[Federal Register Volume 81, Number 191 (Monday, October 3, 2016)]
[Proposed Rules]
[Pages 68110-68147]
[FR Doc No: 2016-21475]

Vol. 81

Monday,

No. 191

October 3, 2016

Part II

Environmental Protection Agency

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40 CFR Parts 51, 52, 60, et al.

Revisions to the Prevention of Significant Deterioration (PSD) and
Title V Greenhouse Gas (GHG) Permitting Regulations and Establishment
of a Significant Emissions Rate (SER) for GHG Emissions Under the PSD
Program; Proposed Rule

Federal Register / Vol. 81 , No. 191 / Monday, October 3, 2016 /
Proposed Rules

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 51, 52, 60, 70 and 71

[EPA-HQ-OAR-2015-0355; FRL-9951-79-OAR]
RIN 2060-AS62

Revisions to the Prevention of Significant Deterioration (PSD)
and Title V Greenhouse Gas (GHG) Permitting Regulations and
Establishment of a Significant Emissions Rate (SER) for GHG Emissions
Under the PSD Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing to
revise provisions applicable to greenhouse gases (GHG) in the EPA's
Prevention of Significant Deterioration (PSD) and title V permitting
regulations. This action is in response to the June 23, 2014, U.S.
Supreme Court's decision in Utility Air Regulatory Group (UARG) v. EPA
and the April 10, 2015, Amended Judgment by the United States Court of
Appeals for the District of Columbia Circuit (D.C. Circuit) in
Coalition for Responsible Regulation v. EPA. The proposed PSD and title
V revisions involve changes to several regulatory definitions in the
PSD and title V regulations, revisions to the PSD provisions on GHG
Plantwide Applicability Limitations (PALs), and revisions to other
provisions necessary to ensure that neither the PSD nor title V rules
require a source to obtain a permit solely because the source emits or
has the potential to emit (PTE) GHGs above the applicable thresholds.
In addition, the EPA is also proposing a significant emissions rate
(SER) for GHGs under the PSD program that would establish an
appropriate threshold level below which Best Available Control
Technology (BACT) is not required for a source's GHG emissions.

DATES: Comments must be received on or before December 2, 2016.
    If anyone contacts us requesting to speak at a public hearing by
October 13, 2016, we will hold a public hearing. Additional information
about the hearing would be published in a subsequent Federal Register
notice.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2015-0355, at http://www.regulations.gov. Follow the online
instructions for submitting comments. Once submitted, comments cannot
be edited or removed from Regulations.gov. The EPA may publish any
comment received to its public docket. Do not submit electronically any
information you consider to be Confidential Business Information (CBI)
or other information whose disclosure is restricted by statute.
Multimedia submissions (audio, video, etc.) must be accompanied by a
written comment. The written comment is considered the official comment
and should include discussion of all points you wish to make. The EPA
will generally not consider comments or comment contents located
outside of the primary submission (i.e., on the Web, Cloud, or other
file sharing system). For additional submission methods, the full EPA
public comment policy, information about CBI or multimedia submissions,
and general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Questions concerning this proposed
rule should be addressed to Ms. Carrie Wheeler, U.S. Environmental
Protection Agency, Office of Air Quality Planning and Standards, Air
Quality Policy Division, (C504-01), Research Triangle Park, NC 27711,
telephone number<PHONE_NUMBER>, email at<EMAIL_ADDRESS>    To request a public hearing or information pertaining to a public
hearing on this proposal, contact Ms. Pamela Long, U.S. Environmental
Protection Agency, Office of Air Quality Planning and Standards, Air
Quality Policy Division, (C504-01), Research Triangle Park, NC 27711;
telephone number<PHONE_NUMBER>; fax number<PHONE_NUMBER>; email at:
<EMAIL_ADDRESS>(preferred method of contact).

SUPPLEMENTARY INFORMATION: Throughout this document wherever ``we,''
``us,'' or ``our'' is used, we mean the EPA.
    The information in this Supplementary Information section of this
preamble is organized as follows:

I. General Information
    A. To whom does this action apply?
    B. Where To Get a Copy of This Document and Other Related
Information
    C. What acronyms, abbreviations and units are used in this
preamble?
II. Overview of the Proposed Rule
III. Background
    A. PSD Program
    B. Title V Program
    C. Application of PSD and Title V Programs to GHG Emissions
    1. Regulation of the Pollutant GHGs
    2. Revisions to PSD and Title V Regulations in the Tailoring
Rule
    3. Actions After the Tailoring Rule
IV. Revisions to the PSD and Title V GHG Permitting Regulations
    A. What revisions to the PSD and title V GHG permitting
regulations is the EPA proposing with this action?
    1. Revisions to the PSD Regulations
    2. Revisions to the PSD PAL Regulations
    3. Revisions to State-Specific PSD Regulations
    4. Revisions to the Title V Regulations
    5. Revisions to State-Specific Title V Regulations
    B. What additional regulatory revisions is the EPA proposing
with this action?
V. Establishment of a GHG SER
    A. What is the legal basis for establishing a GHG SER?
    B. What is the regulatory context for the de minimis exception
proposed in this rule?
    C. Historical Approaches to Establishing a De Minimis Level in
the PSD Program
    D. What is the technical basis for the proposed GHG SER?
    1. Summary of Technical Support Information
    2. Review of PSD Permitting and GHG Emission Sources
    a. GHG Permitting Under Step 1 of the Tailoring Rule
    b. RBLC Permitting Information
    3. GHG Emissions Levels for Combustion Units
    4. Non-Combustion Related GHG Emissions
    5. Potential BACT Techniques Applicable to GHG Emission Sources
    a. Energy Efficiency Measures
    b. Carbon Capture and Storage
    c. Gas Recovery and Utilization
    d. Leak Detection and Repair Measures
    6. Costs of GHG BACT Review
    E. Proposed GHG SER and Request for Comment
VI. What would be the economic impacts of the proposed rule?
VII. How should state, local and tribal authorities adopt the
regulatory revisions included in this action?
VIII. Environmental Justice Considerations
IX. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act (PRA)
    C. Regulatory Flexibility Act (RFA)
    D. Unfunded Mandates Reform Act (UMRA)
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
    H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
    K. Determination Under CAA Section 307(d)
X. Statutory Authority

I. General Information

A. To whom does this action apply?

    This proposal potentially affects owners and operators of sources
in all industry groups, such as the owners and operators of proposed
new and modified major stationary sources. The majority of potentially
affected categories and entities include:

------------------------------------------------------------------------
             Industry group                         NAICS \a\
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Mining.................................  21.
Utilities (electric, natural gas, other  2211, 2212, 2213.
 systems).
Manufacturing (food, beverages,          311, 312, 313, 314, 315, 316.
 tobacco, textiles, leather).
Wood product, paper manufacturing......  321, 322.
Petroleum and coal products              32411, 32412, 32419.
 manufacturing.
Chemical manufacturing.................  3251, 3252, 3253, 3254, 3255,
                                          3256, 3259.
Rubber product manufacturing...........  3261, 3262.
Miscellaneous chemical products........  32552, 32592, 32591, 325182,
                                          32551.
Nonmetallic mineral product              3271, 3272, 3273, 3274, 3279.
 manufacturing.
Primary and fabricated metal             3311, 3312, 3313, 3314, 3315,
 manufacturing.                           3321, 3322, 3323, 3324, 3325,
                                          3326, 3327, 3328, 3329.
Machinery manufacturing................  3331, 3332, 3333, 3334, 3335,
                                          3336, 3339.
Computer and electronic products         3341, 3342, 3343, 3344, 3345,
 manufacturing.                           4446.
Electrical equipment, appliance, and     3351, 3352, 3353, 3359.
 component manufacturing.
Transportation equipment manufacturing.  3361, 3362, 3363, 3364, 3365,
                                          3366, 3366, 3369.
Furniture and related product            3371, 3372, 3379.
 manufacturing.
Miscellaneous manufacturing............  3391, 3399.
Waste management and remediation.......  5622, 5629.
------------------------------------------------------------------------
\a\ North American Industry Classification System.

    Potentially affected entities also include state, local and tribal
permitting authorities \1\ responsible for implementing the PSD and
title V permitting programs.
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    \1\ Under the PSD regulations, the entities that implement the
program are referred to as ``reviewing authorities,'' while under
the title V program the implementing entities are referred to as
``permitting authorities.'' For simplicity, in this preamble we
refer to both as ``permitting authorities.''
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    As noted, the potentially affected entities could be in any
industry group. Thus, the earlier table is not intended to be
exhaustive, but rather provides a guide for readers regarding likely
affected entities. The EPA believes this table lists the most typical
types of affected entities. Other types of entities not listed in the
table could also be regulated. To determine if an entity is regulated
by this action, the applicability criteria found in the PSD and title V
regulations (and which are briefly described in Sections III.A and B of
this preamble) should be consulted.

B. Where To Get a Copy of This Document and Other Related Information

    In addition to being available in the docket, an electronic copy of
this proposal notice will also be available on the World Wide Web.
Following signature by the EPA Administrator, a copy of this notice
will be posted in the regulations section of our New Source Review
(NSR) Web site, under Regulatory Actions, at http://www.epa.gov/nsr/nsr-regulatory-actions and the title V Web site, under Current
Regulations and Regulatory Actions, at http://www.epa.gov/title-v-operating-permits/current-regulations-and-regulatory-actions. A ``track
changes'' version of the full regulatory text that incorporates and
shows the full context of the changes in this proposed action is also
available in the docket for this rulemaking. In addition to the
proposal and regulatory text documents, other relevant documents are
located in the docket, including technical support documents referenced
in this preamble.

C. What acronyms, abbreviations and units are used in this preamble?

APA Administrative Procedures Act
AQRV[s] Air Quality Related Value[s]
BACT Best Available Control Technology
CAA or Act Clean Air Act
CCS Carbon Capture and Sequestration
CFR Code of Federal Regulations
CH4 Methane
CO Carbon Monoxide
CO2 Carbon Dioxide
CO2e Carbon Dioxide Equivalent
D.C. Circuit United States Court of Appeals for the District of
Columbia Circuit
EGU Electric Generating Unit
EIA Economic Impact Analysis
EPA U.S. Environmental Protection Agency
FIP Federal Implementation Plan
FR Federal Register
GHG[s] Greenhouse Gas[es]
GHGRP Greenhouse Gas Reporting Program
GWP Global Warming Potential
HP Horsepower
HFC[s] Hydrofluorocarbons
IC Internal Combustion
ICR Information Collection Request
LAER Lowest Achievable Emission Rate
LDAR Leak Detection and Repair
LDVR Light-Duty Vehicle Rule
NAAQS National Ambient Air Quality Standard
NESHAP National Emission Standard for Hazardous Air Pollutants
NHTSA National Highway Transportation Safety Administration
NOX Nitrogen Oxides
NO2 Nitrogen Dioxide
NSPS New Source Performance Standard
NSR New Source Review
OMB Office of Management and Budget
PAL[s] Plantwide Applicability Limitation[s]
PFC[s] Perfluorocarbons
PM Particulate Matter
PSD Prevention of Significant Deterioration
PTE Potential To Emit
RACT Reasonably Available Control Technology
SER Significant Emissions Rate
SF6 Sulfur Hexafluoride
SIP State Implementation Plan
SO2 Sulfur Dioxide
TCEQ Texas Commission on Environmental Quality
TIP Tribal Implementation Plan
Tpy Tons Per Year
UARG Utility Air Regulatory Group
UMRA Unfunded Mandates Reform Act
VOC Volatile Organic Compound

