issued.  Thus, we are not promulgating any new rules or requirements
pertaining to PSD permits issued prior to Step 1 of the phase-in
described in this rule.  There is no mandatory requirement to reopen a
previously issued PSD permit to incorporate GHG requirements that were
not applicable at the time the permit was issued.

A major source that obtains a PSD permit prior to January 2, 2011 will
not be required under EPA regulations to reopen or revise the PSD permit
to address GHGs in order for such a source to begin or continue
construction authorized under the permit.  Our current PSD permitting
regulations provide that “[n]o new major stationary source or major
modification to which the requirements of paragraphs (j) through (r)(5)
of this section apply shall begin actual construction without a permit
that states the major stationary source or major modification will meet
those requirements.”  40 CFR 51.166(a)(7)(iii); 40 CFR
52.21(a)(2)(iii).  The term “begin actual construction” generally
means “initiation of physical onsite construction activities on an
emissions unit which are of a permanent nature” and includes
activities such as “installation of building supports and foundations,
laying underground pipework and construction of permanent storage
structures.”  40 CFR 51.166(b)(11); 40 CFR 52.21(b)(11).  A source
that begins actual construction authorized under a PSD permit prior to
January 2, 2011 will not be in violation of the prohibition described
previously if it continues construction after that date.  This portion
of the regulation precludes only beginning construction without the
appropriate preconstruction permit and does not require a permit to be
updated to continue actual construction that has already begun.

Furthermore, a source that is authorized to construct under a PSD permit
but has not yet begun actual construction on January 2, 2011 may still
begin actual construction after that date without having to amend the
previously-issued PSD permit to incorporate GHG requirements.  Sections
51.166(a)(7)(iii) and 52.21(a)(2)(iii) require “a permit that states
that the major stationary source or major modification will meet those
requirement,” which refers to the “requirements in paragraphs (j)
through (r)(5)” referenced earlier in those provisions.  EPA construes
this language to describe a permit that meets the requirements of
paragraph (j) through (r)(5) that are in effect at the time the permit
is issued.  Permitting and licensing decisions of regulatory agencies
must generally reflect the law in effect at the time the agency makes a
final determination on a pending application.  See Ziffrin v. United
States, 318 U.S. 73, 78 (1943); State of Alabama v. EPA, 557 F.2d 1101,
1110 (5th Cir. 1977); In re: Dominion Energy Brayton Point, LLC, 12
E.A.D. 490, 614-616 (EAB 2006); In re Phelps Dodge Corp., 10 E.A.D. 460,
478 n. 10 (EAB 2002).

Thus, a source may begin actual construction on or after January 2, 2011
under a PSD permit that authorized construction to begin prior to
January 2, 2011 because such a permit states that the source will meet
the requirements of paragraphs (j) through (r)(5) of these regulations
(or state equivalents) that were in effect at the time the permit was
issued.  However, this would not be the case if the permit has expired
because the applicant has discontinued construction or failed to
commence construction by the necessary date.  See, 40 CFR 52.21(r)(2).

This approach is consistent with EPA’s practice when the
preconstruction permitting requirements change by virtue of the
designation of an area as a nonattainment area after a PSD permit is in
issued.  In transitional guidance issued by EPA in 1991, EPA explained
that “the area designation in effect on the date of permit issuance by
the reviewing agency determines which regulations (part C or D) apply to
that permit.”  Memorandum from John S. Seitz, Director OAQPS, New
Source Review (NSR) Program Transitional Guidance, page 6 (Mar. 11,
1991).  This memorandum explained further that “where a source
receives a PSD or other permit prior to the date the area is designated
as nonattainment, the permit remains in effect” as long as the sources
meets the conditions necessary to prevent the permit from expiring.  Id.
at 6.

This approach does not apply if the source engages in a major
modification after January 2, 2011 that is not authorized by the
previously issued permit.  Once step 1 of the phase-in begins, if the
PSD requirements for GHGs are applicable to a previously-permitted
source that engages in a major modification not covered by the permit,
such a source will need obtain a new PSD permit to authorize the
modification and that permit may need to include GHG requirements
depending on the level of increase in GHGs that results from the
modification.

3.  Additional Sources for Which PSD Applies in Step 2

In light of the terms of existing PSD regulations and the lead time
provided in this action for sources that will first become subject to
PSD permitting in step 2, we do not believe there is presently a need to
establish transition provisions for sources that will be required to
obtain PSD permits for the first time in step 2 of the phase-in.  As
described previously, under our current PSD permitting regulations, a
new major stationary source or major modification may not begin actual
construction without a PSD permit that meets the applicable
preconstruction permitting requirements.  40 CFR 51.166(a)(7)(iii); 40
CFR 52.21(a)(2)(iii).

Since a permit must be obtained before a major source may begin actual
construction, the major source preconstruction permitting requirements
in sections 51.166 and 52.21 of the regulation do not generally apply to
a source that begins actual construction at a time when it was not a
major source required to obtain a PSD permit.  One exception, however,
is the unique circumstance when a source becomes a major source solely
by virtue of the relaxation of an enforceable limitation on the
source’s potential to emit.  40 CFR 51.166(r)(2); 40 CFR 52.21(r)(4).
But absent these circumstances, PSD preconstruction permitting
requirements do not generally preclude a source from continuing actual
construction that began before the source was a source required to
obtain a PSD permit.  Thus, a source that began actual construction
under the authorization of any previously required minor source or state
construction permit is not required to meet any PSD preconstruction
permitting requirement that becomes applicable after actual construction
begins unless the source engages in a major modification after PSD
permitting requirements are applicable.  Likewise, a PSD permit is not
required after a source begins actual construction based on a valid
determination (by the source or the permitting authority) that the
source need not obtain either a major PSD permitting requirements or and
minor NSR permit.  Based on these provisions in existing regulations,
EPA will not require any sources to which PSD permitting requirements
begin to apply in step 2 to obtain a PSD permit to continue construction
that actually begins before step 2 begins.

However, we will expect phase 2 sources that begin actual construction
in phase 2 (i.e., beginning July 1, 2011) to do so only after obtaining
a PSD permit in accordance with sections 52.21, 51.166, or any
applicable state regulation that meets the requirements of section
51.166.  We recognize the potential for the triggering of step 2 to
result in a change in status where a project may legally have begun
actual construction before step 2 but did not do so and would then need
a PSD permit.  However we also note that we are providing over a year of
lead time before PSD permitting requirements become applicable to step 2
sources.  If projects would be adversely affected by this change in
status, this lead time affords an opportunity for sources planning such
projects to secure appropriate minor NSR permits (which generally take
less than a year to issue), non-applicability determinations, etc. in
time to avoid such a change in status.  If a new or modified source that
would become newly subject to PSD in step 2 plans to begin actual
construction before step 2, it has more than a year to obtain the
applicable preconstruction approvals and begin actual construction.
Likewise, a step 2 source that does not anticipate the ability to begin
actual construction before step 2 begins should have enough lead time to
submit a PSD permit application and obtain the necessary permit without
significantly delaying the project further.  Therefore, we do not think
it is necessary or appropriate to promulgate a transition provision that
would exempt step 2 sources from PSD permitting requirements that will
apply based on construction that begins after step 2 takes effect.

This approach for step 2 sources that have obtained a minor source
construction permit or non-applicability determination differs from the
approach described previously for source that obtained a PSD permit
prior to step 1.  As described previously, a step 1 source that is
authorized to begin actual construction before January 2, 2011 under a
previously-issued PSD permit may begin actual construction under that
permit after January 2, 2011 without modifying the PSD permit to address
GHGs.  However, a step 2 source that was not required to obtain a PSD
permit before Step 2 begins would need to obtain a PSD permit addressing
GHGs if it has not yet begun actual construction prior to step 2, even
if the source had obtained any preconstruction approvals that were
necessary to authorize construction prior to step 2.  This is because
such a step 2 source that begins actual construction after step 2 would
likely be doing so without having any permit meeting the requirements of
paragraphs (j) through (r)(5) of section 52.21, 51.166, or a state
equivalent.  A source that has obtained only a minor source permit prior
to step 2 but that begins actual construction after July 1, 2011 would
violate the requirements of section 52.21(a)(2)(iii), 51.166(a)(7)(iii),
or a state equivalent, unless the source took care to ensure that it was
authorized to construct under a PSD permit or could demonstrate that the
source’s minor source construction permit makes clear that requirement
of paragraphs (j) through (r)(5) of sections 52.21, 51.166, or a state
equivalent would be met by the source even though such a permit was not
nominally a PSD permit.  This difference in approach for non-PSD sources
is driven by the terms of sections 52.21(a)(2)(iii) and
51.166(a)(7)(iii).  Since we have not provided any prior notice that we
might be considering revisions to sections 52.21 and 51.166 to address
this topic, we are unable to revise the regulations in this action to
achieve the same result for non-PSD sources as for PSD sources.
Furthermore, this difference in approach is not unreasonable since
non-PSD sources will not trigger permitting for GHG until step 2 (only
anyway PSD source trigger in step 1).  Thus sources will have until July
1, 2010, an additional 6 months of lead time, to prepare for the
transition described here.

EPA has previously promulgated exemptions that have authorized some
sources that were not previously subject to the PSD regulations to
commence construction on the basis of minor source permits after the
date new PSD requirements have took effect in 1978 and 1980.  See e.g.,
40 CFR 52.21(i)(1)(iv)-(v).  There is a notable distinction between
these provisions, which use the term “commence construction,” and
the terms of sections 52.21(a)(2)(iii) and 51.166(a)(7)(iii), which use
the term “begin actual construction.”  Commence construction is
defined more broadly than begin actual construction to include obtaining
all necessarily preconstruction approvals and either beginning actual
on-site construction or entering into binding contracts to undertake a
program of actual construction.  40 CFR 52.21(b)(9); 40 CFR
51.166(b)(9).  The term commence construction is also defined in the
CAA.  42 USC 7479(2)(A).  Among other purposes, the term “commence
construction” is generally used in the Act and EPA regulations to
distinguish construction activities that are exempt from new PSD
permitting requirements from those that are not.  See e.g., 42 USC
7475(a); 40 CFR 52.21(i)(1)(i)-(v).  In the absence an explicit
exemption in the CAA or the PSD regulations that uses the term
“commence construction,” we do not believe we can use the date a
source “commences construction” under a minor source construction
permit approval as a demarcation point for step 2 sources that may
continue ongoing construction activities without having to obtain a PSD
permit based on emissions of GHGs.  Since we did not provide prior
notice of an intention to adopt transition provisions applicable to this
situation, we are unable to adopt such an exemption in this action that
applies the term commence construction in this context.  Consequently,
the approach described previously applies the term “begin actual
construction” based on the language in sections 52.21(a)(2)(iii) and
51.166(a)(7)(iii).

4.  Transitional Issues for Title V Permitting

	Since the title V permitting regulations already include a robust set
of provisions to address the incorporation of new applicable
requirements and other transitional considerations, we do not see
grounds to establish unique transition or grandfathering provisions for
GHGs in this action.  Furthermore, since the purpose of title V is to
collect all regulatory requirements applicable to a source and ensure
compliance, we do not believe special exemptions for GHG requirements
are likely to be justified.  The existing title V rules do not provide
any exemptions that relieve the obligation to incorporate all applicable
requirements into a title V permit.  However, the title V regulations
contain numerous provisions that allow a reasonable period of time for
incorporating new applicable requirements or applying for a title V
permit that was not previously required.  Transitional issues for
incorporation of GHG requirements into title V permitting generally
involve questions in the following categories:  (1) permit application
requirements for sources not previously subject to title V that will
become subject to title V requirements in step 2 of the phase-in; (2)
the need for updates or amendments to title V permit applications that
are pending when GHGs become subject to regulation in step 1 of the
phase-in; and (3) the incorporation of new applicable requirements for
GHGs into existing permits for sources currently subject to title V.

