requirements in section 165(a)(3)(C) and (4) that, by their terms, apply
to non-NAAQS pollutants.

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

throughout the country to large sources that undertake new construction
or modifications, and that Congress’s overall purpose was to assure
that, as the industrial stock of the nation turned over, it would become
cleaner for all air pollutants emitted.  Greenhouse gas sources, as a
general matter, fit readily into this overall vision.  At the time that
Congress enacted the PSD provisions in 1977, every area of the nation
was designated attainment or unclassifiable for at least one air
pollutant, and that has remained the case to the present time.
Accordingly, at all times, PSD has applied in every area of the country.
 The PSD requirements clearly cover all air pollutants emitted by the
source, and provide a process for reviewing those emissions and
determining BACT for them under CAA section 165(a)(4).  It is true that
at the time Congress adopted the PSD provisions, it was primarily
concerned about the NAAQS pollutants – or, as some commenters assert,
pollutants with local, ambient impact - because those pollutants
represented a major component of the air pollution problems it was aware
of and was addressing.  But its overall purpose was broad enough to
cover additional pollutants; the process it enacted for establishing
BACT was broad enough to encompass additional pollutants; and the
applicability provisions it established were phrased broadly enough to
encompass additional pollutants, see section 169(1).  As a result, we
believe that the PSD applicability provisions, which, again, refer to,
as we have interpreted them, “any air pollutant [subject to regulation
under the CAA]” should be seen as “capacious” and therefore
encompass GHG sources, in much the same manner as the U.S. Supreme Court
viewed the definition of “air pollutant” to be “capacious” and
therefore encompass GHGs.  Massachusetts v. EPA, 549 U.S. 497, 533
(2007).

In addition, it should not be overlooked that we have applied PSD to
non-NAAQS pollutants since the inception of the program over 30 years
ago.  For example, prior to the 1990 CAA Amendments, PSD applied to
hazardous air pollutantsHAPs regulated under CAA section 112; and over
the years, EPA has established significance levels for fluorides,
sulfuric acid mist, hydrogen sulfide, total reduced sulfurTRS, reduced
sulfur compounds, municipal waste combustor organics, municipal waste
combustor metals, municipal waste combustor acid gases, and municipal
solid waste landfill emissions, see 40 CFR 51.166(b)(23)(i); and EPA has
proposed a significance level for ozone depleting substances.  See 61
Fed. Reg. 38,307/2FR 38307 (July 23, 1996).  Of course, the basis for
all these actions is PSD’s applicability to these non-NAAQS air
pollutants.  We are not aware that EPA’s actions in establishing
significance levels for these pollutants gave rise to challenges on
grounds that the PSD provisions do not apply to them.  As the U.S.
Supreme Court recently stated in upholding an EPA approach in another
context:  “While not conclusive, it surely tends to show that the
EPA’s current practice is a reasonable and hence legitimate exercise
of its discretion … that the agency has been proceeding in essentially
this fashion for over 30 years.”  Entergy Corp. v. Riverkeeper, Inc.,
129 S.Ct. 1498, 1509 (2009) (citations omitted).

Finally, we note that excluding GHG sources from PSD applicability would
create inequitable results.  Consider the hypothetical case of two
sources that construct in the same area, each of which emits the same
amount of GHGs, and that amount is large enough to trigger PSD
applicability.  Assume that the first one, but not the second, also
emits NAAQS pollutants amounts large enough to trigger PSD
applicability.  If GHG sources are excluded from PSD applicability, then
the first of those sources, but not the second, would be subject to PSD
requirements for its GHG emissions.  Similarly, consider the
hypothetical case of two sources that emit identical amounts of the same
NAAQS pollutant and identical amounts of GHGs, all amounts of which are
large enough to trigger PSD applicability requirements.  Assume that the
first source constructs in an area that is an attainment or
unclassifiable area for the NAAQS pollutant that it emits, and that the
second source constructs in an area that is not an attainment or
unclassifiable area for that NAAQS pollutant.  Here again, if GHG
sources are excluded from PSD applicability, then the first of those
sources, but not the second, would be subject to PSD requirements for
its GHG emissions.  These results are inequitable and would create an
uneven playing field and for this reason, too, support our view that the
PSD applicability provisions apply to GHG sources.

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

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

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

6.  Application of the “absurd results” doctrine for the title V
programAbsurd Results” Doctrine for the Title V Program

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

to GHG sources in a phased-in manner, as we do through the tailoring
approach, because although congressional intent is clear that title V
applies to GHG sources in general, congressional intent is unclear on
the question of how title V applies, and the tailoring approach is a
reasonable interpretation of the statute.

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

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

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

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

a..  Congressional Intent for the Title V Program

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

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

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

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

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

It would immediately expand the program so that thea large
majoritynumber of sources have empty permits, that is, permits without
applicable requirement, and undermine the implementation of the program
for sources with applicable requirements.

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

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

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

However, if title V were to apply to GHG sources at the 100 tpy level,
until EPA could develop streamlining methods, all of these sources newly
subject to title V would need to apply for permits.  We estimate that
the commercial and residential sources would incur, on average, expenses
of $23,370175, while an industrial source would incur expenses of
$46,350, to prepare a permit application and receive a permit.  The
great majority of these sources would be small commercial and
residential sources of the type that Congress did not expect would be
included in title V, and we estimate that.  For example, as discussed
above, the legislative history of title V, including both the permit
program under CAA sections 501-506 and the “small business stationary
source technical and environmental compliance assistance program”
under CAA section 507, indicated that Congress did not expect that
“printers, furniture makers, dry cleaners, and millions of other small
businesses” would become subject to title V.  House Committee Report,
H.R. 101-590, at 354.  These sources generally do not have the potential
to emit conventional pollutants at or above the 100 tpy threshold.
However, many do have the potential to emit GHGs above that threshold.
Many printers and furniture makers use a variety of combustion equipment
that has the potential to emit at least 100 tpy CO2, and many commercial
dry cleaners have gas-fired driers that have the potential to emit at
least 100 tpy of CO2.  All told, there are in fact “millions of …
small businesses” that would become subject to title V - of the 6.1
million sources that would become subject to title V, the great majority
of them would not have applicable Clean Air Act requirements to include
in their permits.  Theare small businesses – if the title V
applicability provisions are applied literally to GHG sources.

Moreover, the overall cost to all 6.1 million sources – before the
development of streamlining methods - would be a staggering $49 billion
per year over a 3 year period.  Imposing burdens of this magnitude on
these sources – individually and in total – would of course be
contrary to Congress’s efforts to minimize the expenses of title V,
especially to small sources.  The magnitude of the costs is, in a sense,
heightened because a great many of these sources will not have
applicable requirements to include in their permits; therefore, much of
the costs will produce relatively little benefit.

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

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

Beyond this disconnect with congressional expectations as to scope of
the program, what is most important is that the extraordinarily large
number of permit applications would overwhelm permitting authorities and
slow their ability to process permit applications to a crawl.  As
described at proposal, the survey of permitting authorities conducted by
NACAA found that a literal application of the title V applicability
provisions to all GHG sources would result in permitting delays of some
ten10 years.  However, as we further noted at proposal, this estimate
was based on the assumption that the applicability threshold would be
100 tpy based on actual emissions; in fact, the applicability threshold
would be 100 tpy in potential to emit, based on PTE, which would sweep
in many more sources.  Moreover, as stated elsewhere, we currently
estimate the amount of per-permit work hours for permitting authorities
in processing title V permit applications to be several times higher
than what we estimated at proposal.  As with PSD, such a program is so
far would be beyond anything within our experience that , and it is
difficult to give a meaningful estimate for how long the permitting
process would take for each permit on average, but .  But it is clear
that the period would be many years longer than even the 10 years
estimated by NACAA.

