netting-out provision, including ability to use offsite "offsets;" (5)
Modified "top-down" BACT analysis; (6) Expedited development of GHG
Presumptive-BACT standards; and (7) PSD GHG trigger/permit applicability
based on current conventional pollutant PSD Program.  (8691)

Modern NG facilities should be presumed to comply with BACT or should be
exempt from BACT analysis.  (4515, 4691, 4749)  Natural gas pipeline
combustion units minimize GHG emissions to the greatest extent feasible,
and therefore already satisfy BACT standards.  (4515, 4691)  Gas-fired
engines, such as those used in pipeline compressor stations, are
designed to operate at an optimal level of efficiency given other
engineering and regulatory constraints that apply to pipelines.  (4515,
4691)  Altering the horsepower of these engines could upset a delicate
balance between pipe size and compression levels that allow interstate
pipelines to operate cost-effectively.  (4515, 4691)  Requiring a PSD
permitting process for GHGs would not yield any significant
environmental benefit because there is no available add-on control
technology (e.g., CCS technology is still years from being widely
available), using electric pumps would result in higher emissions in
most parts of the country, and firing with biogas is technically
infeasible (4515, 4691, 4749).  Moreover, consideration of these
alternatives would lead permitting authorities to engage in dubious
second-guessing of natural gas pipeline design and engine selection,
potentially leading to redefinition of the source in a way that is
inconsistent with the language of the CAA and past practice in PSD
proceedings.  (4515, 4691)

One of these commenters adds that BACT for GHGs must take into account
the demands of the marketplace for flexible power generation.  This
would include: (1) Flexible technologies that can start up and be
brought online quickly where peak demand is unpredictable; (2)
trade-offs between criteria pollutants and GHG control; and (3)
development of new technology  such as the use of IGCC (or any other
technology) when coal has been selected as the fuel for a source.
(5147)

Presumptive BACT or general permits for fossil-fired generating units
should provide for, and focus on, measures that only address CO2, and
not all six of the GHGs (which would require a wide range of reduction
measures).  (5313)

Implementation of GHG emission controls at small installation sites of
engines and gas turbines with a multitude of unique application
requirements is a function of two aspects (3512): (1) efficiency of the
work performed at each unique site, and (2) the fuel used.  To try to
address this GHG BACT issue for these small sites, the commenter makes
following general comments and observations concerning GHG BACT related
issues:

The local/state GHG BACT review should not redefine the type of source
being permitted or prime mover technology being proposed.  A control
technology must be feasible within the design elements and process
configuration proposed, including the prime technology and fuel types
chosen by the permittee.

Not all biofuels are created equally when it comes to GHG impact.
EPA’s recent “Renewable Fuel Standard 2” clearly showed
significant differences in the GHG impacts of various renewable fuels
based on the lifecycle analysis completed.

If the agency chooses to institute presumptive BACT analysis for GHG
emissions from ethanol production facilities, the creation of an
agency/industry advisory group to identify and develop realistic and
cost-effective tools for the implementation is absolutely needed.
(4555)

EPA should establish a collaborative process in developing BACT for CO2
management, for entities which are already engaged in “best
practice” management of CO2.  (4990)  In addition, the impact of the
application of BACT to facilities that currently sell certain off-gas
streams to processors that remove and purify the CO2 and place it into
commercial applications should be addressed.  (4990)

Streamlining should be developed for landfills.  EPA should carefully
develop presumptive BACT that initially aligns with current regulations,
citing in particular, the NSPS for landfills that was carefully
developed to reduce non-methane organic compound(s) (NMOC[s]), but also
effectively reduces CH4 emissions.  Commenter continues that at a later
date, presumptive BACT can be updated as EPA's re-evaluation of the
landfill NSPS is completed and any resultant rulemaking finalized and
asserts this approach should minimize unnecessary impacts to the
landfill industry.  (4863)

	Examples of particular presumptive BACT streamlining mechanism
suggestions submitted by commenters include the following:

In the absence of a GHG technologies database, EPA should develop
industry-specific BACT guidelines along with the rule.  (2731, 4989)

EPA should develop BACT templates at least for larger sources to
streamline the permitting process.  (5147)

Guiding principles should be developed to frame the development of GHG
BACT and these principles should consider and/or state that:

Limiting the definition of the affected source such that unaffected
sources/operations are not subject to BACT.  Barring
downstream/debottlenecking effects, increases of GHGs at a single source
within a unit should not subject an entire unit to BACT review.  This
approach is identical to that already employed for other criteria
pollutants (5124).

Fundamental redesign of a unit should not be an option under BACT.  BACT
is the application of a control technology.  The redesign of a unit to
utilize different fuels or to require a different process design falls
outside of the scope of a control technology.  For example, BACT reviews
should not force utilities and other combustion sources to “fuel
switch” from coal to natural gas, which would have significant
economic impacts throughout the country.  EPA should continue to defer
to regulatory and operational considerations in determining BACT for
GHGs.  (4515, 4691, 5058, 5079, 5085 5124, 5123, 5224)

Questions such as "why does this unit need to be built?" and "why does
the design capacity need to be at X level?" are not within the purview
of the BACT analysis (5124).  For example, it should not be appropriate
for EPA, under the rubric of determining BACT, to tell a source what
type of combustion unit it must build, or what type of fuel it may use,
or how it must engineer its operations to reduce demand for the thermal
energy or electricity that the combustion unit will generate.  (16411)
Commenters believe that such expansion of the statutory requirement to
assure that BACT is used for a particular project, into an inquiry by
the permitting authority into whether a plant can be designed or
operated more efficiently, or whether it might be
environmentally-preferable for the plant to be proposing a different
kind of project, would be inconsistent with EPA’s statutory authority,
long-standing EPA interpretations and policy, and judicial and EAB
decisions.

Energy efficiency will be central to BACT.  At this time, there are
virtually no "end-of-pipe" control technologies for GHGs.  BACT
requirements should not force unproven or uneconomical technology, such
as CCS.  (5124)

Various commenters (2797, 4860, 5062, 5081, 5141, 5143, 5306, 5082,
5143, 5337, 7935, 8015) oppose the use of presumptive BACT as a
streamlining option.  Examples of general reasons provided by commenters
for opposing presumptive BACT as a streamlining option include the
following:

Presumptive BACT may not be an effective means to address permitting
burden concerns because the insufficiently flexible permitting scheme
requires a flexible BACT analysis, appropriate to the particulars of a
specific tool and process configurations and technologies.  For that
reason, it is unlikely that presumptive BACT could play a constructive
role in addressing these deep and fundamental concerns, at least in the
near term.  (5143)

EPA should not decide the BACT absent a notice-and-comment rulemaking.
In the proposed rulemaking EPA does not address how to set the BACT for
sources subject to the PSD and permitting requirements.  (5062)

EPA statements in the rule preamble about "presumptive BACT" seem
inconsistent with the fact that BACT is by statute supposed to be a
case-by-case analysis, rather than the imposition of national emission
standards.  (5141, 5306, 8015)  Case-by-case BACT determination affords
flexibility to consider a range of case-specific factors, such as
available control options and collateral cost, energy, and environmental
impacts.  (5141)  The diversity of process technologies within industry
creates a range of case-specific factors that would likely interfere
with identification of a presumptive BACT approach that would achieve
the desired streamlining and permit efficiency.  (5141)  One of
commenters is also concerned that EPA seems to be suggesting that it
could be appropriate, under the rubric of determining BACT, to tell a
source what type of combustion unit it must build, or what type of fuel
it may use, which would be inconsistent with EPA's statutory authority,
longstanding EPA interpretations and policy, and judicial and EAB
decisions.  (8015)  One of these commenters added that presumptive BACT
may therefore only be imposed on the basis of source - and
pollutant-specific demonstrations of necessity such that: (1) The PSD
provisions do not contemplate the use of presumptive BACT; and (2)
presumptive BACT is considered only under limited circumstances.  (5306)

Establishing presumptive BACT raises various concerns (5082):

Would the presumptive BACT undergo public scrutiny?

How would presumptive BACT be established for a pollutant with no
currently available feasible control technology options?

How would you establish BACT for combustion devices when reducing CO2
and reducing CO (another PSD pollutant) are mutually exclusive?

How will EPA reconcile PSD permits where BACT for CO is catalytic
conversion, which consequently causes increases in CO2 emissions and
cannot by definition be BACT for CO2?

How will EPA resolve BACT for energy efficiency projects at single
combustion sources which necessarily mean increases in CO2 because to
increase energy efficiency requires more efficient combustion resulting
in more CO2 emissions per hour than inefficient combustion?

Under PSD, would we have to consider inefficient combustion as a means
of reducing CO2 from a combustion source because that would result in
the lowest emissions limitation achievable in practice?

It will dampen the technology forcing aspects of case-by-case BACT
determinations.  (4860, 5081, 7935)

It does not address the largest sources that would be brought under the
Tailoring Rule.  (2797)

	Examples of the type of comments received on particular industry sector
presumptive BACT streamlining concerns submitted by commenters include
the following:

The use of presumptive BACT may cause several problems for the
semiconductor industry:

To date, there are no BACT determinations for GHGs for the semiconductor
industry.  Moreover, even if in the near future there are BACT
determinations for combustion sources, it is unlikely that there will be
any near term BACT determinations for control of PFCs used in
manufacturing.  Because the semiconductor industry’s use of PFCs is
unique, the determination of BACT for PFCs will likely be slow and time
consuming, at least at first.  (5143)

It is impossible for the fast moving semiconductor manufacturing
industry to plan ahead and design the necessary controls when it is
unknown if those controls will later be deemed to be compliant with BACT
standards.  Since BACT would be determined case-by-case, it is also not
feasible for the semiconductor industry association to identify common
BACT solutions for all of its operations, since the BACT review would be
performed by different state and local agencies for semiconductor
industry association member companies’ different locations.  (5143)

Since the actions to reduce PFC emissions in the semiconductor industry
have been voluntary, the abatement devices are not incorporated into
local or state air permits; therefore, they would not be federally
“enforceable” to limit the potential to emit of these GHGs.  (5143)

Most of the abatement devices used to control PFCs are point-of-use
devices (e.g., burn boxes) which are connected by interlocks into each
separate manufacturing tool.  As such, not only are there potentially
hundreds of tools that will be replaced numerous times over a 5-year
period, but there are a similar number of abatement devices in use.
Because the devices are connected to each tool, and hundreds are spread
throughout the manufacturing facility, the application of periodic or
compliance assurance monitoring (CAM) to these devices under title V
would be a huge administrative burden.  Similarly, compliance testing
would be problematic and expensive because these devices are neither
designed, nor manufactured, with traditional sampling locations or
ports.  Finally, because the devices are connected to the tools they
support, as the tools are changed out, the control devices also will be
changed frequently.  As such, it will be challenging for permitting
agencies to respond to changes of this nature.  (5143)

The use of presumptive BACT could be tremendously damaging to the
Energy-Intensive Trade-Exposed (EITE) industry.  Process emissions are
inherent in the underlying chemical reactions, and by and large they can
only be changed by a change in the process itself – in which case the
operation becomes a different type of operation.  EITEs have powerful
economic incentives to manage energy and emissions using things like
recycled materials, cogeneration or combined heat and power systems,
process improvements, and fuel switching.  The use of the most efficient
production processes, and maximizing energy efficiencies are already an
integral part of the production processes in the EITE industry, and
should not be addressed through a regulation which includes presumptive
BACT.  (5337)

	Opposing commenters (4238, 4239, 4860) also gave suggestions about how
to address presumptive BACT.  These suggestions include:

If EPA is to pursue presumptive BACT determinations, a commenter (4860)
recommends that: (1) presumptive BACT determinations should be limited
to a small number of source categories; 2) timely guidance regarding
presumptive BACT by source category should be issued by EPA; and (3)
that BACT determinations should be revisited by EPA on a predefined
schedule of not more than 5 years.

If EPA believes that predefining the technology is the best approach,
then EPA should develop a NSPS instead.  (4238, 4239)

Response:

Since many commenters had differences of opinion as to whether and how
we should move forward on the use of “presumptive BACT” as a
streamlining option, including policy and legal concerns, we are not
finalizing this option at this time.  We would likely want to explore,
through a notice and comment process, if this measure is viable to
pursue further.  These comments, including as any concerns expressed by
commenters about this approach, will be addressed in the action(s) where
we might apply this streamlining option.