With respect to the first category, a title V source applying for the
first time must submit its permit application within 12 months after the
source “becomes subject to the [operating] permit program” or such
earlier time that the permitting authority may require (see section
70.5(a)(1)).  Sources not otherwise subject to title V can become major
sources subject to title V due to emissions of GHG no sooner than July
1, 2011.  If a source becomes “subject to the [operating] permit
program” on July 1, 2011, then its permit application under the title
V operating permit program would typically have to be submitted no later
than July 1, 2012.  The title V program has traditionally provided
significant flexibility to state programs in setting deadlines for
permit application submittal, consistent with the statutory
requirements, and EPA does not believe, as several commenters suggested,
that it is appropriate or necessary to limit state discretion in this
regard in this action, provided the state’s deadlines are consistent
with the statutory requirements.  Also in this final rule, EPA has
reduced the number of sources that will potentially be subject to title
V as a result of GHG emissions in step 2, compared to the proposal,
because we believe permitting additional sources in step 2 would
overwhelm the permitting process and be contrary to congressional
intent, thus, helping states to manage the transition to permitting GHG
sources.  In the prospective step 3 rulemaking, we will continue to
consider approaches to phasing-in title V applicability for sources of
GHG emissions, which will also potentially help states with transitional
issues, consistent with congressional intent.

There are also existing regulations relevant for the second category of
GHG transition issues, where sources currently subject to title V have
title V permit applications pending with a permitting authority as of
January 2, 2011.  Where additional applicable requirements become
applicable to a source after it submits its application, but prior to
release of a draft permit, the source is obligated to supplement its
permit application.  See 40 CFR 70.5(b); 71.5(b).  Furthermore, title V
permits are generally required to contain provisions to assure
compliance with all applicable requirements at the time of permit
issuance.  See CAA section 504(a); 40 CFR 70.6(a)(1); 71.6(a)(1).  If a
permitting authority determines that additional information is necessary
to evaluate or take final action on an application (e.g., because of
uncertainty over whether a draft permit assures compliance with all
applicable requirements), it may, and should, request additional
information from the source in writing and set a reasonable deadline for
a response.  See 40 CFR 70.5(a)(2); 71.5(a)(2).

Likewise, the existing title V regulations provide sufficient transition
for the third category of issues, where a source has additional
GHG-related applicable requirements (such as the terms of a PSD permit)
that must be incorporated into its existing title V permit.  Where a
source is required to obtain a PSD permit, the source must apply for a
title V permit or permit revision within 12 months of commencing
operation or on or before such earlier date as the permitting authority
may establish (or prior to commencing operation if an existing title V
permit would prohibit the construction or change in operation).  See 40
CFR 70.5(a)(1)(ii); 71.5(a)(1)(ii); see also sections 70.7(d) and (e);
71.7(d) and (e) (permit modifications).  In addition, where a source
becomes subject to additional applicable requirements, the permitting
authority is required to reopen the permit to add those applicable
requirements if the permit term has three or more years remaining and
the applicable requirements will be in effect prior to the date the
permit is due to expire.  See 40 CFR 70.7(f)(1)(i); 71.7(f)(1)(i).

Finally, EPA notes that the existing title V regulations require sources
to furnish permitting authorities, within a reasonable time, any
information the permitting authority may request in writing to determine
whether cause exists for modifying, revoking, and reissuing, or
terminating the permit, and for other reasons, and further provide that
permitting authorities shall reopen and revise permits if EPA or the
permitting authority determine that the permit must be revised or
revoked to assure compliance with applicable requirements.  See sections
70.6(a)(6)(v);71.6(a)(6)(v) and sections 70.7(f)(1)(iv); 71.7(f)(1)(iv).

Thus, EPA believes that the existing title V regulations provide an
adequate regulatory framework for managing the transition to
incorporating GHG requirements in title V permits and additional
specific exemptions or transition rules for title V are not currently
warranted.

8.2.2  Requests for Delays in Implementation

Comment:

Several commenters assert that EPA has discretion to delay the
implementation of GHG permitting as described in the proposal in various
ways using various mechanisms under the “absurd results” and
“administrative necessity” doctrines.  Examples of the types of
comments received include the following:

If EPA has the legal authority to defer regulation for sources emitting
equal to or less than 25,000 tpy of GHGs, then by implication, EPA also
would have the authority to exempt sources above 25,000 tpy of GHG
emissions, if it is necessary to do so to avoid “absurd results”
(4771, 4863, 5305, 5922) and “administrative infeasibility.”  (4771,
5922)

EPA should delay promulgation of the final automotive emission CO2 rule,
now scheduled for March 2010, to ensure that EPA’s proposed BACT
guidance is available for public comment, and that states are in
position to implement PSD and BACT reviews pursuant to EPA’s final
guidance.  In the mean time, the companion CAFE rule that will be issued
by NHTSA in March 2010 will require equivalent CO2 emission limits on
new automobiles as the final automotive emission CO2 rule.  (5342)

EPA can finalize just the CAFE standards to allow time to formulate an
efficient approach to stationary source regulation without sacrificing
expected light-duty vehicle efficiency improvements.  (5714)

EPA should delay promulgation of the GHG emission standards portion of
the Motor Vehicle GHG rule until mitigating measures are lawfully in
place.  There is little environmental benefit from regulating GHGs under
this rule and the fact that the timing of the Motor Vehicle GHG Rule is
discretionary means that the PSD Tailoring Rule cannot be justified
under the “absurd results” or “administrative necessity”
doctrine.  (4870)

EPA has an obligation to respond to the remand from Massachusetts v.
EPA, but EPA retains significant discretion on taking action concerning
regulation of GHGs under the CAA (4771, 5131, 5183, 5300, 5343, 6414,
7131, 8283) and regarding timing of rules based on this remand (4870,
5318, 6414, 8283).  Two commenters add that the Court of Appeals for the
District of Columbia (“D.C. Circuit”) has already denied a petition
to compel EPA action in response to Massachusetts v. EPA  (5278, 5140).
For that reason:

EPA has clear legal authority to defer promulgation of section 202 GHG
emission standards and thereby avoid the need for the PSD Tailoring Rule
altogether, even now that the Agency has proceeded to finalize the
endangerment and cause or contribute findings under CAA section 202
(4870).  One commenter (5318) adds that EPA needs to conduct further
evaluation of the numerous legal questions surrounding the Tailoring
Rule and evaluate the impact on state and local permitting authorities
in order to insure that the Unfunded Mandates Reform Act (UMRA) of 2005
is not violated.

EPA is well-justified in deferring action on a CAA GHG regulatory
program to provide a reasonable period of time for EPA, states, and
regulated entities to prepare for such a program, given the enormous
difficulties of regulating GHGs under the CAA (5131), and to ensure that
its regulatory program in fact will not create more problems than it
solves (5343).  One commenter adds that EPA should take the time to
gather adequate public input on this plan and carefully examine all of
the consequences of this action (7131).

EPA should simply defer regulating GHG emissions under the PSD and title
V programs to allow Congress the time and opportunity to develop a GHG
regulatory mechanism outside the CAA.  Congress never contemplated, and
certainly never intended, that GHG emissions be regulated under the CAA.
 (5300)

Various commenters state that a delay is necessary to evaluate legal
questions and to accommodate inevitable legal challenges because the
court system needs to test the legality of the Tailoring Rule (5184,
5504, 5524, 5606, 5785, 8015) and the endangerment finding, and as such,
EPA should consider suspending implementation of this proposed rule
(4555).

Several commenters believe that a delay is also necessary to give
everyone time to prepare for the new GHGs requirements because:

EPA has not given the states sufficient time to revise their SIPs for
GHG permitting (2504, 3278, 3858, 3916, 3918, 4019, 4238, 4239, 4515,
4519, 4521, 4630, 4694, 4691, 4860, 4864, 4866, 4871, 4989, 5061, 5063,
5073, 5081, 5084, 5142, 5304, 5314, 5338, 5339, 5343, 5443, 5528, 6679,
7296, 7935, 8747, 16411).

EPA must delay the rule at least for more than six months (2504, 3278,
3918, 4019, 4238, 4239, 4860, 4864, 4866, 4871, 4989, 5061, 5081, 5084,
5314, 5339, 5443, 5528, 6679, 6681, 7296, 7935) until more programmatic
systems have been developed (4555, 5143) and to give states sufficient
time to: (1) revise their regulations (3307, 4515, 4524, 4691, 5134,
5711, 16411), (2) contribute to the development of BACT (5342) or any
other guidance (4863, 5276, 5305), (3) train personnel about the new PSD
and BACT requirements (4515, 4691, 5342), (4) prepare for the massive
influx in permit requests (4863, 5184, 5305, 5504, 5606, 5785, 8015),
and (5) allow for an orderly transition and avoid economic disruption
(4749, 5276, 5301, 16411).

EPA must allow for enough time to resolve all implementation issues.
(3858, 5143)

A deferral of 4-5 years is necessary to resolve implementation issues.
(16411)

It can take up to 2 years to change state rules, hire, and train new
people (4154, 4519, 4521, 5061, 5135, 5443, 5711, 7296) and SIP approval
of a state rule takes between 12 to 20 months.  (3858)

EPA’s suggestion to use emergency rulemaking procedures is unworkable
because there must be an imminent threat to public health, safety, or
the environment (4521), adjustments to thresholds and fees under this
rule do not rise to that threat level, and such rules can only stay in
place for 90 days and can be renewed only once.  (4521)

Sources will need sufficient time to collect CO2 emissions data for
title V renewal applications that may be due shortly after this rule
takes effect.  (3757, 3968)

The lack of BACT guidance remains a massive obstacle to successful
implementation of this rule no matter what applicability thresholds are
adopted.  (3282)

Thus, concerning timing, some of these commenters recommend that:

EPA should allow states 12 months before this rule applies to major PSD
sources.  (4863, 5228, 5305)

EPA should allow for a 1- (5314) to 2-year (4515/4691) extension of the
implementation of these requirements, starting from the date that the
vehicle GHG standards become effective.  (4515, 4691, 5314)

EPA should extend the applicability date for both programs to no sooner
than 1 year after the effective date of any rule making GHGs a regulated
NSR pollutant.  (4767, 4800)

EPA should phase-in the title V program over 5 years.  (4767, 4800)

EPA should delay applicability for GHGs other than CO2 for at least
another year from when the vehicle GHG standards become effective to
allow EPA and the states to further understand the workload and title V
applicability to pollutants with high GWP.  (5134)

EPA should wait until the GHG Mandatory Reporting Rule data is available
in order to perform a more thorough evaluation of the impacted universe
(4903, 5339) and to minimize the burden on firms seeking permits (4513).

EPA should allow the implementation of this rule to begin with
certification of MY 2012 vehicles.  (3918, 4019, 4238, 4864, 4866, 5057,
5084, 6681), providing 15 months for states to take the necessary
actions to implement the rule.

EPA should postpone any actions that may trigger PSD and title V until
it has conducted a thorough assessment of the workability and
defensibility of the proposed streamlining techniques (5317) or has
developed an effective means of streamlining implementation (4862, 4903,
5142, 5183, 5773, 16411).  For example, EPA stated in the preamble of
the Tailoring Rule that it would take 3 to 4 years to develop and
implement the various potential techniques needed to “streamline”
and reduce the burden of PSD and title V permitting (16411).

EPA must provide an implementation timeframe for the establishment of
control technologies for reducing CO2 emissions.  (5142)

EPA should allow a 3- to 5-year phase-in of the Tailoring Rule to allow
sources the time necessary to make emissions reductions and avoid PSD
applicability.  (3278)

At a minimum, a title V application for a major sources of GHG emissions
(but a minor source of criteria and HAPs) should not be due any earlier
than one year after the first substantive compliance date of any GHG
requirement applicable to that source (e.g., NSPS).  (4871)

EPA clearly has not mapped out a process for implementation that will
foster a climate of investment and regulatory certainty.  It is not
clear the control technology for BACT for GHG is commercially-viable,
and the interrelation of other EPA regulations, such as the GHG
Mandatory Reporting Rule, and companion provisions within the proposed
Tailoring Rule, are unclear.  (4862)

	Other commenters request a delay in order to develop an adequate impact
assessment:

EPA needs to conduct an adequate impact evaluation (0331, 4018, 4123,
5145, 5318, 5451, 5744, 5787, 5886, 7136, 8585, 15050), including the
economic consequences (8272), and the burdens and unforeseen
consequences of these rules (2831).

EPA needs to further evaluate the impact on state and local permitting
authorities in order to insure that UMRA of 2005 is not violated.
(5304, 5524)

EPA should conduct a comprehensive analysis (including convening a SBAR
panel) of the impacts of this rule (5088, 5771, 5789, 5236) as well as
the other GHG rules (including the endangerment finding) on all small
businesses (4867).