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

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

In addition, only a small fraction of these millions  of sources will be
subject to any CAA requirements due to their GHG emissions, and we
suspect that the majority will not be subject to any CAA requirements at
all, so that although they would need to apply for and receive a permit,
there would be no applicable requirements to include in the permit and
thus the exercise would not improve compliance.  But at least for an
initial period, until resources could be ramped up and streamlining
methods could be developed, the extraordinary numbers of these
sourcespermit applicants would sweep aside Congress’s this carefully
constructed program, and instead, backlog the permit authorities.  The
large numbers involved mean that this This initial period would last for
many years because it would take that long to raise the requisite funds
and hire and train the necessary employees, as well as, as.  As
discussed elsewhere, it would take several years to develop and apply
streamlining measures.  Therefore, – in particular, general permits
– and during that time, the permit backlog would grow so large that it
would take many more years for permitting authorities to catch up by
raising the requisite funds and hiring and training the necessary
employees.

What’s more, only a fraction of these millions of sources newly
covered by title V will be subject to any CAA requirements due to their
GHG emissions, and we suspect that a larger number will not be subject
to any CAA requirements at all.  As a result, for most of these sources,
although they would need to apply for and receive a permit, there would
be no applicable requirements to include in the permit and thus the
exercise would not improve compliance.

The picture that emerges from a literal application of title V’s
requirements to all GHG sources - at the 100 tpy level, beginning on
January 2, 2011 – shows multi-year delays in issuance of all permits
would ensue, for both the sources that have applicable requirements and
that Congress clearly intended the program to cover, and for the
millions of sources that may not be subject to any applicable
requirements.  Thus, a In short, this literal interpretation of the
title V threshold provisions would apply title V to millions of sources
that Congress did not intend expect be covered, and the ensuing
administrative burdens – at least initially -- would impede the
issuance of permits to the thousands or perhaps tens of thousands of
sources that Congress did intendexpect be covered.  This result is the
type of “absurd results” from a literal application of statutory
provisions that the courts have held should be avoided.  And even beyond
all that, the sheer magnitude of the numbers involved – millions of
permits requiring thousands of FTEs at a cost to the permitting
authorities of billions of dollars, all occurringthis beginning
immediately at the time that GHGs become subject to regulation – makes
clear that this, the result of a literal application of the PSDtitle V
provisions to GHG sources is notcannot be what Congress in fact intended
or could conceivably have intended.

b.  EPA’s reconciliationReconciliation of Applicability Provisions
With Congressional Intent

For the reasons just described, we should not consider the literal
meaning of the applicability provisions with to be determinative of
congressional intent

EPA has concluded that the impacts of applying the literal definition of
“major source” to GHG sources are inconsistent with, and in fact
undermine, congressional intent  as to the applicability of title V to
all GHG sources; rather, we should examine other provisions of the
statute and the legislative history to determine congressional intent on
that question.  If congressional intent is clear, we must adopt and
implement an applicability approach that is as close as possible to
congressional intent; and if congressional intent is not clear, then we
must select an interpretation that is reasonable and consistent with the
statutory requirements.  This section explains EPA’s view of
congressional intent for the applicability of the title V program.
Therefore, under the Chevron framework, accounting for the “absurd
results” doctrine, EPA may tailor the definition of the program to be
more consistent with congressional intent.  This section explains  to
GHG sources and the principles and approach EPA is using to accomplish
that for tailoring so as to be consistent with congressional intent and
to .  In addition, we also respond to other approaches to reconciling
that were suggested by commenters.

This final rule reconciles the definition of “major source” – as
narrowed through EPA interpretation -- with congressional intent by
applying the definition to include as many of the To determine
congressional intent, we consider the statutory provisions and
legislative history, and this analysis is similar to that for PSD.  The
most important title V provisions and legislative history for this
purpose are the following:

The applicability provisions themselves, which, as we have interpreted
them, apply title V to all sources that would be included under the
terms of the definition as promptly as possible, consistent with the
intent of the statute as illuminated by the legislative history.  This
emit at least 100 tpy of any air pollutant subject to regulation.  CAA
sections 502(a), 501(2)(B), 302(j).  Although we do not believe these
provisions should be applied literally to GHG sources, their broad
phrasing indicates, directionally, a congressional intent towards
inclusiveness of sources in title V, including GHG sources.

The provisions for general permits, CAA section 504(d); and title V
fees, CAA section 502(b)(3)(A).  These provisions give title V an
important measure of flexibility as to its scope.  The explicit
authorization of general permits means that we intend to phase in title
V applicability to sources, based on their size, over time.  The
specific schedule will depend on information we have as to title V may
be applied to more sources and more efficiently, thereby saving costs to
both source and permitting authority.  The requirements for permit fees
provide a mechanism for permitting authorities to, over time, develop
their programs to cover more sources.  In this sense, these provisions
could be construed to indicate congressional intent to apply title V
inclusively, to the extent that permitting authorities can accommodate
additional sources through general permits and permit fees.

The detailed procedural requirements - including time periods, such as
the 18-month time period for action on permit applications - for title V
permit processing.  CAA sections 503, 505.  Although these requirements
are consistent with applying title V to GHG sources - in the sense that
at least in theory, there is nothing intrinsic to GHG sources that would
mean that permitting authorities could not comply with these
requirements – these requirements cast doubt on whether Congress can
be said to have intended that title V cover the many small GHG sources
(at least immediately) in light of the risk that including all those
sources in title V would strain the process.

The provisions and legislative history concerning applicable
requirements, which indicate that a purpose of title V is to include
sources’ applicable requirements in their permits.  CAA sections
503(b)(2), 504(a).  These provisions, and the accompanying legislative
history, discussed previously, suggest an intent to include within title
V GHG sources that have applicable requirements, but may also suggest
that Congress would not have intended to include in title V the large
numbers of GHG sources that have “empty permits,” at least where
their inclusion would undermine implementation of the program for
sources with applicable requirements.

(5) The small-business-assistance provisions of section 507 and the
legislative history of title V – both the permitting program and the
small-business-assistance program - concerning the scope of the
permitting program and small businesses.  These indicate that Congress
intended title V to cover some tens of thousands of sources, and did not
intend that title V apply to small businesses.  These provisions and
legislative history suggest that Congress did not intend for title V to
apply to include large numbers of small GHG sources.

Finally, the legislative history of title V does not explicitly mention
GHG sources, which could suggest that Congress did not have occasion to
focus on whether and how title V would apply to GHG sources.

With all this, we believe that Congress had a clear intent on the
question of whether title V generally applies to GHG sources, and that
was that it does.  As with PSD, the most important indication of
congressional intent in this regard is the applicability provisions,
which provide, in part, that title V applies to “any stationary
facility or source of air pollutants which directly emits, or has the
potential to emit, [the requisite quantity] of any air pollutant.”
CAA sections 502(a), 501(2)(B), 302(j).  This term is quite broad, and
should be read to include GHG sources.  See Massachusetts v. EPA, 549
U.S. 497, 533 (2007) (“Because greenhouse gases fit well within the
Clean Air Act's capacious definition of ‘air pollutant,’ we hold
that EPA has the statutory authority to regulate the emission of such
gases from new motor vehicles.”).  Moreover, including GHG sources –
under certain circumstances – is consistent with the various statutory
provisions and statements in the legislative history described
previously.

In the alternative, if it is concluded that Congress did not express a
clear intent on that question, then, under Chevron Step 2, EPA exercises
its discretion to conclude that title V applies to GHG sources as a
general matter.  This is a reasonable policy because applying the title
V program to at least the larger GHG sources will assure promote
accountability and enforceability for those sources, which is a key goal
of the title V program, and will not impose obligations that are beyond
the resources of those sources or insurmountable burdens on the
permitting authorities.  This policy is a reasonable interpretation of
the statutory provisions for the same reasons just discussed.

