[Federal Register Volume 79, Number 32 (Tuesday, February 18, 2014)]
[Proposed Rules]
[Pages 9123-9133]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-03429]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R06-OAR-2013-0808; FRL-9906-62-Region-6]


Approval and Promulgation of Air Quality Implementation Plans; 
Withdrawal of Federal Implementation Plan; Texas; Prevention of 
Significant Deterioration; Greenhouse Gas Tailoring Rule Revisions

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing to 
approve portions of two revisions to the Texas State Implementation 
Plan (SIP) submitted by the Texas Commission on Environmental Quality 
(TCEQ) to EPA on October 5, 2010, and December 2, 2013. Together, these 
two SIP submittals revise the Texas Prevention of Significant 
Deterioration (PSD) Program to provide for the regulation of greenhouse 
gas (GHG) emissions and clarify the applicability of Best Available 
Control Technology (BACT) for all PSD permit applications. The December 
2, 2013, submittal is a request for parallel processing of revisions 
proposed by the TCEQ on October 23, 2013. The December 2, 2013, 
submittal includes proposed revisions to the Texas SIP to provide the 
State of Texas with the express authority to regulate GHG emissions, 
issue PSD permits governing GHG emissions, establish appropriate 
emission thresholds for determining which new stationary sources and 
modifications to existing stationary sources become subject to Texas's 
PSD permitting requirements for their GHG emissions, and revises 
several Minor New Source Review (NSR) provisions to specify that Minor 
NSR permit mechanisms cannot be used for authorizing GHG emissions. The 
December 2, 2013, SIP revision also defers until July 21, 2014, 
application of the PSD permitting requirements to biogenic carbon 
dioxide emissions from bioenergy and other biogenic stationary sources. 
The October 5, 2010, submittal

[[Page 9124]]

revises the Texas SIP to clarify that all PSD permits must undergo BACT 
review consistent with the requirements in the Federal and Texas PSD 
programs. EPA is proposing to approve portions of the October 5, 2010, 
and December 2, 2013, SIP revisions to the Texas SIP and NSR permitting 
program as consistent with federal requirements for PSD permitting of 
GHG emissions. EPA is proposing to sever and take no action on the 
portion of the October 5, 2010, SIP revision which pertains to the 
Texas Minor NSR program for Qualified Facilities. EPA is also proposing 
to sever and take no action on the portion of the December 2, 2013, SIP 
revision that relates to the provisions of EPA's July 20, 2011, 
``Deferral for CO2 Emissions from Bioenergy and other 
Biogenic Sources Under the Prevention of Significant Deterioration 
(PSD) and Title V Programs'' (Biomass Deferral Rule), as the DC Circuit 
Court of Appeals issued an order to vacate that rule on July 13, 2013. 
EPA is also proposing to rescind the Federal Implementation Plan (FIP) 
for Texas, with three limited possibilities for retained authority, 
which was put in place to ensure the availability of a permitting 
authority for GHG permitting in Texas until final approval of the Texas 
SIP PSD GHG program. EPA is proposing this action under section 110 and 
part C of the Clean Air Act (CAA).

DATES: Comments must be received on or before March 20, 2014.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R06-
OAR-2013-0808 by one of the following methods:
     www.regulations.gov. Follow the online instructions for 
submitting comments.
     EMail: Ms. Adina Wiley at [email protected].
     Mail or Delivery: Ms. Adina Wiley, Air Permits Section 
(6PD-R), Environmental Protection Agency, 1445 Ross Avenue, Suite 1200, 
Dallas, Texas 75202-2733.
    Instructions: Direct your comments to Docket ID No. EPA-R06-OAR-
2013-0808. EPA's policy is that all comments received will be included 
in the public docket without change and may be made available online at 
http://www.regulations.gov, including any personal information 
provided, unless the comment includes information claimed to be 
Confidential Business Information (CBI) or other information the 
disclosure of which is restricted by statute. Do not submit information 
through http://www.regulations.gov or email, if you believe that it is 
CBI or otherwise protected from disclosure. The http://www.regulations.gov Web site is an ``anonymous access'' system, which 
means that EPA will not know your identity or contact information 
unless you provide it in the body of your comment. If you send an email 
comment directly to EPA without going through http://www.regulations.gov, your email address will be automatically captured 
and included as part of the comment that is placed in the public docket 
and made available on the Internet. If you submit an electronic 
comment, EPA recommends that you include your name and other contact 
information in the body of your comment along with any disk or CD-ROM 
submitted. If EPA cannot read your comment due to technical 
difficulties and cannot contact you for clarification, EPA may not be 
able to consider your comment. Electronic files should avoid the use of 
special characters and any form of encryption and should be free of any 
defects or viruses. For additional information about EPA's public 
docket, visit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm.
    Docket: The index to the docket for this action is available 
electronically at www.regulations.gov and in hard copy at EPA Region 6, 
1445 Ross Avenue, Suite 700, Dallas, Texas. While all documents in the 
docket are listed in the index, some information may be publicly 
available only at the hard copy location (e.g., copyrighted material), 
and some may not be publicly available at either location (e.g., CBI). 
To inspect the hard copy materials, please schedule an appointment with 
the person listed in the FOR FURTHER INFORMATION CONTACT paragraph 
below or Mr. Bill Deese at 214-665-7253.

FOR FURTHER INFORMATION CONTACT: Ms. Adina Wiley (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) 665-2115. Ms. Wiley can also be reached via electronic mail at 
[email protected].

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

Table of Contents

I. Background for Our Proposed Action
    A. History of EPA's GHG-Related Actions
    B. EPA's Biomass Deferral Rule
    C. EPA's Tailoring Rule Step 3
II. Summary of State Submittals
    A. October 5, 2010
    B. December 2, 2013
III. EPA's Analysis of the State Submittals
    A. Analysis of the October 5, 2010 State Submittal
    B. Analysis of the December 2, 2013 State Submittal
    i. Analysis of the Proposed Revisions to the Texas PSD Program
    ii. Analysis of the Proposed Non-PSD Revisions to the Texas SIP
IV. EPA's Analysis for Rescinding the Texas PSD FIP
    A. Evaluation of Rescission of the GHG PSD FIP at 40 CFR 
52.2305(a), (b) and (c)
    B. Transition Process upon Rescission of the GHG PSD FIP for 
Pending GHG PSD Permit Applications and Issued GHG PSD Permits
V. Proposed Action
VI. Statutory and Executive Order Reviews

I. Background for Our Proposed Action

    The CAA at section 110(a)(2)(C) requires states to develop and 
submit to EPA for approval into the SIP, preconstruction review and 
permitting programs applicable to certain new and modified stationary 
sources of air pollutants for attainment and nonattainment areas that 
cover both major and minor new sources and modifications, collectively 
referred to as the NSR SIP. The CAA NSR SIP program is composed of 
three separate programs: PSD, Nonattainment NSR (NNSR), and Minor NSR. 
PSD is established in part C of title I of the CAA and applies in areas 
that meet the National Ambient Air Quality Standards (NAAQS)--
``attainment areas''--as well as areas where there is insufficient 
information to determine if the area meets the NAAQS--``unclassifiable 
areas.'' The NNSR SIP program is established in part D of title I of 
the CAA and applies in areas that are not in attainment of the NAAQS--
``nonattainment areas.'' The Minor NSR SIP program addresses 
construction or modification activities that do not emit, or have the 
potential to emit, beyond certain major source thresholds and thus do 
not qualify as ``major'' and applies regardless of the designation of 
the area in which a source is located. EPA regulations governing the 
criteria that states must satisfy for EPA approval of the NSR programs 
as part of the SIP are contained in 40 CFR sections 51.160--51.166.
    Texas submitted on October 5, 2010, and December 2, 2013, a 
collection of regulations for approval by EPA into the Texas SIP, 
including some regulations specific to the Texas PSD permitting program 
to clarify the applicability of BACT for all PSD permit applications 
and to provide for regulation of GHG emissions through the Texas PSD 
program. The October 5, 2010, submittal included revisions to the 
Permit Application requirements for the Texas NSR program at 30 TAC 
Section 116.111