II. Overview of the Proposed Rule

    The EPA is proposing revisions to the provisions applicable to GHGs
in its PSD and title V permitting regulations in order to conform those
regulations with the U.S. Supreme Court's decision in UARG v. EPA, 134
S.Ct. 2427 (2014), and the April 10, 2015, Amended Judgment by the D.C.
Circuit in Coalition for Responsible Regulation v. EPA, Nos. 09-1322,
10-073, 10-1092 and 10-1167 (D.C. Cir. April 10, 2015) (Amended
Judgment). Some of these provisions were promulgated as part of

the June 3, 2010, regulation titled ``Prevention of Significant
Deterioration and Title V Greenhouse Gas Tailoring Rule'' \2\
(hereinafter ``Tailoring Rule''). The D.C. Circuit Amended Judgment
ordered that: (1) The regulations under review be vacated to the extent
they require a stationary source to obtain a PSD or title V permit
solely because the source emits or has the potential to emit GHG above
the applicable thresholds and (2) that the EPA consider whether any
further revisions to its regulations are appropriate in light of UARG
v. EPA and, if so, that it undertake to make such revisions. The
proposed revisions to the PSD and title V GHG permitting regulations
include changes to certain regulatory definitions and the PSD PAL
provisions applicable to GHGs. In addition, we are proposing to
establish a SER for GHGs \3\ under the PSD air permitting program to
establish an appropriate threshold level below which BACT review is not
required for GHG emissions from a source that is required to obtain a
PSD permit.
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    \2\ 75 FR 31514, June 3, 2010.
    \3\ In this document, we reserve the abbreviations ``GHG'' and
``GHGs'' to refer to the air pollutant ``greenhouse gases,'' which
is defined as the aggregate of six individual greenhouse gases as
discussed in Section III C.2 of this preamble. We spell out
``greenhouse gas'' where we refer more broadly to compounds that
trap heat in the atmosphere.
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    The EPA published an initial set of revisions in light of the UARG
v. EPA decision and the D.C. Circuit's Amended Judgment on August 19,
2015.\4\ These revisions removed entire sections and paragraphs that
were readily severable from other provisions in the PSD and title V
regulations and specifically identified in the D.C. Circuit's Amended
Judgment. These removed provisions required a stationary source to
obtain a PSD permit solely on the basis of the source's GHG emissions
and required that the EPA study and consider further phasing-in the PSD
and title V permitting requirements at lower GHG emissions thresholds.
Because of the nature of the D.C. Circuit's Amended Judgment, these
earlier revisions were ministerial in nature and exempt from notice-
and-comment rulemaking procedures under the ``good cause'' exception of
the Administrative Procedure Act (APA).
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    \4\ 80 FR 50199, August 19, 2015.
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    In this action, the EPA is proposing a second set of regulatory
revisions that we believe are necessary to fully implement the UARG
decision and D.C. Circuit Amended Judgment and further revisions that
are appropriate in light of UARG. The revisions proposed in this action
were not included in the August 19, 2015, rule because the revisions
proposed in this action amend, rather than completely remove, text that
remains pertinent to the PSD and title V programs as a whole and their
continued application to GHGs. As a result, these revisions are not
ministerial in nature and not exempt from notice-and-comment rulemaking
procedures under the ``good cause'' exception of the APA. Therefore,
this action gives the public an opportunity to comment on how the EPA
proposes to revise other parts of its regulations to conform to the
Amended Judgment as further explained in Section IV.
    In general, this action proposes revisions to the PSD definitions
at 40 Code of Federal Regulations (CFR) sections 51.166 and 52.21 for
the following terms: ``major stationary source,'' ``major
modification,'' ``significant,'' and ``subject to regulation.'' This
action also proposes to revise the title V definitions at 40 CFR parts
70 and 71 for the terms ``major stationary source'' and ``subject to
regulation.'' In addition, this action proposes to add a definition of
``greenhouse gases'' to these PSD and title V regulations, which
contains content that was previously part of the definition of
``subject to regulation'' in each set of regulations. The EPA believes
these revisions are appropriate to fully implement the Amended
Judgment. We are also proposing to revise the PSD GHG PAL provisions at
40 CFR part 52 to reflect the UARG decision, which stated that sources
that only emit or have the potential to emit GHGs above the applicable
thresholds are no longer required to obtain a PSD permit. Furthermore,
we are proposing to revise certain provisions under 40 CFR part 60,
which the EPA wrote to ensure that the existing GHG applicability
threshold for the PSD BACT requirement continues to apply on an interim
basis after this pollutant became regulated under standards set forth
in those parts. Finally, we are proposing to revise a few state-
specific PSD or title V permitting provisions that, in general,
established permitting requirements for sources that only emit or have
the potential to emit GHGs above the major source thresholds. We are
proposing the revisions listed in this paragraph in response to the
D.C. Circuit's directive in the Amended Judgment.
    In addition, the EPA is proposing to establish a SER for the
pollutant GHGs under the PSD permitting program in response to the UARG
decision. The U.S. Supreme Court recognized that the EPA did not
justify on de minimis grounds the 75,000 tons per year (tpy) carbon
dioxide equivalent (CO2e) threshold that currently
determines whether GHG BACT is required for ``anyway sources.'' \5\ 134
S.Ct. at 2438 n. 3. The U.S. Supreme Court also expressly did not
address whether 75,000 tpy CO2e necessarily exceeds a true
de minimis level, holding only that the EPA must justify its selection
of such a level on proper grounds. 134 S.Ct. at 2449. An ``anyway
source'' in this context refers to a facility or emission source that
is otherwise required to obtain a PSD permit based on its emissions of
one or more regulated NSR pollutants other than GHG. The U.S. Supreme
Court limited the scope of the PSD permitting program to ``anyway
sources'' and added that the EPA may exempt an ``anyway source'' from
the GHG BACT requirement if the source emits a de minimis amount of
GHGs. 134 S.Ct. at 2449.
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    \5\ Under existing regulations, a threshold level of 75,000 tpy
CO2e is contained in the definition of a ``subject to
regulation'' to determine the applicability of the GHG PSD
permitting requirements to ``anyway sources.'' 40 CFR part
51.166(b)(48)(iv); 40 CFR part 52.21(b)(49)(iv). This value was
based principally on addressing potential permitting burdens, but it
was not proposed or promulgated as a permanent GHG SER (75 FR
31560).
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    In response to the outcome of the UARG decision, this rulemaking
action proposes a GHG SER that represents a de minimis level of GHG
emissions for the purposes of determining the applicability of the GHG
BACT requirement at ``anyway sources,'' new and modified sources that
trigger PSD permitting obligations on the basis of their emissions of
air pollutants other than GHGs. If not for provisions that remain in
the EPA's definition of ``subject to regulation'' at this time, any GHG
emissions increase at an ``anyway source'' would be considered
``significant'' and thus require a newly constructed major source, or a
major modification at an existing major source, to undergo PSD BACT
review for GHGs.\6\
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    \6\ Definition of ``significant,'' 40 CFR part 51.166(b)(23)(ii)
and 40 CFR part 52.21(b)(23)(ii).
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    In July 2014, following the UARG decision, the EPA issued a
memorandum titled, ``Next Steps and Preliminary Views on the
Application of Clean Air Act (CAA) Permitting Programs to Greenhouse
Gases Following the U.S. Supreme Court's Decision in UARG v. EPA''
(Preliminary Views Memo).\7\ In that memorandum

the EPA explained that, among other things, it would consider whether
to promulgate a de minimis level.\8\ The EPA also explained that, with
respect to new ``anyway sources,'' we preliminarily ``intend to
continue applying the PSD BACT requirements to GHG if the source emits
or has the potential to emit 75,000 tpy or more of GHG on a
[CO2e] basis.'' \9\ With respect to modified sources, we
said that initially ``the EPA intends to continue applying the PSD BACT
requirements to GHG if both of the following circumstances are present:
(1) The modification is otherwise subject to PSD for a pollutant other
than GHG; (2) the modification results in a GHG emissions increase and
a net GHG emissions increase equal to or greater than 75,000 tpy
CO2e and greater than zero on a mass basis.'' \10\
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    \7\ Next Steps and Preliminary Views on the Application of Clean
Air Act (CAA) Permitting Programs to Greenhouse Gases Following the
Supreme Court's Decision in UARG v. EPA, Memorandum from Janet G.
McCabe, Acting Assistant Administrator, Office of Air and Radiation,
and Cynthia Giles, Assistant Administrator, Office of Enforcement
and Compliance Assurance, U.S. EPA, to Regional Administrators, July
24, 2014. Available at http://www.epa.gov/sites/production/files/2015-12/documents/20140724memo.pdf.
    \8\ Id. at 4.
    \9\ Id. at 3.
    \10\ Id. at 3.
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    In this proposed rule, based on our technical and legal analyses as
described in Section V of this preamble, we are proposing to establish
a 75,000 tpy CO2e SER. We propose to determine that this
level represents a de minimis level of GHG emissions for purposes of
determining whether the GHG BACT review should be required as part of
an ``anyway source'' PSD permit. A 75,000 tpy CO2e GHG SER,
based on our technical analysis, represents a level of GHGs, below
which there is trivial or no value in conducting a BACT analysis for
GHGs because we would not expect to obtain meaningful GHG reductions
from requiring application of BACT at all such sources. In addition,
there does not appear to be a basis to set a GHG SER level above 75,000
tpy CO2e based on our review of the GHG permitting
experience to date and the fundamental principles for establishing a de
minimis exception to a statutory requirement as described in Section V
of this preamble. Therefore, we are not considering a GHG SER level
greater than 75,000 tpy CO2e. Finally and although our
analysis supports a SER at 75,000 tpy CO2e, we are
soliciting comments on (and associated supporting documentation for)
establishing a GHG SER level below 75,000 tpy CO2e and at or
above 30,000 tpy CO2e. Based on our current understanding,
we do not believe there is any basis for a SER level to be established
below 30,000 tpy CO2e, and we are not considering SER values
below this level.

III. Background

A. PSD Program

    Part C of title I of the CAA contains the requirements for the PSD
program. The primary element of this program is a preconstruction
review and permitting requirement for new and modified stationary
sources of air pollution locating in areas meeting a national ambient
air quality standard (NAAQS) (``attainment'' areas) and areas for which
there is insufficient information to classify the area as either
attainment or nonattainment (``unclassifiable'' areas). Under the CAA,
the PSD preconstruction permitting requirement applies to any ``major
emitting facility'' that commences construction or undertakes a
``modification.'' CAA 165(a) and CAA 169(2)(C). The Act defines the
term ``major emitting facility'' as a stationary source that emits or
has the potential to emit any air pollutant in the amount of at least
100 or 250 tpy, depending on the source category. CAA section 169(1).
The Act also defines ``modification'' as any physical or operational
change that increases the amount of any air pollutant emitted by the
source. CAA section 111(a)(4).
    The EPA's regulations reflect these requirements.\11\ Under the
regulations, PSD applies to any ``major stationary source'' that begins
actual construction on a new facility or undertakes a ``major
modification'' in an area designated as attainment or unclassifiable
for a NAAQS. 40 CFR 52.21(a)(2)(i)-(iii). The regulations define a
``major stationary source'' as a stationary source that emits,
depending on the source category, at least 100 or 250 tpy, of a
``regulated NSR pollutant.'' 40 CFR part 52.21(b)(1)(i)(a)-(b). A
``regulated NSR pollutant'' is defined as any of the following: (1) In
general, any pollutant subject to a NAAQS, (2) any pollutant subject to
a standard of performance for new sources under CAA section 111, (3)
any of a certain type of stratospheric ozone depleting substances, or
(4) any pollutant that otherwise is subject to regulation under the
Act. 40 CFR part 52.21(b)(50)(i)-(iv). Regulated NSR pollutants do not
include hazardous air pollutants listed under CAA section 112. 40 CFR
part 52.21(b)(v).
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    \11\ The EPA's PSD regulations are found in two parts of 40 CFR,
part 51 and part 52. The part 52 regulations at 40 CFR 52.21
constitute the federal PSD program that applies in any state or
other area, such as Indian country, that does not have an approved
PSD program in its implementation plan. The part 51 regulations at
40 CFR 51.166 spell out the requirements that must be met for the
EPA to approve a PSD program into an implementation plan. The
language in the regulations is nearly identical, with small
differences reflecting their different purposes. For simplicity, we
cite only the 40 CFR part 52 regulations in this section, but the
part 51 regulations contain analogous provisions in 40 CFR 51.166.
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    Construction of a new major stationary source \12\ is subject to
preconstruction review under PSD if the source has the potential to
emit any regulated NSR pollutant in the amount of at least 100 or 250
tpy, depending on the source category. The PSD permitting requirements
then apply to each regulated NSR pollutant that the source would have
the potential to emit in ``significant amounts.'' 40 CFR parts
52.21(j); 52.21(m)(1)(i). PSD does not apply to pollutants for which
the area in which the source would be located is a nonattainment area
(often referred to as ``nonattainment pollutants'') 40 CFR part
52.21(i)(2). The amount of emissions of each pollutant that is
considered significant is specified in the definition of the term
``significant.'' 40 CFR part 52.21(b)(23)(i). Because these values are
expressed as a rate of emissions in tpy, the EPA often refers to each
value as a ``significant emissions rate'' or ``SER.'' For any regulated
NSR pollutant for which no SER is specified, any emissions rate is
considered significant. 40 CFR part 52.21(b)(23)(ii).
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    \12\ A new major stationary source can be either a newly
constructed facility or a physical change at an existing minor
source that would qualify as a major stationary source by itself. 40
CFR 52.21(b)(1)(i)(c).
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    The PSD program also applies to an existing major stationary source
when there is a planned ``major modification'' to the source, which is
a physical change or change in the method of operation that would
result in both a significant emissions increase and a significant net
emissions increase of one or more regulated NSR pollutants, other than
nonattainment pollutants.\13\ The SERs are the measure that is used to
determine whether projected emissions increases of regulated NSR
pollutants are significant.
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    \13\ There is a two-step process for determining whether a
planned physical or operational change at an existing major
stationary source qualifies as a major modification that is subject
to PSD. First, the change itself must be projected to result in a
significant increase in a regulated NSR pollutant. If so, the change
must also be projected to result in a significant net emissions
increase of that pollutant when other contemporaneous, creditable
increases and decreases of that pollutant at the source are taken
into account. This process is spelled out at 40 CFR 52.21(a)(2)(iv);
the definition of ``major modification'' is at 40 CFR 52.21(b)(2)
and the definition of ``net emissions increase'' is at 40 CFR
52.21(b)(3).
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    One principal PSD requirement is that a permit authorizing
construction of a new major source or major modification must contain
emissions limitations based on application of the BACT for each
regulated NSR pollutant. BACT is