As to the question of how title V applies to GHG sources, we believe
that Congress cannot be said to have expressed a clear intent.  A
central aspect of how title V is to apply to GHG sources concerns
“empty permits,” and on this aspect, some of the above-described
provisions and statements in the legislative history point in different
directions.  This is particularly true of, on the one hand the title V
applicability provisions, which apply by their terms inclusively and, on
the other hand, the requirement that sources include applicable CAA
requirements in their permits, and the statements in the legislative
history indicating that Congress intended title V to cover sources
subject to other CAA requirements.

 Because Congress cannot be said to have expressed an intent as to the
manner and scope of title V applicability to GHG sources, then, under
Chevron Step 2, EPA may apply a reasonable interpretation of the
applicability provision to determine the scope of coverage of GHG
sources that is consistent with the statutory requirements.  The
Tailoring Rule qualifies as such an interpretation.  The Tailoring Rule
in effect reads the applicability provisions not to apply title V to GHG
sources at or above the 100 tpy level, but instead to apply title V to
as many of the GHG sources at or above that level as possible and as
quickly as possible, starting with the largest sources first, that is
consistent with both the permitting authorities’ ability to process
permits in a timely fashion.  That information will be based on the
real-world experience the permitting authorities will accumulate as they
proceed to administer the program and with a sensible imposition of
costs to sources.  This tailoring approach is consistent with the
inclusive direction of the applicability provision, the flexibility in
title V’s scope that is inherent in the provisions authorizing general
permits and requiring permit fees, the detailed process permit
application for the larger GHG sources, coupled with the size of their
resources.  In addition, we intend to vigorously pursue streamlining
methods, so as to make title V more accessible for more sources moving
down the size scale. requirements, and the legislative history that
focuses on Congress’s concern about costs to sources and
administrability.  With the tailoring approach, over time, more sources
may be included in title V, consistent with those provisions and
legislative history.  This reconciles the inclusiveness of the
applicability provisions with Congress’s expectations of a more
limited scope for the

Thus, under our presenttitle V program.  However, as part of the
tailoring approach, we recognize that we may at some point determine
that it is appropriate to exclude certain sources, such as the smallest
of the GHG sources.  In addition, we intend to address the issue of
sources with “empty permits” in a later rulemaking, as discussed
previously.

The specific phase-in schedule will depend on the following:  We will
gather information about the permitting authorities’ ability to
process permits, and we will develop streamlining techniques, and,
based.  Based on that information, expandwe will address expanding the
title V program in a step-by-step fashion to include more sources over
time.  Each step will be based on our assessment of the permitting
authorities’ and sources’ ability to comply with their respective
obligations under the title V program.

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

Even so, title V fees cannot be considered a panacea that will resolve
all resource problems that permitting authorities will have, for several
reasons.  Permitting authorities will likely be constrained as to the
rate in which they can increase fees in light of the costs to sources.
As indicated elsewhere, at least at the outset of the program before
streamlining techniques have been developed, a literal application of
the title V applicability provisions to GHG sources would, on average,
cost each industrial source $46,400 and each commercial or residential
source $23,200 to complete the permit application and take other
associated actions,; and it would cost each permitting authority, on
average, $19,678688 to process the industrial source permit and
$9,839844 to process the commercial or residential source permit.
Particularly in light of the high costs to sources of applying for a
permit, it is not likely that permitting authorities would be able to
pass on to the sources in the form of fees, the entirety of the
permitting authorities’ own high costs for processing those permits,
at least not right away.  Even if to the extent it were would be
possible to raise permit fees, permitting authorities would have to
undergo a process to assess and , impose  those fees, then collection of
, and collect those fees, and then the hiringhire and training of
personnel.  The survey from the state and local agencies described
abovepreviously forecast a two2-year period for hiring and training,
without counting time for the fee process of assessing and imposing
fees.  For these reasons, we do not believe that the authorization for
fees will allow the permitting authorities either to accelerate Steps 1
or 2 of the tailoring schedule or to permit a larger number of sources
at those steps.  Step 1 will take effect on January 2, 2011, step Step 2
will take effect on July 1, 2011, and the process for determining and
collecting fees, and then hiring and training personnel will take at
least several years after July 1, 2011.

Moreover, we do not believe that the authorization for fees means that
permitting authorities can reasonably be expected to permit title V
sources at levels below 50,000 tpy CO2e before 2016.  The next level
below 50,000 tpy CO2e for which we have data is 25,000 tpy CO2e, and the
costs to permitting authorities to run their programs at that level
($126 million) is more than double their current costs ($62 million).
We do not consider it reasonable to expect permitting authorities to
more than double their program within the first six 6 years of  title V
applicability to GHG sources.  That it is not reasonable to expect that
is made even clearer when the permitting authorities’ burdens in
implementing their PSD programs are considered.  The ability of
permitting authorities to impose fees may have more important
implications for subsequent steps, and as we address those subsequent
steps in future rulemakings, we will consider the fees.  EPA’s
approach to fees in this rulemaking is discussed elsewhere.

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

Possible Approaches to Reconciling Literal Reading of Title V
Applicability Provisions and Congressional Intent

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

In particular, commenters have argued by comments, which is that EPA
should apply the title V program only to sources that are subject to
applicable requirements, so that sources should not be required to hold
“empty permits (i.” (e.g., permits issued to a source that is not
subject to any applicable requirement for any pollutant).  To the extent
that commenters argue that the statute requires EPA to adopt a
“no-empty –permits” theory, we disagree.  We believe that although
various provisions of title V indicate that one of title V’s purposes
is to gather a source’s applicable requirements into a single
permitting mechanism, see CAA §§ sections 503(b)(1), 504(a), we do not
read those provisions as expressly limiting, as a matter of Chevron Step
1, title V to sources with applicable requirements.  The applicability
provisions, by their terms, include sources based on amount of
emissions, and do not include any explicit limits to applicability based
on whether the sources has applicable requirements.  As described
previously, we believe that Congress, although clearly expressing an
intent that title V apply to GHG sources generally, did not express a
clear intent as to how title V applies to GHG sources.  The tension
between these two sets of provisions, which we identified in the
proposal and commenters further discussed, provides further support for
that conclusion.  Accordingly, we have discretion under Chevron Step 2
to determine a reasonable approach, consistent with the statutory
requirements, concerning the application of title V to GHG sources with
empty permits.

 We also note that to date, we have issued permits to sources without
applicable requirements, albeit on rare occasions.  We have little
reason to believe that the “empty-permits” issue will arise in Steps
1 and 2 of our tailoring approach because we believe there will be no
“empty permits” in Step 1 or Step 2 or, if there are, that they will
be very few in number.  As stated elsewhere, we believe that the
tailoring approach we adopt in this rulemaking best reconciles the
statutory provisions with congressional intent.for Steps 1 and 2 is a
reasonable approach that is consistent with statutory requirements.

We need to gather more information concerning the potential number and
utility of “empty permits” for GHG sources, in light of the fact
that the need for requirements in title V permits will vary based on the
requirements of each SIP, and the fact that some SIPs contain broadly
applicable requirements.  As stated elsewhere, we intend to consider the
issue of the applicability of title V to GHG sources with “empty
permits” in Step 3 of our tailoring approach.  When we do so, we will
further assess the potential for the approach of excluding empty permits
from title V to relieve burden consistent with statutory requirements.

