The “one-step-at-a-time” doctrine fits into the Chevron framework
in much the same manner that the “administrative necessity” doctrine
does.  That is, inherent in the statutory design is the presumption that
Congress intended an agency, under certain circumstances, to implement
thatthe statutory requirements in a  one-step-at-a-time fashion, as long
as the agency stays on a path towards full implementation.

Under all of the circumstances described abovepreviously, congressional
intent is clear – whether it is indicated by the plain language or
otherwise – and as a result, the agency must follow that  intent under
Chevron stepStep 1.  On the other hand, the agency may determine that
congressional intent on the specific issue is not clear.  In these
cases, the agencies should proceed to Chevron stepStep 2 and select an
interpretation or an application that is a permissible construction of
the statute.  This situation generally occurs when the statutory
provisions are ambiguous or silent as to the specific issue, and there
are no other indications of clear congressional intent.  In addition, in
some cases in which the literal meaning of the statutory provision, when
applied to the specific question, leads to an absurd result – and,
therefore, the statutory provision should be considered not to have a
plain meaning – there may be no other indications of clear
congressional intent.  Under all these circumstances, the agency is
authorized, under Chevron Step 2, to develop and implement a
construction of the statute that the courts will uphold as long as it is
reasonable.

As noted abovepreviously, the D.C. Circuit, has pointed out that this
situation may also occur when the plainliteral language leads to an
absurd result, and, in attempting to implement congressional intent, the
agency is “able to show that there are multiple ways of avoiding a
statutory anomaly, all equally consistent with the intentions of the
statute’s drafters . . . .….  In such a case, we would move to the
second stage of the Chevron analysis, and ask whether the agency’s
choice between these options was ‘based on a permissible construction
of the statute.’”  Mova Pharm. Corp, 140 F.3d at 1068.  As the U.S.
Supreme Court has recently said, although in a context different than
“absurd results,” “ In the end, the interpretation applied by EPA
"governs if it is a reasonable interpretation of the statute -- not
necessarily the only possible . . .… interpretation, nor even the
interpretation deemed most reasonable by the courts."  Entergy Corp. v.
Riverkeeper, Inc., 129 S.Ct. 1498. 1505 (2009).

e.As a related matter, although the courts have described Chevron Step 2
as requiring that the agency’s policy be “a permissible construction
of the statute,” see Mova Pharm. Corp, 140 F.3d at 1068 (quoting
Chevron, 467 U.S. at 842-43), if the statutory requirements cannot be
read literally because doing so would produce “absurd results,” then
the agency’s policy need not be completely consistent with those
particular requirements.  The policy must still, in order to be upheld,
be consistent with Congress’s actions, but those actions should be
considered to afford the agency broad discretion considering that both
the statutory terms cannot be considered dispositive and underlying
congressional intent is not clear.  As the U.S. Supreme Court has
recently said, although in a context different than “absurd
results,” “ In the end, the interpretation applied by the agency
governs if it is a reasonable interpretation of the statute - not
necessarily the only possible … interpretation, nor even the
interpretation deemed most reasonable by the courts."  Entergy Corp. v.
Riverkeeper, Inc., 129 S.Ct. 1498. 1505 (2009).

There is another aspect of the “administrative necessity” doctrine
worth noting in this context:  The doctrine applies when (i) a literal
application of the statutory directive to the case at hand is impossible
for the agency to administer; and (ii) even so, either Congress clearly
intended the statutory directive to apply to the case at hand or, if
Congress did not clearly intend that, then the agency reasonably
construes the statute to apply the statutory directive to the case at
hand.  In contrast, if Congress did not intend the statutory directive
to apply to the case at hand, or if congressional intent is uncertain
and the agency considers another approach to be reasonable, then the
“administrative necessity” doctrine would not apply.  As a result,
the agency would not be required to implement the statutory directive to
the case at hand at all, much less in a more administrable fashion.

f.  Interconnectedness of the Legal Doctrines

Although we believe that each of the “absurd results,”
“administrative necessity,” and “one-step-at-a-time” doctrine
providesdoctrines provide independent support for our action, we also
believe that in this case, the three doctrines are intertwined and form
a comprehensive basis for EPA’s tailoring approach.  As just
discussed, each of the three doctrines is tied into the Chevron
analytical framework because each is designed to give effect to
underlying intent.  EachAs discussed previously, each of the three
doctrines comes into play in this case because a literal reading of the
PSD and title V applicability provisions results in insurmountable
administrative burdens.  Those insurmountable administrative burdens --
along with the undue costs to sources -- must be considered “absurd
results” that would undermine congressional purpose for the PSD and
title V programs.  Under the “absurd results” doctrine, EPA is
authorized not to implement the applicability provisions literally, –
that is, not to implement them as applying on the January 2, 2011 date
that PSD and title V are triggered to all GHG sources at or above the
statutory thresholds - but instead to tailor them in a manner consistent
with congressional intent.  That means applying the PSD and title V
requirements through a phase-in approach to as many sources as possible
and as quickly as possible, starting with the largest sources, as EPA
does with this Tailoring Rule,  at least to a certain point.  By the
same token, the insurmountable administrative burdens bring into play
the “administrative necessity” doctrine, under which EPA is, again,
authorized not to implement the applicability provisions literally, but
instead to apply them in a manner consistent with administrative
resources.  This also supports the tailoring means phasing them in
through the approach in the Tailoring Rule.  Finally, the
“one-step-at-a-time” doctrine, which authorizes incremental action
by agencies to implement statutory requirements under certain
circumstances, provides further support for the phased tailoring
approach in the Tailoring Rule.

f. g.  Application of Chevron approach

Approach

The Chevron analytical approach, and the three legal doctrines at issue
here, apply to this action in the following manner:  To reiterate, for
convenience, the statutory provisions at issue:  Congress, through the
definition of “major emitting facility,” applied the PSD program to
include (i) “any … stationary sources of air pollutants which emit
or have the potential to emit, one hundred  tons per year or more or
more of any air pollutant…. [or] any other source with the potential
to emit, depending on the source category, two hundred fifty] tons per
year or more of any air pollutant.” ,” CAA §§sections 165(a),
169(1).); and (ii) and such sources that undertake a physical or
operational change that “increases the amount of any air pollutant
emitted” by such

sources, CAA sections 165(a), 169(2)(C), 111(a)(4).  Similarly,
Congress, through the definition of “major source,” specified that
the title V program includes “any stationary facility or source of air
pollutants which directly emits, or has the potential to emit, one
hundred tons per year or more of any air pollutant.”  CAA §§sections
502(a), 501(2)(B), 302(j).  EPA, through long-established regulatory
action, in the case of PSD, and long-established interpretation, in the
case of title V, has interpreted these definitions so that they apply
only with respect to air pollutants that are subject to regulation under
the CAA.

