[Federal Register Volume 86, Number 8 (Wednesday, January 13, 2021)]
[Rules and Regulations]
[Pages 2542-2558]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-00389]
=======================================================================
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 60
[EPA-HQ-OAR-2013-0495; FRL-10019-30-OAR]
RIN 2060-AT56
Pollutant-Specific Significant Contribution Finding for
Greenhouse Gas Emissions From New, Modified, and Reconstructed
Stationary Sources: Electric Utility Generating Units, and Process for
Determining Significance of Other New Source Performance Standards
Source Categories
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: In this final action, the U.S. Environmental Protection Agency
(EPA) is finalizing a significant contribution finding (SCF) for
purposes of regulating source categories for greenhouse gas (GHG)
emissions, under section 111(b) of the Clean Air Act (CAA) for electric
generating units (EGUs), and in doing so, reaffirming that EGUs remain
a listed source category. The EPA has reached that conclusion by
articulating a framework under which source categories are considered
to contribute
[[Page 2543]]
significantly to dangerous air pollution due to their GHG emissions if
the amount of those emissions exceeds 3 percent of total U.S. GHG
emissions. The EPA is applying the 3-percent threshold to the EGU
source category to demonstrate that GHG emissions from the EGU source
category would contribute significantly to dangerous air pollution.
While EGU GHG emissions exceed this threshold by a sufficient magnitude
to warrant an SCF without more ado, the EPA has also, for completeness,
analyzed EGU emissions under a secondary criteria framework, which also
demonstrates the propriety of the SCF.
DATES: The final rule is effective on March 15, 2021.
ADDRESSES: The EPA has established a docket for this action under
Docket ID No. EPA-HQ-OAR-2013-0495. All documents in the docket are
listed on the https://www.regulations.gov/ website. Although listed,
some information is not publicly available, e.g., Confidential Business
Information or other information whose disclosure is restricted by
statute. Certain other material, such as copyrighted material, is not
placed on the internet and will be publicly available only in hard copy
form. With the exception of such material, publicly available docket
materials are available electronically through https://www.regulations.gov/. Out of an abundance of caution for members of the
public and our staff, the EPA Docket Center and Reading Room are closed
to the public, with limited exceptions, to reduce the risk of
transmitting COVID-19. Our Docket Center staff will continue to provide
remote customer service via email, phone, and webform. For further
information on EPA Docket Center services and the current status,
please visit us online at https://www.epa.gov/dockets.
FOR FURTHER INFORMATION CONTACT: For questions about this final action,
contact Mr. Christopher Werner, Sector Policies and Programs Division
(D243-01), Office of Air Quality Planning and Standards, U.S.
Environmental Protection Agency, Research Triangle Park, North Carolina
27711; telephone number: (919) 541-5133; fax number: (919) 541-4991;
and email address: [email protected].
SUPPLEMENTARY INFORMATION:
Preamble acronyms and abbreviations. The EPA uses multiple acronyms
and terms in this preamble. While this list may not be exhaustive, to
ease the reading of this preamble and for reference purposes, the EPA
defines the following terms and acronyms here:
AEO Annual Energy Outlook
BSER best system of emission reduction
[deg]C degrees Celsius
CAA Clean Air Act
CFR Code of Federal Regulations
CH4 methane
CO carbon monoxide
CO2 carbon dioxide
D.C. Cir. United States Court of Appeals for the District of
Columbia Circuit
DOE Department of Energy
EGU electric utility generating unit
EIA U.S. Energy Information Administration
EPA Environmental Protection Agency
[deg]F degrees Fahrenheit
GHG greenhouse gas
HAP hazardous air pollutant(s)
HFC hydrofluorocarbon
km kilometers
M million
N2O nitrous oxide
NAICS North American Industry Classification System
NGCC natural gas combined cycle
NOX nitrogen oxides
NSPS new source performance standards
OMB Office of Management and Budget
PC pulverized coal
PFC perfluorocarbon
PM particulate matter
SF6 sulfur hexafluoride
SO2 sulfur dioxide
U.S. United States
U.S.C. United States Code
Organization of this document. The information in this preamble is
organized as follows:
I. General Information
A. Does this action apply to me?
B. Where can I get a copy of this document and other related
information?
C. Judicial Review
II. Executive Summary
A. What is the purpose of this regulatory action?
B. What is the summary of the major provisions in this action?
C. What are the costs and benefits?
III. Summary of Previous Rulemaking Actions
IV. Pollutant-Specific Significant Contribution Finding (SCF)
A. Background
B. What is a Significant Contribution Finding (SCF)?
C. Primary Criteria for Determining Significance
D. Secondary Criteria for Determining Significance
E. Significant Contribution Finding for EGUs
V. Summary of Cost, Environmental, and Economic Impacts
A. What are the affected facilities?
B. What are the air quality impacts?
C. What are the energy impacts?
D. What are the cost impacts?
E. What are the economic impacts?
F. What are the benefits?
VI. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
B. Executive Order 13771: Reducing Regulations and Controlling
Regulatory Costs
C. Paperwork Reduction Act (PRA)
D. Regulatory Flexibility Act (RFA)
E. Unfunded Mandates Reform Act (UMRA)
F. Executive Order 13132: Federalism
G. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
H. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
I. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
J. National Technology Transfer and Advancement Act (NTTAA)
K. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
L. Congressional Review Act (CRA)
I. General Information
A. Does this action apply to me?
Categories and entities potentially impacted by this rule include
sources subject to new source performance standards (NSPS) requirements
under section 111 of the CAA. While this rule informs all NSPS source
categories, the EPA is finalizing a SCF specific to electric generating
units regulated under 40 CFR part 60, subpart TTTT. The North American
Industry Classification System (NAICS) code for the industrial, federal
government, and state/local government electric generating units is
221112. The NAICS code for tribal government electric generating units
is 921150.
B. Where can I get a copy of this document and other related
information?
In addition to being available in the docket, an electronic copy of
this final action is available on the internet. Following signature by
the EPA Administrator, the EPA will post a copy of this final action at
https://www.epa.gov/stationary-sources-air-pollution/nsps-ghg-emissions-new-modified-and-reconstructed-electric-utility. Following
publication in the Federal Register, the EPA will post the Federal
Register version of the final rule and key technical documents at this
same website.
C. Judicial Review
Under section 307(b)(1) of the Clean Air Act (CAA), judicial review
of this final rule is available only by filing a petition for review in
the United States Court of Appeals for the District of Columbia Circuit
(the D.C. Circuit) by March 15, 2021. Moreover, under
[[Page 2544]]
section 307(b)(2) of the CAA, the requirements established by this
final rule may not be challenged separately in any civil or criminal
proceedings brought by the EPA to enforce these requirements. The
Administrator has determined that this action is subject to section
307(d) of the CAA (42 U.S.C. 7607(d)(1)(V)). Section 307(d)(7)(B) of
the CAA further provides that ``[o]nly an objection to a rule or
procedure which was raised with reasonable specificity during the
period for public comment (including any public hearing) may be raised
during judicial review.'' This section also provides a mechanism for
the EPA to convene a proceeding for reconsideration ``[i]f the person
raising an objection can demonstrate to the EPA that it was
impracticable to raise such objection within [the period for public
comment] or if the grounds for such objection arose after the period
for public comment, (but within the time specified for judicial review)
and if such objection is of central relevance to the outcome of the
rule.'' Any person seeking to make such a demonstration to us should
submit a Petition for Reconsideration to the Office of the
Administrator, U.S. Environmental Protection Agency, Room 3000, WJC
South Building, 1200 Pennsylvania Ave. NW, Washington, DC 20460, with a
copy to both the person(s) listed in the preceding FOR FURTHER
INFORMATION CONTACT section, and the Associate General Counsel for the
Air and Radiation Law Office, Office of General Counsel (Mail Code
2344A), U.S. Environmental Protection Agency, 1200 Pennsylvania Ave.
NW, Washington, DC 20460.
II. Executive Summary
A. What is the purpose of this regulatory action?
In Executive Order 13783 (Promoting Energy Independence and
Economic Growth), all executive departments and agencies, including the
EPA, were directed to ``immediately review existing regulations that
potentially burden the development or use of domestically produced
energy resources and appropriately suspend, revise, or rescind those
that unduly burden the development of domestic energy resources beyond
the degree necessary to protect the public interest or otherwise comply
with the law.'' \1\ Moreover, the Executive Order directed the EPA to
undertake this process of review with regard to the ``Standards of
Performance for Greenhouse Gas Emissions from New, Modified, and
Reconstructed Stationary Sources: Electric Utility Generating Units,''
80 FR 64510 (October 23, 2015) (2015 Rule).
---------------------------------------------------------------------------
\1\ Executive Order 13783, Section 1(c), 82 FR 16093, March 31,
2017.
---------------------------------------------------------------------------
In a document signed the same day as Executive Order 13783 and
published in the Federal Register at 82 FR 16330 (April 4, 2017), the
EPA announced that, consistent with the Executive Order, it was
initiating a review of the 2015 Rule and providing notice of a
forthcoming proposed rulemaking consistent with the Executive Order.
After due deliberation, the EPA issued a proposed rulemaking, ``Review
of Standards of Performance for Greenhouse Gas Emissions From New,
Modified, and Reconstructed Stationary Sources: Electric Utility
Generating Units--Proposed Rule,'' 83 FR 65424 (December 20, 2018)
(2018 Proposal). Here the EPA is finalizing a rulemaking with respect
to whether GHG emissions from EGUs contribute significantly to
dangerous air pollution, in reliance on a methodology articulated
herein for determining whether GHG emissions from other NSPS source
categories contribute significantly to dangerous air pollution. Any
action regarding the proposal to revise the standards of performance,
including the underlying determinations of the BSER, for new,
reconstructed, and modified coal-fired EGUs, including certain
technical issues, is beyond the scope of this final rule and comments
received on the 2018 Proposal will be addressed in a separate future
action.
B. What is the summary of the major provisions in this action?
The EPA is finalizing a pollutant-specific SCF for GHG emissions
from EGUs. That finding is based on an emissions threshold framework
for determining significance, as well as secondary criteria to be
applied in certain circumstances, for other NSPS source categories.
C. What are the costs and benefits?
In 2015, the EPA promulgated ``Standards of Performance for
Greenhouse Gas Emissions From New, Modified, and Reconstructed
Stationary Sources: Electric Utility Generating Units,'' 80 FR 64510
(October 23, 2015) (2015 Rule). When the EPA promulgated the 2015 Rule,
it took note of both utility announcements and U.S. Energy Information
Administration (EIA) modeling and, based on that information, concluded
that even in the absence of this rule, (1) existing and anticipated
economic conditions are such that few, if any, coal-fired EGUs will be
built in the foreseeable future, and that (2) utilities and project
developers are expected to choose new generation technologies
(primarily natural gas combined cycle (NGCC)) that would meet the final
standards and also renewable generating sources that are not affected
by these final standards. See 80 FR 64515 (October 23, 2015). The EPA,
therefore, projected that the 2015 Rule would ``result in negligible
CO2 emission changes, quantified benefits, and costs by 2022
as a result of the performance standards for newly constructed EGUs.''
Id. The Agency went on to say that it had been ``notified of few power
sector new source performance standards (NSPS) modifications or
reconstructions.'' Based on that additional information, the EPA said
it ``expects that few EGUs will trigger either the modification or the
reconstruction provisions'' of the 2015 Rule. Id. at 64516.
The EPA has concluded that the projections described in the 2015
Rule remain generally correct.\2\ In the period of analysis,\3\ the EPA
expects there to be few, if any, newly constructed, reconstructed, or
modified sources that will trigger the provisions the EPA is
promulgating in this action. Consequently, the EPA projects that there
will be no significant changes in carbon dioxide (CO2)
emissions or in compliance costs as a result of this final rule.
---------------------------------------------------------------------------
\2\ In the reference case for the most recent Annual Energy
Outlook (AEO2020), the EIA projected no additions of new planned or
unplanned coal capacity through 2050 (www.eia.gov/aeo2020; Table 9.
Electricity Generating Capacity).
\3\ Standards developed under the NSPS program must, by
statutory requirement, be reviewed, at least, every 8 years.
