[Federal Register Volume 75, Number 238 (Monday, December 13, 2010)]
[Rules and Regulations]
[Pages 77698-77719]
[FR Doc No: 2010-30854]

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Part II

Environmental Protection Agency

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40 CFR Part 52

 Action To Ensure Authority To Issue Permits Under the Prevention of
Significant Deterioration Program to Sources of Greenhouse Gas
Emissions: Finding of Substantial Inadequacy and SIP Call; Final Rule

Federal Register / Vol. 75 , No. 238 / Monday, December 13, 2010 /
Rules and Regulations

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-HQ-OAR-2010-0107; FRL-9236-3]
RIN-2060-AQ08

Action To Ensure Authority To Issue Permits Under the Prevention
of Significant Deterioration Program to Sources of Greenhouse Gas
Emissions: Finding of Substantial Inadequacy and SIP Call

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The EPA is issuing a finding that the EPA-approved state
implementation plans (SIP) of 13 states (comprising 15 state and local
programs) are substantially inadequate to meet Clean Air Act (CAA)
requirements because they do not apply Prevention of Significant
Deterioration (PSD) requirements to greenhouse gas (GHG)-emitting
sources. In addition, EPA is issuing a ``SIP call'' for each of these
states, which requires the state to revise its SIP as necessary to
correct such inadequacies. Further, EPA is establishing a deadline for
each state to submit its corrective SIP revision. These deadlines,
which differ among the states, range from December 22, 2010, to
December 1, 2011.

DATES: This action is effective on December 13, 2010. The deadline for
each state to submit its corrective SIP revision is listed in table IV-
1, ``SIP Call States and SIP Submittal Deadlines'' in the SUPPLEMENTARY
INFORMATION section of this rule.

ADDRESSES: EPA has established a docket for this rulemaking under
Docket ID No. EPA-HQ-OAR-2010-0107. All documents in the docket are
listed in the http://www.regulations.gov index. Although listed in the
index, some information is not publicly available, e.g., CBI or other
information whose disclosure is restricted by statute. Certain other
material, such as copyrighted material, will be publicly available only
in hard copy. Publicly available docket materials are available either
electronically in http://www.regulations.gov or in hard copy at the
U.S. Environmental Protection Agency, Air Docket, EPA/DC, EPA West
Building, Room 3334, 1301 Constitution Ave., NW., Washington, DC. The
Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding legal holidays. The telephone number for the Public
Reading Room is<PHONE_NUMBER>, and the telephone number for the Air
Docket is<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: Ms. Lisa Sutton, Air Quality Policy
Division, Office of Air Quality Planning and Standards (C504-03),
Environmental Protection Agency, Research Triangle Park, NC 27711;
telephone number:<PHONE_NUMBER>; fax number:<PHONE_NUMBER>; e-mail
address<EMAIL_ADDRESS>    For information related to a specific state, local, or tribal
permitting authority, please contact the appropriate EPA regional
office:

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                               Contact for regional office (person, mailing
  EPA  regional  office                 address, telephone number)                     Permitting authority
----------------------------------------------------------------------------------------------------------------
I........................  Dave Conroy, Chief, Air Programs Branch, EPA Region   Connecticut, Massachusetts,
                            1, 5 Post Office Square, Suite 100, Boston, MA        Maine, New Hampshire, Rhode
                            02109-3912,<PHONE_NUMBER>.                           Island, and Vermont.
II.......................  Raymond Werner, Chief, Air Programs Branch, EPA       New Jersey, New York, Puerto
                            Region 2, 290 Broadway, 25th Floor, New York, NY      Rico, and Virgin Islands.
                            10007-1866,<PHONE_NUMBER>.
III......................  Kathleen Cox, Chief, Permits and Technical            District of Columbia, Delaware,
                            Assessment Branch, EPA Region 3, 1650 Arch Street,    Maryland, Pennsylvania,
                            Philadelphia, PA 19103-2029,<PHONE_NUMBER>.          Virginia, and West Virginia.
IV.......................  Lynorae Benjamin, Chief, Regulatory Development       Alabama, Florida, Georgia,
                            Section, Air, Pesticides and Toxics Management        Kentucky, Mississippi, North
                            Division, EPA Region 4, Atlanta Federal Center, 61    Carolina, South Carolina, and
                            Forsyth Street, SW., Atlanta, GA 30303-3104, (404)    Tennessee.
                            562-9033.
V........................  J. Elmer Bortzer, Chief, Air Programs Branch (AR-     Illinois, Indiana, Michigan,
                            18J), EPA Region 5, 77 West Jackson Boulevard,        Minnesota, Ohio, and
                            Chicago, IL 60604-3507,<PHONE_NUMBER>.               Wisconsin.
VI.......................  Jeff Robinson, Chief, Air Permits Section, EPA        Arkansas, Louisiana, New
                            Region 6, Fountain Place 12th Floor, Suite 1200,      Mexico, Oklahoma, and Texas.
                            1445 Ross Avenue, Dallas, TX 75202-2733, (214) 665-
                            6435.
VII......................  Mark Smith, Chief, Air Permitting and Compliance      Iowa, Kansas, Missouri, and
                            Branch, EPA Region 7, 901 North 5th Street, Kansas    Nebraska.
                            City, KS 66101,<PHONE_NUMBER>..
VIII.....................  Carl Daly, Unit Leader, Air Permitting, Monitoring &  Colorado, Montana, North
                            Modeling Unit, EPA Region 8, 1595 Wynkoop Street,     Dakota, South Dakota, Utah,
                            Denver, CO 80202-1129,<PHONE_NUMBER>.                and Wyoming.
IX.......................  Gerardo Rios, Chief, Permits Office, EPA Region 9,    Arizona; California; Hawaii and
                            75 Hawthorne Street, San Francisco, CA 94105, (415)   the Pacific Islands; Indian
                            972-3974.                                             Country within Region 9 and
                                                                                Navajo Nation; and Nevada.
X........................  Nancy Helm, Manager, Federal and Delegated Air        Alaska, Idaho, Oregon, and
                            Programs Unit, EPA Region 10, 1200 Sixth Avenue,      Washington.
                            Suite 900, Seattle, WA 98101,<PHONE_NUMBER>.
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SUPPLEMENTARY INFORMATION:

I. General Information

A. Does this action apply to me?

    Entities affected by this rule include state and local permitting
authorities.\1\ In this rule, EPA finds that any state's SIP-approved
PSD applicability provisions that do not apply the PSD program to GHG-
emitting sources are substantially inadequate to meet CAA requirements,
under CAA section 110(k)(5), and such states will be affected by this
rule. For example, if a state's PSD regulation identifies its regulated
New Source Review (NSR) pollutants by specifically listing each
individual pollutant and the list omits GHGs, then the regulation is
substantially inadequate.
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    \1\ For convenience, we refer to ``states'' in this rulemaking
to collectively mean states and local permitting authorities.
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    Entities affected by this rule also include sources in all industry
groups, which have a direct obligation under the CAA to obtain a PSD
permit for GHGs for projects that meet the applicability thresholds set
forth in a GHG PSD rule that EPA recently promulgated, which

we refer to as the Tailoring Rule.\2\ This independent obligation on
sources is specific to PSD and derives from CAA section 165(a). The
majority of entities affected by this action are in the following
groups:
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    \2\ Prevention of Significant Deterioration and Title V
Greenhouse Gas Tailoring Rule; Final Rule. 75 FR 31514 (June 3,
2010).

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        Industry group                         NAICS \a\
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Utilities (electric, natural   2211, 2212, 2213
 gas, other systems).
Manufacturing (food,           311, 312, 313, 314, 315, 316
 beverages, tobacco,
 textiles, leather).
Wood product, paper            321, 322
 manufacturing.
Petroleum and coal products    32411, 32412, 32419
 manufacturing.
Chemical manufacturing.......  3251, 3252, 3253, 3254, 3255, 3256, 3259
Rubber product manufacturing.  3261, 3262
Miscellaneous chemical         32552, 32592, 32591, 325182, 32551
 products.
Nonmetallic mineral product    3271, 3272, 3273, 3274, 3279
 manufacturing.
Primary and fabricated metal   3311, 3312, 3313, 3314, 3315, 3321, 3322,
 manufacturing.                 3323, 3324, 3325, 3326, 3327, 3328, 3329
Machinery manufacturing......  3331, 3332, 3333, 3334, 3335, 3336, 3339
Computer and electronic        3341, 3342, 3343, 3344, 3345, 4446
 products manufacturing.
Electrical equipment,          3351, 3352, 3353, 3359
 appliance, and component
 manufacturing.
Transportation equipment       3361, 3362, 3363, 3364, 3365, 3366, 3366,
 manufacturing.                 3369
Furniture and related product  3371, 3372, 3379
 manufacturing.
Miscellaneous manufacturing..  3391, 3399
Waste management and           5622, 5629
 remediation.
Hospitals/nursing and          6221, 6231, 6232, 6233, 6239
 residential care facilities.
Personal and laundry services  8122, 8123
Residential/private            8141
 households.
Non-residential (commercial).  Not available. Codes only exist for
                                private households, construction and
                                leasing/sales industries.
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\a\ North American Industry Classification System.

B. How is the preamble organized?

    The information presented in this preamble is organized as follows:

I. General Information
    A. Does this action apply to me?
    B. How is the preamble organized?
II. Overview of Final Rule
III. Background
    A. CAA and Regulatory Context
    1. SIP PSD Requirements
    2. Recent EPA Regulatory Action Concerning PSD Requirements for
GHG-emitting Sources
    3. SIP Inadequacy and Corrective Action
    4. State PSD SIPs
    B. Proposed Action
    1. Finding of Substantial Inadequacy and SIP Call
    2. Corrective SIP Revision
IV. Final Action and Response to Comments
    A. Response to Comments
    B. Finding of Substantial Inadequacy and SIP Call
    1. Overall Basis
    2. State-Specific Actions
    C. Requirements for Corrective SIP Revision
    1. Application of PSD Program to GHG-Emitting Sources
    2. Definition and Calculation of Amount of GHGs
    3. Thresholds
    D. Response to Procedural and Other Comments
    1. Approved SIP PSD Programs That Apply to GHG Sources
    2. Opportunity for Notice and Comment
    3. Federal Implementation Plan
V. SIP Submittals
    A. EPA Action: Findings of Failure To Submit and Promulgation of
FIPs; Process for Action on Submitted SIPs
    1. Actions on SIP Submittals
    2. Findings of Failure To Submit and Promulgation of FIPs
    3. Rescission of the FIP
    B. Streamlining the State Process for SIP Development and
Submittal
    C. Primacy of the SIP Process
    D. Effective Date
VI. Statutory and Executive Order Reviews
    A. Executive Order 12866--Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform
    E. Executive Order 13132--Federalism
    F. Executive Order 13175--Consultation and Coordination With
Indian Tribal Governments
    G. Executive Order 13045--Protection of Children From
Environmental Health Risks and Safety Risks
    H. Executive Order 13211--Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898--Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
    K. Congressional Review Act
VII. Judicial Review
VIII. Statutory Authority

