6560-50-P

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 51, 52, 70, and 71

[EPA-HQ-OAR-2009-0517; FRL - -_________]

RIN 2060-AP86

Prevention of Significant Deterioration and Title V Greenhouse Gas
Tailoring Rule

AGENCY:  Environmental Protection Agency (EPA).

ACTION:  Final Rulerule.

SUMMARY:  EPA is tailoring the applicability criteria that determine
which stationary sources and modification projects become subject to
permitting requirements for greenhouse gas (GHG) emissions under the
Prevention of Significant Deterioration (PSD) and title V programs of
the Clean Air Act (CAA or Act).  This rulemaking is necessary because
without it PSD and title V requirements would apply, as of January 2,
2011, at the 100 or 250 tons per year (tpy) levels provided under the
CAA, greatly increasing the number of required permits, imposing undue
costs on small sources, overwhelming the resources of permitting
authorities, and severely impairing the functioning of the programs.
EPA is relieving these resource burdens by phasing- in the applicability
of these programs to GHG sources, starting with the largest GHG
emitters.  This rule establishes two initial steps of the phase-in.
Step 1 begins on January 2, 2011, and covers only sources and
modifications that would otherwise undergo PSD or title V permitting
based on emissions of non-GHG pollutants.  Step 2 begins on July 1,
2011, and covers large sources of GHG emissions that emit or have the
potential to emit 100,000 tpy carbon dioxide equivalent (CO2e) or more,
and modifications at those sources that increase net GHG emissions by
75,000 tpy CO2e or more, provided those sources or modifications also
have GHG mass emissions that exceed the relevant mass-based
applicability thresholds.  This rule also requires EPA to promulgate by
July 1, 2012, a step 3The rule that will consider phasing-in additional
sources.  EPA excludes also commits the agency to take certain actions
on future steps addressing smaller sources, but excludes certain smaller
sources from PSD and title V permitting for GHG emissions, until at
least    April 30, 2016, sources that are not already subject and that
emit less than 50,000 tpy of CO2e, as well as modifications that do not
increase net GHG emissions by 50,000 tpy CO2e, or more.  EPA will use
this time to streamline the programs for those sources and must complete
a study by April 30, 2015, to assess improvements in administrability of
the programs for such sources, and must complete a rule by April 30,
2016, addressing additional such sources based on this study.  EPA’s
legal basis for this tailoring rule is its interpretation of the PSD and
title V applicability provisions under the familiar Chevron two-step
framework for interpreting administrative statutes, taking account of
the legal doctrines authorizing agencies to apply statutory requirements
in way that avoids absurd results or administrative impossibility and
authorizing agencies to implement statutory requirements a step at a
time.

DATES:  This action is effective on [INSERT DATE 60 DAYDAYS FROM DATE OF
PUBLICATION IN THE FEDERAL REGISTER].

ADDRESSES:  EPA has established a docket for this rulemaking under
Docket ID No. EPA-HQ-OAR-2009-0517.  All documents in the docket are
listed in the   HYPERLINK "http://www.regulations.gov"
www.regulations.gov  index.  Although listed in the index, some
information is not publicly available, e.g., Confidential Business
Information or other information whose disclosure is restricted by
statute.  Certain other material, such as copyrighted material, is not
placed on the Internet and will be publicly available only in hard copy.
 Publicly available docket materials are available either electronically
in   HYPERLINK "http://www.regulations.gov"  www.regulations.gov  or in
hard copy at the EPA Docket Center EPA/DC, EPA West, Room 3334, 1301
Constitution Avenue, Northwest, Washington, D.C.  The Public Reading
Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday,
excluding legal holidays.  The telephone number for the Public Reading
Room is<PHONE_NUMBER>, and the telephone number for the EPA Docket
Center is<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT:  Mr. Joseph Mangino, Air Quality Policy
Division, Office of Air Quality Planning and Standards (C504-03),
Environmental Protection Agency, Research Triangle Park, NC 27711;
telephone number:<PHONE_NUMBER>; fax number:<PHONE_NUMBER>; e-mail
address:    HYPERLINK<EMAIL_ADDRESS><EMAIL_ADDRESS>.

SUPPLEMENTARY INFORMATION:

I.  General Information

A.  Does this action apply to me?

Entities affected by this action include sources in all sectors of the
economy, including commercial and residential sources.  Entities
potentially affected by this action also include states, local
permitting authorities, and tribal authorities.  The majority of
categories and entities potentially affected by this action are expected
to be in the following groups:

Industry Group	NAICSa

Agriculture, fishing, and hunting……………………….

11

Mining………………………………………

21

Utilities (electric, natural gas, other
systems)………………………………………………..

2211, 2212, 2213

Manufacturing (food, beverages, tobacco, textiles,
leather)…………………………….

311, 312, 313, 314, 315, 316

Wood product, paper
manufacturing…………………………………..

321, 322

Petroleum and coal products manufacturing……………………..

32411, 32412, 32419

Chemical manufacturing………………………	.

3251, 3252, 3253,3254, 3255, 3256,3259

Rubber product manufacturing…………………….

3261, 3262

Miscellaneous chemical
products………………………………………………..

32552, 32592, 32591, 325182, 32551

Nonmetallic mineral product manufacturing…………………….

3271, 3272, 3273, 3274, 3279

Primary and fabricated metal manufacturing…….

3311, 3312, 3313, 3314, 3315, 3321, 3322, 3323, 3324, 3325, 3326, 3327,
3328, 3329

Machinery manufacturing…………………….

3331, 3332, 3333, 3334, 3335, 3336, 3339

Computer and electronic products manufacturing…………………….

3341, 3342, 3343, 3344, 3345, 4446

Electrical equipment, appliance, and component
manufacturing…………………….

3351, 3352, 3353, 3359

Transportation equipment manufacturing…………………….

3361, 3362, 3363, 3364, 3365, 3366, 3366, 3369

Furniture and related product manufacturing…………………….

3371, 3372, 3379

Miscellaneous manufacturing…………………….

3391, 3399

Waste management and remediation…………………………

5622, 5629

Hospitals/Nursing and residential care
facilities…………………………….

6221, 6231, 6232,6233, 6239

Personal and laundry services………………………………….

8122, 8123

Residential/private households…………………………….

8141

Non-Residential (Commercial)……………………….

Not available.  Codes only exist for private households, construction,
and leasing/sales industries.

a	North American Industry Classification System.

B.  How is this preamble organized?

	The information presented in this preamble is organized as follows:

Outline

I.  General Information

A.  Does this action apply to me?

B.  How is this preamble organized?

C.  Preamble Acronyms and Abbreviations

II.  Overview of the Final Rule

III.  Background

A.  What are greenhouse gasesGHGs and their sources?

B.  Endangerment Finding and the Light-Duty Vehicle RuleLDVR

1.  Endangerment Finding

2.  Light-Duty Vehicle Rule

C.  What are the General Requirementsgeneral requirements of the PSD
Programprogram?

1.  Overview of the PSD Program

2.  General Requirements for PSD

D.  What are the general requirements of the title V operating permits
program?

1.  Overview of Title V

2.  Title V Permit Requirements

E.  The Interpretive Memorandum

IV.  Summary of Final Actions

A.  How do you define the GHG pollutant for PSD and title V purposes?

1.  GHG Pollutant Defined as the Sum-of-Six Well-Mixed GHGs

2.  What GWP values should be used for calculating CO2e?

B.  When will PSD and title V applicability begin for GHGs and emission
sources?

1.  What are the Step 1 thresholds, timing, and calculation methodology?

2.  What are the Step 2 thresholds, timing, and calculation methodology?

3.  What about Step 3?

4.  What about the proposed 6 -year exclusion for smaller sources?

5.  When and how will EPA take further action on smaller sources?

C.  How do state, local, and tribal area programs adopt the final GHG
applicability thresholds?

D.  How do you treat GHGs for purposes of title V permit fees?

E.  Other Actions and Issues

1.  Timing for Permit Streamlining Techniques

2.  Guidance for Best Available Control TechnologyBACT Determinations

3.  Requests for Higher Category-Specific Thresholds and Exemptions from
Applicability

4.  Transitional Issues includingIncluding Requests for Grandfathering

V.  What is the legal and policy rationale for the final actions?

A.  Rationale for our approachOur Approach to calculatingCalculating GHG
emissionsEmissions for PSD and titleTitle V applicability
purposesApplicability Purposes

1.  Grouping of GHGs into a Single Pollutant

2.  Identifying Which GHGs are Included in the Group

3.  Use of GWP vs. Mass-Based GHG Thresholds

4.  Determining What GWP Values are to beAre To Be Used

45.  Use of Short Tons vs. Metric Tons

B.  Rationale for Thresholds and Timing for PSD and Title V
Applicability to GHG Emissions Sources

	1.  Overview

2.  Data Concerning Costs to Sources and Administrative Burdens to
Permitting Authorities

3.  Legal Doctrines:  “Absurd Results,” “Administrative
Necessity,” and “One-Step-at-a-Time” Legal Doctrines

	4.  The PSD and Title V programsPrograms

5.  Application of the “Absurd results” Doctrine for the PSD Program

6.  Application of the “Absurd Results” Doctrine for the Title V
Program

	7.  Additional Rulemaking for the PSD and Title V Programs

8.  Rationale for the Phase-in Schedule for Applying PSD and Title V to
GHG Sources

9.  “Administrative Necessity” Basis for PSD and Title V
Requirements in Tailoring Rule

	10.  ““One-Step-at-a-Time” Basis for Tailoring Rule

C.  Mechanisms for Implementing and Adopting the Tailoring Approach

1.  PSD Approach:  Background and Proposal

2.  Rationale for Our Final Approach to Implementing PSD

3.  Other Mechanisms

4.  Codification of Interpretive Memo

5.  Delaying Limited Approvals and Request for Submission of Information
from States Implementing a SIP-Approved PSD Program

6.  Title V Programs

D.  Rationale for Treatment of GHGs for Title V Permit Fees

E.  Other Actions and Issues

1.  Permit Streamlining Techniques

2.  Guidance for Best Available Control TechnologyBACT Determinations

3.  Requests for Higher Category-Specific Thresholds or Exemptions from
Applicability

4.  Transitional Issues Including Requests for Grandfathering

VI.  What are the economic impacts of the final rule?

A.  What entities are affected by this final rule?

B.  What are the estimated annual benefits to sources due to regulatory
relief from the statutory requirements?

1.  What are annual estimated benefits or avoided burden costs for title
V permits?

2.  What are annual benefits or avoided costs associated with NSR
permitting regulatory relief?

	C.  What are the economic impacts of this rulemaking?

	D.  What are the costs of the final rule for society?

VII.  Comments on Statutory and Executive Orders Reviews

A.  Comments on Executive Order 12866 - Regulatory Planning and Review

B.  Comments on the Paperwork Reduction Act

C.  Comments on the RFA

D.  Comments on the Unfunded Mandates Reform Act

E.  Comments on Executive Order 13132 – Federalism

F.  Comments on Executive Order 13175 - Consultation and Coordination
with Indian Tribal Governments

G.  Comments on Executive Order 13211 - Actions That Significantly
Affect Energy Supply, Distribution, or Use

VIII.  Statutory and Executive Orders Reviews

XIA.  Executive Order 12866 - Regulatory Planning and Review

B.  Paperwork Reduction Act

C.  Regulatory Flexibility Act

D.  Unfunded Mandates Reform Act

E.  Executive Order 13132 – Federalism

F.  Executive Order 13175 - Consultation and Coordination with Indian
Tribal Governments

G.  Executive Order 13045 - Protection of Children from Environmental
Health and Safety Risks

H.  Executive Order 13211 - Actions That Significantly Affect Energy
Supply, Distribution, or Use

I.  National Technology Transfer and Advancement Act

J.  Executive Order 12898 – Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income Populations

K.  Congressional Review Act

L.  Judicial Review

IX.  Statutory Language

Authority

C.  Preamble Acronyms and Abbreviations

	The following are abbreviations of terms used in the this preamble.