---------------------------------------------------------------------------
III. Summary of Previous Rulemaking Actions
On December 20, 2018, the EPA published a proposal to revise
certain parts of the 2015 Rule; ``Review of Standards of Performance
for Greenhouse Gas Emissions From New, Modified, and Reconstructed
Stationary Sources: Electric Utility Generating Units.'' 83 FR 65424
(2018 Proposal). The majority of that proposal was dedicated to the
issue of the best system of emission reduction (BSER) for newly
constructed, modified, and reconstructed coal-fired EGUs. Comments
received on that issue are not being addressed in this rule and will be
addressed in any future EPA action. In that proposal, the EPA solicited
comment on whether to make a pollutant-specific significant
contribution determination for GHG emissions from EGUs, 83 FR 65432 n.
25, which is the subject of this action.
[[Page 2545]]
IV. Pollutant-Specific Significant Contribution Finding (SCF)
A. Background
CAA section 111(b)(1)(A) states that ``[The Administrator] shall
include a category of sources in such list if in his judgment it
causes, or contributes significantly to, air pollution which may
reasonably be anticipated to endanger public health or welfare.''
In the 2015 Rule, the EPA promulgated standards for GHG (measured
CO2 emissions) from fossil fuel-fired steam generating EGUs
and combustion turbines, a pollutant that the Administrator had not
considered when he listed the categories of those sources--fossil fuel-
fired steam generators \4\ and stationary gas turbines.\5\ See 80 FR
64510. Similarly, in 2016, the EPA promulgated an NSPS for GHG
(measured by methane (CH4) emissions) from oil and gas
sources, a pollutant that the Administrator had not considered when he
listed the category for those sources--the Crude Oil and Natural Gas
Production source category.\6\ See 81 FR 35824 (June 3, 2016) (2016 Oil
& Gas Rule).
---------------------------------------------------------------------------
\4\ See ``List of Categories of Stationary Sources,'' 36 FR 5931
(March 31, 1971) (listing source category); ``Standards of
Performance for New Stationary Sources,'' 36 FR 24376 (December 31,
1971) (promulgating NSPS for source category).
\5\ See ``Standards of Performance for New Stationary Sources;
Gas Turbines,'' 44 FR 52792 (September 10, 1979) (listing and
promulgating NSPS for source category).
\6\ See ``Priority List and Additions to the List of Categories
of Stationary Sources,'' 49 FR 49222 (August 21, 1979) (listing
source category); ``Standards of Performance for New Stationary
Sources; Equipment Leaks of VOC From Onshore Natural Gas Processing
Plants,'' 50 FR 26124 (June 23, 1985), and ``Standards of
Performance for New Stationary Sources; Onshore Natural Gas
Processing SO2 Emissions,'' 50 FR 40160 (October 1, 1985)
(promulgating standards of performance).
---------------------------------------------------------------------------
In each rule, the EPA interpreted CAA section 111(b) to require
that an SCF and endangerment finding be made only with respect to the
source category, at the time the EPA lists the category, and to
authorize the EPA to promulgate NSPS for GHG, as long as the EPA
provides a rational basis for doing so. However, in each rule, the EPA
acknowledged that some stakeholders had argued that the EPA first
needed to make a pollutant-specific SCF, that is, a finding that GHG
from the source category contributes significantly to dangerous air
pollution. In each rule, the EPA stated that it disagreed with those
stakeholders, but nevertheless, in the alternative, did make a
pollutant-specific SCF for GHG, supported by the same reasons that the
EPA had used to determine that it had a rational basis to regulate GHG.
See 80 FR 64529 through 64531 (2015 EGU Rule); 81 FR 35840 through
35843 (2016 Oil & Gas Rule).
In the 2018 Proposal, in which the EPA proposed to revise the 2015
Rule, the EPA solicited comment on whether to adopt the interpretation
that it was required to make an SCF for GHG from the EGU source
category before it could promulgate an NSPS for CO2. Some
commenters stated that the EPA must make pollutant-specific findings of
endangerment and significant contribution in order to establish an NSPS
for that pollutant. These commenters explained that in their view, CAA
section 111(b)(1)(A) requires the EPA to make two specific findings:
(1) The specific ``air pollution'' to be regulated is ``reasonably . .
. anticipated to endanger public health or welfare;'' and (2) the
specific source category ``causes or contributes significantly to''
that air pollution. Commenters asserted that CAA section 111(b)(1)(A)
is not ambiguous in this respect, and, therefore, the Agency's
interpretation in the 2015 Rule directly contradicts the plain language
of that section.
Other commenters stated that the EPA's approach in the 2015 Rule,
that it needs to determine only that it has a rational basis to
regulate GHGs emitted by this source category as a prerequisite to
regulation, is sound. They said in the context of CAA section 111, the
SCF and endangerment finding are made with respect to the source
category, and not as to specific pollutants. These commenters supported
the conclusion in the 2015 Rule that the EPA possesses authority to
regulate GHG emissions from fossil fuel-fired EGUs under CAA section
111 because there was no new evidence calling into question its
determination that GHG air pollution may reasonably be anticipated to
endanger public health and welfare and fossil fuel-fired EGUs have a
high level of GHG emissions. The commenters stated that these
considerations hew closely to the statutory factors that inform the
decision whether to list a source category in the first place--namely,
whether the category ``causes, or contributes significantly to, air
pollution which may reasonably be anticipated to endanger public health
or welfare,'' under CAA section 111(b)(1)(A). The commenters added that
this approach, which closely parallels the listing analysis but does
not require a formal endangerment finding or SCF, is legally sound.
They also added that the statute is clear that a formal endangerment
finding is required to initially list a sector to be regulated under
CAA section 111; but it is also clear that such a finding is not
required before regulating additional harmful pollutants from a
previously-listed sector.\7\
---------------------------------------------------------------------------
\7\ Some commenters on the 2018 Proposal also said that, in the
2009 Endangerment Finding, the EPA specifically defined air
pollution, as referred to in section 202(a) of the CAA, to be the
mix of six well-mixed, long-lived, and directly emitted GHGs:
CO2, CH4, N2O, HFCs, PFCs, and
SF6. 74 FR 66497. They commented that the EPA needs to
make, but has never made, a separate finding that CO2
alone is reasonably anticipated to endanger the public health or
welfare. The Agency disagrees with commenters. The air pollutant
that the 2015 Rule regulates is GHG, and that air pollutant
contributes to the same GHG air pollution that was addressed by the
Endangerment Finding. The standards of performance adopted in the
2015 Rule take the form of an emission limitation on only one
constituent gas of this air pollutant, CO2. See 40 CFR
60.5515(a) (``The pollutants regulated by this subpart are
greenhouse gases. The greenhouse gas standard in this subpart is in
the form of a limitation on emission of carbon dioxide.''). This is
reasonable, given that CO2 is the constituent gas emitted
in the largest volume by the source category and for which there are
available controls that are technically feasible and cost effective.
There is no requirement that standards of performance address each
component of an air pollutant. CAA section 111(b)(1)(B) requires the
EPA to establish ``standards of performance'' for listed source
categories, and the definition of ``standard of performance'' in CAA
section 111(a)(1) does not specify which air pollutants must be
controlled. Moreover, as the EPA noted in the 2015 Rule, the
information considered in the 2009 Endangerment Finding and its
supporting record, together with additional discussion of GHG
impacts in the 2015 Rule, makes clear that GHG air pollution may
reasonably be anticipated to endanger public health or welfare. See
80 FR 64517, 64530 and 31. Because the 2015 Rule followed the same
approach as in the 2009 findings and regulated the same pollutant as
contributing to the same air pollution (to reiterate, both the air
pollutant and the air pollution are GHG as the group of six well-
mixed gases, including CO2), it was not necessary to
evaluate CO2 separately. The EPA took the same position
in the 2016 Oil & Gas Rule in response to a similar comment
concerning CH4. See 81 FR 35843.
---------------------------------------------------------------------------
Similarly, in a 2019 proposal to revise the 2016 Oil & Gas Rule,
the EPA solicited comment on whether to adopt the interpretation that
it was required to make an SCF for GHG from the Oil and Gas source
category before it could promulgate a CH4 NSPS. Recently,
the EPA completed the final rule to revise the 2016 Oil & Gas Rule,
``Oil and Natural Gas Sector: Emission Standards for New,
Reconstructed, and Modified Sources Review: Final Rule,'' 85 FR 57018
(September 14, 2020) (2020 Oil & Gas Rule). There, the EPA determined
that a pollutant-specific SCF is required. In addition, the EPA further
determined that the pollutant-specific SCF in the 2016 Oil & Gas Rule
was invalid on grounds, in part, that the EPA had not established a
threshold or criteria by which to determine whether an amount of
emissions contributes significantly to dangerous air pollution, and to
distinguish from an amount of emissions that simply contributes to
dangerous air pollution. The EPA stated
[[Page 2546]]
that section 111(b) of the CAA requires, or at least authorizes, a
pollutant-specific SCF, and such an SCF must be based on defined
criteria or thresholds. Id. at 57033-40.
B. What is a Significant Contribution Finding (SCF)?
1. Significant Contribution Finding and Key Comments Received
CAA section 111 directs the EPA to regulate, through a multi-step
process, air pollutants from categories of stationary sources. CAA
section 111(b)(1)(A) requires the initial action, which is that the
Administrator must ``publish . . . a list of categories of stationary
sources. He shall include a category of sources in such list if in his
judgment it causes, or contributes significantly to, air pollution
which may reasonably be anticipated to endanger public health or
welfare.'' Therefore, the first action that the EPA must take,
specified in CAA section 111(b)(1)(A), is to list a source category for
regulation on the basis of a determination that the category
contributes significantly to dangerous air pollution. This provision
makes clear that although Congress designed CAA section 111 to apply
broadly to source categories of all types wherever located, Congress
also imposed a constraint: The EPA is authorized to regulate only
sources that it finds cause or contribute significantly to air
pollution that the EPA finds to be dangerous. Because CAA section
111(b)(1)(A) refers to air pollution, the EPA's determination that a
source category should be listed for regulation can be based on all
pollutants emitted by the category (i.e., collective contribution), or
for a specific pollutant.
After the EPA lists a source category, CAA section 111(b)(1)(B)
then directs the EPA to propose regulations ``establishing Federal
standards of performance'' for new sources within the source category,
to allow public comment, and to ``promulgate . . . such standards with
such modifications as he deems appropriate.'' CAA section 111(a)(1)
defines the term ``standard of performance'' as ``a standard for
emissions of air pollutants which [the Administrator is required to
determine through a specified methodology].'' These provisions read
together make clear that the standards of performance that CAA section
111(b)(1)(A) directs the Administrator to promulgate must concern air
pollutants emitted from the sources in the source category. However,
industrial sources of the type subject to CAA section 111(b)(1)(A)
invariably emit more than one air pollutant, and neither CAA section
111(b)(1)(B) nor CAA section 111(a)(1), by their terms, specifies for
which of those air pollutants the EPA must promulgate standards of
performance.
In the past, the EPA has interpreted CAA section 111(b)(1)(B) to
authorize it to promulgate standards of performance for any air
pollutant that the EPA identified in listing the source category and
any additional air pollutant for which the EPA has identified a
rational basis for regulation. 81 FR 35843 (2016 Oil & Gas Rule); 80 FR
64510 (2015 Rule). Inherent in this approach is the recognition that
CAA section 111(b)(1)(A) does not, by its terms, necessarily require
the EPA to promulgate standards of performance for all air pollutants
emitting from the source category. The EPA could list a source category
on grounds that it emits numerous air pollutants that, taken together,
significantly contribute to air pollution that may reasonably be
anticipated to endanger public health or welfare, and proceed to
regulate each of those pollutants, without ever finding that each (or
any) of those air pollutants by itself causes or contributes
significantly to--or, in terms of the text of other provisions, causes
or contributes to--air pollution that may reasonably be anticipated to
endanger public health or welfare.