Nevertheless, we want to clarify that while the BACT provisions clearly
contemplate that the permitting authority evaluate control strategies on
a case-by-case basis, EPA recognizes the need to develop and share
policy guidance and technical information for sources and permitting
authorities as they begin to permit sources of newly regulated
pollutants, such as GHGs.  When applied in a practical matter, this
additional EPA guidance and technical information should reduce the time
and resource needs when evaluating BACT for newly regulated pollutants.
For that reason, section IV.E.2 of the final rule preamble discusses
details of the current efforts underway to issue BACT guidance.

Thus, while BACT will remain a case-by-case assessment, as it always has
been under the PSD program, EPA is confident that this guidance
development effort will help support a smooth transition to permitting
emissions of GHGs.  Furthermore, EPA will continue to work to provide
the most updated information and support tools to allow permitting
authorities to share and access the most updated information on GHG BACT
determinations as they are made once permitting of GHGs begins.  EPA
remains committed to involving stakeholders in the upcoming efforts to
develop guidance to help to permitting authorities in making BACT
determinations for sources of GHGs.

4.4  General Permits and Permits-by-Rule

	The proposal preamble notes that we have limited experience in
developing general permits and permits-by-rule under the PSD program
because of the predominance of the case-by-case BACT determination
process.  In contrast, we note that, in the title V program, general
permits are specifically authorized under CAA section 504(d) and are
widely-used.  40 CFR 70.6(d) specifically authorizes the use of general
permits covering numerous similar sources under the title V program, and
40 CFR 70.7(h) stipulates the public participation requirements.  We
acknowledged that the process for a general permit can take anywhere
from 2 to 3 years to be fully developed.  Additionally, at proposal, we
sought comment on the use of general permits within the PSD and title V
programs.  Comments received on the use of general
permits/permits-by-rule to streamline permitting under PSD and title V
are presented in this subsection.

Comment:

Various commenters (2997, 3278, 4154, 4298, 4515, 4526, 4691, 4860,
4863, 4940, 5078, 5079, 5111, 5130, 5135, 5198, 5280, 5306, 5313, 5329,
5711, 7026, 7935) support the use of general permits and/or
permits-by-rule to streamline the permitting process.  Some of the
reasons for their support include:

The general permits and/or a permit-by-rule option would serve to
streamline the process and reduce both administrative burden and
potential permitting delay.  (4154, 4515, 4691, 4863, 5130, 5329, 5711,
7026, 7935)  Some of these commenters added that this would be
particularly helpful for semiconductor facilities (5329) and common
types of control devices such as boilers, process heaters, and
combustion turbines (4154, 5130) as well as commercial and residential
natural gas appliances and equipment (5711).

General permits and permits-by-rule are adequate streamlining options,
but case-by-case review and the development of a site-specific permit,
even if there is a general permit that would cover the site in question,
should always remain an option.  (4940, 5079)

EPA should issue a standard general PSD permit for very small GHG
emission sources that will effectively allow these permits to be issued
within 30 to 90 days.  (5417).

General permits may prove useful in administration of a title V program
for sources subject to title V solely by virtue of their GHG emissions.
(4515, 4691, 5306)

Commenters (3278, 4298, 4515, 4526, 4691, 4860, 4863, 4990, 5111, 5313,
5711) also provide comments on and suggestions for developing general
permits and/or permits-by-rule.  These suggestions include:

Use of general permits should be limited to a small list of source
categories and that these general permits should contain output based
emission limitations wherever possible.  (4860)

Using PTE limits and/or permits by rule for smaller or limited-use
sources, such as emergency generators or Heating, Ventilation, & Air
Conditioning (HVAC) equipment where there are practical and/or legal
limitations on hours of operation or other key factors in determining a
facility’s true PTE.  (5078, 5079)

These general rules could take the form of operational limitations,
provided such limitations provide a streamlined method to allow a source
to operate for longer hours or at a greater throughput upon request to
the permitting agency, and provided such limitations do not apply to
energy efficiency and pollution control improvements.  (4298)

Recognizing that a sector-by-sector general permit would take time to
develop, perhaps in the first 3 years of the first phase, a general PSD
permit for GHG can simply have a few requirements, such as mimicking any
requirements from EPA's mandatory reporting program, a listing of Class
I National Parks with distances from the facility, and a generalized
discussion of BACT (4863).  The commenter adds that at this stage, BACT
can be efficiency measures used by the project to reduce energy.  (4863)

For a limited period, initiate blanket use of general permits for
“urgent” (necessary to avoid a material adverse affect on health and
safety) and “small” (less than 100,000 metric tpy CO2e) projects,
and a moratorium on GHG permits for all other projects.  This would
maximize streamlining, diminish adverse economic impacts (and reduce the
likelihood of litigation from permitted sources), and allow more time
for the Clean Air Act Advisory Committee (CAAAC) Climate Change Work
Group to formulate a legally robust and administratively streamlined set
of procedures.  (4526)

General permits will violate the text of the CAA if we move from a
case-by-case BACT determination basis to a presumptive BACT system.  For
that reason, this commenter would like general permits to only be
imposed on the basis of source- and pollutant-specific demonstrations of
necessity such that: (1) the PSD provisions do not contemplate the use
of general permits, and (2) general permits are considered only under
limited circumstances.  (5306, 5711)  One of the commenters adds that
for gas-burning sources, general permits should only be applied to those
sources that could not be excluded from the PSD program under EPA's
proposed approach.  Even then, it should serve simply as a checklist of
generally accepted technology that sources should consult to make sure
they were not behind the times.  (5711)

Permits-by-rule should be allowed to exempt sources from NSR pollutant
requirements for PSD because small sources captured in the program under
the initial definition and subjected to PSD/title V permitting
requirements might not later be considered a PSD/title V source with a
revision of the definition for PTE.  (3278)

General permits could easily be developed for different categories of
landfills, which should ease the burden on smaller sites that are
currently not in the title V program.  (4863)

The EPA should develop an affirmative designation for sources that use
administrative controls to remain below the “major source”
threshold, e.g. a facility that has the potential to emit enough CO2 to
be required to obtain a permit, but sets limits on operating hours or
other controls to ensure that the facility stays below the permitting
threshold.  Such an affirmation of administrative control could either
be in the form of a general permit, permit-by-rule, or as a
self-declaration kept on record at the affected site.  (4990)

Allow for a variance from a general permit on a case-by-case basis where
an alternate standard is warranted.  (5313)

Employing general permits would require a fundamental change to the PSD
program (4515, 4691) because:

General permits, while well-established, have typically been used for
minor source NSR permits and a limited number of title V operating
permits, not PSD, mainly because the CAA’s PSD provisions require
case-by-case determinations of BACT.

States would need to revise their SIPs to adopt this more expedient
process for PSD.

General permits must also include presumptive BACT, which could take
years to develop.

The paucity of technical and economic data and other supporting
information related to GHG BACT will result in a significant number of
challenges during the required public review process.  Such legal
challenges could delay permits for months or years.

EPA should consider issuing national model PSD permits for GHG sources
that contain a menu of options of potential BACT measures that sources
can adopt to streamline permitting.  If a source elects one of these
options, then it can forgo case-by-case BACT review by adopting a
presumptive BACT that already has been subject to public participation,
thereby alleviating the burden of public comment on its decision.
Because such general permits already will have been subject to public
comment upon adoption of the general permit into a state’s law,
additional public comment will not be required and the burden to
regulators and the regulated community would be reduced.  (5111)

In order to streamline permit issuance by eliminating case-by-case
public participation requirements, the commenter urges EPA to
immediately commence rulemaking on a national general permit for title V
sources pursuant to which an affected entity would provide notice of
applicability of the general permit to its operations and operate under
that national permit.  Since title V fees do not apply by law to
pollutants other than pollutants regulated under a NAAQS, NSPS or
National Emission Standards for Hazardous Air Pollutants (NESHAPs),
pursuant to section 502(b) (3) (B) (ii) of the CAA, state and local
authorities would be relieved of the considerable burden of issuing
title V permits to entities for whom they would have no authority to
levy permitting fees, and the notices would provide national and local
authorities the ability to track major sources of GHGs.  (5111)

Some commenters (4863, 5139, 6414) did not explicitly support or oppose
the use of general permits and/or permits by rule as a streamlining
option.  However, these commenters had comments on the use of general
permits and/or permits by rule, including:

EPA’s argument that it should be allowed to redefine “potential to
emit” as “actually emitting” is not justified in this instance, as
the permits themselves could be streamlined by including legally and
practically enforceable general limits on operational parameters.
(5139)

EPA has proposed to disapprove elements of the commenter’s state’s
air permitting program where a key component of the minor source
permitting program is the use of general permits or permits-by-rule,
because of the assumption that these minor source programs have
systematically been utilized inappropriately to authorize major sources
and circumvent major NSR requirements.  The commenter believes that EPA
now proposing to use these very same mechanisms to authorize major
sources will be confusing to some, but perhaps a signal that a more
rational policy has been adopted by others.  (6414)

Some commenters (5082, 7935) oppose the use of general permits and/or
permits by rule as a permitting streamlining option.  Their reasons for
opposition include:

If GHGs were to become subject to control requirements, many sources
would be applying for title V permits at the same time.  As a result,
permitting authorities would face unrealistic title V permit processing
demands.  Such demands would likely make it impossible for authorities
to act on title V applications within 18 months, as generally required,
which could ignite a wave of litigation over missed deadlines.  (5082)

General permits cannot substitute for the case-by-case analyses required
under PSD provisions because general permits do not allow for
facility-specific conditions.  (7935)

Response:

Since commenters echoed many of our concerns about why it will take time
to put these measures in place and many commenters had differences of
opinion as to whether and how we should move forward on these
approaches, including policy and legal concerns, we are not finalizing
the general permits and permits-by-rule streamlining options at this
time.  We would likely want to explore, through a notice and comment
process, which of these measures is viable to pursue further.  These
comments, including any opinions about the legal and policy direction we
must take regarding these streamlining options, will be addressed in the
action(s) where we might apply them.

4.5  Electronic Permitting

	The proposal preamble for the Tailoring Rule acknowledges that the use
of electronic permitting is growing across the U.S. as more states
implement new or upgraded systems.  We believe that the use of
electronic permitting (in addition to the use of general permits) could
assist in addressing some of the administrative burdens that may occur
due to GHG emission sources being added to the PSD and title V programs.
 Comments received on electronic permitting as an option to streamline
the PSD and title V permitting process are presented in this subsection.

Comment:

Some commenters (5079, 5711) support the use of electronic permitting as
a streamlining option.  These commenters state that electronic
permitting could:

Help streamline the PSD program for sources already considered major
sources for conventional pollutants, as well as those that would be
brought into the program for GHG emissions by reducing the time, cost
and resources expended by permitting agencies and applicants to obtain a
PSD permit.  (5711)

Help where data entry may be used for multiple compliance programs, such
as a consistent data platform between PSD and GHG Mandatory Reporting
Rule requirements.  (5711)

Various commenters (2504, 4238, 4239, 5082, 5135, 5198) oppose the use
of electronic permitting as a streamlining option.  The reasons for
their opposition include:

EPA should not address electronic permitting as part of the Tailoring
Rule.  EPA should do so in a separate rulemaking and only after a
careful evaluation of how such rules impact individual states.  (2504)

Electronic permitting approaches would not be helpful until states have
gained some experience implementing the new requirements into their PSD
and title V permitting programs.  (4238, 4239)

The commenters’ states attempted the use of electronic permitting and
that the effort was unsuccessful and resulted in a significant loss of
money and time.  (5135, 5198)

EPA has not demonstrated how electronic permitting of major sources of
GHG will reduce the amount of time required for permitting or how it
"streamlines" the permitting process.  Therefore, the commenter states
that EPA should not rely on this "potential" streamlining" method to
mitigate the absurdities that will result from EPA's regulation of GHGs.
 (5082)

Response:

Even though electronic permitting is a streamlining approach that does
not require rulemaking or state adoption, this approach will require
implementation experience with GHG that is not now available.  We expect
that at least 1 year of implementation experience (of the type we will
gain starting in 2011) would be required, plus at least an additional
year to extrapolate that experience to small sources and put this
approach into effect.  For that reason, we are not able, at this time,
to presume that this approach will ease any burden prior to the planned
rulemaking for step 3 (i.e., later half of 2011, to promulgate by July
2012, effective July 2013).  These comments, including as any concerns
expressed by commenters about this approach, will be addressed in the
action(s) where we might apply this streamlining option.