7.  Additional rulemakingRulemaking for the PSD and title V programs

Title V Programs

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

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

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

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

8. Rationale for the phase-in schedule for applyingPhase-In Schedule for
Applying PSD and Title V to GHG sources.

Sources

	Having discussed in sections V.B.5, V.B.6, and V.B.7 above the
compelling reasons for tailoring the PSD and title V programs, we now
describe our rationale for selecting the specific phase-in schedule in
today’sthis rule for applying PSD and title V to GHG-emitting sources.
 To reiterate for convenience,  under Step 1 of this schedule, which
begins on January 2, 2011, (i1) PSD applies to the GHG emissions of
“anyway” PSD sources, that is, sources that are subject to PSD
anyway due to their emissions of conventional pollutants and that
undertake a modification that results in an increase of at least 75,000
tpy CO2e; and (ii2) title V applies to “anyway” title V sources,
that is, sources that are subject to title V anyway due to their
emissions of conventional pollutants.  Under Step 2, which begins on
July 1, 2011, (a1) sources will be subject to PSD on account of their
GHG emissions if they newly construct and emit at least 100,000 tpy
CO2e, or if they are existing sources that emit at least 100,000 tpy
CO2e of GHGs and make a modification that results in the emission of at
least 75,000 tpy CO2e; and (b2) existing and new sources will be subject
to title V on account of their GHG emissions if they emit 100,000 tpy
CO2e in GHG emissions.  In addition, EPA intends to begin another round
of rulemaking – Step 3 – in 2011 and commits to complete it by July
1, 2012.  In that rulemaking, we will propose or solicit comment on a
further phase-in of GHG sources for PSD and title V applicability, and
we may propose or solicit comment on another application of the
“absurd results” doctrine that excludes categories of sources from
PSD or title V.  However, under today’sthis rule, in no event will EPA
apply PSD or title V to sources below the 50,000 tpy CO2e levels in
stepStep 3, or any other step we might promulgate prior to April 2016.
In addition, EPA commits to conduct a study, to be concluded by April
30, 2015, evaluating the status of PSD and title V applicability to GHG
sources, and, based on the study, complete a rulemaking by April 30,
2016 that promulgatesaddresses another round of a phase-in.

a. Rationale for Step 1

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

(1) Proposal

In our proposal, we proposed (i1) the application of PSD and title V
requirements to sources that emit at least 25,000 tpy CO2e, (ii2) a PSD
significance level of between 10,000 and 25,000 tpy CO2e, and (iii3) a
commitment to undertake a study to be followingfollowed by further
rulemaking after six6 years.  In addition, we solicited comment on the
alternative of limiting PSD and title V applicability to “anyway”
sources for at least the first six6 years.  Under this approach, PSD and
title V applicability would be determined based on non-GHG pollutants,
and without regard to GHGs, but those sources subject to PSD would also
be subject to BACT requirements for GHGs if their GHG emissions exceeded
the significance level established in the final rule, and those sources
subject to title V would be required to include any applicable
requirements for GHGs in their permits.

(2) Comments

Many commenters supported this “anyway”-source approach, and offered
 a variety of reasons:  According to the commenters, (i1) this approach
is a better reading of Congress’s intent in the Act and is consistent
with Alabama Power v. Costle, .636 F.2d 323 (D.C. Cir. 1980): (ii); (2)
this  approach would reduce the permitting workload on sources currently
considered minor and focus PSD and title V requirements on large sources
of non-GHG pollutants, as intended by Congress; (iii3) it is appropriate
to base PSD and title V applicability on non-GHG emissions until data on
GHG emissions are available from the mandatory GHG Reporting Rule;
(ivreporting rule; (4) in the initial phase, this approach would be more
straightforward to administer, would provide a more predictable
permitting workload, and would prevent a flood of newly regulated
sources from overburdening state agencies; (v5) this approach would
provide permitting agencies time to develop experience handling GHG
sources and requirements under the PSD and title V programs; (vi6) this
approach would provide EPA and the permitting agencies the time needed
to develop streamlining techniques; (vii7) this approach is consistent
with the “absurd results” and “administrative necessity”
doctrines because the scope of the permitting programs would remain
consistent with both Congressionalcongressional intent and current
administrative practice, but EPA and Statestate agencies would still be
allowed  to begin regulating GHG emissions from existing PSD and title V
sources; and (viii) 8) sources already required to obtain PSD permits
are best equipped to work through BACT issues with permitting
authorities.

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

(3) Determination as to Step 1, PSD and titleTitle V
applicabilityApplicability and PSD significance level

Significance Level

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

At Step 1, by definition, all of the covered sources are already subject
to PSD and title V permitting requirements, and will simply be adding a
GHG component to what would be an otherwise occurring permitting action
for conventional pollutants.  These sources include fossil fuel-fired
power plants, petroleum refineries, cement plants, iron and steel
plants, pulp and paper plants, petroleum refineries, large landfills,
and other large industrial sources.  These sources will need to perform
some additional analysis that is unique to GHG emission units,
particularly related to the BACT review and selection process, but they
will likely be able to utilize information developed as part of other
permitting requirements for conventional pollutants, such as equipment
fuel usage and operational parameters.  Also, because these facilities
are familiar with the case-by-case permitting processes, including all
the steps from the application to the final review process, they will
not confront a high PSD or title V learning curve.

The “anyway” ”-source approach has particular appeal during this,
the first step of the phase-in approach because it begins to apply key
PSD and title V program requirements as soon as January 2, 2011 to large
sources of emissions, but because it applies only to sources that are
already regulated under the CAA subject to PSD for other pollutants, it
can be implemented efficiently and with an administrative burden that is
manageable in the next eight8 months.    Under We expect that under this
approach, the sources and permitting authorities will still face
substantial additional work due to address the GHG emissions.  In
addition to the activities discussed elsewhere, there are will be
significant and complex policy questions about how BACT will be
implemented for GHGs that must be resolved.  These issues will include
how to determine BACT for GHGs, how to do netting, and other similar
issues.  Even with EPA guidance, many case-specific policy issues will
arise and must will have to be resolved by the permitting authority in
the context of a specific permit application.  Nevertheless, with the
“anyway” source approach, this work will be manageable because the
associated permitting burden will be limited to adding a GHG component
to each existing permit action for which it will be required, and will
avoid the significantly greater burdens associated with large numbers of
new permit actions that would be required for sources and modifications
that would be subject to PSD for the first time.  Instead, this
“anyway” source approach allows permitting authorities sufficient
time to develop necessary expertise and staffing resources to address
GHG BACT.

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

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

During Step 1, inIn addition to these workload and monetary costs,
permitting authorities will confront additional burdens before and
during Step 1 and that , which we have not attempted to quantify.  One
of the most significant of these is training staff in the PSD-related
areas of GHG emissions calculations and BACT evaluations.  In addition,
permitting staff will need to build staff expertise and capacity for
addressing GHG requirements in preparation for Step 2, which will begin
only six6 months after Step 1; and in communicating and providing
outreach to sources addressing GHG emissions for the first time.  Based
on comments we received on the proposal from permitting authorities, we
believe these additional training and outreach requirements – for both
the PSD and title V programs -- will add significantly to the permitting
authorities’ burden during the initial six6-month period under Step 1.

	We believe that these administrative burdens are substantial but
manageable.  Following today’s this action, permitting authorities
will have only eight8 months to prepare for Step 1, when they will need
to increase their resources by 5% percent for both the PSD and title V
programs combined, and be able to implement BACT requirements for GHG
sources.  During Step 1, they will need to prepare for Step 2, when, as
discussed belowlater, they will need to process over 900 additional PSD
permits each year and begin to process over 2,6001,100 additional title
V permit actions.

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

Second, we believe that the costs of GHG permitting to the sources, as
described abovepreviously, are substantial and as a result, necessitate
that we wait for the permitting authorities to develop the PSD and title
V programs for GHG sources during the first six6 months of 2011 before
subjecting sources to PSD and title V requirements on account of their
GHG emissions.  By July 1, 2011, when Step 2 takes effect, the PSD and
title V programs will be better developed.  For example, the permitting
authorities will have more experience making BACT determinations.  In
addition, by that time, sources will have had more time to prepare for
the permitting processes.  In addition, as suggested by one commenter,
the additional time will allow sources and permitting authorities to
address the current uncertainty surrounding how to measure high-GWP
gases.

