May 2010

Prevention of Significant Deterioration and Title V GHG Tailoring Rule:
EPA’s Response to Public Comments

U.S. Environmental Protection Agency

Office of Air Quality Planning and Standards

Air Quality Policy Division

Research Triangle Park, NC

[This page intentionally left blank.]Foreword

This document provides responses to public comments on the U.S.
Environmental Protection Agency’s (EPA’s) proposed “Prevention of
Significant Deterioration and Title V Greenhouse Gas Tailoring Rule.”
EPA received comments on this proposal via mail, e-mail, facsimile, and
the web site at http://regulations.gov.  Additionally, EPA conducted two
public hearings to allow the public to provide oral testimony on the
proposed rule.  Copies of the public hearing transcripts and all comment
letters submitted to the docket are available at the EPA Docket Center
Public Reading Room, or electronically through
http://www.regulations.gov by searching Docket ID EPA-HQ-OAR-2009-0517.

In light of the very large number of comments received and the
significant overlap between many comments, this document does not
respond to each comment individually.  Rather, EPA summarizes and
provides a single response to each significant argument, assertion, and
question contained within the totality of comments.  Within each comment
summary, EPA provides in parentheses one or more Docket ID numbers for
commenters who raised particular issues.  However, the list of commenter
ID numbers is not meant to be exhaustive.  EPA does not individually
identify each and every commenter who made a certain point in all
instances, particularly in cases where multiple commenters express
essentially identical arguments.  Although portions of the preamble to
the final rule are paraphrased in this document, to the extent any
ambiguity is introduced by this paraphrasing, the preamble itself
remains the definitive statement of the rationale for the final rule.

The primary contact regarding questions or comments on this document is:

	Joseph Mangino

Air Quality Policy Division

	Office of Air Quality Planning and Standards

	Mail Code C504-03

	Environmental Protection Agency

	Research Triangle Park, NC  27711

	e-mail<EMAIL_ADDRESS>

[This page intentionally left blank.]

Table of Contents

  TOC \o "1-3" \h \z \u    HYPERLINK \l "_Toc260329787"  Foreword
PAGEREF _Toc260329787 \h  i

  HYPERLINK \l "_Toc260329788"  Table of Contents	  PAGEREF
_Toc260329788 \h  iii

  HYPERLINK \l "_Toc260329789"  Acronyms and Abbreviations	  PAGEREF
_Toc260329789 \h  vii

  HYPERLINK \l "_Toc260329790"  Chapter 1.  Introduction	  PAGEREF
_Toc260329790 \h  1

  HYPERLINK \l "_Toc260329791"  Chapter 2.  Public Hearing, Form
Letters, and General Comments Related to GHG-Related Rules and the
Proposed Tailoring Rule	  PAGEREF _Toc260329791 \h  3

  HYPERLINK \l "_Toc260329792"  2.1  Public Hearings	  PAGEREF
_Toc260329792 \h  3

  HYPERLINK \l "_Toc260329793"  2.2  Small Business Outreach Meeting
PAGEREF _Toc260329793 \h  4

  HYPERLINK \l "_Toc260329794"  2.3  Meeting with Semiconductor Industry
Association	  PAGEREF _Toc260329794 \h  5

  HYPERLINK \l "_Toc260329795"  2.4  Form Letters and General Comments
Received on GHGs Regulation and the Proposed Tailoring Rule	 5

  HYPERLINK \l "_Toc260329796"  2.5  General Comments on the Tailoring
Rule and Comments on Other GHG Regulations	 9

  HYPERLINK \l "_Toc260329797"  2.5.1  Regulation of GHGs Under the CAA
and The Proposed Tailoring Rule	  PAGEREF _Toc260329797 \h  10

  HYPERLINK \l "_Toc260329798"  2.5.2  Endangerment Finding Under
Section 202 of the CAA	  PAGEREF _Toc260329798 \h  17

  HYPERLINK \l "_Toc260329799"  2.5.3  Light Duty Vehicle Rule (LDVR)
PAGEREF _Toc260329799 \h  2  3

  HYPERLINK \l "_Toc260329800"  2.5.4  Reconsideration of Interpretation
of Regulations that Determine Pollutants Covered by CAA Permitting
Programs (“CAA Interpretation Reconsideration Rulemaking”)	  PAGEREF
_Toc260329800 \h  2  7

  HYPERLINK \l "_Toc260329801"  Chapter 3.  Comments on the Legal Basis
for the Proposed Rule	30

  HYPERLINK \l "_Toc260329802"  3.1  Comments on Regulation of GHGs
under the CAA	30

  HYPERLINK \l "_Toc260329803"  3.1.1  Comments on Regulation of GHGs
under the CAA in General	30

  HYPERLINK \l "_Toc260329804"  3.1.2  Comments on Regulation of GHGs
under the PSD Program	  PAGEREF _Toc260329804 \h  3  3

  HYPERLINK \l "_Toc260329805"  3.1.3  Comments on Regulation of GHGs
under the Title V Program	  PAGEREF _Toc260329805 \h  3  9

  HYPERLINK \l "_Toc260329806"  3.2  Comments on the Administrative
Necessity Doctrine	 42

  HYPERLINK \l "_Toc260329807"  3.3  Comments on the Absurd Results
Doctrine	 49

  HYPERLINK \l "_Toc260329808"  3.4  Comments on the Step-by-Step
Process	 54

  HYPERLINK \l "_Toc260329809"  3.5  Comments on Implementation through
Retroactively Limiting Approval of SIPs and Title V Programs	 54

  HYPERLINK \l "_Toc260329810"  Chapter 4.  Comments on Streamlining
Options and Tools To Address the Administrative Burdens of PSD and Title
V for GHGs	 58

  HYPERLINK \l "_Toc260329811"  4.1  General Comments on Permit
Streamlining Options for PSD and Title V	 58

  HYPERLINK \l "_Toc260329812"  4.2  Redefining “Potential to Emit”
62

  HYPERLINK \l "_Toc260329813"  4.3  Presumptive BACT	 65

  HYPERLINK \l "_Toc260329814"  4.4  General Permits and Permits-by-Rule
 77

  HYPERLINK \l "_Toc260329815"  4.5  Electronic Permitting	 81

  HYPERLINK \l "_Toc260329816"  4.6  “Lean” Techniques for Permit
Process Improvement	 82

  HYPERLINK \l "_Toc260329817"  Chapter 5.  Comments on the Proposed
Definition of the GHG Pollutant	 84

  HYPERLINK \l "_Toc260329818"  5.1  Comments on the Compounds Included
in the Definition of the GHG Pollutant	 84

  HYPERLINK \l "_Toc260329819"  5.2  Comments on Use of GWP and the CO2e
Metric	 90

  HYPERLINK \l "_Toc260329820"  5.2.1  General Support and Opposition to
the CO2e Metric	 90

  HYPERLINK \l "_Toc260329821"  5.2.2  Comments on Combining the Six
GHGs into a Single Metric	 94

  HYPERLINK \l "_Toc260329822"  5.2.3  Comments on Linking the
Definition of CO2e to EPA’s “Inventory of U.S. Greenhouse Gas
Emissions and Sinks”	 98

  HYPERLINK \l "_Toc260329823"  5.2.4  Comments on the Use of Dual
Thresholds for Pollutants that Do Not Exceed the Statutory Thresholds
but Do Exceed the CO2e Thresholds	 101

  HYPERLINK \l "_Toc260329824"  5.2.5  Comments on the Use of English
versus Metric Tons for GHG Metric	 103

  HYPERLINK \l "_Toc260329825"  Chapter 6.  Comments on Permitting
Thresholds	 104

  HYPERLINK \l "_Toc260329826"  6.1  Comments on Administrative Burden
and Sources Impacted under the Statutory Thresholds	 104

  HYPERLINK \l "_Toc260329827"  6.2  Comments on the Administrative
Burden and Sources Impacted under the Proposed Thresholds	 107

  HYPERLINK \l "_Toc260329828"  6.3  Comments on the Methodology Used to
Evaluate Burden	 115

  HYPERLINK \l "_Toc260329829"  6.4  Comments on Recommended Thresholds
124

  HYPERLINK \l "_Toc260329830"  6.4.1  Comments Recommending a Non-GHG
Trigger	 124

  HYPERLINK \l "_Toc260329831"  6.4.2  Comments Recommending Specific
Thresholds	 127

  HYPERLINK \l "_Toc260329832"  6.4.3  Comments on the PTE Basis for
Thresholds	 145

  HYPERLINK \l "_Toc260329833"  6.4.4  Comments Recommending Alternative
Approaches to Applicability	 146

  HYPERLINK \l "_Toc260329834"  6.4.5  Comments on the Proposed Phasing
of the Thresholds	 148

  HYPERLINK \l "_Toc260329835"  Chapter 7.  Comments on the Economic
Impacts of the Proposed Rule	 153

  HYPERLINK \l "_Toc260329836"  7.1  Economic/Societal Impacts and the
Regulatory Impacts Analysis of the Rule	 153

  HYPERLINK \l "_Toc260329837"  7.2  Regulatory Flexibility Analysis
164

  HYPERLINK \l "_Toc260329838"  Chapter 8.  Implementation Issues	 172

  HYPERLINK \l "_Toc260329839"  8.1  Comments on EPA’s Mechanism for
Implementing and Adopting the Tailoring Approach	 172

  HYPERLINK \l "_Toc260329840"  8.2  Transitional Issues	 182

  HYPERLINK \l "_Toc260329841"  8.2.1  Requests for “Grandfathering”
and for Exemptions from Revision, Reopening or Update Requirements for
Application and Permits	 182

  HYPERLINK \l "_Toc260329842"  8.2.2  Requests for Delays in
Implementation	 192

  HYPERLINK \l "_Toc260329843"  8.3  Requests for Specific
Exemptions/Deferrals from Applicability	 202

  HYPERLINK \l "_Toc260329844"  8.3.1  Source Categories	 202

  HYPERLINK \l "_Toc260329845"  8.3.2  Biogenic Emissions and Combustion
of Biomass	 208

  HYPERLINK \l "_Toc260329846"  8.3.3  Fugitive Emissions	 213

  HYPERLINK \l "_Toc260329847"  8.3.4  Pollution Control Projects	 216

  HYPERLINK \l "_Toc260329848"  8.3.5  Indirect Emissions	 218

  HYPERLINK \l "_Toc260329849"  8.4  PSD and Title V Permitting
Implementation Issues and Questions	 218

  HYPERLINK \l "_Toc260329850"  8.4.1  General Suggestions, Comments, or
Questions	 218

  HYPERLINK \l "_Toc260329851"  8.4.2  General Requests for Guidance
221

  HYPERLINK \l "_Toc260329852"  8.4.3  General Suggestions or Comments
for Specific Sectors	 224

  HYPERLINK \l "_Toc260329853"  8.4.4  General Suggestions or Comments
on Emissions Monitoring, Public Participation, and Funding	 226

  HYPERLINK \l "_Toc260329854"  8.4.5  PSD-Specific Implementation
Issues	 228

  HYPERLINK \l "_Toc260329855"  8.4.6  Title V-Specific Implementation
Issues	  PAGEREF _Toc260329855 \h  2  33

  HYPERLINK \l "_Toc260329856"  Chapter 9.  Comments on Statutory and
Executive Order Reviews	  PAGEREF _Toc260329856 \h  2  42

  HYPERLINK \l "_Toc260329857"  9.1  General Comment	  PAGEREF
_Toc260329857 \h  2  42

  HYPERLINK \l "_Toc260329858"  9.2  Executive Order 12866 –
Regulatory Planning and Review	  PAGEREF _Toc260329858 \h  2  42

  HYPERLINK \l "_Toc260329859"  9.3  Paperwork Reduction Act	  PAGEREF
_Toc260329859 \h  2  43

  HYPERLINK \l "_Toc260329860"  9.4  Regulatory Flexibility Act
PAGEREF _Toc260329860 \h  2  44

  HYPERLINK \l "_Toc260329861"  9.5  Unfunded Mandates Reform Act
PAGEREF _Toc260329861 \h  2  44

  HYPERLINK \l "_Toc260329862"  9.6  Executive Order 13132 –
Federalism	  PAGEREF _Toc260329862 \h  2  45

  HYPERLINK \l "_Toc260329863"  9.7  Executive Order 13175 –
Consultation and Coordination with Indian Tribal Governments	  PAGEREF
_Toc260329863 \h  2  46

  HYPERLINK \l "_Toc260329864"  9.8  Executive Order 13211 – Actions
That Significantly Affect Energy Supply, Distribution, or Use	  PAGEREF
_Toc260329864 \h  2  46

  HYPERLINK \l "_Toc260329865"  Chapter 10.  Miscellaneous Comments
PAGEREF _Toc260329865 \h  2  48

   TOC \o "1-3" \h \z \u

Appendix A

Appendix B

Acronyms and Abbreviations

Acronym/

Abbreviation	Definition

ANPR	Advance Notice of Proposed Rulemaking

APA	Administrative Procedure Act

BACT	Best Available Control Technology

BMP	Best Management Practice(s)

Btu	British Thermal Unit

CAA or Act	Clean Air Act

CAAAC	Clean Air Act Advisory Committee

CAFE	Corporate Average Fuel Economy

CAIR	Clean Air Interstate Rule

CAM	Compliance Assurance Monitoring

CARB	California Air Resources Board

CCS	Carbon Capture and Sequestration

CFR	Code of Federal Regulations

CH4	Methane

CO	Carbon Monoxide

CO2	Carbon Dioxide

CO2e	Carbon Dioxide Equivalent

CREDO	Chaplains Religious Enrichment Development Operation

CRU	Climate Research Institute

CTG	Control Techniques Guidelines

CWA	Clean Water Act

D.C. Circuit	District Court Circuit

DOE	Department of Energy

DOT	Department of Transportation

EAB	Environmental Appeals Board

EITE	Energy-Intensive Trade-Exposed

EO	Executive Order

EPA	Environmental Protection Agency

FERC	Federal Energy Regulatory Commission

FR or Fed. Reg.	Federal Register

GHG	Greenhouse Gas

GSP	Gross State Product

GWP	Global Warming Potential

HAP	Hazardous Air Pollutants

HFC	Hydrofluorocarbon

H.R.	House of Representatives

HVAC	Heating, Ventilation, & Air Conditioning

HQ	Headquarters

ICR	Information Collection Request

IGCC	Integrated Gasification Combined Cycle

IL	Illinois

IPCC	Intergovernmental Panel on Climate Change

Lbs	Pounds

LAER	Lowest Achievable Emission Rate

LFG	Landfill Gas

LDVR	Light-Duty Vehicle Rule

MMBtu	Million British Thermal Units

MSW	Municipal Solid Waste

MW	Megawatt

MWh	Megawatt Hours

MY	Model Year

N2O	Nitrous Oxide

NAAQS	National Ambient Air Quality Standard(s)

