[Federal Register Volume 81, Number 191 (Monday, October 3, 2016)]
[Proposed Rules]
[Pages 68110-68147]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-21475]
[[Page 68109]]
Vol. 81
Monday,
No. 191
October 3, 2016
Part II
Environmental Protection Agency
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40 CFR Parts 51, 52, 60, et al.
Revisions to the Prevention of Significant Deterioration (PSD) and
Title V Greenhouse Gas (GHG) Permitting Regulations and Establishment
of a Significant Emissions Rate (SER) for GHG Emissions Under the PSD
Program; Proposed Rule
Federal Register / Vol. 81 , No. 191 / Monday, October 3, 2016 /
Proposed Rules
[[Page 68110]]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 51, 52, 60, 70 and 71
[EPA-HQ-OAR-2015-0355; FRL-9951-79-OAR]
RIN 2060-AS62
Revisions to the Prevention of Significant Deterioration (PSD)
and Title V Greenhouse Gas (GHG) Permitting Regulations and
Establishment of a Significant Emissions Rate (SER) for GHG Emissions
Under the PSD Program
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
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SUMMARY: The Environmental Protection Agency (EPA) is proposing to
revise provisions applicable to greenhouse gases (GHG) in the EPA's
Prevention of Significant Deterioration (PSD) and title V permitting
regulations. This action is in response to the June 23, 2014, U.S.
Supreme Court's decision in Utility Air Regulatory Group (UARG) v. EPA
and the April 10, 2015, Amended Judgment by the United States Court of
Appeals for the District of Columbia Circuit (D.C. Circuit) in
Coalition for Responsible Regulation v. EPA. The proposed PSD and title
V revisions involve changes to several regulatory definitions in the
PSD and title V regulations, revisions to the PSD provisions on GHG
Plantwide Applicability Limitations (PALs), and revisions to other
provisions necessary to ensure that neither the PSD nor title V rules
require a source to obtain a permit solely because the source emits or
has the potential to emit (PTE) GHGs above the applicable thresholds.
In addition, the EPA is also proposing a significant emissions rate
(SER) for GHGs under the PSD program that would establish an
appropriate threshold level below which Best Available Control
Technology (BACT) is not required for a source's GHG emissions.
DATES: Comments must be received on or before December 2, 2016.
If anyone contacts us requesting to speak at a public hearing by
October 13, 2016, we will hold a public hearing. Additional information
about the hearing would be published in a subsequent Federal Register
notice.
ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2015-0355, at http://www.regulations.gov. Follow the online
instructions for submitting comments. Once submitted, comments cannot
be edited or removed from Regulations.gov. The EPA may publish any
comment received to its public docket. Do not submit electronically any
information you consider to be Confidential Business Information (CBI)
or other information whose disclosure is restricted by statute.
Multimedia submissions (audio, video, etc.) must be accompanied by a
written comment. The written comment is considered the official comment
and should include discussion of all points you wish to make. The EPA
will generally not consider comments or comment contents located
outside of the primary submission (i.e., on the Web, Cloud, or other
file sharing system). For additional submission methods, the full EPA
public comment policy, information about CBI or multimedia submissions,
and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.
FOR FURTHER INFORMATION CONTACT: Questions concerning this proposed
rule should be addressed to Ms. Carrie Wheeler, U.S. Environmental
Protection Agency, Office of Air Quality Planning and Standards, Air
Quality Policy Division, (C504-01), Research Triangle Park, NC 27711,
telephone number (919) 541-9771, email at [email protected].
To request a public hearing or information pertaining to a public
hearing on this proposal, contact Ms. Pamela Long, U.S. Environmental
Protection Agency, Office of Air Quality Planning and Standards, Air
Quality Policy Division, (C504-01), Research Triangle Park, NC 27711;
telephone number (919) 541-0641; fax number (919) 541-5509; email at:
[email protected] (preferred method of contact).
SUPPLEMENTARY INFORMATION: Throughout this document wherever ``we,''
``us,'' or ``our'' is used, we mean the EPA.
The information in this Supplementary Information section of this
preamble is organized as follows:
I. General Information
A. To whom does this action apply?
B. Where To Get a Copy of This Document and Other Related
Information
C. What acronyms, abbreviations and units are used in this
preamble?
II. Overview of the Proposed Rule
III. Background
A. PSD Program
B. Title V Program
C. Application of PSD and Title V Programs to GHG Emissions
1. Regulation of the Pollutant GHGs
2. Revisions to PSD and Title V Regulations in the Tailoring
Rule
3. Actions After the Tailoring Rule
IV. Revisions to the PSD and Title V GHG Permitting Regulations
A. What revisions to the PSD and title V GHG permitting
regulations is the EPA proposing with this action?
1. Revisions to the PSD Regulations
2. Revisions to the PSD PAL Regulations
3. Revisions to State-Specific PSD Regulations
4. Revisions to the Title V Regulations
5. Revisions to State-Specific Title V Regulations
B. What additional regulatory revisions is the EPA proposing
with this action?
V. Establishment of a GHG SER
A. What is the legal basis for establishing a GHG SER?
B. What is the regulatory context for the de minimis exception
proposed in this rule?
C. Historical Approaches to Establishing a De Minimis Level in
the PSD Program
D. What is the technical basis for the proposed GHG SER?
1. Summary of Technical Support Information
2. Review of PSD Permitting and GHG Emission Sources
a. GHG Permitting Under Step 1 of the Tailoring Rule
b. RBLC Permitting Information
3. GHG Emissions Levels for Combustion Units
4. Non-Combustion Related GHG Emissions
5. Potential BACT Techniques Applicable to GHG Emission Sources
a. Energy Efficiency Measures
b. Carbon Capture and Storage
c. Gas Recovery and Utilization
d. Leak Detection and Repair Measures
6. Costs of GHG BACT Review
E. Proposed GHG SER and Request for Comment
VI. What would be the economic impacts of the proposed rule?
VII. How should state, local and tribal authorities adopt the
regulatory revisions included in this action?
VIII. Environmental Justice Considerations
IX. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
B. Paperwork Reduction Act (PRA)
C. Regulatory Flexibility Act (RFA)
D. Unfunded Mandates Reform Act (UMRA)
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
G. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution or Use
I. National Technology Transfer and Advancement Act
J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
K. Determination Under CAA Section 307(d)
X. Statutory Authority
[[Page 68111]]
I. General Information
A. To whom does this action apply?
This proposal potentially affects owners and operators of sources
in all industry groups, such as the owners and operators of proposed
new and modified major stationary sources. The majority of potentially
affected categories and entities include:
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Industry group NAICS \a\
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Mining................................. 21.
Utilities (electric, natural gas, other 2211, 2212, 2213.
systems).
Manufacturing (food, beverages, 311, 312, 313, 314, 315, 316.
tobacco, textiles, leather).
Wood product, paper manufacturing...... 321, 322.
Petroleum and coal products 32411, 32412, 32419.
manufacturing.
Chemical manufacturing................. 3251, 3252, 3253, 3254, 3255,
3256, 3259.
Rubber product manufacturing........... 3261, 3262.
Miscellaneous chemical products........ 32552, 32592, 32591, 325182,
32551.
Nonmetallic mineral product 3271, 3272, 3273, 3274, 3279.
manufacturing.
Primary and fabricated metal 3311, 3312, 3313, 3314, 3315,
manufacturing. 3321, 3322, 3323, 3324, 3325,
3326, 3327, 3328, 3329.
Machinery manufacturing................ 3331, 3332, 3333, 3334, 3335,
3336, 3339.
Computer and electronic products 3341, 3342, 3343, 3344, 3345,
manufacturing. 4446.
Electrical equipment, appliance, and 3351, 3352, 3353, 3359.
component manufacturing.
Transportation equipment manufacturing. 3361, 3362, 3363, 3364, 3365,
3366, 3366, 3369.
Furniture and related product 3371, 3372, 3379.
manufacturing.
Miscellaneous manufacturing............ 3391, 3399.
Waste management and remediation....... 5622, 5629.
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\a\ North American Industry Classification System.
Potentially affected entities also include state, local and tribal
permitting authorities \1\ responsible for implementing the PSD and
title V permitting programs.
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\1\ Under the PSD regulations, the entities that implement the
program are referred to as ``reviewing authorities,'' while under
the title V program the implementing entities are referred to as
``permitting authorities.'' For simplicity, in this preamble we
refer to both as ``permitting authorities.''
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As noted, the potentially affected entities could be in any
industry group. Thus, the earlier table is not intended to be
exhaustive, but rather provides a guide for readers regarding likely
affected entities. The EPA believes this table lists the most typical
types of affected entities. Other types of entities not listed in the
table could also be regulated. To determine if an entity is regulated
by this action, the applicability criteria found in the PSD and title V
regulations (and which are briefly described in Sections III.A and B of
this preamble) should be consulted.
B. Where To Get a Copy of This Document and Other Related Information
In addition to being available in the docket, an electronic copy of
this proposal notice will also be available on the World Wide Web.
Following signature by the EPA Administrator, a copy of this notice
will be posted in the regulations section of our New Source Review
(NSR) Web site, under Regulatory Actions, at http://www.epa.gov/nsr/nsr-regulatory-actions and the title V Web site, under Current
Regulations and Regulatory Actions, at http://www.epa.gov/title-v-operating-permits/current-regulations-and-regulatory-actions. A ``track
changes'' version of the full regulatory text that incorporates and
shows the full context of the changes in this proposed action is also
available in the docket for this rulemaking. In addition to the
proposal and regulatory text documents, other relevant documents are
located in the docket, including technical support documents referenced
in this preamble.
C. What acronyms, abbreviations and units are used in this preamble?
APA Administrative Procedures Act
AQRV[s] Air Quality Related Value[s]
BACT Best Available Control Technology
CAA or Act Clean Air Act
CCS Carbon Capture and Sequestration
CFR Code of Federal Regulations
CH4 Methane
CO Carbon Monoxide
CO2 Carbon Dioxide
CO2e Carbon Dioxide Equivalent
D.C. Circuit United States Court of Appeals for the District of
Columbia Circuit
EGU Electric Generating Unit
EIA Economic Impact Analysis
EPA U.S. Environmental Protection Agency
FIP Federal Implementation Plan
FR Federal Register
GHG[s] Greenhouse Gas[es]
GHGRP Greenhouse Gas Reporting Program
GWP Global Warming Potential
HP Horsepower
HFC[s] Hydrofluorocarbons
IC Internal Combustion
ICR Information Collection Request
LAER Lowest Achievable Emission Rate
LDAR Leak Detection and Repair
LDVR Light-Duty Vehicle Rule
NAAQS National Ambient Air Quality Standard
NESHAP National Emission Standard for Hazardous Air Pollutants
NHTSA National Highway Transportation Safety Administration
NOX Nitrogen Oxides
NO2 Nitrogen Dioxide
NSPS New Source Performance Standard
NSR New Source Review
OMB Office of Management and Budget
PAL[s] Plantwide Applicability Limitation[s]
PFC[s] Perfluorocarbons
PM Particulate Matter
PSD Prevention of Significant Deterioration
PTE Potential To Emit
RACT Reasonably Available Control Technology
SER Significant Emissions Rate
SF6 Sulfur Hexafluoride
SIP State Implementation Plan
SO2 Sulfur Dioxide
TCEQ Texas Commission on Environmental Quality
TIP Tribal Implementation Plan
Tpy Tons Per Year
UARG Utility Air Regulatory Group
UMRA Unfunded Mandates Reform Act
VOC Volatile Organic Compound
II. Overview of the Proposed Rule
The EPA is proposing revisions to the provisions applicable to GHGs
in its PSD and title V permitting regulations in order to conform those
regulations with the U.S. Supreme Court's decision in UARG v. EPA, 134
S.Ct. 2427 (2014), and the April 10, 2015, Amended Judgment by the D.C.
Circuit in Coalition for Responsible Regulation v. EPA, Nos. 09-1322,
10-073, 10-1092 and 10-1167 (D.C. Cir. April 10, 2015) (Amended
Judgment). Some of these provisions were promulgated as part of
[[Page 68112]]
the June 3, 2010, regulation titled ``Prevention of Significant
Deterioration and Title V Greenhouse Gas Tailoring Rule'' \2\
(hereinafter ``Tailoring Rule''). The D.C. Circuit Amended Judgment
ordered that: (1) The regulations under review be vacated to the extent
they require a stationary source to obtain a PSD or title V permit
solely because the source emits or has the potential to emit GHG above
the applicable thresholds and (2) that the EPA consider whether any
further revisions to its regulations are appropriate in light of UARG
v. EPA and, if so, that it undertake to make such revisions. The
proposed revisions to the PSD and title V GHG permitting regulations
include changes to certain regulatory definitions and the PSD PAL
provisions applicable to GHGs. In addition, we are proposing to
establish a SER for GHGs \3\ under the PSD air permitting program to
establish an appropriate threshold level below which BACT review is not
required for GHG emissions from a source that is required to obtain a
PSD permit.
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\2\ 75 FR 31514, June 3, 2010.
\3\ In this document, we reserve the abbreviations ``GHG'' and
``GHGs'' to refer to the air pollutant ``greenhouse gases,'' which
is defined as the aggregate of six individual greenhouse gases as
discussed in Section III C.2 of this preamble. We spell out
``greenhouse gas'' where we refer more broadly to compounds that
trap heat in the atmosphere.
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The EPA published an initial set of revisions in light of the UARG
v. EPA decision and the D.C. Circuit's Amended Judgment on August 19,
2015.\4\ These revisions removed entire sections and paragraphs that
were readily severable from other provisions in the PSD and title V
regulations and specifically identified in the D.C. Circuit's Amended
Judgment. These removed provisions required a stationary source to
obtain a PSD permit solely on the basis of the source's GHG emissions
and required that the EPA study and consider further phasing-in the PSD
and title V permitting requirements at lower GHG emissions thresholds.
Because of the nature of the D.C. Circuit's Amended Judgment, these
earlier revisions were ministerial in nature and exempt from notice-
and-comment rulemaking procedures under the ``good cause'' exception of
the Administrative Procedure Act (APA).
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\4\ 80 FR 50199, August 19, 2015.
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In this action, the EPA is proposing a second set of regulatory
revisions that we believe are necessary to fully implement the UARG
decision and D.C. Circuit Amended Judgment and further revisions that
are appropriate in light of UARG. The revisions proposed in this action
were not included in the August 19, 2015, rule because the revisions
proposed in this action amend, rather than completely remove, text that
remains pertinent to the PSD and title V programs as a whole and their
continued application to GHGs. As a result, these revisions are not
ministerial in nature and not exempt from notice-and-comment rulemaking
procedures under the ``good cause'' exception of the APA. Therefore,
this action gives the public an opportunity to comment on how the EPA
proposes to revise other parts of its regulations to conform to the
Amended Judgment as further explained in Section IV.
In general, this action proposes revisions to the PSD definitions
at 40 Code of Federal Regulations (CFR) sections 51.166 and 52.21 for
the following terms: ``major stationary source,'' ``major
modification,'' ``significant,'' and ``subject to regulation.'' This
action also proposes to revise the title V definitions at 40 CFR parts
70 and 71 for the terms ``major stationary source'' and ``subject to
regulation.'' In addition, this action proposes to add a definition of
``greenhouse gases'' to these PSD and title V regulations, which
contains content that was previously part of the definition of
``subject to regulation'' in each set of regulations. The EPA believes
these revisions are appropriate to fully implement the Amended
Judgment. We are also proposing to revise the PSD GHG PAL provisions at
40 CFR part 52 to reflect the UARG decision, which stated that sources
that only emit or have the potential to emit GHGs above the applicable
thresholds are no longer required to obtain a PSD permit. Furthermore,
we are proposing to revise certain provisions under 40 CFR part 60,
which the EPA wrote to ensure that the existing GHG applicability
threshold for the PSD BACT requirement continues to apply on an interim
basis after this pollutant became regulated under standards set forth
in those parts. Finally, we are proposing to revise a few state-
specific PSD or title V permitting provisions that, in general,
established permitting requirements for sources that only emit or have
the potential to emit GHGs above the major source thresholds. We are
proposing the revisions listed in this paragraph in response to the
D.C. Circuit's directive in the Amended Judgment.
In addition, the EPA is proposing to establish a SER for the
pollutant GHGs under the PSD permitting program in response to the UARG
decision. The U.S. Supreme Court recognized that the EPA did not
justify on de minimis grounds the 75,000 tons per year (tpy) carbon
dioxide equivalent (CO2e) threshold that currently
determines whether GHG BACT is required for ``anyway sources.'' \5\ 134
S.Ct. at 2438 n. 3. The U.S. Supreme Court also expressly did not
address whether 75,000 tpy CO2e necessarily exceeds a true
de minimis level, holding only that the EPA must justify its selection
of such a level on proper grounds. 134 S.Ct. at 2449. An ``anyway
source'' in this context refers to a facility or emission source that
is otherwise required to obtain a PSD permit based on its emissions of
one or more regulated NSR pollutants other than GHG. The U.S. Supreme
Court limited the scope of the PSD permitting program to ``anyway
sources'' and added that the EPA may exempt an ``anyway source'' from
the GHG BACT requirement if the source emits a de minimis amount of
GHGs. 134 S.Ct. at 2449.
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\5\ Under existing regulations, a threshold level of 75,000 tpy
CO2e is contained in the definition of a ``subject to
regulation'' to determine the applicability of the GHG PSD
permitting requirements to ``anyway sources.'' 40 CFR part
51.166(b)(48)(iv); 40 CFR part 52.21(b)(49)(iv). This value was
based principally on addressing potential permitting burdens, but it
was not proposed or promulgated as a permanent GHG SER (75 FR
31560).
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In response to the outcome of the UARG decision, this rulemaking
action proposes a GHG SER that represents a de minimis level of GHG
emissions for the purposes of determining the applicability of the GHG
BACT requirement at ``anyway sources,'' new and modified sources that
trigger PSD permitting obligations on the basis of their emissions of
air pollutants other than GHGs. If not for provisions that remain in
the EPA's definition of ``subject to regulation'' at this time, any GHG
emissions increase at an ``anyway source'' would be considered
``significant'' and thus require a newly constructed major source, or a
major modification at an existing major source, to undergo PSD BACT
review for GHGs.\6\
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\6\ Definition of ``significant,'' 40 CFR part 51.166(b)(23)(ii)
and 40 CFR part 52.21(b)(23)(ii).
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In July 2014, following the UARG decision, the EPA issued a
memorandum titled, ``Next Steps and Preliminary Views on the
Application of Clean Air Act (CAA) Permitting Programs to Greenhouse
Gases Following the U.S. Supreme Court's Decision in UARG v. EPA''
(Preliminary Views Memo).\7\ In that memorandum
[[Page 68113]]
the EPA explained that, among other things, it would consider whether
to promulgate a de minimis level.\8\ The EPA also explained that, with
respect to new ``anyway sources,'' we preliminarily ``intend to
continue applying the PSD BACT requirements to GHG if the source emits
or has the potential to emit 75,000 tpy or more of GHG on a
[CO2e] basis.'' \9\ With respect to modified sources, we
said that initially ``the EPA intends to continue applying the PSD BACT
requirements to GHG if both of the following circumstances are present:
(1) The modification is otherwise subject to PSD for a pollutant other
than GHG; (2) the modification results in a GHG emissions increase and
a net GHG emissions increase equal to or greater than 75,000 tpy
CO2e and greater than zero on a mass basis.'' \10\
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\7\ Next Steps and Preliminary Views on the Application of Clean
Air Act (CAA) Permitting Programs to Greenhouse Gases Following the
Supreme Court's Decision in UARG v. EPA, Memorandum from Janet G.
McCabe, Acting Assistant Administrator, Office of Air and Radiation,
and Cynthia Giles, Assistant Administrator, Office of Enforcement
and Compliance Assurance, U.S. EPA, to Regional Administrators, July
24, 2014. Available at http://www.epa.gov/sites/production/files/2015-12/documents/20140724memo.pdf.
\8\ Id. at 4.
\9\ Id. at 3.
\10\ Id. at 3.
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In this proposed rule, based on our technical and legal analyses as
described in Section V of this preamble, we are proposing to establish
a 75,000 tpy CO2e SER. We propose to determine that this
level represents a de minimis level of GHG emissions for purposes of
determining whether the GHG BACT review should be required as part of
an ``anyway source'' PSD permit. A 75,000 tpy CO2e GHG SER,
based on our technical analysis, represents a level of GHGs, below
which there is trivial or no value in conducting a BACT analysis for
GHGs because we would not expect to obtain meaningful GHG reductions
from requiring application of BACT at all such sources. In addition,
there does not appear to be a basis to set a GHG SER level above 75,000
tpy CO2e based on our review of the GHG permitting
experience to date and the fundamental principles for establishing a de
minimis exception to a statutory requirement as described in Section V
of this preamble. Therefore, we are not considering a GHG SER level
greater than 75,000 tpy CO2e. Finally and although our
analysis supports a SER at 75,000 tpy CO2e, we are
soliciting comments on (and associated supporting documentation for)
establishing a GHG SER level below 75,000 tpy CO2e and at or
above 30,000 tpy CO2e. Based on our current understanding,
we do not believe there is any basis for a SER level to be established
below 30,000 tpy CO2e, and we are not considering SER values
below this level.
III. Background
A. PSD Program
Part C of title I of the CAA contains the requirements for the PSD
program. The primary element of this program is a preconstruction
review and permitting requirement for new and modified stationary
sources of air pollution locating in areas meeting a national ambient
air quality standard (NAAQS) (``attainment'' areas) and areas for which
there is insufficient information to classify the area as either
attainment or nonattainment (``unclassifiable'' areas). Under the CAA,
the PSD preconstruction permitting requirement applies to any ``major
emitting facility'' that commences construction or undertakes a
``modification.'' CAA 165(a) and CAA 169(2)(C). The Act defines the
term ``major emitting facility'' as a stationary source that emits or
has the potential to emit any air pollutant in the amount of at least
100 or 250 tpy, depending on the source category. CAA section 169(1).
The Act also defines ``modification'' as any physical or operational
change that increases the amount of any air pollutant emitted by the
source. CAA section 111(a)(4).
The EPA's regulations reflect these requirements.\11\ Under the
regulations, PSD applies to any ``major stationary source'' that begins
actual construction on a new facility or undertakes a ``major
modification'' in an area designated as attainment or unclassifiable
for a NAAQS. 40 CFR 52.21(a)(2)(i)-(iii). The regulations define a
``major stationary source'' as a stationary source that emits,
depending on the source category, at least 100 or 250 tpy, of a
``regulated NSR pollutant.'' 40 CFR part 52.21(b)(1)(i)(a)-(b). A
``regulated NSR pollutant'' is defined as any of the following: (1) In
general, any pollutant subject to a NAAQS, (2) any pollutant subject to
a standard of performance for new sources under CAA section 111, (3)
any of a certain type of stratospheric ozone depleting substances, or
(4) any pollutant that otherwise is subject to regulation under the
Act. 40 CFR part 52.21(b)(50)(i)-(iv). Regulated NSR pollutants do not
include hazardous air pollutants listed under CAA section 112. 40 CFR
part 52.21(b)(v).
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\11\ The EPA's PSD regulations are found in two parts of 40 CFR,
part 51 and part 52. The part 52 regulations at 40 CFR 52.21
constitute the federal PSD program that applies in any state or
other area, such as Indian country, that does not have an approved
PSD program in its implementation plan. The part 51 regulations at
40 CFR 51.166 spell out the requirements that must be met for the
EPA to approve a PSD program into an implementation plan. The
language in the regulations is nearly identical, with small
differences reflecting their different purposes. For simplicity, we
cite only the 40 CFR part 52 regulations in this section, but the
part 51 regulations contain analogous provisions in 40 CFR 51.166.
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Construction of a new major stationary source \12\ is subject to
preconstruction review under PSD if the source has the potential to
emit any regulated NSR pollutant in the amount of at least 100 or 250
tpy, depending on the source category. The PSD permitting requirements
then apply to each regulated NSR pollutant that the source would have
the potential to emit in ``significant amounts.'' 40 CFR parts
52.21(j); 52.21(m)(1)(i). PSD does not apply to pollutants for which
the area in which the source would be located is a nonattainment area
(often referred to as ``nonattainment pollutants'') 40 CFR part
52.21(i)(2). The amount of emissions of each pollutant that is
considered significant is specified in the definition of the term
``significant.'' 40 CFR part 52.21(b)(23)(i). Because these values are
expressed as a rate of emissions in tpy, the EPA often refers to each
value as a ``significant emissions rate'' or ``SER.'' For any regulated
NSR pollutant for which no SER is specified, any emissions rate is
considered significant. 40 CFR part 52.21(b)(23)(ii).
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\12\ A new major stationary source can be either a newly
constructed facility or a physical change at an existing minor
source that would qualify as a major stationary source by itself. 40
CFR 52.21(b)(1)(i)(c).
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The PSD program also applies to an existing major stationary source
when there is a planned ``major modification'' to the source, which is
a physical change or change in the method of operation that would
result in both a significant emissions increase and a significant net
emissions increase of one or more regulated NSR pollutants, other than
nonattainment pollutants.\13\ The SERs are the measure that is used to
determine whether projected emissions increases of regulated NSR
pollutants are significant.
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\13\ There is a two-step process for determining whether a
planned physical or operational change at an existing major
stationary source qualifies as a major modification that is subject
to PSD. First, the change itself must be projected to result in a
significant increase in a regulated NSR pollutant. If so, the change
must also be projected to result in a significant net emissions
increase of that pollutant when other contemporaneous, creditable
increases and decreases of that pollutant at the source are taken
into account. This process is spelled out at 40 CFR 52.21(a)(2)(iv);
the definition of ``major modification'' is at 40 CFR 52.21(b)(2)
and the definition of ``net emissions increase'' is at 40 CFR
52.21(b)(3).
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One principal PSD requirement is that a permit authorizing
construction of a new major source or major modification must contain
emissions limitations based on application of the BACT for each
regulated NSR pollutant. BACT is
[[Page 68114]]
determined on a case-by-case basis, taking into account, among other
factors, the energy, environmental, and economic impacts. 40 CFR part
52.21(b)(12) and (j). To ensure these criteria are satisfied in
individual permitting decisions, the EPA has developed a ``top-down''
approach for BACT review that the EPA applies and recommends to state
permitting authorities. This involves a decision process that includes
identification of all available control technologies, elimination of
technically infeasible options, ranking of remaining options by control
and cost effectiveness, and then selection of BACT. In re Prairie State
Generating Company, 13 E.A.D. 1, 13-14 (EAB 2006). Under PSD, once a
source is determined to be major for any regulated NSR pollutant, a
BACT review is performed for each attainment pollutant that is
projected to increase over its PSD significance level as a result of
new construction or a modification project at an existing major source.
In addition to complying with the BACT requirements, the source
must analyze impacts on ambient air quality and demonstrate that the
construction will not cause or contribute to a violation of any NAAQS
or PSD increments. However, this requirement is not applicable to GHGs
because there are no NAAQS or PSD increments for GHGs. A permit
applicant must also analyze impacts on soil, vegetation and visibility.
In addition, new sources or modifications that would impact Class I
areas (e.g., national parks) may be subject to additional requirements
to protect air quality related values (AQRVs) that have been identified
for such areas (e.g., visibility). Under PSD, if a source's proposed
project may impact a Class I area, the Federal Land Manager is notified
and is responsible for evaluating a source's projected impact on the
AQRVs. Because it is not possible with current climate change modeling
to quantify the impacts at particular locations attributable to a
specific GHG source, the EPA considers the reduction of GHG emissions
to the maximum extent achievable under the BACT requirement to be the
best technique to satisfy the additional impacts analysis and Class I
area requirements related to GHGs. PSD and Title V Permitting Guidance
for Greenhouse Gases at 47-49.\14\
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\14\ U.S. EPA, Document No. EPA-457/B-11-001, March 2011. http://www2.epa.gov/nsr/new-source-review-policy-and-guidance-document-index.
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State or local air pollution control agencies issue most PSD
permits. The EPA establishes the basic requirements for the PSD program
in two sections of its regulations--40 CFR part 51.166 and 52.21. Under
40 CFR part 51.166, which sets out the minimum requirements for
obtaining the EPA's approval of the PSD program in a State
Implementation Plan (SIP), states may develop unique PSD requirements
and procedures tailored for the air quality needs of each area as long
as the program is at least as stringent as the EPA requirements.
Because a state's SIP is required to contain a PSD program, states with
PSD programs approved under 40 CFR part 51.166 are typically referred
to as ``SIP-approved states.'' Some local air pollution agencies have
also developed their own PSD programs that have been approved, so
typically they are also referred to as SIP-approved. To date, no tribes
have developed PSD programs under Tribal Implementation Plans (TIP). In
cases where state, tribal or local air pollution control agencies do
not have a SIP-approved or TIP-approved PSD program, as applicable, the
federal PSD program at 40 CFR part 52.21 applies. In these areas, such
state, tribal or local air pollution control agencies can be delegated
the federal law authority to issue permits on behalf of the EPA, and
those programs are often referred to as ``delegated programs.'' To
date, no tribes have requested delegation of the federal PSD program
and, therefore, the EPA is the permitting authority in those areas. The
EPA is also the permitting authority in all areas where no other entity
has requested delegation of the federal program or has requested
approval of its own PSD program under a SIP or a TIP (e.g., Puerto
Rico, other U.S. Territories, and the jurisdictions of several local
agencies in California).