II. Overview of Final Rule

    This rulemaking is related to four distinct GHG-related actions
recently taken by EPA. Some of these actions, in conjunction with the
operation of the applicable CAA provisions, will require stationary
sources that emit large amounts of GHGs to obtain a PSD permit before
they construct or modify, beginning January 2, 2011. In one of these
actions, which we call the Tailoring Rule, EPA limited the
applicability of PSD to GHG-emitting sources at or above specified
thresholds.\3\
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    \3\ Prevention of Significant Deterioration and Title V
Greenhouse Gas Tailoring Rule; Final Rule. 75 FR 31514 (June 3,
2010).
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    Most states include EPA-approved PSD programs in their state
implementation plans (SIPs), and, as a result, they act as the
permitting

authority. Most of these states' PSD programs apply to GHG-emitting
sources, and through a separate regulatory action, EPA and these states
are now taking steps to limit the applicability of PSD to GHG-emitting
sources at or above the Tailoring Rule thresholds. However, 13 states
have SIPs with EPA-approved PSD programs that do not apply PSD to GHG-
emitting sources, and it is those states that are the subject of this
rulemaking.
    In this rulemaking, EPA is (i) issuing a finding of substantial
inadequacy for 13 states because their EPA-approved SIP PSD programs do
not apply to GHG-emitting sources, (ii) issuing a requirement, which we
refer to as a SIP call, that these states submit a corrective SIP
revision to assure that their PSD programs will apply to GHG-emitting
sources, and (iii) establishing the deadline by which each of these
states must submit its corrective SIP revision, which differs among the
various states and ranges from December 22, 2010, to December 1, 2011.
Each of these actions is authorized under CAA section 110(k)(5). The 13
states (some of which include at least one local permitting agency)
are: Arizona; Arkansas; California; Connecticut; Florida; Idaho;
Kansas; Kentucky; Nebraska; Nevada; Oregon; Texas; and Wyoming.
    If a state for which we are finalizing a SIP call in this action
does not submit its corrective SIP revision by its deadline, EPA
intends to immediately issue to the state a finding of failure to
submit a required SIP revision and also immediately promulgate a
federal implementation plan (FIP) for the state, under CAA section
110(c)(1)(A). EPA proposed this SIP call and the FIP by separate
notices dated September 2, 2010. ``Action to Ensure Authority to Issue
Permits under the Prevention of Significant Deterioration Program to
Sources of Greenhouse Gas Emissions: Finding of Substantial Inadequacy
and SIP Call--Proposed Rule,'' 75 FR 53892; ``Action to Ensure
Authority to Issue Permits under the Prevention of Significant
Deterioration Program to Sources of Greenhouse Gas Emissions: Federal
Implementation Plan--Proposed Rule,'' 75 FR 53883.
    This SIP call is important because without it, large GHG-emitting
sources in these states may be unable to obtain a PSD permit for their
GHG emissions and therefore may face delays in undertaking construction
or modification projects. This is because without the further action by
the states or EPA that the SIP call is designed to lead to, sources
that emit or plan to emit large amounts of GHGs will, starting January
2, 2011, be required to obtain PSD permits before undertaking new
construction or modification projects, but neither the states nor EPA
would be authorized to issue the permits. The SIP call and, in the
states in which it is necessary, the FIP will assure that in each of
the 13 states--with the exception of Texas--either the state or EPA
will have the authority to issue PSD permits by January 2, 2011, or
sufficiently soon thereafter so that sources in the state will not be
adversely affected by the short-term lack of a permitting authority. We
are planning additional actions to ensure that GHG sources in Texas can
be issued permits as of January 2, 2011.
    The SIP submittal deadlines that this rule establishes for the
states reflect, in almost all instances, a recognition by EPA and the
states of the need to move expeditiously to assure the availability of
a permitting authority. EPA emphasizes that for those states for which
EPA proceeds to promulgate a FIP: (i) The purpose of the FIP is solely
to assure that industry in the state will be able to obtain required
air permits to construct or modify; (ii) EPA encourages the state to
assume delegation of the FIP so that the state will become the permit
issuer (although administering EPA regulations); and (iii) EPA will
rescind the FIP as soon as the state submits and EPA approves a
corrective SIP revision.
    The corrective SIP revision that this rule requires must: (i) Apply
the SIP PSD program to GHG-emitting sources; (ii) define GHGs as the
same pollutant to which the Light-Duty Vehicle Rule \4\ (LDVR) applies,
that is, a single pollutant that is the aggregate of the group of six
gases (carbon dioxide (CO2), methane (CH4),
nitrous oxide (N2O), hydrofluorocarbons (HFCs),
perfluorocarbons (PFCs), and sulfur hexafluoride (SF6)); and
(iii) either limit PSD applicability to GHG-emitting sources by
adopting the applicability thresholds included in the Tailoring Rule or
adopt lower thresholds and show that the state has adequate personnel
and funding to administer and implement those lower thresholds.
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    \4\ ``Light-Duty Vehicle Greenhouse Gas Emission Standards and
Corporate Average Fuel Economy Standards; Final Rule.'' 75 FR 25324
(May 7, 2010).
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III. Background

A. CAA and Regulatory Context

    EPA described the relevant background information in the SIP call
proposal, 75 FR at 53896-98, as well as in the final Tailoring Rule, 75
FR at 31518-21. Knowledge of this background information is presumed
and will be only briefly summarized here.
1. SIP PSD Requirements
    In general, under the CAA PSD program, as discussed later in this
preamble, a stationary source must obtain a permit prior to undertaking
construction or modification projects that would result in specified
amounts of new or increased emissions of air pollutants that are
subject to regulation under other provisions of the CAA. CAA sections
165(a), 169(1), 169(2)(C). The permit must, among other things, include
emission limitations associated with the best available control
technology (BACT). CAA section 165(a)(4).
    Specifically, under the CAA PSD requirements, a new or existing
source that emits or has the potential to emit ``any air pollutant'' in
the amounts of either 100 or 250 tons per year (tpy), depending on the
source category, cannot construct or modify unless the source first
obtains a PSD permit that, among other things, includes emission
limitations that qualify as BACT. CAA sections 165(a)(1), 165(a)(4),
169(1). Longstanding EPA regulations have interpreted the term ``any
air pollutant'' more narrowly so that only emissions of any pollutant
subject to regulation under the CAA trigger PSD. This interpretation
currently is found in 40 CFR 51.166(j)(1), 52.21(j)(2), which applies
PSD to any ``regulated NSR pollutant,'' a term that the regulations
then define to include four classes of air pollutants, including, as a
catch-all, ``any pollutant that otherwise is subject to regulation
under the Act.'' 40 CFR 51.166(b)(49)(iv), 52.21(b)(50)(iv).
    The CAA contemplates that the PSD program be implemented by the
states through their SIPs. CAA section 110(a)(2)(C) requires that:

    Each implementation plan * * * shall * * * include a program to
provide for * * * regulation of the modification and construction of
any stationary source within the areas covered by the plan as
necessary to assure that national ambient air quality standards are
achieved, including a permit program as required in part[] C * * *
of this subchapter.

    CAA section 110(a)(2)(J) requires that:

    Each implementation plan * * * shall * * * meet the applicable
requirements of * * * part C of this subchapter (relating to
significant deterioration of air quality and visibility protection).

    CAA section 161 provides that:

    Each applicable implementation plan shall contain emission
limitations and such other measures as may be necessary, as
determined under regulations promulgated under this part [C], to
prevent significant deterioration of air quality for such region * *
* designated * * * as attainment or unclassifiable.

    These provisions, read in conjunction with the PSD applicability
provisions, CAA section 165(a)(1), 169(1), mandate that SIPs include
PSD programs that are applicable to any air pollutant that is subject
to regulation under the CAA, including, as discussed later in this
preamble, GHGs on and after January 2, 2011.\5\
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    \5\ In the Tailoring Rule, we noted that commenters argued, with
some variations, that the PSD provisions applied only to National
Ambient Air Quality Standards (NAAQS) pollutants, and not GHGs, and
we responded that the PSD provisions apply to all pollutants subject
to regulation, including GHGs. See 75 FR 31560-62; ``Prevention of
Significant Deterioration and Title V GHG Tailoring Rule: EPA's
Response to Public Comments,'' May 2010, pp. 38-41. We are not
reopening that issue in this rulemaking.
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2. Recent EPA Regulatory Action Concerning PSD Requirements for GHG-
emitting Sources
    In recent months, EPA has taken four distinct actions related to
GHGs under the CAA. Some of these, in conjunction with the operation of
the CAA, trigger PSD applicability for GHG-emitting sources on and
after January 2, 2011, but focus the scope of PSD on the largest GHG-
emitting sources. The first of these four actions was what we call the
``Endangerment Finding,'' which is governed by CAA section 202(a).
Based on an exhaustive review and analysis of the science, in December
2009 the Administrator exercised her judgment to conclude that ``six
greenhouse gases taken in combination endanger both the public health
and the public welfare of current and future generations.'' The
Administrator also found ``that the combined emissions of these
greenhouse gases from new motor vehicles and new motor vehicle engines
contribute to the greenhouse gas air pollution that endangers public
health and welfare under CAA section 202(a).'' \6\ This Endangerment
Finding led directly to promulgation of what we call the ``Vehicle
Rule'' or the ``LDVR,'' also governed by CAA section 202(a), in which
EPA set standards for the emission of greenhouse gases for new motor
vehicles built for model years 2012-2016.\7\ The other two actions were
what we call the ``Johnson Memo Reconsideration'' or the ``Timing
Decision'' \8\ and the Tailoring Rule and were governed by the PSD and
title V provisions in the CAA. EPA issued them to address the automatic
statutory triggering of these programs for greenhouse gases due to the
Vehicle Rule's establishing the first controls for greenhouse gases
under the Act. More specifically, the Johnson Memo Reconsideration
provided EPA's interpretation of a pre-existing definition in its PSD
regulations delineating the ``pollutants'' that are taken into account
in determining whether a source must obtain a PSD permit and the
pollutants each permit must control. Regarding the Vehicle Rule, the
Johnson Memo Reconsideration stated that such regulations, when they
take effect on January 2, 2011, will, by operation of the applicable
CAA requirements, subject GHG-emitting sources to PSD requirements. The
Tailoring Rule limited the applicability of PSD requirements to the
largest GHG-emitting sources on a phased-in basis.
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    \6\ ``Endangerment and Cause or Contribute Findings for
Greenhouse Gases Under Section 202(a) of the Clean Air Act.'' 74 FR
66496 (December 15, 2009).
    \7\ ``Light-Duty Vehicle Greenhouse Gas Emission Standards and
Corporate Average Fuel Economy Standards; Final Rule.'' 75 FR 25324
(May 7, 2010).
    \8\ ``Interpretation of Regulations that Determine Pollutants
Covered by Clean Air Act Permitting Programs.'' 75 FR 17004 (April
2, 2010). This action finalizes EPA's response to a petition for
reconsideration of ``EPA's Interpretation of Regulations that
Determine Pollutants Covered by Federal Prevention of Significant
Deterioration (PSD) Permit Program'' (which we call the ``Johnson
Memo''), December 18, 2008.
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    Certain specific aspects of these rules are important to highlight
for purposes of the present action. In the Endangerment Finding, the
Administrator found that six long-lived and directly emitted GHGs--
CO2, CH4, N2O, HFCs, PFCs, and
SF6--may reasonably be anticipated to endanger public health
and welfare. The LDVR included applicability provisions specifying that
the rule ``contains standards and other regulations applicable to the
emissions of those six greenhouse gases.'' 75 FR at 25686 (40 CFR
86.1818-12(a)).
    In the Tailoring Rule, EPA identified the air pollutant that, if
emitted or potentially emitted by the source in excess of specified
thresholds, would subject the source to PSD requirements, as the
aggregate of the same six GHGs (CO2, CH4,
N2O, HFCs, PFCs, and SF6), based on the LDVR. The
Tailoring Rule further provided that for purposes of determining
whether the amount of GHGs emitted (or potentially emitted) exceeded
the specified thresholds, it must be calculated on both a mass
emissions basis and on a carbon dioxide equivalent (CO2e)
basis. With respect to the latter, according to the rule, ``PSD * * *
applicability is based on the quantity that results when the mass
emissions of each of these [six] gases is multiplied by the Global
Warming Potential (GWP) of that gas, and then summed for all six
gases.'' 75 FR 31518.
3. SIP Inadequacy and Corrective Action
    The CAA provides a mechanism for the correction of SIPs with
certain types of inadequacies, under CAA section 110(k)(5), which
provides:
    (5) Calls for plan revisions

    Whenever the Administrator finds that the applicable
implementation plan for any area is substantially inadequate to * *
* comply with any requirement of this Act, the Administrator shall
require the State to revise the plan as necessary to correct such
inadequacies. The Administrator shall notify the State of the
inadequacies and may establish reasonable deadlines (not to exceed
18 months after the date of such notice) for the submission of such
plan revisions.

    This provision by its terms authorizes the Administrator to
``find[] that [a SIP] * * * is substantially inadequate to * * * comply
with any requirement of this Act,'' and, based on that finding, to
``require the State to revise the [SIP] * * * to correct such
inadequacies.'' This latter action is commonly referred to as a ``SIP
call.'' In addition, this provision provides that EPA must notify the
state of the substantial inadequacy and authorizes EPA to establish a
``reasonable deadline[] (not to exceed 18 months after the date of such
notice)'' for the submission of the corrective SIP revision.
    If EPA does not receive the corrective SIP revision by the
deadline, CAA section 110(c) authorizes EPA to ``find[] that [the]
State has failed to make a required submission.'' CAA section
110(c)(1)(A). Once EPA makes that finding, CAA section 110(c)(1)
requires EPA to ``promulgate a Federal implementation plan at any time
within 2 years after the [finding] * * * unless the State corrects the
deficiency, and [EPA] approves the plan or plan revision, before [EPA]
promulgates such [FIP].''
4. State PSD SIPs
    The states and other jurisdictions in the U.S. may be grouped into
three categories with respect to their PSD programs and the
applicability of those PSD programs to GHG-emitting sources:
    The first category is the states that do not have PSD programs
approved into their SIPs. In those states, EPA's regulations at 40 CFR
52.21 govern, and either EPA or the state as EPA's delegatee acts as
the permitting authority.\9\
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    \9\ EPA identified the first category of states, local
jurisdictions, and Indian country, in the proposal for this action.
75 FR at 53898, n. 11. This list is updated in Declaration of Regina
McCarthy, Coalition for Responsible Regulation v. EPA, DC Cir. No.
09-1322 (and consolidated cases) (McCarthy Declaration), Attachment
1, Table 1, which can be found in the docket for this rulemaking,
except that the Northern Mariana Islands and the Trust Territories
also fall into this category. EPA is not taking any final action
with respect to these jurisdictions, and EPA's identification of
them in this action is for informational purposes only.

