required, this conclusion has no relevance for applying other CAA
requirements – such as the requirements concerning endangerment and
contribution findings under CAA section 202(a)(1) or emission standards
for new motor vehicles or new motor vehicle engines under CAA section
202 -- to GHGs or GHG sources.  EPA’s conclusions with respect to the
PSD and title V applicability requirements are based on the specific
terms of those requirements, other relevant PSD and title V provisions,
and the legislative history of the PSD and title V programs.

Within the context of the Chevron framework, the “administrative
necessity” doctrine applies as follows:  Under the doctrine, Congress
is presumed to intend that the PSD and title V applicability
requirements be administrable.  Here, those applicability requirements,
if applied to GHG sources in accordance with their literal meaning,
would be impossible to administer.  Accordingly, under Chevron Stepstep
1, it is consistent with congressional intent that EPA and the
permitting authorities be authorized to implement the applicability
requirements in a manner that is administrable, that is, through the
tailoring approach.

As for the “one-step-at-a-time” doctrine, we believe it applies
within the Chevron framework in conjunction with the “absurd
results” and “administrative necessity” doctrines.  As we discuss
elsewhere, the PSD and title V applicability provisions by their terms
require that sources at or above the 100/250 tpy thresholds comply with
PSD and title V requirements at the time those requirements are
triggered, which is when GHGs become subject to regulation.  Therefore,
if the literal meaning of the applicability provisions as applied to GHG
sources were controlling – that is, if it reflected congressional
intent -- it would foreclose use of the one-step-at-a-time doctrine to
implement a phase-in approach.  However, the literal meaning is not
controlling because - in light of the absurd results, including the
insurmountable administrative burdens, that would result from the
literal meaning -- congressional intent is not to require the
application of the PSD and title V requirements to all GHG sources at or
above the statutory thresholds at the time that GHGs become subject to
regulation.  Instead, as described previously, we consider congressional
intent for the applicability provisions, as applied to GHG sources,
either (i) to be clear that PSD and title V should be phased in for GHG
sources as quickly as possible, or (ii) to be unclear, so that EPA may
reasonably choose to phase PSD and title V in for those sources in that
manner.  Under either view, congressional intent for PSD and title V
applicability to GHG sources accommodates the “one-step-at-a-time”
approach.

4.  The PSD and Title V Programs

Having discussed both the factual underpinnings and, immediately above,
the legal underpinnings for our tailoring approach, we now discuss the
PSD and title V programs themselves, including, for each program, the
key statutory provisions, their legislative history, and the relevant
regulations and guidance documents through which EPA has implemented the
provisions.  We start with the PSD program.

a.  The PSD program

(1)  PSD Provisions

Several PSD provisions are relevant for present purposes because of the
specific requirements that they establish and the window that they
provide into congressional intent.  These provisions start with the
applicability provisions, found in CAA sections 165(a) and 169(1), which
identify the new sources subject to PSD, and CAA section §111(a)(4),
which describes the modifications of existing sources that are subject
to PSD.  CAA section §165(a) provides:

	No major emitting facility on which construction is commenced after
August 7, 1977, may be constructed in any area to which this part
applies unless—

	(1) a permit has been issued for such proposed facility in accordance
with this part setting forth emission limitations for such facility
which conform to the requirements of this part;

	(2) the proposed permit has been subject to a review in accordance with
this section …,* * *, and a public hearing has been held with
opportunity for interested persons including representatives of the
Administrator to appear and submit written or oral presentations on the
air quality impact of such source, alternatives thereto, control
technology requirements, and other appropriate considerations;

...

* * *

	(4) the proposed facility is subject to the best available control
technology for each pollutant subject to regulation under this chapter
emitted from, or which results from, such facility ….* * * *.

The term "major emitting facility" is defined, under CAA section
§169(1) to include:

…* * * stationary sources of air pollutants which emit, or have the
potential to emit, one hundred tons per year or more of any air
pollutant from [28 listed] types of stationary sources.  …* * *   Such
term also includes any other source with the potential to emit two
hundred and fifty tons per year or more of any air pollutant.  This term
shall not include new or modified facilities which are nonprofit health
or education institutions which have been exempted by the State.

As for modification of existing sources, CAA section 169(1)(C)  provides
that the term "construction," as used in CAA section 165(a) (the PSD
applicability section) "includes the modification (as defined in section
111(a)(4)) of any source or facility."  Section 111(a)(4), in turn,
provides:

The term "modification" means any physical change in, or change in the
method of operation of, a stationary source which increases the amount
of any air pollutant emitted by such source or which results in the
emission of any air pollutant not previously emitted.

As interpreted by EPA regulations, these provisions, taken together,
provide that new stationary sources are subject to PSD if they emit at
the 100/250-tpy thresholds air pollutants that are subject to EPA
regulation, and that existing stationary sources that emit such air
pollutants at the 100/250-tpy thresholds are subject to PSD if they
undertake a physical or operational change that increases their
emissions of such air pollutants by any amount.

Other provisions of particular relevance are the requirements for timely
issuance of permits.  The permitting authority must “grant[] or den[y]
[any completed permit application] not later than one year after the
date of filing of such completed application.”  CAA section §165(c).

In addition, the PSD provisions articulate “‘the purposes of [the
PSD program],” which are to balance environmental protection and
growth.  CAA section §160.  One of the purposes, in subsection (1), is
specifically “to protect public health and welfare,” and another, in
subsection (3), is “to insure that economic growth will occur in a
manner consistent with the preservations of existing clean air
resources.”

The PSD provisions also include detailed procedures for implementation.
Most relevant for sources of GHG are the provisions that the proposed
permit for each source must be the subject of a public hearing with
opportunity for interested persons to comment, CAA section §165(a)(2),
and each source must be subject to BACTbest available control
technology, as determined by the permitting authority on a
source-by-source basis, CAA section §165(a)(4), 169(3).

(2)  PSD Legislative History

The legislative history of the PSD provisions, enacted in the 1977 CAA
Amendments, makes clear that Congress was largely focused on sources of
criteria pollutants:  primarily sulfur dioxide (SO2), PM, NOx, and
carbon monoxide (CO).  This focus is evident in the basic purpose of the
PSD program, which is to safeguard maintenance of the NAAQS.  See S
95-127 (95th Cong., 1st Sess.), at 27.

	Congress designed the PSD provisions to impose significant regulatory
requirements, on a source-by-source basis, to identify and implement
BACT and, for criteria pollutant, to also undertake certain studies.
Congress was well aware that because these requirements are
individualized to the source, they are expensive.  Accordingly, Congress
designed the applicability provisions (i) to apply these requirements to
industrial sources of a certain type and a certain size – sources
within 28 specified source categories and that emit at least 100 tpy --
as well as all other sources that emit at least 250 tpy, and, by the
same token, (ii) to exempt other sources from these requirements.

	Although Congress required that CAA requirements generally apply to
“major emitting facilities,” defined as any source that emits or has
the potential to emit 100 tpy of any pollutant, Congress applied PSD to
only sources at 100 tpy or higher in 28 specified industrial source
categories, and at 250 tpy or more in all other source categories.  This
distinction was deliberate:  According to Sen. McClure, Congress
selected the 28 source categories after reviewing an EPA study
describing 190 industrial source categories.  122 Cong. Rec. 24521 (July
29, 1976) (statement by Sen. McClure).

	Congress also relied on an EPA memorandum that identified the range of
industrial categories that EPA regulated under its regulations that
constituted the precursor to the statutory PSD program, and listed both
the estimated number of new sources constructing each year and the
amount of pollution emitted by the “typical plant” in the category.
The memorandum was prepared by B.J. Steigerwald, Director of the Office
of Air Quality Planning and Standards and Roger Strelow, EPA’s
Assistant Administrator for Air and Waste Management
(“Steigerwald-Strelow  memorandum”).  The Steigerwald-Strelow
memorandum makes clear that the 100 tpy cut-off for the 28 listed
sources categories, and the 250 tpy cut-off for all other sources, was
meaningful; that is, there were a large number of sources below those
cut-offs that Congress explicitly contemplated would not be included in
the PSD program.  Id. at 24548-50.

Consistent with this, the legislative history on the Senate side also
specifically identified certain source categories that Senators believed
should not be covered by PSD.  The Senate bill language limited PSD to
sources of 100 tpy or more in 28 listed source categories, and to any
other categories that the Administrator might add.  Sen. Muskie stated
that the Senate bill excluded “houses, dairies, farms, highways,
hospitals, schools, grocery stores, and other such sources.”  123
Cong. Rec. 18021 (June 8, 1977) (statement of Sen. Muskie).  Sen.
McLure’s list of excluded source categories were “[a] small gasoline
jobber, or a heating plant at a community college, [which] could have
the potential to emit 100 tons of pollution annually.”  122 Cong. Rec.
24548-49 (July 29, 1976) (statement of Sen. McClure).  The Senate
Committee Report included a comparable list, and in describing it,
concisely articulated the cost-conscious basis for the line-drawing:
“[the PSD] procedure … must include an effective review-and-permit
process.  Such a process is reasonable and necessary for very large
sources, such as new electrical generating plants or new steel mills.
But the procedure would prove costly and potentially unreasonable if
imposed on construction of storage facilities for a small gasoline
jobber or on the construction of a new heating plant at a junior
college, each of which may have the potential to emit 100 tons of
pollution annually.”  S. Rpt. 95-127 at 96-97.

The enacted legislation differs from the Senate bill by replacing the
authorization to EPA to include by regulation source categories in
addition to the listed 28 source categories with an inclusion of all
other sources if they exceed 250 tpy, and with an authorization for the
states to exempt hospitals and educational institutions.  But
Congress’s overall intention remains clear, as the D.C. Circuit
described in Alabama Power:    "Congress's intention was to identify
facilities which, due to their size, are financially able to bear the
substantial regulatory costs imposed by the PSD provisions and which, as
a group, are primarily responsible for emissions of the deleterious
pollutants that befoul our nation's air….[With respect to] the heating
plant operating in a large high school or in a small community college
…. . . [w]e have no reason to believe that Congress intended to define
such obviously minor sources as 'major' for the purposes of the PSD
provision."  636 F.2d at 353-54.