For each of these two applicability provisions, the approach under
Chevron is as follows:  Under Chevron stepStep 1, we must determine
whether Congress expressed an intention on the specific question, which
is whether the PSD or T-title V applicability provisions apply to GHG
sources.  Said differently, the specific question is whether, in the
case of PSD, Congress intended that the definitiondefinitions of
“major emitting facility applies” and “modification” apply,
respectively, to all GHG sources that emit at least 100 or 250 CO2etpy
or GHGs and to all physical or operational changes by major emitting
facilities that “increase[] the amount” of GHGs; and, in the case of
title V, whether,  the definition of “major source” applies to all
GHG sources that emit at least 100 tpy or more CO2eGHGs.

To determine intent, we must first examine the terms of the statute in
light of their plainliteral meaning.  Here, the plainliteral reading of
each provision covers GHG sources.  For PSD, a GHG source that emits at
least 100 or 250 tpy CO2e plainly GHGs literally qualifies as “any …
other stationary source with[] of air pollutants which emit[s] or ha[s]
the potential to emit, one hundred [or two hundred fifty] tons per year
or more of any air pollutant [subject to regulation under the CAA].”
CAA §section 169(1).  For modifications, a physical or operational
change that increases the amount of GHG emissions qualifies as a
“modification” because it “increases the amount of any air
pollutant emitted” by the source.  Similarly, for title V, a GHG
source that emits at least 100 tpy CO2e plainly GHGs literally qualifies
as “any stationary facility or source of air pollutants which directly
emits, or has the potential to emit, one hundred tons per year or more
of any air pollutant [subject to regulation under the CAA].”  CAA
§§sections 502(a), 501(2)(B), 302(j).

However, Although each definition is clear that it applies to GHG
sources as a general matter, applying each definition in accordance with
its plainliteral meaning to all GHG sources at the specified levels of
emissions and at the present time (i)– in advance of the development
of streamlining methods and greater permitting authority expertise and
resources - would produce absurdcreate undue costs for sources and
impossible administrative burdens for permitting authorities.  These
results, that is, results that are not consistent with other provisions
of the PSD and title V requirements, and that are inconsistent with –
and, indeed, undermine – congressional purposes for the PSD and title
V provisions; and (ii) would create impossible administrative burdens
for the permitting authorities.  Accordingly, under the “absurd
results” doctrine, neither the PSD nor the title V
definitionsdefinition of “major emitting facility” or
“modification” nor the title V definition of “major source,”
should be applied literally to all GHG sources, and therefore none
should be considered to have a plainliteral meaning with respect to
theirits application toto all GHG sources.

In parsingIn analyzing the provisions of each definition more closely,
we believe that each has threefour terms, any one of which could be
considered not to have its plainliteral meaning, in this respect.
Specifically, each provision includes (i) the term “any … source,”
or “a stationary source,” and that term could be considered not to
refer literally to all of the GHG sources; (ii) either the term “two
hundred fifty tons per year” or “100 tons per year,” or the term
“increases the amount,” and those terms could be considered not to
refer literally to the tonnage amount of emissions from all of the GHG
sources; and (iii) the term “any air pollutant [,” and that term
could be considered not to refer literally to the emissions from all of
the GHG sources; and (iv) the term “subject to regulation under the
CAA],”” (which we have interpreted “any air pollutant” to
include), and that term could be considered not to refer literally to
the emissions from all of the GHG sources.  As long as any one of those
threefour terms shouldmay be considered not to have its plainliteral
meaning as applied to GHG sources, then the definition as a whole –
again, for PSD, the term terms “major emitting facility” or
“modifications,” and for title V, the term “major source” –
cannot be considered to applyapply literally to GHG sources.  Because we
read the terms together, as integral parts of each definition as a
whole, we do not think that the choice of which of those threefour terms
within each definition cannot be considered to apply literally to GHG
sources has substantive legal effect.  In other words, we believe that
any one of the threethese terms, or all threeof them together as part of
each definition as a whole, should be considered not to apply literally
in the case of GHG sources.

Having determined that each definition does not have a plainliteral
meaning on with respect to the specific questionapplicability of whether
PSD or title V applies to all GHG sources, we must next inquire as to
whether Congress has nevertheless expressed an intent on that question
through other means.  We believe that there are two possible views about
congressional intent.  The first is that Congress did express an intent,
and that was that if a type of source – such as GHG sources – cannot
be included in the PSD program or title V program in accordance with the
literal terms of the applicability provisions, then, nevertheless, as
many of those sources should be included in the programs at as close to
the statutory thresholds as possible, and as quickly as possible.  This
view about congressional intent could be considered to be a logical
inference from the fact that Congress wrote the applicability provisions
broadly.discuss the statutory terms and legislative history of the PSD
and title V provisions in more detail later, but for now it suffices to
say that on the issue of whether PSD and title V apply to GHG sources,
we believe that congressional intent is clear, and that is to apply PSD
and title V to GHG sources generally.  We believe that this intent is
clear from the broad phrasing of the applicability provisions – as
noted earlier, the definitions apply by their terms to GHG source
generally, even though the definitions should not be applied literally
to all GHG sources - the fact that the various components of the PSD and
title V programs can be readily applied to GHG sources, and the fact
that the two programs can readily accommodate at least some GHG sources.
 As a result, we believe that as a matter of Chevron Step 1, PSD and
title V generally 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.

Under this first view, EPA would be required at Chevron step 1 to adopt
the Tailoring Rule because it most closely gives effect to Congress’s
intent that PSD and title V each apply to GHG sources at emission levels
as close to the statutory thresholds as possible and as quickly as
possible.  Even so, On the issue of how to apply PSD to GHG sources,
including the specific threshold levels and the timing, we believe that
Congress could be considered to have expressed a clear intent that GHG
sources be included in the PSD program at as close to the statutory
thresholds as possible, and as quickly as possible, and at least to a
certain point, all as consistent with the need to assure that the PSD
program does not impose undue costs on sources or undue administrative
burdens on the permitting authorities.  Under this view, EPA would be
required at Chevron Step 1 to adopt the Tailoring Rule because, by
phasing in PSD applicability, it most closely gives effect to
Congress’s intent.  Under these circumstances, EPA is authorized to
exercise its expert judgment as to the best approach for phasing in the
application of PSD and title V to GHG sources.  In addition, even under
this view, we believe there may be uncertainty as to whether
congressional intent to apply PSD and title V to GHG sources extends to
very small GHG sources, that is, those at or near the statutory
thresholds or whether congressional intent to apply title V to GHG
sources extends to GHG sources that would have empty permits.

