[Federal Register Volume 76, Number 139 (Wednesday, July 20, 2011)]
[Rules and Regulations]
[Pages 43149-43153]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-18125]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R06-OAR-2011-0031; FRL-9440-7]


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

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is approving a State Implementation Plan (SIP) revision 
submitted by the New Mexico Environment Department (NMED) to EPA on 
December 1, 2010. This SIP revision modifies New Mexico's Prevention of 
Significant Deterioration (PSD) program to establish appropriate 
emission thresholds for determining which new stationary sources and 
modification projects become subject to New Mexico's PSD permitting 
requirements for their greenhouse gas (GHG) emissions. EPA is fully 
approving New Mexico's December 1, 2010, PSD SIP revision because the 
Agency has determined that this PSD SIP revision is in accordance with 
section 110 and part C of the Federal Clean Air Act and EPA regulations 
regarding PSD permitting for GHGs.

DATES: This final rule will be effective August 19, 2011.

ADDRESSES: EPA has established a docket for this action under Docket ID 
No. EPA-R06-OAR-2011-0031. All

[[Page 43150]]

documents in the docket are listed in the http://www.regulations.gov 
index. Although listed in the index, some information is not publicly 
available, e.g., CBI or other information whose disclosure is 
restricted by statute. Certain other material, such as copyrighted 
material, will be publicly available only in hard copy. Publicly 
available docket materials are available either electronically in 
www.regulations.gov or in hard copy at the Air Planning Section (6PD-
L), Environmental Protection Agency, 1445 Ross Avenue, Suite 700, 
Dallas, Texas 75202-2733. The file will be made available by 
appointment for public inspection in the Region 6 FOIA Review Room 
between the hours of 8:30 a.m. and 4:30 p.m. weekdays except for legal 
holidays. Contact the person listed in the FOR FURTHER INFORMATION 
CONTACT paragraph below or Mr. Bill Deese at 214-665-7253 to make an 
appointment. If possible, please make the appointment at least two 
working days in advance of your visit. There will be a 15 cent per page 
fee for making photocopies of documents. On the day of the visit, 
please check in at the EPA Region 6 reception area at 1445 Ross Avenue, 
Suite 700, Dallas, Texas.
    The State submittal related to this SIP revision, and which is part 
of the EPA docket, is also available for public inspection at the State 
Air Agency listed below during official business hours by appointment:
    New Mexico Environment Department, Air Quality Bureau, 1190 St. 
Francis Drive, Santa Fe, New Mexico 87502.

FOR FURTHER INFORMATION CONTACT: If you have questions concerning 
today's final rule, please contact Ms. Melanie Magee (6PD-R), Air 
Permits Section, Environmental Protection Agency, Region 6, 1445 Ross 
Avenue (6PD-R), Suite 1200, Dallas, TX 75202-2733. The telephone number 
is (214) 665-7161. Ms. Magee can also be reached via electronic mail at 
[email protected].

SUPPLEMENTARY INFORMATION: Throughout this document, whenever ``we'', 
``us'', or ``our'' is used, we mean the EPA.

Table of Contents

I. What final action is EPA taking?
II. What is the background for this action?
III. What are EPA's responses to comments received on the proposed 
action?
IV. Statutory and Executive Order Reviews

I. What final action is EPA taking?

    EPA is fully approving New Mexico's December 1, 2010, SIP 
submittal, relating to PSD requirements for GHG-emitting sources. 
Specifically, New Mexico's December 1, 2010, proposed SIP revision 
establishes appropriate emissions thresholds for determining PSD 
applicability to new and modified GHG-emitting sources in accordance 
with EPA's Tailoring Rule. EPA has made the determination that this SIP 
submittal is approvable because it is in accordance with the Clean Air 
Act (CAA) and EPA regulations regarding PSD permitting for GHGs.
    As explained in our proposed approval of the New Mexico December 1, 
2010, SIP revision, 76 FR 20907 (April 14, 2011), since EPA is 
finalizing its approval of New Mexico's changes to its air quality 
regulations to incorporate the appropriate thresholds for GHG 
permitting applicability into New Mexico's SIP, then paragraph (d) in 
Sec.  52.1634 of 40 CFR part 52, added in EPA's PSD SIP Narrowing Rule 
to codify the limitation of EPA's approval of New Mexico's PSD SIP to 
exclude the applicability of PSD to GHG-emitting sources below the 
Tailoring Rule thresholds, is no longer necessary. In today's action, 
EPA is also amending Sec.  52.1634 of 40 CFR part 52 to remove this 
unnecessary regulatory language.
    Today, we are approving the December 1, 2010, New Mexico PSD SIP 
revision as we proposed and find that the SIP revision complies with 
section 110 and part C of the Federal Clean Air Act and EPA regulations 
regarding PSD permitting for GHGs.

