[Federal Register Volume 76, Number 85 (Tuesday, May 3, 2011)]
[Rules and Regulations]
[Pages 25178-25209]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-10285]
[[Page 25177]]
Vol. 76
Tuesday,
No. 85
May 3, 2011
Part IV
Environmental Protection Agency
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40 CFR Part 52
Determinations Concerning Need for Error Correction, Partial Approval
and Partial Disapproval, and Federal Implementation Plan Regarding
Texas's Prevention of Significant Deterioration Program; Final Rule
Federal Register / Vol. 76, No. 85 / Tuesday, May 3, 2011 / Rules and
Regulations
[[Page 25178]]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[EPA-HQ-OAR-2010-1033; FRL-9299-9]
RIN 2060-AQ68
Determinations Concerning Need for Error Correction, Partial
Approval and Partial Disapproval, and Federal Implementation Plan
Regarding Texas's Prevention of Significant Deterioration Program
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: EPA is finalizing a correction to its previous full approval
of Texas's Clean Air Act (CAA) Prevention of Significant Deterioration
(PSD) program to be a partial approval and partial disapproval and is
also promulgating a Federal Implementation Plan (FIP) for Texas. These
actions are based on EPA's determination that at the time EPA approved
Texas's PSD program, the program was flawed because the state did not
address how the program would apply to all pollutants that would become
newly subject to regulation in the future, including non-National
Ambient Air Quality Standard (NAAQS) pollutants, among them greenhouse
gases (GHGs). The partial disapproval requires EPA to promulgate a FIP
and EPA is doing so to assure that GHG-emitting sources in Texas are
able to proceed with plans to construct or expand.
DATES: This action is effective on May 1, 2011.
ADDRESSES: EPA has established a docket for this rulemaking under
Docket ID No. EPA-HQ-OAR-2010-1033. All documents in the docket are
listed in the http://www.regulations.gov index. Although listed in the
index, some information is not publicly available, e.g., confidential
business information or other information whose disclosure is
restricted by statute. Certain other material, such as copyrighted
material, will be publicly available only in hard copy. Publicly
available docket materials are available either electronically in
http://www.regulations.gov or in hard copy at the U.S. Environmental
Protection Agency, Air Docket, EPA/DC, EPA West Building, Room 3334,
1301 Constitution Ave., NW., Washington, DC. The Public Reading Room is
open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding
legal holidays. The telephone number for the Public Reading Room is
(202) 566-1744, and the telephone number for the Air Docket is (202)
566-1742.
FOR FURTHER INFORMATION CONTACT: For information on this rule, contact
Ms. Cheryl Vetter, Air Quality Policy Division, Office of Air Quality
Planning and Standards (C504-03), Environmental Protection Agency,
Research Triangle Park, NC 27711; telephone number: (919) 541-4391; fax
number: (919) 541-5509; e-mail address: [email protected].
SUPPLEMENTARY INFORMATION:
I. General Information
A. Does this action apply to me?
The only governmental entity potentially affected by this rule is
the State of Texas. Other entities potentially affected by this rule
include sources in all industry groups within the State of Texas, which
have a direct obligation under the CAA to obtain a PSD permit for GHGs
for projects that meet the applicability thresholds set forth in the
Tailoring Rule.\1\ This independent obligation on sources is specific
to PSD and derives from CAA section 165(a). The majority of entities
potentially affected by this action are expected to be in the following
groups:
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\1\ Prevention of Significant Deterioration and Title V
Greenhouse Gas Tailoring Rule; Final Rule. 75 FR 31,514 (June 3,
2010). The Tailoring Rule is described in more detail later in this
preamble.
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Industry Group NAICS a
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Utilities (electric, natural gas, other 2211, 2212, 2213.
systems).
Manufacturing (food, beverages, 311, 312, 313, 314, 315, 316.
tobacco, textiles, leather).
Wood product, paper manufacturing...... 321, 322.
Petroleum and coal products 32411, 32412, 32419.
manufacturing.
Chemical manufacturing................. 3251, 3252, 3253, 3254, 3255,
3256, 3259.
Rubber product manufacturing........... 3261, 3262.
Miscellaneous chemical products........ 32552, 32592, 32591, 325182,
32551.
Nonmetallic mineral product 3271, 3272, 3273, 3274, 3279.
manufacturing.
Primary and fabricated metal 3311, 3312, 3313, 3314, 3315,
manufacturing. 3321, 3322, 3323, 3324, 3325,
3326, 3327, 3328, 3329.
Machinery manufacturing................ 3331, 3332, 3333, 3334, 3335,
3336, 3339.
Computer and electronic products 3341, 3342, 3343, 3344, 3345,
manufacturing. 4446.
Electrical equipment, appliance, and 3351, 3352, 3353, 3359.
component manufacturing.
Transportation equipment manufacturing. 3361, 3362, 3363, 3364, 3365,
3366, 3369.