Members of Congress and agency officials should evaluate the effect that
the proposed regulation will have on local environmental and economic
initiatives (4768) because there are alternative approaches that would
be less expensive, less burdensome, and more economically sound.

Various commenters believe EPA should delay or stop implementation of
GHG regulation until Congress completes their current debate on GHG
regulation because:

Curbing GHG pollution should be fully debated by Congress and,
therefore, the rulemaking should be delayed until impact projections can
be made (7128) or it is determined that it is the policy of the U.S. to
regulate GHGs (5784).

The CAA is not the appropriate tool for addressing the regulation of GHG
emissions and that the Agency should delay long enough to allow Congress
to take action.  (4771, 5169, 5573, 14710)

EPA should withdraw the proposed rule and publish a Federal Register
notice announcing (what they feel is)  more reasonable interpretation of
the overall applicability of the PSD program that excludes GHGs.  (5140,
5278)

EPA should abandon or defer the Tailoring Rule and GHG regulation under
the CAA.  (4990, 5056, 5074, 5085, 5142).

Congress can use this delay to: (1) consider necessary and meaningful
climate legislation/public policy (3307, 3607, 4021, 4903, 5088, 5141,
5258, 5525, 5713, 5803, 8071), (2) alleviate the burden of this
regulation on EPA (3607), (3) develop an implementation plan that can be
agreed upon (5072).  One commenter recommends that EPA should withdraw
and re-propose the Tailoring Rule after Congress fully considers the
policy and economic implications of the Tailoring Rule (5141).

EPA should withdraw the Tailoring Rule as it is conceived on a legally
precarious theory and agriculture will inevitably be subject to CAA
permitting.  At the very least, EPA should delay action until Congress
finishes work on GHG regulation.  (5303)

It should be Congress, not the Agency that develops such a
“breathtaking” scope of regulation.  (4861)

Congress is already considering climate change legislation and will
provide a more comprehensive response to climate change and GHG
emissions.  (5076, 5103)

Congress can pass compromise climate legislation alleviating the burden
on the EPA.  (5803)

	One commenter (7295) did not request a delay, but did state that
changes this significant should, at a minimum, be debated by Congress
and should not be decided unilaterally by EPA.  Another commenter that
did not specifically request a delay or hold on the rule opines that, if
EPA implements the NSR and title V programs for GHGs, the applicability
of these programs should only be considered interim and should
“sunset” upon the commencement of a GHG program enacted by Congress
(7076).

	Several commenters believe that a delay is needed to allow time (1) for
the American public to review the Tailoring Rule proposal (3741, 4123,
4209, 4631, 4953, 5184, 5454, 5767, 5784, 7131), (2) for EPA to clarify
why the Tailoring Rule is needed, and (3) for EPA to clearly and
accurately explain its costs (5784).

	Various commenters believe delays are necessary to give Congress,
scientists, and the public time to evaluate the science behind these
rulemakings.

Appropriate scientific and regulatory documentation of the environmental
or climate change benefits is needed to support the Tailoring Rule and
Congress needs to enact a law allowing what we proposed.  (5787)

EPA should consider scientific facts regarding GHGs on the health of our
citizens and the effect on global warming.  (4120)

The recent allegations of bias and lack of peer-reviewed science on the
part of the IPCC mean that all underlying data supporting the findings
in the IPCC report should be available for review by EPA and the science
community.  (5607)

Response:

Many of the changes we have made to the Tailoring Rule since proposal,
discussed in this and other sections of the RTC and in the preamble for
the final rule, address many of the specific concerns that prompted the
commenters’ to request delays in implementation (e.g., we increased
the GHG applicability threshold for step 2 from 25,000 to 100,000 tpy
CO2e and made other changes with respect to GHG applicability, compared
to proposal, which effectively limits the number of sources potentially
subject to permitting during the early stages of implementation).

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

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

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

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

	The Court properly noted that EPA retained "significant latitude" as to
the "timing ... and coordination of its regulations with those of other
agencies" (id.).  However it has now been nearly three years since the
Court issued its opinion, and the time for delay has passed.  In the
absence of these final standards, there would be three separate federal
and state regimes independently regulating light-duty vehicles to
increase fuel economy and reduce GHG emissions: NHTSA’s CAFE
standards, EPA’s GHG standards, and the GHG standards applicable in
California and other states adopting the California standards. This
joint EPA-NHTSA program will allow automakers to meet all of these
requirements with a single national fleet because California has
indicated that it will accept compliance with EPA’s GHG standards as
compliance with California's GHG standards.  74 FR at 49460.  California
has not indicated that it would accept NHTSA’s CAFE standards by
themselves.  Without EPA’s vehicle GHG standards, the states will not
offer the federal program as an alternative compliance option to
automakers and the benefits of a harmonized national program will be
lost.  California and several other states have expressed strong concern
that, without comparable federal vehicle GHG standards, the states will
not offer the federal program as an alternative compliance option to
automakers.  Letter dated February 23, 2010 from Commissioners of
California, Maine, New Mexico, Oregon and Washington to Senators Harry
Reid and Mitch McConnell (Docket EPA-HQ-OAR-2009-0472-11400).  The
automobile industry also strongly supports issuance of these rules to
allow implementation of the national program and avoid “a myriad of
problems for the auto industry in terms of product planning, vehicle
distribution, adverse economic impacts and, most importantly, adverse
consequences for their dealers and customers.”  Letter dated March 17,
2010 from Alliance of Automobile Manufacturers to Senators Harry Reid
and Mitch McConnell, and Representatives Nancy Pelosi and John Boehner
(Docket EPA-HQ-OAR-2009-0472-11368).  Thus, without EPA’s GHG
standards as part of a federal harmonized program, important GHG
reductions as well as benefits to the automakers and to consumers would
be lost.165 In addition, delaying the rule would impose significant
burdens and uncertainty on automakers, who are already well into
planning for production of MY 2012 vehicles, relying on the ability to
produce a single national fleet.  Delaying the issuance of this final
rule would very seriously disrupt the industry’s plans

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

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

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

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

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

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

Comment:

Some commenters contend EPA has the discretion to choose a date besides
the “effective date” of the rule as the date where a pollutant
becomes “subject to regulation” or on which compliance requirements
would apply (5088, 5124).  This date can be the “first compliance
date” instead of the “effective date” of the rule because: (1)
neither the statute, nor its accompanying regulations, mandate the
specific trigger date(s) and the long-held judicial doctrines of absurd
results and administrative necessity support even agency action that
would deviate from statutory language, if such action is necessary to
avoid results contrary to Congressional intent or due to administrative
necessity (4298), (2) it is reasonable for EPA to interpret the timing
of “subject to regulation” (based on section 165(a)(4) of the CAA
(5143, 5147)) to start at the time emission control requirements are
actually applied to a regulated entity (4862, 5058, 5110, 5111, 5134,
5181, 5236, 5390, 5922) and (3) the complexity of adapting the existing
permitting programs to GHGs justifies this definition (4693, 4867,
5180).  For these reasons, some commenters have different
recommendations on what the “first compliance date” should be for
regulating GHGs under the PSD and title V programs.  They suggest:

January 2, 2011 (the first date on which a 2012 model year vehicle can
be produced) because only after the “first substantive compliance
date” would the new standard be enforceable in a manner that
“actually controls” and reduces emissions of GHGs (4298, 5180).  One
commenter adds that no automobile will be subject to control before
January 2, 2001, and compliance certification will not be needed until
March 2013 for the 2012 MY.  (5111)

October 1, 2011 (the start date of the first model year to which the
rules apply) because, if EPA does go ahead with the LDVR (which most of
these commenters do not support), EPA should recognize that PSD and
title V would not be triggered until the LDVR “takes effect.”
(4122, 4318, 4522, 4523, 4952, 4992, 5038, 5058, 5080, 5089, 5114, 5128,
5317, 5327, 5342, 5601, 5741, 5922, 6459, 8301)

No specific date, but they say that "actual control" of GHGs under the
section 202 rule does not occur until: (1) such time as model year 2012
vehicles are certified (4693, 4867), (2) the date when manufacturer
fleets must comply with the attribute-based standard created by the
regulation for the control of CO2 (5134), or (3) the point in time at
which compliance with other MY 2012 GHG standards is considered to
occur.  (4862, 5110, 5134, 5181, 5236, 5390)

Response:

On December 18, 2008, EPA issued a memorandum, "EPA's Interpretation of
Regulations that Determine Pollutants Covered by Federal Prevention of
Significant Deterioration (PSD) Permit Program" (known as the “Johnson
Memo” or the “PSD Interpretive Memo,” and referred to in the
preamble of this final rule as the “Interpretive Memo”) that set
forth EPA’s interpretation regarding which EPA and state actions, with
respect to a previously unregulated pollutant, cause that pollutant to
become “subject to regulation” under the Act.  Whether a pollutant
is “subject to regulation” is important for the purposes of
determining whether it is covered under the federal PSD and title V
permitting programs.  The Interpretive Memo established that a pollutant
is “subject to regulation” only if it is subject to either a
provision in the CAA or regulation adopted by EPA under the CAA that
requires actual control of emissions of that pollutant (referred to as
the “actual control interpretation”).  On February 17, 2009, EPA
granted a petition for reconsideration on the Interpretive Memo, and
announced its intent to conduct a rulemaking to allow for public comment
on the issues raised in the memorandum and on related issues.  EPA also
clarified that the Interpretive Memo would remain in effect pending
reconsideration.

On March 29, 2010, EPA signed a notice conveying its decision to
continue applying (with one limited refinement) the Interpretive
Memo’s interpretation of “subject to regulation”
(“Interpretation of Regulations that Determine Pollutants Covered by
Clean Air Act Permitting Programs“).  See 75 FR 17004.  EPA concluded
that the “actual control interpretation” is the most appropriate
interpretation to apply given the policy implications.  However, we
refined our interpretation in one respect: we established that PSD
permitting requirements apply to a newly regulated pollutant at the time
a regulatory requirement to control emissions of that pollutant “takes
effect” (rather than upon promulgation or the legal effective date of
the regulation containing such a requirement).  In addition, based on
the anticipated promulgation of the LDVR, we stated that the GHG
requirements of the vehicle rule would take effect on January 2, 2011,
because that is the earliest date that a 2012 MY vehicle may be
introduced into commerce.  In other words, the compliance obligation
under the LDVR does not occur until a manufacturer may introduce into
commerce vehicles that are required to comply with GHG standards, which
will begin with MY 2012 and will not occur before January 2, 2011.  We
also reiterated EPA’s interpretation that the 100 tpy major source
threshold for title V is triggered only by pollutants “subject to
regulation” under the Act, and we defined and applied that term for
title V purposes in the same way that we did for PSD purposes.  That is,
we stated that a pollutant is “subject to regulation” if it is
subject to a CAA requirement establishing “actual control of
emissions;” that a pollutant is considered “subject to regulation”
for title V purposes when such a requirement “takes effect”; and,
based on the anticipated promulgation of the LDVR, that the GHG
requirements of the vehicle rule would take effect on January 2, 2011.

On April 1, 2010, we finalized the LDVR as anticipated, confirming that
manufacturer certification can occur no earlier than January 2, 2011.
Thus, under the terms of the final notice for the Interpretive Memo,
GHGs become subject to regulation on that date, and PSD and title V
program requirements will also begin to apply upon that date.

8.3  Requests for Specific Exemptions/Deferrals from Applicability

	Although we did not propose any categorical exemptions, many commenters
request exemptions from major source and major modification
applicability determinations under title V and PSD for certain types of
GHG-emitting sources or certain types of GHG emissions.

8.3.1  Source Categories

Comment:

Many commenters request complete and permanent exemptions from the
applicability or other requirements of the permitting rules with respect
to GHG emissions as set forth in the proposal with respect to a wide
variety of sources, source categories, and types of emissions.