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    The second category comprises states that have approved SIP PSD
programs that do not apply to GHG-emitting sources. This second
category is the subject of this rulemaking and is discussed further in
this preamble.
    The third category, which includes most of the states, is states
that have approved SIP PSD programs that apply to GHG-emitting sources.
Those SIPs have PSD applicability provisions that identify, as some or
all of the pollutants covered under their PSD program, any ``pollutant
subject to regulation'' under the CAA. Further, in these states, this
term in effect is automatically updating so as to cover pollutants that
become newly subject to regulation under the CAA without further action
by the state. As a result, the PSD programs of these states will apply
to GHG emissions as of January 2, 2011, when GHGs become subject to
regulation under the LDVR. See 40 CFR 52.21(b)(50).\10\
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    \10\ EPA included in the proposal a list of states and local
jurisdictions that appeared to fall into this third category. 75 FR
at 53899, table IV-2. This list is updated in Declaration of Regina
McCarthy, Coalition for Responsible Regulation v. EPA, DC Cir. No.
09-1322 (and consolidated cases) (McCarthy Declaration), Attachment
1, Table 3, which can be found in the docket for this rulemaking.
Except to the extent discussed later in this preamble, EPA is not
taking final action in this rule with respect to these states and
local jurisdictions.
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B. Proposed Action

1. Finding of Substantial Inadequacy and SIP Call
    In the proposal for this rulemaking, EPA proposed the SIP call for
13 states whose SIPs have EPA-approved PSD programs but did not appear
to apply to GHG-emitting sources. These 13 states are listed in table
III-1:

 Table III-1--States with SIPs that EPA Proposed Do Not Appear To Apply
                           PSD to GHG Sources
                       [Presumptive SIP Call List]
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                             State (or area)
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Alaska
Arizona: Pinal County; Rest of State (Excludes Maricopa County, Pima
 County, and Indian Country)
Arkansas
California: Sacramento Metropolitan AQMD
Connecticut
Florida
Idaho
Kansas
Kentucky: Jefferson County; Rest of State
Nebraska
Nevada: Clark County
Oregon
Texas
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    In the proposal, EPA explained that it had identified these 13
states on the basis of EPA's review of the SIP PSD provisions and other
relevant state law, as well as the views of the states as expressed in
their written statements to EPA following promulgation of the Tailoring
Rule and in other communications with the EPA regions. EPA further
explained that this information appeared to indicate that these SIP PSD
provisions did not apply to GHG-emitting sources because of one or
another of the following problems, depending on the state: (i) The PSD
applicability provision applies to any ``pollutant subject to
regulation'' under the CAA, but other provisions of state law preclude
what we call automatic updating or forward adoption, so that this
applicability provision covers only pollutants--not including GHGs--
that were subject to regulation at the time the state promulgated or
enacted the applicability provision; (ii) the PSD applicability
provision does not apply to any ``pollutant subject to regulation''
under the CAA and instead applies to only specifically identified
pollutants, not including GHGs; or (iii) the SIP explicitly precludes
regulation of CO2. On the other hand, EPA further recognized
in the proposal that a state that fits into one of the earlier-
described subcategories might nevertheless have in its SIP or other
state laws a ``general authority clause'' that affirms the state's
legal authority to issue, and enforce compliance with, permits that are
consistent with federal requirements. In this case, the SIP, read as a
whole, may be considered to apply PSD to GHG sources. Even so, we added
that if a SIP appeared ambiguous as to whether it applied PSD to GHG-
emitting sources (e.g., it includes an applicability provision that
explicitly excludes GHG sources but also includes a general-authority
provision that could be read to authorize permitting of GHG sources),
we would consider the SIP PSD program not to apply to GHG sources.
    As a related matter, we noted that if a state with a SIP that did
not appear to apply PSD to GHG-emitting sources submitted a SIP
revision prior to December 1, 2010--the date EPA intended to issue the
SIP call--EPA would not include that state in the SIP call.
    EPA included with the proposal a technical support document (TSD)
that addressed each state with an approved PSD program that did not at
time of proposal appear to apply to GHG-emitting sources. The TSD
referenced the applicable state law and the position of the state as to
PSD applicability for GHG-emitting sources, based on communications to
EPA. EPA also included in the TSD much the same information for each
state with an approved PSD program that did at time of proposal appear
to apply to GHG-emitting sources.
    For each of the 13 states, EPA proposed to issue a finding that the
SIP is ``substantially inadequate * * * to * * * comply with any
requirement of [the CAA]'' and EPA proposed to ``require the State to
revise the plan as necessary to correct such inadequacies,'' i.e., EPA
proposed to issue a SIP call in accordance with CAA section 110(k)(5).
EPA explained that the reference in CAA section 110(k)(5) to ``any
requirement of [the CAA]'' includes the PSD requirements and that SIPs
are therefore required to include PSD programs that apply to sources
that emit pollutants subject to regulation. As a result, EPA proposed
the 13 states' SIPs merit a finding of substantial inadequacy because
they fail to apply the PSD program to GHG-emitting sources on and after
January 2, 2011. EPA further proposed that because the SIPs merit a
finding of substantial inadequacy, EPA is authorized to issue a SIP
call and thereby require a corrective SIP revision.
    EPA invited comment on its legal interpretation of the 13 states'
SIPs and made clear that for any of these states, if EPA did not
receive any further information from the state or other commenters
indicating that EPA's proposed interpretation was incorrect, EPA
intended to finalize the SIP call, but that on the other hand, if EPA
did receive further information indicating that the proposed
interpretation was incorrect, then EPA would not finalize the SIP call.
    In addition, EPA specifically solicited comment on its
interpretation that the approved SIPs for the other states do appear to
apply their PSD program to GHG-emitting sources. EPA indicated that if
it received comments indicating, for any of these latter states, that
the SIP does not apply PSD to GHG sources, then, without further
proposed action, EPA would issue a final finding of substantial
inadequacy and SIP call for

that state. EPA identified these states as listed in table III-2,
``States with SIPs that EPA Proposed Appear to Apply PSD to GHG Sources
(Presumptive Adequacy List).'' \11\
---------------------------------------------------------------------------

    \11\ Note that in this final rule, except for any of these
states for which EPA is making a finding of substantial inadequacy
and issuing a SIP call, EPA is not taking any action with respect to
these states.
    \12\ Pennsylvania's Philadelphia County correctly belongs in the
category of states that do not have PSD programs approved into their
SIPs. We note this correction for informational purposes only, as it
has no bearing on this rulemaking. A corrected table III-2 would
list, ``Pennsylvania: All except Allegheny County and Philadelphia
County.'' However, we have not reflected the correction in table
III-2 itself, for the reason that the table represents our proposed
list. In addition, as noted above, an updated version of this
category of jurisdictions--those that have approved PSD SIPs that
apply to GHG-emitting sources--appears in Declaration of Regina
McCarthy, Coalition for Responsible Regulation v. EPA, DC Cir. No.
09-1322 (and consolidated cases) (McCarthy Declaration), Attachment
1, Table 3, which can be found in the docket for this rulemaking.
    \13\ Note that in this final action, we are issuing a SIP call
for Wyoming, based on information submitted by the state during the
SIP call comment period.

 Table III-2--States With SIPs That EPA Proposed Appear To Apply PSD to
                               GHG Sources
                       [Presumptive Adequacy List]
------------------------------------------------------------------------
                             State (or area)
-------------------------------------------------------------------------
Alabama: Jefferson County; Huntsville; Rest of State
California: Mendocino County AQMD; Monterey Bay Unified APCD; North
 Coast Unified AQMD; Northern Sonoma County APCD
Colorado
Delaware
Georgia
Indiana
Iowa
Louisiana
Maine
Maryland
Michigan
Mississippi
Missouri
Montana
New Hampshire
New Mexico: Albuquerque; Rest of State
North Carolina: Forsyth County; Mecklenburg; Western NC; Rest of State
North Dakota
Ohio
Oklahoma
Pennsylvania: All except Allegheny County \12\
Rhode Island
South Carolina
South Dakota
Tennessee: Chattanooga; Nashville; Knoxville; Memphis; Rest of State
Utah
Vermont
Virginia
West Virginia
Wisconsin \13\
Wyoming \13\
------------------------------------------------------------------------

    We further stated in the proposal that we intended to finalize the
finding of substantial inadequacy and the SIP call on or about December
1, 2010, approximately one month in advance of the January 2, 2011,
date when PSD requirements will first apply to GHG-emitting sources. We
justified this timing on the need to give sources notice that the PSD
requirements apply. In addition, we recognized that as a practical
matter, some states would not object to our imposing a FIP effective as
of January 2, 2011, in order to avoid any period of time when the GHG-
emitting sources identified in the Tailoring Rule as subject to PSD
would be unable to obtain a permit due to lack of a permitting
authority to process their PSD applications. We observed that we could
not impose a FIP until we have first finalized the SIP call and given
the state a reasonable period of time to make the corrective SIP
submission.
    In the proposal, we also described in greater detail the process
for finalizing the SIP call. We stated that we would issue the final
SIP call for any state for which we had concluded that the PSD program
did not as of that date apply to GHG-emitting sources. However, if a
state that was included in the proposed SIP call were to submit a SIP
revision by December 1, 2010, that purported to correct that
inadequacy, we would not finalize the finding or SIP call for that
state. Rather, we would take action on its SIP submittal as promptly as
possible. While we will strive to expedite approval of such SIP
submissions, we could not commit in the proposal to approving them by
January 2, 2011. We therefore cautioned in our proposal (see 75 FR at
53904) that states with submitted (but not EPA-approved) SIP revisions
will not be able to issue federally approved PSD permits until those
SIP revisions are approved. We stated that for all other states for
which we concluded that the PSD program did not apply to GHG sources,
on or about December 1, 2010, we would make the finding of substantial
inadequacy and issue the SIP call in a final rule and submit the notice
for the rule for publication in the Federal Register as soon as
possible thereafter. We stated that at the same time, we would also
notify the state of the finding of substantial inadequacy by letter and
by posting the signed SIP call rulemaking on our Web site. In view of
the urgency of the task, which is to do everything possible to ensure
that a PSD permitting authority for affected GHG sources is in place by
January 2, 2011, we proposed to give the final SIP call an effective
date of its publication date. We recognized that this process is highly
expedited, but we stated that it was essential to maximize our and the
states' opportunity to put in place a permitting authority to process
PSD permit applications beginning on January 2, 2011, without which
sources may be unable to proceed with plans to construct or modify.
    In the proposal, EPA discussed in some detail the SIP submittal
deadline it was proposing to establish under CAA section 110(k)(5).
Under this provision, in notifying the state of the finding of
substantial inadequacy and issuing the SIP call, EPA ``may establish
reasonable deadlines (not to exceed 18 months after the date of such
notice) for the submission of such plan revisions.'' EPA proposed to
allow the state up to 12 months from the date of signature of the final
finding of substantial inadequacy and SIP call within which to submit
the SIP revision, unless, during the comment period, the state
expressly advised that it would not object to a shorter period--as
short as 3 weeks from the date of signature of the final rule--in which
case EPA would establish the shorter period as the deadline. EPA stated
that, assuming that EPA were to finalize the SIP call on or about
December 1, 2010, as EPA said it intended to do in the proposal, then
the earliest possible SIP submittal deadline would be December 22,
2010.
    A few states did not inform EPA until after the end of the comment
period for the proposed SIP call that they would not object to a
deadline earlier than December 2011. Nevertheless, we considered their
responses when establishing their SIP submittal deadlines in this final
action.
    EPA made clear that the purpose of establishing the shorter period
as the deadline--for any state that advises us that it does not object
to that shorter period--is to accommodate states that wish to ensure
that a FIP is in effect as a backstop to avoid any gap in PSD
permitting. EPA also made clear that if a state did not advise EPA that
it does not object to a shorter deadline, then the 12-month deadline
would apply. EPA emphasized that for any state that receives a deadline
after January 2, 2011, the affected GHG-emitting sources in that state
may be delayed in their ability to receive a federally approved permit
authorizing construction or modification. That is, after January 2,
2011, these sources may not have available a permitting authority to
review their permit applications until