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

A large number of commenters urged us to leave this “anyway” source
approach in place until such time as we complete an assessment and
conduct further rulemaking, which we proposed would be six6 years from
now.  We are not taking this action; rather, for the reasons discussed
next, we believe it is reasonable to use GHG thresholds to begin to
phase in PSD and title V applicability to additional sources in Step 2.

b.  Rationale for Step 2

(1)  Proposal

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

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

(2)  Comments

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

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

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

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

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

iii.(3)  Rationale for stepStep 2

	Based on these comments, we reassessed our original burden estimates
from our proposal.  This reassessment is discussed at the beginning of
this section.  We decided that, once this adjustment is taken into
account, the burdens at the proposed 25,000 threshold and the proposed
10,000-25,000 significance levels would be unmanageable.  We therefore
evaluated higher thresholds ranging from a 25,000 tpy CO2e major source
applicability level for PSD and title V to a 50,000, 75,000, or 100,000
tpy CO2e level, with associated PSD GHG significance levels of equal or
lesser magnitude; and we selected the 100,000/75,000 tpy CO2e level.
Central to our decision to promulgate higher thresholds than what we
proposed is our recognition, based on comments and further analysis,
that applying PSD to GHG sources at the statutory or any other threshold
level or significance level that we have considered would result in (i1)
a greater number of sources, and significantly greater number of
modifications than we first estimated becoming subject to those
programs; and (ii2) a greater per-permit cost than we first estimated to
the permitting authority of processing those permit actions.  We
discussed our revised estimates and reasoning at the beginning of this
section.

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

	For title V, under our final burden analysis at a 25,000 tpy CO2e
threshold, we estimate a $64 million annual increase in program costs to
permitting authorities to add GHG emission sources, which reflects a
greater than 100% percent increase over current programs costs of $62
million.  We estimate that this increased burden would result in the
need for almost 700 new FTEs nationwide at permitting authorities
(compared to our estimate at proposal of 492 additional FTEs, or about a
50% percent increase in existing program size).  This increase in burden
is due to an estimated annual increase of 2,500 new title V permits,
over 9,500 permit revisions, and over 2,500 600 permit renewal actions
due to GHG emission sources.   These additional title V actions compare
to current annual program actions of approximately 50 new title V
permits, 1,394 significant revisions, and 3,267 permit renewals.

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

Based on our revised burden analysis, in today’s this final action, we
have decided to establish a multi-step, phase-in approach that contains
a significantly higher initial threshold level:.  We have determined
that a 100,000 tpy CO2e major source threshold level for PSD and title V
purposes, and a 75,000 tpy CO2CO2e significance level, produce a level
of permitting activity that would certainly be an increase over current
workload, but that would be administratively feasible by July 1, 2011.
As a result, we have decided to finalize these thresholds as Step 2.

In reaching this conclusion, we needed to consider both the sources’
abilities to manage the permitting process and the permitting
authorities’ capacity to address newly-major sources as expeditiously
as possible.  NoteAs to the former, sources subject to Step 2 will, for
the most part, continue to include the “anyway” sources subject to
Step 1.  In addition, we estimate that Step 2 will include about 500
additional sources that are not already subject to permitting.  Most of
them will become subject to PSD and title V because of fuel burning.  In
order to meet the 100,000/75,000 threshold, they will have to burn a
significant quantity of fuel, and that means they will be a significant
size.  In general, these sources include municipal or commercial
landfills that are large, but not large enough to be covered by the
NSPS, pulp and paper facilities, electronics manufacturing plants,
chemical production plants, and beverage producers.  Although these
sources have not been subject to PSD permitting before, some of them
have already been subject to minor source permitting, and so will have
some familiarity with the permitting process.  In addition, in general,
these sources are in source categories that have larger sources that are
already subject to PSD and title V.  As a result, they are in industries
that have experience in the permitting process.  Because of their
relatively large size and access to knowledge about the permitting
processes, we believe these sources will be able to manage the
permitting requirements.

As to the permitting authorities’ capacity to handle the Step 2
workload, we note first that our Step 1 approach does not cover
newly-major sources, so.  As a result, the stepStep 2 threshold and
timing has to be established in a way that takes into account permitting
authority challenges in addressing many sources and categories that
would be subject to major source permitting for the first time.

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

	We then considered the impact on both PSD and title V programs of
different PSD significance level options for GHGs.   The choice of a PSD
significance level has a direct impact on title V burdens because PSD
permit requirements resulting from modification activities will result
in a required title V permit revisions.  We developed PSD and title V
burden estimates based on significance levels of 50,000 tpy, 75, 000 tpy
and 100,000 tpy CO2e, combined with a major source applicability level
of 100,000 tpy CO2e.

At a 50,000 tpy CO2e significance level, we estimated an annual increase
of approximately 1,800 PSD permitting actions and almost 2,000
additional title V permitting actions, as compared to Step 1.   At a
75,000 tpy CO2e significance level, we estimated an annual increase of
approximately 900 PSD permitting actions and just over 1,000 additional
title V permitting actions as compared to Step 1.  At a 100,000 tpy CO2e
significance level we estimated an annual increase of approximately 25
PSD permitting actions and 210 additional title V permitting actions as
compared to Step 1.   For title V, under these different scenarios, the
major source applicability level of 100,000 tpy CO2e results in
approximately 200 new permits annually, but, as noted, the choice of
significance levels affects the number of required permit revisions.

	Based on this information, we have decided to set our final Step 2
thresholds at 100,000 tpy CO2e for major source applicability under PSD
and title V and at a 75,000 tpy CO2CO2e significance level for PSD.
Overall, we estimate that the almost 900 additional PSD permitting
actions (virtually all of which would be modifications) per year at
these levels will result in an approximately a $21 million increase
(from Step 1) in states’ annual costs for running PSD programs.  In
addition, we estimate that the 1,000 additional title V permit actions
will cause the total title V burden for permitting authorities to
increase by $6 million annually from Step 1.  This total increase in
permit program burdens of $27 million represents a 34%  percent increase
over the $78 million in total cost of PSD and title V programs at Step
1.  We consider this a substantial increase, particularly because Step
2’s start date of July 1, 2011 is only six6 months after Step 1’s
start date of January 2, 2011.  What’s more, Step 1 will entail a
substantial increase in permitting authority obligations, so that adding
the costs of Step 1 and Step 2 together -- $31 million – means that
permitting authorities will be required to increase their permitting
resources by approximately 42%  percent between now and Step 2.  In
addition to the administrative burdens we have been able to monetize, we
must be mindful that permitting authorities will incur other burdens,
including the significant support and outreach activities by permitting
staff for the many newly permitted sources.  We believe that any lower
thresholds in this timeframe, whether in the PSD and title V
applicability levels or in the significance level, would give rise to
administrative burdens that are not manageable by the permitting
authorities.

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

	In addition, we believe that the sources that will become subject to
PSD and title V requirements at the 100,000/75,000 tpy CO2CO2e levels
will be able to accommodate the additional costs of permitting.  For the
most part, these sources will be of a comparable size and activity level
as those sources that are already subject to those requirements.

	Because the administrative burdens at the 100,000/75,000 tpy CO2e level
are as heavy as the permitting authorities can reasonably be expected to
carry, adopting these threshold levels is consistent with our legal
basis under the “absurd results” doctrine.  Under this basis, we are
reconciling the statutory levels with congressional intent by requiring
that the PSD and title V requirements be applied to GHG sources at
levels as close as possible to the statutory thresholds, and as quickly
as possible, in light of costs to sources and administrative burdens.