	A particularly important indication of congressional intent to limit
the PSD program it was designing to larger sources comes in considering
the emissions profile of the small-sized boilers.  Congress focused
closely on identifying which sources with emissions in excess of 100 tpy
should not be subject to PSD even though they are subject to CAA
requirements generally.  But Congress viewed a large set of sources as
emitting below 100 tpy and therefore not included in the PSD program.
Chief among these sources, in terms of absolute numbers of sources, were
small boilers.  The Steigerwald-Strelow memorandum identified two
categories of these boilers, differentiated by size.  The first ranges
in size from 10 to 250 x 106 Btu per hour (Btu/hr), and has a “typical
plant” size of 107 Btu/hr, with “BACT emissions from typical
plant” of 53 tpy, and a total of 1,446 sources in the category.  The
second category ranges in size from 0.3 to 10 x 106 Btu/hr, and has a
“typical plant” size of 1.3 x 106 Btu/hr, with “BACT emissions
from typical plant” of 2 tpy, and a total of 11,215 sources in the
category.  The memorandum discusses these two categories in the context
of explaining which source categories exceed a size of 100 tpy - and
therefore would be subject to PSD if a 100 tpy threshold were set -- by
stating, “Fortunately, most truly small boilers and typical space
heating operations would not be covered.”  122 Cong. Rec. 24549 (July
29, 1976).

	 The legislative history also provides a window into the scope of the
program that Congress anticipated and related administrability concerns.
 According to the Steigerwald-Strelow memorandum, the number of new
sources each year whose “BACT emissions from typical plant” exceed
100 for the 28 listed source categories and 250 for all other source
categories is less than 100 per year.  Although the Steigerwald-Strelow
memorandum does not attempt to estimate the number of modifications, it
appears that based on this information, Congress had reason to expect
the total size of the PSD program to be measured in the hundreds or
perhaps thousands of permits each year.  A program of this size would be
manageable by EPA and the permitting authorities.

(3)  PSD Regulatory History:  Regulations Concerning the Definition of
“Major Stationary Source”

For present purposes, the regulatory history of the PSD program is most
noteworthy because it shows that since the inception of the program
following the 1977 CAA Amendments, EPA has interpreted the statutory PSD
applicability provisions to apply more narrowly – to any air pollutant
subject to regulation – than their literal meaning (“any air
pollutant”).  EPA’s initial rulemaking implementing the PSD program,
which was proposed and finalized in 1977-1978, made explicit that the
entire PSD program applied to only pollutants regulated under the Act.
43 FR 26,380, 26,403/3, 26,406 (June 19, 1978) (promulgating 40 CFR
51.21(b)(1)(i)).  In 1979-1980, EPA revised the PSD program to conform
to Alabama Power v. Costle, 636 F.2d 323 (D.C. Cir. 1980).  44 FR 51,924
(September. 5, 1979) (proposed rule); 45 FR 52,676 (August. 7, 1980)
(final rule).  In this rulemaking, EPA did not disturb the pre-existing
provisions that limited the applicability of the PSD program to
regulated air

pollutants.  In 1996 EPA proposed, and in 2002 finalized, a set of
amendments to the PSD provisions that included revisions to conform with
the 1990 CAAAct Amendments, which, in relevant part, exempted hazardous
air pollutants (HAPs) from PSD, under CAA section§ 112(b)(6).  See 61
FR 38,250 (July 23, 1996), 67 FR 80,186 (December. 31, 2002).  In the
preamble to the final rule, EPA noted that based on a request from a
commenter, EPA was amending the regulations to “clarify which
pollutants are covered under the PSD program.”  EPA accomplished this
by promulgating a definition for “regulated NSR pollutant,” which
listed categories of pollutants regulated under the Act, and by
substituting that defined term for the  phrase “pollutants regulated
under the Act” that was previously used in various parts of the PSD
regulations.  67 FR at 80,240.  The definition of “regulated NSR
pollutant” includes several categories of pollutants (including, in
general, NAAQS pollutants and precursors, pollutants regulated under CAA
section §111 NSPSnew source performance standards, Class I or II
substances regulated under CAA title VI) and a catch-all category,
“[a]ny pollutant that otherwise is subject to regulation under the
Act.”  E.g., 40 CFR 52.21(b)(50).  As in the previous rulemakings, EPA
did not address the difference between the definition of “major
emitting facility” and its regulatory approach or indicate that it had
received comments on this issue.  While the definition of “major
modification” in the PSD regulations has changed over time with
respect to how emission increases are calculated, the regulatory history
with respect to pollutant coverage parallels that of major emitting
facility.

We recount this regulatory history as background information.  We are
not reconsidering or reopening these regulations to the extent they
interpret the definition of “major emitting facility” and
“modification” narrowly to be limited to pollutants subject to
regulation under the Act.

b.  Title V Program

Having reviewed the key statutory provisions, their legislative history,
and the relevant administrative interpretations for the PSD program, we
now do the same for the title V program.

(1)  Title V Provisions

The key title V provisions for present purposes start with the
applicability provisions, which are found in CAA sections §§502(a),
501(2)(B), and 302(j).  These provisions provide that it is unlawful for
any person to operate a "major source" without a title V permit, section
§502(a), and define a "major source" to include “"any major
stationary facility or source of air pollutants which directly emits, or
has the potential to emit, one hundred tons per year or more of any air
pollutant.”."  CAA  sections §501(2)(B) and §302(j).  As noted
elsewhere, these provisions, taken together and as interpreted by EPA,
provide that stationary sources are subject to title V if they emit at
the 100-tpy threshold air pollutants that are subject to EPA regulation.

In addition, although title V does not have a set of provisions
describing its purpose, it is clear from its provisions and its
legislative history, discussed later, that its key goal is to gather
into one permitting mechanism the CAA requirements applicable to a
source and impose conditions necessary to assure compliance with such
requirements, and thereby promote the enforceability of CAA requirements
applicable to the covered sources.  Section CAA §503(b)(1) requires
that the source’s permit application contain a compliance plan
describing how the source will ”comply with all applicable
requirements” of the CAA, and section §504(a) requires that “[e]ach
permit issued under [title V] shall include … * * *  such …* * *
conditions as are necessary to assure compliance with applicable
requirements of [the Clean Air Act].”  See H.R. Rep. No. 101–490, at
351 (1990) (“(‘‘It should be emphasized that the operating permit
to be issued under this title is intended by the Administration to be
the single document or source of all of the requirements under the Act
applicable to the source.”’’).

Importantly, title V is replete with provisions designed to make the
permitting process as efficient and smooth-running as possible,
including the expeditious processing of permit applications and the
timely issuance of permits.  Section CAA §503(c) requires that “the
permitting authority shall approve or disapprove a completed application
…* * * and shall issue or deny the permit, within 18 months after the
date of receipt thereof ….”  Section * * * *”  CAA §502(b)(6)
requires the permitting authority to develop “adequate, streamlined,
and reasonable procedures for expeditiously determining when
applications are complete, for processing such applications, for public
notice …* * * and for expeditious review of permit actions, including
…* * * judicial review in State court of the final permit action by
[specified persons].”  Section CAA §502(b)(7) includes a “hammer”
provision designed to reinforce timely permit issuance, which is that
the permitting authority’s program must include:

To ensure against unreasonable delay by the permitting authority,
adequate authority and procedures to provide that a failure of such
permitting authority to act on a permit application or permit renewal
application (in accordance with the time periods specified in [CAA]
section  §503 …)] * * *) shall be treated as a final permit action
solely for purposes of obtaining judicial review in State court of an
action brought by any person referred to in paragraph (6) to require
that action be taken by the permitting authority on such application
without additional delay.

Section CAA §502(b)(8) requires the permit program to include
“[a]uthority and reasonable procedures consistent with the need for
expeditious action by the permitting authority on permit applications
and related matters, to make available to the public [certain
permit-related documents]”.  Section CAA §502(b)(9) requires a permit
revision to incorporate requirements promulgated after issuance of the
permit, but only if the permit is for a major source and has a term of 3
or more years remaining.  In addition, the revision must occur “as
expeditiously as practicable.”  Section CAA §502(b)(10) requires the
permit program to include operational flexibility provisions that
“allow changes within a permitted facility …. . . without requiring
a permit revision, if the changes are not modifications …. . . and
…. . . do not exceed the emissions allowable under the permit …. . .
.”

In addition, title V includes a comprehensive and finely detailed
implementation schedule that mandates timely issuance of permits while
building in EPA and affected state review, public participation, and
timely compliance by the source with reporting requirements.  Following
the date that sources become subject to title V, they have 1 year to
submit their permit applications.  CAA section §503(c).  As noted
previously, the permitting authority then has 18 months to issue or deny
the permit.  CAA section §503(c).  Permitting authorities must provide
an opportunity for public comment and a hearing.  CAA section
§502(b)(6).  If the permitting authority proposes to issue the permit,
the permitting authority must submit the permit to EPA, and notify
affected states, for review.  CAA section §505(a)(1).  EPA then has 45
days to review the permit and, if EPA deems it appropriate, to object to
the permit.  CAA section §505(b)(1).  If EPA does object, then the
permitting authority must, within 90 days, revise it to meet the
objections, or else EPA becomes required to issue or deny the permit.
CAA section §505(c).  If EPA does not object, then, within 60 days of
the close of the 45-day review period, any person may petition EPA to
object, and EPA must grant or deny the petition within 60 days.  CAA
section §505(b)(2).  If a permit is issued, it must include a permit
compliance plan, under which the permittee must “submit progress
reports to the permitting authority no less frequently than every 6
months,” and must “periodically (but no less frequently than
annually) certify that the facility is in compliance with any applicable
requirements of the permit, and [] promptly report any deviations from
permit requirements to the permitting authority.”  CAA section
§503(b).

(2)  Title V Legislative History

(a)  Scope of Title V

The legislative history of title V, enacted by Congress in the 1990 CAA
Amendments, indicates the scope of the program that Congress expected:
Congress expected the program to cover some tens of thousands of
sources, which would approximate the scope of the permit program under
the Clean Water Act.  The Senate Committee on Environment and Public
Works stated:

	EPA estimates that the new permit requirements will cover about 8,200
major sources that emit 100 tons per year or more of criteria pollutants
(which are regulated under SIPs).  In addition, many smaller sources are
(or, as EPA promulgates additional regulations, will be) covered by new
source performance standards under section 111 of the Act, hazardous air
pollutant standards under section 112 of the Act, and nonattainment
provisions of this legislation.  By comparison, under the Clean Water
Act, some 70,000 sources receive permits, including more than 16,000
major sources.  Although many air pollution sources have more emission
points than water pollution sources, the additional workload in managing
the air pollution permit system is estimated to be roughly comparable to
the burden that States and EPA have successfully managed under the Clean
Water Act.

