[Federal Register: June 3, 2010 (Volume 75, Number 106)]
[Rules and Regulations]
[Page 31513-31608]
[DOCID:fr03jn10-14]

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

Part II

Environmental Protection Agency

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

40 CFR Parts 51, 52, 70, et al.

 Prevention of Significant Deterioration and Title V Greenhouse Gas
Tailoring Rule; Final Rule

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

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 51, 52, 70, and 71

[EPA-HQ-OAR-2009-0517; FRL-9152-8]
RIN 2060-AP86

Prevention of Significant Deterioration and Title V Greenhouse
Gas Tailoring Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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

SUMMARY: EPA is tailoring the applicability criteria that determine
which stationary sources and modification projects become subject to
permitting requirements for greenhouse gas (GHG) emissions under the
Prevention of Significant Deterioration (PSD) and title V programs of
the Clean Air Act (CAA or Act). This rulemaking is necessary because
without it PSD and title V requirements would apply, as of January 2,
2011, at the 100 or 250 tons per year (tpy) levels provided under the
CAA, greatly increasing the number of required permits, imposing undue
costs on small sources, overwhelming the resources of permitting
authorities, and severely impairing the functioning of the programs.
EPA is relieving these resource burdens by phasing in the applicability
of these programs to GHG sources, starting with the largest GHG
emitters. This rule establishes two initial steps of the phase-in. The
rule also commits the agency to take certain actions on future steps
addressing smaller sources, but excludes certain smaller sources from
PSD and title V permitting for GHG emissions until at least April 30,
2016.

DATES: This action is effective on August 2, 2010.

ADDRESSES: EPA has established a docket for this rulemaking under
Docket ID No. EPA-HQ-OAR-2009-0517. All documents in the docket are
listed in the http://www.regulations.gov index. Although listed in the
index, some information is not publicly available, e.g., Confidential
Business Information or other information whose disclosure is
restricted by statute. Certain other material, such as copyrighted
material, is not placed on the Internet and will be publicly available
only in hard copy. Publicly available docket materials are available
either electronically in http://www.regulations.gov or in hard copy at
the EPA Docket Center EPA/DC, EPA West, Room 3334, 1301 Constitution
Avenue, Northwest, Washington, DC. The Public Reading Room is open from
8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal
holidays. The telephone number for the Public Reading Room is (202)
566-1744, and the telephone number for the EPA Docket Center is (202)
566-1742.

FOR FURTHER INFORMATION CONTACT: Mr. Joseph Mangino, Air Quality Policy
Division, Office of Air Quality Planning and Standards (C504-03),
Environmental Protection Agency, Research Triangle Park, NC 27711;
telephone number:<PHONE_NUMBER>; fax number:<PHONE_NUMBER>; e-mail
address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. General Information

A. Does this action apply to me?

    Entities affected by this action include sources in all sectors of
the economy, including commercial and residential sources. Entities
potentially affected by this action also include States, local
permitting authorities, and tribal authorities. The majority of
categories and entities potentially affected by this action are
expected to be in the following groups:

------------------------------------------------------------------------
             Industry group                         NAICS \a\
------------------------------------------------------------------------
Agriculture, fishing, and hunting......  11.
Mining.................................  21.
Utilities (electric, natural gas, other  2211, 2212, 2213.
 systems).
Manufacturing (food, beverages,          311, 312, 313, 314, 315, 316.
 tobacco, textiles, leather).
Wood product, paper manufacturing......  321, 322.
Petroleum and coal products              32411, 32412, 32419.
 manufacturing.
Chemical manufacturing.................  3251, 3252, 3253, 3254, 3255,
                                          3256, 3259.
Rubber product manufacturing...........  3261, 3262.
Miscellaneous chemical products........  32552, 32592, 32591, 325182,
                                          32551.
Nonmetallic mineral product              3271, 3272, 3273, 3274, 3279.
 manufacturing.
Primary and fabricated metal             3311, 3312, 3313, 3314, 3315,
 manufacturing.                           3321, 3322, 3323, 3324, 3325,
                                          3326, 3327, 3328, 3329.
Machinery manufacturing................  3331, 3332, 3333, 3334, 3335,
                                          3336, 3339.
Computer and electronic products         3341, 3342, 3343, 3344, 3345,
 manufacturing.                           4446.
Electrical equipment, appliance, and     3351, 3352, 3353, 3359.
 component manufacturing.
Transportation equipment manufacturing.  3361, 3362, 3363, 3364, 3365,
                                          3366, 3366, 3369.
Furniture and related product            3371, 3372, 3379.
 manufacturing.
Miscellaneous manufacturing............  3391, 3399.
Waste management and remediation.......  5622, 5629.
Hospitals/Nursing and residential care   6221, 6231, 6232, 6233, 6239.
 facilities.
Personal and laundry services..........  8122, 8123.
Residential/private households.........  8141.
Non-Residential (Commercial)...........  Not available. Codes only exist
                                          for private households,
                                          construction, and leasing/
                                          sales industries.
------------------------------------------------------------------------
\a\ North American Industry Classification System.

B. How is this preamble organized?

    The information presented in this preamble is organized as follows:
Outline
I. General Information
    A. Does this action apply to me?
    B. How is this preamble organized?
    C. Preamble Acronyms and Abbreviations
II. Overview of the Final Rule
III. Background
    A. What are GHGs and their sources?
    B. Endangerment Finding and the LDVR
    1. Endangerment Finding
    2. Light-Duty Vehicle Rule
    C. What are the general requirements of the PSD program?
    1. Overview of the PSD Program
    2. General Requirements for PSD
    D. What are the general requirements of the Title V operating
permits program?
    1. Overview of Title V
    2. Title V Permit Requirements
    E. The Interpretive Memo
IV. Summary of Final Actions

    A. How do you define the GHG pollutant for PSD and Title V
purposes?
    1. GHG Pollutant Defined as the Sum-of-Six Well-Mixed GHGs
    2. What GWP values should be used for calculating
CO2e?
    B. When will PSD and Title V applicability begin for GHGs and
emission sources?
    1. What are the Step 1 thresholds, timing, and calculation
methodology?
    2. What are the Step 2 thresholds, timing, and calculation
methodology?
    3. What about Step 3?
    4. What about the proposed 6-year exclusion for smaller sources?
    5. When and how will EPA take further action on smaller sources?
    C. How do state, local, and tribal area programs adopt the final
GHG applicability thresholds?
    D. How do you treat GHGs for purposes of Title V permit fees?
    E. Other Actions and Issues
    1. Timing for Permit Streamlining Techniques
    2. Guidance for BACT Determinations
    3. Requests for Higher Category-Specific Thresholds and
Exemptions From Applicability
    4. Transitional Issues Including Requests for Grandfathering
V. What is the legal and policy rationale for the final actions?
    A. Rationale for Our Approach to Calculating GHG Emissions for
PSD and Title V Applicability Purposes
    1. Grouping of GHGs Into a Single Pollutant
    2. Identifying Which GHGs Are Included in the Group
    3. Use of GWP vs. Mass-Based GHG Thresholds
    4. Determining What GWP Values Are To Be Used
    5. Use of Short Tons vs. Metric Tons
    B. Rationale for Thresholds and Timing for PSD and Title V
Applicability to GHG Emissions Sources
    1. Overview
    2. Data Concerning Costs to Sources and Administrative Burdens
to Permitting Authorities
    3. ``Absurd Results,'' ``Administrative Necessity,'' and ``One-
Step-at-a-Time'' Legal Doctrines
    4. The PSD and Title V Programs
    5. Application of the ``Absurd Results'' Doctrine for the PSD
Program
    6. Application of the ``Absurd Results'' Doctrine for the Title
V Program
    7. Additional Rulemaking for the PSD and Title V Programs
    8. Rationale for the Phase-in Schedule for Applying PSD and
Title V to GHG Sources
    9. ``Administrative Necessity'' Basis for PSD and Title V
Requirements in Tailoring Rule
    10. ``One-Step-at-a-Time'' Basis for Tailoring Rule
    C. Mechanisms for Implementing and Adopting the Tailoring
Approach
    1. PSD Approach: Background and Proposal
    2. Rationale for Our Final Approach to Implementing PSD
    3. Other Mechanisms
    4. Codification of Interpretive Memo
    5. Delaying Limited Approvals and Request for Submission of
Information From States Implementing a SIP-Approved PSD Program
    6. Title V Programs
    D. Rationale for Treatment of GHGs for Title V Permit Fees
    E. Other Actions and Issues
    1. Permit Streamlining Techniques
    2. Guidance for BACT Determinations
    3. Requests for Higher Category-Specific Thresholds or
Exemptions From Applicability
    4. Transitional Issues Including Requests for Grandfathering
VI. What are the economic impacts of the final rule?
    A. What entities are affected by this final rule?
    B. What are the estimated annual benefits to sources due to
regulatory relief from the statutory requirements?
    1. What are annual estimated benefits or avoided burden costs
for title V permits?
    2. What are annual benefits or avoided costs associated with NSR
permitting regulatory relief?
    C. What are the economic impacts of this rulemaking?
    D. What are the costs of the final rule for society?
    E. What are the net benefits of this final rule?
VII. Comments on Statutory and Executive Order Reviews
    A. Comments on Executive Order 12866--Regulatory Planning and
Review
    B. Comments on the Paperwork Reduction Act
    C. Comments on the RFA
    D. Comments on the Unfunded Mandates Reform Act
    E. Comments on Executive Order 13132--Federalism
    F. Comments on Executive Order 13175--Consultation and
Coordination With Indian Tribal Governments
    G. Comments on Executive Order 13211--Actions That Significantly
Affect Energy Supply, Distribution, or Use
VIII. Statutory and Executive Order Reviews
    A. Executive Order 12866--Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132--Federalism
    F. Executive Order 13175--Consultation and Coordination With
Indian Tribal Governments
    G. Executive Order 13045--Protection of Children From
Environmental Health and Safety Risks
    H. Executive Order 13211--Actions That Significantly Affect
Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898--Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
    K. Congressional Review Act
    L. Judicial Review
IX. Statutory Authority

C. Preamble Acronyms and Abbreviations

    The following are abbreviations of terms used in this preamble.

ANPR Advance Notice of Proposed Rulemaking
APA Administrative Procedure Act
AQRVs Air Quality Related Values
BACT Best Available Control Technology
Btu British thermal units
Btu/hr British thermal units per hour
CAA or Act Clean Air Act
CAAAC Clean Air Act Advisory Committee
CAFE Corporate Average Fuel Economy
CH4 Methane
CO Carbon Monoxide
CO2 Carbon Dioxide
CO2e Carbon Dioxide Equivalent
EPA U.S. Environmental Protection Agency
FDA Food and Drug Administration
FIP Federal Implementation Plan
FTEs Full-Time Equivalents
GHG Greenhouse Gas
GHz Gigahertz
GWP Global Warming Potential
HAP Hazardous Air Pollutant
HFCs Hydrofluorocarbons
ICR Information Collection Request
IPCC Intergovernmental Panel on Climate Change
LDVR Light-Duty Vehicle Rule
MACT Maximum Achievable Control Technology
MCL Maximum Contaminant Level
N2O Nitrous Oxide
NAAQS National Ambient Air Quality Standard
NHTSA National Highway Traffic Safety Administration
NMOC Nonmethane Organic Compounds
NOX Nitrogen Oxides
NPDES National Pollutant Discharge Elimination System
NSPS New Source Performance Standard
NSR New Source Review
NTAA National Tribal Air Association
NTTAA National Technology Transfer and Advancement Act
OMB Office of Management and Budget
PFCs Perfluorocarbons
PM Particulate Matter
PSD Prevention of Significant Deterioration
PTE Potential to Emit
RFA Regulatory Flexibility Act
RIA Regulatory Impact Analysis
RTC Response to Comment
SBA Small Business Administration
SBAR Small Business Advocacy Review
SBREFA Small Business Regulatory Enforcement Fairness Act
SF6 Sulfur Hexafluoride
SIP State Implementation Plan
SNPR Supplemental Notice of Proposed Rulemaking
TIP Tribal Implementation Plan
TRS Total Reduced Sulfur
TSD Technical Support Document
tpy Tons Per Year
UMRA Unfunded Mandates Reform Act
UNFCCC United Nations Framework Convention on Climate Change
VOC Volatile Organic Compound

