must be applied each time that phrase appears in the CAA.

Although there is often a presumption that identical words used in
different parts of the same statute have the same meaning – see, e.g.,
Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Dabit, 547 U.S. 71, 86
(2006); Comm’r v. Lundy, 516 U.S. 235, 249-50 (1996) – courts
recognize that this presumption can yield to a different interpretation
in appropriate circumstances.  EPA may interpret the same word
differently based on statutory context.  See Envtl. Def. v. Duke Energy
Corp., 549 U.S. 561, 127 S.Ct. 1423, 1433 (2007).  The Supreme Court
observed that the same or similar words may be construed differently
“not only when they occur in different statutes, but when used more
than once in the same statute or even in the same section.“  Id.
(quoting Atl. Cleaners & Dyers, Inc. v. United States, 286 U.S. 427, 433
(1932)).  In reviewing the meaning of the phrase “subject to
regulation under this Act” EPA has not confined itself “to examining
a particular statutory provision in isolation.”  See FDA v. Brown &
Williamson Tobacco Corp., 529 U.S. 120, 132 (2000).  Rather, “[t]he
meaning -- or ambiguity -- of certain words or phrases may only become
evident when placed in context * * *.  It is a ‘fundamental canon of
statutory construction that the words of a statute must be read in their
context and with a view to their place in the overall statutory
scheme.’”  Id. at 132-33 (quoting Davis v. Mich. Dep’t of
Treasury, 489 U.S. 803, 809 (1989).

	The context in which “subject to regulation” is used in section 209
and in sections 165 and 169 of the CAA are clearly distinguishable and
support the different interpretations that EPA has applied in each case.

The CAA section 209(e) preemption provision addresses specific
categories of nonroad engines and nonroad vehicles that EPA had the
authority to regulate under section 213 of the Act and was required to
regulate by a specific time.  EPA read the preemption of state authority
in 209(e)(1) as applying prior to issuance of EPA regulation, in a
context where Congress had allocated authority to regulate to EPA, not
to states, and where EPA was required to issue regulations for
locomotives, and had just issued regulations the month before for farm
and construction equipment.  In the context of these provisions
(sections 213 and 209(e)) allocating authority to EPA instead of the
states, it naturally follows that the use of “subject to regulation”
in section 209(e) would address something that EPA has the authority to
regulate as opposed to something that EPA has in fact regulated.

In contrast, the phrase “subject to regulation” appears in the PSD
provisions in a context that requires BACT emissions limitations for any
pollutants that are “subject to regulation” under the Act.  As
discussed above, this provision appears in the context of other CAA
provisions that establish specific criteria that governs the exercise of
the Administrator’s judgment as to whether to establish emissions
limitations on particular pollutants or source categories.  In this
latter context, it is more appropriate to read the term “subject to
regulation” to address whether something is actually covered by a
control requirement or emissions limitations, rather than to describe
something that EPA has the authority to regulate.  As discussed above,
reading “subject to regulation” to describe pollutants that EPA has
the authority to regulate would lead to an unworkable situation in which
the PSD program applied to any substance that could theoretically be
regulated at some point in the future.

In comparison, the application of the actual control interpretation in
CAA section 209(e)(1) would lead to peculiar result --- that Congress
allowed temporary state controls that would later be totally preempted
by mandatory EPA regulations.  Section 209(e)(1) provides for total
preemption, without any chance for a waiver, for the applicable subset
of nonroad equipment.  This contrasts with the preemption under
209(e)(2) for the rest of nonroad, where EPA could issue a waiver of
preemption and there was no reference to “subject to regulation.”

3.2.5.   Distinction Between Term “Control” and “Regulations” In
Other Portions of the Clean Air Act

Comment:

An environmental group commenter (0087) states that EPA’s
interpretation conflates the concept of quantitative “control” or
emissions “standards” with the more expansive term “subject to
regulation.”  The commenter asserts that Congress clearly knew how to
distinguish between pollutants subject to “control” or direct
emissions standards and pollutants “subject to regulation” under the
CAA.  CO2 is “regulated” under “this chapter” (i.e., Chapter 85
of Title 42) because section 821 of the CAA Amendments of 1990 require
EPA to “promulgate regulations” requiring major sources to monitor
CO2 emissions and report them to EPA, and EPA has done so.  The
commenter cites as an example of Congress’ deliberate distinction
between emissions standards and “controls” of air pollutants is
illustrated by section 307(b)(1), which provides for venue in the D.C.
Circuit for actions challenging:

any emission standard or requirement under section 7412 of this title,
any standard of performance or requirement under section 7411 of this
title, any standard under section 7521 of this title (other than a
standard required to be prescribed under section 7521(b)(1) of this
title), any determination under section 7521(b)(5) of this title, any
control or prohibition under section 7545 of this title, any standard
under section 7571of this title, any rule issued under section 7413,
7419, or under section 7420 of this title, or any other nationally
applicable regulations promulgated, or final action taken, by the
Administrator under this chapter . . . .

42 U.S.C. §7607(b) (emphasis added).  According to this commenter, this
section makes clear that Congress knew how to distinguish – and did
distinguish – quantitative “controls” or “standards” of air
pollutants with other types of regulations to which air pollutants may
be subject, including monitoring and reporting requirements.

Similarly, another commenter (0095) claims EPA ignores the fact that
throughout the CAA, Congress carefully differentiated “regulation”
from “control,” and indeed from numerous other terms that describe
various types of agency actions.  Instead, EPA seems to suggest that
when Congress used the word “regulation” in section 821, Congress
overlooked what it had written in section 165(a)(4).  However, according
to the commenter, if Congress had intended BACT to apply only when a
pollutant was subject to “actual control,” it would have said so.
In fact, Congress uses the word “control” dozens of times in the
CAA, including right there in section 165(a)(4), when it requires
“best available control technology” for each such pollutant
“subject to regulation under this chapter.” 42 U.S.C. 7475(a)(4).
Notably, Congress did not limit the requirement to impose “control”
technology to only those pollutants that were already “subject to
control” elsewhere in the CAA; Congress required “control”
technology for any pollutants that were “subject to regulation.”

The commenter (0095) also states that Congress was equally nuanced in
section 307(d)(1), which established rulemaking procedures for certain
agency actions and that section 307(d)(1) carefully and repeatedly
distinguishes between “standards,” “emission standard or
limitation,” “standards of performance,” “requirement,” and
“regulations.”  Yet despite this, EPA insists that Congress used
“regulation” in section 165(a)(4) to mean “control” of
emissions:

(A) the promulgation or revision of any national ambient air quality
standard under section 7409 of this title,* * *

(C) the promulgation or revision of any standard of performance under
section 7411 of this title, or emission standard or limitation under
section 7412(d) of this title, any standard under section 7412(f) of
this title, or any regulation under section 7412(g)(1)(D) and (F) of
this title, or any regulation under section 7412(m) or (n) of this
title,

(D) the promulgation of any requirement for solid waste combustion under
section 7429 of this title,

(E) the promulgation or revision of any regulation pertaining to any
fuel or fuel additive under section 7545 of this title,

(F) the promulgation or revision of any aircraft emission standard under
section 7571 of this title, etc.

42 U.S.C. 7607.  In particular, it is worth noting how Congress treats
section 7545 in these two different provisions of section 307; after
specifically limiting the applicability of 307(b)(1) to only a
“control or prohibition” promulgated under section 7545, Congress
made section 307(d) applicable to “any regulation pertaining to any
fuel or fuel additive” under section 7545.  Thus, Congress clearly
knew how to distinguish between “control” and “regulation” –
and did so when it wanted to.

Response:

EPA does not contend that Congress clearly and unequivocally intended to
use the term “regulation” in section 165(a)(4) and 169(3) to
describe a control or emissions limitation.  Rather EPA’s view is that
sections 165(a)(4) and 169(3) are ambiguous and that Congress left EPA
with a gap to fill.  EPA agrees that if Congress had clearly intended
for EPA read “subject to regulation” to mean “subject to
control,” Congress certainly could have used language to this effect.
However, the fact that Congress did not use particular terms in sections
165(a)(4) and 169(3) that it used elsewhere does not demonstrate that
Congress intended to preclude the meaning that EPA has applied to the
words Congress did use, considering the potential meanings of various
terms and the context in which they are used.  Nor does Congressional
failure to use particular words that would have plainly established the
meaning EPA applies demonstrate the opposite proposition -- that
Congress clearly intended for section 165(a)(4) and 169(a)(3) of the Act
to mean what commenters argues these provisions mean.  The logic
employed by commenters -- that Congress knew how to use particular terms
and could have used those terms in the PSD provisions if that is how
Congress intended for EPA to read them – can also be applied to
demonstrate that Congress did not clearly intend the PSD provisions to
mean that PSD is triggered by a monitoring or reporting requirement or
the promulgation of any regulation of any type that covers a particular
pollutant.  Thus, this exercise simply leaves one with an ambiguous
statutory provision that has no readily apparent plain meaning.

In all but one of the contrasting examples cited by commenters of
Congressional usage of the term “regulation,” Congress in fact used
the plural term “regulations” rather than the singular
“regulation.”  There are many examples in the CAA where Congress
uses the plural term “regulations” in a context with the verb
“promulgate” or a similar verb to describe the product of the
rulemaking process.  See, e.g., CAA section 110(5)(B) (authorizing the
Administrator to “promulgate, implement and enforce regulations” for
indirect source review); Section 111(b)(1)(B) (requiring the
Administrator to propose “regulations” establishing Federal
standards of performance for new sources); Section 111(d) (directing the
Administrator to promulgate “regulations” for categories of air
pollutants); Section 165(e)(1) (describing “regulations”
implementing analytical requirements of the PSD program); Section 166
(directing the Administrator to “promulgate regulations” to prevent
the significant deterioration of air quality by specific pollutants);
Section 301(a) (requiring the Administrator to “promulgate
regulations” setting forth the general criteria for regional officers
and employees).  This Congressional direction that EPA promulgate
“regulations” found at various places in the CAA and in section 821
of the 1990 amendments is most naturally read to mean that Congress
directed EPA to use its legislative rule making authority to implement
the statutory requirements, filling in necessary specificity and detail.
 Likewise, section 112 of the Act uses the term “subject to
regulations,” referring to “regulations” in the plural.  CAA
sections 112(r)(3) and 112(r)(7)(F).  In the one example cited by
commenters where Congress used the singular form of the term
“regulation,” Congress added the word “any” in front of the word
“regulation.”

If, as commenters argue, Congress could have used the term “control”
in section 165(a)(4) or 169(3) of the Act, it certainly would not have
been any harder for Congress to add an “S,” “A,” or “ANY” to
the phrase “subject to regulation,” as it did elsewhere in the Act
to establish a particular meaning, if Congress had intended for EPA to
read sections 165(a)(4) and 169(3) to apply to any pollutant covered by
a regulation promulgated by EPA.  The phrase “promulgate
regulations” fits best with the adoption of a “rule or practice”
or “rule of order,” as used in the dictionary meanings from
Black’s and Webster’s cited by Petitioners.  Pet. at 6.  The
phrasing “subject to regulations under the Act” or “subject to a
regulation under the Act” would have been more consistent with the
dictionary meanings that describe a regulation as a “rule” such as
would be contained in the CFR.

Following commenters reasoning, the language in section 307(d)(1)(E) of
the Act can be read to show that Congress did not clearly intend for the
PSD provisions to apply to any regulation pertaining to any pollutant.
If Congress had specifically intended for sections 165 and 169(3) to
apply to “the promulgation of any regulation” covering any
pollutant, then Congress could have written sections 165(a)(4) and
169(3) of the Act to use the same or similar language as section
307(d)(1)(E).  Congress did not in fact write language that applies the
BACT requirement to a pollutant upon “the promulgation or revision of
any regulation pertaining to” that pollutant.  If this is what
Congress had clearly intended, it could have just as easily included
this language in section 165(a)(4) and 169(3) as it could have used the
term “control” or “emissions limitation”

	Instead, Congress used the term “regulation” in a context that is
ambiguous, but that permits the application of the dictionary meaning
applied by EPA that refers to an “act or process” rather than a
“rule.”  In context, the “subject to regulation” terminology
reflected in sections 165(a)(4) and 169(3) may be read to describe an
“act or process,” which supports EPA’s application of the meaning
from Black’s Law Dictionary (8th Ed.) that emphasizes “controlling
by rule or restriction.”

Thus, EPA has not been persuaded by this line of argument that the PSD
Interpretive Memorandum is inconsistent with the plain meaning of the
Act or Congressional intent.

3.2.6.   EPA Elevates Policy Preference Over Plain Statutory Meaning

According to the commenter (0087), EPA does not ground its proposed
interpretation in the language of the CAA, at all.  Rather, after making
a cursory reference to statutory text at the outset of the proposal, the
commenter opines that EPA offers only that its position “best reflects
our past policy and practice” and “allows for a more practical
development for regulations and guidance concerning control of
pollutants once they are determined to endanger public health or
welfare.”

	Finally, the commenter (0087) states that EPA’s suggestion that its
proposed interpretation will allow for a more practical approach to
determining whether emissions of air pollutants endanger health and
human welfare amounts only to a policy preference.  Given the clear
Congressional intent to distinguish between air pollutants “subject to
regulation” and air pollutants subject to quantitative controls,
EPA’s policy preference must be subordinate.

