requirements of the Clean Air Act that apply to them.

But, Mr. President, we emphatically do not intend to burden industry
with preparation and submission of unnecessary compliance plans. The
substitute clarifies that any compliance plans would address only those
matters by which the sources would comply with new requirements imposed
by this act as it is finally signed into law. These plans would not need
to address compliance with any existing Clean Air Act requirements,
unless the source is in violation of those requirements.

136 Cong. Rec. S2030-02 (March 5, 1990) (statement of Sen. Chafee).

As another indication of congressional concern over administrability,
Congress recognized that at the beginning of the program, large numbers
of permit applications might overwhelm the permitting authorities.  To
protect against this, Congress included in CAA section 503(c) a phase-in
schedule for permitting authorities to act on the initial set of permit
applications.  Under 503(c), permitting authorities were not required to
act on the initial set of permit applications within 18 months after it
received the application, but rather could act on one-third of them on
an annual basis over a three-year period.  Sen. Chafee, in describing an
early version of this provision – which would have allowed permitting
authorities to phase-in the submission of permit applications –
explained that its purpose was “to avoid a logjam of permit
applications[,] … ensure that [regulatory] gridlock can be avoided,
and [ensure] that the permitting process will work with a minimum of
disruption and delay.”  136 Cong. Rec.,S2106 (March 5, 1990)
(statement of Sen. Chafee).

(3)  Title V regulatory history

	Congress enacted title V as part of the 1990 Clean Air Act Amendments.
Under its applicability provisions, as discussed above, title V applies
to any “major source,” defined, as relevant here, under CAA sections
501(2)(B) and 302(j), as “any stationary facility or source of air
pollutants which directly emits, or has the potential to emit, one
hundred tons per year or more of any air pollutant....”

	EPA’s regulations mirror the CAA definitional provisions.  The
regulations provide that a title V program must provide for permitting
“[a]ny major source,” 40 CFR 70.3(a), defined, as relevant here, as
“[a] major stationary source of air pollutants, as defined in section
302 of the Act, that directly emits or has the potential to emit, 100
tpy or more of any air pollutant….” 40 CFR 70.2.

	However, since 1993, EPA has interpreted the applicability provisions
more narrowly.  At that time, shortly after title V was enacted, EPA
issued a guidance document making clear that it interprets this
requirement to apply to sources of pollutants “subject to
regulation” under the Act.  EPA previously articulated its
interpretation that this title V permitting requirement applies to
“pollutants subject to regulation” in a 1993 memorandum from EPA’s
air program.  Memorandum from Lydia N. Wegman, Deputy Director, Office
of Air Quality Planning and Standards, U.S. EPA, “Definition of
Regulated Air Pollutant for Purposes of Title V” (Apr. 26, 1993)
(Wegman Memorandum).  The interpretation in this memorandum was based
on: (1) EPA’s reading of the definitional chain for “major source”
under title V, including the definition of “air pollutant” under
section 302(g) and the definition of “major source” under 302(j);
(2) the view that Congress did not intend to require a variety of
sources to obtain title V permits if they are not otherwise regulated
under the Act (see also CAA section 504(a), providing that title V
permits are to include and assure compliance with applicable
requirements under the Act); and (3) consistency with the approach under
the PSD program.

While the specific narrow interpretation in the Wegman Memorandum of the
definition of “air pollutant” in CAA section 302(g) is in question
in light of the holding in the Massachusetts case (finding this
definition to be “sweeping”), EPA believes the core rationale for
its interpretation of the applicability of title V remains sound.  EPA
continues to maintain its interpretation, consistent with CAA sections
302(j), 501, 502 and 504(a), that the provisions governing title V
applicability for “a major stationary source” can only be triggered
by emissions of pollutants subject to regulation.  This interpretation
is based primarily on the purpose of title V to collect all regulatory
requirements applicable to a source and to assure compliance with such
requirements, see, e.g., CAA section 504(a), and on the desire to
promote consistency with the approach under the PSD program.

	In the Tailoring Rule notice of proposed rulemaking, EPA acknowledged
the Wegman Memorandum and affirmed the memorandum’s continued
viability, stating that “EPA continues to maintain this
interpretation.”  74 Fed. Reg. 55,300, col. 3, fn. 8; see also 75 Fed.
Reg. at 17022-23 (Interpretive Memorandum Reconsideration).

5.   Application of the “absurd results” doctrine for the PSD
program

Having reviewed the factual background, legal doctrines, and the key
components of the PSD and title V programs, we now turn towards
interpreting the PSD and title V requirements in accordance with the
Chevron framework, accounting for the applicable legal doctrines.  We
begin with the “absurd results” doctrine, and apply it first to the
PSD requirements.

In this action, we finalize, with some refinements, the “absurd
results” basis we proposed.  Specifically, we are revising our
regulations to limit PSD applicability to GHG emitting sources by
revising the regulatory term, “major stationary source,” and
although our revised regulations do not accord with a literal reading of
the statutory provisions for PSD applicability, which are incorporated
into the definition of “major emitting facility,” we have concluded
that based on the “absurd results” doctrine, a literal adherence to
the terms of this definition is not required.  A literal adherence would
not reflect congressional intent for PSD applicability.  Instead, we may
limit PSD applicability for GHG emitting sources through the tailoring
approach because that either best reflects or at least reasonably
reflects congressional intent.

a. Congressional Intent for PSD Program

To reiterate, for convenience, CAA §169(1) defines a “major emitting
facility” to include “any … source[] [that] emit[s], or ha[s] the
potential to emit, [depending on the source category], one hundred [or
two hundred fifty] tons per year or more or more of any air
pollutant.”  CAA § 169(1).  We also reiterate that, as discussed
above, beginning with our initial rulemaking in 1977-1978 to implement
the PSD program we have narrowed this definition by reading into it the
limitation that a source is subject to PSD only if the air pollutants in
question are subject to regulation under another Clean Air Act
provision.  We have maintained this approach to the present time through
several additional rulemaking actions, albeit with refinements not here
relevant, and in all the various rulemakings, our approach has never
been seriously questioned by stakeholders.  As the U.S. Supreme Court
recently stated in upholding an EPA approach in another context:
“While not conclusive, it surely tends to show that the EPA’s
current practice is a reasonable and hence legitimate exercise of its
discretion . . . that the agency has been proceeding in essentially this
fashion for over 30 years.”  Entergy Corp. v. Riverkeeper, Inc., 129
S.Ct. 1498, 1509 (2009) (citations omitted).  Under the current
regulations, PSD applies to a “major stationary source” (a term that
EPA employed as  the regulatory implementation of the statutory term,
“major emitting facility”), which is defined as a source that, in
general “emits, or has the potential to emit, [depending on the source
category], 100 [or 250] tons per year or more of any regulated NSR
pollutant,” 51.166(b)(1)(i)(a)-(b); and the term  “regulated NSR
pollutant” includes, in general, pollutants regulated under the NAAQS,
the NSPS, and title VI, as well as “[a]ny pollutant that is …
subject to regulation under the Act.” 51.166(b)(49)(iv).   EPA is not
re-opening this regulation or its interpretation in this action.

Under the current interpretation of the PSD applicability provision,
EPA’s recent promulgation of the light-duty vehicle rule will trigger
the applicability of PSD for GHG sources at the 100/250 tpy threshold
levels as of January 2, 2011.  This is because PSD applicability hinges
on the definition of “major emitting facility,” which, under EPA’s
long-standing narrowing interpretation, but absent further tailoring,
applies PSD to sources of any air pollutant subject that is subject to
regulation under another provision of the CAA.  EPA’s promulgation of
the light-duty vehicle rule means that GHGs will become subject to
regulation on the date that the rule takes effect, which will be January
2, 2011.

But absent tailoring, the January 2, 2011 trigger date for GHG PSD
applicability will subject an extraordinarily large number of sources,
more than 81,000, to PSD each year, an increase of almost 300-fold.  And
the great majority of these new sources will be small commercial or
residential sources. We believe that for many reasons, this result is
anathema to congressional intent for the PSD program, and in fact would
severely undermine what Congress sought to accomplish with the program.
As a result, under our Chevron analysis, accounting for the “absurd
results” doctrine, the statutory definition for “major emitting
facility” (as narrowed to include “subject to regulation”) should
not be read to apply to all GHG sources at or above the 100/250 tpy
threshold as of the January 2, 2011 date.  Rather, the definition of
“major emitting facility” should be tailored so that it applies to
GHG sources on a phased-in basis, with the largest sources first, as we
describe in this rule.

As explained above, Chevron  step 1 calls for a determination of
congressional intent, and the courts consider the best indicator of
congressional intent to be the plain meaning of the statute.  However,
the U.S. Supreme Court has held that the plain meaning of a statutory
provision is not conclusive “in the ‘rare cases [in which] the
literal application of a statute will produce a result demonstrably at
odds with the intentions of the drafters’ … [in which case] the
intention of the drafters, rather than the strict language, controls.”
United States v. Ron Pair Enterprises, 489 U.S. 235, 242 (1989).  To
determine whether “the intentions of the . . . drafters” differ from
the result produced from “literal application” of the statutory
provisions in question, the courts may examine the overall context of
the statutory provisions, including whether there are related statutory
provisions that either conflict or are consistent with that
interpretation, and including whether there is legislative history that
exposes what the legislature meant by the terms in question.  In
addition, the courts may examine whether a literal application of the
provisions produces a result that the courts characterize variously as
absurd, futile, strange, or indeterminate, and therefore so illogical or
otherwise contrary to sensible public policy as to be beyond anything
Congress would reasonably have intended. In such cases, the literal
languge cannot be said to reflect the intention of the drafters, and
therefore does not control.  See United States v. Ron Pair Enterprises,
489 U.S. 235, 242-43 (1989); Griffin v. Oceanic Contractors, Inc., 458
U.S. 564, 571 (1982).

	Here, applying the definition of “major emitting facility” without
tailoring – that is, applying PSD to GHG sources at the 100/250 tpy
level without tailoring -- would be contrary to congressional intent as
found in the statutory provisions and legislative history, especially as
those provisions and history are viewed in light of the results that
would occur from applying PSD to those sources.   Congress established
the PSD program in large measure because it was concerned that around
the country, industrial development, which was confronting barriers
locating in nonattainment areas (that is, areas that do not meet the
NAAQS), would attempt to locate in clean air areas (that is, attainment
areas or unclassifiable areas), but that as a consequence, the clean air
areas would see their air quality deteriorate to the point where they,
too, would no longer meet the NAAQS.  The end result would be the spread
of environmental and health problems to those formerly clean air areas,
as well as more barriers to further industrial development.  With these
concerns in mind, Congress designed the PSD program to have a primary
focus of requiring newly constructing or modifying sources in areas with
air quality that meets the NAAQS (or that is unclassifiable) to analyze
their emissions of NAAQS pollutants and to implement controls as needed
to assure that those emissions do not significantly deteriorate air
quality.  Many of the PSD requirements, and much of the discussion in
the legislative history, reflect these aspects of the PSD program.
E.g., CAA sections 162, 163, 164, 165(a)(3), 165(d)(2), 165(e), 166; see
generally H. Rep. 95-294, 95th Cong., 1st Sess. (1977)  103-78.

Congress also designed the PSD program to impose controls on non-NAAQS
pollutants, through the requirement under CAA section 165(a)(4) that the
source be “subject to the best available control technology
[(“BACT”)]for each pollutant subject to regulation under this
chapter emitted from, or which results from, such facility.”  For
example, when Congress enacted the PSD provisions in 1977, sources
emitting hazardous air pollutants (“HAPs”) were required to
implement BACT for those pollutants, although in the 1990 Clean Air Act
Amendments, Congress redesigned CAA section 112, which includes the
requirements for HAPs, and excluded HAPs from PSD.  CAA § 112(b)(6).

Congress was keenly aware that the PSD program needed to serve two
purposes:  protect the environment and promote economic growth.
Congress explicitly identified these two goals in the “purposes”
section of the PSD provision, CAA § 160, and various PSD requirements
clearly reflect them.  For example, to protect economic growth, the PSD
program includes a one-year limitation on the time that the permitting
authority has act on permit applications.  To protect the environment,
in addition including many provisions that focus on NAAQS pollutants,
the PSD program requires that the preconstruction permit impose emission
limits that reflect best available control technology (“BACT”) for
each pollutant subject to regulation under another CAA provision
implement.  CAA section 165(a)(4).  This BACT provision also makes
clear, by its terms, that although Congress designed the PSD program
primarily with NAAQS pollutants in mind, Congress also intended that
sources subject to PSD to control the emissions of their other
pollutants.  The D.C. Circuit has recognized the twin goals of
environmental protection and economic development that underlie PSD, and
has upheld EPA interpretations of the PSD program that reflect a
balancing of those goals.  See, e.g., New York v. EPA, 413 F.3d 3, 27
(D.C. Cir.), rehearing en banc den. 2005 U.S. App. LEXIS 27103, (2005).