II. Overview of the Final Rule

    EPA is relieving overwhelming permitting burdens that would, in the
absence of this rule, fall on permitting authorities and sources. We
accomplish this by tailoring the applicability criteria that determine
which GHG emission sources become subject to the PSD and title V
programs \1\ of the CAA. In particular, EPA is establishing with this
rulemaking a phase-in approach for PSD and title V applicability, and
is establishing the first two steps of the phase-in for the largest
emitters of GHGs. We also commit to certain follow-up actions regarding
future steps beyond the first two, discussed in more detail later. Our
legal basis for this rule is our interpretation of the PSD and title V
applicability provisions under the familiar Chevron \2\ two-step
framework for interpreting administrative statutes, taking account of
three legal doctrines, both separately and interdependently: They are
what we will call (1) The ``absurd results'' doctrine, which authorizes
agencies to apply statutory requirements differently than a literal
reading would indicate, as necessary to effectuate congressional intent
and avoid absurd results, (2) the ``administrative necessity''
doctrine, which authorizes agencies to apply statutory requirements in
a way that avoids impossible administrative burdens; and (3) the ``one-
step-at-a-time'' doctrine, which authorizes agencies to implement
statutory requirements a step at a time. This legal basis justifies
each of the actions we take with this rule--e.g., each of the first two
steps of the phase-in approach--both (1) as part of the overall
tailoring approach, and (2) independently of each other action we take
with this rule. EPA also has authority for this Tailoring Rule under
CAA section 301(a)(1), which authorizes the Administrator ``to
prescribe such regulations as are necessary to carry out his functions
under [the CAA].''
---------------------------------------------------------------------------

    \1\ Unless otherwise indicated, references in this preamble to
``title V,'' ``title V requirements,'' the ``title V program,'' and
similar references are to the operating permit provisions in CAA
sections 501-506, and not the ``small business stationary source
technical and environmental compliance assistance program'' under
CAA section 507.
    \2\ Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837 (1984).
---------------------------------------------------------------------------

    For the first step of this Tailoring Rule, which will begin on
January 2, 2011, PSD or title V requirements will apply to sources' GHG
emissions only if the sources are subject to PSD or title V anyway due
to their non-GHG pollutants. Therefore, EPA will not require sources or
modifications to evaluate whether they are subject to PSD or title V
requirements solely on account of their GHG emissions. Specifically,
for PSD, Step 1 requires that as of January 2, 2011, the applicable
requirements of PSD, most notably, the best available control
technology (BACT) requirement, will apply to projects that increase net
GHG emissions by at least 75,000 tpy carbon dioxide equivalent
(CO2e), but only if the project also significantly increases
emissions of at least one non-GHG pollutant. For the title V program,
only existing sources with, or new sources obtaining, title V permits
for non-GHG pollutants will be required to address GHGs during this
first step.
    The second step of the Tailoring Rule, beginning on July 1, 2011,
will phase in additional large sources of GHG emissions. New sources as
well as existing sources not already subject to title V that emit, or
have the potential to emit, at least 100,000 tpy CO2e will
become subject to the PSD and title V requirements. In addition,
sources that emit or have the potential to emit at least 100,000 tpy
CO2e and that undertake a modification that increases net
emissions of GHGs by at least 75,000 tpy CO2e will also be
subject to PSD requirements. For both steps, we also note that if
sources or modifications exceed these CO2e-adjusted GHG
triggers, they are not covered by permitting requirements unless their
GHG emissions also exceed the corresponding mass-based triggers (i.e.,
unadjusted for CO2e.)
    EPA believes that the costs to the sources and the administrative
burdens to the permitting authorities of PSD and title V permitting
will be manageable at the levels in these initial two steps, and that
it would be administratively infeasible to subject additional sources
to PSD and title V requirements at those times. However, we also intend
to issue a supplemental notice of proposed rulemaking (SNPR) in 2011,
in which we will propose or solicit comment on a third step of the
phase-in that would include more sources, beginning by July 1, 2013. In
the same rulemaking, we may propose or solicit comment on a permanent
exclusion from permitting for some category of sources, based on the
doctrine of ``absurd results,'' within the Chevron framework. We are
establishing an enforceable commitment that we will complete this
rulemaking by July 1, 2012, which will allow for 1 year's notice before
Step 3 would take effect.
    In addition, we commit to explore streamlining techniques that may
well make the permitting programs much more efficient to administer for
GHGs, and that therefore may allow their expansion to smaller sources.
We expect that the initial streamlining techniques will take several
years to develop and implement.
    We are also including in this action a rule that no source with
emissions below 50,000 tpy CO2e, and no modification
resulting in net GHG increases of less than 50,000 tpy CO2e,
will be subject to PSD or title V permitting before at least 6 years
from now, April 30, 2016. This is because we are able to conclude at
the present time that the administrative burdens that would accompany
permitting sources below this level will be so great that even the
streamlining actions that EPA may be able to develop and implement in
the next several years, and even with the increases in permitting
resources that we can reasonably expect the permitting authorities to
acquire, it will be impossible to administer the permit programs for
these sources until at least 2016.
    Further, we are establishing an enforceable commitment that we will
(1) Complete a study by April 30, 2015, to evaluate the status of PSD
and title V permitting for GHG-emitting sources, including progress in
developing streamlining techniques; and (2) complete further rulemaking
based on that study by April 30, 2016, to address the permitting of
smaller sources. That rulemaking may also consider additional permanent
exclusions based on the ``absurd results'' doctrine, where applicable.
    This Tailoring Rulemaking is necessary because without it, PSD and
title V would apply to all stationary sources that emit or have the
potential to emit more than 100 or 250 tons of GHGs per year beginning
on January 2, 2011. This is the date when EPA's recently promulgated
Light-Duty Vehicle Rule (LDVR) takes effect, imposing control
requirements for the first time on carbon dioxide (CO2) and
other GHGs. If this January 2, 2011 date were to pass without this
Tailoring Rule being in effect, PSD and title V requirements would
apply at the 100/250 tpy applicability levels provided under a literal
reading of the CAA as of that date. From that point forward, a source
owner proposing to construct any new major source that emits at or
higher than the applicability levels (and which therefore may be
referred to as a ``major'' source) or modify any existing major source
in a way that would increase GHG emissions would need to obtain a
permit under the PSD program that addresses these emissions before
construction or modification could begin. Similarly, title V would
apply to a new or existing source exceeding the 100 tpy

applicability level in the Act, if the source did not already have a
title V permit.
    Under these circumstances, many small sources would be burdened by
the costs of the individualized PSD control technology requirements and
permit applications that the PSD provisions, absent streamlining,
require. Additionally, state and local permitting authorities would be
burdened by the extraordinary number of these permit applications,
which are orders of magnitude greater than the current inventory of
permits and would vastly exceed the current administrative resources of
the permitting authorities. Permit gridlock would result with the
permitting authorities able to issue only a tiny fraction of the
permits requested.
    These impacts--the costs to sources and administrative burdens to
permitting authorities--that would result from application of the PSD
and title V programs for GHG emissions at the statutory levels as of
January 2, 2011, are so severe that they bring the judicial doctrines
of ``absurd results,'' ``administrative necessity,'' and ``one-step-at-
a-time'' into the Chevron two-step analytical framework for statutes
administered by agencies. Under the U.S. Supreme Court's decision in
Chevron, the agency must, at Step 1, determine whether Congress's
intent as to the specific matter at issue is clear, and, if so, the
agency must give effect to that intent.\3\ If congressional intent is
not clear, then, at Step 2, the agency has discretion to fashion an
interpretation that is a reasonable construction of the statute.
---------------------------------------------------------------------------

    \3\ Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 842-43 (1984).
---------------------------------------------------------------------------

    To determine congressional intent, the agency must first consider
the words of the statutory requirements, and if their literal meaning
answers the question at hand, then, in most cases, the agency must
implement those requirements by their terms. However, under the
``absurd results'' doctrine, the literal meaning of statutory
requirements should not be considered to indicate congressional intent
if that literal meaning would produce a result that is senseless or
that is otherwise inconsistent with--and especially one that
undermines--underlying congressional purpose. In these cases, if
congressional intent for how the requirements apply to the question at
hand is clear, the agency should implement the statutory requirements
not in accordance with their literal meaning, but rather in a manner
that most closely effectuates congressional intent. If congressional
intent is not clear, then an agency may select an interpretation that
is reasonable under the statute.
    Under the ``administrative necessity'' doctrine, Congress is
presumed, at Chevron Step 1, to intend that its statutory directives to
agencies be administrable, and not to have intended to have written
statutory requirements that are impossible to administer. Therefore,
under this doctrine, an agency may depart from statutory requirements
that, by their terms, are impossible to administer, but the agency may
depart no more than necessary to render the requirements administrable.
Under the ``one-step-at-a-time'' doctrine, Congress is presumed at
Chevron Step 1 to have intended to allow the agency to administer the
statutory requirements on a step-by-step basis, as appropriate, when
the agency remains on track to implement the requirements as a whole.
Each of these doctrines supports our action separately, but the three
also are intertwined and support our action in a comprehensive manner.
    Here, we have determined, through analysis of burden and emissions
data as well as consideration of extensive public comment, that the
costs to sources and administrative burdens to permitting authorities
that would result from application of the PSD and title V programs for
GHG emissions at the statutory levels as of January 2, 2011 should be
considered ``absurd results.'' Therefore, we conclude that under the
``absurd results'' doctrine, Congress could not have intended that the
PSD or title V applicability provisions--in particular, the threshold
levels and timing requirements--apply literally to GHG sources as of
that date.
    Even so, the PSD and title V provisions and their legislative
history do indicate a clear congressional intent, under Chevron Step 1,
as to whether the two permitting programs applied to GHG sources, and
that the intent was in the affirmative, that the permitting programs do
apply to GHG sources. Our previous regulatory action defining the
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 and title V generally to GHG sources, was
justified under Chevron step 2.\4\
---------------------------------------------------------------------------

    \4\ In this preamble and the response to comments document we
fully address arguments that commenters and others have presented
about congressional intent and coverage of GHGs. We do so to be
fully responsive, even though we believe that this is a settled
matter for which the time for judicial review has passed.
---------------------------------------------------------------------------

    As to how to apply the PSD program to GHG sources, congressional
intent, as expressed in the various statutory provisions and statements
in the legislative history, is clear that PSD should apply at least to
the largest sources initially, at least to as many more sources as
possible and as promptly as possible over time--consistent with
streamlining actions that we intend to consider coupled with increases
in permitting authority resources--and at least to a certain point.
This is the approach we take in this Tailoring Rule, and because it is
consistent with congressional intent, we believe it is required under
Chevron Step 1. Even if congressional intent were not clear as to how
to apply the PSD requirements to GHG sources, we would have authority
under Chevron Step 2 to establish a reasonable interpretation that is
consistent with the PSD provisions, and we believe that the tailoring
approach so qualifies.
    As for title V, the statutory provisions and legislative history,
which of course are different than those concerning the PSD program, do
not express a clear intent as to how title V applies to GHG sources,
which leads our analysis to Chevron Step 2, and here, again, we believe
that the tailoring approach is a reasonable interpretation that is
consistent with the title V provisions.
    For both PSD and title V, we intend to use the tailoring approach
to address smaller GHG sources over time, consistent with Congress's
expectations that the programs would not impose undue costs to sources
or undue administrative burdens to permitting authorities. However, we
cannot say at this point how close to the statutory thresholds we will
eventually reach. Because this rule establishes only the first two
phases of the tailoring approach, we do not find it necessary to answer
these questions in this rule, and instead we expect to resolve them
through future rulemaking. We will remain mindful of the concerns that
Congress expressed about including small sources in either program. We
intend to consider the issue of the applicability of title V to GHG
sources without applicable requirements (i.e., ``empty permits'') in
future steps of our tailoring approach. When we do so, we will further
assess the potential for the approach of excluding empty permits from
title V to relieve burden consistent with statutory requirements.
    In addition, because Congress can be said to have intended the PSD
and title