NESHAP	National Emission Standards for Hazardous Air Pollutants

NG	Natural Gas

NHTSA	National Highway Traffic Safety Administration

NMOC	Non-Methane Organic Compound

NOD	Notice of Determination

NOx	Nitrogen Oxides

NRC	Nuclear Regulatory Commission

NRDC	Natural Resources Defense Council

NSPS	New Source Performance Standard

NSR	New Source Review

NTTAA	National Technology Transfer and Advancement Act

OA	Office of Advocacy

OAR	Office of Air and Radiation

ODS	Ozone Depleting Substances

OIRA	Office of Information and Regulatory Affairs

OMB	Office of Management and Budget

OPEI	Office of Policy, Economics, and Innovation

PAL	Plantwide Applicability Limit

PFC	Perfluorocarbons

PM	Particulate Matter

POTW	Publicly Owned Treatment Works

ppm	Parts per Million

ppmv	Parts per Million by Volume

PRA	Paperwork Reduction Act

PSD	Prevention of Significant Deterioration

PTE	Potential to Emit

RACT	Reasonably Available Control Technology

R&D	Research and Development

RFA	Regulatory Flexibility Act

RIA	Regulatory Impact Analyses

RMRR	Routine Maintenance, Repair, Replacement

SBA	Small Business Administration

SBARP	Small Business Advocacy Review Panel

SBREFA	Small Business Regulatory Enforcement Fairness Act

SER	Small Entity Representative

SF6	Sulfur Hexafluoride

SIA	Semiconductor Industry Association

SIP	State Implementation Plan

SO2	Sulfur Dioxide

T&D	Transmission and Distribution

TDF	Tire-Derived Fuel

TIP	Tribal Implementation Plan

tpy/TPY	Tons Per Year

TSD	Technical Support Document

UMRA	Unfunded Mandates Reform Act

UNFCCC	United Nations Framework Convention on Climate Change

U.S.C.	United States Code

USDA	United States Department of Agriculture

U.S. or U.S.A.	United States of America

VA	Virginia

VOC	Volatile Organic Compound

Chapter 1.  Introduction

On October 27, 2009, we proposed to tailor the major source
applicability thresholds for greenhouse gas (GHG) emissions under the
Prevention of Significant Deterioration (PSD) and title V programs of
the Clean Air Act (CAA or Act) by setting first-phase applicability
threshold levels under both programs, setting a first-phase PSD
significance level for GHG emissions, undertaking efforts to streamline
the administration of the programs, and committing to an assessment of
the administration of the programs within 5 years and a second-phase
rulemaking within 6 years.  (See 74 Federal Register [FR] 55292, October
27, 2009).  As the first phase, we proposed to establish applicability
thresholds for both the PSD and title V programs at the level of 25,000
tons per year (tpy) carbon dioxide equivalent (CO2e) and to establish a
PSD significance level of between 10,000 and 25,000 tpy CO2e.  In
addition, we proposed to commit that, within 5 years of promulgating the
first phase, we would conduct a study of the permitting authorities'
ability to administer the programs going forward, and then, within a
year, conduct a rulemaking for the second phase of the program.  This
second phase would either confirm the first-phase permitting levels, or
establish revised levels or other streamlining techniques.

We proposed to identify the GHG metric as the group of six GHGs, on a
CO2e basis.  A source’s emissions for any of the six primary GHGs that
are “subject to regulation” under the CAA, and therefore considered
“regulated NSR pollutants,” are summed on a CO2e basis using their
global warming potential (GWP) values.  The summed CO2e emissions would
then be compared to the applicable permitting threshold to determine
whether the source is subject to PSD and title V requirements.

Moreover, we also proposed a process, consisting of several components,
for conforming the EPA-approved State Implementation Plans (SIPs) and
title V programs to reflect the GHG threshold levels.  As part of the
proposed Tailoring Rule, we proposed to limit our approval of previously
approved SIPs and title V programs to the extent that they would
require permitting for sources below the GHG permitting thresholds.  In
addition, we explained our intention to undertake a separate rulemaking
to resolve issues related to the definition of the pollutants covered
under the permitting programs in certain approved SIPs and title V
programs.

In conjunction with the first phase of our proposed action to tailor the
GHG permitting thresholds, we committed to a concurrent effort to
investigate, evaluate, and support the implementation of streamlining
techniques to address GHG sources.  In addition to developing permit
streamlining techniques, we also proposed plans to compile and make
available technical and background information on GHG emission factors,
control technologies, strategies and measurement and monitoring
methodologies for key GHG source categories.  We also stated that we
would pursue using this information to develop presumptive Best
Available Control Technology (BACT) levels for selected source
categories, focusing our support effort on the largest emitting GHG
source categories.  A key objective of this support effort is to help
permitting authorities find cost effective ways to achieve GHG controls
under the BACT requirement.

The docket for this proposed rulemaking contains 19,123 public
submission items that represent over 446,000 public comments received
during the public comment period for the proposed rule.  The docket also
contains the transcripts for two public hearings conducted for the
proposed rule (see Docket Id. No. EPA-HQ-OAR-2009-0517-5319 for the
transcript of the November 18, 2010 public hearing in Arlington, VA, and
Docket Id. No. EPA-HQ-OAR-2009-0517-3412 for the transcript of the
November 19, 2010 public hearing in Rosemont, IL.  Appendix A to this
document presents the list of public submissions (by Docket ID No.) with
a description of the type of comment and the organization/individual
submitting the comment.  Specific and general comments received at the
public hearings and during the public comment period for the proposal
are summarized in this document, organized under the following Chapters:

Chapter 2 – Public Hearing, Mass Campaign Letters/Form Letters, and
General Comments Related to GHG-Related Rules and the Proposed Tailoring
Rule

Chapter 3 – Comments on the Legal Basis for the Proposed Rule

Chapter 4 – Comments on Streamlining Options and Tools To Address the
Administrative Burdens of PSD and Title V for GHGs

Chapter 5 – Comments on the Proposed Definition of the GHG Pollutant

Chapter 6 – Comments on Permitting Thresholds

Chapter 7 – Comments on the Economic Impacts of the Proposed Rule

Chapter 8 – Comments on Implementation Issues

Chapter 9 – Comments on Statutory and Executive Order Reviews

Chapter 10 – Miscellaneous Comments

Chapter 2.  Public Hearing, Form Letters, and General Comments Related
to GHG-Related Rules and the Proposed Tailoring Rule

	The proposal preamble for the Tailoring Rule provided background
information on GHG regulation under the CAA, the current (at that time)
and proposed treatment of GHG emissions under the title V and PSD
programs and what future actions may change that treatment.  The
proposal also announced that we would conduct a public hearing if one
was requested and provided numerous avenues that the public could use to
comment on the proposed Tailoring Rule.  A public hearing was requested
and two public hearings were held, and hundreds of thousands of comments
were received on the proposal through various avenues.  An overview of
the public hearings, mass campaign letters/form letters and general
comments related to the proposed Tailoring Rule are presented in this
Chapter.  Section 2.1 of this Chapter presents an overview of the public
hearings; section 2.2 summarizes the form letters as well as the general
support and opposition comments related to the proposal; and section 2.3
summarizes examples of the general comments received on the regulation
of GHGs under the CAA, the proposed Tailoring Rule, and other CAA
GHG-related rules.

2.1  Public Hearings

	On November 18 and November 19, 2009, EPA conducted public hearings on
the proposed PSD and title V GHG Tailoring Rule in Arlington, Virginia
(VA) and Rosemont, Illinois (IL), respectively.  There were 128
attendees and 49 speakers at the Arlington, VA hearing, and 157
attendees and 77 speakers at the Rosemont, IL hearing.  Transcripts for
these hearings can be found in the docket for this rulemaking (see EPA
Docket No. EPA-HQ-OAR-2009-0517-5319 for the Arlington, VA public
hearing transcript, and EPA-HQ-OAR-2009-0517-3412 for the Rosemont, IL
public hearing transcript).

	Each of the public hearings conducted for the PSD and title V proposed
GHG Tailoring Rule included an introduction which included an overview
of the proposed rule, and procedures for the hearing by the EPA.
Comments received at both of these hearings parallel comments received
during the public comment period.  Some of the more unique comments not
received during the public comment period were about the use of nuclear
power and/or use of clean coal technology, and/or the vegan lifestyle as
being necessary or desired in reducing carbon dioxide (CO2) and other
GHG emissions, and were not specifically germane to the proposed
Tailoring Rule rulemaking.  One commenter (representing the
Nongovernmental International Panel on Climate Change) raised extensive
arguments against the scientific basis EPA is using to support
regulation of GHGs and provided copyrighted material that is in
opposition to EPA’s position/conclusions (which is available for
viewing at the Air Docket; see EPA Docket No.
EPA-HQ-OAR-2009-0517-5319.2 for further information).  Several
commenters support EPA regulating GHG emissions (focusing on support for
reductions from coal and/or other industries), while others opposed the
regulation of GHG emissions on an economic or scientific basis.  Oral
testimonies at public hearings from differing industries/environmental
groups raise parallel arguments to those submitted in greater detail
during the public comment period.  The more-detailed comments submitted
during the public comment period that are representative of those
presented at the public hearings are represented and responded to in
this document.

2.2  Small Business Outreach Meeting

The EPA, in collaboration with the Small Business Administration (SBA)
and OMB, conducted an outreach meeting designed to exchange information
with small entities that may be affected by various rulemakings that EPA
is developing for GHGs.  The meeting focused, in particular, on the
proposed Tailoring Rule.  Small entity representatives (SERs)
participating in person and via conference call were briefed on the
rulemaking proposal and given the opportunity to provide input that the
EPA considered while developing the final rule.  The meeting took place
in Arlington, Virginia on November 17, 2009, and included
representatives from EPA, SBA, OMB, as well as small entity
representatives.  The outreach effort was organized and led by
representatives from EPA’s OAQPS within the Office of Air and
Radiation (OAR), EPA’s Office of Policy, Economics, and Innovation
(OPEI), the Office of Information and Regulatory Affairs (OIRA) within
the OMB, and the Office of Advocacy (OA) of the SBA.  Documentation of
this meeting, which includes a summary of the advice and recommendations
received from the SERs identified for the purposes of this process can
be obtained in the docket for this rulemaking.  (See Docket No.
EPA-HQ-OAR-2009-0517-19130).

Comment:

Comments received from small entity representatives are generally
reflected by comments submitted during the public comment period and are
addressed elsewhere in the RTC.  One of the more unique comments not
generally provided in written comments during the public comment period
was provided by an agriculture representative (Farm Bureau).  This
commenter stated that section 424 of the Interior and Environment
Appropriations Act states that, notwithstanding any other provision of
law, none of the funds made available in this Act or any other Act may
be used to promulgate or implement any regulation requiring the issuance
of permits under title V of the CAA for CO2, nitrous oxide (N2O), water
vapor or methane (CH4) emissions resulting from biological processes
associated with livestock production.   The Farm Bureau representative
was concerned that the Light Duty Vehicle Rule (LDVR) will trigger title
V permits for livestock operations involving biological processes.

Response:

The appropriations provision states that “[n]otwithstanding any other
provision of law, none of the funds made available in this Act or any
other Act may be used to promulgate or implement any regulation
requiring the issuance of permits under title V of the CAA (42 United
States Code [U.S.C.] 7661 et seq.) for carbon dioxide, nitrous oxide,
water vapor, or methane emissions resulting from biological processes
associated with livestock production.”  Section 424 of the FY 2010
Interior-Environment Appropriations Act.  This language does not
prohibit EPA from spending funds on the Tailoring Rule because the
Tailoring Rule does not require the issuance of permits under title V
for certain emissions from biological processes associated with
livestock production.  Rather, the statute would require title V permits
(to the extent title V does apply to these emissions) in the absence of
the Tailoring Rule.   In other words, if we do not finalize this
Tailoring Rule then, pursuant to the terms of the CAA, sources of GHG
emissions in excess of the 100 tpy would be subject to title V
permitting as of January 2, 2010.  The Tailoring Rule relieves certain
sources of the obligation to apply for title V permits, and thus its
promulgation is not prohibited by section  424 of the Interior and
Environment Appropriations Act for Fiscal Year 2010.

Moreover, the LDVR also was not prohibited by this provision because the
regulations in the LDVR do not require issuance of permits under title V
for emissions from biological processes associated with livestock.
The regulatory requirements in the LDVR are directed at automobile
manufacturers and the vehicles they produce, and would not address or
require issuance of any permits under title V.   EPA does not interpret
the provision to prohibit the Agency from promulgating or implementing
regulations that do not establish title V permitting requirements for
certain emissions from biological processes associated with livestock.
 For example, EPA does not interpret the provision to prohibit the
Agency from promulgating or implementing a non-title V regulation that,
by operation of the CAA, could make a pollutant “subject to
regulation” under the Act, potentially triggering title V.   Such a
regulation would not itself establish (or implement) any requirements
under title V.   Further, a mobile source regulation such as the Light
Duty Vehicle Rule, would not establish any requirements with regard to
GHG emissions from livestock.  This interpretation is consistent with
the legislative history of this provision, which states that the
provision "[p]rohibits EPA from regulating certain livestock emissions
under the Clean Air Act," S. Rep. No. 111-38 at 95 (2009), and described
this “a provision … regarding greenhouse gas reporting requirements
associated with livestock production.”   House Rep. No. 111-316
(2009).

2.3  Meeting with Semiconductor Industry Association

	The EPA met with the Semiconductor Industry Association (SIA) on
February 3, 2010 to listen to comments they had on the proposed
Tailoring Rule.  Documentation for this meeting can be found in the
docket for this rulemaking.  (See Docket No. EPA-HQ-OAR-2009-0517)
Comments received from SIA at the meeting parallel their written
comments on the proposal and are addressed in this RTC.

2.4  Form Letters and General Comments Received on GHGs Regulation and
the Proposed Tailoring Rule

Comment:

Hundreds of thousands (over 400,000) of form letters were received
during the public comment period for the proposed Tailoring Rule.  In
addition, thousands of commenters submitted e-mails providing statements
of general support or opposition to the proposed Tailoring Rule and
regulation of GHGs.  Examples of the comments submitted are presented in
this subsection of the RTC, and examples of many of the “base” form
letters cited in these examples (in italics) are included in Appendix B
of this document.  Note that many of the form letters are similar in
content and often even adopt phrases used in another letter.  Where
substantive additional comment was provided with a form letter, we have
addressed the comment or parallel comment in the appropriate Chapter of
this document.