Congress was also keenly aware that the PSD analyses and controls that
it was mandating had to be implemented on a source-by-source basis, and
that this process would be expensive for sources.  As a result, Congress
intended to limit the PSD program to large industrial sources because it
was those sources that were the primary cause of the pollution problems
in question and because those sources would have the resources to comply
with the PSD requirements.  Congress’s mechanism for limiting PSD was
the 100/250 tpy threshold limitations.  Focused as it was primarily on
NAAQS pollutants, Congress considered sources that emit NAAQS pollutants
in those quantities generally to be the large industrial sources to
which it intended PSD be limited.

That Congress paid careful attention to the types and sizes of sources
that would be subject to the PSD program and designed the thresholds
deliberately to limit the program’s scope is evident from the
legislative history.  The Senate side saw floor statements and
discussion on several occasions, as well as discussion in the Committee
Report, all of which were clear in their insistence that PSD should
apply to small sources, particularly commercial and residential sources:
 As discussed below, Congress scrutinized information that EPA provided
as to types and sizes of sources, found largely in the
Steigerwald-Strelow memorandum.  Sen. Muskie stated that the Senate bill
excluded “houses, dairies, farms, highways, hospitals, schools,
grocery stores, and other such sources.”  123 Cong. Rec. 18021 (June
8, 1977) (statement of Sen. Muskie).  Sen. McLure stated that PSD shuld
be limited to “industrial plants of significant impact,” and should
exclude ”[a] small gasoline jobber, or a heating plant at a community
college, [which] could have the potential to emit 100 tons pf pollution
annually.”  122 Cong. Rec. 24548-49 (July 29, 1976) (statement of Sen.
McClure).  The Senate Committee Report mirrored Sen. McClure’s
statement, and concisely articulated the cost-conscious basis for the
line-drawing: “[the PSD] procedure … must include an effective
review-and-permit process.  Such a process is reasonable and necessary
for very large sources, such as new electrical generating plants or new
steel mills.  But the procedure would prove costly and potentially
unreasonable if imposed on construction of storage facilities for a
small gasoline jobber or on the construction of a new heating plant at a
junior college, each of which may have the potential to emit 100 tons of
pollution annually.”  S. Rpt. 95-127 at 96-97.

The D.C. Circuit had occasion, in Alabama Power, to acknowledge this
legislative history:  "Congress's intention was to identify facilities
which, due to their size, are financially able to bear the substantial
regulatory costs imposed by the PSD provisions and which, as a group,
are primarily responsible for emissions of the deleterious pollutants
that befoul our nation's air." Alabama Power, 636 F.2d at 353.  The
Court added, “Though the costs of compliance with [the PSD]
requirements are substantial, they can reasonably be borne by facilities
that actually emit, or would actually emit when operating at full
capacity, the large tonnage thresholds specified in section 169(1).”.
Id. at 354.

It is not too much to say that applying PSD requirements to GHG sources
without tailoring the definition of “major emitting facility” would
result in a program that would have been unrecognizable to the Congress
that designed PSD.  Congress intended that PSD be limited to a
relatively small number of large industrial sources.  Without tailoring
– that is, without phasing in PSD and title V applicability to GHG
sources so as to allow the development of streamlining methods and
increases in permitting authority resources -- the PSD program would
expand by January 2, 2011 from the current 280 sources per year to
almost 82,000 sources, all of which would be smaller than the sources
currently in the PSD program and most of which would be small commercial
and residential sources.  Until EPA could develop streamlining methods,
all of the sources that would become newly subject to PSD – whether
larger or smaller sources, whether industrial or commercial/residential
sources -- would have to undergo source-specific BACT determinations for
their GHG emissions, as well as their emissions of conventional
pollutants in amounts in excess of the significance levels.  We estimate
that the commercial and residential sources would incur, on average,
almost $60,000 in PSD permitting expenses.  This result would be
anathema to Congress’s careful efforts to confine PSD to large
industrial sources.

	A closer look at the legislative history confirms the view that
sweeping in large numbers of small commercial and residential sources is
precisely what Congress thought it was avoiding by establishing the
100/250 tpy thresholds.  As noted above, Congress relied on an EPA
memorandum – the Steigerwald-Strelow memorandum -- that identified the
range of industrial categories that EPA regulated under its program that
constituted the precursor to the statutory PSD program, and listed both
the estimated number of new sources constructing each year and the
amount of pollution emitted by the “typical plant” in the category.
The Steigerwald-Strelow memorandum makes clear that the 100 tpy cut-off
for the 28 listed sources categories, and the 250 tpy cut-off for all
other sources, would exclude from PSD a large number of sources.  122
Cong. Rec. 24548-50 (July 29, 1976).  However, virtually all of these
sources in the 28 source categories emit carbon dioxide in quantities
that equal or exceed the 100/250 tpy thresholds, and therefore would be
swept into PSD through application of the “major emitting facility”
definition, without tailoring.  For example, we estimate that over
700,000 commercial facilities and 180,000 residential facilities would
exceed a PTE emission level for CO2 of 250 tpy.

Most telling, in this regard, is the small-sized boilers.  The
Steigerwald-Strelow memorandum identified two categories of these
boilers, differentiated by size.  The first ranges in size from 10 to
250 x 106 Btu/hr, and has a “typical plant” size of 107 Btu/hr, with
“BACT emissions from typical plant” of 53 tpy, and a total of 1,446
sources in the category.  The second category ranges in size from 0.3 to
10 x 106 Btu/hr, and has a “typical plant” size of 1.3 x x 106
Btu/hr, with “BACT emissions from typical plant” of 2 tpy, and a
total of 11,215 sources in the category.  The memorandum discusses these
two categories in the context of explaining which source categories
exceed a size of 100 tpy -- and therefore would be subject to PSD if a
100 tpy threshold were set -- by stating, “Fortunately, most truly
small boilers and typical space heating operations would not be
covered.”  122 Cong. Rec. 24549 (July 29, 1976).  However, these data
and conclusions were all based on emissions of NAAQS pollutants, the
amounts of which placed these boilers well below the PSD threshold
limitations.  In general, most boilers of these small sizes are fired
with natural gas, and a natural gas boiler greater than 0.5 x 106 Btu/hr
emits at least 250 tpy CO2.  If the CO2 emissions of these small boilers
are considered – as would occur by applying the definition of “major
emitting facility” without tailoring -- then most of them would in
fact be subject to PSD.  Again, this result would directly contravene
Congress’s intention to limit PSD to “industrial plants of
significant impact.”  122 Cong. Rec. 24548-49 (statement of Sen.
McClure).  Industry raised significant concerns about the cost of PSD
permitting if the statutory threshold were to apply for GHG emissions.
One commenter estimated a cost of over $5 billion and the dedication of
over 17,000 FTEs to this effort.

	Perhaps the most compelling reason why applying the PSD program to GHG
sources without tailoring, and before the development of streamlining
methods, would be inconsistent with congressional intent, is that the
resulting program would prove unadministrable.  Although the legislative
history of the PSD program does not reveal explicit congressional
concern about administrability issues, the Steigerwald-Strelow
Memorandum, which identifies the source categories and numbers of
sources that were before Congress as it considered PSD, suggests that
the program that Congress fashioned could be expected to cover at most a
few thousand sources each year.  Moreover, the Alabama Power court
acknowledged the importance of administrability concerns:  The Court
based its holding that potential-to-emit for purposes of the
applicability thresholds should be defined as emissions at full capacity
with implementation of control equipment, in part on its view that with
this definition, the number of sources subject to PSD would be
manageable:

Though the costs of compliance with section 165 requirements are
substantial, they can reasonably be borne by facilities that actually
emit, or would actually emit when operating at full capacity, the large
tonnage thresholds specified in section 169(1).  The numbers of sources
that meet these criteria, as we delineate them, are reasonably in line
with EPA’s administrative capability.

Alabama Power, 636 F.2d at 354.

	However, applying PSD to GHG sources without tailoring would increase
the size of the PSD program at least an order of magnitude beyond what
Congress could have had any reason to expect, which would have been far
beyond the “administrative capability” that Alabama Power described
EPA as having.

Beyond this disconnect with congressional expectations, what is most
important is that the extraordinarily large number of permit
applications would overwhelm permitting authorities and slow their
ability to process permit applications to a crawl.  Our best estimate at
present is that permitting authorities would need to process almost
82,000 permit applications per year, compared to, at most, 800 in the
current PSD program.  The total additional workload, in workhours, for
PSD permits would be more than 19.5 million more work hours, compared to
150,795 work hours for the current PSD program, and the total additional
costs for would be over $1.5 billion, compared with $12 million for the
current PSD program.

At proposal, we noted that the states had estimated that the influx of
permit applications that would result from applying the 250 tpy
threshold at actual emissions would, without additional resources,
result in permitting delays of three years.  In fact, as we noted at
proposal, a literal reading of the PSD requirements would require their
application at the 250 potential to emit level, which would result in
ten times more permit applications than were assumed when the States
made the three-year estimate.  Further, our current estimates of the
numbers of sources that would be subject to PSD requirements are about
twice what we estimated at proposal, as described elsewhere.  Moreover,
our estimate of  the number of hours that permitting authorities would
need to process a permit application from a source in the commercial or
residential sector – which is, by far, the largest single sector –
is three and one-half times as long as we estimated at proposal.   And
under a literal reading of the statutory provisions, the permitting
authorities would be required to implement a program of this size
beginning on January 2, 2011, less than nine months from now.

In light of these burdens, it is difficult to overstate the impact that
applying PSD requirements  literally to GHG sources as of January 2,
2011, without tailoring, would have on permitting authorities, on the
PSD program, and, more broadly, on economic development.  The number of
permits that would be required from such an approach is so far beyond
what has ever been seen that it is difficult to develop a meaningful
picture of what the permitting program would look like, except to say
that throughout the country, PSD permit issuance would be unable to keep
up with the flood of incoming applications, resulting in delays that
would only grow worse over time, as far into the future as the eye can
see.  Because PSD is a preconstruction program, during this time, tens
of thousands of sources each year would be prevented from constructing
or modifying.  In fact, it is reasonable to assume that many of those
sources will be forced altogether to abandon plans to construct or
modify.  This can be expected to be true for virtually all PSD
applicants, from the small commercial and residential sources to the
large industrial sources.  As a result, a literal application of the PSD
applicability provisions to GHG sources would have the effect of a
virtual nationwide construction ban extending for years, with all of the
adverse effects that this would have on economic development.

The only possible remedies for this dismal scenario would be for
permitting authorities to increase their PSD funding by over 100-fold,
from $12 million to over $1.5 billion, or the development by EPA and the
permitting authorities of streamlining techniques.  But it is simply
inconceivable that permitting authorities could increase their funding
to those levels or anything close to them in the foreseeable future,
partly because of the sheer magnitude of those levels and partly because
of the financial challenges that States currently face.  And, for the
reasons discussed below, streamlining offers genuine promise to improve
the manageability of the PSD workload, but not in the very near term and
not to an extent that has yet come into focus.

So clear are at least the broad outlines of this picture that EPA did
not receive any substantive comments arguing that permitting authorities
could in fact administer the PSD program with the applicability
requirements applied literally to GHG sources beginning in the very near
future.  Every permitting authority that addressed this issue in their
comments on the proposed GHG Tailoring Rule stated unequivocally that it
could not administer the PSD program at the statutory levels.  For
example, NACAA, which represents air pollution control agencies in 53
states and territories, provided comments on the proposed GHG tailoring
rule that stated it “…agrees with the EPA that immediately
attempting to implement the PSD and title V programs using the statutory
thresholds meets the test for invoking the administrative necessity and
absurd results doctrines.”  Similarly, the California Air Resources
Board in their comments on the  proposed tailoring rule stated that it
“…concurs with the U.S. EPA that if more appropriate applicability
thresholds [as opposed to the statutory thresholds] are not set for GHG
it will not be administratively possible to implement these [the PSD and
tile V] permitting programs”.   All other state and local permitting
agencies that commented on the proposed tailoring provided similar
comments that they would not have the adequate staff capacity or
resources to be able to successively administer their permitting
programs with the addition of GHG emission sources at the statutory
thresholds for PSD and title V.