the date that EPA either approves the SIP submittal or promulgates a
FIP.
    EPA proposed that this 3-week-to-12-month time period, although
expedited, meets the CAA section 110(k)(5) requirement as a
``reasonable'' deadline in light of: (i) The SIP development and
submission process; (ii) the preference of the state; and (iii) the
imperative to minimize the period when sources will be subject to PSD
but will not have available a PSD permitting authority to act on their
permit application and therefore may face delays in constructing or
modifying.
2. Corrective SIP Revision
    EPA proposed certain requirements for each state receiving a SIP
call. The central requirement is that the corrective SIP revision must
apply the PSD program to GHG-emitting sources. EPA proposed two
different ways for the SIP revision to do so: First, the SIP revision
could revise the PSD applicability provisions or other provisions of
the SIP or state law that affect PSD applicability, to assure that the
PSD applicability provisions are automatically updating. This means
that these provisions would apply PSD to any air pollutant as soon as
the pollutant becomes newly subject to regulation under the CAA. As a
result, the PSD applicability provisions will apply to GHGs as of
January 2, 2011. In this case, EPA would approve the SIP revision as
fully meeting the CAA requirements. Second, and as an alternative, the
SIP revision could simply specifically identify GHGs as subject to PSD
applicability, in which case EPA would approve the SIP revision on the
basis that the revision is SIP-strengthening, as discussed later in
this preamble.
    In addition, EPA proposed to require that the corrective SIP
revision, in applying the PSD program to GHG-emitting sources, must
either limit PSD applicability to GHG-emitting sources at or above the
Tailoring Rule thresholds or adopt lower thresholds. However, EPA added
that if the state adopts lower thresholds, then the state must
demonstrate that it has ``adequate personnel [and] funding * * * to
carry out,'' that is, administer and implement, the PSD program with
those lower thresholds, in accordance with CAA section 110(a)(2)(E)(i).
    EPA also noted in the proposal that the state must define GHGs as a
single pollutant that is the aggregate of the group of six gases:
CO2, CH4, N2O, HFCs, PFCs, and
SF6, which is the pollutant that the LDVR subjected to
regulation. EPA further noted in the proposal that in the Tailoring
Rule, EPA adopted a carbon dioxide equivalent (CO2e) metric
and use of short tons (as opposed to metric tons) for calculating GHG
emissions in order to implement the Tailoring Rule thresholds. 75 FR at
31530, 31532. A state retains the authority to adopt lower thresholds
than in the Tailoring Rule in order to meet statutory requirements,
and, as a result, EPA stated in the proposal that the state is not
obligated to adopt the CO2e metric or use of short tons in
the corrective SIP revision. However, if the state wishes to adopt the
Tailoring Rule thresholds, but through a different approach, then the
state must assure that its approach is at least as stringent as under
the Tailoring Rule.
    As we noted in the preamble to the proposed rulemaking (75 FR at
53902), EPA issued a Call for Information (CFI) to solicit public
comment and data on technical issues that might be used to consider
biomass fuels and the emissions resulting from their combustion
differently with regard to applicability under PSD and with regard to
the BACT review process under PSD. Subsequently, EPA discussed these
considerations in its ``PSD and Title V Permitting Guidance for
Greenhouse Gases'' \14\ that was released on November 10, 2010, and
made available for public comment. In that GHG permitting guidance
document, EPA described on pages 8 through 10 how permitting
authorities may consider the use of biomass for energy generation when
carrying out their BACT analyses for GHGs. EPA also described plans for
future guidance regarding analysis of the environmental, energy, and
economic benefits of biomass in GHG BACT determinations.\15\
---------------------------------------------------------------------------

    \14\ See http://www.epa.gov/nsr/ghgpermitting.html/for more
information on EPA's recent GHG permitting guidance document and on
EPA's other permitting guidance for GHGs.
    \15\ Specifically, we stated the following in ``PSD and Title V
Permitting Guidance for Greenhouse Gases,'' pages 8-10: In the
annual US inventory of GHG emissions and sinks, EPA has reported
that the Land-Use, Land-Use Change and Forestry (LULUCF) sector
(including those stationary sources using biomass for energy) in the
United States is a net carbon sink, taking into account the carbon
gains (e.g., terrestrial sequestration) and losses (e.g., emissions
or harvesting) from that sector. [Footnote: 2010 US Inventory Report
at http://epa.gov/climatechange/emissions/usinventoryreport.html.]
On the basis of the Inventory results and other considerations,
numerous stakeholders requested that EPA exclude, either partially
or wholly, emissions of GHG from bioenergy and other biogenic
sources for the purposes of the BACT analysis and the PSD program
based on the view that the biomass used to produce bioenergy
feedstocks can also be a carbon sink and therefore management of
that biomass can play a role in reducing GHGs. [Footnote: GHG
emissions from bioenergy and other biogenic sources are generated
during combustion or decomposition of biologically-based material,
and include sources such as utilization of forest or agricultural
products for energy, wastewater treatment and livestock management
facilities, and fermentation processes for ethanol production.] EPA
plans to provide further guidance on the how to consider the unique
GHG attributes of biomass as fuel.
     Even before EPA takes further action, however, permitting
authorities may consider, when carrying out their BACT analyses for
GHG, the environmental, energy and economic benefits that may accrue
from the use of certain types of biomass and other biogenic sources
(e.g., biogas from landfills) for energy generation, consistent with
existing air quality standards. In particular, a variety of federal
and state policies have recognized that some types of biomass can be
part of a national strategy to reduce dependence on fossil fuels and
to reduce emissions of GHGs. Federal and state policies, along with
a number of state and regional efforts, are currently under way to
foster the expansion of renewable resources and promote biomass as a
way of addressing climate change and enhancing forest-management.
EPA believes that it is appropriate for permitting authorities to
account for both existing federal and state policies and their
underlying objectives in evaluating the environmental, energy and
economic benefits of biomass fuel. Based on these considerations,
permitting authorities might determine that, with respect to the
biomass component of a facility's fuel stream, certain types of
biomass by themselves are BACT for GHGs.
    To assist permitting authorities further in considering these
factors, as well as to provide a measure of national consistency and
certainty, EPA intends to issue guidance in January 2011 that will
provide a suggested framework for undertaking an analysis of the
environmental, energy and economic benefits of biomass in Step 4 of
the top-down BACT process, that, as a result, may enable permitting
authorities to simplify and streamline BACT determinations with
respect to certain types of biomass.
    The guidance will include qualitative information on useful
issues to consider with respect to biomass combustion, such as
specific feedstock types and trends in carbon stocks at different
spatial scales (national, regional, state). The aim of the
information will be to assist permitting authorities in evaluating
``carbon neutrality'' in the assessment of environmental, energy and
economic impacts of control strategies under Step 4 of the BACT
process, which, again, may enable the streamlining of BACT
determinations with respect to certain types of biomass. The agency
is currently reviewing the comments received in response to the July
15, 2010 Call for Information (CFI) that solicited feedback from
stakeholders on approaches to accounting for GHG emissions from
bioenergy and other biogenic sources. [Footnote: The Call for
Information was published on July 15, 2010. (75 FR 41173 and 75 FR
45112). EPA received over 7,000 comments and is still assessing
them.] These comments, among other things, suggest that certain
biomass feedstocks (e.g., biogas) may be considered carbon neutral
with minor additional analysis. Such a carbon benefit may further
inform the BACT process, especially where a permitting authority
considers the net carbon impact or carbon-neutrality of certain
feedstocks in accounting for the broader environmental implications
of using particular biomass feedstocks.
     Finally, EPA also plans to determine by May 2011, well before
the start of the second phase of PSD implementation pursuant to the
Tailoring Rule, whether the issuance of a supplemental rule is
appropriate to address whether the Clean Air Act would allow the
Agency and permitting authorities or permitted sources, when
determining the applicability of PSD permitting requirements to
sources of biogenic emissions, to quantify carbon emissions from
bioenergy or biogenic sources by applying separate accounting rules
for different types of feedstocks that reflect the net impact of
their carbon emissions. This determination will take into
consideration both the LULUCF inventory and the full record of
responses to the CFI.

---------------------------------------------------------------------------

IV. Final Action and Response to Comments

A. Process for Response to Comments

    We proposed our SIP call and FIP actions as companion proposals.
Both proposals were signed by the Administrator and made publicly
available on August 12, 2010, and both proposals were published in the
Federal Register on September 2, 2010. The SIP call and FIP actions
share a rulemaking docket, and the majority of comments that were
submitted to EPA during the proposals' comment periods were provided in
the form of a letter that intermingled comments on the SIP call and the
FIP actions. We respond to comments on the SIP call proposal in this
preamble, in a Response to Comment Document for the SIP call, and in a
Supplemental Information Document for the SIP call. The Response to
Comment Document and Supplemental Information Document can be found in
the docket for this action. We will respond to comments on the FIP when
we finalize that action.

B. Finding of Substantial Inadequacy and SIP Call

    In this action, EPA is finalizing its proposal, under CAA section
110(k)(5), to: (i) Issue a finding that the SIPs for 13 states
(comprising 15 state and local programs) are ``substantially inadequate
to * * * comply with any requirement of this Act'' because their PSD
programs do not apply to GHG-emitting sources as of January 2, 2011;
(ii) ``require[] the state[s] to revise the [SIP] * * * to correct such
inadequacies,'' that is, to issue a SIP call requiring submission of a
corrective SIP revision; and (iii) establish a ``reasonable deadline[]
(not to exceed 18 months after the date of such notice)'' for the
submission of the corrective SIP revision. This deadline ranges, for
different states, from 3 weeks to 12 months after the date of this
action. The 13 states and their deadlines are listed in table IV-1,
``SIP Call States and SIP Submittal Deadlines'':

         Table IV-1--SIP Call States and SIP Submittal Deadlines
------------------------------------------------------------------------
                                                                 SIP
                      State (or area)                         submittal
                                                               deadline
------------------------------------------------------------------------
Arizona: Pinal County......................................     12/22/10
Arizona: Rest of State (Excludes Maricopa County, Pima          12/22/10
 County, and Indian Country)...............................
Arkansas...................................................     12/22/10
California: Sacramento Metropolitan AQMD...................     01/31/11
Connecticut................................................     03/01/11
Florida....................................................     12/22/10
Idaho......................................................     12/22/10
Kansas.....................................................     12/22/10
Kentucky (Jefferson County): Louisville Metro Air Pollution     01/01/11
 Control District..........................................
Kentucky: Rest of State (Excludes Louisville Metro Air          03/31/11
 Pollution Control District (Jefferson County))............
Nebraska...................................................     03/01/11
Nevada: Clark County.......................................     07/01/11
Oregon.....................................................     12/22/10
Texas......................................................     12/01/11
Wyoming....................................................     12/22/10
------------------------------------------------------------------------

    This final rule is consistent with EPA's proposal, except that (i)
EPA is not finalizing the SIP call with respect to one state for which
EPA proposed the SIP call, namely Alaska, because it has already
submitted a revised SIP, and (ii) EPA is finalizing the SIP call with
respect to one state for which EPA solicited comment but did not
propose the SIP call, namely Wyoming.
    In this section of this preamble, we: (1) Explain in detail our
overall basis for these actions, including responding to comments on
that overall basis; and (2) explain concisely our basis for action for
each of the 13 states. In a Supplemental Information Document, which
can be found in the docket for this rulemaking, we include more detail
for our explanations and we respond to state-specific comments we
received in response to the proposed actions.
1. Overall Basis
a. Finding of Substantial Inadequacy: Final Action and Response to
Comments
(i) Final Action
    Our overall basis for issuing the finding of substantial inadequacy
and issuing the SIP call for the 13 states is the same as we stated
during the proposal. As summarized earlier in this preamble, for each
of these 13 states, EPA finds that the failure of the SIP PSD
applicability provisions to apply to GHG-emitting sources renders the
SIP ``substantially inadequate * * * to * * * comply with any
requirement of [the CAA]'' and as a result, EPA ``require[s] the State
to revise the plan as necessary to correct such inadequacies,'' i.e.,
issues a SIP call, all in accordance with CAA section 110(k)(5).
    We consider the legal basis to be straightforward. CAA section
110(k)(5), as quoted earlier in this preamble, authorizes EPA to issue
a finding that a SIP is ``substantially inadequate'' to meet CAA
requirements. The CAA does not define the quoted term, and as a result,
it should be given its ordinary, everyday meaning. In the present case,
the failure of a SIP to apply PSD to GHG-emitting sources means that
the SIP is ``substantially inadequate'' to comply with CAA requirements
because (i) The CAA requires that SIP PSD programs apply PSD to GHG-
emitting sources, (ii) the SIPs at issue fail to do so, and (iii)
applying PSD to GHG-emitting sources would affect a large number of
sources and permitting actions.
    CAA section 110(k)(5) authorizes EPA to issue a finding of
substantial inadequacy whenever the SIP fails to comply with ``any
requirement of [the CAA].'' CAA section 165(a)(1) provides that ``[n]o
major emitting facility * * * may be constructed * * * unless * * * a
[PSD] permit has been issued for such proposed facility in accordance
with this part.'' CAA section 169(1) defines ``major emitting
facility'' as any stationary source that emits specified quantities of
``any air pollutant.'' EPA regulations have long defined ``any air
pollutant'' as, at least in part, ``any pollutant * * * subject to
regulation under the Act.'' 40 CFR 52.21(b)(50)(iv). Further, CAA
section 161 requires SIPs to contain ``emission limitations and such
other measures as may be necessary to prevent significant deterioration
of air quality * * *'' and CAA section 110(a)(2)(J) requires that
``[e]ach [SIP] * * * meet the applicable requirements of * * * part C
of this subchapter (relating to significant deterioration of air
quality.'' Reading these provisions together, the CAA requires that PSD
requirements apply to any stationary source that emits specified
quantities of any air pollutant subject to regulation under the CAA,
and those PSD requirements must be included in the approved SIPs.\16\
---------------------------------------------------------------------------

    \16\ EPA has long interpreted the PSD applicability provisions
in the CAA to be self-executing, that is, they apply by their terms
so that a source that emits any air pollutant subject to regulation
becomes subject to PSD--and, therefore, cannot construct or modify
without obtaining a PSD permit--and these provisions apply by their
terms in this manner regardless of whether the state has an approved
SIP PSD program. What's more, until an applicable implementation
plan is in place--either an approved SIP or a FIP--no permitting
authority is authorized to issue a permit to the source. In a recent
decision, the 7th Circuit, mistakenly citing to PSD provisions when
the issue before the court involved the separate and different non-
attainment provisions of CAA sections 171-193, concluded that
sources could continue to abide by permitting requirements in an
existing SIP until amended, even if that SIP does not comport with
the law. United States v. Cinergy Corp., No. 09-3344, 2010 WL
4009180 (7th Cir. Oct. 12, 2010). In stark contrast to the
nonattainment provisions actually at issue in Cinergy--which are not
self-executing and must therefore be enforced through a SIP--PSD is
self-executing; it is the statute (CAA section 165), not just the
SIP, that prohibits a source from constructing a project without a
permit issued in accordance with the Act.