S. Rep. 101–228, at 353 (1990).  Sen. Mitchell, the Senate Majority
Leader, stated that he expected “over 10,000 permits [to] …. . . be
issued under this program.”  136 Cong. Rec. S3239-03 (March 27, 1990).
 Others in Congress had similar estimates.  See, e.g., 136 Cong. Rec.
S3166 (“thousands and thousands of permit applications … will be
required to be submitted”) (statement of Sen. Nickles).

Furthermore, the legislative history indicates that Congress did not
contemplate that large numbers of very small sources would be subject to
title V’s requirements.  This becomes clear by reviewing the
legislative history of a companion piece of legislation to the operating
permits provisions that Congress enacted into CAA section 507, which is
the “Small business stationary source technical and environmental
compliance assistance program.”  CAA section 507.  Under this
provision, sources that, among other things, “are not major stationary
source[s]” and that emit less than 50 tpy of any regulated pollutant,
as well as less than 75 tpy or all regulated pollutants, are eligible
for assistance under CAA section 507.  CAA section 507(c)(1).  The House
Committee Report described this provision – including what types of
sources it expected this provision to benefit -- as follows:

New section [507] is a small source/small business provision added by
the Committee.  It seeks to help small businesses to comply with the
problems that are likely to occur under the Act as amended by this bill.
 For purposes of this section, small businesses or small emitters are
defined as sources that are emitting 100 tons or less per year and that
have a number of employees that would qualify them for assistance from
the Small Business Administration (SBA).  As we look to the future of
environmental protection under the Act, we take special steps here to
ensure that it is possible for these small businesses to comply with
minimum hassle and in recognition of the problems that are unique to
them.  Such small businesses include printers, furniture makers, dry
cleaners, and millions of other small businesses in this country.

House Committee Report, H.R. 101-590, at 354.  In this manner, the House
Committee Report made clear that it expected “millions of … small
businesses”  including “printers, furniture makers, dry cleaners”
and many others  to benefit from the CAA section 507 small source/small
business program, but Congress did not expect them to become subject to
the operating permit requirements of title V because their emissions
fell below 100 tpy, which is, in general, the threshold for title V
applicability as a “major source.”

The legislative history of title V confirms that Congress viewed a
principal purpose of title V as providing a vehicle to compile the
requirements applicable to the source.  As the report of the House
Committee on Energy and Commerce (“House Committee Report”) stated,
“‘‘It should be emphasized that the operating permit to be issued
under this title is intended by the Administration to be the single
document or source of all of the requirements under the Act applicable
to the source.”  H.R. Rep. No. 101–490, at 351 (1990).  Combined
with the source’s reporting requirements, this compilation of
applicable requirements would facilitate public awareness of a
source’s obligations and compliance and would facilitate compliance
and enforcement.

On the Senate side, Sen. Chafee, one of the floor managers of the bill,
made a similar point:

The permits will serve the very useful function of gathering and
reciting in one place -- the permit document itself -- all of the duties
imposed by the Clean Air Act upon the source that holds the permit.
This would clearly be an improvement over the present system, where both
the source and EPA must search through numerous provisions of state
implementation plans and regulations to assemble a complete list of
requirements that apply to any particular plant….

Once these permits are in place, plant managers will be better able to
understand and to follow the requirements of the Clean Air Act.  At the
same time, EPA will be better able to monitor how well each plant is
complying with those requirements.  This is a highly sensible approach
for all concerned.

136 Cong. Rec. S213 (January 24, 1990) (statement of Sen. Chafee).  Sen.
Lieberman made a similar statement.  136 Cong. Rec. 3172-73 (March 26,
1990) (statement of Sen. Lieberman).  Thus, a central purpose of the
title V permit program is to compile all the requirements applicable to
the source into a single place, the permit.  Implicit in this purpose is
that the sources subject to title V will have applicable requirements to
be compiled.  As Sen. Chafee directly stated, “[T]he vast majority of
these permit applications will … , in all likelihood, only codify the
existing requirements of the applicable State implementation plan.”
136 Cong. Rec. S2720 (March 20, 1990) (statement of Sen. Chafee).

More broadly, the legislative history also indicates congressional
concern about the costs of permitting for small businesses, and a
determination to minimize those costs to the extent possible.  This
concern is reflected in several provisions of title V.  For example,
section 502(a) authorizes EPA to exempt all or part of a source category
– except for any major source  from the title V permit program if EPA
“finds that compliance with [title V] requirements is impracticable,
infeasible, or unnecessarily burdensome on such categories.”
Similarly, the permit fee provisions include a presumptive minimum fee
amount, but authorize an exemption from that presumptive amount upon a
showing that a lesser amount will meet overall fee requirements, CAA
section 502(b)(3)(B)(iv).  One of the drafters of this provision, Rep.
Wyden, explained that its purpose was to preserve the flexibility of
states to impose lower fees of small businesses:

I note that the provision on fees allows reductions for small sources
where appropriate.  The state has some flexibility, under the general
permit fee provisions, to adjust fee levels for any source so long as
the average fee charged meets the statutory minimum.

136 Cong. Rec. H12884 (Oct. 26, 1990) (statement of Rep. Wyden).  See,
e.g., 136 Cong. Rec.  H2559 (May 21, 1990) (statement of Rep. Wyden)
(discussing need to “help small businesses through the air permit
labyrinth”).

	The legislative history also indicates that Congress was deeply
concerned both about the need not to burden sources generally with undue
costs and to assure the administrability of the title V program, and as
a result, was determined to make the program as smooth-running as
possible.  These goals are reflected in many of the title V
requirements, as discussed previously.  See, e.g., CAA section
§502(b)(6) (requiring “adequate, streamlined, and reasonable
procedures for expeditiously determining when applications are complete,
for processing such applications, for public notice …* * * and for
expeditious review of permit actions); CAA section §502(b)(7) (includes
a “hammer” provision designed to reinforce timely permit issuance);
CAA section §502(b)(9)-(10) (limiting circumstances under which permit
revision is required; requiring revision to occur “as expeditiously as
practicable;” including operational flexibility provisions).

The legislative history confirms that these provisions were designed to
reduce costs to sources and promote administrability.  The
“Chafee-Baucus Statement of Senate Managers” for the bill explained
the purpose of the CAA section 502(b)(6) requirement for “[a]dequate,
streamlined, and reasonable procedures for expeditious[]” permit
actions as follows:

[M]uch concern has been expressed that this new permitting process will
unduly delay the proper functioning of many sources, and we intend to
mitigate any delay by directing that the process be expeditious.

In addition to this general directive for expeditious processing, we
mandate in new section 503 that permitting authorities approve or reject
permit applications within certain specified time periods following
filing.  In this fashion, we have taken explicit steps to protect
against undue delays.

136 Cong. Rec. S16941 (statement of Sen. Chafee).  The same statement
explained that the permit revision procedures of CAA section 502(b)(9)
reflect a –

careful effort to ensure that the permit program works effectively and
efficiently.  Succinctly, this provision accommodates two competing
concerns.  On the one hand, it is important to ensure that permit
requirements remain up-to-date as the provisions of the Clean Air Act
are developed and new requirements are imposed.  On the other hand, it
also is important to be sure that we do not reduce the permit program to
a shambles by requiring sources to engage in a continuous process of
revising their permits as these new requirements are imposed.

136 Cong. Rec. 16942 (Oct. 27, 1990) (Chafee-Baucus statement of Senate
Managers) (statement of Sen. Chafee).

	In addition, these concerns were at the bottom of the following
statement by Sen. Chafee, in which he described how the bill’s
drafters had revised it in response to a concern by industry that an
earlier version of the bill would have put undue costs on industry:

We have also heard concerns from industry that S. 1630 would burden
sources unduly by requiring them to submit-along with their permit
applications-plans explaining how they intend to comply with all
requirements of the Clean Air Act that apply to them.

But, Mr. President, we emphatically do not intend to burden industry
with preparation and submission of unnecessary compliance plans.  The
substitute clarifies that any compliance plans would address only those
matters by which the sources would comply with new requirements imposed
by this act as it is finally signed into law.  These plans would not
need to address compliance with any existing Clean Air Act requirements,
unless the source is in violation of those requirements.

136 Cong. Rec. S2107 (March 5, 1990) (statement of Sen. Chafee).

As another indication of congressional concern over administrability,
Congress recognized that at the beginning of the program, large numbers
of permit applications might overwhelm the permitting authorities.  To
protect against this, Congress included in CAA section 503(c) a phase-in
schedule for permitting authorities to act on the initial set of permit
applications.  Under 503(c), permitting authorities were not required to
act on the initial set of permit applications within 18 months after it
received the application, but rather could act on one-third of them on
an annual basis over a 3-year period.  Sen. Chafee, in describing an
early version of this provision – which would have allowed permitting
authorities to phase -in the submission of permit applications –
explained that its purpose was “to avoid a logjam of permit
applications[,] … ensure that [regulatory] gridlock can be avoided,
and [ensure] that the permitting process will work with a minimum of
disruption and delay.”  136 Cong. Rec., S2106 (March 5, 1990)
(statement of Sen. Chafee).

(3)  Title V Regulatory History

	As with PSD, for present purposes, the regulatory history of the title
V program is most noteworthy because it shows that beginning shortly
after the inception of the program following the 1990 CAA Amendments,
EPA has interpreted the statutory title V applicability provisions to
apply more narrowly – to any air pollutant subject to regulation –
than their literal meaning (“any air pollutant”).  As discussed
previously, title V applies to any “major source,” defined, as
relevant here, under CAA sections 501(2)(B) and 302(j), as “any
stationary facility or source of air pollutants which directly emits, or
has the potential to emit, one hundred tons per year or more of any air
pollutant ….”....”  EPA’s regulations mirror the CAA
definitional provisions.  40 CFR 70.2.

	However, since 1993, EPA has interpreted the applicability provisions
more narrowly.  At that time, which was shortly after title V was
enacted, EPA issued a guidance document making clear that it interprets
this requirement to apply to sources of pollutants “subject to
regulation” under the Act.  Memorandum from Lydia N. Wegman, Deputy
Director, Office of Air Quality Planning and Standards, U.S. EPA,
“Definition of Regulated Air Pollutant for Purposes of Title V”
(Apr. 26, 1993) (Wegman Memorandum).  The interpretation in this
memorandum was based on:  (1) EPA’s reading of the definitional chain
for “major source” under title V, including the definition of “air
pollutant” under section 302(g) and the definition of “major
source” under 302(j); (2) the view that Congress did not intend to
require a variety of sources to obtain title V permits if they are not
otherwise regulated under the Act (see also CAA section 504(a),
providing that title V permits are to include and assure compliance with
applicable requirements under the Act); and (3) consistency with the
approach under the PSD program.