determined on a case-by-case basis, taking into account, among other
factors, the energy, environmental, and economic impacts. 40 CFR part
52.21(b)(12) and (j). To ensure these criteria are satisfied in
individual permitting decisions, the EPA has developed a ``top-down''
approach for BACT review that the EPA applies and recommends to state
permitting authorities. This involves a decision process that includes
identification of all available control technologies, elimination of
technically infeasible options, ranking of remaining options by control
and cost effectiveness, and then selection of BACT. In re Prairie State
Generating Company, 13 E.A.D. 1, 13-14 (EAB 2006). Under PSD, once a
source is determined to be major for any regulated NSR pollutant, a
BACT review is performed for each attainment pollutant that is
projected to increase over its PSD significance level as a result of
new construction or a modification project at an existing major source.
    In addition to complying with the BACT requirements, the source
must analyze impacts on ambient air quality and demonstrate that the
construction will not cause or contribute to a violation of any NAAQS
or PSD increments. However, this requirement is not applicable to GHGs
because there are no NAAQS or PSD increments for GHGs. A permit
applicant must also analyze impacts on soil, vegetation and visibility.
In addition, new sources or modifications that would impact Class I
areas (e.g., national parks) may be subject to additional requirements
to protect air quality related values (AQRVs) that have been identified
for such areas (e.g., visibility). Under PSD, if a source's proposed
project may impact a Class I area, the Federal Land Manager is notified
and is responsible for evaluating a source's projected impact on the
AQRVs. Because it is not possible with current climate change modeling
to quantify the impacts at particular locations attributable to a
specific GHG source, the EPA considers the reduction of GHG emissions
to the maximum extent achievable under the BACT requirement to be the
best technique to satisfy the additional impacts analysis and Class I
area requirements related to GHGs. PSD and Title V Permitting Guidance
for Greenhouse Gases at 47-49.\14\
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    \14\ U.S. EPA, Document No. EPA-457/B-11-001, March 2011. http://www2.epa.gov/nsr/new-source-review-policy-and-guidance-document-index.
---------------------------------------------------------------------------

    State or local air pollution control agencies issue most PSD
permits. The EPA establishes the basic requirements for the PSD program
in two sections of its regulations--40 CFR part 51.166 and 52.21. Under
40 CFR part 51.166, which sets out the minimum requirements for
obtaining the EPA's approval of the PSD program in a State
Implementation Plan (SIP), states may develop unique PSD requirements
and procedures tailored for the air quality needs of each area as long
as the program is at least as stringent as the EPA requirements.
Because a state's SIP is required to contain a PSD program, states with
PSD programs approved under 40 CFR part 51.166 are typically referred
to as ``SIP-approved states.'' Some local air pollution agencies have
also developed their own PSD programs that have been approved, so
typically they are also referred to as SIP-approved. To date, no tribes
have developed PSD programs under Tribal Implementation Plans (TIP). In
cases where state, tribal or local air pollution control agencies do
not have a SIP-approved or TIP-approved PSD program, as applicable, the
federal PSD program at 40 CFR part 52.21 applies. In these areas, such
state, tribal or local air pollution control agencies can be delegated
the federal law authority to issue permits on behalf of the EPA, and
those programs are often referred to as ``delegated programs.'' To
date, no tribes have requested delegation of the federal PSD program
and, therefore, the EPA is the permitting authority in those areas. The
EPA is also the permitting authority in all areas where no other entity
has requested delegation of the federal program or has requested
approval of its own PSD program under a SIP or a TIP (e.g., Puerto
Rico, other U.S. Territories, and the jurisdictions of several local
agencies in California).

B. Title V Program

    Title V of the CAA establishes requirements for an operating permit
program for major sources of air pollutant emissions and certain other
sources. CAA section 502. The operating permit requirements under title
V are intended to ensure that sources comply with CAA applicable
requirements. CAA section 504; 40 CFR parts 70.1(b) and 71.1(b). The
title V program is implemented through regulations contained in 40 CFR
part 70 for the EPA-approved programs implemented by state and local
agencies and tribes, and 40 CFR part 71 for the federal program
generally implemented by the EPA in jurisdictions without a program
approved under part 70 (e.g., much of Indian country).
    The title V program requires major sources and certain other
sources to apply for operating permits. The EPA has interpreted the
term ``major source'' to include stationary sources that emit or have a
potential to emit (PTE) of 100 tpy or more of any air pollutant subject
to regulation, as now reflected in the regulatory definition of ``major
source'' in 40 CFR parts 70.2 and 71.2. 75 FR 31521. In general and
under the EPA's longstanding interpretation, a pollutant is ``subject
to regulation'' for purposes of title V if it is subject to a CAA
requirement establishing actual control of emissions and it is first
considered ``subject to regulation'' for title V purposes when such a
requirement ``takes effect.'' \15\ Title V generally does not add new
pollution control requirements, but it does require that each permit
contain emission limitations and other conditions as are necessary to
assure compliance with all ``applicable requirements'' required by the
CAA, and it requires that certain procedural requirements be followed.
``Applicable requirements'' for title V purposes include stationary
source requirements (e.g., New Source Performance Standards (NSPS), and
SIP requirements, including PSD). Procedural requirements include
providing review of permits by the EPA, states, and the public, and
requiring permit holders to track, report, and annually certify their
compliance status with respect to their permit requirements.
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    \15\ A more detailed definition of the term ``subject to
regulation'' can be found in 40 CFR 70.2 and 71.2.
---------------------------------------------------------------------------

C. Application of PSD and Title V Programs to GHG Emissions

1. Regulation of the Pollutant GHGs
    On April 2, 2007, the U.S. Supreme Court held that GHGs fit within
the definition of the term ``air pollutant'' under CAA section 302(g).
Massachusetts v. EPA, 549 U.S. 497 (2007). As a result, the EPA was
required to determine, under CAA section 202(a) whether: (1) GHGs from
new motor vehicles cause or contribute to air pollution which may
reasonably be anticipated to endanger public health or welfare, or (2)
the science is too uncertain to make a reasoned decision.\16\ After
issuing a proposal and receiving comment, the EPA Administrator signed
two distinct findings regarding GHGs under CAA section 202(a), which
were subsequently published in the Federal Register on December 15,
2009:\17\
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    \16\ This background is also summarized in the Tailoring Rule.
75 FR 31519.
    \17\ 74 FR 66496.
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     Endangerment Finding: The Administrator found that the
current

and projected atmospheric concentrations of the mix of six long-lived
and directly emitted GHGs are reasonably anticipated to endanger the
public health and welfare of current and future generations. The six
gases are carbon dioxide (CO2), nitrous oxide
(N2O), methane (CH4), hydrofluorocarbons (HFCs),
perfluorocarbons (PFCs) and sulfur hexafluoride (SF6)
(referred to as ``well-mixed greenhouse gases'' in the endangerment
finding).
     Cause or Contribute Finding: The Administrator found that
the emissions of the single air pollutant defined as the aggregate
group of six ``well-mixed greenhouses gases'' from new motor vehicles
and new motor vehicle engines contributes to the GHG air pollution that
threatens public health and welfare.
    These findings did not themselves impose any requirements on
industry or other entities. However, they triggered a requirement for
the EPA to issue standards under CAA section 202(a) ``applicable to''
emissions of the air pollutant that the EPA found causes or contributes
to the air pollution that endangers public health and welfare.
Accordingly, the EPA and the Department of Transportation's National
Highway Traffic Safety Administration (NHTSA) finalized the Light-Duty
Vehicle Rule (LDVR) as a joint rule on May 7, 2010. 75 FR 25324.
Consistent with the Cause or Contribute Finding, the LDVR contains
standards and other regulations applicable to the emissions of the air
pollutant defined as the aggregate group of six greenhouse gases:
CO2, N2O, CH4, HFCs, PFCs and
SF6. 40 CFR part 86.1818-12(a).
    When controls on GHGs in the LDVR took effect, the pollutant GHGs
became a pollutant ``subject to regulation under the Act,'' and
therefore subject to PSD and title V requirements. 75 FR 17004. The EPA
identified January 2, 2011, as the date when GHGs first became subject
to regulation and subject to the stationary source permitting programs
under the CAA. Id.
2. Revisions to PSD and Title V Regulations in the Tailoring Rule
    Prior to promulgation of the LDVR, the EPA recognized that the
regulation of GHGs under the PSD and title V programs would radically
increase the number of sources subject to the program at the 100 or 250
tpy major source applicability thresholds provided under the CAA. 74 FR
55292. This is primarily because combustion sources emit GHGs
(specifically CO2) at levels that may be from several
hundred times to over 1,000 times the emissions of other combustion
pollutants that are subject to permitting under the longstanding PSD
and title V major source applicability thresholds.
    Under these circumstances, the EPA estimated that thousands of
sources, mostly smaller sources that would otherwise not be subject to
PSD permitting, would become subject to PSD review each year, thereby
incurring the costs of the permit applications and individualized PSD
BACT requirements that the PSD provisions require. We also estimated
that millions of new and existing sources, mostly existing commercial
and residential sources that had never before been required to obtain
an air permit, would become subject to title V, and would incur the
costs of obtaining title V permits. Additionally, state and local
permitting authorities would be burdened by the large number of these
permit applications, which would be orders of magnitude greater than
the current inventory of applications and permits and would vastly
exceed the administrative resources of the permitting authorities.
    Therefore, to relieve the overwhelming permitting burdens that
would have fallen on permitting authorities and sources under the Act
in the absence of the EPA action, we promulgated the Prevention of
Significant Deterioration and Title V Greenhouse Gas Tailoring Rule
(Tailoring Rule).\18\ This rule limited the scope of permitting
requirements that would have otherwise applied under the EPA's
understanding of the CAA by including applicability criteria
specifically ``tailored'' for GHGs. These criteria determined which GHG
emission sources initially became subject to the PSD and title V
programs when controls of GHG under the LDVR became effective. Thus,
the rule established a phase-in approach for PSD and title V
applicability, with the first two steps of the phase-in only applicable
to the largest emitters of GHGs, and also included enforceable
commitments for the EPA to study and consider further phasing-in the
PSD and title V permitting requirements under the Act for sources
emitting at lower GHG emissions thresholds.
---------------------------------------------------------------------------

    \18\ 75 FR 31514, June 3, 2010.
---------------------------------------------------------------------------

    Under Step 1, which went into effect on January 2, 2011, only
``anyway sources'' required a PSD permit and were subject to PSD
requirements for their GHG emissions based on an applicability
threshold of 75,000 tpy CO2e.\19\ For a Step 1 PSD ``anyway
source'' that met or exceeded the GHG emissions threshold, the primary
additional requirement, beyond the PSD permitting requirements already
applicable to pollutants other than GHGs, was to determine and
implement BACT for GHGs.\20\ The EPA explained that the establishment
of a significance level--which, in effect, is a BACT threshold--[wa]s
appropriate and . . . decided [at that time] to establish this level at
75,000 tpy CO2e. 75 FR 31568. The EPA also described this
value as a ``significance level'' for convenience because it was
intended to function in a manner similar to the significance levels for
other pollutants. 75 FR 31559. However, the EPA did not add a GHG value
to the definition of ``significant'' in the regulations or attempt to
determine a de minimis level for GHGs. 75 FR 31560. The EPA selected
the 75,000 tpy CO2e level for this purpose in Step 1 because
it was the same as one that the EPA established for Step 2, based on a
judgment that the administrative burdens of addressing GHGs in the PSD
program would be manageable using that value as an applicability level.
75 FR 31568.
---------------------------------------------------------------------------

    \19\ In addition to the applicability thresholds established in
the Tailoring Rule on a CO2e basis, in order for a
source's GHG emissions to trigger PSD or title V requirements, the
quantity of the GHGs also had to equal or exceed the statutory
thresholds of 100 or 250 tpy on a mass basis. 75 FR 31523, June 3,
2010.
    \20\ Shortly after Step 1 went into effect, the EPA issued
guidance on permitting, including BACT determinations, for GHGs
titled ``PSD and Title V Permitting Guidance for Greenhouse Gases,''
EPA Document No. EPA-457/B-11-001, March 2011. http://www3.epa.gov/nsr/ghgdocs/ghgpermittingguidance.pdf.
---------------------------------------------------------------------------