Furniture and related product 3371, 3372, 3379.
manufacturing.
Miscellaneous manufacturing............ 3391, 3399.
Waste management and remediation....... 5622, 5629.
Hospitals/nursing and residential care 6221, 6231, 6232, 6233, 6239.
facilities.
Personal and laundry services.......... 8122, 8123.
Non-residential (commercial)........... Not available. Codes only exist
for private households,
construction and leasing/sales
industries.
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\a\ North American Industry Classification System.
B. How is the preamble organized?
The information presented in this preamble is organized as follows:
I. General Information
A. Does this action apply to me?
B. How is the preamble organized?
II. Overview of Rulemaking
III. Background
A. Requirements for SIP Submittals and EPA Action
B. General Requirements for the PSD Program
C. Regulatory Background: Texas SIP and PSD Program
D. Regulatory Background: GHG Rules
IV. Final Action and Response to Comments
A. Response to General Comments on the Operation of the PSD
Program
[[Page 25179]]
B. Determination That EPA's Previous Approval of Texas's PSD
Program Was in Error
C. Error Correction: Conversion of Previous Approval to Partial
Approval and Partial Disapproval
D. Reconsideration Under CAA Section 301, Other CAA Provisions,
and Case Law
E. Relationship of This Action to GHG PSD SIP Call
F. Relationship of This Rulemaking to Other States
G. Federal Implementation Plan
V. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
D. Unfunded Mandates Reform
E. Executive Order 13132--Federalism
F. Executive Order 13175--Consultation and Coordination With
Indian Tribal Governments
G. Executive Order 13045--Protection of Children From
Environmental Health Risks and Safety Risks
H. Executive Order 13211--Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
I. National Technology Transfer and Advancement Act
J. Executive Order 12898--Federal Actions to Address
Environmental Justice in Minority Populations and Low-Income
Populations
K. Congressional Review Act
VI. Judicial Review
II. Overview of Rulemaking
This notice-and-comment final rulemaking is intended to assure that
large GHG-emitting sources in Texas, which became subject to PSD on
January 2, 2011, will continue to be able to obtain preconstruction
permits under the CAA New Source Review (NSR) PSD program beyond the
April 30, 2011, expiration date of the FIP that EPA put in place for
this purpose via an Interim Final Rule. ``Determinations Concerning
Need for Error Correction, Partial Approval and Partial Disapproval,
and Federal Implementation Plan Regarding Texas Prevention of
Significant Deterioration Program; Interim Final Rule.'' 75 FR 82,430
(Dec. 30, 2010). In this manner, this rulemaking will allow those
sources to avoid delays in construction or modification.
As in the interim final rulemaking, EPA is determining in this
rulemaking that it erred in fully approving Texas's PSD program in 1992
because at that time, the program had a gap, which recent statements by
Texas have made particularly evident. The program did not address its
application to, or provide assurances that it has adequate legal
authority to apply to, all pollutants newly subject to regulation,
including non-NAAQS pollutants, among them GHGs. As a result, EPA is
correcting its previous full approval to be a partial approval and
partial disapproval. EPA is taking this action through the error-
correction mechanism provided under CAA section 110(k)(6). The partial
disapproval requires EPA, under CAA section 110(c)(1)(B), to promulgate
a FIP within 2 years, and, as part of this rulemaking, EPA is
exercising its discretion to promulgate the FIP immediately. Under the
FIP, EPA will become the permitting authority for, and apply Federal
PSD requirements to, large GHG-emitting sources in accordance with the
thresholds established under what we call the Tailoring Rule, which EPA
published by notice dated June 3, 2010, 75 FR 31,514.\2\
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\2\ Texas will continue to be the permitting authority for non-
GHG pollutants for sources that triggered PSD requirements due to
such other pollutants. EPA will be the permitting authority for all
pollutants for sources that trigger PSD solely because of their
GHGs, which may occur after July 1, 2011, under the Tailoring Rule.
This permitting process will also take place in the seven other
states for which EPA is implementing a GHG PSD FIP.
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By becoming the permitting authority, EPA will be able to process
preconstruction PSD permit applications for GHG-emitting sources and
thereby allow the affected sources to avoid delays in construction and
modification. According to Texas, 167 GHG-emitting sources will require
PSD permits during 2011. These sources have a real need to have a
permitting authority in place in Texas. Although the CAA allows states
to implement PSD, and Texas has been implementing an EPA-approved PSD
program since 1992, Texas has recently informed EPA that it does not
have the intention or the authority to apply PSD to GHG-emitting
sources, and that it could very well maintain this position even if the
U.S. Court of Appeals for the DC Circuit (the DC Circuit) upholds the
GHG rules against legal challenges that Texas and other parties have
recently brought. Texas's unwillingness to implement this aspect of the
Federal PSD program leaves EPA no choice but to resume its role as the
permitting authority for this portion, in order to assure that
businesses in Texas are not subject to delays or potential legal
challenges and are able to move forward with planned construction and
expansion projects that will create jobs and otherwise benefit the
state's and the nation's economy. EPA has determined that this action
is necessary at this time so that there is no period of time when
sources are unable to obtain necessary PSD permits.