While the specific narrow interpretation in the Wegman Memorandum of the
definition of “air pollutant” in CAA section 302(g) is in question
in light of the holding in Massachusetts v. EPA, 549 U.S. 497, 533
(20072077) (finding this definition to be “capacious”),”, we
believe that the overall rationale for our interpretation of the
applicability of title V remains sound.  EPA continues to maintain its
interpretation, consistent with CAA sections 302(j), 501, 502 and
504(a), that the provisions governing title V applicability for “a
major stationary source” can only be triggered by emissions of
pollutants subject to regulation.  This interpretation is based
primarily on the purpose of title V to collect all regulatory
requirements applicable to a source and to assure compliance with such
requirements, see, e.g., CAA section 504(a), and on the desire to
promote consistency with the approach under the PSD program.

	In the Tailoring Rule notice of proposed rulemaking, EPA acknowledged
the Wegman Memorandum and affirmed the memorandum’s continued
viability, stating that “EPA continues to maintain this
interpretation.”  74 FR 55,300, col. 3, fn. 8; see also 75 FR at
17022-23 (Interpretive Memo reconsiderationMemorandum Reconsideration).

As with PSD, we recount this regulatory history as background
information, and we are not reconsidering or re-opening this
interpretation of the definition of “major source” narrowly to be
limited to pollutants subject to regulation under the Act.

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

Having reviewed the factual background, legal doctrines, and the key
components of the PSD and title V programs, we now turn towards
interpreting the PSD and title V requirements in accordance with the
Chevron framework, accounting for the applicable legal doctrines.  We
begin with the “absurd results” doctrine, and apply it first to the
PSD requirements.

In this action, we finalize, with some refinements, the “absurd
results” basis we proposed.  Specifically, we are revising our
regulations to limit PSD applicability to GHG emitting sources by
revising the regulatory term, “regulated NSR pollutant,” and
although our revised regulations do not accord with a literal reading of
the statutory provisions for PSD applicability, which are incorporated
into the definition of “major emitting facility” and “major
modification,” we have concluded that based on the “absurd
results” doctrine, a literal adherence to the terms of these
definitions is not required.  Even so, we believe Congress did intend A
literal adherence would not reflect congressional intent that PSD apply
to GHG sources as a general matter.  Further, we may apply PSD to GHG
sources in a phased-in manner, as we do through the tailoring approach,
because either congressional intent is clear on that issue and the
tailoring approach best reflects it, or congressional intent is unclear
and the tailoring approach is a reasonable interpretation of the
statute.  However, in this rulemaking, it is not necessary to make
decisions, and we do not do so, about congressional intent for applying
PSD to smaller GHG sources, that is, those that emit at or close to the
statutory thresholds.

a.  Congressional Purpose for the PSD Program

To reiterate, for convenience, CAA section §169(1) defines a “major
emitting facility” to include “any … source[] [that] emit[s], or
ha[s] the potential to emit, [depending on the source category], one
hundred [or two hundred fifty] tons per year or more or more of any air
pollutant.”  CAA section§ 169(1); and a “modification” as any
physical or operational change in “a stationary source which increases
the amount of any air pollutant emitted by such source,” CAA section§
169(2)(C), 111(a)(4).  We also reiterate that, as discussed above,
beginning with our initial rulemaking in 1977-1978 to implement the PSD
program, we have interpreted these definitions more narrowly by reading
into them the limitation that a source is subject to PSD only if the air
pollutants in question are “subject to regulation under the Act.”
40 CFR 51.166(b)(49)(iv).  EPA is not re-opening this interpretation in
this regulation in this action.

Under the current interpretation of the PSD applicability provision,
EPA’s recent promulgation of the LDVR light-duty vehicle rule will
trigger the applicability of PSD for GHG sources at the 100/250 tpy
threshold levels as of January 2, 2011.  This is because PSD
applicability hinges on the definition of “major emitting facility,”
which, under EPA’s long-standing narrowing interpretation, but absent
further tailoring, applies PSD to sources of any air pollutant subject
that is subject to

regulation under another provision of the CAA.  EPA’s promulgation of
the LDVRlight-duty vehicle rule means that GHGs will become subject to
regulation on the date that the rule takes effect, which will be January
2, 2011.

But absent tailoring, the January 2, 2011 trigger date for GHG PSD
applicability will subject an extraordinarily large number of sources,
more than 81,000, to PSD each year, an increase of almost 300-fold.  And
the great majority of these new sources will be small commercial or
residential sources.  We believe that for many reasons, this result is
contrary to congressional intent for the PSD program, and in fact would
severely undermine what Congress sought to accomplish with the program.
As a result, under our Chevron analysis, accounting for the “absurd
results” doctrine, the statutory definition for “major emitting
facility” (as interpreted narrowly to include “subject to
regulation”) should not be read to apply to all GHG sources at or
above the 100/250 tpy threshold as of the January 2, 2011 date.  Rather,
the definitions of “major emitting facility” and “modification”
should be tailored so that they applies to GHG sources on a phased-in
basis, with the largest sources first, as we describe in this rule.

As explained previously, Chevron Stepstep 1 calls for a determination of
congressional intent, and the courts consider the best indicator of
congressional intent to be the plain meaning of the statute.  However,
the U.S. nited States Supreme Court has held that the literal meaning of
a statutory provision is not conclusive “in the ‘rare cases [in
which] the literal application of a statute will produce a result
demonstrably at odds with the intentions of the drafters’ … [in
which case] the intention of the drafters, rather than the strict
language, controls.”  United States v. Ron Pair Enterprises, 489 U.S.
235, 242 (1989).  To determine whether “the intentions of the …. . .
drafters” differ from the result produced from “literal
application” of the statutory provisions in question, the courts may
examine the overall context of the statutory provisions, including
whether there are related statutory provisions that either conflict or
are consistent with that interpretation; and the legislative history to
see if it exposes what the legislature meant by the terms in question.
In addition, the courts may examine whether a literal application of the
provisions produces a result that the courts characterize variously as
absurd, futile, strange, or indeterminate, and therefore so illogical or
otherwise contrary to sensible public policy as to be beyond anything
Congress would reasonably have intended.  In such cases, the literal
language cannot be said to reflect the intention of the drafters, and
therefore does not control.  See United States v. Ron Pair Enterprises,
489 U.S. 235, 242-43 (1989); Griffin v. Oceanic Contractors, Inc., 458
U.S. 564, 571 (1982).

Here, applying the definitions of “major emitting facility” and
“modification” literally (as EPA has interpreted them more narrowly)
at the present time -– in the absence of streamlining measures or
additional permitting authority resources, and without tailoring –
would be contrary to congressional purpose for the PSD provisions, as
found in the statutory provisions and legislative history, especially in
light of the impact from applying those definitions literally.  Congress
established the PSD program in large measure because it was concerned
that around the country, industrial development, which was confronting
barriers to locating in nonattainment areas (that is, areas that do not
meet the NAAQS), would attempt to locate in clean air areas (that is,
attainment areas or unclassifiable areas), but that as a consequence,
the clean air areas would see their air quality deteriorate to the point
where they, too, would no longer meet the NAAQS.  The end result would
be the spread of environmental and health problems to those formerly
clean air areas, as well as more barriers to further industrial
development.  With these concerns in mind, Congress designed the PSD
program to require newly constructing or modifying sources in areas with
air quality that meets the NAAQS (or that is unclassifiable) to analyze
their emissions of NAAQS pollutants and to implement controls as needed
to assure that those emissions do not significantly deteriorate air
quality.  Many of the PSD requirements, and much of the discussion in
the legislative history, reflect these aspects of the PSD program.
E.g., CAA sections 162, 163, 164, 165(a)(3), 165(d)(2), 165(e), 166; see
generally H. Rep. 95-294, 95th Cong., 1st Sess. (1977)  103-78.

Congress also designed the PSD program to impose controls on non-NAAQS
pollutants, through the requirement under CAA section 165(a)(4) that the
source be “subject to the best available control technology
[(“BACT”)]for each pollutant subject to regulation under this
chapter emitted from, or which results from, such facility.”  For
example, when Congress enacted the PSD provisions in 1977, sources
emitting HAPs were required to implement BACT for those pollutants,
although in the 1990 CAA Amendments, Congress redesigned CAA section
112, which includes the requirements for HAPs, and excluded HAPs from
PSD.  CAA section§ 112(b)(6).

Congress was keenly aware that the PSD program needed to serve two
purposes:  protect the environment and promote economic growth.
Congress explicitly identified these two goals in the “purposes”
section of the PSD provision, CAA section§ 160, and various PSD
requirements clearly reflect them.  For example, to protect economic
growth, the PSD program expedites the permit process to include a 1-year
limitation on the time that the permitting authority has act on permit
applications.  To protect the environment, in addition to including many
provisions that focus on NAAQS pollutants, the PSD program requires that
the preconstruction permit impose emission limits that reflect BACT for
each pollutant subject to regulation under another CAA provision.  CAA
section 165(a)(4).  This BACT provision also makes clear, by its terms,
that although Congress designed the PSD program largely with NAAQS
pollutants in mind, Congress also intended that sources subject to PSD
control the emissions of their other pollutants as well.  The D.C.
Circuit has recognized the twin goals of environmental protection and
economic development that underlie PSD, and has upheld EPA
interpretations of the PSD program that reflect a balancing of those
goals.  See, e.g., New York v. EPA, 413 F.3d 3, 27 (D.C. Cir.),
rehearing en banc den.  431 F.3d 801 (2005).

Congress was also keenly aware that the PSD analyses and controls that
it was mandating had to be implemented on a source-by-source basis, and
that this process would be expensive for sources.  As a result, Congress
intended to limit the PSD program to large industrial sources because it
was those sources that were the primary cause of the pollution problems
in question and because those sources would have the resources to comply
with the PSD requirements.  Congress’s mechanism for limiting PSD was
the 100/250 tpy threshold limitations.  Focused as it was primarily on
NAAQS pollutants, Congress considered sources that emit NAAQS pollutants
in those quantities generally to be the large industrial sources to
which it intended PSD to be limited.