Many commenters support regulation of GHGs because:

Regulation of GHGs is the right thing to do (Chaplains Religious
Enrichment Development Operation [CREDO] Action, over 34,500
commenters).  (8909)

They support EPA’s goal of controlling GHG emissions (over 7,200
commenters).

They support the overall plan to limit global warming pollution emitted
by coal plants and other big polluters through the CAA (Form Letter 9,
over 8,300 commenters).

They support EPA’s recognition that GHGs must be regulated to protect
human health and the environment (Form Letter 11, over 80 commenters).

They generally support EPA in reducing GHG emissions and using
regulations to control emissions (Form Letter 17, over 200 commenters).

	Other commenters oppose regulation of GHGs because:

They generally oppose EPA’s regulation of GHGs (over 150 commenters).

They assert that regulating GHGs under the CAA will cripple the
country’s economy and that EPA’s rationale for the proposed
Tailoring Rule, by claiming “absurd results” and “administrative
necessity,” is flawed given that the EPA is applying the law that
produces the “absurd results” (Form Letter 5, over 18,500
commenters).  The commenters urge EPA to defer to Congress to decide how
to regulate GHGs.

In regards to the Tailoring Rule, many commenters support the proposed
rule.  Some of these commenters (over 280 commenters) use a form letter
to express their support (only provide comments that are several lines
in length), while other commenters use form letters to express their
support.  Form letter supporters believe that:

The biggest polluters should be regulated and prevented from passing on
the costs associated with their pollution to the public.  They add that
the public that is most exposed and vulnerable to these big polluters
are the undeserved and people in poverty (Form Letter 6, over 30
commenters).

The proposed rule and EPA’s efforts to address GHG emissions will
ensure substantial capital investments in the largest sources of GHGs
are in sync with efforts to reduce GHGs, avoiding costly retrofits in
the future (Form Letter 7, over 600 commenters)  The commenters also
support the use of the 25,000 ton threshold to shield small sources.

EPA should regulate GHGs from “mega-polluters” (Form Letter 8, a
couple of commenters).

The rule targets the worst offenders and that it will create the largest
emissions reductions while helping the economy grow (Form Letter 10,
over 10 commenters).

EPA should “finalize a strong rule to require big smokestack
industries to meet modern pollution standards for carbon emissions”
(Form Letter 12, over 550 commenters).  They also generally support
EPA’s goal of controlling GHG emissions.

EPA should “finalize a strong rule to require big smokestack
industries to meet modern pollution standards for global warming
pollution” (Form Letter 13, over 49,900 commenters).  The letter also
urges EPA to investigate various renewable resources such as wind and
solar power to further reduce global warming pollution and transition to
clean energy sources.

EPA should finalize a strong rule to hold industry sources accountable
(Form Letter 14, over 9,700 commenters).  The letter asserts that EPA's
proposed new rule would use the CAA to curb pollution from these large
sources, while at the same time assuring small sources (like millions of
mom and pop businesses) that they will not be regulated.

EPA should require America’s largest industrial facilities to obtain
CAA Permits (Form Letter 15, over 5,900 commenters).

This proposal is an essential step that will help reduce GHG pollution
and address climate change (Form Letter 16, over 180 commenters).

The proposed rule is a major step to holding “mega-polluters”
accountable for GHG emissions, and this strategy will ensure that GHG
emissions are cut quickly while maintaining economic growth (Form Letter
18, over 38,600 commenters).

A strong rule by the EPA requiring heavy polluters to meet modern
emission standards when expanding or building new facilities is a
critical first step in cutting America’s emissions (Form Letter 19,
over 5,400 commenters).  The letter also requests that a reporting
system be created to provide businesses the necessary data to compare
and control emissions as well as inform federal strategies on national
emissions reduction.

EPA’s rule will limit GHGs from the largest sources of U.S. global
warming pollution sources (Form Letter 20, over 39,500 commenters).

Regulation of “big polluters” and the reduction of GHG emissions
from coal plants under the CAA is the right thing to do.  (Form Letters
21 through 24, over 190,000 commenters).

EPA should require mitigating global warming pollution by transitioning
to clean energy sources that do not harm the environment, never run out,
and create new, local jobs (Form Letter 25, over 170 commenters).  The
postcard asserts that mitigation of global warming pollution will only
succeed if we require coal-fired power plants-America's largest single
source of global warming pollution-and other big polluters to reduce
their GHG emissions.

	Nevertheless, many commenters oppose the proposed rule because they
believe that:

The rule is based upon “faulty and discredited science” and would
raise energy prices (Form Letter 1, over 800 commenters).

The CAA is not designed to regulate GHGs and that regulating GHGs under
the CAA will lead to economic hardship and few environmental benefits
(Form Letter 2, over 20 commenters).  Moreover, the letter cites A
Regulatory Burden: The Compliance Dimension of Regulating CO2 as a
Pollutant” which provides a breakdown of the millions of businesses
that have the potential to emit (PTE) 250 tpy or more.

The proposed rule will have unintended adverse consequences (Form Letter
3, over 500 commenters).  Consequences cited by the letter include
permitting delays, and the prevention of energy sector projects from
moving forward.  The letter also advocates that a market-based mechanism
be employed for addressing GHGs, although no specifics are provided.

Congress (not EPA) should address the climate change issue.  (Form
Letter 4, over 800 commenters).  The letter asserts that the proposed
rule opens the door for regulation of GHGs emitted from many small
businesses and even homes.  The letter also states that the proposed
rule will cost jobs and undermine America’s ability to remain
globally-competitive.

	Other commenters provide general comments, ranging from topics on
health care to why coal is a good or bad energy source, and on various
types of renewable resources that should be used for energy independence
(over 580 commenters).

Response:

	We agree with those commenters that support EPA’s efforts to regulate
GHGs.  As we state in the final rule titled: “Endangerment and Cause
or Contribute Findings for Greenhouse Gases Under Section 202(a) of the
Clean Air Act” (74 FR 66496), the Agency has found that GHGs in the
atmosphere may reasonably be anticipated to endanger both public health
and public welfare.  The Agency reached this determination after
considering an extensive amount of data on both observed and projected
effects of GHGs in the atmosphere, their effect on climate, and the
public health and welfare risks and impacts associated with such climate
change not only in the U.S., but also in the world.  See 74 FR 66496 for
more information.  Furthermore, even if some of the data that the Agency
considered to reach this conclusion were erroneous, as some of these
commenters claim, the overall evidence that the EPA looked at provides
compelling support that GHGs endanger the public health and public
welfare of both current and future generations.  In addition, the risk
and the severity of adverse impacts on public health and welfare are
expected to increase over time.

	However, regardless of whether the CAA is the preferred mechanism for
GHG regulation and as we state in the final action titled:
“Reconsideration of Interpretation of Regulations That Determine
Pollutants Covered by Clean Air Act Permitting Programs (75 FR 17004),
the U.S. Supreme Court determined that GHGs fit within the definition of
air pollutant in the Act and directed EPA to take actions in accordance
with that determination.  EPA is responding to the Court’s decision by
following the statutory requirements of the CAA.  Accordingly, EPA
finalized its endangerment and cause and contribute findings for GHGs
under section 202(a) of the CAA and finalized corresponding GHG controls
for light duty vehicles.  In addition, the final vehicle rule will
trigger PSD requirements for GHGs because EPA has decided to interpret
the phrase “subject to regulation” found within the definition of
the term “regulated NSR pollutant” to include each pollutant subject
to either a provision in the CAA or regulation adopted by EPA under the
CAA that requires actual control of emission of a pollutant when the
regulatory requirement to control emissions of that pollutant “takes
effect.”  Thus, EPA is taking appropriate action in the
“Reconsideration of Interpretation of Regulations that Determine
Pollutants covered by Clean Air Act Permitting Programs” (see 75 FR
17004) and this rule to ensure a common sense and efficient approach to
GHG regulation.  For these reasons, this rule is not the appropriate
forum for addressing whether the CAA is suited to GHG regulation or
opining on potential Congressional action with regard to GHG regulation.

	We also agree with those commenters that support the Tailoring Rule
because without it, and as we state in the preamble of this rule, PSD
and title V requirements would apply, as of January 2, 2011, at the 100
or 250 tpy levels provided under the CAA, greatly increasing the number
of required permits, overwhelming the resources of permitting
authorities, and severely impairing the functioning of the programs.
EPA is relieving these resource burdens by phasing-in the applicability
of these programs to GHG sources.

The Tailoring Rule establishes two initial steps of the phase-in.  Step
1 begins on January 2, 2011, and covers only sources and modifications
that would otherwise undergo PSD or title V permitting based on
emissions of non-GHG pollutants.  Step 2 begins on July 1, 2011, and
covers large sources of GHG emissions that emit or have the potential to
emit 100,000 tpy CO2e or more, and modifications at those sources that
increase net GHG emissions by 75,000 tpy CO2e or more, provided those
sources or modifications also have GHG mass emissions that exceed the
relevant mass-based applicability thresholds.  This rule also requires
EPA to promulgate by July 1, 2012, a step 3 rule that will consider
phasing-in additional sources.  EPA excludes from PSD and title V
permitting for GHG emissions, until at least April 30, 2016, sources
that are not already subject and that emit less than 50,000 tpy of CO2e,
as well as modifications that do not increase net GHG emissions by
50,000 tpy CO2e, or more.  EPA will use this time to streamline the
programs for those sources and must complete a study by April 30, 2015,
to assess improvements in administrability of the programs for such
sources, and must complete a rule by April 30, 2016, addressing
additional such sources based on this study.  Thus, we disagree with the
commenters that believe that the proposed rule will have unintended
adverse consequences including permitting delays and the prevention of
energy sector projects from moving forward since we are phasing-in the
applicability of the PSD and title V programs to GHG sources as
described here and in more detail in the preamble of this rule.

EPA’s legal basis for this Tailoring Rule is its interpretation of the
PSD and title V applicability provisions under the familiar Chevron
two-step framework for interpreting administrative statutes, taking
account of the legal doctrines authorizing agencies to apply statutory
requirements in way that avoids absurd results or administrative
impossibility and authorizing agencies to implement statutory
requirements a step at a time.  Details on why we disagree with those
commenters that oppose the use of the “administrative results” and
“administrative necessity” doctrine are included in the final
preamble of this rule under section V.B.

2.5  General Comments on the Tailoring Rule and Comments on Other GHG
Regulations

2.5.1  Regulation of GHGs Under the CAA and the Proposed Tailoring Rule

Comment:

Several commenters (0480, 0600, 4631, 5184, 8071) explicitly state that
they generally support EPA’s mission in regards to climate change.
However, one of these commenters also states that climate change is a
global problem and requires a global solution.  It is imperative that
the U.S. re-establish itself as a world leader in solving the complex
challenges posed by climate change.  Strong U.S. emission reduction
commitments will enable a wide range of developing economies to take
more ambitious domestic actions and create new markets to grow the
global green economy from which we will all benefit (0600).

	Various commenters (0480, 0600, 3916, 3918, 3998, 4154, 4238, 4239,
4518, 4694, 4742, 4746, 4778, 4860, 4863, 4903, 4988, 5039, 5052, 5057,
5081, 5305, 5314, 5528, 5745,  6665, 7935, 8025, 8607, 8803, 8685,
9613), including four commenters (5122, 5306, 5311, 5448) representing
12 environmental advocacy groups, generally support the regulation of
GHGs and the use of the CAA to regulate GHGs.  One commenter adds that
in the absence of comprehensive climate change legislation, EPA must act
under its authority in the CAA (3918), while another commenter opines
that the CAA is necessary and appropriate as a critical bridge towards
comprehensive federal legislation, and can be a valuable component of
comprehensive federal climate policy in the future (7935).

Other commenters (0033, 0041, 0410, 3741, 5140, 5258, 5278, 5136, 5452,
5603, 5606, 5784, 6712, 7133, 7295, 7961, 8014, 17451) explicitly state
that they generally oppose EPA regulating CO2/GHG emissions while
several other comments (0040, 0331, 2504, 2797, 2832, 3277, 3278, 3512,
3513, 3607, 3720, 3741, 3858, 3906, 3915, 3917, 4020, 4095, 4106, 4108,
4113, 4118,4119, 4120, 4123, 4208, 4209, 4228, 4298, 4302, 4504, 4512,
4514, 4515, 4519, 4521, 4522, 4525, 4544, 4554, 4567, 4630, 4667, 4691,
4745, 4749, 4794, 4801, 4851, 4859, 4862, 4863, 4866, 4871, 4903, 4904,
4949, 4990, 4991, 5004, 5038, 5040, 5045, 5052, 5056, 5058, 5062, 5063,
5064, 5073, 5074, 5079, 5082, 5083, 5085, 5104, 5109, 5111, 5112, 5113,
5120, 5123, 5124, 5125, 5129, 5130, 5135, 5136, 5137, 5140, 5142, 5144,
5145, 5179, 5182, 5183, 5198, 5199, 5205, 5214, 5235, 5236, 5245, 5257,
5274, 5275, 5276, 5278, 5279, 5280, 5300, 5301, 5305, 5307, 5310, 5312,
5313, 5315, 5316, 5317, 5318, 5328, 5335, 5336, 5340, 5342, 5344, 5347,
5367, 5391, 5392, 5417, 5425, 5444, 5449, 5525, 5603, 5605, 5607, 5676,
5706, 5708, 5712, 5714, 5715, 5725, 5740, 5743, 5744, 5768, 5769, 5770,
5771, 5773, 5784, 5787, 5789, 5800, 5801, 5803, 5808, 5809, 5844, 5884,
5885, 5886, 5922, 5939, 6201, 6202, 6270, 6460, 6491, 6609, 6880, 7026,
7125, 7126, 7130, 7131, 7134, 7192, 7193, 7203, 7204, 7212, 7217, 7294,
7961, 7986, 8014, 8015, 8071, 8273, 8283, 8300, 8303, 8459, 8460, 8513,
8514, 8521, 8533, 8583, 8584, 8585, 8691, 9269, 10432, 14697, 14710,
16411, 17451, 18025, 19129) oppose the use of the CAA to regulate GHGs.
The reasons for their opposition include:

The CAA is not the tool or is ill-suited for addressing GHG emissions
(0040, 2797, 2832, 3512, 3917, 4020, 4118, 4119, 4120, 4123, 4208, 4209,
4228, 4243, 4302, 4514, 4521, 4525, 4630, 4667, 4801, 4851, 4862, 4863,
4866, 4903, 4990, 5040, 5056, 5062, 5064, 5073, 5074, 5082, 5085, 5130,
5136, 5140, 5142, 5144, 5199, 5214, 5236, 5275, 5278, 5280, 5300, 5301,
5305, 5307, 5312, 5313, 5315, 5316, 5317, 5318, 5328, 5335, 5336, 5340,
5347, 5367, 5444, 5740, 5769, 5770, 5773, 5784, 5808, 6202, 6270, 6460,
6609, 7126, 7193, 8300, 8513, 8691, 10432, 14697, 17451, 18025, 19129),
and have problems with the legal/congressional intent and scientific
basis for using the CAA to regulated GHGs (2797, 3512, 3513, 3858, 4095,
4106, 4243, 4298, 4515, 4554, 4691, 4741, 4745, 4851, 4871/5063/5605,
4949, 5004, 5058, 5074, 5082, 5111, 5124, 5137, 5183, 5199, 5275, 5318,
5391, 5706, 5744, 5787, 5844, 5922, 7193, 7961, 8014, 8459, 8460, 10432,
14697, 17451, 18025, 19129).