---------------------------------------------------------------------------

    As of January 2, 2011, GHG-emitting sources will become subject to
PSD. As a result, the CAA provisions described earlier in this preamble
require PSD programs to apply to GHG-emitting sources. Accordingly, it
is clear that the failure of any SIP PSD applicability provisions to
apply the PSD program to GHG-emitting sources means that the SIP fails
to comply with these CAA requirements.
    Moreover, in this case, the failure of the SIPs to apply PSD to
GHG-emitting sources will affect a substantial number of sources and
permitting actions. EPA estimated in the Tailoring Rule that on a
nationwide basis, many of the sources that now require PSD permit
applications due to their emissions of non-GHG pollutants (which we
call ``anyway'' sources) also emit GHG pollutants in quantities that
will trigger the application of PSD. On average, on an annual basis
nationwide, these sources submit 688 PSD permit applications. 75 FR at
31540. In addition, EPA estimated that beginning on July 2, 2011, on an
annual basis nationwide, another 917 permit applications would
potentially be submitted due to the GHG emissions of sources
undertaking construction or modification activities, even though these
sources' other pollutants would not, in and of themselves, trigger PSD.
Id. Thus, large numbers of permitting actions are at issue. Moreover,
the principal PSD requirement that will apply to GHG-emitting sources
is the requirement to implement BACT, which is the principal mechanism
under the PSD provisions for controlling emissions from non-NAAQS
pollutants.
    The failure of a SIP to apply PSD to GHG-emitting sources--when the
SIP is required to apply PSD to GHG-emitting sources and when doing so
would, on average, result in a significant number of additional
permitting actions subject to PSD--justifies a finding by the
Administrator that a SIP that does not apply PSD to such sources as of
January 2, 2011, is ``substantially inadequate'' to comply with CAA
requirements.
(ii) Response to Comments
(I) Pollutants Subject to the SIP Call
    Some commenters stated that failure of a SIP to require PSD permits
for GHG-emitting sources does not constitute a ``substantial[]
inadequa[cy]'' under CAA section 110(k)(5). In making this point, the
commenters first state that ``PSD can only be triggered by pollutants
for which EPA has issued a national ambient air quality standard
(``NAAQS'') and only in attainment areas for such pollutants.'' The
commenters go on to assert that whether a SIP can be considered
substantially inadequate due to its failure to require PSD permits
depends on the extent to which the foregone controls ``affect * * * the
state's ability to attain a NAAQS.'' Then, the commenters claim that
the numbers of permits that the state would be required to issue that
would include GHG controls beginning January 2, 2011, will be such ``a
small number'' that ``the lack of a BACT limit for [GHGs] would not
affect in any way the state's ability to attain a NAAQS.'' The
commenters explain that the number of permits that would be required
for GHG sources under the Tailoring Rule is limited to, on an annual
basis, on average, in each state, (i) beginning as of January 2, 2011,
``one or two permits'' for sources that would be subject to PSD anyway
due to their emissions of other pollutants (which, again, we call
``anyway'' sources), plus (ii) beginning as of July 1, 2011, 11 permits
for sources that would become subject to PSD solely because of their
emissions of GHGs.\17\ Again, the commenters assert that the controls
foregone from this ``small number'' of permits would have too little an
impact on a state's ability to attain a NAAQS to justify finding the
SIP to be substantially inadequate under CAA section 110(k)(5).
---------------------------------------------------------------------------

    \17\ In another part of their comments, commenters state that
the total number of affected permits is ``a few permits with GHG
limits in the first 6 months of 2011.''
---------------------------------------------------------------------------

    We find this argument unpersuasive for several reasons. Most
importantly, we do not accept what appear to be the premises of this
argument, which are that PSD can only be triggered for NAAQS pollutants
and that whether deficiencies in a PSD program can render a SIP
substantially inadequate depend only on whether any foregone controls
affect the state's ability to maintain a NAAQS. In the Tailoring Rule,
we addressed at length the comment that PSD can be triggered only by
pollutants subject to the NAAQS, and we concluded that as a matter of
Chevron Step 1, this view was incorrect and that, instead, PSD applies
to non-NAAQS pollutants, including GHGs. (See discussion in Tailoring
Rule preamble, 75 FR at 31514 and elsewhere.)\18\ In this rulemaking,
we are not reopening that issue. We did not solicit comment on it and
our response to this comment should not be construed to be a reopening.
---------------------------------------------------------------------------

    \18\ We also explained our view that PSD may be triggered by
non-NAAQS pollutants such as GHGs in the Tailoring Rule response to
comments document (``Prevention of Significant Deterioration and
Title V GHG Tailoring Rule: EPA's Response to Public Comments''),
pp. 34-41; and in EPA's response to motions for a stay filed in the
litigation concerning those rules (``EPA's Response to Motions for
Stay,'' Coalition for Responsible Regulation v. EPA, DC Cir. No. 09-
1322 (and consolidated cases)), at 47-59.
---------------------------------------------------------------------------

    Second, we believe that the commenters have understated the number
of permitting actions that will involve GHG controls. As noted earlier
in this preamble, we provided estimates of the numbers of permits in
the Tailoring Rule. There, we addressed at length the numbers of
permitting actions that would involve GHGs, including soliciting
comment on our proposed estimates and revising our final estimates
based on comments received. In this rulemaking, the GHG PSD SIP call,
we are not reopening that issue. We did not solicit comment on it and
our response to this comment should not be construed to be a reopening.
As noted earlier in this preamble and also in the Tailoring Rule, we
estimated that on an annual basis, nationwide, beginning January 2,
2011, there would be 688 permitting actions for ``anyway'' sources that
would require GHG controls, and, beginning July 1, 2011, there would be
an additional 917 permitting actions per year. These totals are
significantly higher than the commenters' estimates.\19\
---------------------------------------------------------------------------

    \19\ Although, again, we are not reopening in this rule the
issue of the number of permits that would include GHG controls, we
note the following additional reasons why we do not find the
commenters' estimates persuasive: (i) The commenters stated that
they were adjusting downward what they described as EPA's estimates
for ``anyway'' sources, but the commenters did not provide a basis
for that downward adjustment. (ii) Some of the commenters have also
brought lawsuits against the Tailoring Rule, and in court papers
filed at approximately the same time as their comments in this
rulemaking, they stated that the numbers of affected permits would
be significantly higher than the numbers that they stated in their
comments in this rulemaking. National Association of Manufacturers,
et al., ``Petitioner's Motion for Partial Stay of EPA's Greenhouse
Gas Regulations,'' Coalition for Responsible Regulation v. EPA, DC
Cir. No. 09-1322 (and consolidated cases) at 45, 47.
---------------------------------------------------------------------------

    Commenters also state that ``EPA's own actions further reveal the
flaw in its analysis.'' They note that EPA has proposed to issue the
SIP call on grounds that some of the SIPs apply PSD to only criteria
pollutants and not

to pollutants other than criteria pollutants, and they state that these
SIPs have applied to only criteria pollutants for ``many years.'' The
commenters argue that EPA has never, up until now, issued a SIP call on
the basis that the PSD provisions in the SIPs do not cover pollutants
more broadly.
    Commenters appear to infer from EPA's failure to have initiated a
SIP call for these states in the past an indication that EPA does not
have authority to do so. That inference is simply incorrect. An
agency's not taking certain action at one point in time does not
indicate a lack of authority to take that action, nor is the agency
required to explain its earlier inaction in order to justify subsequent
action. An agency may properly address an issue in step-by-step
fashion. See, e.g., Grand Canyon Air Tour Coalition v. F.A.A., 154 F.3d
455 (DC Cir. 1998), City of Las Vegas v. Lujan, 891 F.2d 927 (DC Cir.
1989). 75 FR at 31544. In addition, as discussed later in this
preamble, EPA has discretion in deciding whether, and when, to issue a
finding of substantial inadequacy. Moreover, commenters have pointed to
no statements by EPA indicating that SIPs that do not apply PSD to all
pollutants subject to regulation fully meet CAA requirements; on the
contrary, in the 2002 NSR Reform rule,\20\ EPA specifically required
SIP revisions to apply PSD to all pollutants subject to regulation.
---------------------------------------------------------------------------

    \20\ ``Prevention of Significant Deterioration (PSD) and
Nonattainment New Source Review (NNSR): Baseline Emissions
Determination, Actual-to-Future-Actual Methodology, Plantwide
Applicability Limitations, Clean Units, Pollution Control Projects--
Final Rule,'' 67 FR 80186 (December 31, 2002).
---------------------------------------------------------------------------

(II) Requirements of Tailoring Rule
(A) Comment
    Some industry commenters stated that EPA had no basis to issue a
SIP call, and so should withdraw the proposal, because EPA was required
to give states 3 years from the date the Tailoring Rule was published
(June 3, 2010) to submit SIP revisions implementing PSD requirements
for GHG-emitting sources. The commenters' premise is that without the
Tailoring Rule, PSD would not apply to GHG-emitting sources, and the
Tailoring Rule imposed the requirement that PSD applies to GHG-emitting
sources. As evidence for its premise that the Tailoring Rule imposed
this requirement, the commenters point to the fact that EPA codified
certain provisions in 40 CFR 51.166, including, for example, provisions
concerning the definition of GHGs.
    As a corollary to their premise, the commenters take the position
that EPA regulations establishing the process for SIPs to adopt PSD
program requirements govern and, therefore, require EPA to give the
states up to 3 years to submit their SIP revisions that incorporate
what the commenters view as the Tailoring Rule's requirement to apply
PSD to GHG-emitting sources. See 40 CFR 51.166(a)(6) (``Any state
required to revise its implementation plan by reason of an amendment to
this section, including any amendment adopted simultaneously with this
paragraph (a)(6)(i), shall adopt and submit such plan revision to the
Administrator for approval no later than three years after such
amendment is published in the Federal Register.''). The commenters add
that during this 3-year period, the Tailoring Rule requirements that
PSD applies to GHG-emitting sources do not apply in the states. Rather,
according to the commenters, state permitting authorities may continue
to issue PSD permits that do not include requirements for GHGs.
    Commenters also argue that CAA section 110(a)(1), which requires
SIP submittal ``within 3 years (or such shorter period as the
Administrator may prescribe),'' supports a 3-year period for the SIPs
required under the SIP call. Another commenter takes a similar position
but points to CAA section 166, which, the commenter asserts, provides a
21-month period for SIP submissions and also prevents the application
of PSD to GHG-emitting sources in the meantime.
    Turning to the SIP call, the commenters view the purpose of the SIP
call as requiring the state to adopt what the commenters call the
Tailoring Rule's requirements to apply PSD to GHG-emitting sources. The
commenters assert that because, in their view, the adoption process of
40 CFR 51.166(a)(6) applies--which allows states 3 years to adopt the
SIP revision and, in the meantime, allows states to continue to issue
permits without GHG controls--the SIP call (with its 12-month or
shorter deadlines) does not apply and EPA should withdraw its SIP call
proposal.
    Continuing to focus on the SIP call, one of the industry commenters
adds: ``In the proposed SIP Call rule, EPA characterizes the Tailoring
Rule as creating a PSD permit moratorium, beginning on the [January 2,
2011 and July 1, 2011 phase-in] dates, with regard to those sources
whose GHG emissions are above the applicable Tailoring Rule
thresholds.'' This commenter argues that ``EPA's premise that the
Tailoring Rule imposes a construction moratorium, absent a SIP revision
or a FIP, beginning on January 2, 2011, is unlawful and should be
abandoned.'' This commenter appears to ascribe to EPA the view that the
construction ban is a sort of sanction that EPA may impose; the
commenter appears to read the proposed SIP call as characterizing the
Tailoring Rule as attempting to use the construction moratorium in that
manner. The commenter does not cite any statement in the proposed SIP
call that characterizes the Tailoring Rule in that manner or any
provision in the Tailoring Rule that could be read to attempt to use
the construction moratorium in that manner.
(B) Response
    The commenters have misstated what the Tailoring Rule did and, in
so doing, have misstated the source of the requirement that PSD applies
to GHG-emitting sources. Contrary to what the commenters state, the
Tailoring Rule did not establish the requirement that PSD apply to GHG-
emitting sources. This requirement was established by operation of the
applicable CAA provisions, in conjunction with the LDVR. That is, the
CAA requirements (i) prohibit ``major emitting facilit[ies]'' from
constructing or modifying without obtaining a permit that meets the PSD
requirements, CAA section 165(a)(1), and (ii) define a ``major emitting
facility'' as a source that emits a specified quantity of ``any air
pollutant,'' CAA section 169(1), which EPA has long interpreted as any
pollutant subject to regulation. In this manner, the CAA requirements
for PSD applicability are what we call automatically updating, that is,
whenever EPA regulates a previously unregulated pollutant, PSD applies
at that time to that pollutant without further regulatory action by
EPA.
    EPA regulations have long codified this automatically updating
aspect of the CAA PSD requirements. See 43 FR 26380, 26403/3, 26406
(June 19, 1978) (promulgating 40 CFR 51.21(b)(1)(i)) and 42 FR 57479,
57480, 57483 (November 3, 1977) (proposing 40 CFR 51.21(b)(1)(i))
(applying PSD requirements to a ``major stationary source'' and
defining that term to include sources that emit specified quantities of
``any air pollutant regulated under the Clean Air Act''). Most
recently, in our 2002 NSR Reform rule, EPA reiterated these
requirements, although changing the terminology. 67 FR 80186 (December
31, 2002). Specifically, EPA required that emissions of ``any regulated
NSR pollutant'' be subject to PSD requirements when emitted in
specified quantities by sources and defined that