The second possible view is that Congress did not express an intent as
to the applicability of PSD and title V to GHG sources.  The lack of
plain meaning in the definitional provisions, and silence elsewhere in
the statutory provisions and legislative history, could be considered to
support this conclusion.  Under this second view, EPA has the discretion
at Chevron stepEven so, we recognize that it could be concluded that on
the issue of how to apply PSD to GHG sources, congressional intent is
unclear.  Under these circumstances, EPA has the discretion at Chevron
Step 2 to adopt the Tailoring Rule because it is a reasonable
interpretation of the statutory requirements.  Here, too, EPA is
authorized to exercise its expert judgment as to the best approach for
phasing in the application of PSD and title V to GHG sources. (remaining
mindful that the applicability requirements cannot be applied
literally).  Under the Tailoring Rule, EPA seeks to include as many GHG
sources in the permitting programs at as close to the statutory
thresholds as possible, and as quickly as possible, although we
recognize that we ultimately may stop the phase-in process short of the
statutory threshold levels.

We do not believe it necessary to choose between these two differing
views as to congressional intent.  Although each leads to a different
analytical approach under Chevron, each also supports the Tailoring
Rule.  As for title V, we believe that taken together, the various
statutory requirements and statements in the legislative history do not
evidence a clear congressional intent for how title V is to be applied
to GHG sources.  As discussed later, the relevant title V requirements
and statements in legislative history differ from PSD, not least because
they include provisions that concern empty permits that point in
different directions.  As a result, here, too, EPA has the discretion at
Chevron Step 2 to adopt the Tailoring Rule as a reasonable
interpretation of the statutory requirements.  Alternatively, even if
the statute does express a clear intent as to title V that, similar to
PSD, title V requirements must be phased in as closely to the statutory
threshold as possible and as quickly as possible, this Tailoring Rule is
consistent with that intent.

It should also be noted that although EPA has concluded that applying
the PSD and title V applicability provisions literally in the case of
GHG sources would produce “absurd results” and therefore is not
required, this conclusion has no relevance for applying other CAA
requirements – such as the requirements concerning endangerment and
contribution findings  under CAA section 202(a) (1) or emission
standards for new motor vehicles or new motor vehicle engines under CAA
section 202 -- to GHGs or GHG sources.  EPA’s conclusions with respect
to the PSD and title V applicability requirements are based on the
specific terms of those requirements, other relevant PSD and title V
provisions, and the legislative history of the PSD and title V programs.

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

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

4.  The PSD and Title V programsPrograms

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

a.  The PSD program

(1)  PSD provisions

Provisions

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

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

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

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

* * *

...

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

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

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

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

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

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

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

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

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

(2)  PSD legislative history

Legislative History

The legislative history of the PSD provisions, enacted in the 1977 Clean
Air ActCAA Amendments, makes clear that Congress was largely focused on
sources of criteria pollutants:  primarily sulfur dioxide (SO2),
particulate matter, nitrogen oxides (, PM, NOx), and carbon monoxide
(CO).  This focus stems fromis evident in the basic purpose of the PSD
program, which is to safeguard maintenance of the national ambient air
quality standards (NAAQS), combined with the limited awareness at that
time of the problem of climate change.  See S 95-127 (95th Cong., 1st
Sess.), at 27.

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

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

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

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

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

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

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

	For convenience, the Steigerwald-Strelow memorandum is included in the
docket as docket number ______.

(3)  PSD regulatory historyRegulatory History:  Regulations concerning
the definition of “major stationary sourceConcerning the Definition of
“Major Stationary Source”

EPA’s initial rulemaking implementing the PSD program was proposed and
finalized in 1977-1978, immediately after enactmentFor present purposes,
the regulatory history of the PSD program.  This is most noteworthy
because it shows that since the inception of the program following the
1977 CAA Amendments, EPA has interpreted the statutory PSD applicability
provisions to apply more narrowly – to any air pollutant subject to
regulation – than their literal meaning (“any air pollutant”).
EPA’s initial rulemaking implementing the PSD program, which was
proposed and finalized in 1977-1978, made explicit that the entire PSD
program – including the permitting component (with air quality review)
– applied to only pollutants regulated under the Act.  EPA
accomplished this by requiring each “major stationary source” to
obtain a PSD permit, and by defining a “major stationary source” as
a source that is included in a specified source category or that is of a
specified size and that emits at least a specified amount of “any air
pollutant regulated under the Clean Air Act.”  43 FR 26,380, 26,403/3,
26,406 (June 19, 1978) (promulgating 40 CFR 51.21(b)(1)(i) ).  See 42 FR
57,479, 57,480, 57,483 (Nov. 3, 1977) (proposing 40 CFR 51.21(b)(1)(i)).
 Similarly, the regulations required each “major stationary source”
to apply “best available control technology”  for “each pollutant
subject to regulation under the act.” 43 FR at 26,406 (promulgating 40
CFR 51.21(j), 52.21(b)(10)).  EPA acknowledged that for regulatory
purposes, it was replacing the term that appears in the statute –
“major emitting facility,” CAA § 169(l) – with the term “major
stationary source,” and explained that it was doing so in order “to
reflect current EPA terminology.”  42 FR at 57,480 (Nov. 3, 1977).
EPA did not discuss that the statutory term “major emitting
facility” – which refers to “any air pollutant” – differs from
EPA’s regulatory term “major stationary source” – which refers
more narrowly to “any air pollutant regulated under the [CAA].”)).
In the preamble to the final rule, EPA did not indicate that it had
received any comments on the issue.  See 43 FR 26,388 (June 19, 1978).