	One environmental group commenter (0101) notes that EPA’s primary
justification for the preference for the current definition of the
phrase “subject to regulation” is not the statutory language, as
nothing there can be found to support it.  Rather, according to the
commenter, it is clear that EPA’s argument is almost entirely grounded
in a practical desire to go about regulating GHGs in a particular
manner.  This commenter states that EPA, long prone to ignoring
deadlines explicitly spelled out in the CAA until finally forced to
proceed by court decree, cannot avail itself of additional,
non-statutory de facto extensions of time to fulfill its statutory
obligations. Nor can the agency simply choose by fiat to implement
mandatory CAA requirements seriatim when the statute requires that they
be contemporaneous and complementary.

Response:

Where the governing statutory authority is susceptible to more than one
interpretation, it is not impermissible for EPA to apply policy
preferences when determining which interpretation to apply, so long as
the interpretation EPA elects to follow is a permissible one.  The PSD
Interpretive Memo provides a persuasive explanation for why the
interpretation reflected in that memorandum is consistent with the terms
of the CAA and Congressional intent.  In this instance, EPA’s policy
preferences are fully consistent with that intent.  Congress intended
for EPA to gather data before establishing controls on emissions and to
make reasoned decisions.

3.3.   Interpretation of Regulations

Comment:

Ten industry commenters (0089 and others incorporating this submission
(0065, 0067, 0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) believe
that EPA reasonably construes the definition of the phrase “regulated
NSR pollutant,” as contained in the Agency’s regulations, to require
actual control of emissions in light of the fact that 40 CFR
52.21(b)(50)(i)-(iii) describes pollutants that are subject to actual
emission control requirements under the CAA’s NAAQS, NSPS, and
stratospheric ozone programs and that the phrase “otherwise is subject
to regulation” in 40 CFR 52.21(b)(50)(iv) is therefore properly
understood to require actual control of emissions by regulations
promulgated under other provisions of the CAA that are not described in
the first three clauses.  See 74 FR 51539-51540;  In re: Deseret Power
Electric Cooperative, Brief Amicus Curiae of the Utility Air Regulatory
Group in Support of Respondent Environmental Protection Agency (“UARG
Amicus Brief”) at 31 & n.21.

Another commenter (0080) asserts that interpreting the phrase “subject
to regulation” as “subject to regulation that restricts emissions”
fits within the statute because EPA is only authorized to restrict
emissions of  air pollutant where the EPA has made an endangerment
finding (or where Congress has implicitly done so, as in the case of
Title VI).  The commenter (0080) adds that defining the term
“regulated NSR pollutant” at 40 CFR 52.21(b)(50) as a pollutant that
is actually subject to emission controls makes sense for the same
reason.

Response:

EPA agrees that the actual control interpretation is consistent with the
terms of the regulations EPA promulgated in 2002.  See 67 FR
80186-80289.  EPA continues to find the reasoning of the PSD
Interpretive Memo to be persuasive.  The structure and language of
EPA’s definition of ‘regulated NSR pollutant’ at 40 CFR
52.21(b)(50) supports the actual control interpretation.  The first
three parts of the definition describe pollutants that are subject to
regulatory requirements that mandate control or limitation of the
emissions of those pollutants, which suggests that the use of
“otherwise subject to regulation” in the fourth prong of the
definition also intended some prerequisite act or process of control.
The definition’s use of “subject to regulation” should be read in
light of the primary meanings of “regulation” described above, which
each use or incorporate the concept of control.

	Comment:

The Petition for Reconsideration criticizes EPA’s application of a
canon of statutory construction known as ejusdem generis, which provides
that “where general words follow the enumeration of particular classes
of things, the general words are most naturally construed as applying
only to things of the same general class as those enumerated.” Am.
Mining Cong. v. EPA, 824 F.2d 1177, 1189 (D.C. Cir. 1987).  Petitioners
argue that the PSD Interpretive Memo conflicts with the Deseret decision
because the EAB explicitly held that it is not appropriate to use
ejusdem generis to interpret a parroting regulation “[w]ithout a clear
and sufficient supporting analysis or statement of intent in the
regulation’s preamble.”  Deseret at 46 (emphasis added). The
Petition states analysis in a memo is an inadequate substitute for the
missing analysis in the rulemaking itself.  In addition, the Petitioners
argue that this ejusdem generis canon of construct is inapplicable in
this situation because the dispute concerns the meaning of a provision
of the CAA, not the nearly identical language of a subsection of the
regulation.  Finally, the Petition argues that the first three
subsections of the regulation at 40 CFR 52.21(b)(50) are more dissimilar
than similar and that the “otherwise” language in the fourth part of
the definition suggests a contrast to the other three parts rather than
a similarity.

Ten industry commenters (0089 and others incorporating this submission
(0065, 0067, 0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) believe
that EPA may apply the canon of statutory interpretation that states
that general words that follow a description of a particular class of
things are naturally construed as applying to things in the same class
that is enumerated.  PSD Interpretive Memorandum at 8-9.  Although the
EAB in Deseret declined to apply this canon, it did so in the absence at
that time of any clear, definitive evidence of Agency intent to so cabin
the terms of the regulation.  See Deseret at 45.  In the PSD
Interpretive Memorandum, EPA provided the necessary analysis and
statement of intent.

The commenter (0080) states that the use of esjudem generis in
construing the meaning of 40 CFR 52.21(b)(50)(iv) is appropriate
(contrary to the assertion of the Petitioners) because it advances the
purposes of the statute as a whole – to interpret it otherwise would
confound the purpose of the statute to require emission reductions where
there is endangerment.

Response:

The Petition for Reconsideration correctly notes that the EAB decision
in Deseret declined to apply this canon of statutory construction in
part based on the absence of a statement of intent in regulation’s
preamble.  However, the EAB did not have before it the question of
whether an after-the-fact memorandum of the Administrator, could supply
sufficient intent to apply this principle.  Thus, the EAB decision
itself does not definitely preclude the approach applied in the PSD
Interpretive Memo to supply a clearer statement of EPA intent.  It is
also not clear that this portion of the EAB’s decision was grounded on
any controlling judicial decision.  This part of EAB decision in Deseret
does, however, support the commenters argument that this doctrine is not
appropriately applied to regulations that parrot the statutory language,
since EPA has the power to write the regulations in more explicit terms.
 Thus, upon reconsideration, EPA agrees that this element of the PSD
interpretive memorandum is not particularly persuasive.  However, we do
not consider the weakness in this part of the memorandum significant
enough to undermine the merits of the memorandum as a whole.  The
discussion of the dictionary meanings of the term regulation and the
context in which this term is used in the regulations is sufficiently
persuasive to justify continuing to apply that interpretation, even
without application of the ejusdem generis principle.

The Petitioners argument that the use of the term “otherwise” is
intended to convey a contrast rather than a similarity, even if
plausible, does not demonstrate that the reasoning of the PSD
Interpretive Memo is erroneous.  At most, Petitioners have presented an
alternative reading of this same language.  Petitioners have provided no
additional information to demonstrate that EPA in fact intended the
regulation to be interpreted in this manner when that regulation was
adopted in 2002.  The factual record does not reflect that EPA has ever
interpreted “otherwise” in the fourth part of this definition to
mean that the PSD BACT requirement applies to pollutants that were not
subject to a control requirement.

Comment:

One commenter (0086) presents detailed arguments that the regulatory
history of the PSD program can only be squared with the “actual
control” interpretation in which the commenter discusses the 1978
preamble to the PSD regulations, the Wegman and Cannon memoranda, the
MSW NSPS, the 2002 regulation defining “regulated NSR pollutant,”
the 2008 GHG ANPR, and longstanding EPA permitting practices.

Four industry and commerce commenters (0051, 0053, 0068, 0074) assert
that the primary regulation is the most plausible textual reading of
sections 165 and 169 which suggests that BACT limits are required for
pollutants subject to requirements that actually control or limit
emissions.  This commenter cites the 1978 preamble to PSD regulations,
the 1980 Regulatory Impact Analyses (RIA), the 2008 ANPR on whether and
how GHGs might be regulated under the CAA, and regulatory history,
policy and permitting practices to support their position.

Response:

	The EAB discussed this regulatory history cited by the commenters at
length in the Deseret decision.  The PSD Interpretive Memo described the
EAB’s opinion as thoughtful and well-reasoned and built on that
reasoning.  EPA continues to find the EAB decision thoughtful and
well-reasoned.  With regard to the significance of the regulatory
history cited by commenters, EPA adopts the reasoning of the EAB’s
Deseret decision.  With respect to the significant of the 1978 to
preamble to the PSD regulations, EPA is applying the reasoning of the
EAB’s Deseret decision and the additional analysis provided in the PSD
Interpretive Memorandum.

Comment:

The Petition for Reconsideration asserts that the PSD Interpretive memo
“attempts to revive a definition that the EAB found was not supported
by any prior EPA interpretation of the statute.”  Petition at Pages
9-10.

	Response:

	The EAB’s conclusion that EPA had not previously adopted the
particular interpretation does not itself preclude EPA from taking
subsequent action to do so.  The record for the PSD Interpretive
Memorandum supports the interpretation reflected there.

3.4.    Policy Considerations Raised by Actual Control Interpretation

3.4.1.   Orderly and Deliberative Decision Making Process

One (0109) states that each of the other proposed alternative
interpretations would short circuit what the CAA envisions as an orderly
process, starting with information gathering about emissions of a
pollutant, determinations regarding the effect of the pollutant on
public health and welfare, and if determined to be necessary, the
issuance of proposed control regulations, followed by final regulatory
controls on emissions of the pollutant.

Another commenter (0110) opines that the alternative interpretations (to
the “actual control” interpretation) contemplated by EPA in the
Reconsideration proposal would not allow for the agency to gather
emissions information on GHG air pollutants in an orderly way, nor
assess that information adequately to determine whether to impose
controlling regulations of those emissions under the CAA.

One commenter (0085) adds that the “actual control” interpretation
comports with the deliberate process of evaluation and eventual
regulation that is contemplated by the CAA.

Another commenter (0105) adds that this interpretation provides the
agency with much needed flexibility to review a pollutant’s effects
without triggering PSD, and also ensures the PSD is not triggered until
EPA has truly determined that a pollutant should be controlled by
regulation.

 Three commenters (0067, 0073, 0083) state that any of the alternatives
would be damaging to the efficient and orderly operation of the Act, and
an efficient and orderly transition to regulation of GHGs under the CAA
is essential for both regulated sources and permitting authorities.

Another commenter (0097) also agrees with the important policy concerns
stated in the proposed reconsideration (and in the original PSD
Interpretive Memo) that support application of PSD requirements only
after actual control requirements are in place under another part of the
Act.  According to this commenter, to deviate from the “actual control
interpretation” would actually create much more difficulty in
determining if it is appropriate to regulate other compounds.

One commenter (0070) notes that the “actual control interpretation”
is the only interpretation that provides EPA with a meaningful
opportunity to collect and analyze crucial data and information before
subjecting sources to PSD permitting requirements for newly identified
pollutants.

Industry commenter (0090) believes this is the correct interpretation
because it allows for EPA to gather emissions data on air pollutants
through monitoring and reporting.

A commenter (0104) representing a group of industry associations,
generally agrees with EPA’s approach and also supports the “actual
control” interpretation outlined in the PSD Interpretive Memo over the
four other possible interpretations outlined in the EPA proposal.  This
commenter concurs with EPA that this interpretation is the most
reasonable because it allows for a more practical development of
regulations and guidance concerning control of pollutants.

Ten industry commenters (0089 and others incorporating this submission
(0065, 0067, 0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) said that
the “actual control” interpretation safeguards the Administrator’s
authority to require such controls on individual pollutants under other
portions of the Act before triggering PSD requirements.  In other words,
EPA has and should retain flexibility “to address whether and how a
pollutant should be ‘subject to regulation’ based on the
promulgation of more general control requirements.”  See 74 FR 51541.

Some commenters (0095) who opposed the actual control interpretation
argued that this deliberate approach leads to “analysis paralysis”
and is subject to political manipulation.

Response:

EPA continues to prefer the actual control interpretation because it
ensures an orderly and manageable process for incorporating new
pollutants into the PSD program after an opportunity for public
participation in the decision making process.  EPA agrees with the
commenters who identified these considerations as important reasons that
EPA should continue applying the “actual control” interpretation.
As discussed persuasively in the PSD Interpretive Memo, under this
interpretation, EPA may first assess whether there is a justification
for controlling emissions of a particular pollutant under relevant
criteria in the Act before imposing controls on a pollutant under the
PSD program.  In addition, this interpretation permits the Agency to
provide notice to the public and an opportunity to comment when a new
pollutant is proposed to be regulated under one or more programs in the
Act.  It also promotes the orderly administration of the permitting
program by providing an opportunity for EPA to develop regulations to
manage the incorporation of a new pollutant into the PSD program, for
example, by promulgating a significant emissions rate (or de minimis
level) for the pollutant when it becomes regulated.  See 40 CFR
52.21(b)(23)  TA \l “40 CFR 52.21(b)(23)” \s “40 CFR
52.21(b)(23)” \c 6  .  Furthermore, this interpretation preserves the
Agency’s ability to gather data on pollutant emissions to inform their
judgment regarding the need to establish controls on emissions without
automatically triggering such controls.  This interpretation preserves
EPA’s authority to require control of particular pollutants through
emissions limitations or other restrictions under various provisions of
the Act, which would then trigger the requirements of the PSD program
for any pollutant addressed in such an action.