II. What is the background for this action?

    This section briefly summarizes EPA's recent GHG-related actions 
that provide the background for today's action. More detailed 
discussion of the background is found in the preambles for those 
actions, particularly in the background section of what we call the PSD 
SIP Narrowing Rule.\1\
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    \1\ ``Limitation of Approval of Prevention of Significant 
Deterioration Provisions Concerning Greenhouse Gas Emitting-Sources 
in State Implementation Plans; Final Rule.'' 75 FR 82536 (December 
30, 2010).
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A. GHG-related Actions

    EPA has recently undertaken a series of actions pertaining to the 
regulation of GHGs that, although for the most part distinct from one 
another, establish the overall framework for today's final action on 
the New Mexico SIP. Four of these actions include, as they are commonly 
called, the ``Endangerment Finding'' and ``Cause or Contribute 
Finding,'' which EPA issued in a single final action,\2\ the ``Johnson 
Memo Reconsideration,'' \3\ the ``Light-Duty Vehicle Rule,'' \4\ and 
the ``Tailoring Rule.'' \5\ Taken together and in conjunction with the 
CAA, these actions established regulatory requirements for GHGs emitted 
from new motor vehicles and new motor vehicle engines; determined that 
such regulations, when they took effect on January 2, 2011, subjected 
GHGs emitted from stationary sources to PSD requirements; and limited 
the applicability of PSD requirements to GHG sources on a phased-in 
basis. EPA took this last action in the Tailoring Rule, which, more 
specifically, established appropriate GHG emission thresholds for 
determining the applicability of PSD requirements to GHG-emitting 
sources.
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    \2\ ``Endangerment and Cause or Contribute Findings for 
Greenhouse Gases Under Section 202(a) of the Clean Air Act.'' 74 FR 
66496 (December 15, 2009).
    \3\ ``Interpretation of Regulations that Determine Pollutants 
Covered by Clean Air Act Permitting Programs.'' 75 FR 17004 (April 
2, 2010).
    \4\ ``Light-Duty Vehicle Greenhouse Gas Emission Standards and 
Corporate Average Fuel Economy Standards; Final Rule.'' 75 FR 25324 
(May 7, 2010).
    \5\ Prevention of Significant Deterioration and Title V 
Greenhouse Gas Tailoring Rule; Final Rule.'' 75 FR 31514 (June 3, 
2010).
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    PSD is implemented through the SIP system, and so in December 2010, 
EPA promulgated several rules to implement the new GHG PSD SIP program. 
Recognizing that some states had approved SIP PSD programs that did not 
apply PSD to GHGs, EPA issued a SIP call and, for some of these states, 
a FIP.\6\ Recognizing that other states had approved SIP PSD programs 
that do apply PSD to GHGs, but that do so for sources that emit as 
little as 100 or 250 tons per year (tpy) of GHG, and that do not limit 
PSD applicability to GHGs to the higher thresholds in the Tailoring 
Rule, EPA issued the GHG PSD SIP Narrowing Rule. Under that rule, EPA

[[Page 43151]]

withdrew its approval of the affected SIPs to the extent those SIPs 
applied PSD requirements to GHG emissions from GHG-emitting sources 
below the Tailoring Rule thresholds.
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    \6\ Specifically, by notice dated December 13, 2010, EPA 
finalized a ``SIP Call'' that would require those states with SIPs 
that have approved PSD programs but do not authorize PSD permitting 
for GHGs to submit a SIP revision providing such authority. ``Action 
To Ensure Authority To Issue Permits Under the Prevention of 
Significant Deterioration Program to Sources of Greenhouse Gas 
Emissions: Finding of Substantial Inadequacy and SIP Call,'' 75 FR 
77698 (Dec. 13, 2010). EPA has begun making findings of failure to 
submit that would apply in any state unable to submit the required 
SIP revision by its deadline, and finalizing FIPs for such states. 
See, e.g., ``Action To Ensure Authority To Issue Permits Under the 
Prevention of Significant Deterioration Program to Sources of 
Greenhouse Gas Emissions: Finding of Failure To Submit State 
Implementation Plan Revisions Required for Greenhouse Gases,'' 75 FR 
81874 (December 29, 2010); ``Action To Ensure Authority To Issue 
Permits Under the Prevention of Significant Deterioration Program to 
Sources of Greenhouse Gas Emissions: Federal Implementation Plan,'' 
75 FR 82246 (December 30, 2010). Because New Mexico's SIP already 
authorizes New Mexico to regulate GHGs once GHGs become subject to 
PSD requirements on January 2, 2011, New Mexico is not subject to 
the proposed SIP Call or FIP.
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B. New Mexico's Actions