In 1979-1980, EPA revised the PSD program to conform to Alabama Power v.
Costle, 636 F.2d 323 (D.C. Cir. 1980).  44 FR 51,924 (Sept.ember 5,
1979) (proposed rule); 45 FR 52,676 (Aug.ust 7, 1980) (final rule).  In
this rulemaking, EPA did not disturb the pre-existing provisions
(including the definitions of “major stationary source” and BACT)
that limited the applicability of the PSD program to regulated air
pollutants..  In addition, EPA did not discuss – or indicate that
commenters had raised – any issues concerning the difference between
the narrower definition of “major stationary source” in the
regulations and the statutory definition that could be broader under a
literal reading.

In 1996 EPA proposed, and in 2002 finalized, a set of amendments to the
PSD (and nonattainment NSR) provisions that included revisions to
conform with the 1990 ActCAA Amendments, which, in relevant part,
exempted hazardous air pollutants (HAPs) from PSD, under CAA §section
112(b)(6).  See 61 FR 38,250 (July 23, 1996), 67 FR 80,186 (Dec.ember
31, 2002).  In the preamble to the final rule, EPA noted that based on a
request from a commenter, EPA was amending the regulations to “clarify
which pollutants are covered under the PSD program.”  EPA accomplished
this by promulgating a definition for “regulated NSR pollutant,”
which listed categories of pollutants regulated under the Act, and by
substituting that defined term for the  phrase “pollutants regulated
under the Act” that was previously used in various parts of the PSD
regulations.   67 FR at 80,240.  80240.  The definition of “regulated
NSR pollutant” includes several categories of pollutants (including,
in general, NAAQS pollutants and precursors, pollutants regulated under
CAA §section 111 new source performance standardsNSPS, Class I or II
substances regulated under CAA title VI) and a catch-all category,
“[a]ny pollutant that otherwise is subject to regulation under the
Act.”  E.g., 40 CFR 52.21(b)(50).  As in the previous rulemakings, EPA
again did not address the difference between the definition of “major
emitting facility” and its regulatory approach or indicate that it had
received comments on this issue.  While the definition of “major
modification” in the PSD regulations has changed over time with
respect to how emission increases are calculated, the regulatory history
with respect to pollutant coverage parallels that of major emitting
facility.

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

b..  Title V programProgram

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

i.(1)  Title V provisions

Provisions

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

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

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

includes a “hammer” provision designed to reinforce timely permit
issuance, which is that the permitting authority’s program must
include:

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

CAA §

Section 502(b)(8) requires the permit program to include “[a]uthority
and reasonable procedures consistent with the need for expeditious
action by the permitting authority on permit applications and related
matters, to make available to the public [certain permit-related
documents]”. CAA § Section 502(b)(9) requires a permit revision to
incorporate requirements promulgated after issuance of the permit, but
only if the permit is for a major source and has a term of three3 or
more years remaining.  In addition, the revision must occur “as
expeditiously as practicable.”  CAA §Section 502(b)(10) requires the
permit program to include operational flexibility provisions that
“allow changes within a permitted facility . . .… without requiring
a permit revision, if the changes are not modifications . . .… and . .
.… do not exceed the emissions allowable under the permit. . .
….”

In addition, title V includes a comprehensive and finely detailed
implementation schedule that mandates timely issuance of permits while
building in EPA and affected state review, public participation, and
timely compliance by the source with reporting requirements.  Following
the date that sources become subject to title V, they have one1 year to
submit their permit applications.  CAA §section 503(c).  As noted
abovepreviously, the permitting authority then has 18 months to issue or
deny the permit.  CAA §section 503(c).  Permitting authorities must
provide an opportunity for public comment and a hearing.  CAA §section
502(b)(6).  If the permitting authority proposes to issue the permit,
the permitting authority must submit the permit to EPA, and notify
affected states, for review.  CAA §section 505(a)(1).  EPA then has 45
days to review the permit and, if EPA deems it appropriate, to object to
the permit.  CAA §section 505(b)(1).  If EPA does object, then the
permitting authority must, within 90 days, revise it to meet the
objections, or else EPA becomes required to issue or deny the permit.
CAA §section 505(c).  If EPA does not object, then, within 60 days of
the close of the 45-day review period, any person may petition EPA to
object, and EPA must grant or deny the petition within 60 days.  CAA
§section 505(b)(2).  If a permit is issued, it must include a permit
compliance plan, under which the permittee must “submit progress
reports to the permitting authority no less frequently than every 6
months,” and must “periodically (but no less frequently than
annually) certify that the facility is in compliance with any applicable
requirements of the permit, and [] promptly report any deviations from
permit requirements to the permitting authority.”  CAA §section
503(b).

ii..(2)  Title V legislative historyLegislative History

(I). Scope of title V

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

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

S. Rep. 101–228, at 353 (1990).   Sen. Mitchell, the Senate Majority
Leader, stated that he expected “over 10,000 permits [to] . . .… be
issued under this program.”  136 Cong. Rec. S3233S3239-03 (March 27,
1990).  Others in Congress had similar estimates.  See, e.g., 136 Cong.
Rec. S3162-04S3166 (“thousands and thousands of permit applications
… will be required to be submitted”) (statement of Sen. Nickles)..

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

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

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

 as a “major source.”

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

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

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

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

136 Cong. Rec. S2030-02 (March 5S213 (January 24, 1990) (statement of
Sen. Chafee).  Sen. Lieberman made a similar statement.  136 Cong. Rec.
3162-043172-73 (March 26, 1990) (statement of Sen. Lieberman).  Thus, a
central purpose of the title V permit program is to compile all the
requirements applicable to the source into a single place, the permit.
Implicit in this purpose is that the sources subject to title V will
have applicable requirements to be compiled.  As Sen. Chafee directly
stated, “[T]he vast majority of these permit applications will … ,
in all likelihood, only codify the existing requirements of the
applicable State implementation plan.”  136 Cong. Rec. S2715-04S2720
(March 20, 1990) (statement of Sen. Chafee).

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

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

136 Cong. Rec. H12883H12884 (Oct. 26, 1990) (statement of Rep. Wyden).
See, e.g., 136 Cong. Rec.  H2511-02H2559 (May 212, 1990) (statement of
Rep. Wyden) (discussing need to “help small businesses through the air
permit labyrinth”).

	The legislative history also indicates that Congress was deeply
concerned both about the need not to burden sources generally with undue
costs and to assure the administrability of the title V program, and as
a result, was determined to make the program as smooth-running as
possible.  These goals are reflected in many of the title V
requirements, as discussed abovepreviously.  See, e.g.,

CAA §section 502(b)(6) (requiring “adequate, streamlined, and
reasonable procedures for expeditiously determining when applications
are complete, for processing such applications, for public notice * *
*… and for expeditious review of permit actions); CAA §section
502(b)(7) (includes a “hammer” provision designed to reinforce
timely permit issuance); CAA §section 502(b)(9)-(10) (limiting
circumstances under which permit revision is required; requiring
revision to occur “as expeditiously as practicable;” including
operational flexibility provisions).