term to include pollutants regulated under certain CAA requirements, as
well as ``any pollutant that otherwise is subject to regulation under
the [CAA].'' 52.166(b)(49)(iv). EPA made clear in the preamble to the
NSR Reform rule that PSD applicability was automatically updating. 67
FR at 80240.
    As discussed elsewhere, it is these provisions, in conjunction with
the LDVR (which subjects GHGs to regulation), that have triggered PSD
applicability for GHG-emitting sources. The Tailoring Rule did not do
so.
    In fact, rather than establishing the requirement that PSD apply to
GHG-emitting sources, the Tailoring Rule alleviated that requirement
for most of the GHG-emitting sources that would otherwise be affected.
The Tailoring Rule did so by providing that the only GHGs ``subject to
regulation'' are those that are emitted by sources at or above
specified thresholds (the Tailoring Rule thresholds).\21\ In order to
identify the thresholds, it was necessary for EPA to identify (i) the
pollutant that comprises GHGs and (ii) how to account for that
pollutant. However, the Tailoring Rule made clear that, on the one
hand, the states may either: (a) Adopt different requirements for the
thresholds, as long as those requirements were equivalent to the
requirements of the thresholds promulgated by EPA; or (b) apply lower
thresholds, as long as the states accompanied them with an assurance of
adequate resources. Thus, had EPA never promulgated the Tailoring Rule,
PSD would nevertheless apply to GHG-emitting sources; it would apply to
all GHG-emitting sources at or above the 100/250-tpy threshold; and it
would not be limited to GHG-emitting sources at or above the Tailoring
Rule thresholds.
---------------------------------------------------------------------------

    \21\ More broadly, the Tailoring Rule indicated that the
Tailoring Rule thresholds could be treated as incorporated in any of
several of the components of the regulatory definition of ``major
stationary source.'' 75 FR at 31582.
---------------------------------------------------------------------------

    The SIP call that EPA is finalizing in this action is based on the
failure of the SIPs to apply PSD to GHG-emitting sources, and that
failure, in turn, is rooted in the failure of the SIPs to apply PSD to
newly regulated pollutants on an automatically updating basis. The
states' corrective SIP revision in response to the SIP call that
applies PSD to GHG-emitting sources may apply the Tailoring Rule
thresholds (or lower thresholds, depending, as just noted, on the
state's resources), but, again, the current failure of the SIPs to
include the Tailoring Rule thresholds is not the basis for the SIP
call.
    As a result, the process of 40 CFR 51.166(a)(6)(i), with its 3-year
deadline, does not apply in place of the SIP call, as the commenter
suggests. 40 CFR 51.166(a)(6)(i) provides, ``Any State required to
revise its implementation plan by reason of an amendment to this
section, including any amendment adopted simultaneously with this
paragraph (a)(6)(i), shall adopt and submit such plan revision to the
Administrator for approval no later than three years after such
amendment is published in the Federal Register.'' (Emphasis added.)
This provision was added as part of the 2002 rulemaking revising the
NSR program that we call the NSR Reform rule. See 67 FR 80186 (December
31, 2002). In addition, as noted already, the requirement that SIP PSD
programs automatically update is a longstanding requirement, and EPA
most recently reiterated that requirement, with revised terminology, in
the NSR Reform rule as well. There, EPA revised the definition of major
stationary source--the entity to which PSD applies--to mean a source
that emits the requisite amount of ``any regulated NSR pollutant,'' 40
CFR 51.166(b)(1)(i)(a), 67 FR at 80239-40; and EPA defined that term to
include, among other things, ``any air pollutant that otherwise is
subject to regulation under the Act.'' 40 CFR 51.166(b)(49)(iv). EPA
added in the preamble, ``[t]he PSD program applies automatically to
newly regulated NSR pollutants, which would include final promulgation
of an NSPS applicable to a previously unregulated pollutant.'' 67 FR at
80240. After EPA promulgated the NSR Reform rule, many states submitted
SIP revisions that incorporated the revised terminology, and in that
manner, assured that their PSD programs automatically updated. Of
course, the states subject to this SIP call have had the opportunity to
submit SIP revisions since December 31, 2002--almost 8 years ago--to
conform to the NSR Reform rule and thereby assure that their PSD
programs are automatically updating. 67 FR at 80241. Many of the
affected states did not do so, and that has led to the failure of the
SIPs to apply PSD to GHGs, which is the substantial inadequacy that
justifies the SIP call.
    It is true that the SIP call requires a corrective SIP revision for
states to apply PSD to GHG-emitting sources (and does not mandate that
states revise their PSD applicability provisions to incorporate an
automatic updating mechanism). In doing so, states may adopt the
Tailoring Rule thresholds--including certain features such as the
definition of GHGs--or may adopt differently phrased requirements or
lower thresholds, as explained earlier in this preamble, but this
aspect of the state's obligation does not, as commenters would have it,
somehow take the requirement out of the SIP call process and place it
in the 40 CFR 51.166(a)(i) process.
    In addition, it is clear that the commenters are incorrect in their
assertion that PSD applicability for GHGs must be delayed for the 3-
year SIP submission period under 40 CFR 51.166(a)(i) and in their
related assertion that EPA's efforts to apply the Tailoring Rule amount
to unlawful retroactive application of regulatory requirements. The 3-
year period does not apply to this requirement that PSD apply to GHG-
emitting sources, as discussed earlier in this preamble; even more, by
operation of the CAA, in conjunction with the LDVR, PSD applies to GHGs
beginning on January 2, 2011, with or without the Tailoring Rule.
Again, the Tailoring Rule simply adds thresholds to limit that
applicability.\22\
---------------------------------------------------------------------------

    \22\ Nor does any provision in 40 CFR 51.166 mandate that states
adopt the Tailoring Rule thresholds. Again, the Tailoring Rule
thresholds are limitations on PSD applicability and are not minimum
PSD requirements that states must adopt under CAA section 110(a) or
the PSD provisions. Rather, a state may, if it chooses, retain the
lower 100/250-tpy thresholds, apply PSD to a larger universe of GHG-
emitting sources, and increase its resources for PSD permitting
accordingly. Thus, the 3-year period in 40 CFR 51.166(a)(1) does not
apply to the SIP revisions that adopt the Tailoring Rule thresholds.
---------------------------------------------------------------------------

    For similar reasons, commenters are also incorrect in arguing that
CAA section 110(a)(1), which requires a SIP submittal ``within 3 years
(or such shorter period as the Administrator may prescribe),'' supports
a 3-year period for the SIPs required under the SIP call and precludes
PSD applicability during that period. Nothing in that provision
overrides the operation of the CAA provisions, discussed elsewhere,
which automatically apply PSD to newly regulated pollutants, and EPA's
regulations that codify those provisions, in conjunction with the LDVR,
to mean that GHG-emitting sources are subject to PSD as of January 2,
2011. Moreover, this provision cannot override the SIP call provisions,
which apply for reasons stated elsewhere. In any event, this provision
does not mandate a 3-year period for SIP submittal; rather, the
provision, by its terms, authorizes EPA to prescribe a shorter period.
    Another commenter is mistaken in making the somewhat similar
assertion that ``with regard to the SIP revisions required to
accommodate any new regulated pollutant under the PSD program Section
166(b) of the Act allows the States 21 months. Any SIP

Call before the States have failed to meet that deadline is illegally
premature.'' The commenter is mistaken because (i) CAA section 166(b)
by its terms applies only in the case of certain pollutants listed in
CAA section 166(a) and pollutants for which NAAQS are promulgated and
therefore does not apply to GHGs, and (ii) the D.C. Circuit held, in
Alabama Power v. Costle, that the 21-month period does not toll the
applicability of PSD requirements to pollutants, that is, that PSD
requirements apply to pollutants during that period. 636 F.2d 323,406
(1980).
    Finally, the commenter erred in asserting that in the proposed SIP
call, ``EPA characterized the Tailoring Rule as creating a PSD permit
moratorium,'' that EPA has no authority to impose such a moratorium,
and therefore that no such moratorium can apply in the affected states.
On the contrary, neither in the proposed SIP call nor anywhere else has
EPA ``characterized the Tailoring Rule as creating a PSD permit
moratorium.'' The commenter has not--nor could it--provide any
citations to that effect. It is certainly true that EPA does not have
authority to impose a blanket construction moratorium, and EPA has
never claimed to the contrary. What EPA did say in the proposed SIP
call is that GHG-emitting sources in states without authority to issue
permits to those sources will face de facto obstacles to construction
or modification. For example, EPA said that in such states, ``absent
further action, GHG sources that will be required to obtain a PSD
permit for construction or modification on and after January 2, 2011,
will be unable to obtain that permit and therefore may be unable to
proceed with planned construction or modification * * *. '' 75 FR at
53894/3. This statement remains valid.
(III) Timing of finding of substantial inadequacy
    Some industry commenters also stated that EPA ``cannot make [a
finding of substantial inadequacy] until the January 2, 2011, date on
which PSD permitting requirements for GHGs will [first] apply.'' They
explained that CAA section 110(k)(5) ``does not describe the event of a
`substantial inadequacy' as an anticipated future occurrence, instead
stating that EPA may issue a SIP call to any state with a SIP that `is
substantially inadequate' to comply with CAA requirements. The CAA does
not provide EPA with a basis for * * * issu[ing] a SIP call because the
agency expects to find that some states' SIP will become `substantially
inadequate' at some later time.'' (Emphasis in original.)
    We disagree with commenters' reading of CAA section 110(k)(5). EPA
is justified in finding that under CAA section 110(k)(5), each of the
affected SIPs ``is substantially inadequate'' to comply with CAA
requirements at the present time.
    In brief, under each of these SIPs' current provisions, they will
not apply PSD to GHG-emitting sources when, in only one month's time,
those sources will be subject to PSD under the CAA. Some lead time
generally is required to revise SIPs. As a result, there is a
meaningful risk in each of these states that, beginning in one month's
time, sources that are subject to PSD will not have a permitting
authority available to process their permit applications and therefore
will face delays in their construction and modification projects. This
situation is not in keeping with one of the purposes of PSD, which is
to protect the environment in a manner that reduces potential negative
repercussions to economic growth. Consistent with that purpose, we
interpret CAA section 110(k)(5) to authorize a finding at this time
that the SIPs are substantially inadequate to comply with CAA
requirements.
    Specifically, as discussed earlier in this preamble, under the
terms of the CAA PSD applicability provisions, large sources become
subject to PSD as soon as the pollutants they emit become subject to
regulation. CAA section 165(a)(1), 169(1). Accordingly, again as
discussed earlier in this preamble, (i) the CAA requires that states
assure that the PSD applicability provisions in their SIPs are
automatically updating, (ii) EPA's longstanding regulations incorporate
this requirement, and (iii) EPA reiterated this regulatory requirement
for automatic updating in the 2002 NSR Reform rule (see 67 FR 80186,
December 31, 2002), using different terminology, and required states to
submit SIP revisions incorporating the requirement within 3 years. The
requirement for automatic updating is one of the foundations for the
requirement that the SIPs affected by this action apply PSD to GHG-
emitting sources as of January 2, 2011.
    These SIPs, under their present provisions, do not do so, and thus
they will not apply PSD to GHG-emitting sources by January 2, 2011. If
they do not, then no permitting authority will be available by January
2, 2011, and sources may face delays in obtaining permits to construct
or modify. To assure the availability of a permitting authority, the
SIPs must be revised and approved by EPA, or else a FIP must be put in
place. This process requires some time, but again, until it is
completed, sources face those delays.
    Delays in construction or modification solely due to the lack of a
permitting authority to process applications are not consonant with the
purposes of the PSD provisions. One purpose of the PSD provisions is to
protect public health and the environment consistent with the promotion
of economic development. See CAA section 160. In particular, CAA
section 160(3) identifies as some of the purposes of PSD, ``to insure
that economic growth will occur in a manner consistent with the
preservation of existing clean air resources.''
    The requirements of CAA section 110(k)(5), as they apply to PSD
SIPs, should be interpreted in that light. The DC Circuit has held that
the terms of the PSD provisions should be interpreted with the PSD
purposes in mind, New York v. EPA, 413 F.3d 3, 23(DC Cir.), rehearing
en banc den., 431 F.3d 801 (2005), and the same should be true of CAA
section 110(k)(5) as applied to PSD requirements. Therefore, whether a
SIP ``is substantially inadequate'' under CAA section 110(k)(5) should
be interpreted in light of the purposes of the PSD provisions,
including the need to insure that economic growth will occur consistent
with environmental goals.
    In this light, EPA concludes that each affected SIP ``is
substantially inadequate'' at this time because it does not apply PSD
to GHG-emitting sources, and only a month remains before those sources
will become subject to the requirement to obtain a permit for their GHG
emissions when they construct or modify. In light of the lead time
required to revise the SIP or put in place a FIP, there is a
substantial risk that no permitting authority will be in place to
process permit applications, which would result in delays in PSD permit
issuance. As a result, it is sensible and in keeping with the purposes
of the PSD provisions to issue the SIP call at this time and thereby
set in motion the process to establish a permitting authority. As noted
elsewhere, with this approach, almost all of the affected states will
have a permitting authority in place by January 2, 2011, or soon enough
thereafter that any delay will not have substantial adverse effects on
sources in the state.
    In contrast, under the commenter's interpretation, EPA would be
obliged to wait until January 2, 2011, when PSD begins to apply to GHG-
emitting sources, before EPA could require corrective action. Under
that approach, it is much more likely that sources in some states would
find themselves subject to delays before they could