As described in the 2020 Oil and Gas Policy Rule, CAA section
111(b)(1)(A) does not provide or suggest any criteria to define the
rational basis approach, the EPA has not articulated any criteria in
its previous applications in the EGU CO2 NSPS and the 2016
40 CFR part 60, subpart OOOOa rules, and in instances before those
rules in which the EPA has relied on the ``rational basis'' approach,
the EPA has done so to justify not setting a standard for a given
pollutant, rather than to justify setting such a standard. 85 FR 77037,
December 1, 2020. Thus, the rational basis test allows the EPA
virtually unfettered discretion in determining which air pollutants to
regulate. As a result, the rational basis standard creates the
possibility that the EPA could seek to promulgate NSPS for pollutants
that may be emitted in relatively minor amounts.
In contrast, CAA section 111(b)(1)(A) is clear that the EPA may
list a source category for regulation only if the EPA determines that
the source category ``causes or contributes significantly'' (emphasis
added) to dangerous air pollution. As described in the 2020 Oil and Gas
Policy Rule, in light of the stringency of this statutory requirement
for listing a source category, it would be unreasonable to interpret
CAA section 111(b)(1)(B) to allow the Agency to regulate air pollutants
from the source category merely by making an administrative
determination under the open-ended and undefined rational basis test.
The EPA, therefore, determined it is logical to interpret CAA section
111(b)(1)(B) to require that the Agency apply the same degree of rigor
in determining which air pollutants to regulate as it does in
determining which source categories to list for regulation, and,
therefore, must make a pollutant-specific SCF. Id.
Requiring a pollutant-specific SCF necessitates the establishment
of a clearer framework for assessing which air pollutants merit
regulatory attention that will require sources to bear control costs.
The establishment of such a framework or criteria promotes regulatory
certainty for stakeholders and consistency in the EPA's identification
of which air pollutants to regulate and reduces the risk that air
pollutants that do not merit regulation will nevertheless become
subject to regulation due to an unduly vague standard.
As previously described, CAA section 111(b)(1)(B) requires the EPA
to establish an NSPS for a source category listed under CAA section
111(b)(1)(A). For a source category previously listed under CAA section
111(b)(1)(A), in order to subsequently promulgate an NSPS for a
pollutant that the EPA did not evaluate the source category for at the
time of listing, the EPA must make a pollutant-specific SCF for the
reasons described above. As part of making an SCF, the EPA concluded in
the 2020 Oil and Gas Policy Rule that, ``a standard or an established
set of a criteria, or perhaps both, are necessary to identify what is
significant and what is not.'' 85 FR 57039. The EPA did not finalize or
take a position in the 2020 Oil and Gas Policy Rule on potential
criteria, stating that it was deferring the identification of such
criteria to a future rulemaking. Id. CAA section 111(b) itself does not
specify what the criteria for a pollutant-specific SCF.
The ``contributes significantly'' provision in CAA section
111(b)(1)(A) is ambiguous as to what level of contribution is
considered to be significant. See 84 FR 50267 and 50268, September 24,
2019 (citing EPA v. EME Homer City Generation, L.P., 572 U.S. 489
(2014) (holding that a similar provision in CAA section
110(a)(2)(D)(i), often termed the ``good neighbor'' provision, is
ambiguous)). Accordingly, the EPA has authority to interpret that
provision. Id. at 50268. As noted above, the EPA reads CAA section
111(b)(1)(B) in light of CAA sections 111(b)(1)(A) and 111(a)(1) to
incorporate the ``contributes significantly'' standard in
[[Page 2547]]
connection with promulgating NSPS for particular air pollutants. The
EPA has concluded that to allow the EPA to distinguish between a
contribution and a significant contribution to dangerous pollution,
some type of (reasonably explained and intelligible) standard and/or
established set of criteria that can be consistently applied is
necessary.
A supporting basis for this conclusion can be found by looking at
the EPA's interpretation of the similarly worded ``contribute
significantly'' provisions of CAA section 189(e), concerning major
stationary sources of particulate matter with a diameter of 10
micrometers or less (PM10). This provision requires that the
control requirements applicable to major stationary sources of
PM10 also apply to major stationary sources of
PM10 precursors ``except where the Administrator determines
that such sources [of precursors] do not contribute significantly to
PM10 levels which exceed the standard in the area.'' As the
EPA noted in the 2019 Oil and Gas Policy Rule proposal, in CAA section
189(e), Congress intended that, in order to be subject to regulation,
the emissions must have a greater impact than a simple contribution not
characterized as a significant contribution. However, Congress did not
quantify how much greater. Therefore, the EPA developed criteria for
identifying whether the impact of a particular precursor would
``contribute significantly'' to a NAAQS exceedance. 84 FR 50268. These
criteria included numerical thresholds. Id. The EPA concluded similarly
that, under CAA section 111(b), a standard or an established set of a
criteria, or perhaps both, are necessary to identify what is
significant and what is not.
These criteria help ensure that the EPA's decision-making is well-
reasoned and consistent. The EPA considers it particularly important to
develop a set of criteria and/or a standard in order to determine when
a significant contribution occurs, in order, as noted above, to
distinguish it from a simple contribution. A contribution can be
greater or lesser and remain a contribution, but a significant
contribution determination necessarily involves a judgment about the
degree of the contribution that rises to the level of significance. For
such a judgment to be meaningful (and, of critical importance, to be
understood by regulated parties and by the public), the Agency must
identify the criteria it will use to determine significance.
2. Other Comments Received on the EPA's Basis for Regulating GHG
Emissions from EGUs
Comment: Commenters stated that the EPA must make the specific
pollutant findings of endangerment and significant contribution that
are required in listing a source category in order to establish a NSPS
for that pollutant. Commenters stated they are not arguing that the EPA
could not or should not make these findings. Rather, that the Clean Air
Act (CAA) requires the EPA to make two specific findings: (i) The
specific ``air pollution'' to be regulated is ``reasonably . . .
anticipated to endanger public health or welfare''; and (ii) the
specific source category ``causes or contributes significantly to''
that endangering air pollution. CAA section 111(b)(1)(A). The
commenters said section 111(b)(1)A) is not ambiguous at all in this
respect, and therefore the Agency's interpretation in the 2015 Rule
directly contradicts the plain language of this section. Additionally,
they said that in the 2009 Endangerment Finding, the EPA specifically
defined air pollution, as referred to in section 202(a) of the CAA, to
be the mix of six long-lived and directly emitted GHGs: CO2,
CH4, N2O, HFCs, PFCs, and SF6 (74 FR
66497, December 15, 2009). They commented that the EPA did not make a
separate finding then, or now, that CO2 alone is a danger to
the public health or welfare and the EPA has argued that because
CO2 is the ``dominant anthropogenic GHG,'' it is not
required to ``make an endangerment finding with respect to a particular
pollutant.'' (Id). They argued that this view does not satisfy the
statutory standard and said the GHG endangerment determination in
section 111(b)(1)(A) is fundamentally different than that in section
202(a) and other CAA sections, in part because it: (i) Is source-
category based; and (ii) requires a finding of significance.
These commenters stated that in the 2015 Rule, the EPA made three
arguments as to why it believed it had met its statutory obligations.
The commenters stated that none of these arguments are correct as a
legal matter for the following primary reasons: (1) The EPA was wrong
in claiming that new CO2-specific findings were unnecessary,
as the 2015 Rule was for a new category of electric utility generating
unit (EGUs) emitting CO2--a specific pollutant for which an
endangerment finding had not been made. EPA's prior listings of ``steam
generators'' and ``stationary gas turbines'' covered only emissions of
NOX, SO2, and particulate matter. Because EPA's
findings in earlier listings addressed different pollutants, those
listings triggered and authorized only regulation of NOX,
SO2, and particulate matter. Cf. Nat'l Asphalt Pavement
Ass'n v. Train, 539 F.2d 775 (D.C. Cir. 1976). EPA has asserted the
authority to regulate under section 111 any pollutant for which EPA
believes it has a ``rational basis'' to regulate (see 83 FR 65432; 80
FR 64530). But this ``rational basis'' standard is not the one
authorized by section 111; the endangerment and significant
contribution standard governs section 111 regulation. EPA cannot
rewrite the statute to circumvent the endangerment and significant
contribution standard that Congress prescribed for section 111
regulation.; (2) the EPA cannot rely on its 2009 finding regarding GHG
emissions from automobiles which determined that ``six well-mixed
GHGs'' in the ``aggregate'' endanger public health or welfare, as this
``combined mix'' is different air pollutant than the single pollutant
controlled here (CO2 alone). EPA has never found that
CO2 alone endangers public health or welfare, much less that
CO2 from fossil fuel-fired steam generating units (as
opposed to motor vehicles) has that effect; and (3) the EPA's attempt
to rely on ``information and conclusions'' contained in the 2015 Rule
does not satisfy the CAA. Simply identifying the evidence that might
support a finding is not the same as completing the administrative
process of distilling and analyzing that data in the context of the
Agency's statutory obligations and its failure to make the requisite
findings of endangerment and significant contribution in the 2015 Rule
violated the CAA. They said the CAA grants the EPA narrowly bounded
authority to regulate stationary sources that emit pollutants that may
reasonably be anticipated to endanger public health or welfare for
those pollutants which led to the endangerment finding and to which the
source category significantly contributes. The CAA does not grant the
Agency unlimited authority to regulate any pollutant emitted by that
source. Accordingly, before the EPA finalizes the 2018 Proposal, it
must make a specific and supportable finding that CO2
emissions from fossil fuel-fired EGUs pose a danger to public health
and welfare. They said the EPA should reject its ill-founded ``rational
basis test'' for imposing performance standards without endangerment
and contribution findings. The Agency's rational basis test is not in
the CAA. They argued that section 111 never uses the term and the case
law on which the EPA relied for
[[Page 2548]]
this test addresses agency authority under a different statute, the
Administrative Procedure Act (APA). The APA does not define the scope
of the EPA's authority to undertake this rulemaking.
Commenters added that as a textual matter, the endangerment
requirement modifies, and relates back to, ``air pollution,'' not
``sources'': The provision requires the EPA to determine whether a
source causes or contributes significantly to ``air pollution which may
reasonably be anticipated to endanger public health or welfare.'' 42
United States Code (U.S.C.) section 7411(b)(1)(A). Only after the EPA
determines that a pollutant poses a threat to ``public health or
welfare'' must it inquire whether the particular category of sources
``contributes significantly'' to that pollution. Id. The idea that an
endangerment finding is ``one and done'' on a source level also cannot
be squared with the surrounding statutory requirements. Section
111(b)(1)(B) provides that the EPA may issue performance standards
after a source category is listed pursuant to section 111(b)(1)(A). Id.
section 7411(b)(1)(B). Yet by definition, a ``standard of performance''
is tied to specific pollutants for which an endangerment finding has
been made. Id. section 7411 (a)(1) (defining a ``standard of
performance'' as ``a standard for emissions of air pollutants).
Commenters said that as such, the approach in the 2015 Rule would give
the EPA unfettered authority to regulate any air pollutant emitted by a
source regardless of whether it endangers health or welfare and the
2015 Rule's approach of mixing and matching elements of endangerment
findings would allow the EPA to impose stringent regulations on sources
that do not ``contribute significantly'' to emissions of a pollutant.
In summary, the commenters argued that if the EPA ``retain[s]'' the
``statutory interpretation'' of section 111 as set out in the 2015
Rule, 83 FR 65432 n. 25, it will once again be setting standards beyond
the scope of its authority and it may be that the EPA can make the
findings section 111(b)(1)(A) requires for CO2 emissions
from fossil-fuel-fired electricity generating units, but unless and
until the EPA makes those determinations under the proper legal
standard, the Proposed Rule will rest on a flawed foundation.
Commenters stated that the previous endangerment findings the EPA
listed in the 2015 Rule did not relate to ``fossil fuel-fired
electricity generating units.'' (80 FR 64527 nn.86 & 87). Rather, one
related to ``steam generators,'' (36 FR 5931, March 31, 1971,--cited at
80 FR 64527 n.86), and the other to ``stationary gas turbines,'' (42 FR
53657. October 3, 1977,--cited at 80 FR 64527 n.87). The commenters
stated that this failing should prevent the EPA's ability to move
forward with proposed regulation because the Agency has not issued the
required endangerment finding for the specific source category, it
becomes irrelevant whether it may rely on that (nonexistent) finding to
justify setting standards of performance for different emissions from
sources in the category.
