results,'' ``In the end, the interpretation applied by EPA ``governs if
it is a reasonable interpretation of the statute--not necessarily the
only possible * * * interpretation, nor even the interpretation deemed
most reasonable by the courts.'' Entergy Corp. v. Riverkeeper, Inc.,
129 S.Ct. 1498. 1505 (2009).
    As a related matter, although the courts have described Chevron
Step 2 as requiring that the agency's policy be ``a permissible
construction of the statute,'' see Mova Pharm. Corp, 140 F.3d at 1068
(quoting Chevron, 467 U.S. at 842-43), if the statutory requirements
cannot be read literally because doing so would produce ``absurd
results,'' then the agency's policy need not be completely consistent
with those particular requirements. The policy must still, in order to
be upheld, be consistent with Congress's actions, but those actions
should be considered to afford the agency broad discretion considering
that both the statutory terms cannot be considered dispositive and
underlying congressional intent is not clear. As the U.S. Supreme Court
has recently said, although in a context different than ``absurd
results,'' In the end, the interpretation applied by the agency governs
if it is a reasonable interpretation of the statute--not necessarily
the only possible * * * interpretation, nor even the interpretation
deemed most reasonable by the courts.'' Entergy Corp. v. Riverkeeper,
Inc., 129 S.Ct. 1498. 1505 (2009).
    There is another aspect of the ``administrative necessity''
doctrine worth noting in this context: The doctrine applies when (i) a
literal application of the statutory directive to the case at hand is
impossible for the agency to administer; and (ii) even so, either
Congress clearly intended the statutory directive to apply to the case

at hand or, if Congress did not clearly intend that, then the agency
reasonably construes the statute to apply the statutory directive to
the case at hand. In contrast, if Congress did not intend the statutory
directive to apply to the case at hand, or if congressional intent is
uncertain and the agency considers another approach to be reasonable,
then the ``administrative necessity'' doctrine would not apply. As a
result, the agency would not be required to implement the statutory
directive to the case at hand at all, much less in a more administrable
fashion.
f. Interconnectedness of the Legal Doctrines
    Although we believe that each of the ``absurd results,''
``administrative necessity,'' and ``one-step-at-a-time'' doctrines
provide independent support for our action, we also believe that in
this case, the three doctrines are intertwined and form a comprehensive
basis for EPA's tailoring approach. As just discussed, each of the
three doctrines is tied into the Chevron analytical framework because
each is designed to give effect to underlying intent. As discussed
previously, each of the three doctrines comes into play in this case
because a literal reading of the PSD and title V applicability
provisions results in insurmountable administrative burdens. Those
insurmountable administrative burdens--along with the undue costs to
sources--must be considered ``absurd results'' that would undermine
congressional purpose for the PSD and title V programs. Under the
``absurd results'' doctrine, EPA is authorized not to implement the
applicability provisions literally--that is, not to implement them as
applying on the January 2, 2011 date that PSD and title V are triggered
to all GHG sources at or above the statutory thresholds--but instead to
tailor them in a manner consistent with congressional intent. That
means applying the PSD and title V requirements through a phase-in
approach to as many sources as possible and as quickly as possible,
starting with the largest sources, as EPA does with this Tailoring
Rule,\29\ at least to a certain point. By the same token, the
insurmountable administrative burdens bring into play the
``administrative necessity'' doctrine, under which EPA is, again,
authorized not to implement the applicability provisions literally, but
instead to apply them in a manner consistent with administrative
resources. This also means phasing them in through the approach in the
Tailoring Rule. Finally, the ``one-step-at-a-time'' doctrine, which
authorizes incremental action by agencies to implement statutory
requirements under certain circumstances, provides further support for
the phased tailoring approach in the Tailoring Rule.
---------------------------------------------------------------------------

    \29\ As discussed later, EPA may, in future rulemaking, make a
final determination that under the ``absurd results'' doctrine,
Congress did not intend for EPA to apply PSD to very small sources,
that is, those, with emissions at or near the 100/250 tpy statutory
levels.
---------------------------------------------------------------------------

g. Application of Chevron Approach
    The Chevron analytical approach, and the three legal doctrines at
issue here, apply to this action in the following manner: To reiterate,
for convenience, the statutory provisions at issue: Congress, through
the definition of ``major emitting facility,'' applied the PSD program
to include (i) ``any * * * stationary sources of air pollutants which
emit or have the potential to emit, one hundred [or, depending on the
source category, two hundred fifty] tons per year or more of any air
pollutant,'' CAA sections 165(a), 169(1); and (ii) and such sources
that undertake a physical or operational change that ``increases the
amount of any air pollutant emitted'' by such sources, CAA sections
165(a), 169(2)(C), 111(a)(4).\30\ Similarly, Congress, through the
definition of ``major source,'' specified that the title V program
includes ``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.'' CAA sections 502(a), 501(2)(B), 302(j).
EPA, through long-established regulatory action, in the case of PSD,
and long-established interpretation, in the case of title V, has
interpreted these definitions so that they apply only with respect to
air pollutants that are subject to regulation under the CAA.
---------------------------------------------------------------------------

    \30\ A physical or operational change is treated as a
``modification'' that is subject to PSD if it either ``increases the
amount of any air pollutant emitted'' by the source or ``results in
the emission of any air pollutant not previously emitted.'' For
convenience, unless otherwise indicated, when we refer to changes
that ``increase[ ] the amount of any air pollutant emitted,'' we
mean both to those types of changes and changes that ``result[ ] in
the emission of any air pollutant not previously emitted.''
---------------------------------------------------------------------------

    For each of these applicability provisions, the approach under
Chevron is as follows: Under Chevron Step 1, we must determine whether
Congress expressed an intention on the specific question, which is
whether the PSD or title V applicability provisions apply to GHG
sources. Said differently, the specific question is whether, in the
case of PSD, Congress intended that the definitions of ``major emitting
facility'' and ``modification'' apply, respectively, to all GHG sources
that emit at least 100 or 250 tpy or GHGs and to all physical or
operational changes by major emitting facilities that ``increase[ ] the
amount'' of GHGs; and, in the case of title V, whether the definition
of ``major source'' applies to all GHG sources that emit at least 100
tpy GHGs.
    To determine intent, we must first examine the terms of the statute
in light of their literal meaning. Here, the literal reading of each
provision covers GHG sources. For PSD, a GHG source that emits at least
100 or 250 tpy GHGs literally qualifies as ``stationary source [ ] of
air pollutants which emit[s] or ha[s] the potential to emit, one
hundred [or two hundred fifty] tons per year or more of any air
pollutant [subject to regulation under the CAA].'' CAA section 169(1).
For modifications, a physical or operational change that increases the
amount of GHG emissions qualifies as a ``modification'' because it
``increases the amount of any air pollutant emitted'' by the source.
Similarly, for title V, a GHG source that emits at least 100 tpy GHGs
literally qualifies 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 [subject to
regulation under the CAA].'' CAA sections 502(a), 501(2)(B), 302(j).
    Although each definition is clear that it applies to GHG sources as
a general matter, applying each definition in accordance with its
literal meaning to all GHG sources at the specified levels of emissions
and at the present time--in advance of the development of streamlining
methods and greater permitting authority expertise and resources--would
create undue costs for sources and impossible administrative burdens
for permitting authorities. These results are not consistent with other
provisions of the PSD and title V requirements, and are inconsistent
with--and, indeed, undermine--congressional purposes for the PSD and
title V provisions. Accordingly, under the ``absurd results'' doctrine,
neither the PSD definition of ``major emitting facility'' or
``modification'' nor the title V definition of ``major source,'' should
be applied literally to all GHG sources, and therefore none should be
considered to have a literal meaning with respect to its application to
all GHG sources.
    In analyzing the provisions of each definition more closely, we
believe that each has four terms, any one of which could be considered
not to have its literal meaning, in this respect. Specifically, each
provision includes (i) The term ``any * * * source,'' or ``a stationary
source,'' and that term could be considered not to refer literally to
all

of the GHG sources; (ii) either the term ``two hundred fifty tons per
year'' or ``100 tons per year,'' or the term ``increases the amount,''
and those terms could be considered not to refer literally to the
tonnage amount of emissions from all of the GHG sources; (iii) the term
``any air pollutant,'' \31\ and that term could be considered not to
refer literally to the emissions from all of the GHG sources; and (iv)
the term ``subject to regulation under the CAA'' (which we have
interpreted ``any air pollutant'' to include), and that term could be
considered not to refer literally to the emissions from all of the GHG
sources. As long as any one of those four terms may be considered not
to have its literal meaning as applied to GHG sources, then the
definition as a whole--again, for PSD, the terms ``major emitting
facility'' or ``modifications,'' and for title V, the term ``major
source''--cannot be considered to apply literally to GHG sources.
Because we read the terms together, as integral parts of each
definition as a whole, we do not think that the choice of which of
those four terms within each definition cannot be considered to apply
literally to GHG sources has substantive legal effect. In other words,
we believe that any one of these terms, or all of them together as part
of each definition as a whole, should be considered not to apply
literally in the case of GHG sources.
---------------------------------------------------------------------------

