that pollutant, and that such a control 
requirement has taken effect and is operative to control, limit or 
restrict the quantity of emissions of that pollutant released from the 
regulated activity. Pollutants subject to regulation include, but are 
not limited to, greenhouse gases as defined in paragraph (b)(31) of 
this section.
* * * * *

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

0
3. The authority citation for part 52 continues to read as follows:

    Authority: 42 U.S.C. 7401 et seq.

Subpart A--General Provisions

0
4. Section 52.21 is amended by:
0
a. Revising paragraphs (b)(1)(i)(a) and (b);
0
b. Revising paragraph (b)(2)(i);
0
c. Revising paragraph (b)(23)(i);
0
d. Adding paragraph (b)(32);
0
e. Revising paragraph (b)(49);
0
f. Revising paragraph (aa)(1);
0
g. Revising paragraphs (aa)(2)(i) and (iii);
0
h. Removing paragraph (aa)(2)(iv)(c);
0
i. Revising paragraphs (aa)(2)(v), (viii) through (xi);
0
j. Removing paragraphs (aa)(2)(xii)through (xv);
0
k. Revising paragraph (aa)(3) introductory text;
0
l. Removing paragraph (aa)(3)(iv);
0
m. Revising paragraph (aa)(4)(i) introductory text;
0
n. Revising paragraphs (aa)(4)(i)(a), (d) and (g);
0
o. Revising paragraph (aa)(5);
0
p. Revising paragraph (aa)(6)(i);
0
q. Removing paragraph (aa)(6)(iii);
0
r. Revising paragraph (aa)(7) introductory text;
0
s. Revising paragraphs (aa)(7)(i), (iii), (v), (vi) and (vii);
0
t. Removing paragraph (aa)(7)(xi);
0
u. Revising paragraph (aa)(8)(ii)(b)(2);
0
v. Revising paragraph (aa)(9)(i)(a);
0
w. Revising paragraphs (aa)(9)(iv) and (v);
0
x. Revising paragraphs (aa)(10)(i) and (ii);

[[Page 68143]]

0
y. Revising paragraphs (aa)(10)(iv)(c)(1) and (2);
0
z. Revising paragraph (aa)(11)(i) introductory text;
0
aa. Revising paragraphs (aa)(11)(i)(a) and (b);
0
bb. Revising paragraph (aa)(12)(i)(a);
0
cc. Revising paragraphs (aa)(14)(i)(b) and (d); and
0
dd. Revising paragraph (aa)(14)(ii) introductory text.
    The revisions and addition read as follows:


Sec.  52.21  Prevention of significant deterioration of air quality.

* * * * *
    (b) * * *
    (1) * * *
    (i) * * *
    (a) Any of the following stationary sources of air pollutants which 
emits, or has the potential to emit, 100 tons per year or more of any 
regulated NSR pollutant (except the pollutant greenhouse gases as 
defined in paragraph (b)(32) of this section): Fossil fuel-fired steam 
electric plants of more than 250 million British thermal units per hour 
heat input, coal cleaning plants (with thermal dryers), kraft pulp 
mills, portland cement plants, primary zinc smelters, iron and steel 
mill plants, primary aluminum ore reduction plants (with thermal 
dryers), primary copper smelters, municipal incinerators capable of 
charging more than 250 tons of refuse per day, hydrofluoric, sulfuric, 
and nitric acid plants, petroleum refineries, lime plants, phosphate 
rock processing plants, coke oven batteries, sulfur recovery plants, 
carbon black plants (furnace process), primary lead smelters, fuel 
conversion plants, sintering plants, secondary metal production plants, 
chemical process plants (which does not include ethanol production 
facilities that produce ethanol by natural fermentation included in 
NAICS codes 325193 or 312140), fossil-fuel boilers (or combinations 
thereof) totaling more than 250 million British thermal units per hour 
heat input, petroleum storage and transfer units with a total storage 
capacity exceeding 300,000 barrels, taconite ore processing plants, 
glass fiber processing plants, and charcoal production plants;
    (b) Notwithstanding the stationary source size specified in 
paragraph (b)(1)(i)(a) of this section, any stationary source which 
emits, or has the potential to emit, 250 tons per year or more of a 
regulated NSR pollutant (except the pollutant greenhouse gases as 
defined in paragraph (b)(32) of this section); or
* * * * *
    (2) * * *
    (i) Major modification means any physical change in or change in 
the method of operation of a major stationary source that would result 
in: A significant emissions increase (as defined in paragraph (b)(40) 
of this section) of a regulated NSR pollutant (as defined in paragraph 
(b)(50) of this section) other than the pollutant greenhouse gases (as 
defined in paragraph (b)(32) of this section); and a significant net 
emissions increase of that regulated NSR pollutant from the major 
stationary source.
* * * * *
    (23) * * *
    (i) Significant means, in reference to a net emissions increase or 
the potential of a source to emit any of the following pollutants, a 
rate of emissions that would equal or exceed any of the following 
rates:

Pollutant and Emissions Rate

Carbon monoxide: 100 tons per year (tpy)
Nitrogen oxides: 40 tpy
Sulfur dioxide: 40 tpy
Particulate matter: 25 tpy of particulate matter emissions
PM10: 15 tpy
PM2.5: 10 tpy of direct PM2.5 emissions; 40 tpy of sulfur 
dioxide emissions; 40 tpy of nitrogen oxide emissions unless 
demonstrated not to be a PM2.5 precursor under paragraph 
(b)(50) of this section
Ozone: 40 tpy of volatile organic compounds or nitrogen oxides
Lead: 0.6 tpy
Fluorides: 3 tpy
Sulfuric acid mist: 7 tpy
Hydrogen sulfide (H2S): 10 tpy
Total reduced sulfur (including H2S): 10 tpy
Reduced sulfur compounds (including H2S): 10 tpy
Greenhouse gases: 75,000 tpy CO2e
Municipal waste combustor organics (measured as total tetra- through 
octa-chlorinated dibenzo-p-dioxins and dibenzofurans): 3.2 x 
10-\6\ megagrams per year (3.5 x 10-\6\ tons per 
year)
Municipal waste combustor metals (measured as particulate matter): 14 
megagrams per year (15 tons per year)
Municipal waste combustor acid gases (measured as sulfur dioxide and 
hydrogen chloride): 36 megagrams per year (40 tons per year)
Municipal solid waste landfill emissions (measured as nonmethane 
organic compounds): 45 megagrams per year (50 tons per year)
* * * * *
    (32) Greenhouse gases (GHGs) means the air pollutant defined in 
Sec.  86.1818-12(a) of this chapter as the aggregate group of six 
greenhouse gases: Carbon dioxide, nitrous oxide, methane, 
hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride. To 
represent an amount of GHGs emitted, the term tpy CO2 equivalent 
emissions (CO2e) shall be used and computed as follows:
    (a) Multiply the mass amount of emissions (tpy), for each of the 
six greenhouse gases in the pollutant GHGs, by the gas's associated 
global warming potential published at Table A-1 to subpart A of part 98 
of this chapter--Global Warming Potentials.
    (b) Sum the resultant value for each gas to compute a tpy 
CO2e.
* * * * *
    (49) Subject to regulation means, for any air pollutant, that the 
pollutant is subject to either a provision in the Clean Air Act, or a 
nationally-applicable regulation codified by the Administrator in 
subchapter C of this chapter, that requires actual control of the 
quantity of emissions of that pollutant, and that such a control 
requirement has taken effect and is operative to control, limit or 
restrict the quantity of emissions of that pollutant released from the 
regulated activity. Pollutants subject to regulation include, but are 
not limited to, greenhouse gases as defined in paragraph (b)(32) of 
this section.
* * * * *
    (aa) * * *
    (1) * * *
    (i) The Administrator may approve the use of an actuals PAL for any 
existing major stationary source if the PAL meets the requirements in 
paragraphs (aa)(1) through (15) of this section. The term ``PAL'' shall 
mean ``actuals PAL'' throughout paragraph (aa) of this section.
    (ii) Any physical change in or change in the method of operation of 
a major stationary source that maintains its total source-wide 
emissions below the PAL level, meets the requirements in paragraphs 
(aa)(1) through (15) of this section, and complies with the PAL permit:
    (a) Is not a major modification for the PAL pollutant;
    (b) Does not have to be approved through the PSD program; and
    (c) Is not subject to the provisions in paragraph (r)(4) of this 
section (restrictions on relaxing enforceable emission limitations that 
the major stationary source used to avoid applicability of the major 
NSR program).
    (iii) Except as provided under paragraph (aa)(1)(ii)(c) of this 
section, a major stationary source shall continue to comply with all 
applicable Federal or State requirements, emission limitations, and 
work practice