Attempting to implement a comprehensive federal climate policy by means
of the decades-old CAA achieves none of EPA’s objectives.  The CAA was
not designed to address global climate issues.  Even though EPA attempts
to avoid “absurd results” by proposing the Tailoring Rule, all the
Tailoring Rule does is highlight the legal and practical problems of
attempting to regulate stationary source GHG emissions under the CAA.
(4862, 8513)

Forcing GHG regulation under the CAA is inappropriate.  For example, by
regulating GHGs through PSD requirements triggered by finalizing the
motor vehicle rule, EPA will in effect preclude permitting authorities
and regulated entities alike from needed time to adequately analyze
emissions and available controls and otherwise prepare for
source-specific regulation.  (5315)

The differences of GHGs relative to NAAQS pollutants are so substantial
that EPA, working closely with Congress, should be evaluating more
appropriate solutions to regulating GHG rather than force fitting them
into existing CAA programs not designed to regulate GHGs (3917, 4209,
4243, 4302, 4863, 4866, 5040, 5064, 5074, 5145, 5199, 5214, 5275, 5280,
5305, 5307, 5335, 5336, 5525, 5886, 8691).  They believe or state that:

EPA has spent decades developing health-based NAAQS and no such standard
exists for CO2e.  (5305)

The CAA is clearly not designed to address pollutants that are
distributed on a global scale and remain in the atmosphere (4243, 8691).
 The CAA – designed for regulating pollutants from specific sources
and measuring impacts on specific areas – mandates EPA to designate
areas as either attainment or nonattainment (4243).  Due to the global
nature of GHGs and their associated atmospheric lifetime properties, EPA
would likely have to assess air quality on a national scale, and thus
designate the entire country as either attainment or nonattainment
(4243).

The impacts of conventionally-regulated pollutants under the CAA (e.g.,
criteria pollutants) are more local and regional as opposed to
well-mixed and dispersed GHG.  (5040, 5145, 5199, 5275, 5280, 5886);

CO2 creates different effects on human health (which has secondary
non-direct effects) than conventional pollutants regulated under the CAA
(e.g., hazardous air pollutant [HAP] and criteria pollutants which have
primary direct and secondary non-direct effects), and therefore, the EPA
is attempting to regulate the secondary effects of a pollutant (CO2)
rather than the pollutant itself.  (5214)

The CAA is in large part a statutory structure for regulating localized
air emissions based upon empirical health and environmental based
standards, and therefore not designed for the regulation of global GHGs
- much of which originate outside the U.S. and for which there are no
empirical standards.  (4209, 5525)

The fate of criteria pollutants in the atmosphere are well understood
while current global climate models are typically long term, macroscopic
overviews.  (5305)

Control technologies for criteria pollutants have an established track
record, whereas control and measurement of GHG are more tenuous.  (5305)

Federal regulatory thresholds have been developed around criteria
pollutants which are more typically emitted at the parts per million
concentration level, as opposed to GHG which are typically emitted at
the percent levels.  CO2, for example, is emitted at levels that are
completely different from the currently regulated pollutants (4302,
5214) and the health effects levels are also completely different
(4302).

The CAA fails to encourage innovation to reduce emissions beyond its
scope through such critical projects as emissions mitigation programs in
agriculture, forestry, greenscaping, and beyond.  (8691).

	Opposing commenters (3278, 3512, 3513, 4095, 4020, 4106, 4118, 4504,
4667, 5275, 5317, 5335, 5715, 5743, 5787, 6457, 8691) also provide
suggestions, including:

Prior to developing any GHG air permitting regulation that is intended
to address climate change concerns; an overall air quality assessment
needs to be completed by EPA.  This assessment must include: 1) An
overall emissions inventory which includes all GHG emissions from all
source categories (mobile, off-road mobile, area, stationary sources);
2) A climate change assessment to determine the relative impact of each
source category (climate change models could be used to conduct this
assessment) and; 3) A GHG reduction strategy focusing on the largest
emitting sources.  Specific regulations or permit requirements should
not be developed until this assessment is completed.  (5787)

EPA has available to it several means of avoiding the need for any
tailoring, all of which are consistent with the CAA.  (5715)

EPA should have declined to find that GHG emissions endanger public
health and welfare.  The Supreme Court has left EPA with the option of
declining to make an endangerment finding on the basis of such
prudential considerations as the CAA unsuitability for regulating GHGs,
itself established by the very proposal under consideration.

Under the clear terms of the CAA, EPA can determine that GHGs do not
contribute to climate change or EPA can provide some reasonable
explanation as to why it cannot or will not exercise its discretion to
determine whether they do.

A reviewing court surely would accept as a reasonable explanation
"economic and bureaucratic collapse resulting from application of CAA
programs to control a vanishingly small fraction of total emissions of a
'pollutant' that is a natural, trace constituent of the global
atmosphere with no known or knowable 'safe' or 'unsafe levels,' the
presence in the atmosphere of which possibly leads to variations in
temperature that yield costs and benefits far beyond human capacity to
meaningfully quantify."  And so Massachusetts leaves EPA to the best
option of all:  Decline further action until Congress actually enacts a
law intended to control GHGs without all of the unintended consequences
of trying to do so under the CAA.

If EPA were correct that the adoption of mobile source standards
ineluctably leads to regulation of GHG emissions from stationary
sources, and to the untenable costs and administrative burdens that it
then seeks to avoid with the Tailoring Rule, it should indefinitely
postpone those burdens by declining to adopt the vehicle emissions
rules.  EPA's proposed GHG emission standards for motor vehicles are
only 4 percent more stringent in effect than the fuel efficiency
standards proposed by the Department of Transportation (DOT).

Even if EPA were to press its finding that mobile source GHG emissions
endanger public health and welfare, and to adopt tailpipe standards and
fuel efficiency standards accordingly, it is not at all inevitable that
GHG's then become a "regulated pollutant" for purposes of CAA permitting
programs intended for stationary sources.  In fact, quite the contrary,
Congress did not mandate the nonsensical result that a decision to
regulate mobile source emissions of a pollutant should somehow change
the requirements for issuing permits to stationary sources.

The CAA is the wrong tool to use to reduce GHG emissions.  If
nonetheless EPA decides to proceed with the PSD Tailoring Rule, neither
the statute nor the Supreme Court ruling compels the approach proposed
by EPA.  EPA must exercise more flexibility than proposed and take into
account the nature of GHG emissions (compared to conventional
pollutants); the relative contribution from each industry to the total
global emissions that EPA claims is causing the endangerment, and the
facts and circumstances applicable to each industry.  (5335)

An effective climate change program will be market-based, comprehensive,
and would preempt state law – and it should come from Congress.  The
commenter recommends that any economy-wide climate change program should
have flexible approaches to establish a price signal for carbon.  The
commenter suggests such approaches may vary by economic sector and could
include, depending on the sector, market-based incentives; cap and
trade; tax reform; performance standards; and incentives for technology
research, development, and deployment.  (3512)

A market-based program to regulate GHG emissions would work (4120, 4504,
4667, 8691).  Cap-and-trade has the added benefit of harmonizing with
similar programs already in place and under consideration globally
(5743, 8691).  Another commenter added that market-based approaches
achieved through new legislation should properly consider energy,
emissions, allowances and costs, including legislation that coordinates
energy efficiencies and emission reductions, and that provides
compliance options and cost management through provisions such as
cap-and-trade, prevention of GHG leakage to overseas from unequal
impacts on energy intensive and trade exposed industry in the U.S., and
provisions for cost-effective GHG offsets (4667).  Commenter 4020
prefers a legislative solution to this issue, and favors a market-based
cap and trade program tailored to address issues of emission reductions
and allocations, credits for early performance and alternative measures
to reduce GHG’s, such as through expanded recycling.

Emissions offsets provide critical cost-containment and price stability,
whether under federal cap-and-trade legislation or existing CAA
authority, by providing flexibility to regulated industries to find the
lowest-cost emissions reductions across a range of options.  GHG
reduction opportunities are diverse and spread across the entire
economy, and offset trading is the best means to tap these opportunities
and create real change by overcoming market barriers, serving investment
needs, and correcting misaligned incentives.  Numerous studies have
concluded that use of market-based offset approaches can reduce air
pollution compliance costs in the range of 70-90 percent.  In addition
to providing cost-containment and price moderation, by energizing
innovation and market forces, offset projects provide an essential
bridge to a transformative low-carbon economy.  Offset projects are
already providing jobs and opportunity for the U.S. economy through a
robust voluntary market.  (6457)

Future legislation should not impose a carbon tax.  The commenter states
that federal regulations that would result in federal or state program
fees or taxes on the livestock industry will impose a significant added
cost that almost always cannot be absorbed or passed on to consumers.
(5743)

	Several commenters (3512, 3917, 3954, 4106, 4554, 4667, 4691, 4862,
4866, 4990, 5052, 5056, 5062, 5085, 5086, 5123, 5124, 5140, 5182, 5245,
5257, 5258, 5274, 5275, 5278, 5279, 5301, 5307, 5315, 5318, 5328, 5336,
5347, 5367, 5451, 5607, 5744, 5769, 5922, 6491, 7134, 7203, 7204, 7212,
7217, 8014, 8015, 8071, 8300, 8401, 8405, 8513, 8585, 8691, 10432,
14710, 16411) also opine that GHGs regulations should be developed by
Congress or established under a single national program.  Some of these
commenters made the following points:

New regulations should be determined by Congress-not by the EPA (3512,
4667, 5086, 5140, 5182, 5245, 5258, 5275, 5278, 5279, 5336, 5451, 5607,
5769, 5922, 6491, 7134, 7212, 7217, 8014, 8015, 8071, 8585).

The cap-and-trade program that Congress is considering to limit GHG
emissions may have duplicative, contradictory, or overlapping
requirements with this rule.  (5336)

GHG regulation is beyond the authority of just the EPA (4554, 5124,
5182, 5318, 5607, 6491, 7134, 7212, 8071).

EPA’s recent GHG-related rulemakings are not compelled under the CAA,
and the EPA should exercise its discretion under the statute in
deference to Congress’ primary role in establishing this new and
sweeping policy framework.  (5086)

The best way to arrive at the right climate change solution is to
develop a single national program, scientifically based and purposefully
designed to deal with the issue of climate change, and addressing as
well the interrelated issues of energy policy,  (8015)

EPA should not regulate GHG emissions from stationary sources using
existing CAA authority unless and until Congress has had an opportunity
to consider the policy and economic implications of taking this step.
(5123)

Regulating GHGs under the CAA should be addressed through the
legislative or regulatory process.  (3917, 4667, 4691, 4862, 4990, 5056,
5062, 5085, 5140, 5274, 5278, 5328, 5367, 8513)

EPA has voluntarily elected to establish a national GHG emission limit
as part of the LDVR before the CAA was ready to regulate GHG emissions
effectively and before Congress has had an opportunity to pass
comprehensive climate change legislation.  (5245)

New legislation (5052) and international agreements are needed to
address the GHG emissions not only in the U.S. but worldwide (4106,
4866, 5257, 5307, 5315, 5336, 8691).  Climate change is a global issue
best addressed on a worldwide basis.

EPA should develop a single national program to deal with the issue of
climate change, and address the interrelated issues of energy policy.
The commenter notes it is essential that climate change regulatory
policy promote the health and welfare of Americans by not causing severe
adverse economic impacts domestically and placing U.S. industry at a
severe international competitive disadvantage.  (16411)

Congress continues to debate market approaches such as a cap-and-trade
system for reducing GHG emissions, a command and control regulatory
scheme under the CAA will only complicate the regulation of GHGs –
resulting in a maze of partially developed regulatory permitting
regulations that will be in direct conflict with Congressional
legislative language and intent.  Because GHG reduction technologies are
in the research and development (R&D) stage, the commenter believes that
unproven technologies will complicate and delay BACT determinations,
whereas a market-based legislative solution would allow reductions at
the lowest cost to society.  The commenter is also concerned about the
impact of the PSD program on the ability to use offsets, such as
landfill and coal mine waste-to-energy projects, under a future
market-based program – without a clear signal of a future for these
offset projects, incentives for reductions from these projects would
wither.  (5301)

Various commenters (0600, 3916, 3918, 3998, 4154, 4238, 4239, 4518,
4694, 4746, 4778, 4860, 4863, 4903, 5039, 5052, 5057, 5081, 5305, 5314,
5528, 5740, 5745, 5808, 7935, 8025, 8607, 8803, 9613), including four
commenters (5122, 5306, 5311, 5448) representing 12 environmental
advocacy groups, generally support the use of the CAA to regulate GHGs
and the proposed Tailoring Rule. These commenters often made the
following points:

The rule is a significant step forward in the national effort to develop
a clear regulatory structure for addressing GHG emissions in the U.S.
(4860, 3918).

Adoption of the rule will allow their state to focus on the largest
sources of GHGs (3916).

With the implementation of the rule, impacts on some of the sensitive
lands of Indian Country may be diminished.  (4778, 8803)

The applicability thresholds governing the traditional criteria
pollutants are not appropriate for facilities that emit CO2 and other
GHGs and must be increased in order to provide a workable and reasonable
regulatory structure - and to avoid the “absurd results” that EPA
discusses (3998).  In addition, various commenters that do not
necessarily agree with EPA’s legal interpretation of when PSD and
title V permitting requirements would be triggered, do agree that a
"tailoring" of the thresholds for each of these programs must be
performed to avoid the unintended consequence of subjecting a large
number of small sources to the regimens of PSD and title V (4746, 4863,
4903, 5052, 5740, 5808, and 5305).