That Congress paid careful attention to the types and sizes of sources
that would be subject to the PSD program and designed the thresholds
deliberately to limit the program’s scope is evident from the
legislative history.  Several Senate floor statements and the Committee
Report made clear that PSD should not apply to small sources.  As
discussed later, Congress scrutinized information that EPA provided as
to types and sizes of sources, found largely in the Steigerwald-Strelow
memorandum.  Sen. Muskie stated that the Senate bill excluded “houses,
dairies, farms, highways, hospitals, schools, grocery stores, and other
such sources.”  123 Cong. Rec. 18021 (June 8, 1977) (statement of Sen.
Muskie).  Sen. McClure stated that PSD should be limited to
“industrial plants of significant impact,” and should exclude ”[a]
small gasoline jobber, or a heating plant at a community college,
[which] could have the potential to emit 100 tons of pollution
annually.”  122 Cong. Rec. 24548-49 (July 29, 1976) (statement of Sen.
McClure).  The Senate Committee Report mirrored Sen. McClure’s
statement, and concisely articulated the cost-related basis for the
line-drawing: “[The PSD] procedure … must include an effective
review-and-permit process.  Such a process is reasonable and necessary
for very large sources, such as new electrical generating plants or new
steel mills.  But the procedure would prove costly and potentially
unreasonable if imposed on construction of storage facilities for a
small gasoline jobber or on the construction of a new heating plant at a
junior college, each of which may have the potential to emit 100 tons of
pollution annually.”  S. Rpt. 95-127 at 96-97.

The D.C. Circuit had occasion, in Alabama Power, to acknowledge this
legislative history.  "Congress's intention was to identify facilities
which, due to their size, are financially able to bear the substantial
regulatory costs imposed by the PSD provisions and which, as a group,
are primarily responsible for emissions of the deleterious pollutants
that befoul our nation's air."  Alabama Power, 636 F.2d at 353.  The
Court added, “Though the costs of compliance with [the PSD]
requirements are substantial, they can reasonably be borne by facilities
that actually emit, or would actually emit when operating at full
capacity, the large tonnage thresholds specified in section 169(1).”.
Id. at 354.

It is not too much to say that applying PSD requirements literally to
GHG sources at the present time – in the absence of streamlining or
increasing permitting authority resources and without tailoring the
definition of “major emitting facility” or “modification” --
would result in a program that would have been unrecognizable to the
Congress that designed PSD.  Congress intended that PSD be limited to a
relatively small number of large industrial sources.  Without phasing in
PSD and title V applicability to GHG sources so as to allow the
development of streamlining methods and increases in permitting
authority resources, the PSD program would expand by January 2, 2011
from the current 280 sources per year to almost 82,000 sources,
virtually all of which would be smaller than the sources currently in
the PSD program and most of which would be small commercial and
residential sources.  Until EPA could develop streamlining methods, all
of the sources that would become newly subject to PSD – whether they
be larger or smaller sources, whether industrial or
commercial/residential sources - would have to undergo source-specific
BACT determinations for their GHG emissions, as well as their emissions
of conventional pollutants in amounts in excess of the significance
levels.  We estimate that the commercial and residential sources – the
great majority of which are small business -- would each incur, on
average, almost $60,000 in PSD permitting expenses.  This result would
be contrary to Congress’s careful efforts to confine PSD to large
industrial sources that could afford these costs.

	A closer look at the legislative history confirms the view that
Congress did not expect PSD to apply to large numbers of small sources,
including commercial and residential sources, and instead expected the
100/250 tpy thresholds to limit PSD’s applicability to larger sources.
 As noted previously, Congress relied on an EPA memorandum – the
Steigerwald-Strelow memorandum -- that identified the range of
industrial categories that EPA regulated under its program that
constituted the precursor to the statutory PSD program, and listed both
the estimated number of new sources constructing each year and the
amount of pollution emitted by the “typical plant” in the category.
The Steigerwald-Strelow memorandum makes clear that the 100 tpy cut-off
for the 28 listed sources categories, and the 250 tpy cut-off for all
other sources, would exclude from PSD a large number of sources.  122
Cong. Rec. 24548-50 (July 29, 1976).  However, virtually all, if not
all, of the sources in half the 28 source categories emit CO2carbon
dioxide in quantities that equal or exceed the 100 tpy threshold, and
almost all of the sources in the remaining categories emit CO2 in
quantities that equal or exceed the 100 tpy threshold.  Therefore,
applying the “major emitting facility” definition to GHG sources, in
the absence of streamlining methods and without tailoring, would, as a
practical matter, vitiate much of the purpose of the 100

tpy cut-off for industrial sources.

Most telling, in this regard, is the small-sized boilers, which the
Steigerwald-Strelow memorandum describes, in terms of size, pollutants
emitted, and numbers of sources, as follows:  The memorandum identified
two categories of these boilers, differentiated by size.  The first
ranges in size from 10 to 250 x 106 Btu/hr, and has a “typical
plant” size of 107 Btu/hr, with “BACT emissions from typical
plant” of 53 tpy, and a total of 1,446 sources in that category.  The
second category ranges in size from 0.3 to 10 x 106 Btu/hr, and has a
“typical plant” size of 1.3 x x 106 Btu/hr, with “BACT emissions
from typical plant” of 2 tpy, and a total of 11,215 sources in the
category.  That memorandum makes clear that EPA did not believe that
sources in these two categories – and especially the smallest one –
would be subject to PSD under a 100 tpy threshold, by stating,
“Fortunately, most truly small boilers and typical space heating
operations would not be covered.”  122 Cong. Rec. 24549 (July 29,
1976).  However, these data and conclusions were all based on emissions
of NAAQS pollutants, the amounts of which placed these boilers well
below the PSD threshold limitations.  In general, most boilers of these
small sizes are fired with natural gas, and a natural gas boiler greater
than 0.5 x 106 Btu/hr emits at least 250 tpy CO2.  Therefore, if the CO2
emissions of these small boilers are considered – as would occur by
applying the definition of “major emitting facility” to GHG sources
without tailoring - then most of them would in fact be subject to PSD.
Again, this result would directly contravene Congress’s intention to
limit PSD to “industrial plants of significant impact.”  122 Cong.
Rec. 24548-49 (statement of Sen. McClure).

	Perhaps the most compelling reason why applying the PSD program to GHG
sources without tailoring, and before the development of streamlining
methods, would be inconsistent with congressional intent, is that the
resulting program would prove unadministrable.  Although the legislative
history of the PSD program does not reveal much explicit congressional
focus on administrability issues, the Steigerwald-Strelow Memorandum,
which identifies the source categories and numbers of sources that were
before Congress as it considered PSD, suggests that the program that
Congress fashioned could be expected to cover at most a few thousand
sources each year.  This appears to be approximately the size of the
program that EPA administered before the 1977 CAA Amendments, so that it
seems reasonable to assume that Congress expected the PSD program it
enacted to be within EPA’s and the states’ administrative
capacities.

     Moreover, the Alabama Power court stressed the importance of
administrability concerns:  Most importantly, the Court held that EPA,
in interpreting the “modification” provisions that apply PSD to
physical or operational changes by major emitting facilities that
“increase the amount of any air pollutant emitted,” CAA section
111(a)(4), may “exempt from PSD review some emission increases on
grounds of de minimis or administrative necessity,” and went on to
state that in establishing the exemption thresholds, “[t]he Agency
should look at the degree of administrative burden posed by enforcement
at various de minimis threshold levels.”  636 F.2d at 400,405.  In
addition, the Court based its holding that potential-to-emit for
purposes of the applicability thresholds should be defined as emissions
at full capacity with implementation of control equipment, in part on
its view that with this definition, the number of sources subject to PSD
would be manageable:

Though the costs of compliance with section 165 requirements are
substantial, they can reasonably be borne by facilities that actually
emit, or would actually emit when operating at full capacity, the large
tonnage thresholds specified in section 169(1).  The numbers of sources
that meet these criteria, as we delineate them, are reasonably in line
with EPA’s administrative capability.

Alabama Power, 636 F.2d at 354.  However, applying PSD to GHG sources
before streamlining and without tailoring would increase the size of the
PSD program at least an order of magnitude beyond what Congress seems to
have expected, which would have been far beyond the “administrative
capability” that Alabama Power described EPA as having.

Beyond this disconnect with congressional expectations, what is most
important is that the extraordinarily large number of permit
applications would overwhelm permitting authorities and slow their
ability to process permit applications to a crawl.  Our best estimate at
present is that permitting authorities would need to process almost
82,000 permit applications per year, compared to, at most, 800 in the
current PSD program.  The total additional workload, in workhours, for
PSD permits would be more than 19.5 million more work hours, compared to
150,795 work hours for the current PSD program, and the total additional
costs would be over $1.5 billion, compared with $12 million for the
current PSD program.

At proposal, we noted that the states had estimated that the influx of
permit applications that would result from applying the 250 tpy
threshold at actual emissions would, without additional resources result
in permitting delays of 3 years.  In fact, as we noted at proposal, a
literal reading of the PSD requirements would require their application
at the 250 tpy PTE level, which would result in ten times more permit
applications than were assumed when the states made the 3-year estimate.
 Further, our current estimates of the numbers of sources that would be
subject to PSD requirements are about twice what we estimated at
proposal, as described elsewhere.  Moreover, our estimate of the number
of hours that permitting authorities would need to process a permit
application from a source in the commercial or residential sector –
which is, by far, the largest single sector – is three and one-half
times as long as we estimated at proposal.  And under a literal reading
of the PSD applicability provisions as applied to GHG sources, the
permitting authorities would be required to implement a program of this
size beginning on January 2, 2011, less than 9 months from now.  We
received many comments from states and industry raising concerns about
the cost to sources and administrative burdens of PSD permitting if the
statutory threshold were to apply for GHG emissions.  One commenter
estimated a cost of over $5 billion and the dedication of over 17,000
FTEs to this effort.

We consider it difficult to overstate the impact that applying PSD
requirements literally to GHG sources as of January 2, 2011 – before
streamlining or increasing permitting resources and without tailoring --
would have on permitting authorities and on the PSD program, and we are
concerned that this impact could adversely affect national economic
development.  The number of PSD permits that would be required from such
an approach is far beyond what the PSD program has seen to date.  It is
clear throughout the country, PSD permit issuance would be unable to
keep up with the flood of incoming applications, resulting in delays, at
the outset, that would be at least a decade or longer, and that would
only grow worse over time as each year, the number of new permit
applications would exceed permitting authority resources for that year.
Because PSD is a preconstruction program, during this time, tens of
thousands of sources each year would be prevented from constructing or
modifying.  In fact, it is reasonable to assume that many of those
sources will be forced to abandon altogether plans to construct or
modify.  As a result, a literal application of the PSD applicability
provisions to GHG sources would slow construction nationwide for years,
with all of the adverse effects that this would have on economic
development.