It is the many-year delays in permit issuance and the consequent
chilling of economic development that provide perhaps the clearest
indication that applying the PSD applicability provisions to GHG sources
without tailoring produces absurd results.  These effects would
undermine one of Congress’s central purposes in establishing the PSD
program, which was to promote development in clean air areas by large
industrial sources (as long as they included environmental safeguards).
As discussed above, this goal is manifest in the structure of the PSD
provisions, and Congress even went so far as to make this goal explicit
in the purposes section of the PSD provisions.  But even if Congress had
not been so clear, it is simply inconceivable that Congress could have
intended the PSD program to be applied in a way that would cause such
damage to the national economy.

Moreover, at the present time, there is little environmental benefit in
subjecting large numbers of small GHG sources to PSD permitting
requirements.  They represent a relatively small share of the GHG
inventory and the control options available to them, at present, are
limited.  As a result, approaches other than source-by-source permitting
presently offer more promise for generating emissions reductions in an
efficient manner.  These approaches, which ,may be developed through
both Federal and State efforts, include requirements, incentives, and
educational outreach to promote efficiency improvements to boilers and
furnaces and energy efficient operations, including, for example,
weatherization programs.

	For all these reasons, interpreting the definition of “major emitting
facility” literally -- that is, as EPA has narrowed it, but without
tailoring – would produce results that are not be consonant with, and,
in fact, would severely undermine, congressional intent for the PSD
program.  These results may fairly be characterized as the type of
absurd results that supports our view that the literal terms of the PSD
applicability provisions do not indicate congressional intent for how
those provisions should applied to GHG sources.

b. EPA’s reconciliation of applicability provisions with congressional
intent

EPA may tailor the definition of “major emitting facility” as
applied to GHG sources because doing so best effectuates congressional
intent, or at least, constitutes a reasonable construct of the statutory
provisions.  This tailoring will allow a window of time for EPA and the
permitting authorities to develop methods to streamline PSD requirements
and to ramp up permitting authority resources, which will allow for an
orderly expansion of the PSD program to cover more GHG sources over time
in a way that is manageable for both source and permitting authority.

(1) Congressional intent as applied to PSD applicability to GHG sources

To determine how the PSD program should apply to GHG sources, it is
important first to ascertain what would be congressional intent for
applying the program to GHG sources.    Congress wrote the applicability
provisions broadly, so that by their terms they would sweep in sources
of many types of pollutants, but most of the PSD provisions and the
legislative history indicate that Congress was primarily focused on
NAAQS pollutants.  Even so, nothing in statutory provisions provide
conclusively that GHG emissions -- or other non-NAAQS pollutants –
when emitted in the appropriate quantity may never trigger PSD
applicability, and nothing in the legislative history indicates that
Congress intended such a result.  In addition, it is clear that Congress
expected PSD to be limited to large industrial sources – which are the
sources whose emissions are most important for air quality purposes --
but no provision explicitly imposes that limitation.  Congress’s
reasoning was that large industrial sources are best suited to handle
the resource-intensive analyses required by the PSD program, but it is
conceivable that under certain circumstances, other sources could manage
the PSD requirements as well.  Finally, it is reasonable to read into
Congress’s intent that the PSD program be limited to a size that
permitting authorities would be able to administer, but the permitting
authorities could take certain steps – including adoption of
streamlining measures and ramping up resources – that would allow them
to handle a higher volume of permitting.

Accordingly, at present, we believe that congressional intent may be
characterized as applying PSD to sources of any pollutants that are
subject to regulation as long as those sources can reasonably be
expected to manage PSD’s requirements and as long as the resulting
numbers of permits can be reasonably accommodated by permitting
authorities.  As a result, for reasons described above, we believe that
it is not consonant with congressional intent to apply the PSD program
to GHG sources at the 100/250 tpy level as soon as January 2, 2011, when
GHGs become subject to regulation through the light-duty vehicle rule.
However, it is consonant with congressional intent to apply the PSD
program to GHG sources on a schedule that begins with the largest GHG
sources and gradually includes smaller sources over time.  Thus, under
this view, the tailoring approach is justified under Chevron step 1.
However, even under this view of congressional intent, we are not
certain at present whether congressional intent can be said to be clear
that the smallest of the GHG sources – those emitting at or near the
statutory thresholds – should be included in the PSD program.  As
noted elsewhere, we may explore this issue further in subsequent
rulemaking.

On the other hand, we recognize that it may also be concluded that
congressional intent with respect to applying PSD to the entire universe
of GHG sources is unclear.  Under these circumstances, the tailoring
approach is justifiable under Chevron step 2 as a reasonable
interpretation of the statutory requirments.

(2) Criteria for establishing phase-in schedule

The phase-in schedule will depend on several things.  The first is our
progress in developing streamlining methods that will render the
permitting authority workload more manageable by taking some sources off
the table (through regulations or guidance interpreting “potential to
emit”), and by allowing for more efficient permit processing (through
general permits and presumptive BACT).  At the same time, streamlining
techniques will lower permitting costs to sources or even eliminate some
sources’ obligations to obtain permits altogether.  The second is the
time that permitting authorities need to ramp up their resources in an
orderly and efficient manner to manage the additional workload.  The
third is information we have as to the sources’ abilities to meet the
requirements of the PSD program and the permitting authorities’
ability to process permits in a timely fashion.  That information will
be based on the real-world experience the permitting authorities will
accumulate as they proceed to process permit application for the larger
GHG sources.

Thus, under our present approach, we will develop streamlining
techniques, we expect the permitting authorities to ramp up resources,
and we will gather real world- information about the GHG permitting
process; and based on all that, we will expand the PSD program in a
step-by-step fashion to include more sources over time.  We intend to
follow this process to establish both the PSD applicability thresholds
and, as we describe next, the significance levels.

(3)  Criteria for establishing significance levels

	The criteria for establishing the significance levels are the same as
for establishing the major emitting facility thresholds.  As noted
above, under the applicable CAA sections, any physical or operational
change at a stationary source that “increases the amount of any air
pollutant emitted by such source” or that results in the emission of a
new pollutant is treated as a “modification” that is subject to PSD
requirements.  Although the CAA, by its terms, treats as an
“increase[]” any amount of emissions that is greater than zero, the
D.C. Circuit held in Alabama Power v. Costle that EPA may establish a
threshold – called the significance level – on de minimis grounds
for the amount of any particular pollutant that may be increased. 636
F.2d at 400. EPA has established significance levels for various
pollutants and has generally established a de minimis basis for them.
See, e.g., 45 Fed. Reg. 52,676, 52,705 – 52,710 (August 7, 1980)   In
addition, the Court in Alabama Power authorized EPA to use an
“administrative necessity” basis for establishing significance
levels. 636 F.2d. at 400.

To this point, we have not attempted to determine de minimis levels for
GHGs.  Instead, in today’s rulemaking, EPA is establishing a phase-in
schedule for significance levels based on the “absurd results”
doctrine or, alternatively, as discussed below, the “administrative
necessity” doctrine.  It is not necessary to establish a permanent de
minimis level in today’s rulemaking, and attempting to do so would
give rise to administrability problems.  This is because we are
considering establishing the major emitting facility threshold for step
3 as low as the 50,000 tpy CO2e level, as discussed elsewhere, and of
course, we could eventually establish a lower level.  Our present view
is that we do not have the authority to establish the de minimis level
higher than the major emitting facility threshold.  Accordingly, at
present if we were to establish a permanent significance level on a de
minimis basis,that level would be relatively low and would result in too
many small sources submitting permit applications while the phase-in is
occurring.  This would give rise to the same problems concerning undue
costs to the sources and administrative burdens for the permitting
authorities for which we are fashioning a remedy.  Accordingly, the
significance levels we establish with this action are the lowest levels
that sources and permitting authorities can reasonably be expected to
implement at the present time in light of the costs to the sources and
the administrative burdens to the permitting authorities.

Our rationale for the implementation schedule is based on the combined
burdens for both PSD and Title permitting purposes.  As a result, we
discuss our rationale below, after first describing the “absurd
results” basis for our action concerning title V applicability to GHG
sources.

c. Other possible approaches to reconciling literal reading of PSD
applicability provisions and congressional intent

In addition, we recognize that commenters have suggested other
approaches to reconciling the inconsistency between the definition of
“major emitting facility” and congressional intent.  For example,
some commenters urged that the “major emitting facility” definition
should be applied so that only sources that emit NAAQS pollutants in the
requisite quantities would be subject to PSD, and sources would not be
subject to PSD based solely on their emissions of non-NAAQS pollutants.
Some commenters argue that this approach is mandated by several of the
PSD provisions, read together, or at least that the relevant statutory
provisions are ambiguous and that this approach is a reasonable reading
of them.  Under this approach, we would not need to phase in the
application of PSD by lowering the applicability threshold for GHG
emitters.

Specifically, many commenters questioned whether EPA has the authority
to regulate GHGs under the PSD provisions. Although the specific lines
of reasoning varied somewhat from one commenter to another, in general,
they based their arguments largely on CAA sections 161 and 165(a).
Under CAA section 161:

In accordance with the policy of section 101(b)(1), each applicable
implementation plan shall contain emission limitations and such other
measures as may be necessary, as determined under regulations
promulgated under this part, to prevent significant deterioration of air
quality in each region (or portion thereof) designated pursuant to
section 107 as attainment or unclassifiable.

Commenters point out that section 107 applies only to NAAQS pollutants
and directs that areas be designated as attainment, nonattainment, or
unclassifiable on a pollutant-by-pollutant basis.

Under CAA section 165(a), a “major emitting facility” cannot be
constructed “in any area to which this part applies” unless it meets
certain requirements.  According to some commenters, these provisions,
read together, limit PSD to being triggered only for NAAQS pollutants
that are emitted from sources in areas that are designated attainment or
unclassifiable for those pollutants.

Some commenters go on to take the position that NAAQS pollutants for
which the area is designated attainment or unclassifiable are the only
pollutants that can be regulated under any provision of PSD; while
others take the position that once PSD is triggered for a source, then
other, non-NAAQS, pollutants may be regulated under other PSD
provisions, in particular, the BACT provision under CAA section
165(a)(4).  These commenters agree, however, that emissions of GHGs, by
themselves, cannot trigger PSD applicability.   Finally, some commenters
state that even if the PSD provisions cannot be read by their terms to
preclude GHGs from triggering PSD, then they can be read to authorize
EPA to determine that GHG emissions should not trigger PSD.

We recognize, as we have said elsewhere, that a primary purpose of the
PSD provisions is to regulate emissions of NAAQS pollutants in an area
that is designated attainment or unclassifiable for those pollutants.
However, we do not read CAA sections 161 and 165(a), read in context
with the PSD applicability provisions, as limiting PSD applicability to
those pollutants.  The key PSD applicability provision is found in
section 165(a), which states, “No major emitting facility on which
construction is commenced after August 7, 1977, may be constructed in
any area to which this part applies unless [certain requirements are
met].  A “major emitting facility” is defined, under CAA section
169()(1), as “any … stationary source[] which emit[s], or ha[s] the
potential to emit, one hundred [or, depending on the source category,
250] tons per year or more of any air pollutant.”  As discussed
elsewhere, EPA has long interpreted the term “any air pollutant” to
refer to “any air pollutant subject to regulation under the CAA,”
and for present purposes, will continue to read the “subject to
regulation” phrase into that term.

Although section 165(a) makes clear that the PSD requirements apply only
to sources located in areas designated attainment or unclassifiable, it
does not, by its terms, state that the PSD requirements apply only to
pollutants for which the area is designated attainment or
unclassifiable.  Rather, 165(a) applies, by its terms, more broadly to
any pollutant that is subject to regulation.  Moreover, two other
requirements in CAA section 165(a) apply to pollutants broadly.  Under
CAA section 165(a)(3), one of the requirements for securing a
preconstruction permit is to demonstrate that the source’s emissions
“will not cause, or contribute to, air pollution in excess of any (A)
[NAAQS increment to which the PSD requirements apply], (B) [NAAQS] in
any air quality control region, or (C) any other applicable emission
standard or standard of performance under this chapter.”  Subparagraph
(B), by its terms, applies to NAAQS pollutants for which the area is
designated nonattainment, and therefore are outside of the PSD program.
Most importantly, subparagraph (C), by its terms and its differentiation
from NAAQS pollutants under subparagraph (C), clearly applies to
non-NAAQS pollutants.  For example, by its terms this provision requires
a demonstration that a landfill seeking a PSD permit will comply with
emission limitations for “municipal solid waste landfill emissions.”

In addition, CAA section 163(a)(4) includes as a PSD requirement that
“the proposed facility is subject to the best available control
technology for each pollutant subject to regulation under this chapter
emitted from, or which results from, such facility.  Section
163(a)(4)’s broad reference to  “each pollutant subject to
regulation under this chapter” strongly indicates that it applies to
non-NAAQS pollutants, as long as they are regulated under other
provisions of the Act.  Indeed, the very existence of this provision
makes clear that Congress knew how to limited the scope of “any air
pollutant” when it intended to do so.