4.6  “Lean” Techniques for Permit Process Improvement

	The proposal preamble describes “lean” techniques as referring to a
collection of process improvement principles, methods, and tools
designed to help organizations identify and eliminate non-value-added
activity (“waste”), in order to meet customer needs better, more
quickly, and more efficiently.  In the context of air permitting, we
assert that “lean” improvement events typically focus on eliminating
administrative process waste (e.g., backlogs in permitting, document
errors, unnecessary rework on documents, delays associated with
transmission of documents between various parties that develop and
approve them).  We acknowledge that many states employ “lean”
techniques to improve air permitting and other agency processes and
believe that similar and improved “lean” techniques could be
employed as a streamlining option/tool for GHG PSD and title V
permitting purposes.  This subsection presents comments on the use of
“lean” techniques as a streamlining option/tool for GHG PSD and
title V permitting.

Comment:

One commenter (5711) expresses explicit support for the use of
“lean” techniques for permit process improvement.  The commenter
believes that lean permitting may reduce procedural waste by reducing or
eliminating permit backlogs, errors, unnecessary redrafting of
documents, and delays due to transmitting documents among the parties
that develop and approve them.  (5711)

A few commenters (2504, 4238, 4239) oppose the use of “lean”
techniques for permit process improvement.  The reasons for their
opposition include:

EPA should not address “lean” as part of the Tailoring Rule.  EPA
should do so in a separate rulemaking and only after a careful
evaluation of how such rules impact individual states.  (2504)

“Lean” approaches would not be helpful until states have gained some
experience implementing the new requirements into their PSD and title V
permitting programs.  (4238, 4239)

Response:

Even though “lean” permitting is another streamlining approach that
does not require rulemaking or state adoption, this approach will
require implementation experience with GHG that is not now available.
We expect that at least 1 year of implementation experience (of the type
we will gain starting in 2011) would be required, plus at least an
additional year to extrapolate that experience to small sources and put
this approach into effect.  For that reason, we are not able, at this
time, to presume that this approach will ease any burden prior to the
planned rulemaking for step 3 (i.e., later half of 2011, to promulgate
by July 2012, effective July 2013).  These comments, including as any
concerns expressed by commenters about this approach, will be addressed
in the action(s) where we might apply this streamlining option.

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

5.1  Comments on the Compounds Included in the Definition of the GHG
Pollutant

	We proposed to identify the GHG metric to be used for determining PSD
and title V permitting applicability as the group of six GHGs summed on
a CO2e basis.  The six constituent GHGs included in the proposed metric
were CO2, CH4, N2O, SF6, HFCs, and PFCs.  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 55329.  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 endangerment and
cause and contribute findings and 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.

	It is worth noting overall that a majority of the proposal comments did
not speak to or show a preference for or against the proposed GHG metric
for the purposes of determining applicability under the PSD and title V
programs.  Below we summarize our responses to those comments that
specifically showed support for or opposition to the proposed metric.
For more information regarding the rationale for the GHG metric, see
section V.A. of the preamble to the rule.

Comment:

	Various state commenters (4239, 4860, 7935, 8025, 4866) and public
advocacy groups (5306) express support for listing the six compounds
identified by EPA as GHGs.  Generally, commenters in support of
including all six of the well-mixed GHGs in the threshold metric cite
the same reasons they provided in support of grouping the individual
GHGs together:  namely, the contribution findings that identify the
pollutant as “the combined mix of six key, directly emitted,
long-lived and well-mixed GHGs.”  See 74 FR 66496, 66516, 66536
(December 15, 2009).  They also emphasize that EPA, in order to protect
the public, has to control all the GHGs it has regulated and reduce the
overall impact of the mix of six GHGs.  One fuels sector commenter
(2369) generally agrees with EPA’s proposed GHG metric to define the
“air pollutant” as the class of six GHGs.

	A significant number of industrial commenters contend that only the
GHGs actually subject to controls under the LDVR should be defined as
GHGs under the Tailoring Rule.  Some of these commenters (4122, 4298,
4318, 4522, 4523, 4952, 4992, 5038, 5052, 5080, 5089, 5111, 5114, 5128,
5137, 5257, 5317, 5327, 5328, 5601, 5741, 5788, 6459, 8301) believe that
only the three compounds (CO2, N2O, and CH4) for which the LDVR contains
limits should be considered GHGs, while others (3306, 4020, 4095, 4106,
4118, 5058, 5059, 5140, 5181, 5278, 5714, 5276) would also add HFCs
(which are included in a credit flexibility arrangement under the LDVR)
for a total of four GHGs.

The commenters present some or all of the following arguments for
reducing the number of compounds included in the definition of GHG:

PSD is not triggered for all six GHGs by the LDVR, even under EPA’s
theory of the statute, because under the proposed PSD Interpretation,
actual emission controls under the CAA – not simply an endangerment
finding – are required to trigger PSD obligations for a given
pollutant (citing 74 FR 51535, 51539-51541, 51544).  (4122, 4318, 4522,
4523, 4952, 4992, 5038, 5080, 5089, 5114, 5128, 5257, 5317, 5327, 5601,
5741, 6459, 8301)

Including all six would conflict with the “absurd results” and
“administrative necessity” doctrines because it would lead to larger
numbers of sources subject to permitting, increasing the harm that EPA
says it wants to avoid.  The EPA cannot both widen the scope of the
applicability to six GHGs at its discretion and rely on these judicial
doctrines, which apply only where the EPA has availed itself of all
reasonable discretion to minimize the harm.  (4122, 4318, 4522, 4523,
4952, 4992, 5038, 5080, 5089, 5114, 5128, 5257, 5317, 5327, 5601, 5741,
6459, 8301)

The LDVR must dictate how the subject GHGs are regulated and any other
result is arbitrary and, therefore, does not pass muster under section
307(d) of the Act.  (4118)

	An operator of waste-to-energy facilities (2371) recommends that the
Tailoring Rule require the measurement of the same emissions as the GHG
Mandatory Reporting Rule (40 CFR part 98) in determining which of the
six GHGs to measure for specific source categories.  The commenter also
suggests that the Tailoring Rule state that emissions should be
determined according to the methods of GHG Mandatory Reporting Rule, or
an equivalent method, in order to avoid unintentional noncompliance.
State commenters 4521 and 5338 also recommend that chemicals listed as
GHGs should be consistent with those listed in the GHG Mandatory
Reporting Rule.

	Some commenters raise the issue of regulating black carbon or similar
short-lived climate forcers as GHGs subject to permitting:

One environmental commenter (5311) agrees with EPA’s decision to
exclude black carbon for purposes of the Endangerment Finding for now
but would like EPA to move forward expeditiously to list black carbon as
a GHG and establish appropriate regulation in the near future because:

Black carbon is a potent, short-lived climate forcer that contributes
significantly to climate change.

Reducing these emissions is among the most effective strategies to
mitigate global warming in the immediate future, particularly for
slowing Arctic warming.

Scientific evidence makes clear that black carbon meets all of the
requirements of the endangerment and contribution tests under section
202(a) of the CAA.

Some state commenters (4239, 4860, 7935) also encourage EPA to consider
adding black carbon and other short-lived climate forcers to the list of
GHGs.

	One fuels sector commenter (2369) (who generally agrees with EPA’s
proposal to define the “air pollutant” as the class of six GHGs)
also suggests the alternative of defining the regulated pollutants in
the LDVR as “GHG emissions from Light Duty Vehicles,” similar to the
approach taken for municipal solid waste (MSW) landfills where the
pollutant defined for the NSPS is “emissions from MSW landfills.”
The commenter believes this approach would prevent triggering PSD and
title V requirements for stationary sources as a result of the LDVR.

	A solid waste industry commenter (5276) asserts that the Tailoring Rule
should confirm that CH4 and N2O will not be regulated under PSD or title
V because these pollutants are only emitted in miniscule amounts from
automobiles.  The commenter believes that EPA’s failure to consider
the significance of each automobile GHG individually is inconsistent
with purpose of the CAA requirement to determine whether an air
pollutant contributes to an air pollution concern before regulating it.
At a minimum, the commenter asks EPA to consider using the Tailoring
Rule to avoid the PSD and title V regulation of CH4 and N2O emissions
from landfills until it can address the emission of those pollutants
from stationary sources more directly through notice and comment
rulemaking.

	One commenter (6457) notes that EPA has previously stated that the
“single designated pollutant” at MSW landfills is landfill gas
(LFG), and not individual GHG components.  For that reason, the
commenter believes that emissions from municipal solid waste landfills
would not be separately regulated under the NSR/PSD or title V programs
solely on the basis of the individual components of LFG consisting of
CH4 or CO2.  Because the pollutant emitted from landfills is not
considered to be any one of the gases subject to the Tailoring Rule (or
the Endangerment Finding), the commenter does not read either of these
rules as foreclosing voluntary reductions of LFG at non-NSPS regulated
landfills (often undertaken to generate carbon offsets for sale).

Response:

We appreciate the commenters’ responses and support for the GHG metric
we proposed.  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 55329.  We believe that this approach
is both compelled by the statute and reflects the preferable policy
approach.  We describe in full our rationale for this approach in
section V.A of the preamble for the final rulemaking.

We disagree with commenters who suggest that because the LDVR actually
regulates only four of the six GHGs, EPA may apply PSD and title V to
only those four GHGs.  It is true that the LDVR for the single air
pollutant that is comprised of the aggregate of six GHGs consists of
individual standards for only four particular constituents of the single
air pollutant—which are emissions limits or caps for three GHGs (CO2,
CH4, and N2O) and an emission crediting option for one GHG (HFCs) –but
it does not dictate that only those four compounds are subject to
regulation for permitting purposes.  Although the LDVR results in
reductions only with respect to four specific GHGs, as a legal matter
the LDVR standard covers the entire set of GHGs that as a class are the
single “air pollutant” in the contribution finding.

EPA’s conclusion that the pollutant subject to regulation is the
single pollutant comprised of the six individual gases, and not the four
individual constituents, is dictated by the interrelationship between
the endangerment and contribution findings and the requirement to set
standards under section 202(a), and not the endangerment finding itself.
 We agree with commenters that the endangerment and contribution
findings do not by themselves define the pollutant or make GHGs subject
to regulation.  Specifically, as detailed below, our conclusion on as to
what pollutant is subject to regulation is dictated by our obligation to
regulate under section 202(a) the air pollutant for which EPA made the
cause or contribute finding.

The Administrator found that emissions from new motor vehicles and new
motor vehicle engines of the single air pollutant defined as the
aggregate group of these same six GHGs contribute to the air pollution
and hence to the threat of climate change.  These findings 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 –
in the LDVR, EPA determined that the final emissions standards in that
rule are “standards applicable to the emission” of the single “air
pollutant” defined as the aggregate group of six GHGs.  EPA also
interpreted section 202(a) as providing the Administrator with
significant discretion in how to structure the standards that apply to
the emission of the air pollutant at issue, 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 rulemaking EPA
finalized separate standards for N2O and CH4, and a CO2 standard that
provides for credits based on reductions of HFCs, as the appropriate way
to issue standards applicable to emissions of the single air pollutant,
the aggregate group of six GHGs.  EPA did not set any standards for
perfluorocarbons (PFCs) or sulfur hexafluoride (SF6) as they are not
emitted by motor vehicles.  EPA determined that this combination of
standards satisfied its obligation to set emissions standards applicable
to emissions of the single air pollutant for this group of motor
vehicles.  In addition, EPA did not define the regulated pollutants in
the LDVR as “GHG emissions from Light Duty Vehicles,” similar to the
approach taken for MSW landfills where the pollutant defined for the
NSPS is “emissions from MSW landfills,” because the definition of
pollutants in the LDVR is out of the scope of this rulemaking.  The fact
that EPA exercised its discretion in how to structure the standards for
the aggregate group of six GHGs does not change that the standards are
applicable to emission of the single air pollutant defined as the
aggregate group of the six GHGs.  [See 75 FR 25398 (May 7, 2010).]

As explained in the preamble to this final rule, we must adhere to the
definition of air pollutant as established in the endangerment finding
and the final LDVR for GHGs, which includes CO2, CH4, N2O, HFCs, PFCs,
and SF6.  We do not have discretion to select only a subset of these
gases in defining our GHG threshold metric for permitting applicability
purposes.

