On Nov. 18 and 19, 2009, lawyers from Barnes & Thornburg LLP attended the United States Environmental Protection Agency's (USEPA's) public meetings in Arlington, Va. and Rosemont, Ill. concerning the USEPA's new "Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Proposed Rule" (GHG Tailoring Rule), see 74 Fed. Reg. 55291 (Oct. 27, 2009). This proposed rule is focused on large facilities emitting over 25,000 tons of greenhouse gases (GHG) a year, including carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride. The proposed rule suggests new thresholds for GHG emissions that would define when Clean Air Act permits would be required under the New Source Review (NSR) and Title V Operating Permit programs for new and existing facilities.
The proposed tailoring rule arises from the likelihood that GHGs soon will be covered under the Prevention of Significant Deterioration (PSD) and Title V programs. USEPA has issued a draft finding that GHGs endanger the health and welfare of humans (endangerment finding) that will allow USEPA to regulate GHGs as pollutants under the Clean Air Act (CAA). Once the endangerment finding goes final, then USEPA plans to issue GHG emissions requirements for light-duty vehicles – a proposed rule was issued on Sept. 28, 2009. See 74 Fed. Reg. 49453 (Sept. 28, 2009). If USEPA issues the light-duty vehicle GHG emission standards, then GHGs automatically become regulated under the PSD/Title V provisions of the CAA. If and when that happens, any new source that has potential to emit over 250 tons/year of GHGs would need a PSD permit before construction begins, and new sources in certain industrial groups may need a PSD permit for any potential GHG emissions over 100 tons/year. Any existing source with a Title V Operating Permit that makes modifications that exceed 100 tons/year of GHGs would need to have technology requirements reflected in their Title V permits.
100 tons/year is an extremely low threshold for GHGs that would apply to multiple large and small businesses alike. The proposed tailoring rule would increase the 100 tons/year threshold to limit which facilities would be required to obtain NSR and Title V permits. USEPA estimates that the proposed rule would cover nearly 70 percent of the national GHG emissions that come from stationary sources – including those from large emitters of GHGs such as power plants, refineries, and cement production facilities.
At both the meetings in Arlington and Rosemont, citizen's groups were out in full force to express their support for the GHG Tailoring Rule. Indeed, in a number of cases, the public comments suggested that citizen's groups believe that the GHG Tailoring Rule, as proposed, does not go far enough in protecting the environmental against the perceived dangers of GHG emissions. Only a few industry representatives spoke over the two days, including representatives from the American Petroleum Institute (API), the National Petrochemical Refiners Association (NPRA), a petroleum recycling industry member, the Farm Bureau, and the head of the Competitive Enterprise Institute.
Three points were consistently raised against the proposed GHG Tailoring Rule by industry representatives: (1) that the CAA is not designed for GHGs; (2) USEPA does not have the authority for tailoring the PSD/Title V thresholds in the manner it proposes; and (3) the rule lacks a required regulatory impact analysis under the Small Business Regulatory Flexibility Act (SBRFA). Some industry representatives added that the proposed GHG Tailoring Rule is unnecessary because legislation is pending that could resolve the potential permitting overload, and that the proposed rule does not assure the relief for small sources. Others added that the comment period for such an important and controversial rule (i.e., over USEPA's authority to issue the rule) is too short. Comments are due on the proposed rule by Dec. 28, 2009.
Mike Fusco of Safety Kleen added a specific request for the petroleum recycling industry that USEPA consider life-cycle credits based on recycling of oils and solvents, because recycling supposedly reduces overall GHGs compared to single usage.
The remaining witnesses were from the Sierra Club, local public interest groups or private citizens. Comments ranged from general concerns over GHG impacts, especially from coal-fired power plants, to specific concerns about the use of renewable energy sources; however, all of the citizen's group witnesses were supportive of the proposed GHG Tailoring Rule. One specific comment requested that USEPA make a determination that carbon capture and sequestration should not be allowed to be used as BACT; instead, the commenter suggested that all coal-fired power plants should be shut down within the next 35-40 years and, in the interim, BACT should be the use of renewable energy and energy efficiency.
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