that Vermont cannot, through inclusion of a state ambient air quality
standard in a revision to a SIP, impose that standard on upwind states.)

Two commenters (0107, 0105) state that EPA’s approval of a SIP
revision only approves that state developing and implementing its own
regulations and only allows EPA to enforce the regulation in a state as
part of that state’s overall effort to attain it policies within its
own jurisdiction.  Commenter (0059, 0107) believes it would be
unreasonable to interpret the CAA as requiring PSD permitting of a
source that emitted GHGs in Montana simply because Delaware chose to
regulate emissions from combustion turbines locally.  Commenter 0059
notes that CAA clearly recognizes in section 116 that a state can set
more stringent CAA regulations in its jurisdiction to advance the
state’s own public policy goals.  Another industry commenter (0050)
states that States often apply to EPA to add substances to their SIP
that may be an issue within the state.  The commenter (0050) opines that
EPA’s consideration of these applications extends only to the impacts
on the particular state, and not nationally, and that problems that one
state seeks to address may not be problems in the other 49 states.  A
state/local agency association and industry commenter (0058, 0086) also
concurs with EPA’s concern that taking the opposite view would set a
precedent for other pollutants, such as ammonia, which EPA currently
allows, but does not require, a state to treat as a precursor to PM2.5.

	Several commenters (0062, 0102, 0059, 0085, 0051, 0053) noted that the
process for EPA to approve an individual State’s SIP is not the
appropriate process for establishing nationally applicable requirements.
 One state/local agency associations (0062) states that PSD and Title V
applicability should arise only after a EPA makes a conscious decision
to broadly regulate a pollutant under the CAA.  Another state agency
commenter (0102) states that it is appropriate and necessary that
regulations, particularly those with significant economic effect, not be
indiscriminately applied throughout an individual state or the nation.

Finally, two commenters (0051, 0053) state that because EPA’s approval
of a SIP does not constitute a NAAQS, a NSPS, or a federal standard
regulating ozone-depleting substances (see 40 CFR
52.21(b)(50)(i)-(iii)), and is merely an approval of state laws as
meeting federal requirements, that approval does not make GHGs regulated
pollutants under the CAA.

 Response:

We are concerned that adopting the SIP interpretation would subject a
pollutant to regulation before EPA finds that the pollutant warrants
national regulation, and by-pass the opportunity for judicial review of
that finding for each individual pollutant.  As one commenter notes, the
process for the Administrator to establish national regulations is
different than the process for approving SIPs.  For example, before
establishing a new NAAQS, the Administrator must find that the pollutant
“causes or contributes to air pollution which may reasonably be
anticipated to endanger public health or welfare.”  See 42 U.S.C 7408.
 The CAA requires the Administrator to make similar findings before
regulating pollutants under other sections of the Act.  See, for
example, CAA sections 111, 112(b), 112(f) that require the Administrator
to find that a pollutant “presents or may present… a threat of
adverse human health effects;” or is “known to cause or may… cause
death, injury, or serious adverse effects to human health and the
environment.”

In contrast, the statutory process for EPA to approve SIPs does not
directly contemplate that EPA conduct a finding or national impact
analysis of an individual state’s decision to regulate a new
pollutant.  Specifically, Congress limited the EPA’s ability to
disapprove a State’s decision to adopt more stringent requirements in
setting forth the criteria for approving state submissions under section
110.  See CAA section 110(k)(3).  Accordingly, under the SIP
interpretation, a new pollutant could become nationally regulated upon
EPA’s approval of a SIP, and the ability of any party to challenge the
national implications of such approval would be limited.  EPA believes
such an outcome raises public policy concerns because it by-passes these
meaningful steps in the regulatory development process.

Even if the Act could be read to support EPA review of the national
implications of state SIP submissions, such an approach would be
undesirable for policy reasons.  As we highlighted in our
reconsideration notice, one practical effect of allowing state-specific
concerns to create national regulation is that EPA’s review of SIPs
would likely be much more time-consuming, because we would have to
consider each nuance of the SIP as a potential statement of national
policy.  Thus, we would have heightened oversight of air quality actions
in all states – even those regarding local and state issues that are
best decided by local agencies.  Our approval of SIPs would be delayed,
which would in turn, delay state’s progress toward improving air
quality.  And, EPA would be required to defend challenges to the
approval of a SIP with national implications in the D.C. Circuit Court
of Appeals rather than the local Circuit Court of Appeals.  The
potential increased burden of reviewing and approving SIPs to analyze
the national implications of each SIP, and the associated delay in
improving air quality, creates a compelling policy argument against
adoption of the SIP interpretation.

The Memo reasons that application of the SIP interpretation would
convert EPA’s approval of regulations applicable only in one state
into a decision to regulate a pollutant on a nationwide scale for
purposes of the PSD program.  The Memo explains that the establishment
of SIPs is better read in light of the “cooperative federalism”
underlying the Act, whereby Congress allowed individual states to create
and apply some regulations more stringently than federal regulations
within its borders, without allowing individual states to set national
regulations that would impose those requirements on all states.  See
Ellis v. Gallatin Steel Co., 390 F.3d 461, 467 (6th Cir. 2004).  In
rejecting the SIP interpretation, the Memo also explains that EPA
adopted a similar position in promulgation of the NSR regulations for
fine particulate matter (or “PM2.5”), without any public comments
opposing that position.  See Memo at 15-16.

5.4.   Content of “Applicable Implementation Plan”

Comment:

Several industry commenters (0089 and others incorporating this
submission (0065, 0067, 0083, 0090, 0096, 0106/0107, 0108, 0109) argue
that only those portions of EPA-approved state regulations that
implement CAA requirements can be part of an applicable implementation
plan under the CAA.  (See CAA section 302(q) (defining the “applicable
implementation plan” as “the portion (or portions) of the
implementation plan, or most recent revision thereof, which has been
approved under section 110 of this Act, . . . and which implements the
relevant requirements of this Act”) (emphasis added).)  Because
emission controls for CO2 and other GHGs have not been established as
relevant requirements of the Act to be implemented through SIPs, any
state regulation that imposes emission controls on these substances
would not be an applicable implementation plan under the CAA.  Thus, the
fact that Delaware established emission controls for CO2 in state
regulations and included those state-law provisions in a document that
it labeled a SIP, which subsequently was approved by EPA, does not
thereby render CO2 subject to regulation for PSD purposes.  In fact, in
its submittal information to EPA, Delaware made clear it had included
CO2 provisions solely as a matter of state law and those provisions were
not within the scope of the state’s implementation of the federal CAA
(Doc. No. EPA-R03-OAR-2007-1188-0002.7).

An environmental group commenter (0101) argues that approval of a
regulation into a SIP makes that requirement part of the “applicable
implementation plan.”  The commenter’s notes that EPA has approved a
SIP revision submitted by the State of Delaware that directly
establishes emissions limits for CO2.  See Approval and Promulgation of
Air Quality Implementation Plans; Delaware; Control of Stationary
Generator Emissions, 73 FR 23101 (April 29, 2008).  Specifically,
Delaware’s SIP revision imposed CO2 limits on new and existing
distributed generators.  Section 110 of the CAA mandates that EPA
approve or disapprove SIPs; upon EPA’s approval, these CO2 emission
control requirements became part of an “applicable implementation
plan” under the Act, and thus enforceable “regulations” under the
Act.

Response:

EPA did not propose in this action to reconsider whether it should have
approved the Delaware CO2 provisions included in the state’s SIP
submission.  Thus, it would not be appropriate for EPA to revisit that
determination here.  Furthermore, since we have otherwise declined to
interpret the PSD provisions to apply to pollutants regulated in a SIP,
it is not necessary for EPA to address the commenter’s argument that
the Delaware CO2 provisions are not a part of the applicable
implementation plan notwithstanding EPA’s approval of a SIP submission
that included those provisions.  Under the interpretation affirmed by
EPA in this action, the Delaware CO2 provisions are insufficient to
trigger PSD requirements for CO2 on a nationwide basis.

5.5.   Implementation Considerations of a SIP Interpretation for GHGs

Comment:

One industry group (0071) noted that the SIP interpretation would lead
to unacceptable consequences. Specifically the commenter states that if
States are allowed to decide that the CAA PSD subtitle, and their SIP
provisions implementing the PSD subtitle, apply to GHGs even before GHGs
are subject to any emission limitation or other control requirement,
then the adverse consequences of overloading the PSD permitting system,
causing unacceptable delays in processing PSD permits and thereby
impeding economic development, efficiency and other improvements, and
innovation, would be felt despite EPA’s intention to try and avoid
such permitting gridlock.

Response:

We agree that the SIP interpretation could cause a delay in obtaining
preconstruction permits for major stationary sources that emit GHGs.
Moreover, we agree that we do not know what consequences any of our
proposed interpretation would have on PSD permitting for future
pollutants.  The potential for a delay in obtaining PSD permits, while
undesirable, does not, by itself, necessitate that we reject the SIP
interpretation or any other proposed interpretation.  Nonetheless, we
decline to adopt the SIP interpretation in favor of the actual control
interpretation for all the reasons summarized above and in our Federal
Register notice.

5.6.    Reliance on Connecticut Decision

Comment:

An environmental group commenter (0095), who incorporated by reference
the Petition for Reconsideration, faults EPA’s reliance on Connecticut
v. EPA, 656 F.2d 902 (2d Cir. 1981), and asserts that this case has
nothing to do with the issue of whether a pollutant is “subject to
regulation under the Act.”

Another commenter (0086) notes that courts have already recognized that
the CAA does not require a state to “respect its neighbor’s air
quality standards (or design its SIP to avoid interference therewith) if
those standards are more stringent than the requirements of federal
law.” Connecticut v. EPA, 656 F.2d 902, 909 (2d Cir. 1981).

Response:

In the PSD Interpretive Memo, EPA cited Connecticut to support the
notion that while a state is free to adopt air quality standards more
stringent than required by the NAAQS or other federal law provisions,
Congress precludes those stricter requirements from applying to other
states.  The Agency agrees with commenter 0095 that the circumstances
involved in that case are not directly analogous, but, nevertheless, the
case supports the inference that EPA has drawn from it.  The Court
concluded that “[n]othing in the Act, however, indicates that a state
must respect its neighbor’s air quality standards (or design its SIP
to avoid interference therewith) if those standards are more stringent
than the requirements of federal law.”  If a state is not required to
respect the more stringent requirements of a neighboring State in
developing its own implementation plan, then by inference, the state
would also not be compelled to follow the more stringent standards.

Chapter 6.   Finding of Endangerment

6.1.   Appropriateness of Triggering PSD Requirements from an
Endangerment Finding

	Comment:

Twenty-nine industry commenters (0050, 0051, 0053, 0056, 0059, 0065,
0066, 0067, 0068, 0070, 0071, 0073, 0074, 0076, 0081, 0083, 0085, 0086,
0089, 0090, 0092, 0096, 0098, 0100, 0105, 0106/0107, 0108, 0109, 0118)
and four state/local agency associations (0058, 0062, 0091, 0102) agree
with EPA’s proposed position that the “endangerment finding
interpretation” is not the proper interpretation of the phrase
“subject to regulation” for purposes of PSD.  One of the state/local
agency associations (0062.1) added that an endangerment finding also
does not give rise to permitting obligations under Title V of the CAA.
Eight industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107,
0108, 0109) note that the Petition for Reconsideration also disavows the
endangerment finding interpretation, and agrees with EPA’s analysis
showing that the endangerment finding interpretation would be
inconsistent with the other parts of the definition of “regulated NSR
pollutant” at 40 CFR 52.21(b)(50)(i) and (ii).  The industry commenter
(0085) adds that EPA’s conclusion in prior actions that endangerment
finding alone does not trigger PSD should be reaffirmed in this action.

The commenters believe that subjecting the pollutant to PSD
requirements, including imposition of BACT emission limits, before the
Agency has taken regulatory action to establish emission controls would
turn the CAA process on its head.  The industry commenter (0067)
similarly indicated that endangerment finding interpretation clearly
undermines the orderly process created by Congress for regulation of new
air pollutants.  A state agency (0102) commenter (0102) adds that
establishing controls without having a standard to be achieved leads to
uncertainty in the permitting program.

Three industry commenters (0067, 0092, 0098) representing several groups
of companies (industry), states that an interpretation of “subject to
regulation” that would be applied to pollutants simply because they
have been subject to an “endangerment finding” would be completely
irrational and unworkable since an endangerment finding is only the
first of many necessary steps when developing NSPS under section 111 of
the CAA and thus it would be premature and inappropriate to subject
sources to PSD permitting requirements for pollutants after only
undergoing the very first step in the NSPS development process.

	One  environmental groups commenter (0101) contends that an
endangerment finding is sufficient to make a pollutant subject to
regulation.  In particular, they point to the December 2009 endangerment
and cause or contribute findings under section 202(a), and argue that
because control requirements under section 202(a) are mandatory (e.g.,
inevitable) for a particular air pollutant (here, greenhouse gases) once
EPA has made a positive endangerment finding for an air pollutant, at
that point the air pollutant becomes “subject to” regulation.