V programs to apply to GHG sources, the Tailoring Rule is also
justifiable under the ``administrative necessity'' and ``one-step-at-a-
time'' doctrines.
    The legal analysis just described justifies each of the actions in
this rule. The first two steps that we promulgate in this rule, which
take effect on January 2, 2011 and July 1, 2011, constitute the most
that permitting authorities can reasonably be expected to do by those
times. Similarly, the 50,000 tpy floor that we promulgate through at
least April 30, 2016 is reasonable because the information we have
available now shows that it constitutes the most that permitting
authorities can reasonably be expected to do by that date. Finally, the
study and two additional rulemakings--to take effect by July 1, 2013
and April 30, 2016--to which we commit in this rule establish a track
for acquiring additional information and for taking further steps to
address the application of PSD and title V more closely to the literal
statutory levels. We intend to apply them as closely to those levels as
is consistent with congressional intent and administrative imperatives,
in light of the ``absurd results,'' ``administrative necessity,'' and
``one-step-at-a-time'' doctrines, although, as noted previously, we
will consider in future rulemaking how closely to the statutory
thresholds we will be able to implement the PSD and title V programs as
well as what to require with respect to a potentially large number of
sources with empty title V permits.
    In this rule, we are adopting regulatory language codifying our
phase-in approach. As we will explain, many state, local and tribal
area programs will likely be able to immediately implement our approach
without rule or statutory changes by, for example, interpreting the
term ``subject to regulation'' that is part of the applicability
provisions for PSD and title V. We ask permitting authorities to
confirm that they will follow this implementation approach for their
programs, and if they cannot, then we ask them to notify us so that we
can take appropriate follow-up action to narrow our federal approval of
their programs before GHGs become subject to regulation for PSD and
title V programs on January 2, 2011. Narrowing our approval will ensure
that for federal purposes, GHG sources below the size thresholds we
establish in this Tailoring Rule are not obligated to hold PSD or title
V permits until the states develop and submit revised PSD and title V
programs that EPA approves, either because they adopt our tailoring
approach or because, if they continue to cover smaller GHG sources, the
states have demonstrated that they have adequate resources to
administer those programs.
    The thresholds we are establishing are based on CO2e for
the aggregate sum of six greenhouse gases that constitute the pollutant
that will be subject to regulation, which we refer to as GHGs.\5\ These
gases are: CO2, methane (CH4), nitrous oxide
(N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs),
and sulfur hexafluoride (SF6). Thus, in this rule, we
provide that PSD and title V applicability is based on the quantity
that results when the mass emissions of each of these gases is
multiplied by the Global Warming Potential (GWP) of that gas, and then
summed for all six gases. However, we further provide that in order for
a source's GHG emissions to trigger PSD or title V requirements, the
quantity of the GHGs must equal or exceed both the applicability
thresholds established in this rulemaking on a CO2e basis
and the statutory thresholds of 100 or 250 tpy on a mass basis.\6\
Similarly, in order for a source to be subject to the PSD modification
requirements, the source's net GHG emissions increase must exceed the
applicable significance level on a CO2e basis and must also
result in a net mass increase of the constituent gases combined.
---------------------------------------------------------------------------

    \5\ The term ``greenhouse gases'' is commonly used to refer
generally to gases that have heat-trapping properties. However, in
this notice, unless noted otherwise, we use it to refer to
specifically to the pollutant regulated in the LDVR.
    \6\ The relevant thresholds are 100 tpy for title V, and 250 tpy
for PSD, except for 28 categories listed in EPA regulations for
which the PSD threshold is 100 tpy.
---------------------------------------------------------------------------

    We are adopting this rule after careful consideration of numerous
public comments. On October 27, 2009 (74 FR 55292), EPA proposed the
GHG Tailoring Rule. EPA held two public hearings on the proposed rule,
and received over 400,000 written public comments. The public comment
period ended on December 28, 2009. The comments have provided detailed
information that has helped EPA understand better the issues and
potential impacts of this rule, and the final rule described in this
preamble incorporates many of the suggestions we received. We respond
to many of these comments in explaining our rationale for the final
rule, which is described in section V. The final rule adopts many
elements of the proposal but differs from the proposal in several
important respects. We proposed to apply PSD and title V to GHG sources
that emit or have the potential to emit at least 25,000 tpy
CO2e, and we proposed a PSD significance level in a range
between 10,000 and 25,000 tpy CO2e, but based on
consideration of the additional information we received and our further
analysis, we are finalizing the threshold levels in the amounts and on
the schedule described previously. In addition, the mechanism for
state, local, and tribal program implementation has been significantly
changed to reflect the comments received that we needed to develop an
implementation approach that states could adopt under state law more
expeditiously.
    The remainder of this notice describes our approach and rationale
in more detail. Following this overview, section III of this preamble
provides background information on the nature of GHG emissions, recent
regulatory developments that affect when and how GHG emissions are
subject to stationary source permitting, and the general requirements
of the PSD and title V programs. Section IV describes in detail the
summary of the key actions being taken in this rule, including the
determination of emissions, the thresholds and timing for the phase-in,
our approach to implementing the phase-in, and the additional future
actions we will take. Section V provides a more detailed description of
each action, explaining the policy and legal rationale and responding
to comments received. Section V begins with our decisions on how to
calculate the mass-based and CO2e-based emissions used in
the phase-in. Section V then turns to our legal and policy rationale
for the first two steps of the phase-in, the 50,000 tpy floor, and the
subsequent study and rulemakings to determine whether and how smaller
sources should be subject to permitting. This section then describes
key implementation issues including the approach to state adoption.
After describing our plans for follow-up on title V fee programs, the
section concludes by describing permit streamlining techniques;
guidance on BACT for the GHG sources that are affected under the first
two steps of the Tailoring Rule phase-in; requests for exemptions; and
transitional issues, including grandfathering. Finally, section VI
describes the expected impacts that will result from the phase-in
approach (i.e., the narrower application of PSD and title V
requirements during the phase-in period) and sections VII and VIII
address administrative requirements.

III. Background

A. What are GHGs and their sources?

    Greenhouse gases trap the Earth's heat that would otherwise escape
from the atmosphere into space, and form the

greenhouse effect that helps keep the Earth warm enough for life.
Greenhouse gases are naturally present in the atmosphere and are also
emitted by human activities. Human activities are intensifying the
naturally occurring greenhouse effect by increasing the amount of GHGs
in the atmosphere, which is changing the climate in a way that
endangers human health, society, and the natural environment.
    Some GHGs, such as CO2, are emitted to the atmosphere
through natural processes as well as human activities. Other gases,
such as fluorinated gases, are created and emitted solely through human
activities. As previously noted, the well-mixed GHGs of concern
directly emitted by human activities include CO2,
CH4, N2O, HFCs, PFCs, and SF6. These
six GHGs will, for the purposes of this final rule, be referred to
collectively as ``the six well-mixed GHGs,'' or, simply, GHGs, and
together constitute the ``air pollutant'' upon which the GHG thresholds
in this action are based. These six gases remain in the atmosphere for
decades to centuries where they become well-mixed globally in the
atmosphere. When they are emitted more quickly than natural processes
can remove them from the atmosphere, their concentrations increase,
thus increasing the greenhouse effect. The heating effect caused by the
human-induced buildup of GHGs in the atmosphere is very likely the
cause of most of the observed global warming over the last 50 years. A
detailed explanation of greenhouse gases, climate change and its impact
on health, society, and the environment is included in EPA's technical
support document (TSD) for the endangerment finding final rule (Docket
ID No. EPA-HQ-OAR-2009-0472-11292).
    In the United States, the combustion of fossil fuels (e.g., coal,
oil, gas) is the largest source of CO2 emissions and
accounts for 80 percent of the total GHG emissions. Anthropogenic
CO2 emissions released from a variety of sources, including
through the use of fossil fuel combustion and cement production from
geologically stored carbon (e.g., coal, oil, and natural gas) that is
hundreds of millions of years old, as well as anthropogenic
CO2 emissions from land-use changes such as deforestation,
perturb the atmospheric concentration of CO2 and the
distribution of carbon within different reservoirs readjusts. More than
half of the energy related emissions come from large stationary sources
such as power plants, while about a third comes from transportation. Of
the six well-mixed GHGs, four (CO2, CH4,
N2O, and HFCs) are emitted by motor vehicles. In the United
States industrial processes (such as the production of cement, steel,
and aluminum), agriculture, forestry, other land use, and waste
management are also important sources of GHGs.
    Different GHGs have different heat-trapping capacities. The concept
of GWP was developed to compare the heat-trapping capacity and
atmospheric lifetime of one GHG to another. The definition of a GWP for
a particular GHG is the ratio of heat trapped by one unit mass of the
GHG to that of one unit mass of CO2 over a specified time
period. When quantities of the different GHGs are multiplied by their
GWPs, the different GHGs can be summed and compared on a
CO2e basis. For example, CH4 has a GWP of 21,
meaning each ton of CH4 emissions would have 21 times as
much impact on global warming over a 100-year time horizon as 1 ton of
CO2 emissions. Thus, on the basis of heat-trapping
capability, 1 ton of CH4 would equal 21 tons of
CO2e. The GWPs of the non-CO2 GHGs range from 21
(for CH4) up to 23,900 (for SF6). Aggregating all
GHGs on a CO2e basis at the source level allows a facility
to evaluate its total GHG emissions contribution based on a single
metric.

B. Endangerment Finding and the LDVR

1. Endangerment Finding
    On April 2, 2007, the U.S. Supreme Court found that GHGs are air
pollutants under CAA section 302(g). Massachusetts v. EPA, 549 U.S. 497
(2007). As a result, the Supreme Court found that EPA was required to
determine, under CAA section 202(a), whether (1) GHGs from new motor
vehicles cause or contribute to air pollution which may reasonably be
anticipated to endanger public health or welfare, or (2) the science is
too uncertain to make a reasoned decision. After issuing a proposal and
receiving comment, on December 7, 2009, the Administrator signed two
distinct findings regarding GHGs under CAA section 202(a):
     Endangerment Finding: The Administrator found that the
current and projected atmospheric concentrations of the mix of six
long-lived and directly emitted GHGs--CO2, CH4,
N2O, HFCs, PFCs, and SF6 (referred to as ``well-
mixed greenhouse gases'' in the endangerment finding)--are reasonably
anticipated to endanger the public health and welfare of current and
future generations.
     Cause or Contribute Finding: The Administrator found that
the emissions of the single air pollutant defined as the aggregate
group of six well-mixed greenhouses gases from new motor vehicles and
new motor vehicle engines contributes to the GHG air pollution that
threatens public health and welfare.

These findings, which were published December 15, 2009 (74 FR 66496),
do not themselves impose any requirements on industry or other
entities. However, they were a prerequisite to finalizing the GHG
standards for light-duty vehicles, described next.
2. Light-Duty Vehicle Rule
    The LDVR, 75 FR 25324 (May 7, 2010), is a joint rule between EPA
and the Department of Transportation's National Highway Traffic Safety
Administration (NHTSA) that establishes a national program consisting
of new standards for light-duty vehicles that will reduce GHG emissions
and improve fuel economy. EPA finalized the national GHG emissions
standards under the Act, and NHTSA finalized Corporate Average Fuel
Economy (CAFE) standards under the Energy Policy and Conservation Act,
as amended. The new standards apply to new passenger cars, light-duty
trucks, and medium-duty passenger vehicles, starting with model year
2012. The EPA GHG standards are projected to result in an estimated
combined average emissions level of 250 grams of CO2 per
mile for model year 2016 vehicles. The standards begin with the 2012
model year, with standards increasing in stringency through model year
2016. The standards are a fleet average for each manufacturer, based on
a footprint attribute curve, meaning that the actual target for a
vehicle will vary depending on the size of the vehicle. Under the
footprint-based standards, each manufacturer will have a GHG standard
unique to its fleet, depending on the footprints of the vehicle models
produced by that manufacturer. A manufacturer will have separate
footprint-based standards for cars and for trucks.
    The endangerment and contribution findings described previously
require EPA to issue standards under section 202(a) ``applicable to
emission'' of the air pollutant that EPA found causes or contributes to
the air pollution that endangers public health and welfare. The final
emissions standards satisfy this requirement for GHGs from light-duty
vehicles. Under section 202(a), the Administrator has significant
discretion in how to structure the standards that apply to the emission
of the air pollutant at issue here, the aggregate group of six GHGs.
EPA has the discretion under section 202(a) to adopt separate standards
for each gas, a single

composite standard covering various gases, or any combination of these.
In the LDVR, EPA finalized separate standards for N2O and
CH4, and a CO2 standard that provides for credits
based on reductions of HFCs, as the appropriate way to issue standards
applicable to emission of the single air pollutant, the aggregate group
of six GHGs. EPA did not set any standards for PFCs or SF6,
as they are not emitted by motor vehicles.