    \31\ We do not believe that this term is ambiguous with respect
to the need to cover GHG sources under either the PSD or title V
program, only with respect to what sources of GHG should be covered
under the circumstances presented here.
---------------------------------------------------------------------------

    Having determined that each definition does not have a literal
meaning with respect to the applicability of PSD or title V applies to
all GHG sources, we must next inquire as to whether Congress has
nevertheless expressed an intent on that question through other means.
We discuss the statutory terms and legislative history of the PSD and
title V provisions in more detail later, but for now it suffices to say
that on the issue of whether PSD and title V apply to GHG sources, we
believe that congressional intent is clear, and that is to apply PSD
and title V to GHG sources generally. We believe that this intent is
clear from the broad phrasing of the applicability provisions--as noted
earlier, the definitions apply by their terms to GHG source generally,
even though the definitions should not be applied literally to all GHG
sources--the fact that the various components of the PSD and title V
programs can be readily applied to GHG sources, and the fact that the
two programs can readily accommodate at least some GHG sources. As a
result, we believe that as a matter of Chevron Step 1, PSD and title V
generally apply to GHG sources. Our previous regulatory action defining
the applicability provisions made this clear, and we do not reopen this
issue in this rulemaking. Moreover, even if this long-established
regulatory position were not justifiable based on Chevron step 1--on
the grounds that in fact, congressional intent on this point is not
clear--then we believe that this position, that the statutory
provisions to apply PSD and title V generally to GHG sources, was
justified under Chevron step 2.\32\
---------------------------------------------------------------------------

    \32\ In this preamble and the response to comments document we
fully address arguments that commenters and others have presented
about congressional intent and coverage of GHGs. We do so to be
fully responsive, even though we believe that this is a settled
matter for which the time for judicial review has past.
---------------------------------------------------------------------------

    On the issue of how to apply PSD to GHG sources, including the
specific threshold levels and the timing, we believe that Congress
could be considered to have expressed a clear intent that GHG sources
be included in the PSD program at as close to the statutory thresholds
as possible, and as quickly as possible, and at least to a certain
point, all as consistent with the need to assure that the PSD program
does not impose undue costs on sources or undue administrative burdens
on the permitting authorities. Under this view, EPA would be required
at Chevron Step 1 to adopt the Tailoring Rule because, by phasing in
PSD applicability, it most closely gives effect to Congress's intent.
Under these circumstances, EPA is authorized to exercise its expert
judgment as to the best approach for phasing in the application of PSD
to GHG sources.
    Even so, we recognize that it could be concluded that on the issue
of how to apply PSD to GHG sources, congressional intent is unclear.
Under these circumstances, EPA has the discretion at Chevron Step 2 to
adopt the Tailoring Rule because it is a reasonable interpretation of
the statutory requirements (remaining mindful that the applicability
requirements cannot be applied literally). Under the Tailoring Rule,
EPA seeks to include as many GHG sources in the permitting programs at
as close to the statutory thresholds as possible, and as quickly as
possible, although we recognize that we ultimately may stop the phase-
in process short of the statutory threshold levels.
    As for title V, we believe that taken together, the various
statutory requirements and statements in the legislative history do not
evidence a clear congressional intent for how title V is to be applied
to GHG sources. As discussed later, the relevant title V requirements
and statements in legislative history differ from PSD, not least
because they include provisions that concern empty permits that point
in different directions. As a result, here, too, EPA has the discretion
at Chevron Step 2 to adopt the Tailoring Rule as a reasonable
interpretation of the statutory requirements. Alternatively, even if
the statute does express a clear intent as to title V that, similar to
PSD, title V requirements must be phased in as closely to the statutory
threshold as possible and as quickly as possible, this Tailoring Rule
is consistent with that intent.
    It should also be noted that although EPA has concluded that
applying the PSD and title V applicability provisions literally in the
case of GHG sources would produce ``absurd results'' and therefore is
not required, this conclusion has no relevance for applying other CAA
requirements--such as the requirements concerning endangerment and
contribution findings under CAA section 202(a)(1) or emission standards
for new motor vehicles or new motor vehicle engines under CAA section
202--to GHGs or GHG sources. EPA's conclusions with respect to the PSD
and title V applicability requirements are based on the specific terms
of those requirements, other relevant PSD and title V provisions, and
the legislative history of the PSD and title V programs.
    Within the context of the Chevron framework, the ``administrative
necessity'' doctrine applies as follows: Under the doctrine, Congress
is presumed to intend that the PSD and title V applicability
requirements be administrable. Here, those applicability requirements,
if applied to GHG sources in accordance with their literal meaning,
would be impossible to administer. Accordingly, under Chevron Step 1,
it is consistent with congressional intent that EPA and the permitting
authorities be authorized to implement the applicability requirements
in a manner that is administrable, that is, through the tailoring
approach.
    As for the ``one-step-at-a-time'' doctrine, we believe it applies
within the Chevron framework in conjunction with the ``absurd results''
and ``administrative necessity'' doctrines. As we discuss elsewhere,
the PSD and title V applicability provisions by their terms require
that sources at or above the 100/250 tpy thresholds comply with PSD and
title V requirements at the time those requirements are triggered,
which

is when GHGs become subject to regulation. Therefore, if the literal
meaning of the applicability provisions as applied to GHG sources were
controlling--that is, if it reflected congressional intent--it would
foreclose use of the one-step-at-a-time doctrine to implement a phase-
in approach. However, the literal meaning is not controlling because--
in light of the absurd results, including the insurmountable
administrative burdens, that would result from the literal meaning--
congressional intent is not to require the application of the PSD and
title V requirements to all GHG sources at or above the statutory
thresholds at the time that GHGs become subject to regulation. Instead,
as described previously, we consider congressional intent for the
applicability provisions, as applied to GHG sources, either (i) to be
clear that PSD and title V should be phased in for GHG sources as
quickly as possible, or (ii) to be unclear, so that EPA may reasonably
choose to phase PSD and title V in for those sources in that manner.
Under either view, congressional intent for PSD and title V
applicability to GHG sources accommodates the ``one-step-at-a-time''
approach.
4. The PSD and Title V Programs
    Having discussed both the factual underpinnings and, immediately
above, the legal underpinnings for our tailoring approach, we now
discuss the PSD and title V programs themselves, including, for each
program, the key statutory provisions, their legislative history, and
the relevant regulations and guidance documents through which EPA has
implemented the provisions. We start with the PSD program.
a. The PSD program
(1) PSD Provisions
    Several PSD provisions are relevant for present purposes because of
the specific requirements that they establish and the window that they
provide into congressional intent. These provisions start with the
applicability provisions, found in CAA sections 165(a) and 169(1),
which identify the new sources subject to PSD, and CAA section
111(a)(4), which describes the modifications of existing sources that
are subject to PSD. CAA section 165(a) provides:

    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--
    (1) A permit has been issued for such proposed facility in
accordance with this part setting forth emission limitations for
such facility which conform to the requirements of this part;
    (2) The proposed permit has been subject to a review in
accordance with this section * * *, and a public hearing has been
held with opportunity for interested persons including
representatives of the Administrator to appear and submit written or
oral presentations on the air quality impact of such source,
alternatives thereto, control technology requirements, and other
appropriate considerations;
* * * * *
    (4) 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 * *
*.

    The term ``major emitting facility'' is defined, under CAA section
169(1) to include:

    * * * stationary sources of air pollutants which emit, or have
the potential to emit, one hundred tons per year or more of any air
pollutant from [28 listed] types of stationary sources. * * * Such
term also includes any other source with the potential to emit two
hundred and fifty tons per year or more of any air pollutant. This
term shall not include new or modified facilities which are
nonprofit health or education institutions which have been exempted
by the State.

    As for modification of existing sources, CAA section 169(1)(C)
provides that the term ``construction,'' as used in CAA section 165(a)
(the PSD applicability section) ``includes the modification (as defined
in section 111(a)(4)) of any source or facility.'' Section 111(a)(4),
in turn, provides:

    The term ``modification'' means any physical change in, or
change in the method of operation of, a stationary source which
increases the amount of any air pollutant emitted by such source or
which results in the emission of any air pollutant not previously
emitted.