	Response:

EPA maintains its view that the terms of EPA’s regulations and the
relevant provisions of the CAA do not compel EPA to conclude that an air
pollutant becomes “subject to regulation” when EPA finds that it
endangers public health or welfare without contemporaneously
promulgating control requirements for that pollutant.

As explained in EPA’s Endangerment and Cause or Contribute Findings
for GHGs under section 202(a) of the CAA, there are actually two
separate findings involved in what is often referred to as an
endangerment finding.  See 74 FR 66496 (Dec. 15, 2009).  The first
finding addresses whether air pollution may reasonably be anticipated to
endanger public health or welfare.  The second finding involves an
assessment of whether emissions of an air pollutant from the relevant
source category cause or contribute to this air pollution.  In this
action, EPA uses the phrase “endangerment finding” to refer to EPA
findings on both of these questions.  The EPA interpretation described
here applies to both findings regardless of whether they occur together
or separately.

As explained in the proposed reconsideration, and as several commenters
noted, an interpretation of “subject to regulation” that does not
include endangerment findings is consistent with the first three parts
of the definition of “regulated NSR pollutant” in section
52.21(b)(50) of EPA’s regulations.  Unlike the first three parts of
the definition, an endangerment finding does not itself contain any
restrictions (e.g., regarding the level of air pollution or emissions or
use).  Moreover, two parts of the definition involve actions that can
occur only after an endangerment finding of some sort has taken place.
In other words, other parts of the definition already bypass an
endangerment finding and apply the PSD trigger to a later step in the
regulatory process.

Specifically, under the first part of that definition, PSD regulation is
triggered by promulgation of a NAAQS under CAA section 109.  However, in
order to promulgate NAAQS standards under section 109, EPA must first
list, and issue air quality criteria for a pollutant under section 108,
which in turn can only happen after EPA makes an endangerment finding
and a version of a cause or contribute finding, in addition to meeting
other requirements.  CAA sections 108(a)(1) and 109(a)(2).  Thus, if EPA
were to conclude that an endangerment finding, cause or contribute
finding, or both would make a pollutant “subject to regulation”
within the meaning of the PSD provisions, this would read all meaning
out of the first part of the “regulated NSR pollutant” definition
because a pollutant would become subject to PSD permitting requirements
well before the promulgation of the NAAQS under section 109.  See 40 CFR
52.21(b)(50)(i).

Similarly, the second part of the definition of “regulated NSR
pollutant” includes any pollutant that is subject to a standard
promulgated under section 111 of the CAA.  Section 111 requires EPA to
list a source category, if in his or her judgment, “it causes, or
contributes significantly to, air pollution which may reasonably be
anticipated to endanger public health or welfare.”  See CAA section
111(b)(1)(A).  After EPA lists a source category, it promulgates NSPS
for that source category.  For a source category not already listed, if
EPA were to list it on the basis of its emissions of a pollutant that
was not previously regulated, and such a listing made that pollutant
“subject to regulation” within the meaning of the PSD provisions,
this chain of events would result in triggering PSD permitting
requirements for that pollutant well in advance of the point
contemplated by the second prong of the regulated NSR pollutant
definition.  See 40 CFR 52.21(b)(50)(ii).

Furthermore, waiting to apply PSD requirements at least until the actual
promulgation of control requirements that follow an endangerment finding
is sensible.  When promulgating the final regulations establishing the
control requirements for a pollutant, EPA often makes decisions that are
also relevant to decisions that must be made in implementing the PSD
program for that pollutant.  For example, EPA often does not make a
final decision regarding how to identify the specific pollutant subject
to an NSPS standard until the NSPS is issued, which occurs after both
the endangerment finding and the source category listing.

Finally, we disagree with commenters who argue that EPA must adopt an
interpretation of its regulations that has PSD triggered by a positive
endangerment finding.  While such an interpretation may be available to
EPA, given the ambiguity in the statute and the language “subject
to” and “regulation,” it is not mandated by the statutory or
regulated text.  See section 3.2.4 of this document for response to
comments regarding “subject to regulation.”  Section6.3 below
contains EPA’s response to comments regarding whether a final
endangerment finding is “regulation.”  In addition, as noted above,
it would be inconsistent with other parts of the definition of
“regulated NSR pollutant,” which are linked to action that can occur
only after (or concurrently with) an endangerment finding is made.
Moreover, also as noted above, relevant considerations for
implementation of the PSD program often do not occur until the actual
control requirements are finalized, and establishing a PSD trigger
before this last step would deprive the PSD program of potentially
important and necessary information.  For these and other reasons
provided in the final notice and this Response to Comments document, EPA
reasonably interprets the regulations to include each pollutant subject
to a regulation adopted by EPA under the Clean Air Act that requires
actual control of emissions of that pollutant.

6.2.   Endangerment Finding Must be Specific to Stationary Sources to
Trigger PSD Requirements

	Comment:

One commenter (0068) suggests that EPA should make a “cause and
contribute” finding, specific to stationary sources, before GHGs are
considered “subject to regulation.”  This commenter stated that the
endangerment and cause or contribute finding process for vehicles,
regulated under Title II of the CAA did not consider whether emissions
from stationary sources also cause and contribute to the endangerment
from GHGs.  They assert that to comply with the APA and ensure
constitutional safeguards, a “cause and contribute” process for
stationary sources, regulated under Title I of the CAA must be followed.

Response:

Absent specific Congressional direction, we do not believe EPA is
compelled to conduct a “cause or contribute” finding for stationary
sources before applying PSD requirements to a pollutant that is
otherwise subject to regulation under the Act.  In contrast to the
specific inclusion of a “cause and contribute” finding requirement
in Section 202 of the CAA, Congress did not include a similar
requirement within the definition of major emitting facility (section
169 of the CAA) such that the term would be necessarily limited to only
those stationary sources found to “cause or contribute.”  Likewise,
Congress did not  include a “cause or contribute” requirement
directly in Section 165.  For reasons discussed in section 9.8 of this
document, EPA is unable in this action to change its interpretation that
the regulation of a pollutant under Title II of the Clean Air Act is
sufficient to make a pollutant subject to regulation under the Act for
PSD purposes.

We disagree with commenter that the APA and constitutional safeguards
compel EPA to make a “cause or contribute” finding for stationary
sources before regulating stationary sources under the PSD provisions in
Title I of the CAA.  As discussed elsewhere in this document, the actual
control interpretion applied by EPA ensures that there is an opportunity
for public comment before EPA establishes controls on a pollutant that
trigger PSD permitting requirements.

6.3.    Endangerment Finding as Prerequisite to Regulation or as a
Regulation Itself

	Comment:

  SEQ CHAPTER \h \r 1 One industry commenter (0105) that supports
EPA’s preferred interpretation of “subject to regulation” states
that although a finding of endangerment may be one of the first steps in
EPA regulating a pollutant it can not trigger PSD; the finding in itself
is not even a regulation and certainly does not impact or regulate the
pollutant.

One commenter (0050) expresses that EPA acknowledges that the petition
for reconsideration does not propose that a pollutant be considered
“subject to regulation” upon a finding of endangerment.  They
express that EPA has repeatedly stated (as it does in the proposed
endangerment finding for GHG) that it does not consider the endangerment
finding as a “regulation” under the CAA.  The commenter (0050)
asserts that an endangerment finding has been construed as requiring
regulation under the CAA, and not the regulation itself.

One state/local agency association (0058) and one state agency commenter
(0102) states that it seems self-evident that an endangerment finding
does not by itself make a pollutant “subject to regulation” because
it is a prerequisite to regulation.

Industry commenters (0067, 0083, 0089, 0090, 0106/0107, 0108, 0109) note
that the CAA sets out a process under which EPA first makes a
determination whether emissions of a pollutant should be regulated (a
determination that, under several provisions of the CAA, includes an
endangerment determination) and later promulgates regulations regarding
control of emissions of that pollutant.  Industry commenters (0105,
0050) assert that an endangerment finding requires regulation under the
CAA, but is not itself a regulation.

	Response:

EPA agrees that the fact that an endangerment finding is not a codified
regulation in the Code of Federal Regulations further supports the view
that an endangerment finding does not make an air pollutant “subject
to regulation.”  The PSD Interpretive Memo explains that an
endangerment finding should not be construed as “regulating” the air
pollutant(s) at issue because there is no actual regulatory language
applicable to the air pollutant at this time in the CFR.  Rather, the
finding is a prerequisite to issuing regulatory language that imposes
control requirements.  This is true even if the endangerment finding is
a “rule” for purposes of administrative processes; that does not
alter the fact that there is no regulation or regulatory text attached
to the endangerment finding itself.  Since an endangerment finding does
not establish “regulation” within the common meaning of the term
applied by EPA, we do not believe the CAA compels EPA to apply PSD
requirements to a pollutant on the basis of an endangerment finding
alone.

As noted elsewhere in this document, the existence of a regulation or
rule covering a pollutant in the Code of Federal Regulation is also not
determinative of whether a pollutant is “subject to regulation”
within the meaning of the PSD provisions in the Clean Air Act and EPA
regulations.

6.4.   Consistency with Supreme Court Ruling

	Comment:

Industry commenters (0085, 0070, 0107,0105, 0050, 0067, 0092, 0098) and
one state/local agency association commenter (0058)  and two state
agency commenter (0102,0091) state that an endangerment finding does not
by itself make a pollutant “subject to regulation” because it is a
prerequisite to regulation.  Commenter (0107) notes that the Supreme
Court acknowledged the difference between a finding of endangerment and
regulation in Massachusetts v. EPA, in which Justice Stevens, writing
for the majority, observed that while the judgment to find that an air
pollutant “causes(s) or contribute(s) to air pollution which may
reasonably be anticipated to endanger public health or welfare (cite
omitted),” is not a “roving license to ignore the Agency’s
responsibility to regulate, EPA “has significant latitude as to the
manner, timing, content and coordination of its regulations with those
of other agencies.”  The commenter (0107) believes that this shows
that the Supreme Court clearly distinguished between a finding of
endangerment and ensuing regulations which subject pollutants to
control.

	Response:

We agree with commenters that EPA’s interpretation is also consistent
with the Supreme Court’s decision in Massachusetts.  In its decision,
the Court acknowledged that EPA “has significant latitude as to the
manner, timing, content and coordination” of the regulations that
would result from a positive endangerment finding under section 202(a).
See 549 U.S. at 532.  Just as EPA has discretion regarding the timing of
the section 202(a) control regulations that would flow from an
endangerment finding under that section, it also has some discretion
regarding the timing of the triggering of PSD controls that the statute
requires based on those section 202(a) regulations.  EPA has reasonably
determined that PSD controls should not precede any other control
requirements.

Chapter 7.   Granting of Section 209 Waiver

7.1.   Granting Waiver of State Preemption

Comments:

As summarized below, a majority of commenters agreed with EPA’s
proposal to find that neither the CAA nor the Agency’s PSD regulations
require that EPA’s grant of a waiver of preemption to state standards
under section 209 of the CAA result in the application of the PSD
program to pollutants subject to those state standards.  These
commenters agreed that the Agency’s decision to grant a section 209
waiver to the state of California to establish its own GHG emission
standards for new motor vehicles does not trigger PSD requirements for
GHGs.  While two commenters disagreed with that proposal, EPA has not
been persuaded to change its proposed position based on these comments,
as explained below.

Twenty-seven industry commenters (0050, 0051, 0053, 0056, 0059, 0065,
0067, 0068, 0070, 0071, 0073, 0074, 0076, 0079, 0081, 0083, 0085, 0086,
0089, 0090, 0096, 0097, 0105, 0106/0107, 0108, 0109, 0118) and two
state/local agency association (0058, 102) agree with EPA’s position
that a decision to grant a CAA section 209 waiver to the State of
California to adopt and enforce establish GHG emission standards for new
motor does not trigger PSD requirements for GHGs.  Most of the industry
commenters state that California standards are not regulations under the
CAA, and therefore do not trigger PSD for pollutants regulated under
California standards.

Eight of the industry commenters (0067, 0083, 0089, 0090, 0096,
0106/0107, 0108, 0109) expressly concur with EPA’s analysis and
conclusions regarding this issue as presented in the proposed PSD
Interpretation.  One of these commenters (0089) also noted that his
organization had submitted detailed comments on this issue in comments
on EPA’s proposed reversal of its 2008 denial of California’s
request for a section 209 waiver to enforce state regulatory limits on
GHG emissions from new motor vehicles, which can be found in Docket ID
No. EPA-HQ-OAR-2006-0173-8960.1.

One industry commenter (0085) supports EPA’s reasoning and added that
it is well-established that if Congress intends to accord a state law
the status of a federal law (or allow an agency like EPA to do so), it
must state its intentions clearly.  The commenter (0085) asserts that
Congress made no such plain statement here; therefore section 209(b) of
the Act does not convert an EPA-approved state emissions standard into
federal law.