construct or modify, a result at odds with the purposes of the PSD
provisions.
b. Deadline
(i) Final Action
    This action finalizes our proposal to establish for each state
subject to the SIP call a deadline of 12 months from the date of the
final SIP call to submit its corrective SIP revision, except that if
the state informed EPA that it would not object to a specified shorter
deadline--as short as 3 weeks from the date of this final action--then
EPA would establish that shorter period as the SIP deadline.
    This 3-week-to-12-month time deadline, although expedited, meets
the CAA section 110(k)(5) requirement of a ``reasonable deadline[].''
The term ``reasonable'' as it appears in that provision is not defined.
Accordingly, it should be given its everyday meaning. The dictionary
definition of the word ``reasonable'' is ``fair and sensible,'' ``based
on good sense,'' or ``as much as is appropriate or fair.'' Oxford
American College Dictionary 1138 (2d ed. 2007). Thus, a reasonable
deadline is a time period that is sensible or logical, and that in turn
depends on the facts and circumstances. Those facts and circumstances
include (i) The SIP development and submission process, (ii) the
preference of the state, and (iii) the imperative to minimize the
period when sources will be subject to PSD but will not have available
a PSD permitting authority to act on their permit application and
therefore would be unable to construct or modify.
    First, as to the SIP development process, the 12-month outside time
limit is reasonable because it is consistent with the time period
required for SIP revisions in at least one previous SIP call that EPA
issued, the NOx SIP Call.\23\ Moreover, a large number of states have
indicated to EPA that they expect to submit their GHG SIP revisions
within 12 months. These states include some that are the subject of
today's SIP call action and others that already have PSD programs that
apply to GHG-emitting sources and are submitting SIP revisions to
incorporate the Tailoring Rule thresholds.\24\
---------------------------------------------------------------------------

    \23\ ``Finding of Significant Contribution and Rulemaking for
Certain States in the Ozone Transport Assessment Group Region for
Purposes of Reducing Regional Transport of Ozone; Rule.'' 63 FR
57356 (October 27, 1998).
    \24\ Declaration of Regina McCarthy, Coalition for Responsible
Regulation v. EPA, DC Cir. No. 09-1322 (and consolidated cases)
(McCarthy Declaration), Attachment 1, Tables 2-3, in the docket for
this rulemaking.
---------------------------------------------------------------------------

    At the state's election, the deadline may be shorter than 12
months. We recognize that this period is expedited in light of the time
involved in most SIP development and submission processes. In
particular, we recognize that some states may need to undertake full-
blown rulemaking actions, which often take a long time to complete, and
we acknowledge that some states may need to change their statutory
provisions, which may take even longer. Even so, we believe that under
the circumstances present here, states may decide that a deadline
shorter than 12 months is reasonable in light of emergency or other
streamlined processes that may be used to significantly expedite
action. The reasonableness of the shorter deadline is further supported
because as a practical matter, for the most part, the affected states
were given notice as early as August 12, 2010, when the proposed SIP
call was signed and posted to the web (75 FR 53907), that they would
likely need to submit, on a short timeframe, a SIP revision. Thus,
these states will have had some three-and-a-half months prior to the
final SIP call date to have begun work on their SIP revisions. Indeed,
many states have taken advantage of that time and have already begun to
develop their SIP submissions, some have already submitted them in
draft form for parallel processing, and some have submitted them in
final form. Although this is a matter of state process, we are prepared
to work with the states on our end to develop expedited methods for
developing, processing, and submitting SIP revisions.
    Second, the flexibility in EPA's structure for deadlines, including
the opportunity for states to select shorter deadlines, is reasonable
because it is based on the state's preference. This is consistent with
the federalism principles that underlie the SIP call process and the
SIP system as a whole. That is, in the first instance, it is to the
state to whom falls the responsibility of developing pollution controls
through an implementation plan. Here, the deadline for the state to
submit the plan can be as long as 1 year or as little as 3 weeks, at
the election of the state. In fact, almost all of the states have
articulated a preference for a deadline, and among them, they are
choosing--or at least not objecting to--deadlines that range from 3
weeks to 12 months. An earlier deadline under which the state must
operate acts as a burden on the state, but if the state has chosen
that, and thereby has declined the option of a longer deadline (e.g.,
12 months), then the earlier deadline should be considered reasonable.
    Third, the need to give the states the opportunity to minimize the
period when sources may be unable to construct or modify due to the
lack of regulatory authority to act on their permit applications is an
essential consideration that supports the reasonableness of EPA's
schedule. A shorter period for SIP submittal means that either the
state, through the SIP revision that it submits on an expedited basis
in light of this tight schedule, or EPA, through a FIP, will become the
permitting authority sooner and will then be able to act on permit
applications and issue permits that allow new construction and
modification of existing plants. As noted earlier in this preamble, the
purposes of the PSD provisions include both the protection of public
health and the environment as well as the promotion of economic
development. See, e.g., CAA section 160(3). The D.C. Circuit has held
that the terms of the PSD provisions should be interpreted with these
goals in mind. New York v. EPA, 413 F.3d 3, 23 (DC Cir.), rehearing en
banc den., 431 F.3d 801 (2005). Accordingly, determining a ``reasonable
deadline[]'' for the submittal of a PSD SIP revision should account for
the need to protect economic development, consistent with protecting
clean air resources, by assuring the availability of a permitting
authority to process permit applications.
(ii) Response to comments
    Some industry commenters objected to this deadline on several
grounds. Their first objection is that (i) EPA contends that EPA has
the authority to impose a construction ban, (ii) in fact, EPA does not
have that authority, but (iii) EPA is ``using the phantom threat of a
construction ban to intimidate states into immediately accepting GHG
regulation. * * *''
    We disagree with the commenters' objection. It is untrue that EPA
somehow interprets the CAA to authorize EPA to apply a construction ban
as a type of sanction to apply when a pollutant becomes subject to
regulation, or that EPA has stated that it interprets the CAA that way.
Rather, as discussed earlier in this preamble, it is by operation of
the CAA provisions that as of January 2, 2011, large GHG-emitting
sources will be required to obtain permits to construct or modify. If
these sources are located in a state with an approved PSD program that
does not apply to GHGs, then no permitting authority may be available
and, as a result, the sources may face delays in undertaking
construction or modification projects. EPA is not seeking to intimidate
states; rather, we wish to make sure states are fully aware

of this potential for delays in their sources' ability to construct or
modify, and we do wish to give states the option to allow an early FIP
that will eliminate that potential for delays. As noted earlier in this
preamble, some states are selecting an early SIP submittal deadline in
order to allow an early FIP that will eliminate that potential, while
other states are selecting a later SIP submittal deadline but are
confident that their sources will not suffer damaging delays in the
interim.
    Commenters also state that even with a SIP call, states should be
given more than 12 months to submit their corrective SIP revisions. The
commenters explain that a 12-month period is ``much too brief'' in
light of the need for notice and comment at the state level in
developing a SIP revision. Some commenters claim that the ```default'
timeframe for allowing states to revise their SIPs due to a
`substantial inadequacy' with the SIPs' ability to maintain NAAQS for a
conventional pollutant is 18 months.'' Some commenters state that
``[b]ased on EPA's SIP call precedent, a development period of up to
three years would be appropriate.'' Commenters also note that the
legality of various aspects of the Tailoring Rule, including the
revisions made by that rule to 40 CFR 51.166, has been challenged in
the U.S. Court of Appeals for the DC Circuit, and the outcome of that
litigation will not be known for some time. In such a setting,
commenters state, even a December 2011 SIP call deadline would be
inconsistent with CAA section 110(k)(5) by not affording states a
``reasonable'' time to accomplish all that they would need to do in
order to address the Tailoring Rule requirements.
    Another commenter concludes that ``[i]t was EPA's choice (and EPA's
legal interpretation of the CAA) to require states to regulate GHGs
under the states' PSD and Title V permit programs; the agency must now
give states a 'reasonable' period of time to comply free from onerous
consequences if the states do not act within one month.''
    Other commenters also express concern that a deadline of 3 weeks
cannot be considered ``reasonable.'' One state commenter (Kentucky)
observes that the 3-week deadline departs from the ``normal SIP Call
process'' and is ``impossibly aggressive for many agencies,'' and the
commenter recommends ``a later date to allow states the ability to
properly and adequately prepare to implement the new standards as has
been done historically with every SIP Call in the past.'' Another state
commenter (Arkansas) notes that its standard rulemaking process is
lengthy in comparison to the 3-week-to-12-month deadline EPA proposed
and weighs against calling EPA's deadline reasonable.
    According to a state commenter (Arkansas), ``the need to keep state
PSD permitting authority intact in order to act on permit applications
would not be an issue but for the conglomeration of rules and timelines
put into place by EPA to implement the regulation of GHG-emitting
sources.'' Responding to the proposed SIP call, Arkansas states that it
does not object to the shortest SIP deadline of 3 weeks after the SIP
call, in light of the precarious position that Arkansas sources would
be in without the speedy issuance of a FIP. However, state officials
remark that the deadline is not a preference but instead is more aptly
described as a necessity under the circumstances created by EPA.
    With respect to the longer end of the schedule, as we explained
earlier in this preamble, we consider the 12-month period to be
adequate. We provided 12 months for the NOX SIP Call
rulemaking, and states were generally able to comply within that
timeframe. Our information indicates that in virtually all cases, the
affected states have begun to develop their SIP revisions already, and
so far, almost all of the states are on track to submit their SIP
revisions by December 1, 2011, even though many have indicated they do
not object to an earlier deadline.
    Specifically, EPA regional and headquarters officials have
conferred extensively with state officials concerning the states'
progress and plans.\25\ Based on the states' 30-day letters and other
communications with the states, 13 states operate PSD programs under
SIPs that EPA identifies as lacking the authority to issue PSD permits
for GHG emissions starting January 2, 2011. EPA expects that, of these
13 states (encompassing 15 state and local permitting agencies), 7
states (8 state and local permitting agencies) will be subject to a FIP
by January 2, 2011. One state, Texas, has not indicated a preference
for a SIP submittal deadline--and so will receive the default deadline
of December 1, 2011--and has said that it does not intend to submit a
SIP revision. EPA specifically requested of states for which we
proposed the SIP call that they inform EPA of the period of time that
they would accept as the deadline for submittal of their SIP revisions
in response to a SIP call. See 75 FR at 53901. Accordingly, EPA is
planning additional actions to ensure that GHG sources in Texas, as in
every other state in the country, have available a permitting authority
to process their permit applications as of January 2, 2011 (or, at the
state's election, a short period thereafter that the state has said
will not impede the ability of sources to obtain permits in a timely
way).
---------------------------------------------------------------------------