Requests for exemptions for small sources, such as farms, homes, and
other residential or commercial buildings:

Smaller sources such as residential homes (4522), commercial buildings
(4522), retail stores (4522), small space heaters (4522), and pool
houses (4522) should be exempt from GHG permitting.  Another commenter
believes that sources such as agricultural, residential, and small
businesses (as defined by the SBA) should be exempted from this rule
during the first 5-7 years to allow EPA and permitting authorities time
to gain experience with the program (5367).  In addition, small
businesses and service providers must be provided with education,
resources, and tools to help small business owners understand whether
and how they will be impacted by the rule and how they can report and
comply (5367).

Four commenters (3953, 4572, 5168, 5743) state that EPA anticipates at
some future date to require the “absurd results” of having entities
emitting more than 100 or 250 tpy of GHG to comply with PSD and title V
permitting requirements.  Thus, under the Tailoring Rule, it presumably
is not a question of if permitting will be applied to farms, ranches and
other small entities, but a question of when such requirements will be
applied.  The distinction between exemption and deferral for such
entities becomes important when considering that PSD is a
pre-construction program because exempt entities can begin building, but
deferred entities may not be on as solid legal ground.  Thus, small
entities like farms and ranches will not escape PSD or title V
requirements, even with the Tailoring Rule.

The semiconductor industry should be exempt (5141, 5143), including
solar and LED (8640); or at least defer action on the semiconductor
industry pending further study of alternatives for this industry (8460)
because:

PSD is ill-suited to regulate GHG from the semiconductor industry.
(8640)

These sources have a small contribution to the total GHG inventory,
comprising only 0.1 percent of the total U.S. inventory of GHG.  (5141,
5143, 8640)

The industry is making substantial efforts to reduce GHG emissions under
a partnership with EPA.  (5143)

Significant competitiveness issues for this industry to be permitted
(5141, 5143, 8640).  It is not realistic for this industry to be subject
to PSD permitting considering the substantial lead time needed to
conduct monitoring and prepare an application (8640).

The high GWP factors for the GHGs emitted by this industry will burden
them with permitting.  (5141, 5143)

For the semiconductor industry, short of an outright exemption, one
commenter (5141) urges EPA to adopt other approaches to minimize
burdens.  At a minimum, such approaches should include a deferral until
streamlining mechanisms become available, or a separate regulatory
regime for the high GWP emissions, and different thresholds, especially
for PFCs, which may trigger permitting at low volumes.

Energy-intensive trade-exposed (EITE) industries, industries that
consume a great deal of energy and that are subject to intense
international competitiveness should be exempted pending further
analysis of the impacts on those industries, and pending international
agreements covering industrial GHG emissions (4771, 5169, 5737).  If not
exempted, regulation of the manufacturing/industrial sector, or at least
the EITE producers should be delayed until the “second phase” of
regulation, after 6 years (5737).  EPA has not carefully considered the
environmental and economic consequences of this action because if we
had, we would have exempted them for several reasons, including that
other countries typically exempt similar sources from GHG cap and trade
programs because the industries are making significant energy efficiency
improvements absent GHG regulation, and because permitting such sources
may cause many facilities to move to countries that have less regulation
or no regulation for GHGs.

Regulation of the glass manufacturing industry will not achieve CO2
emission reductions for the foreseeable future.  Process emissions
account for 20-30 percent of emissions, but there are no substitute raw
materials to reduce emissions.  Glass manufacturers already use
low-carbon fuels and recycle scrap glass to the extent possible.  (4771,
5169)  In addition, glass products (e.g., windows and windshields) are
often used to meet specified energy efficiency standards, and are used
in solar cells.  (4771)

The PSD program should exclude calcination emissions to encourage energy
efficiency projects (5133).  It is pointless to subject process
emissions to the PSD program because it is already known that BACT for
calcination emissions is no additional controls and fuel costs alone are
sufficient to ensure that new and modified kilns will utilize the most
energy efficient designs that are economically and technologically
available.  In addition, because less than 5 percent of the U.S.’s GHG
emissions are from industrial process emissions, exclusion of
calcination emissions from the PSD program will not have a material
effect on air quality or global warming.

Commenter 4112 requests that EPA exclude from the PSD significance
analysis those GHG emissions resulting from incidental combustion where
the process creates heat and the emissions are de minimis.  The
commenter states that their operations include carbon activation and
reactivation processes that are conducted in heated units where the
primary fuel is natural gas and the carbon being processed, or in the
case of regeneration, a combination of natural gas and the adsorbates on
the spent carbon.  In the activation process it is necessary to burn
some of the carbon to activate it.  The fact that the process creates
heat that is used in the activation is not controllable from a GHG
reduction perspective.

Commenter 4112 requests that EPA exclude process-based emissions similar
to the GHG Mandatory Reporting Rule.  The GHG Mandatory Reporting Rule
does not require sources within the general stationary fuel combustion
source category to monitor and report process-based emissions because
EPA recognized that such process emissions are negligible.  See 40 CFR
98, subpart C.

Natural respiration from poultry should be excluded from GHG regulation
applicability determinations because: (1) the U.S. agricultural sector
was responsible for less than 6 percent of total U.S.GHG emissions and
less than a tenth of that 6 percent (7.6 percent) was attributable to
poultry production, (2) approximately 90-93 percent of GHG emissions
from poultry farms are attributable to natural bird respiration or
breathing (only 7-10 percent is associated with poultry litter) and the
IPCC itself has excluded natural respirations from consideration in its
methodology for estimating GHG emissions (5245).

EPA should clarify how it will address GHG emissions from the solid
waste management sector, such as fugitive emissions, biogenic emissions,
and "common control” (5391).  EPA should be consistent with NSPS
applicability determinations that exclude landfills that closed prior to
November 8, 1987 (4951).  The 25,000-tpy threshold will cause many old
closed landfills to be brought into this rule, while the GHG Mandatory
Reporting Rule exempts landfills that were closed prior to 1980 (4951).

Commenter 8461 inquires whether EPA is planning on exemptions for GHGs
used or emitted from military, warfare, and security operations.

Small electric generating units should not become subject to PSD or
title V (4122, 4318, 4523, 4992, 5080, 5038, 5089, 5114, 5128, 5257,
5317, 5327, 5601, 5741, 5788, 6459, 8301).  EPA did not seriously
consider the impacts on small entities that emit above the 25,000-tpy
threshold, which may include, among many others, small municipal
electric utilities, small rural electric cooperative generators,
automobile service centers, and small diesel generators in rural or
remote areas.  These smaller facilities have more in common with
commercial establishments EPA proposes defer over the long term, also
citing SBA concerns over small entities that emit more than 25,000 tpy
of CO2.

Emergency generators should be exempt or EPA should increase the
applicability thresholds sufficiently to ensure that they do not become
subject to the GHG requirements because:

Some generators may feel the need to accept a limit on hours of
operation to avoid PSD or title V requirements, and that could impair
communities’ ability to obtain a reliable supply of electricity in
emergency situations.  (4122, 4318, 4523, 4749, 4770, 4992, 5080, 5038,
5089, 5114, 5128, 5257, 5317, 5327, 5601, 5741, 6459, 8301)

Emissions from these emergency generation units are truly negligible
including those generating units that meet the “black start”
definition except where those units run more than 1,000 hours.  (4122,
4318, 4523, 4992, 5038, 5052, 5080, 5089, 5114, 5128, 5257, 5327, 5601,
5741, 6459, 8301)

Becoming subject to PSD and BACT requirements could jeopardize their
ability to meet the Nuclear Regulatory Commission (NRC) Reliability and
Availability requirements, which would place nuclear power plants at
risk of not being able to perform in emergency situations and thus not
complying with their NRC-required Emergency and Security Plans.  (5788)

Research and development facilities, including national labs involved in
defense and homeland security should be exempt from the GHG
requirements, especially minor GHG emissions from research activities,
to avoid confusion with EPA’s GHG Mandatory Reporting Rule.  (8546)

The EPA should defer regulation of SF6 in the transmission of
electricity until the second phase of the PSD permit program because
there are no known SF6 controls and SF6 is used to prevent arcing and
death.  If SF6 is regulated, it should be controlled through BMPs –
possession stewardship and good tank recycling practices for SF6
delivery, use, and return of tanks.  (5052)

Response:

Although the proposal for the Tailoring Rule generally addressed how the
statutory requirements for major source applicability (100/250
thresholds) could be phased-in in ways that would offer relief to
traditional and non-traditional sources, such as residences, farms,
small business, and semiconductor manufacturers, it did so by
establishing relatively high CO2e thresholds during the early
implementation period and lowering the thresholds over time as
streamlining mechanisms become available to reduce administrative
burdens.  We did not propose any permanent exemptions of any kind or
temporary exemption based on source category.  Also, note that the
proposal discussed energy efficiency, process efficiency improvements,
recovery and beneficial use of process gases, and certain raw material
and product changes in the context of short-term, low-cost means of
achieving GHG emission reductions for small-scale stationary sources,
but not in the context of exemptions.

As discussed previously, we are still considering whether permanent
exemptions from the statute are justified for GHG permitting based on
the “absurd results” legal doctrine.  However, we do not have  a
sufficient basis to take final action at this time to promulgate any of
the suggested exclusions on the grounds, described previously, suggested
by the commenters.  We did not propose any sort of permanent exclusion
based on an interpretation of the statutory provisions of PSD or title
V.  Regardless of any arguments about the legality and advisability from
a policy or economic standpoint of such exclusions, we would need to
propose a PSD and/or title V specific legal and policy rationale that
fits within the CAA, to specify details regarding our implementation
approach, and to provide an opportunity for public comment before
adopting any such exclusion.  Therefore we are not doing so here.  We
note, however, that nothing in this rule forecloses the opportunities we
may have to explore such options in the future.  Therefore, we are
taking no action in this rule on these various commenters’ requests
for exclusions.

Some commenters also recommended that we create exclusions for their
particular source categories for the specific purpose of avoiding
overwhelming permitting burdens.  We did solicit comment on alternative
approaches to burden relief in the proposal.  Some commenters suggested
that the “administrative necessity” or “absurd results”
rationale, each of which would be based on extraordinary administrative
burdens, could be used to create at least temporary exclusions that
would allow more sources to escape permitting than what we proposed.
However, commenters have not, to date, provided specific information
about the costs and administrative burdens associated with permitting
their source categories.  In addition, we have finalized steps 1 and 2
using the threshold-based approach, which applies the various legal
doctrines, in the context of the Chevron framework, in a way that
effectively exempts all small sources during this part of the phase-in,
while assuring the administrability of the permitting programs for the
sources that remain subject to them.  Furthermore, specifically with
respect to high GWP gases as discussed previously, we are maintaining
the statutory mass-based threshold, and this should address
commenters’ concerns regarding the inclusion of those gases.
Therefore, we reiterate that we are not finalizing any such exclusions
in this rule and, as noted above, we are not taking final action in the
commenters’ requests for exclusions.

Concerning the comment that we did not take appropriate economic and
environmental considerations into account for this rulemaking action, we
disagree.  The approach we finalize in this notice for steps 1 and 2
minimizes economic burdens by limiting permitting to the largest GHG
emission sources.  We further note that the PSD program as applied to
the sources that are covered in steps 1 and 2 contains an express
requirement to take energy, environmental, and economic considerations
into account when making control technology (i.e., BACT) decisions and
accordingly many of the concerns about control costs will be able to be
accounted for in that analysis.  Also, EPA, in collaboration with the
SBA, conducted an outreach meeting with small entities to brief them on
the Tailoring Rule and its environmental and economic impacts and to
seek advice and recommendations from them on the proposal.  (See Docket
No. EPA-HQ-OAR-2009-0517-19130).

Several commenters were concerned that the proposal defers, rather than
exempts,  permitting at the statutory thresholds (100/250 tpy), and
thus, that small sources will eventually be subject to permitting that
those thresholds.  In response, we do not have adequate information at
this time to conclude that the statutory thresholds will ever be
administrable for permitting GHG sources, so the commenters are
premature in assuming that the statutory thresholds will apply to any
particular source categories, or anyone, in the future.  We explain in
the preamble for the final rule how we will address smaller sources in a
future rulemaking based on the 5-year study – we explain that in no
event will sources below 50,000 tpy CO2e be subject to PSD or title V
permitting, nor will PSD modification be triggered for emission
increases below 50,000 tpy CO2e, during the 6-year period ending April
30, 2016, which is the date by which we have committed to complete a
rulemaking action based on the 5-year study to determine exemptions or
appropriate thresholds for GHG permitting after step 3.  See section
IV.B.2.b.5 of the preamble for the final rule.