[[Page 9125]]

to clarify that federal BACT will be applied to all PSD permit 
applications, in addition to the application of Texas BACT process as 
required by the Texas Clean Air Act. The October 5, 2010, submittal 
also included revisions to the Texas Minor NSR Qualified Facilities 
Program, which is severable from today's proposed action on the Texas 
PSD program. The December 2, 2013, submittal includes revisions to the 
Texas SIP and the Texas NSR program to (1) establish that the State of 
Texas has the express authority to regulate GHG emissions, (2) provide 
for the issuance of PSD permits governing GHG emissions, (3) establish 
appropriate emission thresholds for determining which new stationary 
sources and modification projects become subject to Texas's PSD 
permitting requirements for their GHG emissions consistent with the 
``PSD and Title V Greenhouse Gas Tailoring Final Rule'' (75 FR 31514) 
hereafter referred to as the ``Tailoring Rule'', and (4) make revisions 
to the Texas Minor NSR program to limit the scope of GHG permitting to 
the Texas PSD program. The December 2, 2013, submittal also included 
provisions to adopt and implement EPA's July 20, 2011, GHG Biomass 
Deferral.
    We have evaluated the SIP submissions for whether they meet the CAA 
and 40 CFR Part 51, and are consistent with EPA's interpretation of the 
relevant provisions. Today's proposed action and the accompanying 
Technical Support Document (TSD) present our rationale for proposing 
approval of these regulations as meeting the minimum federal 
requirements for the adoption and implementation of the PSD SIP 
permitting programs. Note that Texas is currently subject to the PSD 
Federal Implementation Plan (FIP) at 40 CFR 52.2305. See 76 FR 25178, 
May 3, 2011. We are also proposing to rescind the PSD FIP for Texas 
when we finalize today's proposed action. EPA is proposing to sever and 
take no action on the portions of the October 5, 2010, submittal that 
pertain to the Texas Minor NSR Qualified Facilities Program. EPA is 
proposing to sever and take no action on the portions of the December 
2, 2013, submittal that relate to the provisions of EPA's Biomass 
Deferral for the reasons stated above.

A. History of EPA's GHG-Related Actions

    This section summarizes EPA's recent GHG-related actions. Please 
see the preambles for the identified GHG-related rulemakings for more 
information.
    EPA has recently undertaken a series of actions pertaining to the 
regulation of GHGs that, although for the most part are distinct from 
one another, establish the overall framework for today's proposed 
action on the Texas 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,\1\ the ``Johnson 
Memo Reconsideration,'' \2\ the ``Light-Duty Vehicle Rule,'' \3\ and 
the ``Tailoring Rule.'' \4\ 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. 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 for 13 states 
(including Texas) on December 13, 2010, 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.\5\ EPA advised the States that as of January 2, 2011, if the 
States had not submitted, and EPA had not approved, a SIP revision 
establishing PSD permitting for GHGs, or if EPA had not promulgated a 
Federal Implementation Plan (FIP) by the same time, then sources with 
GHG emissions could, as a practical matter, be precluded from lawfully 
constructing or modifying due to the lack of a permitting authority to 
issue the required permit.
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    \1\ ``Endangerment and Cause or Contribute Findings for 
Greenhouse Gases Under Section 202(a) of the Clean Air Act.'' 74 FR 
66496 (December 15, 2009).
    \2\ ``Interpretation of Regulations that Determine Pollutants 
Covered by Clean Air Act Permitting Programs.'' 75 FR 17004 (April 
2, 2010).
    \3\ ``Light-Duty Vehicle Greenhouse Gas Emission Standards and 
Corporate Average Fuel Economy Standards; Final Rule.'' 75 FR 25324 
(May 7, 2010).
    \4\ Prevention of Significant Deterioration and Title V 
Greenhouse Gas Tailoring Rule; Final Rule.'' 75 FR 31514 (June 3, 
2010).
    \5\ ``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). 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.
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    All of the states identified in the SIP Call, except for Texas, 
either (i) submitted a corrective SIP revision to apply their CAA PSD 
programs to sources of GHG emissions promptly enough to avoid adverse 
impacts on their new or modifying sources, or (ii) did not object to 
EPA establishing a deadline for SIP revisions of December 22, 2010. For 
the latter states, EPA published a finding of failure to submit the 
required SIP revision by the specified deadline and then immediately 
promulgated the GHG PSD FIP to ensure the availability of a permitting 
authority for GHG emitting sources subject to PSD requirements in those 
states.6 7
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    \6\ ``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).
    \7\ ``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).
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    The State of Texas did not identify a GHG SIP revision deadline; 
therefore, EPA assigned a default twelve-month SIP revision deadline of 
December 1, 2011. This meant that, absent further action, there would 
be no authority in Texas to issue PSD permits starting January 2, 2011. 
In that case, GHG-emitting sources seeking to undertake construction or 
modification activities during almost all of 2011 would have no 
permitting authority available to issue a PSD permit until, at the 
earliest, December 2011.
    To remedy this situation, EPA determined that pursuant to CAA 
Section 110(k)(6), its prior approval of Texas's PSD program ``was in 
error'' because, among other things the SIP failed to address all 
pollutants that would become subject to regulation in the future or 
provide assurance of Texas's legal authority to do so. EPA corrected 
its previous full approval of Texas's PSD SIP to be a partial approval 
and partial disapproval. The partial disapproval reflected the PSD 
SIP's failure to address how PSD would apply to newly regulated 
pollutants. At the same time, EPA promulgated a FIP that applied PSD to 
GHGs, which are the newly regulated pollutants presently at issue. That 
FIP established EPA as the permitting authority, so that as of January 
2, 2011, EPA could issue PSD permits to Texas's GHG-emitting

[[Page 9126]]

sources that sought to undertake construction or modification 
activities.
    EPA took this action in December 2010, through an interim final 
rulemaking, without a prior proposal, under the ``good cause'' 
exception of 5 U.S.C. Section 553(b)(B), in light of the need to 
establish a permitting authority by January 2, 2011. EPA further 
provided that the interim final rulemaking would expire by May 1, 2011. 
At the same time, EPA proposed to take the same action through notice-
and-comment rulemaking. By May 1, 2011, EPA completed the notice-and-
comment rulemaking by finalizing a rule that mirrored the interim final 
rulemaking by correcting the previous full approval of Texas's PSD SIP 
provision to be a partial approval and partial disapproval, and by 
promulgating a FIP that established EPA as the permitting authority for 
GHG-emitting sources.\8\
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    \8\ Texas, Wyoming and industry challenged the GHG PSD SIP Call 
rules in the D.C. Circuit. Texas and industry also challenged the 
Texas error correction rules in the D.C. Circuit. On July 26, 2013, 
the D.C. Circuit handed down a single decision for two separate 
cases: (1) the challenge by Texas, Wyoming and industry to three 
related GHG PSD SIP Call rules (Utility Air Regulatory Group v. EPA, 
No. 11-1037), and (2) the challenge by Texas and industry to two 
related Texas GHG PSD error correction and FIP rules (Texas v. EPA, 
No. 10-1425). The decision dismisses challenges to both of these 
sets of rules by holding that none of the petitioners had standing 
to challenge any of the rules.
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    For other states, EPA recognized that many 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 tpy of GHG, and that do not limit PSD 
applicability to GHGs to the higher thresholds in the Tailoring Rule. 
Therefore, EPA issued the GHG PSD SIP Narrowing Rule.\9\ Under that 
rule, EPA withdrew its approval of the affected SIPs to the extent 
those SIPs covered GHG-emitting sources below the Tailoring Rule 
thresholds. EPA based its action primarily on the ``error correction'' 
provisions of CAA section 110(k)(6).
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    \9\ ``Limitation of Approval of Prevention of Significant 
Deterioration Provisions Concerning Greenhouse Gas Emitting Sources 
in State Implementation Plans,'' 75 FR 82536 (December 30, 2010). 
The GHG PSD SIP Narrowing Rule does not apply to Texas because the 
GHG PSD FIP is in place.
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B. EPA's Biomass Deferral Rule

    On July 20, 2011, EPA promulgated the final Biomass Deferral Rule. 
The Biomass Deferral delayed until July 21, 2014, the consideration of 
CO2 emissions from bioenergy and other biogenic sources when 
determining whether a stationary source meets the PSD and Title V 
applicability thresholds. The D.C. Circuit Court issued its decision to 
vacate the Biomass Deferral Rule on July 12, 2013.