    For the title V program under Step 1, no sources were subject to
title V permitting solely as a result of their GHG emissions. Only
existing sources with, or new sources obtaining, title V permits based
on pollutants other than GHGs were required to address GHGs as part of
their title V permitting to the extent necessary to assure compliance
with GHG applicable requirements established under other CAA programs.
For a Step 1 title V ``anyway source,'' the only additional
requirement, beyond the already-applicable title V permitting
requirements for the pollutants other than GHGs, was to apply any title
V requirements to its GHG emissions when it applied for, renewed or
revised its permit. These requirements included incorporating any GHG
applicable requirements (e.g., GHG BACT requirements from a PSD permit)
and associated monitoring, recordkeeping and reporting. This also
included a requirement to identify GHG emissions and other information
to the extent required under the title V regulations.
    Step 2, which went into effect on July 1, 2011, allowed PSD
applicability

under the Act to extend beyond ``anyway sources'' to new stationary
sources that emit or have a PTE of 100,000 tpy CO2e or more.
Step 2 also covered modifications at existing major stationary sources
that emit or have a PTE of 100,000 tpy CO2e or more that
would increase GHG emissions by 75,000 tpy CO2e or more,
even though the modification would not otherwise be subject to PSD
based on emissions of any pollutant other than GHGs. A Step 2 source
was required to obtain a PSD permit, with the associated procedural
requirements, but the primary substantive requirement for GHGs was
again to determine and implement BACT. Once PSD was triggered by GHG
emissions, these Step 2 PSD sources also were subject to the applicable
PSD requirements for any new or increased emissions of regulated NSR
pollutants other than GHGs at or above of the applicable SERs.
    Step 2 also extended the applicability of title V beyond ``anyway
sources'' to new and existing sources that emitted or had a PTE of
100,000 tpy CO2e or more, even if the new or existing source
would not otherwise be subject to title V based on emissions of any
pollutant other than GHGs. These Step 2 title V sources incurred the
procedural expenses of obtaining a title V permit, but the requirement
to apply for a permit did not, in itself, trigger any additional
substantive requirements for control of GHGs. These permits also
incorporated any applicable CAA requirements that applied to the source
for any other air pollutants.
    In addition, the Tailoring Rule made clear that the pollutant
regulated in the PSD and title V programs was the same as the one
regulated in the LDVR--the single air pollutant defined as the
aggregate group of the six well-mixed GHGs. 75 FR 31522. To reflect
this, the Tailoring Rule adopted a definition of the term ``greenhouse
gases'' or ``GHGs'' in revisions to the PSD and title V regulations
that describes this aggregate air pollutant (as opposed to the
individual gases). We use a similar convention regarding GHGs in this
preamble, using the abbreviation ``GHG'' or ``GHGs'' to refer to the
aggregate air pollutant.
    In the existing regulations adopted in the Tailoring Rule, this
aggregate pollutant is measured in terms of ``carbon dioxide
equivalent'' or ``CO2e'' emissions, which is a metric that
allows all the compounds comprising GHGs to be evaluated on an
equivalent basis despite the fact that the different compounds have
different heat-trapping capacities. The Global Warming Potential (GWP)
that has been determined for each compound reflects its heat-trapping
capacity relative to CO2. The mass of emissions of a
constituent compound is multiplied by its GWP to determine the
emissions in terms of CO2e. A source's emissions of all
compounds in terms of CO2e are summed to determine the
source's total GHG emissions.
3. Actions After the Tailoring Rule
    After the Tailoring Rule was completed, in accordance with the
phase-in process begun in that rule, on July 12, 2012, the EPA
completed a Step 3 rulemaking. In this rule, the EPA determined that
the Tailoring Rule Step 1 or Step 2 permitting thresholds did not need
to be revised at that time. The EPA also improved the usefulness of
PALs for GHG emissions by allowing GHG PALs to be established on a
CO2e basis, in addition to the already-available mass
basis.\21\ The action revised the regulations to allow a source
emitting only GHGs in major amounts (i.e., an existing Step 2 source)
to submit an application for a CO2e-based GHG PAL while also
maintaining its minor source status.\22\
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    \21\ Under the EPA's existing regulations, a PAL is an emissions
limitation for a single pollutant expressed in tpy that is
enforceable as a practical matter and is established source-wide in
accordance with specific criteria. 40 CFR 52.21(aa)(2)(v). Sources
may, but are not required to, apply for a PAL, and the decision to
issue a PAL to particular source is at the discretion of the
permitting authority. 77 FR 41060. PALs offer an alternative method
for determining major NSR applicability by allowing sources to make
a change without triggering PSD review, as long as the source can
maintain its overall emissions of the PAL pollutant below the PAL
level. Therefore, PALs allow sources to make the changes necessary
to respond rapidly to market conditions, while generally assuring
the environment is protected from adverse impacts from the change.
Id.
    \22\ 77 FR 41051, July 12, 2012.
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    The United States courts also resolved several challenges to the
Tailoring Rule and other EPA actions regarding GHGs. On June 26, 2012,
the D.C. Circuit upheld in all respects the Endangerment Finding, LDVR,
Tailoring Rule, and other actions pertinent to the regulation of GHGs
under the PSD and title V programs. After an appeal of this case, on
June 23, 2014, the U.S. Supreme Court issued a decision in UARG v. EPA
addressing only the application of stationary source permitting
requirements to GHGs.
    The U.S. Supreme Court held that the EPA may not treat GHGs as an
air pollutant for the specific purpose of determining whether a source
is a major source (or a modification thereof) and thus required to
obtain a PSD or title V permit. However, the U.S. Supreme Court also
said that the EPA could continue to require that PSD permits, otherwise
required based on emissions of pollutants other than GHGs pollutants,
contain limitations on GHG emissions based on the application of BACT.
That is, the ruling effectively upheld PSD and title V permitting
requirements for GHG emissions under Step 1 of the Tailoring Rule for
``anyway sources,'' and invalidated the application of PSD and title V
permitting requirements to Step 2 sources to the extent that these
sources triggered permitting requirements solely because they had GHG
emissions above the applicable thresholds.
    The U.S. Supreme Court also noted that BACT applied to GHGs under
provisions in the Tailoring Rule only if a source emits GHGs in excess
of 75,000 tpy CO2e, but that the EPA had not arrived at that
number by determining that the impacts of emissions below that level
were de minimis. 134 S.Ct. at 2449. The U.S. Supreme Court recognized
that the ``EPA may establish an appropriate de minimis threshold below
which BACT is not required for a source's greenhouse gas emissions,''
but said that the EPA would need to justify such a threshold on proper
grounds. Id. The U.S. Supreme Court had earlier noted that the EPA's
75,000 CO2e tpy threshold was not an exercise of its
authority to establish de minimis exceptions. 134 S.Ct. at 2438 n. 3.
To address this part of the U.S. Supreme Court's decision, the EPA is
now proposing to exercise that authority. This action proposes a GHG
SER, which represents a de minimis exception level, for purposes of
determining the applicability of the BACT requirement in PSD
permitting.
    To communicate the EPA's preliminary views on the effect of the
UARG v. EPA decision to the public, on July 24, 2014, the EPA issued
the previously-described Preliminary Views Memo. In that memorandum,
the EPA explained that, with respect to ``anyway sources,'' we
initially intended ``to continue applying the PSD BACT requirements to
GHG if the source emits or has the potential to emit 75,000 tpy or more
of GHG on a [CO2e] basis.'' \23\ With respect to modified
sources, we said that initially ``the EPA intends to continue applying
the PSD BACT requirements to GHG if both of the

following circumstances are present: (1) The modification is otherwise
subject to PSD for a pollutant other than GHG; (2) the modification
results in a GHG emissions increase and a net GHG emissions increase
equal to or greater than 75,000 tpy CO2e and greater than
zero on a mass basis.'' Id. at 3. The EPA based this initial approach
on the 75,000 tpy CO2e applicability level that remained in
the EPA's regulations pending further action by the courts. However,
the EPA also explained that it would consider whether to promulgate a
de minimis level, which the EPA is now proposing to do in this action.
Id. at 4.
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    \23\ Next Steps and Preliminary Views on the Application of
Clean Air Act (CAA) Permitting Programs to Greenhouse Gases
Following the Supreme Court's Decision in UARG v. EPA, Memorandum
from Janet G. McCabe, Acting Assistant Administrator, Office of Air
and Radiation, and Cynthia Giles, Assistant Administrator, Office of
Enforcement and Compliance Assurance, U.S. EPA, to Regional
Administrators, p. 3, July 24, 2014.
---------------------------------------------------------------------------

    Because the UARG v. EPA decision affirmed in part and reversed in
part the earlier decision of the D.C. Circuit in Coalition for
Responsible Regulation v. EPA, 684 F.3d 102 (D.C. Cir. 2012), the
matter was returned to the D.C. Circuit to determine whether particular
parts of the regulations adopted by the EPA in the Tailoring Rule
should be struck down (vacated) or left in place with instructions that
the EPA revise them (remanded). On April 10, 2015, the D.C. Circuit
issued an Amended Judgment, which provided a more specific remedy
reflecting the UARG v. EPA U.S. Supreme Court decision.
    In the Amended Judgment, the D.C. Circuit ordered that the EPA
regulations under review (including 40 CFR parts 51.166(b)(48)(v) and
52.21(b)(49)(v)) be vacated to the extent they require a stationary
source to obtain a PSD permit if GHGs are the only pollutant (i) that
the source emits or has the potential to emit above the applicable
major source thresholds, or (ii) for which there is a significant
emissions increase from a modification. The D.C. Circuit also ordered
that the regulations under review be vacated to the extent they require
(i) a stationary source to obtain a title V permit solely because the
source emits or has the potential to emit GHGs above the applicable
major source thresholds and (ii) the EPA to consider further phasing-in
the GHG permitting requirements at lower GHG emission thresholds (in
particular 40 CFR part 52.22 and 40 CFR parts 70.12 and 71.13). The
Court did not vacate the provisions implementing Step 1 of the
Tailoring Rule (in particular, for the PSD program, 40 CFR parts
51.166(b)(48)(iv) and 52.21(b)(49)(iv)).\24\ However, the D.C. Circuit
ordered that the EPA take steps to rescind and/or revise the applicable
provisions of the CFR as expeditiously as practicable to reflect the
relief granted in the Amended Judgment and to consider whether any
further revisions are appropriate in light of UARG and, if so, to
undertake such revisions.
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    \24\ Without these provisions in the definition of ``subject to
regulation'' at this time, any GHG emissions increase would require
a newly constructed major source, or a major modification at an
existing facility, to undergo PSD BACT review for GHGs. 40 CFR
51.166(b)(23)(ii); 40 CFR 52.21(b)(23)(ii).
---------------------------------------------------------------------------

    Consistent with the Amended Judgment, on August 12, 2015, the EPA
issued a final rule that removed from the PSD and title V regulations
entire sections and paragraphs that were readily severable from other
provisions in the PSD and title V regulations and specifically
identified in the D.C. Circuit's Amended Judgment. These removed
provisions required a stationary source to obtain a PSD permit solely
on the basis of the source's GHG emissions and required the EPA to
study and consider further phasing-in of GHG permitting requirements
into the PSD and title V permitting programs at lower GHG emissions
thresholds. 80 FR 50199. Because of the nature of the D.C. Circuit's
Amended Judgment, these revisions were ministerial in nature and exempt
from notice-and-comment rulemaking procedures under the ``good cause''
exception of the APA. In that rulemaking, we also announced that we
intended to further revise the PSD and title V regulations to fully
implement the Amended Judgment in a separate rulemaking, and the
present action initiates that separate rulemaking. This action proposes
revisions to several regulatory definitions in the PSD and title V
permitting regulations, revisions to the PSD GHG PALs and revisions to
other provisions necessary to ensure that neither the PSD nor title V
rules require a source to obtain a permit solely because the source
emits or has the potential to emit GHGs above the applicable
thresholds. These latter revisions include revisions to the title V
regulations that were vacated in the Amended Judgment case--those that
require a stationary source to obtain a title V permit solely because
the source emits or has the potential to emit GHGs above the applicable
major source thresholds. They also include revisions to state-specific
GHG PSD or title V permitting regulations that, in general, the EPA
believes are no longer necessary in light of the other proposed
revisions in this action and that the EPA considers no longer
appropriate to the extent that they might have the effect of
establishing federal permitting requirements for sources that only emit
or have the potential to emit GHGs above the major source thresholds.
These additional revisions to the PSD and title V regulations, although
necessary to implement the Amended Judgment, are not purely ministerial
in nature because they amend, rather than completely remove, text that
remains pertinent to the PSD and title V programs as a whole and their
continued application to GHGs. As a result, we are addressing them in
this separate notice-and-comment rulemaking to give the public an
opportunity to comment on how the EPA proposes to address those
portions of the Amended Judgment.

IV. Revisions to the PSD and Title V GHG Permitting Regulations

A. What revisions to the PSD and title V GHG permitting regulations is
the EPA proposing with this action?

1. Revisions to the PSD Regulations
    In this action, the EPA is proposing to revise certain definitions
in the PSD permitting regulations to fully implement the Amended
Judgment. The first revision would add an exemption clause to the
definitions of ``major stationary source'' and ``major modification''
to ensure that the PSD rules do not require a source to obtain a permit
solely because the source emits or has the potential to emit GHGs above
the major source thresholds or significance level. In other words, a
new stationary source that emits, or has the potential to emit, 100 or
250 tpy or more, as applicable, of any regulated NSR pollutant except
for GHGs would be required to obtain a PSD permit before it is
constructed. Furthermore, a physical change or change in the method of
operation at an existing major source that would result in a
significant increase in emissions of any regulated NSR pollutant except
for GHGs and a significant net emission increase of that regulated NSR
pollutant would be a major modification required to obtain a permit.
    The EPA is proposing to establish a freestanding definition of the
term ``greenhouse gases'' in the PSD regulations at 40 CFR parts
51.166(b)(31) and 52.21(b)(32) to facilitate the application of the
exemptions clauses described earlier. Previously, the definition of
this pollutant was located within the definition of the term ``subject
to regulation'' and we are now proposing to simply move the language
that defined GHGs in this context into an independent definition for
the term ``greenhouse gases.'' This proposed definition of GHGs does
not change the meaning of the term; we are proposing to use the same
language as in the existing regulations.