We are not prepared at this time to exempt closed landfills, as one
commenters suggested, for the same reasons we have not decided to exempt
open landfills, or other source categories, at this time.  Landfills
continue to generate GHGs after they stop accepting new solid waste, and
thus, they continue to be stationary sources potentially subject to
permitting under the applicability provisions of title V.  Also, the
higher GHG thresholds for step 2 in the final rule – we proposed
25,000 tpy CO2e and finalize 100,000 tpy CO2e – will potentially
result in fewer landfills needing permits during step 2, including less
potential for closed landfills to meet the applicability thresholds.

8.3.2  Biogenic Emissions and Combustion of Biomass

Several commenters request that EPA exempt emissions from biogenic
activities or biomass combustion or oxidation activities from PSD or
title V applicability determinations.

Comment:

Biogenic CO2 emissions should be exempted from the PSD program (2371,
4770, 8015, 8283) or not be counted towards the applicability thresholds
for PSD and title V permitting requirements (4122, 4241, 4318, 4523,
4667, 4749, 4951, 4992, 5038, 5070, 5075, 5080, 5089, 5114, 5124, 5126,
5128, 5257, 5279, 5280, 5300, 5303, 5317, 5327, 5335, 5346, 5601, 5741,
5742, 5922, 6459, 8301, 8283, 8395) because:

GHG emissions that result from biogenic activities are "carbon neutral"
(4122, 4241, 4318, 4523, 4667, 4749, 4951, 4992, 5038, 5040, 5070, 5080,
5089, 5114, 5128, 5257, 5280, 5300, 5301, 5303, 5317, 5327, 5601, 5741,
6459, 8015, 8283, 8301, 16411) or should be considered (5124) “carbon
neutral” and thus outside the scope and intent of the PSD and title V
programs.  This approach:

Has been widely accepted by scientists and regulators in both the U.S.
and Europe (4667, 5070, 5303, 16411).  Commenter 4667 cites various
domestic and international policies.

Would create an important incentive for companies to try to use
biomass-based fuels where possible, with the dual benefits of reducing
atmospheric GHG loadings as compared to fossil-fuel combustion and
increasing the use of renewable energy.  (5335, 16411)

Is clearly aligned with the agency's policy goals of promoting
renewable/sustainable industrial operations with low-carbon or carbon
neutral footprints and "biogenic activities" should encompass everything
from fermentation processes to the combustion of renewable fuels,
including ethanol manufacturing, biodiesel production, and other
alternative energy production based on biomass feedstocks.  (5124)

Would not be arbitrary and capricious for EPA to do (5040), because EPA
would not be imposing PSD on a source’s CO2 emissions if those
emissions do not have the potential to degrade air quality (i.e.,
increase atmospheric CO2 concentrations).  (5335, 5040)

EPA has acknowledged that the guidance on how to calculate a source’s
GHG emissions in tpy CO2e and referenced directly by the proposed rule
language, excludes CO2 emitted from the CO2 neutral biomass.  (4667,
5303)

Only anthropogenic stationary emissions should count towards the major
source or significance thresholds (4863, 5064, 5276, 5305, 6458).  If
EPA does not differentiate between biogenic and anthropogenic CO2
emissions, sources whose CO2 emissions are largely biogenic, such as
landfills (e.g., landfills that generate less than 300 scfm of LFG) and
publicly owned treatment works (POTWs), would easily trigger any
threshold, regardless of the facility's size (4746, 5064, 5276, 5305,
6458).

If landfills must count CO2 in determining whether PSD or title V is
triggered, it would discourage efforts by landfills to either flare CH4
or combust it to produce electricity – projects that reduce GHG
emissions overall.  (5276)

Several commenters add that: (1) this approach is consistent with both
proposed federal and state regulations for reducing GHGs (they cite
various examples) (4746, 4863), (2) in the RIA of the Tailoring Rule,
EPA recognizes that CO2 emissions from landfills and the combustion of
LFG do not constitute anthropogenic GHG emissions and these emissions
were not counted in the study that formed the basis of the proposed rule
(5276), (3) biogenic CO2 emissions are not included in national and
international inventories (5276, 6458), (4) the Clean Development
Mechanism of the Kyoto Protocol does not include CO2 from biogenic
sources as an emission (6458), (5) inclusion of biogenic emissions may
adversely affect efforts to develop new renewable resources (4746), (6)
it would be premature to regulate process CO2e emissions from wastewater
treatment since they are not well understood (4746).

The inclusion of biogenic GHGs in the PSD program is contradictory to
the objectives of climate change control and requiring additional title
V permits and BACT measures for net GHG reducers such as waste-to-energy
sources will discourage the expansion of renewable sources.  The
contribution of waste-to-energy facilities to GHG reductions should be
recognized as it is in climate change legislation such as House Bill
2454 and Senate Bill 1733.  (2371)

Including biogenic emissions in the applicability determination would
dramatically increase the number of facilities subject to regulation
(5742), especially for PSD in the forest products industry (4667, 8015)
and will potentially undermine the biofuels and bioenergy industries,
widely recognized as having a key role to play in a low carbon future
(4667, 5742).  In addition, combustion of biomass may be discouraged if
shifting to renewable or low-carbon fuels (or installation of equipment
necessary to burn such fuels) could be deemed to trigger PSD
requirements (4122, 4318, 4523, 4749, 4992, 5038, 5080, 5089, 5114,
5128, 5257, 5317, 5327, 5601, 5741, 6459, 8301).  One commenter adds
that fossil carbon and anthropogenic emissions of CH4 are the primary
drivers behind global increases in atmospheric CO2 concentrations and
thus these emissions should be the focus of any GHG regulation.  (5742)

Emissions from yeast fermentation during bread making are carbon-neutral
and should not be counted as industrial emissions for purposes of GHG
regulation.  (5303)

Sugarcane is an annual crop and bagasse is a by-product of the sugarcane
harvest.  Thus, bagasse is a renewable biomass fuel and as a fuel, it is
carbon-neutral.  (5280)

Biogenic CO2 should be exempt from permitting because there is a
precedent under the PSD program for EPA to exclude a class of compounds
that would otherwise be regulated (4667, 8283).  For example, EPA has
logically determined PSD applicability on a functional basis when: (1)
EPA, by regulation excluded certain compounds, which are in fact
"volatile" and "organic," from the definition of VOCs for purposes of
applying the PSD regulations, including applicability thresholds, (2)
faced with the fact that ambient air quality standards (and therefore
attainment areas) are defined for ozone, whereas it is the emission of
ozone precursors, especially VOCs that can cause nonattainment of the
ozone NAAQS, EPA applied the major-source thresholds to VOC emissions
rather than to ozone emissions.  (8283)

The GHG Mandatory Reporting Regulation excludes biogenic emissions from
basic threshold criteria for report applicability, except where they are
captured and sold for commercial use.  (4241, 4122, 4318, 4523, 4749,
4992, 5038, 5080, 5089, 5114, 5124, 5128, 5257, 5280, 5317, 5327, 5346.
5601, 5741, 6459, 8301, 8395).

Excluding these emissions is consistent with domestic and international
standards (4122, 4318, 4523, 4667, 4749, 4992, 5038, 5080, 5089, 5114,
5128, 5257, 5303, 5317, 5327, 5335, 5601, 5741, 6459, 8301).

One commenter adds source owners should be allowed to consider net GHG
emissions from biomass fuels when determining a facility's PTE for
PSD/title V applicability purposes (5279).

In addition, EPA could require the GWP of biomass CO2 emissions to be
zero due to CO2 neutrality (4667).  If biogenic CO2 emissions are not
excluded or GWP considered zero then EPA should: (1) allow public
comment on any revised “Inventory of U.S. Greenhouse Gas Emissions and
Sinks,” since this guidance affects the calculation of these
thresholds (5126) and (2) give CO2e credit against a source’s baseline
CO2 emissions for those facilities that convert and use CH4 emissions
from landfills as an energy source in the production of renewable fuels
(5075).

Furthermore, two commenters would like us to exempt renewable energy
facilities: (1) that do not trigger the PSD thresholds for criteria
pollutants (3918) to further align this concept with EPA's policy goals
of promoting alternative/renewable energy (5124).  Providing an
exemption from GHG PSD would give industry more regulatory certainty
under which to plan and execute projects, provide more stability to the
market, and reduce industry's burden in meeting regulatory GHG
obligations (5124).

Nevertheless, several commenters would like EPA to clarify in the final
Tailoring Rule that biogenic CO2 emissions trigger the BACT statutory
requirements (5311) or are not exempt from the Tailoring Rule (4860,
5519, 6673, 10376) because:

There is scientific evidence refuting the notion that biomass combustion
is categorically carbon neutral (5311, 6673, 10376) and thus exempting
biogenic CO2 emissions from BACT would violate the Act (5311).  For
example, the DOE reports that CO2 emissions from biomass burning were at
least 7000 million tpy in 2002 and so EPA must regulate power plants
that burn biomass (10376).  In addition, the projected growth in CO2
emissions from biomass burning is at least 700 million tpy by 2020
(about 11 percent of total U.S. GHG emissions) (6673).

There is no valid scientific basis for differentiating CO2 emissions
from biomass combustion from CO2 emissions from other forms of electric
power production (6673).  EPA’s exemption of biomass combustion CO2
from the GHG Mandatory Reporting Rule is based on an outdated and
unsupportable “assumption” that this activity is “carbon neutral
(4860, 6673).”  The “carbon neutral” myth stems in part from a
“critical accounting error” in the Kyoto protocols.  This error has
been incorporated into the structure of EPA’s GHG Mandatory Reporting
Rule and wholly undermines efforts to curb GHG emissions from power
production.  In fact, it promotes biomass power production and makes
climate change worse.  For these reasons, the Tailoring Rule should not
compound this error by exempting biogenic CO2 emissions form
applicability determinations.

The IPCC recommended that biomass burning be exempt because those
emissions may be double-counted in both the land-use category as well as
the energy category (5519, 10376).  However, regulatory systems do not
take into account land-use and thus biomass-burning emissions should not
be exempt (5519, 10376).

	For these reasons a commenter recommends that:

Facilities should be required to calculate emissions of biogenic CO2 in
accordance with the GHG Mandatory Reporting Rule (5311).

EPA, either in regulations or in a guidance document, should develop a
policy addressing when biomass may constitute a “clean fuel” within
the meaning of BACT, since biomass may play an important role in
combating climate change (5311).

Several other commenters simply asked for clarification:

EPA should clarify whether biogenic CO2 is a GHG, provide a clear
definition of biogenic CO2, and indicate how, if all, it is counted in
CO2e determinations (4239, 4860, 4864).

EPA should clarify its treatment of emissions from the combustion of
biomass (5338). Another asks if emissions from fermentation are included
in the PSD and title V applicability determinations (3916)?

Response:

The proposed Tailoring Rule did not address this issue of exemptions for
biomass combustion or biogenic emissions.  We are mindful of the role
that biomass or biogenic fuels and feedstocks could play in reducing
anthropogenic GHG emissions, and we do not dispute the commenters’
observations that many state, federal, and international rules and
policies treat biogenic and fossil sources of CO2 emissions differently.

Nevertheless, we have determined that our application of the “absurd
results,” “administrative necessity,” and one-step-at-a-time legal
rationales that support this rule, which are based on the overwhelming
permitting burdens described previously, does not provide sufficient
basis to exclude emissions of CO2 from biogenic sources in determining
permitting applicability provisions at this time.  This is because such
an exclusion alone, while reducing burdens for some sources, would not
address the overwhelming permitting burdens described above, and a
threshold-based approach would still be needed.  As noted above, we have
not examined burdens with respect to specific categories and thus we
have not analyzed the administrative burden of permitting projects that
specifically involve biogenic CO2 emissions taking account of the
threshold-based approach, nor did the commenters provide information to
demonstrate that an overwhelming permitting burden would still exist,
justifying a temporary exclusion for biomass sources.