C. EPA's Tailoring Rule Step 3

    On July 12, 2012, EPA promulgated the final ``Prevention of 
Significant Deterioration and Title V Greenhouse Gas Tailoring Rule 
Step 3 and GHG Plantwide Applicability Limits'' (GHG Tailoring Rule 
Step 3 and GHG PALs). EPA's rationale for the rule is available in the 
notice of final rulemaking at 77 FR 41051. EPA finalized Step 3 by 
determining not to lower the current GHG applicability thresholds from 
the Step 1 and Step 2 levels because state permitting authorities had 
not had sufficient time and opportunity to develop the necessary 
infrastructure and increase their GHG permitting expertise and 
capacity, and the state permitting authorities and EPA had not had the 
opportunity to develop streamlining measures to improve permit 
implementation. See 77 FR 41051, 41052. The Tailoring Rule Step 3 also 
promulgated revisions to our regulations under 40 CFR part 52 for 
better implementation of the federal program for establishing PALs for 
GHG emissions. A PAL establishes a site-specific plantwide emission 
level for a pollutant that allows the source to make changes at the 
facility without triggering the requirements of the PSD program, 
provided that emissions do not exceed the PAL level. Under the EPA's 
interpretation of the federal PAL provisions, such PALs are already 
available under PSD for non-GHG pollutants and for GHGs on a mass 
basis, and we revised the PAL regulations to allow for GHG PALs to be 
established on a CO2e basis as well. We also revised the 
regulations to allow a GHG-only source to submit an application for a 
CO2e-based GHG PAL while also maintaining its minor source 
status. We believe that these actions could streamline PSD permitting 
programs by allowing sources and permitting authorities to address GHG 
emissions one time for a source and avoid repeated subsequent 
permitting actions for a 10-year period. See 77 FR 41051, 41052.
    The revisions to the PSD PAL rules for GHG permitting are voluntary 
for a state to adopt and implement. The December 2, 2013, submittal 
from Texas does not address the Tailoring Rule Step 3 GHG PAL 
revisions.

II. Summary of State Submittals

A. October 5, 2010

    In a letter dated October 5, 2010, Mr. Bryan W. Shaw, Ph.D., 
Chairman of the TCEQ, submitted revisions to the Texas SIP that were 
adopted on September 15, 2010, and became effective on October 7, 2010. 
This submittal included the following revisions that were submitted 
primarily to address the Texas Minor NSR Qualified Facilities Program:
     Substantive and non-substantive revisions to General 
Definitions for the Texas NSR Program at 30 TAC Section 116.10,
     New definitions at 30 TAC Section 116.17 for the Texas 
Qualified Facilities Program,
     Substantive and non-substantive revisions to the General 
Application Provisions for the Texas NSR Program at 30 TAC Section 
116.111,
     Substantive revisions to the provisions for Changes to 
Facilities at 30 TAC Section 116.116 specific to qualified facilities, 
and
     Substantive and non-substantive revisions to the 
provisions for Documentation and Notification of Changes to Qualified 
Facilities at 30 TAC Section 116.117.
    EPA's proposed action today will only evaluate the revisions to the 
General Application requirements at 30 TAC Section 116.111 that are 
necessary to support the Texas PSD program, including the permitting of 
GHG emissions in Texas. EPA is severing and taking no action at this 
time on the remaining components of the October 5, 2010, SIP submittal 
that address the Qualified Facilities program. By severing, we mean 
that the October 5, 2010 submittal of the revisions to the General 
Application requirements at 30 TAC Section 116.111 can be implemented 
independently of the portions of the submittal relating to the Texas 
Minor NSR Qualified Facilities program. EPA will evaluate and take 
action on the remaining portions of the October 5, 2010, SIP submittal 
at a later date.

B. December 2, 2013

    In a letter dated December 2, 2013, Mr. Zak Covar, Executive 
Director of the TCEQ, requested parallel processing of the October 23, 
2013, proposed new and amended rules to implement the requirements of 
Texas House Bill (HB) 788, 83rd Legislature, 2013. Texas HB 788 
directed the TCEQ to adopt rules necessary to implement the 
requirements of EPA's GHG Tailoring Rule and limit the regulation of 
GHGs only to the Texas PSD program. The December 2, 2013, parallel 
processing submittal consisted of the following revisions:
     30 TAC Chapter 39--Public Notice.
    The rules governing public notice for applications for air quality 
permits are

[[Page 9127]]

contained in Chapter 39. Emissions of GHGs will be covered under the 
Texas PSD program, and will therefore follow the same public notice 
provisions as other PSD permit applications in Texas. The TCEQ has made 
changes to indicate that certain items required by a PSD public notice 
may not be applicable to GHG PSD permit applications--such as an air 
quality analysis or a Class I impact analysis for GHGs. Additionally, 
Texas HB 788, from the 83rd Legislature, 2013, has specifically 
exempted GHG PSD permit applications from the Texas requirement to 
provide an opportunity for the contested case hearing process.
    [cir] 30 TAC Section 39.411--Text of Public Notice.
    The TCEQ has proposed revisions to 30 TAC Section 39.411 that will 
require the public notice for a GHG PSD permit application to include a 
statement that any person is entitled to request a public meeting or a 
notice and comment hearing. The TCEQ has also amended this section to 
include the phrase ``as applicable'' in reference to the air quality 
analyses that must be made available for review. Additionally, the TCEQ 
has proposed several typographical corrections throughout section 
39.411.
    [cir] 30 TAC Section 39.412--Combined Notice for Certain Greenhouse 
Gases Permit Applications.
    The TCEQ has proposed this new section to streamline the permit 
application process only for permit applications that have been 
transferred from EPA after the effective date of the FIP rescission, or 
for permit applications that were previously filed with EPA and EPA has 
already published a draft permit. This new section would allow a permit 
applicant to issue one public notice combining the requirements of the 
Texas first notice (Notice of Receipt of Application and Intent to 
Obtain Permit (NORI)) and the Texas second notice (Notice of 
Application and Preliminary Decision (NAPD)).
    [cir] 30 TAC Section 39.419--Notice of Application and Preliminary 
Decision.
    The TCEQ has amended this section to add the phrase ``as 
applicable'' in reference to the air quality analysis that must be 
available for public review.
    [cir] 30 TAC Section 39.420--Transmittal of the Executive 
Director's Response to Comments and Decision.
    TCEQ has amended this section to include a new provision at 30 TAC 
Section 39.420(e)(4) that says public notice documents for GHG PSD 
permits do not need to include instructions on how to request a 
contested case hearing or requesting the commission reconsider the 
Executive Director's decision.
     30 TAC Chapter 101--General Air Quality Rules.
    The TCEQ has amended the definitions and general rules germane to 
the Texas SIP to implement the requirements of Texas HB 788 and to 
provide authority to regulate GHGs.
    [cir] 30 TAC Section 101.1--Definitions.
    [ssquf] The TCEQ has proposed a new definition for GHGs at 30 TAC 
Section 101.1(42).
    [ssquf] The TCEQ has also proposed several amendments to the 
definition of Reportable Quantity at 30 TAC Section 101.1(89) to 
establish that there is no reportable quantity for GHGs (except for the 
specific individual air contaminants found in the current definition of 
RQ), and establish a reportable quantity of 5,000 pounds for 3-
pentanone, 1,1,1,2,2,4,5,5,5-nonafluoro-4-(trifluromethyl)-, CAS No. 
756-13-8 (hereafter referred to as C6 fluoroketone) rather than the 
default reportable quantity of 100 pounds.
    [ssquf] The TCEQ has also proposed amendments to the definition of 
unauthorized emissions at 30 TAC Section 101.1(108) to exclude 
emissions of carbon dioxide (CO2) and methane 
(CH4).
    [ssquf] The TCEQ has also proposed a number of non-substantive 
amendments to correct for renumbering and internal referencing to other 
TAC provisions.
    [cir] 30 TAC Section 101.10--Emissions Inventory Requirements.
    [ssquf] The TCEQ has proposed amendments to 30 TAC Section 
101.10(a)(3) to provide an exception for GHG emissions to the 
applicable criteria for which an owner or operator is required to 
submit emission inventories.
    [ssquf] The TCEQ has also proposed non-substantive revisions for 
renumbering and formatting and to update references to other TAC 
provisions.
    [cir] 30 TAC Section 101.201--Emissions Event Reporting and 
Recordkeeping Requirements.
    The TCEQ has proposed an amendment to specify that any emissions of 
GHG, individually or collectively, are not subject to emissions event 
reporting.
     30 TAC Chapter 106--Permits by Rule.
    The Texas Permits by Rule (PBR) program under 30 TAC Chapter 106, 
is one component of the SIP-approved Minor NSR program in Texas. The 
TCEQ has proposed amendments to the Minor NSR PBR program at 30 TAC 
Section 106.2 to clarify that emissions of GHG cannot be authorized 
through a PBR. Additionally, the TCEQ has proposed an amendment to 30 
TAC Section 106.4 to specify that for sources that are only subject to 
PSD for GHG emissions, a PBR can still be used to authorize the non-PSD 
emissions; provided that the source obtains the GHG PSD construction 
permit prior to commencing construction.
     30 TAC Chapter 116--Control of Air Pollution by Permits 
for New Construction or Modification.
    The Texas PSD program and necessary implementing definitions are 
SIP-approved under 30 TAC Chapter 116. With the exception of PBR which 
are codified at 30 TAC Chapter 106, the remainder of the SIP-approved 
Texas Minor NSR program is SIP-approved at 30 TAC Chapter 116. The TCEQ 
has proposed several amendments to this chapter to provide for PSD 
permitting of GHG emissions and to limit the scope of the Texas Minor 
NSR programs to not include emissions of GHG. Specifically, the TCEQ 
has proposed the following:
    [cir] 30 TAC Section 116.12--Nonattainment and Prevention of 
Significant Deterioration Definitions.
    [ssquf] The TCEQ has proposed new definitions for the 
``CO2 equivalent'' and the pollutant GHG.
    [ssquf] The TCEQ has also proposed revisions to the definitions of 
``Federally Regulated NSR pollutant,'' ``major stationary source,'' and 
``major modifications.''
    [ssquf] The TCEQ has also proposed renumbering to accommodate the 
proposed new definitions.
    [cir] 30 TAC Section 116.111--General Application.
    [ssquf] The TCEQ has proposed an amendment to the general 
application provisions to require a PSD permit for GHG emissions that 
meet or exceed the thresholds for GHG PSD permitting established in new 
proposed section 116.164. This amendment will specify that GHG 
permitting is statewide, without regard to an attainment designation 
for GHG permitting.
    [cir] 30 TAC Section 116.160--Prevision of Significant 
Deterioration Requirements.
    [ssquf] TCEQ has proposed an amendment to 30 TAC Section 116.160(a) 
to require new major sources of GHG emissions or major modifications of 
GHG emissions to comply with the PSD permitting program regardless of 
location of the source.
    [ssquf] TCEQ has proposed amendments to 30 TAC Section 
116.160(b)(2) to include references to the netting requirements for GHG 
applicability thresholds established in new section 116.164.
    [ssquf] TCEQ has also proposed an amendment to 30 TAC Section 
116.160(c) to clarify that emissions of