In order to assure no gap in permitting, EPA is establishing May 1,
2011, as the effective date for the FIP, which immediately follows the
expiration of the interim-final FIP EPA published by notice dated
December 30, 2010. EPA stated in the interim final rule that the FIP
would remain in place until April 30, 2011.
III. Background
A. Requirements for SIP Submittals and EPA Action
This section reviews background information concerning the CAA
requirements for what SIPs must include, the process for state
submittals of SIPs, requirements for EPA action on SIPs and SIP
revisions, and FIPs.
1. Requirements for What SIPs Must Include
Congress enacted the NAAQS and SIP requirements in the 1970 CAA
Amendments. CAA section 110(a)(1) requires that states adopt and submit
to EPA for approval SIPs that implement the NAAQS. CAA section
110(a)(2) contains a detailed list of requirements that all SIPs must
include to be approvable by EPA.
Of particular relevance for this action, subparagraph (E)(i) of CAA
section 110(a)(2) provides that SIPs must ``provide * * * necessary
assurances that the state * * * will have adequate personnel, funding,
and authority under State * * * law to carry out such implementation
plan.* * *'' As applicable to PSD programs, this provision means that
EPA may approve the SIP PSD provisions only if EPA is satisfied that
the state will have adequate legal authority under state law.
2. EPA Action on SIP Submittals
After a SIP or SIP revision has been submitted, EPA is authorized
to act on it under CAA section 110(k)(3)-(4). Those provisions
authorize a full approval or, if the SIP or SIP revision meets some but
not all of the applicable requirements, a conditional approval, a
partial approval and disapproval, or a full disapproval. If EPA
disapproves a required SIP or SIP revision, then EPA must promulgate a
FIP at any time within 2 years after the disapproval, unless the state
corrects the deficiency within that period of time by submitting a SIP
revision that EPA approves. CAA section 110(c)(1).\3\
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\3\ States are subject to sanctions for failure to submit, or
for EPA disapproval of, SIPs for nonattainment areas, under CAA
section 179. These sanctions provisions are not relevant for this
rule because they do not apply to PSD SIPs.
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[[Page 25180]]
3. SIP Call
The CAA provides a mechanism for the correction of SIPs with
certain types of inadequacies, under CAA section 110(k)(5), which
provides:
(5) Calls for plan revisions
Whenever the Administrator finds that the applicable
implementation plan for any area is substantially inadequate to * *
* comply with any requirement of this Act, the Administrator shall
require the State to revise the plan as necessary to correct such
inadequacies. The Administrator shall notify the State of the
inadequacies and may establish reasonable deadlines (not to exceed
18 months after the date of such notice) for the submission of such
plan revisions.
This provision by its terms authorizes the Administrator to ``find[]
that [a SIP] * * * is substantially inadequate to * * * comply with any
requirement of this Act,'' and, based on that finding, to ``require the
State to revise the [SIP] * * * to correct such inadequacies.'' This
latter action is commonly referred to as a ``SIP call.'' In addition,
this provision authorizes EPA to establish a ``reasonable deadline[]
(not to exceed 18 months after the date of such notice)'' for the
submission of the corrective SIP revision.
If EPA does not receive the corrective SIP revision by the
deadline, CAA section 110(c) authorizes EPA to ``find[] that [the]
State has failed to make a required submission.'' CAA section
110(c)(1)(A). Once EPA makes that finding, CAA section 110(c)(1)
requires EPA to ``promulgate a Federal implementation plan at any time
within 2 years after the [finding] * * * unless the State corrects the
deficiency, and [EPA] approves the plan or plan revision, before [EPA]
promulgates such [FIP].''
CAA section 110(k)(5), by its terms--specifically, the use of the
term ``[w]henever''--authorizes, but does not require, EPA to make the
specified finding and does not impose any time constraints for EPA to
do so. As a result, EPA has discretion in determining whether and when
to make the specified finding. See New York Public Interest Research
Group v. Whitman, 321 F.3d 316, 330-31 (2d Cir. 2003) (opening phrase
``Whenever the Administrator makes a determination'' in CAA section
502(i)(1) grants EPA ``discretion whether to make a determination'');
Her Majesty the Queen in Right of Ontario v. EPA, 912 F.2d 1525, 1533
(DC Cir. 1990) (``whenever'' in CAA section 115(a) ``impl[ied] a degree
of discretion'' in whether EPA had to make a finding).
4. Authority for EPA to Revise Previous Action on SIPs
EPA has authority to revise its previous actions concerning SIP
submittals. Two mechanisms are available to EPA: The error correction
mechanism provided under CAA section 110(k)(6), and EPA's general
administrative authority to reconsider its own actions under CAA
sections 110 and 301(a), in light of case law.