One industry commenter (0118) and one commenter representing several
groups of companies  (industry) (0086) agrees with EPA’s position that
a decision to grant a CAA section 209 waiver to the State of California
to establish GHG emission standards for new motor does not trigger PSD
requirements for GHGs.  This commenter provides detailed analyses of the
statutory text and Congressional intent to support EPA’s position.

  SEQ CHAPTER \h \r 1 One industry commenter (0105) that supports
EPA’s preferred interpretation of “subject to regulation” states
that the granting of a section 209 waiver allows a state to develop its
own regulations, but does not in itself regulate any pollutant.

	One industry commenter (0107) supports the reasoning EPA provided when
rejecting the SIP interpretation in the proposal.  The commenter added
that this was a state choice and for the same reasons that Delaware’s
SIP particulars do not establish that a pollutant is subject to federal
regulation, California law and policy does not extend to other
jurisdictions.  The industry commenter (0107) asserts that under our
federalist system, not only may a state regulate a pollutant that is not
regulated elsewhere in the country under its autonomous authority, but
the provision of the CAA allowing EPA to grant a waiver from a national
vehicle emissions program to California does not subject other sources
to a national emission control requirement.

A couple of the industry commenters (0050, 0070) opine that granting a
waiver merely removes a barrier to allowing a state to set its own
standard in a particular area, and only applies in and to the state that
requests it, and should not be construed as applying or creating a
federal standard.

One industry commenter (0079) states that EPA’s decision to grant a
CAA section 209 waiver to the State of California to establish GHG
emission standards for new motor does not trigger nation-wide PSD
requirements for GHGs for the same reasons that adoption of such a
standard in a state SIP does not trigger those requirements.

One commenter (0097) states that regulation upon issuance of a section
209 waiver is inappropriate because the granting of a waiver does not
establish any federal emission standards or other federal requirement,
and the action of one state or political jurisdiction should not direct
the actions of other states or jurisdictions.

One state/local agency association (0058) notes that CAA section
209(b)(3) provides that where a state is subject to rules which have
been granted a waiver, “compliance with such State standards shall be
treated as compliance with applicable Federal standards for purposes of
this subchapter,” but does not say that such state standards actually
become the federal standards, which would have been easy to say had it
been Congress’s intent.  The commenter (0058) adds that a contrary
interpretation would mean that California had the power to dictate what
pollutants are subject to PSD throughout the entire nation, which could
not have been the intent of Congress in adopting the waiver provision.

One commenter (0101) notes several instances that support GHGs as
already being “subject to regulation,” including EPA’s
authorization for California to implement its own CO2 emissions
limitations under section 209(b) of the Act, 42 U.S.C. §7509(b).  See
California State Motor Vehicle Pollution Control Standards; Notice of
Decision Granting a Waiver of CAA Preemption for California’s 2009 and
Subsequent Model Year Greenhouse Gas Emission Standards for New Motor
Vehicles;  74 FR at 32744 (July 8, 2009).  The commenter argues that
this authorization immediately allowed California and 10 other states to
“regulate” CO2 under the Act.  In this case, “regulation”
entails not only the control, but the drastic curtailment of CO2
emissions.  The commenter (0101) also argues that throughout years of
litigation, EPA has vehemently insisted that California is prohibited
from controlling GHG emissions unless EPA first issues a
“regulation” (the waiver) permitting those emissions controls.  This
commenter states that EPA has now issued the waiver, and thus stopped
claiming, as it did in the proposed reconsideration notice, that it has
not actually controlled these emissions.

  SEQ CHAPTER \h \r 1 Another environmental organization commenter
(0099) contends that even under the “actual control” theory, a
waiver under section 209 triggers BACT.  The EPA authorized the state of
California to implement its motor vehicle GHG emission standards
pursuant to section 209(b) of the CAA, 42 U.S.C. §7543(b), on July 8,
2009.  See 74 FR 32744.  As a result, CO2 was immediately subject to
emission limits not only in California, but also in ten of the 14 other
states that have imposed these same standards pursuant to their
independent authority under Section 177 of the Act, 42 U.S.C. §7507.
Therefore, according to the commenter, even under EPA’s unduly narrow
interpretation of the phrase “subject to regulation” in CAA section
165(a)(4) to mean “subject to actual control of emissions,” CO2 is
now “subject to regulation” and, accordingly, CO2 emissions from
major emitting facilities are now unambiguously subject to BACT.

The commenter (0099) adds that two federal courts have found that these
very CO2 emission limits are indeed federal CAA standards (citations
provided with comment).  When confronted with these two decisions, EPA
turns again to its touchstone of congressional confusion, opining that
what those courts actually held was that Congress intended that such
standards be federal regulations under the CAA for purposes of Energy
Policy and Conservation Act, but nonetheless they remain state standards
for purpose of the CAA.  See 74 FR 51544 n. 7.  EPA has made its
reluctance to have states determine what additional pollutants -- even
ones subject to “actual control” -- are “subject to regulation”
clear in its discussion of the Delaware SIP.  Id. at 51542-43.  But
EPA’s reluctance should not stand in the way of clear congressional
intent in the case of California’s emission standards.  In 1970,
Congress specifically carved out a regulatory role for California
vehicle emission standards under the CAA, and over the years has
endorsed and expanded that role by allowing other states to adopt
California standards. Given how Congress has enshrined this role in the
Act, it is hard to see how pollutants regulated under these provisions
are somehow not regulated “under the Act.”  (Even more telling is
the fact that each time California has chosen to regulate a pollutant
under this provision, EPA has followed suit. (e.g., for carbon monoxide
(CO), Nitrogen Oxide (NOx), hydrocarbons, and evaporative emissions),
the exact same scenario as with CO2.  The commenter adds that apropos of
these specific standards, EPA’s position is doubly unfounded, because
these standards are an integral part of EPA’s own proposed GHG vehicle
emission standards.  In fact, by agreement between California and EPA,
EPA’s has proposed regulations that explicitly incorporate these
standards in order to create “a single, nationwide program to reduce
light duty vehicle GHG emissions.” See 74 FR 49460.  Commenter (0091)
concludes that EPA should interpret pollutants “subject to
regulation” in both CAA §165(a)(4) and 40 CFR 52.21(b)(50)(iv) (a) to
include pollutants that are regulated by California and other states
pursuant to §§177 and 209(b) of the CAA.

	Response:

EPA is affirming its position that an Agency decision to grant a waiver
to a state under section 209 of the CAA does not make the PSD program
applicable to pollutants that may be regulated under state authority
following a grant of such a waiver.  For the reasons discussed below,
the granting of a waiver does not make the pollutants that are regulated
by a state after obtaining a section 209 waiver into pollutants
regulated under the CAA.  Furthermore, EPA is also affirming the
position that PSD requirements are not applicable to a pollutant in all
states when a handful of states besides the one obtaining the waiver
adopt identical standards under section 177 of the CAA that are then
approved into state SIPs by EPA.  EPA agrees with the majority of
commenters on this issue that this final interpretation is consistent
with the statutory and regulatory structure of the waiver program and is
also consistent with the position that we previously explained to
Congress.  As the Administrator stated last year, “a decision to grant
a waiver under section 209 of the Act removes the preemption of state
law otherwise imposed by the Act.  Such a decision is fundamentally
different from the decisions to establish requirements under the CAA
that the Agency and the [EAB] have considered in interpreting the
provisions governing the applicability of the PSD program.”  Letter
from Lisa P. Jackson, EPA Administrator, to Senator James M. Inhofe
(March 17, 2009).

With regard to the commenters that disagreed with EPA’s proposed
position on the section 209 waiver provisions, and assert that EPA’s
granting of the waiver results in “actual control,” EPA has not been
persuaded to change its proposed position based on these comments. EPA
does not disagree that the regulations promulgated by the state pursuant
to the waiver will require control of emissions and thus constitute
“regulation” of GHGs under the meaning applied by EPA.  However, the
principal issue here is whether this regulation occurs under the
authority of the Clean Air Act (i.e., “under the Act.”).  As
explained in our reconsideration notice, a waiver granted under CAA
section 209(b)(1) simply removes the prohibition found in section 209(a)
that forbids states from adopting or enforcing their own standards
relating to control of emissions from new motor vehicles or new motor
vehicle engines.  Thus, the grant of the waiver does not lead to
regulation “under the Act” because it simply allows California to
exercise the same authority to adopt and enforce state emissions
standards for new motor vehicles that California could have exercised
without the initial prohibition in section 209(a).

Consistent with a number of the comments that support our position and
reasoning with regard to the section 209 waiver, we note that a waiver
constitutes a withdrawal of federal preemption that allows a state to
develop its own state standards to regulate vehicle emissions; the
waiver does not transform the pollutants regulated by these state
standards into pollutants regulated under the CAA for purpose of
sections 165 and 169.  As a number of the comments summarized above
note, there is nothing in the legislative history that supports a
conclusion that Congress intended section 209 waivers to result in
application of PSD requirements. The opposing comments have not
convincingly articulated a mechanism through which EPA’s action
granting the waiver in fact requires control of emissions (as opposed to
the states action under state law).  If EPA granted the waiver alone and
the state ultimately decided not to implement its regulation, there
would be no control requirement in effect under the CAA.

As we explained in our reconsideration notice, we also find it
instructive that enforcement of any emission standard by the State after
we grant a section 209 waiver would occur pursuant to state enforcement
authority, not federal authority.  EPA would continue to enforce the
federal emission standards we promulgate under section 202. EPA does not
enforce the state standard.  EPA only conducts testing to determine
compliance with the federal standards promulgated by EPA, and any
enforcement would be for violation of EPA standards, not the state
standards.  As noted in some of the comments, CAA section 209(b)(3)
provides that where a state has adopted standards that have been granted
a waiver “compliance with such State standards shall be treated as
compliance with applicable Federal standards for purposes of this
subchapter,” but does not say that such state standards actually
become EPA standards.  A review of the relevant legislative history
reveals nothing that would indicate that Congress intended for such
state standards to generally become EPA standards under the CAA when it
gave EPA the authority to grant a section 209 waiver, especially in
light of the fact that if a manufacturer fails to comply with a state
standard adopted pursuant to a section 209 waiver, EPA only has
authority to bring an enforcement action if the EPA standards are
violated.  Simply put, while compliance with a state standard adopted
pursuant to a section 209 waiver may be treated as compliance with the
EPA standard, violation of the state standard is not enough to show
violation of the EPA standard.  Accordingly, we find the absence of
legislative history supporting the contrary position and the language in
section 209(b)(3) instructive, as they indicate that Congress clearly
recognized the co-existence of the EPA and state standards.  This shows
Congress did not intend that state regulations replace, or transform
state standards into EPA regulations “under the Act.”

Contrary to the commenter’s assertions, this position is also
consistent with the two federal court decisions noted in the comments.
As EPA explained in the preamble to the proposed reconsideration, these
Courts did not examine whether California standards were EPA standards
under the specific provisions of the CAA.  Rather, those decisions
turned on an interpretation of the corporate average fuel economy (CAFE)
standard setting and preemption provisions found in the Energy Policy
and Conservation Act (EPCA).  These courts determined that the
California GHG emissions standards are a type of “other motor vehicle
standards of the Government” as that term is used in EPCA such that
NHTSA had to consider the effect of these state standards on fuel
economy in determining the appropriate CAFE standard.  The Court relied
on legislative history indicating Congress specifically intended to
include California emissions standards in this EPCA provision for
setting CAFE standards, and NHTSA had historically treated California
emissions standards as included in this provision.  Based on this
legislative history and past practice, the Court concluded that
California’s GHG emissions standards are not included in the scope of
EPCA’s preemption provision.  Nothing in the comments has persuaded
EPA to change its position that these determinations apply only to these
EPCA preemption provisions and do not apply to an interpretation of very
different provisions, sections 165 and 169 of the CAA.  EPA continues to
believe that these courts’ interpretations of an EPCA provision did
not change the California standards into EPA standards under the CAA
regulatory program, and thus should not trigger PSD permitting.

It is important to note that in this action EPA is not interpreting
EPCA, the standard setting or preemption provisions of EPCA, or the
interplay between GHG standards adopted by EPA under section 202(a) of
the CAA, state GHG standards that receive a waiver under section 209(b)
of the CAA, and consideration by NHTSA of “other motor vehicle
standards of the Government” under EPCA.  While those issues were
before the District Courts discussed by commenters, EPA is interpreting
a different and separate provision, section 165, and the relationship of
that specific CAA provision and state GHG standards that receive a
waiver under CAA section 209(b).  That is a very different issue than
the EPCA issues before the District Courts, and EPA is not in any way
intending to imply or indicate that the interpretation announced today
is based on or is in any way related to the very different issues
considered in those District Court cases.

Moreover, EPA is not aware of any position in previous litigation that
is inconsistent with this position, and the commenter fails to site any
specific litigation, statements, or positions to the contrary.  While
EPA agrees that it was required to grant the section 209 waiver before
standards regulating GHGs emissions from new motor vehicles could be
enforced in California, EPA did not assert that the grant of such a
waiver would constitute “regulation under the Act” or impose control
of GHG emissions pursuant to federal emissions standards.  Rather, as
explained above, EPA’s grant of the section 209 waiver simply removed
a federal prohibition and thereby allowed California to impose state
regulations that control GHG emissions pursuant to state law.