[[Page 68144]]

requirements that were established prior to the effective date of the 
PAL.
    (2) * * *
    (i) Actuals PAL for a major stationary source means a PAL based on 
the baseline actual emissions (as defined in paragraph (b)(48) of this 
section) of all emissions units (as defined in paragraph (b)(7) of this 
section) at the source, that emit or have the potential to emit the PAL 
pollutant.
* * * * *
    (iii) Small emissions unit means an emissions unit that emits or 
has the potential to emit the PAL pollutant in an amount less than the 
significant level for that PAL pollutant, as defined in paragraph 
(b)(23) of this section or in the Act, whichever is lower.
* * * * *
    (v) Plantwide applicability limitation (PAL) means an emission 
limitation expressed on a mass basis in tons per year, or expressed in 
tons per year CO2e for a GHG emission limitation, for a 
pollutant at a major stationary source, that is enforceable as a 
practical matter and established source-wide in accordance with 
paragraphs (aa)(1) through (15) of this section.
* * * * *
    (viii) PAL major modification means, notwithstanding paragraphs 
(b)(2) and (b)(3) of this section (the definitions for major 
modification and net emissions increase), any physical change in or 
change in the method of operation of the PAL source that causes it to 
emit the PAL pollutant at a level equal to or greater than the PAL.
    (ix) PAL permit means the major NSR permit, the minor NSR permit, 
or the State operating permit under a program that is approved into the 
State Implementation Plan, or the title V permit issued by the 
Administrator that establishes a PAL for a major stationary source.
    (x) PAL pollutant means the pollutant for which a PAL is 
established at a major stationary source.
    (xi) Significant emissions unit means an emissions unit that emits 
or has the potential to emit a PAL pollutant in an amount that is equal 
to or greater than the significant level (as defined in paragraph 
(b)(23) of this section or in the Act, whichever is lower) for that PAL 
pollutant, but less than the amount that would qualify the unit as a 
major emissions unit as defined in paragraph (aa)(2)(iv) of this 
section.
    (3) Permit application requirements. As part of a permit 
application requesting a PAL, the owner or operator of a major 
stationary source shall submit the following information to the 
Administrator for approval:
* * * * *
    (4) * * *
    (i) The Administrator is allowed to establish a PAL at a major 
stationary source, provided that at a minimum, the requirements in 
paragraphs (aa)(4)(i)(a) through (g) of this section are met.
    (a) The PAL shall impose an annual emission limitation expressed on 
a mass basis in tons per year, or expressed in tons per year 
CO2e for a GHG PAL, that is enforceable as a practical 
matter, for the entire major stationary source. For each month during 
the PAL effective period after the first 12 months of establishing a 
PAL, the major stationary source owner or operator shall show that the 
sum of the monthly emissions from each emissions unit under the PAL for 
the previous 12 consecutive months is less than the PAL (a 12-month 
average, rolled monthly). For each month during the first 11 months 
from the PAL effective date, the major stationary source owner or 
operator shall show that the sum of the preceding monthly emissions 
from the PAL effective date for each emissions unit under the PAL is 
less than the PAL.
* * * * *
    (d) The PAL shall include fugitive emissions, to the extent 
quantifiable, from all emissions units that emit or have the potential 
to emit the PAL pollutant at the major stationary source.
* * * * *
    (g) The owner or operator of the major stationary source with a PAL 
shall comply with the monitoring, recordkeeping, and reporting 
requirements provided in paragraphs (aa)(12) through (14) of this 
section for each emissions unit under the PAL through the PAL effective 
period.
* * * * *
    (5) Public participation requirements for PALs. PALs for existing 
major stationary sources shall be established, renewed, or increased 
through a procedure that is consistent with Sec. Sec.  51.160 and 
51.161 of this chapter. This includes the requirement that the 
Administrator provide the public with notice of the proposed approval 
of a PAL permit and at least a 30-day period for submittal of public 
comment. The Administrator must address all material comments before 
taking final action on the permit.
    (6) * * *
    (i) Except as provided in paragraph (aa)(6)(ii) and (iii) of this 
section, the plan shall provide that the actuals PAL level for a major 
stationary source shall be established as the sum of the baseline 
actual emissions (as defined in paragraph (b)(48) of this section) of 
the PAL pollutant for each emissions unit at the source; plus an amount 
equal to the applicable significant level for the PAL pollutant under 
paragraph (b)(23) of this section or under the Act, whichever is lower. 
When establishing the actuals PAL level, for a PAL pollutant, only one 
consecutive 24-month period must be used to determine the baseline 
actual emissions for all existing emissions units. However, a different 
consecutive 24-month period may be used for each different PAL 
pollutant. Emissions associated with units that were permanently shut 
down after this 24-month period must be subtracted from the PAL level. 
The reviewing authority shall specify a reduced PAL level(s) in tons 
per year (or tons per year CO2e for a GHG PAL) in the PAL 
permit to become effective on the future compliance date(s) of any 
applicable Federal or State regulatory requirement(s) that the 
reviewing authority is aware of prior to issuance of the PAL permit. 
For instance, if the source owner or operator will be required to 
reduce emissions from industrial boilers in half from baseline 
emissions of 60 ppm NOX to a new rule limit of 30 ppm, then 
the permit shall contain a future effective PAL level that is equal to 
the current PAL level reduced by half of the original baseline 
emissions of such unit(s).
* * * * *
    (7) Contents of the PAL permit. The PAL permit must contain, at a 
minimum, the information in paragraphs (aa)(7)(i) through (x) of this 
section.
    (i) The PAL pollutant and the applicable source-wide emission 
limitation in tons per year, or in tons per year CO2e for a 
GHG PAL.
* * * * *
    (iii) Specification in the PAL permit that if a major stationary 
source owner or operator applies to renew a PAL in accordance with 
paragraph (aa)(10) of this section before the end of the PAL effective 
period, then the PAL shall not expire at the end of the PAL effective 
period. It shall remain in effect until a revised PAL permit is issued 
by a reviewing authority.
* * * * *
    (v) A requirement that, once the PAL expires, the major stationary 
source is subject to the requirements of paragraph (aa)(9) of this 
section.
    (vi) The calculation procedures that the major stationary source 
owner or operator shall use to convert the monitoring system data to 
monthly emissions and annual emissions based