B. Title V Program
Title V of the CAA establishes requirements for an operating permit
program for major sources of air pollutant emissions and certain other
sources. CAA section 502. The operating permit requirements under title
V are intended to ensure that sources comply with CAA applicable
requirements. CAA section 504; 40 CFR parts 70.1(b) and 71.1(b). The
title V program is implemented through regulations contained in 40 CFR
part 70 for the EPA-approved programs implemented by state and local
agencies and tribes, and 40 CFR part 71 for the federal program
generally implemented by the EPA in jurisdictions without a program
approved under part 70 (e.g., much of Indian country).
The title V program requires major sources and certain other
sources to apply for operating permits. The EPA has interpreted the
term ``major source'' to include stationary sources that emit or have a
potential to emit (PTE) of 100 tpy or more of any air pollutant subject
to regulation, as now reflected in the regulatory definition of ``major
source'' in 40 CFR parts 70.2 and 71.2. 75 FR 31521. In general and
under the EPA's longstanding interpretation, a pollutant is ``subject
to regulation'' for purposes of title V if it is subject to a CAA
requirement establishing actual control of emissions and it is first
considered ``subject to regulation'' for title V purposes when such a
requirement ``takes effect.'' \15\ Title V generally does not add new
pollution control requirements, but it does require that each permit
contain emission limitations and other conditions as are necessary to
assure compliance with all ``applicable requirements'' required by the
CAA, and it requires that certain procedural requirements be followed.
``Applicable requirements'' for title V purposes include stationary
source requirements (e.g., New Source Performance Standards (NSPS), and
SIP requirements, including PSD). Procedural requirements include
providing review of permits by the EPA, states, and the public, and
requiring permit holders to track, report, and annually certify their
compliance status with respect to their permit requirements.
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\15\ A more detailed definition of the term ``subject to
regulation'' can be found in 40 CFR 70.2 and 71.2.
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C. Application of PSD and Title V Programs to GHG Emissions
1. Regulation of the Pollutant GHGs
On April 2, 2007, the U.S. Supreme Court held that GHGs fit within
the definition of the term ``air pollutant'' under CAA section 302(g).
Massachusetts v. EPA, 549 U.S. 497 (2007). As a result, the EPA was
required to determine, under CAA section 202(a) whether: (1) GHGs from
new motor vehicles cause or contribute to air pollution which may
reasonably be anticipated to endanger public health or welfare, or (2)
the science is too uncertain to make a reasoned decision.\16\ After
issuing a proposal and receiving comment, the EPA Administrator signed
two distinct findings regarding GHGs under CAA section 202(a), which
were subsequently published in the Federal Register on December 15,
2009:\17\
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\16\ This background is also summarized in the Tailoring Rule.
75 FR 31519.
\17\ 74 FR 66496.
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Endangerment Finding: The Administrator found that the
current
[[Page 68115]]
and projected atmospheric concentrations of the mix of six long-lived
and directly emitted GHGs are reasonably anticipated to endanger the
public health and welfare of current and future generations. The six
gases are carbon dioxide (CO2), nitrous oxide
(N2O), methane (CH4), hydrofluorocarbons (HFCs),
perfluorocarbons (PFCs) and sulfur hexafluoride (SF6)
(referred to as ``well-mixed greenhouse gases'' in the endangerment
finding).
Cause or Contribute Finding: The Administrator found that
the emissions of the single air pollutant defined as the aggregate
group of six ``well-mixed greenhouses gases'' from new motor vehicles
and new motor vehicle engines contributes to the GHG air pollution that
threatens public health and welfare.
These findings did not themselves impose any requirements on
industry or other entities. However, they triggered a requirement for
the EPA to issue standards under CAA section 202(a) ``applicable to''
emissions of the air pollutant that the EPA found causes or contributes
to the air pollution that endangers public health and welfare.
Accordingly, the EPA and the Department of Transportation's National
Highway Traffic Safety Administration (NHTSA) finalized the Light-Duty
Vehicle Rule (LDVR) as a joint rule on May 7, 2010. 75 FR 25324.
Consistent with the Cause or Contribute Finding, the LDVR contains
standards and other regulations applicable to the emissions of the air
pollutant defined as the aggregate group of six greenhouse gases:
CO2, N2O, CH4, HFCs, PFCs and
SF6. 40 CFR part 86.1818-12(a).
When controls on GHGs in the LDVR took effect, the pollutant GHGs
became a pollutant ``subject to regulation under the Act,'' and
therefore subject to PSD and title V requirements. 75 FR 17004. The EPA
identified January 2, 2011, as the date when GHGs first became subject
to regulation and subject to the stationary source permitting programs
under the CAA. Id.
2. Revisions to PSD and Title V Regulations in the Tailoring Rule
Prior to promulgation of the LDVR, the EPA recognized that the
regulation of GHGs under the PSD and title V programs would radically
increase the number of sources subject to the program at the 100 or 250
tpy major source applicability thresholds provided under the CAA. 74 FR
55292. This is primarily because combustion sources emit GHGs
(specifically CO2) at levels that may be from several
hundred times to over 1,000 times the emissions of other combustion
pollutants that are subject to permitting under the longstanding PSD
and title V major source applicability thresholds.
Under these circumstances, the EPA estimated that thousands of
sources, mostly smaller sources that would otherwise not be subject to
PSD permitting, would become subject to PSD review each year, thereby
incurring the costs of the permit applications and individualized PSD
BACT requirements that the PSD provisions require. We also estimated
that millions of new and existing sources, mostly existing commercial
and residential sources that had never before been required to obtain
an air permit, would become subject to title V, and would incur the
costs of obtaining title V permits. Additionally, state and local
permitting authorities would be burdened by the large number of these
permit applications, which would be orders of magnitude greater than
the current inventory of applications and permits and would vastly
exceed the administrative resources of the permitting authorities.
Therefore, to relieve the overwhelming permitting burdens that
would have fallen on permitting authorities and sources under the Act
in the absence of the EPA action, we promulgated the Prevention of
Significant Deterioration and Title V Greenhouse Gas Tailoring Rule
(Tailoring Rule).\18\ This rule limited the scope of permitting
requirements that would have otherwise applied under the EPA's
understanding of the CAA by including applicability criteria
specifically ``tailored'' for GHGs. These criteria determined which GHG
emission sources initially became subject to the PSD and title V
programs when controls of GHG under the LDVR became effective. Thus,
the rule established a phase-in approach for PSD and title V
applicability, with the first two steps of the phase-in only applicable
to the largest emitters of GHGs, and also included enforceable
commitments for the EPA to study and consider further phasing-in the
PSD and title V permitting requirements under the Act for sources
emitting at lower GHG emissions thresholds.
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\18\ 75 FR 31514, June 3, 2010.
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Under Step 1, which went into effect on January 2, 2011, only
``anyway sources'' required a PSD permit and were subject to PSD
requirements for their GHG emissions based on an applicability
threshold of 75,000 tpy CO2e.\19\ For a Step 1 PSD ``anyway
source'' that met or exceeded the GHG emissions threshold, the primary
additional requirement, beyond the PSD permitting requirements already
applicable to pollutants other than GHGs, was to determine and
implement BACT for GHGs.\20\ The EPA explained that the establishment
of a significance level--which, in effect, is a BACT threshold--[wa]s
appropriate and . . . decided [at that time] to establish this level at
75,000 tpy CO2e. 75 FR 31568. The EPA also described this
value as a ``significance level'' for convenience because it was
intended to function in a manner similar to the significance levels for
other pollutants. 75 FR 31559. However, the EPA did not add a GHG value
to the definition of ``significant'' in the regulations or attempt to
determine a de minimis level for GHGs. 75 FR 31560. The EPA selected
the 75,000 tpy CO2e level for this purpose in Step 1 because
it was the same as one that the EPA established for Step 2, based on a
judgment that the administrative burdens of addressing GHGs in the PSD
program would be manageable using that value as an applicability level.
75 FR 31568.
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\19\ In addition to the applicability thresholds established in
the Tailoring Rule on a CO2e basis, in order for a
source's GHG emissions to trigger PSD or title V requirements, the
quantity of the GHGs also had to equal or exceed the statutory
thresholds of 100 or 250 tpy on a mass basis. 75 FR 31523, June 3,
2010.
\20\ Shortly after Step 1 went into effect, the EPA issued
guidance on permitting, including BACT determinations, for GHGs
titled ``PSD and Title V Permitting Guidance for Greenhouse Gases,''
EPA Document No. EPA-457/B-11-001, March 2011. http://www3.epa.gov/nsr/ghgdocs/ghgpermittingguidance.pdf.
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For the title V program under Step 1, no sources were subject to
title V permitting solely as a result of their GHG emissions. Only
existing sources with, or new sources obtaining, title V permits based
on pollutants other than GHGs were required to address GHGs as part of
their title V permitting to the extent necessary to assure compliance
with GHG applicable requirements established under other CAA programs.
For a Step 1 title V ``anyway source,'' the only additional
requirement, beyond the already-applicable title V permitting
requirements for the pollutants other than GHGs, was to apply any title
V requirements to its GHG emissions when it applied for, renewed or
revised its permit. These requirements included incorporating any GHG
applicable requirements (e.g., GHG BACT requirements from a PSD permit)
and associated monitoring, recordkeeping and reporting. This also
included a requirement to identify GHG emissions and other information
to the extent required under the title V regulations.
Step 2, which went into effect on July 1, 2011, allowed PSD
applicability
[[Page 68116]]
under the Act to extend beyond ``anyway sources'' to new stationary
sources that emit or have a PTE of 100,000 tpy CO2e or more.
Step 2 also covered modifications at existing major stationary sources
that emit or have a PTE of 100,000 tpy CO2e or more that
would increase GHG emissions by 75,000 tpy CO2e or more,
even though the modification would not otherwise be subject to PSD
based on emissions of any pollutant other than GHGs. A Step 2 source
was required to obtain a PSD permit, with the associated procedural
requirements, but the primary substantive requirement for GHGs was
again to determine and implement BACT. Once PSD was triggered by GHG
emissions, these Step 2 PSD sources also were subject to the applicable
PSD requirements for any new or increased emissions of regulated NSR
pollutants other than GHGs at or above of the applicable SERs.
Step 2 also extended the applicability of title V beyond ``anyway
sources'' to new and existing sources that emitted or had a PTE of
100,000 tpy CO2e or more, even if the new or existing source
would not otherwise be subject to title V based on emissions of any
pollutant other than GHGs. These Step 2 title V sources incurred the
procedural expenses of obtaining a title V permit, but the requirement
to apply for a permit did not, in itself, trigger any additional
substantive requirements for control of GHGs. These permits also
incorporated any applicable CAA requirements that applied to the source
for any other air pollutants.
In addition, the Tailoring Rule made clear that the pollutant
regulated in the PSD and title V programs was the same as the one
regulated in the LDVR--the single air pollutant defined as the
aggregate group of the six well-mixed GHGs. 75 FR 31522. To reflect
this, the Tailoring Rule adopted a definition of the term ``greenhouse
gases'' or ``GHGs'' in revisions to the PSD and title V regulations
that describes this aggregate air pollutant (as opposed to the
individual gases). We use a similar convention regarding GHGs in this
preamble, using the abbreviation ``GHG'' or ``GHGs'' to refer to the
aggregate air pollutant.
In the existing regulations adopted in the Tailoring Rule, this
aggregate pollutant is measured in terms of ``carbon dioxide
equivalent'' or ``CO2e'' emissions, which is a metric that
allows all the compounds comprising GHGs to be evaluated on an
equivalent basis despite the fact that the different compounds have
different heat-trapping capacities. The Global Warming Potential (GWP)
that has been determined for each compound reflects its heat-trapping
capacity relative to CO2. The mass of emissions of a
constituent compound is multiplied by its GWP to determine the
emissions in terms of CO2e. A source's emissions of all
compounds in terms of CO2e are summed to determine the
source's total GHG emissions.
3. Actions After the Tailoring Rule
After the Tailoring Rule was completed, in accordance with the
phase-in process begun in that rule, on July 12, 2012, the EPA
completed a Step 3 rulemaking. In this rule, the EPA determined that
the Tailoring Rule Step 1 or Step 2 permitting thresholds did not need
to be revised at that time. The EPA also improved the usefulness of
PALs for GHG emissions by allowing GHG PALs to be established on a
CO2e basis, in addition to the already-available mass
basis.\21\ The action revised the regulations to allow a source
emitting only GHGs in major amounts (i.e., an existing Step 2 source)
to submit an application for a CO2e-based GHG PAL while also
maintaining its minor source status.\22\
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\21\ Under the EPA's existing regulations, a PAL is an emissions
limitation for a single pollutant expressed in tpy that is
enforceable as a practical matter and is established source-wide in
accordance with specific criteria. 40 CFR 52.21(aa)(2)(v). Sources
may, but are not required to, apply for a PAL, and the decision to
issue a PAL to particular source is at the discretion of the
permitting authority. 77 FR 41060. PALs offer an alternative method
for determining major NSR applicability by allowing sources to make
a change without triggering PSD review, as long as the source can
maintain its overall emissions of the PAL pollutant below the PAL
level. Therefore, PALs allow sources to make the changes necessary
to respond rapidly to market conditions, while generally assuring
the environment is protected from adverse impacts from the change.
Id.
\22\ 77 FR 41051, July 12, 2012.
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The United States courts also resolved several challenges to the
Tailoring Rule and other EPA actions regarding GHGs. On June 26, 2012,
the D.C. Circuit upheld in all respects the Endangerment Finding, LDVR,
Tailoring Rule, and other actions pertinent to the regulation of GHGs
under the PSD and title V programs. After an appeal of this case, on
June 23, 2014, the U.S. Supreme Court issued a decision in UARG v. EPA
addressing only the application of stationary source permitting
requirements to GHGs.
The U.S. Supreme Court held that the EPA may not treat GHGs as an
air pollutant for the specific purpose of determining whether a source
is a major source (or a modification thereof) and thus required to
obtain a PSD or title V permit. However, the U.S. Supreme Court also
said that the EPA could continue to require that PSD permits, otherwise
required based on emissions of pollutants other than GHGs pollutants,
contain limitations on GHG emissions based on the application of BACT.
That is, the ruling effectively upheld PSD and title V permitting
requirements for GHG emissions under Step 1 of the Tailoring Rule for
``anyway sources,'' and invalidated the application of PSD and title V
permitting requirements to Step 2 sources to the extent that these
sources triggered permitting requirements solely because they had GHG
emissions above the applicable thresholds.
The U.S. Supreme Court also noted that BACT applied to GHGs under
provisions in the Tailoring Rule only if a source emits GHGs in excess
of 75,000 tpy CO2e, but that the EPA had not arrived at that
number by determining that the impacts of emissions below that level
were de minimis. 134 S.Ct. at 2449. The U.S. Supreme Court recognized
that the ``EPA may establish an appropriate de minimis threshold below
which BACT is not required for a source's greenhouse gas emissions,''
but said that the EPA would need to justify such a threshold on proper
grounds. Id. The U.S. Supreme Court had earlier noted that the EPA's
75,000 CO2e tpy threshold was not an exercise of its
authority to establish de minimis exceptions. 134 S.Ct. at 2438 n. 3.
To address this part of the U.S. Supreme Court's decision, the EPA is
now proposing to exercise that authority. This action proposes a GHG
SER, which represents a de minimis exception level, for purposes of
determining the applicability of the BACT requirement in PSD
permitting.
To communicate the EPA's preliminary views on the effect of the
UARG v. EPA decision to the public, on July 24, 2014, the EPA issued
the previously-described Preliminary Views Memo. In that memorandum,
the EPA explained that, with respect to ``anyway sources,'' we
initially intended ``to continue applying the PSD BACT requirements to
GHG if the source emits or has the potential to emit 75,000 tpy or more
of GHG on a [CO2e] basis.'' \23\ With respect to modified
sources, we said that initially ``the EPA intends to continue applying
the PSD BACT requirements to GHG if both of the
[[Page 68117]]
following circumstances are present: (1) The modification is otherwise
subject to PSD for a pollutant other than GHG; (2) the modification
results in a GHG emissions increase and a net GHG emissions increase
equal to or greater than 75,000 tpy CO2e and greater than
zero on a mass basis.'' Id. at 3. The EPA based this initial approach
on the 75,000 tpy CO2e applicability level that remained in
the EPA's regulations pending further action by the courts. However,
the EPA also explained that it would consider whether to promulgate a
de minimis level, which the EPA is now proposing to do in this action.
Id. at 4.
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\23\ Next Steps and Preliminary Views on the Application of
Clean Air Act (CAA) Permitting Programs to Greenhouse Gases
Following the Supreme Court's Decision in UARG v. EPA, Memorandum
from Janet G. McCabe, Acting Assistant Administrator, Office of Air
and Radiation, and Cynthia Giles, Assistant Administrator, Office of
Enforcement and Compliance Assurance, U.S. EPA, to Regional
Administrators, p. 3, July 24, 2014.
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Because the UARG v. EPA decision affirmed in part and reversed in
part the earlier decision of the D.C. Circuit in Coalition for
Responsible Regulation v. EPA, 684 F.3d 102 (D.C. Cir. 2012), the
matter was returned to the D.C. Circuit to determine whether particular
parts of the regulations adopted by the EPA in the Tailoring Rule
should be struck down (vacated) or left in place with instructions that
the EPA revise them (remanded). On April 10, 2015, the D.C. Circuit
issued an Amended Judgment, which provided a more specific remedy
reflecting the UARG v. EPA U.S. Supreme Court decision.
In the Amended Judgment, the D.C. Circuit ordered that the EPA
regulations under review (including 40 CFR parts 51.166(b)(48)(v) and
52.21(b)(49)(v)) be vacated to the extent they require a stationary
source to obtain a PSD permit if GHGs are the only pollutant (i) that
the source emits or has the potential to emit above the applicable
major source thresholds, or (ii) for which there is a significant
emissions increase from a modification. The D.C. Circuit also ordered
that the regulations under review be vacated to the extent they require
(i) a stationary source to obtain a title V permit solely because the
source emits or has the potential to emit GHGs above the applicable
major source thresholds and (ii) the EPA to consider further phasing-in
the GHG permitting requirements at lower GHG emission thresholds (in
particular 40 CFR part 52.22 and 40 CFR parts 70.12 and 71.13). The
Court did not vacate the provisions implementing Step 1 of the
Tailoring Rule (in particular, for the PSD program, 40 CFR parts
51.166(b)(48)(iv) and 52.21(b)(49)(iv)).\24\ However, the D.C. Circuit
ordered that the EPA take steps to rescind and/or revise the applicable
provisions of the CFR as expeditiously as practicable to reflect the
relief granted in the Amended Judgment and to consider whether any
further revisions are appropriate in light of UARG and, if so, to
undertake such revisions.
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\24\ Without these provisions in the definition of ``subject to
regulation'' at this time, any GHG emissions increase would require
a newly constructed major source, or a major modification at an
existing facility, to undergo PSD BACT review for GHGs. 40 CFR
51.166(b)(23)(ii); 40 CFR 52.21(b)(23)(ii).
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Consistent with the Amended Judgment, on August 12, 2015, the EPA
issued a final rule that removed from the PSD and title V regulations
entire sections and paragraphs that were readily severable from other
provisions in the PSD and title V regulations and specifically
identified in the D.C. Circuit's Amended Judgment. These removed
provisions required a stationary source to obtain a PSD permit solely
on the basis of the source's GHG emissions and required the EPA to
study and consider further phasing-in of GHG permitting requirements
into the PSD and title V permitting programs at lower GHG emissions
thresholds. 80 FR 50199. Because of the nature of the D.C. Circuit's
Amended Judgment, these revisions were ministerial in nature and exempt
from notice-and-comment rulemaking procedures under the ``good cause''
exception of the APA. In that rulemaking, we also announced that we
intended to further revise the PSD and title V regulations to fully
implement the Amended Judgment in a separate rulemaking, and the
present action initiates that separate rulemaking. This action proposes
revisions to several regulatory definitions in the PSD and title V
permitting regulations, revisions to the PSD GHG PALs and revisions to
other provisions necessary to ensure that neither the PSD nor title V
rules require a source to obtain a permit solely because the source
emits or has the potential to emit GHGs above the applicable
thresholds. These latter revisions include revisions to the title V
regulations that were vacated in the Amended Judgment case--those that
require a stationary source to obtain a title V permit solely because
the source emits or has the potential to emit GHGs above the applicable
major source thresholds. They also include revisions to state-specific
GHG PSD or title V permitting regulations that, in general, the EPA
believes are no longer necessary in light of the other proposed
revisions in this action and that the EPA considers no longer
appropriate to the extent that they might have the effect of
establishing federal permitting requirements for sources that only emit
or have the potential to emit GHGs above the major source thresholds.
These additional revisions to the PSD and title V regulations, although
necessary to implement the Amended Judgment, are not purely ministerial
in nature because they amend, rather than completely remove, text that
remains pertinent to the PSD and title V programs as a whole and their
continued application to GHGs. As a result, we are addressing them in
this separate notice-and-comment rulemaking to give the public an
opportunity to comment on how the EPA proposes to address those
portions of the Amended Judgment.
IV. Revisions to the PSD and Title V GHG Permitting Regulations
A. What revisions to the PSD and title V GHG permitting regulations is
the EPA proposing with this action?
1. Revisions to the PSD Regulations
In this action, the EPA is proposing to revise certain definitions
in the PSD permitting regulations to fully implement the Amended
Judgment. The first revision would add an exemption clause to the
definitions of ``major stationary source'' and ``major modification''
to ensure that the PSD rules do not require a source to obtain a permit
solely because the source emits or has the potential to emit GHGs above
the major source thresholds or significance level. In other words, a
new stationary source that emits, or has the potential to emit, 100 or
250 tpy or more, as applicable, of any regulated NSR pollutant except
for GHGs would be required to obtain a PSD permit before it is
constructed. Furthermore, a physical change or change in the method of
operation at an existing major source that would result in a
significant increase in emissions of any regulated NSR pollutant except
for GHGs and a significant net emission increase of that regulated NSR
pollutant would be a major modification required to obtain a permit.
The EPA is proposing to establish a freestanding definition of the
term ``greenhouse gases'' in the PSD regulations at 40 CFR parts
51.166(b)(31) and 52.21(b)(32) to facilitate the application of the
exemptions clauses described earlier. Previously, the definition of
this pollutant was located within the definition of the term ``subject
to regulation'' and we are now proposing to simply move the language
that defined GHGs in this context into an independent definition for
the term ``greenhouse gases.'' This proposed definition of GHGs does
not change the meaning of the term; we are proposing to use the same
language as in the existing regulations.
[[Page 68118]]
In this action we are also proposing to simplify the definition of
``subject to regulation'' in other ways. In the Tailoring Rule, the EPA
placed the GHG applicability thresholds in a new definition of the term
``subject to regulation'' in an effort to enable states with approved
PSD programs to rapidly apply the Tailoring Rule limitations without
necessarily having to revise state regulations. 75 FR 31580-81. The EPA
intended to enable states to immediately read rules that already
contained the term ``subject to regulation'' in a manner consistent
with the definition of this term adopted by the EPA in the Tailoring
Rule. Id. at 31581. However, after the Tailoring Rule, most states
concluded that it was still necessary to revise their regulations to
incorporate the limitations on PSD applicability reflected in the
Tailoring Rule. Also, experience has shown that this mechanism for
implementing the GHG applicability thresholds is confusing and
cumbersome. Thus, the EPA is proposing to eliminate this mechanism and
revert to a more traditional approach of placing the value that
determines applicability of BACT within the definition of the term
``significant.'' This approach also enables the EPA to eliminate the
Tailoring Rule Step 1 thresholds in 40 CFR parts 51.166(b)(48)(iv) and
52.21(b)(49)(iv) that were not vacated but that nevertheless, as the
U.S. Supreme Court noted, lacked a de minimis rationale.
The EPA thus is proposing to repeal all parts of the definitions of
``subject to regulation'' except for the first paragraph, which simply
served to codify our interpretation of the term ``subject to
regulation'' that was reflected in prior actions. 75 FR 31582. Those
prior actions are the following: (1) A Memorandum from Administrator
Stephen Johnson titled ``EPA's Interpretation of Regulations that
Determine Pollutants Covered by Federal Prevention of Significant
Deterioration (PSD) Permit Program'' \25\ and (2) An action titled
Reconsideration of Interpretation of Regulations That Determine
Pollutants Covered by Clean Air Act Permitting Programs.\26\ This
second action was subsequently described as the ``Timing Decision'' in
Court proceedings. The EPA is not proposing to change or reconsider the
interpretation of its regulations and the CAA reflected in these
actions. Thus, we are retaining the first paragraph in the definition
``subject to regulation'' at 40 CFR parts 51.166(b)(48) and
52.21(b)(49) that codify this interpretation of the term ``subject to
regulation'' that is used elsewhere in the PSD regulations.
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\25\ 75 FR 80300, December 31, 2008.
\26\ 75 FR 17004, April 2, 2010.
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Finally, consistent with deleting most of the remaining parts of
the definition of ``subject to regulation,'' we are proposing to amend
the definition of ``significant'' to add the proposed value for the GHG
SER. With these revisions to the PSD regulations, GHG will only be
subject to BACT review under the PSD permitting requirements at 40 CFR
parts 52.21(j) and 51.166(j) if the source has been classified as a
major stationary source or a major modification for another regulated
NSR pollutant first and there is a significant net emissions increase
of the source's GHGs emissions equal to or greater than the GHG SER
that is being proposed in this action.
2. Revisions to the PSD PAL Regulations
The EPA is proposing a number of revisions to the PSD PAL
provisions at 40 CFR 52.21(aa) to address the UARG decision and Amended
Judgment. Because a PSD PAL permit is only available to an existing
major stationary source, and a source is no longer subject to PSD
solely because of its emissions of GHGs, we are proposing to revise the
PSD PAL provisions to remove the ability for a source that would be
``major'' \27\ only for GHGs to obtain a GHG PAL and the ability of a
source establishing a GHG PAL to retain its minor NSR status. We are
proposing to make refinements to the PSD PAL provisions whereby an
existing ``anyway source'' could still apply for and obtain a GHG PAL,
but only for the limited purpose of relieving the source from having to
address the BACT requirement for GHGs when triggering PSD for another
NSR pollutant.\28\ The EPA has previously observed that the PAL
provisions may still have relevance for this purpose after the U.S.
Supreme Court decision.\29\ A PAL may be issued for this purpose if all
requirements for obtaining a GHG PAL are met. As a result of our
proposed revisions, a GHG PAL would be established and function in this
narrower context in much the same way as a PAL for any other regulated
NSR pollutant. The main difference will be that a GHG PAL would not be
issued on a mass basis, but rather on a CO2e basis since the
regulated pollutant GHGs is the aggregate of six individual gases
calculated on a CO2e basis. Finally, all PALs must include
enforceable requirements for the monitoring system to accurately
determine plantwide emissions of the PAL pollutant. As current
monitoring systems do not measure tpy CO2e, we would also
like to clarify that permitting authorities can specify in each
individual GHG PAL permit, much as they already do for GHG PSD permits,
the type of mass-based monitoring to be carried out for each individual
gas and require the applicant to perform the applicable CO2e
calculations.
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\27\ Assuming GHGs could still be considered in defining a
source as ``major.'' The EPA recognizes they cannot be after the
U.S. Supreme Court decision. If the proposed changes in this rule
are enacted, no source will be considered major for GHGs.
\28\ We are not proposing similar revisions to 40 CFR 51.166
because the June 29, 2012, final rule that adopted the GHG PAL
provisions under 40 CFR 52.21 did not adopt these changes into the
existing PAL provisions contained in 40 CFR 51.166. 77 FR 41051.
However, nothing in that 2012 action was intended to restrict
states, tribes or local permitting authorities from adopting changes
into their SIP-approved PAL program to allow for the issuance of
PALs on a CO2e basis if they choose to do so. Moreover,
the revisions we are proposing in this action do not preclude a
state, local or tribal program from applying construction permitting
requirements equivalent to the PSD GHG PAL requirements for Step 2
sources under state law, although such provisions are no longer
approvable parts of a PSD or title V program under federal law.
\29\ 79 FR 70095; 80 FR 14062; 80 FR 23245; 80 FR 28901.
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3. Revisions to State-Specific PSD Regulations
The EPA is also taking this opportunity to propose to remove
elements in a specific SIP-approved program that are no longer needed
as a result of the Amended Judgment. The EPA is proposing to remove the
provisions at 40 CFR 52.2305, which establish the Federal
Implementation Plan (FIP) requirements for the issuance of PSD permits
for GHG emissions in the state of Texas.
On November 10, 2014, the EPA approved the revisions to the Texas
PSD program for GHG emissions which provided the state of Texas the
authority to regulate GHGs in the Texas PSD program and to issue GHG
PSD permits to ``anyway sources.'' 79 FR 66626. However, to avoid
delays to some permit applicants, we retained limited authority under
the Texas GHG PSD FIP at 40 CFR part 52.2305 to issue GHG PSD permits
in certain circumstances. We retained the authority to: (1) Issue
permits to those permit applicants who elected to continue their permit
application with the EPA by May 15, 2014; (2) issue permits to those
permit applicants who did not request a transfer to the Texas
Commission on Environmental Quality prior to the date of final permit
decision; and (3) complete the permit action for all GHG PSD permits
issued by the EPA for which the time for filing an
[[Page 68119]]
administrative appeal had not expired or all administrative and
judicial appeals processes had not been completed by November 10, 2014.
The EPA proposes to find that all three circumstances for limited
authority to issue GHG PSD permits in Texas have now been satisfied;
therefore, we no longer need to retain the authorities provided to us
in 40 CFR part 52.2305 and propose to remove that section.