The rule:

Proposes a regulatory method that has been proven as an effective means
of achieving pollution reduction.  EPA analysis has found the CAA has
achieved cost-effective reductions in sulfur dioxide (SO2), nitrogen
oxides (NOx), and particulate matter (PM) with an economic benefit
demonstrated to be 42 times greater than the costs of compliance.
Therefore, applying BACT standards under the CAA to GHG emissions
continues the legacy of a demonstrably successful program to now meet
the threats of global climate change and energy independence.  (0600)

Establishes an equitable framework, by setting a regulatory threshold
that holds the largest polluters accountable while protecting the
nation’s schools, farms, and small businesses.  This arrangement would
most fairly assign responsibility to the small handful of big polluters
who account for a majority of the nation’s global warming pollution.
This allows the EPA to achieve the greatest impact with the fewest
agency resources in the short timeframe needed to protect the public
from the risks to health and welfare posed by climate change.  (0600)

Facilitates a sustainable energy strategy for the country’s future.
By applying NSR standards for GHG emissions, the EPA sends a strong
signal of support for the clean energy industry.  No longer will
fossil-fuel facilities reap the unfair advantage of being financially
unaccountable for the costs of their pollution.  Such signals are
necessary to drive investment in low-carbon technologies that will spur
sustainable growth and create valuable jobs.  (0600)

Other commenters (2504, 2797, 3278, 3512, 3858, 3278, 3607, 3720, 3741,
3915, 4020, 4118, 4120, 4123, 4298, 4512, 4519, 4521, 4554, 4768, 4866,
4871/5063/5605, 4903, 4949, 4990, 5045, 5056, 5062, 5073, 5074, 5082,
5085, 5111, 5135, 5140, 5142, 5276, 5278, 5307, 5308, 5312, 5315, 5318,
5328, 5336, 5340, 5417, 5706, 5769, 5773, 5800, 5922, 7026, 7986, 8585)
oppose the issuance of the Tailoring Rule because they believe that:

The rule is unnecessary.  The LDVR does not need to trigger PSD and
title V  (5312)  (See comments on the LDVR rulemaking and the “subject
to regulation” reconsideration rulemaking in this section for further
comments regarding applicability trigger dates for GHG PSD and title V
requirements).

The Tailoring Rule should not be finalized under the authority of CAA
section 202.  (4118).  EPA should delay or withdraw the rule and lay a
statutory groundwork that will enable a reasonable and orderly
transition for incorporation of GHG emissions into the existing PSD and
title V programs.  (3278)

EPA should conclude that PSD and title V permitting are not meant to
apply based on a source’s CO2 or GHG emissions, and cite
Congressional, legislative history, and legal support for their
position.  (3512, 3720, 4298, 5082, 5111, 5318, 5800, 5922)

EPA must realize that it is unreasonable and unnecessary to interpret
the CAA to impose PSD requirements suddenly upon issuance of a wholly
separate regulation such as the LDVR.  (4871/5063/5605)

The proposal will precipitate costly legal challenges and more time is
needed to study the environmental and economic impacts that would be
associated with regulating GHGs.  (8585)

The rule is not an efficient use of taxpayer money and represents
duplicity of regulation for no apparent reason.  (4554)

Response:

Most of the above comments are not relevant to the proposed rule at
issue in this rulemaking.  This rulemaking is not about whether and/or
when EPA should determine, under section 202(a), that emissions of GHGs
from new motor vehicles cause or contribute to air pollution that may
reasonably  be anticipated to endanger public health or welfare, and if
so when EPA should or should not establish emissions standards under
section 202(a) of the CAA.  Rather, this proposed rule was about
developing a reasonable implementation plan for the PSD and title V
permitting programs in the event they are triggered for GHGs.  Thus, for
example, comments questioning the timing of a final section 202(a)
endangerment finding, opining about the timing of regulations under
section 202(a), discussing generally the appropriateness of using the
CAA to address GHGs, arguing that GHGs require a global approach, noting
a preference for legislation generally and/or a preference for a
particular regulatory or legislative approach, and otherwise arguing
against CAA actions to address GHGs are outside the scope of the
specific questions and issues raised and addressed in the proposed
Tailoring Rule.  Therefore, we are not responding to them in this RTC.
We note that many of these comments have been raised and addressed in
other GHG rulemakings.  See, e.g.,  Final Endangerment and Cause or
Contribute Findings for Greenhouse Gases Under Section 202(a) of the
Clean Air Act, 74 FR 66496, 66500 (Dec. 15, 2009) (responding to
comments regarding timing of endangerment finding).  As noted above,
comments that are relevant to the specific issue of how to implement the
title V and PSD programs for GHGs are addressed in Chapter 8 of this RTC
(Implementation Issues).

	Importantly, because EPA has finalized the endangerment finding and the
LDV rule, we must move forward with the Tailoring Rule.  Thus, we also
agree with those commenters that support the Tailoring Rule because
without it, and as we state in the preamble of this rule, PSD and title
V requirements would apply, as of January 2, 2011, at the 100 or 250 tpy
levels provided under the CAA, greatly increasing the number of required
permits, overwhelming the resources of permitting authorities, and
severely impairing the functioning of the programs.  EPA is relieving
these resource burdens by phasing-in the applicability of these programs
to GHG sources as we explained above and as explained in more detail in
the preamble of this final action.

EPA’s legal basis for this Tailoring Rule is its interpretation of the
PSD and title V applicability provisions under the familiar Chevron
two-step framework for interpreting administrative statutes, taking
account of the legal doctrines authorizing agencies to apply statutory
requirements in way that avoids absurd results or administrative
impossibility and authorizing agencies to implement statutory
requirements a step at a time.  Details on why we disagree with those
commenters that oppose the use of the “absurd results” and
“administrative necessity” doctrine as well as our responses to the
comments received on how this Tailoring Rule fits into the CAA (e.g.,
details on our interpretation of the concept that a NAAQS should be
established before GHGs can be regulated under the PSD program) are
included under Section V.B. under the final preamble of this rule.  We
note that for the reasons presented in those sections we disagree that
we are required, or allowed, to undertake the rulemakings and other
regulatory actions (e.g., inventory development) that commenters suggest
are needed prior to subjecting a pollutant to PSD review.  See also 75
FR 17400 (April 2, 2010).

2.5.2  Endangerment Finding Under Section 202 of the CAA

Comment:

Two commenters representing eight environmental groups, support the
endangerment finding under section 202 of the CAA.  (5306, 5311)

	Other commenters (3720, 3954, 4095, 4118, 4542, 4630, 4631, 4693, 4741,
4851, 4867, 4871, 5005, 5045, 5063, 5082, 5110, 5120, 5129, 5137, 5140,
5142, 5184, 5235, 5278, 5309, 5310, 5317, 5328, 5605, 5607. 5712, 5715,
5718, 5800, 6712, 7204, 8015, 8459, 10432, 14697) express or imply that
they oppose the endangerment finding under section 202 of the CAA.

Other  commenters argue that EPA is under no obligation to issue these
rules at the present time, and that the Supreme Court noted in
Massachusetts v. EPA that the EPA has administrative discretion
regarding the timing and form of issuing rules (0523, 3720, 5110, 5120,
5235, 5800, 8015, 16411).

	Several other commenters (4542, 4851, 5142, 5235, 5712, 8459) state
that the science does not support an endangerment finding, while other
commenters (e.g., 15054) request clarification/evidence and
quantification of the effects of global warming that they believe EPA
had not sufficiently provided to support an endangerment finding
because:

Data from the Intergovernmental Panel on Climate Change (IPCC) has been
found to be suspect.  The IPCC relied on information from the Climate
Research Institute (CRU) at the University of East Anglia in England.
More than 61 megabytes of CRU e-mails and documents that were made
public has cast serious doubt of the reliability of this information and
its ability to meet the requirements of the IQA.  The publicly-available
e-mails suggest that CRU scientists have been suppressing, possibly
destroying and misstating data.  Public review needs to be held to
determine if raw data was deleted, doctored or otherwise withheld that
would have changed any of the GWPs prior to relying on the values
referenced to the IPCC SAR.  There must be an opportunity to determine
if a correction is needed and, if so, then time needed to propose the
correction.  The commenter asserts that EPA’s proposal to define, by
reference, the GWPs of EPA's Inventory of U.S. Greenhouse Gas Emissions
and Sinks also violates the CAA 307(d) rulemaking requirements, as well
as regulations of the Director of the Federal Register.  (8459)

EPA's finding that high concentrations of GHGs are "very likely" the
cause of increased global temperatures ignores strong evidence that
global temperatures have stopped rising.  As recently as November 20,
2009 Der Spiegel reported that climatologists are "puzzled as to why
average global temperatures have stopped rising over the last 10 years."
 (5235)

The article cites a recent study completed by Great Britain's Hadley
Centre for Climate Prediction and Research questioning the IPCC's
figures pertaining to an increase in global climate temperatures.
According to the Hadley Centre, the “world grew warmer by .07 degrees
Celsius from 1999 to 2008 and not by the .2 degrees Celsius assumed by
the United Nations Intergovernmental Panel on Climate Change."
Furthermore, the Hadley Center attributes the .07 degree increase to
naturally occurring phenomena, El Niño and La Niña.

Recently released confidential documents from the University of East
Anglia's Climate Research Unit, strongly suggest that key IPCC
scientists have improperly manipulated evidence to support the theory of
anthropogenic global warming.  (4542, 4851)

	A couple of commenters believe EPA misstates the regulatory
ramifications of the Supreme Court's decision in Massachusetts vs. EPA
(5082) or EPA could have determined that a policy-based reason prevents
EPA from making a reasoned decision on endangerment (5110) because:

EPA could provide some reasonable explanation as to why it cannot or
will not exercise its discretion to determine whether GHG emissions from
new motor vehicles or new motor vehicle engines contribute to air
pollution that may reasonably be anticipated to endanger public health
or welfare.  The commenter believes that EPA can meet this standard, and
respond to the remand in Massachusetts on the ground that an
endangerment finding under section 202 will directly lead to the trigger
of NAAQS, NSPS, PSD and title V, which the commenter believes were never
intended to cover such emissions, and triggering these provisions will
have a devastating effect on the already fragile economy.  (5082)

The Court did not require that EPA’s "reasonable explanation" not to
undertake the endangerment process be wholly science-based.  Instead,
the commenter believes that a decision by EPA not to undertake the
process for finding endangerment, on the basis that such a finding will
trigger a regulatory cascade and cause economic chaos - of the precise
type contemplated by the Tailoring Rule itself - constitutes a
"reasonable explanation" as required by the ruling in the cited case.
(5110)  The commenter cites the statement made by the Supreme Court that
states:  "[u]nder the clear terms of the CAA, EPA can avoid taking
further action only if it determines that GHGs do not contribute to
climate change or if it provides some reasonable explanation as to why
it cannot or will not exercise its discretion to determine whether they
do."

Other commenters argue that:

By moving several separate, near-simultaneous packages to initiate and
define the regulation of GHGs under authority of the CAA, EPA has
obscured fundamental issues of how and when EPA should proceed to
respond to the Supreme Court’s decision in Massachusetts v. EPA.
(4095)

EPA did not allow for comment on the affect the findings of endangerment
and the promulgation of mobile source rules under section 202 had on the
implementation of PSD or other title I requirements on stationary
sources, saying it was unrelated.  Under the Tailoring Rule, EPA is
proposing regulations on stationary sources without discussion or
elicitation of comment on how the other requirements of title I under
the CAA are affected by these coordinated rulemakings.  EPA must analyze
and describe how the other provisions of title I will be affected by its
coordinated rulemakings for GHGs before finalizing any GHG Endangerment
Finding or rulemakings under the Act.  (5082)

Finally, some commenters believe EPA should withdraw or revoke the
Endangerment Finding and/or proposed Tailoring Rule because:

EPA should defer to sound science, Congress, and world organizations to
address policy on the issue of manmade climate change.  (5607, 5712)

The Tailoring Rule will have a devastating effect on their state’s
economy.  (4871/5063/5605)

Response:

	As noted earlier, comments regarding the section 202(a) endangerment
and cause or contribute findings, and the Supreme Court’s decision in
Massachusetts v. EPA, are outside the scope of this rulemaking.  Indeed,
many of these same issues were raised in the comment period on the
findings or on pending petitions for reconsideration on the findings.
Thus, they have either already been responded to in the final findings,
to the extent relevant, or are pending before EPA in petitions for
reconsideration and will be addressed in EPA’s response to those
petitions.  They are not, however, within the scope of this rulemaking.

We disagree with commenters who argue that EPA has obscured fundamental
issues of how it should respond to the Supreme Court’s decision or the
effect of regulating GHGs under the CAA through the promulgation of
several rules addressing GHGs.  EPA has been moving forward in careful,
thoughtful manner to address this complicated issue.  This rule, which
addresses implementation issues regarding the PSD and title V programs
is a key part of that overall process.

We further note that withdrawing the Tailoring Rule would be
counter-productive to solving the problems that commenters argue flow
from the endangerment finding and LDVR.  The Tailoring Rule will provide
relief and establish a reasonable path forward for implementing the PSD
and title V programs.  See section 6.1 of this RTC.

2.5.3  Light Duty Vehicle Rule (LDVR)

Comment:

	Several commenters (5306, 5311) support the promulgation of the LDVR
under section 202 of the CAA, at least in the near term.

One commenter (4524), while not necessarily supporting or opposing the
rule, states that EPA should take steps to allow for sufficient time for
states to revise their own title V and PSD programs before GHGs become
regulated pollutants triggering PSD and title V requirements by either
delaying the adoption of its portion of the LDVR or by adopting an
effective date of its portion of the rule that gives a sufficient time
for states to revise their own title V and PSD programs.

Several other commenters (3513, 3720, 3858, 4016, 4095, 4021, 4106,
4113, 4118, 4122, 4123, 4243, 4318, 4519, 4522, 4523, 4631, 4741, 4851,
4862, 4870, 4952, 4992, 5005, 5038, 5052, 5080, 5083, 5088, 5089, 5113,
5114, 5120, 5123, 5128, 5137, 5140, 5141, 5143, 5184, 5214, 5224, 5245,
5278, 5310, 5316, 5317, 5327, 5328, 5342, 5345, 5346, 5390, 5451, 5601,
5712, 5713, 5714, 5715, 5741, 5768, 5773, 5800, 5886, 6141, 6414, 6459,
6880, 7217, 8015, 8071, 8273, 8301, 8303, 8533, 8545, 8581, 16411)
oppose the promulgation or support delaying promulgation of the LDVR
under section 202 of the CAA because:

EPA is not required by the CAA or judicial decisions to regulate GHGs
from motor vehicles under CAA section 202/statute by a particular
deadline.  (3513, 3720, 4095, 4519, 5005, 5120, 5245, 5310, 5316, 5317,
5328, 5452, 5800)

While EPA is now required to set standards for vehicles under CAA
section 202 by virtue of its December 6, 2009 final Endangerment
Determination, the Supreme Court’s opinion in Massachusetts v. EPA
indicated clearly that EPA has significant discretion with regard to the
time, manner, and form of its regulations (4095).