[[Page 68145]]

on a 12-month rolling total as required by paragraph (aa)(13)(i) of 
this section.
    (vii) A requirement that the major stationary source owner or 
operator monitor all emissions units in accordance with the provisions 
under paragraph (aa)(12) of this section.
* * * * *
    (8) * * *
    (ii) * * *
    (b) * * *
    (2) Reduce the PAL consistent with any other requirement, that is 
enforceable as a practical matter, and that the State may impose on the 
major stationary source under the State Implementation Plan; and
* * * * *
    (9)  * * *
    (i) * * *
    (a) Within the time frame specified for PAL renewals in paragraph 
(aa)(10)(ii) of this section, the major stationary source shall submit 
a proposed allowable emission limitation for each emissions unit (or 
each group of emissions units, if such a distribution is more 
appropriate as decided by the Administrator) by distributing the PAL 
allowable emissions for the major stationary source among each of the 
emissions units that existed under the PAL. If the PAL had not yet been 
adjusted for an applicable requirement that became effective during the 
PAL effective period, as required under paragraph (aa)(10)(v) of this 
section, such distribution shall be made as if the PAL had been 
adjusted.
* * * * *
    (iv) Any physical change or change in the method of operation at 
the major stationary source will be subject to major NSR requirements 
if such change meets the definition of major modification in paragraph 
(b)(2) of this section.
    (v) The major stationary source owner or operator shall continue to 
comply with any State or Federal applicable requirements (BACT, RACT, 
NSPS, etc.) that may have applied either during the PAL effective 
period or prior to the PAL effective period except for those emission 
limitations that had been established pursuant to paragraph (r)(4) of 
this section, but were eliminated by the PAL in accordance with the 
provisions in paragraph (aa)(1)(ii)(c) of this section.
    (10) * * *
    (i) The Administrator shall follow the procedures specified in 
paragraph (aa)(5) of this section in approving any request to renew a 
PAL for a major stationary source, and shall provide both the proposed 
PAL level and a written rationale for the proposed PAL level to the 
public for review and comment. During such public review, any person 
may propose a PAL level for the source for consideration by the 
Administrator.
    (ii) Application deadline. A major stationary source owner or 
operator shall submit a timely application to the Administrator to 
request renewal of a PAL. A timely application is one that is submitted 
at least 6 months prior to, but not earlier than 18 months from, the 
date of permit expiration. This deadline for application submittal is 
to ensure that the permit will not expire before the permit is renewed. 
If the owner or operator of a major stationary source submits a 
complete application to renew the PAL within this time period, then the 
PAL shall continue to be effective until the revised permit with the 
renewed PAL is issued.
* * * * *
    (iv) * * *
    (c) * * *
    (1) If the potential to emit of the major stationary source is less 
than the PAL, the Administrator shall adjust the PAL to a level no 
greater than the potential to emit of the source; and
    (2) The Administrator shall not approve a renewed PAL level higher 
than the current PAL, unless the major stationary source has complied 
with the provisions of paragraph (aa)(11) of this section (increasing a 
PAL).
* * * * *
    (11) * * *