Finally, EPA finds no merit in commenter’s assertion that GHGs are
clearly “subject to regulation” as a matter of the federal PSD
program after the grant of the section 209 waiver because the California
standards are an integral part of EPA’s own proposed GHG emission
standards for light duty vehicles (LDV) or because there is an asserted
agreement between EPA and California regarding such integration.  At the
outset, the “agreement” to which the commenter is referring are
several individual commitments made by various vehicle manufacturers,
trade associations, and California that are conditional in nature.
There is no “agreement” between these parties.  Instead each of
these commitment letters states the intentions of the signatory and
states that if certain things occur then they will take certain actions.
 Many of the conditions relate to future actions that were under
consideration by EPA, such as the then pending reconsideration of the
California waiver and EPA’s intention to propose GHG standards for
LDV.  EPA made no “commitments” or “agreement” and had no
obligation to take any action.  Instead EPA announced that it planned to
conduct a notice and comment rulemaking proposing GHG emissions from
LDV.  The various parties announced their support for such a proposed
rule, and their intention to take various actions if EPA in fact
finalized such GHG standards.  Nothing in the actions by these various
parties somehow transformed or changed the legal effect of a waiver of
emissions standards under section 209.

Moreover, EPA has not incorporated California’s GHG standards into our
proposed LDV Rule.  EPA’s proposed standards are in fact very
different from the California standards, and do not incorporate or
duplicate California’s regulations.  EPA did not propose to adopt the
California standards as federal standards in the LDV Rule.  EPA’s
actions in adopting such a  LDV Rule  would not have any relevance to
whether the prior grant of the 209 waiver made GHG “subject to
regulation” under federal law.  In fact, promulgation of an EPA
standard in the LDV Rule would itself establish a federal
“regulation” of GHG emissions under the CAA, which was not achieved
through issuance of the waiver.

Furthermore, as explained in the proposed LDV Rule, once EPA’s rule is
promulgated, California will make a final decision on whether it will
accept a manufacturer’s compliance with the federal GHG standards as
compliance with the California standards.  California’s acceptance of
this compliance approach under California’s regulations is not because
California’s standards are incorporated into the federal standards but
would be based on California’s view that the federal standards would
achieve comparable performance to the California standards.  As
discussed elsewhere in this RTC, EPA agrees that issuance of final GHG
emissions standards in a LDV Rule will make GHGs subject to regulation
under the Act.  However, we emphasize that this result would occur
regardless of whether California  was granted a section 209 waiver for
GHG regulations and regardless of  how standards and regulations in the
California state program take into account  any federal GHG standards
established in the LDV Rule.

7.2.   Adoption of California Standards by Other States

Comment:

The commenter (0099) states that the CO2 emission limits are in effect
not only in California, but also in ten other states that have also
promulgated these standards for Model Years 2009 or 2010: Connecticut,
Maine, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Rhode
Island, Vermont, and Washington.  Each of these states adopted the CO2
Emission Limits pursuant to section 177 of the CAA, 42 U.S.C. §7507,
which expressly grants other states the authority to adopt
California’s vehicle emission standards.  Commenter (0099) notes that
states have been exercising their section 177 authority for almost two
decades; the first to do so was New York, adopting California’s
original Low Emission Vehicle standards in 1992, and adds that in three
more states and the District of Columbia, these standards will come into
effect in subsequent model years.  Once incorporated into a SIP, the
commenter notes that numerous provisions authorize both EPA and citizens
to enforce such requirements, e.g., 42 U.S.C. §7413; 42 U.S.C.
§7604(a)(1), (f)(3).  Because the CO2 Emission Limits are no different
than any other vehicle emission standards that states have been adopting
and enforcing under the CAA for decades, it is clear that CO2 is now
“subject to regulation” under the CAA.

Response:

EPA has also concluded that the adoption of identical standards by
several states under section 177 does not make a pollutant covered by
those standards “subject to regulation under the Act” in all states.
 Like section 209, section 177 only grants States authority to regulate
under state authority by removing federal preemption.  Adoption of
California standards by other States does not change the fact that those
standards are still state standards enforced under state law and federal
law is approved in a SIP.  While EPA agrees that when a state adopts
alternate vehicle standards into its SIP pursuant to section 177, and
EPA approves the SIP, these standards become enforceable by EPA and
citizens under the CAA, we do not agree that this compels an
interpretation that any pollutant included in an individual state SIP
requirement becomes “subject to regulation” in all states under the
CAA.  As discussed in response to comments above, EPA rejects the theory
that a regulation of a pollutant in one or more states in an
EPA-approved implementation plan necessarily makes that pollutant
subject to regulation in all states.  Such an approach is inconsistent
with the fundamental principle of cooperative federalism embodied in the
CAA.

Chapter 8.   Timing of Regulation

EPA received many comments on the appropriate interpretation of
“subject to regulation” as it relates to the actual date by which
PSD permitting requirements will be triggered.  As discussed more fully
below (and also in Chapter 9 of this RTC), those comments suggested
trigger dates ranging from promulgation of the underlying actual control
regulation (0099) to more than two years after that event (0067, 0073).
Overall, many commenters agreed with EPA’s proposal to change from an
interpretation of “subject to regulation” under which PSD permitting
requirements would become applicable upon the  promulgation date of the
underlying “actual control” regulation to an interpretation in which
PSD requirements would become applicable on the effective date of that
regulation.  However, a majority of the commenters argued that EPA had
improperly limited the proposal of “effective date” to the end of
the 60 day review period afforded by the Congressional Review Act (CRA).
 Instead, they argued that a more natural reading of “subject to
regulation – as supported by the CAA, various policy and
implementation concerns, and the CRA itself – was that the underlying
“actual control” regulation does not become effective until it
“takes effect” for the sources affected by that regulation.

The specific basis for the various interpretations and trigger dates, as
provided for in the comments, will be discussed in more detail below.
However, we note that in arguing for a specific interpretation of the
triggering date, many commenters discussed how various implementation
concerns supported that interpretation.  Some of those concerns are
summarized below in order to provide the context in which the specific
timing interpretation comments were provided, but we primarily address
the various implementation concerns in Chapter 9 of this RTC.

8.1.   Effective Date of Control Requirements

8.1.1.   Legal analysis for the “takes effect” reading for the
effective date interpretation:

Comments:

	Eight of the industry commenters (0067, 0083, 0089, 0090, 0096,
0106/0107, 0108, 0109) agree with EPA’s statement in the proposed PSD
Interpretation that PSD requirements should not be considered to apply
to emissions of a pollutant before an actual emission control regulation
for that pollutant has become “final and effective.”  However, the
commenters believes that such a regulation would have to have become
actually effective, in the sense that actual legal obligations created
by the regulation have become currently applicable for regulated sources
and are no longer merely prospective obligations, before that regulation
could make a pollutant subject to actual control and thus be “subject
to regulation” for PSD purposes.  The commenters therefore state that
if EPA promulgates its proposed motor vehicle GHG rules in final form,
those rules could not have any PSD triggering effect before the
beginning date of the first model year to which those rules apply (i.e.,
October 1, 2011).  (A second industry commenter (0067) concurs with this
interpretation of when the motor vehicle rules should be considered to
“become effective.”)  The commenters provide an extensive legal
analysis of this issue, which is presented below.

	The industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108,
0109) state that the date a regulation becomes “final and effective”
and the date it actually “takes effect” may differ, and that the
“take effect” date may occur after the “final and effective”
date.  See Liesegang v. Sec’y of Veterans Affairs, 312 F.3d 1368,
1374-75 (Fed. Cir. 2002) (recognizing that the two dates are not
necessarily the same and stating that “[t]he ordinary meaning of
‘take effect’ is ‘[t]o be in force; go into operation’”
(quoting Black’s Law Dictionary at 1466 (7th ed. 1999)), amended on
reh’g in part on other grounds, 65 Fed. Appx. 717 (Fed. Cir. 2003).
The commenters argue that a regulation may “take effect” subsequent
to its stated “effective date” where it has been published in final
form but does not require immediate implementation by the agency or
compliance by regulated entities.  The commenters note that in this
situation, a regulated entity has no immediate compliance obligations
and cannot be held in violation of the regulation until such a legal
obligation becomes applicable to them on the “takes effect” date.
See, e.g., Natural Res. Def. Council v. Abraham, 355 F.3d 179, 201-02
(2d Cir. 2004) (“takes effect” means the point at which the “rule
becomes applicable,” a point that may not be reached until “several
years” after the final rule is issued); Liesegang, 312 F.3d at 1376
(agency must wait for rule to become operative before it can implement
it); cf. Natural Res. Def. Council v. EPA, 22 F.3d 1125, 1137-39 (D.C.
Cir. 1994) (recognizing that where a provision of the CAA (section
182(c)(3)(B)) required a program of emission controls to “take
effect” by a given date, it did not thereby require the program to
“be fully implemented” by that date).

The industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108,
0109) went on to state that under the CRA, a major rule does not
necessarily “take effect” on the date that the rule or authorizing
statute states as the “effective date.”  See Abraham, 355 F.3d at
201-02 (“take effect” under the CRA signifies when a rule becomes
applicable, even if that occurs several years after the rule is
prescribed in final form); Liesegang, 312 F.3d at 1375 (recognizing that
the CRA affects the date when a rule is operative, i.e., enforceable).

	The industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108,
0109) note that section 202(a)(2) of the CAA uses the “takes effect”
formulation, stating that a regulation under that provision “shall
take effect after such period as the Administrator finds necessary to
permit the development and application of the requisite technology,
giving appropriate consideration to the cost of compliance within such
period” (emphasis added).  Thus, the commenters believe, even if EPA
issues final motor vehicle GHG rules by the end of March 2010, those
standards would not take effect on that date or 60 days after
publication of those rules in the Federal Register because EPA is both
authorized and, given the mandatory “shall” in section 202(a)(2),
required to ensure that the rules’ requirements will not “take
effect” until after motor vehicle manufacturers have had an adequate
period of time to develop and apply the technology necessary to meet
those requirements, giving appropriate consideration to compliance costs
within that lead-time period.  See Am. Motors Corp. v. Blum, 603 F.2d
978, 981 (D.C. Cir. 1979) (EPA’s Administrator is “bound by section
202(a)(2) to allow such lead time as he finds necessary to satisfy the
requirements of section 202(a)(2).”).

	The industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107, 0108,
0109) point out that the proposed motor vehicle GHG rules do not require
actual compliance until model year 2012, which does not begin until
October 1, 2011; thus, by the very nature of EPA’s proposed motor
vehicle rules, and consistent with section 202(a)(2), the rules’
compliance obligations would begin several months later than 60 days
after the rules’ Federal Register publication date.  The commenters
(0067, 0083, 0089, 0090, 0096, 0106/0107, 0108, 0109) believe that it
would make no sense for EPA to subject stationary sources to immediate
regulation of GHG emissions, based on a regulation promulgated for
automobile manufacturers, at a time when the regulation is not yet even
operative for those primarily regulated entities.

	Based on points discussed above, the industry commenters (0067, 0083,
0089, 0090, 0096, 0106/0107, 0108, 0109) indicate that EPA should
clarify that PSD for GHGs could not be triggered by EPA’s motor
vehicle GHG rules before those rules “take effect” within the
meaning of section 202(a)(2).  The commenter states that this conclusion
not only is required by the clear implication of the PSD provisions’
“subject to regulation” language, as EPA’s statements in the
proposed PSD Interpretation reflect, but also is supported by compelling
policy reasons: major stationary sources would need time to prepare to
meet any newly applicable PSD compliance obligations in a cost-effective
way, and EPA and state permitting authorities would need time to prepare
to satisfy their permitting obligations.  Other industry commenters
(0067, 0073) concur with this policy rationale and added that the Agency
needs time to develop its own technical capability and provide guidance
to the regulated community and permitting authorities.

Response:

EPA has reviewed the federal court decisions and other arguments
presented in the comments above, and we agree that they support the idea
that the date a regulation becomes “final and effective” and the
date it actually “takes effect” may differ.  The federal court
decisions referenced in the comments that suggest the date that the
terms of a regulation become effective can take more than one form.  In
one case involving the Congressional Review Act (CRA), the United States
Court of Appeals for the Federal Circuit observed that the date a
regulation may “take effect” in accordance with the CRA is distinct
from the “effective date” of the regulation.  See Liesegang v.
Sec’y of Veterans Affairs, 312 F.3d 1368, 1374-75 (Fed. Cir. 2002),
amended on reh’g in part on other grounds, 65 Fed. Appx. 717 (Fed.
Cir. 2003).  In this opinion, the court observed that “[t]he ordinary
meaning of ‘take effect’ is ‘[t]o be in force; go into
operation.’”  Id. at 1375 (quoting Black’s Law Dictionary at 1466
(7th ed. 1999).  Based on this, the court reasoned that the CRA does not
“change the date on which the regulation becomes effective” but
rather “only affects the date when the rule becomes operative.”  Id.
 In another case, the Second Circuit Court of Appeals described a
distinction between the date a rule may “take effect” under the CRA,
the “effective date” for application of the rule to regulated
manufacturers, and the “effective date” for purposes of modifying
the CFR.  See Natural Resources Defense Council v. Abraham, 355 F.3d
179, 202 (2d Cir. 2004).