For the same reasons, we disagree that this approach is inconsistent
with the Agency’s final action in “EPA’s Interpretation of
Regulations that Determine Pollutants Covered by Federal Prevention of
Significant Deterioration (PSD) Permit Program.”  While it is the
case, that only four constituent gases are reduced by the LDVR, the
‘air pollutant” that is controlled, and thus “subject to
regulation,” is the group of six, and it is this “air pollutant”
to which PSD and title V apply.

We also disagree with commenters who suggested that including all six
GHGs in determining permitting applicability would conflict with our
“absurd results” and “administrative necessity” rationale for
the phase-in periods and applicability thresholds for GHGs.  Even if we
did have discretion to identify the air pollutant for PSD and title V
purposes as consisting of only four of the six well-mixed GHGs, we do
not believe that doing so would have any meaningful impact on the
administrative burdens that are at the heart of our reliance on the
“absurd results” and “administrative necessity” doctrines.  The
number of additional permitting actions and amount of additional
permitting burden resulting from including all six GHGs, rather than
four, in the definition is minimal.  This is because the administrative
burden of GHG permitting is dominated by CO2 and CH4 emission sources.
For example, with a major source threshold set at 100,000 tpy CO2e, the
combined population of sources that would be major for N2O, HFCs, PFCs,
and SF6 accounts for fewer than two percent of the GHG sources that
would remain covered.

In regards to the few commenters that suggested the Tailoring Rule
should only include the GHGs for source categories that are required to
be reported under the EPA’s Mandatory Reporting Rule for GHGs, we also
disagree.   The Tailoring Rule addresses the permitting requirements
under PSD and title V programs for GHGs and, as described above, these
requirements must address the single pollutant subject to regulation as
defined in the LDVR.  We cannot identify different subsets of individual
GHGs for different source categories, and there are no categorical
exclusions under the final Tailoring Rule that would exempt specific
emission sources (see section V.E.3 of the preamble to the final rule
for EPA’s rationale regarding requests for exemptions).  Also, it is
worth noting that the Mandatory Reporting Rule for GHGs generally does
indeed require the reporting of all six of the primary GHGs – as well
as other fluorinated gases – that are included in the sum-of-six GHG
metric used in the Tailoring Rule; however, in some cases the rule
identifies where the current lack of a specific GHG measurement
technique may result in some specific GHGs not being reported by a
specific source category.  The GHG Tailoring Rule does not establish the
GHG measurement techniques for determining the amount of GHG emissions
released at a source; sources will need to verify what GHG measurement
techniques are acceptable for use by contacting their applicable
permitting authority.  It is likely that the same or similar techniques
as identified in the GHG Mandatory Reporting Rule will be required, but
this should be confirmed with the applicable permitting authority.

We disagree with the commenters who suggest we include black carbon and
other short-lived climate forcers to the list of GHGs as well as with
those asking for an exclusion of CH4 and N2O.  The definition of the air
pollutant, as cited in the LDVR, includes CH4 and N2O and does not
include black carbon or other short-lived gases.

We also disagree with the commenter who states that we should have
defined the air pollutant as “GHG emissions from LDVs,” similar to
the approach taken for municipal solid waste (MSW) landfills where the
pollutant defined for the NSPS is “emissions from MSW landfills.”
In addition to the reasons noted above, including the definition of the
air pollutant being outside the scope of this rulemaking, we find our
action on landfills not to be instructive (56 FR 24468, 24473; May 30,
1991).  As we explained in that action, EPA found that the complex
mixture of the constituent gases which emanated from landfills
endangered public health and welfare based on a number of concerns.
Under section 111(b)(1)(A), we determined that this category of sources
– MSW landfills - caused or contributed significantly to air pollution
which may reasonably be anticipated to endanger public health or
welfare.

The term “air pollution” as used in section 111 and various other
CAA provision generally refers to an ambient concentration of some
compound or set of compounds.  In most cases the ambient concentrations
of a compound are the result of emissions from a variety of sources, and
can include both anthropogenic and non-anthropogenic sources of
emissions.  For example, ambient concentrations of PM are a form of air
pollution, and the PM in the ambient air results from emissions from
many different source categories.

For MSW landfills, the air pollution at issue was unique in that it was
defined as the emissions from MSW landfills, making the air pollution at
issue a source specific definition.  This was done because the impacts
on public health or welfare were in part tied to these specific
emissions (e.g. welfare effects were tied to landfill odors and off-site
explosions from pollutant migration), not simply a broader air pollution
where MSW emissions played just one part.  56 FR 24468, 24473 (May 30,
1991).  Since the air pollution was defined this way, the category
clearly caused or significantly contributed to this air pollution.  It
was the unique, source specific nature of the definition of the air
pollution that led to the result that the air pollutant emitted by the
MSW landfills was also defined as emissions from MSW landfills.
Accordingly, it was the specific mixture, which emanates solely from
landfills, that we were concerned about.

As discussed above, the endangerment finding here is of a different
nature.  Specifically, the Administrator determined that the air
pollution was atmospheric levels of the combination of six GHGs.  This
air pollution was not limited to any one source of GHGs, but was defined
as the atmospheric concentrations of these gases, irrespective of
sources. Unlike MSW landfills, EPA did not define the air pollution in
terms of emissions from a specific source category, but instead defined
it in terms of the atmospheric concentrations irrespective of any one
source category.  See 74 FR 66496, 66516-523 (December 15, 2009).   The
endangerment to public health and welfare came from this total
atmospheric concentration of GHGs, not from a subset reflecting just
emissions from one source category.  EPA rejected suggestions that it
should define the air pollution in terms of a subset of the GHGs in the
atmosphere, such as the emissions from new motor vehicles.  Id at 66521,
and Endangerment RTC Volume 9, at p.16.  The air pollutant was defined
in the same manner as the air pollution, irrespective of source
category, and was not limited to emissions from new motor vehicles.  Id.
at 66536-41.  Of course, EPA focused on the emissions of this air
pollutant coming from new motor vehicles, as that was required to
determine whether emissions from these sources caused or contributed to
the atmospheric air pollution.  However the air pollutant was defined in
the same way as the air pollution, without reference to any specific
source.  Thus, the GHG endangerment and contribution findings did not
follow the somewhat unique approach to defining the air pollution that
was used in listing MSW landfills under section 111, and the agency
decisions in the MSW landfill listing does not provide a basis for
defining air pollutant here different than the air pollutant and the air
pollution defined in the GHG endangerment and contribution findings.

Moreover, the proposed approach would appear to circumvent the
requirement that an air pollutant regulated under the CAA be subject to
PSD permitting as it would give the Agency authority to avoid this
result simply by issuing source specific definitions of a pollutant even
where the air pollutant is of general concern.

	With respect to landfills, we also disagree with commenters that
because we designated the pollutant in the landfills NSPS as LFGs that
the only regulated NSR pollutant emitted from them is LFGs.  Nothing in
that rulemaking suggests that other pollutants meeting the definition of
regulated NSR pollutant (e.g. NOx from flaring) would not also be
covered.

Arguments that certain individual constituents should not have been
included under the LDVR (CH4 and N2O) because they are emitted in small
amounts are beyond the scope of this rulemaking.  Rather their inclusion
was the subject of the endangerment and cause or contribute finding and
the LDVR and are properly addressed there.  Questions as to the impact
that the LDVR has on the availability of reductions of GHGs at landfills
for use as offsets or credits is also beyond the scope of this
rulemaking and we are not addressing those issues at this time.

5.2  Comments on Use of GWP and the CO2e Metric

	As noted previously, we proposed to identify the GHG metric as the
group of the six GHGs, on a CO2e basis.  Specifically, this means that a
source’s emissions of all six GHGs would be combined into a single
metric by multiplying the mass of each individual GHG (in tpy) by its
GWP value, and summing these products to determine the total emissions
of the GHG pollutant expressed in terms of tpy CO2e.  We received
comments on many aspects of the proposed metric.  In our proposal
preamble discussion of GHG metric, EPA also raised the possibility of
including a limitation in the metric to address the prospect (expected
to occur only rarely) that high-GWP gases could be emitted in quantities
less than statutory thresholds for PSD and title V but nevertheless
exceed the proposed thresholds in terms of CO2e.

5.2.1  General Support and Opposition to the CO2e Metric

Comment:

	Several commenters (3916, 4154, 4518, 4747, 4886, 5306, 5311, 5347,
5922, 8025) explicitly support the use of GWP and the CO2e metric for
GHG emissions.  These commenters make the following points in support:

The EPA has the discretion and authority to select an appropriate metric
to measure GHGs in the PSD program, and policy considerations support
the choice of GWP.  (5306)

The GWP is a widely-used metric which employs internationally-recognized
conversion factors to compare GHGs based upon their climate properties.
(4518, 5306, 5347)

This approach provides for an inherent balancing among the GHGs,
possibly minimizing PSD reviews.  (3916)

This will lead to a more effective system for permitting authorities and
create more opportunities to reduce emissions over the full class of
GHGs, rather than focusing on reducing individual GHGs.  (4866)

States and local areas that have climate action plans for GHG reductions
use CO2e.  (4518, 5347)

The use of CO2e ensures a standard measure across all permitting
agencies.  (4518)

However, even though one commenter agrees that using GWPs sensibly
focuses on the characteristic that endangers the public health and
welfare (i.e., the potential to cause global warming), this state
commenter (4742) believes that there is no reason that EPA should select
carbon dioxide equivalency over another metric.  The commenter
recommends that EPA consider adopting a unit of measurement that would
eliminate the need to adjust the numeric thresholds in the statute.  In
addition, another supportive commenter (4518) believes that the proposal
underestimates CH4’s heat-trapping potency relative to the other GHGs.
 Because CH4 has an atmospheric lifetime of approximately one decade
instead of 100 years like other GHGs, its GWP value (which is derived
based on a warming potential over 100 years per the IPCC methodology) is
relatively lower than the more persistent GHGs.  The commenter believes
that this is a missed opportunity to get significant, near-term
emissions reductions.

Several state (4519, 4864, 5081) and industrial commenters (4020, 4095,
4747, 5082, 5086, 5183, 5276, 5391, 6457) oppose the use of GWP and CO2e
in setting the thresholds for GHGs, and most of these believe that
thresholds should be based on individual mass-based emissions for each
GHG.  Specific reasons for this opposition include the following:

Two industry commenters (4095, 5082) do not believe EPA has any
discretion to ignore the metric for regulation established by Congress
for PSD in section 169 of the Act.

A state commenter (5081) suggests that regulating each of the GHGs
individually on a mass basis provides a better, more immediate
environmental result and is a more appropriate approach under the
administrative necessity doctrine.

An industry commenter (5183) states that facilities will face enough
challenges without introducing requirements to consider intensity
multipliers or other factors beyond the simple NSR threshold levels, and
that a facility which emits less than an established threshold level
should not trigger PSD or title V requirements, regardless of the type
and intensity of the emission.

Two solid waste industry commenters (5086, 5391) state that an
individual mass-based emissions metric without GWP would be consistent
with the GHG Mandatory Reporting Rule and the current landfill-specific
PSD regulation based on NMOC.

Some state (4864), solid waste industry (5391), and semiconductor
industry (5143, 5417) commenters are concerned that the CO2e metric
relies on GWP assumptions that could change with periodic updates to the
scientific literature.  Commenter 5391 adds that GWP is therefore a
variable, and EPA cannot grant permits that include variables.  (See
additional comments on this topic below.)

An industry commenter (5276) contends that the use of CO2e will
complicate the implementation of BACT because sources that trigger PSD
will be required to install BACT for each regulated pollutant, not for
CO2e.  As a result, a source that exceeds the threshold primarily due to
its CO2 emissions would be forced to install BACT for all other
individual GHGs, regardless of how minor those other emissions may be.
The commenter states that EPA should provide further analysis on how the
single GHG-based metric approach is representative and equitable for all
sources impacted by the proposed rule.

One commenter (6457) supports elevated thresholds, but believes that
these thresholds as applied to CH4 should be expressed on a mass basis
because a 25,000 tpy threshold on a CO2e basis would effectively lower
the threshold for CH4 emissions to approximately 1,000 tpy, which would
potentially extend PSD and title V requirements to hundreds of small
facilities such as landfills, farm manure digesters, coal mine fugitive
emissions, non-uniform oil/gas system components, and small wastewater
treatment facilities that could not afford the administrative and
compliance costs.  This permitting need would overwhelm state and local
permitting authorities.