	While this analysis may sometimes take more time than some commenters
would prefer, a deliberative and orderly approach to regulation is in
the public interest and consistent with Congressional intent.  It would
be premature to impose the BACT requirement on a particular pollutant if
neither EPA nor Congress has made a considered judgment that a
particular pollutant is harmful to public health and welfare and merits
control.

3.4.2.   Public Participation Concerns

One commenter (0050) observed that the “actual control”
interpretation best implements the procedures and requirements for
regulating pollutants under the CAA and the public participation
requirements of the APA.  Section 202(a)(1) of the CAA provides that the
Administrator shall “by regulation” prescribe standards applicable
to motor vehicle emissions “which, in his judgment cause, or
contribute to, air pollution which may reasonably be anticipated to
endanger public health and welfare.”  This section reinforces the two
required findings —the finding of endangerment, and the finding that
the pollutant from the source “cause or contribute” to the pollution
that is the subject of the proposed regulation.  The “actual
control” approach is the only alternative considered that incorporates
both of these requirements.  Further, it is the only approach being
considered that provides for public participation under the APA on both
endangerment and cause or contribute.  Because PSD and Title V affect
all sectors of the economy, the commenter asserts that transparency and
public participation are extremely important elements of the regulatory
process.

Industry commenter (0090) believes this is the correct interpretation
because it provides the opportunity for public notice and comments
associated with a proposed new regulated pollutant.

Ten industry commenters (0089 and others incorporating this submission
(0065, 0067, 0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) said that
the “actual control” interpretation provides an opportunity for
public notice and comment when a new pollutant is proposed to be
regulated under other provisions of the CAA, which is very important to
allow the potentially regulated entities and other affected members of
the public to participate in the development of any emission control
regulations, including by submitting comments on the potential impacts
of the regulations and the timeframe necessary to allow compliance
before the regulations could take effect.

One industry commenter (0050) observed that if the EPA were to adopt any
interpretation other than “actual control,” it would completely
change the regulatory design for GHGs and likely cause severe economic
disruption.  Adoption of any of the other options would automatically
make PSD and Title V applicable to GHGs without public notice or
opportunity for public comment, and without agency analyses of the
economic or small business impacts.  The commenter states that such an
outcome would violate both the letter and spirit of the notice and
comment requirements of the Administrative Procedures Act (APA).

Response:

EPA agrees that one significant benefit of the actual control
interpretation is that it permits the Agency to provide notice to the
public and an opportunity to comment when a new pollutant is proposed to
be regulated under one or more programs in the Act.  This was one of the
important policy considerations that EPA cited in its justification for
the interpretation adopted in the PSD Interpretive Memo, and it remains
an important ground for EPA’s decision to continue following the
interpretation reflected in that memorandum.  EPA thus agrees that it
would not be good policy to allow automatic triggering of PSD permitting
requirements for additional pollutants without an opportunity for public
comment on EPA’s initial decision to regulate a pollutant.

3.4.3.   Development of Control Strategies

One commenter (0110) emphasizes that regulated entities need adequate
time to analyze and implement technologies and strategies to comply with
new requirements.  The requirement for entities seeking permits for new
construction of major stationary sources or for major modifications to
existing stationary sources to install BACT for regulated pollutants
imposes significant costs and burdens on those entities.  The commenter
states that EPA’s “actual control” interpretation is the most
reasonable option considered by EPA in the Reconsideration in terms of
allowing permitting authorities and regulated entities appropriate time
to implement appropriate controls.  The commenter also discusses the
need to allow permitting authorities time to rationally and adequately
develop emission control programs for regulated pollutants prior to
subjecting facilities to PSD requirements.

Another commenter (0107) argues that until actual control measures are
required, there is no requisite information about a pollutant for a
permit authority to issue a PSD permit or evaluate alternative pollution
controls that may represent BACT.  The proposed PSD Interpretation and
companion proposed PSD/Title V Tailoring rule both underscore the need
to provide the EPA, state permitting authorities, and industries with
the time necessary to develop controls and establish control strategies
for GHGs.  Before a pollutant has been subject to “actual controls,”
there would have been no examination of the technological feasibility
and capabilities that are appropriate to reduce such a pollutant.  This
information is critical before a source can be subject to BACT review.
Once a control requirement is effective, however, and an affected source
has time to evaluate compliance with the requirement, purchase or design
the control required, and install and test it, it would be reasonable to
require BACT for that pollutant.  As evidenced by EPA’s creation of
the GHG BACT Workgroup and other efforts, EPA has only begun to evaluate
potential available technologies for the control of GHGs from various
industries that emit GHGs, the cost of such technologies, and whether
the application of such technologies will have a positive impact on the
build-up of GHGs in the atmosphere.  Congress did not intend for EPA to
impose economic hardships on businesses and their customers if
regulations of a pollutant did not yield an environmental benefit.

Another commenter (077) agrees that the “actual control”
interpretation allows for sensible development of regulations and
guidance following an endangerment finding – control options can be
better evaluated and BACT can be explored in an orderly and efficient
manner.

Ten industry commenters (0089 and others incorporating this submission
(0065, 0067, 0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) said that
EPA has underscored that it needs time to gather information on
emissions of an air pollutant and to research and evaluate various
emission control options and technologies for that pollutant before any
PSD requirements for the pollutant are imposed.  This concern is
important not only for EPA and states, but also for the sources of
emissions of that pollutant that will have to comply with the PSD
requirements because the PSD program imposes potentially very costly and
burdensome requirements (including but not limited to BACT
requirements).  Thus, it is vital that any interpretation by EPA of the
phrase “subject to regulation” provide the Agency, states, and
affected sources with the time necessary to establish appropriate
compliance strategies and to prepare to satisfy compliance obligations.

  SEQ CHAPTER \h \r 1 One environmental group commenter (0095) states
that EPA’s desire to have “time to study and evaluate the emissions
characteristics and control options for new pollutants prior to making
emissions of those pollutants subject to PSD permitting requirements”
(74 FR 51541) flies in the face of both the language and purpose of the
BACT requirement.  The case-by-case BACT requirement does not
contemplate waiting years for EPA to conduct analyses and “develop”
control options.  See 74 FR at 51541.  Rather, BACT must be based on
control options that are available, and it applies “immediately to
each type of pollutant regulated for any purpose under any provision of
the Act.” Alabama Power v. Costle, 636 F.2d 323, 403 (D.C. Cir. 1979).
 And, permitting agencies are instructed to make this “case-by-case”
determination “taking into account energy, environmental, and economic
impacts and other costs” and thereby ensuring that the decision is
informed by the available solutions, their efficacy and costs.  See CAA
§169(3).

Response:

Once the Agency has made a determination that a pollutant should be
controlled using one or more of the regulatory tools provided in the CAA
and those controls take effect, a BACT analysis must then be completed
based on available information.  As one commenter (0095) points out, the
BACT process is designed to determine the most effective control
strategies achievable in each instance, considering energy,
environmental, and economic impacts.  Thus, EPA agrees that the onset of
the BACT requirement should not be delayed in order for technology or
control strategies to be developed.  Furthermore, EPA agrees with the
commenter that delaying the application of BACT to enable development of
guidance on control strategies is not necessarily consistent with the
BACT requirement.  The BACT provisions clearly contemplate that the
permitting authority will develop control strategies on a case-by-case
basis.  Thus, EPA is not in this final action relying on the need to
develop guidance or control strategies for BACT as a justification for
choosing to continue applying the actual control interpretation.
However, in the absence of guidance on control strategies from EPA and
other regulatory agencies, the BACT process may be more time and
resource intensive when applied to a new pollutant.  Under a mature PSD
permitting program, successive BACT analyses establish guidelines and
precedents for subsequent BACT determinations.  However, when a new
pollutant is regulated, the first permit applicants and permitting
authorities that are faced with determining BACT for a new pollutant
must invest more time and resources in making an assessment of BACT
under the statutory criteria.  Given the potentially large number of
sources that could be subject to the BACT requirement when EPA regulates
GHGs, the absence of guidance on BACT determinations for GHGs presents a
unique challenge for permit applicants and permitting authorities.  EPA
intends to partially address this challenge under the Tailoring Rule by
deferring the applicability of the PSD permitting program for various
categories of sources that would become major based solely on GHG
emissions.  EPA is also developing guidance on BACT for GHGs.

3.4.4.   Past Policy and Practice

Comment:

According to the commenter (0095), the Deseret decision rejects the idea
that “past policy and practice” is a sufficient justification for
EPA’s position, and in any event, such policy preferences cannot trump
the clearly expressed intent of Congress.  Engine Mfrs. Ass’n, 88 F.3d
1075, 1089 (D.C. Cir. 1996) (EPA cannot “avoid the Congressional
intent clearly expressed in the text simply by asserting that its
preferred approach would be better policy.”).

One industry commenter (0055) agrees with EPA’s current policy and
preferred interpretation that GHGs are not currently “regulated NSR
pollutants” that are “subject to regulation” under the CAA.  This
commenter (0055) states that EPA has historically and consistently
interpreted PSD regulations to apply to only those pollutants subject to
actual emission limitations or control measures, without previous
objection, is significant justification for the current proposal to
continue in that regard.

One industry commenter (0050) supports the “actual control”
interpretation because it best reflects EPA’s past policy and
practice.

Another of the industry commenters (0090) believes this is the correct
interpretation because it is consistent with past policy and practice.

 One industry group (0070) commenter expresses support for the “actual
control interpretation” for because it best reflects EPA’s past
policy.

Ten industry commenters (0089 and others incorporating this submission
(0065, 0067, 0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) states that
the “actual control” interpretation is also reasonable because it
“best reflects [EPA’s] past policy and practice, as applied
consistently over the years.”  See 74 FR 51541;  PSD Interpretive
Memorandum at 10-13.  The EPA is correct that it has never taken the
position that CO2 or other GHGs are “subject to regulation” under
the CAA.  The commenter cites EPA discussion at 74 FR 51540 & n.6
(discussing Memorandum from Jonathan Z. Cannon, EPA General Counsel, to
Carol M. Browner, EPA Administrator (Apr. 10, 1998)), and Deseret UARG
Amicus Br. at 24-27 (citing statements by EPA officials in testimony and
memoranda that the Agency had not decided to regulate CO2 emissions).
This history is fully consistent with the legislative history of the CAA
and its 1990 amendments, in which Congress clearly declined to take any
action that would have required EPA to establish or impose any emission
controls for CO2 under the CAA at that time.  (The commenter provided
several citations to the legislative history of the 1990 CAA
Amendments.)

	Response:

While the record continues to show that the actual control
interpretation is consistent with EPA’s historic practice under the
PSD program, EPA agrees that continuity with past practice alone does
not justify maintaining a position when there is good cause to change
it.  In this case, however, EPA has not found cause to change an
interpretation that is consistent with Congressional intent and
supported by the policy considerations described earlier.  Thus, EPA is
not retaining the actual control interpretation simply to maintain
continuity with historic practice.  The record reflects that EPA’s
past practice was grounded in a permissible interpretation of the law
and supported by rational policy considerations.  Public commenters have
not otherwise persuaded EPA to change its historic practice in this
area.

	A review of numerous federal PSD permits shows that EPA has been
applying the actual control interpretation in practice – issuing
permits that only contained emissions limitations for pollutants subject
to regulations requiring actual control of emissions under other
portions of the Act.  Furthermore, in 1998, well after promulgation of
the initial CO2 monitoring regulations in 1993, EPA’s General Counsel
concluded that CO2 would qualify as an “air pollutant” that EPA had
the authority to regulate under the CAA, but the General Counsel also
observed that “the Administrator has made no determination to date to
exercise that authority under the specific criteria provided under any
provision of the Act.”  Memorandum from Jonathan Z. Cannon, General
Counsel to Carol M. Browner, Administrator, entitled EPA’s Authority
to Regulate Pollutants Emitted by Electric Power Generation Sources
(April 10, 1998).

