will be triggered at anyway sources for projects that increase GHG
emissions by more than 75,000 tpy CO2e and more than a year before the
requirements would be triggered at sources solely because of emissions
of GHGs (more than 100,000 tpy of CO2e).  We intend to work
constructively and affirmatively with permitting authorities to use this
time to ensure expeditious processing of pending permits and to further
assure that the triggering of BACT requirements at such sources will not
result in adverse impacts on pending projects.  We have separately
described our plans to expeditiously issue GHG BACT guidance, but we
understand that for pending projects that will be permitted soon after
January 2, 2011, an opportunity for earlier engagement with EPA on BACT
issues would be beneficial for permitting authorities to issue these
permits without delay.

Therefore, following the issuance of this rule, we will contact
permitting authorities that have pending PSD permit applications to
identify those applications with a reasonable likelihood that final
issuance will occur after January 2, 2011, and therefore will be
required to contain GHG BACT limits.  We will then work closely with
those permit agencies to provide technical, legal or policy assistance
to help prepare BACT analysis and provide additional support as
necessary to expedite permitting for those pending applications.
Similarly, when EPA is the permitting authority, we will provide
assistance to applicants with pending permits to ensure that GHG
permitting decisions are made promptly, and that administrative
processes move forward expeditiously.

b.  PSD Permits Issued Prior to Step 1

EPA has not historically required PSD permits to be updated or reopened
after they are issued in the absence of an action by the applicant to
change the physical or operational characteristics of the source
described in the permit application.  EPA’s PSD permitting regulations
contain no provisions that address the modification or amendment of a
PSD permit or require a PSD permit to be reopened or modified on the
basis of new PSD permitting requirements that take effect after the
final permit is issued.   Since PSD permits are construction permits,
EPA has not required updates to PSD permits in the same manner as is
typically required for operating permits that incorporate a variety of
applicable requirements (such as title V permits and NDPESNational
Pollutant Discharge Elimination System (NPDES) permits under the Clean
Water Act).  In addition, unlike operating permits, PSD permits are not
required to be renewed.   However, if construction under a PSD permit is
not commenced in a timely manner or is discontinued for an extended
period, a PSD permit may expire if an extension is not requested or
justified.  See, 40 C.F.R.FR 52.21(r)(2); 40 C.F.R.FR 124.5(g).

With respect to the application of PSD permitting requirements for GHGs
beginning on January 2, 2011, we do not see any cause to deviate from
our historical practice of not requiring PSD permits to be reopened or
amended to incorporate requirements that take effect after the permit is
issued.   Thus, we are not promulgating any new rules or requirements
pertaining to PSD permits issued prior to Step 1 of the phase-in
described in this rule.  There is no mandatory requirement to reopen a
previously issued PSD permit to incorporate GHG requirements that were
not applicable at the time the permit was issued.

A major source that obtains a PSD permit prior to January 2, 2011 will
not be required under EPA regulations to reopen or revise the PSD permit
to address greenhouse gasesGHGs in order for such a source to begin or
continue construction authorized under the permit.   Our current PSD
permitting regulations provide that “[n]o new major stationary source
or major modification to which the requirements of paragraphs (j)
through (r)(5) of this section apply shall begin actual construction
without a permit that states the major stationary source or major
modification will meet those requirements.”  40 C.F.R. §FR
51.166(a)(7)(iii); 40 C.F.R. §FR 52.21(a)(2)(iii).   The term “begin
actual construction” generally means “initiation of physical onsite
construction activities on an emissions unit which are of a permanent
nature” and includes activities such as “installation of building
supports and foundations, laying underground pipework and construction
of permanent storage structures.”  40 C.F.R. §FR 51.166(b)(11); 40
C.F.R. §FR 52.21(b)(11).   A source that begins actual construction
authorized under a PSD permit prior to January 2, 2011 will not be in
violation of the prohibition described abovepreviously if it continues
construction after that date.  This portion of the regulation precludes
only beginning construction without the appropriate preconstruction
permit and does not require a permit to be updated to continue actual
construction that has already begun.

Furthermore, a source that is authorized to construct under a PSD permit
but has not yet begun actual construction on January 2, 2011 may still
begin actual construction after that date without having to amend the
previously-issued PSD permit to incorporate GHG requirements.   Sections
51.166(a)(7)(iii) and 52.21(a)(2)(iii) require “a permit that states
that the major stationary source or major modification will meet those
requirement,” which refers to the “requirements in paragraphs (j)
through (r)(5)” referenced earlier in those provisions.    EPA
construes this language to describe a permit that meets the requirements
of paragraph (j) through (r)(5) that are in effect at the time the
permit is issued.  Permitting and licensing decisions of regulatory
agencies must generally reflect the law in effect at the time the agency
makes a final determination on a pending application.  See Ziffrin v.
United States, 318 U.S. 73, 78 (1943); State of Alabama v. EPA, 557 F.2d
1101, 1110 (5th Cir. 1977); In re: Dominion Energy Brayton Point, LLC,
12 E.A.D. 490, 614-616 (EAB 2006); In re Phelps Dodge Corp., 10 E.A.D.
460, 478 n. 10 (EAB 2002).

  Thus, a source may begin actual construction on or after January 2,
2011 under a PSD permit that authorized construction to begin prior to
January 2, 2011 because such a permit states that the source will meet
the requirements of paragraphs (j) through (r)(5) of these regulations
(or state equivalents) that were in effect at the time the permit was
issued.   However, this would not be the case if the permit has expired
because the applicant has discontinued construction or failed to
commence construction by the necessary date.   See, 40 C.F.R.FR
52.21(r)(2).

This approach is consistent with EPA’s practice when the
preconstruction permitting requirements change by virtue of the
designation of an area as a nonattainment area after a PSD permit is in
issued.  In transitional guidance issued by EPA in 1991, EPA explained
that “the area designation in effect on the date of permit issuance by
the reviewing agency determines which regulations (Partpart C or D)
apply to that permit.”   Memorandum from John S. Seitz, Director
OAQPS, New Source Review (NSR) Program Transitional Guidance, page 6
(Mar.ch 11, 1991).  This memorandum explained further that “where a
source receives a PSD or other permit prior to the date the area is
designated as nonattainment, the permit remains in effect” as long as
the sources source meets the conditions necessary to prevent the permit
from expiring.    Id. at 6.

 This approach does not apply if the source engages in a major
modification after January 2, 2011 that is not authorized by the
previously issued permit.   Once stepStep 1 of the phase-in begins, if
the PSD requirements for GHGs are applicable to a previously-permitted
source that engages in a major modification not covered by the permit,
such a source will need to obtain a new PSD permit to authorize the
modification and that permit may need to include GHG requirements
depending on the level of increase in GHGs that results from the
modification.

c.   Additional Sources for Which PSD Applies in Step 2

In light of the terms of existing PSD regulations and the lead time
provided in this action for sources that will first become subject to
PSD permitting in Step 2, we do not believe there is presently a need to
establish transition provisions for sources that will be required to
obtain PSD permits for the first time in Step 2 of the phase-in.   As
described abovepreviously, under our current PSD permitting regulations,
a new major stationary source or major modification may not begin actual
construction without a PSD permit that meets the applicable
preconstruction permitting requirements.   40 C.F.R. §FR
51.166(a)(7)(iii); 40 C.F.R. §FR 52.21(a)(2)(iii).

Since a permit must be obtained before a major source may begin actual
construction, the major source preconstruction permitting requirements
in sections40 CFR 51.166 and 52.21 of the regulation do not generally
apply to sources a source that begins actual construction at a time when
it was not a major source required to obtain a PSD permit.  One
exception, however, is the unique circumstance when a source becomes a
major source solely by virtue of the relaxation of an enforceable
limitation on the source’s potential to emit. PTE.  40 C.F.R. §FR
51.166(r)(2); 40 C.F.R. §FR 52.21(r)(4).  But absent these
circumstances, PSD preconstruction permitting requirements do not
generally preclude a source from continuing actual construction that
began before the source was a source required to obtain a PSD permit.
Thus, a source that began actual construction under the authorization of
any previously required minor source or state construction permit is not
required to meet any PSD preconstruction permitting requirement that
becomes applicable after actual construction begins unless the source
engages in a major modification after PSD permitting requirements are
applicable.  Likewise, a PSD permit is not required after a source
begins actual construction based on a valid determination (by the source
or the permitting authority) that the source need not obtain either a
major PSD permitting requirements or and minor NSR permit.   Based on
these provisions in existing regulations, EPA will not require any
sources to which PSD permitting requirements begin to apply in stepStep
2 to obtain a PSD permit to continue construction that actually begins
before step Step 2 begins.

However, we will expect Phase Step 2 sources that begin actual
construction in phaseStep 2 (i.e., beginning July 1, 2011) to do so only
after obtaining a PSD permit in accordance with sections40 CFR 52.21,
or 51.166, or any applicable state regulation that meets the
requirements of section40 CFR 51.166.   We recognize the potential for
the triggering of stepStep 2 to result in a change in status where a
project may legally have begun actual construction before stepStep 2 but
did not do so and would then need a PSD permit.  However we also note
that we are providing over a year of lead time before PSD permitting
requirements become applicable to stepStep 2 sources.  If projects would
be adversely affected by this change in status, this lead time affords
an opportunity for sources planning such projects to secure appropriate
minor NSR permits (which generally take less than a year to issue),
non-applicability determinations, etc . in time to avoid such a change
in status.  If a new or modified source that would become newly subject
to PSD in stepStep 2 plans to begin actual construction before stepStep
2, it has more than a year to obtain the applicable preconstruction
approvals and begin actual construction.  Likewise, a stepStep 2 source
that does not anticipate the ability to begin actual construction before
stepStep 2 begins should have enough lead time to submit a PSD permit
application and obtain the necessary permit without significantly
delaying the project further.  Therefore, we do not think it is
necessary or appropriate to promulgate a transition provision that would
exempt stepStep 2 sources from PSD permitting requirements that will
apply based on construction that begins after stepStep 2 takes effect.

This approach for Step 2 sources that have obtained a minor source
construction permit or non-applicability determination differs from the
approach described above previously for source that obtained a PSD
permit prior to Step 1.   As described abovepreviously, a Step 1 source
that is authorized to begin actual construction before January 2, 2011
under a previously-issued PSD permit may begin actual construction under
that permit after January 2, 2011 without modifying the PSD permit to
address GHGs.   However, a Step 2 source that was not required to obtain
a PSD permit before Step 2 begins would need to obtain a PSD permit
addressing GHGs if it has not yet begun actual construction prior to
Step 2, even if the source had obtained any preconstruction approvals
that were necessary to authorize construction prior to Step 2.   This is
because such a Step 2 source that begins actual construction after Step
2 would likely be doing so without having any permit meeting the
requirements of paragraphs (j) through (r)(5) of section40 CFR 52.21,
or 51.166, or a state equivalent.  A source that has obtained only a
minor source permit prior to Step 2 but that begins actual construction
after July 1, 2011 would violate the requirements of section40 CFR
52.21(a)(2)(iii), ) or 51.166(a)(7)(iii), or a state equivalent ,,
unless the source took care to ensure that it was authorized to
construct under a PSD permit or could demonstrate that the source’s
minor source construction permit makes clear that requirement of
paragraphs (j) through (r)(5) of sections40 CFR 52.21, or 51.166, or a
state equivalent, would be met by the source even though such a permit
was not nominally a PSD permit.  This difference in approach for non-PSD
sources is driven by the terms of sections40 CFR 52.21(a)(2)(iii) and
51.166(a)(7)(iii).  Since we have not provided any prior notice that we
might be considering revisions to sections40 CFR 52.21 and 51.166 to
address this topic, we are unable to revise the regulations in this
action to achieve the same result for non-PSD sources as for PSD
sources.  Furthermore, at the present time, we see no indication that
this difference in approach is not unreasonable since non-PSD sources
will not trigger permitting for GHG until stepStep 2  (only anyway PSD
source trigger in stepStep 1).  Thus sources will have until July 1,
20102011, an additional 6 months of lead time (for a total of more than
14 months), to prepare for the transition described here.  Nevertheless,
we recognize that the transition to the increased coverage of new
sources and modifications that occurs in July will represent an unusual
occurrence that may have unanticipated impacts.  For this reason it is
important to note that nothing in this rule forecloses our ability to
further address such impacts, as necessary, by adopting rule changes or
using other available tools.