At the same time, the decision not to provide this type of an exclusion
at this time does not foreclose EPA’s ability to either (1) provide
this type of an exclusion at a later time when we have additional
information about overwhelming permitting burdens due to biomass
sources, or (2) provide another type of exclusion or other treatment
based on some other rationale.  Although we do not take a final position
here, we believe that some commenters’ observations about a different
treatment of biomass combustion warrant further exploration as a
possible rationale.  Therefore, although we did not propose any sort of
permanent exclusion from PSD or title V applicability based on lifecycle
considerations of biogenic CO2, we plan to seek further comment on how
we might address emissions of biogenic carbon dioxide under the PSD and
title V programs through a future action, such as a separate ANPR.  This
action would seek comment on how to address biogenic carbon under PSD
and title V, the legal and policy issues raised by options regarding
implementation.  We will provide an opportunity for public comment
before adopting any final approach.

We further note that, while we are not promulgating an applicability
exclusion for biogenic emissions and biomass fuels or feedstocks, there
is flexibility to apply the existing regulations and policies regarding
BACT in ways that take into account their lifecycle effects on GHG
concentrations.  This topic has already been explored by the CAAAC
workgroup on BACT issues related to GHGs that recently provided
recommendations to EPA.  These recommendations are located in the public
docket for this rulemaking and at   HYPERLINK
"http://www.epa.gov/air/caaac/climate/2010_02_InterimPhaseIReport.pdf"
http://www.epa.gov/air/caaac/climate/2010_02_InterimPhaseIReport.pdf .
While that group was unable to come to a consensus on how biomass-based
emissions should be treated, it provided us with information that we
will consider as we issue guidance on BACT.  As previously discussed, we
plan to issue BACT guidance later this year, but are not doing so as
part of this rulemaking.  Without prejudging the outcome of our process
to seek comment whether and how we might address emissions of biogenic
carbon under the PSD and title V programs through a future action, this
issue warrants further exploration in the BACT context as well, and we
plan to fully explore it and take action if appropriate.

8.3.3  Fugitive Emissions

Comment:

EPA has provided no clarity as to how fugitive emissions of GHGs are to
be measured or considered in applicability threshold calculations (4106,
4122, 4317, 4318, 4523, 4770, 4992, 5038, 5080, 5089, 5137, 5114, 5128,
5183, 5257, 5317, 5327, 5343, 5601, 5715, 5741, 6459, 8301).  Fugitive
emissions present unique problems of measurement, quantification and
control (5145, 5715).  In addition, even though difficult to quantify,
fugitive emissions of GHGs with large GWP may be significant in
determining whether the applicability threshold has been met (4122,
4318, 4523, 4770, 4992, 5038, 5080, 5089, 5114, 5128, 5257, 5317, 5327,
5601, 5741, 6459, 8301).  For these reasons, some commenters suggest
that EPA exclude fugitive emissions of GHGs for all sources (4298, 4903,
4951, 5052, 5111, 5224, 5715) or sources that have to do a PSD
applicability determination (4122, 4318, 4523, 4770, 4992, 5038, 5080,
5089, 5114, 5128, 5257, 5317, 5327, 5601, 5741, 6459, 8301) because:

Excluding fugitive emissions would: (1) reduce the burden on regulators
and regulated entities (4298, 5111, 5715), (2) have little, if any,
environmental impact (4298, 5111), (3) serve the purpose of the
Tailoring Rule (5715).  If fugitive emissions are included in
applicability determinations, the proposed GHG thresholds would be
rendered meaningless (5715).  In addition, EPA currently exempts a major
source or a major modification form PSD if it would be major only for
fugitive emissions, to the extent quantifiable, and if the stationary
source or modification does not belong to any [of the listed] categories
(5715).

The source categories listed in 40 CFR 52.21(b)(1)(iii) and (i)(vii) and
40 CFR 70.2 (definition of major source) (subsection (2)) may present a
limited exception to this rule (4298, 5111).  Since EPA has not
undertaken rulemaking under section 302(j) for any source category of
fugitive GHG emissions, EPA should not count fugitive GHG emissions
until there has been a rulemaking to determine the feasibility and
advantages of doing so.  (5111, 5224)

In the July 2008 ANPR, EPA acknowledges that fugitive emissions do not
count toward determining if a source is a major source.  (4106)

Concerning fugitive emissions, EPA should clarify:

Whether, and in which cases, fugitive emissions of GHGs are to be
included to determine PSD applicability for those categories of sources
listed under 40 CFR 52.21(b)(1)(iii).  (4122, 4318, 4523, 4770, 4992,
5080, 5038, 5089, 5114, 5128, 5257, 5317, 5327, 5601, 5741, 6459, 8301)

EPA should not consider fugitive emissions for non-listed source
categories.  (5343 8545)

The treatment of emissions from the combustion of fugitive emissions.
In the absence of clarity, this state assumes that the existing guidance
on fugitives applies to GHG emissions.  (5338)

Which GHG emission sources are covered in a facility’s PTE for GHG
with regards to stack-level emissions versus fugitives and in terms of
source categories and size.  (4864)

Fugitive CH4 emissions should be exempted because:

Fugitive CH4 emissions pose a conflict with pending climate change
legislation that provides for emission offsets from the reduction of CH4
from underground coal mining.  Application of BACT requirements would
eliminate this potentially large source of domestic emission offsets.
(5342)

Fugitives are difficult, and potentially impossible to account for.  If
EPA reconsiders the Fugitive Emissions Rule, coal mine fugitives may
need to be counted in determining a significant emissions increase and,
as EPA has determined in other rulemakings, CH4 emissions from
post-mining operations cannot be accurately measured and would be
similarly difficult to control.  (5145)

Until EPA identifies a standard measurement methodology for fugitive CH4
emissions (4691) it will be impossible to ensure that PSD permits for
fugitive and vented CH4 emissions are consistently enforced or based on
accurate data.  Commenters (4120, 4749, 5301) add that this is
especially true for emissions from Oil & Gas systems and that the GHG
Mandatory Reporting Rule does not require measurement of such emissions
because of the significant challenge in monitoring and measuring such
emissions.  If EPA rejects this recommendation and decides that fugitive
and CH4 emissions should be considered in the initial phase of PSD for
GHGs, commenter (4691) urges EPA to issue guidance for proper
quantification of these emissions for purposes of determining
applicability and establishing BACT, and that this guidance should be
provided before the requirements take effect (4691).

Fugitive emissions from natural gas transmission, storage, and
distribution should not count toward the PSD major source applicability
threshold because they are not part of the 28 listed PSD source
categories (4120, 5711).  Only combustion related CO2e emissions should
be considered in the threshold determination (4120).

Fugitive emissions from landfills should be excluded from major source
determinations (4863, 5276, 5305) because:

EPA (in a 1994 memorandum) has previously made a determination that if a
landfill Gas Collection and Control System (GCCS) could be reasonably
designed to collect the landfill's gas emissions, then the emissions are
not fugitive and should not be counted toward regulatory compliance,
such as major source status.  (5305)

Existing federal regulations for MSW landfills do not count fugitive
emissions (i.e., CH4, non-CH4 organic compounds, and VOC) for
applicability purposes and the GHG Tailoring Rule should do the same to
maintain consistency.  (5086)

	However, one commenter (4951) opines that the Tailoring Rule appears to
count fugitive emissions when determining applicability (with proposed
thresholds which correspond to as little as 200 scfm of LFG), and adds
that while this is consistent with the GHG Mandatory Reporting Rule, it
is unclear how the Tailoring Rule would quantify these emissions
because:

The Landfill Gas Emission Model (LandGEM) that the GHG Mandatory
Reporting Rule used to estimate landfills gas (LFG) generation has an
EPA acknowledged error of 30 to 400 percent and that this level of error
is unacceptable when the model results are applied to possible PSD and
title V applicability.  The commenter adds that the error for closed
landfills could be even higher (4951).

MSW landfills are not included in the source categories where fugitive
emissions must be counted and were not subject to an NSPS or NESHAPS as
of August 7, 1980, and as such, fugitive emissions of regulated criteria
pollutants from MSW landfills, which include NMOCs and VOCs from LFG,
would not be counted toward PSD and title V applicability thresholds
(4951).

Response:

In the proposal, EPA did not offer any specific guidance or discuss
exemptions for fugitive emissions of GHGs.  Commenters did not suggest
that a fugitive exemption would address the overwhelming permitting
burdens described previously, or that it was necessary to specifically
tailor GHG applicability through the use of a fugitive emissions
exclusion for categories that would otherwise be required to include
them.

We do agree with commenters who stated that we should clarify how to
count fugitives in determining applicability under this rule.  In
response, we note that we are not taking final action with respect to
commenters’ request, and we are not finalizing any special rules for
fugitive emissions related to GHG.  Thus, EPA's rules related to the
treatment of fugitives would continue to apply to GHG, the same as they
apply to other air pollutants.

Despite multiply requests for implementation guidance, including
guidance on measurement of fugitive GHG for various industries, we are
not including such guidance in the final rule at this time.  Such
guidance is beyond the scope of this rulemaking, which concerns adopting
GHG applicability thresholds that mitigate untenable administrative
burdens that would apply at the statutory thresholds that apply absent
this rulemaking, rather than about gathering detailed technical
information on measurement techniques for particular source categories
or finalizing other implementation guidance relevant to those source
categories.  The Mandatory GHG reporting rules rule sought to establish
measurement requirements applicable to many of these source categories,
or may do so in the future (e.g., that rule is being revised to address
GHG from underground mining and a few other source categories at this
time) but that was never the primary intent of this rulemaking action.
See section 8.4 of this RTC for more on emission calculation requests
for guidance on implementation issues, including monitoring and emission
calculation.

Regarding the comment that a section 302(j) rulemaking is required
before fugitive emissions may be counted, we disagree.  As we read
section 302(j), once EPA has established by rule that fugitive emissions
are to be counted for a specific source category, nothing in section
302(j) requires EPA to conduct new rulemaking to allow for the counting
of additional pollutants from that category.  We read section 302(j) as
imposing an obligation to determine if fugitive emission generally
should be counted from a source or source category and not requiring
that EPA list both source categories and relevant pollutants.  Indeed,
our practice in listing categories has not been to limit the pollutants
to which the listing applies.  Therefore, we are applying our existing
rules and policies for fugitive emissions for GHG as we would any other
pollutant.

8.3.4  Pollution Control Projects

Comment:

	Many commenters request exemptions or deferrals (temporary exemptions)
from major source determinations for GHG emissions that would result in
emissions reductions for GHGs or for other regulated air pollutants,
including pollution control projects, energy efficiency projects, and
generally, the installation of control devices or use of cleaner fuels:

EPA should not discourage installation of control devices that may be
used to lower conventional pollutants even if collateral GHG emission
increases result.  (4122, 4318, 4523, 4745, 4749, 4770, 4992, 5080,
5038, 5089, 5114, 5128, 5224, 5257, 5301, 5317, 5327, 5601, 5741, 6459,
8301)

If EPA does not exempt or defer from major source determinations,
projects that would result in emissions reduction for GHGs or other
regulated air pollutants, such as pollution control projects, EPA may
create an untenable situation of "control devices that require control
devices"  (5124)

EPA should evaluate whether energy efficiency projects should trigger
PSD permitting for GHGs.  Some energy efficiency projects will benefit
the environment by reducing overall GHG emissions, but still trigger PSD
permitting for GHGs due to direct, unit-level emissions.  EPA can
promote energy efficiency and reduce administrative permitting burdens
by allowing permitting agencies to consider the overall GHG emissions
impact of energy efficiency projects.  This makes sense for because it
makes no environmental difference where GHG emissions (or reductions)
occur – whether at the same unit, the same facility or even in the
same state.  (5277)

EPA should exempt projects from BACT (without imposing operational
limits) that: (1) improve efficiency or thermal performance and deliver
net emission reductions when measured on an output basis (e.g.,
production level or electricity generated), or (2) control GHG or
criteria pollutant emissions.  A similar exemption for emission controls
is provided under the NSPS regulations at 40 CFR 60.14(e)(5).  If EPA
declines to follow this approach, at a minimum, EPA should state that:
(1) any increases in criteria pollutants from GHG control devices are
presumed to be so minimal that it would not be cost effective to control
them, and thus, additional controls to capture criteria pollutants are
presumptively unnecessary, and (2) it is presumed that it would not be
cost-effective to control any increase in GHG emissions resulting from
criteria pollutant controls, and thus, additional controls to capture
GHGs are presumptively unnecessary.  (4298) Furthermore, if a project:

Increases the efficiency or thermal performance of a unit or facility,
such that the resulting intensity of all emissions is reduced on a
pounds per gross megawatt hour or production basis, then that project
should not trigger the “major modification” provisions of PSD.