C. What are the general requirements of the PSD program?

1. Overview of the PSD Program
    The PSD program is a preconstruction review and permitting program
applicable to new major stationary sources and major modifications at
existing major stationary sources. The PSD program applies in areas
that are designated ``attainment'' or ``unclassifiable'' for a National
Ambient Air Quality Standard (NAAQS). The PSD program is contained in
part C of title I of the CAA. The ``nonattainment new source review
(NSR)'' program applies in areas not in attainment of a NAAQS or in the
Ozone Transport Region and is implemented under the requirements of
part D of title I of the CAA. Collectively, we commonly refer to these
two programs as the major NSR program. The governing EPA rules are
contained in 40 CFR 51.165, 51.166, 52.21, 52.24, and part 51,
Appendices S and W. There is no NAAQS for CO2 or any of the
other well-mixed GHGs, nor has EPA proposed any such NAAQS; therefore,
unless and until we take further such action, we do not anticipate that
the nonattainment NSR program will apply to GHGs.
    The applicability of PSD to a particular source must be determined
in advance of construction or modification and is pollutant-specific.
The primary criterion in determining PSD applicability for a proposed
source is whether the source is a ``major emitting facility,'' based on
its predicted potential emissions of regulated pollutants, within the
meaning of CAA section 169(1) and either constructs or undertakes a
modification. EPA has implemented these requirements in its
regulations, which use somewhat different terminology for determining
PSD applicability, which is whether the source is a ``major stationary
source'' or whether the proposed project is a ``major modification.''
a. Major Stationary Source
    Under PSD, a ``major stationary source'' is any source belonging to
a specified list of 28 source categories which emits or has the
potential to emit 100 tpy or more of any pollutant subject to
regulation under the CAA, or any other source type which emits or has
the potential to emit such pollutants in amounts equal to or greater
than 250 tpy. We refer to these levels as the 100/250-tpy thresholds. A
new source with a potential to emit (PTE) at or above the applicable
``major stationary source threshold'' is subject to major source NSR.
These limits originate from section 169 of the CAA, which applies PSD
to any ``major emitting facility'' and defines the term to include any
source that emits or has a PTE of 100 or 250 tpy, depending on the
source category. Note that the major source definition incorporates the
phrase ``subject to regulation,'' which, as described later, will begin
to include GHGs on January 2, 2011, under our interpretation of that
phrase discussed in the recent Interpretive Memo notice. 75 FR 17004,
April 2, 2010.
b. Major Modifications
    PSD also applies to existing sources that undertake a ``major
modification,'' which occurs: (1) When there is a physical change in,
or change in the method of operation of, a ``major stationary source;''
(2) the change results in a ``significant'' emission increase of a
pollutant subject to regulation (equal to or above the significance
level that EPA has set for the pollutant in 40 CFR 52.21(b)(23)); and
(3) there is a ``significant net emissions increase'' of a pollutant
subject to regulation that is equal to or above the significance level
(defined in 40 CFR 52.21(b)(23)). Significance levels, which EPA has
promulgated for criteria pollutants and certain other pollutants,
represent a de minimis contribution to air quality problems. When EPA
has not set a significance level for a regulated NSR pollutant, PSD
applies to an increase of the pollutant in any amount (that is, in
effect, the significance level is treated as zero).
2. General Requirements for PSD
    This section provides a very brief summary of the main requirements
of the PSD program. One principal requirement is that a new major
source or major modification must apply BACT, which is determined on a
case-by-case basis taking into account, among other factors, the cost
effectiveness of the control and energy and environmental impacts. EPA
has developed a ``top-down'' approach for BACT review, which involves a
decision process that includes identification of all available control
technologies, elimination of technically infeasible options, ranking of
remaining options by control and cost effectiveness, and then selection
of BACT. Under PSD, once a source is determined to be major for any
regulated NSR pollutant, a BACT review is performed for each attainment
pollutant that exceeds its PSD significance level as part of new
construction or for modification projects at the source, where there is
a significant increase and a significant net emissions increase of such
pollutant.\7\
---------------------------------------------------------------------------

    \7\ We note that the PSD program has historically operated in
this fashion for all pollutants--when new sources or modifications
are ``major,'' PSD applies to all pollutants that are emitted in
significant quantities from the source or project. This rule does
not alter that for sources or modifications that are major due to
their GHG emissions.
---------------------------------------------------------------------------

    In addition to performing BACT, the source must analyze impacts on
ambient air quality to assure that no violation of any NAAQS or PSD
increments will result, and must analyze impacts on soil, vegetation,
and visibility. In addition, sources or modifications that would impact
Class I areas (e.g., national parks) may be subject to additional
requirements to protect air quality related values (AQRVs) that have
been identified for such areas. Under PSD, if a source's proposed
project may impact a Class I area, the Federal Land Manager is notified
and is responsible for evaluating a source's projected impact on the
AQRVs and recommending either approval or disapproval of the source's
permit application based on anticipated impacts. There are currently no
NAAQS or PSD increments established for GHGs, and therefore these PSD
requirements would not apply for GHGs, even when PSD is triggered for
GHGs. However, if PSD is triggered for a GHG emissions source, all
regulated NSR pollutants which the new source emits in significant
amounts would be subject to PSD requirements. Therefore, if a facility
triggers review for regulated NSR pollutants that are non-GHG
pollutants for which there are established NAAQS or increments, the air
quality, additional impacts, and Class I requirements would apply to
those pollutants.
    The permitting authority must provide notice of its preliminary
decision on a source's application for a PSD permit, and must provide
an opportunity for comment by the public, industry, and other
interested persons. After considering and responding to comments, the
permitting authority must issue a final determination on the
construction permit. Usually NSR permits are issued by state or local
air

pollution control agencies, which have their own permit programs
approved by EPA in their State Implementation Plans (SIPs). In some
cases, EPA has delegated its authority to issue PSD permits to the
state or local agency. In other areas, EPA issues the permits under its
own authority.

D. What are the general requirements of the title V operating permits
program?

1. Overview of Title V
    The operating permit requirements under title V are intended to
improve sources' compliance with other CAA requirements. The title V
program is implemented through regulations promulgated by EPA, 40 CFR
part 70, for programs implemented by state and local agencies and
tribes, and 40 CFR part 71, for programs generally implemented by EPA.
    In summary, the title V program requires major sources (defined and
interpreted by EPA to include sources that emit or have a PTE of 100
tpy of any pollutant subject to regulation) and certain other sources
to apply for operating permits. Under EPA's long-standing
interpretation, a pollutant, such as a GHG, is ``subject to
regulation'' when it is subject to a CAA requirement establishing
actual control of emissions. Title V generally does not add new
pollution control requirements, but it does require that each permit
contain all pollution control requirements or ``applicable
requirements'' required by the CAA (e.g., New Source Performance
Standard (NSPS), and SIP requirements, including PSD), and it requires
that certain procedural requirements be followed, especially with
respect to compliance with these requirements. ``Applicable
requirements'' for title V purposes include stationary source
requirements, but do not include mobile source requirements. Other
procedural requirements include providing review of permits by EPA,
states, and the public, and requiring permit holders to track, report,
and annually certify their compliance status with respect to their
permit requirements.
2. Title V Permit Requirements
    This section provides a brief summary of the requirements of the
title V program that are most relevant to this action. A source
generally must apply for a title V permit within 1 year of first
becoming subject to permitting--for new sources, this is usually within
1 year of commencing operation. The application must include, among
other things, identifying information, a description of emissions and
other information necessary to determine applicability of requirements
and information concerning compliance with those requirements. The
permitting authority uses this information to develop the source's
operating permit.
    Title V permits generally contain the following elements: (1)
Emissions limitations and standards to assure compliance with all
applicable requirements; (2) monitoring, recordkeeping, and reporting
requirements, including submittal of a semiannual monitoring report and
prompt reporting of deviations from permit terms; (3) fee payment; and
(4) an annual certification of certification by a responsible official.
The detailed requirements are set forth at 40 CFR 70.6.
    In addition to the permit content requirements, there are
procedural requirements that must be followed in issuing title V
permits, including (1) Application completeness determination; (2)
public notice and a 30-day public comment period, including an
opportunity for a public hearing, on draft permits; (3) EPA and
affected state review; and (4) a statement of the legal and factual
basis of the draft permit. The permitting authority must take final
action (issue or deny) on the permit applications within 18 months of
receipt. EPA also has 45 days from receipt of a proposed permit to
object to its issuance, and citizens have 60 days after that to
petition EPA to object to a permit. Permits may also need to be revised
or reopened if new requirements come into effect during the permit
terms or if the source makes changes that conflict with, or necessitate
changes to, the current permit. Permit revisions and re-openings follow
procedural requirements which vary depending on the nature of the
necessary change to the permit.

E. The Interpretive Memo

    On December 18, 2008, EPA issued a memorandum, ``EPA's
Interpretation of Regulations that Determine Pollutants Covered by
Federal Prevention of Significant Deterioration (PSD) Permit Program''
(known as the ``Johnson Memo'' or the ``PSD Interpretive Memo,'' and
referred to in this preamble as the ``Interpretive Memo'') that set
forth EPA's interpretation regarding which EPA and state actions, with
respect to a previously unregulated pollutant, cause that pollutant to
become ``subject to regulation'' under the Act. Whether a pollutant is
``subject to regulation'' is important for the purposes of determining
whether it is covered under the federal PSD and title V permitting
programs. The Interpretive Memo established that a pollutant is
``subject to regulation'' only if it is subject to either a provision
in the CAA or regulation adopted by EPA under the CAA that requires
actual control of emissions of that pollutant (referred to as the
``actual control interpretation''). On February 17, 2009, EPA granted a
petition for reconsideration on the Interpretive Memo, and announced
its intent to conduct a rulemaking to allow for public comment on the
issues raised in the memorandum and on related issues. EPA also
clarified that the Interpretive Memo would remain in effect pending
reconsideration.
    On March 29, 2010, EPA signed a notice conveying its decision to
continue applying (with one limited refinement) the Interpretive Memo's
interpretation of ``subject to regulation'' (``Interpretation of
Regulations that Determine Pollutants Covered by Clean Air Act
Permitting Programs''). See 75 FR 17004. EPA concluded that the
``actual control interpretation'' is the most appropriate
interpretation to apply given the policy implications. However, we
refined our interpretation in one respect: we established that PSD
permitting requirements apply to a newly regulated pollutant at the
time a regulatory requirement to control emissions of that pollutant
``takes effect'' (rather than upon promulgation or the legal effective
date of the regulation containing such a requirement). In addition,
based on the anticipated promulgation of the LDVR, we stated that the
GHG requirements of the vehicle rule would take effect on January 2,
2011, because that is the earliest date that a 2012 model year vehicle
may be introduced into commerce. In other words, the compliance
obligation under the LDVR does not occur until a manufacturer may
introduce into commerce vehicles that are required to comply with GHG
standards, which will begin with model year 2012 and will not occur
before January 2, 2011. We also reiterated EPA's interpretation that
the 100 tpy major source threshold for title V is triggered only by
pollutants ``subject to regulation'' under the Act, and we defined and
applied that term for title V purposes in the same way that we did for
PSD purposes. That is, we stated that a pollutant is ``subject to
regulation'' if it is subject to a CAA requirement establishing
``actual control of emissions;'' that a pollutant is considered
``subject to regulation'' for title V purposes when such a requirement
``takes effect''; and, based on the anticipated promulgation of the
LDVR, that the GHG requirements of the

vehicle rule would take effect on January 2, 2011.
    On April 1, 2010, we finalized the LDVR as anticipated, confirming
that manufacturer certification can occur no earlier than January 2,
2011. Thus, under the terms of the final notice for the Interpretive
Memo, GHGs become subject to regulation on that date, and PSD and title
V program requirements will also begin to apply upon that date.

IV. Summary of Final Actions

    This section describes the specific actions we are taking in this
final rule. It describes the overall tailoring approach for NSR and
title V applicability, the steps we are taking to put it into place,
and future actions that we commit to take. The next section, V,
provides the legal and policy rationale for these actions. In that
section, we provide a description of our rationale and response to
comments for each action, presented in the same order as we describe
the actions here.