EPA has previously promulgated exemptions that have authorized some
sources that were not previously subject to the PSD regulations to
commence construction on the basis of minor source permits after the
date new PSD requirements have took effect in 1978 and 1980.   See,
e.g.., 40 C.F.R.FR 52.21(i)(1)(iv)-(v).   There is a notable distinction
between these provisions, which use the term “commence
construction,” and the terms of sections40 CFR 52.21(a)(2)(iii) and
51.166(a)(7)(iii), which use the term “begin actual construction.’
Commerce”  “Commence construction” is defined more broadly than
“begin actual construction” to include obtaining all necessarily
preconstruction approvals and either beginning actual on-site
construction or entering into binding contracts to undertake a program
of actual construction.    40 C.F.R.FR 52.21(b)(9); 40 C.F.R.FR
51.166(b)(9).   The term “commence construction” is also defined in
the Clean Air ActCAA.  42 U.S.C. 7479(2)(A).   Among other purposes, the
term “commence construction” is generally used in the Act and EPA
regulations to distinguish construction activities that are exempt from
new PSD permitting requirements from those that are not.  See, e.g.., 42
U.S.C. 7475(a); 40 C.F.R.FR 52.21(i)(1)(i)-(v).   In the absence an
explicit exemption in the Clean Air ActCAA or the PSD regulations that
uses the term “commence construction,” we do not believe we can use
the date a source “commences construction” under a minor source
construction permit approval as a demarcation point for Step 2 sources
that may continue ongoing construction activities without having to
obtain a PSD permit based on emissions of GHGs.  Since we did not
provide prior notice of an intention to adopt transition provisions
applicable to this situation, we are unable to adopt such an exemption
in this action that applies the term commence construction in this
context.   Consequently, the approach described abovepreviously applies
the term “begin actual construction” based on the language in
sections40 CFR 52.21(a)(2)(iii) and 51.166(a)(7)(iii).

d.  Transitional Issues for Title V Permitting

Since the title V permitting regulations already include a robust set of
provisions to address the incorporation of new applicable requirements
and other transitional considerations, we do not see grounds to
establish unique transition or grandfathering provisions for GHGs in
this action.  Furthermore, since the purpose of title V is to collect
all regulatory requirements applicable to a source and ensure
compliance, we do not believe special exemptions for GHG requirements
are likely to be justified.   The existing title V rules do not provide
any exemptions that relieve the obligation to incorporate all applicable
requirements into a title V permit.  However, the title V regulations
contain numerous provisions that allow a reasonable period of time for
incorporating new applicable requirements or applying for a title V
permit that was not previously required.  Transitional issues for
incorporation of GHG requirements into title V permitting generally
involve questions in the following categories:  (1) permit application
requirements for sources not previously subject to title V that will
become subject to title V requirements in step Step 2 of the phase-in;
(2) the need for updates or amendments to title V permit applications
that are pending when GHGs become subject to regulation in Step 1 of the
phase-in; and (3) the incorporation of new applicable requirements for
GHGs into existing permits for sources currently subject to title V.

With respect to the first category, a title V source applying for the
first time must submit its permit application within 12 months after the
source “becomes subject to the [operating] permit program” or such
earlier time that the permitting authority may require (see §40 CFR
70.5(a)(1)).  Sources not otherwise subject to title V can become major
sources subject to title V due to emissions of GHG no sooner than July
1, 2011.  If a source becomes “subject to the [operating] permit
program” on July 1, 2011, then its permit application under the title
V operating permit program would typically have to be submitted no later
than July 1, 2012.

There are also existing regulations relevant for the second category of
GHG transition issues, where sources currently subject to title V have
title V permit applications pending with a permitting authority as of
January 2, 2011.  Where additional applicable requirements become
applicable to a source after it submits its application, but prior to
release of a draft permit, the source is obligated to supplement its
permit application.  See 40 CFR §§ 70.5(b); 71.5(b).  Furthermore,
title V permits are generally required to contain provisions to assure
compliance with all applicable requirements at the time of permit
issuance.  See CAA section 504(a); 40 CFR §§ 70.6(a)(1); ) and
71.6(a)(1).  If a permitting authority determines that additional
information is necessary to evaluate or take final action on an
application (e.g.., because of uncertainty over whether a draft permit
assures compliance with all applicable requirements), it may, and
should, request additional information from the source in writing and
set a reasonable deadline for a response.  See 40 CFR §§ 70.5(a)(2);
71.5(a)(2).

Likewise, the existing title V regulations provide sufficient transition
for the third category of issues, where a source has additional
GHG-related applicable requirements (such as the terms of a PSD permit)
that must be incorporated into its existing title V permit.  Where a
source is required to obtain a PSD permit, the source must apply for a
title V permit or permit revision within 12 months of commencing
operation or on or before such earlier date as the permitting authority
may establish (or prior to commencing operation if an existing title V
permit would prohibit the construction or change in operation).  See 40
C.F.R. §§FR 70.5(a)(1)(ii); 71.5(a)(1)(ii); see also §§40 CFR
70.7(d) and (e); 71.7(d) and (e) (permit modifications).  In addition,
where a source becomes subject to additional applicable requirements,
the permitting authority is required to reopen the permit to add those
applicable requirements if the permit term has three or more years
remaining and the applicable requirements will be in effect prior to the
date the permit is due to expire.   See  40 C.F.R. §§FR 70.7(f)(1)(i);
71.7(f)(1)(i).

Finally, EPA notes that the existing title V regulations require sources
to furnish permitting authorities, within a reasonable time, any
information the permitting authority may request in writing to determine
whether cause exists for modifying, revoking, and reissuing, or
terminating the permit, and for other reasons, and further provide that
permitting authorities shall reopen and revise permits if EPA or the
permitting authority determine that the permit must be revised or
revoked to assure compliance with applicable requirements.  See §§40
CFR 70.6(a)(6)(v);71.6(a)(6)(v) and §§ 70.7(f)(1)(iv); 71.7(f)(1)(iv).

Thus, EPA believes that the existing title V regulations provide an
adequate regulatory framework for managing the transition to
incorporating GHG requirements in title V permits and additional
specific exemptions or transition rules for title V are not currently
warranted.

VI. What are the economic impacts of the final rule?

This section of the preamble examines the economic impacts of the final
rule including the expected benefits and costs for affected sources and
permitting authorities.  The final rule uses a stepped phased-in
approach for requiring sources of GHG emissions to comply with title V
operating permit and PSD statutory requirements, essentially lifting
this burden for athe phase-in period of at least six years for a large
number of smaller sources of GHG.  Thus, this rule provides regulatory
relief rather than regulatory requirements for these smaller GHG
sources.  For larger sources of GHGGHGs that will be required to obtain
title V permits and/or comply on PSD requirements, there are no direct
economic burdens or costs as a result of this final rule, because these
requirements are not imposed as a result of this rulemaking.  Statutory
requirements to obtain a title V operating permit or to adhere to PSD
requirements are already mandated by the CAA and by existing rules, not
by this rule.  Similarly, this rule will impose costs to society in the
form of foregone environmental benefits resulting from GHG emission
reductions that, absent this rule, might otherwise have occurred at
sources deferred from permitting during the phase-in period.

The regulatory impact analysis (RIA) conducted for this final rule
provides details of the benefits or regulatory relief that smaller GHG
sources will experience in terms of costs avoided as a result of this
final rule and the potential for social costs in terms of foregone
environmental benefits during this 6-year period.  Complete details of
the regulatory impact analysis RIA conducted for this final rule may be
found in the document "Regulatory Impact Analysis for the Final
Prevention of Significant Deterioration and Title V Greenhouse Gas
Tailoring Rule," in the docket for this rulemaking.

This rulemaking provides permitting thresholds for sources of GHG that
exceed levels contained in the CAA, and these levels are phased -in
steps based upon application of the “administrative necessity” and
“absurd results” doctrines as explained in section V.B.   For step
Step 1 that , which is effective from January 2, 2011 through June 30,
2011, only sources required to undergo title V or PSD permitting based
upon non-GHG air pollutants are required to obtain an operating permit
or PSD permit to include GHG emissions (referred to as the “anyway”
threshold).  Step 2, effective from July 1, 2011 until such time as EPA
acts on a rule to amend it (which for reasons described abovepreviously,
we assume is June 30, 2013 for the purposes of this analysis), requires
will phase in title V permit requirements for larger sources emitting
GHG above 100,000 tpy CO2e tpy to obtain a title V permit (if they do
not already have one) and to comply withphase in for such sources, PSD
requirements when they are newly constructed or modify in a way that
increases emissions by more than a 75,000 tpy CO2e tpy significance
level.  Step 2 is referred to as the 100,000 tpy CO2e threshold.
Thereafter, EPA makes an enforceable commitment to consider a possible
stepStep 3 to further lower thresholds below 100,000 tpy CO2e tpy and/or
permanently exclude some sources from the program(s), but only after a
regulatory process is conducted addressing “administrative
necessity” and “absurd results” considerations based upon the
actual permitting experiences in the first two steps of the phase-in.
In addition, EPA provides a deferral of permitting until we take
required action in April 2016 for sources and modifications that emit
below 50,000 tpy CO2e tpy.  The deferral will end when a required study
is conducted of the permitting process for sources of GHG and EPA acts,
based on the study, to promulgate a rule that describes the additional
GHG permitting requirements beyond 2016.  In the 6 years following
promulgation of this rule, the EPA estimates that compared to baseline
estimates that do not include the effects of this rule, over six million
sources of GHG emissions in total will be allowed to continue to operate
without a title V operating permit.  During this period, tens of
thousands of new sources or modifying sources each year will not be
subject to PSD requirements for GHG.  For this large number of smaller
sources, this rule alleviates the regulatory burden associated with
obtaining an operating or PSD permit or complying with NSR BACT
requirements.  Therefore, this final action may be considered beneficial
to these small sources because it provides relief from regulation that
would otherwise be required.

This decision does potentially have environmental consequences in the
form of higher emissions during the 6-year period of time (generally
because emissions increases would have been lower if BACT were applied).
 These consequences are limited due to the fact that sources between
100/250 and 100,000 tpy CO2e tpy account for an estimated 11 percent of
the six directly emitted GHG nationally from industrial, commercial, and
residential source categories, while representing over 95 percent of the
total number of sources potentially requiring an operating or PSD permit
for GHG under current permitting thresholds in the CAA.  Moreover,
requiring such a large number of small sources to obtain permits for the
first time would overtax the permitting authorities' abilities to
process new permits and would therefore interfere with any such benefits
actually being achieved.  Moreover, reductions from these small sources
will still be occurring, notwithstanding the fact that permitting
requirements would not apply to them.  These smaller sources of GHGGHGs
will be the focus of voluntary emission reduction programs and energy
efficiency measures that lead to reductions in GHGs.  We will also
reevaluate this decision after a 6-year period and complete a study of
the implications for those sources and permitting authorities of
permitting smaller GHG sources beyond 2016.

In reaching the preceding decisions for this final rule, we carefully
considered comments received on the tailoring ruleTailoring Rule
proposal.  We received several comments specifically on our description
of the impacts of this rule.  Most of these comments disagreed with our
assertion that the rule is a “relief” rule.  Others assert that we
should have prepared a more comprehensive RIA than prepared for the rule
proposal.  Those commenting contend: (1) we understated the burdens of
the rule while overstating its relief at proposal; (2) we erroneously
omitted the impacts for “larger sources” of GHG GHGs from the
proposal RIA and should have recognized the burden to “larger
sources” due to other GHG actions; (3) the economic impacts the rule
will have on industry and the U.S. economy and society in general will
be burdensome, especially given the current state of the economy; and
(4) we need to propose a full RIA or a complete estimation of impacts to
comply with CAA section 307(d) and the Administrative Procedure ActAPA.

	EPA has carefully considered the comments addressing the issue of
whether the tailoring ruleTailoring Rule is a regulatory “relief
rule”,,” and we are not persuaded that we erred in concluding that
the effect of the tailoring ruleTailoring Rule is to provide regulatory
relief to a large number of sources of GHG for a period of up to six6
years.  This final rule will provide relief from title V permitting to
over 6 million sources of GHG in this country.  Likewise tens of
thousands of sources potentially subject to PSD permitting requirements
annually for GHG will have regulation postponed for a period of up to 6
years under this rule, followed by an additional required rule
addressing the period beyond 6 years.  While larger sources of GHG may
be required to obtain title V permits or modify existing permits and to
comply with PSD requirements, these burdens result not from the
tailoring ruleTailoring Rule but rather from the CAA requirement
requirements to apply PSD and title V to each pollutant subject to
regulation, which is are triggered when the LDVR takes effect.  To
clearly illustrate this, consider what would occur if EPA did not
complete the tailoring ruleTailoring Rule.  Sources would not be
relieved of the requirement to obtain permits addressing each pollutant
subject to regulation when they construct or modify, nor would they be
relieved of their obligation to obtain title V permits.  Instead, these
requirements would simply apply to a much larger population of sources
and modifications, and would lead to the absurd results and severe
impairment to program implementation that this rule is designed to
address.

In response to comments asserting that the RIA completed for proposal of
this rulemaking: (1) understated the burdens of the rule and overstated
the benefits, (2) did not fully recognize the rule will be burdensome,
especially given the current state of the economy; and (3) does not
consider a complete estimation of impacts to comply with the
Administrative Procedure ActAPA and CAA section 307(d) and needs to
correct flawed or erroneous assumptions, EPA did make improvements and
modifications to the RIA completed for this final rule.  Based upon
comments, EPA modified estimates of the number of sources affected at
various threshold levels upward.  EPA also improved the burden estimates
associated with obtaining permits for sources and permitting
authorities.

After consideration of the burden imposed by the proposed rule with
these improved estimates for affected sources, the EPA modified the
steps of the phase-in period to include two initial steps, described in
section V, that are higher, and therefore cover fewer sources and are
less burdensome than the proposal threshold of 25,000 tpy CO2e tpy
emissions.  EPA also increased the threshold below which permitting
would not apply for six6 years from 25,000 to 50,000 tpy CO2e.  After
the initial two step period, EPA has committed to consider lower
thresholds but only down to 50,000 tpy CO2e, and only after a regulatory
process that uses information gathered on actual permitting activity
during the first two steps of the phase-in period.  The RIA conducted
for the final rule also incorporates improvements in our estimates of
the number of sources affected at alternative thresholds and improved
estimates of the costs of obtaining permits by sources and processing
permits by permitting authorities.  The EPA acknowledges that the
regulatory relief associated with the control costs due to BACT
requirements for PSD new and modifying sources is not included in the
RIA for the final rule due to the lack of sufficient data about the
nature of those requirements.  However, it is the case that, as it
relates to burden, those estimates would simply increase the amount of
regulatory relief associated with this final rule.