[[Page 9128]]

GHG are subject to the applicability thresholds in new section 116.164.
    [cir] 30 TAC Section 116.164--Prevention of Significant 
Deterioration Applicability for Greenhouse Gases Sources.
    The TCEQ has proposed a new subsection to the Texas PSD program 
specifically for the permitting of GHG emissions. This new subsection 
establishes the applicability thresholds developed by EPA in the GHG 
Tailoring Rule.
    [cir] 30 TAC Section 116.169--Greenhouse Gas Transition.
    The TCEQ has proposed a new subsection to the Texas PSD program to 
address the transition process for permit applicants upon the effective 
date of the rescission of the GHG PSD FIP by the EPA Administrator. The 
proposed subsection does not identify the actions to be taken by EPA; 
it only establishes that upon the rescission of the FIP, the TCEQ will 
accept the transfer and review of pending permit applications. The 
actions to be taken by EPA during the transition process will be 
discussed in section IV.B. of this notice.
     30 TAC Chapter 122--Federal Operating Permits.
    The TCEQ proposed several amendments to the Texas Title V program 
on October 23, 2013; but only the proposed revisions to 30 TAC Section 
122.122--Potential to Emit--have been submitted for parallel processing 
into the Texas SIP. In this proposed revision, the TCEQ amends the 
potential to emit provisions to clarify that existing sites must 
certify emissions of GHG below major source thresholds. Existing sites 
that are currently operating will have 90 days after EPA's FIP 
rescission to certify emissions of GHGs to avoid applicability of Title 
V permitting.
     The TCEQ December 2, 2013, commitment letter also 
addresses the requirement that the state provide the necessary 
assurances of its authority to address all future federally regulated 
pollutants under the Texas PSD program, in order to remove the PSD FIP 
at 40 CFR 52.2305(c).
     The January 13, 2014, letter from TCEQ demonstrates its 
authority to administer the Texas PSD program for EPA issued GHG PSD 
permits.

III. EPA's Analysis of the State Submittals

A. Analysis of the October 5, 2010, State Submittal

    As explained previously in section II.A., EPA's analysis of the 
October 5, 2010, submittal only addresses the submitted substantive and 
non-substantive revisions to the General Application provisions to the 
Texas NSR program at 30 Section TAC 116.111. The substantive revision 
to 30 TAC Section 116.111(a)(2)(C) clarifies when federal BACT will be 
applied to PSD permit applications. The TCAA requires the TCEQ to apply 
BACT to all facilities and to all contaminants emitted from said 
facilities that are permitted under the TCAA, including non-PSD sources 
and modifications. EPA refers to this process as ``Texas BACT.'' We 
view the application of Texas BACT, which would include BACT for Minor 
NSR permitting, to be a separate requirement from the application of 
federal BACT as required in EPA's PSD regulations and the Texas SIP-
approved PSD Program. To clarify the requirements of the TCAA and to 
ensure compliance with federal PSD regulations, the TCEQ has submitted 
revisions to the general application provisions at 30 TAC Section 
116.111(a)(2)(C). Pursuant to the submitted revisions, BACT consistent 
with the Texas Clean Air Act (Texas BACT) will be applied to all permit 
applications under the TCAA. However, prior to the application of Texas 
BACT, if the permit application is for a new source or modification 
subject to PSD, then BACT consistent with the federal PSD requirements 
and the SIP-approved Texas PSD program must be applied. The SIP-
approved Texas PSD program at 30 TAC Section 116.160(c)(1)(A) 
incorporates the requirements for BACT at 40 CFR 52.21(b)(12).\10\ The 
submitted revision clearly requires that all PSD subject applications 
go through federal PSD BACT in addition to Texas BACT; for PSD permit 
applications, federal BACT requirements will govern the permitting 
process if there is a discrepancy between the federal BACT and Texas 
BACT analysis. The TCEQ also submitted several non-substantive 
revisions made throughout 30 TAC Section 116.111 to spell out acronyms 
and to clarify/update cross-references. A complete listing of all the 
revisions is available in the accompanying TSD for this rulemaking. EPA 
proposes to approve the October 5, 2010, revisions to 30 TAC Section 
116.111 as consistent with the PSD requirements at 40 CFR 51.166. 
Further, we note that the substantive revision is consistent with and 
supportive of revisions to the Texas PSD program separately approved at 
30 TAC Section 116.160 on September 15, 2010. See 75 FR 55978.
---------------------------------------------------------------------------

    \10\ The Texas PSD program incorporates the federal PSD 
definition of BACT at 40 CFR 52.21(b)(12). This means that PSD BACT 
will be based on the maximum degree of reduction for each pollutant 
subject to regulation under the Act, taking into account energy, 
environmental, and economic impacts and other costs. The Texas BACT 
process will apply to all permitted facilities and contaminants--not 
just major sources--and is not held to the same rigor as the federal 
PSD BACT analysis. For example, minor NSR applicants only have to 
meet controls currently permitted as compared to the federal PSD 
requirement to use the most stringent control technology.
---------------------------------------------------------------------------