    In this action we are also proposing to simplify the definition of
``subject to regulation'' in other ways. In the Tailoring Rule, the EPA
placed the GHG applicability thresholds in a new definition of the term
``subject to regulation'' in an effort to enable states with approved
PSD programs to rapidly apply the Tailoring Rule limitations without
necessarily having to revise state regulations. 75 FR 31580-81. The EPA
intended to enable states to immediately read rules that already
contained the term ``subject to regulation'' in a manner consistent
with the definition of this term adopted by the EPA in the Tailoring
Rule. Id. at 31581. However, after the Tailoring Rule, most states
concluded that it was still necessary to revise their regulations to
incorporate the limitations on PSD applicability reflected in the
Tailoring Rule. Also, experience has shown that this mechanism for
implementing the GHG applicability thresholds is confusing and
cumbersome. Thus, the EPA is proposing to eliminate this mechanism and
revert to a more traditional approach of placing the value that
determines applicability of BACT within the definition of the term
``significant.'' This approach also enables the EPA to eliminate the
Tailoring Rule Step 1 thresholds in 40 CFR parts 51.166(b)(48)(iv) and
52.21(b)(49)(iv) that were not vacated but that nevertheless, as the
U.S. Supreme Court noted, lacked a de minimis rationale.
    The EPA thus is proposing to repeal all parts of the definitions of
``subject to regulation'' except for the first paragraph, which simply
served to codify our interpretation of the term ``subject to
regulation'' that was reflected in prior actions. 75 FR 31582. Those
prior actions are the following: (1) A Memorandum from Administrator
Stephen Johnson titled ``EPA's Interpretation of Regulations that
Determine Pollutants Covered by Federal Prevention of Significant
Deterioration (PSD) Permit Program'' \25\ and (2) An action titled
Reconsideration of Interpretation of Regulations That Determine
Pollutants Covered by Clean Air Act Permitting Programs.\26\ This
second action was subsequently described as the ``Timing Decision'' in
Court proceedings. The EPA is not proposing to change or reconsider the
interpretation of its regulations and the CAA reflected in these
actions. Thus, we are retaining the first paragraph in the definition
``subject to regulation'' at 40 CFR parts 51.166(b)(48) and
52.21(b)(49) that codify this interpretation of the term ``subject to
regulation'' that is used elsewhere in the PSD regulations.
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    \25\ 75 FR 80300, December 31, 2008.
    \26\ 75 FR 17004, April 2, 2010.
---------------------------------------------------------------------------

    Finally, consistent with deleting most of the remaining parts of
the definition of ``subject to regulation,'' we are proposing to amend
the definition of ``significant'' to add the proposed value for the GHG
SER. With these revisions to the PSD regulations, GHG will only be
subject to BACT review under the PSD permitting requirements at 40 CFR
parts 52.21(j) and 51.166(j) if the source has been classified as a
major stationary source or a major modification for another regulated
NSR pollutant first and there is a significant net emissions increase
of the source's GHGs emissions equal to or greater than the GHG SER
that is being proposed in this action.
2. Revisions to the PSD PAL Regulations
    The EPA is proposing a number of revisions to the PSD PAL
provisions at 40 CFR 52.21(aa) to address the UARG decision and Amended
Judgment. Because a PSD PAL permit is only available to an existing
major stationary source, and a source is no longer subject to PSD
solely because of its emissions of GHGs, we are proposing to revise the
PSD PAL provisions to remove the ability for a source that would be
``major'' \27\ only for GHGs to obtain a GHG PAL and the ability of a
source establishing a GHG PAL to retain its minor NSR status. We are
proposing to make refinements to the PSD PAL provisions whereby an
existing ``anyway source'' could still apply for and obtain a GHG PAL,
but only for the limited purpose of relieving the source from having to
address the BACT requirement for GHGs when triggering PSD for another
NSR pollutant.\28\ The EPA has previously observed that the PAL
provisions may still have relevance for this purpose after the U.S.
Supreme Court decision.\29\ A PAL may be issued for this purpose if all
requirements for obtaining a GHG PAL are met. As a result of our
proposed revisions, a GHG PAL would be established and function in this
narrower context in much the same way as a PAL for any other regulated
NSR pollutant. The main difference will be that a GHG PAL would not be
issued on a mass basis, but rather on a CO2e basis since the
regulated pollutant GHGs is the aggregate of six individual gases
calculated on a CO2e basis. Finally, all PALs must include
enforceable requirements for the monitoring system to accurately
determine plantwide emissions of the PAL pollutant. As current
monitoring systems do not measure tpy CO2e, we would also
like to clarify that permitting authorities can specify in each
individual GHG PAL permit, much as they already do for GHG PSD permits,
the type of mass-based monitoring to be carried out for each individual
gas and require the applicant to perform the applicable CO2e
calculations.
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    \27\ Assuming GHGs could still be considered in defining a
source as ``major.'' The EPA recognizes they cannot be after the
U.S. Supreme Court decision. If the proposed changes in this rule
are enacted, no source will be considered major for GHGs.
    \28\ We are not proposing similar revisions to 40 CFR 51.166
because the June 29, 2012, final rule that adopted the GHG PAL
provisions under 40 CFR 52.21 did not adopt these changes into the
existing PAL provisions contained in 40 CFR 51.166. 77 FR 41051.
However, nothing in that 2012 action was intended to restrict
states, tribes or local permitting authorities from adopting changes
into their SIP-approved PAL program to allow for the issuance of
PALs on a CO2e basis if they choose to do so. Moreover,
the revisions we are proposing in this action do not preclude a
state, local or tribal program from applying construction permitting
requirements equivalent to the PSD GHG PAL requirements for Step 2
sources under state law, although such provisions are no longer
approvable parts of a PSD or title V program under federal law.
    \29\ 79 FR 70095; 80 FR 14062; 80 FR 23245; 80 FR 28901.
---------------------------------------------------------------------------

3. Revisions to State-Specific PSD Regulations
    The EPA is also taking this opportunity to propose to remove
elements in a specific SIP-approved program that are no longer needed
as a result of the Amended Judgment. The EPA is proposing to remove the
provisions at 40 CFR 52.2305, which establish the Federal
Implementation Plan (FIP) requirements for the issuance of PSD permits
for GHG emissions in the state of Texas.
    On November 10, 2014, the EPA approved the revisions to the Texas
PSD program for GHG emissions which provided the state of Texas the
authority to regulate GHGs in the Texas PSD program and to issue GHG
PSD permits to ``anyway sources.'' 79 FR 66626. However, to avoid
delays to some permit applicants, we retained limited authority under
the Texas GHG PSD FIP at 40 CFR part 52.2305 to issue GHG PSD permits
in certain circumstances. We retained the authority to: (1) Issue
permits to those permit applicants who elected to continue their permit
application with the EPA by May 15, 2014; (2) issue permits to those
permit applicants who did not request a transfer to the Texas
Commission on Environmental Quality prior to the date of final permit
decision; and (3) complete the permit action for all GHG PSD permits
issued by the EPA for which the time for filing an

administrative appeal had not expired or all administrative and
judicial appeals processes had not been completed by November 10, 2014.
The EPA proposes to find that all three circumstances for limited
authority to issue GHG PSD permits in Texas have now been satisfied;
therefore, we no longer need to retain the authorities provided to us
in 40 CFR part 52.2305 and propose to remove that section.
    For questions on whether federally approved SIPs or TIP would need
to be revised to address the regulatory revisions in this proposal, see
Section VII of this preamble.
4. Revisions to the Title V Regulations
    The EPA is proposing to revise certain definitions in the title V
permitting regulations at 40 CFR parts 70 and 71 to fully implement the
Amended Judgment. Specifically, we are proposing to revise the
definition of ``major source'' in 40 CFR parts 70.2 and 71.2 to clarify
that GHGs are no longer considered in determining whether a stationary
source is a major source and thus subject to major source permitting
requirements under the title V program. We are also proposing to remove
paragraphs from the definition of ``subject to regulation'' to remove
those provisions that incorporated the Tailoring Rule CO2e
applicability thresholds into the title V regulations. Those provisions
are no longer necessary or appropriate, in light of the proposed
revisions to the definition of ``major source'' in 40 CFR parts 70.2
and 71.2 described immediately above. Furthermore, we are proposing to
move the definition of ``GHGs'' from the definition of ``subject to
regulation'' to its own definition under the title V regulations at
both 40 CFR parts 70.2 and 71.2. By moving this definition, the EPA
does not intend to make any material changes in how the air pollutant
GHGs is defined, but rather intends to clarify that the definition
applies throughout the title V regulations and that it continues to
include a description of CO2e and how it is calculated.
    While the EPA is proposing to revise its title V regulations so
that they no longer require that a source obtain a title V permit
solely because it emits or has the potential to emit GHGs above major
source thresholds, the agency does not read the UARG decision or the
Amended Judgment to affect other grounds on which a title V permit may
be required or the applicable requirements that must be addressed in
title V permits. The proposed revisions are not intended to change the
existing title V requirements in that regard.
5. Revisions to State-Specific Title V Regulations
    On December 30, 2010, we issued a final rule that narrowed the
EPA's previous approval of state title V operating permit programs that
apply (or may apply) to GHG-emitting sources under 40 CFR part 70, and,
in a few instances, under 40 CFR part 52. 75 FR 82254. For most states,
title V programs are federally-approved only under 40 CFR part 70, but,
in some cases, states have chosen to submit their title V programs as
part of their SIPs. The EPA has approved provisions related to the
operating permit program into the SIP as codified in 40 CFR part 52 for
three states that were addressed in the December 2010 rule: Arizona
(Pinal County Air Quality Control District), Minnesota, and Wisconsin.
    In that December 2010 final rule, we narrowed our previous approval
of certain state permitting thresholds for GHG emissions so that only
sources that equal or exceed the GHG thresholds established in the
Tailoring Rule would be covered as major sources by the EPA-approved
programs in the affected states. For most of the affected states, this
was accomplished by amending our approvals under 40 CFR part 70,
Appendix A. For Minnesota, and Wisconsin, which had title V
applicability provisions that were federally approved under both 40 CFR
part 70 and 40 CFR part 52, we amended our title V program approval in
both 40 CFR part 70 and 40 CFR part 52 to ensure that the scope of the
approved title V program was consistent. In Arizona (Pinal County Air
Quality Control District), we amended our approval under 40 CFR part
52. In this proposal, however, we are proposing to remove those
provisions from all the applicable state title V operating permit
programs except for Arizona (Pinal County Air Quality Control
District), which we intend to address in a separate action. For
Minnesota and Wisconsin, we are proposing to remove the narrowing
provisions under both 40 CFR parts 52 and 70 to ensure consistency.
    We are proposing to remove those provisions from the applicable
title V programs because they no longer seem necessary after the UARG
decision, the Amended Judgment, and the EPA's actions to implement that
decision and the Amended Judgment, since a source would no longer be
required to obtain a title V permit solely because it emits or has the
potential to emit GHGs above the major source threshold.
    For questions regarding whether title V program approvals would
need to be revised to address these regulatory revisions, see Section
VII of this preamble.

B. What additional regulatory revisions is the EPA proposing with this
action?

    The EPA is also proposing to repeal provisions in its 40 CFR parts
60 regulations that the EPA considered advisable to ensure that the
75,000 tpy CO2e applicability threshold for the GHG BACT
requirement continued to apply on an interim basis after GHGs became
regulated under section 111 of the CAA. These provisions were included
in the Carbon Pollution Emission Guidelines for Existing Stationary
Sources: Electric Generating Units,\30\ the Standards of Performance
for GHG Emissions from New, Modified, and Reconstructed Stationary
Sources: Electric Generating Units,\31\ and the Standards of
Performance for Crude Oil and Natural Gas Facilities for which
Construction, Modification or Reconstruction Commenced after September
18, 2015.\32\
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    \30\ 80 FR 64662, October 23, 2015. On February 9, 2016, the
U.S. Supreme Court stayed this rule pending judicial review before
the U.S. Court of Appeals for the D.C. Circuit and any subsequent
proceedings in the U.S. Supreme Court.
    \31\ 80 FR 64510, October 23, 2015.
    \32\ 81 FR 35823, June 3, 2016.
---------------------------------------------------------------------------

    As we explained previously, under 40 CFR parts 51.166(b)(49) and
52.21(b)(50), we define a ``regulated NSR pollutant'' to include, among
other requirements, ``any pollutant subject to a new source standard of
performance under CAA section 111'' and ``any pollutant that otherwise
is subject to regulation under the Act.'' This definition first applied
to GHGs in 2011 under the fourth part of this definition because this
pollutant was then ``otherwise subject to regulation under the Act'' in
the LDVR. However, because the EPA chose to include the Tailoring Rule
thresholds in the definition of the term ``subject to regulation,''
some question arose as to whether those thresholds would continue to
apply after GHGs also became a regulated NSR pollutant when this
pollutant became subject to a standard of performance under section
111. Thus, the EPA adopted provisions in 40 CFR part 60 that made clear
that promulgation of CAA section 111 requirements for GHGs under these
rules would not result in BACT applying to GHGs at an ``anyway source''
that increased GHGs by any amount below 75,000 tpy CO2e. To
ensure this was clear, the final regulatory text for these rules said
that ``the pollutant that is subject to the standard promulgated under
section 111 of the Act'' shall be considered to be the

pollutant that otherwise is ``subject to regulation'' under the Act as
defined under the respective ``subject to regulation'' definitions
under the PSD and title V provisions. With the addition of a SER for
GHGs, these 40 CFR part 60 provisions are no longer needed to ensure
that a BACT applicability threshold remains applicable to GHGs after
the regulation of GHGs under section 111 of the Act. Thus, we are
proposing to remove the provisions at 40 CFR parts 60.5360a(b),
60.5515(b) and 60.5705(b).