(a) Error Correction Under CAA Section 110(k)(6)
CAA section 110(k)(6) provides as follows:
Whenever the Administrator determines that the Administrator's
action approving, disapproving, or promulgating any plan or plan
revision (or part thereof), area designation, redesignation,
classification, or reclassification was in error, the Administrator
may in the same manner as the approval, disapproval, or promulgation
revise such action as appropriate without requiring any further
submission from the State. Such determination and the basis thereof
shall be provided to the State and public.
The key provisions for present purposes are that the Administrator has
the authority to ``determine[]'' when a SIP approval was ``in error,''
and when she does so, she may then revise the SIP approval ``as
appropriate,'' in the same manner as the approval, and without
requiring any further submission from the state.
As quoted previously, CAA section 110(k)(6) provides EPA with the
authority to correct its own ``error,'' but nowhere does this provision
or any other provision in the CAA define what qualifies as ``error.''
Thus, the term should be given its plain language, everyday meaning,
which includes all unintentional, incorrect or wrong actions or
mistakes.
The legislative history of CAA section 110(k)(6) is silent
regarding the definition of error, but the timing of the enactment of
the provision suggests a broad interpretation. The provision was
enacted shortly after the Third Circuit decision in Concerned Citizens
of Bridesburg v. U.S. EPA, 836 F.2d 777 (1987). In Bridesburg, the
court adopted a narrow interpretation of EPA's authority to
unilaterally correct errors. The court stated that such authority was
limited to typographical and other similar errors, and stated that any
other change to a SIP must be accomplished through a SIP revision. Id.
at 786. In Bridesburg, EPA determined that it lacked authority to
include odor regulations as part of a SIP unless the odor regulations
had a significant relationship to achieving a NAAQS, and so directly
acted to remove 13-year-old odor provisions from the Pennsylvania SIP.
Id. at 779-80. EPA found the previous approval of the provisions to
have been an inadvertent error, and so used its ``inherent authority to
correct an inadvertent mistake'' to withdraw its prior approval of the
odor regulations without seeking approval of the change from
Pennsylvania. Id. at 779-80, 785. After noting that Congress had not
contemplated the need for revision on the grounds cited by EPA, Id. at
780, the court found that EPA's ``inherent authority to correct an
inadvertent mistake'' was limited to corrections such as
``typographical errors,'' and that instead EPA was required to use the
SIP revision process to remove the odor provision from the SIP. Id. at
785-86.
When the court made its determination in Bridesburg in 1987, there
was no provision explicitly addressing EPA's error correction authority
under the CAA. In 1990, Congress passed CAA section 110(k)(6). The
legislative history says little about the provision, and does not
mention Bridesburg. Even so, the terms of the provision make it evident
that Congress authorized EPA to undertake a broader set of revisions
under the guise of error correction than the Bridesburg court read the
pre-existing Clean Air Act to authorize, and that Congress did not
intend to codify the holding of Bridesburg. This is apparent because
CAA section 110(k)(6) both (i) authorizes EPA to correct SIP approvals
and other actions that were ``in error,'' which, as noted previously,
broadly covers any mistake, and thereby contrasts with the holding in
Bridesburg that EPA's pre-section 110(k)(6) authority was limited to
correction of typographical or similar mistakes; and (ii) provides that
the error correction need not be accomplished via the SIP revision or
SIP call process, which contrasts with the holding of Bridesburg
requiring a SIP revision. By the same token, because the Bridesburg
decision stood for the proposition that EPA could not correct anything
more than a narrow range of errors, had Congress intended to codify the
decision in Bridesburg, it is logical that Congress would have
described the type of error that EPA was authorized to correct in the
same limited way that the decision did. In this manner, the fact that
Congress adopted CAA section 110(k)(6) against the backdrop of the
Bridesburg case confirms that the provision cover a broad range of
errors.
EPA has used CAA section 110(k)(6) in the past to correct errors of
a non-technical nature. Most recently, EPA withdrew its approval of SIP
PSD
[[Page 25181]]
programs in 24 states to the extent they apply PSD to GHG-emitting
sources below the thresholds in the final Tailoring Rule. ``Limitation
of Approval of Prevention of Significant Deterioration Provisions
Concerning Greenhouse Gas Emitting Sources in State Implementation
Plans; Final Rule,'' 75 FR 82,536 (Dec. 30, 2010)(Narrowing Rule). In
addition, EPA has used CAA section 110(k)(6) as authority to make
substantive corrections to remove a variety of provisions from
Federally approved SIPs that are not related to the attainment or
maintenance of NAAQS or any other CAA requirement. See, e.g.,
``Approval and Promulgation of Implementation Plans; Kentucky: Approval
of Revisions to the State Implementation Plan,'' 75 FR 2,440 (Jan. 15,
2010) (correcting the SIP by removing a provision, approved in 1982,
used to address hazardous or toxic air pollutants); ``Approval and
Promulgation of Implementation Plans; New York,'' 73 FR 21,546 (April
22, 2008) (issuing a direct final rule to correct a prior SIP
correction from 1998 that removed general duties from the SIP but
neglected to remove a reference to ``odor'' in the definition of ``air
contaminant or air pollutant''); ``Approval and Promulgation of
Implementation Plans; New York,'' 63 FR 65,557 (Nov. 27, 1998) (issuing
direct final rule to correct SIP by removing a general duty ``nuisance
provision'' that had been approved in 1984); ``Correction of
Implementation Plans; American Samoa, Arizona, California, Hawaii, and
Nevada State Implementation Plans,'' 63 FR 34,641 (June 27, 1997)
(correcting five SIPs by deleting a variety of administrative
provisions concerning variances, hearing board procedures, and fees
that had been approved during the 1970s).