To return to sections 161 and 165(a), which commenters rely on as the
cornerstone of their argument, commenters in effect take the position
that Congress intended the geographic references in these provisions –
that is, the references to areas designated as attainment or
unclassifiable – to limit the scope of the permitting provisions.  We
think it unpersuasive that Congress would have taken such an indirect,
and silently implied, route to limit the scope of the permitting
provisions, which, as noted above, apply broadly by their terms.  Had
Congress intended to limit PSD permitting in the manner urged by
commenters, it certainly could have done so directly, such as by
limiting PSD permitting to “any pollutant for which an area is
designated attainment or unclassifiable.”  Indeed, in other sections
of the CAA, Congress did directly limit the scope of pollutant
applicability by specifiying which pollutants are or are not subject to
the provision.  See, e.g., 111(d) (performance standards for existing
sources apply only to pollutants other than NAAQs or hazardous air
pollutants), 112(a)(1) (applying air toxics requirements in section 112
to sources that emit above the specified tonnage thresholds of
“hazardous air pollutants”).

In addition, although section 161 requires that SIPs contain emission
limitations and other measures as necessary to prevent significant
deterioration in areas designated as attainment or unclassifiable, it
does not limit SIPs to only those measures.  Moreover, section 161
should be read in conjunction with section 110(a)(2)(C), which
establishes the basic requirement that SIPs include PSD requirements.
Section 110(a)(2)(C) provides that each SIP shall --

Include a program to provide for the enforcement of the measures
described in subparagraph (A), and regulation of the modification and
construction of any stationary source within the areas covered by the
plan as necessary to assure that [NAAQS] are achieve, including a permit
program as required in parts C and D of this subchapter.

Subparagraph (A), in turn, requires SIPs to include “enforceable
emission limitations and other control measures, means, or techniques
… as may be necessary or appropriate to meet the applicable
requirements of this chapter”.  It is clear from subparagraph (C) of
section 110(a)(2), read in conjunction with subparagraph (A), that SIPs
may contain provisions to meet requirements other than those related to
the NAAQS (that is, subparagraph (A) requires control measures “to
meet the applicable requirements of this chapter”), and that SIPs must
include “a permit program as required in part[] C.”  That permit
program, in turn, must include the requirements in section 165(a)(3)(C)
and (4) that, by their terms, apply to non-NAAQS pollutants.

A further indication that the PSD requirements apply to non-NAAQS
pollutants may be found in Congress’s addition in the 1990 CAA
Amendments of the limitation in section 112(b)(6) that “The provisions
of part C of this subchapter (prevention of significant deterioration)
shall not apply to pollutants listed under this section,” that is,
hazardous air pollutants.  By adding this provision, Congress clearly
recognized that hazardous air pollutants had been subject to the PSD
provisions.  The D.C. Circuit, in Alabama Power v. Costle, 636 F.2d 323,
361 n.90 (D.C. Cir. 1980) indicated that PSD applies to hazardous air
pollutants.

In addition, it should not be overlooked that we have applied PSD to
non-NAAQS pollutants since the inception of the program over 30 years
ago.  For example, prior to the 1990 CAA Amendments, PSD applied to
hazardous air pollutants regulated under CAA section 112; and over the
years, EPA has established significance levels for fluorides, sulfuric
acid mist, hydrogen sulfide, total reduced sulfur, reduced sulfur
compounds, municipal waste combustor organics, municipal waste combustor
metals, municipal waste combustor acid gases, and municipal solid waste
landfill emissions, see 40 CFR 51.166(b)(23)(i); and EPA has proposed a
significance level for ozone depleting substances.  See 61 Fed. Reg.
38,307/2 (July 23, 1996). Of course, the basis for all these actions is
PSD’s applicability to these non-NAAQS air pollutants.  We are not
aware that EPA’s actions in establishing significance levels for these
pollutants gave rise to challenges on grounds that the PSD provisions do
not apply to them.

Accordingly, we reject the argument that section 165 must be, or may
reasonably be, limited in scope to pollutants for which an area has been
designated as attainment or unclassifiable.  Rather, the PSD
applicability provision – the definition of “major emitting
facility” in CAA section 169(1) – applies by its terms (as we have
narrowed them through regulation) to sources emitting any air pollutant
subject to regulation, and is not limited to any NAAQS air pollutant.
Our research has not disclosed any explicit statements in the
legislative history that Congress intended to limit PSD applicability to
sources of NAAQS pollutants.

We recognize, as we discuss at length elsewhere in today’s notice,
that applying the PSD applicability provisions literally to GHG sources
is not consistent with, and in fact would undermine, congressional
intent.  We further believe that the tailoring approach we adopt in this
rulemaking most closely gives effect to congressional intent and
therefore best reconciles the statutory provisions with congressional
intent.

In any event, we did not include the NAAQS approach as advocated by
commenters in our notice of proposed rulemaking, and so we could not
proceed to adopt it in today’s final action.  However, we are not
inclined to reject the possibility that some approach other than the
phase-in approach that we adopt today could merit further exploration
under the “absurd results” doctrine.  Therefore, while we will
proceed to implement the approach described in today’s rulemaking, we
intend to publish a supplemental notice of proposed rulemaking in the
near future, in which we solicit additional comment on whether we have
authority to adopt some other approach under the “absurd results”
doctrine on grounds of consistency with congressional intent.  If we
decide to change our approach, that could have important ramifications
for whether we will promulgate lower thresholds in step 3 or
subsequently.

6.  Application of the “absurd results” doctrine for the title V
program

	Having discussed the application of the Chevron framework, taking
account of the “absurd results” doctrine, for the PSD applicability
requirements, we now turn towards applying the same approach to the
title V applicability requirements.  Because of the parallels between
the PSD and Title applicability provisions, much of the discussion below
parallels the discussion above of PSD.  As with PSD, we finalize, with
some refinements, the “absurd results” basis we proposed.
Specifically, we are revising our regulations to limit title V
applicability to GHG emitting sources by revising the regulatory term,
“major source,” and although our revised regulations do not accord
with a literal reading of the statutory provisions for title V
applicability, which are incorporated into the statutory definition of
“major source,” we have concluded that based on the “absurd
results” doctrine, a literal adherence to the terms of this definition
is not required.  A literal adherence would not reflect congressional
intent for title V applicability.  Instead, we may limit title V
applicability for GHG emitting sources in a way that is reasonably
reflective of congressional intent.

	To reiterate, for convenience, the title V applicability provisions
provide that after the effective date of a title V program, it is
unlawful for any person to operate a "major source" without a title V
permit, §502(a), and define a "major source" to include "any major
stationary facility or source of air pollutants which directly emits, or
has the potential to emit, one hundred tons per year or more of any air
pollutant."  CAA §501(2)(B) and §302(j).

Under the current interpretation of the title V applicability provision,
EPA’s recent promulgation of the light-duty vehicle rule will trigger
the applicability of title V for GHG sources at the 100 tpy threshold
levels as of Jan. 2, 2011.  This is because title V applicability hinges
on the definition of “major source,” which, under EPA’s
long-standing narrowing interpretation, but absent further tailoring,
applies title V to sources of any air pollutant that is subject to
regulation under another provision of the CAA.  EPA’s promulgation of
the light-duty vehicle rule means that GHGs will become subject to
regulation on the date that the rule takes effect, which will be January
2, 2011.

But absent tailoring, the January 2, 2011 trigger date for GHG PSD
applicability will see an extraordinarily large number of sources --
some 6.1 million --  become subject to title V, an increase of over
400-fold over the 14,700 sources that currently are subject to title V
each year.  The great majority of these new sources will be small
commercial or residential sources.

We believe that for many reasons, this result is anathema to
congressional intent for the title V program, and in fact would severely
undermine what Congress sought to accomplish with the program.  As a
result, under Chevron, accounting for the “absurd results” doctrine,
the statutory definition for “major source” (as EPA has already
narrowed it to refer to any air pollutant “subject to regulation”)
should not be read to apply to all GHG sources at or above the 100 tpy
threshold as of the January 2, 2011 date.  Rather, the definition of
“major source” should be tailored so that it applies to GHG sources
on a phased-in basis, with the largest sources first, as we describe in
today’s rule.

a. Congressional Intent for Title V Program

Applying the definition of “major source” without tailoring – that
is, applying title V to GHG sources at the 100 tpy level without
tailoring -- would be contrary to congressional intent as found in the
statutory provisions and legislative history, especially as those
provisions and history are viewed in light of the results that would
occur from applying title V to those sources.

As we said, above, in a similar circumstance involving the PSD program,
applying title V requirements to GHG sources without tailoring the
definition of “major source” – and, as discussed below, without
streamlining the title V requirements or allowing for time for
permitting authorities to ramp up resources -- would result in a program
unrecognizable to the program that Congress intended, and one that would
be flatly unadministrable.  Without tailoring, the PSD program would
expand from the current 14,700 sources to some 6.1 million, with the
great majority of the sources being small commercial and residential
sources that not only have never been permitted before, but that in many
cases have no applicable requirements under the Clean Air Act to include
in the permit.  In the next several sections, we will walk through some
of the specific ways that this literal application of title V would not
only differ from, but would undermine, congressional intent.  But the
big picture is readily drawn:  The influx of millions of permit
applications would do nothing less than overwhelm the program Congress
finely crafted for thousands of sources, with its multi-step deadlines
measured in days and months, its multiple mandates for expeditious
permit processing, its nuanced limitations on the need for permit
revisions, its efforts to save smaller sources permit fees.  Regulatory
gridlock, precisely what Congress strove to avoid, would result.

	Most visibly, interpreting the applicability provisions literally to
include GHG sources at the 100/250 tpy levels would revise the program
from what Congress envisioned in three major ways, each of which was
discussed above:

It would expand the program to cover several-hundred-fold more sources
than Congress anticipated

It would expand the program to cover very small sources that Congress
expected would not be included in the program

It would expand the program so that the large majority of sources have
empty permits, that is, permits without applicable requirements.

Revising the program in this way through a literal interpretation of the
applicability

provisions – without tailoring the applicability requirements and
without streamlining of program requirements -- is clearly inconsistent
with Congress’s conception of the program’s scope, and these
inconsistencies are nothing less than foundational.  Most importantly,
the program that would result would be unduly costly to sources and
impossible for permitting authorities to implement, and therefore would
frustrate the purposes that Congress intended to achieve with the
program that it did design.

As discussed above, Congress was fully aware that with the title V
program, it was subjecting sources and permitting authorities to
additional costs and administrative burdens, and it was fully aware of
concerns that absent careful design, the program could become a formula
for regulatory gridlock.   Determined to make the program workable,
Congress crafted the provisions to be efficient and workable.

However, if title V were to apply to GHG sources at the 100 tpy level,
until EPA could develop streamlining methods, all of these sources newly
subject to title V would need to apply for permits.  We estimate that
the commercial and residential sources would incur, on average, expenses
of $23,370, while an industrial source would incur expenses of $46,350,
to prepare a permit application and receive a permit.  The great
majority of these sources would be small commercial and residential
sources of the type that Congress did not expect would be included in
title V, and we estimate that the great majority of them would not have
applicable Clean Air Act requirements to include in their permits.  The
overall cost to all 6.1 million sources would be a staggering $49
billion.  Imposing burdens of this magnitude on these sources –
individually and in total – would of course be contrary to
Congress’s efforts to minimize the expenses of title V, especially to
small sources.  The magnitude of the costs is, in a sense, heightened
because a great many of these sources will not have applicable
requirements to include in their permits; therefore, much of the costs
will produce little benefit.

	Yet, the most important reason why applying the title V program to GHG
sources without tailoring, and before the development of streamlining
methods, would be inconsistent with congressional intent, is that the
resulting program would prove unadministrable.  Adding some 6.1 million
permit applications to the 14,700 that permitting authorities now handle
would completely overwhelm permitting authorities, and for all practical
purposes, bring the title V permitting process to a standstill.

	The costs to permitting authorities of this multi-million-source
program would again be staggering.  On average, and without
streamlining, a permitting authority would expend 214 hours, which would
cost $9,844, to issue a permit to a commercial or residential source;
and 428 hours, which would cost $19,688, to issue a permit to an
industrial source.  In all, permitting authorities would face over $21
billion in additional permitting costs each year due to GHGs, compared
to the current program cost of $62 million each year.