Finally, with regard to comments that the RIA should have been a more
comprehensive analysis to include the larger sources of GHG that will be
required to obtain permits when GHG are regulated, the EPA maintains as
previously explained that there are no direct economic burdens or costs
as a result of this rule for these sources.  Requirements for larger GHG
sources to obtain title V or PSD permits are already mandated by the Act
and by existing rules and are not imposed as a result of the tailoring
ruleTailoring Rule.  Thus the economic impacts for larger sources of GHG
do not occur because of this tailoring ruleTailoring Rule.  To include
these larger sources in the RIA would actually be an inaccurate
assessment of how this rule affects sources and would ignore the fact
that this rule isprovides regulatory relief.

A.  What entities are affected by this final rule?

As previously stated, this final rule does not itself result in the
application of permitting requirements to any industrial, commercial, or
residential entities.  Entities affected by this rule are those who
experience regulatory relief due to the higher thresholds and deferred
applicability set forth in this rule.  This action increases the
threshold to obtain a title V and PSD permitting from statutory CAA
levels using a phased-in step process as previously discussed.  As
tableTable VI-1 shows, this action lifts permitting requirements for
over six million potential title V sources in total and tens of
thousands of potential PSD new sources annually that would be otherwise
required by the CAA to obtain permits.  Under stepStep 1, over six
million title V sources in total and approximately 20 thousand new PSD
sources per year will not be required to obtain permits.  Under stepStep
2, requiring sources over a 100,000 tpy CO2e to obtain a permit, over
six million title V sources in total and approximately 19.9 thousand new
PSD sources per year will obtain regulatory relief.  While the threshold
approach differs for stepsSteps 1 and 2 of the phase-in plan, the
estimated number of sources affected does not differ greatly as shown in
Table VI-1. Sectors experiencing this regulatory relief include
electricity, industrial, energy, waste treatment, agriculture,
commercial and residential.

Table VI-1.  Estimated Number of Affected Sources Experiencing
Regulatory Relief1,2

	Number of Sources Experiencing Regulatory Relief

	Non-GHG BasedStep 1 Anway	<Step 2 100,000 tpy

Sector	Title V	New PSD	Title V	New PSD

Electricity	285	93	285	33

Industrial	170,910	604	170,654	599

Energy	2,588	48	2,536	44

Waste Treatment	3,358	2	3,165	1

Agriculture	37,351	299	37,351	299

Commercial	1,355,921	12,041	1,355,870	12,039

Residential 	4,535,500	6,915	4,535,500	6,915

Totals	6,105,913	20,002	6,105,361	19,930

% Emissions Covered3

13%

11%

Notes: (1) Number of sources is determined on a potential to emitPTE
basis.  Estimates for title V are the total number of sources expected
to experience regulatory relief.  PSD sources are annual estimates of
newly constructed facilities and do not include modifications at
existing facilities that may also be subject to PSD requirements.  (2)
See Appendices to ‘appendices to “Regulatory Impact Analysis of the
Final Prevention of Significant Deterioration and Title V Greenhouse Gas
Tailoring Rule’” for more details of how thresholds and sources
affected are developed.  (3) Percentage of emissions covered represent
estimated actual emissions from sources expected to experience
regulatory relief as a percentage of total stationary source GHG
emissions.

B.  What are the estimated annual benefits to sources due to regulatory
relief from the statutory requirements?

EPA estimated the annual benefits (avoided costs) to sources of GHG
emissions and permitting authorities anticipated from this final rule.
In addition, an accounting of the benefits from this action as measured
by avoided permit processing costs for state, local, and tribal
permitting authorities is provided.  These benefits or avoided costs
relate specifically to information collection costs or permit burden
costs postponed for smaller sources of GHG emissions otherwise required
to obtain an operating permit under title V or required to modify an
existing permit to address GHG emissions.  Avoided costs shown also
include information collection requirements permit burdens for
additional PSD permits postponed for new or modifying smaller sources of
GHG, as well as the avoided costs to state, local and tribal permitting
authorities.  We are providing an illustrative monetary estimate of
statutory permitting requirements to show the magnitude of the savings
that hypothetically result from this rulemaking.  While we believe it is
impossible to implement these permit requirements by January 2, 2011,
for the reasons laid out in this preamble, it is useful to understand
the scale of what the burden may have been.  For sake of simplicity, we
refer to this illustrative monetary estimate as the monetized benefits
of the regulatory relief presented by this rulemaking or regulatory
relief benefits for brevity.

 These benefit estimates do not consider avoided emission control costs
associated with PSD requirements for potential BACT requirements.
Estimates for BACT are unavailable at this time because of the
difficulty predicting the results of the BACT process as it would be
applied to new pollutants and classes of sources for which there is no
previous BACT experience on which to rely.

1.  What are annual estimated benefits or avoided burden costs for title
V permits?

Table VI-2 shows that the estimated annual title V benefits to sources
and to permitting authorities in terms of avoided information collection
cost resulting from this final action to be approximately $70,524.3535
million under stepStep 1 of the phase-in, the non-GHG based requirements
threshold.  These avoided costs become $70,517.1520 million annually
under stepStep 2 of the phase-in. where permitting is required for
sources at or above the 100,000 tpy CO2e threshold.  Under the non-GHG
based phase-in stepanyway threshold Step 1, approximately $49,457.3
million in regulatory relief will accrue to sources and approximately
$21,067078 million to permitting authorities annually in the form of
avoided permit processing costs.  With the <100,000 tpy CO2e threshold
for phase-in stepStep 2, these annual regulatory relief benefits are
expected to be quite similar at $49,455.4447 million for sources of GHG
emissions and $21,061.7072 million for permitting authorities.
Industrial sources permitting costs are estimated to be $46.4 thousand
per permit for a new permit and $1.7 thousand for a permit revision.
The EPA estimates that over tens of thousands of industrial sources per
year will avoid incurring these permitting costs under stepsSteps 1 and
2 of the phase-in period.  The cost for a permit for new commercial and
residential sources is estimated to be $23.2 thousand per permit with
approximately 2 million of these permits avoided annually.

State, local, and tribal permitting authorities will also benefit in
terms of avoided permitting administrative costs of over $21 billion as
a result of the decisions final in this action.  For industrial sources,
the cost for permitting authorities to process a new industrial title V
permit is approximately $19.7 thousand per permit and $1.8 thousand for
a permit revision.  Similarly, permitting authority avoided permit
processing costs are approximately $9.8 thousand per permit for a new
commercial or residential title V permit.  All estimates are stated in
2007 dollars.

Table VI-2.  Annual Title V Regulatory Relief for Sources and
Permitting Authorities1, 2

 	 	Step One

Non-GHG Based	Step Two

<100,000 tpy CO2e

 	Step One

Anyway	Step Two

100,000 tpy CO2e

Activity	Cost per Permit (2007$)	Number of Permits	Avoided Costs
(millions 2007$)	Number of Permits	Avoided Costs (millions 2007$)

Sources

Sources

New Industrial	$46,350	71,829	$3,329.3	71,829657	$3,329.3321

New Commercial/ Residential	$23,175	1,985,948	$46,024.3	1,985,930
$46,023.9024

Permit revisions due to GHG	$1,677	61,836	$103.7104	60,921	$102.2

Source Total	 	2,119,613	$49,457.3	2,118,508	$49,455.4447

Permitting Authority

Permitting Authority

New Industrial	$19,678688	71,829	$1,413.5414	71,829657	$1,410.1

New Commercial/ Residential	$9,839844	1,985,948	$19,539.7550	1,985,930
$19,539.6550

Permit revisions due to GHG	$1,840	61,836	$113.8114	60,921	$112.1

Permitting Authority Total	 	2,119,613	$21,067.0078	2,118,508
$21,061.7072

Total Title V Regulatory Relief	$70,524.3535	 	$70,517.1520

Note Notes:  Sums may not add due to rounding. (1) Annual title V
avoided costs estimates represent information collection costs for one
third of the total number of title V sources obtaining regulatory relief
shown in Table VI-1 potentially requiring permits or permit revisions
for GHG.

 (2) More details on these estimated regulatory relief benefits are
available in the Appendicesappendices to the “Regulatory Impact
Analysis for the Final Prevention of Significant Deterioration and Title
V Greenhouse Gas Tailoring Rule”.

.”

permit is approximately $19.7 thousand per permit and $1.8 thousand for
a permit revision.  Similar permitting authority avoided permit
processing costs are approximately $9.8 thousand per permit for a new
commercial or residential title V permit.  All estimates are stated in
2007 dollars.

2.	What are annual benefits or avoided costs associated with NSR
permitting regulatory relief?

Table VI-3 summarizes the estimated annual information collection permit
burden costs avoided by sources and permitting authorities for PSD
permitting due to this tailoring rule.Tailoring Rule.  The benefits
associated with avoided cost of compliance for BACT for these sources is
not included in these estimates due to a lack of available data.  The
estimated avoided burden or reporting and recordkeeping cost that would
occur absent this rule for new industrial sources to obtain permits is
estimated to be $84.5 thousand for a modifying PSD industrial source and
$59.2 thousand for a modifying commercial or multi-family residential
source.  New PSD sources will also be required to obtain a title V
permit increasing these costs to $130.9 thousand per permit for new
industrial sources and to $82.3 thousand per permit for new commercial
or multi-family residential sources.  (Note the title V costs for these
new PSD sources have been included in title V estimates shown in Table
VI-2.)  New and modifying sources avoid approximately $5.5 billion
annually in PSD permitting costs with this rule under the phase-in
stepStep 1, non-GHG based threshold.  Under the phase-in stepStep 2,
<100,000 tpy CO2e tpy threshold and <75,000 tpy CO2e significance level,
this avoided PSD permitting cost estimate becomes $5.4 billion annually.
 State, local, and tribal permitting authorities are expected to avoid
about $1.51 billion annually in administrative expenditures associated
with postponing PSD program requirements for these GHG sources under
stepStep 1 and $1.49 billion under stepStep 2.  All estimates are shown
in 2007 dollars.

Table VI-3.  Annual PSD Regulatory Relief for Sources and Permitting
Authorities1,2

 	 	Step One

Non-GHG Based	Step Two

<100,000 tpy Threshold, <75,000 Significance Level

 	Step One

Anyway	Step Two

100,000 tpy Threshold, 75,000 Significance Level

Activity	Cost per Permit (2007$)	Number of Permits	Avoided Costs
(millions 2007$)	Number of Permits	Avoided Costs (millions 2007$)

Sources

Sources

New Industrial	$84,530	26,089	$2,205.3	25174	$2,128.0

New Commercial/Residential	$59,152	55,509	$3,283.5	55505	$3,283.2

Source Total	 	81,598	$5,488.8489	80679	$5,411.2

Permitting Authority

	0

Permitting Authority

	New Industrial	$23,243	26,089	$606.4	25174	$585.1

New Commercial/Residential	$16,216	55,509	$900.1	55505	$900.1

Permitting Authority Total	 	 81,598	$1,506.5	80679	$1,485.2

Total Title V Regulatory Relief	 	$6,995.3	 	$6,896.4

Note:s: Sums may not add due to rounding.  (1) All estimates are based
upon potential to emit.PTE.  Regulatory relief shown represents annual
estimates of PSD permitting costs avoided under stepsSteps 1 and 2 of
the phase-in period.

 (2) More details on these estimated regulatory relief benefits are
available in the Appendicesappendices to the “Regulatory Impact
Analysis for the Final Prevention of Significant Deterioration and Title
V Greenhouse Gas Tailoring Rule”..”

C.  What are the economic impacts of this rulemaking?

This final rulemaking does not impose economic burdens or costs on any
sources or permitting authorities, but should be viewed as regulatory
relief for smaller GHG emission sources and for permitting authorities.
Although sources above the thresholds set in this rule will become
subject to permitting on January 2, 2011, those impacts are not
attributable to the present rulemaking.  Rather they are mandated by the
CAA and existing regulations and automatically take effect independent
of this action.

In addition to considering the regulatory relief expected for affected
entities as a result of this final rule, the EPA considered the impact
of this rulemaking to small entities (small businesses, governments and
non-profit organizations) as required by the Regulatory Flexibility Act
(RFA) and the Small Business Regulatory Enforcement Fairness Act
(SBREFA).  For informational purposes, the RIA includes the Small
Business Administration (SBA) definition of small entities by industry
categories for stationary sources of GHG and potential regulatory relief
from title V and NSR permitting programs for small sources of GHG.
Since this rule does not impose regulatory requirements but rather
lessens the regulatory burden of the CAA requirements to smaller sources
of GHG, no economic costs are imposed upon small sources of GHG as a
result of this final rule.  Rather this action provides regulatory
relief for small sources.  These avoided costs or benefits accrue
because small sources of GHG are not required to obtain a title V permit
and new or modifying small sources of GHG are not required to meet PSD
requirements.  Some of the small sources benefitting from this action
are small entities, and these entities will benefit from the regulatory
relief finalized by this rule.  For discussion of comments received and
EPA responses regarding small entities impacts, see section VIII. of
this preamble.