CAA section 110(k)(6), by its terms--specifically, the use of the
terms ``[w]henever'' and ``may'' and the lack of any time constraints--
authorizes, but does not require, EPA to make the specified finding. As
a result, EPA has discretion in determining whether and when to make
the specified finding. See New York Public Interest Research Group v.
Whitman, 321 F.3d 316, 330-31 (2d Cir. 2003) (opening phrase ``Whenever
the Administrator makes a determination'' in CAA section 502(i)(1)
grants EPA ``discretion whether to make a determination''); Her Majesty
the Queen in Right of Ontario v. EPA, 912 F.2d 1525, 1533 (DC Cir.
1990) (``whenever'' in CAA section 115(a) ``impl[ied] a degree of
discretion'' in whether EPA had to make a finding).
(b) Inherent Authority To Reconsider
The provisions in CAA section 110 that authorize EPA to take action
on a SIP revision inherently authorize EPA to, on its own initiative,
reconsider and revise that action as appropriate. The courts have found
that an administrative agency has the inherent authority to reconsider
its decisions, unless Congress specifically proscribes the agency's
discretion to do so. See, e.g., Gun South, Inc. v. Brady, 877 F.2d 858,
862 (11th Cir. 1989) (holding that agencies have implied authority to
reconsider and rectify errors even though the applicable statute and
regulations do not provide expressly for such reconsideration);
Trujillo v. General Electric Co., 621 F.2d 1084, 1086 (10th Cir. 1980)
(``Administrative agencies have an inherent authority to reconsider
their own decisions, since the power to decide in the first instance
carries with it the power to reconsider''); see also New Jersey v. EPA,
517 F.3d 574 (DC Cir. 2008) (holding that an agency normally can change
its position and reverse a prior decision but that Congress limited
EPA's ability to remove sources from the list of hazardous air
pollutant source categories, once listed, by requiring EPA to follow
the specific delisting process at CAA section 112(c)(9)).\4\
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\4\ For additional case law, see Belville Mining Co. v. United
States, 999 F.2d 989, 997 (6th Cir. 1993); Dun & Bradstreet Corp. v.
United States Postal Service, 946 F.2d 189, 193 (2d Cir. 1991); Iowa
Power & Light Co. v. United States, 712 F.2d 1292 (8th Cir. 1983).
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Section 301(a) of the CAA, read in conjunction with CAA section 110
and the case law just described, provides further statutory authority
for EPA to reconsider its actions under CAA section 110. CAA section
301(a) authorizes EPA ``to prescribe such regulations as are necessary
to carry out [EPA's] functions'' under the CAA. Reconsidering prior
rulemakings, when necessary, is part of ``[EPA's] functions'' under the
CAA--in light of EPA's inherent authority as recognized under the case
law to do so--and, as a result, CAA section 301(a) confers such
authority upon EPA.
EPA finds further support for its authority to narrow its approvals
in the Administrative Procedures Act (APA) section 553(e), which
requires EPA to give interested persons ``the right to petition for the
issuance, amendment, or repeal of a rule,'' and CAA section 307(b)(1),
which expressly contemplates that persons may file a petition for
reconsideration under certain circumstances (at the same time that a
rule is under judicial review). These authorizations for other persons
to petition EPA to amend or repeal a rule suggest that EPA has inherent
authority, on its own, to issue such amendment or repeal. This is
because EPA may grant a petition from another person for an amendment
to or repeal of a rule only if justified under the CAA, and if such an
amendment or repeal is justified under the CAA, then EPA should be
considered as having inherent authority to initiate the process on its
own, even without a petition from another person.
EPA recently used its authority to reconsider prior actions and
limit its prior approval of a SIP in connection with California
conformity SIPs. See, e.g., 68 FR 15,720, 15,723 (discussing prior
action taken to limit approvals); 67 FR 69,139 (taking final action to
amend prior approvals to limit their duration); and 67 FR 46,618
(proposing to amend prior approvals to limit their duration, based on
CAA sections 110(k) and 301(a)). EPA had previously approved SIPs with
emissions budgets based on a mobile source model that was current at
the time of EPA's approval. Later, EPA updated the mobile source model.