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

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

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

136 Cong. Rec. S16895-01 [S16938?]S16941 (statement of Sen. Chafee).
The same statement explained that the permit revision procedures of CAA
section 502(b)(9) reflect a –

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

136 Cong. Rec. 16895-0116942 (Oct. 27, 1990) (Chafee-Baucus statement of
Senate Managers) (statement of Sen. Chafee).

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

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

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

136 Cong. Rec. S2030-02S2107 (March 5, 1990) (statement of Sen. Chafee).

As another indication of congressional concern over administrability,
Congress recognized that at the beginning of the program, large numbers
of permit applications might overwhelm the permitting authorities.  To
protect against this, Congress included in CAA section 503(c) a phase-in
schedule for permitting authorities to act on the initial set of permit
applications.  Under 503(c), permitting authorities were not required to
act on the initial set of permit applications within 18 months after it
received the application, but rather could act on one-third of them on
an annual basis over a three3-year period.  Sen. Chafee, in describing
an early version of this provision – which would have allowed
permitting authorities to phase- in the submission of permit
applications – explained that its purpose was “to avoid a logjam of
permit applications[,] … ensure that [regulatory] gridlock can be
avoided, and [ensure] that the permitting process will work with a
minimum of disruption and delay.”  136 Cong. Rec., S2106 (March 5,
1990) (statement of Sen. Chafee).

(3)  Title V Regulatory History

	As with PSD, for present purposes, the regulatory history

	Congress enacted title V as part of the title V program is most
noteworthy because it shows that beginning shortly after the inception
of the program following the 1990 Clean Air ActCAA Amendments.  Under
its, EPA has interpreted the statutory title V applicability provisions,
as to apply more narrowly – to any air pollutant subject to regulation
– than their literal meaning (“any air pollutant”).  As discussed
abovepreviously, title V applies to any “major source,” defined, as
relevant here, under CAA sections 501(2)(B) and 302(j), as “any
stationary facility or source of air pollutants which directly emits, or
has the potential to emit, one hundred tons per year or more of any air
pollutant....”

	 ….”  EPA’s regulations mirror the CAA definitional provisions.
The regulations provide that a title V program must provide for
permitting “[a]ny major source,” 40 CFR 70.3(a), defined, as
relevant here, as “[a] major stationary source of air pollutants, as
defined in section 302 of the Act, that directly emits or has the
potential to emit, 100 tpy or more of any air pollutant….” 40 CFR
70.2.

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

While the specific narrow interpretation in the Wegman Memorandum of the
definition of “air pollutant” in CAA section 302(g) is in question
in light of the holding in the Massachusetts casev. EPA, 549 U.S. 497,
533 (2007) (finding this definition to be “sweeping”), EPA believes
the corecapacious”), we believe that the overall rationale for itsour
interpretation of the applicability of title V remains sound.  EPA
continues to maintain its interpretation, consistent with CAA sections
302(j), 501, 502 and 504(a), that the provisions governing title V
applicability for “a major stationary source” can only be triggered
by emissions of pollutants subject to regulation.  This interpretation
is based primarily on the purpose of title V to collect all regulatory
requirements applicable to a source and to assure compliance with such
requirements, see, e.g., CAA section 504(a), and on the desire to
promote consistency with the approach under the PSD program.

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

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

5.   Application of the “absurd results” doctrineAbsurd Results”
Doctrine for the PSD programProgram

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

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

 is unclear and the tailoring approach is a reasonable interpretation of
the statute.

a.  Congressional IntentPurpose for the PSD Program

To reiterate, for convenience, CAA §section 169(1) defines a “major
emitting facility” to include “any … source[] [that] emit[s], or
ha[s] the potential to emit, [depending on the source category], one
hundred [or two hundred fifty] tons per year or more or more of any air
pollutant.”  CAA § section 169(1); and a “modification” as any
physical or operational change in “a stationary source which increases
the amount of any air pollutant emitted by such source,” CAA section
169(2)(C), 111(a)(4).  We also reiterate that, as discussed above,
beginning with our initial rulemaking in 1977-1978 to implement the PSD
program, we have narrowed this definitioninterpreted these definitions
more narrowly by reading into itthem the limitation that a source is
subject to PSD only if the air pollutants in question are “subject to
regulation under another Clean Air Act provision.  We have maintained
this approach to the present time through several additional rulemaking
actions, albeit with refinements not here relevant, and in all the
various rulemakings, our approach has never been seriously questioned by
stakeholders.  As the U.S. Supreme Court recently stated in upholding an
EPA approach in another context:  “While not conclusive, it surely
tends to show that the EPA’s current practice is a reasonable and
hence legitimate exercise of its discretion . . . that the agency has
been proceeding in essentially this fashion for over 30 years.”
Entergy Corp. v. Riverkeeper, Inc., 129 S.Ct. 1498, 1509 (2009)
(citations omitted).  Under the current regulations, PSD applies to a
“major stationary source” (a term that EPA employed as  the
regulatory implementation of the statutory term, “major emitting
facility”), which is defined as a source that, in general “emits, or
has the potential to emit, [depending on the source category], 100 [or
250] tons per year or more of any regulated NSR pollutant,”
51.166(b)(1)(i)(a)-(b); and the term  “regulated NSR pollutant”
includes, in general, pollutants regulated under the NAAQS, the NSPS,
and title VI, as well as “[a]ny pollutant that is … subject to
regulation under the Act.”Act.”  40 CFR 51.166(b)(49)(iv).   EPA is
not re-opening this regulation or its interpretation in this regulation
in this action.