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

We estimate that facilities meeting the Step 2 major source
applicability thresholds account for approximately 67 percent of total
national stationary source GHG emissions.  Many commenters felt that
this should be an important basis for our selection of a threshold,
stating that there is no significant loss in GHG emissions coverage of
source categories at the 100,000 tpy CO2CO2e threshold, and in some
cases arguing that as a result, we should set the level even higher.  We
agree that it is important that the coverage in stepStep 2 represents 86
percent of the coverage at full implementation of the statutory 100/250
thresholds.

c.  Rationale for EPA’s plan beyondPlan Beyond Step 2

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

(1)  Proposal

In our proposal, we noted that following implementation of the first
phase of PSD and title V applicability to GHG sources, generally at the
25,000 tpy CO2e threshold, additional action would be required over time
to assure full compliance with the statute.  We did not establish more
steps in the schedule, but we did commit to conduct a study, to be
completed by five5 years after promulgation, evaluating the status of
PSD and title V applicability to GHG sources, and, based on the study,
complete a rulemaking by six6 years after promulgation that
establishedaddressed an additional step of the phase-in.

(2)  Comments

	A number of commenters supported the proposal’s overall approach to
phase in the permitting of GHGs, mainly because this approach will allow
permitting of the largest sources of GHGs immediately while collecting
more information about smaller sources and more fully considering
streamlining options for subsequent phases.  Many of these commenters
made clear that they do not support implementation of the statutory
100/250 tpy thresholds, even through a phase-in approach.  On the other
hand, one commenter asserted that EPA has failed to demonstrate that it
needs six6 years to study and implement NSR and title V for sources
emitting less than 25,000 tpy.  The commenter contends that EPA has not
analyzed, among other things, what combined effect the full
implementation of its streamlining proposals in the 15 months before the
due-date for title V permit applications would do be to reduce the cost,
complexity, and number of title V permit applications that would have to
be submitted.

(3)  Rationale for further steps

Further Steps

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

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

In addition, in today’s this action, we are determining that in no
event – whether through Step 3 or a subsequent step – will we apply
PSD or title V to sources at the 50,000/50,000 tpy CO2e level or lower
prior to May 1, 2016.   We have several reasons for making this
determination at this time.  Most importantly, our examination of the
expected burdens to the permitting authorities of applying PSD and title
V to GHG sources convinces us that extending the permitting programs to
sources at or below the 50,000/50,000 tpy CO2e level within six 6 years
of promulgation would result in prohibitively heavy burdens.  This
threshold option would result in close to 2,000 additional annual PSD
permitting actions per year over the current program and more than 1,000
over Step 2, including both new construction and modifications.   For
title V, we estimated an increase of over 1,000 new title V permits (all
newly permitted sources because of GHG emissions) and over 2,000 permit
revisions per year over the current program, and about 980 new title V
permits and 900 permit revisions more than the Step 2 amounts.

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

Importantly, the next lower cut-off – below 50,000 tpy CO2e for the
major threshold level – is the 25,000/25,000 tpy CO2e level.   For the
reasons discussed abovepreviously, this level is clearly not manageable
within the first six6 years after today’s this action.  This
applicability level would bring in over 7,000 sources that would be
newly subject to title V permitting and result in close to 10,000 new
PSD permitting actions.  This would result in a 380% percent increase
over current program costs for PSD and title V to run these programs.
Based on comments we received from state and local permitting agencies
on our proposed tailoring ruleTailoring Rule, these levels of permitting
activities would far exceed the administrative capabilities of the
permitting agencies for at least the near future.  Thus, the six 6-year
exclusion is necessary to provide these agencies and their permittees
certainty that this will not occur.

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

As a further reason for concluding that we will not reduce thresholds
beyond 50,000/50,000 tpy CO2e during the first six6 years, we recognize
that the PSD permitting process in particular is a high stakes
endeavorcarries important ramifications for the permitting authorities
and the affected sources, and we wish to tread cautiously as a result.
If we have underestimated the permitting burden or the ability of states
to respond to their additional workload, then permitting backlogs will
result, and PSD permit issuance will be delayed.  Because PSD is a
preconstruction program, during this time , and sources seeking a PSD
permit couldwill not be able to construct or modify.  If this were to
happen on a large enough scale, it could have potentially serious
consequences for the national economy.

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

Beyond the administrative burdens to permitting authorities, we
recognize that the costs of PSD and title V permitting to sources may be
high, and we are not inclined to  impose them allow their imposition at
this time on sources smaller than the 50,000/50,000 tpy CO2e threshold.
At that level, the permitting programs will apply to a significant
number of newly permitted sources, including a variety of small
manufacturing, commercial and residential categories.   The next level
that we have analyzed is the 25,000/25,000 tpy CO2e threshold.  At that
level, more than 7,000 more sources would become subject to PSD each
year – almost all due to modifications – and another 4,000 sources
would become subject to title V each year.  These sources would be even
smaller than those that already will have become subject to PSD and
title V due to their GHG emissions.  We do not think it reasonable to
subject more of those types of sources, and smaller ones, to permitting
costs within the next six6 years.

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

 We recognize that our progress in developing streamlining methods will
be a key determinant to the ability of permitting authorities to
administer, and sources to comply with, PSD and title V at GHG emission
levels below 50,000/50,000 tpy CO2e.  Although we commit to pursue
streamlining, we cannot predict our progress.  This uncertainty may be
problematic for stakeholders, primarily permitting authorities and
industry.  That is, permitting authorities will face uncertainty in
planning the scope of their programs over the next few years, and
industry will face uncertainty as to what new construction projects and
modifications will be subject to PSD for GHGs.  By determining now that
for the next six6 years we will not impose PSD requirements below a
floor at the 50,000/50,000 tpy CO2e level, we add a measure of needed
certainty.

We also recognize that selecting a level that is too lowhigh or keeping
a level for too long means that some sources may construct or modify
without implementing BACT level controls, and this could result in
additional emissions of GHGs.  We need to be vigilant and to protect
against this outcome.  Even so, all things considered, we believe that
our determination not to apply the PSD or title V permitting
requirements to sources below the 50,000/50,000 tpy CO2e level for the
first six6 years also represents a reasonable balancing of protection of
the environment with promotion of economic development.  This type of
balancing is consistent with our authority under the PSD provisions.

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

 	In the proposal, we noted that the ”absurd results” doctrine does
not directly consider whether the statutory requirements lead to actions
that agencies or commenters may consider wasteful.  However, we do We
believe that the amount of resources that would be spent on, and the
limited value that would result from, “empty permits” does warrant
consideration under an the Chevron analysis, taking account of the
“absurd results rationale” doctrine.  Therefore, we are still
actively considering intend to consider the role of “empty permits
as” when we apply the absurd results rationale to GHG permitting
inundertake future stepsrulemaking.  However, we believe itthe issue of
“empty permits” has limited or no relevance to the first two steps
of the phase -in that we are promulgating todayin this rule.  During
stepStep 1, permitting for GHGs is only required if the source is
otherwise subject to permitting for its emissions of non-GHGs, meaning
that those.  Those sources very likely will be subject to existing
substantive applicable requirements for non-GHG GHGs (e.g., NSPS,
Maximum Achievable Control Technology (MACT), and SIP requirements,
including PSD).  Thus, there should be few, if any, empty permits, no,
or at least with respect to applicable requirements for non-GHG during
step 1.  For stepno additional, “empty permits” during Step 1.  For
Step 2, it is possible that sources that become subject to title V
requirements for GHG emissions may not be subject to other requirements,
but our assessment suggests that this will be rareis very unlikely.  We
estimate that virtually all of the 550 newly-major sources in stepStep 2
will be subject to applicable requirements under the CAA because they
are from categories that have been traditionally subject to regulations,
such as smaller industrial sources from already regulated categories,
large landfills, and oil/gas/coal production.  Even the approximately 50
newly-subject commercial sources in stepStep 2, which we estimate to be
comprised of very large hospitals, are likely to be covered by standards
for medical waste incinerators.  In addition, we expect these sources
may well be subject to SIP requirements.  Thus, we project few, ifdo not
expect any, or at most very few “empty permits” during stepStep 2.