For questions on whether federally approved SIPs or TIP would need
to be revised to address the regulatory revisions in this proposal, see
Section VII of this preamble.
4. Revisions to the Title V Regulations
The EPA is proposing to revise certain definitions in the title V
permitting regulations at 40 CFR parts 70 and 71 to fully implement the
Amended Judgment. Specifically, we are proposing to revise the
definition of ``major source'' in 40 CFR parts 70.2 and 71.2 to clarify
that GHGs are no longer considered in determining whether a stationary
source is a major source and thus subject to major source permitting
requirements under the title V program. We are also proposing to remove
paragraphs from the definition of ``subject to regulation'' to remove
those provisions that incorporated the Tailoring Rule CO2e
applicability thresholds into the title V regulations. Those provisions
are no longer necessary or appropriate, in light of the proposed
revisions to the definition of ``major source'' in 40 CFR parts 70.2
and 71.2 described immediately above. Furthermore, we are proposing to
move the definition of ``GHGs'' from the definition of ``subject to
regulation'' to its own definition under the title V regulations at
both 40 CFR parts 70.2 and 71.2. By moving this definition, the EPA
does not intend to make any material changes in how the air pollutant
GHGs is defined, but rather intends to clarify that the definition
applies throughout the title V regulations and that it continues to
include a description of CO2e and how it is calculated.
While the EPA is proposing to revise its title V regulations so
that they no longer require that a source obtain a title V permit
solely because it emits or has the potential to emit GHGs above major
source thresholds, the agency does not read the UARG decision or the
Amended Judgment to affect other grounds on which a title V permit may
be required or the applicable requirements that must be addressed in
title V permits. The proposed revisions are not intended to change the
existing title V requirements in that regard.
5. Revisions to State-Specific Title V Regulations
On December 30, 2010, we issued a final rule that narrowed the
EPA's previous approval of state title V operating permit programs that
apply (or may apply) to GHG-emitting sources under 40 CFR part 70, and,
in a few instances, under 40 CFR part 52. 75 FR 82254. For most states,
title V programs are federally-approved only under 40 CFR part 70, but,
in some cases, states have chosen to submit their title V programs as
part of their SIPs. The EPA has approved provisions related to the
operating permit program into the SIP as codified in 40 CFR part 52 for
three states that were addressed in the December 2010 rule: Arizona
(Pinal County Air Quality Control District), Minnesota, and Wisconsin.
In that December 2010 final rule, we narrowed our previous approval
of certain state permitting thresholds for GHG emissions so that only
sources that equal or exceed the GHG thresholds established in the
Tailoring Rule would be covered as major sources by the EPA-approved
programs in the affected states. For most of the affected states, this
was accomplished by amending our approvals under 40 CFR part 70,
Appendix A. For Minnesota, and Wisconsin, which had title V
applicability provisions that were federally approved under both 40 CFR
part 70 and 40 CFR part 52, we amended our title V program approval in
both 40 CFR part 70 and 40 CFR part 52 to ensure that the scope of the
approved title V program was consistent. In Arizona (Pinal County Air
Quality Control District), we amended our approval under 40 CFR part
52. In this proposal, however, we are proposing to remove those
provisions from all the applicable state title V operating permit
programs except for Arizona (Pinal County Air Quality Control
District), which we intend to address in a separate action. For
Minnesota and Wisconsin, we are proposing to remove the narrowing
provisions under both 40 CFR parts 52 and 70 to ensure consistency.
We are proposing to remove those provisions from the applicable
title V programs because they no longer seem necessary after the UARG
decision, the Amended Judgment, and the EPA's actions to implement that
decision and the Amended Judgment, since a source would no longer be
required to obtain a title V permit solely because it emits or has the
potential to emit GHGs above the major source threshold.
For questions regarding whether title V program approvals would
need to be revised to address these regulatory revisions, see Section
VII of this preamble.
B. What additional regulatory revisions is the EPA proposing with this
action?
The EPA is also proposing to repeal provisions in its 40 CFR parts
60 regulations that the EPA considered advisable to ensure that the
75,000 tpy CO2e applicability threshold for the GHG BACT
requirement continued to apply on an interim basis after GHGs became
regulated under section 111 of the CAA. These provisions were included
in the Carbon Pollution Emission Guidelines for Existing Stationary
Sources: Electric Generating Units,\30\ the Standards of Performance
for GHG Emissions from New, Modified, and Reconstructed Stationary
Sources: Electric Generating Units,\31\ and the Standards of
Performance for Crude Oil and Natural Gas Facilities for which
Construction, Modification or Reconstruction Commenced after September
18, 2015.\32\
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\30\ 80 FR 64662, October 23, 2015. On February 9, 2016, the
U.S. Supreme Court stayed this rule pending judicial review before
the U.S. Court of Appeals for the D.C. Circuit and any subsequent
proceedings in the U.S. Supreme Court.
\31\ 80 FR 64510, October 23, 2015.
\32\ 81 FR 35823, June 3, 2016.
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As we explained previously, under 40 CFR parts 51.166(b)(49) and
52.21(b)(50), we define a ``regulated NSR pollutant'' to include, among
other requirements, ``any pollutant subject to a new source standard of
performance under CAA section 111'' and ``any pollutant that otherwise
is subject to regulation under the Act.'' This definition first applied
to GHGs in 2011 under the fourth part of this definition because this
pollutant was then ``otherwise subject to regulation under the Act'' in
the LDVR. However, because the EPA chose to include the Tailoring Rule
thresholds in the definition of the term ``subject to regulation,''
some question arose as to whether those thresholds would continue to
apply after GHGs also became a regulated NSR pollutant when this
pollutant became subject to a standard of performance under section
111. Thus, the EPA adopted provisions in 40 CFR part 60 that made clear
that promulgation of CAA section 111 requirements for GHGs under these
rules would not result in BACT applying to GHGs at an ``anyway source''
that increased GHGs by any amount below 75,000 tpy CO2e. To
ensure this was clear, the final regulatory text for these rules said
that ``the pollutant that is subject to the standard promulgated under
section 111 of the Act'' shall be considered to be the
[[Page 68120]]
pollutant that otherwise is ``subject to regulation'' under the Act as
defined under the respective ``subject to regulation'' definitions
under the PSD and title V provisions. With the addition of a SER for
GHGs, these 40 CFR part 60 provisions are no longer needed to ensure
that a BACT applicability threshold remains applicable to GHGs after
the regulation of GHGs under section 111 of the Act. Thus, we are
proposing to remove the provisions at 40 CFR parts 60.5360a(b),
60.5515(b) and 60.5705(b).
V. Establishment of a GHG SER
A. What is the legal basis for establishing a GHG SER?
In the UARG decision, the U.S. Supreme Court observed that the EPA
may limit application of the BACT requirement for GHGs to those
situations where a source has the potential to emit ``more than a de
minimis amount of greenhouse gases.'' 134 S.Ct. at 2449. The Court also
acknowledged the EPA's past practice of establishing de minimis levels
for other pollutants that determine whether individual pollutants are
subject to the BACT requirement. Id. at 2435 n. 1. In both of these
parts of its opinion, the U.S. Supreme Court cited the D.C. Circuit's
decision in Alabama Power Co. v. Costle.\33\ The D.C. Circuit's opinion
in that case provides the foundational legal principles upon which the
EPA has previously established the de minimis levels in the NSR program
that are known as ``significant emission rates.'' In light of the U.S.
Supreme Court's favorable citation of the Alabama Power case, the EPA
continues to look to this case as providing the controlling legal
principles for an agency to establish a de minimis exception to a
statutory requirement.
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\33\ 636 F.2d 323, D.C. Cir. 1979.
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Agencies have inherent authority ``to overlook circumstances that
in context may fairly be considered de minimis'' and need not ``apply
the literal terms of a statute to mandate pointless expenditures of
effort.'' Alabama Power, 636 F.2d at 360. ``Unless Congress has been
extraordinarily rigid, there is likely a basis for an implication of de
minimis authority to provide an exemption when the burdens of
regulation yield a gain of trivial or no value.'' Id. at 360-361.
Determining when matters are truly de minimis depends on the particular
circumstances and the agency bears the burden of making the required
showing. Id. Thus, the de minimis authority is ``tightly bounded by the
need to show that the situation is genuinely de minimis or one of
administrative necessity'' Id. at 361. De minimis authority is not a
mechanism to ``depart from the statute, but rather a tool to be used in
implementing the legislative design'' and cannot be used where there
are acknowledged benefits but the agency concludes they ``are exceeded
by the costs.'' Id.\34\
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\34\ See also 44 FR 51937, September 5, 1979 (the EPA proposal
to establish SERs stating that it would not be appropriate to base a
SER on ``a cost-effectiveness rationale'').
---------------------------------------------------------------------------
As the U.S. Supreme Court noted, the CAA does not specify how much
of a given regulated pollutant a major source must emit before it is
subject to the BACT requirement for that pollutant. 134 S.Ct. 2427 n.
1. The Act requires application of BACT to ``each pollutant subject to
regulation'' under the Act but does not address whether the EPA has
discretion not to apply the BACT requirement to pollutants emitted
below a particular level. CAA section 169(3). The EPA has previously
recognized that sources that trigger PSD can emit some pollutants at
levels below which application of the BACT requirement would be a
pointless expenditure of effort. Accordingly, the EPA's regulations
specify that the BACT requirement need only be applied to pollutants
that: (1) A new major source has ``the potential to emit in significant
amounts'' and (2) will increase by a ``net significant'' amount as a
result of a major modification at an existing major source. 40 CFR
parts 51.166(j)(2)-(3) and 52.21(j)(2)-(3).
After acknowledging these existing regulations, the U.S. Supreme
Court specifically recognized in UARG that the EPA could establish ``an
appropriate de minimis threshold below which BACT is not required.''
134 S.Ct. at 2449. Inherent in this aspect of the UARG decision is a
judgment by the U.S. Supreme Court that Congress has not been
``extraordinarily rigid'' with respect to application of the PSD BACT
requirement to pollutants emitted in lower amounts. The U.S. Supreme
Court has now recognized, consistent with the principles of Alabama
Power, that the PSD statutory scheme includes the inherent authority
for the EPA to overlook de minimis levels of pollutant emissions when
applying the BACT requirement in the PSD permitting program.
However, the U.S. Supreme Court also emphasized that the EPA must
justify its selection of a de minimis threshold ``on proper grounds,''
citing the discussion at page 405 of Alabama Power. This part of the
Alabama Power decision consists of two paragraphs expressly addressing
the application of de minimis principles to BACT. The Court said that a
``de minimis exception must be designed with the specific
administrative burdens and the specific statutory context in mind'' and
then specifically considered the BACT context. Id. at 405. The Court
recognized that de minimis principles could be used to address ``severe
administrative burdens on the EPA, as well as severe economic burdens
on the construction of new facilities.'' 636 F.2d at 405. A rational
approach to the application of BACT, the Court continued, would
consider ``the danger posed by increases in'' emissions and ``the
degree of administrative burden posed by enforcement at various de
minimis threshold levels.'' Id.
At first, there may appear to be an internal tension in Alabama
Power between the language describing general parameters for the
exercise of de minimis exemption authority and the BACT discussion. The
Court's recognition that a de minimis exemption cannot be based simply
on a conclusion that a requirement's costs outweigh its benefits, 636
F.2d at 361, was paired with explicit acknowledgement that a de minimis
threshold could be ``rationally designed to alleviate severe
administrative burdens.'' 636 F.2d at 405. The Court also observed that
a rational approach would consider the following factors: ``the
administrative burden with respect to each statutory context;''
``whether the de minimis threshold should vary depending on the
specific pollutant and the danger posed by increases in its
emissions;'' and ``the degree of administrative burdens posed by
enforcement at various de minimis threshold levels.'' Id. While the
degree of burden might be viewed as part of a cost-benefit analysis,
EPA believes it is possible to harmonize these parts of the Court's
opinion by treating each of these elements as factors for the Agency to
consider in a rational approach to determining a de minimis threshold.
Considering all the relevant parts of the Alabama Power opinion,
the EPA believes that it need not focus solely on the programmatic
advantages of regulation and disregard implementation burdens when
establishing a de minimis exception. Where the record shows that the
burdens of regulation are high relative to a small gain that is
achievable by regulation, the EPA reads Alabama Power to allow an
agency to consider such gains to be de minimis if the Agency finds this
appropriate after considering the statutory context, the nature of
pollutant, and the danger caused by increases of that pollutant.
However, where the gains of regulation
[[Page 68121]]
are greater, the EPA reads Alabama Power to preclude the agency from
declining to regulate on the basis of a judgment that the costs simply
exceed achievable benefits that further the regulatory objectives.
In sum, therefore, to justify a de minimis exemption by regulation,
an agency must show that the benefits of regulating an activity below
the level set forth in the exemption are trivial or of no value. The
supporting analysis must consider the regulatory context, including the
nature of the pollutant and the dangers caused by increases in that
pollutant, the nature and purposes of the regulatory program, the
administrative and implementation burdens of, and the gain achieved
from, regulating the activities at or below a certain level. Based on
that analysis, the agency must make a reasoned judgment whether, in
light of the regulatory context, the gains from regulating an activity
below the exemption level can fairly be characterized as being trivial
or of no value. In developing the SER for GHGs proposed in this action,
the EPA has considered the factors laid out by the Court in Alabama
Power.
B. What is the regulatory context for the de minimis exception proposed
in this rule?
The Alabama Power opinion said that a ``de minimis exception must
be designed with . . . the specific statutory context in mind.'' Id. at
405. The SER for GHGs that the EPA is proposing in this rule will apply
only in the particular context of determining whether the BACT
requirement applies to GHG emissions from a new source or modification
that requires a PSD permit based on emission of pollutants other than
GHGs.
Because GHGs are a regulated NSR pollutant under the applicable
definition, the BACT provisions in 40 CFR parts 51.166(j) and 52.21(j)
apply to GHGs when an ``anyway source'' triggers the obligation to
obtain a PSD permit. Under the specific terms of 40 CFR parts
51.166(j)(2)-(3) and 52.21(j)(2)-(3) of the EPA's regulations, the SER
adopted in this rule will determine whether the BACT requirement
applies to GHGs.
Because of the U.S. Supreme Court's decision, the requirement to
obtain a PSD permit does not apply to a source that emits only GHGs in
major amounts. Likewise, the modification of an existing major source
cannot trigger the requirement to obtain a PSD permit based solely on a
significant increase in the amount of GHGs. In order to qualify as a
major modification under the revisions proposed in this rule, a
modification of an existing major source must result in a significant
net emissions increase of a regulated NSR pollutant other than GHGs. If
a modification triggers PSD on this basis, then the SER proposed in
this rule will apply to determine whether the PSD permit for that
modification must contain a BACT limit for GHGs. But the SER proposed
in this rule will not determine whether a modification at an existing
major source requires a PSD permit in the first instance.
This contrasts with the 75,000 tpy CO2e value the EPA
identified as a ``significance level'' in parts of the Tailoring Rule.
During Step 2 of the Tailoring Rule phase-in, this value was used to
determine whether a PSD permit was required based solely on an increase
in GHG emissions resulting from a modification at an existing major
source that did not increase any other pollutants above the
significance levels. In this context, the EPA said that if the agency
were to establish a de minimis level for GHGs, ``that amount could be
below--perhaps even well below--the `major emitting facility'
thresholds established in this rulemaking on the grounds of
`administrative necessity' and other doctrines.'' 75 FR 31560.
Paraphrasing this statement, the U.S. Supreme Court noted that the
``EPA stated . . . that a truly de minimis level might be `well below'
75,000 tons per year [CO2e].'' 134 S. Ct at 2427 n.3. At the
time of the Tailoring Rule, the EPA read the definition of ``major
emitting facility'' in section 169(1) of the CAA to require that the
agency apply the 100 or 250 tpy major source threshold to all regulated
pollutants, including GHGs. In that light, the EPA believed it would be
difficult for the agency to justify a value substantially greater than
the statutory major source thresholds as a de minimis or trivial level
of emissions. Thus, the EPA said that a de minimis level for GHGs could
perhaps be ``well below'' 75,000 tpy CO2e based on its
understanding at the time that the EPA's de minimis exception authority
was constrained by the Congressional determination that it was worth
regulating any source emitting more than 100 or 250 tpy of a regulated
pollutant. The U.S. Supreme Court has since clarified that the EPA
cannot apply the 100 or 250 tpy levels to GHGs, or even consider the
pollutant GHGs in defining a major source (or modification thereof)
that requires a PSD permit. The Court's reasoning suggests that
Congress has not determined that 100 or 250 tpy is a major amount of
GHGs. Thus, the EPA no longer views the 100 and 250 tpy thresholds as a
constraint on the level of GHGs that the EPA may identify as de minimis
in the PSD program context. Furthermore, in this proposed rule, the EPA
is considering the application of a de minimis level in a PSD program
context that is narrower than the one the EPA was addressing in the
Tailoring Rule. The SER the EPA proposes in this rule will apply only
to determine whether BACT applies to GHGs and not to determine whether
a source is required to obtain a PSD permit.
In addition, because there is no NAAQS for GHGs, the SER for GHGs
proposed in this rule will not determine whether a PSD permit
application is required to include an ambient air quality analysis for
this pollutants. 40 CFR parts 51.166(m)(1)(i) and 52.21(m)(1)(i). In
the absence of a NAAQS or PSD increment for GHGs, a permit applicant
need not make an air quality demonstration for GHGs, as required for
other pollutants under section 165(a)(3) of the Act and 40 CFR parts
51.166(k) and 52.21(k) of the EPA's regulations.\35\
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\35\ ``PSD and Title V Permitting Guidance for Greenhouse
Gases,'' EPA, Office of Air Quality Planning and Standards, Research
Triangle Park, NC, EPA-457/B-11-001, pp. 47-48, March 2011.
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Accordingly, in light of the Court direction that an agency
consider the particular context for a de minimis exception, the EPA has
based the proposed SER for GHGs on an evaluation of the benefits and
burdens of applying the BACT requirement to GHGs when an ``anyway
source'' emits this pollutant at various levels. Under section 169(3)
of the CAA, BACT is an emissions limitation based on ``the maximum
degree of reduction . . . which the permitting authority . . .
determines is achievable'' through application of pollutant control
technology. CAA section 169(3). Thus, in assessing the value of
regulating GHG emissions under the PSD BACT requirement at sources
emitting GHGs at various emissions levels, the EPA has focused on the
degree of emission reduction that would be expected to be achieved at
individual sources emitting GHGs below the levels under consideration.
Furthermore, since the regulation the EPA is proposing will apply
across the PSD program as a whole, the EPA has also considered the
potential for GHG emissions reduction, principally through the
characterization of affected sources and units, that one would expect
to achieve at ``anyway sources'' emitting (or modifications increasing)
GHGs below prospective de minimis levels as compared in relation to the
potential for GHG emissions
[[Page 68122]]
reductions expected from the population of sources that would be
subject to the BACT requirement because they emit GHGs above that
level.
While the dangers caused by increases in GHGs are relevant under
the factors discussed in the preceding section, since the SER for GHGs
will not be used to determine what sources must apply for a PSD permit
or whether an ambient air quality analysis must be conducted for GHG,
the EPA does not believe it is necessary for the Agency to attempt to
identify the specific nature or degree of environmental impact
predicted from various levels of GHG emissions from ``anyway sources''
that are required to obtain a PSD permit. Likewise, EPA does not
believe it is necessary for the Agency to try to distinguish specific
environmental impacts at a given level from those expected at other
levels. As the EPA has noted, climate change modeling and evaluations
of risks and impacts of GHG emissions is typically conducted for
changes in emissions that are orders of magnitude larger than the
emissions from individual projects that might be analyzed in PSD permit
reviews.\36\ In the context of PSD permitting, the EPA is continuing to
use the level of GHG emissions from a stationary source as the more
credible and appropriate means for assessing the potential
environmental impact of such a source. This aligns with the
Congressional direction in the BACT provision to achieve the maximum
degree of emissions reduction of each pollutant. Congress established a
separate requirement in the PSD program to demonstrate that the air
quality impact of a source does not cause a violation of air quality
standards, but that requirement is not applicable to GHGs at this time.
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\36\ ``PSD and Title V Permitting Guidance for Greenhouse
Gases,'' EPA, Office of Air Quality Planning and Standards, Research
Triangle Park, NC, EPA-457/B-11-001, p. 48, March 2011.
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Considering this context and Congressional intent that BACT reflect
a ``degree of reduction'' that is achievable, the SER that the EPA
proposes to establish for GHGs represents a level of GHG emissions
below which application of the BACT requirement would be expected to
yield a ``degree of emissions reduction'' that has trivial or no value.
In this proposed rule, the EPA's analysis shows that the proposed SER
is de minimis only as applied in the particular context of determining
whether application of the BACT requirement to GHGs would be of value
in reducing GHG emissions from ``anyway sources'' that trigger the
requirement to obtain a PSD permit. The proposed SER is not a level of
GHGs below which the EPA has concluded there is a de minimis impact on
the global climate. Rather, the de minimis level proposed in this rule
reflects only a level of GHG emissions from an ``anyway source'' below
which the EPA is proposing to find that there would be trivial or no
value in applying the BACT requirement to GHGs in the context of
preparing a PSD permit.
C. Historical Approaches to Establishing a De Minimis Level in the PSD
Program
The EPA has previously established de minimis levels for several
pollutants in the PSD program that are reflected in the definition of
``significant'' in existing PSD regulations. 40 CFR parts
51.166(b)(23)(i) and 52.21(b)(23)(i). In this section of the preamble,
we discuss the approaches the EPA has previously used to establish de
minimis emissions levels. We then examine the extent to which these
approaches can be employed to support the development of a de minimis
emissions level for GHGs. The EPA's judgment at this time is that the
approaches we have previously used to establish SERs are not workable
for the establishment of a GHG SER due the unique nature of GHG
emissions.
The EPA first established SERs in 1980 as part of the revised PSD
regulations that the EPA completed following the Alabama Power
decision. 45 FR 52676 (1980 PSD Rule). The 1980 PSD Rule included the
current approach for defining ``major'' modifications, based on the use
of SERs to define ``significant'' increases in emissions. As discussed
previously, a modification must be ``major'' to trigger the PSD
permitting requirement. The EPA determined the level of these SERs
following the principles regarding de minimis exceptions that the Court
provided in Alabama Power.
In the preamble to the 1980 PSD Rule, the EPA identified the
primary objectives the Agency sought to meet in selecting de minimis
values: (1) Provide effective Class I area protection, (2) guard
against excessive un-reviewed consumption of the Class II or III PSD
increments, and (3) assure meaningful permit reviews. 45 FR 52676,
52706. ``Meaningful'' in this context meant that there would be a
possibility of obtaining useful air quality information or obtaining
greater emission reductions as a result of BACT analysis than would be
expected from otherwise-applicable state permit or NSPS/national
emission standards for hazardous air pollutants (NESHAP) processing.
Id.
Within this framework, the de minimis levels finalized for each
pollutant in the 1980 PSD Rule were based on consideration of both
environmental impacts and administrative burden. The Administrator
chose to specify de minimis level cutoffs in terms of emissions rate
(i.e., tpy). The derivation of the de minimis levels are described in
preambles published in the Federal Register and two technical support
documents to the 1980 rulemaking.\37\ In setting the de minimis levels
for each pollutant, the EPA relied on existing ``data on sources
permitted under the PSD program'' to predict the environmental/air
quality impacts associated with regulating emissions above that level,
and a measure of the number of PSD permitting actions that might result
from a particular de minimis level. 45 FR 52676, 52707.
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\37\ One report is titled ``Impact of Proposed and Alternative
De Minimis Levels for Criteria Pollutants,'' EPA-450/2-80-072; the
other report is a staff paper titled ``Approach to Developing De
Minimis Levels for Noncriteria Air Pollutants.'' Both papers have a
June 1980 publication date.
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The EPA assessed the air quality impacts differently for criteria
and non-criteria pollutants.\38\ For criteria pollutants, where there
was extensive health and welfare documentation based on ambient
concentration data used in setting NAAQS, the EPA based the de minimis
emission levels on ambient air impacts. For non-criteria pollutants,
for which no ambient air quality standards existed, the EPA based the
de minimis emission levels on emission rates embodied in NSPS and
NESHAP, which are national emission standards developed under CAA 111
and CAA 112, respectively. The bases for the de minimis emissions rates
are summarized below.
---------------------------------------------------------------------------
\38\ ``Criteria pollutants'' are those pollutants listed by the
EPA under CAA section 108 for study and subsequent development of
NAAQS under CAA section 109. ``Non-criteria'' pollutants are other
pollutants that are subject to regulation under the Act.
---------------------------------------------------------------------------
For the criteria pollutants (all except carbon monoxide (CO), as
discussed later), the final de minimis levels were based on 2 to 4
percent of the primary NAAQS for the pollutant. 45 FR 52676, 52708. To
develop these SERs in tpy, the EPA first established a range of
potential air quality ``design values'' \39\ representing percentages
of the then-current primary NAAQS and, for particulate matter (PM) and
sulfur dioxide (SO2), percentages of the Class
[[Page 68123]]
II PSD increments.\40\ These design values were then converted to
annual emissions rates in accordance with the EPA modeling procedures
using data on sources permitted under the PSD program. 45 FR 52676,
52707. Since at that time there was only an annual NAAQS for nitrogen
dioxide (NO2), the EPA elected to set the de minimis
emissions rate for nitrogen oxides (NOX) at the level
corresponding to 2 percent of the annual NAAQS. Id. For CO, the
emissions rates corresponding to all the evaluated percentages of the
NAAQS were in excess of the major stationary source threshold of 100
tpy that applies to many source categories, so the EPA set the SER at
100 tpy. Id. The pollutant volatile organic compounds (VOC) is not a
criteria pollutant in itself but was, and is, designated as a precursor
to the formation of the criteria pollutant ozone in the atmosphere. The
EPA set the SER for VOC at the same level as that for NOX in
recognition of the link between VOC and NOX emissions in the
formation of ozone. Id.
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\39\ These ``design values'' are to be distinguished from the
design values calculated from ambient air quality data as part of
determining compliance with certain of the NAAQS.
\40\ At the time, increments had been established only for PM,
which at that time was expressed as total suspended particulate
(TSP), and SO2.
---------------------------------------------------------------------------
For other non-criteria pollutants, the de minimis emissions rates
were generally based on 20 percent of the NSPS or 10 percent of the
NESHAP that imposed limits on their emissions. For example, for
sulfuric acid, the SER in tpy was determined based on 20 percent of a
model sulfuric acid production plant's annual emissions using the NSPS-
based emission standard. A model plant is considered a typical plant
affected by the NSPS. 45 FR 52676, 52709.
Since no NAAQS has been set for GHGs, the EPA cannot use the
approach based on a percentage of the NAAQS to identify a de minimis
level for GHGs. In addition, current climate modeling tools are not
capable of isolating the precise correlations between singular,
incremental facility-specific GHG emissions changes, ambient
CO2 concentrations, and climate impacts. Thus, because of
the absence of a NAAQS for GHGs and the inherent uncertainties and
limitations in modeling climate-related impacts from incremental
project-level GHG emission increases, the EPA's judgment at this time
is that an ambient-air quality impact-based approach is not workable
for setting a GHG SER.
Regarding the historical ``20 percent of NSPS'' approach for non-
criteria pollutants, we believe that this would result in a GHG SER
that would be inconsistent with the de minimis principles described
earlier. The only NSPS containing a GHG emissions limit that EPA had
finalized as of the date of our analysis \41\ was the rule that limits
CO2 emissions from new electric generating units (EGUs).\42\
Based on the modeled emissions profile for the EGU NSPS emissions
limit, the ``20 percent of NSPS'' approach would result in a de minimis
value of approximately 320,000 tpy CO2e when applied to the
standard for a 600 megawatt natural gas combined cycle EGU.\43\ For
comparison purposes, this level of GHG emissions is four times greater
than the current interim GHG BACT applicability level of 75,000 tpy
CO2e. As described later in Section V.D.1 of this preamble,
the 75,000 tpy CO2e permitting level has been successfully
implemented and is achieving meaningful GHG emission reductions through
BACT review at larger, industrial GHG emission sources and units, some
of which would not have GHG emission increases large enough to be
subject to GHG BACT review at a 320,000 tpy CO2e permitting
level.
---------------------------------------------------------------------------
\41\ EPA has since completed other standards that contain GHG
emission limits, but these were not available at the time of our
analysis.
\42\ Final Rulemaking titled ``Standards of Performance for
Greenhouse Gas Emissions from New Stationary Sources: Electric
Utility Generating Units'' (80 FR 64510, October 23, 2015).
\43\ ``Regulatory Impact Analysis for the Final Standards of
Performance for Greenhouse Gas Emissions from New, Modified, and
Reconstructed Stationary Sources: Electric Utility Generating
Units.'' Chapter 5, Table 5-1. EPA-452/R-15-005, August 2015,
(http://www2.epa.gov/sites/production/files/2015-08/documents/cps-ria.pdf.
---------------------------------------------------------------------------
In addition, using the ``model plant'' approach for establishing a
de minimis level for GHGs is problematic because GHGs are emitted from
such a diverse group of sources, in terms of both type and size. Even
if NSPS that regulated GHG emissions for source categories other than
EGUs had been available for analysis, the diversity of sources and the
differences in GHG emissions contribute to eliminate the viability of
the ``model plant'' approach for setting a SER. The model plant
approach worked for other non-criteria pollutants because there was a
much narrower set of industrial source categories from which the
pollutant of interest was emitted in quantities of any concern (e.g.,
fluoride emissions from aluminum production plants).