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

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

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

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

	Here, applying the definitiondefinitions of “major emitting
facility” and “modification” literally (as EPA has interpreted
them more narrowly) at the present time -– in the absence of
streamlining measures or additional permitting authority resources, and
without tailoring – that is, applying PSD to GHG sources at the
100/250 tpy level without tailoring -- would be contrary to
congressional intentpurpose for the PSD provisions, as found in the
statutory provisions and legislative history, especially as those
provisions and history are viewed in light of the results that would
occurimpact from applying PSD to those sources. those definitions
literally.  Congress established the PSD program in large measure
because it was concerned that around the country, industrial
development, which was confronting barriers to locating in nonattainment
areas (that is, areas that do not meet the NAAQS), would attempt to
locate in clean air areas (that is, attainment areas or unclassifiable
areas), but that as a consequence, the clean air areas would see their
air quality deteriorate to the point where they, too, would no longer
meet the NAAQS.  The end result would be the spread of environmental and
health problems to those formerly clean air areas, as well as more
barriers to further industrial development.  With these concerns in
mind, Congress designed the PSD program to have a primary focus of
requiringrequire newly constructing or modifying sources in areas with
air quality that meets the NAAQS (or that is unclassifiable) to analyze
their emissions of NAAQS pollutants and to implement controls as needed
to assure that those emissions do not significantly deteriorate air
quality.  Many of the PSD requirements, and much of the discussion in
the legislative history, reflect these aspects of the PSD program.
E.g., CAA sections 162, 163, 164, 165(a)(3), 165(d)(2), 165(e), 166; see
generally H. Rep. 95-294, 95th Cong., 1st Sess. (1977)  103-78.

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

Congress was keenly aware that the PSD program needed to serve two
purposes:  protect the environment and promote economic growth.
Congress explicitly identified these two goals in the “purposes”
section of the PSD provision, CAA § section 160, and various PSD
requirements clearly reflect them.  For example, to protect economic
growth, the PSD program includes a oneexpedites the permit process to
include a 1-year limitation on the time that the permitting authority
has act on permit applications.  To protect the environment, in addition
to including many provisions that focus on NAAQS pollutants, the PSD
program requires that the preconstruction permit impose emission limits
that reflect best available control technology (“BACT”) for each
pollutant subject to regulation under another CAA provision implement.
CAA section 165(a)(4).  This BACT provision also makes clear, by its
terms, that although Congress designed the PSD program primarily largely
with NAAQS pollutants in mind, Congress also intended that sources
subject to PSD to control the emissions of their other pollutants as
well.  The D.C. Circuit has recognized the twin goals of environmental
protection and economic development that underlie PSD, and has upheld
EPA interpretations of the PSD program that reflect a balancing of those
goals.  See, e.g., New York v. EPA, 413 F.3d 3, 27 (D.C. Cir.),
rehearing en banc den. 2005 U.S. App. LEXIS 27103, 431 F.3d 801 (2005).

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

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

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

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

	A closer look at the legislative history confirms the view that
sweeping in Congress did not expect PSD to apply to large numbers of
small sources, including commercial and residential sources is precisely
what Congress thought it was avoiding by establishing, and instead
expected the 100/250 tpy thresholds to limit PSD’s applicability to
larger sources.  As noted abovepreviously, Congress relied on an EPA
memorandum – the Steigerwald-Strelow memorandum -- that identified the
range of industrial categories that EPA regulated under its program that
constituted the precursor to the statutory PSD program, and listed both
the estimated number of new sources constructing each year and the
amount of pollution emitted by the “typical plant” in the category.
The Steigerwald-Strelow memorandum makes clear that the 100 tpy cut-off
for the 28 listed sources categories, and the 250 tpy cut-off for all
other sources, would exclude from PSD a large number of sources.  122
Cong. Rec. 24548-50 (July 29, 1976).  However, virtually all, if not
all, of these the sources in half the 28 source categories emit carbon
dioxide CO2 in quantities that equal or exceed the 100/250 tpy
thresholds, and therefore would be swept into PSD through application of
the “major emitting facility” definition, without tailoring.  For
example, we estimate that over 700,000 commercial facilities and 180,000
residential facilities would exceed a PTE emission level for CO2 of 250
tpy. tpy threshold, and almost all of the sources in the remaining
categories emit CO2 in quantities that equal or exceed the 100 tpy
threshold.  Therefore, applying the “major emitting facility”
definition to GHG sources, in the absence of streamlining methods and
without tailoring, would, as a practical matter, vitiate much of the
purpose of the 100

tpy cut-off for industrial sources.

Most telling, in this regard, is the small-sized boilers.  The , which
the Steigerwald-Strelow memorandum describes, in terms of size,
pollutants emitted, and numbers of sources, as follows:  The memorandum
identified two categories of these boilers, differentiated by size.  The
first ranges in size from 10 to 250 x 106 Btu/hr, and has a “typical
plant” size of 107 Btu/hr, with “BACT emissions from typical
plant” of 53 tpy, and a total of 1,446 sources in the that category.
The second category ranges in size from 0.3 to 10 x 106 Btu/hr, and has
a “typical plant” size of 1.3 x x 106 Btu/hr, with “BACT emissions
from typical plant” of 2 tpy, and a total of 11,215 sources in the
category.  TheThat memorandum discussesmakes clear that EPA did not
believe that sources in these two categories in the context of
explaining which source categories exceed a size of 100 tpy -- and
therefore– and especially the smallest one – would be subject to PSD
ifunder a 100 tpy threshold were set --, by stating, “Fortunately,
most truly small boilers and typical space heating operations would not
be covered.”  122 Cong. Rec. 24549 (July 29, 1976).  However, these
data and conclusions were all based on emissions of NAAQS pollutants,
the amounts of which placed these boilers well below the PSD threshold
limitations.  In general, most boilers of these small sizes are fired
with natural gas, and a natural gas boiler greater than 0.5 x 106 Btu/hr
emits at least 250 tpy CO2.  IfTherefore, if the CO2 emissions of these
small boilers are considered – as would occur by applying the
definition of “major emitting facility” to GHG sources without
tailoring -- then most of them would in fact be subject to PSD.  Again,
this result would directly contravene Congress’s intention to limit
PSD to “industrial plants of significant impact.”  122 Cong. Rec.
24548-49 (statement of Sen. McClure).  Industry raised significant
concerns about the cost of PSD permitting if the statutory threshold
were to apply for GHG emissions.  One commenter estimated a cost of over
$5 billion and the dedication of over 17,000 FTEs to this effort.

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

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

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

Alabama Power, 636 F.2d at 354.

	However, applying PSD to GHG sources before streamlining and without
tailoring would increase the size of the PSD program at least an order
of magnitude beyond what Congress could seems to have had any reason to
expectexpected, which would have been far beyond the “administrative
capability” that Alabama Power described EPA as having.