Beyond this disconnect with congressional expectations as to scope of
the program, what is most important is that the extraordinarily large
number of permit applications would overwhelm permitting authorities and
slow their ability to process permit applications to a crawl.  As
described at proposal, the survey of permitting authorities found that a
literal application of the title V applicability provisions to GHG
sources would result in permitting delays of some ten years.  However,
as we further noted at proposal, this estimate was based on the
assumption that the applicability threshold would be 100 tpy actual
emissions; in fact, the applicability threshold would be 100 tpy in
potential to emit, which would sweep in many more sources.  Moreover, as
stated elsewhere, we currently estimate the amount of per-permit work
hours for permitting authorities in processing title V permit
applications to be several times higher than what we estimated at
proposal.  As with PSD, such a program is so far beyond anything within
our experience that it is difficult to give a meaningful estimate for
how long the permitting process would take for each permit on average,
but it is clear that the period would be many years.

More specifically, applying title V to GHG sources without tailoring
would be in tension with a specific CAA requirement, that of CAA §
503(c), which imposes a time limit of 18 months from the date of receipt
of the completed permit application for the permitting authority to
issue or deny the permit.  It would be flatly impossible for permitting
authorities to meet this statutory requirement if their workload
increases from some 14,700 permits to 6.1 million.  Instead, as just
noted, permit applications would face multi-year delays in obtaining
their permits.

Moreover, these delays would undermine the overall statutory design that
promotes the smooth-running of the permitting process, and the very
purpose of the title V program itself.  As noted elsewhere, Congress
intended through title V to facilitate compliance by establishing an
operating permit program that requires the source to combine all of its
CAA requirements, and explain how it will assure compliance with such
requirements.  Congress established a comprehensive process to implement
the operating permit program. Through this process, following the date
that sources become subject to title V, they have one year to submit
their permit applications.  CAA §503(c).  As noted, the permitting
authority then has 18 months to issue or deny the permit.  CAA §503(c).
 Permitting authorities must provide an opportunity for public comment
and a hearing.  CAA §502(b)(6).  If the permitting authority proposes
to issue the permit, the permitting authority must submit the permit to
EPA, and notify affected states, for review.  CAA §505(a)(1).  EPA then
has 45 days to review the permit and, if EPA deems it appropriate, to
object to the permit. CAA §503(b)(1).  If EPA does object, then the
permitting authority must, within 90 days, revise it to meet the
objections, or else EPA becomes required to issue or deny the permit.
CAA §503(c).  If EPA does not object, then, within 60 days of the close
of the 45-day review period, any person may petition EPA to object, and
EPA must grant or deny the petition within 60 days.  CAA §505(b)(2).
This set of applicant, permitting authority, and EPA actions and
deadlines establishes the process for the prompt and efficient issuance
of operating permits for the appropriate universe of sources.

In addition, only a small fraction of these millions  of sources will be
subject to any CAA requirements due to their GHG emissions, and we
suspect that the majority will not be subject to any CAA requirements at
all, so that although they would need to apply for and receive a permit,
there would be no applicable requirements to include in the permit and
thus the exercise would not improve compliance.  But at least for an
initial period, until resources could be ramped up and streamlining
methods could be developed, the extraordinary numbers of these sources
would sweep aside Congress’s carefully constructed program, and
instead, backlog the permit authorities.  The large numbers involved
mean that this initial period would last for many years because it would
take that long to raise the requisite funds and hire and train the
necessary employees, as well as, as discussed elsewhere, develop and
apply streamlining measures.  Therefore, multi-year delays in issuance
of all permits would ensue, for both the sources that have applicable
requirements and that Congress clearly intended the program to cover,
and for the millions of sources that may not be subject to any
applicable requirements.  Thus, a literal interpretation of the title V
threshold provisions would apply title V to millions of sources that
Congress did not intend be covered, and the ensuing administrative
burdens – at least initially -- would impede the issuance of permits
to the thousands of sources that Congress did intend be covered.  This
result is the type of “absurd results” from a literal application of
statutory provisions that the courts have held should be avoided.  And
even beyond all that, the sheer magnitude of the numbers involved–
millions of permits requiring thousands of FTEs at a cost to the
permitting authorities of billions of dollars, all occurring at the time
that GHGs become subject to regulation – makes clear that this, the
result of a literal application of the PSD provisions to GHG sources is
not what Congress in fact intended or could conceivably have intended.

b.  EPA’s reconciliation of applicability provisions with
congressional intent

EPA has concluded that the impacts of applying the literal definition of
“major source” to GHG sources are inconsistent with, and in fact
undermine, congressional intent for the applicability of the title V
program.  Therefore, under the Chevron framework, accounting for the
“absurd results” doctrine, EPA may tailor the definition of the
program to be more consistent with congressional intent.  This section
explains the principles and approach EPA is using to accomplish that
tailoring so as to be consistent with congressional intent and to
respond to other approaches to reconciling that were suggested by
commenters.

This final rule reconciles the definition of “major source” – as
narrowed through EPA interpretation -- with congressional intent by
applying the definition to include as many of the sources that would be
included under the terms of the definition as promptly as possible,
consistent with the intent of the statute as illuminated by the
legislative history.  This means that we intend to phase in title V
applicability to sources, based on their size, over time.  The specific
schedule will depend on information we have as to the permitting
authorities’ ability to process permits in a timely fashion.  That
information will be based on the real-world experience the permitting
authorities will accumulate as they proceed to process permit
application for the larger GHG sources, coupled with the size of their
resources.  In addition, we intend to vigorously pursue streamlining
methods, so as to make title V more accessible for more sources moving
down the size scale.

Thus, under our present approach, we will gather information about the
permitting authorities’ ability to process permits, and we will
develop streamlining techniques, and, based on that information, expand
the title V program in a step-by-step fashion to include more sources
over time.  Each step will be based on our assessment of the permitting
authorities’ and sources’ ability to comply with their respective
obligations under the title V program.

	We recognize that the availability of permit fees to support title V
permit actions creates a potentially important source of resources, and
that this has implications for the permitting authorities’ ability to
implement the title V program for sources of GHGs.  At least in theory,
permitting authorities could assess and collect sufficient fees to
support hiring and training sufficient personnel so that they could
expand their programs to match the expansion in the number of sources
covered by the program.

Even so, title V fees cannot be considered a panacea that will resolve
all resource problems that permitting authorities will have, for several
reasons.  Permitting authorities will likely be constrained as to the
rate in which they can increase fees in light of the costs to sources.
As indicated elsewhere, at least at the outset of the program before
streamlining techniques have been developed, a literal application of
the title V applicability provisions to GHG sources would, on average,
cost each industrial source $46,400 and each commercial or residential
source $23,200 to complete the permit application and take other
associated actions, and it would cost each permitting authority, on
average, $19,678 to process the industrial source permit and $9,839 to
process the commercial or residential source permit.  Particularly in
light of the high costs to sources of applying for a permit, it is not
likely that permitting authorities would be able to pass on to the
sources in the form of fees the permitting authorities’ own high costs
for processing those permits, at least not right away.  Even if it were
possible to raise permit fees, permitting authorities would have to
undergo a process to assess and impose  those fees, then collection of
those fees, and then the hiring and training of personnel.  The survey
from the state and local agencies described above forecast a two-year
period for hiring and training, without counting time for the process of
assessing and imposing fees.  For these reasons, we do not believe that
the authorization for fees will allow the permitting authorities either
to accelerate Steps 1 or 2 of the tailoring schedule or to permit a
larger number of sources at those steps.  Step 1 will take effect on
January 2, 2011, step 2 will take effect on July 1, 2011, and the
process for determining and collecting fees, and then hiring and
training personnel will take at least several years after July 1, 2011.

Moreover, we do not believe that the authorization for fees means that
permitting authorities can reasonably be expected to permit title V
sources at levels below 50,000 tpy CO2e before 2016.  The next level
below 50,000 tpy CO2e for which we have data is 25,000 tpy CO2e, and the
costs to permitting authorities to run their programs at that level
($126 million) is more than double their current costs ($62 million).
We do not consider it reasonable to expect permitting authorities to
more than double their program within the first six years of  title V
applicability to GHG sources.  That it is not reasonable to expect that
is made even clearer when the permitting authorities’ burdens in
implementing their PSD programs are considered.  The ability of
permitting authorities to impose fees may have more important
implications for subsequent steps, and as we address those subsequent
steps, we will consider the fees.  EPA’s approach to fees in this
rulemaking is discussed elsewhere.

c. Other possible approaches to reconciling literal reading of title V
applicability provisions and congressional intent

Having described how the Chevron framework, accounting for the ”absurd
results” doctrine applies to title V requirements in this case and why
it supports this tailoring rule -- under which we expect to apply title
V to more sources, in a step-by-step fashion, over time -- we turn to
the last part of our discussion of this doctrine.  Here, we address
other possible approaches that commenters have suggested for reconciling
the inconsistency between a literal reading of the applicability
provisions and congressional intent.

In particular, commenters have argued that EPA should apply the title V
program only to sources that are subject to applicable requirements, so
that sources should not be required to hold empty permits (i.e., permits
issued to a source that is not subject to any applicable requirement for
any pollutant).  To the extent that commenters argue that the statute
requires EPA to adopt a “no-empty –permits” theory, we disagree.
We believe that although various provisions of title V indicate that one
of title V’s purposes is to gather a source’s applicable
requirements into a single permit, see CAA §§ 503(b)(1), 504(a), we do
not read those provisions as expressly limiting title V to sources with
applicable requirements.  We also note that to date, we have issued
permits to sources without applicable requirements, albeit on rare
occasions.  We believe that the tailoring approach we adopt in this
rulemaking best reconciles the statutory provisions with congressional
intent.

7.  Additional rulemaking for the PSD and title V programs

	The previous sections 5 and 6 discussed our application of the Chevron
framework, accounting for the the “absurd results” doctrine, to the
PSD and title V applicability requirements, respectively.  As another
point in this regard, which is relevant for both PSD and title V
purposes, we also commit to subsequent rulemakings in which we may
further address the “absurd results” doctrine.

Specifically, we will propose or solicit comment on establishing a
further phase-in, that is, a step 3, that would apply PSD and title V to
additional sources, effective July 1, 2013, and on which we commit to
take final action, as supported by the record, by no later than July 1,
2012.

We further commit to completing another round of rulemaking addressing
smaller sources by April 30, 2016.   Our action in that rulemaking would
address permitting requirements for smaller sources, taking into account
the severity of the remaining problems associated with permitting
authority burden and source costs.

While committing to future action, we do not decide in this rule when
the phase-in process will ultimately end, or at what threshold level,
because all that depends on uncertain variables such as our progress in
developing streamlining approaches and on permitting authorities’
progress in developing permitting expertise and acquiring more
resources.  . We may continue the phase-in process with further
rulemaking(s) after 2016.  Alternatively, we may make a final
determination through future rulemaking that, under the “absurd
results” doctrine, PSD and/or title V do not apply to GHG sources
that, while small and relatively inconsequential in terms of GHG
contribution, are above the statutory tonnage thresholds for these
programs., and thereby end the phase-in process.  In addition, we may
consider whether to limit title V applicability to GHG sources in order
to minimize the number of GHG sources with “empty” permits.

8. Rationale for the phase-in schedule for applying PSD and Title V to
GHG sources.

	Having discussed in sections V.B.5, V.B.6, and V.B.7 above the
compelling reasons for tailoring the PSD and title V programs, we now
describe our rationale for selecting the phase-in schedule in today’s
rule for applying PSD and title V to GHG-emitting sources.  To reiterate
for convenience,  under Step 1 of this schedule, which begins on January
2, 2011, (i) PSD applies to the GHG emissions of “anyway” PSD
sources, that is, sources that are subject to PSD anyway due to their
emissions of conventional pollutants and that undertake a modification
that results in an increase of at least 75,000 tpy CO2e; and (ii) title
V applies to “anyway” title V sources, that is, sources that are
subject to title V anyway due to their emissions of conventional
pollutants.  Under Step 2, which begins on July 1, 2011, (a) sources
will be subject to PSD on account of their GHG emissions if they newly
construct and emit at least 100,000 tpy CO2e, or if they are existing
sources that emit at least 100,000 tpy CO2e of GHGs and make a
modification that results in the emission of at least 75,000 tpy CO2e;
and (b) existing and new sources will be subject to title V on account
of their GHG emissions if they emit 100,000 tpy CO2e in GHG emissions.
In addition, EPA intends to begin another round of rulemaking – Step 3
– in 2011 and commits to complete it by July 1, 2012.  In that
rulemaking, we will propose or solicit comment on a further phase-in of
GHG sources for PSD and title V applicability, and we may propose or
solicit comment on another application of the “absurd results”
doctrine that excludes categories of sources from PSD or title V.
However, under today’s rule, in no event will EPA apply PSD or title V
to sources below the 50,000 tpy CO2e levels in step 3, or any other step
we might promulgate prior to April 2016.  In addition, EPA commits to
conduct a study, to be concluded by April 30, 2015, evaluating the
status of PSD and title V applicability to GHG sources, and, based on
the study, complete a rulemaking by April 30, 2016 that promulgates
another round of a phase-in.

a. Rationale for Step 1

	In Step 1 of our tailoring approach, which begins on January 2, 2011,
PSD and title V requirements will apply to only those sources that are
subject to PSD or title V requirements anyway due to their conventional
pollutants (“anyway” sources) and that, in the case of PSD, make
modifications that result in an increase in GHG emissions of at least
75,000 tpy CO2e.   No sources would become major for PSD or title V
under this step based on their GHG emissions alone.  This section
describes our proposal, comments on the proposal and our response to
those comments, and our rationale for Step 1.