A. How do you define the GHG pollutant for PSD and title V purposes?

1. GHG Pollutant Defined as the Sum-of-Six Well-Mixed GHGs
    We are identifying the air pollutant for purposes of PSD and title
V applicability to be the pollutant subject to regulation, which is the
air pollutant for GHGs identified in EPA's LDVR, as well as EPA's
endangerment and contribution findings.\8\ In the LDVR, EPA set
emissions standards under section 202(a) that were ``applicable to
emission'' of a single air pollutant defined as the aggregate sum of
six GHGs. The six GHGs, which are well-mixed gases in the atmosphere,
are CO2, CH4, N2O, HFCs, PFCs, and
SF6. Earlier, EPA made the contribution finding for this
single air pollutant.
---------------------------------------------------------------------------

    \8\ See 74 FR 66496, 66499, 66536-7. December 15, 2009.
---------------------------------------------------------------------------

    Furthermore, as proposed, we are using an emissions threshold that
allows all six constituent gases to be evaluated using a common
metric--CO2e. Thus, to determine applicability, a source's
GHG emissions are calculated on a CO2e basis by multiplying
the mass emissions of any of the six GHGs that the source emits by that
gas's GWP and then summing the CO2e for each GHG emitted by
the source. This sum, expressed in terms of tpy CO2e, is
then compared to the applicable CO2e-based permitting
threshold to determine whether the source is subject to PSD and title V
requirements.
    In addition, because we are implementing this phase-in through the
term ``subject to regulation,'' the regulatory language is structured
such that the statutory mass-based thresholds (i.e., for PSD, 100/250
tpy for new construction and zero tpy for modifications at a major
stationary source, and for title V, 100 tpy) continue to apply. As a
result, stationary source apply and stationary sources or modifications
that do not meet these thresholds are not subject to permitting
requirements. While technically evaluation of the mass-based thresholds
is the second step in the applicability analysis, from a practical
standpoint most sources are likely to treat this as an initial screen,
so that if they would not trigger PSD or title V on a mass basis, they
would not proceed to evaluate emissions on a CO2e basis. We
have treated evaluation of mass-based thresholds as the initial step in
our descriptions. As applicable, a source would evaluate these mass-
based thresholds by summing each of the six GHGs it emits on a mass
basis (i.e., before applying GWP). We expect that it will be very rare
for a new stationary source or modification to trigger permitting based
on CO2e and not also trigger based on mass alone.
    Determining permit program applicability for the GHG ``air
pollutant'' by using the sum-of-six GHGs is based on EPA's
interpretation that the PSD and title V requirements apply to each
``air pollutant'' that is ``subject to regulation'' under another
provision of the CAA. As discussed previously, the final LDVR for GHGs
makes it clear that the emissions standards EPA adopted are standards
applicable to emission of the single air pollutant defined as the
aggregate mix of these six well-mixed GHGs. See LDVR, May 7, 2010, 75
FR 25398-99, section III.A.2.c, and 40 CFR 86.1818-12.\9\ For reasons
explained in more detail in section V, we have determined it is legally
required, and preferable from a policy standpoint, for EPA to use the
same definition of the air pollutant for permitting purposes as that
used in the rule that establishes the control requirements for the
pollutant. We also believe there are implementation advantages for
applying PSD and title V in this way. Thus, this rule establishes that
a stationary source will use the group of six constituent gases for
permitting applicability, rather than treating each gas individually.
Similarly, you will include all six constituent gases because that is
how the air pollutant is defined, even though motor vehicles only emit
four of the six.
---------------------------------------------------------------------------

    \9\ 40 CFR 86.1818-12(a).
---------------------------------------------------------------------------

2. What GWP values should be used for calculating CO2e?
    We are requiring that wherever you perform an emissions
calculations involving CO2e for the purposes of determining
the applicability of PSD or title V requirements, you use the GWP
values codified in the EPA's mandatory GHG reporting rule.\10\ This
approach will assure consistency between the values required for
calculations under the reporting rule and for PSD or title V. In
addition, because any changes to Table A-1 of the mandatory GHG
reporting rule regulatory text must go through a rulemaking, this
approach will assure that the values used for the permitting programs
will reflect the latest values adopted for usage by EPA after notice
and comment.
---------------------------------------------------------------------------

    \10\ Table A-1 to subpart A of 40 CFR part 98--Global Warming
Potentials, 74 FR 56395.
---------------------------------------------------------------------------

B. When will PSD and title V applicability begin for GHGs and emission
sources?

Overview
    In this action, we establish the first two phases of our phase-in
approach, which we refer to as Steps 1 and 2. We also commit to a
subsequent rulemaking in which we will propose or solicit comment on
establishing a further phase-in, that is, a Step 3, that would apply
PSD and title V to additional sources, effective July 1, 2013, and on
which we commit to take final action, as supported by the record,\11\
by no later than July 1, 2012.
---------------------------------------------------------------------------

    \11\ Although we commit to propose or solicit comment on lower
thresholds and to take final action on that proposal by July 1,
2012, we cannot, at present, commit to promulgate lower thresholds.
It will not be until the Step 3 rulemaking itself that we will
gather and analyze data and receive comments that determine whether
we have basis for promulgating lower thresholds.
---------------------------------------------------------------------------

    We also commit to undertaking an assessment of sources' and
permitting authorities' progress in implementing PSD and title V for
GHG sources, and to complete this assessment by 2015. We further commit
to completing another round of rulemaking addressing smaller sources by
April 30, 2016. Our action in that rulemaking would address permitting
requirements for smaller sources, taking into account the remaining
problems concerning costs to sources and burdens to permitting
authorities. Finally, we determine in this action that we will apply
PSD or title V requirements to sources that emit GHGs, or that conduct
modifications that result in increases in emissions of GHGs, in amounts
of less than 50,000 tpy CO2e any earlier than when we take
the required further action to address smaller sources by April 30,
2016.

    Through this process, we will implement the phase-in approach by
applying PSD and title V at threshold levels that are as close to the
statutory levels as possible, and do so as quickly as possible, at
least to a certain point. The level and timing of the thresholds that
we promulgate in future actions will be based on our assessment of the
resulting costs to sources and burdens to permitting authorities, and
that, in turn, will depend on such variables as our progress in
developing streamlining approaches and on permitting authorities'
progress in developing permitting expertise and acquiring more
resources. At this time, we cannot foresee exactly when or in what
manner those developments will occur. Therefore, we cannot promulgate
more components of the tailoring approach beyond what we promulgate in
this action. We can say only that we may continue the phase-in process
with further rulemaking after 2016. Alternatively, we may make a
definitive determination in one of the future rulemaking actions that,
under the ``absurd results'' doctrine, PSD or title V applies only to
certain GHG sources, and does not apply to the remaining GHG sources,
and with that rulemaking, bring this tailoring process to a close.
1. What are the Step 1 thresholds, timing, and calculation methodology?
a. PSD Permitting
    Step 1 of the Tailoring Rule phase-in will begin on January 2,
2011. With respect to the PSD program, GHG sources will become subject
to PSD for their GHG emissions if they undergo PSD permitting anyway,
either for new construction or for modification projects, based on
emissions of non-GHG pollutants, in which case they will be subject to
the PSD requirements for GHG if they increase GHG emissions by 75,000
tpy CO2e or more. Under this step, only these sources, which
we refer to as ``anyway'' PSD sources, will become subject to PSD; no
sources will become major sources for PSD purposes or be treated as
undertaking modifications that trigger PSD based solely on their GHG
emissions. As a result, no additional PSD permitting actions will be
necessary solely due to GHG emissions. However, existing or newly-
constructed sources that are determined to be major sources based on
non-GHG emissions are required to conduct a BACT review for their GHG
emissions (from new construction) or emissions increases (from
modifications), if they are subject to PSD due to their non-GHG
emissions from construction or modification actions and each of the
following conditions is met:
    (1) The GHG emissions (or net emissions increase) due to the new
construction (or modification) project, calculated as the sum of the
six well-mixed GHGs on a mass basis (no GWPs applied) exceed a value of
0 tpy; and
    (2) The GHG emissions (or net emissions increase) due to the new
construction (or modification) project, calculated as the sum of the
six well-mixed GHGs on a CO2e basis (GWPs applied) equal or
exceed a value of 75,000 tpy CO2e.
    The purpose of the first condition is to determine whether the GHG
emissions or net emissions increase has resulted in an ``increase in
the amount'' of an air pollutant as required by the Act. Because EPA
has not defined a mass-based regulatory significance level for GHGs,
that level, in effect, is treated as zero. See 40 CFR 52.21(b)(23)(ii)
and 51.166(b)(23)(ii). In practice, this means any amount of new
emissions or an emission increase will exceed the mass-based limit. We
are not, at this time, establishing a significance level based on mass
emissions, and instead we are establishing one based on CO2e
that addresses permitting burdens. The zero mass-based amount applies,
but only as an initial screen to exclude sources or changes that have
no mass increase of GHGs.
b. Title V Permitting
    Under Step 1, only sources required to have title V permits for
non-GHG pollutants (i.e., ``anyway'' title V sources) will be required
to address GHGs as part of their title V permitting. That is, no
sources will become major for title V based solely on their GHG
emissions. Note further, however, that the 75,000 tpy CO2e
limit does not apply to title V, so that anyway title V sources must
apply any title V requirements to their GHG emissions. Sources with
title V permits must address GHG requirements when they apply for,
renew, or revise their permits. These requirements will include any GHG
applicable requirements (e.g., GHG BACT requirements from a PSD
process) and associated monitoring, record-keeping and reporting. When
a permit application is otherwise required, they will also need to
identify GHG emissions and other information in that application to the
extent required under 40 CFR 70.5(c) and 71.5(c), including information
necessary to determine applicable requirements.\12\
---------------------------------------------------------------------------

    \12\ EPA notes, however, that many sources subject to title V
under Steps 1 and 2 will also be subject to the GHG mandatory
reporting rule. For these sources, the emissions description
requirements in the title V regulations will generally be satisfied
by referencing information provided under the reporting rule.
---------------------------------------------------------------------------

2. What are the Step 2 thresholds, timing, and calculation methodology?
a. PSD Permitting
    Step 2 will begin July 1, 2011. Under Step 2, anyway PSD sources--
that is, sources already subject to PSD based on non-GHGs and covered
under Step 1 previously--will remain subject to PSD. In addition,
sources with the potential to emit 100,000 tpy CO2e or more
of GHG will be considered major sources for PSD permitting purposes
(provided that they also emit GHGs or some other regulated NSR
pollutant above the 100/250 tpy (mass based) statutory thresholds.
Additionally, any physical change or change in the method of operation
at a major source (including one that is only major due to GHGs)
resulting in a net GHG emissions increase of 75,000 tpy CO2e
or more will be subject to PSD review and requirements with respect to
GHGs (provided that it also results in an increase of GHG emissions on
a mass basis).
    Specifically, for purposes of determining whether a GHG emission
source, resulting from either new construction or a physical or
operational change at an existing source, is considered a major source
under PSD, both of the following conditions must be met:
    (1) The GHG emission source, which is not major for another
pollutant, emits or has the potential to emit GHG in amounts that equal
or exceed the following, calculated as the sum-of-six well-mixed GHGs
on a mass basis (no GWPs applied):
     100 tpy for sources in any of the 28 major emitting
facility source categories listed under PSD, or
     250 tpy for any other stationary source.
    (2) The GHG emission source emits or has the potential to emit GHGs
in amounts that equal or exceed 100,000 tpy CO2e basis.
    For determining whether a modification project at a major
stationary source is subject to PSD review, both of the following
conditions must be met:
    (1) The net GHG emissions increase resulting from the project,
calculated as the sum-of-six well-mixed GHGs on a mass basis (no GWPs
applied) equals or exceeds 0 tpy.
    (2) The net GHG emissions increase resulting from the project,
calculated as the sum-of-six well-mixed GHGs on a