Comment:

  SEQ CHAPTER \h \r 1 An environmental group commenter (0095) claims
that EPA’s interpretation of “subject to regulation” does not
reflect EPA’s past policy and contradicts its own regulations.  The
commenter disagrees with EPA’s assertion that its preferred
interpretation of “subject to regulation” to mean “actual control
of emissions” is justified on the basis that it “best reflects our
past policy and practice”.  According to the commenter, EPA’s
interpretation repudiates the Agency’s most direct previous statement
interpreting “subject to regulation.”  In the preamble to the
Agency’s 1978 Federal Register rulemaking, 43 FR at 26388, 26397 (June
19, 1978), the Administrator established that “‘subject to
regulation under this Act’ means any pollutant regulated in Subchapter
C of Title 40 of the Code of Federal Regulations for any source type.”
 43 FR at 26397.  This interpretation is the sole instance of past
practice identified by the EAB as “possess[ing] the hallmarks of an
Agency interpretation that courts would find worthy of deference.”
Deseret at 39.  The commenter states that as the Board recognized, that
preamble offers no support for an interpretation applying “BACT only
to pollutants that are ‘subject to a statutory or regulatory provision
that requires actual control of emissions of that pollutant.”  Instead
(again, as expressly noted by the Board) it implies that “CO2 became
subject to regulation under the Act in 1993 when the Agency included
provisions relating to CO2 in Subchapter C.”  Id. at 42 n.43.  Under
the 1978 preamble definition, CO2 is “subject to regulation” for
BACT purposes because it is regulated under Subchapter C of Title 40 of
the CFR.  In its 1993 rulemaking to revise the PSD regulations, EPA did
not withdraw its 1978 interpretation of “subject to regulation.”
See Deseret at 42; see also Acid Rain Program: General Provisions and
Permits, Allowance System, Continuous Emissions Monitoring, Excess
Emissions and Administrative Appeals, 58 FR at 3590, 3701 (Jan. 11,
1993) (final rule implementing §821’s CO2 monitoring and reporting
regulations).  Nor has any subsequent rulemaking, including the 2002
rulemaking on which the PSD Interpretive Memo relies, disturbed the 1978
interpretation.  See Deseret at 46.  Thus, the only existing EPA
interpretation of the phrase “subject to regulation” in section
165(a)(4), 42 U.S.C. §7465(a)(4), affirms that BACT is required for CO2
emissions because it is regulated under the Act’s implementing
regulations.  In both the Memo and the Reconsideration, the Agency
suggests that the “actual control” interpretation is not
inconsistent with the 1978 preamble “because actual control could be
inferred by the specific list of regulated pollutants that followed
reference to 40 CFR.”  See 74 FR at 51540.  Deseret directly refutes
that claim:  “Nothing in the 1978 preamble . . . indicates that the
Agency intended to depart from the normal use of ‘includes’ as
introducing an illustrative, and nonexclusive, list of pollutants
subject to regulation under the Act.” Deseret at 40 (holding that
“we must reject” the “conten[tion] that only the pollutants
identified in the preamble by general category defined the scope of the
Administrator’s 1978 interpretation.) Under any plausible reading, the
1978 Federal Register preamble used “regulated in” to describe all
the regulations contained “in Subchapter C of Title 40 of the Code of
Federal Regulations.”  See Deseret at 41-42 & n.43 (noting that
“plain and more natural reading of the preamble’s interpretative
statement suggests a different unifying rule” than a rule that would
limit “regulation” to actual control of emissions).

Ten industry commenters ((0089 and others incorporating this submission
(0065, 0067, 0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) dispute the
argument that EPA’s interpretation of “subject to regulation” in
the 1978 PSD rulemaking is clear that any regulations found in 40 CFR
Subchapter C, including those implementing section 821 of Public Law
101-549, are thereby “subject to regulation.”  The EPA has properly
clarified that the 1978 statement does not support this interpretation
because that statement referred to specific categories of pollutants for
which emission controls existed as of that date, a clarification that is
consistent with the EAB’s decision in Deseret.  To adopt
petitioners’ view would irrationally elevate procedure – the mere
fortuity of future placement of a newly promulgated regulatory provision
in a particular part of a codification of a large body of rules – over
substance.

Response:

The 1978 Federal Register notice promulgating the initial PSD
regulations stated that pollutants “subject to regulation” in the
PSD program included “any pollutant regulated in Subchapter C of Title
40 of the Code of Federal Regulations.”  Commenters argue this
statement illustrates that EPA has in fact applied the PSD BACT
requirement to any pollutant subject to only a monitoring requirement
codified in this portion of the CFR.  However, this comment overlooked
the discussion in the PSD Interpretive Memo regarding the differing
meanings of the term “regulation” and “regulate.” The 1978
preamble did not amplify the meaning of the term “regulated in.”
Thus, commenters have not demonstrated that EPA had concluded in 1978
that monitoring requirements equaled “regulation” within the meaning
of sections 165(a)(4) and 169(3) of the CAA, nor have commenters
provided any examples of permits issued by EPA after 1978 that
demonstrate EPA’s interpretation was inconsistent with the practice
described in the PSD Interpretive Memo.

Commenters assume that this 1978 interpretative statement is the only
example of EPA’s past practice with respect to whether pollutants
covered by, but not controlled under, regulations in the CFR make the
PSD permitting requirements applicable to a pollutant. These commenters
have not provided any additional information to demonstrate that EPA (or
another other PSD permitting authority) has in fact acted in accordance
with the meaning that the commenters assign to the 1978 interpretation.
The record shows that EPA has not in practice given the 1978 statement
the meaning used by the commenter.

A review of numerous federal PSD permits shows that EPA has been
applying the actual control interpretation in practice – issuing
permits that only contained emissions limitations for pollutants subject
to regulations requiring actual control of emissions under other
portions of the Act.  If EPA had given the 1978 interpretation the
meaning the commenter uses, the Agency would have previously issued PSD
permits containing BACT emission limitations on CO2 and oxygen.
Commenters have provided no information that contradicts the following
analysis from the PSD Interpretive Memorandum:

As a matter of practice, EPA has not issued PSD permits containing
emissions limitations for pollutants that are only subject to monitoring
and reporting requirements.  PSD permits issued by the Agency (and
delegated states authorized to issue federal permits on EPA’s behalf)
have only contained emissions limitations for pollutants subject to
regulations requiring actual control of emissions.  EPA staff have
reviewed permits issued under this program and have not identified any
federal PSD permits that establish limitations on the emissions of
pollutants that were only subject to monitoring and reporting
requirements established under the Act at the time the permit issued.
Since 1993, EPA has had regulations in place requiring monitoring and
reporting of carbon dioxide emissions.  See Acid Rain Program: General
Provisions and Permits, Allowance System, Continuous Emissions
Monitoring, Excess Emissions and Administrative Appeals (final rule), 58
FR at 3590 (Jan. 11, 1993).  I am not aware of any PSD permits
containing emissions limitations for carbon dioxide issued by either the
Agency or its delegates since that time.  During at least part of this
time period, EPA made clear that it considered CO2 to be an air
pollutant under the Act.  See Memorandum from Jonathan Z. Cannon,
General Counsel to Carol M. Browner, Administrator, entitled EPA’s
Authority to Regulate Pollutants Emitted by Electric Power Generation
Sources (April 10, 1998) (“Cannon Memo”).  … The record of permits
compiled to support this memorandum is sufficient to demonstrate that
EPA has not in practice issued PSD permits establishing emissions
limitations for pollutants that are subject to only monitoring and
reporting requirements.

The argument that EPA’s failure to do so was wrong does not establish
that it has in fact been EPA’s position since 1978 that PSD permits
should cover pollutants subject to monitoring and reporting requirements
that are promulgated anywhere in Subchapter C of the Title 40 of the
CFR.

Furthermore, in 1998, well after promulgation of the initial CO2
monitoring regulations in 1993, EPA’s General Counsel concluded that
CO2 would qualify as an “air pollutant” that EPA had the authority
to regulate under the CAA, but the General Counsel also observed that
“the Administrator has made no determination to date to exercise that
authority under the specific criteria provided under any provision of
the Act.” Memorandum from Jonathan Z. Cannon, General Counsel to Carol
M. Browner, Administrator, entitled EPA’s Authority to Regulate
Pollutants Emitted by Electric Power Generation Sources (April 10,
1998).

	With respect to the EAB’s conclusion in the Deseret matter, the PSD
Interpretive Memo highlights portions of the EAB decision that describe
the ambiguity in the phrase “regulated in Subchapter C of Title 40 of
the Code of Federal Regulations” and the term “regulation.”  The
PSD Interpretive Memorandum references the “specific categories of
regulations identified in the second sentence” of the passage quoted
from the 1978 preamble only to illustrate that the PSD Interpretive
Memorandum is not inconsistent with that 1978 statement.  Consistent
with the statements in the PSD Interpretive Memo, EPA agrees with and
accepts the EAB’s reasoning that the enumerated categories of
pollutants do not establish a controlling limitation on the scope of
pollutants subject to regulation.  However, that reasoning still does
not establish an EPA’s historic position has been that monitoring or
reporting requirements make pollutants subject to regulation or
“regulated in” the CFR when the code contains only a requirement to
monitor and report, but not control, emissions of a pollutant.

	Comment:

According to one commenter (0095), to the extent EPA’s reference to
“past policy and practice” is referring to its previous failure to
impose the BACT requirement for pollutants only subject to monitoring
and reporting, that assertion is irrelevant and, moreover, its “actual
control of emissions” interpretation was first put forth by Region 8
in the Deseret permitting proceeding and, as the EAB found, was entirely
unsupported by past policy and practice. Deseret at 37-54.

 Commenter (0087) notes that the EAB in re Deseret Power Electric
Cooperative, PSD Appeal No. 07–03 (EAB Nov. 13, 2008)
(‘‘Deseret’’) found nothing in the administrative record
supporting EPA’s position that the agency’s historical
interpretation mandated EPA’s interpretation of the statutory term.

Response:

EPA’s reference to past practice was supported in the proposal by the
record of PSD permits that EPA compiled to support the PSD Interpretive
Memo.  EPA has not identified any permits that contain an emissions
limitation for a pollutant subject only to a monitoring and reporting
requirement, nor has any public commenter produced such a permit.
Commenters have not substantiated their conclusory assertion that
EPA’s previous failure to impose irrelevant consideration.  Extensive
evidence of EPA’s past practice is available in the permits issued
under the PSD program.  EPA does not rely upon arguments made in the
Deseret permit proceeding to support its conclusion that the actual
control interpretation is consistent with past practice.

In the Deseret matter, the EAB held “the Region’s rationale for not
imposing a CO2 BACT limit in the Permit -- that it lacked the authority
to do so because of an historical Agency interpretation of the phrase
“subject to regulation under this Act” as meaning “subject to a
statutory or regulatory provision that requires actual control of
emissions of that pollutant” -- is not supported by the administrative
record.”  This analysis pertained to the administrative record for the
particular permit at issue, and it did constitute a conclusion that no
such record could be found anywhere. The EAB decision did not prevent
EPA from developing a more thorough record to show the agency’s
traditional practice under the PSD program, as EPA did when it issued
the PSD Interpretive Memorandum.  Despite the weakness of the particular
administrative record for the Deseret permit, the EAB observed that
broad statements in the 1998 memorandum cited above by the Agency’s
then General Counsel suggested that the Agency has not, as a matter of
practice, treated CO2 as a “regulated” pollutant under any
provisions of the Act, including those establishing the PSD program.
Slip op. at 53-54.

Chapter 4.   Monitoring and Reporting Requirement

4.1.   Overview of Comments on Monitoring and Reporting Interpretation

Comment:

Twenty-nine industry and commerce commenters (0050, 0051, 0053, 0056,
0059, 0065, 0066, 0067, 0068, 0070, 0071, 0073, 0074, 0076, 0079, 0081,
0083, 0085, 0086, 0089, 0090, 0092, 0096, 0098, 0105, 0106/0107, 0108,
0109, 0118) and six state/local agency associations (0054, 0058, 0062,
0091, 0102, 0103) agree with EPA’s position that the “monitoring and
reporting interpretation” is not the proper interpretation of the
phrase “subject to regulation” for purposes of PSD.

	Ten of the industry commenters (0089 and others incorporating this
submission (0065, 0067, 0081, 0083, 0090, 0096, 0106/0107, 0108, 0109))
agree that the EPA should reject the “monitoring and reporting”
interpretation for all of the reasons stated in the PSD Interpretive
Memorandum and the proposed PSD Interpretation.

Three commenters (0087, 0095, 0101) representing several environmental
organizations support applying PSD to CO2 at the present time on the
basis of regulations that require monitoring of CO2.  These commenters
argue that the CAA requires this outcome.

Response:

EPA is not persuaded that the monitoring and reporting interpretation is
compelled by the CAA, and the Agency remains concerned that application
of this approach would lead to odd results and make the PSD program
difficult to administer.  EPA continues to find the reasoning of the PSD
Interpretive Memo persuasive.  EPA responds to more specific points
raised by these commenters elsewhere in this document.

4.2.   Statutory Interpretation

4.2.1.   Meaning of the Term Regulation

Comment:

The Petition for Reconsideration argues that CO2 is regulated under
Section 821 of the Clean Air Act Amendments of 1990.  According to the
Petition, Section 821 requires EPA to “promulgate regulations”
requiring major sources, including coal-fired power plants, to monitor
CO2 emissions and report their monitoring data to EPA.  42 U.S.C.
§7651(k) note; Pub. L. 101-549; 104 Stat. 2699 (emphasis added).  In
1993, EPA promulgated these regulations, which require sources to
monitor CO2 emissions, 40 CFR 75.1(b), 75.10(a)(3), prepare and maintain
monitoring plans, id. §75.33, maintain records, id. §75.57, and report
monitoring data to EPA, id. §75.60-64. The regulations prohibit
operation in violation of these requirements and provide that a
violation of any Part 75 requirement is a violation of the Act. Id.
§75.5. Not only do the regulations require that polluting facilities
“measure . . . CO2 emissions for each affected unit,” id.
§75.10(a), they also prohibit operation of such units “so as to
discharge or allow to be discharged, emissions of . . . CO2 to the
atmosphere without accounting for all such emissions . . . . “ Id.
§75.5(d).