(1) Proposal

In our proposal, we proposed (i) the application of PSD and title V
requirements to sources that emit at least 25,000 tpy CO2e, (ii) a PSD
significance level of between 10,000 and 25,000 tpy CO2e, and (iii) a
commitment to undertake a study to be following by further rulemaking
after six years.  In addition we solicited comment on the alternative of
limiting PSD and title V applicability to “anyway” sources for at
least the first six years.  Under this approach, PSD and title V
applicability would be determined based on non-GHG pollutants without
regard to GHGs, but those sources subject to PSD would also be subject
to BACT requirements for GHGs if their GHG emissions exceeded the
significance level established in the final rule, and those sources
subject to title V would be required to include any applicable
requirements for GHGs in their permits.

(2) Comments

Many commenters supported this “anyway”-source approach, and offered
 a variety of reasons:  According to the commenters, (i) this approach
is a better reading of Congress’s intent in the Act and is consistent
with Alabama Power v. Costle, .636 F.2d 323 (D.C. Cir. 1980): (ii) this
approach would reduce the permitting workload on sources currently
considered minor and focus PSD and title V requirements on large sources
of non-GHG pollutants, as intended by Congress; (iii) it is appropriate
to base PSD and title V applicability on non-GHG emissions until data on
GHG emissions are available from the GHG Reporting Rule; (iv) in the
initial phase, this approach would be more straightforward to
administer, would provide a more predictable permitting workload, and
would prevent a flood of newly regulated sources from overburdening
state agencies; (v) this approach would provide permitting agencies time
to develop experience handling GHG sources and requirements under the
PSD and title V programs; (vi) this approach would provide EPA and the
permitting agencies the time needed to develop streamlining techniques;
(vii) this approach is consistent with the “absurd results” and
“administrative necessity” doctrines because the scope of the
permitting programs would remain consistent with both Congressional
intent and current administrative practice, but EPA and State agencies
would still be allowed  to begin regulating GHG emissions from existing
PSD and title V sources; and (viii)  sources already required to obtain
PSD permits are best equipped to work through BACT issues with
permitting authorities.

Commenters added that if BACT is applied for GHG due to permit actions
involving non-GHG pollutants, EPA would need to set a significance
threshold for the application of BACT, without which BACT could apply to
very small (e.g., 1 ton) GHG increases associated with project that
otherwise triggered PSD for increases of non-GHG.

(3) Determination as to Step 1, PSD and title V applicability and PSD
significance level

After considering the administrative burdens from increased permitting
actions and the need for permitting authorities to have sufficient time
to develop necessary expertise and staffing resources to address that
burden, we have decided in this final action to establish the
“anyway” source approach as Step 1.  Beginning on January 2, 2011,
sources subject to PSD requirements for their conventional pollutants
anyway will be required to apply BACT to their GHG emissions if they
construct or modify and in so doing, emit at least 75,000 tpy CO2e in
GHGs.  Similarly, sources subject to title V requirements anyway due to
their conventional pollutants will be required to meet certain
requirements for their GHGs, as described elsewhere. These requirements
at Step 1 for PSD and title V will not expire.  On July 1, 2011, a
further phase-in of PSD and title V applicability – Step 2 – will
kick in.

The “anyway” source approach has particular appeal during this, the
first step of the phase-in approach because it begins to apply key PSD
and title V program requirements as soon as January 2, 2011 to large
sources of emissions, but because it applies only to sources that are
already regulated under the CAA for other pollutants, it can be
implemented efficiently and with an administrative burden that is
manageable in the next eight months.    Under this approach, the sources
and permitting authorities will still face substantial additional work
due to the GHG emissions. In addition to the activities discussed
elsewhere, there are significant and complex policy questions about how
BACT will be implemented for GHGs that must be resolved.  These issues
include how to determine BACT for GHGs, how to do netting, and other
similar issues.  Even with EPA guidance, many case-specific policy
issues arise and must be resolved by the permitting authority in the
context of a specific permit application.  Nevertheless, with the
“anyway” source approach, this work will be manageable because the
associated permitting burden will be limited to adding a GHG component
to each existing permit action for which it will be required, and will
avoid the significantly greater burdens associated with large numbers of
new permit actions that would be required for sources and modifications
that would be subject to PSD for the first time.  Instead, this approach
allows permitting authorities sufficient time to develop necessary
expertise and staffing resources to address GHG BACT.

We agree with commenters that the establishment of a significance level
– which, in effect, is a BACT threshold -- is appropriate, and we have
decided to establish this level at 75,000 tpy CO2e because, for reasons
discussed below, that is the level that will apply during step 2.  At
this level, the administrative burdens, described below, will be
manageable.  Importantly, we believe a consistent significance level
between Steps 1 and 2, as opposed to a lower significance level in Step
1, will provide for a smoother transition and avoid the problems that
would arise if PSD applied to modifications during Step 1 that PSD would
not apply to in Step 2.  Otherwise, we would create a perverse incentive
for companies to delay such projects until Step 2 to avoid BACT.

We estimate that Step 1 will result in a 23% increase in permitting
authority work hours and a $3 million increase – which amounts to a
25% increase from the current program cost of $12 million -- in their
annual costs for running PSD programs.  This is primarily due to the
BACT review requirements.   For title V programs, we estimate a 2%
increase in permitting authority work hours and a $1 million increase in
the title V annual program costs for permitting authorities under Step 1
as compared to the current program cost of $62 million for the title V
program.   These work hours and costs will be needed primarily to review
GHG emissions information, add any GHG-related requirements to title V
revisions and renewal actions that would otherwise be occurring, respond
to comments and petitions from the public, as well as develop fee
requirements and make fee determinations associated with issuing new or
revised title V permits that add GHG-related information.  For both the
PSD and title V programs on a combined basis, the additional costs for
Step 1 will be $4 million, which amounts to a 5% increase in the current
combined program cost of $74 million.

During Step 1, in addition to these workload and monetary costs,
permitting authorities will confront additional burdens before and
during Step 1 and that we have not attempted to quantify.  One of the
most significant of these is training staff in the PSD-related areas of
GHG emissions calculations and BACT evaluations.  In addition,
permitting staff will need to build staff expertise and capacity for
addressing GHG requirements in preparation for Step 2, which will begin
only six months after Step 1; and in communicating and providing
outreach to sources addressing GHG emissions for the first time.  Based
on comments we received on the proposal from permitting authorities, we
believe these additional training and outreach requirements – for both
the PSD and title V programs -- will add significantly to the permitting
authorities’ burden during the initial six-month period under Step 1.

	We believe that these administrative burdens are substantial but
manageable.  Following today’s action, permitting authorities will
have only eight months to prepare for Step 1, when they will need to
increase their resources by 5% for both the PSD and title V programs
combined, and be able to implement BACT requirements for GHG sources.
During Step 1, they will need to prepare for Step 2, when, as discussed
below, they will need to process over 900 additional PSD permits each
year and begin to process over 2,600 additional title V permit actions.

We have decided to limit Step 1 to the “anyway” source approach, and
not apply PSD or title V to sources based on their GHG emissions, for
several reasons.  First, we believe that the administrative burdens
described above are the most that the permitting authorities can
reasonably be expected to manage before and during Step 1.  Tighter PSD
and title V applicability requirements would mean greater administrative
burdens.

Second, we believe that the costs of GHG permitting to the sources, as
described above, are substantial and as a result, necessitate that we
wait for the permitting authorities to develop the PSD and title V
programs for GHG sources during the first six months of 2011 before
subjecting sources to PSD and title V requirements on account of their
GHG emissions.  By July 1, 2011, when Step 2 takes effect, the PSD and
title V programs will be better developed.  For example, the permitting
authorities will have more experience making BACT determinations.  In
addition, by that time, sources will have had more time to prepare for
the permitting processes.  In addition, as suggested by one commenter,
the additional time will allow sources and permitting authorities to
address the current uncertainty surrounding how to measure high-GWP
gases.

Third, we estimate that “anyway” sources account for approximately
65 percent of total national stationary source GHG emissions.  As a
result, limiting Step 1 to these sources will still capture a large
portion of the GHG inventory.

A large number of commenters urged us to leave this “anyway” source
approach in place until such time as we complete an assessment and
conduct further rulemaking, which we proposed would be six years from
now.  We are not taking this action; rather, for the reasons discussed
next, we believe it is reasonable to use GHG thresholds to begin to
phase in PSD and title V applicability to additional sources in Step 2.

b. Rationale for Step 2

(1)  Proposal

We proposed to establish the applicability level for PSD and title V to
GHG sources at 25,000 tpy CO2e, and we proposed a PSD significance level
in the range of 10,000 to 25,000 tpy CO2e.  Our burden estimates at
proposal led us to conclude that at those threshold levels, for the PSD
program, “approximately 400 additional new or modified facilities
would be subject to PSD review in a given year.  These include
approximately 130 new facilities and approximately 270
modifications….” 74 FR 55,331, col. 1.  We estimated that processing
these numbers of additional permits, along with doing the additional
work associated with GHG emissions from sources subject to PSD anyway
due to their conventional emissions, would increase permitting authority
burdens by “approximately 112,000 staff hours at an additional cost of
approximately $8 million.  This workload amount represents an increase
of about 1.3 times, or 32 percent, in the current burden for permitting
authorities on a nationwide basis.”  Id. col. 3.  We concluded that
“this additional burden is manageable,” but that “any threshold
lower than 25,000 tpy CO2e, would create undue administrative
burdens.”  Id.

	For the title V program, we estimated at a 25,000-tpy CO2e permitting
threshold, “about 13,600 existing facilities” would become subject
to title V, and that to manage the additional workload associated with
permitting those sources and with the other permit revisions and
modifications that would result from the 25,000 tpy CO2e threshold,
permitting authorities would require an additional 492 FTEs, which would
be an estimated 50 percent increase over current title V staffing
levels.  74 Fed. Reg. 55,335, cols. 1-2.

(2)  Comments

We received a significant number of comments from both permitting
authorities and industry representatives that our proposed GHG threshold
of 25,000 tpy CO2e for major source applicability was too low and would
result in an unmanageable amount of permitting actions in the near term.
 Many offered evidence that we severely underestimated both the number
of permitting actions and the per-permit administrative burden, for both
PSD and title V programs.

	Commenters also asserted that the proposed 25,000 tpy threshold is too
low because it will subject small sources (including many small
businesses) to PSD and title V, which is not in keeping with
Congress’s intent to limit PSD and title V to large sources when
Congress set the 100/250 tpy thresholds for the permitting programs.
EPA, in collaboration with the Small Business Administration (SBA),
conducted an outreach meeting designed to exchange information with
small entities that may be interested in these regulations.  The EPA
took this small business outreach effort into account when finalizing
this rule.  Many commenters from this outreach effort said that there
were many more small businesses that would subject to PSD and title V
due to the proposed permitting thresholds than EPA estimated at
proposal.

Many commenters recommended specific major source thresholds for PSD and
title V, including levels of 25,000 (as proposed), 40,000, 50,000,
100,000, 150,000, 250,000, and 1,000,000 tpy CO2e.  A majority of the
commenters recommended major source thresholds of 100,000 tpy CO2e,
including both industry and state agency commenters.  However, several
state agency commenters recommended thresholds of 50,000 tpy CO2e.
Other commenters recommended sector-specific thresholds.  For example,
solid waste industry commenters suggested thresholds of 820,000 tpy CO2e
for PSD (which they calculate to be equivalent to the existing PSD
threshold for “municipal solid waste landfill emissions,” i.e., 250
tpy NMOC) and 320,000 tpy CO2e for title V (calculated to be equivalent
to the existing major source applicability threshold of 100 tpy NMOC).
 Other commenters urged EPA to set the GHG thresholds at levels that
correspond to emissions of conventional pollutants at the 100/250 tpy
level.