V. Establishment of a GHG SER

A. What is the legal basis for establishing a GHG SER?

    In the UARG decision, the U.S. Supreme Court observed that the EPA
may limit application of the BACT requirement for GHGs to those
situations where a source has the potential to emit ``more than a de
minimis amount of greenhouse gases.'' 134 S.Ct. at 2449. The Court also
acknowledged the EPA's past practice of establishing de minimis levels
for other pollutants that determine whether individual pollutants are
subject to the BACT requirement. Id. at 2435 n. 1. In both of these
parts of its opinion, the U.S. Supreme Court cited the D.C. Circuit's
decision in Alabama Power Co. v. Costle.\33\ The D.C. Circuit's opinion
in that case provides the foundational legal principles upon which the
EPA has previously established the de minimis levels in the NSR program
that are known as ``significant emission rates.'' In light of the U.S.
Supreme Court's favorable citation of the Alabama Power case, the EPA
continues to look to this case as providing the controlling legal
principles for an agency to establish a de minimis exception to a
statutory requirement.
---------------------------------------------------------------------------

    \33\ 636 F.2d 323, D.C. Cir. 1979.
---------------------------------------------------------------------------

    Agencies have inherent authority ``to overlook circumstances that
in context may fairly be considered de minimis'' and need not ``apply
the literal terms of a statute to mandate pointless expenditures of
effort.'' Alabama Power, 636 F.2d at 360. ``Unless Congress has been
extraordinarily rigid, there is likely a basis for an implication of de
minimis authority to provide an exemption when the burdens of
regulation yield a gain of trivial or no value.'' Id. at 360-361.
Determining when matters are truly de minimis depends on the particular
circumstances and the agency bears the burden of making the required
showing. Id. Thus, the de minimis authority is ``tightly bounded by the
need to show that the situation is genuinely de minimis or one of
administrative necessity'' Id. at 361. De minimis authority is not a
mechanism to ``depart from the statute, but rather a tool to be used in
implementing the legislative design'' and cannot be used where there
are acknowledged benefits but the agency concludes they ``are exceeded
by the costs.'' Id.\34\
---------------------------------------------------------------------------

    \34\ See also 44 FR 51937, September 5, 1979 (the EPA proposal
to establish SERs stating that it would not be appropriate to base a
SER on ``a cost-effectiveness rationale'').
---------------------------------------------------------------------------

    As the U.S. Supreme Court noted, the CAA does not specify how much
of a given regulated pollutant a major source must emit before it is
subject to the BACT requirement for that pollutant. 134 S.Ct. 2427 n.
1. The Act requires application of BACT to ``each pollutant subject to
regulation'' under the Act but does not address whether the EPA has
discretion not to apply the BACT requirement to pollutants emitted
below a particular level. CAA section 169(3). The EPA has previously
recognized that sources that trigger PSD can emit some pollutants at
levels below which application of the BACT requirement would be a
pointless expenditure of effort. Accordingly, the EPA's regulations
specify that the BACT requirement need only be applied to pollutants
that: (1) A new major source has ``the potential to emit in significant
amounts'' and (2) will increase by a ``net significant'' amount as a
result of a major modification at an existing major source. 40 CFR
parts 51.166(j)(2)-(3) and 52.21(j)(2)-(3).
    After acknowledging these existing regulations, the U.S. Supreme
Court specifically recognized in UARG that the EPA could establish ``an
appropriate de minimis threshold below which BACT is not required.''
134 S.Ct. at 2449. Inherent in this aspect of the UARG decision is a
judgment by the U.S. Supreme Court that Congress has not been
``extraordinarily rigid'' with respect to application of the PSD BACT
requirement to pollutants emitted in lower amounts. The U.S. Supreme
Court has now recognized, consistent with the principles of Alabama
Power, that the PSD statutory scheme includes the inherent authority
for the EPA to overlook de minimis levels of pollutant emissions when
applying the BACT requirement in the PSD permitting program.
    However, the U.S. Supreme Court also emphasized that the EPA must
justify its selection of a de minimis threshold ``on proper grounds,''
citing the discussion at page 405 of Alabama Power. This part of the
Alabama Power decision consists of two paragraphs expressly addressing
the application of de minimis principles to BACT. The Court said that a
``de minimis exception must be designed with the specific
administrative burdens and the specific statutory context in mind'' and
then specifically considered the BACT context. Id. at 405. The Court
recognized that de minimis principles could be used to address ``severe
administrative burdens on the EPA, as well as severe economic burdens
on the construction of new facilities.'' 636 F.2d at 405. A rational
approach to the application of BACT, the Court continued, would
consider ``the danger posed by increases in'' emissions and ``the
degree of administrative burden posed by enforcement at various de
minimis threshold levels.'' Id.
    At first, there may appear to be an internal tension in Alabama
Power between the language describing general parameters for the
exercise of de minimis exemption authority and the BACT discussion. The
Court's recognition that a de minimis exemption cannot be based simply
on a conclusion that a requirement's costs outweigh its benefits, 636
F.2d at 361, was paired with explicit acknowledgement that a de minimis
threshold could be ``rationally designed to alleviate severe
administrative burdens.'' 636 F.2d at 405. The Court also observed that
a rational approach would consider the following factors: ``the
administrative burden with respect to each statutory context;''
``whether the de minimis threshold should vary depending on the
specific pollutant and the danger posed by increases in its
emissions;'' and ``the degree of administrative burdens posed by
enforcement at various de minimis threshold levels.'' Id. While the
degree of burden might be viewed as part of a cost-benefit analysis,
EPA believes it is possible to harmonize these parts of the Court's
opinion by treating each of these elements as factors for the Agency to
consider in a rational approach to determining a de minimis threshold.
    Considering all the relevant parts of the Alabama Power opinion,
the EPA believes that it need not focus solely on the programmatic
advantages of regulation and disregard implementation burdens when
establishing a de minimis exception. Where the record shows that the
burdens of regulation are high relative to a small gain that is
achievable by regulation, the EPA reads Alabama Power to allow an
agency to consider such gains to be de minimis if the Agency finds this
appropriate after considering the statutory context, the nature of
pollutant, and the danger caused by increases of that pollutant.
However, where the gains of regulation

are greater, the EPA reads Alabama Power to preclude the agency from
declining to regulate on the basis of a judgment that the costs simply
exceed achievable benefits that further the regulatory objectives.
    In sum, therefore, to justify a de minimis exemption by regulation,
an agency must show that the benefits of regulating an activity below
the level set forth in the exemption are trivial or of no value. The
supporting analysis must consider the regulatory context, including the
nature of the pollutant and the dangers caused by increases in that
pollutant, the nature and purposes of the regulatory program, the
administrative and implementation burdens of, and the gain achieved
from, regulating the activities at or below a certain level. Based on
that analysis, the agency must make a reasoned judgment whether, in
light of the regulatory context, the gains from regulating an activity
below the exemption level can fairly be characterized as being trivial
or of no value. In developing the SER for GHGs proposed in this action,
the EPA has considered the factors laid out by the Court in Alabama
Power.

B. What is the regulatory context for the de minimis exception proposed
in this rule?

    The Alabama Power opinion said that a ``de minimis exception must
be designed with . . . the specific statutory context in mind.'' Id. at
405. The SER for GHGs that the EPA is proposing in this rule will apply
only in the particular context of determining whether the BACT
requirement applies to GHG emissions from a new source or modification
that requires a PSD permit based on emission of pollutants other than
GHGs.
    Because GHGs are a regulated NSR pollutant under the applicable
definition, the BACT provisions in 40 CFR parts 51.166(j) and 52.21(j)
apply to GHGs when an ``anyway source'' triggers the obligation to
obtain a PSD permit. Under the specific terms of 40 CFR parts
51.166(j)(2)-(3) and 52.21(j)(2)-(3) of the EPA's regulations, the SER
adopted in this rule will determine whether the BACT requirement
applies to GHGs.
    Because of the U.S. Supreme Court's decision, the requirement to
obtain a PSD permit does not apply to a source that emits only GHGs in
major amounts. Likewise, the modification of an existing major source
cannot trigger the requirement to obtain a PSD permit based solely on a
significant increase in the amount of GHGs. In order to qualify as a
major modification under the revisions proposed in this rule, a
modification of an existing major source must result in a significant
net emissions increase of a regulated NSR pollutant other than GHGs. If
a modification triggers PSD on this basis, then the SER proposed in
this rule will apply to determine whether the PSD permit for that
modification must contain a BACT limit for GHGs. But the SER proposed
in this rule will not determine whether a modification at an existing
major source requires a PSD permit in the first instance.
    This contrasts with the 75,000 tpy CO2e value the EPA
identified as a ``significance level'' in parts of the Tailoring Rule.
During Step 2 of the Tailoring Rule phase-in, this value was used to
determine whether a PSD permit was required based solely on an increase
in GHG emissions resulting from a modification at an existing major
source that did not increase any other pollutants above the
significance levels. In this context, the EPA said that if the agency
were to establish a de minimis level for GHGs, ``that amount could be
below--perhaps even well below--the `major emitting facility'
thresholds established in this rulemaking on the grounds of
`administrative necessity' and other doctrines.'' 75 FR 31560.
Paraphrasing this statement, the U.S. Supreme Court noted that the
``EPA stated . . . that a truly de minimis level might be `well below'
75,000 tons per year [CO2e].'' 134 S. Ct at 2427 n.3. At the
time of the Tailoring Rule, the EPA read the definition of ``major
emitting facility'' in section 169(1) of the CAA to require that the
agency apply the 100 or 250 tpy major source threshold to all regulated
pollutants, including GHGs. In that light, the EPA believed it would be
difficult for the agency to justify a value substantially greater than
the statutory major source thresholds as a de minimis or trivial level
of emissions. Thus, the EPA said that a de minimis level for GHGs could
perhaps be ``well below'' 75,000 tpy CO2e based on its
understanding at the time that the EPA's de minimis exception authority
was constrained by the Congressional determination that it was worth
regulating any source emitting more than 100 or 250 tpy of a regulated
pollutant. The U.S. Supreme Court has since clarified that the EPA
cannot apply the 100 or 250 tpy levels to GHGs, or even consider the
pollutant GHGs in defining a major source (or modification thereof)
that requires a PSD permit. The Court's reasoning suggests that
Congress has not determined that 100 or 250 tpy is a major amount of
GHGs. Thus, the EPA no longer views the 100 and 250 tpy thresholds as a
constraint on the level of GHGs that the EPA may identify as de minimis
in the PSD program context. Furthermore, in this proposed rule, the EPA
is considering the application of a de minimis level in a PSD program
context that is narrower than the one the EPA was addressing in the
Tailoring Rule. The SER the EPA proposes in this rule will apply only
to determine whether BACT applies to GHGs and not to determine whether
a source is required to obtain a PSD permit.
    In addition, because there is no NAAQS for GHGs, the SER for GHGs
proposed in this rule will not determine whether a PSD permit
application is required to include an ambient air quality analysis for
this pollutants. 40 CFR parts 51.166(m)(1)(i) and 52.21(m)(1)(i). In
the absence of a NAAQS or PSD increment for GHGs, a permit applicant
need not make an air quality demonstration for GHGs, as required for
other pollutants under section 165(a)(3) of the Act and 40 CFR parts
51.166(k) and 52.21(k) of the EPA's regulations.\35\
---------------------------------------------------------------------------

    \35\ ``PSD and Title V Permitting Guidance for Greenhouse
Gases,'' EPA, Office of Air Quality Planning and Standards, Research
Triangle Park, NC, EPA-457/B-11-001, pp. 47-48, March 2011.
---------------------------------------------------------------------------