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

At proposal, we noted that the states had estimated that the influx of
permit applications that would result from applying the 250 tpy
threshold at actual emissions would, without additional resources,
result in permitting delays of three3 years.  In fact, as we noted at
proposal, a literal reading of the PSD requirements would require their
application at the 250 potential to emit tpy PTE level, which would
result in ten times more permit applications than were assumed when the
States states made the three3-year estimate.  Further, our current
estimates of the numbers of sources that would be subject to PSD
requirements are about twice what we estimated at proposal, as described
elsewhere.  Moreover, our estimate of  the number of hours that
permitting authorities would need to process a permit application from a
source in the commercial or residential sector – which is, by far, the
largest single sector – is three and one-half times as long as we
estimated at proposal.   And under a literal reading of the statutoryPSD
applicability provisions as applied to GHG sources, the permitting
authorities would be required to implement a program of this size
beginning on January 2, 2011, less than nine9 months from now.

In light of these   We received many comments from states and industry
raising concerns about the cost to sources and administrative burdens,
of PSD permitting if the statutory threshold were to apply for GHG
emissions.  One commenter estimated a cost of over $5 billion and the
dedication of over 17,000 FTEs to this effort.

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

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

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

It is the many-year delays in permit issuance and the consequent
chilling of economic development that provide perhaps the clearest
indication that applying the PSD applicability provisions to GHG sources
without tailoring produces absurd results.  These effects would
undermine one of Congress’s central purposes in establishing the PSD
program, which was to promote development in clean air areas by large
industrial sources (as long as they included environmental safeguards).
As discussed abovepreviously, this goal is manifest in the structure of
the PSD provisions, and Congress even went so far as to make this goal
explicit in the purposes section of the PSD provisions.  But even if
Congress had not been so clear, it is simply inconceivable that Congress
could have intended the PSD program to be applied in a way that would
cause such damage to the national economy.

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

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

b. EPA’s reconciliation of applicability provisions with congressional
intent

EPA may tailor  Congressonal Intent for the definition of “major
emitting facility” as applied to GHG sources because doing so best
effectuates congressional intent, or at least, constitutes a reasonable
construct of the statutory provisions.  This tailoring will allow a
window of time for EPA and the permitting authorities to develop methods
to streamline PSD requirements and to ramp up permitting authority
resources, which will allow for an orderly expansion of the PSD program
to cover more GHG sources over time in a way that is manageable for both
source and permitting authority.

Applicability Provisions

(1)  Congressional intent as applied to PSD applicability to GHG
sourcesIntent for Whether and How PSD Applies to GHG Sources

To determine how the PSD program should apply to GHG sources, it is
important first to ascertain what would be congressional intent for
applying the program to GHG sources.    Congress wrote the applicability
provisions broadly, so that by their terms they would sweep in sources
of many types of pollutants, but most Several of the PSD provisions and
statements in the legislative history indicate that Congress was
primarily focused on NAAQS pollutants.  Even so, nothing in statutory
provisions provide conclusively that GHG emissions -- or other non-NAAQS
pollutants – when emitted in the appropriate quantity may never
trigger PSD applicability, and nothing in the legislative history
indicates that Congress intended such a result.  In addition, it is
clear that Congress expected PSD to be limited to large industrial
sources – which are the sources whose emissions are most important for
air quality purposes --particularly important in determining whether and
how the PSD program should apply to GHG sources, as discussed elsewhere:

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

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

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

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

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

Looking at these provisions and the legislative history together, we
think Congress can be said to have intended that the PSD program apply
to GHG sources as a general matter.  The most important indication of
congressional intent in this regard is the applicability provisions,
which provide, in part, that PSD applies to (i) “any … source[ that]
emit[s], or ha[s] the potential to emit [the specified quantity] of any
air pollutant,” CAA section 169(1); and (ii) to any such source that
undertakes a physical or operational change that “increases the amount
of any air pollutant emitted.”  CAA section 169(2)(C), 111(a)(4).
These terms are quite broad, and should be read to include GHG sources
and GHGs.  See Massachusetts v. EPA, 549 U.S. 497, 533 (2007)
(“Because greenhouse gases fit well within the Clean Air Act's
capacious definition of ‘air pollutant,’ we hold that EPA has the
statutory authority to regulate the emission of such gases from new
motor vehicles.”).  Moreover, including GHG sources – under certain
circumstances – is consistent with the PSD provisions that refer to
other pollutants, establish the time-frame for acting on PSD
applications, and establish the overall purpose of the program.  In
addition, including GHG sources – again, under certain circumstances -
is consistent with the legislative history that PSD be limited to
sources that cause a meaningful part of the air pollution problem and
have the resources to manage the PSD requirements.  No PSD provision
explicitly imposes that any limitation.  of PSD to large industrial
sources, and Congress’s reasoning for focusing on large industrial
sources – which was that large industrialthese sources are best suited
to handle the resource -intensive analyses required by the PSD program,
but it is conceivable that under certain circumstances, other sources
could manage the PSD requirements as well.  Finally,  – could extend
to GHG sources under certain circumstances (that is, large sources
first, and smaller sources after streamlining methods are developed).
Similarly, as discussed previously, it is reasonable to read into
Congress’s intent that the PSD program be limited to a size that
permitting authorities would be able to administer, but it is consistent
with that reading to recognize that the permitting authorities could
take certain steps – including adoption of streamlining measures and
ramping up resources – that would allow them to handle a higher volume
of permitting.

  Finally, we find nothing in the PSD provisions or legislative history
that would indicate congressional intent to exclude GHG sources.
Accordingly, at present, we believe that congressional intent may be
characterized as applying PSD to sources of any pollutants that are
subject to regulation Congress must be said to have intended an
affirmative response for whether PSD applies to sources of GHGs as long
as those sources can reasonably be expected to manage PSD’s
requirements and as long as the resulting numbers of permits can be
reasonably accommodated by permitting authorities.  As a result, for
reasons described above, we believe that it is not consonant with
congressional intent to apply the PSD program to GHG sources at the
100/250 tpy level as soon as January 2, 2011, when GHGs become subject
to regulation through the light-duty vehicle rule.  However, it is
consonant with congressional intent to apply the PSD program to GHG
sources on a schedule that begins with the largest GHG sources and
gradually includes smaller sources over time.  Thus, under this view,
the tailoring approach is justified under Chevron step 1.  However, even
under this view of congressional intent, we are not certain at present
whether congressional intent can be said to be clear that the smallest
of the GHG sources – those emitting at or near the statutory
thresholds – should be included in the PSD program.  As noted
elsewhere, we may explorea general matter.  Our previous regulatory
action defining the PSD applicability provisions made this clear, and we
do not reopen this issue further in subsequent this rulemaking.