The remedies for this scenario would be for permitting authorities to
increase their PSD funding by over 100-fold, from $12 million to over
$1.5 billion, or the development by EPA and the permitting authorities
of streamlining techniques.  But it is not possible for permitting
authorities to increase their funding to those levels in the foreseeable
future, partly because of the sheer magnitude of those levels and partly
because of the financial challenges that states currently face.  And,
for the reasons discussed later, although streamlining offers genuine
promise to improve the manageability of the PSD workload, streamlining
cannot do so in the very near term and, in any event, the extent to
which it can do so has not yet come into focus.

So clear are at least the broad outlines of this picture that EPA did
not receive any substantive comments arguing that permitting authorities
could in fact administer the PSD program with the applicability
requirements applied literally to GHG sources beginning in the very near
future.  Every permitting authority that addressed this issue in their
comments on the proposed GHG Tailoring Rule stated unequivocally that it
could not administer the PSD program at the statutory levels.  To cite a
few examples (each of which considered both the PSD and title V programs
together): NACAA, which represents air pollution control agencies in 53
states and territories, stated it “…agrees with the EPA that
immediately attempting to implement the PSD and title V programs using
the statutory thresholds meets the test for invoking the administrative
necessity and absurd results doctrines.”  Similarly, the California
Air Resources Board stated that it “… concurs with the United
States, EPA that if more appropriate applicability thresholds [as
opposed to the statutory thresholds] are not set for GHG it will not be
administratively possible to implement these [the PSD and tile V]
permitting programs.”  All other state and local permitting agencies
that commented on the proposed tailoring provided similar comments that
they would not have the adequate staff capacity or resources to be able
to successfully administer their permitting programs with the addition
of GHG emission sources at the statutory thresholds for PSD and title V.

It is the many-year delays in permit issuance and the consequent
chilling of economic development that provide perhaps the clearest
indication that applying the PSD applicability provisions to GHG sources
without tailoring produces absurd results.  These effects would
undermine one of Congress’s central purposes in establishing the PSD
program, which was to promote development in clean air areas by large
industrial sources (as long as they included environmental safeguards).
As discussed previously, this goal is manifest in the structure of the
PSD provisions, and Congress even went so far as to make this goal
explicit in the purposes section of the PSD provisions.

Moreover, at the present time, there is relatively little environmental
benefit in subjecting large numbers of small GHG sources to the
expensive, source-by-source PSD permitting requirements.  They represent
a relatively small share of the GHG inventory and the control options
available to them, at present, are limited.  As a result, approaches
other than source-by-source permitting presently offer more promise for
generating emissions reductions in an efficient manner.  These
approaches, which may be developed through both federal and state
efforts, include requirements, incentives, and educational outreach to
promote efficiency improvements to boilers and furnaces and energy
efficient operations, including, for example, weatherization programs.

	For all these reasons, interpreting the definition of “major emitting
facility” and “modification” literally - that is, as EPA has
interpreted them more narrowly, but without tailoring and before the
program requirements can be streamlined or permitting authority
resources can be increased -– would produce results that are not
consonant with, and, in fact, would severely undermine, Congress’s
purpose for the PSD program.  These results may fairly be characterized
as the type of absurd results that support our view that the literal
terms of the PSD applicability provisions do not indicate congressional
intent for how those provisions should applied to GHG sources.

b.  Congressonal Intent for the Applicability Provisions

(1)  Congressional Intent for Whether and How PSD Applies to GHG Sources

Several of the PSD provisions and statements in the legislative history
are particularly important in determining whether and how the PSD
program should apply to GHG sources, as discussed elsewhere:

(1)	The applicability provisions, under CAA section 165(a) and 169(1).
These provisions are written broadly, and although, as we explain above,
they cannot be read literally to apply to GHG sources at or above the
100/250 tpy, they nevertheless can be read to indicate that
directionally, Congress intended that PSD be applied inclusively.

(2)	The various PSD provisions that identify the pollutants subject to
PSD.  Compare, e.g., CAA sections 162, 163, 164, 165(a)(3), 165(d)(2),
165(e), and 166 (NAAQS pollutants) with CAA sections 165(a)(3)(C),
165(a)(4) (other pollutants).  These provisions indicate that a major
purpose of the PSD program is to control NAAQS pollutants, but that the
program also covers non-NAAQS pollutants.

(3)	The requirement that permitting authorities act on PSD applications
within 1 year.  CAA section 165(c).  This provision indicates that
Congress anticipated the PSD program would be of a size that would allow
permitting authorities to meet this deadline.

(4)	The purpose provision.  CAA section 160.  This provision makes clear
that PSD is designed both to protect public health and welfare and to
promote economic growth.

(5)	In addition, we consider important the legislative history
indicating the Congress intended PSD to apply to large industrial
sources because they were the primary source of the air pollution
problems and they have the resources to manage the demands of the PSD
permitting process; and that, by the same token, Congress expected that
small sources would not be subject to PSD.  The legislative history does
not specifically mention GHG sources.

Looking at these provisions and the legislative history together, we
think Congress can be said to have intended that the PSD program apply
to GHG sources as a general matter.  The most important indication of
congressional intent in this regard is the applicability provisions,
which provide, in part, that PSD applies to (i) “any … source[ that]
emit[s], or ha[s] the potential to emit [the specified quantity] of any
air pollutant,” CAA section 169(1); and (ii) to any such source that
undertakes a physical or operational change that “increases the amount
of any air pollutant emitted.”  CAA section 169(2)(C), 111(a)(4).
These terms are quite broad, and should be read to include GHG sources
and GHGs.  See Massachusetts v. EPA, 549 U.S. 497, 533 (2007)
(“Because greenhouse gases fit well within the Clean Air Act's
capacious definition of ‘air pollutant,’ we hold that EPA has the
statutory authority to regulate the emission of such gases from new
motor vehicles.”).  Moreover, including GHG sources – under certain
circumstances – is consistent with the PSD provisions that refer to
other pollutants, establish the time-frame for acting on PSD
applications, and establish the overall purpose of the program.  In
addition, including GHG sources – again, under certain circumstances
-- is consistent with the legislative history that PSD be limited to
sources that cause a meaningful part of the air pollution problem and
have the resources to manage the PSD requirements.  No PSD provision
explicitly imposes any limitation of PSD to large industrial sources,
and Congress’s reasoning for focusing on large industrial sources –
which was that these sources are best suited to handle the resource
-intensive analyses required by the PSD program – could extend to GHG
sources under certain circumstances (that is, large sources first, and
smaller sources after streamlining methods are developed).  Similarly,
as discussed previously, it is reasonable to read into Congress’s
intent that the PSD program be limited to a size that permitting
authorities would be able to administer, but it is consistent with that
reading to recognize that the permitting authorities could take certain
steps – including adoption of streamlining measures and ramping up
resources – that would allow them to handle a higher volume of
permitting.  Finally, we find nothing in the PSD provisions or
legislative history that would indicate congressional intent to exclude
GHG sources.  Accordingly, we believe that Congress must be said to have
intended an affirmative response for whether PSD applies to sources of
GHGs as a general matter.  Our previous regulatory action defining the
PSD applicability provisions made this clear, and we do not reopen this
issue in this rulemaking.  Moreover, even if this long-established
regulatory position were not justifiable based on Chevron Step 1 – on
the grounds that in fact, congressional intent on this point is not
clear - then we believe that this position, that the statutory
provisions to apply PSD to GHG sources in general, was justified under
Chevron Step 2.

As to how PSD applies to GHG sources, although, for reasons discussed
previously, the 100/250 tpy threshold provision, which establishes the
scope of PSD applicability, should not be read as applying literally to
GHG sources - and as a result, the applicability provision as a whole
cannot be said to have a plain meaning as to the scope of coverage of
GHG sources -- we believe that the applicability provisions and
legislative history nevertheless indicate a congressional intent for how
PSD should apply to GHG sources.  That is to apply PSD to as many
sources as possible as quickly as possible, at least to a certain point.
 We believe that this intent can be inferred from the inclusiveness of
the applicability provision, combined with the legislative history that
focuses on Congress’s desire to include in the PSD program sources
that have the resources to comply with the requirements and, as the
Court in Alabama Power recognized, Congress’s concern about
administrability.  That is, at first, PSD may apply to the largest GHG
sources because they may be expected to have the resources to comply
with PSD’s requirements and permitting authorities may be expected to
accommodate those sources; and over time, with streamlining and
increases in permitting authority resources, PSD may apply to more GHG
sources.  As discussed later, the tailoring approach is consistent with
congressional intent in this regard.

We recognize the tension between the applicability provisions, which are
inclusive, and the statements in the legislative history that express
Congress’s expectation that PSD be limited to large industrial
sources.  At least to a point, the applicability provisions and these
statements can be reconciled by recognizing that the reason why Congress
expected that PSD would be limited to large industrial sources was that
Congress recognized that PSD applied on a source-by-source basis, that
this would be costly to sources, and that only the large industrial
sources could afford those costs.  Taking certain actions – including
streamlining PSD requirements – can render PSD more affordable and
thereby allow its application to smaller sources in a more
cost-effective manner.  In this way, PSD’s inclusive applicability
provisions can be reconciled with the narrower scope Congress expected,
and this is part of the reason why we characterize congressional intent
as being consistent with phasing in the applicability of PSD to GHG

sources through the tailoring approach.

On the other hand, if Congress cannot be said to have expressed an
intent as to the manner and scope of PSD applicability to GHG sources,
then, under Chevron Stepstep 2, EPA may apply a reasonable
interpretation of the applicability provisions to determine the scope of
coverage of GHG sources that is consistent with the statutory
requirements.  The Tailoring Rule is a reasonable interpretation under
Chevron Stepstep 2.  It is consistent with (1i) the applicability
provisions, recognizing that as we have seen, those provisions cannot be
applied literally under these circumstances, (2ii) the provisions
described above concerning which pollutants the PSD provisions cover and
the timetable for permitting authority action on PSD applications;
(3iii) the purpose provisions of PSD, and the accompanying legislative
history, because it protects public health and welfare without
inhibiting economic development; and (4iv) the legislative history
indicating Congress intended that PSD be limited to sources that cause a
meaningful part of the problem and can manage its requirements, because
it will expand PSD’s applicability only after streamlining methods and
greater permitting authority resources will allow for such an expansion
in an orderly manner.