Is specifically for the collection of a GHG, then a “control project
exemption” should apply and exempt any ancillary emissions from the
implementation of the control project from triggering PSD on the grounds
that it provides a “net environmental benefit.”  A carbon control
exemption will also be necessary to encourage investment in carbon
capture and sequestration projects at existing units.  To the extent EPA
determines that such exemptions cannot be provided under the existing
CAA, the commenter urges EPA to encourage Congress to enact appropriate
authorizing legislation.

EPA should defer GHG permitting for sources already subject to state
climate programs, to offshore oil and gas development, and to clean fuel
projects.  EPA should provide special consideration for the energy
intensive and trade exposed refining and chemical industries, as well as
the onshore oil & gas production industry by developing alternative
regulatory approaches in lieu of the PSD/title V GHG Tailoring Rule.
(4106)

Emissions from the combustion of tire-derived fuel (TDF) (or at least
the natural rubber portion of TDF) should not be counted towards
applicability because TDF is used in lieu of alternatives that emit
higher levels of GHG emissions.  TDF is primarily used in biomass
boilers in order to stabilize the combustion process or in cement kilns,
pulp and

paper mill boilers and electric utility boilers in lieu of other
traditional fuels, which are likely to emit more GHG emissions.  (5922)

Response:

The current PSD rules do not exclude pollution control or similar
projects from being considered a physical change or change in the method
of operation that would – if it resulted in a significant net
emissions increase -- constitute a major modification, nor does case law
suggest that we could adopt a permanent exclusion in the future.  To the
extent that the commenters seek an exclusion for pollution control or
similar projects that relies solely on “absurd results” or
“administrative necessity” for reasons similar to those described
previously for other requested exclusions, we take no action on this
request in this rulemaking.  Although such an exclusion may have
positive features, it would not address the overwhelming permitting
burdens that justify the tailoring approach.

8.3.5  Indirect Emissions

Comment:

EPA should specifically state that indirect GHGs emissions, such as
transportation or off-site electricity generation, are not evaluated as
a part of the PSD major source/major modification process or for title V
major source thresholds (5124, 16411).  As with the existing PSD
program, indirect emissions should be analyzed and addressed during the
permitting process for projects related directly to these sources
(5124).  Lacking state preemption, states may include such emissions in
their determinations (5124).  The regulation of indirect GHG emission
has not been considered in the context of BACT, offsets, etc., and
consequently cannot be allowed unless and until EPA has done a thorough
analysis of the consequences of this approach (5124).

Response:

The CAA requires that PSD review includes a detailed air quality impact
assessment to determine if there is a violation of a NAAQS or of a PSD
increment, and this may involve secondary emissions (sometimes called
“indirect emissions”) in limited cases, but the CAA does not require
any secondary emissions to count for applicability purposes.  See 40 CFR
52.21(k) and 52.21(b)(18).  In the proposed Tailoring Rule, EPA
explained that since there are no NAAQS or PSD increments for GHGs,
ambient impact assessment would not be a requirement for GHG, and we
have not changed this policy in the final rule.  Also, the Act generally
does not require mobile source emissions to count for PSD or title V
applicability determinations and we have not revised any provisions that
address such requirements as part of this rulemaking action.

8.4  PSD and Title V Permitting Implementation Issues and Questions

8.4.1  General Suggestions, Comments, or Questions

Comment:

Various commenters provide suggestions or comments regarding
implementation of the Tailoring Rule.  They state that:

EPA’s methodology for determining GHG emissions in the Tailoring Rule
does not take into account that not all fuel gas use is associated with
combustion.  The commenter has a proprietary carbon manufacturing
process that scavenges carbon from flammable gases and incorporates the
carbon into their product.  This process is actually a form of carbon
sequestration according to the commenter; however, the Tailoring Rule
would incorrectly include all carbon that is incorporated in their
product as CO2 emissions to the atmosphere.  (4859)

EPA should acknowledge (under the Tailoring Rule) the importance of
lifecycle analysis in achieving GHG management objectives by encouraging
and not discouraging the production of recycled and used fuel sources.
Commenter makes some suggestions on how EPA could do that (e.g., by
crediting re-refiners with the emissions reduced as a result of not
burning the product as a fuel source, exempt recycling facilities).
(5066)

EPA should clarify that the definitions of “facility” under the GHG
Mandatory Reporting Rule and the Tailoring Rule differ and the GHG
Mandatory Reporting Rule definition should not be precedential for
purposes of interpreting the scope of “stationary source” under PSD
and title V.  (5224)

EPA should do a one source determination for school districts,
residential and commercial buildings, and portable concrete, asphalt,
and aggregate crushing plants.  (3916)

EPA should clarify that motor vehicle, nonroad engines, and nonroad
vehicle emissions do not need to be accounted for in assessing major
source status under PSD or title V.  (5224)

EPA should consider a waiver of penalties for first-time mistakes that
are made in calculating a threshold.  (4684)

EPA implementation support should address source types or emission units
that cut across sectors, e.g., boilers, process heaters, reciprocating
engines, and combustion turbines by fuel type, rather than specific
sectors or source categories.  (4691)

EPA should create a website for the Tailoring Rule similar to the
website for the GHG Mandatory Reporting Rule.  (3916)

EPA should promulgate a list of projects that it considers to be routine
or non-routine (4866).  One government agency (4867) states that EPA
needs to explain more clearly how it will apply the GHG significance
threshold to routine operational changes and clarify how PSD
modifications could be triggered by such operational changes.

EPA should address what triggers PSD for utilities.  (4866)

EPA should make clear in the final rulemaking that PSD and title V are
not subject to the “once in, always in” policy that has been applied
to sources regulated under section 112 of the CAA.  (4749, 4515/4691,
3917)

EPA should allow offset credits to be counted in determining the GHG
emissions for purposes of the PSD and title V programs.  Under this
approach, new facilities would be able to obtain and submit offset
credits to avoid triggering the PSD and title V applicability
thresholds.  In addition, existing facilities would be able to submit
offset credits to avoid triggering the PSD significance level when
undergoing a modification.  (5340)

EPA must answer the following questions about GHG BACT determination:
(1) Will fuel switching be considered part of BACT, such as requiring a
coal power plant to consider natural gas alternatives or co-firing?; (2)
Will BACT determination include “redefining the source” such as
evaluating Integrated Gasification Combined Cycle as an alternative to
traditional coal power plants?; (3) How does one consider tradeoffs in
pollutant controls, such as an SO2 scrubber reducing the efficiency of a
coal power plant and thus requiring more CO2 emissions per unit of power
produced?; and (4) What is an acceptable CO2 ambient air impact for PSD
evaluation and how will one evaluate other impacts of CO2 as required by
PSD rules.  (5061)

Before PSD applies to GHGs, EPA needs to address the unique
characteristics of GHGs which, in some cases, will create a direct
conflict with other pollutants when making BACT determinations.  (4515,
4691, 5059, 6681)  For example, increasing the efficiency of an engine
can have the unintended consequence of increasing emissions of
conventional pollutants, such as NOx.  (4515, 4691)  One commenter added
that EPA must include a broad review of identified GHG BACT for the
various industries to ensure it will not directly conflict with other
criteria pollutants being emitted by the same source.  (4515, 4691,
5056)  For these reasons, EPA should weigh this difficult technical
issue as a factor that favors a more limited scope for the  PSD and
title V programs (either through higher thresholds or the use of non-GHG
pollutants as a “trigger” for PSD requirements for GHGs).  (4515,
4691)

EPA should authorize investment in offset credits as a means of
compliance with BACT requirements.  (5340)  Under this approach, offset
credits could contribute to reducing a source’s emissions to the level
of the required BACT emissions limitation.  (5340)  One commenter added
that EPA should allow offset credits to be considered part of the
“source” for purposes of applicability and significance
determinations as well as BACT requirements under the PSD program.  The
definition of “source” should be interpreted to include any GHG
offsets held by the source.  This will increase demand for offset
credits, which will drive investment into low-carbon technology and
efficient carbon-reduction projects throughout the economy.  Moreover,
offsets would produce the same environmental result at lower cost.
(4749)

Several commenters believe that EPA should determine, under the CAA,
that NSPS in the short-term represents BACT until GHG technologies are
developed (2504, 3916, 4019, 4512, 4521, 4864, 5084, 5339, 5443, 7935,
8025).  Some of these commenters state that: (1) this will prevent
hollow permits at the outset and the approach will result in researched
controls established by industry group.  (5339)  Another commenter
(7935) added that we should implement this approach by focusing on the
source categories with the highest levels of GHG emissions.

	In addition, several commenters request clarification for the following
implementation issues and questions (3003, 4747, 15947):

Has BACT or LAER been determined?  (3003)

What will be the nature of the secondary impact analysis required under
PSD for GHGs?  (4866)

Will CO2e offsets be required and will they be limited to the immediate
air basin?  (3003)

How will visibility impact analyses, required in PSD, be conducted?
(4863)

Will an air quality analysis be required for GHGs and what will it look
like?  (4866)

How GHG emissions are calculated?  (3916)

Will CEMS be required for major CO2e emission sources?  If so, what is
the maximum emission level in parts per million by volume (ppmv) for
these units?  (3003)

Is the R&D facility definition in the proposed rule the same as in the
CAA?  (8691)

Under the current PSD and title V program, engine testing emissions are
treated as stationary sources.  Will they receive the R&D exclusion as
in 40 CFR 98.2(a) (5)?  (8691)

Are refrigerants included in facility-wide title V considerations?
(8691)

One military commenter states that under PSD, there is a significance
level for fluorides of 3 tpy but there is no discussion in the proposed
Tailoring Rule about whether fluorinated GHGs are covered in this
threshold.  (4747)

What are the permit conditions regarding GHG emissions that will need to
be added to a title V permit renewal if the facility has not made a
significant modification requiring a GHG BACT analysis?  (3916)

How are agricultural operations handled under this rule?  (4866)

Can districts phase-in over a 3- to 5-year period the title V permit
submissions for newly captured facilities and major sources?  (3003)

Response:

	EPA appreciates the suggestions and general comments as to what parts
of the PSD and title V permitting programs should be clarified before
permitting of GHGs commences.  Several of the requests for clarification
or questions are specifically addressed in the preamble to the final
Tailoring Rule or in the BACT guidance, Source Category Exemptions, or
other sections of this RTC.  Other of these comments are requests for
specific guidance or determinations that are beyond the scope of the
Tailoring Rule (e.g., source-specific determinations, appropriate
monitoring, emission calculations for particular GHG sources).
Furthermore, since these issues were not specifically addressed in the
proposal of the Tailoring Rule, we do not have a sufficient record upon
which to make such decisions at this time.  However, a few
clarifications may be helpful:

EPA is currently preparing PSD technical and policy guidance for GHG and
expects to issue it by the end of 2010.

As explained in the proposed Tailoring Rule, LAER does not apply to
GHGs.

No “once-in always-in” policies with respect to title V or PSD
applicability are addressed with respect to GHGs in this final rule.

The use of CO2 offsets in PSD programs are not addressed in this final
rule.

Questions about how to determine GHG emissions for permitting
applicability purposes with respect to specific categories of GHG
sources are beyond the scope of this rule.  However, the proposal
clarified that such calculations must be based on a source’s PTE and
that implementation of the Mandatory GHG reporting Rule will produce
information, including facility-level GHG emissions data, that will help
permitting authorities to address GHG emissions for specific source
categories in their programs.  Also, see section 8.4.4 of this RTC for
more on monitoring and other methods of calculating emissions.

We are not finalizing any exemption for PSD or title V for R&D emissions
for engine testing or for any other source category.

The categories of HFCs and PFCs are fluorinated GHGs, included in the
group of six pollutants regulated under this final Tailoring Rule; these
fluorinated GHGs are contained in many refrigerants in common usage
today.

Fluorinated GHGs are GHGs covered under the Tailoring Rule, while
fluorides are a separate category of regulated NSR pollutants not
addressed by the Tailoring Rule.