Some industry commenters (4298, 5111, 7026) recommend using a
combination approach based on the mass emissions of each synthetic GHG
(PFC, HFC, and SF6) and the CO2e or other equivalent emissions of each
naturally occurring GHG (CO2, CH4, and N2O).  Industry commenters 4298
and 5111 argue that for sources of PFC, HFC, and SF6, which each have
low mass emissions, there is no justification under the avoidance of
“absurd results” and “administrative necessity” doctrines to
group these pollutants or use an equivalency metric to evaluate title V
and PSD applicability because they would rarely trigger applicability
based on their mass emissions at the statutory thresholds.

	Without necessarily opposing the use of GWP, state commenters 4239 and
7935 recommend that EPA consider using a mass basis for individual GHGs
because it may be feasible to regulate and control emissions of each
GHG, other than CO2, at the 100/250 tpy thresholds (or less if deemed
necessary) according to the established mechanisms of the CAA.

An industry commenter (4298) suggested that an alternative approach for
calculating global warming equivalency could be based on N2O (i.e.,
N2Oe), which would yield emission ranges that would fall far closer to
the statutory threshold levels than if a CO2e approach is used.  The
commenter notes that an N2Oe approach applied to a major source
threshold of 100 tpy would be only slightly less stringent than the
proposed threshold of 25,000 tpy CO2e (i.e., 100 tpy N2O is equivalent
to 29,600 tpy CO2).  The commenter adds that, to the extent that an N2Oe
approach would exclude sources from PSD that EPA feels should be subject
to GHG standards, EPA has the option to promulgate NSPS for such
sources.

Response:

After considering these comments, we have decided to adopt applicability
thresholds based on a CO2e metric for the sum-of-six well-mixed gases,
and also to adopt an additional mass-based threshold for the sum-of-six
gases as discussed in the proposal.  First, as discussed in the previous
section, we have explained why the appropriate pollutant for PSD
purposes is the single pollutant GHG, which is composed of the six
well-mixed gases.  Regarding the CO2e metric, we continue to believe
there are a number of advantages, as laid out in the proposal, to a CO2e
measure that would not be available if we used only a mass-based metric.
 These include:  (1) a CO2e metric, by incorporating the GWP values,
best addresses the relevant environmental endpoint, which is radiative
forcing of the GHGs emitted; (2) when combined with a sum-of-six gases
approach, the CO2e metric best allows for consideration of their
combined effects when sources emit any one or combination of the six
well-mixed GHGs; (3) a cumulative CO2e metric is consistent with the
applicability metric used in the mandatory reporting rule and other
related rules and guidelines; and (4) a CO2e metric allows more
flexibility for designing and implementing control strategies that
maximize reductions across multiple GHGs.  We recognize the tension
between the mass-based metric in the statute and the CO2e-based metric
we are adopting in this rule, but as discussed later, we will address
this by also retaining the mass-based metric.  Moreover, given our need
to tailor our approach for covering sources of GHGs, we believe that the
considerations driving our choice to also use a CO2e-based metric are
appropriate for defining the phase-in and allow for permitting resources
to be directed at those sources and modifications that have the greatest
impact on radiative forcing of the GHGs emitted.

We recognize the concern of commenters who stated that we cannot ignore
the statutory thresholds based on the mass-based emissions of an air
pollutant as described under CAA section 169(1).  As we mentioned in the
proposal, because both the PSD and title V statutory thresholds are
expressed on a mass basis—i.e., tons of a pollutant with no weighting
values applied—we were concerned from a legal standpoint that the
metric proposed (CO2e) could have the effect of subjecting to PSD or
title V requirements a source whose emissions fall below the statutory
threshold limits on a strictly mass basis, but whose CO2e-based
emissions exceed the CO2e thresholds we establish under the Tailoring
Rule.  As an example, in rare instances it is possible that a source may
emit only a non-CO2 GHG in very small amounts, on a mass basis, but one
that carries a very large GWP.  In this case, it is possible that the
source may emit the GHG in amounts that fall below the PSD and/or title
V statutory applicability threshold (100 or 250 tpy, as applicable) on a
mass basis, but exceed the 100,000 CO2e PSD and title V applicability
thresholds for step 2 in this action.  Under these circumstances,
without a mass-based threshold, the source would trigger PSD and title V
for its CO2e emissions even though its GHG mass emissions would not, in
fact, exceed the statutory triggers.

Upon review of the comments pertaining to this issue and further
analysis of the legal and programmatic implications, we are adopting a
two-part applicability process, for both major source applicability
determinations for GHGs under PSD and title V and for determining if a
net increase has occurred in PSD applicability determinations for
modifications.  We accomplish this two-step applicability approach by
continuing to rely on the existing mass-based applicability provisions
in the current regulations, and by including new regulatory provisions
that add a definition of "subject to regulation" that in turn includes
the phase-in thresholds.  Similarly, for PSD modification reviews and
associated netting analyses, the same two-step process must be used.
Our summary in section IV.A of the preamble describes how we expect this
provision to be implemented in practice.

Regarding concerns raised by one commenter that applying a CO2e-based
threshold to methane sources will create an overwhelming permitting
burden, we have carefully considered the impact of our final GHG
threshold selection under step 2 of the phase-in on the administrative
permitting burden that is created, including specifically the inclusion
of the applicable methane sources mentioned in the comment.  As
discussed in more detail in Section V.B of the preamble to the final
rule, we have decided upon a higher GHG threshold than was proposed,
100,000 tpy CO2e instead of 25,000 tpy CO2e for major source
applicability, and we believe that there will not be an overwhelming
permitting burden created for states as result of our step 2 thresholds,
inclusive of any CH4 sources affected at the step 2 threshold.  While,
there may be some newly permitted CH4 sources under step 2, such as
additional landfills and underground coal mines, we believe that these
additional sources, which we estimate at less than 300 total, will not
result in a number of permitting actions that will overwhelm permitting
authorities.

We acknowledge that the possibility of changing GWP values is a downside
to the use of CO2e for the GHG metric, and we address this comment later
in this chapter, where we discuss our plan to codify GWP values.  By
codifying GWP, any changes will be manageable, and, in our judgment,
will not outweigh the benefits of a CO2e-based approach.  We also
acknowledge that a CO2e-based approach may appear to complicate the BACT
review and implementation process.  However, we disagree with the
commenter’s ultimate conclusion that BACT will be required for each
constituent gas rather than for the regulated pollutant, which is
defined as the combination of the six well-mixed GHGs.  To the contrary,
we believe that, in combination with the sum-of-six gases approach
described above, the use of the CO2e metric will enable the
implementation of flexible approaches to design and implement mitigation
and control strategies that look across all six of the constituent gases
comprising the air pollutant (e.g., flexibility to account for the
benefits of certain CH4 control options, even though those options may
increase CO2).  Moreover, we believe that the CO2e metric is the best
way to achieve this goal because it allows for tradeoffs among the
constituent gases to be evaluated using a common currency.  We also note
that any BACT analysis conducted at a facility would have to take into
account the cost of control and accordingly disagree that grouping the
constituent gases into a single pollutant will lead to the imposition of
controls that are not cost effective.

	We do not agree also with the commenter who suggested an N2O-based
equivalent metric.  There is little evidence of this approach being used
anywhere in formal national GHG emissions reporting mechanisms, GHG
emission trading regimes, or state and local GHG reporting programs.
However, CO2e is a universally recognized and utilized metric for
estimating and reporting GHG emissions, with well established protocols
for applying GWP values based on CO2 equivalency.  We find no reason to
divert from this well-established metric for permitting purposes.
Similarly, we have chosen to follow the same GWP values that are adopted
in EPA’s final GHG Mandatory Reporting Rule, which are based on the
100-year time horizon; these GWP values are well established in
international and national GHG reporting mechanisms and we see no reason
to divert from those values for permitting program purposes either.

5.2.2  Comments on Combining the Six GHGs into a Single Metric

Comment:

	Most commenters who submitted comments during the public comment period
did not speak to or show a preference for or against the combination of
the six GHGs into a single metric, and there were some who agreed with
the metric we proposed.  Of those commenters that specifically support
the combining of the individual GHGs as one pollutant for purposes of
determining permitting applicability, they stated that it is not
uncommon for EPA to recognize ‘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 PM.  One state
commenter (4742) agrees that EPA has substantial discretion to regulate
pollutants collectively, and believes that this seems particularly
appropriate with respect to GHGs.

A smaller number of commenters (many who also oppose including all six
of the proposed GHGs) (2797, 4122, 4298, 4318, 4522, 4523, 4952, 4992,
5038, 5052, 5080, 5089, 5111, 5114, 5128, 5143, 5257, 5317, 5327, 5328,
5601, 5741, 6459, 7026, 8301) specifically oppose the proposal to
combine all six GHGs into a single metric for permitting purposes, for
some of the same reasons:

Regulating all six GHG as a group will increase the likelihood that a
source will trigger permitting requirements.  The LDVR dictates how
these GHGs will be regulated, and any other result is arbitrary and,
therefore, does not pass muster under section 307(d) of the Act.  (4118)

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).  Since GHGs do not interact or combine to create a
pollutant of concern, and EPA has not established a GHG NAAQS, GHGs
should be regulated individually and treated in the same way as under
the LDVR.  (2797, 5328)

The EPA should not regulate CO2 the same as the other GHGs because the
other gases have higher GWP and are more potent.  (2797)

Defining the six GHGs as a single pollutant is unnecessary and would
expand the scope of the statute.  (7026)

Response:

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 55329.  See the discussion under section 5.1 regarding
which compounds are included in the definition of the GHG pollutant.  We
believe that this approach is both compelled by the statute and reflects
the preferable policy approach.  As more fully discussed in the
preamble, under the plain language of section 169(1) a PSD major
emitting facility is one that emits 100 or 250 tpy of “any air
pollutant.”  Through regulation we have reasonably limited the scope
to this provision to those tonnages of any “regulated NSR
pollutant,” which includes any pollutant that is “subject to
regulation under the Act.”  40 CFR 52.21(b)(50)(iv).  This same
limitation exists in the definitions of major modification and BACT.  40
CFR 52.21(b)(2) and (b)(12).  This regulatory limitation reflects the
statutory directive that BACT is required for “each pollutant subject
to regulation under this chapter.”  42 U.S.C. 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 carries 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 case 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 section 169
to be guided by the same requirement to define 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 GHGs to be the single “air pollutant,” they must be
considered as such in determining if “any pollutant” is emitted
above the provided thresholds.

Similar to our discussion in section 5.1 above, 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, N2O, CH4, HFCs, PFCs,
and SF6.   Because it is this pollutant that is regulated under the
LDVR, it is this pollutant that to which PSD and title V apply.
Specifically, the applicability provision in the LDVR provides a clear
reference to the definition of the single pollutant comprised of the
aggregate group of the six well-mixed GHGs, which makes clear PSD and
title V applicability depends on the same sum-of-six GHG construct.  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 or title V.  We note that many of
the comments opposed to aggregating the six GHGs in this rule were
already addressed in the final Contribution Finding.  See, e.g., 74 FR
66541.

Of course, because the LDVR follows the Contribution Finding, 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).  There, the Administrator defined the air pollutant as the
“aggregate group of the same six…greenhouse gases” (see,
specifically, 74 FR 66536), and these well-mixed GHGs are defined to
include CO2, CH4, N2O, HFCs, PFCs, and SF6.

Moreover, even if we had discretion to identify the GHGs air pollutant
differently in the permitting programs 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 reasons noted below specific to
the permit programs.  The term “air pollutant” is defined under CAA
section 302(g) as “any air pollution agent or combination of such
agents, 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.  Here, we
think that the six well-mixed gases are appropriately combined into a
single air pollutant because, as noted in the contribution findings,
they share several important attributes:  Each of the six gases --

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

Is long-lived in the atmosphere after it is emitted

Is sufficiently long-lived 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, treating the six GHGs as a single air pollutant is
consistent with the actions of international scientific bodies.  For
example, the Intergovernmental Panel on Climate Change (IPCC) considers
in various reports how the six gases drive human-induced climate change
and how that affects health, society, and the environment.  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 GWP.