Commenters stated that in the 2016 subpart OOOOa rulemaking, the
EPA established NSPS for CH4 without making an endangerment
finding for CH4 emissions from oil and gas sources.
Commenters and other industry groups filed comments pointing out the
EPA's omission in failing to make a section 111(b) endangerment finding
for the new pollutant subject to regulation under NSPS. By imposing
NSPS requirements for a new pollutant without first establishing that
that pollutant ``may reasonably be anticipated to endanger public
health or welfare'' (i.e., making an endangerment finding), commenters
urged the EPA to reject and withdraw the interpretation that the EPA
may skip the endangerment finding step in this context. The commenters
further urged the EPA to clarify that a statutory prerequisite for
regulation of a new pollutant under the NSPS program is an endangerment
finding for that particular pollutant. Finally, and as a separate
matter, the commenters urged the EPA to revisit the legal underpinnings
for the subpart OOOOa standards as the commenters asserted the EPA did
not follow the statutory prerequisites for the adoption of such
standards. According to the commenters, those standards are illegal as
being outside of the agency's authority, and as such should now be
withdrawn.
Other commenters stated that the EPA's previous approach in the
2015 Rule to determining that it has a rational basis to regulate GHGs
emitted by this source category is sound. The Agency has correctly not
reopened this approach, nor has it proposed any alternatives to it.
They said in the context of section 111, the endangerment finding is
made with respect to the source category, and not as to specific
pollutants (80 FR 64530). It would be unlawful for the Agency to
finalize any alternative approach. In 2015, the EPA concluded that it
possesses authority to regulate GHG emissions from fossil fuel-fired
EGUs under section 111 for two reasons: (1) There was no new evidence
calling into question its determination that ``GHG air pollution may
reasonably be anticipated to endanger public health and welfare''; and
(2) fossil fuel-fired EGUs have a ``high level of GHG emissions.''
These considerations hew closely to the statutory factors that inform
the decision whether to list a source category in the first place--
namely, whether the category ``causes, or contributes significantly to,
air pollution which may reasonably be anticipated to endanger public
health or welfare.'' In fact, in 2015 the Agency confirmed that, even
if it were required to issue endangerment and significant contribution
findings under this provision in order to regulate GHGs emitted by
EGUs, the same information that underpinned its rational basis
conclusion would support such findings (80 FR 64530). This approach,
which closely parallels the listing analysis but does not require
formal endangerment or cause-or-contribute findings, is legally sound.
The statute is clear that a formal endangerment finding is required to
initially list a sector to be regulated under section 111--and is also
clear that such a finding is not required before regulating additional
harmful pollutants from a previously-listed sector. Because Congress
did not provide specific criteria for regulating additional pollutants
from a source category that is already listed under section 111, it is
reasonable to look to the statutory factors that trigger regulation
initially when deciding whether to require reductions of other
pollutants. They said the statutory factors for listing a source
category--the endangerment and cause-or-contribute findings--provide a
floor for when EPA must regulate an additional pollutant from a listed
source category under the rational basis inquiry. It would be
irrational to fail to regulate an additional pollutant simply because a
source category was already listed, if the same evidence regarding that
pollutant would have triggered a formal listing of that source category
had the source category not previously been listed. Thus, it would be
arbitrary for the agency to decline to regulate a pollutant on the
basis of considerations wholly unrelated to the harms that pollutant
poses or the quantities in which it is emitted from a particular source
category.
Other commenters also stated that any effort to reverse the EPA's
decision to regulate CO2 from power plants would require,
among other things, that the EPA fully contend with each step of the
statutory and legal analysis of section 111 it undertook in the 2015
Rule, and
[[Page 2549]]
explain why each of them has become invalid. They said promulgating a
final rule contrary to the 2015 Rule without the requisite record-
based, factual analysis and reasoned explanation would yield ``an
unexplained inconsistency in agency policy'' that is arbitrary,
capricious, and unlawful. Commenters stated that that while the most
comprehensive approach to sensible GHG regulation remains through
congressional action, and while the CAA is far from the perfect tool
for regulating GHGs, it is preferable to protracted legal battles and
to the potential patchwork of judicial and regulatory outcomes. As a
result, the Agency should retain the existing endangerment finding.
They said that if the EPA fails to regulate GHG emissions from new
coal-fired EGUs it would be wholly unreasonable and contrary to the
endangerment finding.
Response: The EPA addressed the substance of these comments in a
lengthy discussion in ``Oil and Natural Gas Sector: Emission Standards
for New, Reconstructed, and Modified Sources Review: Final Rule,'' 85
FR 57018, 57033-40, 57052-58 (September 14, 2020). That discussion is
incorporated by reference here. That discussion further elaborates the
rationale for EPA's determination that a pollutant-specific significant
contribution determination is appropriate, and EPA's related
determinations. That discussion also responds in full to the comments
on the present rule.
It should be noted that in the 2015 Rule, EPA combined the steam
generating source category and combustion turbine source category into
a single source category for purposes of GHG emission regulation, 80 FR
64510, 64521-32 (October 23, 2015), and determined, in the alternative,
that GHG emissions from the combined source category contribute
significantly to dangerous air pollution. Id. at 64531. In today's
rulemaking, the EPA is not revising the source category determination
in the 2015 Rule and, by the same token, the significant contribution
finding that EPA is making in the present rulemaking for GHG emissions
concerns emissions from the same, combined source category.
Comment: Commenters stated that if the Endangerment Finding is
overturned, the electric power sector could be broadly exposed to tort
and nuisance suits brought by citizens and states--as was the case
prior to the EPA regulation of GHGs (e.g., American Electric Power Co.
v. Connecticut, 564 U.S. 610 (2011)). Accordingly, these efforts would
create more uncertainty about the future of GHG regulations applicable
to new EGUs--uncertainty that likely would not be resolved for years
and could undermine any potential for generation owners and operators
to consider new coal-based generation as a viable option. They said as
a result, the Agency should retain the existing endangerment finding.
Response: The Agency has not proposed to overturn the existing
Endangerment Finding and is not overturning it in this final rule.
Comment: Commenters stated that to the extent that emissions of
CO2 from new, modified, or reconstructed electric utility
generating units are to be subjected by the EPA to regulation under the
CAA, the proper path would be to regulate such emissions as part of a
broader effort to regulate CO2 emissions from ``numerous or
diverse'' sources under sections 108-110 of the CAA. Alternatively, if
the EPA is adamant in engaging in regulating such emissions under
section 111(b), at the very least the EPA must complete a specific
endangerment finding for CO2 emissions from such facilities
under the applicable criteria set forth in section 111(b), which the
EPA has failed to do to date. Either way, commenters stated that the
proposed rule amendment is beyond the legal authority of the CAA.
Response: EPA is making a pollutant-specific significant
contribution finding in this action.
Comment: Commenters quoted the NSPS proposal as stating that ``the
Agency will consider comments on the correctness of the EPA's
interpretations and determinations, and whether there are alternative
interpretations that may be permissible, either as a general matter or
specifically as applied to GHG emissions'' (83 FR 65242, 65432 n.25).
Commenters then stated that they filed a petition in 2017 contending
that the EPA should commence a new rulemaking on the subject of the
Agency's 2009 endangerment finding. They provided the following
arguments of the 2017 petition: (1) There had been no statistically
significant atmospheric warming despite a continued increase in
atmospheric CO2 levels; (2) changes in global temperatures
in recent decades were far from unusual; (3) new balloon and satellite
data showed that the atmosphere was far less sensitive to
CO2 forcing than the climate models had predicted; and (4)
there was mounting evidence that the EPA's GHG rules would have no
discernible climate impact. For these reasons, they said there was a
need to reexamine both the three lines of evidence for the EPA's
endangerment finding as well as its underlying rationale. Regarding the
proposal, the commenters stated that in addition to their still pending
petition, they are providing new evidence for why the Agency should
proceed with this petition and with similar petitions pending before
it. They submitted references (titles, weblinks, and synopses) to nine
research papers published since filing their initial petition which
they argue add additional support. They stated that given the points
and data outlined in this newer research, in addition to those set
forth in their 2017 petition, the EPA should commence a new proceeding
to reexamine its 2009 endangerment finding.
Response: The Agency is retaining the existing endangerment
finding. The submitted material is out of scope for this rulemaking.
With regards to the claim that EPA was soliciting comments on this
subject, the footnote quoted by the commenters goes on to specifically
outline examples of the kind of comments referred to: This further
elaboration made clear that EPA was not soliciting comments on the
science of climate change but rather regarding interpretation of
statutory language and legal opinion as to whether the Agency would
need to make an endangerment finding for previously listed source
categories (``For example, the Agency will consider comments on the
issue of whether it is correct to interpret the ``endangerment
finding'' as a finding that is only made once for each source category
at the time that the EPA lists the source category or whether the EPA
must make a new endangerment finding each time the Agency regulates an
additional pollutant by an already-listed source category. Further, the
EPA will consider comments on the issue of whether GHG emissions are
different in salient respects from traditional emissions such that it
would be appropriate to conduct a new ``endangerment finding'' with
respect to GHG emissions from a previously listed source category. In
addition, the EPA solicits comment on whether the Agency does have a
rational basis for regulating CO2 emissions from new coal-
fired electric utility steam generating units and whether it would have
a rational basis for declining to do so at this time'' 83 FR 65242,
65432 n.25).
Comment: Commenters also said that the Agency suggestion in
footnote 25 of the Proposal is unreasonable in that the Agency seems to
presume that it might not be appropriate to regulate GHGs from new
coal-fired power plants because the Agency projects that few such
plants will be built in coming years. They said this approach asks the
[[Page 2550]]
wrong question. The question should be whether there is a rational
basis to regulate GHGs from power plants--not just new coal-fired
plants. This is because, once new sources are regulated under section
111(b), the obligation to regulate existing sources under section
111(d) is triggered. If new sources in a source category could not be
regulated under section 111(b), no sources in the category could be
regulated. Commenters further stated that the EPA cannot reverse its
position merely by asking for comments on whether it should adopt a new
position diametrically opposed to both current law and the position it
maintains in the Proposed Rule.
Commenters stated that using footnote 25 as a means of requesting
public comment is misleading and violates administrative procedures.
They said that it appears that the EPA is seeking rationale or
justification to under the legal basis for this rule while claiming
that is retaining its legal basis. The EPA cannot have it both ways:
either EPA is using its legal basis, or it is looking for alternatives.
If it is looking for alternatives, then EPA has not met its
responsibilities under the Administrative Procedures Act for fair
notice of the nature and scope of this rulemaking.
Commenters stated that in the endangerment finding footnote of the
2018 Proposal (83 FR 65432 n 25), the EPA suggests that it may consider
whether it would have a rational basis to decline to regulate given
that ``no more than a few new coal-fired EGUs can be expected to be
built.'' The commenters said this suggestion is not legally or
factually sound and does not provides a valid reason not to regulate
GHGs from fossil fuel-fired EGUs under section 111. They said the
statute is unambiguous: The EPA must consider pollution from both new
and existing sources when deciding whether to regulate a pollutant
within a source category. To the extent that the statute contains any
ambiguity, a decision not to regulate based solely on projected levels
of emissions from new sources would be disallowed as an impermissible
construction. They argued that section 111(b) unambiguously expresses
Congress's concern with pollution emitted from a source category as a
whole, not just new sources and 111(b) directs the Administrator to
base decisions about whether to list a source category on an analysis
of the entire category, including existing sources. Section
111(b)(1)(A) does not distinguish between ``new'' and ``existing''
sources but rather conveys Congress's directive to address pollution
across the source category.
