EPA Provides Regulatory Relief?

Issue 11 and Volume 113.

By Robynn Andracsek, P.E., Burns & McDonnell and Contributing Editor

On Sept. 30, 2009, EPA announced a proposal to regulate large sources of greenhouse gases (GHGs) through the Prevention of Significant Deterioration (PSD) and Title V programs.

The twist is that the major source thresholds for GHGs will be higher than for criteria pollutants, thus exempting (for six years at least) most “small” sources. The proposed rule touts that this “tailoring” is “essentially providing regulatory relief and does not include direct regulatory provisions for any industrial, commercial or residential entities.” With regulatory relief like this, who needs unfunded mandates?

The proposed rule came the same day that Senators John Kerry (D-Mass.) and Barbara Boxer (D-Calif.) introduced additional climate change legislation. Is this rule meant to be a back-up if Congress does not pass climate change legislation? Would it potentially conflict with whatever law Congress does enact? Or is the goal of this proposed EPA rule to encourage state agencies and other interested parties to lobby Congress to pass greenhouse gas legislation to supplant this proposed rule?

Some of the more pertinent passages from the 400-plus page proposal are commented on below, with page numbers referenced.

EPA’s justification for the need to “tailor” the requirements of PSD and Title V rules with regard to the size of sources that must be regulated is that trying to pound the square peg of CO2 into the round hole of the Clean Air Act (CAA) requirements would produce an “absurd result” with regard to the sheer number of sources that would be regulated. EPA claims the permitting logjam that would result from following the letter of the law creates the “administrative necessity” of circumventing those requirements by unilaterally raising the applicability thresholds by two orders of magnitude. Perhaps EPA should consider that this, in fact, proves it was never the intent of Congress to regulate CO2 through the CAA and that it is inappropriate to do so.

The EPA program will consist of at least two phases, although only the first phase is described in the proposed rule. Both the PSD and Title V major source thresholds are 25,000 tpy CO2e, instead of 100 tpy or 250 tpy thresholds for criteria pollutants. A major modification at a major source would be somewhere between 10,000 and 25,000 tpy CO2e. The proposed rule provides only a range and requests input from commenters as to what the specific value should be. Emissions of the six greenhouse gases [CO2, methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulfur hexafluoride (SF6)] will be weighted by their global warming potential, as determined and annually revised by EPA, and summed to determine the CO2e. (Pages 1-2, 16, 26-27.)

Throughout the proposed rule, EPA emphasizes that this action is the latest in a chain of events. (Pages 15 and 201). First, the Supreme Court held that GHGs are air pollutants covered by the Clean Air Act; second, EPA will begin to regulate GHG from motor vehicles in March 2010; third, EPA’s position is that GHGs become subject to PSD and Title V when a rule controlling those pollutants is promulgated (and even before that rule takes effect).

EPA asserts its rule also marks the beginning of a concerted effort to streamline its administration of the PSD and Title V programs as quickly as possible. However, the Bush EPA already tried streamlining via NSR Reform (see “Clearing the Air,” October 2009). The Obama EPA has rolled back almost every one of those reforms. (Page 16.)

EPA will not prevent an individual state agency from regulating sources with CO2e emissions less than 25,000 tpy. If a State Implementation Plan does not provide for GHG regulation, EPA can revoke delegated authority and take over permitting in that state. (Pages 26 and 48.)

The entire country will be treated as a CO2 attainment area. No modeling or monitoring will be required in PSD permits. (Page 30.)

If a source is PSD minor but has actual emissions greater than 25,000 tpy CO2e, the source is now considered PSD major and subject to PSD review for increases of 15 tpy PM10, 40 tpy NOX, VOC, or SO2, and 100 tpy CO. (Page 34.)

The proposed rule states, “As with the PSD program, currently GHGs are not considered to be subject to regulation and have not been considered to trigger Title V applicability.” However, there are several lawsuits pending that argue PSD permits for coal-fired boilers are not valid since they do not include CO2. Does this statement void those lawsuits?

Tripping PSD for CO2 might be based on actual emissions instead of potential-to-emit. Potential emissions are used to determine major source status for criteria pollutants. No explanation is given regarding fugitive GHGs emissions and if they count toward the 25,000 tpy. (Pages 129-130.)

EPA will try to establish “presumptive BACT” instead of requiring all sources to analysis BACT on a case-by-case basis. Netting out of PSD for CO2 will be difficult, awkward and maybe not even possible. (Pages 165 and 211.)

The number of Title V sources will nearly double and fees will go up drastically. At EPA’s presumed Title V fee of $42.75/ton, the Title V fee for 25,000 tons of GHG would be $1,068,750, annually. Currently, there is a 4,000 ton cap on fees per pollutant. Will something similar be enacted for GHG? Will there be separate fee amounts for GHG and criteria pollutants? (Pages 19, 217-218, 238-239 and 296.)

Many issues remain to be resolved, even as EPA seeks to sell its rule as an exercise in streamlining.

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