ANPR				Advance Notice of Proposed Rulemaking

APA				Administrative Procedure Act

AQRVs			Air Quality Related Values

BACT				Best Available Control Technology

Btu				British thermal units

Btu/hr			British thermal units per hour

CAA or Act		Clean Air Act

CAAAC			Clean Air Act Advisory Committee

CAFE				Corporate Average Fuel Economy

CH4				Methane

CO				Carbon Monoxide

CO2				Carbon Dioxide

CO2e				Carbon Dioxide Equivalent

EPA				U.S. Environmental Protection Agency

FDA				Food and Drug Administration

FIP				Federal Implementation Plan

FTEs				Full-Time Equivalents

GHG				Greenhouse Gases

GHz				Gigahertz

GWP				Global Warming Potential

HAP				Hazardous Air Pollutant

HFCs				Hydrofluorocarbons

ICR				Information Collection Request

IPCC				Intergovernmental Panel on Climate Change

LDVR				Light-Duty Vehicle Rule

MACT				Maximum Achievable Control Technology

MCL				Maximum Contaminant Level

N2O				Nitrous Oxide

NAAQS			National Ambient Air Quality Standard

NHTSA	National Highway Traffic Safety Administration

NMOC				Nonmethane Organic Compounds

NOx				Nitrogen Oxides

NPDES	National Pollutant Discharge Elimination System

NSPS				New Source Performance Standard

NSR				New Source Review

NTAA				National Tribal Air Association

NTTAA	National Technology Transfer and Advancement Act

OMB				Office of Management and Budget

PFCs				Perfluorocarbons

PM				Paticulate Matter

PSD				Prevention of Significant Deterioration

PTE				Potential to Emit

RFA				Regulatory Flexibility Act

RIA				Regulatory Impact Analysis

RTC				Response to Comment

SBA				Small Business Administration

SBAR				Small Business Advocacy Review

SBREFA	Small Business Regulatory Enforcement Fairness Act

SF6				Sulfur Hexafluoride

SIP				State Implementation Plan

SNPR				Supplemental Notice of Proposed Rulemaking

TIP				Tribal Implementation Plan

TRS				Total Reduced Sulfur

TSD				Technical Support Document

tpy				Tons Per Year

UMRA	Unfunded Mandates Reform Act

[COMPLETE LATER.]UNFCCC	United Nations Framework Convention on Climate
Change

VOC				Volatile Organic Compound

II. Overview of the Final Rule

EPA is relieving overwhelming permitting burdens that would, in the
absence of this rule, fall on permitting authorities and sources.  We
accomplish this by tailoring the applicability criteria that determine
which GHG emission sources become subject to the PSD and title V
programs of the CAA.  In particular, EPA is establishing with this
rulemaking a phase-in approach for PSD and title V applicability, and is
establishing the first two steps of the phase-in for the largest
emitters of GHGs.  We also commit to certain follow-up actions regarding
future steps beyond the first two, discussed in more detail belowlater.
Our legal basis for this rule is our interpretation of the PSD and title
V applicability provisions under the familiar Chevron two-step framework
for interpreting administrative statutes, taking account of three legal
doctrines, both separately and interdependently:  they are what we will
call (i1) the “absurd results” doctrine, which authorizes agencies
to apply statutory requirements in way that avoidsdifferently than a
literal reading would indicate, as necessary to effectuate congressional
intent and avoid absurd results, (ii2) the “administrative
necessity” doctrine, which authorizes agencies to apply statutory
requirements in a way that avoids impossible administrative burdens; and
(iii3) the “one-step-at-a-time” doctrine, which authorizes agencies
to implement statutory requirements a step at a time.  This legal basis
justifies each of the actions we take with this rule, – e.g., each of
the first two steps of the phase-in approach - both (i1) as part of the
overall tailoring approach, and (ii2) independently of theeach other
actions.

action we take with this rule.  EPA also has authority for this
Tailoring Rule under CAA section 301(a)(1), which authorizes the
Administrator “to prescribe such regulations as are necessary to carry
out his functions under [the CAA].”

For the first step of this Tailoring Rule, which will begin on January
2, 2011, PSD or title V requirements will apply to sources’ GHG
emissions only if the sources are subject to PSD or title V anyway due
to their non-GHG conventional pollutants.  Therefore, EPA will not
require sources or modifications to evaluate whether they are subject to
PSD or title V requirements solely on account of their GHG emissions.
Specifically, for PSD, Step 1 requires that as of January 2, 2011, the
applicable requirements of PSD, most notably, the best available control
technology (BACT) requirement, will apply to projects that increase net
GHG emissions by at least 75,000 tpy carbon dioxide equivalent (CO2e),
but only if the project also significantly increases emissions of at
least one non-GHG pollutant.  For the title V program, only existing
sources with, or new sources obtaining, title V permits for non-GHG
pollutants will be required to address GHGs during this first step.

The second step of the tailoring ruleTailoring Rule, beginning on July
1, 2011, will phase- in additional large sources of GHG emissions.  New
sources as well as existing sources not already subject to title V that
emit, or have the potential to emit, at least 100,000 tpy CO2e will
become subject to the PSD and title V requirements.  In addition,
sources that emit or have the potential to emit at least 100,000 tpy
CO2e and that undertake a modification that increases net emissions of
GHGs by at least 75,000 tpy CO2e will also be subject to PSD
requirements.  For both steps, we also note that if sources or
modifications exceed these CO2e-adjusted GHG triggers, they are not
covered by permitting requirements unless their GHG emissions also
exceed the corresponding mass-based triggers (i.e., unadjusted for
CO2e.)

EPA believes that the costs to the sources and the administrative
burdens to the permitting authorities of PSD and title V permitting will
be manageable at the levels in these initial two steps, and that it
would be administratively infeasible to subject additional sources to
PSD and title V requirements at those times.  However, we also intend to
issue a supplemental notice of proposed rulemaking (SNPR) in 2011, in
which we will propose or solicit comment on a third step of the phase-in
that would include more sources, beginning by July 1, 2013.  In the same
rulemaking, we may propose or solicit comment on a permanent exclusion
from permitting for some category of sources, based on the doctrine of
“absurd results,” within the Chevron framework.  We are establishing
an enforceable commitment that we will complete this rulemaking by July
1, 2012, which will allow for 1 year's notice before stepStep 3 would
take effect.

In addition, we commit to explore streamlining techniques that may well
make the permitting programs much more efficient to administer for GHGs,
and that therefore may allow their expansion to smaller sources.  We
expect that the initial streamlining techniques will take several years
to develop and implement.

We are also including in this action a rule that no source with
emissions below 50,000 tpy CO2e, and no modification resulting in net
GHG increases of less than 50,000 tpy CO2e, will be subject to PSD or
title V permitting before at least 6 years from now, April 30, 2016.
This is because we are able to conclude at this the present time that
the administrative burdens that would accompany permitting sources below
this level will be so great that, absent significant even the
streamlining actions that EPA will need timemay be able to develop and
implement, or else absent significant resource constraints in the next
several years, and even with the increases in permitting resources
thatthat we can reasonably expect the permitting authorities will need
time to implementto acquire, it will be impossible to administer the
permit programs for these sources until at least 2016.  We commit to
explore streamlining techniques that may well make the permitting
programs much more efficient to administer for GHGs, and that therefore
may allow their expansion to smaller sources, but we expect that those
techniques will take several years to develop and implement.

Further, we are establishing an enforceable commitment that we will (i1)
complete a study by April 30, 2015, to evaluate the status of PSD and
title V permitting for GHG-emitting sources, including progress in
developing streamlining techniques; and (ii2) complete further
rulemaking based on that study by April 30, 2016, to address the
permitting of smaller sources.  That rulemaking may also consider
additional permanent exclusions based on the “absurd results”
doctrine, where applicable.

This rulemakingTailoring Rulemaking is necessary because without it, PSD
and title V would apply to all stationary sources that emit or have the
potential to emit more than 100 or 250 tons of GHGs per year beginning
on January 2, 2011.  This is the date when EPA’s recently promulgated
Light -Duty Vehicle Rule (LDVR) takes effect, imposing control
requirements for the first time on carbon dioxide (CO2) and other GHGs.
If this January 2, 2011 date were to pass without this ruleTailoring
Rule being in effect, PSD and title V requirements would apply at the
100/250 tpy applicability levels provided under a literal reading of the
CAA as of that date.  From that point forward, a source owner proposing
to construct any new major source that emits at or higher than the
applicability levels (and which therefore may be referred to as a
“major” source) or modify any existing major source in a way that
would increase GHG emissions would need to obtain a permit under the PSD
program that addresses these emissions before construction or
modification could begin.  Similarly, for title V, would apply to a new
or existing source exceeding the 100 tpy applicability level in the Act
would be required to get a title V permit, if itthe source did not
already have onea title V permit.

Under these circumstances, many small sources would be burdened by the
costs of the individualized PSD control technology requirements and
permit applications that the PSD provisions, absent streamlining,
require.  Additionally, state and local permitting authorities would be
burdened by the extraordinary number of these permit applications, which
are orders of magnitude greater than the current inventory of permits
and would vastly exceed the current administrative resources of the
permitting authorities.  Permit gridlock would result with the
permitting authorities able to issue only a tiny fraction of the permits
requested.

These impacts – the costs to sources and administrative burdens to
permitting authorities – that would result from application of the PSD
and title V programs for GHG emissions at the statutory levels as of
January 2, 2011, are so severe that they bring the judicial doctrines of
“absurd results,” “administrative necessity,” and
“one-step-at-a-time” into the Chevron two-step analytical framework
for statutes administered by agencies.  Under the U.S. Supreme Court’s
decision in Chevron, the agency must, at stepStep 1, determine whether
Congress’s intent as to the specific matter at issue is clear, and, if
so, the agency must give effect to that intent..  If congressional
intent is not clear, then, at stepStep 2, the agency has discretion to
fashion an interpretation that is a reasonable construction of the
statute.

To determine congressional intent, the agency must first consider the
words of the statutory requirements, and if their plain literal meaning
answers the question at hand, then, in most cases, the agency must
implement those requirements by their terms.  However, under the
“absurd results” doctrine, the plainliteral meaning of statutory
requirements should not be considered to indicate congressional intent
if the plainthat literal meaning would produce a result that is
senseless or that is otherwise inconsistent with -- and especially one
that undermines -undermines - underlying congressional purpose.  In
these cases, if congressional intent for how the requirements apply to
the question at hand is clear, the agency should implement the statutory
requirements not in accordance with their plainliteral meaning, but
rather in a manner that most closely effectuates congressional intent;
and if .  If congressional intent is not clear, then an agency may
select an interpretation that is reasonable under the statute.
Similarly, under

Under the “administrative necessity” doctrine, Congress is presumed,
at Chevron stepStep 1, to intend that its statutory directives to
agencies be administrable, and not to have intended to have written
statutory requirements that are impossible to administer, but rather to
have intended that requirements be implemented in manner that is
administrable.  Therefore, under this doctrine, an agency may depart
from statutory requirements that, by their terms, are impossible to
administer, but the agency may depart no more than necessary to render
the requirements administrable.  Under the “one-step-at-a-time”
doctrine, Congress is presumed at Chevron stepStep 1 to have intended to
allow the agency to administer the statutory requirements on a
step-by-step basis, as appropriate, when the agency remains on track to
iComplement implement the requirements as a whole.  Each of these
doctrines supports our action separately, but the three also are
intertwined and support our action in a comprehensive manner.

Here, we have determined, through analysis of burden and emissions data
as well as consideration of extensive public comment, that the costs to
sources and administrative burdens to permitting authorities that would
result from application of the PSD and title V programs for GHG
emissions at the statutory levels as of January 2, 2011 should be
considered “absurd results.”  Therefore, we conclude that under the
“absurd results” doctrine, Congress could not have intended that the
statutory levels apply as of that date, and instead that Congress
intended some type of ameliorative alternative.  The “administrative
necessity” doctrine supports our conclusion as well because the
administrative burdens of attempting to comply with the statutory
thresholds as of January 2, 2011 would be impossible to bear, and for
this reason, too, Congress could not have intended that the statutory
levels apply as of that date.

Under these circumstances, congressional intent as to how to apply PSD
and or title V applicability provisions – in particular, the threshold
levels and timing requirements - apply literally to GHG sources may be
considered to be unclear.  If so, EPA has authority to develop an
interpretation that is reasonable under the statute, and the tailoring
approach so qualifies.  In the alternative, congressional intent may be
considered to be clear – with the possible exceptions described below
– that as of that date.

Even so, the PSD and title V requirements should apply to GHG sources as
closely to the statutory levels as possible, and as quickly as possible,
while assuring that affected sources and permitting authorities can
manage provisions and their permitting requirements.  The tailoring rule
is the approach that best effectuates this intent.  As a result, the
tailoring rule is validlegislative history do indicate a clear
congressional intent, under Chevron stepStep 1, as informed by the
“absurd results,” “administrative necessity,” and
“step-at-a-time” doctrines.  Even so, we acknowledge that it may not
be clear to whether Congress would have intended that PSD and title V
apply to the smallest GHG sources – those  at or near the statutory
levels -- and we intend to resolve the two permitting programs applied
to GHG sources, and that the intent was in the affirmative, that the
permitting programs do apply to GHG sources.  Our previous regulatory
action defining the applicability provisions made this clear, and we do
not reopen this issue through future rulemaking.  In addition, with
respect to title V, we acknowledge that it may not be clear whether
Congress intended that large numbers of GHG sources be required to hold
permits that do not have applicable requirements – which we will call
“empty permits” – and we intend to resolve in this rulemaking.
Moreover, even if this issue, too, in future rulemaking.
long-established regulatory position were not justifiable based on
Chevron Step 1 – on the grounds that in fact, congressional intent on
this point is not clear - then we believe that this position, that the
statutory provisions to apply PSD and title V generally to GHG sources,
was justified under Chevron step 2.