The commenters also stated that Footnote 25 of the proposal raises
the prospect that, on the question of regulating a pollutant from a
listed source category, Congress inexplicably intended for the EPA to
consider pollution from new sources only, irrespective of the harm
caused by pollution from existing sources--and even though Congress
directed the EPA to consider the air pollution from the sector as a
whole, that plain language should be ignored. They said the Agency
presents no support for this theory, which is contrary to both the
clear terms and the evident objective of the statute. The commenters
argued that Footnote 25's suggested interpretation disregards statutory
language in other ways as well. For example, section 111(b)(1) provides
that the Administrator ``shall include a category of sources in such
list if in his judgment it causes, or contributes significantly to, air
pollution which may reasonably be anticipated to endanger public health
or welfare.'' (42 U.S.C. 7411(b)(1)(A)). Yet as of the date of when the
EPA determines to list a source category, there are no ``new'' sources
in existence. Section 111(a)(2) provides: ``The term ``new source''
means any stationary source, the construction or modification of which
is commenced after the publication of regulations (or, if earlier,
proposed regulations) prescribing a standard of performance under this
section which will be applicable to such source.'' (Id. section
7411(a)(2)). They said under section 111, listing precedes promulgation
of standards. So, when the EPA decides whether to list a category, by
definition it has not yet proposed section 111 standards for that
category and because it has not proposed such standards, no sources
qualify as ``new'' sources under section 111(a)(2). Basing a decision
not to list (and therefore not to regulate) a source category solely on
the absence of emissions from as yet nonexistent ``new'' sources--while
ignoring sources that already exist and are emitting pollutants that
threaten harm to public health and welfare--is not a tenable reading of
the statutory language.
Response: In this rule, EPA takes the position that GHG emissions
from new and existing EGUs contribute significantly to dangerous air
pollution. While EPA proposed to retain the position that it stated in
the 2015 Rule that a pollutant-specific significant contribution
finding is not required, it solicited comment on whether such a finding
is required, and that comment solicitation provided adequate notice.
Comment: Commenters stated that though the EPA notes that it is not
proposing to revisit its 2009 endangerment finding for greenhouse
gases, the proposed NSPS revisions request comment on whether recent
and projected power sector trends present a rational basis to decline
to regulate CO2 emissions from the power sector. The
suggested comment area, presented in footnote 25, cites power sector
trend projections from the Energy Information Administration's (EIA's)
2018 Annual Energy Outlook and findings from the EPA's proposed
Affordable Clean Energy (ACE) rule as potential support for this
position. Commenters also stated that the EIA's 2018 Annual Energy
Outlook does not indicate that power sector CO2 emissions
will decline significantly in the future. Instead, the estimates
referenced by the EPA in the proposal project that CO2
emissions from the power sector will remain the single largest sector-
based source of CO2 emissions over the long term, totaling
1.72 billion tons in 2020, 1.71 billion tons in 2030, and 1.78 billion
tons in 2050. Commenters said though the EPA found that the
transportation sector overtook the power sector as the largest sector-
based source of GHG emissions in 2017, the 2018 Annual Energy Outlook
projects that power sector emissions will regain the top ranking in
2026 and maintain a lead over the transportation sector by growing
modestly through 2050. Commenters stated while newer EIA projections
that were unavailable at the time of the EPA's proposal indicate
slightly lower power sector CO2 emissions, EIA still
projects significant and sustained power sector GHG emissions through
2050, not a steady decline. Commenters said a report from the Rhodium
Group based on preliminary EIA data for 2018 and released a few weeks
after the EPA's proposal estimates that power sector-related GHG
emissions increased 3.4 percent in 2018, breaking a three-year trend of
decreases. Commenters added still more recent EPA data reveals the same
pattern. Commenters stated preliminary 2018 emissions data compiled by
EPA's Clean Air Markets Division (CAMD), also released after the
proposed NSPS revisions were published in the Federal Register, show
power sector CO2 emissions rising from 1.92 billion tons in
2017 to 1.93 billion tons in 2018. Commenters said prior to the 2018
release, EPA's CAMD data had shown flat or declining CO2
emissions for every year since 2013.
Commenters stated it would be unlawful and arbitrary for the EPA to
use declining power sector emissions as
[[Page 2551]]
reason for not regulating. They argued that even if power sector
emissions are declining--which is not at all clear--they are far higher
than levels necessary to keep CO2 concentrations from rising
further, let alone to achieve the necessary net-zero balance.
CO2 pollution accumulates in the atmosphere, where it
lingers for centuries, such that a year-to-year decline in emissions
does not prevent atmospheric concentrations from continuing to rise,
exacerbating the impacts of climate change. ``[T]he urgency of reducing
emissions now,'' (80 FR 64520) which the EPA acknowledged in the 2015
Rule, has only increased in recent years. Commenters said reliance on
recent emission trends is even more unfounded because U.S. climate
pollution significantly increased in 2018, including a 1.9 percent
increase in power sector carbon pollution. Even before the 2018 data
were available, U.S. Energy Information Administration (EIA) had
recognized long-term market and economic uncertainty, which could
potentially drive some shift back to coal generation. EIA projections
now show that the general trend toward declining carbon pollution from
the power sector is likely to flatten out in the early 2020s.
Commenters stated standards that even if pollution levels were
declining more steadily, that would not authorize the EPA to ignore its
obligation to protect the public from what will continue to be a major
threat to public health and the environment. The CAA is not concerned
merely with whether pollution levels are currently below their historic
peak. To the contrary, the Agency must ensure that pollution is
controlled to the degree the statute requires--i.e., in accordance with
a standard of performance that reflects the best system of emission
reduction (BSER) (42 U.S.C. 7411(a)(1)).
The commenters also said that there may be other reasons why a
developer would be willing to pay a premium to build a new coal-fired
plant that the models do not consider (80 FR 64559-64562). Thus, it is
unreasonable not to establish standards of performance on the
assumption that coal-fired power plants will never again be built (or
modified). They said that the Agency does not even consider the fact
that the source category includes not only new sources but also
existing sources that undergo certain ``modifications,'' and that such
modified sources have significant CO2 emissions.
Commenters said that by asking whether the Agency has a rational
basis for regulating CO2 emissions from new coal-fired EGUs
``in light of'' the projections cited in footnote 25, the EPA is
setting itself up to conduct continual market evaluations for all the
EPA regulations for which regulation is premised on a similar type of
prerequisite determination. An interpretation of section 111 that leads
to that result is unreasonable and impractical. They said that there is
no indication in the CAA that Congress intended the Agency to undertake
a continual market assessment of this nature.
Commenters stated that the endangerment finding footnote of the
2018 Proposal (83 FR 65432 footnote 25) contains a fatal factual
deficiency in that it suggests that the rational basis finding might be
reversed because ``no more than a few new coal-fired EGUs can be
expected to be built, which raises questions about whether new coal-
fired EGUs contribute significantly to atmospheric CO2
levels.'' The commenters said that not only does this suggestion
disregard the EPA's 2015 acknowledgment that ``the CO2
emissions from even a single new coal-fired power plant may amount to
millions of tons each year,'' but it entirely ignores natural gas-fired
power plants, which are also included in the source category. In making
the 2015 determination, the EPA specifically observed that ``the
CO2 emissions from even a single natural gas combined cycle
(NGCC) unit may amount to one million or more tons per year.'' They
said natural gas-fired power plants continue to be built at a steady
clip as evidenced by the first ten months of 2018 in which 14.9
gigawatts (GW) of natural gas-fired EGU capacity was added to the grid.
New gas plants must be accounted for and by failing to do so, the
Agency would forfeit any ``rational connection between the facts found
and the choice made,'' and would fail to provide ``a reasoned
explanation . . . for disregarding facts and circumstances that
underlay . . . the prior policy.'' Each of those flaws would render the
decision arbitrary and capricious. Commenters said that even if the EPA
legally could regulate CO2 emissions from new natural gas
plants without regulating CO2 emissions from new coal-fired
power plants, the EPA should not do so because such partial regulation
would provide an inadvertent subsidy to new coal-fired plants.
Response: In this rule, the EPA is determining that GHG emissions
from EGUs contribute significantly to dangerous air pollution and is
promulgating revised standards of performance for EGU GHG emissions. To
the extent it is useful or necessary in this rulemaking for the EPA to
further address whether long-term emission trends, or related
considerations, are relevant for a significant contribution
determination, the EPA does so elsewhere in this document.
C. Primary Criteria for Determining Significance
In this section, the EPA describes criteria for determining when
GHG emissions from a source category contribute significantly to
dangerous air pollution in response to comments submitted on this rule.
The EPA indicated in the 2020 Oil and Gas Policy Rule that it would
finalize these criteria in a separate rulemaking. 85 FR 57039.
1. GHG Emissions
The criteria discussed herein only apply to GHG in the context of
the EPA's SCF under CAA section 111(b)(1)(B). This action does not
discuss criteria for pollutants other than GHGs. Under this framework,
the EPA is determining that the quantity of GHG emissions from a source
category is the primary criterion in determining significance for
purposes of regulation of GHGs from a source category under CAA section
111(b). Gross GHG emissions are important for this set of pollutants
because GHGs are global long-lived pollutants and do not have the
local, near-term ramifications found with other pollutants (e.g.,
criteria pollutants). Unlike other pollutants where both the location
and quantity of pollution emissions are factors in determining the
impact of the emissions, GHGs' impact (i.e., climate change) is based
on a cumulative global loading and the location of emissions is not
nearly as important a factor as it is for assessing local, near-term
impacts associated with criteria pollutants. It is for this reason
that, when the EPA is assessing GHGs impact in contributing
significantly to air pollution which may reasonably be anticipated to
endanger public health and welfare, the quantity of emissions should be
the primary criterion that the EPA should evaluate.
The GHG emissions are the best, but not necessarily only, indicator
of significance because the quantity of emissions emitted from a source
category correlates directly with impacts. Calculations using the Model
for the Assessment of Greenhouse Gas Induced Climate Change (MAGICC
model) to investigate the impact of including or eliminating a single
sector's emissions from 2020 through 2100 have shown that the magnitude
of emissions from that single sector is very close to being linearly
related to the projected temperature change in 2100 resulting from
eliminating that sector's emissions. This is consistent with the
[[Page 2552]]
results of a number of peer reviewed publications in the past decade:
e.g., Matthews et al. found that the temperature change is roughly
proportional to the total quantity of CO2 emissions over a
wide range of potential scenarios.\8\
---------------------------------------------------------------------------
\8\ H. Damon Matthews, Nathan P. Gillett, Peter A. Stott &
Kirsten Zickfeld, The Proportionality of Global Warming to
Cumulative Carbon Emissions. Nature 459, 829-832 (2009), available
at https://www.nature.com/articles/nature08047.
---------------------------------------------------------------------------
A threshold of GHG emissions from the source category compared to
the rest of the U.S. GHG emissions (i.e., the percent of total U.S. GHG
emissions) can be used to demonstrate significance. Emissions can be
large enough from a source category that the evaluation of GHG
emissions in isolation is sufficient for making a finding of
significance for the source category. Conversely, the EPA believes that
some source categories are sufficiently small in GHG emissions that a
finding of insignificance can be made by only evaluating the GHG
emissions from the source category. For many source categories, the
evaluation of GHG emissions alone will be sufficient for determining
whether there is significant contribution.
It should be noted that under section 111(b)(1)(A), the EPA is
required to make a significance finding on a category-by-category
basis. That provision requires the Administrator to list ``a category
of sources'' for regulation if he determines that ``it causes or
contributes significantly to'' dangerous air pollution. Section
111(b)(1)(A) (emphasis. added). As a result, the text of 111(b)(1)(A)
compels or is at least best read to require the EPA to make the
significance determination for a particular source category on the
basis of the emissions (or other relevant attributes) of that
particular source category. In contrast, the EPA may not combine source
categories that individually would not meet the significance criteria
and determine that, when combined, the source categories do meet the
significance criteria.\9\
---------------------------------------------------------------------------
\9\ By the same token, as the EPA explained in the 2020 Oil &
Gas Rule, there are limits to the EPA's ability to expand a source
category to include other sources. As the EPA stated in that rule,
``the authority to revise the scope of a source category must be
exercised within reasonable boundaries and cannot be employed in a
way that results in an unreasonable expansion of an existing source
category. . . . [T]he EPA is not authorized to expand the scope of a
listed source category to cover a new set of sources that are not
sufficiently related to the sources in the pre-existing category. .
. '' 85 FR 57027.