The title V permit conditions that will be included in any particular
permit are source-specific and determined by the permitting authority at
the time the permit is issued.

The CAA requires all operating permitting programs in existence for
three years or more to issue all permits within 18 months of submittal
of a timely and complete permit application and we are not finalizing
any variation from this requirement for GHG sources in this final rule.

8.4.2  General Requests for Guidance

Comment:

	Several commenters ask EPA to provide guidance on various issues
related to GHG permitting.  They request that:

EPA provide guidance on identifying and quantifying sources covered by
title V, similar to the general and sector-specific applicability
guidance provided with the Mandatory Reporting of Greenhouse Gases Rule.
 (5079)

EPA issue guidance to permitting authorities on title V general permits
to ensure a manageable, consistent, and efficient program.  (4515, 4691)

EPA provide guidance for industries that do not have specific emission
factors for GHGs.  (3278, 5073)  One of these commenters recommends
delaying implementation for industries for which emission factors are
not available to allow time to develop these emission factors.  (3278)

EPA provide guidance to the states.  (4747, 4860, 5063, 5336, 5338)
This guidance should include or be for:

Standardized general permits for certain source categories.  (4747,
4860)

Permits-by-Rule language.  (4860)

How states should fund the program through fees and on seeking federal
funding for state and local agencies under section 105 or 103 of the
CAA.  (4860)

How facilities should calculate their GHG emissions to determine if they
fall under PSD and title V programs.  (5336)

How to handle PSD permit applications that are in process when the
Tailoring Rule becomes effective.  (5338)

EPA immediately commence work on a PSD and additional title V “white
paper” guidance to handle GHG aspects of permitting including
provisions for a one-time listing of annual emission targets for title V
facilities under cap and trade, as well as the permit revision routes to
be followed for title V permit modifications dealing with GHG, etc.
4863)

EPA issue specific guidance to potential sources and permitting
authorities of when administrative limitations to PTE are appropriate.
(5078, 5079)

EPA produce a guide that explains how the 25,000 tpy threshold
calculation is done, and the types of businesses that would likely be
covered or not covered.  (4684)

EPA establish a toll-free phone number for small businesses to call and
inquire whether they are covered or not (without fear of enforcement).
(4684)

EPA specify a calculation method for determining GHG emissions for PSD
and title V permits; BACT guidance (including applicability triggering
of BACT); and permit transition considerations.  (8461)

EPA (1) publish a Case Study for each permit example for source
categories expected to trigger PSD and title V requirements for GHGs in
phase 1 (which could be included on their website); (2) hold Case Study
review seminars in each EPA Region for state regulatory staff on a
semi-annual, then annual basis; (3) advertise the notice and comment
period for select permit applications on EPA’s website, including the
EPA implementation assistance and support material, and invite comments
from interested parties.  (4526)

EPA’s BACT guidance development process should involve all
stakeholders and should be more transparent.  (4512, 4515, 4691, 4866,
4951, 4691, 5110, 5863, 6681, 16411)

GHG BACT guidance is needed since GHG do not have well established
industrial BACT beyond efficiency improvements.  In addition, the BACT
refinement effort is further complicated by the use of a single CO2e
pseudo-pollutant which is really six different constituents that could
possibly lead to six different BACT determinations for a single source.
(4519, 4746, 4863, 4949, 5064, 5305)  One of these commenters requests
clarification on how a BACT evaluation will be done for a stack emitting
multiple GHGs and whether the applicant should do one BACT analysis
using CO2e, or would they do separate BACT analyses for each of the
individual GHGs?  (4519)

Additional time provided to develop BACT guidance that is necessary to
fully evaluate the economic impact of regulating GHG emissions under the
PSD and title V programs.  Currently, the CAAAC’s Climate Change
Workgroup is struggling to develop BACT guidance for source categories
that emit the most GHG emissions.  According to the commenter, only
after BACT is evaluated will EPA have information necessary to fully
analyze the economic impact of the rule.  (5133)

The CAAAC’s BACT guidance document should, at a minimum, include the
following criteria:  (1) BACT requirements that are equipment and
project specific; (2) BACT requirements should be based on what is
available at the time of permit issuance; (3) BACT must be
cost-effective and technically feasible; and (4) EPA must ensure that
permit issuance is not delayed.  (5346)

EPA’s BACT procedures summarized by the Climate Change Workgroup
provide for the evaluation of innovative technologies – they believe
that there is a bias against innovative technology built in to the
current process because it eliminates all but “demonstrated”
technologies as being feasible control options under BACT.  (5728)

EPA provide sector-specific guidance on BACT which includes finalizing a
document that addresses BACT determinations entitled "New Source Review
Workshop Manual: Prevention of Significant Deterioration and
Nonattainment Permitting (Draft, October 1990)."  (5078, 5079)  One
commenter adds that EPA should evaluate the applicability of the current
“top-down BACT” approach many states currently follow for criteria
pollutants (and their precursors) and provide initial guidance to states
on how such an approach would be applicable to BACT determination for
emissions of GHGs.  (4239)

EPA develop practical guidance on BACT standards (3858, 4512, 4154,
4238, 4239, 4521, 4866, 4949, 4989, 5039, 5061, 5084, 5135, 5198, 6681,
7935), with the opportunity for stakeholder input if not formal
comments, prior to implementation of this rule in early-to-mid 2010
(5079).

EPA’s BACT guidance include thermal efficiency degradation factors
when establishing the BACT limit.  (5079)

EPA prepare white papers that provide guidance on a range of control
technologies and measures that can be applied in a cost-effective manner
for major stationary source categories, such as power plants, cement
kilns, glass furnaces, and other sources.  (4512, 6681)

EPA issue a white paper to define real world potential for boilers in
high schools and hospitals so that permits are reviewed and issued based
on realistic emission estimates.  (4512)

EPA provide guidance for computing GHG emissions for any sources that
are not in EPA’s GHG Mandatory Reporting Rule but are covered in the
PTE calculation.  (4864)

EPA provide timely and sufficient guidance to states to assist them in
implementing comprehensive PSD and title V GHG permitting programs.
(4238, 4239)

EPA address ties to other CAA programs, such as the CAM Rule.  (4691)

In addition, several commenters would like EPA to harmonize the
Tailoring Rule with the GHG Mandatory Reporting Rule (2371, 3306, 4862,
4951):

Because the GHG Mandatory Reporting Rule does not impose reporting
requirements on combustion of biomass but the PSD does, there is
ambiguity over whether biomass combustion is regulated under the
Tailoring Rule.  If EPA does not harmonize the PSD program and the GHG
Mandatory Reporting Rule, regulators will run the risk of reversing
established policies, which will increase regulatory uncertainty, and
force regulation of stationary sources for which they lack comprehensive
reporting.  (4862)

EPA should reference the methodologies contained in the GHG Mandatory
Reporting Rule (74 FR 56259) for calculation methods in the Tailoring
Rule.  This would eliminate any potential inconsistencies between the
two rulemakings.  (3306)

EPA can link the schedule for enforcements under the GHG Tailoring Rule
to the schedule for the GHG Mandatory Reporting Rule by waiving
enforcement action for sources that fail to comply with the rule prior
to the March 2011 initial reporting deadline under 40 CFR part 98.
(2371)

Response:

	In general, these comments raise implementation issues that are beyond
the scope of this rule, which is generally limited to tailoring the PSD
and title V applicability requirements.  EPA will address the issues
raised in these comments as it moves forward with implementing PSD and
title V for GHG sources.

	Concerning the request for harmonizing the Tailoring Rule with the GHG
Mandatory Reporting Rule, we have harmonized them in this final rule to
some extent, in that both rules adopt the same group of six GHGs.
However, this action does not preclude us from further harmonizing this
rule in the future after a notice and comment process.  For more on BACT
guidance, see section 8.4.5 of this RTC; for more on Biomass, see
section 8.3.2 of this RTC; for more on methodologies for calculating
emissions, including those required by the Mandatory GHG Reporting Rule,
see section 8.4.4.

Concerning the interplay between the Tailoring Rule and the CAM rule,
EPA did not propose any revisions to any regulations to treat GHGs any
differently than any other regulated air pollutants for purposes of CAM
and that approach is the approach of the final rule.  The CAM rule,
under 40 CFR part 64, adds monitoring designed to provide a reasonable
assurance of compliance in cases where underlying monitoring (e.g.,
monitoring imposed through a PSD permit) for an active control device
(e.g., a scrubber) does not meet certain CAM monitoring criteria.  Also,
CAM applies on a pollutant-specific basis at each emission unit located
at a major source that has a title V permit and provided certain
emission thresholds at met or exceeded.  CAM is normally determined as
part of a title V permitting action, including during initial permit
issuance or as part of a significant permit revision.  A more-detailed
explanation of CAM is beyond the scope of this rulemaking.

Lastly, EPA did not propose to link any schedules for enforcement under
the Tailoring Rule to such schedules under the GHG Mandatory Reporting
Rule, and we are not specifically addressing this issue in the final
rule because it is beyond the scope of the rule.  However, because the
final rule delays the applicability of the Tailoring Rule until January
2, 2011, the final rule will likely mitigate the commenter’s concern
to some extent, compared to the proposal, which would have triggered
applicability upon the promulgation of the final rule.

8.4.3  General Suggestions or Comments for Specific Sectors

Comment:

Various commenters offer suggestions and comments for specific sectors
potentially subject to the Tailoring Rule.  They state that:

For the semiconductor and other electronics facilities:  It would be
especially difficult for a facility to operate under title V and PSD
programs, which require close tracking of emission levels to determine
if permit thresholds are exceeded, when EPA and state regulatory
agencies have not determined the relevant emission measurement and
quantification methods for semiconductor and other electronics
facilities.  Even EPA recognized the difficulties and complexities
inherent in quantifying GHG emissions in the semiconductor manufacturing
industry when it elected to postpone finalizing the electronics portion
of the GHG Mandatory Reporting Rule.  (5329)

For the Public Owned Treatment Works (POTWs) Facilities EPA could
achieve better results for limiting GHG emissions at POTWs by providing
incentives for utilities to increase energy efficiency, to reuse
bio-solids and biogas generated through the wastewater treatment process
as fuel, and to adjust treatment processes when viable, rather than
instituting PSD permit requirements.  (5336)

For Landfills

EPA should clarify and streamline the common control determination
process for landfills associated with LFG energy production (4154,
5391).  One commenter adds that separately-owned LFG control and or
treatment operations should not be considered to be under "common
control" of the landfill owner/operator for purposes of PSD and title V
permitting, and emphasizes that this is particularly true when the
landfill can operate independently from a renewable energy recovery
project.  According to this commenter, EPA should, among other things,
(1) define a separate class of parties engaged in the treatment and/or
combustion of LFG, either on-site or off-site, that will bear compliance
responsibility under the Landfill NSPS; and (2) create an option by
which a landfill owner/operator may transfer compliance responsibilities
to a collection, control or treatment system owner/operator, consistent
with the parties' contractual provisions, through a certification
procedure.  Finally, this commenter also believes EPA should narrowly
prescribe the circumstances under which compliance responsibility may
transfer to a third party under the NSPS for landfills, so that landfill
owners/operators would have meaningful opportunities and flexibility to
maximize the value of beneficial use projects involving LFG (5391).

EPA should reconsider the allowable amounts for CH4 oxidation for older,
closed landfills.  Because these sites generate such low quantities of
LFG, the capacity for the cover soils to oxidize the CH4 is
significantly higher than for active or recently closed facilities.  For
landfills that have been closed for more than 20 years, CH4 oxidation of
up to 100 percent should be allowed, and more recently closed facilities
should be allowed a sliding scale.  (4951)

In addition to generating CH4 through breakdown of waste in a landfill,
a portion of the carbon is stored in the landfill and thus, landfilling
provides storage capacity for carbon through this sequestration.  This
quantity of sequestered carbon should be considered as GHG regulations
progress.  At a minimum, sequestration of other biogenic carbon should
be allowed as part of the net calculations that landfills use to
determine their contribution of GHG to the environment.  (4951)

For Electric Utilities and Transmission and Distribution (T&D)
Facilities:

EPA should clarify that it does not intend to regulate mobile sources of
emissions from electric utilities (i.e., fleet vehicles, customer
service vehicles, service vehicles, and emergency or outage management
vehicles).  (5052)