    As interpreted by EPA regulations, these provisions, taken
together, provide that new stationary sources are subject to PSD if
they emit at the 100/250-tpy thresholds air pollutants that are subject
to EPA regulation, and that existing stationary sources that emit such
air pollutants at the 100/250-tpy thresholds are subject to PSD if they
undertake a physical or operational change that increases their
emissions of such air pollutants by any amount.
    Other provisions of particular relevance are the requirements for
timely issuance of permits. The permitting authority must ``grant[ ] or
den[y] [any completed permit application] not later than one year after
the date of filing of such completed application.'' CAA section 165(c).
    In addition, the PSD provisions articulate ``the purposes of [the
PSD program],'' which are to balance environmental protection and
growth. CAA section 160. One of the purposes, in subsection (1), is
specifically ``to protect public health and welfare,'' and another, in
subsection (3), is ``to insure that economic growth will occur in a
manner consistent with the preservations of existing clean air
resources.''
    The PSD provisions also include detailed procedures for
implementation. Most relevant for sources of GHG are the provisions
that the proposed permit for each source must be the subject of a
public hearing with opportunity for interested persons to comment, CAA
section 165(a)(2), and each source must be subject to BACT, as
determined by the permitting authority on a source-by-source basis, CAA
section 165(a)(4), 169(3).
(2) PSD Legislative History
    The legislative history of the PSD provisions, enacted in the 1977
CAA Amendments, makes clear that Congress was largely focused on
sources of criteria pollutants: primarily sulfur dioxide, PM,
NOX, and carbon monoxide (CO). This focus is evident in the
basic purpose of the PSD program, which is to safeguard maintenance of
the NAAQS. See S 95-127 (95th Cong., 1st Sess.), at 27.
    Congress designed the PSD provisions to impose significant
regulatory requirements, on a source-by-source basis, to identify and
implement BACT and, for criteria pollutant, to also undertake certain
studies. Congress was well aware that because these requirements are
individualized to the source, they are expensive. Accordingly, Congress
designed the applicability provisions (i) to apply these requirements
to industrial sources of a certain type and a certain size--sources
within 28 specified source categories and that emit at least 100 tpy--
as well as all other sources that emit at least 250 tpy, and, by the
same token, (ii) to exempt other sources from these requirements.\33\
---------------------------------------------------------------------------

    \33\ Coverage of modifications by the PSD program was addressed
by a technical amendment which added a cross reference in section
169 to section 111. The legislative history of this provision is
scant and there is no suggestion that Congress would have
contemplated sweeping in large number of changes from smaller
sources through the addition of this provision.
---------------------------------------------------------------------------

    Although Congress required that CAA requirements generally apply to
``major emitting facilities,'' defined as any source that emits or has
the potential to emit 100 tpy of any pollutant, Congress applied PSD to
only sources at 100 tpy or higher in 28 specified industrial source
categories, and at 250 tpy or

more in all other source categories. This distinction was deliberate:
According to Sen. McClure, Congress selected the 28 source categories
after reviewing an EPA study describing 190 industrial source
categories. 122 Cong. Rec. 24521 (July 29, 1976) (statement by Sen.
McClure).
    Congress also relied on an EPA memorandum that identified the range
of industrial categories that EPA regulated under its regulations that
constituted the precursor to the statutory PSD program,\34\ 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 memorandum was prepared by B.J. Steigerwald, Director of the Office
of Air Quality Planning and Standards and Roger Strelow, EPA's
Assistant Administrator for Air and Waste Management (``Steigerwald-
Strelow memorandum''). 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, was meaningful; that is, there
were a large number of sources below those cut-offs that Congress
explicitly contemplated would not be included in the PSD program. Id.
at 24548-50.
---------------------------------------------------------------------------

    \34\ Beginning in 1974, EPA implemented a program that required
sources of certain NAAQS pollutants seeking to construct in
attainment or unclassifiable areas to implement emission controls
for the purpose of preventing deterioration in the ambient air
quality in those areas. This program was the precursor to the PSD
program Congress enacted in 1977.
---------------------------------------------------------------------------

    Consistent with this, the legislative history on the Senate side
also specifically identified certain source categories that Senators
believed should not be covered by PSD. The Senate bill language limited
PSD to sources of 100 tpy or more in 28 listed source categories, and
to any other categories that the Administrator might add. 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's list of excluded source categories were ``[a] small gasoline
jobber, or a heating plant at a community college, [which] could have
the potential to emit 100 tons of pollution annually.'' 122 Cong. Rec.
24548-49 (July 29, 1976) (statement of Sen. McClure). The Senate
Committee Report included a comparable list, and in describing it,
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 enacted legislation differs from the Senate bill by replacing
the authorization to EPA to include by regulation source categories in
addition to the listed 28 source categories with an inclusion of all
other sources if they exceed 250 tpy, and with an authorization for the
states to exempt hospitals and educational institutions. But Congress's
overall intention remains clear, as the DC Circuit described in Alabama
Power: ``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 * * *. [With respect to] the heating plant
operating in a large high school or in a small community college * * *
[w]e have no reason to believe that Congress intended to define such
obviously minor sources as `major' for the purposes of the PSD
provision.'' \35\ 636 F.2d at 353-54.
---------------------------------------------------------------------------

    \35\ Note that although Congress specifically authorized the
states to exempt ``nonprofit health or education institutions'' from
the definition of ``major emitting facility,'' this statement by the
DC Circuit should be taken as the Court's view that Congress did not
design PSD to cover sources of the small size described.
---------------------------------------------------------------------------

    A particularly important indication of congressional intent to
limit the PSD program it was designing to larger sources comes in
considering the emissions profile of the small-sized boilers. Congress
focused closely on identifying which sources with emissions in excess
of 100 tpy should not be subject to PSD even though they are subject to
CAA requirements generally. But Congress viewed a large set of sources
as emitting below 100 tpy and therefore not included in the PSD
program. Chief among these sources, in terms of absolute numbers of
sources, were small boilers. The Steigerwald-Strelow memorandum
identified two categories of these boilers, differentiated by size. The
first ranges in size from 10 to 250 x 10 \6\ Btu per hour (Btu/hr), and
has a ``typical plant'' size of 10 \7\ 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 10 \6\
Btu/hr, and has a ``typical plant'' size of 1.3 x 10 \6\ 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).
    The legislative history also provides a window into the scope of
the program that Congress anticipated and related administrability
concerns. According to the Steigerwald-Strelow memorandum, the number
of new sources each year whose ``BACT emissions from typical plant''
exceed 100 for the 28 listed source categories and 250 for all other
source categories is less than 100 per year. Although the Steigerwald-
Strelow memorandum does not attempt to estimate the number of
modifications, it appears that based on this information, Congress had
reason to expect the total size of the PSD program to be measured in
the hundreds or perhaps thousands of permits each year. A program of
this size would be manageable by EPA and the permitting authorities.
(3) PSD Regulatory History: Regulations Concerning the Definition of
``Major Stationary Source''
    For present purposes, the regulatory history of the PSD program is
most noteworthy because it shows that since the inception of the
program following the 1977 CAA Amendments, EPA has interpreted the
statutory PSD applicability provisions to apply more narrowly--to any
air pollutant subject to regulation--than their literal meaning (``any
air pollutant''). EPA's initial rulemaking implementing the PSD
program, which was proposed and finalized in 1977-1978, made explicit
that the entire PSD program applied to only pollutants regulated under
the Act. 43 FR 26380, 26403, 26406 (June 19, 1978) (promulgating 40 CFR
51.21(b)(1)(i)). In 1979-1980, EPA revised the PSD program to conform
to Alabama Power v. Costle, 636 F.2d 323 (DC Cir. 1980). 44 FR 51924
(September 5, 1979) (proposed rule); 45 FR 52676 (August 7, 1980)
(final rule). In this rulemaking, EPA did not disturb the pre-existing
provisions that limited the applicability of the PSD program to

regulated air pollutants.\36\ In 1996 EPA proposed, and in 2002
finalized, a set of amendments to the PSD provisions that included
revisions to conform with the 1990 CAA Amendments, which, in relevant
part, exempted hazardous air pollutants (HAPs) from PSD, under CAA
section 112(b)(6). See 61 FR 38250 (July 23, 1996), 67 FR 80186
(December 31, 2002). In the preamble to the final rule, EPA noted that
based on a request from a commenter, EPA was amending the regulations
to ``clarify which pollutants are covered under the PSD program.'' EPA
accomplished this by promulgating a definition for ``regulated NSR
pollutant,'' which listed categories of pollutants regulated under the
Act, and by substituting that defined term for the phrase ``pollutants
regulated under the Act'' that was previously used in various parts of
the PSD regulations. 67 FR 80240. The definition of ``regulated NSR
pollutant'' includes several categories of pollutants (including, in
general, NAAQS pollutants and precursors, pollutants regulated under
CAA section 111 NSPS, Class I or II substances regulated under CAA
title VI) and a catch-all category, ``[a]ny pollutant that otherwise is
subject to regulation under the Act.'' E.g., 40 CFR 52.21(b)(50). As in
the previous rulemakings, EPA did not address the difference between
the definition of ``major emitting facility'' and its regulatory
approach or indicate that it had received comments on this issue. While
the definition of ``major modification'' in the PSD regulations has
changed over time with respect to how emission increases are
calculated, the regulatory history with respect to pollutant coverage
parallels that of major emitting facility.
---------------------------------------------------------------------------

    \36\ As noted elsewhere in this notice, in Alabama Power, the DC
Circuit noted that the definition of ``major emitting facility''
under CAA section 169(1) could apply to air pollutants not regulated
under other provisions of the Act, and discussed the contrast of
this broad definition to the narrower application of the BACT
provisions. 636 F.2d at 352-53 & n. 60. In its rulemaking notices
responding to Alabama Power, EPA discussed at length certain issues,
such as the applicability of NSR to pollutants emitted below the
``major'' thresholds, that are based on the reference in ``major
emitting facility'' to ``any air pollutant.'' However, throughout
its discussion, EPA interpreted that reference as ``any regulated
air pollutant,'' again without specifically acknowledging the
difference or without acknowledging the above-noted statements in
Alabama Power. See 45 FR 52710-52711. EPA did not indicate that it
had received comments on this issue.
---------------------------------------------------------------------------