    (i) The Administrator may increase a PAL emission limitation only 
if the major stationary source complies with the provisions in 
paragraphs (aa)(11)(i)(a) through (d) of this section.
    (a) The owner or operator of the major stationary source shall 
submit a complete application to request an increase in the PAL limit 
for a PAL major modification. Such application shall identify the 
emissions unit(s) contributing to the increase in emissions so as to 
cause the major stationary source's emissions to equal or exceed its 
PAL.
    (b) As part of this application, the major stationary source owner 
or operator shall demonstrate that the sum of the baseline actual 
emissions of the small emissions units, plus the sum of the baseline 
actual emissions of the significant and major emissions units assuming 
application of BACT equivalent controls, plus the sum of the allowable 
emissions of the new or modified emissions unit(s) exceeds the PAL. The 
level of control that would result from BACT equivalent controls on 
each significant or major emissions unit shall be determined by 
conducting a new BACT analysis at the time the application is 
submitted, unless the emissions unit is currently required to comply 
with a BACT or LAER requirement that was established within the 
preceding 10 years. In such a case, the assumed control level for that 
emissions unit shall be equal to the level of BACT or LAER with which 
that emissions unit must currently comply.
* * * * *
    (12) * * *
    (i) * * *
    (a) Each PAL permit must contain enforceable requirements for the 
monitoring system that accurately determines plantwide emissions of the 
PAL pollutant in terms of mass per unit of time or, in CO2e 
per unit of time for a GHG PAL. Any monitoring system authorized for 
use in the PAL permit must be based on sound science and meet generally 
acceptable scientific procedures for data quality and manipulation. 
Additionally, the information generated by such system must meet 
minimum legal requirements for admissibility in a judicial proceeding 
to enforce the PAL permit.
* * * * *
    (14) * * *
    (i) * * *
    (b) Total annual emissions (expressed on a mass-basis in tons per 
year, or expressed in tons per year CO2e for a GHG PAL) 
based on a 12-month rolling total for each month in the reporting 
period recorded pursuant to paragraph (aa)(13)(i) of this section.
* * * * *
    (d) A list of any emissions units modified or added to the major 
stationary source during the preceding 6-month period.
* * * * *
    (ii) Deviation report. The major stationary source owner or 
operator shall promptly submit reports of any deviations or exceedance 
of the PAL requirements, including periods where no monitoring is 
available. A report submitted pursuant to Sec.  70.6(a)(3)(iii)(B) of 
this chapter shall satisfy this reporting requirement. The deviation 
reports shall be submitted within the time limits prescribed by the 
applicable program implementing Sec.  70.6(a)(3)(iii)(B) of this 
chapter. The reports shall contain the following information:
* * * * *

Subpart Y--Minnesota


Sec.  52.1233   [Amended]

0
5. Section 52.1233(b) is removed.
* * * * *

[[Page 68146]]

Subpart SS--Texas


Sec.  52.2305   [Amended]

0
6. Section 52.2305 is removed and reserved.
* * * * *

Subpart YY--Wisconsin


Sec.  52.2590   [Amended]

0
7. Section 52.2590 is removed and reserved.
* * * * *

PART 60--STANDARDS OF PERFORMANCE FOR NEW STATIONARY SOURCES

0
8. The authority citation for part 60 continues to read as follows:

    Authority:  42 U.S.C. 7401 et seq.