Following the approach used for CO (i.e., applying the major source
threshold of 100 tpy as a SER level) would result in a GHG threshold
that would exclude only very small emissions units. However, it may
still require GHG BACT for what still can be considered relatively
small units in terms of GHG emission increases for which, under any
reasonable viewpoint, there would be trivial value in conducting a GHG
BACT review. This would impose unreasonable administrative burdens for
implementation and enforcement. As discussed previously, after the U.S.
Supreme Court's UARG decision, PSD review is limited to only ``anyway
sources,'' where emissions of a regulated pollutant other than GHGs
triggers major stationary source or major modification status under
PSD. Thus, the GHG BACT requirement will only apply to such sources. In
this context, the term ``small unit'' is a relative term because the
smallest units or modifications will be excluded from PSD entirely
because they do not emit or increase any pollutant in major amounts.
Cases where a new major stationary source or a major modification
involves combustion units with emissions of other pollutants large
enough to trigger PSD generally would be associated with large
CO2 emission increases as well, and thus would focus GHG
BACT review on the larger emitting units. However, in cases where major
stationary source or major modification status is triggered by non-
combustion emissions units, such as large VOC emitters, there may be
collateral GHG emission increases that are very small. In addition,
CO2 is emitted in much greater quantities than CO; the
CO2 emission factor for natural gas boilers is 1,400 times
that of CO, meaning that a boiler triggering PSD for emissions of 100
tpy CO would emit 140,000 tpy CO2.\44\ Very small combustion
units can emit 100 tpy CO2, such as small stationary
internal combustion (IC) engines, water heaters, and heating,
ventilation and air conditioning units. Thus, a 100 tpy GHG SER may
trigger BACT review for very small units or modifications. However, as
will be discussed later in this preamble, the EPA believes applying the
BACT requirement to such small combustion units would provide emission
reductions gains of trivial or no value.
---------------------------------------------------------------------------
\44\ U.S. EPA, Compilation of Air Pollutant Emission Factors,
Document No. AP-42, Volume I, Chapter 1, Section 1.4 ``Natural Gas
Combustion,'' Tables 1.4.1 and 1.4.2, July 1998.
---------------------------------------------------------------------------
In addition, it should be noted that the SER for CO was set at 100
tpy in deference to the statutory definition of ``major stationary
source'' that applies to many source categories, in spite of the fact
that the emissions rates corresponding to all the percentages of the
NAAQS that were evaluated as potential de minimis levels were in excess
of 100 tpy. As a criteria
[[Page 68124]]
pollutant, CO is clearly covered by this statutory major source
definition. However, the U.S. Supreme Court made clear in UARG that the
major source levels are not applicable to GHG emissions. Thus, for the
reasons discussed earlier, setting a SER for GHGs need not be limited
by the major source thresholds in the same manner that the EPA viewed
it as a limitation for CO.
D. What is the technical basis for the proposed GHG SER?
1. Summary of Technical Support Information
In this section, we summarize the key findings from our data
reviews and how they support our proposed GHG SER value. Following this
summary, Sections V.D.2 to V.D.5 of this preamble provide more detailed
information on each of the individual reviews and analyses, the
findings from each, and references to applicable supporting documents.
Section V.E of this preamble then presents our proposed GHG SER, an
overall summary of our findings that support our propose GHG SER level,
and a request for comments.
It is important to note that no single review or analysis by itself
constitutes the basis for the proposed GHG SER value of 75,000 tpy
CO2e. Instead, we based our proposed GHG SER on the
collective findings from these technical reviews, some quantitative in
nature and some qualitative, that sought to evaluate the potential
coverage of GHG sources, and the opportunities for achieving meaningful
GHG emissions reductions from the BACT review as part of projects at
``anyway sources'' under the PSD permitting program.
Information obtained from the following four categories of data
reviews supports the proposed GHG SER level: (1) A review of recent PSD
permitting information for ``anyway sources,'' including those subject
to GHG BACT review since GHGs became subject to regulation in 2011; (2)
a calculation of the equivalent GHG emissions corresponding to a 40 tpy
NOX SER level for different combustion unit types that could
be expected to be part of ``anyway sources;'' (3) an analysis of non-
combustion related GHG source category emissions data; and (4) a review
of control strategies that have been or would likely be applied for GHG
BACT reviews. In addition, the EPA considered the burdens of applying
the GHG BACT requirement to sources emitting (or modifications
increasing) GHGs in relatively small amounts. The following paragraphs
summarize the key findings from each of these reviews that informed our
decision on the proposed GHG SER.
Under the first category of data review, we examined existing PSD
permitting information to determine the types and size of GHG emission
units that are likely to be part of PSD ``anyway sources.'' We looked
at two sources of permitting information for this review. First, we
looked at GHG permitting information from the EPA Regional offices and
states as part of the EPA's effort under the phase-in process
established in the Tailoring Rule to collect information on actual
permits issued that included GHG BACT limits. This information provided
actual, historical information on the type of emissions units
undergoing GHG BACT review at a 75,000 tpy CO2e permitting
applicability level. This was the effective applicability level for
determining whether GHG BACT review applied to ``anyway sources'' that
were otherwise subject to PSD permitting based on conventional (non-
GHG) pollutants under Step 1 of the Tailoring Rule. It is also the
current effective applicability level for determining if GHG BACT
review applies to ``anyway sources.'' \45\ The second data source we
looked at as part of this permitting review was information from the
EPA's Reasonably Available Control Technology (RACT)/BACT/Lowest
Achievable Emission Rate (LAER) Clearinghouse (RBLC). The RBLC is a
voluntary, national reporting database containing PSD permit
information, including permits for which no GHG BACT review was
conducted after GHGs became regulated in 2011. We reviewed the RBLC
data to further characterize PSD permits in regards to potential GHG-
emitting sources and to specifically identify the likelihood of new PSD
``anyway sources'' emitting (or a modified ``anyway source''
increasing) GHG emissions in an amount less than 75,000 tpy
CO2e. Such a source would not have been subject to GHG BACT
review under Step 1 of the Tailoring Rule. Because all of this PSD
permitting information was from a period when 75,000 tpy
CO2e was used as the effective BACT applicability level for
GHGs, this value serves as a key reference point throughout each part
of our analysis.
---------------------------------------------------------------------------
\45\ Next Steps and Preliminary Views on the Application of
Clean Air Act (CAA) Permitting Programs to Greenhouse Gases
Following the Supreme Court's Decision in UARG v. EPA, Memorandum
from Janet G. McCabe, Acting Assistant Administrator, Office of Air
and Radiation, and Cynthia Giles, Assistant Administrator, Office of
Enforcement and Compliance Assurance, U.S. EPA, to Regional
Administrators, p. 3, July 24, 2014.
---------------------------------------------------------------------------
Our review of this permit information produced a number of
important findings. First, we found that, using a 75,000 tpy
CO2e applicability level, BACT review for GHGs was triggered
for the largest sources of GHGs from a national perspective. This was
evidenced by the fact that the source categories represented in the
``anyway sources'' with PSD permits addressing GHGs correlated very
well with the largest GHG-emitting source categories identified through
the EPA's GHG Reporting Program (GHGRP).\46\ The GHGRP emissions
reports are submitted by stationary sources to the EPA on a yearly
basis. Almost all of the PSD permits since 2011 that contained GHG BACT
limits were issued to sources in categories that collectively represent
over 92 percent of the 2013 reported emissions under the GHGRP. These
GHGRP categories include power plants (66 percent of GHGRP emissions
for 2013), petroleum and natural gas systems (7 percent), petroleum
refineries (5.6 percent), organic and inorganic chemicals manufacturing
(5.5 percent), minerals production (3.5 percent), metals production
(3.4 percent) and pulp and paper manufacturing facilities (1.2
percent). The percentages provided above reflect the portion of the
total nationally-reported GHG emissions, on a CO2e basis,
emitted from facilities in the particular source category. The
distribution of ``anyway source'' permits containing a GHG BACT limit
was similar: Power plants made up the largest percentage (47 percent)
followed by the chemical production sector (20 percent), the oil and
gas sector (10 percent), metals production (8 percent), refineries (6
percent), minerals production (6 percent) and the pulp and paper
industry (3 percent). These same categories also contributed over 92
percent of the GHG emissions, based on CO2e, as reported
under the EPA's GHGRP.\47\
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\46\ ``A Summary Analysis of the GHG Permitting Experience
between 2011 and 2014,'' prepared by EPA Staff, March 2015.
\47\ 2013 GHGRP Overview Report, http://www.epa.gov/sites/production/files/2015-07/documents/ghgrp-overview-2013.pdf.
---------------------------------------------------------------------------
This correlation between source categories subject to the GHG BACT
requirement and the source categories contributing the most reported
GHG emissions confirms that at the current applicability level of
75,000 tpy CO2e, the categories of sources contributing the
most to national stationary source GHG emissions are included in the
population of sources that were subject to the BACT requirement for
GHGs. We did not see any prominent, high-ranking
[[Page 68125]]
GHG reporting source categories, in terms of their national GHG
emissions contributions, that were not included in the ``anyway
sources'' that obtained PSD permits with GHG BACT limits at the 75,000
tpy CO2e level. This is one consideration in evaluating
whether there is value in applying BACT to GHGs at sources emitting (or
modifications increasing) this pollutant below the 75,000 tpy
CO2e level. Other parts of the EPA's analysis show that the
potential for achieving meaningful GHG reductions from BACT review is
highest at the GHG reporting source categories that are responsible for
most of the national GHG emissions.
A second key finding from our review of past permitting actions was
that the emissions from large, fossil-fueled combustion units were
generally the principle cause for ``anyway sources'' requiring PSD
permits based on emissions of pollutants other than GHGs. Across all
industry categories, we found that ``anyway sources'' have been
triggering PSD primarily because of the addition or modification of
combustion units. Most of these projects involved some combination of
turbines, boilers, process heaters/furnaces, and stationary IC engines
that were principally fired with either diesel fuel or natural or
process gas, with smaller numbers of biomass-fueled units. We found
that even for a specific sector such as the oil and gas industry, where
there are a variety of fugitive emission sources, combustion emissions
still dominate the emission profile and are the primary driver of PSD
applicability for new construction and major modification projects.
This finding that combustion units dominate the population of PSD
permits that contain GHG BACT limits to date is also consistent with
the general composition of the sources in the national GHG emissions
inventory. Nationally, CO2 is the GHG emitted in the largest
quantities from stationary sources.\48\ The 2.9 billion metric tons of
CO2 emissions reported by stationary sources under the EPA's
GHGRP for the year 2013 represent 91.4 percent of the total reported
GHGs, in terms of percent of total CO2e emissions, from
reporting stationary sources in 2013.\49\ Of the reported 2.9 billion
metric tons of CO2 emissions, approximately 90 percent
results from fossil fuel-fired combustion units.\50\
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\48\ 2013 GHGRP Overview Report, http://www.epa.gov/sites/production/files/2015-07/documents/ghgrp-overview-2013.pdf.
\49\ 2013 GHGRP Overview Report, http://www.epa.gov/sites/production/files/2015-07/documents/ghgrp-overview-2013.pdf.
\50\ 2013 GHGRP Reporting Dataset, http://www.epa.gov/ghgreporting/ghg-reporting-program-data-sets.
---------------------------------------------------------------------------
The fact that combustion units dominate the reported GHG emissions
for industrial stationary sources and are to date the most prevalent
units triggering the requirement to obtain a PSD permit at these same
types of industrial sources is another important consideration in our
development of a GHG SER. The EPA has no reason to believe that
economic conditions or other factors will dramatically alter the nature
of industrial activity triggering PSD permitting in the future. Thus,
we expect that new and modified combustion units of a similar profile
will continue to make up most of the potential ``anyway sources'' and
modifications requiring a PSD permit, regardless of the GHG SER level
that applies to determine whether BACT applies to GHGs at such sources
A third finding, resulting from our review of the RBLC permitting
information, was that very few ``anyway sources'' obtaining permits
experienced GHG emission increases less than 75,000 tpy
CO2e. From the RBLC dataset, we identified 20 PSD permits
issued to ``anyway sources'' between 2011 and 2014 that included
permitted combustion units that did not contain BACT limits for GHGs.
All of these permits authorized modifications of an existing major
source, and typically included some type of smaller, ancillary
combustion units, such as a flare, an IC engine or process heater. It
is possible that each of the projects authorized by these permits
increased GHG emissions in an amount less than 75,000 tpy
CO2e (but greater than zero tpy). We use the term
``possible'' because our analysis is based on emissions unit
information available for the permit from the RBLC database, or from
individual permit documents in cases where those were available. The
unit types and/or fuel used suggest the presence of GHG emission
sources, but without a full site-specific PSD applicability
determination prepared specifically for GHGs (accounting for all
contemporaneous increases and decreases of GHG emissions), these
occurrences should only be considered possible instances where there
may have been GHG emission increases. These 20 permits represent 5
percent out of a total of about 400 PSD permits in the RBLC dataset
occurring over a 4-year period. Although the RBLC dataset is based on
voluntary reporting and, due to incomplete participation, does not
represent a complete dataset of PSD permits issued nationally, we
believe that this relatively small percentage of ``anyway source''
permits that we identified in the RBLC dataset reflects the
unlikeliness of a significant number of ``anyway source'' PSD permits
requiring GHG BACT review below a 75,000 tpy CO2e SER level.
Given the nature and number of these permits that we identified, we
would not expect to add many additional GHG BACT reviews nationwide at
a GHG SER level below 75,000 tpy CO2e. In addition, any
additional BACT reviews would likely only be for modifications of
existing major sources. The past permitting information shows that any
wholly-new ``greenfield facilities'' would be expected to trigger the
PSD BACT requirement at GHG SER level of 75,000 tpy CO2e.
Any new major stationary source that emits pollutants other than GHGs
above the major source thresholds would be expected to emit GHGs in
amounts of at least 75,000 tpy CO2e or more. Thus, our
technical analysis of past PSD permitting activity indicates that GHG
SER values below 75,000 tpy CO2e are only potentially
meaningful for modification projects that trigger PSD at existing major
sources. Modification projects may include both additions of new
emissions units at existing facilities and physical changes to existing
emissions units that result in increases in emissions.
The last key finding from our review of PSD permit information was
that applying BACT to GHGs at the 75,000 tpy CO2e permitting
level has been administratively feasible for both sources and
permitting authorities over the 4 years it has been in place. The EPA's
analysis showed effective and timely implementation of the BACT
requirement for GHGs. A knowledge base on BACT review and design for
GHGs at source categories and units triggering the BACT requirement at
the 75,000 tpy CO2e level has also been developed over this
permitting period that will facilitate future permit reviews.
Based on the finding, supported by our review of past PSD permit
actions, that construction or modification of combustion units is the
dominant form of activity that triggers the requirement to obtain a PSD
permit, our second category of data review involved identifying the
specific level of increased GHG emissions resulting from the
construction or modification of combustion units most likely to trigger
PSD in the future. As discussed earlier, the EPA projects that GHG SER
values below 75,000 CO2e would only be meaningful for
modifications of existing major sources that trigger PSD review.
[[Page 68126]]
Thus, this portion of our analysis did not involve wholly new sources,
but focused instead on projects involving the addition of new emissions
units at an existing major source. Since GHG BACT review can only apply
to a modification in cases where a pollutant other than GHGs is
increased in significant amounts and is thus subject to BACT review for
that pollutant, we used the existing PSD NOX SER value of 40
tpy to calculate an equivalent level of increase in GHG emissions that
we would expect to be associated with the combustion unit types most
likely to be part of future modification projects that trigger the
requirement to obtain a PSD permit. Using this approach, the GHG
equivalency results simply provide an approximate measure of the
theoretical minimum level of GHG emissions increase that could be
associated with a project that adds a particular type of combustion
unit that increases NOX by just more than the NOX
SER level of 40 tpy. We then examined this equivalency level in
relation to both the findings from our first technical review (the past
actual permitting actions) and our fourth technical review, which
evaluated the degree of reductions found to be achievable in GHG BACT
reviews for these unit types.
The results of our equivalency analysis ranged from 17,529 tpy
CO2e for certain types of stationary IC engines, upwards to
425,665 tpy CO2e for large power plant turbines. The average
result across unit types was 98,333 tpy CO2e. The analysis
confirmed that, for some unit types, GHG emissions increases would
clearly exceed the current 75,000 tpy CO2e level if that
unit increased NOX emissions over the NOX 40 tpy
SER level. For example, a natural-gas fired combustion turbine,
commonly added as part of a modification project at existing power
plants, would have GHG emissions well in excess of 75,000 tpy
CO2e. In projects involving a large power plant turbine unit
such as this, a single unit can trigger the requirement to obtain a PSD
permit.
However, for other types of emissions units that might be added as
part of a PSD triggering modification, we found it necessary to
consider the results in light of the actual permitting experience. For
example, our analysis showed equivalent GHG emissions increases below a
20,000 tpy CO2e level for adding a stationary IC engine. In
other words, an IC engine that just increases NOX emissions
by 40 tpy or more could be expected to increase GHGs by less than
20,000 tpy CO2e. However, addition of a single IC engine is
not commonly a PSD triggering event. Our permitting review showed that
most of the IC engines addressed in ``anyway source'' PSD permits are
present for one of the following two reasons: (1) As associated
equipment (e.g., emergency backup generator or fire pump engine) when
the source is adding a large combustion unit (such as a turbine or
boiler) that is principally responsible for triggering the requirement
to obtain a permit; or (2) in multiple-unit configuration generator
sets (e.g., 10 or more large IC engines linked together for electricity
production). Also, in practice, there is a low likelihood that a PSD
project involving the addition of a single unit, of any type, will just
exceed the 40 tpy NOX SER level because, in such cases, the
permit applicant very often accepts PTE emission limits to avoid
triggering PSD if the project's NOX emission increase is
close to the NOX SER level.
Therefore, while our equivalency analysis resulted in possible
theoretical occurrences of ``anyway source'' projects involving
combustion units that may have emissions less than 75,000 tpy
CO2e, we found very few actual PSD-triggering modification
projects that involved adding a single combustion unit that would have
total GHG emissions less than 75,000 tpy CO2e. We found it
is much more likely that a PSD-permitted project would have
NOX emissions well in excess of the 40 tpy NOX
SER level due to the addition of multiple combustion units or the sheer
size of the primary unit itself, such as a power plant turbine or
steam-generating unit. Such projects will have GHG emissions multiple
times greater than our theoretical equivalency results.
Our third category of data review looked to identify any additional
GHG emission sources, particularly non-combustion related units or
processes that might be part of ``anyway sources'' PSD modification
projects, which could potentially be subject to the BACT requirement
for GHGs at applicability levels below 75,000 tpy CO2e. Our
review of past PSD permits showed that the large majority of PSD
permitted projects that involved GHG emission increases triggered PSD
because of the addition of combustion units. In addition, most of these
combustion unit projects had GHG emission increases in excess of 75,000
tpy CO2e. Nevertheless, we also assessed the coverage of
non-combustion related GHG sources that might trigger PSD to ensure
that we did not miss meaningful reductions of GHGs that could be
achieved by applying BACT to GHG at modification projects that increase
GHGs in amounts less than the 75,000 tpy CO2e level that
were used in prior permits. Using information from the EPA's GHGRP, we
identified and evaluated emissions from GHG-emitting processes and
units associated with non-combustion related GHG source categories
relative to different GHG emission threshold levels.
One main finding from this evaluation was that a high percentage of
GHG emissions from non-combustion units or processes triggering PSD
would be covered by the BACT requirement at a level of 75,000 tpy
CO2e on a PTE basis. We found that at a 75,000 tpy
CO2e PTE-based emission threshold level, non-combustion
related units and processes responsible for approximately 89 percent of
the GHG emissions, on a CO2e basis, all the non-combustion
``anyway source'' categories included in our analysis would be
captured, and thus conceivably subject to GHG BACT review if the GHG
SER was set at a 75,000 tpy CO2e level. A construction
project at a municipal waste landfill, for example, can trigger PSD
applicability if its increased emissions exceed the PSD SER level of 50
tpy for non-methane organic compounds (NMOC), the regulated NSR
pollutant most commonly emitted from municipal waste landfills. A
landfill increasing its emissions by just over 50 tpy NMOC would add
over 190,000 tpy CO2e of GHG emissions (CH4
expressed on a CO2e basis), which is well in excess of
75,000 tpy CO2e.\51\ We found significant GHG emission
source coverage at a 75,000 tpy CO2e level for other
important source categories containing non-combustion related GHG-
emitting units and processes, including cement production, nitric acid
production, refineries, and underground coal mines. The non-combustion
related units and processes in these categories that emit GHGs in
amounts greater than 75,000 tpy CO2e are responsible for
over 90 percent of the non-combustion related GHG emissions from each
of these source categories.
---------------------------------------------------------------------------
\51\ Memorandum from H. Ward, EPA/SPPD, to J. Mangino, EPA/AQPD,
re: Methane to NMOC ratio at landfills. June 17, 2014.
---------------------------------------------------------------------------
Another important finding from our review of non-combustion sources
that emit GHGs was that there is evidence that smaller GHG-emitting
units that would not otherwise trigger PSD independently can be pulled
into PSD when other emissions units are added in the same project. Once
the BACT requirement is applicable to a given pollutant based on
emissions in excess of the significance levels, the BACT review covers
any associated processes emitting the same pollutants as the main units
that are the principal reason for triggering PSD review. Because of the
[[Page 68127]]
definition of the GHG pollutant as the ``sum-of-six'' constituent
gases, ancillary units that emit relatively small amounts of GHGs other
than CO2 could become subject to GHG BACT requirement if a
combustion unit added to the source at the same time emits GHGs in
excess of the significance level that the EPA promulgates. Based on the
actual experience of permitted sources using a 75,000 tpy
CO2e level under Step 1 of the Tailoring Rule to determine
GHG BACT applicability, we have seen smaller GHG-emitting units get
pulled into PSD permits involving larger units at oil and gas
production, processing and transmission facilities. At these
facilities, projects that have triggered PSD involved addition of a
large single or multiple smaller combustion units (such as large gas
compressor turbines and engines that trigger PSD because of emissions
of NOX or another pollutant besides GHG). These projects
also had associated CH4 leaks from piping, valves, and gas
storage equipment. The combustion unit(s) involved in such projects
that triggered PSD had GHG emission increases exceeding 75,000 tpy
CO2e, and thus subjecting the project to GHG BACT review
under previous PSD regulations. In addition to evaluating controls for
GHG emission from the combustion units, the GHG BACT review
accompanying these projects included measures directed at the fugitive
CH4 sources associated with the project because the GHG
pollutant includes both CO2 and CH4 gases. By
themselves, the CH4 emissions fell below the 75,000 tpy
CO2e level, and the fugitive sources alone would not have
triggered PSD based on pollutants other than GHGs. However, based on
the definition of the GHG pollutant, because other emissions units at
these sources triggered PSD and then also triggered BACT for GHGs based
on emission in excess of 75,000 tpy CO2e, these ancillary
units were pulled into the overall GHG BACT review.
This finding explains in part why we did not find evidence of many
``anyway source'' PSD permits with emission units that emit less than
75,000 tpy CO2e. Our review of prior ``anyway source'' PSD
permitting actions showed that a large majority of PSD permits for
projects that would be most likely to involve GHG emission increases
are triggered by the addition of large combustion units. In addition,
we found that most of these larger combustion units would have GHG
emission increases in excess of a 75,000 tpy CO2e GHG SER
level. Thus, we can anticipate that setting a GHG SER below the 75,000
tpy CO2e level would be unlikely to subject additional non-
combustion emissions to the GHG BACT review. If these non-combustion
units are constructed independently, they will generally not emit
regulated NSR pollutants other than GHGs in amounts that are high
enough to trigger PSD review, or they will not involve GHG emissions at
all. So establishing a GHG SER lower than 75,000 tpy CO2e
would not likely cause these non-combustion sources to become subject
to the GHG BACT requirement. Non-combustion GHG-emitting processes that
are part of a project generally are not brought into the GHG BACT
review without the contemporaneous addition of a combustion unit that
serves as the PSD-triggering event. A GHG SER of 75,000 tpy
CO2e would ensure that such projects will be subject to the
GHG BACT requirement.
Our fourth category of data review looked at the degree of GHG
emissions reductions that one could expect to achieve by applying
energy efficiency measures as BACT for GHGs at projects involving
certain types and sizes of combustion units. Although we reviewed a
variety of GHG reduction techniques focused on energy efficiency
measures applied to combustion units since, as noted in our review of
``anyway source'' permitting, the addition or modification of
combustion units is, and likely will continue to be, the principal
triggering event for most PSD permits involving GHGs. The EPA's GHG
permitting experience has been that BACT for such sources will usually
be energy efficiency measures. Therefore, in evaluating a possible GHG
SER option, we focused on the implementation, effectiveness and value
of energy efficiency measures at combustion sources that may be
expected to trigger PSD.
Our main finding from reviewing these energy efficiency measures is
that the degree of emissions reductions achieved is greater at larger
combustion units that would be subject to GHG BACT review at or above a
75,000 tpy CO2e SER. We found that the maximum reduction
potential from energy efficiency measures is approximately 7 percent
\52\ from a baseline industrial boiler configuration. Emissions
reductions on this scale are generally only obtainable where site-
specific design and construction criteria can be part of the combustion
unit design and manufacture. Large industrial boilers, process heaters
and furnaces of the size typically seen as part of ``anyway source''
PSD projects are custom-built and thus not generally purchased as
``off-the-shelf'' items. Thus, these units can be site-designed and
constructed in a way that considers and incorporates a combination of
energy efficiency measures.\53\ The application of BACT review is thus
particularly relevant to these types of units as it involves case-by-
case review of technology implementation and cost considerations.
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\52\ ``Available and Emerging Technologies for Reducing
Greenhouse Gas Emissions from Industrial, Commercial, and
Institutional Boilers,'' EPA Office of Air Quality Planning and
Standards. October 2010. http://www.epa.gov/sites/production/files/2015-12/documents/iciboilers.pdf.
\53\ ``Boiler Efficiency Projects-Development of Issues Papers
for GHG Reduction Project Types: Boiler Efficiency Projects,''
Prepared for the California Climate Action Registry, January 7,
2009. http://www.climateactionreserve.org/wp-content/uploads/2009/03/future-protocol-development_boiler-efficiency.pdf.
---------------------------------------------------------------------------
If carbon capture and sequestration (CCS) is found to be achievable
at such large industrial boilers, process heaters and furnaces, the
degree of emissions reductions that could be achieved is significantly
increased. Thus, whether energy efficiency or more effective controls
are applied, the BACT requirement would be expected to yield a
meaningful degree of GHG emissions reductions when applied to an
individual source or modification that increases GHG emission by 75,000
tpy CO2e or more.
In contrast, when we consider emissions units that emit GHGs in
amounts below 30,000 tpy CO2e, we generally see smaller
``off-the-shelf'' type units, such as stationary IC engines. The
ability to achieve additional GHG reductions from such units is limited
or non-existent for several reasons. First, implementing the efficiency
measures generally requires site-specific design and construction
criteria, more typically associated with larger scale projects where
these measures can be part of unit design and manufacture. Second,
``off-the-shelf'' units such as IC engines typically cannot be
substantially modified or tampered with in order to be guaranteed to
meet their certified performance standards. Third, there is little
variation, typically within 1 or 2 percentage points, in the efficiency
of these types of engines sold by different vendors. The market demands
that all such engines be highly-efficient across vendors, and thus
offers little opportunity for GHG reductions from the purchase
decision. Finally, given the relatively small capital cost of these
units and the anticipated high cost of CCS, it is unlikely that CCS
will even be found to be achievable when such a unit is installed by
itself without a much
[[Page 68128]]
larger combustion unit that will trigger the PSD BACT requirement.
It is worth recalling the definition of the word ``meaningful,'' as
described earlier in Section V.C of this preamble where we discuss the
historical background for de minimis levels under PSD. In the preamble
to its 1980 PSD rule, the EPA defined ``meaningful'' reductions as
greater emission reductions than one would expect to be achieved from
otherwise-applicable regulatory requirements such as an NSPS or NESHAP.
45 FR 52706. The EPA does not expect that BACT review for IC engines
would produce any reductions for GHGs beyond that resulting from the
NSPS compliance standards that already exist for these new units. Given
the nature of these units, the EPA and permitting authorities have not
identified controls at this time that can be added to these engines to
further reduce their GHG emissions. Where IC engines have been part of
``anyway source'' PSD projects to date, typically in association with a
larger turbine or boiler units, the selection of high-efficiency
engines that meet the requirements of the applicable NSPS has qualified
as BACT. Therefore, the value for site-specific GHG BACT review on
projects involving only one or two smaller combustion units of the type
that might be implicated at GHG SER values less than 30,000 tpy
CO2e is likely to be virtually non-existent. The EPA
therefore does not view potential emission reductions from the BACT
requirement at projects that increase GHG emissions by less than 30,000
tpy CO2e as meaningful in the context of setting a de
minimis level under PSD.