But, even though the model had been updated, emissions budgets would
continue to be based on the older, previously approved model in the
SIPs, rather than the updated model. To rectify this problem, EPA
conducted a rulemaking that revised the previous SIP approvals so that
the approvals of the emissions budgets would expire early, when the new
ones were submitted by states and found adequate, rather than when a
SIP revision was approved. This helped California more quickly adjust
its regulations to incorporate the newer model. EPA is using its
authority to reconsider and limit its prior approval of SIPs generally
in the same manner as it did in connection with California conformity
SIPs.
5. FIPs
As noted previously, if the state fails to submit a required SIP
revision, or does so but EPA then disapproves that SIP revision, then
the CAA requires EPA to promulgate a FIP and thereby, in effect,
federalize the part of the air pollution control requirements for which
the state, through the required SIP revision, would otherwise have been
responsible. Specifically, under CAA section 110(c)(1), EPA is required
to:
promulgate a [FIP] at any time within 2 years after the
Administrator (A) finds that a State has failed to make a required
submission * * *, or (B) disapproves a [SIP] submission in whole or
in part, unless the State corrects the deficiency, and the
Administrator
[[Page 25182]]
approves the plan or plan revision, before the Administrator
promulgates such [FIP].
Although this provision, by its terms, mandates that EPA promulgate a
FIP under the specified circumstances, and mandates that EPA do so
within 2 years of when those circumstances occur, the provision gives
EPA discretion to promulgate the FIP ``at any time within [that] 2
year[]'' period. Thus, EPA is authorized to promulgate a FIP
immediately after either the specified state failure to submit or EPA
disapproval.
However, CAA section 110(c)(1), as quoted earlier, further provides
that if EPA delays promulgating a FIP until later in the 2-year period,
and, in the meantime, the state corrects the deficiency by submitting
an approvable SIP revision that EPA approves, then EPA is precluded
from promulgating the FIP. Similarly, once EPA promulgates a FIP, it
stays on the books until the state submits an approvable SIP that EPA
then approves.
B. General Requirements for the PSD Program
The PSD program is a preconstruction review and permitting program
applicable, under EPA rules, to large new stationary sources and, in
general, expansions of existing sources. The PSD program applies in
areas that are designated ``attainment'' or ``unclassifiable'' for a
NAAQS, and is contained in part C of title I of the CAA.\5\
Specifically, under EPA's regulations, PSD applies to a ``major
stationary source'' that newly constructs or that undertakes a ``major
modification.'' 40 CFR 52.166(a)(7), (b)(1)(i), (b)(2)(i). A ``major
stationary source'' is any source that emits or has the potential to
emit 100 or 250 tpy or more, depending on the source category, of any
``regulated NSR pollutant.'' 40 CFR 51.166(b)(1)(i)(a). The regulations
define that term to include four classes of air pollutants, including,
as a catch-all, ``any pollutant that otherwise is subject to regulation
under the Act.'' 40 CFR 51.166(b)(49)(iv). As discussed later in this
preamble, the phrase ``subject to regulation'' began to include GHGs on
January 2, 2011, under our interpretation of that phrase as described
in the Tailoring Rule, 75 FR at 31,580/3, and what we call the
``Johnson Memo Reconsideration'' (or the ``Timing Decision'').\6\
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\5\ In contrast, the ``nonattainment new source review (NSR)''
program applies in areas not in attainment of a NAAQS and in the
Ozone Transport Region and is implemented under the requirements of
part D of title I of the CAA. We commonly refer to the PSD program
and the nonattainment NSR program together as the major NSR program.
The EPA rules governing both programs are contained in 40 CFR
51.165, 51.166, 52.21, 52.24, and part 51, Appendices S and W. There
is no NAAQS for CO2 or any of the other well-mixed GHGs,
nor has EPA proposed any such NAAQS; therefore, unless and until we
take further such action, the nonattainment NSR program does not
apply to GHGs.
\6\ ``Interpretation of Regulations that Determine Pollutants
Covered by Clean Air Act Permitting Programs.'' 75 FR 17,004 (April
2, 2010). This action finalizes EPA's response to a petition for
reconsideration of ``EPA's Interpretation of Regulations that
Determine Pollutants Covered by Federal Prevention of Significant
Deterioration (PSD) Permit Program'' (commonly referred to as the
``Johnson Memo''), December 18, 2008.
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The CAA contemplates that the PSD program be implemented by the
states through their SIPs. CAA section 110(a)(2)(C) requires that:
Each implementation plan * * * shall * * * include a program to
provide for * * * regulation of the modification and construction of
any stationary source within the areas covered by the plan as
necessary to assure that national ambient air quality standards are
achieved, including a permit program as required in part[] C * * *
of this subchapter.
CAA section 110(a)(2)(J) requires that:
Each implementation plan * * * shall * * * meet the applicable
requirements of * * * part C of this subchapter (relating to
significant deterioration of air quality and visibility protection).