D.  What are the costs of the final rule for society?

EPA examined the social costs of this final rule.  These social costs
represent the foregone environmental benefits that will occur as a
result of the regulatory relief offered to sources of GHG emissions.
This action is one of regulatory relief since it increases the emissions
thresholds for the title V and PSD programs, as they apply to sources of
GHG emissions, to levels above those in the CAA.  In this preamble
section, the benefits or avoided regulatory costs of such relief are
discussed, but there is also a social cost imposed by such relief,
because this rule may forego some of the possible benefits associated
with title V and PSD programs for sources of GHG emissions below the
permitting thresholds established.  These benefits are those attributed
to title V and PSD permitting programs in general.  These benefits are
based upon the relevance of these programs to policymaking, transparency
issues, and market efficiency, and therefore are very difficult to
quantify and monetize.  For title V, they include the benefits of
improved compliance with CAA requirements that stem from (1) improved
clarity regarding applicability of requirements, (2) discovery and
required correction of noncompliance prior to receiving a permit, (3)
improving monitoring, recordkeeping, and reporting concerning compliance
status, (4) self-certification of compliance with applicable
requirements initially and annually, and prompt reporting of deviations
from permit requirements, (5) enhanced opportunity for the public to
understand and monitor sources’ compliance obligations, and (6)
improved ability of EPA, permitting authorities, and the public to
enforce CAA requirements.  However, it is important to remember that a
title V permit generally does not add new requirements for pollution
control itself, but rather collects all of a facility’s applicable
requirements under the CAA in one permitting mechanism.  Therefore, the
compliance benefits above are less when title V permits contains few or
no CAA applicable requirements.  During the initial steps of the
phase-in plan established under this action, we expect that the vast
majority of sources excluded from title V would be sources that have no
CAA applicable requirements for GHG emissions and few or no requirements
for other pollutants because their emissions of those pollutants are so
small.  For this reason while it is extremely difficult to measure the
degree of improved compliance, if any, that would be foregone, or to
quantify the social costs that would be imposed, we expect that they
would be negligiblesmall.  We will be evaluating this issue further
during subsequent phases.

	For PSD, the primary social cost imposed by the tailoring rule
Tailoring Rule stems from the foregone benefit of applying BACT to the
tens of thousands of small new sources and modifications that will be
below our final thresholds during the first steps of the phase-in.  This
social cost potentially weighs against the cost savings described above
previously that stem (in part) from avoiding the administrative and
control costs of applying BACT to these sources.  The BACT requirement
assures that new and modified sources, when they increase their
emissions are using state-of-the-art emission controls and affords the
public an opportunity to comment on the control decision.  It does not
prohibit increases but it assures that such controls are applied.
Delaying the BACT requirement for numerous small sources during the
first steps of the phase-in for this final rule could allow increases
from these smaller sources that are greater than they would be if BACT
were applied.  A detailed analysis of this difference is beyond the
scope of this rule, because we do not have detailed information on the
universe of these tens of thousands of small PSD actions, the candidate
BACT technologies for each of them, how permitting authorities would
make the BACT decisions, and how the BACT limit would compare to what
would otherwise be installed absent BACT.

It is not possible at this time to quantify the social costs of avoided
BACT.  However, we note that the universe of possible emissions that
would be regulated by sources excluded under the tailoring ruleTailoring
Rule is small compared to those that would remain subject to PSD.  The
sources excluded in these first two steps of the phase-in plan of this
action comprise only 11 percent of total stationary source GHG
emissions, while 67 percent remain subject to regulation.  Furthermore,
we expect the emissions differences due to BACT controls for such
sources to be relatively small due to the lack of available capture and
control technologies for GHG at such sources that are akin to those that
exist for conventional pollutants and sources, as well as the likelihood
that even in the absence of BACT such sources would already be
installing relatively efficient GHG technologies to save on fuel costs.
Thus, while potential benefits would be foregone by excluding smaller
sources from the permitting programs, these benefits are likely to be
small.  Under the tailoring ruleTailoring Rule, we will be working
during the 6-year period to greatly improve our understanding of both
the administrative costs of regulating and the social costs of not
regulating smaller sources under PSD and title V, and we will be relying
on that information to support our future threshold analyses called for
under the action.

In reaching the decisions for this GHG tailoring ruleTailoring Rule, the
EPA recognizes that GHG emissions can remain in the atmosphere for
decades to centuries, meaning that their concentrations become
well-mixed throughout the global atmosphere regardless of emission
origin, and their effects on climate are long lasting and significant.
A detailed explanation of climate change and its impact on health,
society, and the environment is included in EPA's technical support
documentTSD for the endangerment finding action (Docket ID No.
EPA-HQ-OAR-2009-0171).  The EPA recognizes the importance of reducing
climate change emissions for all sources of GHG emissions including
those sources afforded regulatory relief in this rule and plans to
address potential emission reductions from these small sources using
voluntary and energy efficiency approaches.  Elsewhere, we have
discussed EPA's interest in continuing to use regulatory and/or
non-regulatory tools for reducing emissions from smaller GHG sources
because we believe that these tools will likely result in more efficient
and cost-effective regulation than would case-by-case permitting.

E.  What are the net benefits of this final rule?

The net benefits of this GHG tailoring rule represent the difference
between the benefits and costs of this rule to society.  As discussed in
this preamble, this rule is one of regulatory relief and the benefits to
society are estimates the regulatory relief (avoided permit burden
costs) to sources and permitting authorities for Steps 1 and 2 of the
phase-in period.  The social costs of the rule are the foregone
environmental benefits in the form of potential GHG emission reductions
that could occur during the phase-in period and are discussed
qualitatively.

	This rulemaking provides regulatory relief for a phase-in period to
smaller sources of GHG by phasing in the statutory permitting threshold
at levels above statutory requirements.  This final rule establishes
thresholds and PSD significance levels for Steps 1 and 2 of the phase-in
period (the 2.5 year period between January 2, 2011 and July 1, 2013),
commits to considering a further Step 3, and indicates floor title V and
PSD threshold levels from July 1, 2013 through April 30, 2016.  The net
benefits of the final rule for Steps 1 and 2 are $193,598+B-C million
for the 2 and one-half year period where B denotes the unquantified
benefits and C the quantified costs of this final rule.  These
unquantified benefits of this rule include the avoided PSD BACT costs
for new and modifying sources.  The unquantified costs previously
discussed relate to the foregone environment benefits or GHG emission
reductions that might be possible during the 2.5 year Step 1 and 2
phase-in period.  These estimates are subject to significant
uncertainties that are discussed at length in the Regulatory Impact
Analysis for the Prevention of Significant Deterioration and Title V GHG
Tailoring Rule contained in the docket to this final rule.  All dollar
estimates shown are based upon 2007$.

Table VI-4.  Net Benefits of the Rule for Steps 1 and 2 of the Phase-in
Period

 	Final Rule Amounts

(millions of 2007$)

Benefits - Regulatory Relief

	Sources

	   Title V1	$123,624

   PSD2	$13,567

Total Source Regulatory Relief	$137,190

Permitting Authority

   Title V1	$52,684

   PSD2	$3,724

Total Permitting Authority 	$56,407

Total Regulatory Relief	$193,598+B

Costs - Foregone GHG Emission Reductions

   Title V & PSD	C

Net Benefits3	$193,598+B-C

Benefits represent regulatory relief for sources with the annual
potential to emit below the thresholds shown.

B - unquantified benefits of the rule include regulatory relief from
BACT requirements for PSD sources

C - unquantified social costs of tailoring rule represents economic
value of foregone environmental benefits (potential GHG emission
reductions) during Step 1 and 2 of the phase in period.  Foregone GHG
emission reductions are not known at this time.

1Reflects estimates of regulatory relief or avoided permit burden costs
for title V GHG sources and permitting authorities.

2 Shows estimates of regulatory relief or avoided permit burden costs
for GHG PSD sources and permitting authorities.

3 Includes one-half year of Step 1 (anyway threshold), 2 years  of Step
2 (100,000 threshold),

VII.   Comments on Statutory and Executive Orders Reviews

A.  Comments and Response on Statutory and Executive Orders Section in
the Proposed Rule

In this section, we provide responses to comments we received for
various Executive Orders.

A.  Comments on Executive Order 12866 - Regulatory Planning and Review

At proposal, EPA prepared an analysis of the potential costs and
benefits associated with EPA’s tailoring rule Tailoring Rule proposal
in an RIA.  Several commenters state that EPA’s failure to estimate
the full costs of the effects of its interpretation of PSD applicability
in the proposed Tailoring Rule violates EOExecutive Order 12866.  Some
of these commenters maintain that EOExecutive Order 12866 directs EPA to
submit to the Office of Management and Budget (OMB) new significant
regulations under consideration by the EPA.  These commenters assert
that, in the section 202 rule, EPA failed to analyze the effect on
stationary sources in the cost benefit analysis and there is no
indication that EPA included these impacts in its submission to OMB.
According to the commenters, in EPA’s proposal for this rulemaking,
EPA has similarly failed to analyze the costs and benefits of triggering
PSD for stationary sources.  The commenters assert that without this key
information, OMB could not fully review the impacts of the proposed
rule.  The commenters believe that EPA’s failure to account for known
costs that will occur as a direct result of the promulgation of the
proposed rule in conjunction with the section 202 rule violates several
applicable requirements of EOExecutive Order 12866, including sections
6(B)(ii) and 6(C)(iii), which require assessments of the potential costs
and benefits of the regulatory action and “reasonably feasible
alternatives to the planned regulation, identified by the Agencies or
the public . . .” thereby violating both the Administrative Procedures
ActAPA and CAA section 307(d) because they deprive businesses and
permitting authorities alike of a meaningful opportunity to comment on
the rule.

	The EPA has prepared a revised RIA assessing the benefits and costs of
the final tailoring ruleTailoring Rule to support this rulemaking in
accordance with E.O.xecutive Order 12866, as was done with the proposal
for this rulemaking.  Similarly, the RIA completed for this action is
subject to review by an Inter-agency review panel that includes the
President’s Office of Management and Budget OMB, as was the case with
the proposal RIA.  Further, the RIA completed for this final rule fully
assesses the known benefits and costs associated with the tailoring
rulemaking.Tailoring Rule.  This final rule is one of regulatory relief
from statutory requirements in which a large number of sources of GHGs
will be relieved of the burden of title V and PSD permitting for a
period of at least six 6 years.  This final rule will provide relief
from title V permitting to over 6 million sources of GHG in this
country.  Likewise tens of thousands of sources potentially subject to
PSD permitting requirements for GHGs will have regulation postponed for
a period of at least 6 years.  While larger sources of GHG may still be
required to obtain title V permits or modify existing permits and to
comply with PSD requirements, these burdens result from existing
statutory requirements, not from this final tailoring ruleTailoring
Rule.

B.  Comments on the Paperwork Reduction Act

At proposal, we stated in the preamble that we did not believe that the
proposal would impose any new information collection burden.  We
concluded that the proposed action would reduce costs incurred by
sources and permitting authorities relative to the costs that would be
incurred if EPA did not revise the rule and provided estimates of those
reduced costs.  Further, we stated that, despite our estimated burden
reductions, it was unnecessary for us to submit a new ICR to the OMB
because the ICR contained in the existing regulations for PSD (see,
e.g., 40 CFR 52.21) and title V (see 40 CFR parts 70 and 71) had already
been approved under the provisions of the Paperwork Reduction Act, 44
U.S.C. 3501 et seq. and haswas assigned OMB control number 2060–0003
and OMB control number 2060–0336, respectively.

However, several commenters disagree that it was unnecessary for us to
submit a new ICR for the proposed action.  These commenters believe that
(1) prior approval of an ICR for the PSD and title V programs ignores
the fact that there would be an increase in the paperwork burden as a
result of applying PSD and title V permitting requirements; and (2)
unless EPA resubmits the information collection approval request to OMB
with a proper and fully-inclusive analysis, EPA will lack authority to
collect information from stationary sources for PSD and title V GHG
emissions permitting.

As we stated in the proposal, this is a burden relief rule and as such
it does not impose any new requirements for the NSR or title V programs
that are not currently required.  For that reason, we concluded that for
purposes of this rule it was unnecessary for us to submit a new ICR to
the OMB and that the ICR contained in the existing regulations for PSD
(see, e.g., 40 CFR 52.21) and title V (see 40 CFR parts 70 and 71) that
had already been approved under the provisions of the Paperwork
Reduction Act, 44 U.S.C. 3501 et seq. and was assigned OMB control
number 2060–0003 and OMB control number 2060–0336, respectively,
still applies.

Nevertheless, we understand that once GHGs are regulated under the PSD
and title V programs, there might be an increase in the overall
paperwork burden andfor these programs.  EPA will have to access assess
this possible burden. We plan to do so once during the normal course of
3 -year review period of the currentrenewal ICR expires, which will be
in early 2011.process.