 (2)  Criteria for Establishing Phase-in Schedule

The specific phase-in schedule under the tailoring approach will depend
on several things.  The first is our progress in developing streamlining
methods that will render the permitting authority workload more
manageable by taking some sources off the table (through regulations or
guidance interpreting PTE“potential to emit”), and by allowing for
more efficient permit processing (through general permits and
presumptive BACT).  At the same time, streamlining techniques will lower
permitting costs to sources or even eliminate some sources’
obligations to obtain permits altogether.  The second is the time that
permitting authorities need to ramp up their resources in an orderly and
efficient manner to manage the additional workload.  The third is
information we have as to the sources’ abilities to meet the
requirements of the PSD program and the permitting authorities’
ability to process permits in a timely fashion.  That information will
be based on the real-world experience the permitting authorities will
accumulate as they proceed to process permit application for the larger
GHG sources.

Thus, under our present approach, we will develop streamlining
techniques, we expect the permitting authorities to ramp up resources in
response to the additional demands placed upon them in the first two
steps, and we will gather real world- information about the GHG
permitting process; and based on all that, we will address expanding the
PSD program in a step-by-step fashion to include more sources over time.
 We intend to follow this process to establish both the PSD
applicability thresholds and, as we describe next, the significance
levels.

(3)  Criteria for Establishing Significance Levels

	The criteria for establishing the significance levels are the same as
for establishing the “major emitting facility” thresholds.  As noted
previously, under the applicable CAA sections, any physical or
operational change at a stationary source that “increases the amount
of any air pollutant emitted by such source” or that results in the
emission of a new pollutant is treated as a “modification” that is
subject to PSD requirements.  Although the CAA, by its terms, treats as
an “increase” any amount of emissions that is greater than zero, the
D.C. Circuit held in Alabama Power v. Costle that EPA may establish a
threshold – called the significance level – on de minimis grounds
for the amount of any particular pollutant that may be increased.  636
F.2d at 400.

Of particular importance, the Court in Alabama Power indicated that EPA
may rely on administrative considerations to establish significance
levels.  Id.  To reiterate, the Court held that “EPA does have
discretion, in administering the statute’s ‘modification’
provision, to exempt from PSD review some emission increases on grounds
of de minimis or administrative necessity.”  636 F.2d at 400.  The
Court added a more detailed exposition of its views in a subsequent part
of its opinion, where it discussed the BACT provision, under CAA section
165(a)(4), and the Court made clear that those views  applied as well to
the “modification” provision.  There, the Court invalidated an EPA
regulation that established a 100- and 250-tpy exemption from the BACT
requirement.  Both the BACT provision and the modification provision
apply by their terms to all emissions from a source, but the Court
stated that each provision must be read to incorporate an exemption
based on de minimis or administrative considerations, and explained:

We understand that the application of BACT requirements to the emission
of all pollutants from a new facility, no matter how miniscule some may
be, could impose severe administrative burdens on EPA, as well as severe
economic burdens on the construction of new facilities.  But the proper
way to resolve this difficulty is to define a de minimis standard
rationally designed to alleviate severe administrative burdens, not to
extend the statutory 100 or 250-ton threshold to a context where
Congress clearly did not apply it.  Just as for the applicability of PSD
to modifications, the de minimis exemption must be designed with the
specific administrative burdens and specific regulatory context in mind.
 This the Agency has failed to do.  We do not hold that 100 tons per
year necessarily exceeds a permissible de minimis level; only that the
Agency must follow a rational approach to determine what level of
emission is a de minimis amount.

A rational approach would consider the administrative burden with
respect to each statutory context: what level of emission is de minimis
for modification, what level de minimis for application of BACT.
Concerning the application of BACT, a rational approach would consider
whether the de minimis threshold should vary depending on the specific
pollutant and the danger posed by increases in its emission.  The Agency
should look at the degree of administrative burden posed by enforcement
at various de minimis threshold levels.  It is relevant that our
decision requires the Agency, in its evaluation of emissions of
facilities, to take into account the facility's air pollution controls.
It may also be relevant, though it is certainly not controlling, that
Congress made a judgment in the Act that new facilities emitting less
than 100 or 250 tons per year are not sizeable enough to warrant PSD
review.

Id. at 405.  As just quoted, the Court acknowledged the 100 and 250 tpy
thresholds for a major emitting facility, and did not indicate whether
the modification exemption level could exceed those statutory levels,
but nevertheless, the Court made clear that EPA may “consider the
administrative burden” associated with modifications to establish an
exemption level for modifications.

EPA has established significance levels for various pollutants,
generally relying on a de minimis basis.  See, e.g., 45 FR 52,676,
52,705 – 52,710 (August 7, 1980).  In these actions, EPA generally
established the level based on the triviality of the amount of emissions
excluded.  To this point, we have not attempted to determine de minimis
– that is, trivial - levels for GHGs.  Instead, in this rulemaking,
EPA is establishing a phase-in schedule for significance levels based on
the Chevron framework, accounting for the “absurd results,”
“administrative necessity,” and “one-step-at-a-time” doctrines.
It is not necessary to establish a permanent de minimis level in this
rulemaking.  For one thing, the Court in Alabama Power explicitly
authorized an administrative basis for significance levels.  Moreover,
were EPA to establish a de minimis level, that amount could be below –
perhaps even well below – the “major emitting facility” thresholds
established in this rulemaking on grounds of “administrative
necessity” and the other doctrines.  Accordingly, at present, if we
were to establish a permanent significance level on a de minimis basis,
that level could result in too many small sources being required to
submit permit applications while the phase-in is occurring.  This would
give rise to the same problems concerning undue costs to the sources and
administrative burdens for the permitting authorities for which we are
fashioning a remedy.  Accordingly, the significance levels we establish
with this action are the lowest levels that sources and permitting
authorities can reasonably be expected to implement at the present time
in light of the costs to the sources and the administrative burdens to
the permitting authorities.

c.  Other Possible Approaches to Reconciling a Literal Reading of PSD
Applicability Provisions and Congressional Intent

Commenters have suggested another approach to reconciling the
inconsistency between the definition of “major emitting facility”
and congressional intent.  They urge that the “major emitting
facility” definition should be applied so that only sources that emit
NAAQS pollutants, for which the area is designated attainment or
unclassifiable, in the requisite quantities would be subject to PSD, and
sources would not be subject to PSD based solely on their emissions of
non-NAAQS pollutants or a NAAQS pollutant for which an area has been
designated nonattainment.  Some commenters argue that this approach is
mandated by several of the PSD provisions, read together or at least
that the relevant statutory provisions are ambiguous and that this
approach is a reasonable reading of them.  Under this approach, we would
not need to phase in the application of PSD by lowering the
applicability threshold for GHG emitters.

Specifically, many commenters have questioned whether EPA has the
authority to regulate GHGs under the PSD provisions.  Although the
specific lines of reasoning vary somewhat from one commenter to another,
in general, they based their arguments largely on CAA sections 161 and
165(a).  Under CAA section 161:

In accordance with the policy of section 101(b)(1), each applicable
implementation plan shall contain emission limitations and such other
measures as may be necessary, as determined under regulations
promulgated under this part, to prevent significant deterioration of air
quality in each region (or portion thereof) designated pursuant to
section 107 as attainment or unclassifiable.

Commenters point out that section 107 applies only to NAAQS pollutants
and directs that areas be designated as attainment, nonattainment, or
unclassifiable on a pollutant-by-pollutant basis.  Under CAA section
165(a), a “major emitting facility” cannot be constructed “in any
area to which this part applies” unless it meets certain requirements.
 According to some commenters, these provisions, read together, limit
PSD’s applications to only NAAQS pollutants that are emitted from
sources in areas that are designated attainment or unclassifiable for
those pollutants.  Other comments make a similar point, except state
that PSD applies more broadly to pollutants with a local, ambient
impact.

Some commenters go on to take the position that NAAQS pollutants for
which the area is designated attainment or unclassifiable are the only
pollutants that can be regulated under any provision of the PSD
requirements; while others take the position that once PSD is triggered
for a source on the basis of its NAAQS pollutants, then other,
non-NAAQS, pollutants may be regulated under certain PSD provisions, in
particular, the BACT provision under CAA section 165(a)(4).  These
commenters agree, however, that emissions of GHGs, by themselves, cannot
trigger PSD applicability.  Finally, some commenters state that even if
the PSD provisions cannot be read by their terms to preclude GHGs from
triggering PSD, then they can be read to authorize EPA to determine that
GHG emissions do not trigger PSD.

We recognize, as we have said elsewhere, that a major purpose of the PSD
provisions is to regulate emissions of NAAQS pollutants in an area that
is designated attainment or unclassifiable for those pollutants.
However, we do not read CAA sections 161 and the “in any area to which
this part applies” clause in 165(a), in the context of the PSD
applicability provisions, as limiting PSD applicability to those
pollutants.  The key PSD applicability provisions are found in sections
165(a) and 169(1).  Section 165(a) states, “No major emitting facility
on which construction is commenced after August 7, 1977, may be
constructed in any area to which this part applies unless [certain
requirements are met].  A “major emitting facility” is defined,
under CAA section 169(1), as “any … stationary source[] which
emit[s], or ha[s] the potential to emit, one hundred [or, depending on
the source category, two hundred fifty] tons per year or more of any air
pollutant.”  As discussed elsewhere, EPA has long interpreted the term
“any air pollutant” to refer to “any air pollutant subject to
regulation under the CAA,” and for present purposes, will continue to
read the “subject to regulation” phrase into that term.

Although section 165(a) makes clear that the PSD requirements apply only
to sources located in areas designated attainment or unclassifiable, it
does not, by its terms, state that the PSD requirements apply only to
pollutants for which the area is designated attainment or
unclassifiable.  Rather, section 165(a) explicitly states that the PSD
requirements apply more broadly to any pollutant that is subject to
regulation.  Moreover, another requirement requirements in CAA section
165(a) also applies to air pollutants broadly.  Under CAA section
165(a)(3), one of the requirements for securing a preconstruction permit
is to demonstrate that the source’s emissions “will not cause, or
contribute to, air pollution in excess of any (A) maximum allowable
increase or maximum allowable concentration for any pollutant in any
area [to which the PSD requirements apply], (B) [NAAQS] in any air
quality control region, or (C) any other applicable emission standard or
standard of performance under this chapter.”  As just quoted,
subparagraph (C), by its terms clearly applies to non-NAAQS pollutants.
This is because it refers to (1i) “any other applicable emission
standard,” which distinguishes it from subparagraph (B) and therefore
from NAAQS pollutants; and (2ii) “any … standard of performance
under this chapter,” which refers to standards of performance under
section 111, several of which are for non-NAAQS pollutants.  See, e.g.,
40 CFR 60.33c(a) “municipal solid waste landfill emissions.”  By the
same token, CAA section 110(j) specifically contemplates that a source
required to hold a permit under title I of the Clean Air Act, which
includes a PSD permit, demonstrate that the source complies with
“standards of performance,” which may include requirements for
pollutants other than NAAQS.