One environmental commenter (0101) notes that EPA has issued monitoring
and reporting regulations for CO2 in 40 CFR 75, promulgated pursuant to
section 821 of the CAA.  See 42 U.S.C. §7651(k) note; Pub. L. 101-549;
104 Stat. 2699 (1990).  Under the definitions advanced in the PSD
Interpretive Memo, these monitoring and reporting rules are
“regulation”: they are contained in a legal code, have the force of
law, and bring the subject matter under the control of law and the EPA.
EPA itself has characterized these monitoring and reporting requirements
as “regulations.”  Id.

	The state/local agency association (0062) notes that EPA has broad
authority under sections 114 and 208 of the CAA to require monitoring of
emissions, by regulation or otherwise, and has historically done so well
in advance of any decision to limit emissions of any pollutant.  The
commenter opines that such monitoring requirements do not regulate
emissions of pollutants; instead, they govern other conduct by the
operator in a way that does not constrain emissions, just as the
obligation to identify a contact person at a facility may be required of
a Title V source, but does not constitute an emissions limitation.

	Two industry commenters (0051, 0053) opine that the text of the CAA
refutes a “monitoring and reporting” interpretation.  This commenter
asserts that, contrary to the view of some (who believe that regulations
requiring monitoring and reporting of CO2, promulgated pursuant to
section 821 of the CAA, cause CO2 to be “subject to regulation”
under the PSD program), because section 821 of the CAA does not call for
controls of emissions, it does not subject CO2 or other GHGs to
regulation for purposes of the PSD program.

Response:

Each of these commenters focuses on only one of the two potential
meanings of the term “regulation” described elsewhere in this
document.  The commenter that favors the “monitoring and reporting”
interpretation appears to focus only on the dictionary meanings that
describe a rule contained in a legal code.  The commenter has not
demonstrated that it is impermissible for EPA to construe the CAA on the
basis of another common meaning of the term “regulation.”  In the
context of construing the Act, the EAB observed in the Deseret case that
a plain meaning could not be ascertained from looking solely at the word
“regulation.”  The Board reached this conclusion after considering
the dictionary definitions of the term “regulation” cited above.
Deseret slip op. at 28-29.  EPA continues to find the reasoning of the
EAB and the PSD Interpretive Memo to be persuasive.  The EAB found “no
evidence of Congressional intent to compel EPA to apply BACT to
pollutants that are subject only monitoring and reporting
requirements.”  See Deseret at 63.

4.2.2.   Effect of Section 821 of the Clean Air Act

Comment:

The Petition for Reconsideration contends that monitoring and reporting
requirements

clearly constitute regulation.  Against the backdrop of Section 165’s
use of “regulation,”

Congress explicitly used that exact same word in Section 821 to refer
solely to

monitoring and reporting requirements.

Ten commenters (0089 and others incorporating this submission (0065,
0067, 0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) add that this
interpretation should be rejected specifically with regard to CO2
because the legislative histories of the CAA and of Public Law 101-549,
which enacted, among other things, amendments to the CAA, clearly
demonstrate that Congress did not intend monitoring and reporting
requirements for CO2 to have any consequences in terms of triggering
emission control requirements under any part of the CAA.  According to
these commenter, the legislative history of Public Law 101-549 shows
that Congress simply intended the CO2 monitoring and reporting
provisions to allow EPA to gather scientific evidence of U.S.
contributions to GHGs, to establish a baseline to allow utilities to
seek credit for emission reductions in any possible future regulatory
program, and to inform the United States’ position in international
negotiations.  The commenters assert that the legislative history
demonstrates that Congress did not intend those provisions to have any
further regulatory impact.  (See, e.g., 103rd Cong., 1st Sess., S. Print
103-38, Legis. Hist. at 2612, 2652, 2987.  Members of Congress expressly
referred to section 821 as a “simple data collection” provision that
was not intended to “force any reductions” of CO2 emissions.  Legis.
Hist. at 2651-52, 2653, 2985; see also UARG Amicus Brief at 12-15.).
Congress clearly declined to take any action that would have required
EPA to establish or impose any emission controls for CO2 under the CAA
at that time.

One industry commenter (0107) said that section 821 does not make CO2
subject to permitting. According to this commenter, it is hard to
believe that such monitoring, in a provision titled “Information
Gathering on Greenhouse Gases Contribution to Global Climate Change,”
was added to the Act for the purpose of regulating GHGs under PSD.  In
fact, Congress rejected attempts by senators to require control of GHGs
as part of the 1990 CAA Amendments.  As EPA discussed, the collection of
data about a pollutant is necessary before EPA can make decisions about
“regulating” that pollutant under any CAA program that requires
controls.  This means that Congress did not intend BACT for CO2 to apply
before collection of monitoring information for CO2 or other GHGs took
place.  Given that Congress rejected control requirements for GHGs in
1990 on the basis that not much was then known about climate change, it
would be unreasonable to conclude that Congress intended such sources
including multi-unit apartment buildings, shopping malls, and hospitals
to obtain PSD and/or Title V permits.

One of the commenters (0086) presented detailed arguments that the
monitoring and reporting interpretation cannot be squared with the
legislative or regulatory history .

Response:

EPA agrees with the analysis of the EAB (summarized below) that section
821 of the CAA does not compel EPA to apply the monitoring and reporting
interpretation.  The use of similar, but not identical, language in
section 821 of the 1990 Public Law, which requires the Agency to
promulgate “regulations,” does not constrain the Agency’s ability
to interpret sections 165 and 169 to exclude monitoring and reporting
requirements.

The argument that sections 165 and 169 have only one proper
interpretation based on section 821, ignores the fact that Section 821
uses different terminology, “regulations,” from that used in the PSD
provisions of sections 165 and 169, “subject to regulation.” The
difference in terminology is potentially significant.  When read in the
context of the phrases in which they are used, possible alternative
meanings of “regulation” and “regulations” become apparent.  In
the phrase “the Administrator * * * shall promulgate regulations * * *
to require [sources to monitor CO[2]]” in section 821, the term
“regulations” is understood to be the end product of the
administrative rule making process.  Thus, Congress’ direction that
EPA promulgate “regulations” found at various places in the CAA and
in section 821 is most naturally read to mean that Congress directed EPA
to use its legislative rule making authority to implement the statutory
requirements, filling in necessary specificity and detail.  Section 112
of the Act uses the term “subject to regulations,” referring to
“regulations” in the plural. CAA sections 112(r)(3) and
112(r)(7)(F).  This evidences that Congress may not have meant
“subject to regulation” (singular) to have the same meaning.

The Supreme Court has observed in other contexts that the same or
similar words may be construed differently “not only when they occur
in different statutes, but when used more than once in the same statute
or even in the same section.” Envtl. Def. v. Duke Energy Corp., 549
U.S. 561, slip op. at 9 (2007) (quoting Atl. Cleaners & Dyers, Inc. v.
United States, 286 U.S. 427, 433 (1932)).  In reviewing the meaning of
the phrase “subject to regulation under this Act” we do not confine
ourselves “to examining a particular statutory provision in
isolation.”  FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120,
132 (2000).  Rather, “[t]he meaning -- or ambiguity -- of certain
words or phrases may only become evident when placed in context * * *.
It is a ‘fundamental canon of statutory construction that the words of
a statute must be read in their context and with a view to their place
in the overall statutory scheme.’”  Id. at 132-33.

We find no evidence that Congress’s addition of section 821 in 1990
was an attempt to interpret or constrain the Agency’s interpretation
of the broader phrase “subject to regulation” as used in sections
165 and 169.  See 136 Cong. Rec. H2915, 2934 (1990) (statement of Rep.
Moorhead), reprinted in S. Comm. on Env’t and Public Works,
Legislative History of Clean Air Act Amendments of 1990, at 2986-87
(1993); 136 Cong. Rec. H2511, 2578 (1990) (statement of Rep. Cooper),
reprinted in S. Comm. on Env’t and Public Works, Legislative History
of Clean Air Act Amendments of 1990, at 2652-53 (1993); 136 Cong. Rec.
H2511, 2561-62 (1990) (statement of Rep. Moorhead), reprinted in S.
Comm. on Env’t and Public Works, Legislative History of Clean Air Act
Amendments of 1990, at 2612-14 (1993).  Section 821 bears no facial
relationship to the PSD provisions of sections 165 and 169. Congress’s
subsequent use of the word “regulations” in a section of the 1990
Public Law that bears no explicit relationship with the earlier-enacted
sections would not appear sufficient, on its own, to implicitly
constrain EPA’s authority to interpret the PSD provisions of section
165 and 169. This is particularly true where, as here, the two sections
were enacted 13 years apart, bear no obvious relationship, and are not
even placed in close proximity. Moreover, the Agency did determine, in
1978 that the phrase “subject to regulation under this Act” used in
the PSD provisions requires interpretation to properly implement the PSD
program, and Congress did not evidence an intent in section 821 to alter
the Agency’s determination.  Normally, more express terminology would
be expected if Congress intended to alter an established meaning.

Since section 821 was enacted 13 years after sections 165 and 169,
Congress’ use of the term “regulations” in enacting section 821 in
1990 ordinarily would not be looked to as informative of what Congress
intended when much earlier in 1977 it enacted the BACT requirement. See
Int’l Bhd. of Teamsters v. Daniel, 439 U.S. 551, 571 (1979) (Burger,
C.J., concurring) (understanding of draftsman of amendment in 1970
“would have little, if any, bearing” on “construction of
definitions enacted in 1933 and 1934”); United States v. Price, 361
U.S. 304,332 (1960) (“The views of a subsequent Congress form a
hazardous basis for inferring the intent of an earlier one.”)

4.2.3.   Effect of 2008 Consolidated Appropriations Act and Mandatory
Greenhouse Gas Reporting Rule

Comment:

The Petition for Reconsideration also suggests that GHGs are regulated
because Congress has specifically required monitoring of all GHGs,
including CO2, economy-wide, in the 2008 Consolidated Appropriations
Act. H.R. 2764; Public Law 110-161, at 285 (enacted Dec. 26, 2007). As a
result, CO2 monitoring and reporting is required under the Act separate
and apart from Section 821.  According to Petitioner, the PSD
Interpretive Memo, attempts to evade the consequences of the
Appropriations Act requirement by, among other things, opining that a
pollutant is not “subject to regulation” when Congress specifically
tells EPA to regulate it, but only when EPA actually adopts regulations.

The commenter (0107) believes for the same reasons as describe above for
section 821 of the 1990 Clean Air Act Amendments that it would be
unreasonable to conclude that Congress intended EPA to regulate GHGs
under PSD or other provisions of the Act for establishing standards when
it charged EPA in the 2008 Omnibus Budget Amendment to require GHG
monitoring and reporting from the largest sources of GHG by 2010.  This
statute states that it intended EPA to use the information collection
authority in the CAA, not any of the Act’s substantive regulatory
authorities for setting emission standards, to collect and analyze GHG
emissions data from the largest sources.

	Eight industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107,
0108, 0109) note that, while they are  not aware that environmental
advocacy groups or others have expressly argued that EPA’s
promulgation of the Mandatory Reporting of Greenhouse Gases Final Rule
(“GHG Reporting Rule”), 74 FR 56260 (Oct. 30, 2009) makes GHGs
subject to the PSD program, they have argued that the statute that
authorized promulgation of that rule, the Fiscal Year 2008 Consolidated
Appropriations Act, Pub. L. No. 110-161 (“Appropriations Act”),
triggered PSD for GHGs.  The commenters assert that that argument, and
any related argument that the GHG Reporting Rule triggered PSD
requirements, should be rejected for the same reasons the PSD
Interpretive Memorandum rejected – and the proposed PSD Interpretation
would continue to reject – the monitoring and reporting interpretation
discussed above.

	The industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108,
0109) also argue that any such argument is meritless for an additional
reason: the Appropriations Act is not the CAA, and the GHG Reporting
Rule was not promulgated under the CAA.  Thus, even if the GHG Reporting
Rule did constitute “regulation,” it still could not be considered
regulation “under the Act.”

Response:

	Similar to section 821 of the CAA, the 2008 Omnibus Budget Amendment
contains a directive that EPA promulgate regulations that establish
monitoring and reporting requirements for GHGs.  As with section 821 and
the regulations promulgated to satisfy this law (Part 75), EPA does
interpret the 2008 Omnibus Budget Amendment or the EPA regulation
promulgated to implement this law to be sufficient to make GHGs subject
to regulation for the purposes of CAA sections 165(a)(4) and 169(3).
EPA’s reasoning for this conclusion is the same as for section 821,
because the 2008 enactment does not require any controls on emissions.
Furthermore, since EPA has now promulgated GHG reporting regulations to
address its responsibilities under the 2008 law, the Petitioners
criticism of EPA’s conclusion that a pollutant becomes subject to
regulation upon EPA promulgation of rules mandated by Congress is no
longer material.  In this Reporting Rule (which became effective in
December 2009 and required monitoring to begin in January of this year),
EPA established monitoring and reporting requirements for CO2 and other
GHGs under CAA sections 114 and 208.  Thus, there can be no dispute that
monitoring and reporting of CO2 (as well as other GHGs) is now occurring
under the CAA, regardless of the status of the 2008 Omnibus Budget
Amendment.