C.  Comments on Regulatory Flexibility Actthe RFA

At proposal, EPA certified that the proposed rule would not have a
significant impact on a substantial number of small entities and
therefore we are not obligated to convene a formal Small Business
Advocacy Review (SBAR) panel.  This certification was based upon the
fact that the proposed action would relieve the regulatory burden
associated with the major PSD and title V operating permits programs for
new or modified major sources that emit GHGs, including small
businesses.  Nevertheless, EPA was aware at proposal that many small
entities would be interested in the various GHG rulemakings currently
under development and might have concerns about the potential impacts of
the statutory imposition of PSD requirements that may occur as a result
of the group of EPA actions, notwithstanding the relief provided to
small businesses by the tailoring rule.Tailoring Rule.  For these
reasons, and in collaboration with the Small Business Administration
(SBA), EPA conducted an outreach meeting designed to exchange
information with small entities that may be interested in these
regulations.  The outreach effort was organized and led by
representatives from EPA’s Office of Air Quality Planning and
Standards within the Office of Air and Radiation, EPA’s Office of
Policy Economics and Innovation, the Office of Information and
Regulatory Affairs within the Office of Management and Budget (OMB), and
the Office of Advocacy of the Small Business Administration.SBA.  This
meeting was conducted on November 17, 2009 in Arlington, VA, and
documentation of this meeting, which includes a summary of the advice
and recommendations received from the small entity representatives
(SERs) identified for the purposes of this process, can be obtained in
the docket for this rulemaking.  (See Docket No.
EPA-HQ-OAR-2009-0517-19130)..)

During the comment period, several commenters alleged that EPA
inappropriately limited its RIA and RFA/SBREFA analysis, and that had we
done a comprehensive analysis, we would not have been able to certify
that any of the proposed rules will not have a significant economic
impact on a “substantial number of small entities.”  Thus they
conclude that EPA failed to prepare and publicize an initial regulatory
flexibility analysis (IRFA).  Additional commenters stated that EPA’s
failure to conduct an IRFA to assess the full costs of the effects of
its interpretation of PSD applicability in the Proposed proposed
Tailoring Rule violates a host of statutes and Executive Orders
requiring analysis and public review of regulatory burdens.  These
commenters conclude that EPA should have convened one or more Small
Business Advocacy Review (SBAR) Panels.

	EPA is 	We are not persuaded that EPA we should have taken into account
effects beyond those caused by the tailoring rule Tailoring Rule when we
made our certification of no significant economic impact on a
substantial number of small entities for this rule.  No permitting
requirements are imposed by this final tailoring rule.Tailoring Rule.
Instead, this final tailoring ruleTailoring Rule offers regulatory
relief to over an estimated six million sources of GHG emissions that
would otherwise be required to obtain a title V permit and tens of
thousands of sources of GHG emissions subject to PSD permitting
requirements that would otherwise be required statutorily to obtain
permit.  The RFA does not require that an agency complete a regulatory
flexibility analysis or conduct an SBAR panel where the rule does not
have any negative impact on small entities.  For more discussion of RFA
issues, please see the RTC document.

The EPA completed an RIA to assess the economic benefits of regulatory
relief and the environmental benefits afforded by this final rule. The
EPA believes that the RIA completed for this final rule adequately
addresses economic issues associated with this tailoring rule.

D.  Comments onon the Unfunded Mandates Reform Act

At proposal, EPA asserted that the tailoring ruleTailoring Rule does not
impose unfunded mandates on any entities including sources and
permitting authorities.  Since the proposed tailoring ruleTailoring Rule
is one of regulatory relief, it alleviates the burden of adhering to
statutorily required permitting thresholds and does not impose
regulatory requirements.

Some commenters on the proposed rule assert that EPA has failed to
comply with the requirements of UMRAthe Unfunded Mandates Reform Act
(URMA), pursuant to which EPA must assess the effects of the Proposed
Ruleproposed rule on state, local, and tribal governments and the
private sector.  Specifically, these commenters state that section 202
of the UMRA requires EPA to prepare a written statement, including a
cost-benefit analysis, for proposed rules with “federal mandates”
that may result in expenditures to state, local, and tribal governments,
in the aggregate, or to the private sector, of $100 million or more in
any one1 year.  According to the commenters, in concluding that “the
revisions would ultimately reduce the PSD and title V program
administrative burden that would otherwise occur in the absence of this
rulemaking,” EPA did not account for the billions of dollars that
permitting authorities and stationary sources will soon be required to
spend once PSD is triggered for GHGs.  Additionally, a few commenters
contend that the EPA underestimated the impacts to public utilities
which are owned/operated by local governments and also to state
regulatory agencies.

The EPA has carefully considered the comments on unfunded mandates
expressed by commenters to the proposed rule.  The EPA did complete a
RIA for the final rule assessing the benefits and costs of the tailoring
ruleTailoring Rule, including any unfunded mandates.  As previously
discussed, the tailoring ruleTailoring Rule is one of regulatory relief
because it increases the GHG emissions threshold for NSR and title V
permitting substantially above otherwise statutory requirements.  As
such, the EPA asserts this tailoring rulehas determined that this
Tailoring Rule does not impose unfunded mandates on any entities.  This
RIA of the final rule incorporates the extensive changes made in this
final rule, including increased threshold levels for title V and PSD
above those contained in the proposed rule.  While we also incorporated
improved estimates of the costs for sources to obtain permits and for
permitting authorities to process permits, they do not change our
conclusion that this final rule does not impose unfunded mandates on any
entities.

E.  Comments on Executive Order 13132 – Federalism

Some comments received on the proposed rule assert that federalism
concerns were ignored, in violation of Executive Order No. 13132.
According to the commenters, EPA cannot maintain that the Tailoring Rule
"will not have a substantial direct effect on the states, on the
relationship between the national government and the states, or on the
distribution of power and responsibilities between various levels of
government," such that Executive Order No. 13132 does not apply.  Some
of these commenters assert that the proposed rulemaking would require
radical changes in state laws, interjects GHGs into permit programs
never once conceived for that purpose (any more than was EPA's),
requires massive staff hiring at state agencies, and rewrites SIPs in
place for years or even decades.

As we stated previously, this is a burden relief rule and as such it
does not impose any requirements for the NSR or title V programs that
are not currently required.  In addition, this action does not interject
GHGs into the permit programs, nor does it change state laws or SIPs to
impose any new permitting requirements.  Instead, this action will
significantly reduce the burden and costs incurred by sources and
permitting authorities relative to the burden and costs that would be
incurred if EPA did not revise the permitting provisions to account for
higher applicability thresholds for GHG emissions.

However, since this rule finalizes burden reducing thresholds that will
not otherwise apply to the PSD and title V programs, we are aware that a
few states will may have to amend their SIPs to incorporate these new
thresholds.  These states will be the ones whose permitting authorities
if they do not implement the Federal PSD and title Vincorporate federal
rules by reference in their SIPs.and cannot adopt our approach through
interpretation.  Executive Order 13132 is still not implicated by this
rule because it finalizes burden reducing thresholds that would not
otherwise apply to the PSD and title V programs.

F.  Comments on Executive Order 13175 - Consultation and Coordination
with Indian Tribal Governments

The National Tribal Air Association (NTAA) supports EPA’s proposed
rule but requests that tribal air grant funding be increased to reflect
the air quality-related needs of tribes across the nation, and to allow
these tribes the opportunity to implement the CAA’s PSD and title V
programs.  The NTAA states that, not only are Tribes tribes eligible for
section 103 grant funding to conduct air quality monitoring, emissions
inventories, and other studies and assessments, but they may also obtain
section 105 grant funding to implement CAA regulatory programs.
According to the NTAA, Tribestribes are facing many of the same
air-related issues that neighboring state and local jurisdictions are
facing, but are significantly underfunded to address such issues.

	The Agency is aware and concerned about the resource needs for the
Tribaltribal air program and we are working to see how grant funding
might be increased in the future.  Nevertheless and for the purpose of
the permitting programs, we want to clarify that tribes that develop
Tribal Implementation Plans (TIPs) can charge for permits and
Tribestribes with delegation canor authorization would develop permit
fee programs under their authority (e.g., Navajo’s permit fee program
for their delegated title V permit program) to fund both the NSR and
title V programs.  For these reasons, there are a number of ways we
would like to work with tribes to address the funding concern,
includingincluding encouraging delegation or authorization of permitting
programs and having model codes available for Tribestribes that want to
do TIPs for NSR and title V permitting.

G.  Comments on Executive Order 13211 - Actions That Significantly
Affect Energy Supply, Distribution, or Use

Other commenters assert that EPA’s analysis under Executive Order
13211 is insufficient because it addresses only smaller sources.  These
commenters contend that EPA has not meaningfully examined the energy
implications of its proposed actions and interpretations of the CAA.
The commenters disagree with EPA’s conclusion that the imposition of
costly PSD obligations on power plants would have no impact on power
supply, distribution, or use, when those plants will have had no time to
prepare for compliance and no idea what BACT may be for GHG emissions.
Other commenters opine that the adoption of BACT for some industries
newly-subject to PSD permitting requirements for GHGs could involve
fuel-switching, and increased energy costs (due to the need for a source
to convert from coal to natural gas to meet BACT).

Again, this action is a burden relief rule and as such it does not
create any new requirements for sources in the energy supply,
distribution, or use sectors.  For the purpose of the BACT
determinations for GHGs, the long-standing top-down BACT selection
process still applies.  Under the CAA and EPA’s implementing
regulations, BACT is still an emission limitation based on the maximum
degree of emission reduction achievable through application of
production processes and available methods, systems, and techniques that
considers energy, environmental, and economic impacts.  In other words,
BACT determinations for GHGs will still have to consider energy,
environmental and economic feasibility for the various control
technologies under consideration before selecting a particular
technology as BACT for a particularspecific source.  For that reason,
what BACT may be for GHG emissions will vary by source, and the
technology that is ultimately selected has to be one that is feasible
based on the current energy, environmental and economic impacts that the
planned technology might have.  Thus, we do not believe that this action
is likely to have a significant adverse effect on the supply,
distribution, or use of energy.

VIII.   Statutory and Executive Orders Reviews

A.  Executive Order 12866 - Regulatory Planning and Review

	Under section 3(f)(1) of Executive Order (EO) 12866 (58 FR 51735,
October 4, 1993), this action is a "an "economically significant
regulatory action"” because it raises novel legalis likely to have an
annual effect on the economy of $100 million or policy issues.more.
Accordingly, EPA submitted this action to the Office of Management and
Budget (OMB) for review under EOExecutive Order 12866 and any changes
made in response to OMB recommendations have been documented in the
docket for this action.

	In addition, EPA prepared an analysis of the potential costs and
benefits associated with this action.  This analysis is contained in the
RIA for this final rule.  A copy of the analysis is available in the
docket for this action and the analysis is briefly summarized in section
VIII of this preamble.

	This rule uses a phased-in approach for requiring larger sources of GHG
emissions to comply with title V operating permit and PSD statutory
requirements, essentially lifting this burden for a period of at least 6
years for a large number of sources of GHG.  Thus, this rule provides
regulatory relief rather than regulatory requirements for these GHG
sources.  For sources of GHG that will be required to obtain title V
permits and/or comply with PSD requirements, there are no direct
economic burdens or costs as a result of this final rule, because these
requirements are not imposed as a result of this rulemaking.  Statutory
requirements to obtain a title V operating permit or to adhere to PSD
requirements are already mandated by the CAA and by existing rules, not
by this rule.  As a result, this Tailoring Rule annual effect on the
economy will be positive because it will result in billions of dollars
of regulatory relief during the phase-in period.

B.  Paperwork Reduction Act

	This action does not impose any new information collection burden.
Instead, this action will significantly reduce costs incurred by sources
and permitting authorities relative to the costs that would be incurred
if EPA did not revise the rule.  Based on our revised GHG threshold data
analysis, we estimate that over 80,000 new and modified facilities per
year would be subject to PSD review based on applying a GHG emissions
threshold of 100/250 tpy using a CO2e metric.  This is compared to 280
PSD permits currently issued per year, which is an increase of more than
280-fold.  Similarly, for title V, we estimate that over six million new
sources would be affected at the 100-tpy threshold for GHGs using the
CO2e metric.  By increasing the volume of permits by over 400 times, the
administrative burden would be unmanageable without this rule.

	However, OMB has previously approved the information collection
requirements contained in the existing regulations for PSD (see, e.g.,
40 CFR 52.21) and title V (see 40 CFR parts 70 and 71) under the
provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and
has assigned OMB control number 2060-0003 and OMB control number
2060-0336.  The OMB control numbers for EPA’s regulations in 40 CFR
are listed in 40 CFR part 9.

C.  Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) generally requires an agency to
prepare a regulatory flexibility analysis of any rule subject to notice
and comment rulemaking requirements under the Administrative Procedures
Act (APA) or any other statute unless the agency certifies that the rule
will not have a significant economic impact on a substantial number of
small entities.  Small entities include small businesses, small
organizations, and small governmental jurisdictions.

For purposes of assessing the impacts of this final action on small
entities, small entity is defined as: (1) a small business that is a
small industrial entity as defined in the U.S. Small Business
Administration (SBA) size standards (see 13 CFR 121.201); (2) a small
governmental jurisdiction that is a government of a city, county, town,
school district, or special district with a population of less than
50,000; or (3) a small organization that is any not-for-profit
enterprise that is independently owned and operated and is not dominant
in its field.