    Accordingly, in light of the Court direction that an agency
consider the particular context for a de minimis exception, the EPA has
based the proposed SER for GHGs on an evaluation of the benefits and
burdens of applying the BACT requirement to GHGs when an ``anyway
source'' emits this pollutant at various levels. Under section 169(3)
of the CAA, BACT is an emissions limitation based on ``the maximum
degree of reduction . . . which the permitting authority . . .
determines is achievable'' through application of pollutant control
technology. CAA section 169(3). Thus, in assessing the value of
regulating GHG emissions under the PSD BACT requirement at sources
emitting GHGs at various emissions levels, the EPA has focused on the
degree of emission reduction that would be expected to be achieved at
individual sources emitting GHGs below the levels under consideration.
Furthermore, since the regulation the EPA is proposing will apply
across the PSD program as a whole, the EPA has also considered the
potential for GHG emissions reduction, principally through the
characterization of affected sources and units, that one would expect
to achieve at ``anyway sources'' emitting (or modifications increasing)
GHGs below prospective de minimis levels as compared in relation to the
potential for GHG emissions

reductions expected from the population of sources that would be
subject to the BACT requirement because they emit GHGs above that
level.
    While the dangers caused by increases in GHGs are relevant under
the factors discussed in the preceding section, since the SER for GHGs
will not be used to determine what sources must apply for a PSD permit
or whether an ambient air quality analysis must be conducted for GHG,
the EPA does not believe it is necessary for the Agency to attempt to
identify the specific nature or degree of environmental impact
predicted from various levels of GHG emissions from ``anyway sources''
that are required to obtain a PSD permit. Likewise, EPA does not
believe it is necessary for the Agency to try to distinguish specific
environmental impacts at a given level from those expected at other
levels. As the EPA has noted, climate change modeling and evaluations
of risks and impacts of GHG emissions is typically conducted for
changes in emissions that are orders of magnitude larger than the
emissions from individual projects that might be analyzed in PSD permit
reviews.\36\ In the context of PSD permitting, the EPA is continuing to
use the level of GHG emissions from a stationary source as the more
credible and appropriate means for assessing the potential
environmental impact of such a source. This aligns with the
Congressional direction in the BACT provision to achieve the maximum
degree of emissions reduction of each pollutant. Congress established a
separate requirement in the PSD program to demonstrate that the air
quality impact of a source does not cause a violation of air quality
standards, but that requirement is not applicable to GHGs at this time.
---------------------------------------------------------------------------

    \36\ ``PSD and Title V Permitting Guidance for Greenhouse
Gases,'' EPA, Office of Air Quality Planning and Standards, Research
Triangle Park, NC, EPA-457/B-11-001, p. 48, March 2011.
---------------------------------------------------------------------------

    Considering this context and Congressional intent that BACT reflect
a ``degree of reduction'' that is achievable, the SER that the EPA
proposes to establish for GHGs represents a level of GHG emissions
below which application of the BACT requirement would be expected to
yield a ``degree of emissions reduction'' that has trivial or no value.
In this proposed rule, the EPA's analysis shows that the proposed SER
is de minimis only as applied in the particular context of determining
whether application of the BACT requirement to GHGs would be of value
in reducing GHG emissions from ``anyway sources'' that trigger the
requirement to obtain a PSD permit. The proposed SER is not a level of
GHGs below which the EPA has concluded there is a de minimis impact on
the global climate. Rather, the de minimis level proposed in this rule
reflects only a level of GHG emissions from an ``anyway source'' below
which the EPA is proposing to find that there would be trivial or no
value in applying the BACT requirement to GHGs in the context of
preparing a PSD permit.

C. Historical Approaches to Establishing a De Minimis Level in the PSD
Program

    The EPA has previously established de minimis levels for several
pollutants in the PSD program that are reflected in the definition of
``significant'' in existing PSD regulations. 40 CFR parts
51.166(b)(23)(i) and 52.21(b)(23)(i). In this section of the preamble,
we discuss the approaches the EPA has previously used to establish de
minimis emissions levels. We then examine the extent to which these
approaches can be employed to support the development of a de minimis
emissions level for GHGs. The EPA's judgment at this time is that the
approaches we have previously used to establish SERs are not workable
for the establishment of a GHG SER due the unique nature of GHG
emissions.
    The EPA first established SERs in 1980 as part of the revised PSD
regulations that the EPA completed following the Alabama Power
decision. 45 FR 52676 (1980 PSD Rule). The 1980 PSD Rule included the
current approach for defining ``major'' modifications, based on the use
of SERs to define ``significant'' increases in emissions. As discussed
previously, a modification must be ``major'' to trigger the PSD
permitting requirement. The EPA determined the level of these SERs
following the principles regarding de minimis exceptions that the Court
provided in Alabama Power.
    In the preamble to the 1980 PSD Rule, the EPA identified the
primary objectives the Agency sought to meet in selecting de minimis
values: (1) Provide effective Class I area protection, (2) guard
against excessive un-reviewed consumption of the Class II or III PSD
increments, and (3) assure meaningful permit reviews. 45 FR 52676,
52706. ``Meaningful'' in this context meant that there would be a
possibility of obtaining useful air quality information or obtaining
greater emission reductions as a result of BACT analysis than would be
expected from otherwise-applicable state permit or NSPS/national
emission standards for hazardous air pollutants (NESHAP) processing.
Id.
    Within this framework, the de minimis levels finalized for each
pollutant in the 1980 PSD Rule were based on consideration of both
environmental impacts and administrative burden. The Administrator
chose to specify de minimis level cutoffs in terms of emissions rate
(i.e., tpy). The derivation of the de minimis levels are described in
preambles published in the Federal Register and two technical support
documents to the 1980 rulemaking.\37\ In setting the de minimis levels
for each pollutant, the EPA relied on existing ``data on sources
permitted under the PSD program'' to predict the environmental/air
quality impacts associated with regulating emissions above that level,
and a measure of the number of PSD permitting actions that might result
from a particular de minimis level. 45 FR 52676, 52707.
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    \37\ One report is titled ``Impact of Proposed and Alternative
De Minimis Levels for Criteria Pollutants,'' EPA-450/2-80-072; the
other report is a staff paper titled ``Approach to Developing De
Minimis Levels for Noncriteria Air Pollutants.'' Both papers have a
June 1980 publication date.
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    The EPA assessed the air quality impacts differently for criteria
and non-criteria pollutants.\38\ For criteria pollutants, where there
was extensive health and welfare documentation based on ambient
concentration data used in setting NAAQS, the EPA based the de minimis
emission levels on ambient air impacts. For non-criteria pollutants,
for which no ambient air quality standards existed, the EPA based the
de minimis emission levels on emission rates embodied in NSPS and
NESHAP, which are national emission standards developed under CAA 111
and CAA 112, respectively. The bases for the de minimis emissions rates
are summarized below.
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    \38\ ``Criteria pollutants'' are those pollutants listed by the
EPA under CAA section 108 for study and subsequent development of
NAAQS under CAA section 109. ``Non-criteria'' pollutants are other
pollutants that are subject to regulation under the Act.
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    For the criteria pollutants (all except carbon monoxide (CO), as
discussed later), the final de minimis levels were based on 2 to 4
percent of the primary NAAQS for the pollutant. 45 FR 52676, 52708. To
develop these SERs in tpy, the EPA first established a range of
potential air quality ``design values'' \39\ representing percentages
of the then-current primary NAAQS and, for particulate matter (PM) and
sulfur dioxide (SO2), percentages of the Class

II PSD increments.\40\ These design values were then converted to
annual emissions rates in accordance with the EPA modeling procedures
using data on sources permitted under the PSD program. 45 FR 52676,
52707. Since at that time there was only an annual NAAQS for nitrogen
dioxide (NO2), the EPA elected to set the de minimis
emissions rate for nitrogen oxides (NOX) at the level
corresponding to 2 percent of the annual NAAQS. Id. For CO, the
emissions rates corresponding to all the evaluated percentages of the
NAAQS were in excess of the major stationary source threshold of 100
tpy that applies to many source categories, so the EPA set the SER at
100 tpy. Id. The pollutant volatile organic compounds (VOC) is not a
criteria pollutant in itself but was, and is, designated as a precursor
to the formation of the criteria pollutant ozone in the atmosphere. The
EPA set the SER for VOC at the same level as that for NOX in
recognition of the link between VOC and NOX emissions in the
formation of ozone. Id.
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    \39\ These ``design values'' are to be distinguished from the
design values calculated from ambient air quality data as part of
determining compliance with certain of the NAAQS.
    \40\ At the time, increments had been established only for PM,
which at that time was expressed as total suspended particulate
(TSP), and SO2.
---------------------------------------------------------------------------

    For other non-criteria pollutants, the de minimis emissions rates
were generally based on 20 percent of the NSPS or 10 percent of the
NESHAP that imposed limits on their emissions. For example, for
sulfuric acid, the SER in tpy was determined based on 20 percent of a
model sulfuric acid production plant's annual emissions using the NSPS-
based emission standard. A model plant is considered a typical plant
affected by the NSPS. 45 FR 52676, 52709.
    Since no NAAQS has been set for GHGs, the EPA cannot use the
approach based on a percentage of the NAAQS to identify a de minimis
level for GHGs. In addition, current climate modeling tools are not
capable of isolating the precise correlations between singular,
incremental facility-specific GHG emissions changes, ambient
CO2 concentrations, and climate impacts. Thus, because of
the absence of a NAAQS for GHGs and the inherent uncertainties and
limitations in modeling climate-related impacts from incremental
project-level GHG emission increases, the EPA's judgment at this time
is that an ambient-air quality impact-based approach is not workable
for setting a GHG SER.
    Regarding the historical ``20 percent of NSPS'' approach for non-
criteria pollutants, we believe that this would result in a GHG SER
that would be inconsistent with the de minimis principles described
earlier. The only NSPS containing a GHG emissions limit that EPA had
finalized as of the date of our analysis \41\ was the rule that limits
CO2 emissions from new electric generating units (EGUs).\42\
Based on the modeled emissions profile for the EGU NSPS emissions
limit, the ``20 percent of NSPS'' approach would result in a de minimis
value of approximately 320,000 tpy CO2e when applied to the
standard for a 600 megawatt natural gas combined cycle EGU.\43\ For
comparison purposes, this level of GHG emissions is four times greater
than the current interim GHG BACT applicability level of 75,000 tpy
CO2e. As described later in Section V.D.1 of this preamble,
the 75,000 tpy CO2e permitting level has been successfully
implemented and is achieving meaningful GHG emission reductions through
BACT review at larger, industrial GHG emission sources and units, some
of which would not have GHG emission increases large enough to be
subject to GHG BACT review at a 320,000 tpy CO2e permitting
level.
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    \41\ EPA has since completed other standards that contain GHG
emission limits, but these were not available at the time of our
analysis.
    \42\ Final Rulemaking titled ``Standards of Performance for
Greenhouse Gas Emissions from New Stationary Sources: Electric
Utility Generating Units'' (80 FR 64510, October 23, 2015).
    \43\ ``Regulatory Impact Analysis for the Final Standards of
Performance for Greenhouse Gas Emissions from New, Modified, and
Reconstructed Stationary Sources: Electric Utility Generating
Units.'' Chapter 5, Table 5-1. EPA-452/R-15-005, August 2015,
(http://www2.epa.gov/sites/production/files/2015-08/documents/cps-ria.pdf.
---------------------------------------------------------------------------

    In addition, using the ``model plant'' approach for establishing a
de minimis level for GHGs is problematic because GHGs are emitted from
such a diverse group of sources, in terms of both type and size. Even
if NSPS that regulated GHG emissions for source categories other than
EGUs had been available for analysis, the diversity of sources and the
differences in GHG emissions contribute to eliminate the viability of
the ``model plant'' approach for setting a SER. The model plant
approach worked for other non-criteria pollutants because there was a
much narrower set of industrial source categories from which the
pollutant of interest was emitted in quantities of any concern (e.g.,
fluoride emissions from aluminum production plants).
    Following the approach used for CO (i.e., applying the major source
threshold of 100 tpy as a SER level) would result in a GHG threshold
that would exclude only very small emissions units. However, it may
still require GHG BACT for what still can be considered relatively
small units in terms of GHG emission increases for which, under any
reasonable viewpoint, there would be trivial value in conducting a GHG
BACT review. This would impose unreasonable administrative burdens for
implementation and enforcement. As discussed previously, after the U.S.
Supreme Court's UARG decision, PSD review is limited to only ``anyway
sources,'' where emissions of a regulated pollutant other than GHGs
triggers major stationary source or major modification status under
PSD. Thus, the GHG BACT requirement will only apply to such sources. In
this context, the term ``small unit'' is a relative term because the
smallest units or modifications will be excluded from PSD entirely
because they do not emit or increase any pollutant in major amounts.
Cases where a new major stationary source or a major modification
involves combustion units with emissions of other pollutants large
enough to trigger PSD generally would be associated with large
CO2 emission increases as well, and thus would focus GHG
BACT review on the larger emitting units. However, in cases where major
stationary source or major modification status is triggered by non-
combustion emissions units, such as large VOC emitters, there may be
collateral GHG emission increases that are very small. In addition,
CO2 is emitted in much greater quantities than CO; the
CO2 emission factor for natural gas boilers is 1,400 times
that of CO, meaning that a boiler triggering PSD for emissions of 100
tpy CO would emit 140,000 tpy CO2.\44\ Very small combustion
units can emit 100 tpy CO2, such as small stationary
internal combustion (IC) engines, water heaters, and heating,
ventilation and air conditioning units. Thus, a 100 tpy GHG SER may
trigger BACT review for very small units or modifications. However, as
will be discussed later in this preamble, the EPA believes applying the
BACT requirement to such small combustion units would provide emission
reductions gains of trivial or no value.
---------------------------------------------------------------------------

    \44\ U.S. EPA, Compilation of Air Pollutant Emission Factors,
Document No. AP-42, Volume I, Chapter 1, Section 1.4 ``Natural Gas
Combustion,'' Tables 1.4.1 and 1.4.2, July 1998.
---------------------------------------------------------------------------

    In addition, it should be noted that the SER for CO was set at 100
tpy in deference to the statutory definition of ``major stationary
source'' that applies to many source categories, in spite of the fact
that the emissions rates corresponding to all the percentages of the
NAAQS that were evaluated as potential de minimis levels were in excess
of 100 tpy. As a criteria

pollutant, CO is clearly covered by this statutory major source
definition. However, the U.S. Supreme Court made clear in UARG that the
major source levels are not applicable to GHG emissions. Thus, for the
reasons discussed earlier, setting a SER for GHGs need not be limited
by the major source thresholds in the same manner that the EPA viewed
it as a limitation for CO.