CO2e basis (GWPs applied) equals or exceeds 75,000 tpy
CO2e.
    The purpose of the first condition in both of these determinations
is to confirm whether the GHG emissions or emissions increase have
exceeded, on a mass-basis, the statutory major source thresholds (where
the source is not otherwise major) and mass-based statutory
significance level for GHGs, which, as noted previously, is 0 tpy. See
40 CFR 52.21(b)(23)(ii) and 51.166(b)(23)(ii).
    As an example of how the mass-based test would apply, consider a
modification project that results in a 5 tpy increase of GHG emissions
on a mass basis, associated with a high-GWP GHG gas (for example,
SF6, with a GWP value of 23,900), but also results in a 100
tpy reduction in CO2 emissions (assume no other
contemporaneous increases or decreases of GHG). In this example, there
would be a net decrease of GHG emissions on a mass basis (5 tpy-100 tpy
= -95 tpy). Because there is no mass-based increase of GHG, this
project does not trigger PSD, despite the fact that the net GWP-
adjusted emissions increase of SF6 in this example would
equal 119,500 tpy of CO2e and the project would thus exceed
75,000 tpy CO2e.
b. Title V Permitting
    Under Step 2, ``anyway'' title V sources--that is, sources already
subject to title V based on non-GHGs and that are covered under Step 1
previously--will continue to be subject to title V. In addition, GHG
emission sources that equal or exceed the 100,000 tpy CO2e
threshold will be required to obtain a title V permit if they do not
already have one. It is important to note that the requirement to
obtain a title V permit will not, by itself, result in the triggering
of additional substantive requirements for control of GHG. Rather,
these new title V permits will simply incorporate whatever applicable
CAA requirements, if any, apply to the source being permitted. Both of
the following conditions need to be met in order for title V to apply
under Step 2 to a GHG emission source:
    (1) An existing or newly constructed source emits or has the
potential to emit GHGs in amounts that equal or exceed 100 tpy
calculated as the sum of the six well-mixed GHGs on a mass basis (no
GWPs applied).
    (2) An existing or newly constructed source emits or has the
potential to emit GHGs in amounts that equal or exceed 100,000 tpy
calculated as the sum of the six well-mixed GHGs on a CO2e
basis (GWPs applied).
3. What about Step 3?
    In this rule, EPA establishes an enforceable commitment to complete
another rulemaking no later than July 1, 2012, in which we will propose
or solicit comment on a Step 3 of the phase-in and may also consider
other approaches that may result in the permanent exclusion of a
category of sources from PSD or title V requirements, under the Chevron
framework, taking account of the ``absurd results'' doctrine.
    Consistent with our phase-in approach, it is important for us to
consider whether, at some point during the implementation of Step 2, it
will become possible to administer GHG permitting programs for
additional sources. For example, if EPA is able to promulgate measures
that streamline programs to at least some extent, if permitting
authorities increase their resources, or if implementation experience
and more seasoned staff results in more effective use of scarce
permitting resources, then we expect that we will be able to phase in
the application of PSD and title V to more sources by establishing Step
3. We do not have enough information now to establish a final Step 3,
particularly because there will be significant transition occurring in
the GHG permitting programs during Steps 1 and 2. However, we believe
that it will be possible to develop a record on which to base Step 3
sometime soon after we begin to implement Step 2.
    Therefore, we plan to propose a rule in which we solicit comment on
or propose lower thresholds for PSD and title V applicability, and we
establish an enforceable commitment to finalize a rule in which we
address those matters by July 1, 2012. In order to provide a year for
permitting authorities and sources to prepare for any additional GHG
permitting action in Step 3, we will establish that Step 3 would take
effect on July 1, 2013. We also commit to explore, between now and the
Step 3 proposal, a wide range of streamlining options. In the proposal,
we will take comment on streamlining approaches we think may be viable
(except to the extent we will have already issued guidance documents
concerning streamlining approaches), and we will address those options
in the final rule.
    In addition, as part of the Step 3 action, we may solicit comment
on a permanent exclusion of certain sources from PSD, title V or both,
based on an ``absurd results'' rationale. For example, we may make a
final determination that under the ``absurd results'' doctrine, PSD
and/or title V do not apply to a set of GHG sources that, although
above the statutory thresholds for those programs, are too small and
relatively inconsequential in terms of GHG contribution. Another type
of such exclusion for the title V program could be for sources that
would otherwise be required to obtain an ``empty permit,'' that is, for
example, one that would not contain any applicable requirements because
there are none that apply to the source. If we promulgate a permanent
exclusion, we may conclude that by that time, we will have brought into
the PSD and title V programs the full set of sources that would be
consistent with congressional intent (or, if congressional intent on
that point is unclear, with a reasonable policy consistent with
statutory requirements) and, under those circumstances, we would find
that such a rule brings the tailoring process to a close. The
application of the ``absurd results'' rationale for a permanent
exclusion is discussed in more detail in section V.B, later in this
preamble.
4. What about the proposed 6-year exclusion for smaller sources?
    The tailoring proposal contemplated at least a 6-year exclusion
from permitting for small sources. This proposed exclusion was based on
the overwhelming numbers of permitting actions at small sources and the
need for time for permitting authorities to secure resources, hire and
train staff, and gain experience with GHG permitting for new types of
sources and technologies. It was also based on the time needed for EPA
to develop, and for states to adopt, streamlining measures to reduce
the permitting burden (e.g., concerning PTE, presumptive BACT, or
general permits). We therefore proposed such an exclusion, and proposed
that it would last 6 years--5 years to complete a required study
evaluating permitting burden and assessing the effect of streamlining
measures or techniques in reducing this burden, plus an additional year
to complete a final rulemaking that would phase in additional sources
as appropriate based on the study.
    We are finalizing the 6-year exclusion, and for reasons described
later, are establishing that in no event will sources below 50,000 tpy
CO2e be subject to PSD or title V permitting during the 6-
year period, nor will modifications be subject to PSD unless they
increase emissions by 50,000 tpy CO2e or more. The exclusion
will last until we take the action described later to address smaller
sources, which is required by April 30, 2016. The exclusion provides
certainty that, before this date, EPA will not act to cover

sources and modifications below these thresholds, including during the
required Step 3 rulemaking that will occur in 2012. In effect, this
means that Step 3 will establish a major source threshold and
significance level no lower than 50,000 tpy CO2e. This does
not necessarily mean we will cover sources below this level on April
30, 2016. It simply means that the provision we are adopting would
assure that EPA does not cover such sources any sooner than that.
5. When and how will EPA take further action on smaller sources?
    As we proposed, we are establishing an enforceable commitment to
act within 5 years to complete a study projecting the administrative
burdens that remain for small sources after permitting authorities have
had time to secure resources, hire and train staff, and gain experience
with GHG permitting for new types of sources and technologies, and
after EPA has had time to develop (and states have had time to adopt)
streamlining measures to reduce the permitting burden for such sources.
We will use the results of this study to serve as the basis for an
additional rulemaking that would take further action to address small
sources. Similar to the enforceable commitment to act on Step 3, we are
making an enforceable commitment to complete this rulemaking by April
30, 2016.
    We cannot predict at this time what form that final action will
take. It could function as a Step 4, bringing in additional sources
based on, for example, streamlining actions, increased permitting
authority resources, and experienced and more efficient permitting
staff; and it could further indicate that we intend to follow-up with a
Step 5 to bring in more sources. Alternatively, it could also function
as a final step excluding certain sources permanently based on our
application of the Chevron framework, taking account of the ``absurd
results'' doctrine, and subjecting the remaining sources to permitting.
However, whatever final action we take would explain any necessary
changes to the Step 3 thresholds and would supersede the 6-year
exclusion for sources and modifications below 50,000 tpy
CO2e.

C. How do state, local and tribal area programs adopt the final GHG
applicability thresholds?

    We are finalizing our proposed approach to change the definition of
``major stationary source'' in the PSD implementing regulations, and
the ``major source'' definition in the title V implementing regulations
to tailor the application of these permitting programs to GHG
emissions. We are also finalizing a significance level for GHG
emissions for purposes of defining a major modification under the PSD
program, and add an exclusion from PSD and title V permitting for GHG
emissions, until we complete a rulemaking required by April 30, 2016,
for any sources that are not already subject to PSD and title V
permitting and that emit less than 50,000 tpy of CO2e.
    As explained earlier, we are adopting thresholds that phase in the
applicability of GHG permitting over a specified time period. In
adopting regulatory changes to implement these thresholds, we follow an
approach that is substantively the same as the approach proposed, but
takes a different form for purposes of revisions to our PSD and title V
regulations. Specifically, in this final rule, for our regulations, in
conjunction with the definitions of ``major stationary source'' and
``major modification'' (for PSD) and ``major source'' (for title V), we
are adopting a definition of the term ``subject to regulation.''
Moreover, we are defining this term so that GHG emissions from sources
above the threshold are treated as subject to regulation, and therefore
the sources that emit them are subject to PSD and title V. We are not
finalizing the approach we proposed, which was to revise the numerical
thresholds in the definitions so that GHG sources would have a higher
threshold. Although we are defining the term ``subject to regulation,''
we recognize that from a substantive standpoint, our tailoring approach
entails interpreting the definitions of ``major emitting facility,''
``major modification,'' and ``major source'' to phase in the
applicability of PSD and title V, as applicable, to GHG sources, and it
makes no difference whether we interpret those definitions through a
definition of the term ``subject to regulation,'' revising the
numerical thresholds, or revising other terms in those definitions.
    We are adopting definitions of the term ``subject to regulation''
to implement the tailoring approach because that will facilitate rapid
implementation of the final rules by states. Under this approach,
states may not need to undertake a regulatory or legislative action
before implementing the final rule. These states would be able to
establish their interpretations of the term ``subject to regulation''
used in existing state rules before January 2, 2011, which is the date
that the LDVR and permitting requirements would take effect, and
thereby exempt sources below the threshold from PSD and title V as a
matter of both federal and state law. We are also codifying in this
definition EPA interpretations discussed in our recent action
``Reconsideration of Interpretation of Regulations that Determine
Pollutants Covered by Clean Air Act Permitting Programs'' (75 FR 17704)
to provide a complete picture of the meaning of this phrase as it
applies to all air pollutants.
    Because we are finalizing the rule in a manner that will allow most
states to rapidly implement the final rule, and because our recent
action on the Interpretive Memo allowed for a longer transition time
than we anticipated at proposal, we are delaying final action on our
proposal to issue limited approvals for SIP-approved PSD programs and
part 70 operating permit programs.\13\ Instead, we are requesting that
states submit information to the appropriate EPA Regional Administrator
by August 2, 2010 so that we may determine whether it is still
necessary to finalize any of our proposed limited approvals for any
SIP-approved PSD and part 70 title V state programs. In that letter,
states should explain whether they will apply the meaning of the term
``subject to regulation'' established by EPA in this action in
implementing both their PSD and part 70 title V permitting programs,
and if so, whether the state intends to do so without undertaking a
regulatory or legislative process. If a state must revise its statutes
or regulations to implement this rule, we ask that it provide an
estimate of the time to adopt final rules in its letter to the Regional
Administrator. If a state chooses not to apply the approach reflected
in this rule, the letter should address whether the state has
alternative authority to implement the final rule's tailoring approach
or some other approach that is at least as stringent, but which also
addresses the expected shortfalls in personnel and funding that would
exist if the state carried out permitting at thresholds lower than
those in the final rules. For any state that is unable or unwilling to
apply the permitting thresholds in the final rules, and otherwise is
unable to demonstrate adequate personnel and funding, or alternate
authority to permit GHG emissions sources consistent with the final
rules, EPA will move forward with finalizing a limited approval of the
state's permitting program. By the same token, if we do not receive a
letter from

a state in response to this request by August 2, 2010, we will be
obliged to move forward with finalizing a narrowing of our approval of
the existing SIP or title V program.
---------------------------------------------------------------------------

    \13\ In the alternative, we also proposed to use our 110(k)(6)
error correction authority to revise SIP-approved PSD programs.
---------------------------------------------------------------------------

    We also ask any state that currently lacks authority to issue PSD
or title V permits to any GHG emissions sources to notify the EPA
Regional Administrator by letter as to whether the state intends to
undertake rulemaking to revise its rules consistent with these
applicability thresholds. For any state that lacks the ability to issue
PSD or title V permits for GHG emissions sources consistent with the
final rule, we intend to undertake a separate action to call for
revisions to these programs. We also intend to move quickly to impose a
Federal Implementation Plan (FIP) for PSD through 40 CFR 52.21, and use
our federal title V authority to ensure that GHG sources will be
permitted consistent with the final rules. Our request for information
from states is discussed further in section V.C.

D. How do you treat GHGs for purposes of title V permit fees?

    We are not amending the title V regulations for fees at this time,
including any of the provisions specifying the presumptive minimum fee.
We are also not, at this time, calling for each state, local or tribal
program to submit new fee adequacy demonstrations as a result of
increased GHG permitting workload during Steps 1 and 2. However, as
described in section VI.D the statutory and regulatory requirement to
collect fees sufficient to cover all reasonable (direct and indirect)
costs required to develop and administer title V programs still
applies. Therefore, we are recommending that each program review its
resource needs for GHG-emitting sources and determine if the existing
fee approaches will be adequate. If those approaches will not be
adequate, we suggest that state, local and tribal agencies should be
proactive in raising fees to cover the direct and indirect costs of the
program or develop other alternative approaches to meet the shortfall.
We will closely monitor approved title V programs during implementation
of the first two steps of the Tailoring Rule to ensure that the added
workload from incorporating GHGs into the permit program does not
result in fee shortfalls that imperil operating permit program
implementation and enforcement. In developing alternative approaches,
we note the value of approaches that do not require a per-ton fee for
GHG and therefore do not require a GHG inventory to develop. Finally,
we offer to work with permitting authorities that request our
assistance with developing fee approaches.