Many of the commenters that recommended increasing the thresholds cited
EPA’s estimates that a particular threshold would significantly reduce
the number of sources subject to the rule while causing only a slight
reduction in the percentage of GHGs captured.  Several of these
commenters noted that Table VIII-2 in the proposal preamble indicates
that shifting the major source threshold for PSD from 25,000 to 100,000
tpy CO2e would reduce the number of major sources from 13,661 to 4,850
while reducing the coverage of U.S. stationary source GHG emissions by
only about 4 percent.  Other commenters referred to the RIA for the GHG
Reporting Rule to conclude that raising the threshold from 25,000 to
100,000 tpy CO2e would exclude thousands of entities that, on a combined
basis, emit only one percent of the nation’s GHG emissions.  See the
Response to Comments document for this final rulemaking for more
detailed description of comments received on our proposed burden
assessment.

	Many commenters also recommended specific PSD GHG significance
thresholds, including levels of 10,000 (as proposed), 15,000 (within the
proposed range), 25,000 (also as proposed), 40,000, 50,000, and 100,000,
and 150,000 tpy CO2e, as well as suggesting sector-specific thresholds.
These recommendations were based on the view that we had underestimated
the number of modifications and that the burden of permitting at the
proposed levels would therefore be much worse than we projected.  A
number of the commenters argued that the significance threshold should
be no less than the major source threshold, at whatever level that is
set.  The largest number of commenters recommended a PSD significance
threshold of 100,000 tpy CO2e, although significant numbers also support
25,000 and 50,000 tpy CO2e.

iii. Rationale for step 2

	Based on these comments, we reassessed our original burden estimates
from our proposal.  This reassessment is discussed at the beginning of
this section.  We decided that, once this adjustment is taken into
account, the burdens at the proposed 25,000 threshold and the proposed
10,000-25,000 significance levels would be unmanageable.  We therefore
evaluated higher thresholds ranging from a 25,000 tpy CO2e major source
applicability level for PSD and title V to a 50,000, 75,000, or 100,000
tpy CO2e level, with associated PSD GHG significance levels of equal or
lesser magnitude; and we selected the 100,000/75,000 tpy CO2e level.
Central to our decision to promulgate higher thresholds than what we
proposed is our recognition, based on comments and further analysis,
that applying PSD to GHG sources at the statutory or any other threshold
level or significance level that we have considered would result in (i)
a greater number of sources, and significantly greater number of
modifications than we first estimated becoming subject to those
programs; and (ii) a greater per-permit cost than we first estimated to
the permitting authority of processing those permit actions.  We
discussed our revised estimates and reasoning at the beginning of this
section.

We now estimate that the 25,000/25,000 tpy level would result in 250
additional PSD permit actions for new construction (either for GHG-only
sources or additions to otherwise occurring permits) and an additional
9,200 PSD permits for modifications each year (compared to our estimate
at proposal of 130 for new construction and 270 for modifications).
This level of permitting would require an additional 2,815,927 work
hours, or 1,400 FTEs (compared to our estimate at proposal of 112,000
[additional?] work hours, or 57 FTEs); and would cost an additional $217
million each year (compared to our estimate at proposal of an additional
$8 million).  See 74 FR 55,331 (proposal).  This $217 amount represents
approximately a 1,800% increase over current permitting authority annual
cost of $12 million for the major NSR programs

	For title V, under our final burden analysis at a 25,000 tpy CO2e
threshold, we estimate a $64 million annual increase in program costs to
permitting authorities to add GHG emission sources, which reflects a
greater than 100% increase over current programs costs of $62 million.
We estimate that this increased burden would result in the need for
almost 700 new FTEs nationwide at permitting authorities (compared to
our estimate at proposal of 492 additional FTEs, or about a 50% increase
in existing program size). This increase in burden is due to an
estimated annual increase of 2,500 new title V permits, over 9,500
permit revisions, and over 2,500 permit renewal actions due to GHG
emission sources.   These additional title V actions compare to current
annual program actions of approximately 50 new title V permits, 1,394
significant revisions, and 3,267 permit renewals.

	Based on this information, we have decided not to finalize our proposal
to apply a 25,000 tpy CO2e applicability threshold to GHG sources at the
time that PSD and title V take effect.  At that level, too many sources
– many more than we thought at proposal – would be subject to high
permitting costs.  In addition, permitting at that level and at that
time would not be administratively feasible.  The resulting increase in
the number of PSD and title V permitting actions and workload would
create insurmountable resource demands for permitting agencies in the
near term, which would jeopardize the functioning of these permitting
programs.  We are mindful that not only would the permitting programs
have to bear the costs that our estimates are able to monetize, but they
would also incur burdens associated with hiring and training staff to
make and implement GHG BACT determinations, GHG emissions evaluations,
and other evaluations required under the PSD program for a wide variety
of formerly unpermitted sources, including significant numbers and types
of small manufacturing and commercial or residential establishments.
They would also incur burdens associated with reviewing applications,
citizen comment and petitions, and the need to communicate and provide
outreach to new categories of sources, including, again, significant
numbers and types of small manufacturing and commercial or residential
sources.  Thus, the increased administrative burdens at the
25,000/25,000 tpy CO2e levels are so great that we have concluded that
they would not be consistent with the goals of avoiding absurd results
that contravene Congressional intent or avoiding a permitting burden
that would overwhelm the capacity of permitting authorities to
effectively implement their programs.

Based on our revised burden analysis, in today’s final action, we have
decided to establish a multi-step, phase-in approach that contains a
significantly higher initial threshold level:  We have determined that a
100,000 tpy CO2e major source threshold level for PSD and title V
purposes, and a 75,000 tpy CO2 significance level, produce a level of
permitting activity that would certainly be an increase over current
workload, but that would be administratively feasible by July 1, 2011.
As a result, we have decided to finalize these thresholds as Step 2.

In reaching this conclusion, we needed to consider the permitting
authorities’ capacity to address newly-major sources as expeditiously
as possible.  Note that our Step 1 approach does not cover newly-major
sources, so the step 2 threshold and timing has to be established in a
way that takes into account permitting authority challenges in
addressing many sources and categories that would be subject to major
source permitting for the first time.

	We considered the various PSD and title V threshold applicability and
significance level options in our final burden analysis, summarized in
Table VI-1, including levels at 50,000 CO2e, and 100,000 CO2e.  As Table
VI-1 indicates, we estimate that a 100,000 tpy CO2e major source
applicability threshold would result in approximately 550 sources
becoming newly classified as major sources for PSD based on their GHG
emissions, while a 50,000 tpy CO2e threshold would result in 3,500 newly
classified major sources.

	We then considered the impact on both PSD and title V programs of
different PSD significance level options for GHGs.   The choice of a PSD
significance level has a direct impact on title V burdens because PSD
permit requirements resulting from modification activities will result
in a required title V permit revisions.  We developed PSD and title V
burden estimates based on significance levels of 50,000 tpy, 75, 000 tpy
and 100,000 tpy CO2e, combined with a major source applicability level
of 100,000 tpy CO2e.    At a 50,000 tpy CO2e significance level, we
estimated an annual increase of approximately 1,800 PSD permitting
actions and almost 2,000 additional title V permitting actions, as
compared to Step 1.   At a 75,000 tpy CO2e significance level, we
estimated an annual increase of approximately 900 PSD permitting actions
and just over 1,000 additional title V permitting actions as compared to
Step 1.  At a 100,000 tpy CO2e significance level we estimated an annual
increase of approximately 25 PSD permitting actions and 210 additional
title V permitting actions as compared to Step 1.   For title V, under
these different scenarios, the major source applicability level of
100,000 tpy CO2e results in approximately 200 new permits annually, but,
as noted, the choice of significance levels affects the number of
required permit revisions.

	Based on this information, we have decided to set our final Step 2
thresholds at 100,000 tpy CO2e for major source applicability under PSD
and title V and at a 75,000 tpy CO2 significance level for PSD.
Overall, we estimate that the almost 900 additional PSD permitting
actions (virtually all of which would be modifications) per year at
these levels will result in an approximately $21 million increase (from
Step 1) in states’ annual costs for running PSD programs.  In
addition, we estimate that the 1,000 additional title V permit actions
will cause the total title V burden for permitting authorities to
increase by $6 million annually from Step 1.  This total increase in
permit program burdens of $27 million represents a 34% increase over the
$78 million in total cost of PSD and title V programs at Step 1.  We
consider this a substantial increase, particularly because Step 2’s
start date of July 1, 2011 is only six months after Step 1’s start
date of January 2, 2011.  What’s more, Step 1 will entail a
substantial increase in permitting authority obligations, so that adding
the costs of Step 1 and Step 2 together -- $31 million – means that
permitting authorities will be required to increase their permitting
resources by approximately 42% between now and Step 2.  In addition to
the administrative burdens we have been able to monetize, we must be
mindful that permitting authorities will incur other burdens, including
the significant support and outreach activities by permitting staff for
the many newly permitted sources.  We believe that any lower thresholds
in this timeframe, whether in the PSD and title V applicability levels
or in the significance level, would give rise to administrative burdens
that are not manageable by the permitting authorities.

Although the burdens at the 100,000 tpy CO2e/75,000 tpy CO2e levels are
steep, we consider them manageable  Step 2 permitting for GHGs will
mostly involve source categories in which some sources have
traditionally been subject to permitting, which should render applying
even the new GHG requirements more manageable.  These source categories
include fossil fuel-fired power plants, petroleum refineries, cement
plants, iron and steel plants, and petroleum refineries, in addition to
other large industrial type source categories.  A full description of
the type of sources that we expect will have GHG emissions that exceed
the 100,000 tpy CO2 threshold is provided in the “Technical Support
Document for Greenhouse Gas Emissions Thresholds Evaluation” located
in the public docket for this rulemaking.  In addition, because Step 2
does not begin until July 1, 2011, permitting authorities have about 14
months to prepare for it.

	In addition, we believe that the sources that will become subject to
PSD and title V requirements at the 100,000/75,000 tpy CO2 levels will
be able to accommodate the additional costs of permitting.  For the most
part, these sources will be of a comparable size and activity level as
those sources that are already subject to those requirements.

	Because the administrative burdens at the 100,000/75,000 level are as
heavy as the permitting authorities can reasonably be expected to carry,
adopting these threshold levels is consistent with our legal basis under
the “absurd results” doctrine.  Under this basis, we are reconciling
the statutory levels with congressional intent by requiring that the PSD
and title V requirements be applied to GHG sources at levels as close as
possible to the statutory thresholds, and as quickly as possible, in
light of costs to sources and administrative burdens.

	Because the administrative burdens at the 100,000/75,000 level are
manageable, we do not believe that higher threshold levels are
justifiable for Step 2.  Specifically, at the 100,000/100,000 level –
which would entail a 100,000 tpy CO2e significance level, rather than a
75,000 tpy CO2e level – permitting sources would need to handle only
20 additional modifications beyond current levels, and thus would not
incur substantial additional costs.  By the same token, we disagree with
commenters who suggested that we needed to set permanent GHG permitting
thresholds for major sources at a rate equivalent to the amount of GHG
that would be emitted by conventional pollutants at the 100 and 250 tpy
level in order to meet the legal bases of the “absurd results” and
“administrative necessity” doctrines.  These levels would likely be
well above 300,000 tpy CO2e, depending on fuel types and assumptions
regarding the relative emissions of GHGs compared to the conventional
pollutants.  Our data show that none of the levels above 100,000/75,000
would result in significant increases in administrative burdens.  As a
result, establishing these levels would not apply PSD or title V
requirements to GHG sources as quickly as possible, and thus would not
be consistent with the “absurd results” doctrine.

We estimate that facilities meeting the Step 2 major source
applicability thresholds account for approximately 67 percent of total
national stationary source GHG emissions. Many commenters felt that this
should be an important basis for our selection of a threshold, stating
that there is no significant loss in GHG emissions coverage of source
categories at the 100,000 tpy CO2 threshold, and in some cases arguing
that as a result, we should set the level even higher.  We agree that it
is important that the coverage in step 2 represents 86 percent of the
coverage at full implementation of the statutory 100/250 thresholds.

c. Rationale for EPA’s plan beyond Step 2

	EPA commits that after Step 2, EPA will begin another rulemaking in
2011 and complete it by July 1, 2012, and in that rulemaking take
comment on a further phase-in of GHG sources for PSD and title V
applicability (Step 3).  However, under today’s rule, in no event will
EPA apply PSD or title V to sources below the 50,000 tpy CO2e levels
prior to 2016.  In addition, EPA commits to conduct a study, to be
concluded by April 30, 2015, evaluating the status of PSD and title V
applicability to GHG sources, and, based on the study, complete a
rulemaking by April 30, 2016 that promulgates another round of a
phase-in.

(1)  Proposal

In our proposal, we noted that following implementation of the first
phase of PSD and title V applicability to GHG sources, generally at the
25,000 tpy CO2e threshold, additional action would be required over time
to assure full compliance with the statute.  We did not establish more
steps in the schedule, but we did commit to conduct a study, to be
completed by five years after promulgation, evaluating the status of PSD
and title V applicability to GHG sources, and, based on the study,
complete a rulemaking by six years after promulgation that established
an additional step of the phase-in.