As to how to apply the PSD program to GHG sources, congressional intent,
as expressed in the various statutory provisions and statements in the
legislative history, is clear that PSD should apply at least to the
largest sources initially, at least to as many more sources as possible
and as promptly as possible over time - consistent with streamlining
actions that we intend to consider coupled with increases in permitting
authority resources - and at least to a certain point.  This is the
approach we take in this Tailoring Rule, and because it is consistent
with congressional intent, we believe it is required under Chevron Step
1.  Even if congressional intent were not clear as to how to apply the
PSD requirements to GHG sources, we would have authority under Chevron
Step 2 to establish a reasonable interpretation that is consistent with
the PSD provisions, and we believe that the tailoring approach so
qualifies.

As for title V, the statutory provisions and legislative history, which
of course are different than those concerning the PSD program, do not
express a clear intent as to how title V applies to GHG sources, which
leads our analysis to Chevron Step 2, and here, again, we believe that
the tailoring approach is a reasonable interpretation that is consistent
with the title V provisions.

For both PSD and title V, we intend to use the tailoring approach to
address smaller GHG sources over time, consistent with Congress’s
expectations that the programs would not impose undue costs to sources
or undue administrative burdens to permitting authorities.  However, we
cannot say at this point how close to the statutory thresholds we will
eventually reach.

Because this rule establishes only the first two phases of the tailoring
approach, we do not find it necessary to answer these questions in this
rule, and instead we expect to resolve them through future rulemaking.
We will remain mindful of the concerns that Congress expressed about
including small sources in either program.  We intend to consider the
issue of the applicability of title V to GHG sources without applicable
requirements (i.e., “empty permits”) in future steps of our
tailoring approach.  When we do so, we will further assess the potential
for the approach of excluding empty permits from title V to relieve
burden consistent with statutory requirements.

In addition, because Congress can be said to have intended the PSD and
title V programs to apply to GHG sources, the Tailoring Rule is also
justifiable under the “administrative necessity” and
“one-step-at-a-time” doctrines.

The legal analysis just describes described justifies each of the
actions in this rule.  The first two steps that we promulgate in this
rule, which take effect on January 2, 2011 and July 1, 2011, are
constitute the most that permitting authorities can reasonably be
expected to do by those times.  Similarly, the 50,000 tpy floor that we
promulgate through at least April 30, 2016 is reasonable because the
information we have available now shows that it constitutes the most
that permitting authorities can reasonably be expected to do by that
date.  Finally, the study and two additional rulemakings – to take
effect by July 1, 2013 and April 30, 2016 -- to which we commit in this
rule establish a track for acquiring additional information and for
taking further steps to address the application of PSD and title V more
closely to the literal statutory levels.  We intend to apply them as
closely to those levels as is consistent with congressional intent and
administrative imperatives, in light of the “absurd results,”
“administrative necessity,” and “one-step-at-a-time” doctrines,
although, as noted abovepreviously, we may will consider in future
rulemaking whether to conclude that Congress did not intend that the
programs apply to the smallest sources or, for title V, sources with
empty permits. how closely to the statutory thresholds we will be able
to implement the PSD and title V programs as well as what to require
with respect to a potentially large number of sources with empty title V
permits.

We In this rule, we are adopting regulatory language codifying our
phase-in approach.  As we will explain, many state, local and tribal
area programs will likely be able to immediately implement our approach
without rule or statutory changes by, for example, by, interpreting the
term ”“subject to regulation” that is part of the applicability
provisions for PSD and title V.  We ask permitting authorities to
confirm that they will follow this implementation approach for their
programs, and if they cannot, then we will ask them to notify us so that
we can take appropriate follow-up action to narrow our federal approval
of their programs before GHGs become subject to regulation for PSD and
title V programs on January 2, 2011.  This Narrowing our approval will
ensure that our approvals do not federally obligate for federal
purposes, GHG sources below the size thresholds we establish in this
Tailoring Rule are not obligated to hold PSD or title V permits until
the states to implement these programs for GHG until develop and submit
revised PSD and title V programs that EPA approves, either because they
demonstrateadopt our tailoring approach or because, if they continue to
cover smaller GHG sources, the states have demonstrated that they have
adequate resources to do so by undertaking necessary programmatic,
statutory, and/or regulatory changes at the state, local or tribal
leveladminister those programs.

The thresholds we are establishing are based on CO2e for the aggregate
sum of six greenhouse gases that constitute the pollutant that will be
subject to regulation, which we refer to

as GHGs.  These gases are:  CO2, methane (CH4), nitrous oxide (N2O),
hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur
hexafluoride (SF6).  Thus, in this rule, we provide that PSD and title V
applicability is based on the quantity that results when the mass
emissions of each of these gases is multiplied by the Global Warming
Potential (GWP) of that gas, and then summed for all six gases.
However, we further provide that in order for a source’s GHG emissions
to trigger PSD or title V requirements, the quantity of the GHGs must
equal or exceed both the applicability thresholds established in this
rulemaking on a CO2e basis and the statutory thresholds of 100 or 250
tpy on a mass basis.  Similarly, in order for a source to be subject to
the PSD modification requirements, the source’s net GHG emissions
increase must exceed the applicable significance level on a CO2e basis
and must also result in a net mass increase of the constituent gases
combined.

We are adopting this rule after careful consideration of numerous public
comments.  On October 27, 2009 (74 FR 55292), EPA proposed the GHG
tailoring ruleTailoring Rule.  EPA held two public hearings on the
proposed rule, and received over 400,000 written public comments.  The
public comment period ended on December 28, 2009.  The comments have
provided detailed information that has helped EPA understand better the
issues and potential impacts of this rule, and the final rule described
in this preamble incorporates many of the suggestions we received.  We
respond to many of these comments in explaining our rationale for the
final rule, which is described in section V.  The final rule adopts many
elements of the proposal but differs from the proposal in several
important respects.  We proposed to apply PSD and title V to GHG sources
that emit or have the potential to emit at least 25,000 tpy CO2e, and we
proposed a PSD significance level in a range between 10,000 and 25,000
tpy CO2e, but based on consideration of the additional information we
received and our further analysis, we are finalizing the threshold
levels in the amounts and on the schedule described previously.  In
addition, the mechanism for state, local, and tribal program
implementation has been significantly changed to reflect the comments
received that we needed to develop an implementation approach that
states could adopt under state law more expeditiously.

	The remainder of this notice describes our approach and rationale in
more detail.  Following this overview, section III of this preamble
provides background information on the nature of GHG emissions, recent
regulatory developments that affect when and how GHG emissions are
subject to stationary source permitting, and the general requirements of
the PSD and title V programs.  Section IV describes in detail the
summary of the key actions being taken in this rule, including the
determination of emissions, the thresholds and timing for the phase-in,
our approach to implementing the phase-in, and the additional future
actions we will take.  Section V provides a more detailed description of
each action, explaining the policy and legal rationale and responding to
comments received, beginning.  Section V begins with our decisions on
how to calculate the mass-based and CO2e-based emissions used in the
phase-in, followed by.  Section V then turns to our legal and policy
rationale for the first two steps of the phase-in, the 50,000 tpy floor,
and the subsequent study and rulemakings to determine whether and how
smaller sources should be subject to permitting.  This section then
describes key implementation issues including the approach to state
adoption.  After describing our plans for follow-up on title V fee
programs, the section concludes by describing permit streamlining
techniques; guidance on BACT for the GHG sources that are affected under
the first two steps of the tailoring ruleTailoring Rule phase-in;
requests for exemptions; and transitional issues, including
grandfathering.  Finally, section VI describes the expected impacts that
will result from the phase-in approach (i.e, the narrower application of
PSD and title V requirements during the phase-in period) and
sectionsections VII addressesand VIII address administrative
requirements.

III. Background

A.  What are greenhouse gases GHGs and their sources?

GHGs Greenhouse gases trap the Earth’s heat that would otherwise
escape from the atmosphere into space, and forms the greenhouse effect
that helps keep the Earth warm enough for life.  Greenhouse gases are
naturally present in the atmosphere and are also emitted by human
activities.  Human activities are intensifying the naturally occurring
greenhouse effect by increasing the amount of GHGs in the atmosphere,
which is changing the climate in a way that endangers human health,
society, and the natural environment.

Some GHGs, such as CO2, are emitted to the atmosphere through natural
processes as well as human activities.  Other gases, such as fluorinated
gases, are created and emitted solely through human activities.  As
previously noted, the well-mixed GHGs of concern directly emitted by
human activities include CO2, CH4, N2O, HFCs, PFCs, and SF6.  These six
GHGs will, for the purposes of this final rule, be referred to
collectively as "the six well-mixed GHGs,” or, simply, GHGs., and
together constitute the “air pollutant” upon which the GHG
thresholds in this action are based.  These six gases remain in the
atmosphere for decades to centuries where they become well-mixed
globally in the atmosphere.  When they are emitted more quickly than
natural processes can remove them from the atmosphere, their
concentrations increase, thus increasing the greenhouse effect.  The
heating effect caused by the human-induced buildup of GHGs in the
atmosphere is very likely the cause of most of the observed global
warming over the last 50 years.  A detailed explanation of greenhouse
gases, climate change and its impact on health, society, and the
environment is included in EPA'sEPA’s technical support document (TSD)
for the endangerment finding final rule (Docket ID No.
EPA-HQ-OAR-2009-0472-11292).

In the United States, the combustion of fossil fuels (e.g., coal, oil,
gas) is the largest source of CO2 emissions and accounts for 80 percent
of the total GHG emissions.  Anthropogenic CO2 emissions released from a
variety of sources, including through the use of fossil fuel combustion
and cement production from geologically stored carbon (e.g., coal, oil,
and natural gas) that is hundreds of millions of years old, as well as
anthropogenic CO2 emissions from land-use changes such as deforestation,
perturb the atmospheric concentration of CO2 and the distribution of
carbon within different reservoirs readjusts.  More than half of the
energy related emissions come from large stationary sources such as
power plants, while about a third comecomes from transportation.  Of the
six well-mixed GHGs, four (CO2, CH4, N2O, and HFCs) are emitted by motor
vehicles.  In the United States industrial processes (such as the
production of cement, steel, and aluminum), agriculture, forestry, other
land use, and waste management are also important sources of GHGs.

Different GHGs have different heat-trapping capacities.  The concept of
GWP was developed to compare the heat-trapping capacity and atmospheric
lifetime of one GHG to another.  The definition of a GWP for a
particular GHG is the ratio of heat trapped by one unit mass of the GHG
to that of one unit mass of CO2 over a specified time period.  When
quantities of the different GHGs are multiplied by their GWPs, the
different GHGs can be summed and compared on a CO2e basis.  For example,
CH4 has a GWP of 21, meaning each ton of CH4 emissions would have 21
times as much impact on global warming over a 100-year time horizon as 1
ton of CO2 emissions.  Thus, on the basis of heat-trapping capability, 1
ton of CH4 would equal 21 tons of CO2e.  The GWPs of the non -CO2 GHGs
range from 21 (for CH4) up to 23,900 (for SF6).  Aggregating all GHGs on
a CO2e basis at the source level allows a facility to evaluate its total
GHG emissions contribution based on a single metric.

B.  Endangerment Finding and the Light-Duty Vehicle RuleLDVR

1.  Endangerment Finding

On April 2, 2007, the United States .S. Supreme Court found that GHGs
are air pollutants under CAA section 302(g).  Massachusetts v. EPA, 549
U.S. 497 (2007).  As a result, the Supreme Court found that EPA was
required to determine, under CAA section 202(a), whether (a1) GHGs from
new motor vehicles cause or contribute to air pollution which may
reasonably be anticipated to endanger public health or welfare, or (b2)
the science is too uncertain to make a reasoned decision.  After issuing
a proposal and receiving comment, on December 7, 2009, the Administrator
signed two distinct findings regarding GHGs under CAA section 202(a):

Endangerment Finding:  The Administrator found that the current and
projected atmospheric concentrations of the mix of six long-lived and
directly emitted GHGs— — CO2, CH4, N2O, HFCs, PFCs, and SF6
(referred to as “well-mixed greenhouse gases” in the endangerment
finding)–) – are reasonably anticipated to endanger the public
health and welfare of current and future generations.

Cause or Contribute Finding:  The Administrator found that the emissions
of the single air pollutant defined as the aggregate group of six
well-mixed greenhouses gases from new motor vehicles and new motor
vehicle engines contributecontributes to the GHG air pollution that
threatens public health and welfare.