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 previously, we are following the approach to a single air
pollutant comprised of the aggregate of the six GHGs initially adopted
in the Contribution Finding and followed in the LDVR.  We note that many
of the comments opposed to aggregating the six GHGs in this rule were
already addressed in the final Contribution Finding.  See, e.g., 74 FR
66541.

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 PSD 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.  The advantages to sum-of-six definition include that it may --
(1) 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) 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 because it
establishes one class of pollutants that includes individual components
that may, in turn, become subject to specific emission standards under
future regulatory efforts.

We also disagree with commenters who believe that aggregating the GHGs
under one GHG metric for permitting applicability purposes would lead to
an excessive amount of source permitting activity or would increase the
likelihood for a source to trigger applicability.  This is because the
phase-in approach addresses the overwhelming permitting burdens
associated with permitting of GHGs.  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-six metric.  If we based applicability on individual gases,
(assuming, again, that we have 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.  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; 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 may 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.  By using a
consolidated and weighted measurement, we are able to direct the limited
administrative resources to those new sources and modifications with the
greatest impact on GHG emissions.

5.2.3  Comments on Linking the Definition of CO2e to EPA’s
“Inventory of U.S. Greenhouse Gas Emissions and Sinks”

Comment:

	Numerous commenters express concerns about the proposal to link the
definition of CO2e [see, e.g., proposed 40 CFR 51.166(b)(58)] to EPA’s
“Inventory of U.S. Greenhouse Gas Emissions and Sinks” because that
document may change from year to year.  This document includes
information about applicable GWPs and guidance on calculating emissions
in terms of CO2e.  Representative comments include the following:

One commenter (4518) believes it is important to ensure that all
permitting agencies are using the same calculations for the
determination of CO2e for GHGs.  The commenter notes that EPA’s
document, which is updated annually, should address this issue, provided
this information is provided in annual guidelines for permitting
agencies.

One fuels industry commenter (8459) states that EPA should follow the
proper notice and comment procedures and the requirements of the IQA for
the relevant technical underpinnings of the proposal.  The EPA relies
upon the GWPs of the IPCC without providing the supporting data for
review, and it is inappropriate to use this as a basis for this rule
without first making all the raw data available for public inspection
and comment.

A utility and natural gas industry commenter (4749) asserts that EPA
cannot tie the definition to a non-regulatory document that may be
changed without notice and comment rulemaking.  This and other industry
commenters (4106, 5140, 5181, 5278) contend that before EPA utilizes a
new GWP, that GWP must be subject to notice and comment to comply with
the requirements of CAA section 307 and the APA.

Two solid waste industry commenters (5086, 5391) state that EPA should
include guidelines in the rule for how the Agency will evaluate and
adopt or reject changes to the international GWP standard and how it
will apply the standard to PSD and title V permits.

A number of commenters (4020, 4120, 4515, 4691, 5073, 5140, 5141, 5181,
5278, 5417) are concerned that an annual update of GWP would create a
moving target for sources conducting applicability determinations and
assessing compliance with minor NSR and PSD emission limits.  According
to the commenters, this type of enforcement jeopardy creates substantial
uncertainty and will chill investment in more efficient technologies.
The commenters assert that, at a minimum, EPA needs to ensure that
applicability and compliance with limits continues to be based on the
GWP that existed when the determination was made or the limit was
established.  One of the commenters provides two alternatives to address
the issue of changing GWPs, along with several GHG calculation
scenarios:

“Freeze” the GWP at the current values by incorporating those values
into the regulation.  The EPA could still revise the “NSR” GWP, but
would have to revise the regulation to do so.

Allow the GWP to change as more research becomes available, but ensure
that the new values are not used retroactively.  This policy requires:

A date on which a revised GWP becomes effective (e.g., 30 days after the
date the new Inventory is issued).

A transition discussion in the preamble to the final rule and, as
needed, transition language in the final rule.  The transition would
ensure that the new GWP:

Would not apply to any complete applications submitted prior to the
effective date of the revised GWP.

Would not be used to revisit past applicability determinations.

Would be used for future applicability determinations, including
recalculation of past emissions increases and decreases as part of
determining the net emissions increase.

Some commenters (5143, 5417) have concerns about complications arising
from fluctuating GWPs and the fact that new materials may be added to
the IPCC list when it is revised, creating a change in a company’s
emissions even if its operations did not change.  This is a particular
concern to semiconductor manufacturers because they use fluorinated
materials (currently unlisted), which are a key focus in GHG regulation
and likely to be listed in the future.

One energy sector commenter (5742) believes that current GWPs reflecting
the current scientific consensus should be used in calculating CO2e,
specifically the GWPs specified in the IPCC Fourth Assessment Report
(AR4).  Using outdated factors strictly for consistency with a
soon-to-expire international agreement to which the U.S. is not even a
party results in incorrect emissions projections, which is particularly
problematic in a GHG regulatory scheme where investment decisions with
potentially long-term consequences will be made based on outdated
science.

One commenter (4948) suggests that EPA revise the definition of CO2e to
reference the GHG Mandatory Reporting Rule for methods of calculating
GHG emissions.  The commenter indicates that if the GHG Mandatory
Reporting Rule does not address a facility’s GHG emissions, then the
inventory and sinks document could be used as the reference.

Response:

We agree with commenters who suggested we should codify, either in the
Tailoring Rule or through reference to codified values in another
rulemaking, the GWP values to be used in permitting analyses.  We agree
that this approach provides certainty as to which GWP values need to be
used and permitting authorities and sources can plan appropriately for
possible changes in the GWP values.  As mentioned in the comments,
recommended GWP values from IPCC can change over time.  While this is
infrequent – the last such changes were in 2007 – when it occurs,
there are generally significant lag times in universal adoption of new
values because of inconsistencies that could be created in national
inventories and emission reporting mechanisms.  In a regulatory setting,
such as in the permitting programs, this could potentially create
significant implementation issues, such as when a GWP change occurs
while a permit action is in progress.  EPA also recognized similar
potential implementation issues in developing its final Mandatory
Reporting Rule for GHGs, and codified in the regulatory text for that
rule the GWP values to be used in reporting GHGs as part of that final
rulemaking.

For these reasons, we have decided to follow the approach in the GHG
Mandatory Reporting Rule and require that for PSD and title V permitting
requirements, wherever emissions calculations are performed, that
permitting authorities and sources use GWP values that are codified in
EPA rules.  We will establish the GWP values for PSD and title V rules
based on a cross-reference to the values that are codified in the
EPA’s GHG Mandatory Reporting Rule [Reference:  Table A-1 to Subpart A
of 40 CFR part 98 – Global Warming Potentials, 74 FR 56395].  Any
changes to Table A-1 of the GHG Mandatory Reporting Rule regulatory text
must go through a notice-and-comment regulatory process.  In this
manner, the values used for the permitting programs will reflect the
latest values adopted for usage by EPA after a formal regulatory process
and will be consistent with those values used in the EPA’s GHG
Mandatory Reporting Rule.  Furthermore, the lead time for adopting
changes to that rule will provide a transition time to address
implementation concerns raised by commenters.

As noted above, we have decided to follow the approach in the EPA’s
final GHG Mandatory Reporting Rule and require that for PSD and title V
permitting requirements, wherever emissions calculations are performed,
permitting authorities and sources use GWP values that are codified in
that rule.  We believe that maintaining consistency with the GHG
Mandatory Reporting Rule in terms of what GWP values to use will provide
a necessary level of certainty for both sources and permitting
authorities.

We also disagree with commenters who believe that, by updating the GWP
values, this will necessarily result in shifting compliance
obligations.   Permitting authorities should be able to write BACT
limits referencing the regulations in effect at the time.

5.2.4  Comments on the Use of Dual Thresholds for Pollutants that Do Not
Exceed the Statutory Thresholds but Do Exceed the CO2e Thresholds

Comment:

In our proposal preamble discussion of GHG metric, EPA raised the
possibility of including a limitation in the metric to address the
prospect (expected to occur only rarely) that high-GWP gases could be
emitted in quantities less than statutory thresholds for PSD and title V
but nevertheless exceed the proposed thresholds in terms of CO2e.  	Most
commenters (2369, 4120, 4122, 4298, 4318, 4515, 4523, 4691, 4747, 4952,
4992, 5038, 5078, 5079, 5080, 5089, 5111, 5114, 5128, 5236, 5257, 5280,
5317, 5327, 5601, 5741, 6459, 8301, 8545) on this subject support a dual
threshold under which a source would be subject to title V or PSD only
if its GHG emissions exceeded both the statutory thresholds on an actual
tonnage basis and the tailored thresholds on a CO2e basis.  Specific
comments include the following:

It would be unlawful to apply PSD when GHGs are below the statutory
thresholds.  With respect to netting, a source should not trigger PSD
requirements unless there is a net emissions increase.  (4122, 4318,
4523, 4952, 4992, 5038, 5080, 5089, 5114, 5128, 5236, 5257, 5317, 5327,
5601, 5741, 6459, 8301)

The complexity of accounting for emissions according to both mass and
GWP should be manageable, and is not a reason to ignore the role of
mass-based emission rates in determining the applicability of PSD
requirements.  (4120, 4515, 4691)

A dual threshold is consistent with the phasing in of the Tailoring Rule
and is an effective way to address the current uncertainty surrounding
how to measure high-GWP gases.  The commenters recommend that SF6 and
other high-GWP gases not trigger PSD in such small quantities during the
first phase because measurement is too uncertain and SF6’s high GWP
will magnify potential measurement errors.  (5078, 5079)

For modifications to be considered major under PSD, the net emissions
increase would have to be greater than 100 tpy on a mass emissions basis
(for each individual GHG) and greater than 25,000 tpy CO2e of combined
GHG emissions.  (2369)

State commenter 8025 does not support a dual threshold trigger that
incorporates the actual mass tonnage and the GHG GWP thresholds,
believing that there is no benefit to the added complexity.

Response:

	As discussed in more depth in section V.A of the preamble, we recognize
the concern of commenters who stated that we cannot ignore the statutory
thresholds based on the mass-based emissions of an air pollutant as
described under section 169 of the Act.  As we mentioned in the
proposal, because the PSD and title V statutory thresholds are expressed
on a mass basis – i.e., straight tons of a pollutant with no weighting
values applied – we were concerned from a legal standpoint that the
metric proposed (CO2e) could have the effect of subjecting to PSD or
title V requirements a source whose emissions fall below the statutory
threshold limits on a strictly mass basis, but whose CO2e-based
emissions exceed the CO2e thresholds we establish under the Tailoring
Rule.  Although we feel this hypothetical situation would rarely occur,
mainly in instances where a source emits only a non-CO2 GHG with a high
GWP value in very small amounts, we believe we are required to address
this occurrence in the final rule.

Upon review of the comments pertaining to this issue and further
analysis of the legal and programmatic implications, we are now
requiring a two-part applicability process, for both major source
applicability determinations for GHGs under PSD and title V and for
determining if significance levels have been exceeded in the PSD
applicability determinations.  While the regulation we are promulgating
today does not contain tonnage thresholds on a mass basis for GHGs, by
implementing this tailoring approach through the term "subject to
regulation" we achieve the result described above, that is that to be a
major stationary source a source must emit 100/250 tpy on a mass basis
of some regulated pollutant and for a major modification to occur there
must be an emissions increase on a mass basis.   The rule achieves this
result because all that the CO2 e based thresholds do is determine if
GHGs are "subject to regulation" at a specific source.   If GHGs are
determined to be subject to regulation at a specific source then GHGs
would be considered "regulated NSR pollutants" within the meaning of
51.166(b) (49) or 52.21(b)(50).

Assuming that GHGs are determined to be a regulated NSR pollutant, this
does not mean that PSD automatically applies.   Rather, the remaining
regulatory structure, which is unaffected by this action, would then
come into play.   This includes the definition of "major stationary
source" at 52.21 (b)(1) and 51.166(b)(1), which requires that a source
emits 100/250 tpy (on a mass basis) of a "regulated NSR pollutant"
before a source is a major stationary source.   It also includes the
definition of "major modification" at 52.21(b)(2) and 51.166(b)(2) which
requires that before a modification occurs there be a "significant net
emissions increase", also determined on a mass basis.