D. What is the technical basis for the proposed GHG SER?

1. Summary of Technical Support Information
    In this section, we summarize the key findings from our data
reviews and how they support our proposed GHG SER value. Following this
summary, Sections V.D.2 to V.D.5 of this preamble provide more detailed
information on each of the individual reviews and analyses, the
findings from each, and references to applicable supporting documents.
Section V.E of this preamble then presents our proposed GHG SER, an
overall summary of our findings that support our propose GHG SER level,
and a request for comments.
    It is important to note that no single review or analysis by itself
constitutes the basis for the proposed GHG SER value of 75,000 tpy
CO2e. Instead, we based our proposed GHG SER on the
collective findings from these technical reviews, some quantitative in
nature and some qualitative, that sought to evaluate the potential
coverage of GHG sources, and the opportunities for achieving meaningful
GHG emissions reductions from the BACT review as part of projects at
``anyway sources'' under the PSD permitting program.
    Information obtained from the following four categories of data
reviews supports the proposed GHG SER level: (1) A review of recent PSD
permitting information for ``anyway sources,'' including those subject
to GHG BACT review since GHGs became subject to regulation in 2011; (2)
a calculation of the equivalent GHG emissions corresponding to a 40 tpy
NOX SER level for different combustion unit types that could
be expected to be part of ``anyway sources;'' (3) an analysis of non-
combustion related GHG source category emissions data; and (4) a review
of control strategies that have been or would likely be applied for GHG
BACT reviews. In addition, the EPA considered the burdens of applying
the GHG BACT requirement to sources emitting (or modifications
increasing) GHGs in relatively small amounts. The following paragraphs
summarize the key findings from each of these reviews that informed our
decision on the proposed GHG SER.
    Under the first category of data review, we examined existing PSD
permitting information to determine the types and size of GHG emission
units that are likely to be part of PSD ``anyway sources.'' We looked
at two sources of permitting information for this review. First, we
looked at GHG permitting information from the EPA Regional offices and
states as part of the EPA's effort under the phase-in process
established in the Tailoring Rule to collect information on actual
permits issued that included GHG BACT limits. This information provided
actual, historical information on the type of emissions units
undergoing GHG BACT review at a 75,000 tpy CO2e permitting
applicability level. This was the effective applicability level for
determining whether GHG BACT review applied to ``anyway sources'' that
were otherwise subject to PSD permitting based on conventional (non-
GHG) pollutants under Step 1 of the Tailoring Rule. It is also the
current effective applicability level for determining if GHG BACT
review applies to ``anyway sources.'' \45\ The second data source we
looked at as part of this permitting review was information from the
EPA's Reasonably Available Control Technology (RACT)/BACT/Lowest
Achievable Emission Rate (LAER) Clearinghouse (RBLC). The RBLC is a
voluntary, national reporting database containing PSD permit
information, including permits for which no GHG BACT review was
conducted after GHGs became regulated in 2011. We reviewed the RBLC
data to further characterize PSD permits in regards to potential GHG-
emitting sources and to specifically identify the likelihood of new PSD
``anyway sources'' emitting (or a modified ``anyway source''
increasing) GHG emissions in an amount less than 75,000 tpy
CO2e. Such a source would not have been subject to GHG BACT
review under Step 1 of the Tailoring Rule. Because all of this PSD
permitting information was from a period when 75,000 tpy
CO2e was used as the effective BACT applicability level for
GHGs, this value serves as a key reference point throughout each part
of our analysis.
---------------------------------------------------------------------------

    \45\ Next Steps and Preliminary Views on the Application of
Clean Air Act (CAA) Permitting Programs to Greenhouse Gases
Following the Supreme Court's Decision in UARG v. EPA, Memorandum
from Janet G. McCabe, Acting Assistant Administrator, Office of Air
and Radiation, and Cynthia Giles, Assistant Administrator, Office of
Enforcement and Compliance Assurance, U.S. EPA, to Regional
Administrators, p. 3, July 24, 2014.
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    Our review of this permit information produced a number of
important findings. First, we found that, using a 75,000 tpy
CO2e applicability level, BACT review for GHGs was triggered
for the largest sources of GHGs from a national perspective. This was
evidenced by the fact that the source categories represented in the
``anyway sources'' with PSD permits addressing GHGs correlated very
well with the largest GHG-emitting source categories identified through
the EPA's GHG Reporting Program (GHGRP).\46\ The GHGRP emissions
reports are submitted by stationary sources to the EPA on a yearly
basis. Almost all of the PSD permits since 2011 that contained GHG BACT
limits were issued to sources in categories that collectively represent
over 92 percent of the 2013 reported emissions under the GHGRP. These
GHGRP categories include power plants (66 percent of GHGRP emissions
for 2013), petroleum and natural gas systems (7 percent), petroleum
refineries (5.6 percent), organic and inorganic chemicals manufacturing
(5.5 percent), minerals production (3.5 percent), metals production
(3.4 percent) and pulp and paper manufacturing facilities (1.2
percent). The percentages provided above reflect the portion of the
total nationally-reported GHG emissions, on a CO2e basis,
emitted from facilities in the particular source category. The
distribution of ``anyway source'' permits containing a GHG BACT limit
was similar: Power plants made up the largest percentage (47 percent)
followed by the chemical production sector (20 percent), the oil and
gas sector (10 percent), metals production (8 percent), refineries (6
percent), minerals production (6 percent) and the pulp and paper
industry (3 percent). These same categories also contributed over 92
percent of the GHG emissions, based on CO2e, as reported
under the EPA's GHGRP.\47\
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    \46\ ``A Summary Analysis of the GHG Permitting Experience
between 2011 and 2014,'' prepared by EPA Staff, March 2015.
    \47\ 2013 GHGRP Overview Report, http://www.epa.gov/sites/production/files/2015-07/documents/ghgrp-overview-2013.pdf.
---------------------------------------------------------------------------

    This correlation between source categories subject to the GHG BACT
requirement and the source categories contributing the most reported
GHG emissions confirms that at the current applicability level of
75,000 tpy CO2e, the categories of sources contributing the
most to national stationary source GHG emissions are included in the
population of sources that were subject to the BACT requirement for
GHGs. We did not see any prominent, high-ranking

GHG reporting source categories, in terms of their national GHG
emissions contributions, that were not included in the ``anyway
sources'' that obtained PSD permits with GHG BACT limits at the 75,000
tpy CO2e level. This is one consideration in evaluating
whether there is value in applying BACT to GHGs at sources emitting (or
modifications increasing) this pollutant below the 75,000 tpy
CO2e level. Other parts of the EPA's analysis show that the
potential for achieving meaningful GHG reductions from BACT review is
highest at the GHG reporting source categories that are responsible for
most of the national GHG emissions.
    A second key finding from our review of past permitting actions was
that the emissions from large, fossil-fueled combustion units were
generally the principle cause for ``anyway sources'' requiring PSD
permits based on emissions of pollutants other than GHGs. Across all
industry categories, we found that ``anyway sources'' have been
triggering PSD primarily because of the addition or modification of
combustion units. Most of these projects involved some combination of
turbines, boilers, process heaters/furnaces, and stationary IC engines
that were principally fired with either diesel fuel or natural or
process gas, with smaller numbers of biomass-fueled units. We found
that even for a specific sector such as the oil and gas industry, where
there are a variety of fugitive emission sources, combustion emissions
still dominate the emission profile and are the primary driver of PSD
applicability for new construction and major modification projects.
    This finding that combustion units dominate the population of PSD
permits that contain GHG BACT limits to date is also consistent with
the general composition of the sources in the national GHG emissions
inventory. Nationally, CO2 is the GHG emitted in the largest
quantities from stationary sources.\48\ The 2.9 billion metric tons of
CO2 emissions reported by stationary sources under the EPA's
GHGRP for the year 2013 represent 91.4 percent of the total reported
GHGs, in terms of percent of total CO2e emissions, from
reporting stationary sources in 2013.\49\ Of the reported 2.9 billion
metric tons of CO2 emissions, approximately 90 percent
results from fossil fuel-fired combustion units.\50\
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    \48\ 2013 GHGRP Overview Report, http://www.epa.gov/sites/production/files/2015-07/documents/ghgrp-overview-2013.pdf.
    \49\ 2013 GHGRP Overview Report, http://www.epa.gov/sites/production/files/2015-07/documents/ghgrp-overview-2013.pdf.
    \50\ 2013 GHGRP Reporting Dataset, http://www.epa.gov/ghgreporting/ghg-reporting-program-data-sets.
---------------------------------------------------------------------------

    The fact that combustion units dominate the reported GHG emissions
for industrial stationary sources and are to date the most prevalent
units triggering the requirement to obtain a PSD permit at these same
types of industrial sources is another important consideration in our
development of a GHG SER. The EPA has no reason to believe that
economic conditions or other factors will dramatically alter the nature
of industrial activity triggering PSD permitting in the future. Thus,
we expect that new and modified combustion units of a similar profile
will continue to make up most of the potential ``anyway sources'' and
modifications requiring a PSD permit, regardless of the GHG SER level
that applies to determine whether BACT applies to GHGs at such sources
    A third finding, resulting from our review of the RBLC permitting
information, was that very few ``anyway sources'' obtaining permits
experienced GHG emission increases less than 75,000 tpy
CO2e. From the RBLC dataset, we identified 20 PSD permits
issued to ``anyway sources'' between 2011 and 2014 that included
permitted combustion units that did not contain BACT limits for GHGs.
All of these permits authorized modifications of an existing major
source, and typically included some type of smaller, ancillary
combustion units, such as a flare, an IC engine or process heater. It
is possible that each of the projects authorized by these permits
increased GHG emissions in an amount less than 75,000 tpy
CO2e (but greater than zero tpy). We use the term
``possible'' because our analysis is based on emissions unit
information available for the permit from the RBLC database, or from
individual permit documents in cases where those were available. The
unit types and/or fuel used suggest the presence of GHG emission
sources, but without a full site-specific PSD applicability
determination prepared specifically for GHGs (accounting for all
contemporaneous increases and decreases of GHG emissions), these
occurrences should only be considered possible instances where there
may have been GHG emission increases. These 20 permits represent 5
percent out of a total of about 400 PSD permits in the RBLC dataset
occurring over a 4-year period. Although the RBLC dataset is based on
voluntary reporting and, due to incomplete participation, does not
represent a complete dataset of PSD permits issued nationally, we
believe that this relatively small percentage of ``anyway source''
permits that we identified in the RBLC dataset reflects the
unlikeliness of a significant number of ``anyway source'' PSD permits
requiring GHG BACT review below a 75,000 tpy CO2e SER level.
    Given the nature and number of these permits that we identified, we
would not expect to add many additional GHG BACT reviews nationwide at
a GHG SER level below 75,000 tpy CO2e. In addition, any
additional BACT reviews would likely only be for modifications of
existing major sources. The past permitting information shows that any
wholly-new ``greenfield facilities'' would be expected to trigger the
PSD BACT requirement at GHG SER level of 75,000 tpy CO2e.
Any new major stationary source that emits pollutants other than GHGs
above the major source thresholds would be expected to emit GHGs in
amounts of at least 75,000 tpy CO2e or more. Thus, our
technical analysis of past PSD permitting activity indicates that GHG
SER values below 75,000 tpy CO2e are only potentially
meaningful for modification projects that trigger PSD at existing major
sources. Modification projects may include both additions of new
emissions units at existing facilities and physical changes to existing
emissions units that result in increases in emissions.
    The last key finding from our review of PSD permit information was
that applying BACT to GHGs at the 75,000 tpy CO2e permitting
level has been administratively feasible for both sources and
permitting authorities over the 4 years it has been in place. The EPA's
analysis showed effective and timely implementation of the BACT
requirement for GHGs. A knowledge base on BACT review and design for
GHGs at source categories and units triggering the BACT requirement at
the 75,000 tpy CO2e level has also been developed over this
permitting period that will facilitate future permit reviews.
    Based on the finding, supported by our review of past PSD permit
actions, that construction or modification of combustion units is the
dominant form of activity that triggers the requirement to obtain a PSD
permit, our second category of data review involved identifying the
specific level of increased GHG emissions resulting from the
construction or modification of combustion units most likely to trigger
PSD in the future. As discussed earlier, the EPA projects that GHG SER
values below 75,000 CO2e would only be meaningful for
modifications of existing major sources that trigger PSD review.