These findings, which were published December 15, 2009 (74 FR 66496), do
not themselves impose any requirements on industry or other entities.
However, they were a prerequisite to finalizing the GHG standards for
light-duty vehicles, described next.

2.  Light-Duty Vehicle Rule

The light-duty vehicle rule, signed on April 1LDVR, 75 FR 25324 (May 7,
2010), is a joint rule between EPA and the Department of
Transportation’s National Highway Traffic Safety Administration
(NHTSA) that establishes a national program consisting of new standards
for light-duty vehicles that will reduce greenhouse gasGHG emissions and
improve fuel economy.  EPA finalized the national GHG emissions
standards under the Act, and NHTSA finalized Corporate Average Fuel
Economy (CAFE) standards under the Energy Policy and Conservation Act,
as amended.  The new standards apply to new passenger cars, light-duty
trucks, and medium-duty passenger vehicles, starting with model year
2012.  The EPA GHG standards are projected to result in an estimated
combined average emissions level of 250 grams of CO2 per mile for model
year 2016 vehicles.  The standards begin with the 2012 model year, with
standards increasing in stringency through model year 2016.  The
standards are a fleet average for each manufacturer, based on a
footprint attribute curve, meaning that the actual target for a vehicle
will vary depending on the size of the vehicle.  Under the
footprint-based standards, each manufacturer will have a GHG standard
unique to its fleet, depending on the footprints of the vehicle models
produced by that manufacturer.  A manufacturer will have separate
footprint-based standards for cars and for trucks.

 The endangerment and contribution findings described abovepreviously
require EPA to issue standards under section 202 (a) “applicable to
emission” of the air pollutant that EPA found causes or contributes to
the air pollution that endangers public health and welfare.  The final
emissions standards satisfy this requirement for GHGs from light-duty
vehicles.  Under section 202(a)), the Administrator has significant
discretion in how to structure the standards that apply to the emission
of the air pollutant at issue here, the aggregate group of six GHGs.
EPA has the discretion under section 202(a) to adopt separate standards
for each gas, a single composite standard covering various gases, or any
combination of these.  In the LDVR, EPA finalized separate standards for
nitrous oxideN2O and methaneCH4, and a CO2 standard that provides for
credits based on reductions of HFCs, as the appropriate way to issue
standards applicable to emission of the single air pollutant, the
aggregate group of six GHGs.  EPA did not set any standards for PFCs or
SF6, as they are not emitted by motor vehicles.

C.  What are the general requirements of the PSD program?

1. Overview of the PSD Program

The PSD program is a preconstruction review and permitting program
applicable to new major stationary sources and major modifications at
existing major stationary sources.  The PSD program applies in areas
that are designated “attainment” or “unclassifiable” for a
National Ambient Air Quality Standard (NAAQS).  The PSD program is
contained in part C of title I of the CAA.  The "nonattainment new
source review (NSR)" program applies in areas not in attainment for of a
NAAQS or in the Ozone Transport Region and is implemented under the
requirements of part D of title I of the CAA.  Collectively, we commonly
refer to these two programs as the major NSR program.  The governing EPA
rules are contained in 40 CFR 51.165, 51.166, 52.21, 52.24, and part 51,
appendicesAppendices S and W.  There is no NAAQS for CO2 or any of the
other well-mixed GHGs, nor has EPA proposed any such NAAQS; therefore,
unless and until we take further such action, we do not anticipate that
the "nonattainment" major NSR program will apply to GHGs.

The applicability of PSD to a particular source must be determined in
advance of construction or modification and is pollutant-specific.  The
primary criterion in determining PSD applicability for a proposed source
is whether the source is a “major emitting facility,”, based on its
predicted potential emissions of regulated pollutants, within the
meaning of CAA section 169(1) and either constructs or undertakes a
modification.  EPA has implemented these requirements in its
regulations, which use somewhat different terminology for determining
PSD applicability, which is whether the source is a “major stationary
source” or whether the proposed project is a “major modification.”

a.  Major Stationary Source

Under PSD, a "“major stationary source"” is any source belonging to
a specified list of 28 source categories which emits or has athe
potential to emit (PTE) of 100 tpy or more of any pollutant subject to
regulation under the CAA, or any other source type which emits or has
the PTEpotential to emit such pollutants in amounts equal to or greater
than 250 tpy.  We refer to these levels as the 100/250-tpy thresholds.
A new source with a potential to emit (PTE) at or above the applicable
“major stationary source threshold"” is subject to major source NSR.
 These limits originate from section 169 of the CAA, which applies PSD
to any “major emitting facility” and defines the term to include any
source that emits or has a PTE of 100 or 250 tpy, depending on the
source category.  Note that the major source definition incorporates the
phrase “subject to regulation,” which, as described later, will
begin to include GHGs on January 2, 2011, under our interpretation of
that phrase discussed in the recent Interpretive Memo notice.  75 FR
17004, April 2, 2010.

b.  Major Modifications

PSD also applies to existing sources that undertake a "major
modification," which occurs:  (1) when there is a physical change in, or
change in the method of operation of, a "major stationary source;" (2)
the change results in a "significant" emission increase of a pollutant
subject to regulation (equal to or above the significance level that EPA
has set for the pollutant in 40 CFR 52.21(b)(23)); and (3) there is a
“significant net emissions increase” of a pollutant subject to
regulation that is equal to or above the significance level (defined in
40 CFR 52.21(b)(23)).  Significance levels, which EPA has promulgated
for criteria pollutants and certain other pollutants, represent a de
minimis contribution to air quality problems.  When EPA has not set a
significance level for a regulated NSR pollutant, PSD applies to an
increase of the pollutant in any amount (that is, in effect, the
significance level is treated as zero).

2.  General Requirements for PSD

This section provides a very brief summary of the main requirements of
the PSD program.  One principal requirement is that a new major source
or major modification must apply BACT, which is determined on a
case-by-case basis taking into account, among other factors, the cost
effectiveness of the control and energy and environmental impacts.  EPA
has developed a “top-down” approach for BACT review, which involves
a decision process that includes identification of all available control
technologies, elimination of technically infeasible options, ranking of
remaining options by control and cost effectiveness, and then selection
of BACT.  Under PSD, once a source is determined to be major for any
regulated NSR pollutant, a BACT review is performed for each attainment
pollutant that exceeds its PSD significance level as part of new
construction or for modification projects at the source, where there is
a significant increase and a significant net emissions increase of such
pollutant.

.

In addition to performing BACT, the source must analyze impacts on
ambient air quality to assure that no violation of any NAAQS or PSD
increments will result, and must analyze impacts on soil, vegetation,
and visibility.  In addition, sources or modifications that would impact
Class I areas (e.g., national parks) may be subject to additional
requirements to protect air quality related values (AQRVs) that have
been identified for such areas.  Under PSD, if a source proposes to
locate within 100 kilometers of source’s proposed project may impact a
Class I area, the Federal Land Manager is notified and is responsible
for evaluating a source’s projected impact on the AQRV’sAQRVs and
recommending either approval or disapproval of the source’s permit
application based on anticipated impacts.  There are currently no NAAQS
or PSD increments established for GHGs, and therefore these PSD
requirements would not apply for GHGs, even when PSD is triggered for
GHGs.  However, if PSD is triggered for a GHG emissions source, all
regulated NSR pollutants which the new source emits in significant
amounts would be subject to PSD requirements.  Therefore, if a facility
triggers review for regulated NSR pollutants that are non-GHG pollutants
for which there are established NAAQS or increments, the air quality,
additional impacts, and Class I requirements would apply to those
pollutants.

The permitting authority must provide notice of its preliminary decision
on a source's application for a PSD permit, and must provide an
opportunity for comment by the public, industry, and other interested
persons.  After considering and responding to comments, the permitting
authority must issue a final determination on the construction permit.
Usually NSR permits are issued by state or local air pollution control
agencies, which have their own permit programs approved by EPA in their
SIPState Implementation Plans (SIPs).  In some cases, EPA has delegated
its authority to issue PSD permits to the state or local agency.  In
other areas, EPA issues the permits under its own authority.

D. What are the general requirements of the Titletitle V Operating
Permits Programoperating permits program?

1.  Overview of Title V

The operating permit requirements under title V are intended to improve
sources' compliance with other CAA requirements.  The title V program is
implemented through regulations promulgated by EPA, 40 CFR part 70, for
programs implemented by state and local agencies and tribes, and 40 CFR
part 71, for programs generally implemented by EPA.

In summary, the title V program requires major sources (defined and
interpreted by EPA to include sources that emit or have a PTE of 100 tpy
of any pollutant subject to regulation) and certain other sources to
obtain apply for operating permits.  Under EPA’s long-standing
interpretation, a pollutant, such as a GHG, is “subject to
regulation” when it is subject to a CAA requirement establishing
actual control of emissions.  Title V generally does not add new
pollution control requirements, but it does require that each permit
contain all existing pollution control requirements or “applicable
requirements” required by the CAA (e.g., New Source Performance
Standard (NSPS), and State Implementation Plan (SIP) requirements,
including PSD), and it requires that certain procedural requirements be
followed, especially with respect to compliance with these requirements.
 "Applicable requirements" for title V purposes include stationary
source requirements, but do not include mobile source requirements.
Other procedural requirements include providing review of permits by
EPA, states, and the public, and requiring permit holders to track,
report, and annually certify their compliance status with respect to
their permit requirements.

2.  Title V Permit Requirements

This section provides a brief summary of the requirements of the title V
program that are most relevant to this action.  A source generally must
apply for a title V permit within 1 year of first becoming subject to
permitting – for new sources, this is usually within 1 year of
commencing operation.  The application must include, among other things,
identifying information, a description of emissions and other
information necessary to determine applicability of requirements and
information concerning compliance with those requirements.  The
permitting authority uses this information to develop the source's
operating permit.

Title V permits generally contain the following elements:  (1) emissions
limitations and standards to assure compliance with all applicable
requirements; (2) monitoring, recordkeeping, and reporting requirements,
including submittal of a semiannual monitoring report and prompt
reporting of deviations from permit terms; (3) fee payment; and (4) an
annual certification of certification by a responsible official.  The
detailed requirements are set forth at 40 CFR 70.6.

In addition to the permit content requirements, there are procedural
requirements that must be followed in issuing title V permits, including
(1) application completeness determination; (2) public notice and a
30-day public comment period, including an opportunity for a public
hearing, on draft permits; (3) EPA and affected state review; and (4) a
statement of the legal and factual basis of the draft permit.  The
permitting authority must take final action (issue or deny) on the
permit applications within 18 months of receipt.  EPA also has 45 days
from receipt of a proposed permit to object to its issuance, and
citizens have 60 days after that to petition EPA to object to a permit.
Permits may also need to be revised or reopened if new requirements come
into effect during the permit terms or if the source makes changes that
conflict with, or necessitate changes to, the current permit.  Permit
revisions and re-openings follow procedural requirements which vary
depending on the nature of the necessary change to the permit.

E.  The Interpretive Memorandum

 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 this
preamble 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 publishedsigned 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 model year 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 model year 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.

IV. Summary of Final Actions

This section describes the specific actions we are taking in this final
rule.  It describes the overall tailoring approach for NSR and title V
applicability, the steps we are taking to put it into place, and future
actions that we commit to take.  The next section, V, provides the legal
and policy rationale for these actions.  In that section, we provide a
description of our rationale and response to comments for each action,
presented in the same order as we describe the actions belowhere.

A. How do you define the GHG pollutant for PSD and title V purposes?

1.  GHG Pollutant Defined as the Sum-of-Six Well-Mixed GHGs

We are identifying the air pollutant for purposes of PSD and title V
applicability to be the pollutant subject to regulation, which is the
air pollutant for GHGs identified in EPA’s LDVR, as well as EPA’s
endangerment and contribution findings..  In the LDVR, EPA set emissions
standards under section 202(a) that were “applicable to emission” of
a single air pollutant defined as the aggregate sum of six greenhouses
gasesGHGs.  The six GHGs, which are well-mixed gases in the atmosphere,
are:  CO2, CH4, N2O, HFCs, PFCs, and SF6.  Earlier, EPA made the
contribution finding for this single air pollutant.

Furthermore, as proposed, we are using an emissions threshold that
allows all six constituent gases to be evaluated using a common metric
– CO2e.  Thus, to determine applicability, a source's GHG emissions
are calculated on a CO2e basis by multiplying the mass emissions of any
of the six GHGs that the source emits by that gas’s GWP and then
summing the CO2e for each GHG emitted by the source.  This sum,
expressed in terms of tpy CO2e, is then compared to the applicable
CO2e-based permitting threshold to determine whether the source is
subject to PSD and title V requirements.