---------------------------------------------------------------------------
2. Using a Threshold in Significance Determination
Under this framework, the EPA is determining a threshold for the
evaluation of significance of GHG emissions from source categories. The
use of a clear threshold provides certainty regarding the EPA's process
and allows the regulated entities to have insight into how the EPA will
make determinations on significance for their respective source
category. The threshold introduced in this rulemaking is a reflection
of the EPA's best understanding of the landscape of the U.S. GHG
emissions from stationary sources. The EPA is introducing a methodology
to evaluate significance with respect to the U.S. GHG emissions that
can be applied for any source category, and that application of the
methodology is only being directly applied to the EGU source category
in this action as further introduction of this approach. It is
important to note that a significance determination for the U.S. GHG
emissions will be needed before the EPA may regulate any other source
category under CAA section 111(b) for GHG emissions.
As Table 1, below, makes clear, there are at least two natural
breakpoints between groups of emitting source categories. The first
natural breakpoint is between EGUs and all other source categories.
EGUs stand out as by far the largest stationary source of the U.S. GHG
emissions, emitting over 25 percent of all the U.S. GHG emissions.
Based on available data, the next largest source category, Oil and
Natural Gas, emits just under 3 percent of U.S. GHG emissions. Two
other source categories, Boilers and Petroleum Refineries, also fall
between 2.5 percent and 3.0 percent of U.S. emissions. Between 1.5
percent and 2.5 percent of U.S. GHG emissions there is another natural
breakpoint and all of the remaining source categories fall below 1.5
percent of the U.S. GHG emissions. Note that source category emissions
in Table 1 are an estimate of what the Agency currently understands
about the emissions from CAA section 111 source categories. If the EPA
were to do a rulemaking and a significance determination for a specific
source category, the EPA would do a thorough analysis of the available
and attributable GHG emissions data to ensure appropriate
determinations and assessments.
Table 1--Examination of GHG Emissions From Large Stationary Sources of GHG Emissions
----------------------------------------------------------------------------------------------------------------
Percent of U.S.
GHG emissions
Emissions in that range Source categories affected from stationary
% of total U.S. GHG emissions (MMT CO2e) * at different thresholds sources covered
at given
threshold (%)
----------------------------------------------------------------------------------------------------------------
Above 25%............................ >1670 MMT............... EGUs (1778 MMT/27% of total 43
US GHG Emissions, 3.6% of
Global emissions).
3% to 25%............................ 200 MMT-1670 MMT........ No categories identified.... 43
2.5% to 3.0%......................... 167-200 MMT............. Oil/Gas Production and 56
Processing; [supcaret]
Refineries; Boilers.
2.0% to 2.5%......................... 134-167 MMT............. No categories identified.... 56
1.5% to 2.0%......................... 100-134 MMT............. No categories identified.... 56
1.0% to 1.5%......................... 67-100 MMT.............. Landfills; I Iron and Steel. 60
----------------------------------------------------------------------------------------------------------------
* MMT CO2e = Million metric tons of carbon dioxide equivalent
[supcaret] Note that the oil and gas production and processing GHG emissions are very close to the 3% value and
thus there is a possibility that this source category may be above the threshold in the near term.
I Note that the Landfills source category has already been regulated under CAA section 111 and the level of the
emissions in Table 1. reflects reductions in GHG emissions as a result of that regulation as a co-benefit.
The EPA is introducing a threshold of 3 percent of U.S. GHG
emissions to evaluate a source category's emissions to determine
significance for purposes of CAA section 111(b). The EPA is also
determining that source categories that
[[Page 2553]]
are less than this value (i.e., 3 percent or less) are necessarily
insignificant without consideration of any other factors. The reasoning
for choosing this threshold is presented later in this document.
The EPA acknowledges that, when interpreting other CAA provisions,
the EPA has used different thresholds to define ``significant
contribution,'' but it is appropriate to select a threshold based on
the nature of the problem being addressed. For example, to address the
problem of interstate transport under CAA section 111(a)(2)(D)(i)(I)--
which concerns criteria pollutants, i.e., pollutants that affect the
NAAQS--the EPA selected a threshold of 1 percent based on analysis of
air quality modeling specific to the criteria pollutant at issue. 76 FR
48208, 48236 (August 8, 2011) (Cross-State Air Pollution Rule (CSAPR)).
For criteria pollutants, both the location and quantity of emissions
are factors in determining their impact. In contrast, the impact of
GHGs (e.g., climate change) is based on a cumulative global loading,
and the location of emissions is not nearly as important a factor as it
is for assessing local impacts associated with criteria pollutants.
Because GHGs do not have the local near-term impacts that criteria
pollutants tend to have, a larger value is appropriate to use in
determining significance as it still addresses the health and welfare
impacts of GHG emissions without specifically evaluating local near-
term impacts, which is analytically unreasonable to do given the global
nature of GHGs. While the 3 percent threshold will be applied against
domestic emissions, source categories exceeding that threshold
represent a much smaller fraction of global GHG emissions.\10\
---------------------------------------------------------------------------
\10\ The EPA recognizes that in the 2016 Oil & Gas Rule, it
determined that GHG emissions from the oil and natural gas source
category contribute significantly to dangerous air pollution, in
part, on the grounds that those emissions exceeded the total amount
of emissions from various foreign countries. 81 FR 35824, 35840
(June 3, 2016). The EPA believes that its current approach of
identifying a threshold for significance based on a percentage of
U.S. emissions is better reasoned than the 2016 Oil & Gas Rule's
approach of drawing comparisons to the absolute emissions of other
countries.
---------------------------------------------------------------------------
By determining a threshold, the EPA is setting a clear indication
of how source categories will be evaluated for significance based on
GHG emissions. For those source categories that are below the 3 percent
threshold, the EPA would make a determination (through future
rulemaking) of insignificance. This means that if a source category
collectively emits 3 percent or less of the total U.S. GHG emissions,
it will be considered to be insignificant. For those source categories
that are above the threshold, a more detailed evaluation of other
criteria can be used to make a determination of significance. This is
described in section IV.D below. It is important for the EPA to make
this clear indication as it allows source categories and the general
public a level of transparency as to how the EPA will be evaluating
source categories for significance. The threshold in this action will
provide a degree of certainty regarding whether a source category will
later be found significant or insignificant based on the threshold.\11\
---------------------------------------------------------------------------
\11\ The EPA does not currently have a comprehensive inventory
of the U.S. GHG emissions for all of the NSPS source categories. For
the EPA to make determinations of significance for a source
category, a more comprehensive emissions profile of a source
category should be used. The EPA will make determinations of
significance for other source categories in the future.
---------------------------------------------------------------------------
After evaluating the two natural break points in GHG emissions, the
EPA determined that 3 percent of the U.S. GHG emissions was the best
threshold for determining significance. As noted above, there is
currently only one source category above this threshold, EGUs, and the
evaluation of significance for the EGU source category has been a topic
explored and discussed by the Agency in great detail over the course of
the last decade.\12\ Just below the 3 percent threshold are three
source categories: Oil and Natural Gas, Petroleum Refineries, and
Industrial-Commercial-Institutional Steam Generating Units (i.e.,
``Boilers''). There are no other source categories with GHG emissions
between 1.5 percent and the 3 percent. By using a threshold of 3
percent of the U.S. GHG emissions (i.e., only including EGUs above the
threshold), the EPA will effectively be covering 43 percent of the U.S.
stationary source GHG emissions via regulation of a single source
category. If the EPA were to instead set a threshold between the other
identified breakpoint--between 1.5 percent and 2.5 percent of U.S. GHG
emissions--the EPA observes that this threshold would lead to a
relatively modest increase in the stationary source U.S. GHG emissions
that would be regulated of an additional 13 percent (for a total of 56
percent of U.S. stationary source GHG emissions).\13\ In addition,
regulation of the additional source categories that comprise 13 percent
of U.S. emissions would eliminate only a portion of those emissions.
With an even lower threshold of significance set at 1.0 percent of U.S.
GHG emissions, there would be significantly more source categories
covered (about 10 based on the EPA estimates) above the threshold but
likely would include an even more modest increase in stationary source
GHGs that would cover 60 percent of U.S. stationary source GHGs. Under
this framework, the EPA is basing a decision to apply a threshold of 3
percent on the relative contribution of regulating source categories
that contribute significantly to the overall impact of climate change.
To that end, the temperature impact associated with the hypothetical
elimination of all source categories above a 3 percent threshold
corresponds to a hypothetical global mean temperature reduction of
0.049 degrees Celsius ([deg]C) (approximately 0.1 degree Fahrenheit,
the calculated effect in 2100 of removing 1,780 million metric tons
(MMT) of CO2 emissions each year from 2020 through 2100)
from source categories above that threshold (i.e., just EGUs).
Eliminating the next largest source category (i.e., Oil and Gas
Processing and Production) would only generate an additional
hypothetical global mean temperature reduction of less than 0.01[deg]C
and even smaller source categories correspondingly contribute less to
global temperature. The EPA is making the decision that the threshold
for a significance determination for U.S. GHG emissions to be in the
form of a percentage. A percentage is a metric that measures the
relative contribution to the whole and, in this action, the EPA
believes that it is appropriate to measure and evaluate significant
contribution of U.S. GHG emissions as a relative contribution to the
whole of GHG emissions in the U.S. The EPA is determining that a
threshold in the form of a percentage is both reasonable and more
appropriate for making the significance determination in this rule
based on a percent's relative nature. This is important because the
trajectory of U.S. GHG emissions is trending down. As overall emissions
decrease over the course of time, a source category's relative
contribution to GHGs may not have changed or may have even increased
based on GHG reductions in other source categories and sectors. A
relative percentage threshold recognizes that the EPA may later
determine a source category is significant based on these
circumstances, because a source category's emissions may eventually
exceed the threshold even though it is currently below the threshold.
[[Page 2554]]
Accordingly, a percentage threshold allows the EPA, over time, to
always focus on the source categories with the potential to have the
greatest impact. The framework on which EPA bases its decision today
is, therefore, amenable to future use, which augurs in favor of the
framework's use to make today's finding.
---------------------------------------------------------------------------
\12\ See 79 FR 34960 and 80 FR 64510.
\13\ Note that one of those ``next three largest'' source
categories is oil and natural gas. In the recently finalized policy
package, the EPA found that regulation of GHGs from this source
category is unnecessary as it is currently being controlled by
regulation of volatile organic compounds. See 85 FR 57018, 57030
(September 14, 2020).
---------------------------------------------------------------------------
The EPA is introducing in this action that a threshold in the form
of a percentage is both reasonable and more appropriate for making a
significance determination for GHGs based on a percent's relative
nature. A tonnage threshold is a static metric that would not change
over time. As previously described, the trajectory of U.S. GHG
emissions is trending down. As emissions decrease over the course of
time, it is likely that source categories that were once above any
static threshold will fall below such a threshold. Even though a source
category may reduce overall U.S. GHG emissions, that source category's
relative contribution to GHGs may not have changed or may have even
increased based on GHG reductions in other source categories and
sectors. Additionally, if emissions do decrease over time, the use of a
tonnage threshold potentially results in no source category meeting the
criteria for significance, even if collectively the U.S.GHG emissions
continue to pose a danger to public health or welfare.
It should be noted that the U.S. GHG emissions of the EGU source
category are more than an order of magnitude larger than the emissions
threshold in the framework, representing 43 percent of U.S. stationary
source GHG emissions. The EPA believes that it is possible for source
categories with GHG emissions substantially larger than the threshold
to be deemed significant on the basis of the primary criterion alone
(i.e., magnitude of emissions) and without consideration of the
secondary criteria described elsewhere in this notice.
3. Tiers of Source Categories Based on GHG Emissions
As noted previously, the primary criterion in evaluating the
significance of a source category is, again, the relative magnitude of
the U.S. GHG emissions. The EPA believes that NSPS source categories
may be grouped into three tiers on the basis of magnitude of the U.S.
GHG emissions, as follows:
(1) Source category with GHG emissions substantially above the
threshold. This source category has emissions of a large enough
magnitude that a determination of significance can be made on the
basis of the magnitude of emissions alone. As discussed later in
this document, this tier is comprised solely of the EGUs source
category; in other words, EGUs do not require consideration of the
secondary criteria in order to determine significance.
(2) Source categories with an intermediate magnitude of the U.S.