4.2.4.   Effects Threshold for PSD Permitting

Comment:

One environmental group   SEQ CHAPTER \h \r 1 commenter (0095) claims
that EPA ignores the Congressionally-established purpose of PSD to
protect public health and welfare from actual and potential adverse
effects.  Specifically, this commenter states that to limit BACT (as
described in the PSD Interpretive Memo and favored by EPA in the
reconsideration) ignores the broad, protective purpose of the PSD
program as explicitly stated by Congress (the purpose of the PSD program
is to “protect public health and welfare from any actual or potential
adverse effect which in the Administrator’s judgment may reasonably be
anticipate[d] to occur from air pollution notwithstanding attainment and
maintenance of all national ambient air quality standards.” 42 U.S.C.
§7470(1) (emphasis added).  In contrast, Congress required EPA to make
an endangerment finding before establishing generally applicable
standards such as the NSPS or motor vehicle emissions standards.  Each
of these programs expressly require EPA to find that emissions of a
pollutant “cause or contribute to air pollution which may reasonably
be anticipated to endanger public health or welfare” as a prerequisite
to regulation.  Id. §7408(a)(1)(A); id. §7521(a)(1); see also id.
§7411(b)(1).  This commenter opines that the policy arguments cited in
the reconsideration are not consistent with the statutory purpose of
PSD.  It is the emphasis on “potential adverse effect[s]” that
distinguishes PSD from the national ambient air NAAQS and NSPS programs
that EPA looks to bolster its “actual control” position.  As new
pollutants are identified, BACT’s case-by-case approach provides the
dynamic flexibility necessary to implement an emission limitation
appropriate to each particular source and pollutant. PSD’s
Congressionally-enacted power to address potential adverse effects is
dramatically hindered by EPA’s suggestion that endangerment
determinations and actual control limits must be first established.  The
PSD Interpretive Memo’s focus on endangerment – see, e.g., Memo at
18 – and EPA’s consistent position in the reconsideration improperly
limit the scope of the PSD program and the BACT requirement.  The
commenter asserts that the “actual control” view ignores the broader
purpose of the PSD program by limiting the scope of the PSD program and
the BACT requirement.  According to the commenter, the congressional
directive that BACT be no less stringent than those other control
requirements is a further indication that BACT is meant to be more
protective and apply more broadly.  Further, commenter states that the
PSD Interpretive Memo and EPA’s reconsideration demonstrates a
fundamental misperception of the role of the PSD program and its BACT
requirement within the CAA.

Ten industry commenters (0089 and others incorporating this submission
(0065, 0067, 0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) argue that
the Petitioners incorrectly assert that the CAA provides a “lower
threshold” for regulation under the PSD program than it does under the
Act’s NAAQS and NSPS provisions.  To the contrary, the criteria for
regulation under the NAAQS and NSPS provisions are, in effect, imported
by reference into EPA’s definition of “regulated NSR pollutant.”
Moreover, evidence does not exist that Congress intended to create –
or that EPA established by regulation – a subset of potential
regulated NSR pollutants for which similar regulatory preconditions
would not have to be met before they could become subject to PSD
requirements.  In fact, in the preamble to its proposed Tailoring Rule,
EPA appropriately cited legislative history supporting the view that
Congress designed the PSD program to address conventional criteria
pollutants and to promote and safeguard attainment of the NAAQS.  See 74
FR 55308/2-55309/3.

Response:

EPA does not agree that the terms of section 160 compel EPA to read
sections 165(a)(4) and 169(3) to apply to a pollutant before the Agency
has established control requirements for the pollutant.  Section 160(1)
describes PSD’s purpose to “protect public health and welfare from
any actual or potential adverse effect which in the Administrator’s
judgment may reasonably be anticipated to occur from air pollution.”
Thus, this goal contemplates an exercise of judgment by EPA to determine
that an actual or potential adverse effect may reasonably be anticipated
from air pollution.  In that sense, this goal is consistent with NAAQS
and NSPS programs, which contemplate that regulation of a pollutant will
not occur until a considered judgment by EPA that a substance or source
category merits control or restriction.  The commenter has not
persuasively established that the “potential adverse effect”
language in section 160(1) makes this provision markedly different than
the language used in sections 108(a)(1)(A) and 111(b)(1)(A).  All three
sections use the phrase “may reasonably be anticipated” Furthermore,
section 160 contains general goals and purposes and does not contain
explicit regulatory requirements.  The controlling language in the PSD
provisions is the “subject to regulation” language in sections
165(a)(4) and 169(3).  As discussed earlier, the “actual control”
interpretation is based on a common and accepted meaning of the term
“regulation.”  To the extent the goals and purpose in section 160
are instructive as to the meaning of other provisions in Part C of the
Act, section 160(1) is just one of several purposes of the PSD program
that Congress specified.  The Act also instructs EPA to ensure that
economic growth occurs consistent with the preservation of existing
clean air resources.  CAA §160(3).  EPA’s interpretation is
consistent with this goal because it allows EPA to look at the larger
picture by coordinating control of an air pollutant under the PSD
program with control under other CAA provisions.

EPA finds the logic of the PSD Interpretive Memo more persuasive.  The
Memo considers the full context of the CAA, including the health and
welfare criteria that generally must be satisfied to establish control
requirements under other parts of the Act, information gathering
provisions that contemplate data collection and study before pollutants
are controlled, and requirements for reasoned decision making.  While
some commenters presented arguments for why it might be possible or
beneficial to apply the BACT requirement before a control requirement is
established for a pollutant elsewhere under the Act, these arguments do
not demonstrate that the contextual reading of the CAA described in the
PSD Interpretive Memo is erroneous.  Thus, the comments have at most
provided another permissible reading of the Act, but they do not
demonstrate that EPA must require BACT limitations for pollutants that
are not yet controlled but only subject to data collection and study.

4.3.   Policy Considerations Raised by Monitoring and Reporting
Interpretation

Comment:

One commenter (0062) agrees with the policy arguments advanced by EPA
and others that EPA’s critical information gathering activities will
be constrained, with likely adverse environmental and public health
consequences, if monitoring requirements are necessarily associated with
the potentially significant implementation and compliance costs and
resource constraints of the PSD and Title V programs.

Another commenter (0102) expresses concern that without the ability to
gather data or investigate unregulated pollutants, for fear of
triggering automatic regulation under the CAA, EPA will not have the
flexibility to review the validity of controlling additional or fewer
GHGs.

	A state agency commenter (0102) also expresses concern that a
permitting program triggered by a monitoring and reporting requirement
with no established federal emission standard would be subject to
continuous legal challenges based on the concept of the program and the
restrictions of individual permits.  The commenter (0102) believes that
such a program could not be effectively administered.

Commenters (0092, 0067, 0081, 0083, 0089, 0096, 0090, 0106/0107, 0108,
0109) representing several companies (industry), state that an
interpretation of “subject to regulation,” that would be applied to
pollutants based on monitoring and reporting requirements would
effectively eliminate the ability of EPA to conduct investigative
monitoring, necessary if the EPA wishes to develop informed,
appropriate, and legally defensible regulations for controlling
emissions, and could prevent EPA from monitoring unregulated surrogate
emissions, which are monitored to demonstrate compliance with emission
standards of associated regulated pollutants.

	Ten industry commenters (0089 and others incorporating this submission
(0065, 0067, 0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) state that
subjecting a pollutant to the PSD program because of a requirement to
gather information on emissions would reverse the logical order of CAA
regulation, requiring sources to control a pollutant through BACT even
before Congress or EPA could determine whether that pollutant should be
subject to emission controls at all.  The commenters stress that
Congress established the PSD program for the purpose of preventing
emissions of pollutants that are already subject to CAA regulation from
degrading air quality that meets the NAAQS.  The commenters indicate
that EPA has consistently rejected the “monitoring and reporting”
interpretation, and cite as an example a memorandum issued
contemporaneously with its 1993 section 821 regulations (the Wegman
memorandum).  The commenters also agree with EPA that adopting the
“monitoring and reporting” interpretation would hamper EPA’s
consideration of whether to adopt emission control regulations for any
additional pollutant in the future if a requirement merely to measure
and report emissions of that pollutant subjected those emissions to PSD
requirements.

Ten industry commenters (0089 and others incorporating this submission
(0065, 0067, 0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) seek to
rebut Petitioners argument that EPA has failed to demonstrate that there
is anything “unworkable” about requiring PSD to be met for
pollutants that are subject only to monitoring and reporting
requirements.  The EPA has demonstrated that this would pose serious
problems of administrability, e.g., by hampering the gathering of
information to allow factually grounded determinations of whether and
how emission control requirements should be developed and imposed.

One industry commenter (0085) agrees with EPA that monitoring and
reporting are normal preceding steps to actual regulation under the CAA.
 The commenter (0085) adds that if EPA were to adopt the interpretation
that gathering information triggered PSD, the Agency would clearly be
reluctant to even begin the information gathering process for a
pollutant.

One of the commenters (0086) agrees with EPA’s rationale for this
conclusion and that the monitoring and reporting interpretation would
create perverse incentives.

	One industry commenter (0050) states that the CAA allows EPA to
promulgate requirements for monitoring and reporting emissions of
pollutants prior to a finding of endangerment, and that the Greenhouse
Gas Reporting Rule was recently finalized by the EPA.  This commenter
opines that the application of PSD/Title V upon implementation of
monitoring and reporting requirements would stifle the collection of
data necessary to make informed decisions.  In addition, applying
PSD/Title V would render the statutorily-required endangerment finding
unnecessary.  This commenter also believes that adoption of the
“monitoring and reporting requirement” option would deter EPA from
further studying the possible impacts of a substance on public health
and welfare, thereby preventing the agency from much needed information
on addressing possible health or welfare effects.

One industry commenter (0059) submits that it would be unreasonable to
conclude that requiring monitoring of GHG emissions on January 1, 2010
or reporting of GHGs on March 31, 2011 under the Mandatory GHG Reporting
Rule, subjects GHGs to the PSD program.  They assert that collection of
such information is intended to help the EPA determine which industry
sources should be regulated and how, and to construe that collection as
subjecting GHGs to regulation under PSD did not make sense.

	This industry commenter (0050) states that the “monitoring and
reporting requirement” option was not acceptable from the standpoint
of the regulated community because they believed it would subject all
sectors of the economy burdensome PSD and Title V requirements for
substances that may not cause problems for public health or welfare and
thus should not be subject to regulation.

One industry commenter (0097) argues that if an interpretation that a
monitoring requirement triggered control standards, every request for
data or monitoring requirement, excepting a program which is established
to demonstrate compliance with an existing regulation, would be expected
to be challenged in court because of the potential outcome that such
actions would constitute a control requirement and set in motion a
further chain of regulatory action.  On this point, the commenter argues
that if, as now seems the case, regulation of environmental matters
occurs via the judicial system, the analyses and demonstration of need
through the use of scientific information and policy decisions will be
lost.  Further, the commenter claims this could include information
collection requests (ICR) under section 114 of the CAA.  The potential
for this to occur is a circumstance that must be recognized and
considered.

One industry group (0071) commenter opines that industry would be much
more resistant to proposed monitoring requirements and EPA would be less
likely to impose monitoring requirements if they would trigger PSD BACT
requirements.

Response:

The monitoring and reporting interpretation would make the substantive
requirements of the PSD program applicable to particular pollutants
based solely on monitoring and reporting requirements (contained in
regulations established under section 114 or other authority in the
Act).  This approach would lead to the perverse result of requiring
emissions limitations under the PSD program while the Agency is still
gathering the information necessary to conduct research or evaluate
whether to establish controls on the pollutant under other parts of the
Act.  Such a result would frustrate the Agency’s ability to gather
information using section 114 and other authority and make informed and
reasoned judgments about the need to establish controls or limitations
for particular pollutants.  If EPA interpreted the requirement to
establish emissions limitations based on BACT to apply solely on the
basis of a regulation that requires collecting and reporting emissions
data, the mere act of gathering information would essentially dictate
the result of the decision that the information is being gathered to
inform (whether or not to require control of a pollutant).

We agree that a monitoring and reporting interpretation would hamper the
Agency’s ability to conduct monitoring or reporting for investigative
purposes to inform future rulemakings involving actual emissions control
or limits.  In addition, it is not always possible to predict when a new
pollutant will emerge as a candidate for regulation.  In such cases, the
Memo’s reasoning is correct in that we would be unable to promulgate
any monitoring or reporting rule for such a pollutant without triggering
PSD under this interpretation.

Comment:

  SEQ CHAPTER \h \r 1 According to an environmental organization
commenter (0095), requiring BACT for pollutants subject to monitoring
and reporting regulations does not impair EPA’s ability to gather
information about pollutants.  The EPA can gather such information
without triggering BACT because neither section 114 nor the general
regulations governing agency information collection efforts require EPA
to promulgate regulations in order to collect information.  See, e.g., 5
CFR 1320.5(c),1320.8(d) (indicating that information may be collected
with or without a formal

rulemaking).

Response:

	EPA understands that the monitoring and reporting interpretation would
not result in application of the PSD BACT requirement when EPA exercises
its section 114 authority to collect information without promulgating a
regulation.  However, EPA’s ability to gather information by
rulemaking would still be hampered by the application of the monitoring
and reporting interpretation.  EPA wishes to preserve all its potential
information gathering tools, even those that may be used less
frequently.