    We recount this regulatory history as background information. We
are not reconsidering or reopening these regulations to the extent they
interpret the definition of ``major emitting facility'' and
``modification'' narrowly to be limited to pollutants subject to
regulation under the Act.
b. Title V Program
    Having reviewed the key statutory provisions, their legislative
history, and the relevant administrative interpretations for the PSD
program, we now do the same for the title V program.
(1) Title V Provisions
    The key title V provisions for present purposes start with the
applicability provisions, which are found in CAA sections 502(a),
501(2)(B), and 302(j). These provisions provide that it is unlawful for
any person to operate a ``major source'' without a title V permit,
section 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 sections 501(2)(B) and 302(j). As noted elsewhere,
these provisions, taken together and as interpreted by EPA, provide
that stationary sources are subject to title V if they emit at the 100-
tpy threshold air pollutants that are subject to EPA regulation.
    In addition, although title V does not have a set of provisions
describing its purpose, it is clear from its provisions and its
legislative history, discussed later, that its key goal is to gather
into one permitting mechanism the CAA requirements applicable to a
source and impose conditions necessary to assure compliance with such
requirements, and thereby promote the enforceability of CAA
requirements applicable to the covered sources. Section 503(b)(1)
requires that the source's permit application contain a compliance plan
describing how the source will ''comply with all applicable
requirements'' of the CAA, and section 504(a) requires that ``[e]ach
permit issued under [title V] shall include * * * such * * * conditions
as are necessary to assure compliance with applicable requirements of
[the Act].'' See H.R. Rep. No. 101-490, at 351 (1990) (``It should be
emphasized that the operating permit to be issued under this title is
intended by the Administration to be the single document or source of
all of the requirements under the Act applicable to the source.'').
    Importantly, title V is replete with provisions designed to make
the permitting process as efficient and smooth-running as possible,
including the expeditious processing of permit applications and the
timely issuance of permits. Section 503(c) requires that ``the
permitting authority shall approve or disapprove a completed
application * * * and shall issue or deny the permit, within 18 months
after the date of receipt thereof * * *.'' Section 502(b)(6) requires
the permitting authority to develop ``adequate, streamlined, and
reasonable procedures for expeditiously determining when applications
are complete, for processing such applications, for public notice * * *
and for expeditious review of permit actions, including * * * judicial
review in State court of the final permit action by [specified
persons].'' Section 502(b)(7) includes a ``hammer'' provision designed
to reinforce timely permit issuance, which is that the permitting
authority's program must include:
    To ensure against unreasonable delay by the permitting
authority, adequate authority and procedures to provide that a
failure of such permitting authority to act on a permit application
or permit renewal application (in accordance with the time periods
specified in [CAA] section 503 * * *) shall be treated as a final
permit action solely for purposes of obtaining judicial review in
State court of an action brought by any person referred to in
paragraph (6) to require that action be taken by the permitting
authority on such application without additional delay.

Section 502(b)(8) requires the permit program to include ``[a]uthority
and reasonable procedures consistent with the need for expeditious
action by the permitting authority on permit applications and related
matters, to make available to the public [certain permit-related
documents]''. Section 502(b)(9) requires a permit revision to
incorporate requirements promulgated after issuance of the permit, but
only if the permit is for a major source and has a term of 3 or more
years remaining. In addition, the revision must occur ``as
expeditiously as practicable.'' Section 502(b)(10) requires the permit
program to include operational flexibility provisions that ``allow
changes within a permitted facility * * * without requiring a permit
revision, if the changes are not modifications * * * and * * * do not
exceed the emissions allowable under the permit * * *.''
    In addition, title V includes a comprehensive and finely detailed
implementation schedule that mandates timely issuance of permits while
building in EPA and affected state review, public participation, and
timely compliance by the source with reporting requirements. Following
the date that sources become subject to title V, they have 1 year to
submit their permit applications. CAA section 503(c). As noted
previously, the permitting authority then has 18 months to issue or
deny the permit. CAA section 503(c). Permitting authorities must
provide an opportunity for public comment and a hearing. CAA section
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 section 505(a)(1). EPA then has
45 days to review the permit and, if EPA deems it appropriate, to
object to the permit. CAA section 505(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 section 505(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
section 505(b)(2). If a permit is issued, it must include a permit
compliance plan, under which the permittee must ``submit progress
reports to the permitting authority no less frequently than every 6
months,'' and must ``periodically (but no less frequently than
annually) certify that the facility is in compliance with any
applicable requirements of the permit, and [ ] promptly report any
deviations from permit requirements to the permitting authority.'' CAA
section 503(b).
(2) Title V Legislative History
    The legislative history of title V, enacted by Congress in the 1990
CAA Amendments, indicates the scope of the program that Congress
expected: Congress expected the program to cover some tens of thousands
of sources, which would approximate the scope of the permit program
under the Clean Water Act. The Senate Committee on Environment and
Public Works stated:

    EPA estimates that the new permit requirements will cover about
8,200 major sources that emit 100 tons per year or more of criteria
pollutants (which are regulated under SIPs). In addition, many
smaller sources are (or, as EPA promulgates additional regulations,
will be) covered by new source performance standards under section
111 of the Act, hazardous air pollutant standards under section 112
of the Act, and nonattainment provisions of this legislation. By
comparison, under the Clean Water Act, some 70,000 sources receive
permits, including more than 16,000 major sources. Although many air
pollution sources have more emission points than water pollution
sources, the additional workload in managing the air pollution
permit system is estimated to be roughly comparable to the burden
that States and EPA have successfully managed under the Clean Water
Act.

S. Rep. 101-228, at 353 (1990).\37\ Sen. Mitchell, the Senate Majority
Leader, stated that he expected ``over 10,000 permits [to] * * * be
issued under this program.'' 136 Cong. Rec. S3239-03 (March 27, 1990).
Others in Congress had similar estimates. See, e.g., 136 Cong. Rec.
S3166 (``thousands and thousands of permit applications * * * will be
required to be submitted'') (statement of Sen. Nickles).
---------------------------------------------------------------------------

    \37\ The House Committee on Energy and Commerce acknowledged
that it was ``uncertain about the magnitude of permit applications
likely to be submitted under the bill initially and thereafter in
each State or to EPA,'' H. Rep. 101-490 p. 346.
---------------------------------------------------------------------------

    Furthermore, the legislative history indicates that Congress did
not contemplate that large numbers of very small sources would be
subject to title V's requirements.\38\ This becomes clear by reviewing
the legislative history of a companion piece of legislation to the
operating permits provisions that Congress enacted into CAA section
507, which is the ``Small business stationary source technical and
environmental compliance assistance program.'' CAA section 507. Under
this provision, sources that, among other things, ``are not major
stationary source[s]'' and that emit less than 50 tpy of any regulated
pollutant, as well as less than 75 tpy or all regulated pollutants, are
eligible for assistance under CAA section 507. CAA section 507(c)(1).
The House Committee Report described this provision--including what
types of sources it expected this provision to benefit--as follows:

    \38\ Title V can apply to certain small businesses in some
circumstances. Under CAA sections 502(a) and 501(2)(A), title V
applies to major sources of HAPs, which includes sources that may
emit as little as 10 tpy of a single HAP, and which may include some
dry cleaners and other small businesses. In addition, under CAA
section 502(a), title V applies to area sources subject to standards
under CAA sections 111 or 112 (or required to have a PSD or
nonattainment NSR permit), unless the Administrator exempts those
sources from title V because compliance would be impracticable,
infeasible, or unnecessarily burdensome.

    New section [507] is a small source/small business provision
added by the Committee. It seeks to help small businesses to comply
with the problems that are likely to occur under the Act as amended
by this bill. For purposes of this section, small businesses or
small emitters are defined as sources that are emitting 100 tons or
less per year and that have a number of employees that would qualify
them for assistance from the Small Business Administration (SBA). As
we look to the future of environmental protection under the Act, we
take special steps here to ensure that it is possible for these
small businesses to comply with minimum hassle and in recognition of
the problems that are unique to them. Such small businesses include
printers, furniture makers, dry cleaners, and millions of other
---------------------------------------------------------------------------
small businesses in this country.

House Committee Report, H.R. 101-590, at 354. In this manner, the House
Committee Report made clear that it expected ``millions of * * * small
businesses''--including ``printers, furniture makers, dry cleaners''
and many others--to benefit from the CAA section 507 small source/small
business program, but Congress did not expect them to become subject to
the operating permit requirements of title V because their emissions
fell below 100 tpy, which is, in general, the threshold for title V
applicability as a ``major source.''
    The legislative history of title V confirms that Congress viewed a
principal purpose of title V as providing a vehicle to compile the
requirements applicable to the source. As the report of the House
Committee on Energy and Commerce (``House Committee Report'') stated,
``It should be emphasized that the operating permit to be issued under
this title is intended by the Administration to be the single document
or source of all of the requirements under the Act applicable to the
source.'' H.R. Rep. No. 101-490, at 351 (1990). Combined with the
source's reporting requirements, this compilation of applicable
requirements would facilitate public awareness of a source's
obligations and compliance and would facilitate compliance and
enforcement.
    On the Senate side, Sen. Chafee, one of the floor managers of the
bill, made a similar point:

    The permits will serve the very useful function of gathering and
reciting in one place--the permit document itself--all of the duties
imposed by the Clean Air Act upon the source that holds the permit.
This would clearly be an improvement over the present system, where
both the source and EPA must search through numerous provisions of
state implementation plans and regulations to assemble a complete
list of requirements that apply to any particular plant * * *.
    Once these permits are in place, plant managers will be better
able to understand and to follow the requirements of the Clean Air
Act. At the same time, EPA will be better able to monitor how well
each plant is complying with those requirements. This is a highly
sensible approach for all concerned.