EPA was not forced to propose a LDVR that needs to be promulgated by
March 31, 2010 to ensure that this requirement applies to 2012 MY
vehicles.  Because of its own proposed action, EPA has created the very
“absurd result” from which it now seeks relief in the proposed GHG
Tailoring Rule.  (5245, 5452)

EPA as a policy decision could decide not to establish GHG emission
limits under section 202(a) of the CAA at this time (4519, 5317).  One
commenter added that a decision not to regulate under the CAA would be
consistent with the text of the CAA and the Supreme Court’s decision
in Massachusetts v. EPA, 549 U.S. 497 (2007), which emphasizes that the
Court “h[e]ld only that EPA must ground its reasons for action or
inaction in the statute.”  Id. at 535 (emphases added) (5317).  In
other words, section 202(a) imposes no deadline for promulgating
regulations.

EPA’s section 202 rule should be withdrawn or re-proposed since it
violates several statutes and EOs.  (4095, 5607)

The proposed rules: (1) are not projected by EPA to prevent, to any
meaningful or discernible extent, risks to public health and welfare
(5317); and (2) are, with respect to the small reductions of those risks
that those rules are projected to produce, essentially duplicative of
NHTSA’s proposed Corporate Average Fuel Economy (CAFÉ) standards
(3720, 4016, 4095, 4106, 4113, 4118, 4123, 4870, 5184, 5245, 5245, 5317,
5328, 5451, 5713, 5800, 6880, 8071, 8303, 8533, 8581).

	Commenters who support delaying the promulgation of the LDVR (if not
forego promulgation altogether) (3720, 3858, 4095, 4113, 4118, 4122,
4318, 4522, 4523, 4952, 4992, 5038, 5080, 5089, 5114, 5128, 5245, 5317,
5327, 5601, 5741, 5768, 5800, 6459, 6880, 8273, 8301, 8303, 8533, 8581)
added that:

EPA could use this time to pursue streamlining of PSD and title V
requirements for GHGs, to allow states time to prepare, and to avert
negative economic impacts (3720, 4095, 4524, 5800).

Delaying the GHG tailpipe rule would provide states with sufficient time
to update their SIPs to mirror EPA's proposed Tailoring Rule and
otherwise hire sufficient staff to deal with the onslaught of stationary
source permits that will result from the regulation of GHGs.  (3720,
5800)

A delay of 5 to 6 years will allow: (1) NHTSA’s new CAFE standards to
reduce vehicle emissions, (2) states to “ramp up” administrative
resources as necessary to address PSD and title V permit applications,
and (3) EPA and states to develop any appropriate and lawful
“streamlining” techniques for permits and permit processing.  The
commenter adds that this approach would obviate (or defer) any need to
deviate from the clear text of the CAA and would also allow EPA to
engage the regulated community and other members of the public in
meaningful discussion about how GHG emissions might be addressed in a
cost-effective way, to the extent GHG regulation may occur under the
Act, thereby allowing time and opportunity for development of reasonable
approaches to regulatory decision-making.  (5317)

EPA could address GHGs through climate change legislation.  The LDVR
requirements being proposed overlap with the fuel efficiency standards
proposed by the NHTSA.

	In addition, opposing commenters (3513, 3720, 4016, 4106, 4118, 4119,
4122, 4243, 4318, 4519, 4522, 4523, 4684, 4741, 4862, 4952, 4992, 5038,
5080, 5083, 5088, 5089, 5114, 5120, 5123, 5128, 5137, 5140, 5141, 5143,
5214, 5245, 5278, 5317, 5327, 5328, 5345, 5390, 5601, 5711, 5714, 5715,
5741, 5770, 5773, 5800, 6141, 6414, 6459, 7126, 7217, 8301, 8545, 16411)
provide the following suggestions:

GHG emissions from automobiles can be regulated without using section
202, which would eliminate the need for the Tailoring Rule (5214).   For
example, one commenter stated that EPA could limit the scope of the
rulemaking for light-duty vehicles to fuel efficiency (CAFÉ) standards
while deferring regulatory action on tailpipe GHG standards.  (4106)

EPA should decouple the upcoming final vehicle emissions rule from
impacts on stationary sources in order to obviate the need for the
proposed Tailoring Rule (5317, 5844, 6141). One commenter added that EPA
can make a determination that the LDVR does not trigger PSD (or, by
extension, title V) requirements for CO2, even if the LDVR is
promulgated under section 202(a).  (5317)

EPA and NHTSA should establish fuel economy standards that accomplish
the desired goals of substantial reductions in GHG emissions and
improvements in fuel economy.  If this was done, the other sections of
the CAA (specifically title V permitting and PSD permitting) will not be
triggered.  (4519)

EPA should work together with the Administration and Congress to agree
on an interim legislative directive so that EPA could move forward on
the pending LDVR in a manner that would not trigger stationary source
controls.  (4016)  Automotive GHG emissions will be reduced through new
fuel efficiency regulations established by the U.S. DOT.  (5444, 5770)
and EPA could work through existing platforms, like those outlined by
the Department of Transportation (DOT) for light duty vehicles, to
better control GHG emissions and thus avoid radically altering the
regulations.  (7126)

EPA should withdraw the GHG emissions limits from the LDVR, avoid the
administrative problem that is created through the applicability of PSD
and title V permit requirements for sources emitting small amounts of
GHGs, and allow Congress to address this issue with climate change
legislation.  (5088, 5245, 7217).

Response:

	The comments that EPA had no authority to promulgate, or should not
have promulgated, the endangerment/cause or contribute findings or the
LDVR at the times that EPA did are not relevant to this rule, the
Tailoring Rule.  EPA has already promulgated the findings and the LDVR,
and the LDVR triggers PSD and title V applicability, as we have seen.
These comments would have been relevant only to the proposed findings
and LDVR, and we are not, in this rulemaking, revisiting or reopening
the findings or the LDVR.  EPA does have pending before it ten petitions
to reconsider the endangerment and cause or contribute findings.  EPA is
carefully evaluating those petitions and expects to issue its
decision(s) on or about July 30, 2010.

Commenters claim that if EPA promulgates the LDVR, the “absurd
results” doctrine will no longer apply to the Tailoring Rule because
it will have been EPA’s own action – promulgation of the LDVR –
that gives rise to the “absurd results”.  We disagree for several
reasons.  For one thing, commenters have not cited case law, and our
research has disclosed none, in which a court specifically addressed a
similar situation and issued a holding along the lines of what
commenters urge.  Moreover, commenters’ approach would be punitive
because the absurd results would occur absent this rule going final.
Such an outcome would be counter to the purpose of the doctrine.  That
is, it would mean that PSD and title V would apply to GHG sources by
their terms – at the statutory levels, as of January 2, 2011 – with
all the adverse consequences described elsewhere.  	In any event, and
although we are not obligated to respond to these comments on the
merits, they are incorrect on the merits, for the reasons that follow.
This discussion should not be viewed as reopening the endangerment/cause
or contribute findings or the LDVR because, as stated previously, we are
not reconsidering or reopening those two actions in this rule.

In determining and implementing congressional intent, it is important
that  the statutory provisions at issue be considered together – (1)
the obligation to make a determination on endangerment and contribution
under CAA section 202(a); (2) if  affirmative endangerment/cause or
contribute findings are made,  the obligation to promulgate standards
applicable to the emission of any air pollutant from new motor vehicles
or new motor vehicle engines under CAA section 202(a); and (3) the PSD
and title V applicability provisions.  The most appropriate reading, and
certainly a reasonable reading, is that we are required to take the
action we have taken, and are taking with this rule, and that is to
issue the findings, promulgate the LDVR, and promulgate the Tailoring
Rule.  Our approach gives effect to as much of Congress’s intent for
each of these provisions, and the CAA as whole, as possible.

With respect to the endangerment/cause or contribute findings under CAA
section 202(a), congressional intent is clear that, as we stated in
making the findings and the Supreme Court held in Massachusetts v. EPA,
we are precluded from considering factors other than the science based
factors relevant to determining the health and welfare effects of the
air pollution in question.  Accordingly,  EPA determined that under
Massachusetts v. EPA, 549 U.S. 497 (2007) we were precluded from
deferring or foregoing the findings due to concern over impacts on
stationary sources affected by PSD or title V requirements.  See 74 FR
at 66496, 66500-01 (“Taken as a whole, the Supreme Court’s decision
clearly indicates that policy reasons do not justify the Administrator
avoiding taking further action on the questions here.”); see also
Massachusetts v. EPA, 549 U.S. at 533; see also 74 FR at 66515-16
(December 9, 2009).  (The Administrator “must base her decision about
endangerment on the science, and not on the policy considerations about
the repercussions or impact of such a finding).  Moreover, as EPA also
noted, “EPA has the ability to fashion a reasonable and common-sense
approach to address greenhouse gas emissions and climate change.”  74
FR at 66516.

Regarding the timing of the LDVR, Congress’s intent was that
endangerment/cause or contribute findings under section 202(a) would in
fact lead to control of the air pollutants from new motor vehicles and
new motor vehicle engines contributing to the harm.  The primary goal of
section 202(a) is to achieve such reductions by requiring that EPA adopt
emissions standards, and as a result, proceeding with the LDVR is
consistent with that goal.  In contrast, deferring the LDVR and thereby
delaying achievement of the public health and welfare benefits Congress
expected and required under section 202(a) would run directly counter to
what Congress intended under section 202(a) - EPA issuing emissions
standards to address the public health and welfare problems that were
identified, not EPA refusing to do so.

Moreover, we have compelling reasons to proceed with the LDVR, in the
manner that we did.  As we stated in the LDVR, in response to similar
comments that we were not obligated to conduct that rulemaking, or to
conduct it at the time that we did:

Some of the comments relating to the stationary source permitting issues
suggested that EPA should defer setting GHG standards for new motor
vehicles to avoid … [adverse] stationary source permitting impacts.
EPA is issuing these final GHG standards for light-duty vehicles as part
of its efforts to expeditiously respond to the Supreme Court’s nearly
three year old ruling in Massachusetts v. EPA, 549 U.S. 497 (2007).  In
that case, the Court held that GHGs fit within the definition of air
pollutant in the Clean Air Act, and that EPA is therefore compelled to
respond to the rulemaking petition under section 202(a) by determining
whether or not emissions from new motor vehicles cause or contribute to
air pollution which may reasonably be anticipated to endanger public
health or welfare, or whether the science is too uncertain to make a
reasoned decision.  The Court further ruled that, in making these
decisions, the EPA Administrator is required to follow the language of
section 202(a) of the CAA.  The Court stated that under section 202(a),
"[i]f EPA makes [the endangerment and cause or contribute findings], the
Clean Air Act requires the agency to regulate emissions of the
deleterious pollutant."  549 U.S. at 534.  As discussed above, EPA has
made the two findings on contribution and endangerment.  74 FR 66496
(December 15, 2009).  Thus, EPA is required to issue standards
applicable to emissions of this air pollutant from new motor vehicles.

	The Court properly noted that EPA retained "significant latitude" as to
the "timing ... and coordination of its regulations with those of other
agencies" (id.).  However it has now been nearly three years since the
Court issued its opinion, and the time for delay has passed.  In the
absence of these final standards, there would be three separate federal
and state regimes independently regulating light-duty vehicles to
increase fuel economy and reduce GHG emissions: NHTSA’s CAFE
standards, EPA’s GHG standards, and the GHG standards applicable in
California and other states adopting the California standards.  This
joint EPA-NHTSA program will allow automakers to meet all of these
requirements with a single national fleet because California has
indicated that it will accept compliance with EPA’s GHG standards as
compliance with California's GHG standards.  74 FR at 49460.  California
has not indicated that it would accept NHTSA’s CAFE standards by
themselves.  Without EPA’s vehicle GHG standards, the states will not
offer the federal program as an alternative compliance option to
automakers and the benefits of a harmonized national program will be
lost.  California and several other states have expressed strong concern
that, without comparable federal vehicle GHG standards, the states will
not offer the federal program as an alternative compliance option to
automakers.  Letter dated February 23, 2010 from Commissioners of
California, Maine, New Mexico, Oregon and Washington to Senators Harry
Reid and Mitch McConnell (Docket EPA-HQ-OAR-2009-0472-11400).  The
automobile industry also strongly supports issuance of these rules to
allow implementation of the national program and avoid “a myriad of
problems for the auto industry in terms of product planning, vehicle
distribution, adverse economic impacts and, most importantly, adverse
consequences for their dealers and customers.”  Letter dated March 17,
2010 from Alliance of Automobile Manufacturers to Senators Harry Reid
and Mitch McConnell, and Representatives Nancy Pelosi and John Boehner
(Docket EPA-HQ-OAR-2009-0472-11368).  Thus, without EPA’s GHG
standards as part of a federal harmonized program, important GHG
reductions as well as benefits to the automakers and to consumers would
be lost.  In addition, delaying the rule would impose significant
burdens and uncertainty on automakers, who are already well into
planning for production of MY 2012 vehicles, relying on the ability to
produce a single national fleet.  Delaying the issuance of this final
rule would very seriously disrupt the industry’s plans.

Instead of delaying the LDVR and losing the benefits of this rule and
the harmonized national program, EPA is directly addressing concerns
about stationary source permitting in other actions that EPA is taking
with regard to such permitting. That is the proper approach to address
the issue of stationary source permitting, as compared to delaying the
issuance of this rule for some undefined, indefinite time period.

75 FR 25,402 cols. 1-3 (May 7, 2010) (footnote omitted).

With respect to both the endangerment/cause or contribute findings and
the LDVR, it would require speculation and conjecture to defer – or,
certainly, to forego altogether - the findings or LDVR until EPA
completed streamlining the PSD and title V requirements on grounds that
doing so would allow full compliance in the future with all PSD and
title V statutory provisions.  That is the gist of commenters’
argument – that EPA should defer or forego issuance of the findings
and the LDVR to avoid causing an absurd result from implementation of
the separate PSD and title V programs.  Underlying this claim is the
assumption that this would allow EPA to avoid the “absurd results”.
As we discuss elsewhere in this rulemaking, there is no basis at this
point to determine that streamlining will ultimately allow full
compliance with the PSD and title V requirements.  Rather, it is
possible that EPA may conclude that none of the available streamlining
techniques will allow all GHG sources at the statutory thresholds to
comply with PSD and title V requirements in a manner that does not
impose undue costs on the sources or undue administrative burdens on the
permitting authorities.  Under these circumstances, EPA may then
permanently exclude GHG source categories from PSD or title V
applicability under the absurd results doctrine.  Moreover, it may well
take many years before EPA is in a position to come to a conclusion
about the extent to which streamlining will be effective and therefore
be able to come to a conclusion as to whether any source categories
should be permanently excluded from PSD or title V applicability.  In
this final rulemaking, we describe what actions we expect to take in the
first 6 years after PSD and title V are triggered for GHG sources, and
we may well be in a situation in which we continue to evaluate
streamlining measures and PSD and title V applicability to GHG sources
after this 6-year period.