On the other hand, we recognize that it may also be concluded that
congressional intent with respect to applying PSD to the entire universe
of   Moreover, even if this long-established regulatory position were
not justifiable based on Chevron Step 1 – on the grounds that in fact,
congressional intent on this point is not clear - then we believe that
this position, that the statutory provisions to apply PSD to GHG sources
is unclear.  Under these circumstances, the tailoring approach is
justifiable under Chevron step 2 as a reasonable interpretation of the
statutory requirments. in general, was justified under Chevron Step 2.

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

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

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

(2)  Criteria for establishingEstablishing Phase-in Schedule

The specific phase-in schedule

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

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

(3)  Criteria for establishing significance levels

Establishing Significance Levels

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

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

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

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

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

EPA has established significance levels for various pollutants and has ,
generally establishedrelying on a de minimis basis for them.  See, e.g.,
45 Fed. Reg. 52,676, 52,705 – 52,FR 52676, 52705 – 52710 (August 7,
1980)   In addition, the Court in Alabama Power authorized EPA to use an
“administrative necessity” basis for establishing significance
levels. 636 F.2d. at 400.

).  In these actions, EPA generally established the level based on the
triviality of the amount of emissions excluded.  To this point, we have
not attempted to determine de minimis – that is, trivial - levels for
GHGs.  Instead, in today’sthis rulemaking, EPA is establishing a
phase-in schedule for significance levels based on the Chevron
framework, accounting for the “absurd results” doctrine or,
alternatively, as discussed below, the ,”  “administrative
necessity” doctrine,” and “one-step-at-a-time” doctrines.  It is
not necessary to establish a permanent de minimis level in today’sthis
rulemaking, and attempting to do so would give rise to administrability
problems.  This is because we are considering establishing the .  For
one thing, the Court in Alabama Power explicitly authorized an
administrative basis for significance levels.  Moreover, were EPA to
establish a de minimis level, that amount could be below – perhaps
even well below – the “major emitting facility threshold for step 3
as low as the 50,000 tpy CO2e level, as discussed elsewhere, and of
course, we could eventually establish a lower level.  Our present view
is that we do not have the authority to establish the de minimis level
higher than the major emitting facility threshold” thresholds
established in this rulemaking on grounds of “administrative
necessity” and the other doctrines.  Accordingly, at present, if we
were to establish a permanent significance level on a de minimis basis,
that level would be relatively low and would could result in too many
small sources submittingbeing required to submit permit applications
while the phase-in is occurring.  This would give rise to the same
problems concerning undue costs to the sources and administrative
burdens for the permitting authorities for which we are fashioning a
remedy.  Accordingly, the significance levels we establish with this
action are the lowest levels that sources and permitting authorities can
reasonably be expected to implement at the present time in light of the
costs to the sources and the administrative burdens to the permitting
authorities.

Our rationale for the implementation schedule is based on the combined
burdens for both PSD and Title permitting purposes.  As a result, we
discuss our rationale below, after first describing the “absurd
results” basis for our action concerning title V applicability to GHG
sources.

c..  Other possible approaches to reconciling literal reading of PSD
applicability provisions and congressional intentPossible Approaches to
Reconciling a Literal Reading of PSD Applicability Provisions and
Congressional Intent

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

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

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

Commenters point out that section 107 applies only to NAAQS pollutants
and directs that areas be designated as attainment, nonattainment, or
unclassifiable on a pollutant-by-pollutant basis.

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

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

We recognize, as we have said elsewhere, that a primary major purpose of
the PSD provisions is to regulate emissions of NAAQS pollutants in an
area that is designated attainment or unclassifiable for those
pollutants.  However, we do not read CAA sections 161 and the “in any
area to which this part applies” clause in 165(a), read in the context
withof the PSD applicability provisions, as limiting PSD applicability
to those pollutants.  The key PSD applicability provision is provisions
are found in section 165(a), which sections 165(a) and 169(1).  Section
165(a) states, “No major emitting facility on which construction is
commenced after August 7, 1977, may be constructed in any area to which
this part applies unless [certain requirements are met].  A “major
emitting facility” is defined, under CAA section 169()(1), as “any
… stationary source[] which emit[s], or ha[s] the potential to emit,
one hundred [or, depending on the source category, 250two hundred fifty]
tons per year or more of any air pollutant.”  As discussed elsewhere,
EPA has long interpreted the term “any air pollutant” to refer to
“any air pollutant subject to regulation under the CAA,” and for
present purposes, will continue to read the “subject to regulation”
phrase into that term.

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

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

long as they are regulated under other provisions of the Act.  Indeed,
the very existence of this provision makes clear that Congress knew how
to limited the scope of “any air pollutant” when it intended to do
so.The D.C. Circuit, in Alabama Power v. Costle, 636 F.2d 323, 361 n.90
(D.C. Cir. 1980) indicated that, under the law applicable at the time
the Court handed down the decision in 1980, PSD applies to HAPs.

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

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

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

In addition, although section 161 requires that SIPs contain emission
limitations and other measures as necessary to prevent significant
deterioration in areas designated as attainment or unclassifiable, it
does not by its terms limit SIPs to only those measures.  Moreover,
section 161 should be read in conjunction with section 110(a)(2)(C),
which establishes the basic requirement that SIPs include PSD
requirements.  Section 110(a)(2)(C) provides that each SIP shall --

Include a program to provide for the enforcement of the measures
described in subparagraph (A), and regulation of the modification and
construction of any stationary source within the areas covered by the
plan as necessary to assure that [NAAQS] are achieve, including a permit
program as required in parts C and D of this subchapter.

Subparagraph (A), in turn, requires SIPs to include “enforceable
emission limitations and other control measures, means, or techniques
… as may be necessary or appropriate to meet the applicable
requirements of this chapter”.  It is clear from subparagraph (C) of
section 110(a)(2),Most broadly, we read in conjunction with subparagraph
(A), that SIPs may containthe PSD provisions to meet requirements other
than those related to the NAAQS (that is, subparagraph (A) requires
control measures “to meet the applicable requirements of this
chapter”), and that SIPs must include “a permit program as required
in part[] C.”  That permit program, in turn, must include the