    On June 24, 2010, New Mexico provided a letter to EPA, in 
accordance with a request to all States from EPA in the Tailoring Rule, 
with confirmation that the State has the authority to regulate GHG in 
its PSD program. The letter confirmed that current New Mexico rules 
require regulating GHGs at the existing 100/250 tpy threshold, rather 
than at the higher thresholds set in the Tailoring Rule because the 
state does not have the authority to apply the meaning of the term 
``subject to regulation'' established in the Tailoring Rule. New Mexico 
also submitted a letter on September 14, 2010, in response to the 
proposed GHG SIP Call, again confirming that EPA correctly classified 
New Mexico as a state with authority to apply PSD requirements to GHGs. 
The September 14, 2010, letter also states that NMED is pursuing 
rulemaking activity to define the terms ``greenhouse gas'' and 
``subject to regulation.'' See the docket for this proposed rulemaking 
for copies of New Mexico's June 24, 2010, and September 14, 2010, 
letters.
    In the PSD SIP Narrowing Rule, published on December 30, 2010, EPA 
withdrew its approval of New Mexico's SIP--among other SIPs--to the 
extent that SIP applies PSD permitting requirements to GHG emissions 
from sources emitting at levels below those set in the Tailoring 
Rule.\7\ As a result, New Mexico's current approved SIP provides the 
state with authority to regulate GHGs, but only at and above the 
Tailoring Rule thresholds, and thus federally requires new and modified 
sources to receive a PSD permit based on GHG emissions only if they 
emit at or above the Tailoring Rule thresholds.
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    \7\ ``Limitation of Approval of Prevention of Significant 
Deterioration Provisions Concerning Greenhouse Gas Emitting-Sources 
in State Implementation Plans; Final Rule.'' 75 FR 82536 (December 
30, 2010).
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    New Mexico has amended its state regulations to incorporate the 
Tailoring Rule thresholds, and has submitted the adopted regulations as 
revisions to the New Mexico SIP. EPA's approval of the New Mexico 
revisions will clarify the applicable thresholds in the New Mexico SIP 
and incorporate state law changes adopted at the local level into the 
federally-approved SIP.
    The basis for this SIP revision is that limiting PSD applicability 
to GHG sources to the higher thresholds in the Tailoring Rule is 
consistent with the SIP provisions that provide required assurances of 
adequate resources, and thereby addresses the flaw in the SIP that led 
to the PSD SIP Narrowing Rule. Specifically, CAA section 110(a)(2)(E) 
includes as a requirement for SIP approval that States provide 
``necessary assurances that the State * * * will have adequate 
personnel [and] funding `` to carry out such [SIP].'' In the Tailoring 
Rule, EPA established higher thresholds for PSD applicability to GHG-
emitting sources on grounds that the states generally did not have 
adequate resources to apply PSD to GHG-emitting sources below the 
Tailoring Rule thresholds,\8\ and no State, including New Mexico, 
asserted that it did have adequate resources to do so.\9\ In the PSD 
SIP Narrowing Rule, EPA found that the affected states, including New 
Mexico, had a flaw in their SIPs at the time they submitted their PSD 
programs, which was that the applicability of the PSD programs was 
potentially broader than the resources available to them under their 
SIP.\10\ Accordingly, for each affected state, including New Mexico, 
EPA concluded that EPA's action in approving the SIP was in error, 
under CAA section 110(k)(6), and EPA rescinded its approval to the 
extent the PSD program applies to GHG-emitting sources below the 
Tailoring Rule thresholds.\11\ EPA recommended that States adopt a SIP 
revision to incorporate the Tailoring Rule thresholds, thereby (i) 
assuring that under State law, only sources at or above the Tailoring 
Rule thresholds would be subject to PSD; and (ii) avoiding confusion 
under the federally-approved SIP by clarifying that the SIP applies to 
only sources at or above the Tailoring Rule thresholds.\12\
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    \8\ Tailoring Rule, 75 FR 31,517/1.
    \9\ SIP Narrowing Rule, 75 FR 82,540/2.
    \10\ Id. at 82,542/3.
    \11\ Id. at 82,544/1.
    \12\ Id. at 82,540/2.
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    The portions of the submitted SIP revision at 20.2.70.7(AL)(3) NMAC 
and 20.2.74.7(AZ)(6) NMAC act to limit the enforceability of the 
definition of ``subject to regulation'' in the event of an adverse 
federal court determination in certain GHG-related matters. EPA 
received a comment regarding the effect of such court actions, and now 
clarifies its interpretation of these provisions in response. The 
provisions state that in the event of a federal court determination 
that invalidates or renders unenforceable the Tailoring Rule, ``the 
definition `subject to regulation' shall be enforceable by the 
Department only to the extent that it is enforceable by US EPA.'' EPA 
reads this provision to mean that the state will wait for and follow 
EPA's interpretation of the effect of such a court decision regarding 
the enforceability of these SIP revisions by EPA before altering its 
own application of that term. EPA approves the SIP on the basis of this 
interpretation. If a court issues such a decision, EPA intends to 
promptly describe the impact of the court's decision on the 
enforceability of its regulations.