CAA section 161 provides that:
Each applicable implementation plan shall contain emission
limitations and such other measures as may be necessary, as
determined under regulations promulgated under this part [C], to
prevent significant deterioration of air quality for such region * *
* designated * * * as attainment or unclassifiable.
These provisions, read in conjunction with the PSD applicability
provisions, CAA sections 165(a)(1) and 169(1), mandate that SIPs
include PSD programs that are applicable to any air pollutant that is
subject to regulation under the CAA, including, as discussed later in
this preamble, GHGs as of January 2, 2011.\7\
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\7\ In the Tailoring Rule, we noted that commenters argued, with
some variations, that the PSD provisions applied only to NAAQS
pollutants, and not GHGs, and we responded that the PSD provisions
apply to all pollutants subject to regulation, including GHGs. See
75 FR 31,560-62; ``Prevention of Significant Deterioration and Title
V GHG Tailoring Rule: EPA's Response to Public Comments,'' May 2010,
pp.38-41. We did not reopen that issue in this rulemaking.
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Most states have EPA-approved SIP PSD programs, and as a result, in
those states, PSD permits are issued by state or local air pollution
control agencies. In states that do not have EPA-approved SIP PSD
programs, EPA issues PSD permits under its own authority, although in
some cases, EPA has delegated such authority to the state or local
agency.
1. Applicability of PSD to Non-NAAQS Pollutants
EPA has long held the view that PSD applies to ``any pollutant
subject to regulation under the CAA,'' and that includes non-NAAQS
pollutants. EPA's long-standing regulations have interpreted CAA
section 165(a) broadly enough to capture non-NAAQS pollutants. A
detailed discussion of these positions was provided in the Tailoring
Rule at 75 FR 31,560/3, and in the Interim Final Rule at 75 FR 82,443.
2. Automatic Application of PSD to Newly Regulated Pollutants
Under the PSD applicability requirements, PSD applies to sources
automatically, that is, by operation of law, as soon as their emissions
of pollutants become subject to regulation under the CAA. This is
because CAA section 165(a)(1) prohibits ``major emitting facilit[ies]''
from constructing or modifying without obtaining a permit that meets
the PSD requirements, and CAA section 169(1) defines a ``major emitting
facility'' as a source that emits a specified quantity of ``any air
pollutant,'' which, as noted earlier, EPA has long interpreted as any
pollutant subject to regulation. Whenever EPA promulgates control
requirements for a pollutant for the first time, that pollutant becomes
subject to regulation, and any stationary source that emits that
pollutant in sufficient quantities becomes a ``major emitting
facility'' that, when it constructs or modifies, becomes subject to PSD
without any further action from EPA or a state or local government.
EPA regulations have long codified automatic PSD applicability. See
43 FR 26,380, 26403/3, 26406 (June 19, 1978) (promulgating 40 CFR
51.21(b)(1)(i)) and 42 FR 57,479, 57,480, 57,483 (November 3, 1977)
(proposing 40 CFR 51.21(b)(1)(i)) (applying PSD requirements to a
``major stationary source'' and defining that term to include sources
that emit specified quantities of ``any air pollutant regulated under
the Clean Air Act''). Most recently, in the 2002 NSR Reform Rule, EPA
reiterated these requirements, although changing the terminology to
``any regulated NSR pollutant.'' 67 FR 80,186. EPA stated in the
preamble: ``The PSD program applies automatically to newly regulated
NSR pollutants, which would include final promulgation of an NSPS
applicable to a previously unregulated pollutant.'' 67 FR at 80,240/1.
In most states with approved PSD programs, PSD does apply
automatically. However, in a minority of
[[Page 25183]]
states with approved PSD programs, it does not.\8\ Instead, each time
EPA subjects a previously unregulated air pollutant to regulation,
these states must submit a SIP revision incorporating that pollutant
into their programs. Despite the time needed for the state to submit a
SIP revision and EPA to approve it, the pollutant-emitting sources in
the state become subject to PSD under the CAA as soon as EPA first
subjects that pollutant to control. Because under CAA section 165(a)(1)
and 169(1), as interpreted by EPA, a source that emits specified
quantities of any air pollutant subject to regulation cannot construct
or modify unless it first receives a PSD permit, as a practical matter,
in a state with an approved PSD program that does not automatically
update and that has not been revised to include the newly regulated
pollutant, the sources may find themselves subject to the CAA
requirement to obtain a permit, but without a permitting authority to
issue that permit. As discussed later, this action is needed because
GHG-emitting sources in Texas would otherwise confront that situation.
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\8\ 75 FR at 53,897/3 (proposed GHG PSD SIP call).