B. Analysis of the December 2, 2013, State Submittal

    As described in the discussion in Section II.B of this proposal 
notice, the TCEQ proposed revisions to several portions of the Texas 
Air Code to implement the requirements of Texas HB 788 and to provide 
TCEQ the authority to regulate GHG emissions through the Texas PSD 
program. Texas HB 788 required further revisions to the Texas SIP and 
the Minor NSR program to ensure that GHG emissions would only be 
regulated via the PSD program as required through EPA's GHG Tailoring 
Rule. The analysis in this section will be presented based on those 
revisions necessary for the PSD program and those that are non-PSD.
    EPA is parallel processing the revisions proposed on October 23, 
2013, based on the request submitted on December 2, 2013. This means 
that EPA is proposing approval at the same time that Texas is 
completing the public comment and rulemaking process at the state 
level. The December 2, 2013, SIP revision request will not be complete 
and will not meet all the adequacy criteria until the state public 
process is complete and the SIP revision is submitted as a final 
adoption with a letter from the Governor or Governor's designee. EPA is 
proposing to approve the SIP revision request after completion of the 
state public process and final submittal.
i. Analysis of the Proposed Revisions to the Texas PSD Program

Definitions To Effectuate Authority

    TCEQ has proposed several new definitions in the Texas SIP to adopt 
and implement the permitting of GHGs consistent with federal 
requirements.
     TCEQ proposed new definitions at 30 TAC Sections 101.1(42) 
and 116.12(16) to adopt the definition of ``greenhouse gases''. Based 
on our analysis, EPA proposes to find that the new definitions of GHG 
are consistent with the federal PSD definition at 40 CFR 51.166(b)(48).
     The TCEQ has also proposed a new definition for ``carbon 
dioxide equivalent (CO2e)'' at 30 TAC Section 116.12(7)(A). 
Based on our analysis, EPA proposes to find that the definition at 30 
TAC Section 116.12(7)(A) is

[[Page 9129]]

consistent with the provisions at 40 CFR 51.166(b)(48)(ii)(a) and (b).
     The TCEQ also proposed revisions to the definition of 
``potential to emit'' at 30 TAC Section 122.122. EPA proposes to find 
that these revisions are necessary to update the SIP-approved 
definition to account for the permitting of GHG emissions. The Texas 
PSD program relies on a source's potential to emit for establishing 
applicability of the PSD rules.
    EPA's analysis is that the new definitions for GHG and 
CO2e at 30 TAC Sections 101.1(42), 116.12(16), and 
116.12(7A) are consistent with the Act and EPA regulations at 40 CFR 
51.166. The proposed revisions to the definition of ``potential to 
emit'' at 30 TAC Section 122.122 are necessary to ensure that PSD 
permitting applicability is calculated correctly. Therefore, we propose 
approval of the new definitions and propose to find that the final 
adoption of the definitions for ``greenhouse gases'' and 
``CO2e'' will effectuate the authority for the State of 
Texas to regulate emissions of GHG through the Texas SIP and the Texas 
PSD program.

Public Notice for GHG PSD Permit Applications

    The December 2, 2013, proposed revisions included revisions to the 
Texas Public Notice requirements for PSD permitting at 30 TAC Chapter 
39. On January 6, 2014, EPA approved the Texas public notice rules for 
PSD permitting for inclusion in the Texas SIP. See 79 FR 551. Our final 
approval found that the Texas public notice process of the Notice of 
Receipt of Application and Intent to Obtain Permit (NORI) and the 
Notice of Application and Preliminary Decision (NAPD) would satisfy all 
PSD-specific public notice requirements at 40 CFR 51.160, 51.161 and 
51.166(q). We note that Texas regulations require that non-GHG PSD 
permits are subject to the Texas Contested Case Hearing (CCH) process 
which EPA has determined is outside the scope of the Texas SIP. Texas 
HB 788 specifically directed the TCEQ to adopt and implement 
regulations to issue GHG PSD permits; however these GHG PSD permits 
will be exempted from the Texas CCH process. This exemption required 
the TCEQ to revise the PSD public notice provisions at 30 TAC Chapter 
39 to address the special requirements for issuing separate GHG PSD 
permits. Additionally, the PSD public notice provisions were revised to 
accommodate the subset of pending permit applications that will be 
transferred to TCEQ from EPA upon the effective date of the GHG PSD FIP 
rescission. Because of these revisions to the PSD public notice rules, 
EPA finds it necessary to evaluate the Texas proposed revisions to 30 
TAC Chapter 39 with respect to the federal PSD requirements at 40 CFR 
51.166(q) to ensure all federal requirements continue to be satisfied 
in the December 2, 2013, proposed SIP revision.
    Proposed 30 TAC Section 116.111(a)(2)(I)(ii) requires that a 
proposed facility or modification that meets or exceeds the GHG 
emission thresholds defined in new 30 TAC Section 116.164 must comply 
with all applicable requirements in 30 TAC Chapter 116 for PSD 
permitting. One such applicable requirement for PSD permitting is the 
SIP-approved requirement at 30 TAC Section 116.111(b)(2) which requires 
that Chapter 39 public notice provisions are followed for PSD permits 
declared administratively complete on or after September 1, 1999. 
Therefore, proposed 30 TAC Section 116.111(a)(2)(I)(ii) and the 
existing SIP establish that the requirements found in 30 TAC Chapter 
39, Subchapters H and K apply to applications for the new major source 
or major modifications for facilities subject to Chapter 116, 
Subchapter B, Division 6, Sections 116.164 and 116.169 for GHG PSD 
Permitting. Every application for a new major source or major 
modification subject to GHG PSD permitting requirements will therefore 
go through public notice with both the NORI and NAPD. Note that under 
the SIP, as of January 6, 2014, the applicant, rather than the state 
permitting authority, is the legally responsible party for satisfying 
the public notice requirements for PSD applications. For example, the 
applicant continues to be legally responsible for the publication of 
the NORI and NAPD, using the specific notice text provided through 
regulations by the TCEQ. The applicant is also legally responsible for 
providing copies of the public notice documents to the EPA Regional 
Office, local air pollution control agencies with jurisdiction in the 
county, and air pollution control agencies of nearby states that may be 
impacted by the proposed new source or modification. The applicant is 
required to follow the Texas public notice regulations, which specify 
the text for the notice documents and specify the additional agencies 
that will receive notice.
    The TCEQ has proposed revisions to the public notice text 
requirements at 30 TAC Section 39.411 specific to GHG PSD permit 
applications at Sections 39.411(e)(11), (e)(15), (e)(16), (f)(4) and 
(f)(8). These proposed revisions to the notice text require that, in 
addition to the text SIP-approved for PSD permits, the text of the 
public notice specifically for a GHG PSD permit must specify that any 
person is entitled to a public meeting or a notice and comment hearing 
from the commission and that the air quality analysis will be provided 
if applicable. Currently EPA does not require an air quality analysis 
for GHG PSD permits. In the event that an analysis is required in the 
future, the proposed revisions to the Texas Public Notice requirements 
will include the analysis as required without further rulemaking on the 
part of TCEQ. Similarly, the TCEQ has proposed revisions to the NAPD 
text requirements specific to GHG PSD Permit applications at 30 TAC 
Section 30.419(e)(1) to state that an air quality analysis will be 
available for public notice as applicable. The proposed revisions to 30 
TAC Section 39.420(e)(4) exempt applications for GHG PSD permits from 
the Texas CCH process. EPA is proposing to find that the GHG PSD 
specific revisions as discussed above continue to meet the requirements 
to provide opportunity for public comment and for information 
availability at 40 CFR 51.161 and 51.166. The NORI and NAPD both 
identify locations where materials, including the draft permit and all 
technical materials supporting the decision, will be made available for 
public review. The TCEQ will also respond to each comment received when 
making a final permit decision. The TCEQ will provide opportunity for a 
public meeting on the permit application if requested. TCEQ has 
exempted the GHG PSD permit applications from the Texas-specific 
process of contested case hearings, which is outside the scope of the 
Texas SIP.
    The TCEQ has also proposed a new public notice process for the 
subset of GHG PSD permit applications that are transferred to TCEQ from 
the EPA upon the effective date of the GHG PSD FIP Rescission and where 
EPA has already proposed a draft permit. Proposed new Section 30 TAC 
39.412 creates an optional Combined Notice process, to be used in lieu 
of the current SIP-approved process of a separate NORI and NAPD, to 
streamline the processing of these pending permit applications. 
Proposed new 30 TAC Section 39.412(a) establishes the applicability of 
this new section specifically to the subset of applications that were 
previously filed with EPA and which EPA proposed a draft permit prior 
to transfer to the TCEQ. Proposed new 30 TAC Section 39.412(b) provides 
the streamlined