	The Office of Federal Register (OFR) uses the term “effective date”
to describe the date that amendments in a rulemaking document affect the
current CFR.  See Federal Register Document Drafting Handbook, at p.
2-10 (Oct. 10, 1998).  However, OFR draws a contrast between such a date
and the compliance or applicability date of a rule, which is described
as “the date that the affected person must start following the
rule.”  Id. at 2-11.  Thus, the “effective date” of a regulation
is commonly used to describe the date by which a provision in the CFR is
enacted as law, but it is not necessarily the same as the time when
provision enacted in the CFR is operative on the regulated activity or
entity.  The latter may be described as the “compliance,”
“applicability,” or “takes effect” date.

The terms of the CAA also recognize a similar distinction in some
instances.  Section 112(i)(3)(A) of the CAA provides that “after the
effective date of any emissions standard, limitation or regulation
promulgated under this section and applicable to a source, no person may
operate such source in violation of such standard, limitation, or
regulation except, in the case of an existing source, the Administrator
shall establish a compliance date or dates for each category or
subcategory of existing sources, which shall provide for compliance as
expeditiously as practicable, but in no event later than 3 years after
the effective date of such standard.”  Another example is section 202
of the Act, which is discussed in more detail in section 9.2 below.

Another formulation may be found in Section 553(c) of the APA (5 U.S.C.
§553(c)), which provides, with some exceptions, that “[t]he required
publication or service of a substantive rule shall be made not less than
30 days before its effective date.”  The APA does not define the term
“effective date” or make precisely clear whether it is referring to
the date a regulation has the force of law or the date by which a
regulatory requirement applies to a regulated entity or activity.  The
APA also separately recognizes the concept of finality of Agency action
for purposes of judicial review.  See 5 U.S.C. §704.

In the October 7, 2009 notice, EPA did not clearly distinguish between
the various forms of the date when a regulatory requirement may become
effective.  One commenter observed that the EPA analysis in the proposed
reconsideration appeared to blur the distinction between the
“effective date” set by EPA and the date that Congress allows a
regulation to become effective under the CRA.  EPA in fact discussed all
of these concepts in its notice, with part of the discussion focused on
the date a regulation becomes “final” and “effective” and a part
on when a regulation may “take effect” under the CRA.  EPA viewed
these forms of the date when a regulation becomes “effective” to be
essentially the same, but the case law suggests that administrative
agencies do not necessarily need to harmonize the date that regulatory
requirements take effect with the “effective date” of a regulation,
meaning the date a regulation has the force of law and amends the CFR.
Since these are distinct concepts, the effective date of a regulation
for purposes of amending the CFR may precede the date when a regulatory
requirement “takes effect” or when a regulated entity must comply
with a regulatory requirement.  A regulation may “take effect”
subsequent to its stated “effective date” where it has been
published in final form but does not require immediate implementation by
the agency or compliance by regulated entities.

The key issue raised by EPA in the October 7, 2009 notice was
determining which date should be determined by EPA to be the date when a
pollutant becomes “subject to regulation” and, thus, the date when
the requirements of the PSD permitting program apply to that pollutant.
In recognition of the distinction between the “effective date” of
the regulation for purposes of amending the CFR and the point at which a
regulatory restriction may “take effect,” EPA has considered whether
it is permissible to construe section 165(a)(4) and 169(3) of the CAA to
mean that a pollutant becomes “subject to regulation” at the point
that a regulatory restriction or control “takes effect.”  In the
October notice, EPA observed that the use of “subject to” in the Act
suggests that PSD requirements are intended to be triggered when those
standards become effective for the pollutant.  We also said that no
party is required to comply with a regulation until it has become final
and effective.  Prior to that date, an activity covered by a rule is not
in the ordinary sense “subject to” any regulation.  Regardless of
whether one interprets regulation to mean monitoring or actual control
of emissions, prior to the effective date of a rule there is no
regulatory requirement to monitor or control emissions.

The same reasoning applies to the date that a regulation “takes
effect,” as that term is used in the judicial decisions described
above.  Regulated entities are not required to comply with a regulatory
requirement until it takes effect.  Prior to the date a regulatory
requirement takes effect, the activity covered by a rule is not in the
ordinary sense subject to any regulation.

As discussed in the PSD Interpretive Memo, as used in the context of the
PSD provisions in EPA regulations and the CAA, EPA interprets the term
“regulation” in the context of sections 165(a)(4) and 169 of the CAA
to mean the act or process of controlling or restricting an activity.
This interpretation applies a common meaning of the term regulation
reflected in dictionaries.

Thus, EPA agrees with the commenters above that the term “subject to
regulation” used in both the CAA and EPA’s regulations may be
construed to mean the point at which a requirement to control a
pollutant takes effect.  The CAA does not necessarily preclude
construing a pollutant to become subject to regulation upon the
promulgation date or the date that a regulation becomes final and
effective for purposes of amending the CFR or judicial review.  However,
EPA has been persuaded by public comments that the phrase “subject to
regulation” may also be interpreted to mean the date by which a
control requirement takes effect.

Indeed, EPA has concluded that the latter interpretation is more
consistent with the actual control interpretation reflected in the PSD
Interpretive Memo.  As one commenter observed, a regulation would have
to have become actually effective, in the sense that actual legal
obligations created by the regulation have become currently applicable
for regulated entities and are no longer merely prospective obligations,
before that regulation could make a pollutant subject to actual control.
 Another commenter noted that a regulated entity has no immediate
compliance obligations and cannot be held in violation of the regulation
until a legal obligation becomes applicable to them on the “takes
effect” date.  Thus, based on this reasoning, EPA has decided that it
will construe the point at which a pollutant becomes “subject to
regulation” within the meaning of section 52.21(b)(50)(iv) of EPA’s
regulations to be when a control or restriction is operative on the
activity regulated.  EPA agrees with commenters that there is generally
no legally enforceable obligation to control a pollutant when a
regulation is promulgated or, in some instances, even when a regulation
becomes effective for some purposes.

Thus, in this final action, EPA chooses to adopt an interpretation of
“subject to regulation” in section 52.21(b)(50)(iv) under which a
pollutant becomes a “regulated NSR pollutant at the time when a
control or restriction on emissions of the pollutant takes effect or
becomes operative on the regulated activity.

EPA has also concluded that it is appropriate to extend the reasoning of
this interpretation across all parts of the definition of the term
“regulated NSR pollutant.”  The reasoning described above is equally
applicable to the regulation of additional pollutants under the specific
sections of the Act delineated in the first three parts of the
definition of “regulated NSR pollutant.”

8.1.2.   General comments on the effective date interpretation:

Comment:

Seventeen commenters (0050, 0051, 0053, 0064, 0067, 0069, 0070, 0074,
0081, 0083, 0089, 0090, 0096, 0105, 0106/0107, 0108, 0109) believe the
interpretation of “subject to regulation” is most naturally
interpreted as when a regulation becomes “final and effective”, and
that entities should thus be subject to the proposed regulation no
earlier than the date by which the underlying “actual control”
regulations apply to sources covered by the regulations (i.e., for the
GHG Light Duty Vehicle Rule, this is model year 2012 [the first model
year to which the regulation applies]).

Ten commenters (0067, 0071, 0083, 0089, 0090, 0096, 0106/0107, 0108,
0109, 0110) state that the time frame for “final and effective” and
when a regulation actually “takes effect” may be different, and that
the “takes effect” date may occur well after the “final and
effective” date.  Eight of these commenters (0067, 0083, 0089, 0090,
0096, 0106/0107, 0108, 0109) suggest that EPA confirm that PSD
requirements do not begin to apply before the latter of a) the date when
the actual control requirement is “final and effective” or 2) the
date when the control requirement “takes effect”, i.e., the
requirement becomes operative with current applicable compliance
obligations for the regulated sources.

Two commenters (0080, 0100) disagreed with EPA’s proposed
interpretation that a pollutant become “subject to regulation” upon
the CRA effective date of the “actual control” regulation, citing
policy and implementation concerns.  One commenter (0080) states that
EPA’s interpretation of when the LDV Rule is final and effective
(i.e., 60 days after promulgation as per the Congressional Review Act)
is wrong because it will result in stationary sources reducing GHG
emissions almost a year and a half in advance of when motor vehicles
begin reducing emissions.

Another commenter (0100) disagrees with EPA’s decision to make GHGs
“subject to regulation” upon the effective date of the proposed LDV
Rule.  The commenter (0100) states that by the time the tailpipe
standards are adopted (presumably March 2010), EPA will not have been
able to decide that PSD review for stationary sources of GHG is
appropriate, as no information has been presented by EPA on this issue
(such as available BACT for GHGs), nor has EPA provided an opportunity
for public comment on the costs and benefits of regulating GHGs through
the permit process.  The commenter (0100) further asserts that including
GHG emissions in the PSD permit program will be highly disruptive to
state permitting programs.

One industry commenter (0050) states that the appropriate timing for
application of PSD/title V should be no earlier than the effective date
that the regulation is applied.  To that extent, the commenter agrees
with EPA that “the term ‘subject to regulation’ is most naturally
interpreted to mean that PSD requirements apply when the regulation
addressing a pollutant becomes final and effective.”  The commenter
notes however, that a regulation becoming “final” and becoming
“effective” can mean two different dates.  A regulation can become
“effective” 60 days after publication in the Federal Register.  The
Congressional Review Act (5 U.S.C. 801 et seq) (CRA) allows Congress 60
days to review major regulations and to disapprove them within that
time.  Regulations not acted upon by Congress within that time can go
into effect, and in a great many cases the end of the review period is
the effective date.  Thus, the commenter argues that the interpretation
of “subject to regulation” should be a regulation that is “final
and effective” and not one in which the review period under the CRA
has ended.  The commenter (0050) also states that the proposed rule
would be “final” after the CRA period has ended and “effective,”
at the earliest, in the fall of 2011, as the Administrator states that
model year 2012 is the time when it is “necessary to permit the
development and application of the requisite technology, giving
appropriate consideration to the cost of compliance within such a
period.”

One industry commenter (0085) believes that an air pollutant should not
become “subject to regulation” for purposes of the PSD program until
the regulation providing actual control of emissions become effective
and enforceable.  The commenter states that this date would be with the
MY 2012 compliance date for the section 202 regulations, not the
issuance of those regulations.  The commenter (0085) states that just as
manufacturers need time to produce compliant cars, stationary sources
need time to prepare for applicability.  The commenter (0085) points out
that many facilities have applications for PSD permits pending at this
time, and such sources are largely at the mercy of the resources
available to the state permitting authority in terms of the timing of
permit issuance.  The commenter (0085) holds that it is unreasonable to
impose the PSD BACT requirements suddenly upon issuance of a wholly
separate regulation, such as the GHG motor vehicles regulations.  If EPA
adopts an interpretation that applies upon the date the underlying
regulation is effective and enforceable, the commenter (0085) believes
that in most cases, facilities will have sufficient notice and time for
compliance with PSD requirements.

The commenter representing several groups of companies (0086) states
that EPA’s language – about when rules become “final and
effective” – dovetails with the lead time requirement in section
202(a)(2), that tailpipe regulations do not “take effect” until the
model year to which the standards apply.  The commenter (0086) believes
that this interpretation is also dictated by policy considerations,
i.e., to delay implementation of the PSD requirements for GHGs to
account for administrative difficulties (as was done for PM2.5 as a
result of adequate modeling techniques).

A state agency commenter (0091), while agreeing that EPA has the leeway
to interpret “subject to regulation” as the effective date (not the
promulgation date), believes other more fitting interpretation options
exist.  In particular, the commenter believes EPA could also interpret
the full implementation date, or the date controls must be in place and
operational as a trigger for PSD applicability.  According to the
commenter, this could mean the PSD applicability date could be extended
15-19 months for the proposed mobile source tailpipe standards, and for
several years in the case of an NSPS, giving states the time they need
to adjust state regulations, statutes if needed, and fee structures, and
also give time for cost effective GHG control technologies to be
explored and put in practice.  This commenter also believes EPA can use
exemptions and approaches similar to the 1992 exemption for sources
subject to the risk management program made in the title V program (see
40 CFR 70.3(a)(3)), and the clarification in the recent Mandatory
Reporting of Greenhouse Gases rule preamble (74 FR 56288) that this
monitoring and reporting requirement is not an “applicable
requirement” under title V, to lessen the PSD and title V permitting
burden from regulating GHG, by excluding or exempting stationary sources
from being affected by the promulgation of the “tailpipe rule.”
This commenter notes that EPA has a long history of giving states and
the regulated community time to implement resource intensive programs,
citing examples such as the three years given to states to develop and
submit title V operating programs for approval, the three years given to
SIP approved states in 2008 to develop state rules and begin
implementing the PM2.5 NSR Implementation rule, and the NESHAP program
where existing sources are given up to three years to comply with a
control standard.  The commenter suggests EPA could take a similar
approach for GHG emissions by issuing an interim policy (similar to the
1997 PM10 surrogate policy for PM2.5) that would temporarily define the
“presumptive BACT” for GHG emissions from combustion sources while
EPA takes the time to develop essential GHG guidance through rulemaking
and state make adjustments to their state rule.