For modifications at ``anyway sources'' that trigger PSD and
increase GHG emissions by 30,000 tpy to 75,000 tpy CO2e, we
found that it may be possible to apply energy efficiency measures to
achieve some reductions in emissions, but there is reason to question
whether the degree of reduction achieved would be meaningful. For
example, we found that the current maximum reduction potential from
energy efficiency measures for combustion units, mainly at boiler
configurations, is around 7 percent.\54\ At smaller combustion units,
there are reasons to question whether this maximum reduction potential
could be achieved. However, assuming this percentage of reduction could
be achieved by applying the most aggressive energy efficiency measures
on an additional unit that emits at or near the current 75,000 tpy
CO2e permitting threshold, the total amount of GHG emissions
avoided would be limited considering the total amount of increased GHG
emissions from such a unit. A 7 percent improvement in a baseline
boiler unit efficiency could reduce a 74,999 tpy CO2e boiler
unit's GHG emissions by approximately 5,500 tons CO2e per
year. Another way to view this is that exempting such a source from the
BACT requirement for GHGs would result in a marginal increase of 5,500
tpy CO2e in GHG emissions. The modification would still
increase GHG emissions by 69,500 tpy CO2e even after
applying the most aggressive energy efficiency measures through the
BACT requirement. In reality, the marginal emissions increase from not
applying BACT to GHGs at such a source would likely be less than 5,500
tpy CO2e because that increase is based on a PTE
scenario.\55\
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\54\ ``Available and Emerging Technologies for Reducing
Greenhouse Gas Emissions from Industrial, Commercial, and
Institutional Boilers,'' EPA Office of Air Quality Planning and
Standards. October 2010. http://www.epa.gov/nsr/ghgdocs/iciboilers.pdf.
\55\ As this summary of our technical review demonstrates, our
findings are based on an analysis of currently available
information. The information considered as part of our analysis,
such as the average GHG emissions reduction that can be achieved
from the application of energy efficiency or the availability of CCS
for smaller sources, may change in the future. Thus, after this rule
is finalized, EPA may need to periodically consider if there are
significant changes to the information considered in our analysis.
---------------------------------------------------------------------------
In addition to considering the findings from the four categories of
analysis described earlier, we also considered the GHGRP's reporting
threshold for GHG emissions, which is 25,000 metric tpy CO2e
for most reporting sources, based on actual emissions. Depending on
utilization, the PTE-based emissions can be significantly greater than
25,000 metric tpy CO2e. For example, a source actually
emitting 25,000 tpy CO2e would have a PTE of 50,000 tpy
CO2e if it were run at a 50 percent utilization rate over
the course of the year. Also, the reporting rule does not require that
those facilities above the reporting threshold take measures to control
their GHG emissions; rather it only requires that sources monitor and
report their emissions. So while the GHGRP illustrates a comparative
level of GHG emissions associated with industrial type GHG-emitting
facilities deemed significant for monitoring and reporting purposes, we
did not see this threshold as a directly transferrable GHG metric for
setting a GHG SER because of the different end-uses and requirements.
However, the GHGRP reporting threshold did provide us a quantified GHG
emission level for a relative frame of reference in evaluating our
proposed GHG SER option as described in the sections of this preamble
that follow.
Sections V.D.2 to V.D.5 of this preamble provide more detail on
each of the individual technical reviews and analyses and the findings
obtained from each.
2. Review of PSD Permitting and GHG Emission Sources
Under our first technical review, we examined existing PSD
permitting information to determine the types and size of GHG emission
sources that are likely to be part of PSD ``anyway sources.'' We looked
at two sources of information for this review. First, we looked at GHG
permitting information from the EPA Regional offices and states as part
of an effort under the Tailoring Rule to collect information on actual
PSD permits issued that included GHG BACT review. Second, we reviewed
information from the EPA's RBLC, including permits for which no GHG
BACT review was included. The subsections of this preamble that follow
describe each review and the key findings.
a. GHG Permitting Under Step 1 of the Tailoring Rule
The main purpose of this analysis was to assess and summarize the
GHG permitting experience to date for ``anyway sources'' emitting GHGs
at or above the 75,000 tpy CO2e GHG threshold level, the
effective GHG permitting level for sources that were otherwise subject
to PSD permitting for conventional non-GHG pollutants under Step 1 of
the Tailoring Rule. The term ``anyway sources'' refers to sources that
trigger PSD permitting requirements ``anyway'' based on pollutants
other than GHGs, regardless of the amount of their project-related GHG
emissions. We focused on these ``anyway source'' permits since they are
the only GHG sources and projects that would potentially be subject to
GHG permitting following the UARG decision that effectively limited GHG
permitting to sources and projects that would otherwise be subject to
permitting based on emissions of pollutants other than GHGs. We did not
include in our review PSD permitting conducted under Step 2 of the
Tailoring Rule since Step 2 required PSD permits and GHG BACT review
for sources and modifications based solely on GHG emission increases.
Such sources do not trigger PSD after the UARG decision and subsequent
revisions to the EPA's regulations, including those proposed in this
rule.
By analyzing the types of GHG emission units and sources subject to
[[Page 68129]]
GHG BACT review during the past four years, we developed a historical
profile of the source coverage and GHG BACT review process at the
75,000 tpy CO2e GHG permitting level. Looking at this
historical record, we can better assess to what extent the existing
75,000 tpy CO2e permitting level subjects significant GHG-
emitting sources to BACT review, and whether GHG BACT review at that
level yields emission reductions that were meaningful.
For this analysis, we reviewed summary information on 200 PSD
permits issued during the 2011-2014 timeframe that contained GHG BACT
requirements after GHGs became a regulated NSR pollutant. We summarized
the characteristics of the sources and types of units that have been
subject to GHG BACT review. Some of the key findings from this review
are presented here; more details on this analysis are included in the
docket for this proposed rulemaking.\56\ Based on this review sample,
approximately 90 percent of all the PSD permits with GHG BACT limits
were issued to ``anyway sources,'' \57\ with the other 10 percent
issued to sources that were subject to PSD permitting only because of
their GHG emissions (and thus would not be captured at any SER level
because they are not ``anyway sources'').
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\56\ ``A Summary Analysis of the GHG Permitting Experience
between 2011 and 2014.'' Prepared by EPA Staff, March 2015.
\57\ As discussed previously in Section V.D.1, the ``anyway
source'' permits with GHG BACT limits all involved energy-intensive
industries, emitting significant amounts of CO2 from the
burning of fossil fuels in various types of combustion units.
---------------------------------------------------------------------------
The importance and contribution of the power generating sector to
GHG national emissions cannot be overstated when considering
opportunities for GHG reductions and identifying where there is clear,
non-trivial value in applying BACT review to obtain such reductions.
Power plants are responsible for a majority of the country's total
stationary source GHG emissions, approximately 66 percent of the
reported 2013 GHG emissions under the EPA's GHGRP.\58\ Since combustion
units, such as large gas turbines and steam boilers installed at power
plants, consistently have GHG emission increases well in excess of
75,000 tpy CO2e, a GHG SER at this level will ensure that
permitting authorities continue to apply GHG BACT review to the largest
and most prevalent GHG emission units in the power plant sector as part
of ``anyway sources'' permitting actions.
---------------------------------------------------------------------------
\58\ 2013 GHGRP Overview Report, http://www.epa.gov/sites/production/files/2015-07/documents/ghgrp-overview-2013.pdf.
---------------------------------------------------------------------------
A 75,000 tpy CO2e level also does not overlook other
significant units. In our review of GHG permitting at a variety of
``anyway sources'' besides power plants, we found that GHG emissions
for units subject to GHG BACT review were generally well above the
75,000 tpy CO2e threshold. This is because of the greater
level of GHG emissions associated with large fossil-fuel fired
combustion units, such as turbines and boilers. The addition of these
units was typically the triggering event that caused the need for a PSD
permit for pollutants other than GHGs. It was also evident from the
review that most newly constructed facilities (i.e., ``greenfield
facilities'' as opposed to modifications of existing major sources)
that obtain ``anyway source'' PSD permits will generally have GHG
emissions well in excess of a 75,000 tpy CO2e threshold
based on the cumulative, facility-wide total GHG emissions from all
emission points in the facility fence line.
As part of this same analysis, we also performed a more detailed
review on a sample subset of 55 individual ``anyway source'' permits
that included GHG BACT limits and represented PSD permits for different
source category types. Key findings from these sample permit reviews
are summarized here with more details of the review included in the
docket for this proposed rulemaking.\59\ The source category types
represented by these 55 permits included the following: Power plants;
chemicals production facilities; oil and gas industry sources; metals
and mineral production facilities; pulp and paper production
facilities; ethanol production plants; and a municipal waste combustion
facility.
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\59\ ``A Summary Analysis of the GHG Permitting Experience
between 2011 and 2014.'' Prepared by EPA staff, March 2015.
---------------------------------------------------------------------------
We found that the construction projects covered by these PSD
permits included at least one, and in most cases multiple, large
combustion units, such as large fossil fuel-fired turbines, boilers,
process heaters, or furnaces, along with associated stationary IC
engines for some facilities (generally as backup emergency generators
or for associated equipment such as pumps and compressors). The GHG
emission levels associated with these sample PSD projects were
consistently over 100,000 tpy CO2e, with many facilities,
particularly greenfield facilities, reporting much higher levels. The
principal fuels used in the combustion units were natural gas for
boilers, furnaces, and turbines and diesel or natural gas for large
stationary IC engines. There were limited cases of biomass fuel used,
principally in the pulp and paper sector. The emissions from these
larger combustion units were in most cases the principal cause for
these projects requiring PSD review for both non-GHG pollutants and
GHGs. Over 90 percent of the permitted activities within the sample of
reviewed permits involved combustion units of some type, primarily
fossil fuel-fired boilers, turbines, or stationary IC engines.
Some permits for these combustion unit projects also included
ancillary, non-combustion related sources of GHGs for which GHG BACT
review was conducted. These sources consisted principally of fugitive
emission releases of CH4 from natural gas delivery,
processing or storage units, and SF6 releases from circuit
breaker equipment associated with power plants.\60\ There were isolated
examples of other non-combustion related sources at two chemical
production facilities: GHG emissions from a nitric acid production
process and CO2 from a CO2 liquefaction process.
These processes were both large GHG-emitting processes, emitting more
than 90,000 tpy CO2e.
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\60\ ``A Summary Analysis of the GHG Permitting Experience
between 2011 and 2014.'' Prepared by EPA staff, March 2015.
---------------------------------------------------------------------------
b. RBLC Permitting Information
For this analysis, we reviewed information on PSD permits contained
in the RBLC to understand the types of non-GHG emission sources that
were subject to BACT review for other pollutants besides GHG but that
may also be important from a GHG emission perspective. Since the UARG
decision limited the scope of the PSD permitting program to ``anyway
sources,'' it is important to understand the types of sources that are
typically part of ``anyway sources'' PSD permitted projects and their
potential to emit GHGs. This analysis differed from our review of
historical GHG permitting data since the RBLC dataset also contains PSD
permits that did not contain GHG BACT limits, and thus we could
identify if there were other GHG emissions sources that could
potentially be subject to GHG BACT review at permitting threshold
levels below 75,000 tpy CO2e. A detailed report of this
analysis is included in the docket for this rulemaking.\61\
---------------------------------------------------------------------------
\61\ ``A Summary Review of Recent PSD Permitting Activity for
``Anyway Source'' Categories and the Potential GHG-Emitting Units
and Processes within Those Categories.'' Prepared by EPA staff,
March 2015.
---------------------------------------------------------------------------
[[Page 68130]]
We began our review of ``anyway source'' PSD permits by assessing
the types of emission units and sources that triggered PSD actions for
pollutants other than GHGs. We then identified which of the units would
most likely emit GHGs. We reviewed detailed process level information
from over 100 ``anyway source'' PSD permits issued in the last 4 years
for source categories likely to have some amount of GHG emissions.\62\
---------------------------------------------------------------------------
\62\ ``A Summary Review of Recent PSD Permitting Activity for
``Anyway Source'' Categories and the Potential GHG-Emitting Units
and Processes within Those Categories.'' Prepared by EPA staff,
March 2015.
---------------------------------------------------------------------------
We examined individual source category projects as represented in
the RBLC dataset to see if there was evidence of any consistency in the
type and/or size of combustion units across key source categories and
the extent to which they appear to be the primary emissions unit that
is installed or modified and triggers PSD for pollutants other than
GHGs. To get a representative sample across different source
categories, we reviewed permits from a variety of industrial
classifications, including potentially important GHG-emitting
categories such as metals production, chemical manufacturing, petroleum
refineries, the oil and gas industry, pulp and paper industries, and
waste industries.\63\ We did not include power plants in the RBLC
sample set we reviewed because we knew with a high level of certainty
that the PSD permitted projects for these facilities principally
involved very large combustion units, such as large gas turbines, with
GHG levels well in excess of the current 75,000 tpy CO2e
threshold. Therefore, these permits would not provide any additional
insight into the characterization of sources that obtained permits
because of pollutants other than GHGs for purposes of evaluating a
possible GHG SER option.
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\63\ ``A Summary Review of Recent PSD Permitting Activity for
``Anyway Source'' Categories and the Potential GHG-Emitting Units
and Processes within Those Categories.'' Prepared by EPA staff,
March 2015.
---------------------------------------------------------------------------
Across the sampled industry categories, we found that ``anyway
sources'' triggered PSD for conventional pollutants primarily because
of the addition or modification of combustion units, such as turbines,
boilers, process heaters, furnaces, and stationary IC engines. For most
facilities, combustion units or associated combustion unit-related
emissions (e.g., flares, exhaust gas treatment systems) constituted the
majority of the overall processes for which BACT limits were required
for pollutants other than GHGs at any given facility. Most of the
larger combustion units covered by PSD permits were fueled principally
by either natural gas or process-related gas for industries (such as
petroleum refineries) where such gas is generated. Some permits also
included smaller, stationary engines (typically emergency generators or
fire pumps) principally fueled by either diesel or natural gas.
From a sample of about 400 PSD permits contained in the RBLC
dataset for the years 2011 to 2014, we identified only 20 PSD permits
for modification projects \64\ from the RBLC data set that included
combustion units whose cumulative GHG emissions would likely not exceed
75,000 tpy CO2e based on their fuel input data. Although we
recognize that the RBLC dataset does not reflect a complete dataset of
permitting actions due to its voluntary participation and under-
reporting, we reasonably expect, based on the overall characteristics
of the other PSD permits we reviewed and the type of GHG source
categories affected under PSD, that there are a relatively low number
of ``anyway source'' PSD projects with GHG emissions likely to be less
than 75,000 tpy CO2e.
---------------------------------------------------------------------------
\64\ ``List of Permits Identified in RACT/BACT/LAER
Clearinghouse that Likely Have Combustion-Related Emissions that are
less than 75,000 tpy CO2e''. Prepared by EPA Staff,
October 2015.
---------------------------------------------------------------------------
We also found that where non-combustion processes were covered by a
PSD permit, the emissions from these processes principally consisted of
PM-related fugitive emissions, such as dust from material handling or
roads. There were also some specific industries, such as oil and gas
processing plants, refineries, chemical production plants and
landfills, where VOC emissions, often fugitive in nature, from piping,
pumps and storage tanks, were subject to BACT requirements. However, in
most of these cases there were large combustion units included in the
PSD-permitted project that appear to be the key source of the emissions
of a pollutant other than GHGs that exceed the applicable pollutant
significance level, and thus drive the requirement for a PSD
permit.\65\
---------------------------------------------------------------------------
\65\ ``A Summary Review of Recent PSD Permitting Activity for
``Anyway Source'' Categories and the Potential GHG-Emitting Units
and Processes within Those Categories.'' Prepared by EPA staff,
March 2015.
---------------------------------------------------------------------------
Working from our preliminary finding above regarding non-combustion
sources, we took a closer look at the extent to which combustion units
were the main component of PSD projects related to a particular source
category that has significant non-combustion GHG emissions, namely,
facilities in the oil and gas sector with CH4 emissions. The
oil and gas industry is well represented in PSD permitting, with the
third highest count of permits between 2011 and 2014, and is also the
second largest emitting industrial sector for non-combustion related
CH4 emissions.\66\ We were particularly interested in
understanding the contribution of combustion units in triggering PSD
``anyway'' at oil and gas sector facilities, and how this might
influence GHG permitting at a proposed GHG SER level.
---------------------------------------------------------------------------
\66\ ``Inventory of U.S. Greenhouse Gas Emissions and Sinks:
1990-2013,'' Table ES-2. Document No. EPA 430-R-15-004. April 15,
2015. http://www.epa.gov/climatechange/ghgemissions/usinventoryreport.html.
---------------------------------------------------------------------------
We found that, for projects subject to PSD in the oil and gas
industry, combustion units still dominate the GHG emission profile. We
examined a sample of 16 PSD permits issued between 2011 and 2015
associated with the oil and gas sector to determine whether PSD permits
in the industry are principally and routinely required due to projects
involving combustion units or if they are sometimes triggered by non-
combustion emissions units alone, and whether such non-combustion units
might also be sources of GHG emissions. A detailed summary of this
review of oil and gas sector PSD permits is provided in the docket for
this proposed rulemaking, from which the following key findings are
taken.\67\ In all the PSD permits that we evaluated for this oil and
gas sector review, combustion sources were the primary driver of PSD
applicability for the permitted new source or major modification. Based
on available emissions data within the permits, we did not find a PSD
permit that did not cover combustion units as the primary emitters of
PSD pollutants, including GHGs. Of the 13 permits for which GHG
emissions were provided or could be readily calculated, 12 of the
projects involved GHG emissions greater than 75,000 tpy
CO2e, with four of these over 500,000 tpy CO2e.
The one project with less than 75,000 tpy CO2e was a
modification project to increase flaring as a BACT control strategy for
VOCs. Of the 10 permit actions with adequate data to estimate GHG
emissions on a unit basis, combustion emissions accounted for more than
70 percent of GHG emissions in all cases, more than 80 percent in 8 of
the 10 cases, and more than 90 percent in 5 of the 10 cases.
---------------------------------------------------------------------------
\67\ ``A Summary Review of Recent PSD Permitting Activity for
``Anyway Source'' Categories and the Potential GHG-Emitting Units
and Processes within Those Categories.'' Prepared by EPA staff,
March 2015.
---------------------------------------------------------------------------
[[Page 68131]]
3. GHG Emissions Levels for Combustion Units
Once we had an understanding of the characteristics of ``anyway
source'' permitting actions specially, the prevalence of combustion
units as the primary GHG-emitting sources in these PSD permits based on
the permitting review described in Section V.D.2 of this preamble, we
then focused on identifying the level of GHG emissions associated with
the combustion units most likely to be part of future PSD-triggering
projects. From our review of ``anyway source'' PSD permits, we found
that most of the projects involved some combination of turbines,
boilers, process heaters/furnaces, and stationary IC engines.\68\ Most
of the units were either natural gas or diesel-fired, with a smaller
number of biomass-fueled units. Natural gas-fired units predominated in
the larger combustion categories of turbines and boilers. This finding
is consistent with the projections from the EPA's Boiler maximum
achievable control technology (MACT), which shows over 94 percent of
projected industrial boilers and process heaters to be natural gas-
fired units.\69\
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\68\ ``A Summary Review of Recent PSD Permitting Activity for
``Anyway Source'' Categories and the Potential GHG-Emitting Units
and Processes within Those Categories.'' Prepared by EPA staff,
March 2015.
\69\ Memorandum from Eastern Research Group, Inc. to Brian
Shrager, EPA, ``Revised New Unit Analysis Industrial, Commercial,
and Institutional Boilers and Process Heaters National Emission
Standards for Hazardous Air Pollutants--Major Source,'' November
2011.
---------------------------------------------------------------------------
In order to estimate the level of GHG emissions that correlated
with the type and size of combustion units that are most likely to
trigger PSD for ``anyway sources,'' we needed to equate GHG emissions
with those from an appropriate non-GHG pollutant SER that would trigger
PSD applicability. From our review of permit data, we identified that
the combustion units most often occurring in ``anyway sources'' PSD
permits were commonly triggering PSD for emissions of NOX.
We determined that the use of the NOX SER would be a
reasonable and appropriate value to use as the basis for estimating
equivalent GHG emissions associated with these ``anyway source''
combustion units. A full description of this analysis is provided in
the docket for this rulemaking.\70\
---------------------------------------------------------------------------
\70\ ``Estimating Equivalent GHG Emissions Levels based on the
PSD NOX SER Value.'' Prepared by EPA staff, September
2015.
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The basic premise of this analysis was to identify a theoretical
minimum GHG emissions level that equates to the existing NOX
SER level (i.e., 40 tpy) for different combustion unit types. We could
then consider the merits, in the context of meeting the de minimis
principles, of aligning GHG BACT review on similar-sized combustion
unit projects that would be otherwise requesting PSD review for non-GHG
pollutants. From a theoretical standpoint alone, such an alignment
would optimize the emissions-reduction benefits available through the
BACT review process with a marginal increase in permitting burden
program-wide for both permitting authorities and sources (the
incremental increase in burden from the BACT review for an additional
pollutant).
We identified NOX as the most appropriate surrogate
``anyway'' pollutant with which to compare the GHG emissions level.
NOX is commonly emitted in significant quantities from the
types of combustion units that are expected to be covered in most of
the future PSD permits. These are new electricity generation, large
natural gas and diesel-fired turbines, boilers, process heaters,
furnaces, and IC engines. We did not consider coal-fired units in
designing the surrogate analysis because projections of future boiler
and process heater units from the EPA's Boiler MACT (78 FR 7138,
January 31, 2013) and EGU NSPS (80 FR 64510, October 23, 2015)
rulemakings show little, if any, new coal-fired capacity as part of
projected new construction.\71\
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\71\ Memorandum from Eastern Research Group, Inc. to Brian
Shrager, EPA, ``Revised New Unit Analysis Industrial, Commercial,
and Institutional Boilers and Process Heaters National Emission
Standards for Hazardous Air Pollutants--Major Source,'' November
2011.
---------------------------------------------------------------------------
We investigated the possibility of using alternative surrogate
pollutants for performing the equivalency analysis but found little
value in pursuing these other options. For various reasons, these other
pollutants did not correlate well with estimating equivalent GHG
emissions from the combustion unit sources that represent the largest
proportion of the sources that have been permitted for GHG. For
example, CO is not a good surrogate since its emissions are typically
inversely related to the amount of CO2 emitted from
combustion, the former representing more incomplete combustion
conditions and the latter more complete combustion. Also, since the CO
SER level is relatively high compared to other pollutants (100 tpy),
equating CO2 emissions to CO levels would result in a GHG
SER level well above 100,000 tpy, which would not adequately capture
significant projects that are otherwise subject to permitting for other
non-GHG combustion pollutants based on our knowledge of GHG permitting
for ``anyway sources'' that occurred under the GHG Tailoring Rule. PM
is also a combustion pollutant, but it is emitted in very small
quantities from natural gas units and PM often does not trigger PSD
review on its own. Therefore, as a surrogate, PM would not adequately
capture significant projects involving natural gas fired units, which
are anticipated to comprise a large proportion of future PSD permitted
units. Volatile organic compounds (VOCs) are emitted from a large
variety of processes, many of which do not involve combustion units or
have associated CO2 emissions, and therefore is not well
suited as the basis for developing a representative, surrogate GHG
level.
Our equivalency analysis used the ratio of the emission factors of
GHG to NOX for each applicable unit type.\72\ The ratio was
then used to calculate the equivalent emissions of GHG, on a PTE)
basis, for a 40 tpy NOX emission level for each unit type.
The GHG-to-NOX ratio varied based on the unit types, which
was expected since the emission factors for NOX, and to a
lesser extent CO2, vary among the unit types and their
control configurations. The underlying emission factors used for the
surrogate analysis were selected to best represent the most likely
configurations for newly installed units at PSD permitted facilities.
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\72\ Estimating Equivalent GHG Emissions Levels based on the PSD
NOX SER Value.'' Prepared by EPA staff, September 2015.
---------------------------------------------------------------------------
We estimated the following GHG emissions based on our equivalency
analysis. For natural gas-fired turbines, the range was 50,346 to
425,655 tpy CO2e, with an average of 186,537 tpy
CO2e across configurations. For large (greater than 100
MMBtu/hr) natural gas boiler/process heaters/furnaces, the range was
34,302 to 63,188 tpy CO2e, with an average of 48,504 tpy
CO2e across configurations. For small (less than 100 MMBtu/
hr) natural gas boilers/process heaters/furnaces, the range was 48,023
to 150,072 tpy CO2e, with an average of 98,047 tpy
CO2e across configurations. The resulting equivalency level
for GHGs was greater for the smaller boiler category since the ratio of
GHG to NOX in the emission rate was greater; in other words,
for the small boiler category, each ton of NOX emissions
correlated with more tons of GHG emissions than for the large boiler
category. For biomass boilers, the result was 78,210 tpy
CO2e based on average factor for wood residue, including
bark and wet wood. For large (greater than 500 horsepower (HP)) natural
gas-fired stationary IC engines, the result was
[[Page 68132]]
19,000 tpy CO2e. For large (greater than 750 HP) diesel-
fired stationary IC engines, the result was 17,529 tpy CO2e.
The average result across all ranges and units was 98,333 tpy
CO2e.\73\
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\73\ ``Estimating Equivalent GHG Emissions Levels based on the
PSD NOX SER Value.'' Prepared by EPA staff, September
2015
---------------------------------------------------------------------------
It is important to note that the levels of GHG equivalency shown
earlier provide an approximate measure of the theoretical minimum level
of GHG emissions that could be associated with adding a particular type
of combustion unit with emissions that just exceed the NOX
SER level of 40 tpy. This does not necessarily mean that applying BACT
for GHGs to projects of a certain size would yield greater than a de
minimis benefit. This analysis is simply another data point to inform
the identification of a SER level for GHGs where the confluence of
``anyway source'' PSD projects and GHG reduction benefits is
meaningful. The equivalent GHG emissions level represents emissions
from a theoretical project that adds a combustion unit(s) that emits
just over 40 tpy NOX. However, based on what we saw in our
review of ``anyway source'' permits described in Section V.D.2 of this
preamble, the likelihood of such a project is not high because, in
cases where the NOX emission increase is close to the
NOX SER level, and where it is considered a practical
operating condition for the unit involved (such as smaller units), the
applicant very often accepts PTE limits to avoid triggering PSD at all.
Also, as we have seen in our review of actual permits, it is more
likely that a PSD-permitted project would have NOX emissions
well in excess of the 40 tpy NOX SER level, due to the
addition of multiple combustion units or the sheer size of the unit
itself, such as a power plant turbine or steam-generating unit. In
these more typical PSD scenarios, GHG emissions would be multiple times
higher than the values shown earlier. Although our review of actual
samples of PSD permits revealed few cases where projects involving
these units would have GHG emissions just above these equivalent
NOX SER equivalent levels, these equivalency levels have
value in helping us understand and establish a marker point for the
theoretical minimum level of GHG emissions that would be associated
with particular unit types. It is also useful to look at the results
above in light of the type of unit involved. As shown earlier,
stationary IC engines have an equivalent GHG emission ratio below the
30,000 tpy CO2e level. Most of these IC engines units
typically show up in one of two ways in ``anyway source'' PSD permits:
(1) As associated equipment (e.g., emergency backup generator or fire
pump engine) where there is a large combustion unit such as a turbine
or boiler that is principally responsible for triggering the permitting
action; or (2) in multiple-unit configuration generator sets (e.g., 10
or more large IC engines linked together for electricity production).
Unlike the addition or modification of a large turbine unit where a
single unit can trigger a PSD action, it is a much less common scenario
where a single IC engine would be the triggering event for a PSD permit
since such units generally consume much less fuel and generate much
lower emissions, non-GHG or GHG, than larger boiler and turbine units.
Our reviews and analyses to this point have clearly identified the
importance of combustion units as both a triggering event for ``anyway
source'' permitting actions for conventional pollutants and also as a
critical GHG emission component of these projects. The next section in
this preamble describes our review of non-combustion related GHG
emission sources, and how they may also contribute to GHG emissions for
certain PSD projects associated with certain source categories.
4. Non-Combustion Related GHG Emissions
We conducted an additional evaluation to identify any GHG source
categories that we might not have identified in our review of
permitting activity described in earlier sections of this preamble. We
were particularly focused on process-related, GHG-emitting units which
could potentially be subject to the GHG BACT requirement at de minimis
levels below 75,000 tpy CO2e. Our review of PSD permits
issued to date with GHG limits had shown a very small percentage of PSD
permits and GHG BACT reviews that have been triggered based principally
on non-combustion units or processes. We wanted to better understand
the types and sizes of GHG-emitting units and processes that might
possibly fall into non-combustion source categories to ensure that we
did not miss potential non-trivial reductions at the proposed GHG SER
level.
One category we looked at specifically was landfills. Municipal
waste landfills are important non-combustion, CH4-emitting
sources, and are the third largest contributing source category to
national CH4 emissions behind enteric fermentation and
natural gas systems.\74\ A landfill project can trigger PSD
applicability as an ``anyway source'' if its increased emissions exceed
the PSD SER level of 50 tpy for NMOC, the applicable NSR regulated
pollutant for municipal waste landfills. A landfill emitting just over
50 tpy NMOC would emit just over 190,000 tpy of CH4 on a
CO2e basis, well in excess of the current 75,000 tpy
CO2e GHG permitting level.\75\ Thus, there is high
confidence that any landfill project exceeding the PSD SER level for
NMOC will likely exceed any GHG SER option below this 190,000 tpy
CO2e level.
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\74\ ``Inventory of U.S. Greenhouse Gas Emissions and Sinks:
1990-2013,'' Table ES-2. Document No. EPA 430-R-15-004. April 15,
2015. http://www3.epa.gov/climatechange/ghgemissions/usinventoryreport.html.