(2)  Comments

	A number of commenters supported the proposal’s overall approach to
phase in the permitting of GHGs, mainly because this approach will allow
permitting of the largest sources of GHGs immediately while collecting
more information about smaller sources and more fully considering
streamlining options for subsequent phases.  Many of these commenters
made clear that they do not support implementation of the statutory
100/250 tpy thresholds, even through a phase-in approach. On the other
hand, one commenter asserted that EPA has failed to demonstrate that it
needs six years to study and implement NSR and title V for sources
emitting less than 25,000 tpy.  The commenter contends that EPA has not
analyzed, among other things, what combined effect the full
implementation of its streamlining proposals in the 15 months before the
due-date for title V permit applications would do to reduce the cost,
complexity, and number of title V permit applications that would have to
be submitted.

(3)  Rationale for further steps

We agree with commenters who support a phased-in approach to the GHG
tailoring rule.  Our final action reflects a multi-step process that we
believe will create a manageable expansion of PSD and title V
applicability to GHG-emitting sources.  In our final action, we have
established the initial two steps of a multi-step phase-in of lower
threshold applicability with a commitment to take further regulatory
activity to consider adopting lower thresholds.  We believe this process
will provide substantial opportunity for permitting authorities and
sources to establish enough experience and information, and to provide
significant real-world feedback to EPA, so as to better inform decisions
on future phase-in steps.

With this overall phase-in approach in mind, in today’s final rule,
EPA includes an enforceable commitment to undertake a notice-and-comment
rulemaking that would begin with a supplemental notice of proposed
rulemaking that we expect to be issued in 2011 and that we commit will
be finalized in 2012.  The notice will propose or solicit comment on
further reductions in the applicability levels.  This rulemaking will
take effect by July 1, 2013 and therefore, in effect, constitute Step 3.
 In today’s action, we are committing to a rulemaking for Step 3, but
are not promulgating Step 3, is because it is important to allow EPA and
the permitting authorities to gain experience permitting sources under
Steps 1 and 2, and to allow time to develop streamlining methods, before
attempting to determine what would be the next phase-in levels for PSD
and title V applicability.  While committing to future action, we do not
decide in this rule when the phase-in process will ultimately end, or at
what threshold level, because all that depends on uncertain variables
such as our progress in developing streamlining approaches and on
permitting authorities’ progress in developing permitting expertise
and acquiring more resources.  . We may continue the phase-in process
with further rulemaking(s) after 2016.  Alternatively, we may make a
final determination through future rulemaking  that, under the “absurd
results” doctrine, PSD and/or title V do not apply to GHG sources
that, while small and relatively inconsequential in terms of GHG
contribution, are above the statutory tonnage thresholds for these
programs., and thereby end the phase-in process.

In addition, in today’s action, we are determining that in no event
– whether through Step 3 or a subsequent step – will we apply PSD or
title V to sources at the 50,000/50,000 level or lower prior to May 1,
2016.   We have several reasons for making this determination at this
time.  Most importantly, our examination of the expected burdens to the
permitting authorities of applying PSD and title V to GHG sources
convinces us that extending the permitting programs to sources at or
below the 50,000/50,000 level within six years of promulgation would
result in prohibitively heavy burdens.  This threshold option would
result in close to 2,000 additional annual PSD permitting actions per
year over the current program and more than 1,000 over Step 2, including
both new construction and modifications.   For title V, we estimated an
increase of over 1,000 new title V permits (all newly permitted sources
because of GHG emissions) and over 2,000 permit revisions per year over
the current program, and about 980 new title V permits and 900 permit
revisions more than the Step 2 amounts.

These increases, which could occur between 2013 and 2016 under our
approach depending on the outcome of the step 3 rulemaking, represent
very substantial additions to the permitting program.  In terms of cost,
we estimate that these additional actions would result in a $73 million
per year increase in joint PSD and title V program costs over the
current programs – which is almost a doubling of costs – and $42
million annual cost increase over Step 2 for the current programs.   We
believe that it would take permitting authorities some time to adjust to
this workload.  This is particularly true because at the 50,000/50,000
tpy CO2e level, smaller sources – including ones not previously
subject to permitting requirements – will become subject to PSD and
title V.  It will take some time for both the permitting authorities and
the sources to absorb these new obligations.

Importantly, the next lower cut-off – below 50,000 for the major
threshold level – is the 25,000/25,000 level.   For the reasons
discussed above, this level is clearly not manageable within the first
six years after today’s action.  This applicability level would bring
in over 7,000 sources that would be newly subject to title V permitting
and result in close to 10,000 new PSD permitting actions.  This would
result in a 380% increase over current program costs for PSD and title V
to run these programs.  Based on comments we received from state and
local permitting agencies on our proposed tailoring rule, these levels
of permitting activities would far exceed the administrative
capabilities of the permitting agencies for at least the near future.
Thus, the six year exclusion is necessary to provide these agencies and
their permittees certainty that this will not occur.

We recognize that at present, we do not have data that would allow us to
compile administrative burden estimates for specific levels between the
50,000/50,000 and 25,000/25,000 tpy CO2e levels we assessed.  However,
it is clear that the burdens begin to rise sharply below the
50,000/50,000 level.  To reiterate, the combined PSD and title V
administrative burdens at the 50,000/50,000 tpy CO2e level cost almost
twice as much as the current programs, but the burdens at the
25,000/25,000 level cost almost four times as much as the current
programs.  As a result, we conclude that dropping the level below
50,000/50,000 too soon would quickly expose the permitting authorities
to unacceptably high burdens.

As a further reason for concluding that we will not reduce thresholds
beyond 50,000/50,000 tpy CO2e during the first six years, we recognize
that the PSD permitting process in particular is a high stakes endeavor
for the permitting authorities and the affected sources, and we wish to
tread cautiously as a result.  If we have underestimated the permitting
burden or the ability of states to respond to their additional workload,
then permitting backlogs will result, and PSD permit issuance will be
delayed.  Because PSD is a preconstruction program, during this time
sources seeking a PSD permit could not construct or modify.  If this
were to happen on a large enough scale, it could have potentially
serious consequences for the national economy.

Moreover, we need to be mindful that the best information we currently
have as to permitting authority burdens represents a national average,
as described above.  Our information at the individual state and level,
which is where the hard work of permitting occurs, is not as robust.
Accordingly, we recognize that a particular State may encounter
permitting costs that are higher than average, and this may result in
permitting backlogs in that State, with the consequence that sources in
that State will face long delays in constructing or modifying.
Similarly, even if a particular State’s costs are in line with the
national average, that State may not be able to find the additional
resources to cover those costs as readily as other States.  For this
reason, too, sources in that State could face long delays in
constructing or modifying.

Beyond the administrative burdens to permitting authorities, we
recognize that the costs of PSD and title V permitting to sources may be
high, and we are not inclined to  impose them at this time on sources
smaller than the 50,000/50,000 tpy CO2e threshold.  At that level, the
permitting programs will apply to a significant number of newly
permitted sources, including a variety of small manufacturing,
commercial and residential categories.   The next level that we have
analyzed is the 25,000/25,00 tpy CO2e threshold.  At that level, more
than 7,000 more sources would become subject to PSD each year – almost
all due to modifications – and another 4,000 sources would become
subject to title V each year.  These sources would be even smaller than
those that already will have become subject to PSD and title V due to
their GHG emissions.  We do not think it reasonable to subject more of
those types of sources, and smaller ones, to permitting costs within the
next six years.

Finally, we note that moving from a 50,000 tpy CO2e threshold to 25,000
tpy CO2e will increase the emissions coverage of GHG stationary sources
from 70% to 75% nationwide, which we consider to be a relatively small
amount.

 We recognize that our progress in developing streamlining methods will
be a key determinant to the ability of permitting authorities to
administer, and sources to comply with, PSD and title V at GHG emission
levels below 50,000/50,000.  Although we commit to pursue streamlining,
we cannot predict our progress.  This uncertainty may be problematic for
stakeholders, primarily permitting authorities and industry.  That is,
permitting authorities will face uncertainty in planning the scope of
their programs over the next few years, and industry will face
uncertainty as to what new construction projects and modifications will
be subject to PSD for GHGs.  By determining now that for the next six
years we will not impose PSD requirements below a floor at the
50,000/50,000 level, we add a measure of needed certainty.

We also recognize that selecting a level that is too low or keeping a
level for too long means that some sources may construct or modify
without implementing BACT level controls, and this could result in
additional emissions of GHGs.  We need to be vigilant and to protect
against this outcome.  Even so, all things considered, we believe that
our determination not to apply the PSD or title V permitting
requirements to sources below the 50,000/50,000 tpy CO2e level for the
first six years also represents a reasonable balancing of protection of
the environment with promotion of economic development.  This type of
balancing is consistent with our authority under the PSD provisions.

We also raised the issue of “hollow” or “empty” permits in
discussing our rationale for why it may make sense to delay title V
permitting under our proposal.  We were concerned that many title V
permits for GHG sources would contain no applicable requirements, and
their issuance would therefore be of little value and would not be the
best use of scarce resources.  Several commenters agreed that
implementing title V for GHG will, at least initially, require empty
permits to be issued to GHG sources because such sources will not be
subject to “substantive” requirements, and that this would not be
the best use of scarce resources.

 	In the proposal, we noted that the ”absurd results” doctrine does
not directly consider whether the statutory requirements lead to actions
that agencies or commenters may consider wasteful.  However, we do
believe that the amount of resources that would be spent and the limited
value that would result does warrant consideration under an absurd
results rationale.  Therefore, we are still actively considering the
role of empty permits as we apply the absurd results rationale to GHG
permitting in future steps.  However we believe it has limited relevance
to the first two steps of the phase in that we are promulgating today.
During step 1, permitting for GHGs is only required if the source is
otherwise subject to permitting for its emissions of non-GHGs, meaning
that those sources will be subject to existing substantive applicable
requirements for non-GHG (e.g., NSPS, MACT, and SIP requirements,
including PSD).  Thus, there should be few, if any, empty permits, at
least with respect to applicable requirements for non-GHG during step 1.
 For step 2, it is possible that sources that become subject to title V
requirements for GHG emissions may not be subject to other requirements,
but our assessment suggests that this will be rare.  We estimate that
virtually all of the 550 newly-major sources in step 2 will be subject
to applicable requirements under the CAA because they are from
categories that have been traditionally subject to regulations, such as
smaller industrial sources from already regulated categories, large
landfills, and oil/gas/coal production.  Even the approximately 50
newly-subject commercial sources in step 2, which we estimate to be
comprised of very large hospitals, are likely to be covered by standards
for medical waste incinerators.  Thus, we project few, if any, empty
permits during step 2.

In later stages of implementation (e.g., prospective step 3) or in the
event that we permit smaller, non-traditional sources of GHGs that have
never otherwise been subject to major source permitting, there would be
a greater potential for empty permits to be issued under title V.
Cognizant of this, we intend to further explore in the SNPR empty permit
theories under the absurd results rationale that may serve to
permanently narrow the scope of title V to exclude sources that would
potentially be required to obtain an empty permit due to GHG emissions.

In today’s action, EPA is also finalizing its proposal to commit to
conduct an assessment of the threshold levels – to be completed in
2015, five years after today’s action -- that will examine the
permitting authorities’ progress in implementing the PSD and title V
programs for GHG sources as well as EPA’s and the permitting
authorities’ progress in developing streamlining methods.  We further
commit to undertake another round of rulemaking -- beginning after the
assessment is done, and to be completed by April 30, 2016 – to address
smaller sources.

We disagree with the commenter who asserted that we do not need six
years to study and implement NSR and title V for smaller sources. As we
discussed in the proposal, and reiterate in this final action, we do not
have sufficient information at this time to determine the applicability
and effectiveness of the various permitting streamlining techniques.
For reasons discussed in more detail in section V.E.1 regarding
streamlining, we are not now able to determine how such techniques will
be implemented or whether they will prove viable or effective.  We agree
with the commenter that these measures may reduce the scope, cost, and
complexity of these programs, but there is considerable uncertainty as
to the extent of this effect.   We do commit in this action to fully
investigate, propose, and evaluate these permit streamlining techniques
to determine where they may have applications, how they would be
applied, and whether they can withstand legal challenge. Even for those
techniques that may ultimately deemed viable there is a significant time
period necessary for rulemaking on these techniques and state adoption,
which could take up to three years or more. We also note that we will be
required to complete our study of the effectiveness of these techniques
within 5 years, meaning that, in order to complete it in time, we will
essentially need to begin the study as soon as relevant data are