III. What are EPA's responses to comments received on the proposed 
action?

    EPA received one comment letter from Tri-State Generation and 
Transmission Association, Inc. in response to the proposed rulemaking. 
The comment letter is available for review in the docket for this 
rulemaking. A summary of the comments and EPA's responses are provided 
below.
    Comment 1: Commenter states that its comments pertain to EPA's 
proposed approval of the PSD portion of the New Mexico GHG Tailoring 
Rule. Commenter maintains a policy position opposing regulation of 
greenhouse gas emissions under the Clean Air Act, including its 
permitting provisions. The fact that PSD and Title V permitting 
thresholds need ``tailoring'' to be appropriate for greenhouse gases 
demonstrates that the Clean Air Act is not intended to regulate 
greenhouse gas emissions.
    Response 1: We refer Commenter to the ``Tailoring Rule'' 
(Prevention of Significant Deterioration and Title V Greenhouse Gas 
Tailoring Rule; Final Rule'' 75 FR 31514 (June 3, 2010)) as well as our 
proposed rulemaking notice at 76 FR 20907 (April 14, 2011) that cites 
to and provides information on our national GHG actions and that 
provides the general basis for the regulation of GHGs under PSD 
permitting requirements. See footnotes 1-4 at 76 FR 20908, Footnote 6 
at 20909. As we have detailed in those notices, EPA established that 
PSD applies to all pollutants newly subject to regulation, including 
non-NAAQS pollutants such as GHGs, in prior actions, and EPA has not 
re-opened that issue in this rulemaking. Accordingly, we do not believe 
these comments are relevant to this rulemaking.
    Comment 2: Commenter is mindful of the many legal challenges to 
EPA's authority to regulate GHGs, and is concerned about what effect a 
stay, remand, or vacatur of one or all of the federal GHG-related rules 
would have on the New Mexico SIP revision. Commenter supports inclusion 
of