    136 Cong. Rec. S213 (January 24, 1990) (statement of Sen. Chafee).
Sen. Lieberman made a similar statement. 136 Cong. Rec. 3172-73 (March
26, 1990) (statement of Sen. Lieberman). Thus, a central purpose of the
title V permit program is to compile all the requirements applicable to
the source into a single place, the permit. Implicit in this purpose is
that the sources subject to title V will have applicable requirements
to be compiled. As Sen. Chafee directly stated, ``[T]he vast majority
of these permit applications will * * *, in all likelihood, only codify
the existing requirements of the applicable State implementation
plan.''

136 Cong. Rec. S2720 (March 20, 1990) (statement of Sen. Chafee).
    More broadly, the legislative history also indicates congressional
concern about the costs of permitting for small businesses, and a
determination to minimize those costs to the extent possible. This
concern is reflected in several provisions of title V. For example,
section 502(a) authorizes EPA to exempt all or part of a source
category--except for any major source from the title V permit program
if EPA ``finds that compliance with [title V] requirements is
impracticable, infeasible, or unnecessarily burdensome on such
categories.'' Similarly, the permit fee provisions include a
presumptive minimum fee amount, but authorize an exemption from that
presumptive amount upon a showing that a lesser amount will meet
overall fee requirements, CAA section 502(b)(3)(B)(iv). One of the
drafters of this provision, Rep. Wyden, explained that its purpose was
to preserve the flexibility of states to impose lower fees of small
businesses:

    I note that the provision on fees allows reductions for small
sources where appropriate. The state has some flexibility, under the
general permit fee provisions, to adjust fee levels for any source
so long as the average fee charged meets the statutory minimum.

136 Cong. Rec. H12884 (Oct. 26, 1990) (statement of Rep. Wyden). See,
e.g., 136 Cong. Rec. H2559 (May 21, 1990) (statement of Rep. Wyden)
(discussing need to ``help small businesses through the air permit
labyrinth'').
    The legislative history also indicates that Congress was deeply
concerned both about the need not to burden sources generally with
undue costs and to assure the administrability of the title V program,
and as a result, was determined to make the program as smooth-running
as possible. These goals are reflected in many of the title V
requirements, as discussed previously. See, e.g., CAA section 502(b)(6)
(requiring ``adequate, streamlined, and reasonable procedures for
expeditiously determining when applications are complete, for
processing such applications, for public notice * * * and for
expeditious review of permit actions); CAA section 502(b)(7) (includes
a ``hammer'' provision designed to reinforce timely permit issuance);
CAA section 502(b)(9)-(10) (limiting circumstances under which permit
revision is required; requiring revision to occur ``as expeditiously as
practicable;'' including operational flexibility provisions).
    The legislative history confirms that these provisions were
designed to reduce costs to sources and promote administrability. The
``Chafee-Baucus Statement of Senate Managers'' for the bill explained
the purpose of the CAA section 502(b)(6) requirement for ``[a]dequate,
streamlined, and reasonable procedures for expeditious[ ]'' permit
actions as follows:

    [M]uch concern has been expressed that this new permitting
process will unduly delay the proper functioning of many sources,
and we intend to mitigate any delay by directing that the process be
expeditious.
    In addition to this general directive for expeditious
processing, we mandate in new section 503 that permitting
authorities approve or reject permit applications within certain
specified time periods following filing. In this fashion, we have
taken explicit steps to protect against undue delays.

136 Cong. Rec. S16941 (statement of Sen. Chafee). The same statement
explained that the permit revision procedures of CAA section 502(b)(9)
reflect a--

careful effort to ensure that the permit program works effectively
and efficiently. Succinctly, this provision accommodates two
competing concerns. On the one hand, it is important to ensure that
permit requirements remain up-to-date as the provisions of the Clean
Air Act are developed and new requirements are imposed. On the other
hand, it also is important to be sure that we do not reduce the
permit program to a shambles by requiring sources to engage in a
continuous process of revising their permits as these new
requirements are imposed.

136 Cong. Rec. 16942 (Oct. 27, 1990) (Chafee-Baucus statement of Senate
Managers) (statement of Sen. Chafee).
    In addition, these concerns were at the bottom of the following
statement by Sen. Chafee, in which he described how the bill's drafters
had revised it in response to a concern by industry that an earlier
version of the bill would have put undue costs on industry:

    We have also heard concerns from industry that S. 1630 would
burden sources unduly by requiring them to submit--along with their
permit applications--plans explaining how they intend to comply with
all 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. S2107 (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 3-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
    As with PSD, for present purposes, the regulatory history of the
title V program is most noteworthy because it shows that beginning
shortly after the inception of the program following the 1990 CAA
Amendments, EPA has interpreted the statutory title V applicability
provisions to apply more narrowly--to any air pollutant subject to
regulation--than their literal meaning (``any air pollutant''). As
discussed previously, 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. 40 CFR 70.2.
    However, since 1993, EPA has interpreted the applicability
provisions more narrowly. At that time, which was 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. 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 Massachusetts v. EPA, 549 U.S. 497,
533 (2007) (finding this definition to be ``capacious''), we believe
that the overall rationale for our 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 FR 55300, col. 3, fn. 8; see also 75 FR 17022-23
(Interpretive Memo reconsideration).
    As with PSD, we recount this regulatory history as background
information, and we are not reconsidering or re-opening this
interpretation of the definition of ``major source'' narrowly to be
limited to pollutants subject to regulation under the Act.
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, ``regulated NSR pollutant,'' 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'' and ``major
modification,'' we have concluded that based on the ``absurd results''
doctrine, a literal adherence to the terms of these definitions is not
required. Even so, we believe Congress did intend that PSD apply to GHG
sources as a general matter. Further, we may apply PSD to GHG sources
in a phased-in manner, as we do through the tailoring approach, because
either congressional intent is clear on that issue and the tailoring
approach best reflects it, or congressional intent is unclear and the
tailoring approach is a reasonable interpretation of the statute.
a. Congressional Purpose for the PSD Program
    To reiterate, for convenience, CAA section 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 section 169(1); and a ``modification'' as any physical
or operational change in ``a stationary source which increases the
amount of any air pollutant emitted by such source,'' CAA section
169(2)(C), 111(a)(4). We also reiterate that, as discussed above,
beginning with our initial rulemaking in 1977-1978 to implement the PSD
program, we have interpreted these definitions more narrowly by reading
into them the limitation that a source is subject to PSD only if the
air pollutants in question are ``subject to regulation under the Act.''
40 CFR 51.166(b)(49)(iv). EPA is not re-opening this interpretation in
this regulation in this action.
    Under the current interpretation of the PSD applicability
provision, EPA's recent promulgation of the LDVR 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 LDVR 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
contrary 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 interpreted narrowly 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 definitions of ``major emitting facility'' and ``modification''
should be tailored so that they apply to GHG sources on a phased-in
basis, with the largest sources first, as we describe in this rule.
    As explained previously, 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 literal 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 the legislative history to see if it 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 language
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 definitions of ``major emitting facility'' and
``modification'' literally (as EPA has interpreted them more narrowly)
at the present time--in the absence of streamlining measures or
additional permitting authority resources, and without tailoring--would
be contrary to congressional purpose for the PSD provisions, as found
in the statutory provisions and legislative history, especially in
light of the impact from applying those definitions literally. Congress
established the PSD program in large measure because it was concerned
that around the country, industrial development, which was confronting
barriers to 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 require 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
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 HAPs were
required to implement BACT for those pollutants, although in the 1990
CAA Amendments, Congress redesigned CAA section 112, which includes the
requirements for HAPs, and excluded HAPs from PSD. CAA section
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 section 160, and various PSD requirements
clearly reflect them. For example, to protect economic growth, the PSD
program expedites the permit process to include a 1-year limitation on
the time that the permitting authority has act on permit applications.
To protect the environment, in addition to including many provisions
that focus on NAAQS pollutants, the PSD program requires that the
preconstruction permit impose emission limits that reflect BACT for
each pollutant subject to regulation under another CAA provision. CAA
section 165(a)(4). This BACT provision also makes clear, by its terms,
that although Congress designed the PSD program largely with NAAQS
pollutants in mind, Congress also intended that sources subject to PSD
control the emissions of their other pollutants as well. The DC 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 (DC Cir.), rehearing en banc den. 431 F.3d
801 (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 to 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. Several Senate floor statements and the
Committee Report made clear that PSD should not apply to small sources.
As discussed later, 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. McClure stated that PSD should 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 of 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-related 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 DC 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 literally
to GHG sources at the present time--in the absence of streamlining or
increasing permitting authority resources and without tailoring the
definition of ``major emitting facility'' or ``modification''--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 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, virtually 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 they be 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--the great majority of which are small business--would each
incur, on average, almost $60,000 in PSD permitting expenses. This
result would be contrary to Congress's careful efforts to confine PSD
to large industrial sources that could afford these costs.
    A closer look at the legislative history confirms the view that
Congress did not expect PSD to apply to large numbers of small sources,
including commercial and residential sources, and instead expected the
100/250 tpy thresholds to limit PSD's applicability to larger sources.
As noted previously, 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, if not all, of
the sources in half the 28 source categories emit CO2 in
quantities that equal or exceed the 100 tpy threshold, and almost all
of the sources in the remaining categories emit CO2 in
quantities that equal or exceed the 100 tpy threshold. Therefore,
applying the ``major emitting facility'' definition to GHG sources, in
the absence of streamlining methods and without tailoring, would, as a
practical matter, vitiate much of the purpose of the 100 tpy cut-off
for industrial sources.\39\
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    \39\ Specifically, of the 28 source categories under CAA section
169(1), information available to EPA indicates that all of the
sources in the following categories emit at least 100 tpy of
CO2 annually: fossil-fuel fired steam electric plants of
more than 250 million Btu per hour heat input, Portland Cement
plants, primary zinc smelters, iron and steel mill plants, primary
aluminum ore reduction plants, municipal incinerators capable of
charging more than 50 tons of refuse per day, nitric acid plants,
petroleum refineries, lime plants, primary lead smelters, fossil-
fuel boilers of more than 250 Btus per hour heat input. In addition,
all but a few kraft pulp mills and glass fiber processing plants
emit at least 100 tpy CO2 annually. Our information is
incomplete with respect to the remaining source categories, but with
the possible exception of petroleum storage and transfer facilities
with a capacity exceeding three hundred thousand barrels, we suspect
that virtually all sources emit at least 100 tpy CO2
annually. See ``Technical Support Document for Greenhouse Gas
Emissions Thresholds Evaluation''; Office of Air Quality Planning
and Standards; March 29, 2010.
---------------------------------------------------------------------------