GHG emissions (i.e., those with emissions above the threshold but
less than the quantity emitted by the EGU source category). For
source categories with emissions above the threshold, evaluation of
the magnitude of the U.S. GHG emissions is inconclusive. Rather, a
significance determination requires an examination of the source
category's magnitude of emissions combined with a more detailed look
at the secondary criteria discussed elsewhere in this document.
(3) Source categories with a small magnitude of GHG emissions
(i.e., those with emissions below the threshold). Source categories
with a small magnitude of emissions will be deemed insignificant
based on evaluation of the primary criterion alone, without detailed
consideration of any secondary criteria.
D. Secondary Criteria for Determining Significance
As described above, the EPA is determining that the U.S. GHG
emissions from a source category are the primary and most important
criterion for making a determination of significance for a source
category. However, there may be instances where the U.S. GHG emissions
from a source category do not give a comprehensive enough picture to
make a determination of significance. The threshold that the EPA has
described above in Section IV.B would provide a clear indication that
the U.S. GHG emissions from source categories below that threshold are
necessarily insignificant. However, under this framework, for any
source category that is above that threshold, there are other source-
category specific considerations that should be evaluated in addition
to GHG emissions when making a determination of significance.\14\ For
that reason, the EPA will consider other, secondary, criteria in the
evaluation of significance for certain source categories. These other
criteria are described in the subsequent subsections. It is important
for the EPA to consider secondary criteria in the evaluation of
significance for certain source categories because the criteria provide
unique context to the source category beyond the information provided
by the magnitude of the source category's GHG emissions.
---------------------------------------------------------------------------
\14\ Although there is no source category other than EGUs above
the 3% threshold, because the threshold is a percentage and as
previously described, other source categories may move into this
tier as overall GHG emissions decrease and other source category
emissions increase.
---------------------------------------------------------------------------
1. Evaluation and Context of GHG Emissions
Under the introduced framework, the evaluation of the magnitude of
the U.S. GHG emissions from a source category is a substantial
indicator of whether a source category is significant, but in the
specific instance of source categories that have greater GHG emissions
than the threshold, an evaluation based on the magnitude of the U.S.
GHG emissions may be inconclusive. Within the introduced framework,
there are other emissions-based metrics that must be evaluated to
clarify and make a significance determination for these source
categories.
a. Source Category Trends
An important criterion that can help illuminate and contextualize a
significance determination is an evaluation of the trends in emissions
and number of designated facilities within a source category.
Primarily, the EPA is evaluating whether a source category is on a
trajectory of the U.S. GHG emission decline. If the source category, as
a whole, is decreasing its GHG emissions, an explanation for why it is
on the decline may aid in making a significance determination. In one
scenario, if the source category is decreasing emissions because the
source category is declining in production or other output (e.g., due
to decreasing demand for goods or other market conditions, due to
relocation overseas, or due to the cumulative effect of regulations),
it may lend towards an insignificance determination as the emissions
are already declining and expected to continue to decline even without
further regulation. In a separate scenario, if a source category's GHG
emissions are declining due to increased efficiency and updated
technology, it may lend towards a determination of significance. This
would allow the EPA the ability to regulate the source category in
order to ensure that efficiency and technology improvements become
standard across the source category through both an NSPS (111(b)
regulation) for new, modified and reconstructed sources and an emission
guidelines (111(d) regulation) for existing sources.
In a scenario in which the EPA were to find a source category to be
growing in either emissions or number of designated facilities (or
both), it could lend towards that source category being found to be
significant. This would allow EPA to regulate and mitigate emissions
from new, modified and/or reconstructed designated facilities
[[Page 2555]]
within that source category under CAA section 111(b) (i.e., via a
NSPS).
If the EPA were to evaluate the trend in the number of designated
facilities and emissions of a source category, it might show a static
number of existing facilities with a constant or slightly increasing
quantity of the U.S. GHG emissions. In this scenario, there may be
little utility in determining significance for that source category and
consequentially developing a NSPS as there are little to no emissions
that would be subject to such a standard. However, creating a NSPS for
a source category and pollutant is a necessary predicate to regulating
existing sources under CAA section 111(d). Hence, in the scenario of a
static number of existing facilities, a finding of significance for the
source category may be warranted as it would allow eventual regulation
of a group of existing source categories. Under this framework, the EPA
expects the prospect of regulating a source category under CAA section
111(d) for existing sources to be a compelling reason for determining
significance.
b. Source Category Emissions With Global Context
Another important criterion that the EPA considers, as a secondary
factor, is the relative contribution of GHG emissions from the U.S. in
a specific source category compared to worldwide emissions of similar
sources. As previously described, Section 111(b)(1)(A) of the CAA
states that the Administrator shall include source categories that
contribute significantly to endangerment of health and welfare. When
evaluating a global pollutant such as GHGs, the EPA views the impact of
domestic emissions from domestic sources as a more germane
consideration when determining whether a pollutant contributes
significantly to endangerment of health or welfare. Because every ton
of GHG contributes to the global problem, a domestic ton will still
have some impact in the U.S. Accordingly, it is reasonable for the EPA
to evaluate whether a source category is well-regulated internationally
and whether the U.S. emissions from that sector make up a relatively
large share of GHG emissions on a worldwide scale, as such evaluation
in turn would inform whether U.S. emissions are significantly
contributing to domestic impacts. If the emissions from the U.S. are
comparatively a large contribution to source category/sector emissions
worldwide, it may lend towards a finding of significance for the source
category based on the U.S.'s substantial global contribution to the
source category. If, however they are relatively small, it would
suggest less benefit from the EPA regulation of that source category.
The EPA also considers, as one of the secondary criteria, an
evaluation of whether a source category is vulnerable to being trade
exposed (i.e. whether the source category is constrained in the
sources' ability to pass through carbon costs due to actual or
potential international competition). The EPA evaluates whether
regulation of the source category would create a financial incentive
for that source category/industry to move into, or increase production
in, another country. This could be manifested as either a shift in
production to facilities internationally or a complete closure of
existing designated facilities in the U.S. It is not the EPA's
intention in regulating source categories to drive production from the
U.S. to other countries, and there is an environmental concern in
pushing industries to other international locations. This concern is
based on the potential for these new international emissions to
increase compared to the corresponding displaced U.S. emissions.\15\
While this is always a concern for the EPA in the regulation of
industry within the U.S., it even more pronounced with the
consideration of GHG emissions. As discussed, previously, the U.S. GHG
emissions are a global pollutant that also have domestic impacts. As
such, if a smaller quantity of domestic GHG emissions would be
displaced, due to a regulation, by a greater quantity of international
GHG emissions it may support a finding of insignificance for a given
source category. This would occur if the U.S. sources are already
significantly lower emitting in GHG emissions than sources in other
countries. It should also be noted that source categories whose sources
in the U.S. make up a relatively smaller proportion of the world's
emissions from corresponding international sectors may be particularly
vulnerable to being trade exposed as there is likely a greater
international capacity to absorb the displaced U.S. production.
---------------------------------------------------------------------------
\15\ If U.S. production shifted overseas to a jurisdiction that
has laxer environmental regulations, for a global pollutant such as
mercury or GHGs, there could be both increased local environmental
and health impacts at the new overseas location and domestic impacts
to the U.S. resulting from the increased U.S. GHG emissions.
---------------------------------------------------------------------------
Given the global nature of GHG emissions, assessing and
understanding the estimated potential net emissions impact of GHG
control technologies provides useful context in which to consider the
significance of a given set of GHG emissions In addition, there may
also be value in evaluating and considering the technology with the
associated source category (i.e., intrinsic to the process of the
source category)--a prime example of reductions associated with this
evaluation might be assessing the likely impacts of efficiency
improvements. From a public welfare and human health perspective,
targeting source categories that provide the largest overall possible
scope for emissions reductions could be an intrinsic part of
determining the significance of a given magnitude of emissions. Thus,
the EPA is determining that it is appropriate in a given instance to
consider feasible technologies (including efficiency improvements) for
further context in the Agency's determination of significance of a
source category's overall emissions. Here, the magnitude of GHG
emissions from EGUs coupled with the reductions available through
efficiency improvements supports the EPA's determination of
significance.
d. Temporal Evaluation of Criteria
As introduced in this framework, the evaluation of the secondary
criteria is not intended to be performed in isolation. Rather, the EPA
considers the weight of evidence of all the factors (both primary and
secondary) to make an informed and comprehensive decision as to whether
a source category that exceeds the 3-percent threshold contributes
significantly to the U.S. GHG emissions. The consideration of criteria
also has a temporal consideration to a significance determination. A
source category's determination can be reevaluated in the future as the
status and criteria described here may have changed for that source
category. For example, the technology to adequately regulate GHGs from
a source category may not be readily available at this time, but in the
future that technology may become more broadly available causing the
EPA to then make a SCF.
E. Significant Contribution Finding for EGUs
As noted above, the Agency is finalizing a determination that GHG
emissions from EGUs \16\ contribute significantly to dangerous air
pollution. The primary criterion in determining
[[Page 2556]]
whether to make a SCF is the magnitude of GHG emissions from a given
source category. It is readily apparent that EGUs emit a uniquely large
amount of GHGs compared to all other categories of stationary sources.
The EPA made this clear in the 2015 Rule, quoted above, and reiterated
it in the 2020 Oil & Gas Rule: ``the unique CO2 emissions
profile of fossil fuel-fired EGUs should be noted: the volume of
emissions from EGUs dwarfs the amount of GHG emissions from every other
source category.'' 85 FR 57039, n.49.
---------------------------------------------------------------------------
\16\ For this purpose, EGUs include the affected sources in the
combined source category for boilers and turbines. In the 2015 Rule,
the EPA ``combine[d] the two categories of EGUs--steam generators
and combustion turbines--into a single category of fossil fuel-fired
EGUs for purposes of promulgating standards of performance for
CO2 emissions.'' 80 FR 64529 (2015 Rule).
---------------------------------------------------------------------------
Although GHG emissions from EGUs have fallen since the EPA
promulgated the 2015 Rule, they still remain uniquely large among
stationary source categories. The EPA's Inventory of U.S. Greenhouse
Gas Emissions \17\ indicates that, as of 2018, the Electric Power
sector directly emitted 1,778.5 MMT of GHGs.\18\ This amount was more
than twice the amount of GHGs emitted by all other industrial sources
combined and more than all other industrial, commercial, and
residential stationary combustion sources combined.\19\ In addition,
direct GHG emissions from EGUs account for approximately 27 percent of
total U.S. GHG emissions and 43 percent of U.S. stationary source
emissions. The direct GHG emissions from EGUs account for approximately
4 percent of total worldwide GHG emissions and are greater than the
emissions of all but four countries.\20\ These facts confirm that at
current emission levels, EGUs have measurable impacts on both the U.S.
contribution to GHG emissions and the worldwide total GHG emissions and
continue to be uniquely large stationary source emitters of GHGs. It
should be noted that if domestic EGUs no longer emitted any GHG
emissions, there would be a measurable impact on worldwide GHG
emissions and between 2020 and 2100, there would be a reduction in the
projected increase in global temperatures by 0.049 degrees Celsius
([deg] C).
---------------------------------------------------------------------------
\17\ See Table 3-9, Inventory of U.S. Greenhouse Gas Emissions
and Sinks: 1990-2018, Report 430-R-20-002, April 13, 2020, https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks-1990-2018.
\18\ The global warming potential (GWP) of a greenhouse gas is
defined as the ratio of the accumulated radiative forcing within a
specific time horizon relative to that of the reference gas
CO2. Total GHG emissions are the GWP-weighted emissions
of all GHG emissions and reported in million metric tons of
CO2 equivalent (MMT CO2e.).
\19\ See Table 3-9, Inventory of U.S. Greenhouse Gas Emissions
and Sinks: 1990-2018, Report 430-R-20-002, April 13, 2020, https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks-1990-2018.
\20\ In 2016, worldwide GHG emissions were estimated to have
been 49.4 gigaton (Gt) CO2e. The GHG emissions of China,
India, Russia, and Indonesia are 11,577, 3,235, 2,391, and 2,229 MMT
CO2e respectively. https://www.wri.org/blog/2020/02/greenhouse-gas-emissions-by-country-sector.