In addition, because we are implementing this phase-in through the term
“subject to regulation,” the ruleregulatory language is structured
such that the statutory mass-based thresholds (i.e.., for PSD, 100/250
tpy) for new construction and 0zero tpy for modifications at a major
stationary source, and for title V, 100 tpy) continue to apply and .  As
a result, stationary source apply and stationary sources or
modifications that do not meet these thresholds are not subject to
permitting requirements.  While technically evaluation of the mass-based
thresholds is the second step in the applicability analysis, from a
practical standpoint most source sources are likely to treat this as an
initial screen and not evaluate emissions on a CO2 e basis , so that if
they would not trigger PSD or title V on a mass basis and we , they
would not proceed to evaluate emissions on a CO2e basis.  We have
treated it evaluation of mass-based thresholds as suchthe initial step
in our descriptions below.  As applicable, a source would evaluate these
mass-based thresholds by summing each of the six GHGs it emits on a mass
basis (i.e., before applying GWP).  We expect that it will be very rare
for a new stationary source or modification to trigger permitting based
on CO2e and not also trigger based on mass alone.

 Determining permit program applicability for the GHG “air
pollutant” by using the sum-of-six GHGs is based on EPA’s
interpretation that the PSD and title V requirements apply to each
“air pollutant” that is “subject to regulation” under another
provision of the CAA.  As discussed previously, the final LDVR for GHGs
makes it clear that the emissions standards EPA adopted are standards
applicable to emission of the single air pollutant defined as the
aggregate mix of these six well-mixed greenhouse gasesGHGs.  See April
1LDVR, May 7, 2010 Preamble, , 75 FR 25398-99, section III.A.2.c., pp
153-4., and 40 CFR §86.1818-12.  For reasons explained in more detail
in section V, we have determined it is legally required, and preferable
from a policy standpoint, for EPA to use the same definition of the air
pollutant for permitting purposes as that used in the rule that
establishes the control requirements for the pollutant.  We also believe
there are implementation advantages for applying PSD and title V in this
way.  Thus, this rule establishes that a stationary source will use the
group of six constituent gases for permitting applicability, rather than
treating each gas individually.  Similarly, you will include all six
constituent gases because that is how the air pollutant is defined, even
though motor vehicles only emit four of the six.

2.  What GWP values should be used for calculating CO2e?

We are requiring that wherever you perform an emissions calculations
involving CO2e for the purposes of determining the applicability of PSD
or title V requirements, you use the GWP values codified in the EPA’s
GHG mandatory GHG reporting rule [Reference:  Table A-1 to Subpart A of
Part 98 – Global Warming Potentials, FR, Vol.74, No. 209, p. 56395]..
This approach will assure consistency between the values required for
calculations under the mandatory reporting rule and for PSD or title V.
In addition, because any changes to Table A-1 of the mandatory GHG
reporting rule regulatory text must go through a rulemaking, this
approach will assure that the values used for the permitting programs
will reflect the latest values adopted for usage by EPA after notice and
comment.

B.  When will PSD and title V applicability begin for GHGs and emission
sources?

Overview

	In this action, we establish the first two phases of our phase-in
approach, which we refer to as stepsSteps 1 and 2.  We also commit to a
subsequent rulemaking in which we will propose or solicit comment on
establishing a further phase-in, that is, a stepStep 3, that would apply
PSD and title V to additional sources, effective July 1, 2013, and on
which we commit to take final action, as supported by the record, by no
later than July 1, 2012.

We also commit to undertaking an assessment of sources’ and permitting
authorities’ progress in implementing PSD and title V for GHG sources,
and to complete this assessment by 2015.  We further commit to
completing another round of rulemaking addressing smaller sources by
April 30, 2016.  Our action in that rulemaking would address permitting
requirements for smaller sources, taking into account the remaining
problems concerning costs to sources and burdens to permitting
authorities.  Finally, we determine in this action that we will apply
PSD or title V requirements to sources that emit GHGs, or that conduct
modifications that result in increases in emissions of GHGs, in amounts
of less than 50,000 tpy CO2e any earlier than when we take the required
further action to address smaller sources by April 30, 2016.

Through this process, we will implement the phase-in approach by
applying PSD and title V at threshold levels that are as close to the
statutory levels as possible, and do so as quickly as possible, at least
to a certain point.  The level and timing of the thresholds that we
promulgate in future actions will be based on our assessment of the
resulting costs to sources and burdens to permitting authorities, and
that, in turn, will depend on such variables as our progress in
developing streamlining approaches and on permitting authorities’
progress in developing permitting expertise and acquiring more
resources.  At this time, we cannot foresee exactly when or in what
manner those developments will occur.  Therefore, we cannot promulgate
more components of the tailoring approach beyond what we promulgate in
this action.  We can say only that we may continue the phase-in process
with further rulemaking after 2016.  Alternatively, we may make a
definitive determination in one of the future rulemaking actions that,
under the “absurd results” doctrine, PSD or title V applies only to
certain GHG sources, and does not apply to the remaining GHG sources,
and with that rulemaking, bring this tailoring process to a close.

1.  What are the Step 1 thresholds, timing, and calculation methodology?

a. PSD Permitting

Step 1 of the tailoring ruleTailoring Rule phase-in will begin on
January 2, 2011.  With respect to the PSD program, GHG sources will
become subject to PSD for their GHG emissions if they undergo PSD
permitting anyway, either for new construction or for modification
projects, based on emissions of non-GHG pollutants, in which case they
will be subject to the PSD requirements for GHG if they increase GHG
emissions by 75,000 tpy CO2e or more.  Under this step, only these
sources, which we refer to as “anyway” PSD sources, will become
subject to PSD; no sources will become major sources for PSD purposes or
be treated as undertaking modifications that trigger PSD based solely on
their GHG emissions.  As a result, no additional PSD permitting actions
will be necessary solely due to GHG emissions.  However, existing or
newly-constructed sources that are determined to be major sources based
on non-GHG emissions are required to conduct a BACT review for their GHG
emissions (from new construction) or emissions increases (from
modifications), if they are subject to PSD due to their non-GHG
emissions from construction or modification actions and each of the
following conditions is met:

(1)  	The GHG emissions (or net emissions increase) due to the new
construction (or modification) project, calculated as the sum of the six
well-mixed GHGs on a mass basis (no GWPs applied) exceed a value of 0
tpy; and

(2)  	The GHG emissions (or net emissions increase) due to the new
construction (or modification) project, calculated as the sum of the six
well-mixed GHGs on a CO2e basis (GWPs applied) equal or exceed a value
of 75,000 tpy CO2e.

The purpose of the first condition is to determine whether the GHG
emissions or net emissions increase has resulted in an “increase in
the amount” of an air pollutant as required by the Act.  Because EPA
has not defined a mass-based regulatory significance level for GHGs,
that level, in effect, is treated as zero.  See 40 CFR §§ 52.21
(b)(23)(ii) and 51.166 (b)(23)(ii).  In practice, this means any amount
of new emissions or an emission increase will exceed the mass-based
limit.  We are not, at this time, establishing a significance level
based on mass emissions because we have established , and instead we are
establishing one based on CO2e that addresses permitting burdens.  Thus,
theThe zero mass-based step will be used only amount applies, but only
as an initial screen to exclude sources or changes that have no mass
increase of GHGs.  At this time, we are not establishing a significance
level on a mass emissions basis.

b.  Title V Permitting

Under step Step 1, only sources required to have title V permits for
non-GHG pollutants (i.e., “anyway” title V sources) will be required
to address GHGs as part of their title V permitting.  That is, no
sources will become major for title V based solely on their GHG
emissions.  Note further, however, that the 75,000 tpy CO2e limit does
not apply to title V, so that anyway title V sources must apply any
title V requirements to their GHG emissions regardless of the amount of
those emissions.  Sources with title V permits must address GHG
requirements when they apply for, renew, or revise their permits.  These
requirements will include any GHG applicable requirements (e.g., GHG
BACT requirements from a PSD process) and associated monitoring,
record-keeping and reporting.  When a permit application is otherwise
required, they will also need to identify GHG emissions and other
information in that application to the extent required under 40 CFR §§
70.5(c) and 71.5(c), including information necessary to determine
applicable requirements.

2.  What are the Step 2 thresholds, timing, and calculation methodology?

a.  PSD Permitting

Step 2 will begin July 1, 2011.  Under stepStep 2, anyway PSD sources -
that is, sources already subject to PSD based on non-GHGs and covered
under stepStep 1 abovepreviously - will remain subject to PSD.  In
addition, sources with the potential to emit 100,000 tpy CO2e or more of
GHG will be considered major sources for PSD permitting purposes
(provided that they also emit GHGs or some other regulated NSR pollutant
above the 100/250 tpy (mass based) statutory thresholds.  Additionally,
any physical change or change in the method of operation at a major
source (including one that is only major due to GHGs) resulting in a net
GHG emissions increase of 75,000 tpy CO2e or more will be subject to PSD
review and requirements with respect to GHGs (provided that it also
results in an increase of GHG emissions on a mass basis).

  Specifically, for purposes of determining whether a GHG emission
source undertaking, resulting from either new construction or a physical
or operational change at an existing source, is considered a major
source under PSD, both of the following conditions must be met:

(1)  The GHG emissions at a newly constructed source, which is not major
for another pollutant, calculated emits or has the sum-of- six
well-mixed GHGs on a mass basis (no GWPs applied):

equal or exceed 100 tpy (in actual emissions or potential to emit)  GHG
in amounts that equal or exceed the following, calculated as the
sum-of-six well-mixed GHGs on a mass basis (no GWPs applied):

100 tpy for sources in any of the 28 major emitting facility source
categories listed under PSD, or

equal or exceed 250 tpy (in actual emissions or potential to emit) for
any other stationary source.

(2)  The GHG emissions at a newly constructed source, calculated as the
sum-of-six well-mixed GHGs on a mass basis (GWPs applied)	The GHG
emission source emits or has the potential to emit GHGs in amounts that
equal or exceed 100,000 tpy CO2e (on an actual or potential to emit
basis).

For determining whether a modification project at a major stationary
source is subject to PSD review, both of the following conditions must
be met:

(1)  The net GHG emissions increase resulting from the project,
calculated as the sum -of-six well-mixed GHGs on a mass basis (no GWPs
applied) equals or exceeds 0 tpy.

(2)  	The net GHG emissions increase resulting from the project,
calculated as the sum-of-six well-mixed GHGs on a CO2e basis (GWPs
applied) equals or exceeds 75,000 tpy CO2e.

The purpose of the first condition in both of these determinations above
is to confirm whether the GHG emissions or emissions increase have
exceeded, on a mass-basis, the statutory major source thresholds (where
the source is not otherwise major) and mass-based statutory significance
level for GHGs, which, as noted abovepreviously, is 0 tpy.  See 40 CFR
§ 52.21 (b)(23)(ii) and 51.166 (b)(23)(ii).

As an example of how the mass-based test would apply, consider a
modification project that results in a 5 tpy increase of GHG emissions
on a mass basis, associated with a high-GWP GHG gas (for example, SF6,
with a GWP value of 23,900), but also results in a 100 tpy reduction in
CO2 emissions (assume no other contemporaneous increases or decreases of
GHG).  In this example, there would be a net decrease of GHG emissions
on a mass basis (5 tpy – 100 tpy = -95 tpy).  Because there is no
mass-based increase of GHG, this project does not trigger PSD, despite
the fact that the net GWP-adjusted emissions increase of SF6 in this
example would equal 119,500 tpy of CO2e and the project would thus
exceed 75,000 tpy CO2e.

b.  Title V Permitting

Under stepStep 2, “anyway” title V sources - that is, sources
already subject to title V based on non-GHGs and that are covered under
stepStep 1 abovepreviously - will continue to be subject to title V.  In
addition, GHG emission sources that equal or exceed the 100,000 tpy CO2e
threshold will be required to obtain a title V permit if they do not
already have one.  It is important to note that the requirement to
obtain a title V permit will not, by itself, result in the triggering of
additional substantive requirements for control of GHG.  Rather, these
new title V permits will simply incorporate whatever applicable CAA
requirements, if any, apply to the source being permitted.  The Both of
the following conditions need to be met in order for title V to apply
under stepStep 2 to a GHG emission source.:

For determining whether a GHG emission source is subject(1)	An existing
or newly constructed source emits or has the potential to permitting
under title V:

1)  The GHG emissions at an existing or newly constructed source, emit
GHGs in amounts that equal or exceed 100 tpy calculated as the sum of
the six well-mixed GHGs on a mass basis (no GWPs applied), equal or
exceed 100 tpy (on an actual emission or PTE basis).

(2)  The GHG emissions at an	An existing or newly constructed source,
emits or has the potential to emit GHGs in amounts that equal or exceed
100,000 tpy calculated as the sum of the six well-mixed GHGs on a mass
CO2e basis (GWPs applied), equal or exceed a value of 100,000 tpy CO2e
(on an actual emission or PTE basis)).