    Most telling, in this regard, is the small-sized boilers, which the
Steigerwald-Strelow memorandum describes, in terms of size, pollutants
emitted, and numbers of sources, as follows: The memorandum identified
two categories of these boilers, differentiated by size. The first
ranges in size from 10 to 250 x 10\6\ Btu/hr, and has a ``typical
plant'' size of 10\7\ Btu/hr, with ``BACT emissions from typical
plant'' of 53 tpy, and a total of 1,446 sources in that category. The
second category ranges in size from 0.3 to 10 x 10\6\ Btu/hr, and has a
``typical plant'' size of 1.3 x 10\6\ Btu/hr, with ``BACT emissions
from typical plant'' of 2 tpy, and a total of 11,215 sources in the
category. That memorandum makes clear that EPA did not believe that
sources in these two categories--and especially the smallest one--would
be subject to PSD under a 100 tpy threshold, 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 10\6\
Btu/hr emits at least 250 tpy CO2. Therefore, if the
CO2 emissions of these small boilers are considered--as
would occur by applying the definition of ``major emitting facility''
to GHG sources 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).
    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 much explicit
congressional focus on 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. This appears to be approximately the
size of the program that EPA administered before the 1977 CAA
Amendments, so that it seems reasonable to assume that Congress
expected the PSD program it enacted to be within EPA's and the states'
administrative capacities.
    Moreover, the Alabama Power court stressed the importance of
administrability concerns: Most importantly, the Court held that EPA,
in interpreting the ``modification'' provisions that apply PSD to
physical or operational changes by major emitting facilities that
``increase the amount of any air pollutant emitted,'' CAA section
111(a)(4), may ``exempt from PSD review some emission increases on
grounds of de minimis or administrative necessity,'' and went on to
state that in establishing the exemption thresholds, ``[t]he Agency
should look at the degree of administrative burden posed by enforcement
at various de minimis threshold levels.'' 636 F.2d at 400,405. In
addition, 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
before streamlining and without tailoring would increase the size of
the PSD program at least an order of magnitude beyond what Congress
seems

to have expected, 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 work hours, 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 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 3 years. In fact, as we noted at
proposal, a literal reading of the PSD requirements would require their
application at the 250 tpy PTE level, which would result in ten times
more permit applications than were assumed when the states made the 3-
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 PSD applicability provisions as applied to GHG
sources, the permitting authorities would be required to implement a
program of this size beginning on January 2, 2011, less than 9 months
from now. We received many comments from states and industry raising
concerns about the cost to sources and administrative burdens 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.
    We consider it difficult to overstate the impact that applying PSD
requirements literally to GHG sources as of January 2, 2011--before
streamlining or increasing permitting resources and without tailoring--
would have on permitting authorities and on the PSD program, and we are
concerned that this impact could adversely affect national economic
development. The number of PSD permits that would be required from such
an approach is far beyond what the PSD program has seen to date. It is
clear throughout the country, PSD permit issuance would be unable to
keep up with the flood of incoming applications, resulting in delays,
at the outset, that would be at least a decade or longer, and that
would only grow worse over time as each year, the number of new permit
applications would exceed permitting authority resources for that year.
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 to abandon altogether plans to construct or
modify. As a result, a literal application of the PSD applicability
provisions to GHG sources would slow construction nationwide for years,
with all of the adverse effects that this would have on economic
development.
    The remedies for this 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 not possible for
permitting authorities to increase their funding to those levels 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 later, although
streamlining offers genuine promise to improve the manageability of the
PSD workload, streamlining cannot do so in the very near term and, in
any event, the extent to which it can do so has not 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.\40\ Every permitting authority that addressed
this issue in their comments on the proposed Tailoring Rule stated
unequivocally that it could not administer the PSD program at the
statutory levels. To cite a few examples (each of which considered both
the PSD and title V programs together): NACAA, which represents air
pollution control agencies in 53 states and territories, 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 stated that
it ``* * * concurs with the United States, 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 successfully administer their
permitting programs with the addition of GHG emission sources at the
statutory thresholds for PSD and title V.
---------------------------------------------------------------------------

    \40\ EPA did receive a smaller number of comments that asserted
in conclusory fashion that permitting authorities could administer
the 100/250 tpy levels.
---------------------------------------------------------------------------

    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 previously, 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.
    Moreover, at the present time, there is relatively little
environmental benefit in subjecting large numbers of small GHG sources
to the expensive, source-by-source 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''

and ``modification'' literally--that is, as EPA has interpreted them
more narrowly, but without tailoring and before the program
requirements can be streamlined or permitting authority resources can
be increased--would produce results that are not consonant with, and,
in fact, would severely undermine, Congress's purpose for the PSD
program. These results may fairly be characterized as the type of
absurd results that support 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. Congressional Intent for the Applicability Provisions
(1) Congressional Intent for Whether and How PSD Applies to GHG Sources
    Several of the PSD provisions and statements in the legislative
history are particularly important in determining whether and how the
PSD program should apply to GHG sources, as discussed elsewhere:
    (1) The applicability provisions, under CAA section 165(a) and
169(1). These provisions are written broadly, and although, as we
explain above, they cannot be read literally to apply to GHG sources at
or above the 100/250 tpy, they nevertheless can be read to indicate
that directionally, Congress intended that PSD be applied inclusively.
    (2) The various PSD provisions that identify the pollutants subject
to PSD. Compare, e.g., CAA sections 162, 163, 164, 165(a)(3),
165(d)(2), 165(e), and 166 (NAAQS pollutants) with CAA sections
165(a)(3)(C), 165(a)(4) (other pollutants). These provisions indicate
that a major purpose of the PSD program is to control NAAQS pollutants,
but that the program also covers non-NAAQS pollutants.
    (3) The requirement that permitting authorities act on PSD
applications within 1 year. CAA section 165(c). This provision
indicates that Congress anticipated the PSD program would be of a size
that would allow permitting authorities to meet this deadline.
    (4) The purpose provision. CAA section 160. This provision makes
clear that PSD is designed both to protect public health and welfare
and to promote economic growth.
    (5) In addition, we consider important the legislative history
indicating the Congress intended PSD to apply to large industrial
sources because they were the primary source of the air pollution
problems and they have the resources to manage the demands of the PSD
permitting process; and that, by the same token, Congress expected that
small sources would not be subject to PSD. The legislative history does
not specifically mention GHG sources.