  SEQ CHAPTER \h \r 1 An industry commenter (0105) states that the
timing of PSD being triggered should be based on when the control
regulation first actually controls emissions of the pollutant.  In
addition to the EPA view in Federal Register notice EPA that the
regulation must be final and effective, the commenter states that
determining the timing of PSD being triggered should also be based upon
the language at 40 CFR 52.21(b) (50) (iv):  “[a]ny pollutant that
otherwise is subject to regulation under the Act…”  Expanding on the
concept that a control regulation must be final and effective, the
commenter (105) suggests that EPA should also consider a more flexible
interpretation and make clear that PSD would be triggered at the time
when the rule first actually controls emissions of the pollutant, and a
pollutant should not be considered subject to a regulation until the
time that the rule actually controls the pollutant of concern.  This
commenter notes that depending on the specific rule in question, this
may or may not coincide with the 60 day review period for congressional
review, and in the case of EPA’s proposed mobile source rule, this
date would coincide with the production of model year 2012 vehicles that
are subject to the EPA’s mobile source rules.

One industry commenter (0108) believes that the applicability
interpretation (when the LDVR takes effect) would not lead to an
inappropriate delay because if EPA actually decided to regulate GHG
emissions from major stationary sources directly, rather than through
the PSD program, it presumably would allow these sources more than 60
days to comply following publication of a final rule, given the inherent
complexities that would be involved in terms of implementation and
compliance.  Consequently, the commenter (0108) asserts that EPA should
either amend its proposed interpretation to use the language “takes
effect” rather than “final and effective,” or use both and clarify
that the PSD program begins to apply with the later of the two periods,
which would resolve the issue for regulations not only under section 202
of the CAA but also for other CAA provisions where EPA could decide to
postpone the date of compliance beyond the date of the regulation’s
publication.

One of the industry commenters (0109) states that the “takes effect”
interpretation is within EPA’s discretion under the CAA, would provide
more certainty, and would provide more time for permitting authorities
to structure their programs than EPA’s proposed interpretation.  The
commenter (0109) also adds that “subject to regulation” should also
be defined as when the regulation providing actual control of emissions
is effective and enforceable.  The commenter (0109) states that this
definition provides more certainty and allows more time for regulating
agencies to structure (or re-structure) their permitting programs.

One industry commenter (0110) urges EPA to amend its proposed
interpretation to clarify that PSD program requirements begin to apply
when GHG regulations “take effect” and not automatically when the
regulations become “final and effective” 60 days after publication
of the rule.  This will allow time for EPA to resolve the significant
PSD issues that will be created for major stationary sources if the
motor vehicle regulations are finalized.  The EPA has not adequately
analyzed the implications the motor vehicle proposal and the proposed
PSD tailoring rule will have on major stationary sources.  Adopting an
interpretation that allows for the most time and flexibility for all
parties is reasonable and consistent with key policy goals.

	Response:

As discussed in response to the legal comments above, we are persuaded
that EPA should interpret that time that a pollutant becomes a
“regulated NSR pollutant” under section 52.21(b)(50)(iv) to be the
time when a control or restriction on emissions of the pollutant takes
effect or becomes operative on the regulated activity.  The general
comments summarized above provide additional support for that
interpretation.  EPA has reviewed these general comments in light of
that interpretation and finds no issues raised in these comments that
must be addressed through further refinement of that interpretation,
although we do believe a few points of clarification are necessary.

	A number of the comments argue that the “takes effect”
interpretation is appropriate because it will allow for more time to
prepare for implementation of the PSD program for newly regulated
pollutants, including GHGs.  As discussed in response to comments in
section 9.1(a) above, we do not construe the language of the CAA to
provide the Agency with the discretion to choose a date when PSD program
requirements apply based on the implementation considerations for the
PSD program.  Accordingly, we are re-iterating that our adoption of this
interpretation is based on the specific language of the PSD provisions
and structure of the PSD program as provided for in the CAA and our
corresponding implementing regulations, as described above, and not on
the implementation concerns noted in these comments.

	With regard to the comment that “subject to regulation” should also
be defined as when the regulation providing actual control of emissions
is effective and enforceable, we note that there is generally no legally
enforceable obligation to control a pollutant when a regulation is
promulgated or, in some instances, even when a regulation becomes
effective for some purposes.  Consistent with our interpretation, the
enforceable obligation to control a newly regulated pollutant only
exists when the regulation of the pollutant takes effect or becomes
operative on the regulated activity.  Until that time, regulated
entities are generally not required to comply with the control
requirements and thus cannot be found in violation of those
requirements.  See generally, CAA section 113(a)(3) (prohibiting
violation of a “requirement” of a rule).

To the extent that the comments above have suggested specific
interpretations of when regulations “take effect” under the language
of CAA section 202 or have provided specific dates upon which they
believe control requirements for GHG emissions would “take effect”
under the proposed LDV Rule, EPA provides a response to these specific
section 202 timing issue in Chapter 9 of this RTC.

8.2.   Compliance Date

Comments:

Three commenters (0051, 0053, 0074) state that PSD should not become
applicable to a pollutant until controls are actually required by an EPA
regulation, i.e., model year 2012 for the proposed rule.  The three
commenters (0051, 0053, 0074) refer to section 202 regulations, which do
not take effect immediately upon promulgation, although the PSD
Interpretive Memo states that “a pollutant becomes a regulated NSR
pollutant at an earlier point upon promulgation of a regulation that
requires actual control of emissions,” similarly to the proposed PSD
tailoring rule. The two commenters (0051, 0053) state that to use this
interpretation of “subject to regulation” would “directly conflict
with the [CRA]”.  The commenters (0051, 0053) state that “subject to
regulation” is most naturally interpreted to mean that PSD
requirements apply when a regulation becomes “final and effective”,
which in the case of the proposed Light Duty Vehicle (LDV) rule, is the
first compliance date for model year 2012 standards.  Three commenters
(0051, 0053, 0081) also state precedence in delaying implementation of
PSD requirements, such as enforcement of BACT requirements for PM2.5 due
to the lack of adequate modeling techniques.

Other industry commenters (0069, 0096, 0106/0107) state that that EPA
should use its discretion to determine that a pollutant becomes
“subject to regulation” when the regulated entity must actually
comply with an emission limit or other emission standard for control,
not when a regulation becomes effective.  The commenters made the
following points in support of this position:

Under the CAA there is generally no legally enforceable obligation to
control a pollutant when a regulation is promulgated or even when it
becomes effective; instead, a great deal of consideration is given to
how long it will take a facility to evaluate the applicability of the
requirement, to design and engineer or purchase the equipment, to
install the equipment, and to operate the source until it shakes down
and can be tested for compliance.  It is only at that point that an
affected source becomes “subject to the regulation” in the sense
that it is legally obligated by the Act to effect “actual control.”
Therefore, consistent with EPA’s interpretation in the proposed PSD
Interpretation, a pollutant is regulated when a source must actually
comply with such regulation – not when the regulation becomes
effective for purposes of judicial review.

There are very important logistical and other policy reasons for
delaying the applicability of PSD to municipal utilities and other
sources.  The EPA is obligated to provide sources with more information
on available control technologies and provide the market a reasonable
opportunity to bring such technologies to market.  An additional 7
months to a year-and-a-half may help this nation, in a deep economic
crisis, more adequately address the technical and financial challenges
of controlling GHGs.

The EPA’s assertions regarding why the doctrines of “absurd
results” and “administrative necessity” support phasing in PSD
over 6 years compel the Administrator to delay regulation of GHGs under
the PSD program as long as is reasonable.  Unfortunately for the members
of the commenter’s association, nearly all of our cities’ electric
utilities both have the PTE greater than 25,000 tons of GHGs annually
and are small businesses that meet the Small Business Regulatory
Enforcement Fairness Act (SBREFA).  These sources need the relief that
EPA suggests that it is providing to small sources in the PSD Tailoring
Rule.  The commenter urges EPA to provide further and more effective
relief from PSD by not only interpreting the phrase “subject to
regulation” in this rulemaking to when a regulated entity must
“actually comply” with GHG emission standards, but by also deferring
regulation under the PSD program.  The commenter asks that these
comments be considered by the EPA and OMB under UMRA, Executive Order
12866, and SBREFA.

One commenter (0050) states that the proposed rule would be “final”
after the CRA period has ended and “effective,” at the earliest, in
the fall of 2011, as the Administrator states that model year 2012 is
the time when it is “necessary to permit the development and
application of the requisite technology, giving appropriate
consideration to the cost of compliance within such a period.”

One commenter (0056) states there is a substantial difference between a
finding that PSD is applicable to GHGs on the “first substantive
compliance date of a regulation” and a finding that PSD is applicable
on the “effective date” of a regulation. The commenter (0056)
emphasizes that a source becomes “subject to regulation”
specifically after the “first substantive compliance date” in an
effort to provide some temporal relief to sources and allowing EPA to
provide technical and permitting assistance to sources and permitting
authorities.  The commenter (0056) also states that the Interpretation
memo on the meaning of “subject to regulation” does not need to be
re-proposed as there is adequate basis for such an interpretation in the
October 7th proposal.

One local agency commenter (0062) states that the need for more time to
facilitate implementation of the GHG Tailoring Rule for PSD and title V
requirements justifies the MY 2012 compliance date for the GHG mobile
source regulations.

One industry commenter (0076) states that in the maximum achievable
control technology (MACT) program, EPA uses the “first substantive
compliance date” for a standard to distinguish when a source may
become an area source after the effective date of a control requirement.
 This commenter asserts that the use of the “first substantive
compliance date” would be a logical way to define when “actual
control” of a pollutant occurs.

Another of the industry commenter (0080) states that interpreting
“actual control” to occur at the beginning of MY 2012 harmonizes the
requirements that will be triggered by the GHG motor vehicle rule with
the requirements that will be triggered under the PSD program.  The
industry commenter (0080) asserts that EPA’s proposed interpretation
would create the anomalous result that stationary sources would have to
begin reducing GHG emissions as much as a year-and-a-half in advance of
the time when motor vehicles begin reducing emissions, even though it is
the regulation of motor vehicles that triggers the requirements for
stationary sources.

One commenter (0088), while generally agreeing with the December 18,
2008 EPA Memorandum, states the “actual control of emissions” date
should be established by the actual compliance date of any pertinent
regulatory requirement.  The commenter states that, if this is the LDVR,
the date should be the actual implementation of the MY 2012 requirements
(in Calendar Year 2011 or 2012).

Commenters (0092, 0098) representing several groups of companies state
that EPA should adopt a more reasonable approach to the timing of PSD
applicability and conclude that PSD does not apply until the compliance
date (not the promulgation date) of a regulation requiring emission
controls.

One commenter (0097) states that while the “effective date” of a
rule is better than the promulgation date, it still does not properly
identify the date on which a pollutant is actually controlled.  Rather,
“actual control” is the first compliance date for achieving a
standard or implementation of control equipment under a formal national
rule.  Consistent with EPA, this commenter (0097) believes that this
interpretation best reflects past policy and practice, is in keeping the
structure and language of the statute and regulations and best allows
for the necessary coordination of approaches to controlling emissions of
newly identified pollutants.

One state agency commenter (0102) notes that the LDVR provides a certain
amount of time for those vehicles to come into compliance and asserts
that this compliance date also should determine the effective date that
the pollutant must be regulated under the CAA.

Two c  SEQ CHAPTER \h \r 1 ommenters (0115, 0116) encourage EPA to
maintain the interpretation that PSD permitting requirements would be
triggered only when compliance is required with a final regulation
requiring actual control of the pollutant’s emissions.

One industry commenter (0118) and one commenter representing several
groups of companies (industry) (0086) urges EPA to interpret “actual
control” as the date that a source has an actual compliance obligation
under a regulation, that is, when controls must first be in place for
the pollutant.  One of these commenters (0118) indicate that allowing
additional time after a regulation is adopted before BACT must be
determined in PSD permitting will provide a more reasonable period for
sources to identify and evaluate control options for the newly regulated
pollutant, which the commenter (0118) believes is particularly desirable
when, as is the case with GHGs, the initial regulation will require
controls that are not appropriate for stationary sources.

One industry commenter (0083) states that the CAA regulations contain
many examples where active controls are deferred for many months or
years after the effective date of a regulation.  However, the comments
did not provide any specific examples.