Accordingly, deferring the endangerment/cause or contribute findings and
LDVR until such time that PSD and title V streamlining would allow full
implementation of these programs at the statutory limits would serve
only to delay the benefits of the LDVR, as well as the benefits that
come from phasing in implementation of the PSD program to cover larger
sources first.  It would rely on an assumption that is unfounded at this
point, that is, that such full compliance will be required at some point
in the future.  Delaying the emissions benefits of the LDVR and the
related emissions benefits from partial implementation of the PSD
program fails to implement Congress’ intent that the
endangerment/cause or contribute findings “shall” lead to emissions
standards for new motor vehicles contributing to the endangerment, and
related emissions controls for the same air pollutant under the PSD
program.  EPA need not determine at this time what approach would be
appropriate if there was a determination that full compliance with PSD
and title V would in fact occur at some point in the future.  In this
case, absent such a determination, it would be improper to rely on
speculation of such a future possibility as a basis under section 202(a)
to defer or forego issuance of the LDVR on the grounds that EPA should
defer or forego the LDVR to avoid causing an absurd result.  Likewise
there is no basis to defer proceeding at this time with the streamlining
of the PSD and title V programs.

With respect to the PSD and title V applicability requirements, as we
discuss elsewhere, we believe that Congress expressed a clear intent to
apply PSD and title V to GHG sources and that the phase-in approach
incorporated in the Tailoring Rule is fully appropriate.  Proceeding now
with the endangerment/contribution findings and LDVR, even if phasing-in
of the PSD and title V programs is required, is consistent with our
interpretation of the PSD and title V applicability requirements.
Delaying the endangerment/contribution findings or LDVR, and thereby
delaying the triggering of PSD and title V requirements for GHG sources,
would lead to the loss of a practicable opportunity to implement the PSD
and title V requirements in important part, and thereby lead to the loss
of important benefits.  As discussed elsewhere, promulgating the LDVR
and applying the PSD and title V requirements to the largest GHG
sources, as we do in this Tailoring Rule, is practicable because the
sources that would be affected by the initial implementation steps we
promulgate in this rule are able to bear the costs and the permitting
authorities are able to bear the associated administrative burdens.
Promulgating the LDVR now provides important advantages because the
sources that would be affected by the initial steps are responsible for
most of the GHG emissions from stationary sources.

It should also be noted that as discussed elsewhere in this rulemaking,
our ability to develop appropriate streamlining techniques for PSD and
title V requirements is best done within the context of actual
implementation of the permitting programs, and not in isolation of them.
 That is, because the great majority of GHG sources have not been
subject to PSD and title V requirements, we will need to rely on the
early experience in implementing the permitting requirements for the
very large sources that initially will be subject to those requirements
in order to develop streamlining techniques for smaller sources.  It is
the real world experience gained from this initial phase that will allow
EPA to develop any further modifications that might be necessary.  This
would not and could not occur if the LDVR were delayed indefinitely or
permanently, so that PSD and title V requirements were not triggered.
It is unrealistic to expect that delaying action until a future
Tailoring Rule could resolve all of the problems identified in this
rulemaking, absent any real world implementation experience.

At its core, commenters’ argument is that EPA should delay (if not
forego altogether) doing anything to address GHG emissions and the
problems they cause until it can do so in a way that does not cause any
implementation challenges, even if that delay results in continued
endangerment to public health and welfare.  EPA does not take such a
myopic view of its duties and responsibilities under the CAA.  Congress
wrote the CAA to, among other things, promote the public health and
welfare and the productive capacity of the population.  CAA section
101(b)(1).  EPA’s path forward does just this.  Thus, proceeding with
the endangerment/cause or contribute findings, the LDVR, and with PSD
and title V through the phase-in approach of the Tailoring Rule
maximizes the ability of EPA to achieve the Congressional goals
underlying sections 202(a) and the PSD and title V provisions, and the
overarching CAA goal of protecting public health and welfare.  Congress
called for EPA (1) to determine whether emissions from new motor
vehicles contribute to air pollution that endangers, (2) if that the
determination is affirmative, to issue emissions standards for new motor
vehicles to address the endangerment, and (3) to implement the PSD and
title V program to address similar emissions in their permitting program
as another tool to address the air pollutant at issue.  Delaying both
the LDVR and PSD/title V implementation, as commenters have called for,
would run directly counter to these Congressional expectations.
Commenters’ calls for deferral or foregoing of the findings or LDVR
are generally phrased in a conclusory fashion, and do not demonstrate
how EPA could take the required CAA actions concerning GHGs while
remaining within the requirements of each of the various CAA provisions,
and achieving the overall goals of the CAA.  As such the comments do not
provide a valid basis for the deferral of agency action they suggest.

2.5.4  Reconsideration of Interpretation of Regulations that Determine
Pollutants Covered by CAA Permitting Programs (“CAA Interpretation
Reconsideration Rulemaking”)

Comment:

Three commenters, representing nine environmental advocacy groups,
support EPA’s “Reconsideration of Interpretation of Regulations that
Determine Pollutants Covered by Clean Air Act Permitting Programs”
proposal.  (5139, 5306, 5311)

Other commenters (4095, 4118, 4119, 4243, 4298, 4515, 4567, 4691, 4741,
4746, 4862, 4863, 4871/5063/5605, 4903, 5052, 5062, 5073, 5082, 5083,
5084, 5088, 5111, 5120, 5123, 5133, 5137, 5138, 5140, 5141, 5143, 5145,
5147, 5199, 5224, 5278, 5305, 5317, 5328, 5345, 5390, 5714, 5715, 5740,
5800, 5808, 5886, 6414, 7026, 8460, 8513, 8545, 16411) on the
“Reconsideration of Interpretation of Regulations that Determine
Pollutants Covered by CAA Permitting Programs” proposed rulemaking
express that EPA should use its discretion to find that issuance of the
title II LDVR will never trigger PSD and title V permitting.  Other
commenters add that they disagree with EPA’s conclusion that the title
II LDVR triggers PSD/title V (4095, 4903 5062, 5083, 5120, 5800, 5317,
5714, 5773).

A few commenters (4118, 4741, 5062, 5082, 5084, 5199) suggest that we
can interpret the CAA such that:

It does not apply to a pollutant under PSD until “actual controls”
are required to be implemented (5082, 5084) or, alternatively, until EPA
designates a pollutant as regulated under the provisions of title I as
detailed in the provisions and requirements of title I section 108.
However, one of these commenters adds that the provisions in the Johnson
Memorandum are not sufficient to provide an orderly interpretation of
GHG regulations under the PSD and title V programs.  (5084)

(1) PSD requirements should not be considered to apply to emissions of a
pollutant before an emission control regulation for that pollutant has
become effective (in this case the motor vehicle rule), and (2) that to
be "effective" a regulation must have become applicable in a real-world
sense, such that the new requirements imposed by the regulation have
actually become applicable for regulated sources and are no longer
merely prospective obligations.  (5062, 5199)

The phrase “pollutants subject to regulation” excludes GHGs.  This
simple and straightforward approach again provides EPA a way to avoid
"absurd results" without stretching the "administrative necessity"
doctrine further than it can lawfully reach.  (4118, 4741)

Various commenters state that EPA should clarify under the Tailoring
Rule that the trigger date for GHGs being a “pollutant subject to
regulation” is no earlier than the date of compliance with the section
202 rule (3720, 4016, 4118, 4119, 4298, 4567, 4684, 4903, 5062, 5073,
5111, 5133,  5138, 5147, 5714, 5800, 7026, 8460) or no earlier than the
date on which the final motor vehicle GHG rules “take effect” or
actual controls are required (3720, 4118, 4120, 4122, 4243, 4318, 4522,
4523, 4691,  4952, 4992, 5038, 5062, 5080, 5089, 5114, 5128, 5317, 5327,
5328, 5601, 5711, 5741, 5800, 6459, 8301).  PSD requirements should not
be triggered when a rule controlling GHGs pollutants is promulgated
(4120, 4691, 5062, 5088).  In addition, some commenters assert that this
date is:

No sooner than the date on which a 2012 model year vehicle can be
produced and is subject to “actual controls.”  (3720, 4016, 4106,
4118, 4119, 4298, 4684, 5111, 5800, 7026)

When EPA certifies that the first 2012 model vehicles meet the GHG
limits in the vehicle rule.  (5133)

The date on which such rules would become operative and create current,
legally binding obligations, which would be no earlier than October 1,
2011 and could be as late as in January 2011, or sometime in 2012.
(3720, 4120, 4122, 4243, 4318, 4522, 4523, 4952, 4992, 5038, 5080, 5089,
5114, 5128, 5317, 5327, 5328, 5601, 5711, 5741, 5800, 6459, 8301).

A few commenters added that this date should not be the date when the
Tailoring Rule goes into effect, since the proposed Tailoring Rule
appears to be written so that GHG emissions above the thresholds would
trigger PSD and title V applicability as soon as the Tailoring Rule goes
into effect.  See, e.g., proposed 40 C.F.R. 52.21(b)(1)(i)(d)).  That
would be inconsistent with EPA’s claim of statutory authority to apply
these permitting programs to GHGs.  (4903, 5062, 5317)

One commenter requests that EPA clarify when each of the six GHGs become
“subject to regulation” under the CAA.  (5922)

	Other commenters argue that PSD is triggered only after a NAAQS has
been established for those pollutants and where a source’s location is
in attainment with a NAAQS.  (3513, 4095, 4118, 4243, 4862, 5123, 5141,
5143, 5181, 5277, 8513, 16411).  Some commenters add that:

GHG emissions occurring as part of a construction or reconstruction or
modification cannot independently trigger PSD permitting, but rather PSD
can be triggered by emissions of a NAAQS pollutant, and then a BACT
determination could potentially extend to GHG emissions units if
emissions are over established thresholds and if the specific GHGs being
emitted by the source have been subject to actual control at stationary
sources under the CAA.  (8513).

EPA should interpret PSD as being triggered only upon a significant net
emissions increase of a criteria pollutant.  Under this interpretation,
only those major sources that otherwise trigger PSD for a criteria
pollutant would have to comply with BACT for GHGs (4095, 4298).  Sources
that are major only for GHGs, or that undergo a change that increases
only GHG emissions should not be subject to PSD (4095).  The commenter
(4095) asserts that this interpretation of when PSD would be triggered
would largely eliminate the “absurd results” EPA cites as
justification for the Tailoring Rule.

Section 116 of the CAA mandates the promulgation of PSD regulations
within 2 years of establishing a new NAAQS and provides that the
effective date for such regulations is to occur one year later.  Thus,
PSD applicability is never “triggered” by a new pollutant becoming
“subject to regulation” under the CAA, only by the establishment of
a new NAAQS pursuant to sections 108 and 109 of the CAA and the
designation of new areas for that NAAQS under section 107.  (4095)

	Commenter 4871 asks whether it is EPA’s position that GHGs will be
“subject to regulation” upon promulgation of EPA’s LDVR (i.e., the
date the final rule appears in the Federal Register), or upon the
effective date of this rule, which is typically 60 days after
publication.

Response:

EPA addressed these topics in detail in the April 2, 2010 final action
(75 FR 17400) and the associated RTC document located in the docket for
that action.  EPA incorporates those documents by reference as its
response to the comments on these topics submitted to the docket for
this action.  Additional responses to comments arguing that a NAAQS
should be established before GHGs can be regulated under the PSD program
are found in the preamble of this final rule under section V.B.

Chapter 3.  Comments on the Legal Basis for the Proposed Rule

	In this chapter we summarize and respond to the significant comments
related to the legal basis for the proposed rule.  In the first section
we discuss regulation of GHGs under the CAA.  While we did not discuss
this topic at length in the proposal preamble, we received numerous
comments on this subject which we address in section 3.1.

	In sections 3.2 through 3.4, we address the comments received on the
legal bases we proposed for phasing in the applicability thresholds for
PSD and title V:  the “administrative necessity” and “absurd
results” doctrines, as well as the line of cases that establishes, in
certain situations, the acceptability of a “step-by-step process”
for implementing a statutory requirement.  We do not summarize and
directly respond to the numerous comments we received that stated,
without specific reference to any of these three potential legal bases,
that it is legally impermissible to alter the unambiguous numeric
thresholds in the CAA.  We believe that our responses to the more
specific comments on the potential legal bases for the rule serve to
respond to these more general legal concerns as well.

	In addition, we received numerous comments on the legal basis for our
proposal to retroactively limit our approval of the PSD provisions in
SIPs and of title V programs.  These comments are addressed in section
3.5.

3.1  Comments on Regulation of GHGs under the CAA

	We received many comments questioning EPA’s interpretation that GHGs
can, and should, be regulated under the CAA.  However, many of these
comments pertain to the related developments that triggered the
Tailoring Rule proposal (i.e., the Massachusetts v. EPA decision, the
section 202(a) Endangerment Finding, the LDVR, and the reconsideration
of the PSD Interpretive Memorandum) and are not, therefore, germane to
this rulemaking.  Such comments, which were also submitted for
consideration under the related actions, are properly addressed in those
actions.  Here we address only those comments that pertain more directly
to the Tailoring Rule.  Section 3.1.1 addresses general comments
regarding regulation of GHGs under the CAA, comments on regulating GHGs
under the PSD program are addressed in section 3.1.2, and in section
3.1.3 we address comments on regulating GHGs under the title V program.

3.1.1  Comments on Regulation of GHGs under the CAA in General

	In our recent actions, we have announced our intention to begin
regulating GHGs under various portions of the CAA and have begun to
follow through on that intention.  We have finalized an Endangerment
Finding for GHGs under section 202(a) of the CAA and have finalized the
LDVR.  In addition, we have finalized our interpretation of when an air
pollutant becomes subject to regulation for purposes of the PSD and
title V programs.  We received numerous comments on the general topic of
regulating GHGs under the CAA.