E. Other Actions and Issues

    This section describes other actions we intend to take in the
future related to GHG permitting in addition to the actions that we are
promulgating with this final rule. This section also responds to
commenters' suggestions that we undertake certain additional actions in
this rule, which we decline to do.
1. Timing for Permit Streamlining Techniques
    As described at proposal, we intend to develop a series of
streamlining approaches as an integral part of our phase-in approach.
The approaches we described at proposal included: (1) Defining PTE for
various source categories, (2) establishing emission limits for various
source categories that constitute presumptive BACT, (3) establishing
procedures for use of general permits and permits-by-rule, (4)
establishing procedures for electronic permitting, and (5) applying
lean techniques to establish more efficient permitting processes. Taken
as a whole, these techniques have the potential to obviate the
applicability of PSD and title V requirements for some GHG-emitting
sources; promote more efficient treatment of GHG-emitting sources that
will already be subject to PSD and title V; and allow the expeditious
expansion of PSD and title V applicability to more GHG-emitting sources
while protecting those sources and the permitting authorities from
undue expenses.
    As a result, we fully intend to move forward expeditiously with
developing streamlining approaches. However, for reasons discussed in
section V.E, we do not expect to develop and implement any of these
approaches before Step 2 begins. Moreover, we generally expect that
each of the first three--which are the most far-reaching--will take
several years to implement because we will need to undertake notice and
comment rulemaking to develop them, and then the permitting authorities
will need to adopt them through the appropriate state or local
processes. We commit to explore a wide range of possible approaches
before the Step 3 rulemaking, and, in that rulemaking, to propose those
that we think may be viable once we have had time to gather and review
key supporting data, and once the states and we have key implementation
experience that can inform our thinking. Because the streamlining
approaches generally carry uncertainty--as demonstrated by comments we
received raising legal and policy concerns, as discussed later, that we
will have to address--we cannot commit with this action to adopt any
streamlining actions in particular, nor to adopting them on any
particular schedule. However, we intend to pursue streamlining options
as expeditiously as possible, beginning immediately and proceeding
throughout the phase-in period, and we encourage permitting authorities
to do the same.
2. Guidance for BACT Determinations
    Through this final rule we are not amending our regulations or
issuing guidance on BACT for GHGs. As described in our proposal, we
recognize the need to develop and issue technical and policy guidance
for permitting of GHGs, and we plan to accomplish it through a separate
effort that will involve stakeholder input. This effort is already
underway; in addition to comments EPA received on the proposed
Tailoring Rule related to GHG BACT guidance and information needs, EPA
received a suite of recommendations from the Clean Air Act Advisory
Committee (CAAAC) to which EPA is actively responding. This includes
technical guidance and database tools that EPA anticipates issuing by
June 2010, and policy guidance that will be issued by the end of 2010.
Thus, this important information will be available to support
permitting agencies in their BACT determinations at the time that the
GHGs become a regulated NSR pollutant, once the LDVR takes effect in
January 2011. EPA is confident that these measures will help support a
smooth transition to permitting emissions of GHGs.
3. Requests for Higher Category-Specific Thresholds and Exemptions From
Applicability
    EPA has decided not to provide exemptions from applicability
determinations (major source and major modification) under title V and
PSD for certain GHG emission sources, emission activities, or types of
emissions at this time. Commenters requested several applicability
exemptions with respect to GHGs from, for example, agricultural
sources, residential sources, small businesses, energy-intensive
industrial processes (e.g., aluminum, steel, cement, glass, and pulp
and paper manufacturers), lime production, semiconductor production,
poultry production, solid waste landfills, biomass combustion/biogenic
emissions, fugitive emissions, and pollution control projects. For
reasons explained in section V.E, we have

decided to address the need for tailoring through a uniform threshold-
based approach, rather than through a collection of various specific
exclusions.
4. Transitional Issues Including Requests for Grandfathering
    For reasons explained in section V.E, EPA has determined that
transitional issues for pending applications and permitted sources are
adequately addressed by existing requirements and the amount of lead
time provided before permitting requirements apply to GHGs under this
rule and the March 29, 2010 final action regarding the Interpretive
memo. This rule does not contain any additional exemptions or
grandfathering provisions addressing the transition to PSD and title V
permitting for GHGs.
    We are not promulgating an exemption for PSD permit applications
that are pending when Step 1 of the permitting phase-in begins for
those sources that would otherwise need to obtain a PSD permit based on
emissions of pollutants other than GHGs. Any PSD permits issued to such
Step 1 sources on or after January 2, 2011 will need to address GHGs.
This action makes no change to the position we expressed on this issue
on April 2, 2010.
    Final PSD permits issued before January 2, 2011 need not be
reopened or amended to incorporate requirements for GHGs that take
effect after the permit is issued. A source that is authorized to
construct under a PSD permit but has not yet begun actual construction
on January 2, 2011 may begin actual construction after that date
without having to amend the previously-issued PSD permit to incorporate
GHG requirements, provided the permit has not expired.
    Sources that are not subject to PSD permitting requirements until
Step 2 need not obtain a PSD permit addressing GHGs in order to
continue any actual construction that begins before July 1, 2011, when
such a source was not a major stationary source required to obtain a
PSD permit. However, Step 2 sources that begin actual construction in
Step 2 may do so only after obtaining a PSD permit.
    The title V permitting regulations already include a robust set of
provisions to address the incorporation of new applicable requirements
and other transitional considerations. A title V source applying for
the first time must submit its permit application within 12 months
after the source becomes subject to the operating permit program or an
earlier time at the discretion of the permitting authority. Where a
source is required to obtain a PSD permit, the source must apply for a
title V permit or permit revision within 12 months of commencing
operation or on or before such earlier date as the permitting authority
may establish. Where additional applicable requirements become
applicable to a source after it submits its permit application, but
prior to release of a draft permit, the source is obligated to
supplement its application. Permitting authorities may also ask for
additional information during the processing of an application. In
addition, where a source that already has a title V permit becomes
subject to additional applicable requirements, the permitting authority
is required to reopen the permit to add those applicable requirements
if the permit term has 3 or more years remaining and the applicable
requirements will be in effect prior to the date the permit is due to
expire.

V. What Is the Legal and Policy Rationale for the Final Actions?

    In this section, we describe the legal and policy rationale for our
action, including our rationale for the following: (1) Our approach to
calculating GHG emissions for PSD and title V applicability purposes,
(2) our approach to establishing the thresholds and timing of PSD and
title V applicability to GHG emissions sources; (3) how state, local,
and tribal area programs adopt the final GHG applicability thresholds;
(4) treatment of GHGs for title V permit fees; (5) future activities,
including streamlining actions. We present the rationale description in
the following five subsections, corresponding to the basic presentation
of the approach in section IV.

A. Rationale for Our Approach to Calculating GHG Emissions for PSD and
Title V Applicability Purposes

1. Grouping of GHGs Into a Single Pollutant
    In this section, we explain our treatment of the air pollutant at
issue for purposes of PSD and title V, such that sources that emit that
pollutant in the requisite quantities become subject to PSD and/or
title V requirements. We explain our rationale for treating the GHG air
pollutant as a combined group of six GHGs instead of six separate air
pollutants defined by each individual GHG, and our rationale for
including all six of the GHGs in that group. We also define the GHG
metric to use for comparison to the applicability thresholds.
    We proposed to identify the air pollutant as the aggregate group of
the six GHGs that comprise the GHG pollutant, and to use a GHG metric
for the applicability thresholds based on CO2e. The summed
CO2e emissions would then be compared to the applicable
permitting threshold to determine whether the source is subject to PSD
and title V requirements. Historically, the PSD and title V regulatory
provisions do not, in the first instance, define the ``air pollutant''
to which they apply, but rather rely for the definition of the
pollutant on a cross-reference to the regulatory provision under
another part of the Act that establishes the emission standards or
limits for that pollutant that in turn causes the pollutant to be
subject to regulation under PSD and title V permitting. As an example,
the pollutant ``total reduced sulfur'' (TRS) is a pollutant comprised
of the sum of multiple compounds that was originally defined under the
NSPS, subpart BB, Standards of Performance for Kraft Pulp Mills, which
then caused it to be subject to regulation under the PSD program. The
actual compounds that define the pollutant TRS are identified in the
NSPS. The PSD program regulations did not introduce its own independent
definition of TRS, but instead relied on the definition as contained in
the Kraft Pulp Mills NSPS.
    However, at the time of our proposal, the endangerment and cause or
contribute findings had not been completed and the LDVR for GHGs had
not been finalized. Thus, there was no final agency action defining the
``air pollutant'' consisting of GHGs to be considered ``subject to
regulation.'' Absent a definition of ``greenhouse gases'' under another
regulatory provision that we could cross-reference, we proposed to
define ``greenhouse gases'' for permitting purposes as ``the single air
pollutant that is comprised of the group of six GHGs, as proposed in
the [CAA] section 202(a) endangerment and contribution findings.'' 74
FR 55329, col. 1. The six well-mixed GHGs identified in the proposed
contribution finding were: CO2, CH4,
N2O, SF6, HFCs, and PFCs.
    In the proposal, we further recognized that the LDVR for GHGs, as
it was proposed, would result in reductions of only four of the gases,
not all six, because only four are emitted by vehicles. However, we
concluded that if the LDVR were finalized as proposed, then the air
pollutant for purposes of PSD and title V applicability would be a
single air pollutant that is the aggregate mix of the group of six GHGs
because--

[t]hese six GHGs as a class comprise the air pollutant that is the
subject of the

endangerment finding and companion contribution finding and
constitute the air pollutant that is regulated by the light-duty
vehicle rule through measures that address the components of that
air pollutant that are emitted from the mobile sources. Thus,
although the CAA section 202(a) proposal establishes controls only
with respect to four GHGs, as a legal matter, the proposal covers
the entire set of GHGs that as a class are the single ``air
pollutant'' in the proposed endangerment and contribution findings.

74 FR 55329 col. 1.

    We also solicited comment on whether we should identify the GHG
metric in a different way, such as addressing each GHG constituent
compound individually or including (whether individually or as a group)
only those four GHG constituent compounds for which reductions would
occur through the emission standards or limits proposed in the LDVR.
    A minority of the comments on our proposal addressed this issue.
Some commenters supported combining the individual GHGs as one
pollutant for purposes of determining permitting applicability, and
stated that it is not uncommon for EPA to recognize ``collective'' air
pollutants comprised of many individual compounds based upon shared
threats to health and welfare, including such EPA-created group
pollutants as sulfur oxides, nitrogen oxides, volatile organic
compounds (VOCs), and particulate matter (PM).
    On the other hand, a significant number of commenters also raised
concerns about grouping the individual GHGs into one metric. Some of
these commenters argued that grouping GHGs is not appropriate because
GHGs are not like other air pollutants that are comprised of numerous
substances of concern (e.g., VOCs and PM), individual GHGs do not
interact or combine to create a pollutant of concern, and EPA has not
established a ``GHG'' NAAQS that supports the definition of the
pollutant as a group. Some were concerned that regulating the GHGs as a
group would increase the likelihood that a source will trigger
permitting requirements, adding that this is unnecessary and would
conflict with the ``absurd results'' and ``administrative necessity''
doctrines because it would lead to larger numbers of sources becoming
subject to permitting. Some commenters opposing grouping suggested that
we should explore regulating each of the GHG pollutants on an
individual mass basis rather than collectively because in their view,
it is reasonable and feasible to regulate and control emissions of each
of the listed pollutants, other than CO2, at the 100/250 tpy
thresholds, or less if deemed necessary, in accordance with the
established mechanisms of the Act and doing so would lead to a better
environmental result. Finally, some commenters argued that
disaggregating the pollutants would also allow for more appropriate
technology review.
    After considering these comments, and taking into account other
related actions that have occurred since proposal, we have determined
that PSD and title V permitting program requirements will apply, as
proposed, to the ``single air pollutant that is comprised of the group
of six GHGs.'' 74 FR 55329, col. 1. We believe that this approach is
both compelled by the statute and reflects the preferable policy
approach.
    As more fully discussed elsewhere in this rulemaking, the PSD
requirements apply to a ``major emitting facility'' that undertakes
construction or ``modification.'' CAA sections 165(a), 169 (2)(C). The
term ``major emitting facility'' is defined as, in general, a source
that emits 100 or 250 tons of ``any air pollutant,'' CAA section
169(1), and, similarly, the term ``modification'' is defined as a
physical or operational change that results in the increased or new
emissions of ``any air pollutant.'' CAA sections 169(2)(C), 111(a)(4).
Through regulation, we have interpreted the term ``any air pollutant,''
as found in both the terms ``major emitting facility'' and
``modification,'' more narrowly to mean any ``regulated NSR
pollutant,'' and we further define this term to include any pollutant
that is ``subject to regulation under the Act.'' 40 CFR
52.21(b)(50)(iv), 52.21.(b)(2).\14\
---------------------------------------------------------------------------

    \14\ By the same token, CAA section 165(a)(4) requires that a
source subject to PSD impose best available control technology for
``each pollutant subject to regulation under this chapter'' that the
source emits.
---------------------------------------------------------------------------