Looking at these provisions and the legislative history together, we
think Congress can be said to have intended that the PSD program apply
to GHG sources as a general matter. The most important indication of
congressional intent in this regard is the applicability provisions,
which provide, in part, that PSD applies to (i) ``any * * * source[
that] emit[s], or ha[s] the potential to emit [the specified quantity]
of any air pollutant,'' CAA section 169(1); and (ii) to any such source
that undertakes a physical or operational change that ``increases the
amount of any air pollutant emitted.'' CAA section 169(2)(C),
111(a)(4). These terms are quite broad, and should be read to include
GHG sources and GHGs. See Massachusetts v. EPA, 549 U.S. 497, 533
(2007) (``Because greenhouse gases fit well within the Clean Air Act's
capacious definition of `air pollutant,' we hold that EPA has the
statutory authority to regulate the emission of such gases from new
motor vehicles.''). Moreover, including GHG sources--under certain
circumstances--is consistent with the PSD provisions that refer to
other pollutants, establish the time-frame for acting on PSD
applications, and establish the overall purpose of the program. In
addition, including GHG sources--again, under certain circumstances--is
consistent with the legislative history that PSD be limited to sources
that cause a meaningful part of the air pollution problem and have the
resources to manage the PSD requirements. No PSD provision explicitly
imposes any limitation of PSD to large industrial sources, and
Congress's reasoning for focusing on large industrial sources--which
was that these sources are best suited to handle the resource -
intensive analyses required by the PSD program--could extend to GHG
sources under certain circumstances (that is, large sources first, and
smaller sources after streamlining methods are developed). Similarly,
as discussed previously, 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 it is consistent with that
reading to recognize that 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. Finally, we find nothing in the PSD provisions or
legislative history that would indicate congressional intent to exclude
GHG sources. Accordingly, we believe that Congress must be said to have
intended an affirmative response for whether PSD applies to sources of
GHGs as a general matter. Our previous regulatory action defining the
PSD applicability provisions made this clear, and we do not reopen this
issue in this rulemaking. Moreover, even if this long-established
regulatory position were not justifiable based on Chevron Step 1--on
the grounds that in fact, congressional intent on this point is not
clear--then we believe that this position, that the statutory
provisions to apply PSD to GHG sources in general, was justified under
Chevron Step 2.
    As to how PSD applies to GHG sources, although, for reasons
discussed previously, the 100/250 tpy threshold provision, which
establishes the scope of PSD applicability, should not be read as
applying literally to GHG sources--and as a result, the applicability
provision as a whole cannot be said to have a plain meaning as to the
scope of coverage of GHG sources--we believe that the applicability
provisions and legislative history nevertheless indicate a
congressional intent for how PSD should apply to GHG sources. That is
to apply PSD to as many sources as possible as quickly as possible, at
least to a certain point. We believe that this intent can be inferred
from the inclusiveness of the applicability provision, combined with
the legislative history that focuses on Congress's desire to include in
the PSD program sources that have the resources to comply with the
requirements and, as the Court in Alabama Power recognized, Congress's
concern about administrability. That is, at first, PSD may apply to the
largest GHG sources because they may be expected to have the resources
to comply with PSD's requirements and permitting authorities may be
expected to accommodate those sources; and over time, with streamlining
and increases in permitting authority resources, PSD may apply to more
GHG sources. As discussed later, the tailoring approach is consistent
with congressional intent in this regard.
    We recognize the tension between the applicability provisions,
which are inclusive, and the statements in the legislative history that
express Congress's expectation that PSD be limited to large industrial
sources. At least to a point, the applicability provisions and these
statements can be reconciled by recognizing that the reason why
Congress expected that PSD would be limited to large industrial sources
was that Congress recognized that PSD applied on a source-by-source
basis, that this would be costly to

sources, and that only the large industrial sources could afford those
costs. Taking certain actions--including streamlining PSD
requirements--can render PSD more affordable and thereby allow its
application to smaller sources in a more cost-effective manner. In this
way, PSD's inclusive applicability provisions can be reconciled with
the narrower scope Congress expected, and this is part of the reason
why we characterize congressional intent as being consistent with
phasing in the applicability of PSD to GHG sources through the
tailoring approach.\41\
---------------------------------------------------------------------------

    \41\ Reconciling the applicability provisions with the
statements in the legislative history in this manner is also
consistent with the U.S. Supreme Court's view that the Clean Air Act
has inherent flexibility, as it stated in Massachusetts v. EPA, 549
U.S. 497, 532 (2007):
    While the Congresses that drafted Sec.  202(a)(1) might not have
appreciated the possibility that burning fossil fuels could lead to
global warming, they did understand that without regulatory
flexibility, changing circumstances and scientific developments
would soon render the Clean Air Act obsolete. The broad language of
Sec.  202(a)(1) reflects an intentional effort to confer the
flexibility necessary to forestall such obsolescence. See
Pennsylvania Dept. of Corrections v. Yeskey, 524 U. S. 206, 212
(1998) (``[T]he fact that a statute can be applied in situations not
expressly anticipated by Congress does not demonstrate ambiguity. It
demonstrates breadth'' (internal quotation marks omitted)).
---------------------------------------------------------------------------

    On the other hand, if Congress cannot be said to have expressed an
intent as to the manner and scope of PSD applicability to GHG sources,
then, under Chevron Step 2, EPA may apply a reasonable interpretation
of the applicability provisions to determine the scope of coverage of
GHG sources that is consistent with the statutory requirements. The
Tailoring Rule is a reasonable interpretation under Chevron Step 2. It
is consistent with (1) The applicability provisions, recognizing that
as we have seen, those provisions cannot be applied literally under
these circumstances,\42\ (2) the provisions described above concerning
which pollutants the PSD provisions cover and the timetable for
permitting authority action on PSD applications; (3) the purpose
provisions of PSD, and the accompanying legislative history, because it
protects public health and welfare without inhibiting economic
development; and (4) the legislative history indicating Congress
intended that PSD be limited to sources that cause a meaningful part of
the problem and can manage its requirements, because it will expand
PSD's applicability only after streamlining methods and greater
permitting authority resources will allow for such an expansion in an
orderly manner.
---------------------------------------------------------------------------

    \42\ For the reasons discussed above, we believe that Step 2 of
the Chevron framework, which authorizes the exercise of agency
discretion as long as the agency remains consistent with a
reasonable construction of the statute, does not require a literal
construction of the statute in a case such as this one, in which the
``absurd results'' doctrine applies so that the statutory
requirements cannot be read literally.
---------------------------------------------------------------------------

(2) Criteria for Establishing Phase-in Schedule
    The specific phase-in schedule under the tailoring approach 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 PTE), 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
in response to the additional demands placed upon them in the first two
steps, and we will gather real-world information about the GHG
permitting process; and based on all that, we will address expanding
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 \43\
---------------------------------------------------------------------------

    \43\ It should be noted that strictly speaking, we do not, in
our drafting of the regulatory revisions that are part of this
rulemaking, establish a significance level for GHG emissions based
on CO2e. Rather, we establish an applicability criteria
for determining whether GHGs are subject to regulation with respect
to the particular source. We explain our approach in more detail in
the Response to Comments document. Throughout this preamble, we
refer to this action, for convenience, as a significance level.
---------------------------------------------------------------------------

    The criteria for establishing the significance levels are the same
as for establishing the ``major emitting facility'' thresholds. As
noted previously, 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
DC 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.
    Of particular importance, the Court in Alabama Power indicated that
EPA may rely on administrative considerations to establish significance
levels. Id. To reiterate, the Court held that ``EPA does have
discretion, in administering the statute's `modification' provision, to
exempt from PSD review some emission increases on grounds of de minimis
or administrative necessity.'' 636 F.2d at 400. The Court added a more
detailed exposition of its views in a subsequent part of its opinion,
where it discussed the BACT provision, under CAA section 165(a)(4), and
the Court made clear that those views applied as well to the
``modification'' provision. There, the Court invalidated an EPA
regulation that established a 100- and 250-tpy exemption from the BACT
requirement. Both the BACT provision and the modification provision
apply by their terms to all emissions from a source, but the Court
stated that each provision must be read to incorporate an exemption
based on de minimis or administrative considerations, and explained:

    We understand that the application of BACT requirements to the
emission of all pollutants from a new facility, no matter how
miniscule some may be, could impose severe administrative burdens on
EPA, as well as severe economic burdens on the construction of new
facilities. But the proper way to resolve this difficulty is to
define a de minimis standard rationally designed to alleviate severe
administrative burdens, not to extend the statutory 100 or 250-ton
threshold to a context where Congress clearly did not apply it. Just
as for the applicability of PSD to modifications, the de minimis
exemption must be designed with the specific administrative burdens
and specific regulatory context in mind. This the Agency has failed
to do. We do not hold that 100 tons per year necessarily exceeds a
permissible de minimis level; only that the Agency must follow a
rational approach to determine what level of emission is a de
minimis amount.
    A rational approach would consider the administrative burden
with respect to each statutory context: what level of emission is de
minimis for modification, what level de minimis for application of
BACT. Concerning

the application of BACT, a rational approach would consider whether
the de minimis threshold should vary depending on the specific
pollutant and the danger posed by increases in its emission. The
Agency should look at the degree of administrative burden posed by
enforcement at various de minimis threshold levels. It is relevant
that our decision requires the Agency, in its evaluation of
emissions of facilities, to take into account the facility's air
pollution controls. It may also be relevant, though it is certainly
not controlling, that Congress made a judgment in the Act that new
facilities emitting less than 100 or 250 tons per year are not
sizeable enough to warrant PSD review.