[[Page 9130]]

process for the subset of permit applications to be a Combined Notice 
addressing the requirements of both the NORI and NAPD in one notice 
document, in lieu of the SIP-approved process requiring a separate NORI 
and NAPD. The Combined Notice will identify a public location where the 
application, the preliminary determination and draft permit will be 
available for review and comment, in addition to a list of all the GHGs 
proposed to be emitted and an air quality analysis, as applicable. The 
Combined Notice will also provide instructions on submitting comments, 
a statement that a public meeting will be held if requested, and a 
statement that the comment period will be 30 days after the last 
publication of the Combined Notice. Additionally, the Combined Notice 
will state that any comments previously submitted to EPA regarding the 
GHG PSD permit application will not be included in the Executive 
Director's response to comments unless the comments are submitted to 
the TCEQ during the comment period identified in the Combined Notice. 
EPA proposes to find the Combined Notice at 30 TAC Section 39.412, 
specific to the subset of transferred permit applications where a draft 
permit was previously proposed by EPA, is consistent with all 
requirements of 40 CFR 51.166(q) for PSD public notice requirements.
    EPA's analysis of the Texas public participation requirements, both 
for newly submitted GHG PSD permit applications and those transferred 
from EPA, demonstrates that the submitted provisions are consistent 
with the Act and EPA regulations at 40 CFR 51.160, 51.161 and 
51.166(q). Therefore, we propose approval of the new and revised 
sections in 30 TAC Chapter 39, submitted for parallel processing on 
December 2, 2013.

Proposed Revisions To Establish PSD Authority and Appropriate 
Thresholds for GHG Permitting

    TCEQ has proposed several new provisions in the Texas NSR Program 
to adopt and implement the permitting of GHG emissions consistent with 
federal requirements in EPA's GHG Tailoring Rule. The proposed 
regulations are substantively similar to the federal requirements for 
the permitting of GHG-emitting sources subject to PSD. The detailed 
analysis in our TSD demonstrates that the regulatory revisions proposed 
on October 23, 2013, and submitted for parallel processing on December 
2, 2013, establish that Texas has the authority to issue PSD permits 
for GHG-emitting sources subject to PSD consistent with the federal PSD 
requirements of EPA's final GHG Tailoring Rule. The revisions also 
establish thresholds for determining which stationary sources and 
modification projects become subject to permitting requirements for GHG 
emissions under its PSD program. Specifically, the December 2, 2013, 
submittal satisfies the Tailoring Rule requirements in the following 
ways:
     TCEQ proposed a new provision in the NSR Permit 
Application procedures at new subsection 30 TAC Section 
116.111(a)(2)(I)(ii) that explicitly requires that any proposed 
facility or modification that meets or exceeds the GHG thresholds 
established in new proposed section 30 TAC Section 116.164 must comply 
with all applicable requirements of Chapter 116 for PSD review. This 
new provision ensures that all PSD requirements such as BACT and public 
notice will be followed for GHG PSD permit applications. The October 5, 
2010, revisions to 30 TAC Section 116.111(a)(2)(C), previously 
discussed in this proposed rulemaking, complement the implementation of 
the Texas PSD program, especially with regard to the PSD permitting of 
GHG emissions. While the October 5, 2010, revisions are germane to the 
Texas PSD program and ensure that federal BACT consistent with EPA's 
PSD regulations will apply to all PSD permit applications, we 
specifically note that the provision also applies to GHG PSD permits 
and ensures that federal BACT will be applied to all GHG PSD permit 
applications. EPA proposes to find that the October 5, 2010, revisions 
to 30 TAC Section 116.111(a)(2)(C) and the proposed new provision at 30 
TAC Section 116.111(a)(2)(I)(ii) are necessary to implement the Texas 
GHG PSD permitting process.
     TCEQ proposed revisions to the Texas PSD program rules at 
30 TAC Section 116.160(a) to explicitly require any new major source of 
GHG emissions or major modification involving GHG emissions shall 
comply with the applicable requirements of the Texas PSD program. TCEQ 
proposed further revisions to the Texas PSD program at 30 TAC Sections 
116.160(b) and (c) to specify that the proposed new GHG emission 
thresholds established at 30 TAC Section 116.164 must be used when 
evaluating a proposed new source or modification for PSD applicability. 
EPA proposes to find that the proposed revisions to the Texas PSD 
program at 30 TAC Sections 116.160(a), (b), and (c) are necessary to 
implement the Texas GHG PSD permitting process.
     TCEQ proposed new 30 TAC Sections 116.164 to establish the 
PSD applicability requirements for GHG sources.
    [cir] EPA proposes to find that proposed new 30 TAC Section 
116.164(a), which establishes the applicability statement for the GHG 
PSD permitting thresholds, is consistent with the federal requirement 
at 40 CFR 51.166(b)(48)(iv) to regulate GHG emissions through the PSD 
program.
    [cir] EPA proposes to find that proposed new 30 TAC Section 
116.164(a)(1) is consistent with the federal requirements at 40 CFR 
51.166(b)(48)(iv)(a) for the regulation of a new major stationary 
source that is subject to PSD requirements for a non-GHG pollutant and 
will emit or have the potential to emit GHG emissions above the 
specified thresholds.
    [cir] EPA proposes to find that proposed new 30 TAC Section 
116.164(a)(2) is consistent with the federal requirements at 40 CFR 
51.166(b)(48)(iv)(b) for the regulation of an existing major stationary 
source that is major for non-GHG and will emit or have the potential to 
emit GHG emissions above the specified thresholds.
    [cir] EPA proposes to find that proposed new 30 TAC Section 
116.164(a)(3) is consistent with the federal requirement at 40 CFR 
51.166(b)(48)(v)(a) for the regulation of a new major stationary source 
that is subject to PSD only for GHG emissions based on the specified 
thresholds.
    [cir] EPA proposes to find that proposed new 30 TAC Section 
116.164(a)(4) is consistent with the federal requirements at 40 CFR 
51.166(b)(48)(v)(b) for the regulation of an existing stationary source 
that is major for GHG emissions and proposes a major modification for 
GHG emissions above the specified thresholds.
    [cir] EPA proposes to find that proposed new 30 TAC Section 
116.164(a)(5) is consistent with the requirement at 40 CFR 
51.166(b)(1)(i)(C) for the regulation of an existing minor stationary 
source for non-GHG pollutants that would undertake a physical change or 
change in the method of operation that will cause the source to be a 
major stationary source by itself for GHG emissions at the specified 
thresholds.
    [cir] Proposed new 30 TAC Section 116.164(b) establishes that new 
stationary sources or existing stationary sources that make 
modifications involving emissions of GHG below the thresholds 
established in new 30 TAC Section 116.164(a) are not required to have 
an authorization for the GHG emissions through a PSD permit or other 
Texas Minor NSR permit authorizations