\75\ Memorandum from H. Ward, EPA/SPPD, to J. Mangino, EPA/AQPD,
re: Methane to NMOC ratio at landfills. June 17, 2014.
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We analyzed other source categories with significant non-combustion
related GHG emissions based on the EPA's national GHG inventory.\76\
The inventory included source categories with facilities that had a
likelihood of triggering PSD based on our review of past permits.
Unlike landfills, these categories do not have a source-specific,
regulated NSR pollutant that can be equated with GHG emissions and
compared to a GHG SER option. The categories we looked at included
cement production, glass production, nitric acid production,
electronics manufacturing, petroleum refineries, natural gas systems,
underground coal mines and industrial wastewater treatment. For this
effort, we analyzed GHG emissions data for these source categories that
were submitted under the GHGRP. A technical support document describing
the analysis and results is provided in the docket.\77\ In the
following discussion, we summarize the analysis and some of our key
findings.
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\76\ ``Inventory of U.S. Greenhouse Gas Emissions and Sinks:
1990-2013,'' Table ES-2. EPA 430-R-15-004. April 15, 2015. http://www3.epa.gov/climatechange/ghgemissions/usinventoryreport.html.
\77\ Memorandum from T. Parise and S. Edgerton, EC/R
Incorporated, to J. Montanez and J. Mangino, EPA, ``Analysis of
Greenhouse Gas Emissions Data Collected Under Selected Subparts of
the Greenhouse Gas Reporting Rule,'' September 30, 2015.
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For this analysis, we characterized GHG emissions at the unit level
where available (for some categories only facility level data were
available) and compared these emissions to various actual emissions-
based thresholds (50,000 tpy CO2e, 37,500 tpy
CO2e, 25,000 tpy CO2e, and 12,500 tpy
CO2e) to provide an indication of the magnitude of emissions
above each
[[Page 68133]]
threshold in the reporting population. We used actual emissions because
that is the form in which emissions data are submitted under the GHGRP.
We selected the actuals-based thresholds to represent possible PTE-
based levels if one were to assume something less than 100 percent
capacity utilization. For example, at a 50 percent utilization rate, a
37,500 tpy CO2e actuals-based level equates to a 75,000 tpy
CO2e PTE-based level and a 25,000 tpy CO2e
actuals-based level equates to a 50,000 tpy CO2e PTE-based
level. Utilization rates can vary from site to site, and across and
within industry types, but we believe the actuals-based thresholds we
chose for the analysis provide a good representation of the possible
range of equivalent PTE CO2e emissions levels.
Our non-combustion unit analysis across all the source categories
in the analysis showed a consistent profile of a high percentage of GHG
emissions associated with a relatively small percentage of high-
emitting units and facilities. Also, the variation in the amount of
total GHG emissions covered across the analysis thresholds was not
great. Across all categories, this varied from 95 percent of GHG
emissions at the 12,500 tpy CO2e actuals-based threshold to
88 percent of GHG emissions at the 50,000 tpy CO2e actuals-
based threshold. We found that for a number of the source categories
there are particular subcategories of processes or units that are
responsible for a majority of the non-combustion related GHG emissions.
Also, within those particular subcategories there tend to be a
relatively small percentages of large emitting units that are
responsible for most of those emissions. A summary of all the source
category analyses is provided in the supporting technical document
included in the docket for this rulemaking.\78\
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\78\ Memorandum from T. Parise and S. Edgerton, EC/R
Incorporated, to J. Montanez and J. Mangino, EPA, ``Analysis of
Greenhouse Gas Emissions Data Collected Under Selected Subparts of
the Greenhouse Gas Reporting Rule,'' September 30, 2015.
---------------------------------------------------------------------------
Overall, this analysis gave us an indication of the relative size
of emissions from GHG- emitting processes and units in some key non-
combustion related GHG source categories. Our analysis showed that,
even when not including direct combustion emissions from these sources
and isolating only the non-combustion related GHG-emitting units or
processes, a high percentage of GHG emissions would be covered at the
current GHG permitting threshold level of 75,000 tpy CO2e on
PTE basis. Most PSD projects involving sources in these non-combustion
categories, such as refineries and cement production facilities, would
also likely include combustion units with substantial associated GHG
emissions. This would increase the overall GHG emissions from such
projects.
5. Potential BACT Techniques Applicable to GHG Emission Sources
To evaluate the value obtained through the BACT review process, we
looked at the emission reduction potential of control techniques that
might be considered as BACT for a particular type of unit/process. The
following section describes the most common BACT techniques available
for reducing GHG emissions from units that have been, and will continue
to be, part of ``anyway source'' PSD projects.
Under the CAA and applicable regulations, a PSD permit must contain
emissions limitations based on application of BACT for each regulated
NSR pollutant. CAA section 165(a)(4); 40 CFR 52.21(j). An analysis of
BACT for GHGs should be conducted in the same manner as for any other
PSD regulated pollutant. The CAA and corresponding implementing
regulations require that a permitting authority conduct a BACT analysis
on a case-by-case basis. The permitting authority must evaluate the
amount of emissions reductions that each available emissions-reducing
technology or technique would achieve, as well as the energy,
environmental and economic impacts and other costs associated with each
technology or technique. Based on this assessment, the permitting
authority must establish a numeric emissions limitation that reflects
the maximum degree of reduction achievable for each pollutant subject
to BACT through the application of the selected technology or
technique. However, if the permitting authority determines that
technical or economic limitations on the application of a measurement
methodology would make a numerical emissions standard infeasible for
one or more pollutants, it may establish design, equipment, work
practices or operational standards to satisfy the BACT requirement. 40
CFR 52.21(b)(12).
One overarching challenge to analyzing GHG emissions-reduction
potential is the inherent difficulty in predicting the specific makeup
of new construction and modification projects that will trigger PSD in
general. Another challenge is that the BACT control requirement is
determined on a case-by-case basis, based on site-specific factors at
the source in question. Thus, even if we could roughly predict what
sources are likely to be subject to PSD and required to get a permit,
it is still challenging to calculate the emission reductions associated
with application of BACT to GHG emissions from a particular source.
The emissions-reduction benefits that may result from the
application of BACT can vary widely, depending on the specific
configuration of the project and source, and the results of the case-
specific BACT review. Thus, the variation in project composition and
case-specific BACT review not only affects the ability to generate
``typical'' emissions increases and reductions from BACT, but, in turn,
also severely hinders any ability to relate this to health or
environmental benefits. Further complicating the ability to quantify
the benefit of BACT is that the emission reductions would have to be
measured from some alternative baseline, i.e., what the facility would
have emitted absent the application of the BACT technique selected
through the review process. After predicting the project components
subject to BACT review, establishing what the alternative baseline
would have been absent application of a BACT technique requires
specific information about each facility site, the source's development
options and what the potential emissions would have been absent
application of BACT. The alternative future baseline scenarios for any
given facility can vary based on the planned operations and practices.
Thus, it is difficult to project a future project's PTE level with any
specificity within or across industries.
In light of these challenges, we focused on the possible GHG
control techniques that could apply to GHG-emitting units/processes
that other parts of our analysis indicated would most likely be subject
to GHG BACT review at ``anyway sources.'' This review informed our
consideration of the meaningfulness of the GHG BACT review for units
and sources that might be covered at various GHG SER levels.
Recognizing that larger combustion units will likely be the most
predominant GHG emission source type at ``anyway source'' PSD projects,
one finding from this review was that energy efficiency measures are
currently the most common BACT strategy for these units. In addition,
we found that larger combustion units provide the best opportunity for
achieving GHG reductions through case-by-case BACT review. Sources with
small combustion units or other sources of GHGs provide limited
opportunities for achieving additional GHG reductions through the BACT
review.
[[Page 68134]]
The sections that follow discuss the most common types of BACT
techniques that have been evaluated through GHG BACT review at ``anyway
sources'' and implemented by sources that obtained permits. These are
not intended to represent every possible category of BACT for GHGs but
reflect the techniques most commonly evaluated and applied across a
variety of ``anyway sources.'' In specialized cases, there are unique
GHG control techniques available for industry-specific processes that
emit GHGs, such as those that can be implemented at nitric acid plants
to reduce nitrous oxide emissions from the ammonia oxidation step.
However, based on our review of permitting data at ``anyway sources''
and considering the nature of units emitting GHGs below 75,000 tons per
year, we expect for the near to medium term that energy efficiency
measures will continue to be the most predominant GHG BACT mitigation
strategy applicable to ``anyway sources'' that increase emissions of
GHGs by less than 75,000 tons per year (on a CO2e basis).
Therefore, the emissions-reduction achievable with this technique at
sources that have the potential to emit less than 75,000 tons per year
was an important consideration in developing our proposed GHG SER.
a. Energy Efficiency Measures
While energy efficiency measures can reduce emissions of all
combustion-related pollutants, they are particularly important for GHGs
for two reasons: (1) GHG emissions from combustion sources
(particularly CO2) make up a large majority of the GHG
inventory from the industrial facilities most often subject to PSD
permitting; and (2) the use of add-on controls to reduce GHG emissions
is expected, for the foreseeable future, to be a viable BACT option at
a only small set of the largest GHG emission sources. To date, most GHG
BACT determinations for combustion sources have relied on some
combination of energy efficiency measures. Therefore, it is important
to consider the implementation, effectiveness and value of energy
efficiency measures as applied through the BACT process to combustion
sources that may trigger the GHG BACT requirement at different GHG SER
option levels. The following is a description of efficiency improvement
measures that have been applied to industrial combustion units.
The EPA has identified a number of energy efficiency measures, many
of which have been utilized to date to satisfy GHG BACT requirements in
actual PSD permits. These procedures include: \79\
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\79\ ``Available and Emerging Technologies for Reducing
Greenhouse Gas Emissions from Industrial, Commercial, and
Institutional Boilers,'' Office of Air Quality Planning and
Standards, EPA. October 2010. http://www.epa.gov/nsr/ghgdocs/iciboilers.pdf.
---------------------------------------------------------------------------
High efficiency burners.
Combustion and boiler performance optimization.
Combustion system instrumentation and controls.
Air preheat and economizers.
Turbulators for firetube boilers.
Boiler insulation.
Minimization of air infiltration.
Boiler blowdown heat exchanger.
Condensate return system.
Refractory material selection.
Minimization of gas-side heat transfer surface deposits.
Steam line maintenance.
In many cases, the impacts of these measures were highly site-
specific and the benefits varied based on the site-specific
configuration and operational conditions of the unit. These measures
were typically associated with a GHG emission limit, steam generation
rate or required maximum fueling rate for the combustion units
involved. For most of these measures, site-specific conditions and
economic variables must be addressed to determine whether they would be
technically and economically viable. Also, the absolute benefits for
any given facility or project undergoing PSD BACT review will depend on
the relative improvement over some baseline unit efficiency that might
have been used absent the GHG BACT review process.
To give some perspective on the potential benefits of these
measures, a new natural gas-fired industrial boiler unit will generally
have a baseline thermal efficiency in the 82 to 85 percent range.\80\
Implementing a mix of the additional measures above, it is possible to
obtain thermal efficiencies close to 90 percent.\81\ Thus, looking at
the difference between the baseline efficiency of a new boiler unit and
a maximum efficiency around 90 percent, we can identify a maximum GHG
reduction potential of approximately 7 percent.
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\80\ ``Evaluating Efficiency and Compliance Options for Large
Industrial Boilers in California's Changing Local and State
Regulatory Environment,'' 2009 ACEEE Summer Study on Energy
Efficiency in Industry.
\81\ ``Climate Leaders GHG Offset Protocol: Industrial Boiler
Efficiency (Industrial Boiler Applications),'' EPA, Climate
Protection Partnerships Division, August 2008, Version 1.
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In evaluating the value of BACT review, it is also helpful to look
at the type and size of combustion unit involved. Industrial boilers,
process heaters and furnaces of the size typically seen as part of
``anyway source'' projects (e.g., greater than 50 MMBtu/hr heat input
rating) are not generally purchased as an ``off-the-shelf'' item. These
units can be site-designed in a way that enables consideration and
incorporation of a combination of the measures shown earlier. The BACT
review is particularly valuable for these types of units as it is based
on case-by-case review of technology implementation and cost
considerations. Manufacturers have models that they can construct based
on the specifications provided by a facility design engineer. To
achieve the desired performance, the engineer will specify the desired
design output capacity, steam pressure and/or temperature requirements,
and emission thresholds that the boiler unit must meet. The design
engineer can then provide the project-specific boiler specifications to
the boiler manufacturer who will then apply the correctly sized boiler
components to its boiler plan and engineered specifications before
running a computer model to estimate the resulting operational
characteristics, including thermal efficiency and emissions of the
resulting boiler.\82\
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\82\ ``Boiler Efficiency Projects-Development of Issues Papers
for GHG Reduction Project Types: Boiler Efficiency Projects,''
Prepared for the California Climate Action Registry, January 7,
2009. http://www.climateactionreserve.org/wp-content/uploads/2009/03/future-protocol-development_boiler-efficiency.pdf.
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Smaller combustion units, such as smaller industrial and commercial
size boilers and stationary IC engines, are typically purchased ``off
the shelf'' and meet manufacturer's efficiency standards. Minimum
efficiency requirements for these boilers are mandated to manufacturers
by the federal government (U.S. Department of Energy (DOE) and the
EPA), and some states have minimum efficiency requirements for boilers
that are allowed to be sold in the market. Stationary IC engines that
are part of ``anyway source'' PSD projects typically have to meet NSPS
requirements for non-GHG pollutants, which in many cases form the basis
for the BACT requirement for those, resulting in purchase decisions
that include newer, highly-efficient engines that are low-emitters for
all combustion pollutants, including GHGs. The range in performance
efficiency across manufacturers for these new engines is typically
within a couple of percentage points.
Beyond small differences in efficiencies between manufacturers and
model types, the ability to achieve
[[Page 68135]]
additional GHG reductions at these smaller ``off-the-shelf'' type
units, whether they are small boilers or IC engines, is difficult for a
couple of reasons. First, implementing a number of the efficiency
measures described previously requires site-specific design and
construction criteria, more typically associated with larger scale
projects where these measures can be part of unit design and
manufacture. Second, ``off-the-shelf'' units typically cannot be
substantially modified or tampered with in order to be guaranteed to
meet their certified performance standards. Many of the energy
efficiency measures described previously involve significant additions
and/or modifications to the basic unit, which also may not be
technically or economically viable for smaller unit applications.
b. Carbon Capture and Storage
For the purposes of the initial step of a BACT analysis for GHGs,
the EPA classifies CCS as an add-on pollution control technology that
is ``available'' for facilities emitting CO2 in large
amounts, including fossil fuel-fired power plants and industrial
facilities with high-purity CO2 streams (e.g., hydrogen
production, ammonia production, natural gas processing, ethanol
production, ethylene oxide production, cement production and iron and
steel manufacturing).\83\ CCS is a promising technology with the
potential for substantially reducing CO2 emissions. In
October 2015, EPA issued a final NSPS\84\ for new fossil-fueled power
plants. The EPA found that a highly efficient supercritical boiler
implementing partial CCS is the Best System of Emission Reduction
(BSER) for newly constructed steam generating units.\85\ The final NSPS
requires that newly constructed steam generating EGUs meet an emission
standard consistent with the implementation of a CCS system capturing
less than 30 percent of the CO2 emissions from the
plant.\86\ This level of control is referred to as ``partial CCS.''\87\
For units subject to this standard, this NSPS standard sets the minimum
requirements for a BACT emission limit. 42 U.S.C. 7479(3) (``In no
event shall application of [BACT] result in emissions of any pollutants
which will exceed the emissions allowed by any applicable standard
established pursuant to section 7411 or 7412 . . .''). However, a PSD
BACT analysis is a case-by-case analysis that considers several factors
before determining the ``maximum degree of reduction'' that is
achievable for a particular source. In the context of some PSD permit
applications, such as those that predate the October 2015 NSPS or those
for other types of sources, CCS has not been selected as BACT because
it was not found to be technically feasible or the costs of CCS have
made the application of the technology economically unachievable.\88\
CCS is most likely to be a viable BACT candidate for projects involving
very large CO2 emission sources that already trigger GHG
BACT review at the current 75,000 tpy CO2e GHG permitting
level. CCS technologies may not be technically feasible or economically
achievable for lower emitting stationary sources--i.e., those below the
75,000 tpy CO2e GHG threshold--and for sources that emit
CO2 in a dilute emission stream.
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\83\ ``PSD and Title V Permitting Guidance for Greenhouse
Gases,'' EPA, Office of Air Quality Planning and Standards, Research
Triangle Park, NC, EPA-457/B-11-001, p. 32, March 2011.
\84\ Final Rulemaking titled ``Standards of Performance for
Greenhouse Gas Emissions from New Stationary Sources: Electric
Utility Generating Units'' (80 FR 64513, October 23, 2015).
\85\ For newly constructed intermediate and baseload stationary
combustion turbines, the final NSPS requires meeting an emission
standard consistent with the performance of modern, efficient
Natural Gas Combined Cycle (NGCC) technology.
\86\ EPA Fact Sheet on Carbon Dioxide Capture and Sequestration,
http://www3.epa.gov/climatechange/ccs/.
\87\ ``Partial CCS'' is the implementation of CCS technology to
capture only a portion of the CO2 emission from a
stationary source--typically some amount less than 90 percent of the
CO2 and often by treating only a portion of the sources
emission stream. ``Full CCS'' is the capture of more than 90 percent
of the sources CO2--typically accomplished by treating
the sources entire emission stream.
\88\ However, this was not always the outcome in PSD permits
that pre-date the October 2015 NSPS. For example, in November 2014,
the EPA issued a PSD permit for GHGs for the Nuevo Midstream, LLC--
Ramsey Gas Plant in Orla, Reeves County, Texas that assumes use of
partial CCS as BACT to capture 35 percent of the CO2
emissions from the Ramsey IV and VI plants amine still vents.
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c. Gas Recovery and Utilization
The collection and combustion or utilization of either industrial
process waste gas or biogas, both streams which can contain
CH4, is a GHG BACT control technique that has been required
as BACT in PSD permits addressing GHG emissions at oil and gas
production facilities, refineries, landfills, and chemical plants.
Flares are commonly used to control VOC emissions as part of ``anyway
source'' PSD permits for projects that include a process that produces
the waste gas emissions that must be controlled. Combustion of the
waste gas stream avoids simply venting the VOC emissions to the
atmosphere, and as described later in this preamble can also have a
beneficial impact on the CO2e emissions profile for the
sources. Flares are used extensively to dispose of: (1) Purged and
wasted products from refineries, (2) unrecoverable gases emerging with
oil from oil wells, (3) vented gases from blast furnaces, (4) unused
gases from coke ovens, and (5) gaseous wastes from chemical industries.
Id. From our review of ``anyway source'' PSD permitting activity for
these types of industries, these waste gas streams are usually
coincidental to a larger project component driving the PSD
applicability for the project. As an example, for an iron and steel
facility, the addition of a blast furnace would likely trigger
applicability for PSD for a number of criteria pollutants, and also
have significant GHG emissions in terms of direct combustion related
CO2 emissions (large blast furnace units typically will
exceed 75,000 tpy CO2e emissions). Associated with this
furnace unit, however, are likely to be off-gas streams, possibly
containing CH4 gas, which also then become subject to BACT
review as part of the overall project.
A common method for minimizing emissions from flares is through
good combustion practices. When these waste gas streams are combusted
in either a flare or a thermal oxidizer, CH4 in the waste
gas stream is converted to CO2, typically at efficiency
levels greater than 96.5 percent.\89\ Since CO2 is a GHG
with less radiative force than CH4, this technique produces
a lower overall GHG emissions increase on a CO2e basis.
Assuming a combustion efficiency of 96.5 percent and CH4
being the principal GHG of concern in the waste gas stream, the
combustion process can result in reductions of CO2e
emissions of approximately 86 percent (assumes a GWP value of 25 for
CH4).
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\89\ AP-42, Fifth Edition, Volume I, Chapter 13: Miscellaneous
Sources, Section 13.5 ``Industrial Flares,'' EPA, April 2015. http://www.epa.gov/ttn/chief/ap42/ch13/final/C13S05_4-20-15.pdf.
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Utilization of process waste gas, which often can contain
CH4, for on-site energy or off-site sale and use can provide
additional GHG benefits beyond simply flaring. Like flaring, the
collection and utilization of the waste gas can serve as a BACT control
technique that effectively converts CH4 to CO2
through a combustion unit with the net benefits realized on a
CO2e emissions basis. In addition, utilization of the gas
has the potential to avoid additional GHG emissions associated with
supplemental on-site fossil-fuel usage.
For example, at sites such as natural gas processing plants,
refineries, or at
[[Page 68136]]
other facilities where the collected waste gas can be used to fuel on-
site equipment or made available for sale or other uses, there may be
alternatives to simply flaring the gas. In addition, the on-site use of
the collected gas in lieu of additional fossil-fuel use can also lead
to a reduction in the facility's GHG emissions, although GHG emissions
from any off-site sale and use of the collected gas are completely
excluded from the seller facility's calculated GHG emissions.
Another example where gas collection and utilization has
applications for GHG BACT is landfills, where large amounts of
CH4 gas generated through waste decomposition can, at
properly designed sites, be collected through biogas collection wells
and used to run IC engines or microturbines that produce energy for
onsite usage or sale to the electric grid. As mentioned earlier in
Section V.D.4 of this preamble, landfills that are subject to PSD
permitting for their NMOC emissions will likely have CH4
emissions well in excess of 75,000 tpy CO2e, such that BACT
strategies involving gas utilization and recovery may be found
applicable for both non-GHG and GHG emissions from the landfill.
d. Leak Detection and Repair Measures
Leak detection and repair (LDAR) systems have been used as GHG BACT
controls for both fugitive CH4 losses and SF6
emission losses from electrical equipment. Typically, and as previously
described in more detail in the summary of our review of ``anyway
source'' permits in Section V.D.2 of this preamble, these fugitive
sources were associated with a PSD project that involved a larger
stationary source unit or process, such as combustion unit
installations at a power plant or a large gas or oil production/process
unit that contained associated fugitive release points, such as piping
or valves. The GHG reduction potential for LDAR systems can be highly
variable depending on the site-specific design and implementation
procedures. The EPA has identified VOC applications for LDAR systems
that can achieve VOC emissions reductions in the 45 to 70 percent range
for various equipment types (since CH4 would typically be
part of the same waste gas stream, these level of reductions in
fugitive VOC emissions would be expected for fugitive CH4
emissions as well).\90\ The emission sources for CH4 where
these methods are deployed are generally CH4 fugitive losses
from associated piping and natural gas delivery networks, or equipment
leaks at compressor or pumps that move natural gas product. These
sources tend to be most commonly encountered at PSD-triggering projects
involving the oil and gas sector, primarily in the production,
processing and transmission subsectors. However, anywhere combustion
units utilize natural gas as fuel, they can also have associated leaks
in the piping network associated with the unit configuration. In both
these general cases where LDAR has been selected as a BACT for GHG
emissions dominated by CH4, the fugitive CH4
losses have been ancillary to the main GHG emission points in the
project, typically a single or combination of large fossil fuel
combustion units. At all of the ``anyway source'' permits we have
reviewed that required LDAR as GHG BACT, combustion units triggered the
BACT requirement for conventional pollutants as well as GHGs
(principally CO2 from combustion). The fugitive
CH4 losses associated with the combustion unit projects were
included in the BACT review for the GHG emissions increases for the
project.
---------------------------------------------------------------------------
\90\ ``Leak Detection and Repair: A Best Practices Guide.'' EPA-
305-D-07-001. EPA Office of Compliance, Office of Enforcement and
Compliance Assurance, October 2007.
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Another application of LDAR has been in the power plant sector. In
this sector, fugitive leaks of SF6 gas from ancillary
circuit breaker equipment associated with power plant projects have
been subject to GHG BACT review where the principle PSD-triggering
event involved the installation of power-generating combustion units.
SF6 is used as an electrical insulator and interrupter in
equipment that transmits and distributes electricity.\91\ Fugitive
emissions of SF6 can escape from gas-insulated substations
and switchgear through seals, especially from older equipment. The gas
can also be released during equipment manufacturing, installation,
servicing and disposal. The EPA estimates that where consistently
implemented in the power plant sector, applications of LDAR systems
could reduce SF6 emissions by 20 percent.\92\
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\91\ ``Inventory of U.S. Greenhouse Gas Emissions and Sinks:
1990-2013,'' Section 4.24. EPA 430-R-15-004. April 15, 2015. http://www3.epa.gov/climatechange/ghgemissions/usinventoryreport.html.
\92\ SF6 Emissions Reduction Partnership for Electric
Power Systems, http://www3.epa.gov/highgwp/electricpower-sf6/basic.html.
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6. Costs of GHG BACT Review
We have estimated that it costs an individual source approximately
$24,000 to undergo GHG BACT review for a PSD modification project and
the associated title V permit revision costs to include those
requirements in the facility's title V permit.\93\ These costs include
preparing the permitting application, supporting analyses and various
other aspects of the review and submission of the permit application as
it pertains to GHGs. These estimates do not include what can be
significant additional costs for the GHG BACT control that is
ultimately adopted and implemented by the permitted facility since
BACT, and ultimately the costs, can vary from site to site based on
site specific factors that are difficult to predict with any
specificity or certainty in advance. We also estimate it costs the
permitting authority approximately $5,000 for regulatory review and
processing costs related to the GHG BACT review for a PSD modification
project and the associated title V revisions costs to include those
requirements in the facility's title V permit.
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\93\ Information related to the associated individual and
programmatic burden at the proposed GHG SER level is provided in
Section VI of this preamble.
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E. Proposed GHG SER and Request for Comment
After consideration of several factors, we are proposing to
establish a GHG SER of 75,000 tpy CO2e. Establishing a de
minimis exemption threshold requires both policy and legal judgments to
determine what constitutes a ``gain of trivial value'' and ``pointless
expenditure of effort.'' In an effort to identify an appropriate SER
for GHGs, we considered the approaches that the EPA has previously used
to identify de minimis levels for other pollutants in the PSD program,
but we have found that a new approach is needed for GHGs. To develop
this approach, we have considered the legal basis for establishing de
minimis exemptions under the D.C. Circuit's Alabama Power opinion and
the factors the Court called for the agency to consider. These include
the context in which a SER for GHGs would apply to determine only
whether BACT applies to the pollutant GHGs at a source that triggers
PSD based on other pollutant emissions. Other factors we considered are
the nature of the pollutant and the dangers caused by increases in that
pollutant, the nature and purposes of the regulatory program, the gains
achieved from regulating GHG emissions through the PSD program at or
below a certain level, and administrative and implementation burdens of
regulating at or below such levels. We developed findings relevant to
these factors through a four-part technical analysis of GHG-emitting
[[Page 68137]]
sources, PSD permitting information, and GHG emissions reduction
strategies likely to be considered in a BACT review for those sources.
Based on all the information obtained from the various data reviews
and analyses summarized in Section V.D.1 of this preamble, taking into
account the factors mentioned previously, we are proposing a SER of
75,000 tpy CO2e for GHGs. The following discussion describes
how each of the key findings together led to and support our proposed
GHG SER value of 75,000 tpy CO2e.
First, our actual, historical experience of GHG BACT reviews
occurring at a 75,000 tpy CO2e level for sources under Step
1 of the Tailoring Rule provided us valuable insight into the affected
sources and value of GHG BACT review at that permitting level. When
considered in the context of individual sources and the collective
population of sources subject to PSD, the degree of GHG reductions
achievable through application of GHG controls to new sources and
modifications that increase GHG emissions by more than 75,000 tpy
CO2e is meaningful, and thus has more than ``trivial''
value. The current 75,000 tpy CO2e threshold has resulted in
the PSD BACT requirement applying to GHGs in the vast majority of the
actual ``anyway source'' PSD permits covering the type of units for
which GHG BACT review would be expected to achieve meaningful emissions
reductions. We also found that the types of GHG sources that have been
addressed in those GHG BACT reviews represent the most important
industry sectors in terms of national GHG emissions contribution. These
include source categories such as power plants, refineries, chemical
production facilities, and oil and gas production sites. While most of
the GHG emissions from these sources, as well as the ``anyway source''
PSD triggering actions, are related to large, fossil-fueled combustion
units, our investigation into non-combustion sources also revealed that
the most important, non-combustion related GHG-emitting sources, such
as landfills, cement plants, refineries, and nitric acid plants, have
process emissions well in excess of the 75,000 tpy CO2e
level. In summary, based on information from previous permitting
decisions using the 75,000 tpy CO2e applicability level for
GHG BACT review at ``anyway sources,'' we did not see any sources
within major GHG source categories that were ``missing'' BACT limits
for GHGs in permits issued to ``anyway sources,'' which would have been
an indicator that there may be value in applying BACT to GHGs at a
lower SER.
In addition to finding broad coverage of sources in the major GHG
emissions source categories using a 75,000 tpy CO2e
threshold, we found that the ``anyway source'' permitting experience
involving GHG BACT reviews to date since GHGs became subject to PSD has
not imposed unreasonable administrative and enforcement burdens. State
and local permitting authorities, as well as affected industries, have
successfully implemented PSD permitting for GHGs at a 75,000 tpy
CO2e threshold.
Second, our investigation into ``anyway source'' PSD permits that
did not go through GHG BACT review under the Tailoring Rule Step 1
permitting level of 75,000 tpy CO2e revealed only a few
cases where a GHG SER level below 75,000 tpy CO2e may have
resulted in additional GHG BACT reviews. Considering the limited
additional cases where GHG BACT review could apply at a GHG SER below
75,000 tpy CO2e and the limited degree of emissions
reductions that might be achieved in each case, we propose to conclude
that the burdens of subjecting such projects to case-by-case BACT
review for GHGs would yield a gain of trivial or no value.