Id. at 405. As just quoted, the Court acknowledged the 100 and 250 tpy
thresholds for a major emitting facility, and did not indicate whether
the modification exemption level could exceed those statutory levels,
but nevertheless, the Court made clear that EPA may ``consider the
administrative burden'' associated with modifications to establish an
exemption level for modifications.
    EPA has established significance levels for various pollutants,
generally relying on a de minimis basis. See, e.g., 45 FR 52676, 52705-
52710 (August 7, 1980). In these actions, EPA generally established the
level based on the triviality of the amount of emissions excluded. To
this point, we have not attempted to determine de minimis--that is,
trivial--levels for GHGs. Instead, in this rulemaking, EPA is
establishing a phase-in schedule for significance levels based on the
Chevron framework, accounting for the ``absurd results,''
``administrative necessity,'' and ``one-step-at-a-time'' doctrines. It
is not necessary to establish a permanent de minimis level in this
rulemaking. For one thing, the Court in Alabama Power explicitly
authorized an administrative basis for significance levels. Moreover,
were EPA to establish a de minimis level, that amount could be below--
perhaps even well below--the ``major emitting facility'' thresholds
established in this rulemaking on grounds of ``administrative
necessity'' and the other doctrines. Accordingly, at present, if we
were to establish a permanent significance level on a de minimis basis,
that level could result in too many small sources being required to
submit 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.
c. Other Possible Approaches to Reconciling a Literal Reading of PSD
Applicability Provisions and Congressional Intent
    Commenters have suggested another approach to reconciling the
inconsistency between the definition of ``major emitting facility'' and
congressional intent. They urge that the ``major emitting facility''
definition should be applied so that only sources that emit NAAQS
pollutants, for which the area is designated attainment or
unclassifiable, 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 or a NAAQS pollutant for which an area has been
designated nonattainment. 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 have questioned whether EPA has the
authority to regulate GHGs under the PSD provisions. Although the
specific lines of reasoning vary 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's applications to only NAAQS pollutants that are emitted from
sources in areas that are designated attainment or unclassifiable for
those pollutants. Other comments make a similar point, except to state
that PSD applies more broadly to pollutants with a local, ambient
impact.
    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 the PSD
requirements; while others take the position that once PSD is triggered
for a source on the basis of its NAAQS pollutants, then other, non-
NAAQS, pollutants may be regulated under certain 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 do not trigger PSD.
    We recognize, as we have said elsewhere, that a major 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 the ``in any
area to which this part applies'' clause in 165(a), in the context of
the PSD applicability provisions, as limiting PSD applicability to
those pollutants. The key PSD applicability provisions are found in
sections 165(a) and 169(1). Section 165(a) 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[s] which
emit[s], or ha[s] the potential to emit, one hundred [or, depending on
the source category, two hundred fifty] 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, section 165(a) explicitly states
that the PSD requirements apply more broadly to any pollutant that is
subject to regulation. Moreover, another

requirement in CAA section 165(a) also applies to air 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) maximum allowable increase or maximum allowable
concentration for any pollutant in any area [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.'' As just quoted, subparagraph (C), by its terms
clearly applies to non-NAAQS pollutants. This is because it refers to
(1) ``any other applicable emission standard,'' which distinguishes it
from subparagraph (B) and therefore from NAAQS pollutants; and (2)
``any * * * standard of performance under this chapter,'' which refers
to standards of performance under section 111, several of which are for
non-NAAQS pollutants. See, e.g., 40 CFR 60.33c(a) ``municipal solid
waste landfill emissions.'' By the same token, CAA section 110(j)
specifically contemplates that a source required to hold a permit under
title I of the Act, which includes a PSD permit, demonstrate that the
source complies with ``standards of performance,'' which may include
requirements for pollutants other than NAAQS.
    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'' clearly indicates that it applies to non-NAAQS
pollutants, as long as they are regulated under other provisions of the
Act.\44\ The DC Circuit, in Alabama Power v. Costle, 636 F.2d 323, 361
n.90 (DC Cir. 1980) indicated that, under the law applicable at the
time the Court handed down the decision in 1980, PSD applies to
HAPs.\45\
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    \44\ We find no support for the proposition raised by some
commenters that this provision is limited to ``NAAQS'' pollutants.
To the contrary, ``under this chapter'' unambiguously signals an
intent to cover any pollutant regulated under the Act. Had Congress
intended a narrower focus, they would have specified ``any NAAQS
pollutant'' or any pollutant subject to regulation under this Part
(PSD).
    \45\ In the 1990 CAA Amendments, Congress added section
112(b)(6), which provides that PSD ``shall not apply to pollutants
listed under this section,'' that is, HAPs.
---------------------------------------------------------------------------

    In addition, PSD requirements are part of SIPs, and although SIPs
generally are limited to provisions that implement the NAAQS, and
therefore generally are limited to controlling NAAQS pollutants (or
non-NAAQS pollutants that affect ambient air quality), see generally
CAA section 110, Congress explicitly required SIPs to include
requirements to protect visibility, under CAA section 169A-B. See CAA
sections 110(a)(2)(D)(i)(II), 169A(b)(2)(A). Congress took much the
same approach with the PSD program, which was to require that PSD
requirements be included in the SIPs, but to explicitly require that
PSD apply to non-NAAQS pollutants.
    These provisions--sections 165(a)(3), 165(a)(4), and 110(j)--all
indicate by their terms that PSD requirements apply to non-NAAQS
pollutants. As such, they lend credence to our view that Congress
intended the PSD applicability provisions to include GHG sources. At
the very least, they demonstrate that Congress certainly knew how to
specifically describe certain air pollutants--e.g., ``air pollution in
excess of * * * any other applicable emission standard or standard of
performance under this chapter,'' CAA section 165(a)(3)(C)--which
indicates that its decision not to specifically describe air pollutants
in the applicability provisions suggests an intent to cover air
pollutants broadly.
    To return to sections 161 and the ``in any area to which this part
applies'' phrase in 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. As noted
previously, the permitting provisions 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, Congress did so in
other PSD provisions, discussed previously. Similarly, in other
sections of the CAA, Congress also directly limited the scope of
pollutant applicability by specifying which pollutants are or are not
subject to the provision. See, e.g., section 111(d) (performance
standards for existing sources apply only to pollutants other than
NAAQS or HAPs), section 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 by its terms limit SIPs to only those
measures.
    Most broadly, we read the PSD provisions and their legislative
history to evidence Congress's intent that PSD apply throughout the
country to large sources that undertake new construction or
modifications, and that Congress's overall purpose was to assure that,
as the industrial stock of the nation turned over, it would become
cleaner for all air pollutants emitted. Greenhouse gas sources, as a
general matter, fit readily into this overall vision. At the time that
Congress enacted the PSD provisions in 1977, every area of the nation
was designated attainment or unclassifiable for at least one air
pollutant, and that has remained the case to the present time.
Accordingly, at all times, PSD has applied in every area of the
country. The PSD requirements clearly cover all air pollutants emitted
by the source, and provide a process for reviewing those emissions and
determining BACT for them under CAA section 165(a)(4). It is true that
at the time Congress adopted the PSD provisions, it was primarily
concerned about the NAAQS pollutants--or, as some commenters assert,
pollutants with local, ambient impact--because those pollutants
represented a major component of the air pollution problems it was
aware of and was addressing. But its overall purpose was broad enough
to cover additional pollutants; the process it enacted for establishing
BACT was broad enough to encompass additional pollutants; and the
applicability provisions it established were phrased broadly enough to
encompass additional pollutants, see section 169(1). As a result, we
believe that the PSD applicability provisions, which, again, refer to,
as we have interpreted them, ``any air pollutant [subject to regulation
under the CAA],'' should be seen as ``capacious'' and therefore
encompass GHG sources, in much the same manner as the U.S. Supreme
Court viewed the definition of ``air pollutant'' to be ``capacious''
and therefore encompass GHGs. Massachusetts v. EPA, 549 U.S. 497, 533
(2007).
    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 HAPs
regulated under CAA section 112; and over the years, EPA has
established significance levels for fluorides, sulfuric acid mist,
hydrogen sulfide, TRS, 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 FR 38307 (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. 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).
    Finally, we note that excluding GHG sources from PSD applicability
would create inequitable results. Consider the hypothetical case of two
sources that construct in the same area, each of which emits the same
amount of GHGs, and that amount is large enough to trigger PSD
applicability. Assume that the first one, but not the second, also
emits NAAQS pollutants amounts large enough to trigger PSD
applicability. If GHG sources are excluded from PSD applicability, then
the first of those sources, but not the second, would be subject to PSD
requirements for its GHG emissions. Similarly, consider the
hypothetical case of two sources that emit identical amounts of the
same NAAQS pollutant and identical amounts of GHGs, all amounts of
which are large enough to trigger PSD applicability requirements.
Assume that the first source constructs in an area that is an
attainment or unclassifiable area for the NAAQS pollutant that it
emits, and that the second source constructs in an area that is not an
attainment or unclassifiable area for that NAAQS pollutant. Here again,
if GHG sources are excluded from PSD applicability, then the first of
those sources, but not the second, would be subject to PSD requirements
for its GHG emissions. These results are inequitable and would create
an uneven playing field and for this reason, too, support our view that
the PSD applicability provisions apply to GHG sources.
    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 interpreted
them narrowly 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.
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 V applicability provisions, much of the discussion
later parallels the previous discussion 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. Rather, we may apply title V to GHG sources in a
phased-in manner, as we do through the tailoring approach, because
although congressional intent is clear that title V applies to GHG
sources in general, congressional intent is unclear on the question of
how title V applies, and the tailoring approach is a reasonable
interpretation of the statute.
    To reiterate, for convenience, the title V applicability provisions