[[Page 9131]]

such as a Standard Permit, PBR or Flexible Permit. EPA proposes to find 
that this new provision is consistent with EPA's GHG Tailoring Rule 
where we have established that emissions of GHG are only subject to 
regulation above the Tailoring Rule thresholds.
     TCEQ proposed new 30 TAC Section 116.169 to establish the 
authority for the TCEQ to accept the transfer of permit applications 
and associated materials upon the effective date of the GHG PSD FIP 
rescission. EPA proposes to find that new 30 TAC Section 116.169 is 
necessary for establishing the legal authority for TCEQ to implement 
the GHG PSD permitting program.
ii. Analysis of the Proposed Non-PSD Revisions to the Texas SIP
    The December 2, 2013, submittal included several proposed revisions 
to the remainder of the Texas SIP and the Texas Minor NSR programs to 
satisfy the requirements of Texas HB 788 and restrict the permitting of 
GHG emissions only to the extent required under federal law. As such, 
the TCEQ proposed revisions to the definitions of ``reportable 
quantity'' at 30 TAC Section 101.1(89) to establish there is no 
reportable quantity for GHG emissions. TCEQ also proposed revisions to 
the Emission Inventory Requirements at 30 TAC Section 101.10 to specify 
that emissions of GHG are not subject to the reporting requirements in 
the Emission Inventory. Similarly, the TCEQ proposed revisions to the 
Emissions Event Reporting and Recordkeeping Requirements to specify 
that emissions of GHG are not included in emissions event reporting. 
EPA proposes to find that these provisions are consistent with EPA's 
GHG Tailoring Rule and our determination that emissions of GHG are only 
subject to regulation in the PSD program above the specified GHG 
thresholds. There are no federal requirements establishing reportable 
quantities or reporting requirements for emission inventories or 
emission events for GHG emissions.\11\
---------------------------------------------------------------------------

    \11\ EPA has separately promulgated mandatory reporting 
requirements for owners and operators of certain facilities that 
directly emit GHG emissions at 40 CFR part 98. See 74 FR 56260, 
October 30, 2009. The Emission Inventory developed and maintained by 
a state permitting authority under the applicable SIP is separate 
from the requirements under 40 CFR part 98 and is not required to 
include GHG emissions data.
---------------------------------------------------------------------------

    The December 2, 2013, submittal also proposed revisions to the 
Texas Minor NSR program at 30 TAC Sections 106.2, 106.4, 116.610, and 
116.611. The proposed revisions to the Texas Minor NSR Permits by Rule 
(PBR) Program at 30 TAC Sections 106.2 and 106.4 clarify that a PBR 
cannot be used to authorize emissions of GHGs. Similarly, the proposed 
revisions to the Texas Minor NSR Standard Permit Program at 30 TAC 
Sections 116.610 and 116.611 clarify that a Standard Permit cannot be 
used to authorize emissions of GHGs. The Texas provisions also provide 
that if a source is subject to PSD requirements only for the emissions 
of GHGs, then a PBR or Standard Permit can be used to authorize the 
non-GHG pollutants. EPA proposes that the revisions to the PBR and 
Standard Permit are consistent with EPA's Tailoring Rule to only 
regulate GHG emissions through the PSD program at or above the 
specified GHG PSD thresholds; therefore, these proposed revisions will 
ensure that GHG PSD requirements will not be circumvented.

IV. EPA's Analysis for Rescinding the Texas PSD FIP

A. Evaluation of Rescission of the GHG PSD FIP at 40 CFR 52.2305(a), 
(b), and (c)

    EPA established the final Texas GHG PSD FIP on May 3, 2011, at 40 
CFR 52.2305(a), (b), and (c). These provisions remain in effect until 
EPA approves the state's rules to address the permitting of GHG 
emissions consistent with federal requirements and EPA rescinds the 
FIP. The analysis presented in Section III of this rulemaking and the 
accompanying TSD demonstrate that the October 23, 2013, proposed rules 
submitted for parallel processing on December 2, 2013, adequately 
address all federal requirements for GHG PSD permitting. In addition, 
Mr. Zak Covar, former Executive Director of the TCEQ, submitted a 
commitment letter on December 2, 2013, that addresses the requirement 
that the state provide necessary assurances of its authority to address 
all future regulated pollutants under the Texas PSD program in order to 
remove the PSD FIP at 40 CFR 52.2305(c). Based on the commitments in 
the December 2, 2013, letter and the October 23, 2013, proposed 
rulemaking for permitting emissions of GHG through the Texas PSD 
program, EPA proposes to find that the TCEQ has the authority under the 
Texas Clean Air Act to apply the Texas PSD program to all pollutants 
newly subject to regulation, including non-NAAQS pollutants into the 
future. EPA recognizes that the TCEQ may be required to proceed through 
a notice and comment rule development process, but this process in no 
way prevents the TCEQ from addressing the PSD requirements of the CAA. 
As such, we are proposing rescission of the Texas GHG PSD FIP at 40 CFR 
52.2305(a), (b), and (c), with three limited possibilities for retained 
authority as detailed below in Section IV.B.

B. Transition Process Upon Rescission of the GHG PSD FIP for Pending 
GHG PSD Permit Applications and Issued GHG PSD Permits

    As explained throughout this notice, EPA is proposing approval of 
the December 2, 2013, submittal as consistent with the requirements for 
PSD permitting of GHG emissions under EPA's GHG Tailoring Rule. Our 
analysis demonstrates the TCEQ has proposed necessary rule revisions to 
provide adequate authority to regulate GHG emissions using appropriate 
emission thresholds under the Texas PSD program. As such, EPA is 
simultaneously proposing to rescind the GHG PSD FIP and intends to 
finalize both actions simultaneously. We expect that the FIP rescission 
will be effective 30 days after publication of the final approval of 
the Texas GHG PSD revisions. EPA has developed a process for 
transitioning pending permit applications and EPA issued permits to the 
TCEQ following the rescission of the FIP. Our transition process, 
titled ``Transition Process for Pending GHG PSD Permit Applications and 
Issued GHG PSD Permits Upon Rescission of the GHG PSD FIP'' is 
available in the docket for this rulemaking and on the EPA Region 6 GHG 
Web site at http://yosemite.epa.gov/r6/Apermit.nsf/AirP. The transition 
process is briefly summarized below. EPA believes that the transition 
process will ensure a smooth transfer of permitting authorities for GHG 
PSD permits in Texas and inform the regulated entities. Please note 
that this transition process is predicated on the fact that the TCEQ 
will proceed with final rulemaking to adopt the GHG PSD SIP rules and 
submit these rules to EPA for approval into the Texas SIP. If TCEQ is 
unable to submit a final SIP revision, EPA will not rescind the FIP and 
will therefore not initiate the transition process.
    EPA's transition process addresses two components of the GHG PSD 
program--pending permit applications and issued permits.\12\ Through 
application of this transition process and in concert with the 
rescission of the GHG PSD FIP, EPA will retain GHG PSD

[[Page 9132]]

permitting authority at 40 CFR 52.2305 in the following three limited 
instances:
---------------------------------------------------------------------------

    \12\ A ``pending permit application'' is any GHG PSD permit 
application submitted to EPA for which EPA has not yet issued a 
final permit to authorize the emissions of GHG by the signature date 
of EPA's final approval of the Texas SIP rules and rescission of the 
FIP.
---------------------------------------------------------------------------