Comment:

This commenter (0095) further asserts that as a practical matter, EPA
has still not identified even one pollutant other than GHGs that would
become “subject to regulation” as a result of monitoring or
reporting requirements.  In the reconsideration, EPA attempts to provide
a single example, claiming that certain stationary sources “must”
monitor oxygen gas (O2) or CO2 – at 74 FR 51542 – citing 40 CFR
60.49Da(b) and (c).  According to the commenter, EPA is simply wrong:
one of these subsections (40 CFR 60.49Da(c)) deals solely with NOx
monitoring, and says nothing about O2, and the other permits -- but does
not require -- such monitoring. 40 CFR 60.49Da(b)(4) provides that:

If the owner or operator has installed and certified a SO2 continuous
emissions monitoring system (CEMS) according to the requirements of
Sec.75.20(c)(1) of this chapter and appendix A to part 75 of this
chapter, and is continuing to meet the ongoing quality assurance
requirements of Sec. 75.21 of this chapter and appendix B to part 75 of
this chapter, that CEMS may be used to meet the requirements of this
section, provided that:  (i) A CO2 or O2 continuous monitoring system is
installed.

One of the state agency commenters (0102) responds to the Petitioners
contention that EPA has not identified a pollutant other than CO2 that
would be affected by the monitoring and reporting interpretation by
noting that EPA’s endangerment finding covers six GHGs, not just CO2.

Further, commenter (0071) says that EPA has, in the past, imposed
monitoring and/or reporting requirements for chemicals that EPA does not
intend to regulate, nor is likely to want to do so in the future.  For
example, monitoring O2 in the stack of a boiler, which EPA provides at
74 FR at 51542, is a very real example that demonstrates that monitoring
and reporting requirements alone cannot reasonably be interpreted to
trigger PSD and BACT requirements.

A state agency commenter (0091), citing the example described by EPA of
the NSPS subpart Da requirement to “measure” O2 or CO2, states that
since EPA is not considering the measuring of O2 as “subject to
regulation,” it should therefore not interpret CO2 to be regulated in
this manner.  The commenter also states that this interpretation would
not preserve the EPA’s ability to collect emissions data on other
pollutants for research or other purposes such as evaluating the need
for emissions controls or limitations.

One industry group commenter (0070) argues that adopting a “monitoring
and reporting interpretation” could prevent EPA from monitoring
unregulated surrogate emissions, which are monitored to demonstrate
compliance with emission standards of associated regulated pollutants.
Under such a scenario, the mere monitoring of environmentally-benign
surrogate emissions could require pointless control of their emissions.

Commenter (0097) states that if compounds such as oxygen are measured or
monitored to allow quantification of emissions, that gas would also be
“regulated” under this policy, which the commenter does not believe
is the desire of EPA or in the best interest of the Country.

Response:

EPA’s GHG Reporting Rule covers six GHGs, not just CO2.  Further, EPA
has promulgated regulations that require monitoring of oxygen (O2) in
the stack of a boiler under certain circumstances.  See 40 CFR
60.49Da(d).  In the proposal, EPA mistakenly cited 60.49Da(c) of this
regulation.  As the commenter points out, this provision does not
address O2 monitoring.  However, section 60.49Da(d) says that “[t]he
owner or operator of an affected facility not complying with an output
based limit shall install, calibrate, maintain, and operate a CEMS, and
record the output of the system, for measuring the O2 or carbon dioxide
(CO2) content of the flue gases at each location where SO2 or NOx
emissions are monitored.”  These examples help demonstrate why
monitoring and reporting requirements alone should not be interpreted to
trigger PSD and BACT requirements.  Even if EPA only establishes
monitoring and reporting requirements for only a small number of
pollutants, this does not alter the undesirable outcome of the PSD
program requiring emissions limitations on the basis of regulations
designed for information gathering.

4.4.   Monitoring Equipment Captures and Controls Emissions

Comment:

Even if EPA’s “preferred” interpretation of “actual control of
emissions” is applied to its monitoring and reporting regulations, the
commenter (0101) states that the processes that must be utilized to
monitor and report on CO2 emissions require actual and physical
“control” of them, as the amount of emissions cannot be determined
unless the gases are first in some way captured and controlled.

Commenter (0095).  The Part 75 regulations prohibit operation in
violation of these requirements and provide that a violation of any Part
75 requirement is a violation of the Act. Id. §75.5.  Not only do the
regulations require that polluting facilities “measure . . . CO2
emissions for each affected unit,” id. §75.10(a), they also prohibit
operation of such units “so as to discharge or allow to be discharged,
emissions of . . . CO2 to the atmosphere without accounting for all such
emissions . . . . “ Id. §75.5(d).  According to the commenter (0095),
in arguing that these regulations do not make CO2 “subject to
regulation” because they do not require “actual control of CO2
emissions”, EPA appears to really mean “quantitative control” or
“limitation” of emissions, as opposed to “actual control.”  In
fact, this commenter (0095) asserts that one cannot accurately monitor
emissions without “controlling” them.

Ten industry commenters (0089 and others incorporating this submission
(0065, 0067, 0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) argue that
this contention that any monitoring requires some level of “control”
would, without any basis in logic, simply erase the distinction between
monitoring and emission controls.

Response:

	The actual control interpretation contemplates a regulatory action that
serves to limit or restrict emissions of a pollutant.  The containment
of emissions in a stack or a monitoring device for the purposes of
monitoring does not function to limit or restrict emissions.  Even if
some small percentage of emission are captured for purposes of analysis,
a monitoring requirement provides no assurance that pollutants captured
for purposes of monitoring alone will not eventually be emitted to the
ambient air without limitation after the necessary analysis is complete.
 Thus, EPA is not persuaded by the argument that monitoring devices are
equivalent to emissions control devices or techniques and would actually
control emissions.

4.5.   Applicability of Title V Requirements Based on Monitoring and
Reporting

Comment:

One of the industry commenters (0067) and two of the state/local agency
associations (0054, 0062) added that monitoring and reporting
obligations also do not give rise to permitting obligations under Title
V of the CAA.

Response:

Title V requires, among other things, that any “major source” –
defined, as relevant here, under CAA sections 302(j) and 501(2)(b), as
“any stationary facility or source of air pollutants which directly
emits, or has the potential to emit, one hundred tons per year or more
of any air pollutant...” – apply for a Title V permit.  EPA
interprets this requirement to apply to sources of pollutants “subject
to regulation” under the Act.  EPA previously articulated its
interpretation that this Title V permitting requirement applies to
“pollutants subject to regulation” in a 1993 memorandum from EPA’s
air program.  Memorandum from Lydia N. Wegman, Deputy Director, Office
of Air Quality Planning and Standards, U.S. EPA, “Definition of
Regulated Air Pollutant for Purposes of Title V” (Apr. 26, 1993)
(“Wegman Memo”).  EPA continues to maintain this interpretation.
The interpretation in this memorandum was based on: (1) EPA’s reading
of the definitional chain for “major source” under Title V,
including the definition of “air pollutant” under section 302(g) and
the definition of “major source” under 302(j); (2) the view that
Congress did not intend to require a variety of sources to obtain Title
V permits if they are not otherwise regulated under the Act (see also
CAA section 504(a), providing that Title V permits are to include and
assure compliance with applicable requirements under the Act); and (3)
consistency with the approach under the PSD program.  While the specific
narrow interpretation in the Wegman Memo of the definition of “air
pollutant” in CAA section 302(g) is in question in light of
Massachusetts (finding this definition to be “sweeping”), EPA
believes the core rationale for its interpretation of the applicability
of Title V remains sound.  EPA continues to maintain its interpretation,
consistent with CAA sections 302(j), 501, 502 and 504(a), that the
provisions governing Title V applicability for “a major stationary
source” can only be triggered by emissions of pollutants subject to
regulation.  This interpretation is based primarily on the purpose of
Title V to collect all regulatory requirements applicable to a source
and to assure compliance with such requirements –  see, e.g., CAA
section 504(a) – and on the desire to promote consistency with the
approach under the PSD program.

In applying this interpretation under Title V, the Wegman Memo also
explains that EPA does not consider CO2 to be a pollutant subject to
regulation based on the monitoring and reporting requirements of section
821 of the Clean Air Act Amendments of 1990.  As articulated in numerous
orders issued by EPA in response to petitions to object to Title V
permits, EPA views the Title V operating permits program as a vehicle
for ensuring that air quality control requirements are appropriately
applied to facility emission units and that compliance with these
requirements is assured.  See, e.g., In the Matter of Fort James Camas
Mill, Petition No. X-1999-1 at 3-4 (Dec. 22, 2000); In the Matter of
Cash Creek Generation, LLC, Petition Nos. IV-2008-1 & IV-2008-2 at 2
(Dec. 15, 2009).  The Wegman Memo points out that section 821 involves
reporting and study of emissions, but is not related to actual control
of emissions.  Since the reporting requirements of section 821 have no
connection to existing air quality control requirements, it is
appropriate not to treat them as making CO2 “subject to regulation”
for purposes of Title V.  Cf. Section 504(b) (providing EPA authority to
specify requirements for “monitoring and analysis of pollutants
regulated under this Act.”).

4.6.   Practice of Distinguishing Pollutants Covered by Control
Requirements and Monitoring Requirements

Comment:

One industry commenter (0079) states that it is a long standing practice
in the air pollution community to distinguish between those pollutants
subject to control requirements – NAAQS, NSPS, NESHAP, and SIP
requirements – versus those pollutants that are subject only to
generic emission inventory or similar reporting requirements.  The first
set of pollutants is considered “subject to regulation.”  The second
set of pollutants is “potentially” subject to regulation in the
future.

The commenter (0062) indicates that EPA has issued fairly clear guidance
over the years concerning what constitutes an emissions limitation, as
opposed to a monitoring requirement, and states that EPA should
incorporate those concepts in its final guidance.

Response:

EPA agrees there is a distinction between pollutants subject to control
requirements and pollutant subject only to emissions inventory and
monitoring requirements.  This distinction illustrated by commenters
supports EPA’s final action to continue applying the actual control
interpretation under the PSD program.

4.7.   Enforceability of Monitoring Regulations

	Comment:

The Petition for Reconsideration says that, just like regulations
restricting emissions

quantities, the regulations EPA promulgated implementing Section 821
have the force

of law, and violation results in severe sanctions. 40 CFR 75.5; 42
U.S.C. §7413(c)(2) (punishable by imprisonment of up to six months or
fine of up to $10,000 for making false statement or representation or
providing inaccurate monitoring reports under CAA).

Ten industry commenters (0089 and others incorporating this submission
(0065, 0067, 0081, 0083, 0090, 0096, 0106/0107, 0108, 0109)) argue that
fact that EPA may enforce the section 821 regulations using enforcement
mechanisms authorized by the CAA does not support petitioners’
interpretation.  Section 821 expressly incorporates by reference the
CAA’s enforcement mechanisms, but neither that incorporation nor the
use of those mechanisms transforms the section 821 requirement for
monitoring and reporting into an actual emission control under the CAA.
See In Re: Deseret Power Electric Cooperative, Response of Amicus Curiae
Utility Air Regulatory Group to the Board’s Request for Supplemental
Briefing, at 3-10 (Sept. 12, 2008) (“UARG Supplemental Amicus
Brief”); see also infra Section VII.

Response:

EPA agrees that the Part 75 regulations are enforceable and that a
violation of these requirements could lead to the imposition of
penalties where appropriate.  However, this similarity with other EPA
regulations that restrict emissions does not demonstrate that monitoring
and reporting requirements themselves restrict emissions or constitute
“regulation” within the meaning of that term that EPA has applied
considering the context of the CAA.  EPA agrees with the second set of
commenters that the particular enforcement mechanism of the Part 75
regulations does not transform these regulations into actual control
requirements.

Chapter 5.   EPA-Approved State Implementation Plan (SIP)

5.1.   Overview of Comments on the SIP Interpretation

Comment:

Thirty industry commenters (0050, 0051, 0053, 0056, 0059, 0065, 0066,
0067, 0068, 0070, 0071, 0073, 0074, 0076, 0079, 0081, 0083, 0085, 0086,
0089, 0090, 0092, 0096, 0097, 0098, 0105, 0106/0107, 0108, 0109, 0118)
and four state/local agency associations (0058, 0062, 0091, 0102) agree
with EPA’s position that the “SIP interpretation” is not the
proper interpretation of the phrase “subject to regulation” for
purposes of PSD.

Ten of these industry commenters (0089 and others incorporating this
submission (0065, 0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109))
express full support for the rationale provided by EPA in the PSD
Interpretive Memorandum and the proposed PSD Interpretation for
rejecting the SIP interpretation as unwarranted and unreasonable.  These
commenters assert that the petitioners’ arguments in favor of the SIP
interpretation (i.e., that the Delaware SIP is enforceable under the
CAA, that the SIP interpretation is supported by the plain language of
the CAA, and that the approved SIP’s provisions are codified under 40
CFR Subchapter C) are not significantly different from those raised
under the monitoring and reporting interpretation, and that this
interpretation should be rejected for the same reasons.

Environmental group commenters (0095, 0101) who incorporate the Petition
for Reconsideration in their comments support the SIP interpretation.

Response:

After reconsidering the legal and policy issues, we decline to adopt the
SIP interpretation.  Since the meaning of the term “subject to
regulation” is ambiguous and susceptible to multiple interpretations,
the SIP interpretation is not compelled by the structure and language of
the Act.  Furthermore, there would be negative policy implications if
EPA adopted this interpretation.  EPA responds to more specific points
in the responses that follow.