Response:

As discussed in response to the legal comments above, we are persuaded
that EPA should interpret that time that a pollutant becomes a
“regulated NSR pollutant” under section 52.21(b)(50)(iv) to be the
time when a control or restriction on emissions of the pollutant takes
effect or becomes operative on the regulated activity.  In so doing, we
generally note that date at which a regulation “takes effect” and
“becomes operative” is functionally equivalent to the “compliance
date” for that regulation.  As such, EPA acknowledges that the general
“compliance date” comments above provide additional support for the
interpretation we are adopting in this final action.  We have also
reviewed these general comments in light of that interpretation and find
no issues raised in these comments that must be addressed through
further refinement of that interpretation, although we do believe a few
points of clarification are necessary.

A number of comments note that under EPA’s regulatory program for HAP
pollutants, EPA uses the “first substantive compliance date” to
determine when a new MACT standard becomes applicable for the purpose of
applying an area source designation.  While our response to the legal
comments in section 8.1.1. above discussed how CAA section 112(i)(3)(A)
requires the Administrator to establish a date for compliance with a new
HAP emission standard within 3 years after the effective date of the
standard, it did not use the term “first substantive compliance
date”  because it is not contained in the language of CAA section 112.
 Rather, “first substantive compliance date” is the term EPA has
used in policy documents relating to the timing of application of
particular HAP regulatory requirements.  See Memorandum from John S.
Seitz, Director OAQPS, to Regional Air Directors, “Potential to Emit
for MACT Standards – Guidance on Timing Issues” (May 16, 1995).  As
used in this guidance, the term is equivalent to the use of “takes
effect” or “becomes operative” as used in the interpretation EPA
is adopting here.

Similar to the comments received for the “takes effect”
interpretation above, a number of the comments here argue that the
“compliance date” interpretation is appropriate because it will
allow for more time to prepare for implementation of the PSD program for
newly regulated pollutants, including GHGs.  However, our adoption of
the “takes effect”  interpretation is based on the specific language
of the PSD provisions and structure of the PSD program as provided for
in the CAA and our corresponding implementing regulations, as described
above, and not on the implementation concerns noted in these comments.

	As explained above, we agree with the comment that there is generally
no legally enforceable obligation to control a pollutant when a
regulation is promulgated or, in some instances, even when a regulation
becomes effective for some purposes.  Consistent with our
interpretation, the enforceable obligation to control a newly regulated
pollutant only exists when the regulation of the pollutant takes effect
or becomes operative on the regulated activity.  Until that time,
regulated entities are generally not required to comply with the control
requirements and thus cannot be found in violation of those
requirements.  See generally, CAA section 113(a)(3) (prohibiting
violation of a “requirement” of a rule).

To the extent that the comments above have suggested specific
interpretations of the applicable “compliance date” under the
language of CAA section 202 or have provided specific dates upon they
believe auto manufacturer would have to comply with control requirements
for GHG emissions under a final LDV Rule, EPA provides a response to
these specific section 202 timing issue in section 9.2 below.

8.3.   Promulgation Date

Comment:

  SEQ CHAPTER \h \r 1 An environmental organization commenter (0099)
claims that even under the “actual control” theory, CO2 will be
“subject to regulation” upon Federal Register publication of the
appropriate standards.  The commenter (0099) states that EPA should
interpret the phrase “subject to regulation” to mean that pollutants
become so regulated on the date of Federal Register publication of
EPA’s section 209(b) determination (for section 209(b) pollutants) or
EPA regulations.  The commenter (0099) opposes EPA’s proposal to
interpret “subject to regulation” to mean that PSD requirements
apply when the regulations addressing a particular pollutant become
final and effective, as opposed to their date of promulgation.  The
commenter (0099) argues that the reasons EPA gives for choosing
effective date are not persuasive.  First, the commenter (0099) argues
that there is no need to “harmonize” the PSD requirements with the
Congressional Review Act (CRA), because Congress has used the CRA
process exactly once to overturn a regulation.  Second, the
environmental commenters notes that EPA incorrectly finds that the
“effective date” interpretation best fits the regulatory language
describing two of the other three categories of “regulated NSR
pollutant” in 40 CFR 52.21(b)(50), because EPA’s rationale ignores
the language of section 111(b)(1)(B) of the CAA, which specifically
provides that “Standards of performance or revisions thereof shall be
effective upon promulgation.”  Thus, the commenter argues that both
the section 111 and the NAAQS regulatory categories supports the better
interpretation that a pollutant becomes “subject to regulation” upon
promulgation, not the effective date.

This environmental organization commenter (0099) also argues against a
later interpretation of the triggering date – such as “takes
effect” or compliance date – by noting that such an interpretation
would potentially postpone, for many years, PSD regulation of a
pollutant that EPA had already determined threatened health or welfare.
The commenter (0099) also notes that if the PSD regulatory requirements
are triggered at the time a source must comply with the actual control
regulations, there is no such “actual control” until the source
begins operation and emitting that pollutant, which not only adds
additional years to the delay, but there is no way for anyone else to
know when this would happen as the “actual control” status would be
known only to the operator of a single source in one state.  According
to the commenter (0099), even worse is the suggestion that the “actual
control” trigger be defined not by the imposition of such emissions
limits, but only when the source is subsequently required to demonstrate
compliance with that limit.  The commenter notes that for a stationary
source, such an interpretation would (presumably) mean when it reports
its emissions, which could easily be months or even years after it
begins operations, and for mobile sources, this would mean at the final
determination of compliance with fleet average standards may, which not
occur until several years after the close of the model year in which the
standards apply.

Response:

The regulatory language of 40 CFR 52.21(b)(50)(iv) does not specify the
exact time at which the PSD requirements should apply to pollutants in
the fourth category of the definition of “regulated NSR pollutant.”
While the PSD Interpretive Memo states that EPA interprets the language
in this definition to mean that the fourth part of the definition should
“apply to a pollutant upon promulgation of a regulation that requires
actual control of emissions,” Memo at 14, EPA proposed to modify that
interpretation in the reconsideration notice after continuing to
consider the underlying statutory requirement in the CAA and the
language in all parts of the regulatory definition more closely.  EPA
acknowledges, and the comment does not dispute, that the regulatory
language of 40 CFR 52.21(b)(50)(iv) could be interpreted to apply PSD
requirements to a newly regulated pollutant at either the date the
underlying control regulation is promulgated or the date which the
control requirement takes effect.  After considering the comments
received on this timing issue, as well as other issues and policy
concerns raised in the reconsideration notice, EPA has determined that
the term “subject to regulation” in the statute and regulation is
most naturally interpreted to mean that PSD requirements apply at the
point in time when a control or restriction that functions to limit
pollutant emissions takes effect or becomes operative to control or
restrict the regulated activity, as explained above, and nothing in the
comment has persuaded us to change that interpretation.

With regard to the comment’s first point – that harmonization of the
PSD requirements with the Congressional Review Act (CRA) is unnecessary
because Congress has only used the CRA once to overturn a regulation –
we note that the commenter only finds reliance on the CRA unpersuasive
but does not argue that such reliance is prohibited by the regulatory or
statutory language.  As explained in the response to comments provided
above, the potential for the CRA process to affect the date at which a
rule requiring control of a new pollutant becomes operative, or takes
effect, is relevant to determining when PSD requirements shall apply to
newly regulated pollutants.

With regard to the commenter’s argument that EPA incorrectly tries to
rely on the NAAQS and  NSPS categories of “regulated NSR pollutant”
found in 40 CFR 52.21(b)(50)(i) and (ii) to interpret PSD requirements
as applying at a point later than promulgation of underlying regulation
to which the new pollutant is subject, we are also unpersuaded.  We find
that the reasoning we provide in section 8.1 above in applying the
“takes effect” interpretation for timing of PSD requirements for new
pollutants “subject to regulation” under 40 CFR 52.21(b)(50)(iv) is
equally applicable to the regulation of additional pollutants under the
specific sections of the Act delineated in the first three parts of the
definition.  While the date a control requirement may take effect could
vary across sections 109, section 111, and Title VI, we do not see any
distinction in the applicability of the legal reasoning above to these
provisions of the CAA.  There should be less variability among rules
promulgated under the same statutory section, so EPA does not expect
that it will be necessary for EPA to identify the date that a new
pollutant becomes subject to regulation each time EPA regulates a new
pollutant in a NAAQS or NSPS.  EPA can more readily identify the
specific dates when controls under such rules take effect.

With specific regard to the NSPS concerns raised in the comments, we
note that the NSPS under section 111 of the Act preclude operation of a
new source in violation of such a standard after the effective date of
the standard.  See 42 U.S.C. §7411(e).  Thus, an NSPS takes effect on
the effective date of the rule.  Once such a standard takes effect and
operates to preclude operations in violation of the standards, then EPA
interprets the statute and EPA’s PSD regulations to also require that
the BACT requirement apply to a pollutant that is subject to NSPS.
Consistent with our October 7, 2009 proposal, EPA has determined that
the existing language in section 52.21(b)(50)(ii) of its regulations may
be construed to apply to a new pollutant upon the effective date of an
NSPS.  This part of the definition covers “[a]ny pollutant that is
subject to any standard promulgated under section 111 of the Act.”  40
CFR 52.21(b)(50)(ii).  While the word “promulgated” appears in this
part of the definition, term modifies the term “standard” and does
not directly address the timing of PSD requirements.  Under the language
in this part of the definition, the PSD requirements apply when a
pollutant becomes “subject to” the underlying standard, which is
“promulgated under” section 111 of the Act.  Thus, section
52.21(b)(50)(ii) can be interpreted to make an NSPS pollutant a
regulated NSR pollutant upon the effective date of an NSPS.
Accordingly, the effective date of an NSPS is also that date when the
controls in an NSPS “take effect.”

Likewise, with regard to the NAAQS pollutant arguments raised in the
comments, under section 169(a)(3) of the Act, a source applying for a
PSD permit must demonstrate that it will not cause or contribute to a
violation of the NAAQS in order to obtain the permit, as required by
section 169(a)(3) of the Act.  Once a NAAQS is effective with respect to
a pollutant, the standard operates through section 169(a)(3) of the Act
and section 52.21(k) of EPA’s regulations to preclude construction of
a new source that would cause or contribute to a violation of such
standard. Using the effective date of a NAAQS to determine when a
pollutant covered by a NAAQS becomes a regulated NSR pollutant is more
consistent with EPA’s general approach for determining when a new
NAAQS applies to pending permit applications.  EPA generally interprets
a revised NAAQS that establishes either a lower level for the standard
or a new averaging time for a pollutant already regulated to apply upon
the effective date of the revised NAAQS.  Thus, unless EPA promulgates a
grandfathering provision that allows pending applications to apply
standards in effect when the application is complete, a final permit
decision issued after the effective date of a NAAQS must consider such a
NAAQS.  As described above, the effective date of the NAAQS is also the
date a NAAQS takes effect through the PSD permitting program to regulate
construction of a new or modified source.

EPA does not agree that a NAAQS would not take effect until the time a
state first promulgates limitations for the pollutant in a SIP.  Since a
NAAQS covering a new pollutant would operate through the PSD permitting
program to control emissions of that pollutant from the construction or
modification of a major source upon the effective date of the NAAQS, a
NAAQS covering a new pollutant takes effect on the effective date of the
regulation promulgating the NAAQS.  Under section 165(a)(3) of the Act
and the federal PSD permitting regulations at 52.21(k), to obtain a PSD
permit, a major source must demonstrate that the proposed construction
will not cause or contribute to a violation of a NAAQS.  Due to these
requirements, the PSD program operates to incorporate the NAAQS as a
governing standard for permitting construction of large sources.  Thus,
under the federal PSD program regulations at least, a new pollutant
covered by a NAAQS becomes subject to regulation at a much earlier date.
 These PSD provisions require emissions limitations for the NAAQS
pollutant before construction at a major source may commence and thereby
function to protect the NAAQS from new source construction and
modifications of existing major sources in the SIP development period
before a completion of the planning process necessary to determine
whether additional standards for a new NAAQS pollutant need to be
developed.  The timing when the NAAQS operates in this manner under
SIP-approved programs is potentially more nuanced and depends on whether
state laws are sufficiently open-ended to call for application of a new
NAAQS as a governing standard for PSD permits upon the effective date.
EPA believes that state laws that use the same language as in EPA’s
PSD program regulations at 52.21(k) and 51.166(k) are sufficiently
open-ended and allow such a NAAQS to “take effect” through the PSD
program upon the effective date of the NAAQS.  Notwithstanding this
complexity in SIP-approved programs, the applicability of the federal
PSD program regulations to a new NAAQS pollutant upon the effective date
of the NAAQS is sufficient to determine that a new pollutant is subject
to regulation on this date.