    Similarly, as discussed elsewhere, the title V requirements apply
to a ``major source,'' which is defined, in general, as any source that
emits at least 100 tpy of ``any air pollutant.'' CAA sections 502(a),
501(2)(B), 302(j). EPA has interpreted the term ``any air pollutant''
narrowly so that applies only with respect to air pollutants that are
subject to regulation under the CAA. 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).
    Based on these provisions, the key issue for present purposes in
determining whether a source is subject to PSD (because it qualifies as
a major emitting facility that undertakes construction or modification)
or title V is whether the pollutant or pollutants that the source emits
comprise the ``air pollutant'' that is ``subject to regulation'' under
the Act.
    The phrase ``subject to regulation under the Act,'' by its terms,
identifies the air pollutant that is subject to PSD and title V as the
same air pollutant that is identified in the regulatory action under
another provision of the Act. The term is a simple cross-reference. It
carries no implication that EPA, in identifying the pollutant to which
PSD or title V apply, may redefine the pollutant that is regulated
elsewhere in the Act. Whatever the pollutant is that is regulated
elsewhere, it is that pollutant to which PSD and title V apply.
    Since the time of our proposal, we have finalized both the
contribution finding and the LDVR for GHGs. The final LDVR for GHGs
specifies, in the rule's applicability provisions, the air pollutant
subject to control as the aggregate group of the six GHGs, including
CO2, CH4, N2O, SF6, HFCs,
and PFCs.\15\ Because it is this pollutant that is regulated under the
LDVR, it is this pollutant to which PSD and title V apply.
Specifically, the applicability provision in the LDVR provides a clear
reference to the definition of the single pollutant comprised of the
aggregate group of the six well-mixed GHGs, which makes clear PSD and
title V applicability depends on the same sum-of-six GHG construct. We
must follow this construct of the aggregate group of the six gases and
do not have discretion to interpret the GHG ``air pollutant''
differently for the purposes of PSD or title V.
---------------------------------------------------------------------------

    \15\ The applicability provision of the LDVR is found in 40 CFR
86.1818-12(a).
---------------------------------------------------------------------------

    This construct of the pollutant as the aggregate group of the six
gases is also consistent with the definition of the air pollutant in
the final contribution finding for GHGs [see 74 FR 66496, 66499, 66536-
7 (December 15, 2009)]. There, the Administrator defined the air
pollutant as the ``aggregate group of the same six * * * greenhouse
gases,'' (74 FR 66536), and these well-mixed GHGs are defined to
include CO2, CH4, N2O, SF6,
HFCs, and PFCs.
    Moreover, even if we had discretion to identify the GHGs air
pollutant differently in the permitting programs than in the LDVR, we
believe it is reasonable to identify the GHGs air pollutant through the
sum-of-six construct for the same reasons why we adopted that
definition in the contribution finding and for additional reasons noted
below specific to the permit programs. The term ``air

pollutant'' is defined under CAA section 302(g) as ``any air pollution
agent or combination of such agents, including any physical, chemical,
biological, radioactive * * * substance or matter which is emitted into
or otherwise enters the ambient air.'' Under this definition, EPA has
broad discretion to identify an air pollutant, including, as
appropriate, treating a combination of air pollutant agents as a single
air pollutant. Here, we think that the six well-mixed gases are
appropriately combined into a single air pollutant because, as noted in
the contribution findings, they share several important attributes:
Each of the six gases:
     Is directly emitted (and is not formed by secondary
processes in the atmosphere);
     Is long-lived in the atmosphere after it is emitted;
     Is sufficiently long-lived that it becomes ``well-mixed,''
which means that its concentration is essentially uniform in the
atmosphere (as opposed to having significant local/regional variation);
and
     Has well understood atmospheric properties (e.g.,
radiative forcing).

See 74 FR 66516-66518.

    In addition, treating the six GHGs as a single air pollutant is
consistent with the actions of international scientific bodies. For
example, the Intergovernmental Panel on Climate Change (IPCC) considers
in various reports how the six gases drive human-induced climate change
and how that affects health, society, and the environment. Similarly,
the United Nations Framework Convention on Climate Change (UNFCCC)
requires reporting of these six gases and the commitments under the
UNFCCC and Kyoto Protocol are based on the combined emissions of these
six gases. Finally, as discussed later, it is standard practice to
compute the ``CO2 equivalency'' of aggregate emissions using
GWP.
    We disagree with commenters who argued that grouping all six GHGs
is not appropriate because GHGs are not like other air pollutants that
are comprised of numerous substances of concern (e.g., VOCs and PM).
First, as noted previously, we are following the approach to a single
air pollutant comprised of the aggregate of the six GHGs initially
adopted in the contribution finding and followed in the LDVR. Many of
these same comments have already been addressed in the contribution
finding and Response to Comment (RTC) document for that action, and
those responses apply equally here.
    In addition to the reasons described in the endangerment and
contribution findings, there are CAA permitting programmatic and policy
advantages to using the sum-of-six construct for the GHG air pollutant
for PSD and title V applicability purposes. We believe now, as we did
at proposal, that the benefits in using the cumulative group of GHGs
outweigh any implementation advantages to using an individual-GHG-based
metric. The advantages to sum-of-six definition include that it may:
(1) Allow significantly more flexibility to sources for designing and
implementing control strategies that maximize reductions across
multiple GHGs and would also likely align better with possible future
regulations that allow for such flexibility; (2) more effectively
support possible future offsets or trading mechanisms that involve
different source categories and different compositions of GHG
emissions; and (3) could better accommodate and harmonize with future
regulations because it establishes one class of pollutants that
includes individual components that may, in turn, become subject to
specific emission standards under future regulatory efforts.
    We disagree with commenters who believe that aggregating the GHGs
under one GHG metric for permitting applicability purposes would lead
to an excessive amount of source permitting activity. This is because
the phase-in approach addresses overwhelming permitting burdens
associated with permitting of GHGs. It does so by designing our
applicability thresholds to allow for a manageable amount of new
permitting actions based on the emissions from sources using the sum-
of-six metric. If we based applicability on individual gases,
(assuming, again, that we had authority to deviate from the definition
of ``air pollutant'' as used in the LDVR), we would still need to
determine what level of permitting is manageable and appropriate based
on thresholds on an individual gas basis and would expect that the
final rule would result in the same levels of remaining burden.
Accordingly, unless the permitting program were being implemented at
the statutory thresholds, the effect of a decision to aggregate or not
aggregate would not reduce workload; rather, it would simply shift work
from permitting facilities that trigger based on combined GHGs to those
that trigger based on individual GHGs. Although we acknowledge that
this may affect applicability for a particular source, we disagree with
the comment that doing so would conflict with our conclusions based on
the ``absurd results'' or ``administrative necessity'' doctrines. By
using a consolidated and weighted measurement, we are able to direct
the limited administrative resources to those new sources and
modifications with the greatest impact on GHG emissions.
    We also believe that the additional flexibility resulting from the
sum-of-six GHG metric will provide substantially more opportunities for
sources to address emission increases of GHGs than they would have had
under an individual gas based metric, and, thereby, possibly reduce
their permitting burden through multi-gas mitigation strategies. We
disagree with the comment that isolating BACT review on sources that
emit a single GHG necessarily leads to better environmental results
than it would for sources that undergo a combined review for all six
gases. To the contrary, given that Congress built in considerations of
energy, environmental, and economic impacts into the BACT requirement,
we think that allowing consideration of those factors across six gases
will likely result in decisions that more appropriately account for
those impacts at the source.
2. Identifying Which GHGs Are Included in the Group
    As discussed previously, we proposed to include the combination of
six well-mixed GHGs as the air pollutant that triggers PSD and title V
applicability: CO2, CH4, N2O,
SF6, HFCs, and PFCs. Some commenters supported including all
six. They cite the proposed contribution findings that identify the
pollutant through the sum-of-six construct, and they emphasize that
EPA, in order to protect the public, has to control all the GHGs it has
regulated and reduce the overall impact of the mix of six GHGs.
    However, a substantial number of commenters, mainly from industry
sectors who also disagree with grouping the GHGs together, contend that
only the constituent gases that are actually subject to controls under
the LDVR should be included in determining applicability under the
Tailoring Rule. Some of these commenters believe that only the three
compounds (CO2, CH4, N2O) for which
the LDVR contains emissions standards or caps should be considered in
the GHG metric for permitting, while others would also add HFCs (which
are included in a credit flexibility arrangement under the LDVR) for a
total of four GHGs. These commenters argued that PSD is not triggered
for all six GHGs by the LDVR because under the proposed PSD

interpretation in the Interpretive Memo, actual emission controls under
the Act are required to trigger PSD obligations for a given pollutant.
They also argue that including all six would conflict with EPA's
rationale for the Tailoring Rule by leading to larger numbers of
sources subject to permitting, thereby increasing the harm that EPA
says it wants to avoid. They further assert that the EPA cannot
exercise its discretion to widen the scope of PSD and title V
applicability to six GHGs when it is relying on the judicial doctrines
of ``absurd results'' and ``administrative necessity'' to narrow PSD
and title V applicability. They explain that in their view, those
doctrines apply only when EPA has taken all steps possible to narrow
the scope of PSD and title V and thereby avoid the administrative
problems that force it to rely on those doctrines.
    There were a few comments on whether to include specific gases as
part of the sum-of-six grouping. Several commenters representing
sectors that have significant SF6 usage specifically argue
that SF6 should not be included as a GHG, at least at this
time, because there are no known SF6 controls, it is not
clear how PTE would be calculated from such facilities, and EPA has not
addressed the economic burden that regulation of these facilities would
create. A solid waste industry commenter asserts that the Tailoring
Rule should confirm that CH4 and N2O will not be
regulated under PSD or title V because these pollutants are only
emitted in miniscule amounts from automobiles.
    We disagree with commenters who suggest that because the LDVR
actually reduces only four of the six GHGs, EPA may apply PSD and title
V to only those four GHGs. It is true that the LDVR standard for the
single air pollutant that is comprised of the aggregate of six GHGs
consists of individual standards for only four particular constituents
of the single air pollutant--which are emissions limits or caps for
three GHGs (CO2, CH4, and N2O) and an
emission crediting option for one GHG (HFCs)--but this does not dictate
that only those four compounds are subject to regulation for permitting
purposes. Although the LDVR results in reductions only with respect to
four specific GHGs, as a legal matter the LDVR standard covers the
entire set of GHGs that as a class are the single ``air pollutant'' in
the contribution finding. Similar to our rationale for addressing the
group of six GHGs as one pollutant for PSD and title V applicability
purposes, we must adhere to the definition of applicability, cited
previously, in the final LDVR for GHGs and include CO2,
CH4, N2O, SF6, HFCs, and PFCs. We do
not have discretion to select only a subset of these gases in defining
our GHG threshold metric for the permitting applicability purposes. See
LDVR, May 7, 2010, 75 FR 25398-99, section III.A.2.c. (discussing EPA's
exercise of discretion under section 202(a) in setting emissions
standards applicable to emission of the single air pollutant).
    For the same reasons, we disagree that this approach is
inconsistent with the Agency's final action in ``EPA's Interpretation
of Regulations that Determine Pollutants Covered by Federal Prevention
of Significant Deterioration (PSD) Permit Program.'' While it is the
case that only four constituent gases are reduced by the LDVR, the
``air pollutant'' that is controlled, and thus ``subject to
regulation,'' is the group of six, and it is this ``air pollutant'' to
which PSD and title V apply.
    We also disagree with commenters who suggested that including all
six GHGs in determining permitting applicability would conflict with
our ``absurd results'' and ``administrative necessity'' rationale for
the phase-in periods and applicability thresholds for GHGs. Even if we
did have discretion to identify the air pollutant for PSD and title V
purposes as consisting of only four of the six well-mixed GHGs, we do
not believe that doing so would have any meaningful impact on the
administrative burdens that are at the heart of our reliance on the
``absurd results'' and ``administrative necessity'' doctrines. The
number of additional permitting actions and amount of additional
permitting burden resulting from including all six GHGs, rather than
four, is minimal. This is because the administrative burden of GHG
permitting is dominated by CO2 and CH4 emission
sources. For example, with a major source threshold set at 100,000 tpy
CO2e, the combined population of sources that would be major
for N2O, HFCs, PFCs, and SF6 accounts for fewer
than two percent of the GHG sources that would remain covered.
    For similar reasons, we disagree with commenters who specifically
suggest SF6 emissions should not be included in the
applicability metric for GHGs. As we have stated earlier in this
section, our selection of the GHG metric is driven by the definition of
the ``air pollutant'' as defined in the LDVR, and in consideration of
the final GHG endangerment finding. SF6 is specifically
included as one of the ``well-mixed greenhouse gases'' in the
definition of air pollutant in the contribution finding, and is
included in the definition of the air pollutant in the LDVR for which
that rule is applicable. We do not believe we have the discretion to
define the ``air pollutant'' differently for PSD and title V
applicability purposes than the definition of the ``air pollutant''
that is regulated elsewhere. In any event, including SF6
emissions based on the thresholds finalized in this rulemaking does not
add an excessive administrative burden for permitting authorities.
Based on our threshold evaluation study, we estimate that less than 40
sources of SF6 nationwide would exceed the 100,000 tpy
CO2e threshold. Furthermore, SF6 is a high GWP
gas and, as discussed elsewhere, we have included a mass-based trigger
for high GWP gases that will likely have the effect of further reducing
this count.
    For the same reasons, we disagree with the commenters who suggest
we include black carbon and other short-lived climate forcers to the
list of GHGs, as well as commenters asking for an exclusion of