By way of example, assume that a new source wanting to construct after
July 1, 2011 will have the potential to emit 10tpy of sulfur
hexafluoride (SF6) but have no other emissions.   First the source
would determine if it emitted a "regulated NSR pollutant" by using the
formula specified in 51.166(b)(48) or 51.21(b)(49) (as applicable).
In this case by using the specified formula we would determine that the
source emits 239,000 tons of CO2e ((10 ton SF6) x 23,900 (GWP of SF6)).
  Because this exceeds the 100,000 tpy (CO2e) threshold for new sources
after July 1, 2011 specified in the regulation, GHGs would be "subject
to regulation" for this source and would constitute a "regulated NSR
pollutant."

The source, however, would not be a major stationary source, and thus
not subject to PSD.   This is because the source only emits 10 tpy
(mass basis) of a regulated NSR pollutant (GHGs) which is below the
major source threshold of 100/250 tpy (mass basis).  Both determinations
would be based on the sum-of-six GHGs.  Additional explanation of how to
implement this approach is provided in section IV.A of the preamble.

5.2.5  Comments on the Use of English versus Metric Tons for GHG Metric

Comment:

	We proposed that the GHG metric would be expressed in terms of English
(or short) tons, rather than metric (or long) tons.  The existing
applicability thresholds for PSD and title V are in terms of English
tons.

	Some state commenters (4238, 4239) support using English tons rather
than metric tons, but several commenters (4513, 4526, 4864, 4951, 5130,
5147, 5224, 5314, 5305, 5338, 5351, 8461, 8546) prefer metric tons for
this purpose.  Most of the latter commenters note that the GHG Mandatory
Reporting Rule is based on metric tons and believe that the Tailoring
Rule should be consistent.  Specific comments include:

Use of the same units will avoid confusion.  (5305).

In addition to the GHG Mandatory Reporting Rule, various “cap and
trade” legislative proposals quantify GHGs in metric tons.  The 10
percent difference between short tons and metric tons will cause
significant confusion, complexity, and burden for states and sources.
(4106 and 5040).

If the difference between the units of the Tailoring Rule and the GHG
Mandatory Reporting Rule is retained, a site that would not be subject
to the GHG Mandatory Reporting Rule could be subject to PSD, which is
not in keeping with EPA’s intent to apply the Tailoring Rule only to
“major sources.”  (4951)

The EPA should be consistent and use the same units (i.e., metric tpy
CO2e) in this rule and for all future GHG rules.  (5351)

The proposed rule is not clear as to whether it is based on English or
metric tons.  (8546)

Other state (4521, 4989, 5061), industry (4298, 4801), and military
(4747) commenters say that EPA should harmonize the applicability
thresholds established under the proposed Tailoring Rule and the GHG
Mandatory Reporting Rule to utilize the same units (i.e., either English
tons or metric tons).

An industry commenter (5922) recommends that EPA change the GHG
Mandatory Reporting Rule to require that data be collected in English
tons to promote consistency.

Response:

Short tons are the standard unit of measure for both the PSD and title V
permitting programs and the basis for the threshold evaluation to
support this rulemaking.  Calculation inputs for PSD are typically
prepared in English units (e.g., pounds [lbs] of fuel, million British
thermal units [MMBtu’s], etc.) which is the common convention for all
PSD analyses and the units of the statutory thresholds under the Act.

It is true that the GHG Mandatory Reporting Rule uses metric tons, but
this does not create an inconsistency between permitting programs and
the GHG Mandatory Reporting Rule because the two rules already use
different applicability approaches.  Although we originally proposed
25,000 tpy as the major source level for permitting programs, which was
similar to the threshold in the GHG Mandatory Reporting Rule, we decided
to adopt substantially higher thresholds in the final rule.
Furthermore, even if the numbers were similar, the thresholds used for
the GHG Mandatory Reporting Rule are based on actual emissions, while
the PSD and title V programs are based on potential to emit.  Therefore,
we are less persuaded by arguments for consistency, and believe it is
more important for ease of permit program implementation to ensure that
GHG emissions calculations for PSD and title V will build on the same
set of input variables used to develop short ton-based estimates for
non-GHG pollutants.  Thus, the use of short tons should actually
facilitate the development of the GHG emission estimate.  It would
likely be more confusing to require a multi-pollutant PSD applicability
analysis to present emissions information using different units for
different pollutants, as would be the case if we required metric tons
for GHG but continue to use short tons for every other pollutant.
Finally, we do not expect this choice to introduce additional complexity
because the conversion between short tons and metric tons is a very
simple calculation.  Therefore, based on these considerations we are
requiring that short tons be used as the basis for emission calculations
used to meet PSD and title V permitting requirements.

Chapter 6.  Comments on Permitting Thresholds

6.1  Comments on Administrative Burden and Sources Impacted under the
Statutory Thresholds

	At proposal, we discussed the impacts that we projected would occur if
the PSD and title V programs were implemented for GHGs at the statutory
thresholds of 100/250 tpy.  We received many comments on these projected
impacts, which are addressed below.

Comment:

Most commenters, including industrial (3512, 3513, 3906, 4020, 4123,
4741, 4794, 4870, 4903, 5088, 5104, 5110, 6201, 8545, 16411),
agricultural (3917, 4572, 5245, 5602, 5743), state (4522), and other
(3277, 5342) commenters, agree with EPA that the immediate imposition of
the statutory major source thresholds for PSD and title V would
overwhelm both programs, to the detriment of facilities; federal, state,
and local permitting authorities; and the nation as a whole.  Some of
these commenters (4020, 4522, 4903, 5104, 6201) also believe that we
underestimated the number of sources that would be subject to these
programs at the statutory thresholds, asserting for example that many
more residential homes, commercial buildings, and retail stores than
estimated would be subject because the estimate in EPA’s Technical
Support Document (TSD) was based on actual emissions from space heating
equipment rather than PTE.  Some agricultural sector commenters (5245,
5602) provided examples of the types of small agricultural operations
(with no experience in air permitting) that would be subject at the
statutory thresholds.

Numerous commenters believe that the statutory thresholds will become
applicable, despite the Tailoring Rule, if EPA goes forward with
regulation of stationary sources of GHGs under the Act.  These
commenters give one or more of the following reasons:

States will require time to revise their laws and regulations to reflect
the Tailoring Rule.  Thus, the statutory thresholds will apply
immediately and remain applicable during this interim period.  Some
states may choose not to conform their programs to the Tailoring Rule
thresholds.  (3720, 3953, 4019, 4095, 4515, 4524, 4691, 4864, 4866,
4903, 5058, 5084, 5113, 5123, 5143, 5168, 5181, 5276, 5343, 5714, 5800,
7935, 8015, 8459, 16411)

The Tailoring Rule is legally uncertain and thresholds may revert to the
statutory levels.  (3277, 3513, 4095, 4123, 4864, 5074, 5342, 5743,
8400)

The thresholds will return to the statutory levels after the initial
phase of tailored thresholds, development of streamlining approaches,
and EPA study.  (3917, 3953, 4572, 5056, 5186, 5245, 5602, 5743, 5789,
8521)

Three state commenters state that the additional workload and backlog
will significantly delay or jeopardize economically critical PSD
programs in their states.   (2504, 4312, 4871)

One state commenter argues that it is very likely that their permitting
programs will grind to a halt because they will not have state authority
to issue permits addressing GHGs but will be required to by federal
statute.   (4949)

One state commenter opines that their state will be in jeopardy of not
meeting its statutorily imposed time frame for the issuance of title V
and PSD permits under the proposed rule.   (5307)

The proposed rule would negatively impact their state government,
because their state constitution requires a balanced budget.   The
recession has resulted in diminished revenues and increased needs for
social services and implementing the proposed rule could further
undermine critical state programs.   (3906)

It is unacceptable that regulating GHGs under the CAA will render it
impossible for permitting authorities to meet the CAA section 165(c)
requirement to process PSD permit applications within 12 months.   EPA
must do more to lessen the impact of PSD on state agencies and
stationary sources under the proposal.   (5082)

Response:

We agree with the many commenters indicating that applying permitting
requirements to GHG sources at the statutory thresholds in the near term
would be an overwhelming administrative burden for permitting
authorities.  In this final action we address this situation through a
common sense, phased-in approach to GHG applicability that makes the
permitting process for GHG sources administratively feasible.  The legal
and policy rationale for this approach to burden in the final rule is
described in detail in section V.B. of the final preamble.

We disagree with commenters who stated we underestimated the number of
residential and/or commercial facilities that would be subject at the
statutory thresholds of 100 and 250 tpy because we based those emissions
on an ‘actuals’ basis instead of a PTE basis.  In fact, our
threshold analysis estimates for the residential and commercial sectors
(as well as all other sectors) are based on a PTE basis.  We used a
significant adjustment to reflect PTE in the residential and commercial
sectors, assuming that a residential facility operates its fuel
combustion sources only at 10 percent of capacity and commercial
facilities only at 15 percent of their capacity.  Based on these
assumptions, we adjusted residential actual emissions upward by a factor
of 10, and commercial actual emissions by a factor of 6.6 to obtain
PTE-based estimates in order to determine the number of buildings in
these sectors that would exceed a particular GHG threshold.  There is
very little information available on the capacity utilization rates of
fuel combustion equipment at different types of residential and
commercial facilities, but we believe our estimate is within a
reasonable range of what would be expected at these types of facilities.
 Information on the development of these estimates is provided in our
Technical Support Document for Greenhouse Gas Emissions Thresholds
Evaluation.

	In this final action we have addressed the concerns raised by some of
the commenters on the time period necessary for states and local
permitting authorities to amend or revise their laws and regulations,
and the uncertain prospect of the statutory thresholds coming into
effect if the state and local permitting authorities did not have time
to make those changes.  There will be no permitting requirements for GHG
stationary sources prior to January 2, 2011 as a result of the final
reconsideration of the PSD Interpretive Memo’s interpretation of
“subject to regulation.”  After this date, based on the actions
established through this final Tailoring Rule, we are a requiring a
multi-step, phased-in approach for permitting GHGs at stationary sources
utilizing an implementation mechanism for states and local agencies that
allows them to rely on EPA’s interpretation of the “subject to
regulation” language codified under this final action.  By utilizing
this mechanism, we believe most states will be able to readily implement
the phased-in approach to GHG permitting required by this rulemaking,
which does not allow the GHG threshold levels for permitting
applicability to drop below 50,000 tpy CO2e at least until April 30,
2016.  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 will ensure that our approvals do not federally
obligate states to implement these programs for GHG until they
demonstrate that they have adequate resources to do so by undertaking
necessary programmatic, statutory, and/or regulatory changes at the
state, local or tribal level.

We have also stated in this final action that there will not be an
automatic sunset provision to the statutory threshold levels at the end
of any of the phase-in steps and a general exclusion for sources less
than 50,000 tpy CO2e will not end until such time as EPA undertakes
rulemaking action in 2016 to reflect the 5-year implementation study
results.  We believe this action provides certainty to both permitting
authorities and sources as they plan ahead to address GHG permitting
requirements.

We are confident in the legal basis for the final Tailoring Rule, which
is described in more detail in section V of the preamble to the final
rule and in our response to comments on the legal basis for the final
rule summarized in Chapter 3 of the this RTC.

6.2  Comments on the Administrative Burden and Sources Impacted under
the Proposed Thresholds

	At proposal, we estimated the administrative burden that would result
from regulation of GHGs under the PSD and title V programs at the
proposed thresholds.  We received numerous comments on these estimated
burdens and the types of sources that would be impacted, which are
addressed below.

Comment:

	Many commenters provided comments on the administrative burden that
would result from the proposed thresholds for PSD and title V major
sources and PSD significance.  Many commenters address these thresholds
generally, while some gave specific comments on one or more of the
thresholds individually.

	One state commenter agrees with the EPA’s administrative burden
estimates.  (8803)

	Numerous state commenters (2504, 2797, 3858, 3915, 3916, 3918, 4154,
4238, 4512, 4521, 4694, 4864, 4871/5063, 4949, 4989, 5039, 5061, 5084,
5135, 5198, 5307, 5314, 5339, 5524, 7935, 19144) indicate that the
administrative burden at the proposed thresholds will be excessive, and
many of these commenters (2504, 2797, 3916, 3918, 4154, 4512, 4864,
4949, 4989, 5307, 5313, 5314, 5339, 5672, 5744) believe that EPA has
significantly underestimated these administrative burdens.  According to
some state commenters (3858, 3916, 4521, 4531), EPA also has
overestimated permitting authorities’ ability to hire and train
sufficient staff to implement GHG permitting.  These commenters state
that they do not have the staff currently, nor do they have the budget
to hire additional staff to shoulder the increased burden.