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

In today’s this action, EPA is also finalizing its proposal to commit
to conduct an assessment of the threshold levels – to be completed in
2015, five5 years after today’s this action -- that will examine the
permitting authorities’ progress in implementing the PSD and title V
programs for GHG sources as well as EPA’s and the permitting
authorities’ progress in developing streamlining methods.  We further
commit to undertake another round of rulemaking -- beginning after the
assessment is done, and to be completed by April 30, 2016 – to address
smaller sources.

We disagree with the commenter who asserted that we do not need six6
years to study and implement NSRPSD and title V for smaller sources.  As
we discussed in the proposal, and reiterate in this final action, we do
not have sufficient information at this time to determine the
applicability and effectiveness of the various permitting streamlining
techniques.  For reasons discussed in more detail in section V.E.1
regarding streamlining, we are not now able to determine how such
techniques will be implemented or whether they will prove viable or
effective.  We agree with the commenter that these measures may reduce
the scope, cost, and complexity of these programs, but there is
considerable uncertainty as to the extent of this effect.   We do commit
in this action to fully investigate, propose, and evaluate these permit
streamlining techniques to determine where they may have applications,
how they would be applied, and whether they can withstand legal
challenge.  Even for those techniques that may ultimately be deemed
viable, there is a significant time period necessary for rulemaking on
these techniques and state adoption, all of which could take up to
three3 years or more.  We also note that we will be required to complete
our study of the effectiveness of these techniques within 5 years,
meaning that, in order to complete it in time, we will essentially need
to begin the study as soon as relevant data are starting to become
available.  Finally, the sixth year, in which EPA must complete
rulemaking, requires proposal and promulgation of a rule within one 1
year, which is an ambitious schedule.  Therefore we believe that 6 years
is an ambitious schedule, and appropriate for this type of effort.  We
also have received a substantial numbers of comments from permitting
authorities that agreed with our 5-year timeframe, or a greater
timeframe, to get more prepared for permitting smaller sources.

d.  Other comments on “absurd results” doctrine.Comments on
“Absurd Results” Doctrine

	We received other comments on our application of the “absurd
results” doctrine, which we respond to in the Response to Comments RTC
document.  One comment was overarching, and so we respond to it here:
Some commenters arguedCommenters have asserted that under the “absurd
results” doctrine could , EPA does not be applied because EPA had
other approaches for resolving the problems raised by applying PSD to
GHG sources.  In particular, the commenters insisted that we were not
obligated to issue the light-duty vehicle rule, and had we not done so,
we would not have triggered PSD;authority to, or at the least, we could
have delayed issuing the light-duty vehicle rule for some period of
time, during which we could develop streamlining measures and permitting
authorities could ramp up resources and thereby minimize the need for
tailoring when we did  should not, promulgate the light-duty vehicle
ruleendangerment/cause or contribute findings (which we will sometimes
refer to as the “findings”) or the LDVR because doing so would
trigger the PSD and title V requirements, which in turn would give rise
to “absurd results”.  According to commenters, under the “absurd
results” caselaw, EPA is obliged to avoid taking any action that would
trigger absurd results and in this case that means foregoing the
endangerment/cause or contribute findings and/or the LDVR, or at least
deferring finalizing them until EPA has time to streamline PSD and title
V requirements so as to avoid “absurd results”.  Commenters made the
related comment that if we promulgate the LDVR, and thereby trigger PSD,
we cannot rely on the “absurd results” doctrine because it is our
own actions – the promulgation of the LDVR -- that will have given
rise to the “absurd results,” and under those circumstances, the
doctrine is not available.

	These commenters also commented during the light-duty vehicle
rulemaking	The comments that EPA had no authority to promulgate, or
should not have promulgated, the endangerment/cause or contribute
findings or the LDVR at the times that EPA did are not relevant to this
rule, the Tailoring Rule.  EPA has already promulgated the findings and
the LDVR, and the LDVR triggers PSD and title V applicability, as we
have seen.  These comments would have been relevant only to the proposed
findings and LDVR, and we are not, in this rulemaking, revisiting or
reopening the findings or the LDVR.

Commenters claim that if EPA promulgates the LDVR, the “absurd
results” doctrine will no longer apply to the Tailoring Rule because
it will have been EPA’s own action – promulgation of the LDVR –
that gives rise to the “absurd results”.  We disagree for several
reasons.  For one thing, commenters have not cited caselaw, and our
research has disclosed none, in which a court specifically addressed a
similar situation and issued a holding along the lines of what
commenters urge.  Moreover, commenters’ approach would be punitive
because the absurd results would occur absent this rule going final.
Such an outcome would be counter to the purpose of the doctrine.  That
is, it would mean that PSD and title V would apply to GHG sources by
their terms – at the statutory levels, as of January 2, 2011 – with
all the adverse consequences described elsewhere.  	In any event, and
although we are not obligated to respond to these comments on the
merits, they are incorrect on the merits, for the reasons that follow.
This discussion should not be viewed as reopening the endangerment/cause
or contribute findings or the LDVR because, as stated previously, we are
not  reconsidering or reopening those two actions in this rule.

In determining and implementing congressional intent, it is important
that  the statutory provisions at issue be considered together – (1)
the obligation to make a determination on endangerment and contribution
under CAA section 202(a); (2) if  affirmative endangerment/cause or
contribute findings are made,  the obligation to promulgate standards
applicable to the emission of any air pollutant from new motor vehicles
or new motor vehicle engines under CAA section 202(a); and (3) the PSD
and title V applicability provisions.  The most appropriate reading, and
certainly a reasonable reading, is that we are required to take the
action we have taken, and are taking with this rule, and that is to
issue the findings, promulgate the LDVR, and promulgate the Tailoring
Rule.  Our approach gives effect to as much of Congress’s intent for
each of these provisions, and the CAA as whole, as possible.

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

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

Moreover, we have compelling reasons to proceed with the LDVR, in the
manner that we did.  As we stated in the LDVR, in response to similar
comments that we were not obligated to conduct that rulemaking, or to
conduct it at the time that we did.  We believe that our response there
suffices for here, as well::

	Some of the comments relating to the stationary source permitting
issues suggested that EPA should defer setting GHG standards for new
motor vehicles to avoid … [adverse] stationary source permitting
impacts.  EPA is issuing these final GHG standards for light-duty
vehicles as part of its efforts to expeditiously respond to the Supreme
Court’s nearly three year old ruling in Massachusetts v. EPA, 549 U.S.
497 (2007).  In that case, the Court held that greenhouse gases fit
within the definition of air pollutant in the Clean Air Act, and that
EPA is therefore compelled to respond to the rulemaking petition under
section 202(a) by determining whether or not emissions from new motor
vehicles cause or contribute to air pollution which may reasonably be
anticipated to endanger public health or welfare, or whether the science
is too uncertain to make a reasoned decision.

	 The Court further ruled that, in making these decisions, the EPA
Administrator is required to follow the language of section 202(a) of
the CAA.  The Court stated that under section 202(a), "[i]f EPA makes
[the endangerment and cause or contribute findings], the Clean Air Act
requires the agency to regulate emissions of the deleterious pollutant."
 549 U.S. at 534.  As discussed above, EPA has made the two findings on
contribution and endangerment.  74 FR 66496 (December 15, 2009).  Thus,
EPA is required to issue standards applicable to emissions of this air
pollutant from new motor vehicles.

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

	Instead of delaying the LDV rule and losing the benefits of this rule
and the harmonized national program, EPA is directly addressing concerns
about stationary source permitting in other actions that EPA is taking
with regard to such permitting.  That is the proper approach to address
the issue of stationary source permitting, as compared to delaying the
issuance of this rule for some undefined, indefinite time period.