In addition, CAA section 163(a)(4) includes as a PSD requirement that
“the proposed facility is subject to the best available control
technology for each pollutant subject to regulation under this chapter
emitted from, or which results from, such facility.”  Section
163(a)(4)’s broad reference to  “each pollutant subject to
regulation under this chapter” clearly indicates that it applies to
non-NAAQS pollutants, as

long as they are regulated under other provisions of the Act.  The D.C.
Circuit, in Alabama Power v. Costle, 636 F.2d 323, 361 n.90 (D.C. Cir.
1980) indicated that, under the law applicable at the time the Court
handed down the decision in 1980, PSD

applies to HAPs.hazardous air pollutants.

In addition, PSD requirements are part of SIPs, and although SIPs
generally are limited to provisions that implement the NAAQS, and
therefore generally are limited to controlling NAAQS pollutants (or
non-NAAQS pollutants that affect ambient air quality), see generally CAA
section 110, Congress explicitly required SIPs to include requirements
to protect visibility, under CAA section 169A-B.  See CAA sections
110(a)(2)(D)(i)(II), 169A(b)(2)(A).  Congress took much the same
approach with the PSD program, which was to require that PSD
requirements be included in the SIPs, but to explicitly require that PSD
apply to non-NAAQS pollutants.

These provisions – sections 165(a)(3), 165(a)(4), and 110(j) - all
indicate by their terms that PSD requirements apply to non-NAAQS
pollutants.  As such, they lend credence to our view that Congress
intended the PSD applicability provisions to include GHG sources.  At
the very least, they demonstrate that Congress certainly knew how to
specifically describe certain air pollutants – e.g., “air pollution
in excess of … any other applicable emission standard or standard of
performance under this chapter,” CAA section 165(a)(3)(C) – which
indicates that its decision not to specifically describe air pollutants
in the applicability provisions suggests an intent to cover air
pollutants broadly.

To return to sections 161 and the “in any area to which this part
applies” phrasephase in 165(a), which commenters rely on as the
cornerstone of their argument, commenters in effect take the position
that Congress intended the geographic references in these provisions –
that is, the references to areas designated as attainment or
unclassifiable – to limit the scope of the permitting provisions.  We
think it unpersuasive that Congress would have taken such an indirect,
and silently implied, route to limit the scope of the permitting
provisions.  As noted previously, the permitting provisions apply
broadly by their terms.  Had Congress intended to limit PSD permitting
in the manner urged by commenters, it certainly could have done so
directly, such as by limiting PSD permitting to “any pollutant for
which an area is designated attainment or unclassifiable.”  Indeed,
Congress did so in other PSD provisions, discussed previously.
Similarly, in other sections of the CAA, Congress also directly limited
the scope of pollutant applicability by specifying which pollutants are
or are not subject to the provision.  See, e.g., section 111(d)
(performance standards for existing sources apply only to pollutants
other than NAAQS or HAPs), section 112(a)(1) (applying air toxics
requirements in section 112 to sources that emit above the specified
tonnage thresholds of “hazardous air pollutants”).

In addition, although section 161 requires that SIPs contain emission
limitations and other measures as necessary to prevent significant
deterioration in areas designated as attainment or unclassifiable, it
does not by its terms limit SIPs to only those measures.

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

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

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

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

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

Having discussed the application of the Chevron framework, taking
account of the “absurd results” doctrine, for the PSD applicability
requirements, we now turn towards applying the same approach to the
title V applicability requirements.  Because of the parallels between
the PSD and title V applicability provisions, much of the discussion
later parallels the previouspreviously discussion of PSD.  As with PSD,
we finalize, with some refinements, the “absurd results” basis we
proposed.  Specifically, we are revising our regulations to limit title
V applicability to GHG emitting sources by revising the regulatory term,
“major source,” and although our revised regulations do not accord
with a literal reading of the statutory provisions for title V
applicability, which are incorporated into the statutory definition of
“major source,” we have concluded that based on the “absurd
results” doctrine, a literal adherence to the terms of this definition
is not required.  Rather, we may apply title V to GHG sources in a
phased-in manner, as we do through the tailoring approach, because
although congressional intent is clear that title V applies to GHG
sources in general, congressional intent is unclear on the question of
how title V applies, and the tailoring approach is a reasonable
interpretation of the statute.

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

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

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

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

a.  Congressional Intent for the Title V Program

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

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

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

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

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

Revising the program in this way through a literal interpretation of the
applicability provisions – without tailoring the applicability
requirements and without streamlining the program requirements -- is
clearly inconsistent with Congress’s conception of the program’s
scope, and these inconsistencies are foundational.  Most importantly,
the program that would result would be unduly costly to sources and
impossible for permitting authorities to implement, and therefore would
frustrate the purposes that Congress intended to achieve with the
program that it did design.

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

However, if title V were to apply to GHG sources at the 100 tpy level,
until EPA could develop streamlining methods, all of these sources newly
subject to title V would need to apply for permits.  We estimate that
the commercial and residential sources would incur, on average, expenses
of $23,175, while an industrial source would incur expenses of $46,350,
to prepare a permit application and receive a permit.  The great
majority of these sources would be small commercial and residential
sources of the type that Congress did not expect would be included in
title V.  For example, as discussed above, the legislative history of
title V, including both the permit program under CAA sections 501-506
and the “small business stationary source technical and environmental
compliance assistance program” under CAA section 507, indicated that
Congress did not expect that “printers, furniture makers, dry
cleaners, and millions of other small businesses” would become subject
to title V.  House Committee Report, H.R. 101-590, at 354.  These
sources generally do not have the potential to emit conventional
pollutants at or above the 100 tpy threshold.  However, many do have the
potential to emit GHGs above that threshold.  Many printers and
furniture makers use a variety of combustion equipment that has the
potential to emit at least 100 tpy CO2, and many commercial dry cleaners
have gas-fired driers that have the potential to emit at least 100 tpy
of CO2.  All told, there are in fact “millions of … small
businesses” that would become subject to title V -- of the 6.1 million
sources that would become subject to title V, the great majority are
small businesses – if the title V applicability provisions are applied
literally to GHG sources.

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

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

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

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

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

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

But at least for an initial period, until resources could be ramped up
and streamlining methods could be developed, the extraordinary numbers
of these permit applicants would sweep aside this carefully constructed
program, and instead, backlog the permit authorities.  This initial
period would last for many years.  As discussed elsewhere, it would take
several years to develop and apply streamlining measures – in
particular, general permits – and during that time, the permit backlog
would grow so large that it would take many more years for permitting
authorities to catch up by raising the requisite funds and hiring and
training the necessary employees.

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

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

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

For the reasons just described, we should not consider the literal
meaning of the applicability provisions to be determinative of
congressional intent as to the applicability of title V to all GHG
sources; rather, we should examine other provisions of the statute and
the legislative history to determine congressional intent on that
question.  If congressional intent is clear, we must adopt and implement
an applicability approach that is as close as possible to congressional
intent; and if congressional intent is not clear, then we must select an
interpretation that is reasonable and consistent with the statutory
requirements.  This section explains EPA’s view of congressional
intent for the applicability of the title V program to GHG sources and
the principles and approach EPA is using for tailoring.  In addition, we
also respond to other approaches that were suggested by commenters.

To determine congressional intent, we consider the statutory provisions
and legislative history, and this analysis is similar to that for PSD.
The most important title V provisions and legislative history for this
purpose are the following:

The applicability provisions themselves, which, as we have interpreted
them, apply title V to all sources that emit at least 100 tpy of any air
pollutant subject to regulation.  CAA sections 502(a), 501(2)(B),
302(j).  Although we do not believe these provisions should be applied
literally to GHG sources, their broad phrasing indicates, directionally,
a congressional intent towards inclusiveness of sources in title V,
including GHG sources.

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

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

The provisions and legislative history concerning applicable
requirements, which indicate that a purpose of title V is to include
sources’ applicable requirements in their permits.  CAA sections
503(b)(2), 504(a).

These provisions, and the accompanying legislative history, discussed
previouslyabove, suggest an intent to include within title V GHG sources
that have applicable requirements, but may also suggest that Congress
would not have intended to include in title V the large numbers of GHG
sources that have “empty permits,” at least where their inclusion
would undermine implementation of the program for sources with
applicable requirements.

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

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

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

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

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

 Because Congress cannot be said to have expressed an intent as to the
manner and scope of title V applicability to GHG sources, then, under
Chevron Stepstep 2, EPA may apply a reasonable interpretation of the
applicability provision to determine the scope of coverage of GHG
sources that is consistent with the statutory requirements.  The
Tailoring Rule qualifies as such an interpretation.  The Tailoring Rule
in effect reads the applicability provisions not to apply title V to GHG
sources at or above the 100 tpy level, but instead to apply title V to
as many of the GHG sources at or above that level as possible and as
quickly as possible, starting with the largest sources first, that is
consistent with both the permitting authorities’ ability to administer
the program and with a sensible imposition of costs to sources.  This
tailoring approach is consistent with the inclusive direction of the
applicability provision, the flexibility in title V’s scope that is
inherent in the provisions authorizing general permits and requiring
permit fees, the detailed process requirements, and the legislative
history that focuses on Congress’s concern about costs to sources and
administrability.  With the tailoring approach, over time, more sources
may be included in title V, consistent with those provisions and
legislative history.  This reconciles the inclusiveness of the
applicability provisions with Congress’s expectations of a more
limited scope for the

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

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

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

Even so, title V fees cannot be considered a panacea that will resolve
all resource problems that permitting authorities will have, for several
reasons.  Permitting authorities will likely be constrained as to the
rate in which they can increase fees in light of the costs to sources.
As indicated elsewhere, at least at the outset of the program before
streamlining techniques have been developed, a literal application of
the title V applicability provisions to GHG sources would, on average,
cost each industrial source $46,400 and each commercial or residential
source $23,200 to complete the permit application and take other
associated actions; and it would cost each permitting authority, on
average, $19,688 to process the industrial source permit and $9,844 to
process the commercial or residential source permit.  Particularly in
light of the high costs to sources of applying for a permit, it is not
likely that permitting authorities would be able to pass on to the
sources in the form of fees, the entirety of the permitting
authorities’ own high costs for processing those permits, at least not
right away.  Even to the extent it would be possible to raise permit
fees, permitting authorities would have to undergo a process to assess,
impose, and collect those fees, and then hire and train personnel.  The
survey from the state and local agencies described previously forecast a
2-year period for hiring and training, without counting time for the fee