Subpart OOOOa---Standards of Performance for Crude Oil and Natural 
Gas Facilities for Which Construction, Modification or 
Reconstruction Commenced After September 18, 2015


Sec.  60.5360a   [Amended]

0
9. Section 60.5360a is amended by removing and reserving paragraph (b).

Subpart TTTT--Standards of Performance for Greenhouse Gas Emissions 
for Electric Generating Units


Sec.  60.5515   [Amended]

0
10. Section 60.5515 is amended by removing and reserving paragraph (b).

Subpart UUUU--Emission Guidelines for Greenhouse Gas Emissions and 
Compliance Times for Electric Utility Generating Units


Sec.  60.5705   [Amended]

0
11. Section 60.5705 is amended by removing and reserving paragraph (b).

PART 70-- STATE OPERATING PERMIT PROGRAMS

0
15. The authority citation for part 70 continues to read as follows:

    Authority:  42 U.S.C. 7401, et seq.

0
16. Section 70.2 is amended by:
0
a. Adding in alphabetical order a definition for ``Greenhouse gases;''
0
b. Revising the introductory text paragraph (2) for the definition of 
``Major source;'' and
0
c. Revising the definition of ``Subject to regulation''.
    The revisions and addition read as follows:


Sec.  70.2  Definitions.

* * * * *
    Greenhouse gases (GHGs) means the air pollutant defined in Sec.  
86.1818-12(a) of this chapter as the aggregate group of six greenhouse 
gases: Carbon dioxide, nitrous oxide, methane, hydrofluorocarbons, 
perfluorocarbons, and sulfur hexafluoride. To represent an amount of 
GHGs emitted, the term tpy CO2 equivalent emissions 
(CO2e) shall be used and computed as follows:
    (1) Multiply the mass amount of emissions (tpy), for each of the 
six greenhouse gases in the pollutant GHGs, by the gas's associated 
global warming potential published at Table A-1 to subpart A of part 98 
of this chapter--Global Warming Potentials.
    (2) Sum the resultant value for each gas to compute a tpy 
CO2e.
    Major source means * * *
    (1) * * *
    (2) A major stationary source of air pollutants, as defined in 
section 302 of the Act, that directly emits, or has the potential to 
emit, 100 tpy or more of any air pollutant subject to regulation except 
the pollutant greenhouse gases as defined in this section. This 
definition of major stationary source includes any major source of 
fugitive emissions of any such pollutant (except the pollutant 
greenhouse gases as defined in this section), as determined by rule by 
the Administrator. The fugitive emissions of a stationary source shall 
not be considered in determining whether it is a major stationary 
source for the purposes of section 302(j) of the Act, unless the source 
belongs to one of the following categories of stationary source:
* * * * *
    Subject to regulation means, for any air pollutant, that the 
pollutant is subject to either a provision in the Clean Air Act, or a 
nationally-applicable regulation codified by the Administrator in 
subchapter C of this chapter, that requires actual control of the 
quantity of emissions of that pollutant, and that such a control 
requirement has taken effect and is operative to control, limit or 
restrict the quantity of emissions of that pollutant released from the 
regulated activity. Pollutants subject to regulation include, but are 
not limited to, greenhouse gases as defined in this section.