3.   What about Step 3?

In this rule, EPA establishes an enforceable commitment to complete
another rulemaking no later than July 1, 2012, in which we will propose
or solicit comment on a stepStep 3 of the phase-in and may also consider
other approaches that may result in the permanent exclusion of a
category of sources from PSD or title V requirements, under the Chevron
framework, taking account of the “absurd results” doctrine.

Consistent with our phase-in approach, it is important for us to
consider whether, at some point during the implementation of step Step
2, it will become possible to administer GHG permitting programs for
additional sources.  For example, if EPA is able to promulgate measures
that streamline programs to at least some extent, if permitting
authorities increase their resources, or if implementation experience
and more seasoned staff results in more effective use of scarce
permitting resources, then we expect that we will be able to phase- in
the application of PSD and title V to more sources by establishing
stepStep 3.  We do not have enough information now to establish a final
stepStep 3, particularly because there will be significant transition
occurring in the GHG permitting programs during stepsSteps 1 and 2.
However, we believe that it will be possible to develop a record on
which to base stepStep 3 sometime soon after we begin to implement
stepStep 2.

Therefore, we plan to propose a rule in which we solicit comment on or
propose lower thresholds for PSD and title V applicability, and we
establish an enforceable commitment to finalize a rule in which we
address those matters by July 1, 2012.  In order to provide a year for
permitting authorities and sources to prepare for any additional GHG
permitting action in Step 3, we will establish that Step 3 would take
effect on July 1, 2013.  We also commit to explore, between now and the
stepStep 3 proposal, a wide range of streamlining options.  In the
proposal, we will take comment on streamlining approaches we think may
be viable (except to the extent we will have already issued guidance
documents concerning streamlining approaches), and we will address those
options in the final rule.

In addition, as part of the stepStep 3 action, we may solicit comment on
a permanent exclusion of certain sources from PSD, title V or both,
based on an “absurd results” rationale.  For example, we may make a
final determination that under the “absurd results” doctrine, PSD
and/or title V do not apply to a set of GHG sources that, although above
the statutory thresholds for those programs, are too small and
relatively inconsequential in terms of GHG contribution.  Another type
of such exclusion for the title V program could be for sources that
would otherwise be required to obtain an “empty permit,” that is,
for example, one that would not contain any applicable requirements
because there are none that apply to the source or any applicable GHG
requirements, depending on the approach taken.  It is possible that in
promulgating such an exclusion.  If we promulgate a permanent exclusion,
we may conclude that it bringsby that time, we will have brought into
the PSD and title V programs the full set of sources that would be
consistent with congressional intent, (or, if congressional intent on
that point is unclear, with a reasonable policy consistent with
statutory requirements) and, if sounder those circumstances, we would
find that such a rule brings the tailoring process to a close.  The
application of the “absurd results” rationale for a permanent
exclusion is discussed in more detail in the next section V.B, later in
this preamble.

4.  What about the proposed 6 -year exclusion for smaller sources?

The tailoring proposal contemplated at least a six6-year exclusion from
permitting for small sources.  This proposed exclusion was based on the
overwhelming numbers of permitting actions at small sources and the need
for time for permitting authorities to secure resources, hire and train
staff, and gain experience with GHG permitting for new types of sources
and technologies.  It was also based on the time needed for EPA to
develop, and for states to adopt, streamlining measures to reduce the
permitting burden (e.g., concerning PTE, presumptive BACT, or general
permits,).  We therefore proposed such an exclusion, and proposed that
it would last 6 years – 5 years to complete a required study
evaluating permitting burden and assessing the effect of streamlining
measures or techniques in reducing this burden, plus an additional year
to complete a final rulemaking that would phase in additional sources as
appropriate based on the study.

	We are finalizing the six6-year exclusion, and for reasons described
belowlater, are establishing that in no event will sources below 50,000
tpy CO2e be subject to PSD or title V permitting during the 6-year
period, nor will modifications be subject to PSD unless they increase
emissions by 50,000 tpy CO2e or more.  The exclusion will last until we
take the action described later to address smaller sources, which is
required by April 30, 2016.  The exclusion provides certainty that,
before this date, EPA will not act to cover sources and modifications
below these thresholds, including during the required stepStep 3
rulemaking that will occur in 2012.  In effect, this means that stepStep
3 will establish a major source threshold and significance level no
lower than 50,000 tpy CO2e.  This does not necessarily mean we will
cover sources below this level on April 30, 2016.  It simply means that
the provision we are adopting would assure that EPA does not cover such
sources any sooner than that.

5.  When and how will EPA take further action on smaller sources?

As we proposed, we are establishing an enforceable commitment to act
within 5 years to complete a study projecting the administrative burdens
that remain for small sources after permitting authorities have had time
to secure resources, hire and train staff, and gain experience with GHG
permitting for new types of sources and technologies, and after EPA has
had time to develop (and states have had time to adopt) streamlining
measures to reduce the permitting burden for such sources.  We will use
the results of this study to serve as the basis for an additional
rulemaking that would take further action to address small sources.
Similar to the enforceable commitment to act on stepStep 3, we are
making an enforceable commitment to complete this rulemaking by April
30, 2016,

.

We cannot predict at this time what form that final action will take.
It could function as a stepStep 4, bringing in additional sources based
on, for example, streamlining actions, increased permitting authority
resources, and experienced and more efficient permitting staff; and it
could further indicate that we intend to follow-up with a stepStep 5 to
bring in more sources.  Alternatively, it could also function as a final
step excluding certain sources permanently based on our application of
the Chevron framework, taking account of the “absurd results”
doctrine, and subjecting the remaining sources to permitting.  However,
whatever final action we take would explain any necessary changes to the
stepStep 3 thresholds and would supersede the 6-year exclusion for
sources and modifications below 50,000 tpy CO2e.

C.  How do state, local and tribal area programs adopt the final GHG
applicability thresholds?

We are finalizing our proposed approach to change the definition of
“major stationary source” in the PSD implementing regulations, and
the “major source” definition in the title V implementing
regulations to tailor the application of these permitting programs to
GHG emissions.  We are also finalize finalizing a significance level for
GHG emissions for purposes of defining a major modification under the
PSD program, and add an exclusion from PSD and title V permitting for
GHG emissions, until we complete a rulemaking required by April 30,
2016, for any sources that are not already subject to PSD and title V
permitting and that emit less than 50,000 tpy of CO2e.

	As explained earlier, we are adopting thresholds that phase in the
applicability of GHG permitting over a specified time period.  In
adopting regulatory changes to implement these thresholds, we follow an
approach that is substantively the same as the approach proposed, but
takes a slightly different form for purposes of revisions to our PSD and
title V regulations.  Specifically, we are explicitly codifying the
phrase “subject to regulation” in this final rule, for our
implementing regulations, instead of revisingin conjunction with the
definitions of “major stationary source” and “major
modification” (for PSD) and “major source” definitions by
incorporating the tailoring rules numerical thresholds directly into the
definitions.  Under this mechanism, we interpret (for title V), we are
adopting a definition of the term “subject to regulation” .”
Moreover, we are defining this term so that GHG emissions from sources
above the threshold are treated as subject to regulation, and therefore
the sources that emit them are subject to PSD; while GHG emissions from
sources below the threshold are not treated as subject to regulation,
and therefore the sources that emit them are not subject to PSDtitle V.
We are not finalizing this alternative regulatorythe approach we
proposed, which was to revise the numerical thresholds in the
definitions so that GHG sources would have a higher threshold.  Although
we are defining the term “subject to regulation,” we recognize that
from a substantive standpoint, our tailoring approach entails
interpreting the definitions of “major emitting facility,” “major
modification,” and “major source” to phase in the applicability of
PSD and title V, as applicable, to GHG sources, and it makes no
difference whether we interpret those definitions through a definition
of the term “subject to regulation,” revising the numerical
thresholds, or revising other terms in those definitions.

We are adopting definitions of the term “subject to regulation” to
implement the tailoring approach because that will facilitate rapid
adoption and implementation of the final rules by states.  Under this
approach, states may not need to undertake a regulatory or legislative
action before implementing the finl rule.  These states would be able to
establish their interpretationinterpretations of the term “subject to
regulation” byused in existing state rules before January 2, 2011,
which is the date that the tailoring ruleLDVR and permitting
requirements would take effect, and thereby, at that time, exempt
sources below the threshold from PSD and title V as a matter of both
federal and state law.  We are also finalizingcodifying in this
definition consistent with our statements in EPA interpretations
discussed in our recent action “Reconsideration of Interpretation of
Regulations that Determine Pollutants Covered by Clean Air Act
Permitting Programs” (75 FR 17704) to better inform readers of our
existing interpretationprovide a complete picture of the meaning of this
phrase as it applies to all air pollutants.  States may not need to
undertake a regulatory or legislative action before implementing the
final rule.

Because we finalize are finalizing the rule in a manner that will allow
most states to rapidly adopt and implement the final rule, and because
our recent action on the Interpretive Memo allowed for a longer
transition time than we anticipated at proposal, we are delaying final
action on our proposal to issue limited approvals for SIP-approved PSD
programs and part 70 operating permit programs.  Instead, we are
requesting that states submit information to the appropriate EPA
Regional Administrator by [INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION
IN THE FEDERAL REGISTER] so that we may determine whether it is still
necessary to finalize any of our proposed limited approvals for any
SIP-approved PSD and Partpart 70 title V state programs.  In that
letter, states should explain whether they will adopt EPA’s regulatory
interpretationapply the meaning of the term “subject to regulation”
established by EPA in this action in implementing both their PSD and
part 70 title V permitting programs, and if so, whether the state
intends to adopt the interpretationdo so without undertaking a
regulatory or legislative process.  If a state must revise its statutes
or regulations to implement the interpretationthis rule, we ask states
tothat it provide an estimate of the time to adopt final rules in its
letter to the Regional Administrator.  If a state chooses not to adopt
our interpretationapply the approach reflected in this rule, the letter
should address whether the state has alternative authority to implement
the final rule’s tailoring approach or some other approach that is at
least as stringent, but which also addresses the expected shortfalls in
personnel and funding that would exist if the state carried out
permitting at thresholds lower than those in the final rules.  For any
state that is unable or unwilling to adoptapply the permitting
thresholds in the final rules, and otherwise is unable to demonstrate
adequate personnel and funding, or alternate authority to permit GHG
emissions sources consistent with the final rules, EPA will move forward
with finalizing a limited approval of the state’s permitting program.
By the same token, if we do not receive a letter from a state in
response to this request by [dateINSERT DATE 60 DAYS AFTER DATE OF
PUBLICATION IN THE FEDERAL REGISTER], we will be obliged to move forward
with finalizing a narrowing of our approval of the existing SIP or title
V program.

We also ask any state that currently lacks authority to issue PSD or
title V permits to any GHG emissions sources to notify the EPA Regional
Administrator by letter as to whether the state intends to undertake
rulemaking to revise their its rules consistent with these applicability
thresholds.  For any state that lacks the ability to issue PSD or title
V permits for GHG emissions sources consistent with the final rule, we
will intend to undertake a separate action to call for revisions to
these programs.  We will also intend to move quickly to impose a Federal
Implementation Plan (FIP) for PSD through 40 CFR section 52.21, and use
our federal title V authority to ensure that GHG sources will be
permitted consistent with the final rules.  Our request for information
from states is discussed further in section V.C.

D.  How do you treat GHGs for purposes of title V permit fees?

We are not amending the title V regulations for fees at this time,
including any of the provisions specifying the presumptive minimum fee.
We are also not, at this time, calling for each state, local or tribal
program to submit new fee adequacy demonstrations as a result of
increased GHG permitting workload during stepsSteps 1 and 2.  However,
as described in section VI.D the statutory and regulatory requirement to
collect fees sufficient to cover all reasonable (direct and indirect)
costs required to develop and administer title V programs still applies.
 Therefore, we are recommending that each program review its resource
needs for GHG-emitting sources and determine if the existing fee
approaches will be adequate.  If those approaches will not be adequate,
we suggest that state, local and tribal agencies should be proactive in
raising fees to cover the direct and indirect costs of the program or
develop other alternative approaches to meet the shortfall.  We will
closely monitor approved title V programs during implementation of the
first two steps of the Tailoring Rule to ensure that the added workload
from incorporating GHGs into the permit program does not result in fee
shortfalls that imperil operating permit program implementation and
enforcement.  In developing alternative approaches, we note the value of
approaches that do not require a per-ton fee for GHG and therefore do
not require a GHG inventory to develop.  Finally, we offer to work with
permitting authorities that request our assistance with developing fee
approaches,.

E.  Other Actions and Issues

This section describes other actions we intend to take in the future
related to GHG permitting in addition to the actions that we are
promulgating with this final rule.  This section also responds to
commenters’ suggestions that we undertake certain additional actions
in this rule, which we decline to do.