---------------------------------------------------------------------------
Because EGUs represent by far the largest stationary source of GHGs
from combustion of fossil fuels, the EPA believes that this is the most
appropriate place for the EPA, states, and sources to devote resources
to reducing GHGs from stationary sources. Indeed, this uniquely large
magnitude of emissions is the reason over the last 8 years, the Agency
has devoted significant effort to determine how to best reduce GHGs
from EGUs. Because EGUs are a relatively large U.S. source of emissions
in an overall large pool of international EGU sources, regulation over
time could help produce practices and technologies that have
application to EGUs worldwide.
It is noteworthy that GHG emissions from EGUs are approximately an
order of magnitude greater than the estimated emissions of the second
largest stationary source category of GHGs attributed to combustion,
industrial boilers. Because the magnitude of GHG emissions from EGUs is
large compared to other stationary sources, this makes them clearly
significant even without detailed consideration of other factors. As
mentioned earlier, the EPA is also introducing a framework under which
a source category that emits above a threshold of 3 percent of U.S.
stationary source GHG emissions may contribute significantly to
dangerous GHG air pollution. For those source categories above that
threshold, the EPA is also determining that consideration of certain
secondary criteria may, collectively, also inform the evaluation of
whether a source category should be considered to significantly
contribute. However, within this framework, that analysis of secondary
criteria is not necessary in the case of EGUs, due to the
overwhelmingly large emissions of the source category; it is clear that
controlling GHG emissions from the EGU source category will be
necessary to appropriately address dangerous air pollution. This
conclusion is consistent with the EPA's 2018 Proposal where the Agency
explained that if the EPA was required to evaluate significance, EGUs
would be considered significant.
1. Secondary Criteria
The EPA is determining that the uniquely large GHG emissions from
EGUs makes a finding of significant contribution and regulation
appropriate by itself. Under the introduced framework, while the EPA
does not think it is necessary to consider secondary criteria because
of the uniquely large emissions from the EGU source category, as
explained below, the EPA would make the same determination even if it
did consider those criteria.
a. Source Category Trends
As mentioned earlier, an important criterion is the evaluation of
the trends in emissions and number of designated facilities within a
source category, such that the EPA can evaluate whether a source
category is on a trajectory of U.S. GHG emission decline.
While electricity demand is projected to increase the U.S., due to
the increased use of less carbon intensive generation technologies and
more efficient generation, GHG emissions from the power sector are
projected to remain relatively steady for the foreseeable future.
However, EGUs are projected to remain the single largest stationary
source of GHG emissions, and while the Agency expects few, if any, new
coal-fired EGUs will be built to meet the demand for electricity, coal-
fired EGUs are expected to continue to supply electricity and emit
significant GHG emissions for the foreseeable future.\21\ The EGU
source category also includes stationary combustion turbines. The EPA
expects new simple cycle and combined cycle combustion turbine EGUs
will be built in the future and that the existing fleet of combustion
turbines will continue to operate.\22\ Therefore, efficient generation
technology could eventually become standard for all new and existing
EGUs. Consequently, the EPA would consider the source category trends
as supporting the regulation of GHG emissions from EGUs.
---------------------------------------------------------------------------
\21\ According to Table 8 of the Annual Energy Outlook (AEO)
2020, while coal fired generation will decline between 2019 and 2025
from 959 billion kWh to 709 billion kWh, generation from coal-fired
EGUs is projected to subsequently remain relatively steady through
2050.
\22\ According to Table 8 of the AEO 2020, natural gas fired
generation is projected to increase from 1,322 billion kWh to 1,629
billion kWh.
---------------------------------------------------------------------------
b. Source Category Emissions With Global Context
The EPA is also determining that it can consider, as a secondary
criterion, the relative contribution of GHG emissions from the U.S. in
the specific source category compared to worldwide emissions of similar
sources. Accordingly, the EPA evaluates whether a source category is
well-regulated internationally and whether the U.S. emissions from that
sector make up a relatively large share of global GHG emissions, as
such evaluation in turn would inform whether U.S. emissions are
significantly contributing to
[[Page 2557]]
domestic impacts. In this instance, this criteria points towards a
finding of significance given that U.S. EGUs make up a sizeable portion
(13 percent of the emissions) from EGUs worldwide.\23\
---------------------------------------------------------------------------
\23\ U.S. EGU emissions from the Inventory of U.S. Greenhouse
Gas Emissions and Sinks: 1990-2018, Report 430-R-20-002, April 13,
2020, https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks-1990-2018. Worldwide EGU emissions from the
International Energy Agency estimates IEA (2020), CO2
Emissions from Fuel Combustion, https://www.iea.org/subscribe-to-data-services/co2-emissions-statistics.
---------------------------------------------------------------------------
As mentioned earlier in this notice, the EPA is also introducing
that one of the secondary criteria is an evaluation of whether a source
category is vulnerable to being trade exposed (i.e., whether the source
category is constrained in its ability to absorb regulatory costs due
to actual or potential international competition). Concerns about
international competition would not impact the Agency's decision to
regulate EGUs because electricity must be transported over power lines
and it is not as easy to relocate or shift production locations as it
is for other source categories. The ability to locate generation in
Mexico and Canada and transmit the power to the U.S. is limited because
of constraints on existing transmission lines and the expense to build
additional transmission capacity. The only additional transmission
capacity currently being considered is for electricity generated from
hydroelectric power in Canada to supply power to New England. Since
this electricity has a low carbon intensity, it would not contribute to
an overall increase in GHG emissions. Furthermore, the emission
standards in this rule will not increase the costs of electricity from
a new coal-fired EGU such that it might be financially advantageous to
locate new production internationally to countries with less stringent
regulations. If international competition were a concern, the Agency
would compare the forecast GHG emissions from international sources (in
this case, EGUs in Canada and Mexico) against the forecast GHG
emissions from domestic sources (in this case domestic EGUs) in both
the absence of and implementation of the NSPS. In addition, since few,
if any, new coal-fired EGUs are forecast to be built in the U.S., the
standards in this final rule will not impact electricity prices to end
users to an extent that other industries would be incentivized to
relocate internationally due to increased electricity costs. Therefore,
domestic reductions in GHG emissions from regulating EGUs will not be
offset by increased international GHG emissions. In contrast, for
source categories that supply raw materials to other domestic source
categories, the impact of international competition on those source
categories and the resultant GHG impacts could be considered when
determining an appropriate NSPS. It is conceivable that an overly
stringent NSPS could result in an increase in global GHG emissions, if
the increase in international emissions is greater than the reduction
in domestic emissions.
V. Summary of Cost, Environmental, and Economic Impacts
A. What are the affected facilities?
This rule takes final action affecting fossil fuel-fired EGUs.
These EGUs take two forms that are relevant for present purposes: Steam
generating units (utility boilers and gasification units) and
stationary combustion turbines. Fossil fuel-fired steam generating
units can burn natural gas, oil, or coal. However, coal is the dominant
fuel for electric utility steam generating units. Coal-fired steam
generating units are primarily either PC or fluidized bed (FB) steam
generating units.\24\ At a PC steam generating unit, the coal is
crushed (pulverized) into a powder to increase its surface area. The
coal powder is then blown into a steam generating unit and burned. In a
fossil fuel-fired steam generating unit using FB combustion, the solid
fuel is burned in a layer of heated particles suspended in flowing air.
Power can also be generated from coal or other fuels using gasification
technology. An Integrated Gasification Combined Cycle (IGCC) unit
gasifies coal or petroleum coke to form a synthetic gas (or syngas)
composed of carbon monoxide (CO) and hydrogen (H2), which
can be combusted in a combined cycle system to generate power.
Stationary combustion turbines include both fossil fuel-fired simple
cycle and combined cycle combustion turbine EGUs.
---------------------------------------------------------------------------
\24\ Fossil fuel-fired utility steam generating units (i.e.,
boilers) are most often operated using coal as the primary fuel.
However, some utility boilers use natural gas and/or fuel oil as the
primary fuel.
---------------------------------------------------------------------------
B. What are the air quality impacts?
The EPA does not anticipate that this final rule for fossil-fuel-
fired EGUs will result in significant CO2 emission changes.
C. What are the energy impacts?
This final rule for fossil-fuel-fired EGUs is not anticipated to
have an effect on the supply, distribution, or use of energy.
D. What are the cost impacts?
The EPA does not believe that this final rule for fossil-fuel-fired
EGUs will have compliance costs associated with it.
E. What are the economic impacts?
The EPA does not anticipate that this final rule for fossil-fuel-
fired EGUs will result in economic or employment impacts. Likewise, the
EPA believes this rule will not have any impacts on the price of
electricity, employment or labor markets, or the U.S. economy.
F. What are the benefits?
The EPA does not anticipate emission changes resulting from the
final rule for fossil-fuel-fired EGUs.
VI. Statutory and Executive Order Reviews
Additional information about these statutes and Executive Orders
can be found at https://www.epa.gov/laws-regulations/laws-and-executive-orders.
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.
B. Executive Order 13771: Reducing Regulations and Controlling
Regulatory Costs
This action is not expected to be an Executive Order 13771
regulatory action. There are no quantified cost estimates for this
final rule because the EPA does not anticipate this action to result in
costs or cost savings.
C. Paperwork Reduction Act (PRA)
This action does not impose any new information collection burden
under the PRA. OMB has previously approved the information collection
activities contained in the existing parts 75 and 98 regulations and
has assigned OMB control numbers 2060-0626 and 2060-0629, respectively.
D. 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
[[Page 2558]]
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. The EPA expects there to be
few, if any, new, modified, or reconstructed coal-fired EGUs. As such,
this final rule would not impose significant requirements on those
sources, including any that are owned by small entities. The EPA has,
therefore, concluded that this action will have no net regulatory
burden for all directly regulated small entities.
E. 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. This action imposes
no enforceable duty on any state, local, or tribal governments or the
private sector.
F. Executive Order 13132: Federalism
This action does not have federalism implications. It will not have
substantial direct effects on the states, on the relationship between
the national government and the states, or on the distribution of power
and responsibilities among the various levels of government.
G. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
This action does not have tribal implications, as specified in
Executive Order 13175. It would neither impose substantial direct
compliance costs on tribal governments, nor preempt Tribal law. The EPA
is aware of three coal-fired EGUs located in Indian Country but is not
aware of any EGUs owned or operated by tribal entities. The EPA notes
that this action would affect only existing sources such as the three
coal-fired EGUs located in Indian Country if those EGUs were to take
actions constituting modifications or reconstructions as defined under
the EPA's NSPS regulations. However, as previously stated, the EPA
expects there to be few, if any, new, reconstructed, or modified EGUs.
Thus, Executive Order 13175 does not apply to this action.
Consistent with the EPA Policy on Consultation and Coordination
with Indian Tribes, the EPA offered consultation with tribal officials
during the development of this action; however, the Agency did not
receive a request for consultation. The EPA held meetings with tribal
environmental staff during the public comment period to inform them of
the content of the proposed rule and to encourage them to submit
comments on the proposed rule.
H. 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 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 or safety risk.
I. 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 and has not otherwise been designated as
a significant energy action by the Administrator of the Office of
Information and Regulatory Affairs (OIRA). This final action is not
anticipated to have impacts on emissions, costs, or energy supply
decisions for the affected electric utility industry.
J. National Technology Transfer and Advancement Act (NTTAA)
This rulemaking does not involve technical standards.
K. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations
The EPA believes that this action does not have disproportionately
high and adverse human health or environmental effects on minority
populations, low-income populations, and/or indigenous peoples, as
specific in Executive Order 12898 (59 FR 7629, February 16, 1994),
because it does not affect the level of protection provided to human
health or the environment. As previously stated, the EPA expects that
few, if any, coal-fired EGUs would be affected by this action.
L. Congressional Review Act (CRA)
This action is subject to the CRA, and the EPA will submit a rule
report to each House of the Congress and to the Comptroller General of
the United States. This action is not a ``major rule'' as defined by 5
U.S.C. 804(2).
Andrew Wheeler,
Administrator.
[FR Doc. 2021-00389 Filed 1-12-21; 8:45 am]
BILLING CODE 6560-50-P