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

9.  “Administrative necessity”With respect to both the
endangerment/cause or contribute findings and the LDVR, it would require
speculation and conjecture to defer – or, certainly, to forego
altogether - the findings or LDVR until EPA completed streamlining the
PSD and title V requirements on grounds that doing so would allow full
compliance in the future with all PSD and title V statutory provisions.
That is the gist of commenters argument – that EPA should defer or
forego issuance of the findings and the LDVR to avoid causing an absurd
result from implementation of the separate PSD and title V programs.
Underlying this claim is the assumption that this would allow EPA to
avoid the “absurb results”.  As we discuss elsewhere in this
rulemaking, there is no basis at this point to determine that
streamlining will ultimately allow full compliance with the PSD and
title V requirements.  Rather, it is possible that EPA may conclude that
none of the available streamlining techniques will allow all GHG sources
at the statutory thresholds to comply with PSD and title V requirements
in a manner that does not impose undue costs on the sources or undue
administrative burdens on the permitting authorities.  Under these
circumstances, EPA may then permanently exclude GHG source categories
from PSD or title V applicability under the absurd results doctrine.
Moreover, it may well take many years before EPA is in a position to
come to a conclusion about the extent to which streamlining will be
effective and therefore be able to come to a conclusion as to whether
any source categories should be permanently excluded from PSD or title V
applicability.  In our rulemaking today, we describe what actions we
expect to take in the first 6 years after PSD and title V are triggered
for GHG sources, and we may well be in a situation in which we continue
to evaluate streamlining measures and PSD and title V applicability to
GHG sources after this 6-year period.

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

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

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

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

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

EPA believes that the “administrative necessity” doctrine, within
the Chevron  framework, also justifies today’sthis rulemaking.
Applying the applicability requirements of the PSD and title V programs
according to a literal reading of their terms (as EPA has narrowed them
in the past through interpretation) to GHG sources beginning on the
January 2, 2011 date that regulation of GHGs takes effect would sweep so
many sources into those programs as to render the programs impossible
for the permitting authorities to administer.  Although streamlining the
PSD and title V programs offers some promise to improve the
administrability of the programs, given the time needed to implement
such streamlining, the step-by-step expansion of PSD and title V
requirements to GHG sources that we are promulgating today is the most
that the permitting authorities can reasonably be expected to
administer.

This section discusses the application of the “administrative
necessity” doctrine.  Our views concerning this doctrine remain
similar to what we said at proposal, with adjustments for the except
that in this rulemaking we place the doctrine more clearly in the
Chevron analytical framework, we revise our assessment of the
administrative burdens due to new analysis we have conducted and
information we have received since proposal, as well as the and we make
certain revisions we made to the tailoring approach..  This analysis and
information, as well as the revisions to the tailoring approach, have
already been presented abovepreviously, in the discussion of the
“absurd results” basis.  It In addition, it is not necessary to
reiterate the lengthy discussion of the “administrative necessity”
doctrine that we included in the proposal or the factual data presented
abovepreviously; as a result, this section is briefer and briefly
highlights the conclusions we have reached about the application of this
doctrine..

	As noted abovepreviously, under the current interpretation of the PSD
and title V applicability provision, – read literally, as we have long
interpreted them - EPA’s recent promulgation of the light-duty vehicle
ruleLDVR will trigger the applicability of PSDPSD and title V for GHG
sources at the 100/250 tpy and 100 tpy threshold levels, respectively,
as of January 2, 2011.  This is because PSD applicability hinges on the
definition of “major emitting facility,” which,” and title V
applicability hinges on the definition of “major sources,” and those
terms, read literally, and under EPA’s long-standing narrowing
interpretation, and absent further tailoring, applies PSDapply PSD and
title V, respectively, to sources of any air pollutant that is subject
to regulation under another provision of the CAA.  EPA’s promulgation
of the light-duty vehicle ruleLDVR means that GHGs will become subject
to regulation on the date that the rule takes effect, which will be
January 2, 2011.

	Absent tailoring, the January 2, 2011 trigger date for GHG PSD
applicability will see give rise to an extraordinarily large number of
PSD permitting actions – we estimate more than 81,000 per year –
representing an increase of almost 300-fold over the current 280 PSD
permitting actions each year.  In addition, over 6 million sources will
become subject to title V, an increase of more than 400-fold over the
14,700 sources that currently are subject to title V.  The permitting
authorities will find it impossible to administer programs of these
sizes as of that date.

	Under the three-step approach that we read the caselaw to establish for
implementing 	All this results from a literal application of the PSD and
title V applicability provisions to GHG sources.  However, under
Chevron, we must interpret and apply statutory requirements on the basis
of congressional intent.  Although the literal meaning of the statutory
provisions is the first and generally the best indicator of
congressional intent, there are cases in which that is not so.  As
discussed previously, we believe that as a general matter, statutory
directives should be considered to incorporate Congress’s intent that
they be administrable, and we believe that this proposition is implicit
in the “administrative necessity” doctrine, as described above, see
74 Fed. Reg. 55,315 col. 1 to 55,316 col. 3, an that the D.C. Circuit
has established and that we believe applies here.  See Alabama Power v.
Costle, 636 F.2d 323, 356-57 (D.C. Cir. 1980).  This doctrine authorizes
EPA to undertake a process for rendering the PSD and title V
requirements administrable.  Indeed, the Court in Alabama Power
established this doctrine specifically in the context of the PSD
provisions, including, in particular, the modification provision.  As
noted elsewhere, the Court held that EPA may “consider the
administrative burden” associated with applying PSD for emissions
increases, and establish significance levels designed to avoid “severe
administrative burdens on EPA, as well as severe economic burdens” on
sources.  Id. at 405.

	As we said in the proposal, we read the caselaw to establish a
three-step approach for implementing the “administrative necessity”
doctrine:  An agency is not required to adhere to literal statutory
requirements if the agency, as the first step, makes every effort to
adjust the requirements within the statutory constraints, but concludes
with justification – at the second step – that it would be
impossible to comply with the literal reading of the statute.  Under
those circumstances, the agency may – at the third step – develop
what is in effect a compliance schedule with the statutory requirements,
under which the agency will implement the statute as much as
administratively possible and as quickly as administratively possible.
See 74 FR 55315 – 55316.

a. First step of the “administrative necessity” analysis:
streamlining

Step of the “Administrative Necessity” Analysis:  Streamlining

	In the proposed rulemaking, EPA discussed at length the prospect of
streamlining both PSD and title V.  EPA described “several potentially
useful tools available in the streamlining toolbox for the PSD
permitting threshold level, the PSD significance level, and the title V
permitting threshold,” specifically –:

For the PSD permitting threshold level and significance level, there are
at least three such tools:  The first is interpreting the definition of
"potential to emit" so that the amount of a source's emissions that
counts in determining whether it qualifies as a major source and
therefore is above the permitting threshold requirements is closer to
the amount of its emissions when it is in actual operation, rather than
the amount of emissions that the source would emit if it were operating
continuously.  Narrowing the definition of PTE is a potentially
extremely important tool in this context because identifying the amount
of a source's emissions as closer to its actual emissions in this manner
would mean that very large numbers of residential and commercial sources
would have significantly lower emissions and would fall below the
statutory threshold requirements for triggering PSD.  Second, EPA
believes it may be able to develop programs involving general permits,
under which large numbers of similarly situated sources would each be
covered by essentially the same permit established through a regulatory
action by the permitting authority.  This approach could achieve
economies of scale and thereby reduce administrative burden.  Third, EPA
believes it may be able to streamline the single most time-consuming
element of the PSD permit program, which is the determination of BACT as
required under CAA §165(a)(4), by establishing presumptive BACT levels
for certain source categories that comprise large numbers of sources.
As for title V, as discussed below in detail, EPA believes that defining