EPA Finalizes "Tailoring Rule" For Major Source GHG Permitting

May 13: The U.S. EPA announced a final rule to address greenhouse gas (GHG) emissions from the largest stationary sources, but, they said it would shield "millions of small sources of GHGs from Clean Air Act permitting requirements." The controversial, phased-in, rule, which EPA called a "common-sense approach," will address facilities like power plants and oil refineries that are responsible for 70 percent of the greenhouse gases from stationary sources that threaten American's health and welfare [See WIMS 10/1/09].

    EPA Administrator Lisa Jackson said, "After extensive study, debate and hundreds of thousands of public comments, EPA has set common-sense thresholds for greenhouse gases that will spark clean technology innovation and protect small businesses and farms. There is no denying our responsibility to protect the planet for our children and grandchildren. It's long past time we unleashed our American ingenuity and started building the efficient, prosperous clean energy economy of the future." EPA said the phased-in approach will start in January 2011, when Clean Air Act permitting requirements for GHGs will kick in for large facilities that are already obtaining Clean Air Act permits for other pollutants. Those facilities will be required to include GHGs in their permit if they increase these emissions by at least 75,000 tons per year (tpy).

    In July 2011, Clean Air Act permitting requirements will expand to cover all new facilities with GHG emissions of at least 100,000 tpy and modifications at existing facilities that would increase GHG emissions by at least 75,000 tpy. These permits must demonstrate the use of best available control technologies to minimize GHG emission increases when facilities are constructed or significantly modified. Under the new emissions thresholds for GHGs that begin in July 2011, EPA estimates approximately 900 additional permitting actions covering new sources and modifications to existing sources would be subject to review each year. In addition, 550 sources will need to obtain operating permits for the first time because of their GHG emissions.

    The final rule addresses a group of six greenhouse gases: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6). EPA issued a proposed rule in October 2009 and held a 60-day public comment period. The agency received about 450,000 comments, which were carefully reviewed and considered during the development of this final rule. When EPA originally proposed the rule the Administrator announced it would cover large industrial facilities that emit at least 25,000 tons of GHGs a year. At that time EPA estimated that approximately 14,000 large sources would need to obtain operating permits that include GHG emissions.

    In a fact sheet, EPA explains, "The rule establishes a schedule that will initially focus CAA permitting programs on the largest sources with the most CAA permitting experience. The rule then expands to cover the largest sources of GHG that may not have been previously covered by the CAA for other pollutants. Finally, it describes EPA plans for any additional steps in this process. The CAA permitting program emissions thresholds for criteria pollutants such as lead, sulfur dioxide and nitrogen dioxide, are 100 and 250 tons per year (tpy). While these thresholds are appropriate for criteria pollutants, they are not feasible for GHGs because GHGs are emitted in much higher volumes. Without this tailoring rule, the lower emissions thresholds would take effect automatically for GHGs on January 2, 2011. PSD and title V requirements at these thresholds would lead to dramatic increases in the number of required permits -- tens of thousands of PSD permits and millions of title V permits. State, local, and tribal permitting authorities would be overwhelmed and the programs' abilities to manage air quality would be severely impaired."

 

    The American Chemistry Council (ACC) President and CEO Cal Dooley issued a statement on the rule saying, "We are extraordinarily concerned about EPA's plans for regulating stationary sources under the Clean Air Act (CAA), as outlined in the 'tailoring rule' released today. By 2016, as many as six million U.S. sources of greenhouse gas emissions could be required to obtain a permit to build or modify facilities. This would include many of America's smallest sources, such as a new 100,000-square-foot hotel, a new restaurant, a major source that wants to add a gas furnace or space heater, a large commercial property with a $5,000 monthly natural gas bill, and nearly every chemical facility in the country. The approach could delay or cancel much-needed business investment, including energy efficiency-related projects that could help reduce the nation's GHG emissions. With EPA's plans for stationary source regulation now clear, we call on Congress to enact legislation to revisit this policy immediately. We look forward to working with lawmakers in this urgent effort. . ."

    The National Petrochemical & Refiners Association (NPRA) Executive Vice President and General Counsel Gregory Scott said. "It's the job of federal agencies like EPA to regulate, not legislate. If EPA wants changes in the Clean Air Act it should propose them to Congress, not unlawfully take on the role of Congress. EPA has adopted a tortured and legally unsupportable interpretation of the plain wording of the Clean Air Act in an effort to escape a regulatory train wreck of its own creation. If EPA is allowed to get away with this, it sets a dangerous precedent for unelected officials in federal agencies to change laws approved by the elected representatives of the American people. EPA created this regulatory mess when it decided, based on a questionable administrative record, to use the Clean Air Act for a purpose the authors of the law never intended -- to regulate greenhouse gases. However, now that EPA has started down this path, it does not have the right to pick and choose between portions of the law that fit its activist agenda and those that do not. Only Congress can rewrite the Clean Air Act."

    The Center for Biological Diversity (CBD) issued a release saying, "The rule would raise the threshold for permitting requirements from the statute's threshold of 250 tons to 75,000 tons, in the process exempting thousands of pollution sources that collectively account for millions of tons of greenhouse pollution each year." Kassie Siegel, CBD's Climate Law Institute director said, "The EPA should be moving boldly, quickly, and confidently to implement the Clean Air Act's successful pollution-reduction programs for greenhouse gases.  We're extremely disappointed with the EPA's slow and tentative timeline for addressing the climate crisis. While everyone agrees that greenhouse reductions for the largest polluters must be prioritized, the EPA can and should move far more quickly to reduce pollution from the other very important sources. Rather than rapidly employ the full scope of it authorities under the Clean Air Act to address the climate crisis with the urgency it deserves, with this rule the EPA seems intent on moving as slowly as possible."

    Maggie Fox, President and CEO of The Alliance for Climate Protection (ACP) founded in 2006 by Al Gore, said, "Americans can breathe a bit easier in the wake of today's announcement from the EPA on regulating emissions from the largest sources of greenhouse gas pollution causing the climate crisis. This rule is a common-sense and cost-effective approach that will shield small businesses and small sources, and focus on the largest emitters. Coupled with historic national carbon pollution limits for cars, a first-ever mandatory greenhouse gas inventory, and efforts in the Senate to craft comprehensive clean energy and climate policies, America is closer to realizing the promise of a 21st-century clean energy economy."

    Senior Legislative Representative Kyle Ash of Greenpeace USA said, "This final "tailoring" rule is a first step toward reducing the devastating impact of the nation's biggest smokestacks on the planet's climate, oceans, and quality of life. The Clean Air Act has been successfully used to reduce pollution for four decades. Now, three years after the Supreme Court ruled that EPA must come to grips with this problem, we will finally see needed requirements to reduce carbon dioxide pollution  caused by the burning of coal and other fossil fuels at large facilities like power plants and incinerators.

    Access a release from EPA (click here). Access complete details including the 550-page prepublication copy of the final rule, a fact sheet, a timeline and summary of permitting burdens with and without the rule (click here). Access the complete ACC statement (click here). Access the NPRA statement (click here). Access a release and background from CBD (click here). Access the statement from ACP (click here). Access a release from Greenpeace USA (click here).