    \25\ In addition, the National Association of Clean Air Agencies
(NACAA) recently reviewed the 30-day letters from the states and
accurately summarized them in a report, ``GHG Permitting Programs
Ready To Go By January 2nd'' (October 28, 2010). This report is
included as Attachment 3 to the McCarthy Declaration. This report
can be found in the docket for this rulemaking. In a few cases, the
information EPA collected is more recent than what was available to
NACAA because EPA's information is based not just on the 30-day
letters but also on conferring with the states. NACAA summarized its
conclusions as follows: ``Excepting only one, programs in all states
[for which EPA proposed a SIP Call] have indicated that they will
either revise their PSD rules by January 2, 2011 or very shortly
thereafter, or accept a Federal Implementation Plan (FIP) that will
give EPA authority to issue the GHG portion of PSD permits until
state rules are revised. This provides that sources required to
apply PSD controls to their GHG emissions will be able to obtain the
necessary permits and avoid construction delays.''
---------------------------------------------------------------------------

    With respect to the shorter end of the timetable, EPA recognizes
commenters' concerns about the 3-week period that states may elect but
considers this period reasonable, under the particular circumstances
presented, as discussed earlier in this preamble, including the facts
that the states still retain some discretion in selecting that period
and that at this point in time, that 3-week period is what some states
may need to protect their sources from the potential delays due to the
lack of a permitting authority, and any longer period would expose
their sources to such delays.
    A commenter's suggestion that EPA grant states ``a `reasonable'
period of time to comply, free from onerous consequences if the states
do not act within one month,'' is not tenable. A longer period of time
would not solve the problem that, absent the establishment of EPA or
state authority to issue GHG PSD permits by January 2, 2011, some
sources in some states may experience obstacles to obtaining PSD
permits authorizing construction or modification activities.
    As for the commenters' concerns that it is EPA's actions that have
led to the timing issues, our response is that the timing issues arise
because, on the one hand, the CAA requires that PSD applies to GHG-
emitting sources as soon as EPA subjects GHGs to regulation, but, on
the other hand, the affected states' SIPs do not automatically apply
PSD to GHG-emitting sources. As a result of the lack of automatic PSD
applicability in those states, no permitting authority is available to
issue permits to the GHG-emitting sources until some rulemaking
action--whether it is a SIP or a FIP--occurs that applies PSD to GHG-

emitting sources in that state and thereby establishes a permitting
authority. This timing issue does not arise in the majority of states,
because their SIPs do automatically apply to GHG-emitting sources as
soon as EPA subjects GHGs to regulation.
    In this regard, we reiterate that EPA's actions in promulgating the
LDVR, which, in conjunction with the operation of the CAA, resulted in
PSD applicability for GHGs, were fully consistent with the CAA. In
addition, EPA has endeavored to provide as much time as possible to
establish a permitting authority in the affected states by
expeditiously implementing PSD applicability, including the Tailoring
Rule and this rulemaking.
    More specifically, with respect to the timing for the LDVR, EPA
promulgated that rule by notice dated May 7, 2010, and explained the
timing as follows:

    EPA is issuing these final GHG standards for light-duty vehicles
as part of its efforts to expeditiously respond to the Supreme
Court's nearly three year old ruling in Massachusetts v. EPA, 549
U.S. 497 (2007). In that case, the Court held that greenhouse gases
fit within the definition of air pollutant in the Clean Air Act, and
that EPA is therefore compelled to respond to the rulemaking
petition under section 202(a) by determining whether or not
emissions from new motor vehicles cause or contribute to air
pollution which may reasonably be anticipated to endanger public
health or welfare, or whether the science is too uncertain to make a
reasoned decision. The Court further ruled that, in making these
decisions, the EPA Administrator is required to follow the language
of section 202(a) of the CAA. The Court stated that under section
202(a), ``[i]f EPA makes [the endangerment and cause or contribute
findings], the Clean Air Act requires the agency to regulate
emissions of the deleterious pollutant.'' 549 U.S. at 534. As
discussed above, EPA has made the two findings on contribution and
endangerment. 74 FR 66496 (December 15, 2009). Thus, EPA is required
to issue standards applicable to emissions of this air pollutant
from new motor vehicles.
    The Court properly noted that EPA retained ``significant
latitude'' as to the ``timing * * * and coordination of its
regulations with those of other agencies'' (id.). However it has now
been nearly three years since the Court issued its opinion, and the
time for delay has passed.

75 FR at 25402/1. EPA went on to explain other reasons why it was
necessary to promulgate the LDVR at that time. Id. at 25402/1-2.
    The LDVR, in conjunction with the operation of the CAA, resulted in
the January 2, 2011, ``take effect'' date that is triggering PSD
applicability for GHG-emitting sources. Less than one month after the
LDVR, by notice dated June 3, 2010, EPA finalized the Tailoring Rule,
and in that action, EPA requested states to advise EPA by letter within
60 days, or by August 2, 2010, whether their SIP PSD program applied to
GHG-emitting sources. These letters helped indicate the number of
states that lacked authority to apply PSD to GHG-emitting sources. Less
than one month later, on September 2, 2010, EPA published the proposed
SIP call and proposed FIP. EPA is now taking final action on the SIP
call only 3 months after that.
    As a result of EPA's expedited actions, states will have some
opportunity to develop SIP revisions by, or soon after, the January 2,
2011, date. Some states began to develop their SIP revisions promptly
following the SIP call proposal. As a result, they in fact are able to
revise their SIPs within a very short timeframe. For example, of the
states and localities for which EPA proposed the SIP call, EPA
currently expects one state to have an approved SIP revision by January
2, 2011, and two more states (three local permitting agencies) to have
one by February 1, 2011. Other jurisdictions have SIP development
processes that generally take longer but can still be accomplished well
within the 12-month period. According to these particular states, a
deadline that is later than January 2, 2011, does not pose a problem
because they do not expect their sources to require permits from
January 2, 2011, until their deadline. We believe that taken as a
group, the affected states and local agencies have selected a range of
deadlines that suit their individual circumstances and, we think, that
evidences the reasonableness of the deadlines we are establishing.
    We note, finally, that our approach results in reasonable deadlines
in light of the fact that states that select the FIP approach may
immediately seek a delegation of authority to implement the FIP.
Therefore, as a practical matter, there is little difference between
processing GHG PSD permit applications under the authority of the
state's own SIP and processing such applications under the authority of
a FIP. This is because if a state were to accept delegation, the state
would be required to implement EPA regulations, including EPA
regulatory requirements concerning BACT, but in many cases, these EPA
regulatory BACT requirements are the same as BACT requirements in the
state's approved SIP. In addition, the state would inherently have a
great deal of discretion in PSD permitting decisions because BACT
determinations are made on a case-by-case basis that entails making
judgments about a number of factors.
2. State-Specific Actions
    In this section of the preamble, we summarize our basis for action
for each of the states for which we are issuing a finding of
substantial inadequacy and issuing a SIP call, as well as our basis for
not issuing a finding or SIP call for any state for which we proposed
to do so. We present a more detailed discussion in a Supplemental
Information Document, which can be found in the docket for this
rulemaking. The Supplemental Information Document includes all letters
received from the affected states in response to our proposed action,
as well as additional material that we collected and considered for
this final action.
    In table IV-2, ``Summary of State-specific Actions in Finalizing
SIP Call, by State,'' we identify the states and areas affected in this
final rule.

                 Table IV-2--Summary of State-Specific Actions in Finalizing SIP Call, by State
----------------------------------------------------------------------------------------------------------------
                                                              Basis for finding of       SIP submittal deadline
          State (or area)           Final SIP call status    substantial inadequacy            (MM/DD/YY)
----------------------------------------------------------------------------------------------------------------
Alaska............................  No SIP call..........  Not applicable. Already     Not applicable.
                                                            made SIP submittal to
                                                            EPA..
Arizona: Pinal County.............  SIP call issued......  PSD applicability           12/22/10.
                                                            provision identifies
                                                            specific pollutants but
                                                            does not include GHG.
Arizona: Rest of State (Excludes    SIP call issued......  PSD applicability           12/22/10.
 Maricopa County, Pima County, and                          provision identifies
 Indian Country).                                           specific pollutants but
                                                            does not include GHG.

Arkansas..........................  SIP call issued......  PSD applicability           12/22/10.
                                                            provision incorporates by
                                                            reference 40 CFR 52.21,
                                                            but it does not include
                                                            GHG because it does not
                                                            allow automatic updating.
California: Sacramento              SIP call issued......  PSD applicability           01/31/11.
 Metropolitan AQMD.                                         provision identifies
                                                            specific pollutants but
                                                            does not include GHG.
Connecticut.......................  SIP call issued......  PSD applicability           03/01/11.
                                                            provision explicitly
                                                            exempts ``carbon
                                                            dioxide.''.
Florida...........................  SIP call issued......  PSD applicability           12/22/10.
                                                            provision identifies
                                                            specific pollutants but
                                                            does not include GHG.
Idaho.............................  SIP call issued......  PSD applicability           12/22/10.
                                                            provision generally
                                                            incorporates by reference
                                                            40 CFR 52.21, but it does
                                                            not include GHG because
                                                            it does not allow
                                                            automatically updating.
Kansas............................  SIP call issued......  PSD applicability           12/22/10.
                                                            provision incorporates by
                                                            reference 40 CFR 52.21,
                                                            but it does not include
                                                            GHG because it does not
                                                            allow automatic updating.
Kentucky: Louisville Metro Air      SIP call issued......  PSD applicability           01/01/11.
 Pollution Control District.                                provision incorporates by
                                                            reference 40 CFR 52.21,
                                                            but it does not include
                                                            GHG because it does not
                                                            allow automatic updating.
Kentucky: Rest of State (Excludes   SIP call issued......  PSD applicability           03/31/11.
 Louisville Metro Air Pollution                             provision incorporates by
 Control District).                                         reference 40 CFR 52.21,
                                                            but it does not include
                                                            GHG because it does not
                                                            allow automatic updating.
Nebraska..........................  SIP call issued......  PSD requirements lack       03/01/11.
                                                            clear authority to
                                                            regulate GHG.
Nevada: Clark County..............  SIP call issued......  PSD applicability           07/01/11.
                                                            provision identifies
                                                            specific pollutants but
                                                            does not include GHG.
                                                            Local agency-effective
                                                            rule recently submitted
                                                            for SIP approval does not
                                                            include GHG because it
                                                            does not allow automatic
                                                            updating.
Oregon............................  SIP call issued......  PSD applicability           12/22/10.
                                                            provision identifies
                                                            specific pollutants but
                                                            does not include GHG.
Texas.............................  SIP call issued......  PSD applicability           12/01/11.
                                                            provision incorporates by
                                                            reference 40 CFR 52.21,
                                                            but it does not include
                                                            GHG because it does not
                                                            allow automatic updating.
Wyoming...........................  SIP call issued......  State law prevents the      12/22/10.
                                                            state's regulation of GHG.
----------------------------------------------------------------------------------------------------------------

C. Requirements for Corrective SIP Revision

1. Application of PSD Program to GHG-Emitting Sources
    Because EPA is issuing a finding of substantial inadequacy and
issuing a SIP call for each state whose SIP fails to apply the PSD
program to GHG-emitting sources, EPA is requiring the state to correct
its SIP by submitting a SIP revision that applies PSD to GHG-emitting
sources.
    For those states whose PSD applicability provisions apply PSD to
listed air pollutants, the state may accomplish this correction in one
of at least two different ways. First, the state may revise its PSD
applicability provisions so that, instead of applying PSD to sources of
individually listed pollutants, the provisions apply PSD to sources
that emit any ``regulated NSR pollutant.'' We recommend that states
follow this ``regulated NSR pollutant'' approach. It is consistent with
our 2002 NSR Reform rule. See 67 FR at 80240.
    Moreover, the ``regulated NSR pollutant'' approach would more
readily incorporate, for state law purposes, the phase-in approach for
PSD applicability to GHG sources that EPA has developed in the
Tailoring Rule and may develop further through additional rulemaking.
As explained in the Tailoring Rule, incorporation of this phase-in
approach for state law purposes (including Steps 1 and 2 of the phase-
in as promulgated in the Tailoring Rule and additional steps of the
phase-in that EPA may promulgate in the future) can be most readily