In the October 7, 2009 notice, EPA observed that one portion of its
existing regulations was not necessarily consistent with this reading of
the CAA.  For the first class of pollutants described in the definition
of “regulated NSR pollutant,” the PSD requirements apply once a
“standard has been promulgated” for a pollutant or its precursors.
See 40 CFR 52.21(b)(50)(i).  The use of “has been” in the regulation
indicates that a pollutant becomes a “regulated NSR pollutant,” and
hence PSD requirements for the pollutant are triggered, on the date a
NAAQS is promulgated. Thus, EPA observed in the October 7, 2009 notice
that it may not be possible for EPA to read the regulatory language in
this provision to make PSD applicable to a NAAQS pollutant upon the
effective date of the NAAQS.  EPA did not propose to modify the language
in 40 CFR 52.21(b)(50)(i) in the October 2009 notice because EPA had not
yet reached a final decision to interpret the CAA to mean that a
pollutant is subject to regulation on the date a regulatory requirement
becomes effective.  Since EPA was not proposing to establish a NAAQS for
any additional pollutants, the timing of PSD applicability for a newly
identified NAAQS pollutant did not appear to be of concern at the time.
No public comments on the October 2009 notice addressed this issue.
Since EPA is now adopting a variation of the proposed interpretation
with respect to the timing of PSD applicability, we believe it will be
appropriate to propose a revision of the regulatory language in section
52.21(b)(50)(i) at such time as EPA may consider promulgation of a NAAQS
for an additional pollutant.  Until that time, EPA will continue to
apply the terms of section 52.21(b)(50)(i) of the regulation.  This is
permissible because, even though EPA believes the better reading of the
Act is to apply PSD upon the date that a control requirement “takes
effect,” the Agency has not determined in this action that the Clean
Air Act precludes applying PSD requirements upon the promulgation of a
regulation that establishes a control requirement (as a NAAQS does
through the PSD provisions).

However, we do not believe that this present limitation prohibits us
from applying such an interpretation to non-NAAQS pollutants covered by
the 40 CFR 52.21(b)(50)(iv).

As described above, EPA has chosen a “takes effect” interpretation
of when a pollutant becomes “subject to regulation” under the PSD
program because it is a permissible interpretation of the relevant
statutory and regulatory language.  EPA recognizes that the fourth part
of the definition of “regulated NSR pollutant” as used in
52.51(b)(50) functions as a catch-all provision and may cover a variety
of different types of control requirements established by EPA under the
CAA.  These different types of regulations may contain a variety of
different mechanisms for controlling emissions and have varying amounts
of lead time before controls take effect under the particular regulatory
framework.  Thus, in order to avoid the type of uncertainty and
potential delay that concern the commenter, EPA anticipates that it will
be helpful to states and regulated sources for EPA to identify the date
when a new pollutant becomes subject to regulation whenever the Agency
adopts controls on a new pollutant under a portion of the CAA covered by
the fourth part of the definition.  With regard to GHGs, the Agency has
determined that date to be January 2, 2011, or a similar date as
finalized in the LDV rulemaking, as described in section 9.2 below.
Accordingly, the adoption of the “takes effect” interpretation will
not result in the uncertainty regarding the exact date of PSD
applicability or the prolonged delay of such applicability described by
the commenter.

EPA is not adopting the view that a pollutant becomes subject to
regulation at the time that an individual source engages in the
regulated activity.  EPA does not believe such a reading is consistent
with the “subject to regulation” language in the CAA.  Even if no
source is actually engaged in the activity, once a standard or control
requirement has taken effect, no source may engage in the regulated
activity without complying with the standard.  At this point, the
regulated activity and the emissions from that activity are controlled
or restricted, thus being subject to regulation within the common
meaning of the term regulation used in EPA’s regulations and section
165(a)(4) and 169(3) of the CAA.

Likewise, EPA does not accept the view that a pollutant does not become
subject to regulation until the date when a source must certify
compliance with regulatory requirements or submit a compliance report.
In some instances, a compliance report or certification of compliance
may not be required until well after the point that a regulation
operates to control or restrict the regulated activity.  Thus, EPA does
not feel that it would be appropriate as a general rule to establish the
date when a source certifies compliance or submits its compliance report
as the date that a pollutant becomes subject to regulation.

8.4.   Apply PSD only after Significance Level has been promulgated

One commenter (0072) requests that EPA revise the PSD regulations to
prevent application of PSD to a pollutant until EPA has developed a
significance level for that pollutant for the following reasons:

Both potentially regulated facilities and state and federal permitting
agencies would know which pollutants they had to consider in determining
whether there would be a new major emitting facility or a major
modification.

It would give permit writers and sources preparing permit applications
some criteria to apply to emissions of a pollutant, rather than asking
them to start applying PSD permitting to a pollutant without any
guidance as to when that pollutant’s emissions are significant enough
that they should be analyzed in greater detail.

It would avoid the current PSD regulations from considering any increase
significant for a pollutant EPA has never evaluated for significance
under the PSD program.

Response:

EPA does not construe the CAA or existing regulations to permit the
agency to prevent applicability of PSD requirements to a pollutant based
on the absence of a significance level.  Significance levels identify de
minimis levels of emissions that do not warrant scrutiny in permitting
reviews.  They do not serve to “regulate” or require control of the
pollutant for which they are established.  EPA’s regulations
contemplate the application of PSD requirements in the absence of a
significance level.  See 40 CFR 52.21(b)(23)(ii).  However, as discussed
elsewhere in this document, one of the policy reasons EPA prefers the
actual control interpretation is that it provides the opportunity for
EPA to promulgate significance levels in a timely manner when the agency
proposes to regulate an additional pollutant.  In the Tailoring Rule,
EPA took comment on significance levels for GHGs.  As explained above,
we fully expect the Tailoring Rule to be promulgated prior to the GHG
LDV Rule’s “take effect” date of January 2, 2011.

8.5.   Timing Based on Economic and Technical Feasibility of Controls

Comments:

One industry commenter (0083) asserts that certain statutory provisions
require EPA to defer the application of controls until economically or
technically feasible.  Another industry commenter (0081) made the same
point specifically for GHG sources.

Response:

The economic and technical feasibility of available control options are
assessed in setting the BACT limit for each specific facility under
review.  See CAA §169(3); 40 CFR 52.21(b)(12).  Thus, EPA does not
believe this would be a permissible basis for deferring the
applicability of the BACT requirements in the first instance.

Chapter 9.   Regulation of Greenhouse Gases

9.1.   GHG and CO2 are Air Pollutants

Comment:

Commenter (0101) argues that it is now beyond dispute that GHGs are
“pollutants” under the CAA.  The CAA defines “air pollutant” as
“[a]ny air pollution agent or combination of such agents, including
any physical, chemical, biological, [and] radioactive . . . substance or
matter which is emitted into or otherwise enters the ambient air.” CAA
§302(g), 42 U.S.C. §7602(g).  In Massachusetts v. EPA, the Supreme
Court held that greenhouse gases, including CO2, are “without a
doubt” physical chemical substances emitted into the ambient air and
thus pollutants. Id., 549 U.S. at 529.  Similarly, in its final
“Endangerment and Cause or Contribute Finding for Greenhouse Gases”
(Dec. 7, 2009) (“Endangerment Finding”), EPA has stated
unequivocally that GHGs are air pollutants.

One industry commenter (0069) expresses that comments on the PSD
Interpretive Memorandum should not be construed as admitting that GHGs
are, individually or in combination, a “pollutant” subject to
regulation under the CAA.

Response:

EPA recognizes that the Supreme Court has held that GHGs fit within the
definition of “air pollutant” under CAA section 302.  Massachusetts
v. EPA, 549 U.S. 497 (2007).

9.2.   Date When PSD Permitting Requirements Apply to GHGs

Comments:

Several commenters discussed the specific date upon which PSD
requirements for GHG should be triggered based on the GHG standards in
EPA’s proposed motor vehicle regulations, which are proposed to begin
with the 2012 model year (MY 2012), including:

The beginning of MY 2012 (Commenter 0080)

MY 2012, as being either Spring 2011 or Late 2011 (Commenter 0076)

At the earliest January 2, 2011 and at the latest by March 30, 2013
(0056, 0059, 0064, 0096, and 0106/0107)

March 2011 (0062)

Summer 2011, while acknowledging possibility as early as January 2, 2011
(0062)

Fall of 2011 (0050)

October 2011 (0067, 0073, 0083, 0089, 0090, 0096, 0106/0107, 0108, and
0109)

Late 2011 (0081)

May 1, 2012 (0067, 0073)

Eight industry commenters (0067, 0083, 0089, 0090, 0096, 0106/0107,
0108, 0109), in asserting that EPA should clarify it is adopting the
“takes effect” interpretation, state that if EPA promulgates its
proposed motor vehicle GHG rules in final form, those rules could not
have any PSD triggering effect before the beginning date of the first
model year to which those rules apply (i.e., October 1, 2011).

Some industry commenters (0069, 0096, 0106/0107) note that U.S.
automakers are not required to comply with the MY 2012 GHG mobile
vehicle regulations before an LDV is manufactured on January 2, 2011,
and because compliance with these regulations is based on fleet
averaging, automakers will not have to certify compliance until March
2013.  For these reasons, it is more reasonable to conclude that GHGs
are not actually controlled until 2011 at the earliest and 2013 at the
latest.  Because this is the logical construction of EPA’s own
interpretation, the commenters (0069, 0096, 0106/0107) assert that EPA
can take final action and conclude that one of these dates and not the
effective date of the GHG mobile vehicle regulations is when GHGs become
subject to regulation for purposes of triggering PSD without additional
rulemaking.

One commenter (0058) requests that EPA establish an effective date for
the PSD and title V programs for GHGs no earlier than one year after the
effective date of the LDVR.  The commenter (0058) states that EPA has
the authority for such a postponement under the legal doctrine of
“administrative necessity” and “absurd results.”  The commenter
(0058) also requests that EPA postpone applicability for non-CO2 GHGs
for at least another year to allow for further understanding of workload
impacts of PSD and title V applicability to those non-CO2 GHG
pollutants.

One of the industry commenters (0064) notes that, in the case of the
regulation of GHG emissions from motor vehicles, the compliance
obligation occurs when manufacturers introduce into commerce vehicles
that are required to comply with GHG standards, which will begin with MY
2012 and will not occur before January 2, 2011.  The commenter (0064)
also indicates that another interpretation on the timing for the
compliance obligation in the context of the GHG motor vehicle
regulations could be when the manufacturer is required to meet the
fleet-wide average, which occurs for the first time at the close of MY
2012 and is based on actual production figures for each model and on
model-level emissions data collected through testing over the course of
the model year.  Thus, the commenter (0064) believes that some point
after the end of MY 2012 could be considered the date there is a
compliance obligation or “actual control” of GHG pollutants for
purposes of the GHG motor vehicle regulations.  The commenter believes
that these are reasonable interpretations of an ambiguous statute,
entitling EPA deference under Chevron.  Other industry commenters (0067,
0073) use a similar rationale to arrive at alternative dates of October
2011 and May 1, 2012.

One commenter (0067) supports EPA’s proposal that the “effective”
date is the date sources are obliged to meet the requirements for new
pollutants in PSD and title V permit applications.  No actual control
obligations will be imposed until at least October 2011.  One commenter
(0067) states that delaying the effective date until October 2011 will
provide adequate time to receive information from the first year of
EPA’s GHG reporting rule, develop additional information for the
RACT/BACT/LAER clearinghouse, and supplement other necessary information
sources.

Response:

A majority of the comments EPA received in this action, as summarized
above and elsewhere in this RTC, addressed the specific issue of when
GHG-PSD permitting requirements would be applied under the various
interpretations discussed above.  EPA has determined that GHGs will
initially become “subject to regulation” under the CAA on January 2,
2011  based on the following considerations: (1) the overall
interpretation reflected in the PSD Interpretive Memo; (2) EPA’s
conclusion in this notice that a pollutant becomes subject to regulation
when controls “take effect,” and (3) the assumption that the agency
will establish emissions standards for model year 2012 vehicles when it
completes the proposed LDV Rule.

As proposed, the LDV Rule consists of two kinds of standards — fleet
average standards determined by the emissions performance of a
manufacturer’s fleet of various models, and separate vehicle standards
that apply for the useful life of a vehicle to the various models that
make up the manufacturer’s fleet.  CAA section 203(a)(1) prohibits
manufacturers from introducing a new motor vehicle into commerce unless
the vehicle is covered by an EPA-issued certificate of conformity for
the appropriate model year.  Section 206(a)(1) of the CAA describes the
requirements for EPA issuance of a certificate of conformity, based on a
demonstration of compliance with the emission standards established by
EPA under section 202 of the Act.  A certification demonstration
requires emission testing, and must be done for each model year.

The certificate covers both fleet average and vehicle standards, and the
manufacturer has to demonstrate compliance with both of these standards
for purposes of receiving a certificate of conformity.  The
demonstration for the fleet average is based on a projection of sales
for the model year, and the demonstration for the vehicle standard is
based on emissions testing and other information.

Both the fleet average and vehicle standards in the LDV Rule will
require that automakers control or limit GHG emissions from the
tailpipes of these vehicles.  As such, they clearly constitute
“regulation” of GHGs under the interpretation in the PSD
Interpretive Memo.  This view is consistent with the position originally
expressed by EPA in 1978 that a pollutant regulated in a Title II
regulation is a pollutant subject to regulation.  See 42 FR at 57481.
However, the regulation of GHGs will not actually take effect upon