5.2.   Consistency with the Statute and Congressional Intent

Comment:

Several commenters expressed that the SIP interpretation is inconsistent
with the CAA.  One commenter (0079) opines that the SIP interpretation
belies 35 years of practice to the contrary, and is inconsistent with
section 110(a)(1) of the CAA, which limits the effect of a SIP to “air
quality control regions” “within such state.”  42 U.S.C.
§7410(a)(1).  States are only required to prevent interference with
other states’ compliance with NAAQS or measures required to be
included in the PSD portions of their SIP.  42 U.S.C. §7410(a)(2)(D).
Section 126 of the CAA is similar in limiting its effects to NAAQS and
the required elements of the PSD program.  See 42 U.S.C. §7426.
Commenter (0085) also states that the SIP interpretation would ignore
extensive provisions in the CAA for addressing interstate air pollution
by allowing one state to create national policy.  Three commenters
(0059, 0097, 0058, 0107) point to CAA section 116 as evidence that a
state can set more stringent CAA regulations in its jurisdiction to
advance the state’s own public policy goals and Congress expressed no
intent that such state regulations would trigger nationwide
requirements.  Commenters argue that the SIP interpretation establishes
a situation that would allow the actions in a single state to define
policy in other states and nationally, which may be contrary to the best
interests of the nation or other states.

Three commenters (0070, 0086, 0092, 0098) state that the SIP
interpretation conflicts with the core principle of cooperative
federalism on which the CAA is based, and that this interpretation would
strip Congress and EPA of their authority to set the minimum standards
and instead, would allow individual states to control the federal
permitting program’s baseline requirements.  Commenter 0086 notes that
although EPA-approved SIP requirements become enforceable by EPA and
citizens under certain provisions of the CAA, it does not follow that
such enforcement authority renders the pollutant subject to regulation
under the CAA.  Rather, this enforcement authority promotes the CAA of
providing federal assistance to States in preventing air pollution under
their own programs.  Moreover, Section 304 that provides for citizen
enforcement specifically defines the term “emission standard or
limitations” to include SIP requirements, but Congress limited the
application of this definition to only Section 304.  This suggests that
Congress meant for a different definition that does not include SIP
requirements, to apply for other purposes under the CAA.  Another
industry commenter (0068) opines that the SIP interpretation would
unconstitutionally delegate authority to States to substitute their
judgment for EPA’s when the CAA clearly gives States authority to only
address local air quality concerns.  Finally, commenter 0086 notes that
courts have already recognized that the CAA does not require a state to
“respect its neighbor’s air quality standards (or design its SIP to
avoid interference therewith) if those standards are more stringent than
the requirements of federal law.”  Connecticut v. EPA, 656 F.2d 902,
909 (2d Cir. 1981).

Several industry commenters (0089 and others incorporating this
submission (0065,0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109))
add that no interpretation is defensible whereby a state’s SIP
provision would establish national regulatory policies and bind EPA and
other states.  One state’s SIP provisions cannot impose on EPA an
obligation to regulate all other states the same way.  See Vermont v.
Thomas, 850 F.2d 99, 102-04 (2d Cir. 1988) (holding that Vermont cannot,
through inclusion of a state ambient air quality standard in a revision
to a SIP, impose that standard on upwind states).  Rather, EPA
establishes the rules, based on the CAA, which states then implement
through their SIPs.

Another commenter (0085), while ceding that that SIP regulations become
federally-enforceable once approved by EPA, asserts that such approval
does not constitute an affirmative decision to subject GHGs to
regulation under the Act; rather, EPA’s criteria for approving SIPs is
wholly different from the criteria required to establish national
regulations.  Another commenter (0059) states that EPA would be required
to analyze the impacts from a state SIP amendment on a national scale
because the impacts of PSD/Title V would be national in scope.  This
would create an unwarranted and unnecessary burden on the agency and
could lead to significant delays in the approval of SIP amendments.

Another commenter (0086) notes that although, EPA-approved SIP
requirements become enforceable by EPA and citizens under certain
provisions of the CAA, it does not follow that such enforcement
authority renders the pollutant subject to regulation under the CAA.
Rather, this enforcement authority promotes the CAA purpose of providing
federal assistance to States in preventing air pollution under their own
programs.

One industry commenter (0068) opines that, to delegate,
unconstitutionally, the power of federal regulation to the states by
enabling one state to take action triggering the regulation of a
pollutant on a nation-wide scale would be contrary to the structure of
the CAA, which clearly gives states autonomy to tailor their programs to
achieve local air quality requirements but only limited authority for
states to substitute their judgment for EPA’s.

Some environmental commenters, who incorporate the Petition for
Reconsideration in their comments (95, 101) and support the SIP
interpretation, fault the Agency’s rejection of this interpretation by
stating that neither the Act, nor the PSD Interpretive Memo, provides a
basis for a position that regulation by a single state is not enough to
constitute “regulation under the Act” on a nationwide basis for
purpose of section 165.  Petitioners and another commenter also assert
that CO2 is already “subject to regulation under the Act” and take
the position that any requirement EPA adopts and approves in an
implementation plan makes the covered pollutant “subject to regulation
under the Act” because it is approved by the EPA “under the Act,”
and because it becomes enforceable by the state, by EPA and by citizens
“under the Act” upon approval.

Response:

While EPA does not agree that the SIP interpretation is inconsistent
with the CAA, we nonetheless decline to adopt the interpretation.  We
believe that the actual control interpretation better unifies the
multiple purposes of the CAA and the concept of cooperative federalism.
Congress allowed individual states to create and apply some regulations
more stringently than federal regulations within its borders, without
allowing individual states to set national regulations that would impose
those requirements on all states.  See Ellis v. Gallatin Steel Co., 390
F.3d 461, 467 (6th Cir. 2004).

EPA continues to believe that the CAA and our implementing regulations
are intended to provide states flexibility to develop and implement SIPs
to meet the air quality goals of their individual state.  Each state’s
implementation plan is a reflection of the air quality concerns in that
state, allowing a state significant latitude in the treatment of
specific pollutants of concern (or their precursors) within its borders
based on air quality, economic, and other environmental concerns of that
state.  As such, pollutant emissions in one state may not present the
same problem for a state a thousand miles away.  As expressed in the PSD
Interpretive Memo, we continue to have concerns that the SIP
interpretation would improperly limit the flexibility of states to
develop and implement their own air quality plans, because the act of
one state to establish regulatory requirements for a particular
pollutant would drive national policy.  If EPA determined that a new
pollutant becomes “subject to regulation” nationally within the
meaning of section 165 based solely on the provisions of an EPA-approved
SIP, then all states would be required to subject the new pollutant to
PSD permitting whether or not control of the air pollutant was relevant
for improving that state’s air quality.  Whether one state, five
states, or 45 states make the decision that their air quality concerns
are best addressed by imposing regulations on a new pollutant, we do not
think those actions should trump the cooperative federalism inherent in
the CAA.  While several states may face similar air quality issues and
may choose regulation as the preferred approach to dealing with a
particular pollutant, we are concerned that allowing the regulatory
choices of some number of states to impose PSD regulation on all other
states would do just that.

	EPA disagrees with the commenters and petitioners who contend that a
pollutant regulated in one SIP approved by EPA must automatically be
regulated through the PSD program nationally.  In fact, Congress
demonstrated intent, in the language and structure of the Act, for SIP
requirements to have only a local or regional effect.

In CAA section 102(a), Congress directs EPA to encourage cooperative
activities among states, and the adoption of uniform state and local
laws for the control of air pollution “as practicable in light of the
varying conditions and needs.”  This language informs the issue of
whether SIP requirements have nationwide applicability in two ways.
First, there would be no need for EPA to facilitate uniform adoption of
standards in different air quality control regions, if the regulation of
an air pollutant by one region would automatically cause that pollutant
to be regulated in another region.  Second, Congress bounded its desire
to promote uniformity by recognizing that addressing local air quality
concerns may preempt national uniformity of regulation.

Indeed, section 116 of the CAA grants States the right to adopt more
stringent standards than the uniform, minimum requirements set forth by
EPA.  See 42 U.S.C. 7416.  The legislative history of the 1977 CAA
Amendments shows that Congress understood that States may adopt
different and more stringent standards then the federal minimum
requirements.  See, e.g., 122 Cong. Rec. S12456 (daily ed. July 26,
1976) (statement of Sen. Randolph) (“[T]he States are given latitude
in devising their own approaches to air pollution control within the
framework of broad goals. ... The State of West Virginia has established
more stringent requirements than those which, through the Environmental
Protection Agency, are considered as adequate...”); 122 Cong. Rec.
S12458 (daily ed. July 26, 1976) (statement of Sen. Scott) (“The
states have the right, however, to require higher standards, and they
should have under the police powers.”)  Congress could not have
intended states to have latitude to implement their own approaches to
air pollution control, and simultaneously, require that air pollutants
regulated by one State automatically apply in all other States.

Importantly, the legislative history also shows that Congress intended
to limit the EPA’s ability to disapprove a State’s decision to adopt
more stringent requirements in setting forth the criteria for approving
state submissions under section 110.  This intent is supported by the
following passage:

State implementation plans usually contain a unified set of requirements
and frequently do not make distinctions between the controls needed to
achieve one kind of ambient standard or another.  To try to separate
such emission limitations and make judgments as to which are necessary
to achieving the national ambient air quality standards assumes a
greater technical capability in relating emissions to ambient air
quality than actually exists.

A federal effort to inject a judgment of this kind would be an
unreasonable intrusion into protected State authority.  EPA’s role is
to determine whether or not a State’s limitations are adequate and
that State implementation plans are consistent with the statute.  Even
if a State adopts limits which may be stricter than EPA would require,
EPA cannot second guess the State judgment and must enforce the approved
State emission limit.

123 Cong. Rec. S9167 (daily ed. June 8, 1977) (statement of Sen.
Muskie).

	This Congressional intent is reflected within the statutory language.
Under section 110(k)(3), the EPA Administrator “shall approve” a
state’s submittal if it meets the requirements of the Act, and under
section 110(l) “shall not” approve a plan revision “if the
revision would interfere with any other applicable requirement of this
Act.”  Courts have similarly interpreted this language to limit
EPA’s discretion to approve or disapprove SIP requirements.  See,
e.g., State of Connecticut v. EPA, 656 F.2d 902, 906 (2d. Cir. 1981)
(“As is illustrated by Congress’s use of the word ‘shall,’
approval of an SIP revision by the EPA Administrator is mandatory if the
revision has been the subject of a proper hearing and the plan as a
whole continues to adhere to the requirements of section 110(a)(2)”)
(referencing Union Electric Co. v. EPA, 427 U.S. 246, 257 (1976); and
Mission Indus., Inc. v. EPA, 547 F.2d 123 (1st Cir. 1976)).  These
provisions of the statute do not establish any authority or criteria for
EPA to judge the approvability of a state’s submission based on the
implications such approval would have nationally.  The absence of such
authority or criteria in the applicable standard argues against
nationwide applicability of SIP requirements and the SIP interpretation.

Moreover, under section 307(b) of the CAA, Congress assigns review of
specific regulations promulgated by EPA and “any other nationally
applicable regulations promulgated or final action taken, by the
Administrator under this Act” only to the U.S. Court of Appeals for
the District of Columbia Circuit (“D.C. Circuit”).  In contrast,
“the Administrator’s action in approving and promulgating any
implementation plan under Section 110 ... or any other final action of
the Administrator under this Act ... which is local or regionally
applicable may be filed only in the United States Court of Appeals for
the appropriate circuit.”  42 U.S.C. §7607(b) (emphasis added).
Thus, Congress set forth its intended applicability of these regulations
in assigning judicial venue and clearly articulated that requirements in
a SIP are generally “local or regionally applicable.”

We agree that EPA’s approval of a state requirement into that
State’s implementation plan has the effect of making that requirement
enforceable under the CAA.  In addition, we agree with the commenter who
notes that the enforcement provisions of the Act further the concept of
federalism by providing federal support to States’ unique programs,
and do not necessarily define the scope of the PSD permitting program.
However, the fact that EPA has authority to enforce SIP provisions
against regulated entities in one state does not establish that EPA has
the power to enforce these provisions against entities in other states
that are not subject to the state laws incorporated into the SIP.  Thus,
it does not follow that the enforceability of particular SIP provisions
by EPA makes a pollutant regulated under such state’s laws into a
pollutant that is subject to regulation on a nationwide basis.

5.3.    Implications of Applying State-specific Decisions to the Nation

Comment:

Several commenters indicate that state actions to regulate local air
quality concerns should not establish national pollution control policy.
 One State commenter (0091) expressed that States should have
flexibility in their implementation plans to take action, but that one
state’s decision to regulate GHG emissions does not obligate another
state to do so.  Several industry commenters (0067, 0083, 0089, 0090,
0096, 0106/0107, 0108, 0109) argue that no interpretation is defensible
whereby a state’s SIP provision would establish national regulatory
policies and bind EPA and other states.  One state’s SIP provisions
cannot impose on EPA an obligation to regulate all other states the same
way.  See Vermont v. Thomas, 850 F.2d 99, 102-04 (2d Cir. 1988) (holding