1.  Timing for Permit Streamlining Techniques

As described at proposal, we intend to develop a series of streamlining
approaches as an integral part of our phase-in approach.  The approaches
we described at proposal included:  (1) defining PTE for various source
categories, (2) establishing emission limits for various source
categories that constitute presumptive BACT, (3) establishing procedures
for use of general permits and permits-by-rule, (4) establishing
procedures for electronic permitting, and (5) applying lean techniques
to establish more efficient permitting processes.  Taken as a whole,
these techniques will have the potential to obviate the applicability of
PSD and title V requirements for some GHG-emitting sources; promote more
efficient treatment of GHG-emitting sources that will already be subject
to PSD and title V; and allow the expeditious expansion of PSD and title
V applicability to more GHG-emitting sources while protecting those
sources and the permitting authorities from undue expenses.

As a result, we fully intend to move forward expeditiously with
thesedeveloping streamlining approaches.  However, for reasons discussed
in section VI.E, we do not expect to develop and implement any of these
approaches before stepStep 2 begins.  Moreover, we generally expect that
each of the first three – which are the most far-reaching -- will take
several years to implement because we will need to undertake notice and
comment rulemaking to develop them, and then the permitting authorities
will need to adopt them through the appropriate state or local
processes.  We commit to explore a wide range of possible approaches
before the stepStep 3 rulemaking, and, in that rulemaking, to propose
those that we think may be viable once we have had time to gather and
review key supporting data, and once the states and we have key
implementation experience that can inform our thinking.  Because the
streamlining approaches generally carry uncertainty - as demonstrated by
comments we received raising legal and policy concerns, as discussed
belowlater, that we will have to address - we are not committingcannot
commit with this action to adopt any streamlining actions in particular,
nor to adopting them on any particular schedule.  However, we intend to
pursue all streamlining options as expeditiously as possible, beginning
immediately and proceeding throughout the phase-in period, and we
encourage permitting authorities to do the same.

2.  Guidance for Best Available Control Technology BACT Determinations

Through this final rule we are not amending our regulations or issuing
guidance on BACT for GHGs.  As described in our proposal, we recognize
the need to develop and issue technical and policy guidance for
permitting of GHGs, and we plan to accomplish it through a separate
effort that will involve stakeholder input.  This effort is already
underway; in addition to comments EPA received on the proposed Tailoring
Rule related to GHG BACT guidance and information needs, EPA received a
suite of recommendations from the Clean Air Act Advisory Committee
(CAAAC) to which EPA is actively responding.  This includes technical
guidance and database tools that EPA anticipates issuing by June 2010,
and policy guidance that will be issued by the end of 2010.  Thus, this
important information will be available to support permitting agencies
in their BACT determinations at the time that the GHGs become a
regulated NSR pollutant, once the light-duty vehicle ruleLDVR takes
effect in January 2011.  EPA is confident that these measures will help
support a smooth transition to permitting emissions of GHGs.

3.  Requests for Higher Category-Specific Thresholds and Exemptions from
Applicability

   EPA has decided not to provide exemptions from applicability
determinations (major source and major modification) under title V and
PSD for certain GHG emission sources, emission activities, or types of
emissions at this time.  Commenters requested several applicability
exemptions with respect to GHGs from, for example, agricultural sources,
residential sources, small businesses, energy-intensive industrial
processes (e.g., aluminum, steel, cement, glass, and pulp and paper
manufacturers), lime production, semiconductor production, poultry
production, solid waste landfills, biomass combustion/biogenic
emissions, fugitive emissions, and pollution control projects.  For
reasons explained in section VI.E, we have decided to address the need
for tailoring through a uniform threshold-based approach, rather than
through a collection of various specific exclusions.

4.  Transitional Issues includingIncluding Requests for Grandfathering

For reasons explained in section V.E, EPA has determined that
transitional issues for pending applications and permitted sources are
adequately addressed by existing requirements and the amount of lead
time provided before permitting requirements apply to GHGs under this
rule and the April 2March 29, 2010 final action regarding the
Interpretive memo.  This rule does not contain any additional exemptions
or grandfathering provisions addressing the transition to PSD and title
V permitting for GHGs.

We are not promulgating an exemption for PSD permit applications that
are pending when stepStep 1 of the permitting phase-in begins for those
sources that would otherwise need to obtain a PSD permit based on
emissions of pollutants other than greenhouse gasesGHGs.  Any PSD
permits issued to Phasesuch Step 1 sources on or after January 2,
20102011 will need to address GHGs.  This action makes no change to the
position we expressed on this issue on April 2, 2010.

 	Final PSD permits issued before January 2, 2011 need not be reopened
or amended to incorporate requirements for GHGs that take effect after
the permit is issued.  A source that is authorized to construct under a
PSD permit but has not yet begun actual construction on January 2, 2011
may begin actual construction after that date without having to amend
the previously-issued PSD permit to incorporate GHG requirements,
provided the permit has not expired.

Sources that are not subject to PSD permitting requirements until Step 2
need not obtain a PSD permit addressing GHGs in order to continue any
actual construction that begins before July 1, 2011, when such a source
was not a major stationary source required to obtain a PSD permit.
However, PhaseStep 2 sources that begin actual construction in phaseStep
2 may do so only after obtaining a PSD permit.

The title V permitting regulations already include a robust set of
provisions to address the incorporation of new applicable requirements
and other transitional considerations.  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 an earlier
time at the discretion of the permitting authority.  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.
Where additional applicable requirements become applicable to a source
after it submits its permit application, but prior to release of a draft
permit, the source is obligated to supplement its application.
Permitting authorities may also ask for additional information during
the processing of an application.  In addition, where a source that
already has a title V permit 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 three3 or
more years remaining and the applicable requirements will be in effect
prior to the date the permit is due to expire.

V.  What is the legal and policy rationale for the final actions?

In this section, we describe the legal and policy rationale for our
action, including our rationale for the following:  (A1) our approach to
calculating GHG emissions for PSD and title V applicability purposes,
(B2) our approach to establishing the thresholds and timing of PSD and
title V applicability to GHG emissions sources; (C3) how state, local,
and tribal area programs adopt the final GHG applicability thresholds;
(D4) treatment of GHGs for title V permit fees; (E5) future activities,
including streamlining actions.  We present the rationale description in
the following five subsections below, corresponding to the basic
presentation of the approach in section IV.

A.   Rationale for Our Approach to Calculating GHG Emissions for PSD and
Title V Applicability Purposes

1.   Grouping of GHGs into a Single Pollutant

	In this section, we explain our treatment of the air pollutant at issue
for purposes of PSD and title V, such that sources that emit that
pollutant in the requisite quantities become subject to PSD and/or title
V requirements.  We explain our rationale for treating the GHG air
pollutant as a combined group of six greenhouse gases GHGs instead of
six separate air pollutants defined by each individual greenhouse
gasGHG, and our rationale for including all six of the GHGs in that
group.  We also define the GHG metric to use for comparison to the
applicability thresholds.

	We proposed to identify the air pollutant as the aggregate group of
these the six GHGs that comprise the GHG pollutant, and to use a GHG
metric for the applicability thresholds based on CO2e.  The summed CO2e
emissions would then be compared to the applicable permitting threshold
to determine whether the source is subject to PSD and title V
requirements.  Historically, the PSD and title V regulatory provisions
do not, in the first instance, define the “air pollutant” to which
they apply, but rather rely for the definition of the pollutant on a
cross-reference to the regulatory provision under another part of the
Act that establishes the emission standards or limits for that pollutant
that in turn causes the pollutant to be subject to regulation under PSD
and title V permitting.  As an example, the pollutant ‘“total
reduced sulfur’” (TRS) is a pollutant comprised of the sum of
multiple compounds that was originally defined under the NSPS,
Subpartsubpart BB, Standards of Performance for Kraft Pulp Mills, which
then caused it to be subject to regulation under the PSD program.  The
actual compounds that define the pollutant TRS are identified in the
NSPS.  The PSD program regulations did not introduce its own independent
definition of TRS, but instead relied on the definition as contained in
the Kraft Pulp Mills NSPS.

However, at the time of our proposal, the endangerment and cause or
contribute findings had not been completed and the LDVR for GHGs, had
not been finalized.  Thus, there was no final agency action defining
howthe “air pollutant” consisting of GHGs were to be considered
“subject to regulation”..”  Absent a definition of “greenhouse
gases” under another regulatory provision that we could
cross-reference, we proposed to define “greenhouse gases” for
permitting purposes as “the single air pollutant that is comprised of
the group of six GHGs, as proposed in the [CAA] section 202(a)
endangerment and contribution findings.”  74 FR 55,329, col. 1.  The
six well-mixed GHGs identified in the proposed contribution finding
were: CO2, CH4, N2O, SF6, HFCs, and PFCs.

 In the proposal, we further recognized that the LDVR for GHGs, as it
was proposed, would result in reductions of only four of the gases, not
all six, because only four are emitted by vehicles.  However, we
concluded that if the LDVR were finalized as proposed, then the air
pollutant for purposes of PSD and title V applicability would be a
single air pollutant that is the aggregate mix of the group of six GHGs
because –

[t]hese six GHGs as a class comprise the air pollutant that is the
subject of the endangerment finding and companion contribution finding
and constitute the air pollutant that is regulated by the light-duty
vehicle rule through measures that address the components of that air
pollutant that are emitted from the mobile sources.  Thus, although the
CAA section 202(a) proposal establishes controls only with respect to
four GHGs, as a legal matter, the proposal covers the entire set of GHGs
that as a class are the single “air pollutant” in the proposed
endangerment and contribution findings.

74 FR 55,329 col. 1.

 We also solicited comment on whether we should identify the GHG metric
in a different way, such as addressing each GHG constituent compound
individually or including (whether individually or as a group) only
those four GHG constituent compounds for which reductions would occur
through the emission standards or limits proposed in the LDVR.

A majorityminority of the proposal comments did not speak to or show a
preference for or against grouping the six well-mixed GHGs for the
purposes of determining applicability under the PSD and title V
programs.  Of those on our proposal addressed this issue.  Some
commenters that specifically support thesupported combining of the
individual GHGs as one pollutant for purposes of determining permitting
applicability, they and stated that it is not uncommon for EPA to
recognize ‘collective’“collective” air pollutants comprised of
many individual compounds based upon shared threats to health and
welfare, including such EPA-created group pollutants as sulfur oxides,
nitrogen oxides, volatile organic compounds (VOCs), and particulate
matter (PM).

A smaller but On the other hand, a significant number of commenters
opposed thealso raised concerns about grouping of the individual GHGs
into one metric.  Some of these commenters argued that grouping GHGs is
not appropriate because GHGs are not like other air pollutants that are
comprised of numerous substances of concern (e.g., VOCs and PM),
individual GHGs do not interact or combine to create a pollutant of
concern, and EPA has not established a ‘GHG’“GHG” NAAQS that
supports the definition of the pollutant as a group.  Some were
concerned that regulating the GHGs as a group would increase the
likelihood that a source will trigger permitting requirements, adding
that this is unnecessary and would conflict with the “absurd
results” and “administrative necessity” doctrines because it would
lead to larger numbers of sources becoming subject to permitting.  Some
commenters opposing grouping suggested that we should explore regulating
each of the GHG pollutants on an individual mass basis rather than
collectively.  One commenter added that,  because in their view, it is
reasonable and feasible to regulate and control emissions of each of the
listed pollutants, other than carbon dioxideCO2, at the 100/250 tpy
thresholds, or less if deemed necessary, in accordance with the
established mechanisms of the Act and doing so would lead to a better
environmental result.  Finally, some commenters argued that
disaggregating the pollutants would also allow for more appropriate
technology review.

	After considering these comments, and taking into account other related
actions that have occurred since proposal, we have determined that PSD
and title V permitting program requirements will apply, as proposed, to
the “single air pollutant that is comprised of the group of six
GHGs.”  74 FR 55,329, col. 1.  We believe that this approach is both
compelled by the statute and reflects the preferable policy approach.

As more fully discussed elsewhere in this package, under the plain
language of section 169(1) PSD a rulemaking, the PSD requirements apply
to a “major emitting facility” that undertakes construction or
“modification.”  CAA sections 165(a), 169 (2)(C).  The term “major
emitting facility” is one defined as, in general, a source that emits
100 or 250 tons of “any air pollutant.”  Through regulation we have
reasonably limited the scope to this provision to those tonnages of ,”
CAA section 169(1), and, similarly, the term “modification” is
defined as a physical or operational change that results in the
increased or new emissions of “any air pollutant.”  CAA sections
169(2)(C), 111(a)(4).  Through regulation, we have interpreted the term
“any air pollutant,” as found in both the terms “major emitting
facility” and “modification,” more narrowly to mean any
“regulated NSR pollutant,” which includes and we further define this
term to include any pollutant that is “subject to regulation under the
Act.”  40 CFR 52.21(b)(50)(iv).  This same limitation exists in the
definition of major modification and BACT.  See ), 52.21.(b)(2),(  ).
This regulatory limitation reflects the statutory directive that BACT is
required for “each pollutant subject to regulation under this
chapter.”  42 USC 7475 (a)(4).).