Our review revealed only a handful of PSD modification projects on
a yearly basis nationwide that can be expected to increase GHG
emissions in the range from 30,000 to 75,000 tpy CO2e. Based
on our review of permitting data at ``anyway sources'' and considering
the nature of units emitting GHGs between these values, we expect for
the near to medium term that energy efficiency measures will continue
to be the most predominant GHG BACT mitigation strategy that could be
applicable to sources with the potential to emit between 30,000 and
75,000 tpy CO2e. At a project scale, if we were to consider
a single hypothetical, combustion-related project with a GHG emissions
increase of 74,999 tpy CO2e (just under the 75,000 tpy
CO2e proposed GHG SER level) and a maximum energy efficiency
gain through GHG BACT review of 7 percent described above, the maximum
marginal difference in GHG emissions that could result from applying
BACT to GHGs is approximately 5,500 tpy CO2e. Given the
limited number of projects expected in this 30,000 to 75,000 tpy
CO2e range and the limited amount of emissions reductions
that could theoretically be achieved at each source, from a
programmatic perspective, there is little to be gained in terms of
overall reduction in GHG emissions from applying GHG BACT review at a
GHG SER level below 75,000 tpy CO2e. Thus, we propose to
conclude that the burdens of regulation at a GHG SER level between
30,000 and 75,000 tpy CO2e would yield a gain of trivial or
no value from both a programmatic and individual project-level
perspective.
For PSD modification projects that increase GHGs by less than
30,000 tpy CO2e, we found virtually no value in applying the
GHG BACT requirement. We found through both our equivalency analysis
and permitting reviews that these smaller emitting unit projects will
typically not qualify as ``anyway source'' projects by themselves. In
addition, we found that many smaller emissions units will often be
pulled into the GHG BACT analysis because they are ancillary units to a
larger combustion unit that emits well above 75,000 tpy
CO2e; examples include emission units such as flares,
thermal oxidizers, emergency generators, and fugitive emission leaks.
Since the types of units adding GHGs in amounts less than 30,000 tpy
CO2e would not likely trigger PSD at all or would already be
covered because of other changes occurring at the same time, lowering
the GHG threshold to 30,000 tpy CO2e would subject few, if
any, additional projects to the GHG BACT requirements. In cases where a
project theoretically could increase emissions of a pollutant besides
GHGs enough to trigger PSD, the project would involve emission units
such as IC engines. There is virtually no value obtained in conducting
a GHG BACT review of such a unit. We found that ``off-the-shelf''
combustion units, such as IC engines, are generally meeting
manufacturers' performance and efficiency compliance standards
established by DOE and the EPA for new units with only marginal
variations in efficiency ratings on newly purchased units. Also, we do
not expect that GHG BACT review for IC engines would produce any
reductions for GHGs beyond that resulting from the NSPS compliance
standards that already exist for these new units. Thus, the gain from
applying BACT to GHG emissions would yield a gain of virtually no value
and be a pointless expenditure of effort. This is even more apparent
when considered in light of the administrative burdens of conducting a
case-by-case BACT analysis for GHGs at such sources. Thus, the EPA is
not considering establishing a GHG SER level below 30,000 tpy
CO2e.
We are soliciting comment on the extent to which our proposed GHG
SER level of 75,000 tpy CO2e reflects a level below which
the burdens of applying the BACT requirement to GHGs would ``yield a
gain of trivial or no value'' and
[[Page 68138]]
thus would be a ``pointless expenditure of effort'' when applied to all
of the affected units and sources. We are also soliciting comment on
whether a value between 30,000 and 75,000 tpy CO2e,
specifically such as 30,000 tpy or 45,000 tpy CO2e, would
better represent a de minimis threshold for applying the BACT
requirement to GHGs. We encourage commenters to consider the following
in submitting comments. Comments, arguments, and supporting data for a
specific GHG SER level other than 75,000 tpy CO2e should
identify a more appropriate level and explain why that specific level
would be better. Commenters are encouraged to provide information as to
the likely number and type of new or modified emission sources and
units that would trigger PSD and be subject to the GHG BACT requirement
at the suggested alternative GHG SER level. Comments should also
address what source categories would be affected, what types of control
technique would be considered in the GHG BACT review, the expected
degree of GHG reductions achievable from such control techniques, and
the anticipated burden to permitting authorities and sources of
conducting a BACT analysis at the specific alternative level.
In soliciting comment for a SER between 30,000 and 75,000 tpy
CO2e, we recognize that sources and others in the public may
have access to information that is not available to the Agency and that
may inform an appropriate SER level. Therefore, we are specifically
soliciting comment on and requesting data for areas in our technical
analysis where commenters believe such information will provide support
for adjusting our applied assumptions. However, commenters should keep
in mind that the universe of future PSD permitting is constrained by
the U.S. Supreme Court's decision limiting the program to ``anyway
sources'' and modifications at ``anyway sources.'' The GHG BACT
requirement is potentially applicable only to sources and modifications
that would otherwise trigger PSD requirements based on emissions of
pollutants other than GHGs.
We are proposing a GHG SER value based on the GHG metric of
CO2e, representing the single air pollutant defined as the
aggregate group of the six well-mixed greenhouse gases (CO2,
N2O, CH4, HFCs, PFCs and SF6). As
explained earlier, this aggregate pollutant is measured in terms of
``carbon dioxide equivalent'' or ``CO2e'' emissions, which
is a metric that allows all the compounds comprising GHGs to be
evaluated on an equivalent basis despite the fact that the different
compounds have different heat-trapping capacities. The GWP that has
been determined for each compound reflects its heat-trapping capacity
relative to CO2. The mass of emissions of a constituent
compound is multiplied by its GWP to determine the emissions in terms
of CO2e. A source's emissions of all compounds in terms of
CO2e are summed to determine the source's total GHG
emissions.\94\ This construct differs from other pollutant SERs based
solely on a mass basis; however, we believe, as we did in the Tailoring
Rule, that the CO2e metric is consistent with the definition
of the pollutant as defined in the Administrator's endangerment and
contribution findings regarding GHGs (74 FR 66496) and that by
incorporating the GWP values, best addresses the relevant environmental
endpoint, which is the radiative forcing of the GHGs emitted. We also
see no requirement for using a mass-based calculation method for the
GHG SER, such as we determined necessary in the Tailoring Rule. The
determination that a mass-based calculation method was a necessary
first step under the Tailoring rule was due to the statutory 100 and
250 tpy levels in the statutory definition of ``major emitting
facility.'' \95\ The SERs are based on EPA's inherent authority to
identify a de minimis level of GHG emissions for purposes of
determination applicability of the statutory BACT provisions of the
CAA. These provisions in the Act do not include a mass-based emissions
applicability threshold. In addition, the emissions thresholds in the
definition of major stationary source that influenced our reasoning in
the Tailoring rule are no longer applicable to GHGs in light of the
U.S. Supreme Court's decision in UARG.
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\94\ See the accompanying proposed regulatory text to this
preamble at 40 CFR 51.666 (b)(31) and 40 CFR 52.21(b)(32) for
further details on the calculation of CO2e emissions.
\95\ See 75 FR 31531 for background on why this step was needed
in Tailoring Rule.
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In addition to consistency with the Administrator's endangerment
and contribution findings, there are programmatic and policy advantages
to using the ``sum-of-six'' construct based on CO2e for
purposes of the GHG SER BACT review. One significant advantage to this
construct is that it allows more flexibility to sources for designing
and implementing control strategies that maximize reductions across
multiple GHGs. From a programmatic standpoint, the CO2e
metric facilitates permitting authorities' review and consideration of
the combined effect of the six individual GHGs when sources emit any
one or combination of the individual gases. Also, given that Congress
built in considerations of energy, environmental, and economic impacts
into the BACT requirement, we think that allowing consideration of
those factors across six gases will result in decisions that more
appropriately account for those impacts at the source. In summary, we
see no statutory requirement or programmatic advantages for considering
a GHG SER value that incorporates a mass-based component; however, we
welcome comments on whether such a need exists and how such a component
would function for GHG BACT applicability purposes.
Lastly, we are also requesting any specific comments related to the
administrative and enforcement burdens associated with implementing GHG
BACT review at the proposed GHG SER level (75,000 tpy CO2e),
or at a suggested alternative GHG SER level. Due to the relatively
short history of applying the BACT requirement to GHGs (as compared to
PSD permitting overall), the limited experience in applying BACT to
GHGs permitting in some sectors, and the overall uncertainties in
predicting exact levels of future PSD activity, we solicit any comments
pertaining specifically to the administrative and programmatic burdens
associated with the proposed GHG SER and applying the BACT review
process to GHGs emitted at that level or at a suggested alternative
level. We also solicit comments from all parties, including the
regulated community and permitting authorities, as well as commenters
supporting an alternative threshold, as to the administrative and
enforcement burdens of establishing a de minimis threshold at the
suggested alternative level.
VI. What would be the economic impacts of the proposed rule?
The main focus of the Economic Impact Analysis (EIA) is the cost
savings to permitting authorities and affected sources due to ``anyway
sources'' that are below the proposed de minimis GHG SER not having to
go through GHG BACT review. If not for provisions we are proposing to
remove in this proposal and that currently remain in the EPA's
definition of ``subject to regulation'' at this time, under the present
definition of ``significant'' in the PSD regulations, any GHG emissions
increase would require a newly constructed major source of another
regulated NSR pollutant, or a major modification at an existing
facility significantly increasing another pollutant, to undergo PSD GHG
[[Page 68139]]
BACT review.\96\ Therefore, the EIA includes estimated costs relative
to a ``no-action'' scenario where the current functioning GHG
permitting level of 75,000 tpy CO2e would no longer be
applicable and any increase in GHG emissions at sources otherwise
subject to PSD would trigger the requirement for a GHG BACT analysis.
The proposed rule would remove the requirement of conducting the GHG
BACT review, as well as the need to include the requirements resulting
from this GHG BACT review in a source's title V permit, for sources
with GHG emissions increases less than the proposed GHG SER. A summary
of the avoided costs relative to the ``no-action'' scenario for both
PSD and title V programs based on the proposed 75,000 tpy
CO2e GHG SER is described in the following paragraphs.
Details related to the EIA are documented in the report titled
``Economic Impact Analysis for Revisions to the Prevention of
Significant Deterioration and Title V Greenhouse Gas Permitting
Regulations and Establishment of a Significant Emissions Rate for
Greenhouse Gas Emissions Under the Prevention of Significant
Deterioration Program: Proposed Rule.'' This report is available in the
rulemaking docket.
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\96\ Definition of ``significant,'' 40 CFR 51.166(b)(23)(ii) and
40 CFR 52.21(b)(23)(ii).
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For affected sources, the avoided permitting cost or savings for
PSD permits is approximately $23,532 per permit (in 2014 dollars).
Total annual avoided cost program-wide is under $870,000 for sources
that would not have to go through GHG BACT review. State, local and
tribal permitting authorities are estimated to expend $4,400 per permit
to conduct a GHG BACT review in the context of reviewing a PSD permit
application for a source with GHG emissions in the applicable range.
Thus, annual savings for permitting authorities program-wide are less
than $165,000 at a 75,000 tpy CO2e GHG SER.
We anticipate sources subject to title V will experience avoided
regulatory costs because they will not have to add requirements to
their title V permit resulting from a GHG BACT review. Avoided cost is
estimated at approximately $2,470 per permit for addressing GHG
requirements in a new permit, and $520 per permit for revising an
existing permit to include requirements related to a GHG BACT limit.
Total program-wide savings for title V permitting related to the
proposed GHG SER of 75,000 tpy CO2e is less than $20,000
dollars per year for sources. Regulatory cost avoided relative to no
GHG SER for state, local, and tribal permitting authorities is
estimated at $2,632 per permit for adding GHG requirements to a new
permit, and $504 per permit for revisions to existing permits. At the
proposed GHG SER of 75,000 tpy CO2e, title V program-wide
avoided costs for permitting authorities totals approximately $20,000
per year.
Total annual regulatory cost avoided relative to no GHG SER for
sources for both PSD and title V programs together amounts to less than
$890,000 at the proposed 75,000 tpy CO2e GHG SER level.
Total annual avoided costs for permitting authorities for both PSD and
title V programs together is expected to be less than $185,000 at the
proposed 75,000 tpy CO2e GHG SER level. This rulemaking does
not impose economic impacts on any sources or permitting authorities,
but should instead be viewed as leading to savings for ``anyway
sources'' and permitting authorities. Because no businesses or
governmental entities are expected to incur positive costs as a result
of this rule, there is not a significant impact on a substantial number
of small entities. Because the savings are small and spread among many
sources, the market impacts of this rule will be minimal.
VII. How should state, local and tribal authorities adopt the
regulatory revisions included in this action?
Consistent with the PSD regulations for SIP-approved programs at 40
CFR 51.166 and the title V regulations for title V program approvals at
40 CFR part 70, the EPA expects that many state, local and tribal
permitting authorities will amend their respective PSD and title V
permitting regulations and seek revisions of their SIPs, TIPs or title
V program approvals, as applicable, to incorporate (once finalized) the
regulatory changes consistent with those contained in this proposal.
For PSD, 40 CFR part 51.166(a)(6)(i) states that ``any state
required to revise its implementation plan by reason of an amendment to
section [51.166]. . . shall adopt and submit such plan revision to the
Administrator for approval no later than three years after such
amendment is published in the Federal Register.'' Therefore, any
implementation plan that defines a source or modification as major
based solely on GHGs emissions will require a revision to conform to
the amendments to 40 CFR part 51.166 proposed in this rule. However,
states may elect not to incorporate a significant emissions rate for
GHGs into their program if they wish to apply BACT to GHGs at sources
emitting or increasing this pollutant by any amount.
We request comment on what we described in our Preliminary Views
Memo as the ``most efficient and least burdensome way to accomplish
such revisions to state, [local], or tribal programs'' to meet the SIP
or TIP submittal requirements, as applicable.\97\ Furthermore, we ask
for comments on whether the Administrator should shorten the 3-year
time period required under 40 CFR part 51.166(a)(6) (and section
110(a)(1) of the CAA, to the extent applicable), for each state, or
local permitting authority to revise its SIP or TIP (or make a new
submission).
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\97\ Next Steps and Preliminary Views on the Application of
Clean Air Act (CAA) Permitting Programs to Greenhouse Gases
Following the Supreme Court's Decision in UARG v. EPA, Memorandum
from Janet G. McCabe, Acting Assistant Administrator, Office of Air
and Radiation, and Cynthia Giles, Assistant Administrator, Office of
Enforcement and Compliance Assurance, U.S. EPA, to Regional
Administrators, p. 5, July 24, 2014.
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For purposes of the title V program, 40 CFR part 70.4(a) states in
relevant part that: ``If part 70 is subsequently revised such that the
Administrator determines that it is necessary to require a change to an
approved State program, the required revisions to the program shall be
submitted within 12 months of the final changes to part 70 or within
such a period as authorized by the Administrator.'' Since we believe
that the changes being proposed, once finalized, may require changes to
many EPA-approved state title V programs, we also ask for comments on
the most efficient way to accomplish those title V program revisions
and what time period would be appropriate for those revisions.
Furthermore, SIP revisions for the PSD program and revisions to
title V programs that still include the Step 2 provisions may be needed
if any permitting authorities prefer to retain under state law the
construction or operating permit requirements equivalent to the PSD and
title V permitting requirements for Step 2 sources that are no longer
approvable parts of a PSD or title V program under federal law. In the
Preliminary View Memo, we stated that ``we do not read the [UARG v EPA]
U.S. Supreme Court decision to preclude states from retaining
permitting requirements for sources of GHG emissions that apply
independently under state law even when those requirements are no
longer required under federal law'' \98\ and that
[[Page 68140]]
``similar to state-law construction permitting requirements, the [UARG
v EPA] U.S. Supreme Court decision does not preclude states from
continuing to require that certain types of sources obtain operating
permits meeting requirements that apply independently under state
law.'' \99\ Therefore, state, local, or tribal programs wishing to
retain construction or operating permit requirements equivalent to the
PSD and title V permitting requirements for Step 2 sources as a matter
of state, local or tribal law should consult with the EPA Regional
offices on how best to retain those requirements as appropriate, while
excluding them from the EPA-approved SIPs, TIPs or title V
programs.\100\
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\98\ Next Steps and Preliminary Views on the Application of
Clean Air Act (CAA) Permitting Programs to Greenhouse Gases
Following the Supreme Court's Decision in UARG v. EPA, Memorandum
from Janet G. McCabe, Acting Assistant Administrator, Office of Air
and Radiation, and Cynthia Giles, Assistant Administrator, Office of
Enforcement and Compliance Assurance, U.S. EPA, to Regional
Administrators, p. 4, July 24, 2014.
\99\ Id. at 5.
\100\ As noted previously, while the UARG decision and the
Amended Judgment determined that the EPA may no longer require a
source to obtain a title V permit solely because it emits or has the
potential to emit GHGs above major source thresholds, the agency
does not read the UARG decision or the Amended Judgment to affect
other grounds on which a title V permit may be required or the
applicable requirements that must be addressed in title V permits.
Thus, as explained previously, the EPA's proposed revisions are not
intended to change the existing title V requirements in that regard
and the EPA would not expect proposed revisions to the EPA-approved
programs to change those requirements, either.
---------------------------------------------------------------------------
In cases where state, tribal or local air pollution control
agencies incorporate the federal regulations by reference or do not
have an approved SIP or TIP for the PSD program or a title V program
approval for the title V permitting requirements, the federal PSD
program at 40 CFR 52.21 and the title V program at 40 CFR part 71
apply, respectively. Therefore, the EPA anticipates that the revisions
included in this proposal will likely apply automatically to these
programs once finalized.
VIII. Environmental Justice Considerations
This action proposes certain revisions to the PSD and title V GHG
permitting regulations in response to the June 23, 2014, UARG v. EPA
U.S. Supreme Court decision and the April 10, 2015, Amended Judgment by
the D.C. Circuit in Coalition for Responsible Regulation v. EPA. To
comport with these decisions, the proposed revisions would ensure that
neither PSD nor title V rules require a source to obtain a permit
solely because the source emits or has the PTE GHGs above the
applicable thresholds. It also establishes a SER for GHGs that would
serve to determine when a source otherwise subject to PSD would be
required to conduct a BACT analysis for GHGs. Therefore, this proposed
action itself does not compel any specific changes to our permitting
public participation requirements nor does it finalize a particular
permit action that may affect the fair treatment and meaningful
involvement of all people. Rather, it ensures that the Coalition
Amended Judgment is implemented and makes clear in the EPA's PSD
regulations that sources are no longer required to submit a PSD permit
application if GHGs are the only pollutant that the sources emits above
the applicable major source thresholds or that will increase in major
amounts due to a modification of an existing major sources. Similarly,
this proposed rule clarifies in the EPA's title V regulations that a
source is not required to apply for title V permit solely because it
emits or has the PTE GHGs above the major source threshold.
IX. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review
This action is a significant regulatory action that was submitted
to the Office of Management and Budget (OMB) for review because it
raises novel legal or policy issues. Any changes made in response to
OMB recommendations have been documented in the docket. The EPA
prepared an EIA of the potential costs and benefits associated with
this action, which is discussed in Section VI of this preamble. This
analysis, ``Economic Impact Analysis for the Revisions to the
Prevention of Significant Deterioration and Title V Greenhouse Gas
Permitting Regulations and Establishment of a Significant Emissions
Rate for Greenhouse Gas Emissions under the Prevention of Significant
Deterioration Program; Proposed Rule,'' is available in the rulemaking
docket.
B. Paperwork Reduction Act (PRA)
This action does not impose any new information collection burden
under the PRA. The OMB has previously approved the information
collection activities contained in the existing regulations and has
assigned OMB control number 2060-0003 for the PSD program and OMB
control numbers 2060-0243 and 2060-0336 for the title V part 70 and
part 71 programs, respectively.
This action does not impose an information collection burden
because it does not impose a new or revised information collection
burden for stationary sources of air pollution. Instead, the regulatory
revisions reduce the number of sources that may be subject to the PSD
and title V program due to the sources' GHG emissions. Specifically,
this proposed action revises several regulatory provisions under the
federal and state-specific PSD and title V regulations and establishes
a GHG SER for the PSD program.
C. Regulatory Flexibility Act (RFA)
I certify that this action will not have a significant economic
impact on a substantial number of small entities under the RFA. In
making this determination, the impact of concern is any significant
adverse economic impact on small entities. An agency may certify that a
rule will not have a significant economic impact on a substantial
number of small entities if the rule relieves regulatory burden, has no
net burden or otherwise has a positive economic effect on the small
entities subject to the rule. This rule relieves regulatory burden
because it reduces the number of sources that may be subject to the PSD
and title V program due to the sources' GHG emissions. We have,
therefore, concluded that this action will relieve regulatory burden
for all directly regulated small entities.
D. Unfunded Mandates Reform Act (UMRA)
This action does not contain an unfunded mandate of $100 million or
more as described in UMRA, 2 U.S.C. 1531-1538, and does not
significantly or uniquely affect small governments. The EPA expects
that many state, local and tribal permitting authorities will amend
their respective PSD and title V permitting regulations and seek
revisions of their SIPs, TIPs or title V program approvals, as
applicable, to incorporate, once finalized, the regulatory changes
consistent with those in this proposed action. This will result in a
small increase in burden to these entities. However, as discussed in
Section VI of this preamble, this proposed action is expected to result
in cost savings and an administrative burden reduction for permitting
authorities. We have therefore concluded that there are no unfunded
mandates greater than $100 million or any significant or unique effect
on small governments.
E. Executive Order 13132: Federalism
This action does not have federalism implications. It will not have
substantial direct effects on the states, on the relationship between
the national government and the states or on the
[[Page 68141]]
distribution of power and responsibilities among the various levels of
government.
F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
This action does not have tribal implications, as specified in
Executive Order 13175. The proposed rule would not impose substantial
direct compliance costs on Indian tribal governments nor preempt tribal
law. There are no tribal agencies currently implementing the PSD
program under a tribal implementation plan under 40 CFR part 51.166 or
delegation of the federal PSD program at 40 CFR part 52.21. Only two
tribes are implementing the title V program, one through the approval
of its title V program under 40 CFR part 70 and one through a
delegation agreement under 40 CFR part 71. In addition and as explained
previously, this proposed action relieves regulatory burden because it
reduces the number of sources that may be subject to the PSD and title
V program due to the sources' GHG emissions. Specifically, this action
revises several regulatory provisions under the federal and state-
specific PSD and title V regulations and establishes a GHG SER for the
PSD program. If the current PSD GHG permitting level of 75,000 tpy
CO2e were to not be applicable, as described in the
Preliminary Views Memo, any increase in GHG emissions at sources
otherwise subject to PSD would trigger the requirement for a GHG BACT
analysis and thus increase the permitting costs and burden for both
permittees (including entities in tribal areas) and permitting
authorities (including any tribal agencies). Tribal programs may need
to make minor changes to their title V program approvals and their
implementing regulations, as applicable, to incorporate, once
finalized, the regulatory changes being proposed in this action.
Nevertheless, we expect the burden of undertaking those revisions to be
minimal as compared to the burden of applying and reviewing the permits
for GHG-emitting sources that would otherwise be subject to title V
program without the regulatory revisions included in this proposed
action. Thus, Executive Order 13175 does not apply to this action.
G. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks
The EPA interprets Executive Order 13045 as applying only to those
regulatory actions that concern environmental health or safety risks
that the EPA has reason to believe may disproportionately affect
children, per the definition of ``covered regulatory action'' in
section 2-202 of the Executive Order. This action is not subject to
Executive Order 13045 because it does not concern an environmental
health risk or safety risk.
H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution or Use
This action is not a ``significant energy action'' because it is
not likely to have a significant adverse effect on the supply,
distribution or use of energy. Further, we have concluded that this
rule is not likely to have any adverse energy effects because to the
extent that this action would affect PSD and title V permit applicants
in the energy supply, distribution or use sectors, it would reduce the
permitting burden for such sectors.
I. National Technology Transfer and Advancement Act
This rulemaking does not involve technical standards.
J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations
The EPA believes the human health or environmental risk addressed
by this action will not have potential disproportionately high and
adverse human health or environmental effects on minority, low-income
or indigenous populations. The results of this evaluation are contained
in Section VIII of this preamble titled, ``Environmental Justice
Considerations'' for this action.
K. Determination Under CAA Section 307(d)
Pursuant to CAA 307(d)(1)(J) and 307(d)(1)(V), the Administrator
determines that this action is subject to the provisions of section
307(d). Section 307(d)(1)(J) provides that the provisions of section
307(d) apply to promulgation or revision of regulations under part C of
title I of the CAA (relating to PSD and protection of visibility), and
section 307(d)(1)(V) of the CAA provides that the provisions of section
307(d) apply to such other actions as the Administrator may determine.
X. Statutory Authority
The statutory authority for this action is 42 U.S.C. 7401-7671q.
List of Subjects
40 CFR Part 51
Environmental protection, Administrative practice and procedure,
Air pollution control, Carbon monoxide, Greenhouse gases,
Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate
matter, Reporting and recordkeeping requirements, Sulfur oxides,
Transportation, Volatile organic compounds.
40 CFR Part 52
Environmental protection, Air pollution control, Carbon monoxide,
Greenhouse gases, Intergovernmental relations, Lead, Nitrogen dioxide,
Ozone, Particulate matter, Reporting and recordkeeping requirements,
Sulfur oxides, Volatile organic compounds.
40 CFR Part 60
Environmental protection, Administrative practice and procedure,
Air pollution control, Greenhouse gases, Intergovernmental relations,
Reporting and recordkeeping requirements.
40 CFR Part 70
Environmental protection, Administrative practice and procedure,
Air pollution control, Greenhouse gases, Intergovernmental relations,
Reporting and recordkeeping requirements.
40 CFR Part 71
Environmental protection, Administrative practice and procedure,
Air pollution control, Greenhouse gases, Reporting and recordkeeping
requirements.
Dated: August 26, 2016.
Gina McCarthy,
Administrator.
For the reasons stated in the preamble, title 40, Chapter I of the
Code of Federal Regulations is proposed to be amended as follows:
PART 51--REQUIREMENTS FOR PREPARATION, ADOPTION, AND SUBMITTAL OF
IMPLEMENTATION PLANS
0
1. The authority citation for part 51 continues to read as follows:
Authority: 42 U.S.C. 7401-7671q.
Subpart I--Review of New Sources and Modifications
0
2. Section 51.166 is amended by:
0
a. Revising paragraphs (b)(1)(i)(a) and (b);
0
b. Revising paragraph (b)(2)(i);
0
c. Revising paragraph (b)(23)(i);
0
d. Adding paragraph (b)(31); and
0
e. Revising paragraph (b)(48).
[[Page 68142]]
The revisions and addition read as follows:
Sec. 51.166 Prevention of significant deterioration of air quality.
* * * * *
(b) * * *
(1) * * *
(i) * * *
(a) Any of the following stationary sources of air pollutants which
emits, or has the potential to emit, 100 tons per year or more of any
regulated NSR pollutant (except the pollutant greenhouse gases as
defined in paragraph (b)(31) of this section): Fossil fuel-fired steam
electric plants of more than 250 million British thermal units per hour
heat input, coal cleaning plants (with thermal dryers), kraft pulp
mills, Portland cement plants, primary zinc smelters, iron and steel
mill plants, primary aluminum ore reduction plants (with thermal
dryers), primary copper smelters, municipal incinerators capable of
charging more than 250 tons of refuse per day, hydrofluoric, sulfuric,
and nitric acid plants, petroleum refineries, lime plants, phosphate
rock processing plants, coke oven batteries, sulfur recovery plants,
carbon black plants (furnace process), primary lead smelters, fuel
conversion plants, sintering plants, secondary metal production plants,
chemical process plants (which does not include ethanol production
facilities that produce ethanol by natural fermentation included in
NAICS codes 325193 or 312140), fossil-fuel boilers (or combinations
thereof) totaling more than 250 million British thermal units per hour
heat input, petroleum storage and transfer units with a total storage
capacity exceeding 300,000 barrels, taconite ore processing plants,
glass fiber processing plants, and charcoal production plants;
(b) Notwithstanding the stationary source size specified in
paragraph (b)(1)(i)(a) of this section, any stationary source which
emits, or has the potential to emit, 250 tons per year or more of a
regulated NSR pollutant (except the pollutant greenhouse gases as
defined in paragraph (b)(31) of this section); or
* * * * *
(2) * * *
(i) Major modification means any physical change in or change in
the method of operation of a major stationary source that would result
in: A significant emissions increase (as defined in paragraph (b)(39)
of this section) of a regulated NSR pollutant (as defined in paragraph
(b)(49) of this section) other than the pollutant greenhouse gases (as
defined in paragraph (b)(31) of this section); and a significant net
emissions increase of that regulated NSR pollutant from the major
stationary source.