Appendix A to Part 70--Approval Status of State and Local Operating 
Permits Programs

0
17. Appendix A to Part 70 is amended by:
0
a. Removing paragraph (d) under Alabama;
0
b. Removing paragraph (jj) under California;
0
c. Removing paragraph (c) under Colorado;
0
d. Removing paragraph (d) under District of Columbia;
0
e. Removing paragraph (c) under Georgia;
0
f. Removing paragraph (d) under Hawaii;
0
g. Removing paragraph (c) under Illinois;
0
h. Removing and reserving paragraph (m) under Iowa;
0
i. Removing and reserving paragraph (e) under Kansas;
0
j. Removing paragraph (c) under Louisiana;
0
k. Removing paragraph (c) under Maine;
0
l. Removing paragraph (d) under Maryland;
0
m. Removing paragraph (d) under Minnesota;
0
n. Removing paragraph (c) under Mississippi;
0
o. Removing and reserving paragraph (x) under Missouri;
0
p. Removing and reserving paragraph (k) under Nebraska, City of Omaha; 
Lincoln Lancaster County Health Department;
0
q. Removing paragraph (d) under Nevada;
0
r. Removing paragraph (c) under New Hampshire;
0
s. Removing paragraph (e) under New York;
0
t. Removing paragraph (d) under Ohio;
0
u. Removing paragraph (c) under Oklahoma;
0
v. Removing and reserving paragraph (c) under Pennsylvania;
0
w. Removing paragraph (c) under Rhode Island;
0
x. Removing paragraph (c) under South Carolina;
0
y. Removing paragraph (c) under South Dakota;
0
z. Removing paragraph (f) under Tennessee;
0
aa. Removing paragraph (c) under Utah;
0
bb. Removing paragraph (c) under Vermont;
0
cc. Removing paragraph (c) under Virgin Islands;
0
dd. Removing paragraph (c) under Virginia;
0
ee. Removing paragraph (j) under Washington;
0
ff. Removing paragraph (f) under West Virginia; and
0
gg. Removing paragraph (c) under Wisconsin.

PART 71--FEDERAL OPERATING PERMIT PROGRAMS

0
18. The authority citation for part 71 continues to read as follows:

    Authority:  42 U.S.C. 7401, et seq.


[[Page 68147]]


0
19. Section 71.2 is amended by:
0
a. Adding in alphabetical order a definition for ``Greenhouse gases;''
0
b. Revising the introductory text paragraph (2) for the definition of 
``Major source;'' and
0
c. Revising the definition of ``Subject to regulation''.
    The revisions and addition read as follows:


Sec.  71.2  Definitions.

* * * * *
    Greenhouse gases (GHGs) means the air pollutant defined in Sec.  
86.1818-12(a) of this chapter as the aggregate group of six greenhouse 
gases: Carbon dioxide, nitrous oxide, methane, hydrofluorocarbons, 
perfluorocarbons and sulfur hexafluoride. To represent an amount of 
GHGs emitted, the term tpy CO2 equivalent emissions 
(CO2e) shall be used and computed as follows:
    (1) Multiply the mass amount of emissions (tpy), for each of the 
six greenhouse gases in the pollutant GHGs, by the gas's associated 
global warming potential published at Table A-1 to subpart A of part 98 
of this chapter--Global Warming Potentials.
    (2) Sum the resultant value for each gas to compute a tpy 
CO2e.
* * * * *
    Major source means * * *
    (1) * * *
    (2) A major stationary source of air pollutants, as defined in 
section 302 of the Act, that directly emits, or has the potential to 
emit, 100 tpy or more of any air pollutant subject to regulation except 
the pollutant greenhouse gases as defined in this section. This 
definition of major stationary source includes any major source of 
fugitive emissions of any such pollutant (except the pollutant 
greenhouse gases as defined in this section), as determined by rule by 
the Administrator. The fugitive emissions of a stationary source shall 
not be considered in determining whether it is a major stationary 
source for the purposes of section 302(j) of the Act, unless the source 
belongs to one of the following categories of stationary source:
* * * * *
    Subject to regulation means, for any air pollutant, that the 
pollutant is subject to either a provision in the Clean Air Act, or a 
nationally-applicable regulation codified by the Administrator in 
subchapter C of this chapter, that requires actual control of the 
quantity of emissions of that pollutant, and that such a control 
requirement has taken effect and is operative to control, limit or 
restrict the quantity of emissions of that pollutant released from the 
regulated activity. Pollutants subject to regulation include, but are 
not limited to, greenhouse gases as defined in this section.
* * * * *
[FR Doc. 2016-21475 Filed 9-30-16; 8:45 am]
 BILLING CODE 6560-50-P