After considering the economic impacts of this final rule on small
entities, I certify that this final action will not have a significant
economic impact on a substantial number of small entities.  In
determining whether a rule has a significant economic impact on a
substantial number of small entities, the impact of concern is any
significant adverse economic impact on small entities, since the primary
purpose of the regulatory flexibility analyses is to identify and
address regulatory alternatives “which minimize any significant
economic impact of the rule on small entities.”  5 USC.S.C. 603 and
604.  Thus, an agency may certify that a rule will not have a
significant economic impact on a substantial number of small entities if
the rule relieves regulatory burden, or otherwise has a positive
economic effect on all of the small entities subject to the rule.

We have therefore concluded that this final rule will relieve the
regulatory burden for most affected small entities associated with the
major PSD and title V operating permits programs for new or modified
major sources that emit GHGs, including small businesses.  This is
because this rule raises the major source applicability thresholds for
these programs for the sources that emit GHGs.  As a result, the program
changes provided in this rule are not expected to result in a
significant economic impact on a substantial number of small entities.

D.  Unfunded Mandates Reform Act

This rule does not contain a federal mandate that may result in
expenditures of $100 million or more for state, local, and tribal
governments, in the aggregate, or the private sector in any 1 year.
Only those few states whose permitting authorities do not implement the
Federalfederal PSD and title V rules by reference in their SIPs will
have a small increase in burden.  These states will have to amend their
corresponding SIPs to incorporate the new applicability thresholds,
since the burden reducing thresholds that we are finalizing with this
rule will not otherwise apply to the PSD and title V programs.  Thus,
this rule is not subject to the requirements of sections 202 or 205 of
UMRA.

	This rule is also not subject to the requirements of section 203 of
UMRA because it contains no regulatory requirements that might
significantly or uniquely affect small governments.  As discussed
earlier, this rule is expected to result in cost savings and an
administrative burden reduction for all permitting authorities and
permittees, including small governments.

E.  Executive Order 13132 – Federalism

This action does not have federalism implications.  It will not have
substantial direct effects on the states, on the relationship between
the national government and the states, or on the distribution of power
and responsibilities among the various levels of government, as
specified in Executive Order 13132.  These final amendments will
ultimately simplify and reduce the burden on state and local agencies
associated with implementing the PSD and title V operating permits
programs, by providing that a source whose GHG emissions are below the
proposed levels will not have to obtain a PSD permit or title V permit.
Thus, Executive Order 13132 does not apply to this action.

In the spirit of Executive Order 13132, and consistent with EPA policy
to promote communications between EPA and state and local governments,
EPA specifically solicited comment on the proposed rule from state and
local officials.

F.  Executive Order 13175 - Consultation and Coordination with Indian
Tribal Governments

Subject to the Executive Order 13175 (65 FR 67249, November 9, 2000) EPA
may not issue a regulation that has tribal implications, that imposes
substantial direct compliance costs, and that is not required by
statute, unless the federal government provides the funds necessary to
pay the direct compliance costs incurred by tribal governments, or EPA
consults with tribal officials early in the process of developing the
proposed regulation and develops a tribal summary impact statement.

EPA has concluded that this action may have tribal implications.
However, it will neither impose substantial direct compliance costs on
tribal governments, nor preempt Tribal tribal law.  There are no tribal
authorities, currently issuing major NSR permits; therefore, it will not
currently impose direct compliance costs on tribal governments.however,
this may change in the future.

EPA consulted with tribal officials early in the process of developing
this regulation to permitallow them to have meaningful and timely input
into its development by publishing an ANPR that included PSD GHG
tailoring options for regulating GHGs under the CAA.  (73 FR 44354, July
30, 2008)  As a result of the ANPR, EPA received several comments from
tribal officials on differing PSD GHG tailoring options presented in the
ANPR which were considered in the proposal and this final rule.
Additionally, we also specifically solicited comment from tribal
officials on the proposed rule (74 FR 55292, October 27, 2009).

As required by section 7(a) of Executive Order 13175, EPA’s Tribal
Consultation Official has certified that the requirements of the
Executive Order have been met in a meaningful and timely manner.  A copy
of the certification is included in the docket for this action.

G.  Executive Order 13045 - Protection of Children from Environmental
Health and Safety Risks

		 EPA interprets EO Executive Order 13045 (62 FR 19885, April 23, 1997)
as applying only to those regulatory actions that concern health or
safety risks, such that the analysis required under section 5-501 of the
EO Executive Order has the potential to influence the regulation.  This
action is not subject to EO Executive Order 13045 because it does not
establish an environmental standard intended to mitigate health or
safety risks.

H.  Executive Order 13211 - Actions That Significantly Affect Energy
Supply, Distribution, or Use

This action is not a “significant energy action” as defined in
Executive Order 13211 (66 FR 28355 (May 22, 2001)), because it is not
likely to have a significant adverse effect on the supply, distribution,
or use of energy.  Further, we have concluded that this rule is not
likely to have any adverse energy effects because this action would not
create any new requirements for sources in the energy supply,
distribution, or use sectors.

I.  National Technology Transfer and Advancement Act

Section 12(d) of the National Technology Transfer and Advancement Act of
1995 ("NTTAA"), Public Law No. 104-113, 12(d) (15 U.S.C. 272 note)
directs EPA to use voluntary consensus standards in its regulatory
activities unless to do so would be inconsistent with applicable law or
otherwise impractical.  Voluntary consensus standards are technical
standards (e.g., materials specifications, test methods, sampling
procedures, and business practices) that are developed or adopted by
voluntary consensus standards bodies.  The NTTAA directs EPA to provide
Congress, through OMB, explanations when the Agency decides not to use
available and applicable voluntary consensus standards.

This action does not involve technical standards.  Therefore, EPA did
not consider the use of any voluntary consensus standards.

J.  Executive Order 12898 – Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income Populations

	Executive Order 12898 (59 FR 7629 (Feb. 16, 1994)) establishes federal
executive policy on environmental justice.  Its main provision directs
federal agencies, to the greatest extent practicable and permitted by
law, to make environmental justice part of their mission by identifying
and addressing, as appropriate, disproportionately high and adverse
human health or environmental effects of their programs, policies, and
activities on minority populations and low-income populations in the
United States.

		EPA has determinedconcluded that this final rule will it is not have
practicable to determine whether there would be disproportionately high
and adverse human health or environmental effects on minority and/or
low- income populations because it increases the level of environmental
protection for all affected populations without having anyfrom this
rule.  This rule is necessary in order to allow for the continued
implementation of permitting requirements established in the statute.
Specifically, without this rule, the CAA permitting programs (PSD and
title V) would become overwhelmed and unmanageable by the millions of
GHG sources that would become newly subject to them.  This would result
in severe impairment of the functioning of these programs with
potentially adverse human health and environmental effects nationwide.
Under this rule and the legal doctrines of “absurd results,”
administrative necessity, and one-step-at-a-time, EPA is ensuring that
the CAA permitting programs continue to operate by limiting their
applicability to the maximum number of sources the programs can possibly
handle.  This approach is consistent with congressional intent as it
allows PSD applicability to at least the largest sources initially, at
least to as many more sources as possible, and as promptly as possible
over time.  By doing so, this rule allows for the maximum degree of
environmental protection possible while providing regulatory relief for
the unmanageable burden that would otherwise exist.  Therefore, we
believe it is not practicable to identify and address disproportionately
high and adverse human health or environmental effects on any
population, including any minority orpopulations and low- income
population. Any impact that this final rule will have will be global in
nature and will increase the level of protection provided to all human
health and the environment.s in the United States under this final rule.

K.  Congressional Review Act

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996SBREFA,
generally provides that before a rule may take effect, the agency
promulgating the rule must submit a rule report, which includes a copy
of the rule, to each House of the Congress and to the Comptroller
General of the United States.  EPA will submit a report containing this
rule and other required information to the U.S. Senate, the U.S. House
of Representatives, and the Comptroller General of the United States
prior to publication of the rule in the Federal Register. A Majormajor
rule cannot take effect until 60 days after it is published in the
Federal Register.  This action is a “major rule” as defined by 5
U.S.C. 804(2).  This rule will be effective [INSERT DATE 60 DAYS FROM
DATE OF PUBLICATION IN THE FEDERAL REGISTER].

L.  Judicial Review

Under section 307(b)(1) of the Act, petitions for judicial review of
this action must be filed in the United States Court of Appeals for the
District of Columbia Circuit by [INSERT DATE 60 DAYS FROM DATE OF
PUBLICATION IN THE FEDERAL REGISTER].  Any such judicial review is
limited to only those objections that are raised with reasonable
specificity in timely comments.  Filing a petition for reconsideration
by the Administrator of this final rule does not affect the finality of
this rule for the purposes of judicial review nor does it extend the
time within which a petition for judicial review may be filed, and shall
not postpone the effectiveness of such rule or action.  Under section
307(b)(2) of the Act, the requirements of this final action may not be
challenged later in civil or criminal proceedings brought by us to
enforce these requirements. Pursuant to section 307(d)(1)(V) of the Act,
the Administrator determines that this action is subject to the
provisions of section 307(d).  Section 307(d)(1)(V) provides that the
provisions of section 307(d) apply to “such other actions as the
Administrator may determine.”  This action finalizes some, but not
all, elements of a previous proposed action – the Prevention of
Significant Deterioration and Title V Greenhouse Gas Tailoring Rule
Proposed Rule (74 FR 55292, October 27, 2009).

IX. Statutory Authority

The statutory authority for this action is provided by sections
307(d)(7)(B), 101, 111, 114, 116, and 301 of the CAA as amended (42
U.S.C. 7401, 7411, 7414, 7416, and 7601).  This action is also subject
to section 307(d) of the CAA (42 U.S.C. 7407(d)).

List of Subjects

40 CFR Part 51

Environmental protection, Administrative practice and procedure, Air
pollution control, Carbon dioxide, Carbon dioxide equivalents,
Environmental protection, Greenhouse gases, Hydrofluorocarbons,
Intergovernmental relations, Methane, Nitrous oxide, Perfluorocarbons,
Reporting and recordkeeping requirements, Sulfur hexafluoride.

40 CFR Part 52

Environmental protection, Administrative practice and procedure, Air
pollution control, Carbon dioxide, Carbon dioxide equivalents,
Environmental protection, Greenhouse gases, Hydrofluorocarbons,
Intergovernmental relations, Methane, Nitrous oxide, Perfluorocarbons,
Reporting and recordkeeping requirements, Sulfur hexafluoride.

40 CFR Part 70

Environmental protection, Administrative practice and procedure, Air
pollution control, Carbon dioxide, Carbon dioxide equivalents,
Environmental protection, Greenhouse gases, Hydrofluorocarbons,
Intergovernmental relations, Methane, Nitrous oxide, Perfluorocarbons,
Reporting and recordkeeping requirements, Sulfur hexafluoride.Page 478
of 495 - Prevention of Significant Deterioration and Title V Greenhouse
Gas Tailoring Rule

40 CFR Part 71

Environmental protection, Administrative practice and procedure, Air
pollution control, Carbon dioxide, Carbon dioxide equivalents,
Environmental protection, Greenhouse gases, Hydrofluorocarbons, Methane,
Nitrous oxide, Perfluorocarbons, Reporting and recordkeeping
requirements, Sulfur hexafluoride.

___________________________________________

Dated:

___________________________________________

Lisa P. Jackson,

Administrator.

							 For reasons stated in the preamble, title 40, chapter I of the
Code of Federal Regulations is amended as set forth below.

PART 51 – [AMENDED]

1.  The authority citation for part 51 continues to read as follows:

Authority:  23 U.S.C. 101; 42 U.S.C. 7401–7671q.

Subpart I - [Amended]

2.  Section 51.166 is amended:

a.  By adding paragraph (b)(48)

b.  By revising paragraph (b)(49)(iv); and

c.  By adding paragraph (b)(49)(v).

The revisions and additions read as follows:

§51.166  Prevention of significant deterioration of air quality.

* * * * *

	(b)  *  *  *

	(48)  Subject to regulation means, for any air pollutant, that the
pollutant is subject to either a provision in the Clean Air Act, or a
nationally-applicable regulation codified by the Administrator in
subchapter C of this chapter, that requires actual control of the
quantity of emissions of that pollutant, and that such a control
requirement has taken effect and is operative to control, limit or
restrict the quantity of emissions of that pollutant released from the
regulated activity.  Except that:

	(i)  Greenhouse gases (GHGs), the air pollutant defined in
§86.1818-12(a) of this chapter as the aggregate group of six greenhouse
gases: carbon dioxide, nitrous oxide, methane, hydrofluorocarbons,
perfluorocarbons, and sulfur hexafluoride, shall not be subject to
regulation except as provided in paragraphs (b)(48)(iv) through (v) of
this section.

	(ii) For purposes of paragraphs (b)(48)(iii) through (v) of this
section, the term tpy CO2 equivalent emissions (CO2e) shall represent an
amount of GHGs emitted, and shall be computed as follows:

	(a)  Multiplying the mass amount of emissions (tpy), for each of the
six greenhouse gases in the pollutant GHGs, by the gas’s associated
global warming potential published at Table A-1 to subpart A of part 98
of this chapter – Global Warming Potentials.

	(b)  Sum the resultant value from paragraph (b)(48)(ii)(a) of this
section for each gas to compute a tpy CO2e.