* * * * *
(23) * * *
(i) Significant means, in reference to a net emissions increase or
the potential of a source to emit any of the following pollutants, a
rate of emissions that would equal or exceed any of the following
rates:
Pollutant and Emissions Rate
Carbon monoxide: 100 tons per year (tpy)
Nitrogen oxides: 40 tpy
Sulfur dioxide: 40 tpy
Particulate matter: 25 tpy of particulate matter emissions
PM10: 15 tpy
PM2.5: 10 tpy of direct PM2.5 emissions; 40 tpy of sulfur
dioxide emissions; 40 tpy of nitrogen oxide emissions unless
demonstrated not to be a PM2.5 precursor under paragraph
(b)(49) of this section
Ozone: 40 tpy of volatile organic compounds or nitrogen oxides
Lead: 0.6 tpy
Fluorides: 3 tpy
Sulfuric acid mist: 7 tpy
Hydrogen sulfide (H2S): 10 tpy
Total reduced sulfur (including H2S): 10 tpy
Reduced sulfur compounds (including H2S): 10 tpy
Greenhouse gases: 75,000 tpy CO2e
Municipal waste combustor organics (measured as total tetra- through
octa-chlorinated dibenzo-p-dioxins and dibenzofurans): 3.2 x
10-\6\ megagrams per year (3.5 x 10-\6\ tons per
year)
Municipal waste combustor metals (measured as particulate matter): 14
megagrams per year (15 tons per year)
Municipal waste combustor acid gases (measured as sulfur dioxide and
hydrogen chloride): 36 megagrams per year (40 tons per year)
Municipal solid waste landfill emissions (measured as nonmethane
organic compounds): 45 megagrams per year (50 tons per year)
* * * * *
(31) Greenhouse gases (GHGs) means the air pollutant defined in
Sec. 86.1818-12(a) of this chapter as the aggregate group of six
greenhouse gases: Carbon dioxide, nitrous oxide, methane,
hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride. To
represent an amount of GHGs emitted, the term tpy CO2 equivalent
emissions (CO2e) shall be used and computed as follows:
(a) Multiply the mass amount of emissions (tpy), for each of the
six greenhouse gases in the pollutant GHGs, by the gas's associated
global warming potential published at Table A-1 to subpart A of part 98
of this chapter--Global Warming Potentials.
(b) Sum the resultant value for each gas to compute a tpy
CO2e.
* * * * *
(48) Subject to regulation means, for any air pollutant, that the
pollutant is subject to either a provision in the Clean Air Act, or a
nationally-applicable regulation codified by the Administrator in
subchapter C of this chapter, that requires actual control of the
quantity of emissions of that pollutant, and that such a control
requirement has taken effect and is operative to control, limit or
restrict the quantity of emissions of that pollutant released from the
regulated activity. Pollutants subject to regulation include, but are
not limited to, greenhouse gases as defined in paragraph (b)(31) of
this section.
* * * * *
PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS
0
3. The authority citation for part 52 continues to read as follows:
Authority: 42 U.S.C. 7401 et seq.
Subpart A--General Provisions
0
4. Section 52.21 is amended by:
0
a. Revising paragraphs (b)(1)(i)(a) and (b);
0
b. Revising paragraph (b)(2)(i);
0
c. Revising paragraph (b)(23)(i);
0
d. Adding paragraph (b)(32);
0
e. Revising paragraph (b)(49);
0
f. Revising paragraph (aa)(1);
0
g. Revising paragraphs (aa)(2)(i) and (iii);
0
h. Removing paragraph (aa)(2)(iv)(c);
0
i. Revising paragraphs (aa)(2)(v), (viii) through (xi);
0
j. Removing paragraphs (aa)(2)(xii)through (xv);
0
k. Revising paragraph (aa)(3) introductory text;
0
l. Removing paragraph (aa)(3)(iv);
0
m. Revising paragraph (aa)(4)(i) introductory text;
0
n. Revising paragraphs (aa)(4)(i)(a), (d) and (g);
0
o. Revising paragraph (aa)(5);
0
p. Revising paragraph (aa)(6)(i);
0
q. Removing paragraph (aa)(6)(iii);
0
r. Revising paragraph (aa)(7) introductory text;
0
s. Revising paragraphs (aa)(7)(i), (iii), (v), (vi) and (vii);
0
t. Removing paragraph (aa)(7)(xi);
0
u. Revising paragraph (aa)(8)(ii)(b)(2);
0
v. Revising paragraph (aa)(9)(i)(a);
0
w. Revising paragraphs (aa)(9)(iv) and (v);
0
x. Revising paragraphs (aa)(10)(i) and (ii);
[[Page 68143]]
0
y. Revising paragraphs (aa)(10)(iv)(c)(1) and (2);
0
z. Revising paragraph (aa)(11)(i) introductory text;
0
aa. Revising paragraphs (aa)(11)(i)(a) and (b);
0
bb. Revising paragraph (aa)(12)(i)(a);
0
cc. Revising paragraphs (aa)(14)(i)(b) and (d); and
0
dd. Revising paragraph (aa)(14)(ii) introductory text.
The revisions and addition read as follows:
Sec. 52.21 Prevention of significant deterioration of air quality.
* * * * *
(b) * * *
(1) * * *
(i) * * *
(a) Any of the following stationary sources of air pollutants which
emits, or has the potential to emit, 100 tons per year or more of any
regulated NSR pollutant (except the pollutant greenhouse gases as
defined in paragraph (b)(32) of this section): Fossil fuel-fired steam
electric plants of more than 250 million British thermal units per hour
heat input, coal cleaning plants (with thermal dryers), kraft pulp
mills, portland cement plants, primary zinc smelters, iron and steel
mill plants, primary aluminum ore reduction plants (with thermal
dryers), primary copper smelters, municipal incinerators capable of
charging more than 250 tons of refuse per day, hydrofluoric, sulfuric,
and nitric acid plants, petroleum refineries, lime plants, phosphate
rock processing plants, coke oven batteries, sulfur recovery plants,
carbon black plants (furnace process), primary lead smelters, fuel
conversion plants, sintering plants, secondary metal production plants,
chemical process plants (which does not include ethanol production
facilities that produce ethanol by natural fermentation included in
NAICS codes 325193 or 312140), fossil-fuel boilers (or combinations
thereof) totaling more than 250 million British thermal units per hour
heat input, petroleum storage and transfer units with a total storage
capacity exceeding 300,000 barrels, taconite ore processing plants,
glass fiber processing plants, and charcoal production plants;
(b) Notwithstanding the stationary source size specified in
paragraph (b)(1)(i)(a) of this section, any stationary source which
emits, or has the potential to emit, 250 tons per year or more of a
regulated NSR pollutant (except the pollutant greenhouse gases as
defined in paragraph (b)(32) of this section); or
* * * * *
(2) * * *
(i) Major modification means any physical change in or change in
the method of operation of a major stationary source that would result
in: A significant emissions increase (as defined in paragraph (b)(40)
of this section) of a regulated NSR pollutant (as defined in paragraph
(b)(50) of this section) other than the pollutant greenhouse gases (as
defined in paragraph (b)(32) of this section); and a significant net
emissions increase of that regulated NSR pollutant from the major
stationary source.
* * * * *
(23) * * *
(i) Significant means, in reference to a net emissions increase or
the potential of a source to emit any of the following pollutants, a
rate of emissions that would equal or exceed any of the following
rates:
Pollutant and Emissions Rate
Carbon monoxide: 100 tons per year (tpy)
Nitrogen oxides: 40 tpy
Sulfur dioxide: 40 tpy
Particulate matter: 25 tpy of particulate matter emissions
PM10: 15 tpy
PM2.5: 10 tpy of direct PM2.5 emissions; 40 tpy of sulfur
dioxide emissions; 40 tpy of nitrogen oxide emissions unless
demonstrated not to be a PM2.5 precursor under paragraph
(b)(50) of this section
Ozone: 40 tpy of volatile organic compounds or nitrogen oxides
Lead: 0.6 tpy
Fluorides: 3 tpy
Sulfuric acid mist: 7 tpy
Hydrogen sulfide (H2S): 10 tpy
Total reduced sulfur (including H2S): 10 tpy
Reduced sulfur compounds (including H2S): 10 tpy
Greenhouse gases: 75,000 tpy CO2e
Municipal waste combustor organics (measured as total tetra- through
octa-chlorinated dibenzo-p-dioxins and dibenzofurans): 3.2 x
10-\6\ megagrams per year (3.5 x 10-\6\ tons per
year)
Municipal waste combustor metals (measured as particulate matter): 14
megagrams per year (15 tons per year)
Municipal waste combustor acid gases (measured as sulfur dioxide and
hydrogen chloride): 36 megagrams per year (40 tons per year)
Municipal solid waste landfill emissions (measured as nonmethane
organic compounds): 45 megagrams per year (50 tons per year)
* * * * *
(32) Greenhouse gases (GHGs) means the air pollutant defined in
Sec. 86.1818-12(a) of this chapter as the aggregate group of six
greenhouse gases: Carbon dioxide, nitrous oxide, methane,
hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride. To
represent an amount of GHGs emitted, the term tpy CO2 equivalent
emissions (CO2e) shall be used and computed as follows:
(a) Multiply the mass amount of emissions (tpy), for each of the
six greenhouse gases in the pollutant GHGs, by the gas's associated
global warming potential published at Table A-1 to subpart A of part 98
of this chapter--Global Warming Potentials.
(b) Sum the resultant value for each gas to compute a tpy
CO2e.
* * * * *
(49) Subject to regulation means, for any air pollutant, that the
pollutant is subject to either a provision in the Clean Air Act, or a
nationally-applicable regulation codified by the Administrator in
subchapter C of this chapter, that requires actual control of the
quantity of emissions of that pollutant, and that such a control
requirement has taken effect and is operative to control, limit or
restrict the quantity of emissions of that pollutant released from the
regulated activity. Pollutants subject to regulation include, but are
not limited to, greenhouse gases as defined in paragraph (b)(32) of
this section.
* * * * *
(aa) * * *
(1) * * *
(i) The Administrator may approve the use of an actuals PAL for any
existing major stationary source if the PAL meets the requirements in
paragraphs (aa)(1) through (15) of this section. The term ``PAL'' shall
mean ``actuals PAL'' throughout paragraph (aa) of this section.
(ii) Any physical change in or change in the method of operation of
a major stationary source that maintains its total source-wide
emissions below the PAL level, meets the requirements in paragraphs
(aa)(1) through (15) of this section, and complies with the PAL permit:
(a) Is not a major modification for the PAL pollutant;
(b) Does not have to be approved through the PSD program; and
(c) Is not subject to the provisions in paragraph (r)(4) of this
section (restrictions on relaxing enforceable emission limitations that
the major stationary source used to avoid applicability of the major
NSR program).
(iii) Except as provided under paragraph (aa)(1)(ii)(c) of this
section, a major stationary source shall continue to comply with all
applicable Federal or State requirements, emission limitations, and
work practice
[[Page 68144]]
requirements that were established prior to the effective date of the
PAL.
(2) * * *
(i) Actuals PAL for a major stationary source means a PAL based on
the baseline actual emissions (as defined in paragraph (b)(48) of this
section) of all emissions units (as defined in paragraph (b)(7) of this
section) at the source, that emit or have the potential to emit the PAL
pollutant.
* * * * *
(iii) Small emissions unit means an emissions unit that emits or
has the potential to emit the PAL pollutant in an amount less than the
significant level for that PAL pollutant, as defined in paragraph
(b)(23) of this section or in the Act, whichever is lower.
* * * * *
(v) Plantwide applicability limitation (PAL) means an emission
limitation expressed on a mass basis in tons per year, or expressed in
tons per year CO2e for a GHG emission limitation, for a
pollutant at a major stationary source, that is enforceable as a
practical matter and established source-wide in accordance with
paragraphs (aa)(1) through (15) of this section.
* * * * *
(viii) PAL major modification means, notwithstanding paragraphs
(b)(2) and (b)(3) of this section (the definitions for major
modification and net emissions increase), any physical change in or
change in the method of operation of the PAL source that causes it to
emit the PAL pollutant at a level equal to or greater than the PAL.
(ix) PAL permit means the major NSR permit, the minor NSR permit,
or the State operating permit under a program that is approved into the
State Implementation Plan, or the title V permit issued by the
Administrator that establishes a PAL for a major stationary source.
(x) PAL pollutant means the pollutant for which a PAL is
established at a major stationary source.
(xi) Significant emissions unit means an emissions unit that emits
or has the potential to emit a PAL pollutant in an amount that is equal
to or greater than the significant level (as defined in paragraph
(b)(23) of this section or in the Act, whichever is lower) for that PAL
pollutant, but less than the amount that would qualify the unit as a
major emissions unit as defined in paragraph (aa)(2)(iv) of this
section.
(3) Permit application requirements. As part of a permit
application requesting a PAL, the owner or operator of a major
stationary source shall submit the following information to the
Administrator for approval:
* * * * *
(4) * * *
(i) The Administrator is allowed to establish a PAL at a major
stationary source, provided that at a minimum, the requirements in
paragraphs (aa)(4)(i)(a) through (g) of this section are met.
(a) The PAL shall impose an annual emission limitation expressed on
a mass basis in tons per year, or expressed in tons per year
CO2e for a GHG PAL, that is enforceable as a practical
matter, for the entire major stationary source. For each month during
the PAL effective period after the first 12 months of establishing a
PAL, the major stationary source owner or operator shall show that the
sum of the monthly emissions from each emissions unit under the PAL for
the previous 12 consecutive months is less than the PAL (a 12-month
average, rolled monthly). For each month during the first 11 months
from the PAL effective date, the major stationary source owner or
operator shall show that the sum of the preceding monthly emissions
from the PAL effective date for each emissions unit under the PAL is
less than the PAL.
* * * * *
(d) The PAL shall include fugitive emissions, to the extent
quantifiable, from all emissions units that emit or have the potential
to emit the PAL pollutant at the major stationary source.
* * * * *
(g) The owner or operator of the major stationary source with a PAL
shall comply with the monitoring, recordkeeping, and reporting
requirements provided in paragraphs (aa)(12) through (14) of this
section for each emissions unit under the PAL through the PAL effective
period.
* * * * *
(5) Public participation requirements for PALs. PALs for existing
major stationary sources shall be established, renewed, or increased
through a procedure that is consistent with Sec. Sec. 51.160 and
51.161 of this chapter. This includes the requirement that the
Administrator provide the public with notice of the proposed approval
of a PAL permit and at least a 30-day period for submittal of public
comment. The Administrator must address all material comments before
taking final action on the permit.
(6) * * *
(i) Except as provided in paragraph (aa)(6)(ii) and (iii) of this
section, the plan shall provide that the actuals PAL level for a major
stationary source shall be established as the sum of the baseline
actual emissions (as defined in paragraph (b)(48) of this section) of
the PAL pollutant for each emissions unit at the source; plus an amount
equal to the applicable significant level for the PAL pollutant under
paragraph (b)(23) of this section or under the Act, whichever is lower.
When establishing the actuals PAL level, for a PAL pollutant, only one
consecutive 24-month period must be used to determine the baseline
actual emissions for all existing emissions units. However, a different
consecutive 24-month period may be used for each different PAL
pollutant. Emissions associated with units that were permanently shut
down after this 24-month period must be subtracted from the PAL level.
The reviewing authority shall specify a reduced PAL level(s) in tons
per year (or tons per year CO2e for a GHG PAL) in the PAL
permit to become effective on the future compliance date(s) of any
applicable Federal or State regulatory requirement(s) that the
reviewing authority is aware of prior to issuance of the PAL permit.
For instance, if the source owner or operator will be required to
reduce emissions from industrial boilers in half from baseline
emissions of 60 ppm NOX to a new rule limit of 30 ppm, then
the permit shall contain a future effective PAL level that is equal to
the current PAL level reduced by half of the original baseline
emissions of such unit(s).
* * * * *
(7) Contents of the PAL permit. The PAL permit must contain, at a
minimum, the information in paragraphs (aa)(7)(i) through (x) of this
section.
(i) The PAL pollutant and the applicable source-wide emission
limitation in tons per year, or in tons per year CO2e for a
GHG PAL.
* * * * *
(iii) Specification in the PAL permit that if a major stationary
source owner or operator applies to renew a PAL in accordance with
paragraph (aa)(10) of this section before the end of the PAL effective
period, then the PAL shall not expire at the end of the PAL effective
period. It shall remain in effect until a revised PAL permit is issued
by a reviewing authority.
* * * * *
(v) A requirement that, once the PAL expires, the major stationary
source is subject to the requirements of paragraph (aa)(9) of this
section.
(vi) The calculation procedures that the major stationary source
owner or operator shall use to convert the monitoring system data to
monthly emissions and annual emissions based
[[Page 68145]]
on a 12-month rolling total as required by paragraph (aa)(13)(i) of
this section.
(vii) A requirement that the major stationary source owner or
operator monitor all emissions units in accordance with the provisions
under paragraph (aa)(12) of this section.
* * * * *
(8) * * *
(ii) * * *
(b) * * *
(2) Reduce the PAL consistent with any other requirement, that is
enforceable as a practical matter, and that the State may impose on the
major stationary source under the State Implementation Plan; and
* * * * *
(9) * * *
(i) * * *
(a) Within the time frame specified for PAL renewals in paragraph
(aa)(10)(ii) of this section, the major stationary source shall submit
a proposed allowable emission limitation for each emissions unit (or
each group of emissions units, if such a distribution is more
appropriate as decided by the Administrator) by distributing the PAL
allowable emissions for the major stationary source among each of the
emissions units that existed under the PAL. If the PAL had not yet been
adjusted for an applicable requirement that became effective during the
PAL effective period, as required under paragraph (aa)(10)(v) of this
section, such distribution shall be made as if the PAL had been
adjusted.
* * * * *
(iv) Any physical change or change in the method of operation at
the major stationary source will be subject to major NSR requirements
if such change meets the definition of major modification in paragraph
(b)(2) of this section.
(v) The major stationary source owner or operator shall continue to
comply with any State or Federal applicable requirements (BACT, RACT,
NSPS, etc.) that may have applied either during the PAL effective
period or prior to the PAL effective period except for those emission
limitations that had been established pursuant to paragraph (r)(4) of
this section, but were eliminated by the PAL in accordance with the
provisions in paragraph (aa)(1)(ii)(c) of this section.
(10) * * *
(i) The Administrator shall follow the procedures specified in
paragraph (aa)(5) of this section in approving any request to renew a
PAL for a major stationary source, and shall provide both the proposed
PAL level and a written rationale for the proposed PAL level to the
public for review and comment. During such public review, any person
may propose a PAL level for the source for consideration by the
Administrator.
(ii) Application deadline. A major stationary source owner or
operator shall submit a timely application to the Administrator to
request renewal of a PAL. A timely application is one that is submitted
at least 6 months prior to, but not earlier than 18 months from, the
date of permit expiration. This deadline for application submittal is
to ensure that the permit will not expire before the permit is renewed.
If the owner or operator of a major stationary source submits a
complete application to renew the PAL within this time period, then the
PAL shall continue to be effective until the revised permit with the
renewed PAL is issued.
* * * * *
(iv) * * *
(c) * * *
(1) If the potential to emit of the major stationary source is less
than the PAL, the Administrator shall adjust the PAL to a level no
greater than the potential to emit of the source; and
(2) The Administrator shall not approve a renewed PAL level higher
than the current PAL, unless the major stationary source has complied
with the provisions of paragraph (aa)(11) of this section (increasing a
PAL).
* * * * *
(11) * * *
(i) The Administrator may increase a PAL emission limitation only
if the major stationary source complies with the provisions in
paragraphs (aa)(11)(i)(a) through (d) of this section.
(a) The owner or operator of the major stationary source shall
submit a complete application to request an increase in the PAL limit
for a PAL major modification. Such application shall identify the
emissions unit(s) contributing to the increase in emissions so as to
cause the major stationary source's emissions to equal or exceed its
PAL.
(b) As part of this application, the major stationary source owner
or operator shall demonstrate that the sum of the baseline actual
emissions of the small emissions units, plus the sum of the baseline
actual emissions of the significant and major emissions units assuming
application of BACT equivalent controls, plus the sum of the allowable
emissions of the new or modified emissions unit(s) exceeds the PAL. The
level of control that would result from BACT equivalent controls on
each significant or major emissions unit shall be determined by
conducting a new BACT analysis at the time the application is
submitted, unless the emissions unit is currently required to comply
with a BACT or LAER requirement that was established within the
preceding 10 years. In such a case, the assumed control level for that
emissions unit shall be equal to the level of BACT or LAER with which
that emissions unit must currently comply.
* * * * *
(12) * * *
(i) * * *
(a) Each PAL permit must contain enforceable requirements for the
monitoring system that accurately determines plantwide emissions of the
PAL pollutant in terms of mass per unit of time or, in CO2e
per unit of time for a GHG PAL. Any monitoring system authorized for
use in the PAL permit must be based on sound science and meet generally
acceptable scientific procedures for data quality and manipulation.
Additionally, the information generated by such system must meet
minimum legal requirements for admissibility in a judicial proceeding
to enforce the PAL permit.
* * * * *
(14) * * *
(i) * * *
(b) Total annual emissions (expressed on a mass-basis in tons per
year, or expressed in tons per year CO2e for a GHG PAL)
based on a 12-month rolling total for each month in the reporting
period recorded pursuant to paragraph (aa)(13)(i) of this section.
* * * * *
(d) A list of any emissions units modified or added to the major
stationary source during the preceding 6-month period.
* * * * *
(ii) Deviation report. The major stationary source owner or
operator shall promptly submit reports of any deviations or exceedance
of the PAL requirements, including periods where no monitoring is
available. A report submitted pursuant to Sec. 70.6(a)(3)(iii)(B) of
this chapter shall satisfy this reporting requirement. The deviation
reports shall be submitted within the time limits prescribed by the
applicable program implementing Sec. 70.6(a)(3)(iii)(B) of this
chapter. The reports shall contain the following information:
* * * * *
Subpart Y--Minnesota
Sec. 52.1233 [Amended]
0
5. Section 52.1233(b) is removed.
* * * * *
[[Page 68146]]
Subpart SS--Texas
Sec. 52.2305 [Amended]
0
6. Section 52.2305 is removed and reserved.
* * * * *
Subpart YY--Wisconsin
Sec. 52.2590 [Amended]
0
7. Section 52.2590 is removed and reserved.
* * * * *
PART 60--STANDARDS OF PERFORMANCE FOR NEW STATIONARY SOURCES
0
8. The authority citation for part 60 continues to read as follows:
Authority: 42 U.S.C. 7401 et seq.
Subpart OOOOa---Standards of Performance for Crude Oil and Natural
Gas Facilities for Which Construction, Modification or
Reconstruction Commenced After September 18, 2015
Sec. 60.5360a [Amended]
0
9. Section 60.5360a is amended by removing and reserving paragraph (b).
Subpart TTTT--Standards of Performance for Greenhouse Gas Emissions
for Electric Generating Units
Sec. 60.5515 [Amended]
0
10. Section 60.5515 is amended by removing and reserving paragraph (b).
Subpart UUUU--Emission Guidelines for Greenhouse Gas Emissions and
Compliance Times for Electric Utility Generating Units
Sec. 60.5705 [Amended]
0
11. Section 60.5705 is amended by removing and reserving paragraph (b).
PART 70-- STATE OPERATING PERMIT PROGRAMS
0
15. The authority citation for part 70 continues to read as follows:
Authority: 42 U.S.C. 7401, et seq.
0
16. Section 70.2 is amended by:
0
a. Adding in alphabetical order a definition for ``Greenhouse gases;''
0
b. Revising the introductory text paragraph (2) for the definition of
``Major source;'' and
0
c. Revising the definition of ``Subject to regulation''.
The revisions and addition read as follows:
Sec. 70.2 Definitions.
* * * * *
Greenhouse gases (GHGs) means the air pollutant defined in Sec.
86.1818-12(a) of this chapter as the aggregate group of six greenhouse
gases: Carbon dioxide, nitrous oxide, methane, hydrofluorocarbons,
perfluorocarbons, and sulfur hexafluoride. To represent an amount of
GHGs emitted, the term tpy CO2 equivalent emissions
(CO2e) shall be used and computed as follows:
(1) Multiply the mass amount of emissions (tpy), for each of the
six greenhouse gases in the pollutant GHGs, by the gas's associated
global warming potential published at Table A-1 to subpart A of part 98
of this chapter--Global Warming Potentials.
(2) Sum the resultant value for each gas to compute a tpy
CO2e.
Major source means * * *
(1) * * *
(2) A major stationary source of air pollutants, as defined in
section 302 of the Act, that directly emits, or has the potential to
emit, 100 tpy or more of any air pollutant subject to regulation except
the pollutant greenhouse gases as defined in this section. This
definition of major stationary source includes any major source of
fugitive emissions of any such pollutant (except the pollutant
greenhouse gases as defined in this section), as determined by rule by
the Administrator. The fugitive emissions of a stationary source shall
not be considered in determining whether it is a major stationary
source for the purposes of section 302(j) of the Act, unless the source
belongs to one of the following categories of stationary source:
* * * * *
Subject to regulation means, for any air pollutant, that the
pollutant is subject to either a provision in the Clean Air Act, or a
nationally-applicable regulation codified by the Administrator in
subchapter C of this chapter, that requires actual control of the
quantity of emissions of that pollutant, and that such a control
requirement has taken effect and is operative to control, limit or
restrict the quantity of emissions of that pollutant released from the
regulated activity. Pollutants subject to regulation include, but are
not limited to, greenhouse gases as defined in this section.
Appendix A to Part 70--Approval Status of State and Local Operating
Permits Programs
0
17. Appendix A to Part 70 is amended by:
0
a. Removing paragraph (d) under Alabama;
0
b. Removing paragraph (jj) under California;
0
c. Removing paragraph (c) under Colorado;
0
d. Removing paragraph (d) under District of Columbia;
0
e. Removing paragraph (c) under Georgia;
0
f. Removing paragraph (d) under Hawaii;
0
g. Removing paragraph (c) under Illinois;
0
h. Removing and reserving paragraph (m) under Iowa;
0
i. Removing and reserving paragraph (e) under Kansas;
0
j. Removing paragraph (c) under Louisiana;
0
k. Removing paragraph (c) under Maine;
0
l. Removing paragraph (d) under Maryland;
0
m. Removing paragraph (d) under Minnesota;
0
n. Removing paragraph (c) under Mississippi;
0
o. Removing and reserving paragraph (x) under Missouri;
0
p. Removing and reserving paragraph (k) under Nebraska, City of Omaha;
Lincoln Lancaster County Health Department;
0
q. Removing paragraph (d) under Nevada;
0
r. Removing paragraph (c) under New Hampshire;
0
s. Removing paragraph (e) under New York;
0
t. Removing paragraph (d) under Ohio;
0
u. Removing paragraph (c) under Oklahoma;
0
v. Removing and reserving paragraph (c) under Pennsylvania;
0
w. Removing paragraph (c) under Rhode Island;
0
x. Removing paragraph (c) under South Carolina;
0
y. Removing paragraph (c) under South Dakota;
0
z. Removing paragraph (f) under Tennessee;
0
aa. Removing paragraph (c) under Utah;
0
bb. Removing paragraph (c) under Vermont;
0
cc. Removing paragraph (c) under Virgin Islands;
0
dd. Removing paragraph (c) under Virginia;
0
ee. Removing paragraph (j) under Washington;
0
ff. Removing paragraph (f) under West Virginia; and
0
gg. Removing paragraph (c) under Wisconsin.
PART 71--FEDERAL OPERATING PERMIT PROGRAMS
0
18. The authority citation for part 71 continues to read as follows:
Authority: 42 U.S.C. 7401, et seq.
[[Page 68147]]
0
19. Section 71.2 is amended by:
0
a. Adding in alphabetical order a definition for ``Greenhouse gases;''
0
b. Revising the introductory text paragraph (2) for the definition of
``Major source;'' and
0
c. Revising the definition of ``Subject to regulation''.
The revisions and addition read as follows:
Sec. 71.2 Definitions.
* * * * *
Greenhouse gases (GHGs) means the air pollutant defined in Sec.
86.1818-12(a) of this chapter as the aggregate group of six greenhouse
gases: Carbon dioxide, nitrous oxide, methane, hydrofluorocarbons,
perfluorocarbons and sulfur hexafluoride. To represent an amount of
GHGs emitted, the term tpy CO2 equivalent emissions
(CO2e) shall be used and computed as follows:
(1) Multiply the mass amount of emissions (tpy), for each of the
six greenhouse gases in the pollutant GHGs, by the gas's associated
global warming potential published at Table A-1 to subpart A of part 98
of this chapter--Global Warming Potentials.
(2) Sum the resultant value for each gas to compute a tpy
CO2e.
* * * * *
Major source means * * *
(1) * * *
(2) A major stationary source of air pollutants, as defined in
section 302 of the Act, that directly emits, or has the potential to
emit, 100 tpy or more of any air pollutant subject to regulation except
the pollutant greenhouse gases as defined in this section. This
definition of major stationary source includes any major source of
fugitive emissions of any such pollutant (except the pollutant
greenhouse gases as defined in this section), as determined by rule by
the Administrator. The fugitive emissions of a stationary source shall
not be considered in determining whether it is a major stationary
source for the purposes of section 302(j) of the Act, unless the source
belongs to one of the following categories of stationary source:
* * * * *
Subject to regulation means, for any air pollutant, that the
pollutant is subject to either a provision in the Clean Air Act, or a
nationally-applicable regulation codified by the Administrator in
subchapter C of this chapter, that requires actual control of the
quantity of emissions of that pollutant, and that such a control
requirement has taken effect and is operative to control, limit or
restrict the quantity of emissions of that pollutant released from the
regulated activity. Pollutants subject to regulation include, but are
not limited to, greenhouse gases as defined in this section.
* * * * *
[FR Doc. 2016-21475 Filed 9-30-16; 8:45 am]
BILLING CODE 6560-50-P