    1. EPA will retain GHG PSD permitting authority for any applicants 
who select to remain with EPA for GHG PSD permit issuance. This option 
will be detailed in a letter to the permit applicant and will contain a 
deadline by which the applicant must inform EPA of its decision to 
remain with EPA. EPA will also maintain a list of all pending permit 
applications retained under EPA's GHG PSD permitting authority on the 
EPA Region 6 GHG Web site, which will be referenced in any future final 
GHG PSD SIP approval and FIP rescission action EPA may take for Texas.
    2. EPA will retain the GHG PSD permitting authority for applicants 
with pending permits who fail to select a permitting authority by the 
deadline specified in the above referenced EPA letter to each permit 
applicant.
    3. EPA will retain GHG PSD permitting authority for issued permits 
for which either (a) the time for filing an administrative appeal has 
not expired or (b) all administrative and judicial appeal processes 
(including any associated remand action) have not been completed upon 
the signature date of any future EPA final action to approve TCEQ's SIP 
submittal and rescind the GHG PSD FIP. In a letter dated January 13, 
2014, TCEQ requested approval to exercise its authority to administer 
the PSD program with respect to those sources that have final GHG PSD 
permits issued by EPA upon the effective date of the GHG PSD FIP 
rescission. This letter is available for review in the docket for this 
rulemaking. With respect to this transition process, a ``final GHG PSD 
permit issued by EPA'' is a permit where all final EPA actions have 
been taken and all administrative and judicial appeal opportunities 
have expired or processes have been concluded or completed.
    We note that as with any PSD permit application, an applicant may 
withdraw a pending application for any reason before the permit is 
issued. With respect to the permit applications for which EPA will 
retain permitting authority as specified in the transition process, 
EPA's permitting authority will cease upon an applicant's written 
request withdrawing the pending permit application before a final 
determination is made.
    For the permit applicants who elect to transfer to TCEQ for GHG PSD 
permit issuance, EPA will transfer the application, all related 
technical materials submitted by the applicant, the proposed draft 
permit and any comments received on the proposed draft permit to TCEQ. 
The TCEQ will require the applicant to comply with SIP-approved public 
notice rules. The applicant will either follow the current SIP-approved 
process of publishing a separate NORI and NAPD, or publish a combined 
NORI and NAPD notice pursuant to new proposed revisions at 30 TAC 
Section 39.412. Further, pursuant to the Texas SIP, any comments 
submitted to EPA on the proposed draft permit must be resubmitted to 
the TCEQ during the TCEQ's public comment period. EPA intends to 
identify on the EPA Region 6 GHG Web site which applications with 
proposed draft permits have been transferred to TCEQ for issuance. EPA 
will endeavor to notify each commenter about the need to resubmit 
comments under the SIP-approved Texas public comment period provisions 
or the newly proposed revisions at 30 TAC Section 39.412.
    The TCEQ will assume full PSD responsibility for the administration 
and implementation of final GHG PSD permits issued by EPA upon 
notification from EPA that all administrative and judicial appeal 
processes have expired or have been completed or concluded (including 
any associated remand actions) for a specific permit or permit 
application. Assuming full PSD responsibility includes the authority to 
conduct general administration of these existing permits, authority to 
process and issue any and all subsequent PSD permit actions relating to 
such permits (e.g., amendments), and authority to enforce such permits. 
In the above referenced January 13, 2014, letter, the TCEQ explains 
that the provisions contained in element 1 of the Texas PSD Supplement 
(as adopted by the Texas Air Control Board on July 17, 1987) provide 
the TCEQ the authority to enforce all conditions of PSD permits issued 
for sources in Texas by EPA prior to full delegation of authority to 
implement the Texas PSD program. The TCEQ has affirmed that this 
provision continues to apply to the GHG PSD permits issued by EPA. 
Therefore, TCEQ has demonstrated it has the authority to administer 
EPA-issued GHG PSD permits.

V. Proposed Action

    EPA has made the preliminary determination that the October 5, 
2010, revisions to the Texas SIP that are part of this rulemaking are 
approvable because they are adopted and submitted in accordance with 
the CAA and EPA regulations regarding NSR permitting. EPA has made the 
preliminary determination that the December 2, 2013, proposed revisions 
to the Texas SIP and request for parallel processing are in accordance 
with the CAA and EPA regulations regarding SIP development and GHG 
regulations. EPA invites the public to make comments on all aspects of 
the EPA proposed approval of the revisions to the Texas NSR SIP to 
provide for the regulation of GHG emissions and clarify the 
applicability of BACT for all PSD permit applications, and to submit 
comments by the date listed above. Therefore, under section 110 and 
part C of the Act, and for the reasons stated above, EPA proposes to 
approve the following revisions to the Texas SIP:
     Substantive and non-substantive revisions to 30 TAC 
Section 116.111 adopted on September 15, 2010, and submitted on October 
5, 2010, to clarify the application of BACT to all PSD permit 
applications in the Texas NSR program;
     Substantive and non-substantive revisions proposed October 
23, 2013, and submitted for parallel processing on December 2, 2013, 
necessary to provide the TCEQ the authority to regulate GHG emissions 
under the Texas PSD Program:
    [cir] Revisions to Public Notice requirements at 30 TAC Sections 
39.411(e)(11), (e)(15), (e)(16), (f)(4), (f)(8), 39.412(a)--(d), 
39.419(e)(1), and 39.420(e)(4).
    [cir] Revisions to the entirety of the General Air Quality 
Definitions at 30 TAC Sections 101.1.
    [cir] Revisions to the Emission Inventory Requirements at 30 TAC 
Section 101.10.
    [cir] Revisions to Emissions Event Reporting and Recordkeeping 
Requirements at 30 TAC Section 101.201.
    [cir] Revisions to the Permits by Rule Minor NSR program at 30 TAC 
Sections 106.2 and 106.4.
    [cir] Revisions to the Definitions for Texas NSR Permitting at 30 
TAC Section 116.12.
    [cir] Revisions to Permit Application provisions for Texas NSR 
Permitting at 30 TAC Section 116.111.
    [cir] Revisions to the Texas PSD Program at 30 TAC Section 116.160.
    [cir] Proposed new 30 TAC Section 116.164 to tailor the PSD 
thresholds for GHG permitting.
    [cir] Proposed new 30 TAC Section 116.169 to establish the 
transition process for GHG permitting.
    [cir] Revisions to the Standard Permit Minor NSR program at 30 TAC 
Sections 116.610 and 116.611.
    [cir] Revisions to the definition of Potential to Emit at 30 TAC 
Section 122.122.

[[Page 9133]]

    Texas is subject to the FIP for PSD permitting of GHG emissions. 
This GHG PSD FIP remains in place and EPA remains the PSD permitting 
authority for GHG-emitting sources in Texas until EPA finalizes our 
proposed approval of the October 23, 2013, proposed revisions submitted 
for parallel processing on December 2, 2013, to the Texas SIP. 
Therefore, we propose that upon finalization of today's action, EPA 
will rescind the GHG PSD FIP for Texas at 40 CFR 52.2305(a) and (b). 
However, as detailed in Sections IV.B.1-3 and our transition process, 
there are three limited possibilities for retained authority. First, 
EPA will retain GHG PSD permitting authority for any pending permit 
applications where the permit applicant has submitted a written request 
to remain with EPA for permit issuance. Second, EPA will retain GHG PSD 
permitting authority for any pending permit application where the 
applicant has not submitted a written request regarding permit 
authority, and EPA has made a proposed determination through a public 
noticed draft permit upon the signature date of EPA's rescission of the 
GHG PSD FIP. EPA does not intend to retain any other authority over 
pending permit applications. Note, even for those cases where EPA 
announces it will retain permitting authority over an application, this 
authority will cease upon an applicant's written request to EPA 
withdrawing the pending permit application before a final determination 
is made. Finally, EPA will retain GHG PSD permitting authority for any 
issued permit for which either the time for filing an administrative 
appeal has not expired or all administrative and judicial appeals 
processes have not been completed by the signature date of EPA's final 
action to approve TCEQ's SIP submittal. Texas is also subject to the 
FIP for PSD permitting for any other pollutants that become newly 
subject to regulation under the CAA after January 2, 2011. We propose 
to find that the TCEQ has provided necessary and adequate assurances 
that the Texas PSD program will be revised in the future to address 
pollutants that become newly regulated under the CAA after January 2, 
2011, and that the TCEQ has the adequate authority under State law to 
regulate the new PSD pollutants. Therefore, we propose that upon 
finalization of today's action, EPA will rescind the PSD FIP for Newly 
Regulated Pollutants for Texas at 40 CFR 52.2305(c).
    EPA is severing and taking no action on the remainder of the 
October 5, 2010, SIP submittal for the adoption and implementation of 
the Texas Minor NSR Qualified Facilities Program. EPA is also severing 
and taking no action on the portions of the December 2, 2013, submittal 
concerning biomass GHG emissions at 30 TAC Section 116.12(7)(B). The DC 
Circuit Court issued an order to vacate EPA's Biomass Deferral Rule on 
July 12, 2013.

VI. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP 
submission that complies with the provisions of the Clean Air 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 proposes to approve 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.

List of Subjects in 40 CFR Part 52

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

    Dated: February 4, 2014.
Ron Curry,
Regional Administrator, Region 6.
[FR Doc. 2014-03429 Filed 2-14-14; 8:45 am]
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