	(iii)  The term emissions increase as used in paragraphs (b)(48)(iv)
through (v) of this section shall mean that both a significant emissions
increase (as calculated using the procedures in (a)(7)(iv) of this
section) and a significant net emissions increase (as defined in
paragraphs (b)(3) and (b)(23) of this section) occur.  For the pollutant
GHGs, an emissions increase shall be based on tpy CO2e, and shall be
calculated assuming the pollutant GHGs is a regulated NSR pollutant, and
“significant” is defined as 75,000 tpy CO2e instead of applying the
value in paragraph (b)(23)(ii) of this section.

	(iv)  Beginning January 2, 2011, the pollutant GHGs is subject to
regulation if:

	(a)  The stationary source is a new major stationary source for a
regulated NSR pollutant that is not GHGs, and also will emit or will
have the potential to emit 75,000 tpy CO2e or more; or

	(b)  The stationary source is an existing major stationary source for a
regulated NSR pollutant that is not GHGs, and also will have an
emissions increase of  a regulated NSR pollutant, and an emissions
increase of 75,000 tpy CO2e or more; and,

	(v)  Beginning July 1, 2011, in addition to the provisions in paragraph
(b)(48)(iv) of this section, the pollutant GHGs shall also be subject to
regulation:

	(a)  At a new stationary source that will emit or have the potential to
emit 100,000 tpy CO2e; or

	(b)  At an existing stationary source that emits or has the potential
to emit 100,000 tpy CO2e, when such stationary source undertakes a
physical change or change in the method of operation that will result in
an emissions increase of 75,000 tpy CO2e or more.

	(49)  * * *

	(iv)  Any pollutant that otherwise is subject to regulation under the
Act as defined in paragraph (b)(48) of this section.

	(v)  Notwithstanding paragraphs (b)(49)(i) through (iv) of this
section, the term regulated NSR pollutant shall not include any or all
hazardous air pollutants either listed in section 112 of the Act, or
added to the list pursuant to section 112(b)(2) of the Act, and which
have not been delisted pursuant to section 112(b)(3) of the Act, unless
the listed hazardous air pollutant is also regulated as a constituent or
precursor of a general pollutant listed under section 108 of the Act.

PART 52 – [AMENDED]

3.  The authority citation for part 52 continues to read as follows:

Authority:  42 U.S.C. 7401, et seq.

Subpart A - [Amended]

4.  Section 52.21 is amended:

a. By adding paragraph (b)(49);

b. By revising paragraph (b)(50)(iv); and

c. By adding paragraph (b)(50)(v).

The revisions and additions read as follows:

§52.21  Prevention of significant deterioration of air quality.

* * * * *

	(b)  * * *

	(49)  Subject to regulation means, for any air pollutant, that the
pollutant is subject to either a provision in the Clean Air Act, or a
nationally-applicable regulation codified by the Administrator in
subchapter C of this chapter, that requires actual control of the
quantity of emissions of that pollutant, and that such a control
requirement has taken effect and is operative to control, limit or
restrict the quantity of emissions of that pollutant released from the
regulated activity.  Except that:

	(i)  Greenhouse gases (GHGs), the air pollutant defined in
§86.1818-12(a) of this chapter as the aggregate group of six greenhouse
gases: carbon dioxide, nitrous oxide, methane, hydrofluorocarbons,
perfluorocarbons, and sulfur hexafluoride, shall not be subject to
regulation except as provided in paragraphs (b)(49)(iv) through (v) of
this section .

	(ii)  For purposes of paragraphs (b)(49)(iii) through (v) of this
section, the term tpy CO2 equivalent emissions (CO2e) shall represent an
amount of GHGs emitted, and shall be computed as follows:

	(a) Multiplying the mass amount of emissions (tpy), for each of the six
greenhouse gases in the pollutant GHGs, by the gas’s associated global
warming potential published at Table A-1 to subpart A of part 98 of this
chapter – Global Warming Potentials.

	(b)  Sum the resultant value from paragraph (b)(49)(ii)(a) of this
section for each gas to compute a tpy CO2e.,

	(iii)  The term emissions increase as used in paragraphs (b)(49)(iv)
through (v) of this section shall mean that both a significant emissions
increase (as calculated using the procedures in paragraph(a)(2)(iv) of
this section) and a significant net emissions increase (as defined in
paragraphs (b)(3) and (b)(23) of this section) occur.  For the pollutant
GHGs, an emissions increase shall be based on tpy CO2e, and shall be
calculated assuming the pollutant GHGs is a regulated NSR pollutant, and
“significant” is defined as 75,000 tpy CO2e instead of applying the
value in paragraph (b)(23)(ii) of this section.

	(iv)  Beginning January 2, 2011, the pollutant GHGs is subject to
regulation if:

	(a)  The stationary source is a new major stationary source for a
regulated NSR pollutant that is not GHGs, and also will emit or will
have the potential to emit 75,000 tpy CO2e or more; or

	(b)  The stationary source is an existing major stationary source for a
regulated NSR pollutant that is not GHGs, and also will have an
emissions increase of a regulated NSR pollutant, and an emissions
increase of 75,000 tpy CO2e or more; and,

	(v)  Beginning July 1, 2011, in addition to the provisions in paragraph
(b)(49)(iv) of this section, the pollutant GHGs shall also be subject to
regulation

	(a)  At a new stationary source that will emit or have the potential to
emit 100,000 tpy CO2e; or

	(b)  At an existing stationary source that emits or has the potential
to emit 100,000 tpy CO2e, when such stationary source undertakes a
physical change or change in the method of operation that will result in
an emissions increase of 75,000 tpy CO2e or more.

	(50) * * *

	(iv)  Any pollutant that otherwise is subject to regulation under the
Act as defined in paragraph (b)(49) of this section.

	(v)  Notwithstanding paragraphs (b)(50)(i) through (iv) of this
section, the term regulated NSR pollutant shall not include any or all
hazardous air pollutants either listed in section 112 of the Act, or
added to the list pursuant to section 112(b)(2) of the Act, and which
have not been delisted pursuant to section 112(b)(3) of the Act, unless
the listed hazardous air pollutant is also regulated as a constituent or
precursor of a general pollutant listed under section 108 of the Act.

* * * * *

5.  A new §52.22 is added to read as follows:

§52.22  Enforceable Commitments for Further Actions Addressing the
Pollutant Greenhouse Gases (GHGs).

	(a)  Definitions.

	(1)  Greenhouse Gases (GHGs) means the air pollutant as defined in
§86.1818-12(a) of this chapter as the aggregate group of six greenhouse
gases: carbon dioxide, nitrous oxide, methane, hydrofluorocarbons,
perfluorocarbons, and sulfur hexafluoride.

	(2)  All other terms used in this section shall have the meaning given
in §52.21.

	(b)  Further action to regulate GHGs under the PSD program.

	(1)  Near term Action on GHGs.  The Administrator shall solicit
comment, under section 307(b) of the Act, on promulgating lower GHGs
thresholds for PSD applicability.  Such action shall be finalized by
July 1, 2012 and become effective July 1, 2013.

	(2)  Further Study and Action on GHGs.

	(i)  No later than April 30, 2015 the Administrator shall complete a
study projecting the administrative burdens that remain with respect to
stationary sources for which GHGs do not constitute a regulated NSR
pollutant.  Such study shall account, among other things, for permitting
authorities ability to secure resources, hire and train staff;
experiences associated with GHG permitting for new types of sources and
technologies; and, the success of streamlining measures developed by EPA
(and adopted by the states) for reducing the permitting burden
associated with such stationary sources.

	(ii)  Based on the results of the study described in paragraph
(b)(2)(i) of this section, the Administrator shall propose a rule
addressing the permitting obligations of such stationary sources under
§52.21 and §51.166 of this chapter.  The Administrator shall take
final action on such a rule no later than April 30, 2016.

	(iii)  Before completing the rule described in paragraph (b)(2)(ii) of
this section, the Administrator shall take no action to make the
pollutant GHGs subject to regulation at stationary sources that emit or
have the potential to emit less than 50,000 tpy CO2e, or for physical
changes or changes in the method of operations at stationary sources
that result in an emissions increase of less than 50,000 tpy CO2e (as
determined using the methodology described in §52.21(b)(49)(ii).)

PART 70 - [AMENDED]

6.  The authority citation for part 70 continues to read as follows:

Authority: 42 U.S.C. 7401, et seq.

7  Section 70.2 is amended:

	a.  By revising the introductory text of paragraph (2) of the
definition for “major source”; and

b. By adding a definition for “subject to regulation” in
alphabetical order.

The revision and addition read as follows:

§70.2  Definitions.

* * * * *

Major source * * *

(2)  A major stationary source of air pollutants, as defined in section
302 of the Act, that directly emits, or has the potential to emit, 100
tpy or more of any air pollutant subject to regulation (including any
major source of fugitive emissions of any such pollutant, as determined
by rule by the Administrator).  The fugitive emissions of a stationary
source shall not be considered in determining whether it is a major
stationary source for the purposes of section 302(j) of the Act, unless
the source belongs to one of the following categories of stationary
source:

* * * * *

	Subject to regulation  means, for any air pollutant, that the pollutant
is subject to either a provision in the Clean Air Act, or a
nationally-applicable regulation codified by the Administrator in
subchapter C of this chapter, that requires actual control of the
quantity of emissions of that pollutant, and that such a control
requirement has taken effect and is operative to control, limit or
restrict the quantity of emissions of that pollutant released from the
regulated activity.  Except that:

	(1)  Greenhouse gases (GHGs), the air pollutant defined in
§86.1818-12(a) of this chapter as the aggregate group of six greenhouse
gases: carbon dioxide, nitrous oxide, methane, hydrofluorocarbons,
perfluorocarbons, and sulfur hexafluoride, shall not be subject to
regulation unless, as of July 1, 2011, the GHG emissions are at a
stationary source emitting or having the potential to emit 100,000 tpy
CO2 equivalent emissions.

	(2)  The term tpy CO2 equivalent emissions (CO2e) shall represent an
amount of GHGs emitted, and shall be computed by multiplying the mass
amount of emissions (tpy), for each of the six greenhouse gases in the
pollutant GHGs, by the gas’s associated global warming potential
published at Table A-1 to subpart A of part 98 of this chapter –
Global Warming Potentials, and summing the resultant value for each to
compute a tpy CO2e.

* * * * *

8.  A new section 70.12 is added to read as follows:

§70.12 Enforceable Commitments for Further Actions Addressing
Greenhouse Gases (GHGs).

	(a)  Definitions.

	(1)  Greenhouse Gases (GHGs) means the air pollutant as defined in
§86.1818-12(a) of this chapter as the aggregate group of six greenhouse
gases: carbon dioxide, nitrous oxide, methane, hydrofluorocarbons,
perfluorocarbons, and sulfur hexafluoride.

	(2)  All other terms used in this section shall have the meaning given
in §70.2.

	(b)  Further action to regulate GHGs under the title V program.

	(1)  Near term Action on GHGs. The Administrator shall solicit comment,
under section 307(b) of the Act, on promulgating lower GHGs thresholds
for applicability under §70.2.  Such action shall be finalized by July
1, 2012 and become effective July 1, 2013.

	(2)  Further Study and Action on GHGs.

	(i)  No later than April 30, 2015 the Administrator shall complete a
study projecting the administrative burdens that remain with respect to
stationary sources for which GHGs do not constitute a pollutant subject
to regulation.  Such study shall account, among other things, for
permitting authorities ability to secure resources, hire and train
staff; experiences associated with GHG permitting for new types of
sources and technologies; and, the success of streamlining measures
developed by EPA (and adopted by the states) for reducing the permitting
burden associated with such stationary sources.

	(ii)  Based on the results of the study described in paragraph
(b)(2)(i) of this section, the Administrator shall propose a rule
addressing the permitting obligations of such stationary sources under
§70.2.  The Administrator shall take final action on such a rule no
later than April 30, 2016.

	(iii)  Before completing the rule described in paragraph (b)(2)(ii) of
this section, the Administrator shall take no action to make the
pollutant GHGs subject to regulation at stationary sources that emit or
have the potential to emit less than 50,000 tpy CO2e (as determined
using the methodology described in §70.2.)

PART 71 - [AMENDED]

	9.  The authority citation for part 71 continues to read as follows:

Authority: 42 U.S.C. 7401, et seq.

Subpart A – [AMENDED]

10.  Section 71.2 is amended:

	a.  By revising the introductory text of paragraph (2) of the
definition for “major source”; and

b.  By adding a definition for “subject to regulation” in
alphabetical order.

The revision and addition read as follows:

§71.2  Definitions.

* * * * *

Major source * * *

(2)  A major stationary source of air pollutants, as defined in section
302 of the Act, that directly emits or has the potential to emit, 100
tpy or more of any air pollutant subject to regulation (including any
major source of fugitive emissions of any such pollutant, as determined
by rule by the Administrator).  The fugitive emissions of a stationary
source shall not be considered in determining whether it is a major
stationary source for the purposes of section 302(j) of the Act, unless
the source belongs to one of the following categories of stationary
source:

* * * * *

	Subject to regulation means, for any air pollutant, that the pollutant
is subject to either a provision in the Clean Air Act, or a
nationally-applicable regulation codified by the Administrator in
subchapter C of this chapter, that requires actual control of the
quantity of emissions of that pollutant, and that such a control
requirement has taken effect and is operative to control, limit or
restrict the quantity of emissions of that pollutant released from the
regulated activity.  Except that:

	(1)  Greenhouse gases (GHGs), the air pollutant defined in
§86.1818-12(a) of this chapter as the aggregate group of six greenhouse
gases: carbon dioxide, nitrous oxide, methane, hydrofluorocarbons,
perfluorocarbons, and sulfur hexafluoride, shall not be subject to
regulation unless, as of July 1, 2011, the GHG emissions are at a
stationary source emitting or having the potential to emit 100,000 tpy
CO2 equivalent emissions.