Based on these provisions, the sole question in determining what a BACT
analysis must cover is what pollutant is “subject to regulation.”
This phrase caries with it no suggestion that the Agency may subdivide
or otherwise change a pollutant that is regulated elsewhere in the Act.
Instead, it carries with it a dictate that BACT be applied to the air
pollutant which the Administrator has determined elsewhere to regulate.
As described below, this air pollutant, in the cases of GHGs, is the
aggregate mix of the six constituent gases identified in the
contribution finding, which led to the promulgation of the LDVR, and is
the air pollutant that the various LDVR emission standards address.
This same logic regarding the definition of a pollutant “subject to
regulation” applies to the determination of whether a source is a
major stationary source of a “regulated NSR pollutant.”  Thus, we
also read the definition of major emitting facility at CAA 169 to be
guided by the same requirement to defines the “regulated NSR
pollutant” that is “otherwise subject to regulation” to be the
same air pollutant that is actually regulated elsewhere under the Act.
If, as here, that regulation considers the aggregate emissions of
several compounds to be a single air pollutant, the same single air
pollutant is a regulated NSR pollutant.  As noted above, the statutory
definition of major emitting facility covers “any pollutant.”  As
the LDVR and associated contribution finding have defined the aggregate
group of the six greenhouse gases to be the single “air pollutant”,
they must be considered as such in determining if “any pollutant” is
emitted above the provided thresholds.

Since the time of our proposal, both the contribution finding and the
LDVR for GHGs have become finalSimilarly, as discussed elsewhere, the
title V requirements apply to a “major source,” which is defined, in
general, as any source that emits at least 100 tpy of “any air
pollutant.”  CAA sections 502(a), 501(2)(B), 302(j).  EPA has
interpreted the term “any air pollutant” narrowly so that applies
only with respect to air pollutants that are subject to regulation under
the CAA.  Memorandum from Lydia N. Wegman, Deputy Director, Office of
Air Quality Planning and Standards, U.S. EPA, “Definition of Regulated
Air Pollutant for Purposes of Title V” (Apr. 26, 1993).

Based on these provisions, the key issue for present purposes in
determining whether a source is subject to PSD (because it qualifies as
a major emitting facility that undertakes construction or modification)
or title V is whether the pollutant or pollutants that the source emits
comprise the “air pollutant” that is “subject to regulation”
under the Act.

The phrase “subject to regulation under the Act,” by its terms,
identifies the air pollutant that is subject to PSD and title V as the
same air pollutant that is identified in the regulatory action under
another provision of the Act.  The term is a simple cross-reference.  It
carries no implication that EPA, in identifying the pollutant to which
PSD or title V apply, may redefine the pollutant that is regulated
elsewhere in the Act.  Whatever the pollutant is that is regulated
elsewhere, it is that pollutant to which PSD and title V apply.

Since the time of our proposal, we have finalized both the contribution
finding and the LDVR for GHGs.  The final LDVR for GHGs specifies, in
the rule’s applicability provisions, the air pollutant subject to
control as the aggregate group of the six

GHGs, including CO2, CH4, N2O, SF6, HFCs, and PFCs.   The Because it is
this pollutant that is regulated under the LDVR, it is this pollutant to
which PSD and title V apply.  Specifically, the applicability provision
in the LDVR now provides us a clear reference to the definition of the
single pollutant comprised of the aggregate group of the six well-mixed
GHGs and affirms that, which makes clear PSD and title V applicability
should use depends on the same sum-of-6 six GHG construct for
applicability.  Based upon the previous analysis, we .  We must follow
this construct of the aggregate group of the six gases and do not have
discretion to interpret the GHG ‘“air pollutant’” differently
for the purposes of PSD permittingor title V.

This construct of the pollutant as the aggregate group of the six gases
is also consistent with the definition of the air pollutant in the final
contribution finding for GHGs [see 74 FR 66496, 66499, 66536-7 (December
15, 2009)].  In the final contribution findingThere, the Administrator
defined the air pollutant for contribution finding as the “aggregate
group of the same six … greenhouse gases” (see specifically,,” 74
FR 66536).  The well-mixed greenhouse gases are defined under the final
contribution finding as ), and these six greenhouse gases: well-mixed
GHGs are defined to include CO2, CH4, N2O, SF6, HFCs, and PFCs.  Again,
these six GHGs as a class comprise the air pollutant that is the subject
of the contribution finding and therefore are the single air pollutant
that is regulated by the LDVR through measures that address the
components of that air pollutant that are emitted from the mobile
sources.  For these reasons, the pollutant “subject to regulation”
is the aggregate group of the six and we feel compelled to use this
combined pollutant for purposes of regulation under the PSD program.

Similarly, for title V, "major stationary source" status under CAA
sections 501(2)(B) and 302(j) is triggered by the emissions of the
requisite amount of "any air pollutant . . . . ."  Further, as discussed
in more detail elsewhere in this rulemaking, EPA interprets this trigger
to apply to any air pollutant "subject to regulation."  See Johnson Memo
Reconsideration.  As noted above, EPA has treated the aggregate group of
six greenhouse as the "air pollutant" regulated under the Act.  Thus,
the aggregate group constitutes the "air pollutant" for title V
applicability purposes.

Moreover, even if we had discretion to approachidentify the GHGs air
pollutant differently in the permitting programs, we would choose not
to, for the same reasons we adopted the single air pollutant approach
than in the LDVR, we believe it is reasonable to identify the GHGs air
pollutant through the sum-of-six construct for the same reasons why we
adopted that definition in the contribution finding, and for additional
considerations reasons noted below specific to the permit programs.
Congress provided EPA broad discretion to determine, as an initial
matter, an appropriateThe term “air pollutant” is defined under CAA
section 302(g) as “any air pollution agent or combination of air
pollutant such agents that should be treated, including any physical,
chemical, biological, radioactive … substance or matter which is
emitted into or otherwise enters the ambient air.”  Under this
definition, EPA has broad discretion to identify an air pollutant,
including, as appropriate, treating a combination of air pollutant
agents as a single air pollutant.  As Here, we think that the six
well-mixed gases are appropriately combined into a single air pollutant
because, as noted in the contribution findings, the they share several
important common attributes shared by:  Each of the six greenhouse gases
are that each (see 74 FR 66516-66518):

Is directly emitted (and is not formed by secondary processes in the
atmosphere);

Is long-lived in the atmosphere after they areit is emitted;

Is sufficiently long-lived the greenhouse gas that it becomes
“well-mixed,” which means that its concentration is essentially
uniform in the atmosphere (as opposed to having significant
local/regional variation); and

Has well understood atmospheric properties (e.g., radiative forcing).

See 74 FR 66516-66518.

In addition, grouping the six greenhouse gasestreating the six GHGs as a
single air pollutant is consistent with the focus of climate
science—their effects are considered as a group inactions of
international scientific bodies.  For example, the Intergovernmental
Panel on Climate Change (IPCC) considers in various reports (i.e., the
IPCC reports assess the climate change effects on how the six gases
drive human-induced climate change and how that affects health, society,
and the environment as a result of human-induced climate change driven
by the group of GHGs).  It is also consistent with the focus of climate
policy—the .  Similarly, the United Nations Framework Convention on
Climate Change (UNFCCC) requires reporting of these six gases;  and the
commitments under the UNFCCC and Kyoto Protocol are based on the
combined emissions of these six gases.  Finally, as discussed later, it
is standard practice to compute the “carbon dioxide (CO2)
equivalency” of aggregate emissions using GWPs.  All of these common
attributes and factors are relevant to the air pollution for which GHGs
are agents—in other words, they are all related to increased
atmospheric concentrations of the mix of six GHGs and climate change
science and policy.  Thus, they are a reasonable basis upon which to
decide that it is appropriate to define the air pollutant as the
combination of these six GHGs that share these attributes..

We disagree with commenters who argued that grouping all six GHGs is not
appropriate because GHGs are not like other air pollutants that are
comprised of numerous substances of concern (e.g., VOCs and PM).  First,
as noted abovepreviously, we are following the approach to a single air
pollutant comprised of the aggregate of the six greenhouse gases GHGs
initially adopted in the contribution finding and followed in the LDVR.
Many of these same comments have already been addressed in the
contribution finding and response to commentsResponse to Comment (RTC)
document, which is included in the RTC for this that action, and those
responses apply equally here.

In addition to the reasons described in the endangerment and
contribution findings, there are CAA permitting programmatic and policy
advantages to using the sum-of-six construct for the GHG air pollutant
for permittingPSD and title V applicability purposes.  We believe now,
as we did at proposal, that the benefits in using the cumulative group
of GHGs outweigh any implementation advantages to using an
individual-GHG-based metric.  We recognize a number ofThe advantages in
the use of aggregate construction of the GHG metric, including that it:
to sum-of-six definition include that it may: (1) could allow
significantly more flexibility to sources for designing and implementing
control strategies that maximize reductions across multiple GHGs and
would also likely align better with possible future regulations that
allow for such flexibility; (2) could more effectively support possible
future offsets or trading mechanisms that involve different source
categories and different compositions of GHG emissions;  and (3) could
better accommodate and harmonize with future regulations by having one
pollutant class because it establishes one class of pollutants that
includes individual components that includes any of the components of
which maymay, in turn, become subject to specific emission standards
under future regulatory efforts.

We disagree with commenters who believe that by aggregating the GHGs
under one GHG metric for permitting applicability purposes would lead to
an excessive amount of source permitting activity.  This is because the
phase-in approach addresses overwhelming permitting burdens associated
with permitting of greenhouse gasesGHGs.  It does so by designing our
applicability thresholds to allow for a manageable amount of new
permitting actions based on the emissions from sources using the
sum-of-6 six metric.  If we based itapplicability on individual gases,
(assuming, again, that we were not compelled to follow had authority to
deviate from the definition of “air pollutant” as used in the LDVR),
we would still need to determine what level of permitting is manageable
and appropriate based on thresholds on an individual gas basis and would
expect that the final rule would result in the same levels of remaining
burden based on the administrative necessity and the absurd results
concepts.  Accordingly, unless the permitting program were being
implemented at the statutory thresholds, the effect of a decision to
aggregate or not aggregate would not reduce workload; rather, it would
simply shift work from permitting facilities that trigger based on
combined GHGs to those that trigger based on individual GHGs.  Although
we acknowledge that this wouldmay affect applicability for a particular
source, we disagree with the commenter that doing so would conflict with
our conclusions based on the “absurd results” or “administrative
necessity” doctrines.  In light of limited resources, byBy using a
consolidated and weighted measurement, we are able to direct these
limited administrative resources to those new sources and modifications
with the greatest impact on GHG emissions.

We also believe that the additional flexibility resulting from the
sum-of-six GHG metric will provide substantially more opportunities for
sources to address emission increases of GHGs than they would have had
under an individual gas based metric, and, thereby, possibly
reducingreduce their permitting burden through multi-gas mitigation
strategies.  We disagree with the comment that isolating control
technologyBACT review on sources that emit a single GHG necessarily
leads to better environmental results than it would for sources that
undergo a combined review for all six gases.  To the contrary, given
that Congress built in considerations of energy, environmental, and
economic impacts into the BACT requirement, we think that allowing
consideration of those factors across six gases will likely result in
decisions that more appropriately account for those impacts at the
source.

2.  Identifying Which GHGs are Included in the Group

Most commenters did not raise any issues or propose alternatives to the
use of the As discussed previously, we proposed GHG metric as it relates
to inclusion of all to include the combination of six well-mixed GHGs.
We did receive some comments  as the air pollutant that explicitly
supported the inclusion of all six of the well-mixed GHGs identified in
the GHG metric for determiningtriggers PSD and title V applicability.
Those in support of :  CO2, CH4, N2O, SF6, HFCs, and PFCs.  Some
commenters supported including all six of the well-mixed GHGs in the
threshold metric .  They cite the same reasons they provided in support
of grouping the individual GHGs together:  namely, the final proposed
contribution findings that identify the pollutant as “the combined mix
of six key, directly emitted, long-lived and well-mixed greenhouse
gases”.  See 74 FR, 66496, 66516, 66,536 (Dec. 15, 1990).  They also
through the sum-of-six construct, and they emphasize that EPA, in order
to protect the public, has to control all the greenhouse gases GHGs it
has regulated and reduce the overall impact of the mix of six greenhouse
gasesGHGs.

However, a substantial number of commenters, mainly from industry
sectors who also disagreed with grouping the GHGs together, contend that
only the constituent gases that are actually subject to controls under
the LDVR should be included in determining applicability under the