	A number of state commenters provide estimates of the impact on their
permitting programs that would occur under the proposed thresholds:

Approximately 130 new PSD major sources and 90 new title V sources.
(4019)

Coal-fired units, natural gas-fired units, Nos. 1-4 fuel oil units, Nos.
5-6 fuel oil units, and wood-fired units will be substantially smaller
than what has historically been subject to major source permitting.
(4519)

Current list of approximately 150 operating permit sources would
increase by approximately 360 to a total of 510 sources, and a title V
threshold of 50,000 tons of CO2e would result in approximately 180 new
sources.  (4860)

There could be over 30 new title V permits issued in one source category
(natural gas compressors) alone.  (5061)

The number of new or modified PSD sources projected to be over the
proposed 25,000 tpy CO2e annually would be approximately 20.  The number
of new title V permits under the proposed threshold would be
approximately 165.  (19144)

The number of facilities subject to title V would increase by 45 percent
to 115 percent, adding from 66 to 163 new facilities to their current
roster of 142 title V sources, and PSD actions would increase from 3-4
per year to 70 per year.  (6681)

Thirty additional permitting FTEs would be needed for the oil and gas
industry alone for title V permits due to GHGs, with this estimate only
including permitting staff and not taking into account other agency
staff needed.  At least 150 FTEs would be needed to handle PSD
permitting with a significance level of 10,000 tpy.  (2797)

The state would need to issue new title V permits to 50 additional
facilities, which is a substantial administrative task.  (4154)

Ninety percent (283) of 314 currently permitted title V sources would
need modification and 522 of the 2,448 synthetic minor and small
permitted sources that are currently not title V sources would trigger
the major source threshold (with 48 of these needing title V permits and
the other 474 able to become synthetic minors) (4864).  The commenter
believes that there may be many other sources that currently do not have
permits that would be above the major source threshold for title V, such
as 75-115 active landfills and hundreds of inactive landfills.
Regarding PSD permitting, the commenter estimates that, in addition to
about 6 PSD permits per year presently, a significance level of 25,000
tpy would result in 28 NSR actions for title V sources and 96 NSR
actions for synthetic minor and small permitted sources, with an unknown
number for currently unpermitted sources.

There will be 578 permit actions in the state as a result of the
Tailoring Rule and of these actions, 119 would be major stationary
source permit actions.  (4949)

There will be a doubling of PSD work and an increase of 69 percent for
title V work.  (5339)

The increase in title V permit workload should be close to EPA's
estimate of a factor of two and that an additional eight projects per
year will trigger PSD permit requirements due to GHG emissions, which
represents an increase in workload of about a factor of four.  (8747)

Title V sources in their state will increase from the current level of
685 to 942 (38 percent increase) based on PTE, and from 685 to 784 (14
percent increase) based on allowable emissions (5135/5198).  The
commenter estimates current staffing levels for operating permits would
need to increase by at least 50 percent.  The commenter also estimated a
600-638 percent increase in PSD permits per year, with current staffing
levels needed to increase at least 6-fold, adding an additional 42 FTE
employees.

A doubling and possibly a tripling of the number of PSD permits the
state issues per year will occur.  (5528)

The number of regulated sources will increase at least two-fold and
perhaps more.  (5307)

Workload and costs will be two to three times higher than that estimated
by EPA.  (4512)

A 29 percent increase in the title V permitting workload as well as an
increase in synthetic minor permitting will occur because many of the
sources newly subject to title V and PSD will seek synthetic minor
permit limits to reduce their PTE instead of submitting a title V
application.  (3916)

There will be at least 75 new title V sources at a threshold of
25,000 tpy CO2e and at least 15 new title V sources at 50,000 tpy CO2e.
 (5039)

	Numerous industry (3512, 3859, 3998, 4018, 4106, 4113, 4241, 4298,
4368, 4515, 4632, 4691, 4692, 4749, 4865, 4370, 4903, 5052, 5056, 5059,
5073, 5083, 5085, 5086, 5111, 5133, 5136, 5140, 5141, 5143, 5181, 5275,
5278, 5303, 5328, 5329, 5351, 5391, 5417, 5425, 5708, 5711, 5729, 5740,
5770, 5773, 5787, 6141, 7125, 7213, 8015, 8283, 8303, 8396, 8459, 8581,
8584, 16411), agricultural (8013), government agency (5367), and other
(5346, 5444) commenters also contend that EPA significantly
underestimated the administrative burden associated with the proposed
thresholds (some providing data) and/or that the administrative burden
under the proposed thresholds would still overwhelm the states and
result in significant permitting delays and uncertainty for sources.
Many of these commenters indicate that our estimate of the number of
sources that would be subject to permitting is too low, and some add
that we have underestimated the per-permit effort required.  (More
detail on these comments is given in section 6.3 on the methodology used
in the analysis.)  Representative comments include the following:

The proposed thresholds would not make PSD requirements for GHGs
administratively feasible or cure the absurd results because EPA has
underestimated the number of affected sources.  (4749)

Even if EPA's estimates are correct these figures still represent a
significantly increased permitting burden for 	the states.  (5328, 8013)

The EPA’s underestimation means that the proposed thresholds are not
at “the level closest to the statutory levels that permitting
authorities can reasonably administer during this initial phase.”
(4515, 4691)

The manpower demand for the GHG regulatory requirements along with the
strict state hiring practices and training requirements would slow the
permitting process, thus stifling construction and much needed
investments at a time when the economy is struggling to recover and
unemployment rates continue to rise.  (5328, 5367, 8015)

The EPA should revisit the justification for the proposed thresholds on
the basis of more detailed sector-by-sector data.  (4515, 4691)

Projects that actually improve energy efficiency could be delayed
because of the way calculations must be carried out to determine whether
a significant emissions increase will result from the project.  For
example, if there is a project that would reduce CO2 emissions overall,
but the project involves a new emissions unit (as defined in the
regulations), then the significance threshold may be exceeded based on
the potential emissions of the new unit, and the project would be
delayed due to PSD permitting.  (4241)

Although plantwide applicability limits (PALs) might be useful in some
cases, it is likely that many routine changes would still trigger permit
revision requirements.  (5143, 5417)

The proposed thresholds would cause many small and possibly closed
landfills to be newly subject to PSD requirements and would also
adversely influence potential plans by existing landfills to convert
landfill flares into landfill-gas-to-renewable-energy projects.  (5086,
5391)

The proposed thresholds and associated permitting delays will impede the
ability of the natural gas (NG) sector to build the infrastructure
necessary to support the anticipated increase in demand, which will be
particularly problematic in the rapidly-developing Appalachian region
where the coal industry is expected to be negatively impacted by GHG
regulation.  (4749, 6141)

The semiconductor manufacturing industry’s business depends upon
developing and bringing new products to market regularly and quickly,
often requiring modifications to existing factories to do so.  There
will be a tremendous risk that many of the permits would not be issued
rapidly enough to allow for these changes.  Clearly, such a situation
provides a competitive advantage to facilities located outside the U.S.
that are able to make rapid changes without delay.  (5141, 5143, 5329,
5417)

Some commenters indicate that EPA underestimated the number permits
required for specific industry sectors (often providing data), including
the oil and gas production industry (4749), the NG transmission industry
(4515, 4691, 6141), the semiconductor industry (5141, 5143, 5329, 5417),
the wood products industry (4903), the brick industry (5073), and
landfills (4368, 5086, 5391).

Response:

We agree with the many commenters that believe EPA underestimated the
permitting actions, and thus the administrative burden, associated with
the proposed thresholds.  Since the proposal, we have reevaluated our
assessment of the potential permitting actions and administrative
burdens related to the inclusion of GHG emission sources, both for the
PSD and title V programs, at the proposed thresholds and for other
options.  Based on this re-evaluation, which is described in detail in
the TSD contained in the public docket for this final rulemaking,
“Summary of Methodology and Data Used to Estimate Burden Relief and
Evaluate Resource Requirements at Alternative Greenhouse Gas (GHG)
Permitting Thresholds,” we determined a number of reasons for our
underestimate of permitting actions in the proposal and have
substantially revised our estimate of permitting actions accordingly.
Based on these revisions, we are now finalizing significantly higher
applicability thresholds than what was in our proposal, occurring in a
multi-step phase in process.

We identified three main reasons for our underestimate of permitting
activity under the proposed GHG thresholds.  (Please refer to section
V.B.2 of the preamble for the final rule and the burden analysis TSD
mentioned in the previous paragraph above for further explanation of our
final burden assumptions and changes from the proposal.)  The most
significant reason for underestimation, and raised by multiple
commenters, was that we did not fully account for the number of major
modification projects at existing major sources because we did not
capture the number of existing projects that avoid major PSD review (by
either taking limits—synthetic based modifications—or by netting
out) for existing pollutants but that would not be able to avoid PSD for
GHGs (at either the 10,000 or 25,000 tpy CO2e significance levels).
Currently we estimate the population of these types of minor
modifications at about 23,000, almost 9,000 of which we now estimate
under our revised burden analysis would be subject to major PSD review
at the proposed 25,000 CO2e PSD significance levels.  In comparison,
this is significantly higher than our original estimate of 273
modifications under PSD due to GHG emissions in the proposal.

Second, our proposed general modification rate (2 percent of major
source population) used to estimate modifications at newly major GHG
sources does not appear to have caught the extent to which facility
level changes may quickly surpass the proposed significance levels for
CO2 (e.g., multiple changes involving combustion units can aggregate to
a 10,000 or 25,000 CO2e significance level threshold fairly quickly).
In reassessing this modification rate, we determined that we had not
fully accounted for all PSD modifications relative to the major source
population in calculating this modification rate.  Based on this
reassessment we have revised our general modification rate to 4 percent
which is used to estimate the annual modification activity at newly
major GHG sources.

Third, we believe our estimate of capacity utilization used for
estimating PTE-based emissions for the general manufacturing source
category (referred to as ‘unspecified stationary combustion’ in the
GHG threshold analysis TSD) and the oil and gas industry was not
accurate.  In our proposal, the range for capacity utilization for
‘unspecified stationary combustion’ varied from 70 to 90 percent
depending on manufacturing category, and for the oil and gas industry we
used 90 percent.  Based on comments received indicating that these
utilization rates are higher than what is normally achieved in
real-world conditions, particularly for smaller manufacturing type
facilities, we used a 50 percent capacity utilization rate for both of
these source categories. We believe that these assumptions better
reflect what can be deemed reasonable operation under normal conditions
for facilities in these source categories.

We recognize commenter concerns on the potential for serious delays in
the permitting process as a result of a possible excessive influx of
permitting actions due to newly permitting GHG emission sources at our
proposed thresholds.  One of our goals in selecting the proposed
thresholds for GHG permitting was to ensure that the PSD and title V
permitting programs were not severely disrupted to the point they were
not operating effectively and in a timely basis due to the addition of
GHG permitting requirements.  For our finalization of this rule we have
addressed these concerns through both our reassessment of the burden as
described above (and the resulting GHG applicability thresholds selected
for the final rule) and through now applying a multi-step phase-in
process.  See section IV of the preamble for the final rule for a full
explanation of the steps in the phase-in approach and the final
applicability thresholds that are to be used in each step.

The end result of the adjustment to our burden estimates described above
 is that our estimates of PSD and title V permitting actions increased
significantly at the proposed GHG threshold levels, to a level that we
believe our proposed GHG thresholds for applicability are not consistent
with the goal of avoiding a permitting burden that would overwhelm the
capacity of permitting authorities to effectively implement their
programs.  Therefore, for this final action we are establishing a
multi-step, phase-in approach that contains significantly higher GHG
starting point threshold levels (i.e., a 100,000 tpy CO2e major source
threshold for PSD and title V and a 75,000 tpy CO2e PSD significance
level in step 2).

In addition to establishing higher GHG applicability thresholds for step
2 of the Tailoring Rule phase-in, we have defined a step 1 to the
phase-in process that applies only to sources that currently have, or
would otherwise be subject to, PSD or title V permitting requirements
under the CAA for other non-GHG pollutants.  That is, no source under
the step 1 phase, which extends from January 2, 2011 to June 30, 2011,
would trigger permitting requirements for PSD or title V solely based on
their GHG emissions.  We believe the combined effect of the GHG