	(2)  The term tpy CO2 equivalent emissions (CO2e) shall represent an
amount of GHGs emitted, and shall be computed by multiplying the mass
amount of emissions (tpy), for each of the six greenhouse gases in the
pollutant GHGs, by the gas’s associated global warming potential
published at Table A-1 to subpart A of part 98 of this chapter –
Global Warming Potentials, and summing the resultant value for each to
compute a tpy CO2e.

	11.  A new §71.13 is added as follows:

§71.13 Enforceable commitments for further actions addressing
Greenhouse Gases (GHGs)

	(a)  Definitions.

	(1)  Greenhouse Gases (GHGs) means the air pollutant as defined in
§86.1818-12(a) of this chapter as the aggregate group of six greenhouse
gases: carbon dioxide, nitrous oxide, methane, hydrofluorocarbons,
perfluorocarbons, and sulfur hexafluoride.

	(2)  All other terms used in this section shall have the meaning given
in §71.2.

	(b)  Further action to regulate GHGs under the title V program.

	(1)  Near term Action on GHGs. The Administrator shall solicit comment,
under 307(b) of the Act, on promulgating lower GHGs thresholds for
applicability under §71.2.  Such action shall be finalized by July 1,
2012 and become effective July 1, 2013.

	(2) Further Study and Action on GHGs.

	(i) No later than April 30, 2015, the Administrator shall complete a
study projecting the administrative burdens that remain with respect to
stationary sources for which GHGs do not constitute a pollutant subject
to regulation.  Such study shall account, among other things, for
permitting authorities ability to secure resources, hire and train
staff; experiences associated with GHG permitting for new types of
sources and technologies; and, the success of streamlining measures
developed by EPA (and adopted by the states) for reducing the permitting
burden associated with such stationary sources.

	(ii) Based on the results of the study described in paragraph (b)(2)(i)
of this section, the Administrator shall propose a rule addressing the
permitting obligations of such stationary sources under §71.2.  The
Administrator shall take final action on such a rule no later than April
30, 2016.

 Unless otherwise indicated, references in this preamble to “title
V,” “title V requirements,” the “title V program,” and similar
references are to the operating permit provisions in CAA sections
501-506, and not the “small business stationary source technical and
environmental compliance assistance program” under CAA section 507.

 Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837 (1984).

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

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

 The term “greenhouse gases” is commonly used to refer generally to
gases that have heat-trapping properties.  However, in this notice,
unless noted otherwise, we use it to refer to specifically to the
pollutant regulated in the LDVR.

 The relevant thresholds are 100 tpy for title V, and 250 tpy for PSD,
except for 28 categories listed in EPA regulations for which the PSD
threshold is 100 tpy.

 This rule has not yet been published in the Federal Register.  The
signed version of the rule is available at   HYPERLINK
"http://epa.gov/otaq/climate/regulations.htm"
http://epa.gov/otaq/climate/regulations.htm  [update when published]

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

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

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

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

 A source need not meet the 100/250 thresholds for GHGs if it is already
a major stationary source as a result of emissions of another regulated
NSR pollutant.

 §40 CFR 86.1818-12 (a) (“Applicability.  This section contains
standards and other regulations applicable to the emission of the air
pollutant defined as the aggregate group of six greenhouse gases:
carbon dioxide, nitrous oxide, methane, hydrofluorocarbons,
perfluorocarbons, and sulfur hexafluoride”).

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

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

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

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

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

 See §The applicability provision of the LDVR is found in 40 CFR
86.1818-12(a)   ), which provides as follows:

Greenhouse gas emission standards for light-duty vehicles, light-duty
trucks, and medium-duty passenger vehicles.  (“Applicability.  This
section contains standards and other regulations applicable to the
emission of the air pollutant defined as the aggregate group of six
greenhouse gases: carbon dioxide, nitrous oxide, methane,
hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride.”).

 We note that our approach does not entirely avoid the possibility that
a GWP change can occur while a permit is in progress although it will
ensure advance notice of such a change.  In the event that we plan to
propose a change to GWP values, we will work with permitting authorities
as necessary to provide guidance to sources on transitional issues.

 “Summary of ICR-based Methodology and Data Used to Estimate Avoided
Burden Relief and Evaluate Resource Requirements at Alternative
Greenhouse Gas (GHG) Permitting Thresholds;” Prepared by EPA Staff;
August 2009.March 2010.

  “Summary of Methodology and Data Used to Estimate Burden Relief and
Evaluate Resource Requirements at Alternative Greenhouse Gas (GHG)
Permitting Thresholds;” Prepared by EPA Staff; March 2010.

 “Summary of Methodology and Data Used to Estimate Burden Relief and
Evaluate Resource Requirements at Alternative Greenhouse Gas (GHG)
Permitting Thresholds;” Prepared by EPA Staff; March 2010.

 “Summary of Methodology and Data Used to Estimate Burden Relief and
Evaluate Resource Requirements at Alternative Greenhouse Gas (GHG)
Permitting Thresholds;” Prepared by EPA Staff; March 2010.

 “NACAA Summary on Permitting GHGs Under the Clean Air Act”;
Memorandum from Mary Stewart Douglas, National Association of Clean Air
Agencies to Juan Santiago, EPA/OAQPS, September 3, 2009.

 “Summary of Methodology and Data Used to Estimate Burden Relief and
Evaluate Resource Requirements at Alternative Greenhouse Gas (GHG)
Permitting Thresholds;” Prepared by EPA Staff; March 2010

 “Summary of Methodology and Data Used to Estimate Burden Relief and
Evaluate Resource Requirements at Alternative Greenhouse Gas (GHG)
Permitting Thresholds;” Prepared by EPA Staff; March 2010.

 “Summary of Methodology and Data Used to Estimate Burden Relief and
Evaluate Resource Requirements at Alternative Greenhouse Gas (GHG)
Permitting Thresholds;” Prepared by EPA Staff; March 2010.

 “Summary of Methodology and Data Used to Estimate Burden Relief and
Evaluate Resource Requirements at Alternative Greenhouse Gas (GHG)
Permitting Thresholds;” Prepared by EPA Staff; March 2010

  As explained in the preamble, "current program" figures for PSD
permits also reflect NSR permits in nonattainment areas that we assume
include a PSD component for at least one pollutant.

 Number of FTEs may be calculated as work hours divided by 2,000 hours.

 Although we set out an analysis of how the three doctrines fit into the
Chevron framework, we note that even if the doctrines are viewed
independently of the Chevron framework, they support ourthis action
today.

 For early cases in which the U.S. Supreme Court applied the “absurd
results” doctrine, see Holy Trinity Church v. U.S., 143 U.S. 457,
516-17  TA \s "Rector of Holy Trinity Church v. U.S., 143 U.S. 457
(1892)"   (1892)   TA \l "Rector of Holy Trinity Church v. U.S., 143
U.S. 457 (1892)" \s "Rector of Holy Trinity Church v. U.S., 143 U.S. 457
(1892)" \c 1  (“any alien” does not include a foreign pastor; Court
stated, “It is a familiar rule, that a thing may be within the letter
of the statute and yet not within the statute, because not within its
spirit, nor within the intention of its makers….  If a literal
construction of the words be absurd, the Act must be construed as to
avoid the absurdity”); Chew Heong v. United States, 112 U.S. 536, 555
(1884) (rejecting a literal interpretation of treaty that would have
prevented the re-entry of a person into the U.S. upon the ground that he
did not possess a certificate which did not exist prior to his
departure, and which could not possibly have been issued); Heyenfeldt v.
Daney Gold Mining Co., 93 U.S. 634, 638 (1877) (statutory language
expressly referred to past land sales and dispositions, “but evidently
they were not employed in this sense, for no lands in Nevada had been
sold or disposed of by any act of Congress,” and the language of the
statute “could not … apply to past sales or dispositions, and, to
have any effect at all, must be held to apply to the future”).

 For other U.S. Supreme Court cases, see  HYPERLINK
"http://www.westlaw.com/Find/Default.wl?rs=dfa1.0&vr=2.0&DB=708&FindType
=Y&ReferencePositionType=S&SerialNum=1946115791&ReferencePosition=892"
Utah Junk Co. v. Porter,  HYPERLINK
"http://www.westlaw.com/Find/Default.wl?rs=dfa1.0&vr=2.0&DB=708&FindType
=Y&ReferencePositionType=S&SerialNum=1946115791&ReferencePosition=892"
328 U.S. 39, 44 (1946)  (“literalness may strangle meaning”);
HYPERLINK
"http://www.westlaw.com/Find/Default.wl?rs=dfa1.0&vr=2.0&DB=708&FindType
=Y&ReferencePositionType=S&SerialNum=1945117466&ReferencePosition=195"
Markham v. Cabell,  HYPERLINK
"http://www.westlaw.com/Find/Default.wl?rs=dfa1.0&vr=2.0&DB=708&FindType
=Y&ReferencePositionType=S&SerialNum=1945117466&ReferencePosition=195"
326 U.S. 404, 409  (1945) (“The policy as well as the letter of the
law is a guide to decision.”); United States v. American Trucking
Associations, Inc. 310 U.S. 534 (1940) (the term “employees” in the
Federal Motor Carrier Act, is limited to employees whose activities
affect safety)  TA \l "United States v. American Trucking Associations,
Inc. 310 U.S. 534 (1940)" \s "United States v. American Trucking
Associations, Inc. 310 U.S. 534 (1940)" \c 1  ; C.V. Sorrels v. U.S.,
287 U.S. 435, 446-49 (1932) (provisions of National Prohibition Act that
criminalize possessing and selling liquor do not apply if defendant is
entrapped; Court declines to apply the “letter of the statute”
because doing so “in the circumstances under consideration is foreign
to its purpose”); United States v. Katz, 271 U.S. 354, 362 (1926)
(holding that the statutory words “no person” refer only to persons
authorized under other provisions of the Act to traffic alcohol, thus
rejecting a literal application of general terms descriptive of a class
of persons made subject to a criminal statute); Hawaii v. Mankichi, 190
U.S. 197, 212-14 (1903) (refusing to adopt a literal application of the
“Newlands resolution” which would have entitled every criminal in
the State of Hawaii convicted of an offense between 1898 – 1900 to be
set at large, as “surely such a result could not have been within the
contemplation of Congress”).

 For other cases, see Arizona Public Service Co. v. EPA, 562 F.3d 1116,
1125-26 (10th Cir. 2009); General American Transp. Corp. v. ICC, 872
F.2d 1048, 1058 (D.C. Cir. 1989); Hazardous Waste Treatment Council v.
EPA, 861 F.2d 277, 287 (D.C. Cir. 1988);  Western Union International,
Inc. v. FCC, 725 Fl2d 732, 754 (D.C. Cir. 1984).

  We recognize that we described the relationship between the Chevron
framework and the “administrative necessity” doctrine somewhat
differently in the proposal, 74 FR 55312, and that, after further
analysis, we are refining our view of that relationship as described
previously.

  As discussed later, EPA may, in future rulemaking, make a final
determination that under the “absurd results” doctrine, Congress did
not intend for EPA to apply PSD to very small sources, that is, those,
with emissions at or near the 100/250 tpy statutory levels.

 A physical or operational change is treated as a “modification”
that is subject to PSD if it either “increases the amount of any air
pollutant emitted” by the source or “results in the emission of any
air pollutant not previously emitted.”  For convenience, unless
otherwise indicated, when we refer to changes that “increase[] the
amount of any air pollutant emitted,” we mean both to those types of
changes and changes that “result[] in the emission of any air
pollutant not previously emitted.”

  We do not believe that this term is ambiguous with respect to the need
to cover GHG sources under either the PSD or title V program, only with
respect to what sources of GHG should be covered under the circumstances
presented here.

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

  Coverage of modifications by the PSD program was addressed by a
technical amendment which added a cross reference in section 169 to
section 111.  The legislative history of this provision is scant and
there is no suggestion that Congress would have contemplated sweeping in
large number of changes from smaller sources through the addition of
this provision.

 Beginning in 1974, EPA implemented a program that required sources of
certain NAAQS pollutants seeking to construct in attainment or
unclassifiable areas to implement emission controls for the purpose of
preventing deterioration in the ambient air quality in those areas.
This program was the precursor to the PSD program Congress enacted in
1977.

 Note that although Congress specifically authorized the states to
exempt "nonprofit health or education institutions" from the definition
of "major emitting facility," this statement by the D.C. Circuit should
be taken as the Court's view that Congress did not design PSD to cover
sources of the small size described.

 The initial PSD program that EPA established in 1973-74, and which EPA
built on in promulgating the PSD program necessary to implement the 1977
CAA Amendments had an even narrower focus.  In that initial program, in
response to a court order to ensure that state implementation plans
(SIPs) prevent significant deterioration of air quality, EPA imposed
both a technology-based requirement and an air-quality-review