Comment:

Many state government (4209, 4771, 5258, 5318, 5451, 5525, 5607, 5784,
6491, 7134, 7212, 7217, 8071), industry (4095, 4118, 4243, 4298, 4691,
4851, 4862, 4903, 5004, 5041, 5111, 5136, 5182, 5199, 5275, 5301, 5312,
5315, 5317, 5922, 6609, 6880, 8015, 8303, 8533, 8545), and state/local
air agency (2797, 3858, 4871/5063/5605, 4949) commenters argue that the
CAA was never intended by Congress or is ill-suited to address GHGs.
These commenters often cite the development of the CAA over time, the
language and structure of the CAA, and the legislative history to assert
that EPA cannot and should not go forward with regulation of GHGs under
the CAA.  These commenters often made the following points:

Congress enacted the CAA of 1970 and subsequent amendments, including
those in 1990, with an explicit focus on large sources and certain
categories of pollutants that have direct effects on public health in
the U.S. (which does not include GHGs).  (5111, 8545)

The CAA is intended to address pollutants with direct impacts and
control alternatives on a local, state, or regional level, but GHGs are
global pollutants that produce indirect impacts on a global level.
(4209, 4243, 4851, 5136, 5199, 6315, 5525, 8545)

The need for the Tailoring Rule demonstrates that the CAA is not
structured to address global pollutants.  (4298, 4862, 5111, 5784)

Regulating GHG under the Act is not consistent with the intent of the
Act as expressed in section 101(b) because their inclusion will do
little to “protect and enhance the quality of the Nation’s air
resources” yet will significantly weaken the “productive capacity of
[the U.S.] population.”  (5138, 5301)

The issue of global climate change resulting from the emissions of GHGs
should be addressed through comprehensive federal legislation, full
public debate, and U.S. political consensus, rather than through
unilateral EPA action.  (5182, 5258, 5275, 5312, 5451, 5607, 6491, 7212,
7217, 7134, 8015, 8071)

Congress declined to give EPA clear authority to regulate GHGs in the
CAA.  For EPA to seize such authority is an affront to rule by consent
of the governed.  (5784)

The CAA does not allow EPA to deliver the regulatory relief it theorizes
will occur (i.e., thresholds higher than the 100/250 tpy prescribed
under the CAA) and thus this rule is unnecessary, ineffective and/or
unlawful (4095, 4118, 4903, 5004, 6609, 6880, 8303, 8533).

On the other hand, numerous state/local air agency (3916, 3918, 4154,
4238, 4239, 4694, 4778, 4860, 5039, 5057, 5081, 5314, 5528, 7935, 8025,
8803), state government (0600, 4518), and environmental (5122, 5306,
5311, 5448) commenters support the use of the CAA to regulate GHGs.
These commenters typically believe it is important to begin regulation
of the largest sources of GHGs now, pending comprehensive climate change
legislation.  Some of these commenters indicate that the CAA can be a
valuable component of comprehensive federal climate policy in the
future.

One industry commenter (5110) believes that CAA section 115
(International Air Pollution) and section 179B (International Border
Areas) are the logical place to start to address global GHG pollution
under the current CAA.  According to the commenter, section 115 has not
been used to regulate domestic emissions that are connected to
international air pollution, but only because each time its use was
considered Congress enacted legislation to address the problem (i.e.,
for the acid rain and stratospheric ozone programs).  Section 179B would
apply only if a NAAQS for GHGs is promulgated.

One industry commenter (5143) suggests EPA should consider invoking
other CAA authorities such as NSPS and section 111(d) in lieu of
PSD/title V permitting.  Under this approach, EPA would have the ability
to set emissions performance standards for existing sources, and thereby
avoid many of the difficulties under the PSD and title V permitting
regimes.  Regulation under section 111(d) offers additional advantages,
including flexibility in determining the scope of sources to be
regulated, the type and stringency of standards and guidelines and the
timing of their implementation, and the ability to weigh the costs and
benefits.

Response:

Comments that the CAA was never intended by Congress to address GHGs are
not relevant to this tailoring rulemaking.  In any event, the U.S.
Supreme Court’s decision in Massachusetts v. EPA,  549 U.S. 497
(2007), which held that GHGs are an “air pollutant” under the CAA,
made clear that the requirements of CAA section 202(a) apply to GHGs if
EPA makes the endangerment and contribution findings.  As a result, this
decision makes clear that the CAA does apply to GHGs, notwithstanding
the commenters’ concerns.

In addition, in EPA’s recently promulgated LDVR for GHGs, EPA
promulgated requirements for GHGs under CAA section 202(a), and we
explained our basis for doing so.  “Light-Duty Vehicle Greenhouse Gas
Emission Standards and Corporate Average Fuel Economy Standards; Final
Rule,” p. 151 (promulgated on April 1, 2010),    HYPERLINK
"http://www.epa.gov/otaq/climate/regulations/ldv-ghg-final-rule.pdf"
http://www.epa.gov/otaq/climate/regulations/ldv-ghg-final-rule.pdf

	In that rule, we also responded to some of the same arguments made by
commenters in this rule that EPA does not have authority under the CAA
to regulate GHGs.  See “Light-Duty Vehicle Greenhouse Gas Emission
Standards and Corporate Average Fuel Economy Standards,

EPA Response to Comments Document for Joint Rulemaking,” p. 1-67,
HYPERLINK "http://www.epa.gov/otaq/climate/regulations/420r10012a.pdf"
http://www.epa.gov/otaq/climate/regulations/420r10012a.pdf .

	The comments concerning sections 115 and 111(d) are not relevant to
this rulemaking.  In the preamble for this rule we state a reason why
the PSD and title V requirements apply to GHG sources.  These
requirements are not vitiated by the possible applicability of, or
benefits of, other sections of the CAA to GHGs, such as sections 115 and
111(d), as raised by the commenters.

	It is the position of the agency that comprehensive climate change
legislation is a more effective way to address GHGs than through the
CAA, but that does not mean that the CAA does not apply to GHGs.

3.1.2  Comments on Regulation of GHGs under the PSD Program

	We proposed the Tailoring Rule based on our interpretation that GHG
sources would become subject to the PSD and title V permitting programs
upon finalization of the LDVR.  In this section, we address the numerous
comments that we received on the legal aspects of regulating GHGs under
PSD.

Comment:

Many state (4871) and industry (3512, 3513, 4095, 4106, 4522, 4745,
4771, 4870, 4952, 5052, 5058, 5083, 5110, 5112, 5137, 5138, 5140, 5169,
5179, 5183, 5275, 5278, 5345, 5417, 5446, 5800, 5844, 5922, 5935, 8089,
16411) commenters believe that, based on the language of the CAA, PSD
applicability can be triggered only by pollutants for which there is a
NAAQS.  Several of the commenters submitted one or more points of the
following argument:

	The EPA bases applicability of the PSD program solely on the scope of
“pollutants subject to regulation” under CAA section 165(a)(4).
While this language is relevant to PSD applicability because it
determines the applicability of the BACT requirement, EPA must take into
consideration the statutory provisions that act to constrain the
applicability of the PSD program at the outset.  The text of the statute
is more naturally read to limit PSD applicability to sources that are
major for a NAAQS [criteria] pollutant only.  Once PSD is triggered by a
major source for a NAAQS pollutant, the statute would impose BACT on
pollutants “subject to regulation.”  The EPA’s approach – which
first asks what pollutants are “subject to regulation” and then
bases all applicability determinations of the PSD program solely on this
criterion – is inconsistent with the statutory language because it
bypasses the core applicability provisions and renders their inclusion
in the statute superfluous.

	Indeed, the text of sections 161 and 165(a) limit application of PSD to
certain areas – those designated attainment or unclassifiable pursuant
to section 107 of the CAA.  Section 107 is applicable only to NAAQS
pollutants.  Only section 165(a)(4) (which simply establishes the
requirement to apply BACT) uses the phrase “pollutants subject to
regulation.”  The EPA has not effectuated the applicability limitation
in section 161 and 165(a) by interpreting that language as mere
surplusage.  Specifically, under EPA’s historical interpretation of
the statutory provisions, the location limiting language would simply
require that a source be located in an area that is attainment for any
pollutant.  But that is no limitation at all since every area of the
country is and always has been in attainment with at least one criteria
pollutant.  Congress must be presumed to have been aware of this fact
when it enacted the PSD provisions, making EPA’s construction
inconsistent with canons of statutory construction requiring all words
in the statute to be given meaning.

	The NAAQS prerequisite requirement of the CAA is also consistent with
the holding in Alabama Power Co. v. Costle (636 F.2d 323 (D.C. Cir.
1979), where the court found that location is the key determinant for
PSD applicability and rejected EPA’s contention that PSD should apply
in all areas of the country, regardless of attainment status.  The court
stated:  “The plain meaning of the inclusion in [42 U.S.C. § 7475]
of the words ‘any area to which this part applies’ is that Congress
intended location to be the key determinant of the applicability of the
PSD review requirements.”  (636 F.2d 365 (D.C. Cir. 1979))

	In its regulatory response to the Alabama Power decision, EPA gave this
ruling only grudging effect by an interpretation of PSD requirements in
the preamble to the 1980 PSD regulations.  (45 FR 52675, 52676, August
7, 1980)  The 1980 Preamble provides that PSD requirements still apply
to any area that is “designated … as ‘attainment’ or
‘unclassifiable’ for any pollutant for which a national ambient air
quality standard exists.”  This is inconsistent with the CAA, but
attracted little scrutiny because, to date, it has had very little
practical impact.  But now, this incorrect interpretation could trigger
a host of absurd results that contravene Congressional intent.
Accordingly, to give effect to unambiguous terms of the statute (and
regulations), EPA cannot require a source to undergo PSD permitting
solely on the basis of emissions of a pollutant for which there is no
NAAQS.  [Chevron, U.S.A. v. Natural Resources Defense Council (NRDC),
467 U.S. 837, 842 (1984) (agency must give effect to the unambiguously
expressed intent of Congress)].

	Because EPA’s improper interpretation appears only in the preamble to
the 1980 PSD rules and the regulatory language in 40 Code of Federal
Regulations (CFR) 52.21(a)(2) properly includes the location limitation
of the statutory provisions, the only change that is needed for EPA to
properly limit the scope of PSD applicability consistent with the
statute is to announce its interpretation in the Federal Register.
Since EPA has solicited comment on the effect of this proposed rule
regarding PSD applicability, not only in the LDVR but also in the
reconsideration of the PSD Interpretive Memorandum, it is a logical
outgrowth of these actions for the Agency to announce that in response
to comments it is adopting the proper scope of applicability for the PSD
program.

	Some industry commenters (4095, 4745, 4870, 4952, 5052, 5137) also
argue that this interpretation (that PSD applicability is based only on
NAAQS pollutants) is further supported by the presence of section 166 in
the CAA, which sets forth the process and time line to regulate “other
pollutants” under PSD.  These commenters make the following points:

Section 166 mandates the promulgation of PSD regulations within 2 years
of establishing a NAAQS for a new pollutant, provides that the effective
date for such regulations is to occur 1 year later, and requires EPA to
approve plan revisions for the new regulations within 25 months of their
promulgation.  (4095, 4745, 4870, 4952, 5137)

An endangerment finding is merely the first step in establishing a NAAQS
for CO2 and other GHGs under section 109 and, unless and until a NAAQS
is established and the steps set out in section 166 are subsequently
followed, EPA has no legal authority regulate GHGs under the PSD/NSR
provisions of the CAA.  (4095, 4870, 5137)

It seems inconceivable that the statutory structure of the PSD program
could be interpreted to provide for near-immediate triggering of PSD
applicability for GHGs upon becoming subject to regulation when section
166 provides for 2 years to promulgate new PSD regulations for new NAAQS
and another 25 months for EPA to act on plan submissions related to the
new NAAQS.  Instead, the interplay of sections 166 and 165 of the CAA
bespeak of a clear statutory scheme that PSD applicability is never
“triggered” by a new pollutant becoming “subject to regulation”
under the CAA, only by the establishment of a new NAAQS pursuant to
sections 108 and 109 of the CAA and the designation of new areas for
that NAAQS under section 107.  (4745, 4952)  The CAA clearly requires
EPA to first establish a National Ambient Air Quality Standard (NAAQS)
for GHGs before the Agency has the legal ability under the CAA to
require PSD solely on the basis of increases in GHG emissions.  (4095,
5183, 5844, 5922)  Since EPA is not establishing a NAAQS for GHGs, the
PSD program should not be made applicable to GHG emissions (3513, 4106,
5183, 5275).

Now that EPA has announced that it believes that there is a public
health and welfare effect from GHGs, EPA must establish a NAAQS to
determine the level at which public health and welfare need to be
protected.  This would allow the full PSD program to be implemented for
GHGs, including the CAA’s requirements for an impact analysis and PSD
increments (PSD provisions that are currently meaningless for GHGs in
the absence of a NAAQS) (5052).  Another commenter reports that they
would not support the establishment of a NAAQS for GHGs, as an
“attainment” or “nonattainment” status for the entire U.S. given
the global nature of GHGs.  (4106)

	Some industry (5111, 5278, 5140, 5715) commenters base comments on the
language of section 110(a)(2)(C) of the CAA, which requires SIPs to
include PSD permit programs “as necessary” to assure that the NAAQS
are achieved:

Industry commenters 5278, 5140 infer from the language of section 110
(a)(2)(C) that the purpose of the PSD program is to assure the NAAQS are
achieved.  The commenters contend that it is inconsistent with this
language to apply PSD based on emissions of pollutants such as GHGs for
which there is no NAAQS.  In addition, these commenters point out that
CAA section 163(b)(4) specifies that the maximum allowable concentration
of “any air pollutant” in “any area” to which part C applies
shall not exceed the NAAQS, further indicating that the PSD program is
focused on attaining the NAAQS and is not applicable to non-NAAQS
pollutants such as GHGs.

Industry commenters (5111, 5715) state that parts A and C of title I
plainly indicate that the PSD program is implemented solely through
SIPs, and that while states’ SIPs must include PSD permit programs
“as necessary” to assure that the NAAQS are achieved, the CAA cannot
be read to authorize, much less require, SIPs (including their PSD
programs) to include provisions that are not necessary for the
achievement of the NAAQS – such as the regulation of sources based on
emissions on a non-NAAQS pollutant like GHGs.  The commenter adds that
EPA has often refused to approve the inclusion of provisions of a
state’s air quality rules into SIPs because they are not related to
the attainment or maintenance of the NAAQS.

	A number of industry (4630, 4801, 4870, 5052, 5082, 5112, 5446) and
state (4521) commenters also assert that the language and legislative
history of the PSD provisions of the Act make it clear that Congress
never intended PSD to apply to such pollutants as GHGs.  These