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``enforceability'' language at 20.2.70.7(AL)(3) NMAC and 
20.2.74.7(AZ)(6) NMAC.
    Response 2: As discussed above, EPA is finalizing its approval of 
the enforceability clause at 20.2.74.7 and interprets that clause to 
indicate that the state will wait for and follow EPA's interpretation 
of the effect of any adverse court decision regarding the 
enforceability of these SIP revisions. If a court acts adversely, EPA 
intends to promptly describe the impact of the court's decision on the 
enforceability of its regulations.
    Comment 3: Commenter understands the importance of having the 
Tailoring Rule amendments in place at the state level. It would create 
an unreasonable burden on NMED's Air Quality Bureau, and all permit 
holders, should it be required that GHGs be permitted at the 100/250 
tpy levels. Within that context, Commenter remains concerned about the 
practicalities of regulation of GHGs via air quality permits.
    Response 3: We refer Commenter to our proposal for this final 
action that discusses the basis for a SIP revision that limits PSD 
applicability to GHG sources to the higher thresholds in the Tailoring 
Rule. While we appreciate Commenter's general concern about the 
practicalities of regulating of GHGs through air quality permits, 
Commenter did not provide any specific examples in the record to be 
able to adequately respond to this generalized statement. In addition, 
as discussed above, the requirement that sources seek PSD permits for 
GHG emissions was not established in this rulemaking, and was not 
reopened in this rulemaking. In fact, the State makes clear that GHG 
PSD permitting was required under its SIP prior to this rulemaking. We 
refer Commenter to New Mexico's June 24, 2010, and September 14, 2010, 
letters (mentioned elsewhere in this notice) and that are in the docket 
for this rulemaking.
    Comment 4: Commenter states the SIP revision was made in an 
expedited timeframe, despite the fact that NMED, through its membership 
in the National Association of Clean Air Agencies (NACAA) and NACAA's 
December 28, 2009 letter to EPA about the Tailoring Rule, requested 
that EPA provide more time to states to afford consideration of the 
effects of and necessary regulatory changes for the implementation of 
the federal Tailoring Rule. EPA's expedited timeframe contributes to 
regulatory uncertainty.
    Response 4: While we hear Commenter's concerns, we do not believe 
the comment is relevant to the scope of the action before us and we 
disagree with Commenter. We refer Commenter to the proposal for this 
action, which states that New Mexico amended its state regulations to 
incorporate the Tailoring Rule thresholds and timely submitted the 
state-adopted regulations as revisions to the state's SIP thereby 
contributing to regulatory certainty.
    Comment 5: Commenter states that in the state administrative 
rulemaking hearing, several of Commenter's issues were addressed, 
however inconclusively. Since uncertainty remains on various issues 
Commenter raised, Commenter re-states some of those issues. In short, 
Commenter raises issues related to Best Available Control Technology 
(BACT), New Source Performance Standards (NSPS) for GHG, Carbon Capture 
Sequestration (CCS) and GHG Reporting and Cap and Trade issues.
    Response 5: This current rulemaking action concerns whether the 
regulatory revisions relating to PSD requirements for GHG-emitting 
sources that NMED submitted to EPA on December 1, 2010, that seek to 
establish the appropriate emission thresholds for determining PSD 
applicability to new and modified GHG-emitting sources in accordance 
with EPA's Tailoring Rule, are approvable. The above comments raise 
issues that are outside the scope of this narrow rulemaking action and 
that we do not believe are relevant to the current action.

IV. Statutory and Executive Order Reviews

    Under the Clean Air Act, the Administrator is required to approve a 
SIP submission that complies with the provisions of the Act and 
applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). 
Thus, in reviewing SIP submissions, EPA's role is to approve state 
choices, provided that they meet the criteria of the Clean Air Act. 
Accordingly, this action merely approves state law as meeting Federal 
requirements and does not impose additional requirements beyond those 
imposed by state law. For that reason, this action:
     Is not a ``significant regulatory action'' subject to 
review by the Office of Management and Budget under Executive Order 
12866 (58 FR 51735, October 4, 1993);
     Does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
     Is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the Clean Air Act; and
     Does not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human health or environmental 
effects, using practicable and legally permissible methods, under 
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, this rule does not have tribal implications as 
specified by Executive Order 13175 (65 FR 67249, November 9, 2000), 
because the SIP is not approved to apply in Indian country located in 
the state, and EPA notes that it will not impose substantial direct 
costs on tribal governments or preempt tribal law.
    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this action and 
other required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. A major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2).
    Under section 307(b)(1) of the Clean Air Act, petitions for 
judicial review of this action must be filed in the United States Court 
of Appeals for the appropriate circuit by September 19, 2011. Filing a 
petition for reconsideration by the Administrator of this final rule 
does not affect the finality

[[Page 43153]]

of this action for the purposes of judicial review nor does it extend 
the time within which a petition for judicial review may be filed, and 
shall not postpone the effectiveness of such rule or action. This 
action may not be challenged later in proceedings to enforce its 
requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

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

    Dated: June 30, 2011.
Al Armendariz,
Regional Administrator, Region 6.
    40 CFR part 52 is amended as follows:

PART 52--[AMENDED]

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

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

Subpart GG--New Mexico

0
2. Section 52.1620 is amended in paragraph (c) by revising the entry 
for Part 74 under ``New Mexico Administrative Code (NMAC) Title 20--
Environment Protection Chapter 2--Air Quality'' to read as follows:


Sec.  52.1620  Identification of plan.

* * * * *
    (c) * * *

                                       EPA Approved New Mexico Regulations
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                                                         State approval/
        State citation               Title/subject          effective       EPA approval date        Comments
                                                              date
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          New Mexico Administrative Code (NMAC) Title 20--Environment Protection Chapter 2--Air Quality
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                                                  * * * * * * *
Part 74......................  Permits--Prevention of          1/1/2011  7/20/2011 [Insert FR
                                Significant                               page number where
                                Deterioration.                            document begins].
 
                                                  * * * * * * *
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Sec.  52.1634  [Amended]

0
3. Section 52.1634 is amended by removing and reserving paragraph (d).

[FR Doc. 2011-18125 Filed 7-19-11; 8:45 am]
BILLING CODE 6560-50-P