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In a recent decision, the U.S. Court of Appeals for the 7th Circuit
(7th Circuit), mistakenly citing to PSD provisions when the issue
before the court involved the separate and different non-attainment
provisions of CAA sections 171-193, concluded that sources could
continue to abide by permitting requirements in an existing SIP until
amended, even if that SIP does not comport with the law. United States
v. Cinergy Corp., No. 09-3344, 2010 WL 4009180 (7th Cir. Oct. 12,
2010). In stark contrast to the nonattainment provisions actually at
issue in Cinergy--which are not self-executing and must therefore be
implemented through a SIP -- PSD is self-executing; it is the statute
(CAA section 165), not just the SIP, that prohibits a source from
constructing a project without a permit issued in accordance with the
Act.
C. Regulatory Background: Texas SIP and PSD Program
1. Texas's Initial Attainment SIP Revision
In 1972, shortly after the enactment of the 1970 CAA Amendments,
Texas submitted to EPA its SIP to attain and maintain the NAAQS that
EPA had promulgated by that time. As part of that SIP revision, Texas
provided assurances that it had legal authority to carry out the SIP,
in accordance with the predecessor to CAA section 110(a)(2)(E)(i). EPA
approved Texas's SIP, including the assurances of legal authority, by
notice dated May 31, 1972. 37 FR 10,842.
2. Texas Initial PSD SIP Revision
In the 1977 CAA Amendments, Congress enacted the PSD program. In
the immediate aftermath, EPA acted as the PSD permitting authority in
the states, but EPA began to delegate to various state authorities all
or part of EPA's authority to issue PSD permits. In addition, at this
time, EPA revised its pre-existing regulations, which had established a
preconstruction permitting program, to conform to the 1977 CAA
requirements. Each state was required to adopt a PSD program and submit
it for approval as a SIP revision, and, if the PSD program met CAA
requirements, EPA approved the program, and the state then became the
PSD permitting authority. This process occurred for most of the states
in the nation, including Texas. A brief history of Texas's initial PSD
SIP approval follows.\9\
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\9\ This history is described in ``Approval and Promulgation of
Implementation Plan, State of Texas; Prevention of Significant
Deterioration--Final rulemaking, 57 FR 28,093, 28,094 (June 24,
1992); ``Approval and Promulgation of Implementation Plan, State of
Texas; Prevention of Significant Deterioration--Proposed rulemaking,
54 FR 52,823, 52,824 (December 22, 1989).
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a. Texas's Receipt of Delegation Authority for the PSD Program
Beginning in 1980, when EPA was still the permitting authority for
Federally required PSD permits in Texas, the State requested delegation
of certain aspects of the Federal PSD program, and in a series of
actions, EPA granted that authority.\10\ During this time, Texas also
revised its state--i.e., Texas Air Control Board (TACB)--PSD
regulations. EPA commented on an early set of proposed revisions to
TACB regulations by letter dated December 23, 1980 and made clear that
PSD applies to non-NAAQS pollutants.\11\ EPA reiterated these
statements to Texas in 1983.\12\
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\10\ See, e.g., 48 FR 60236,023 (February 9, 1983).
\11\ Letter from Jack S. Divita, U.S EPA, Region 6, to Roger
Wallis, Texas Air Control Board (December 23, 1980), p. 2. In that
letter, EPA objected to Texas's proposed definitions of the terms
``major facility/stationary source'' and ``major modification'' on
grounds they are not equivalent to the definition of those terms in
EPA's PSD and nonattainment NSR regulations because Texas's proposed
definitions --
include only those stationary sources and modifications with
emissions of air contaminants for which a [NAAQS] has been issued.
Under the PSD and [nonattainment] NSR requirements, [Texas's]
definitions must include sources with emissions of ``any air
pollutant subject to regulation under the Act.'' * * * Since the
proposed definitions would exclude PSD and [nonattainment] NSR
coverage for those sources emitting pollutants subject to
regulations under the Act, but for which a NAAQS has not been
issued, they are not equivalent to the federal definitions of
``major stationary source'' and ``major modification.''
Id. (emphasis in original).
\12\ Environmental Protection Agency--Region 6, ``EPA Review of
Texas Revisions to the General Rules and Regulations VI,'' p. 4
(August 1983), cited in 48 FR 55,483/1 & n.1 (December 13, 1983).
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b. Texas's SIP PSD Program
During 1985-1988, Texas submitted a series of SIP revisions
comprising its PSD program to EPA for approval. In these SIP revisions,
Texas established key components of its PSD rules by incorporating by
reference EPA's PSD rules found in 40 CFR 52.21. Of most importance for
present purposes, Texas incorporated by reference (IBR'd) EPA's PSD
applicability regulations in 52.21.\13\ Under EPA's regulations, as
then written, PSD applied to ``any pollutant subject to regulation
under the [Clean Air] Act.'' 40 CFR 52.21(b)(1)(i)) (1985-1988). It
bears emphasis that this provision, by its terms, applied PSD to each
and every air pollutant subject to regulation under the CAA, which, as
discussed elsewhere, has been EPA's consistent interpretation of the
CAA requirements for PSD applicability. CAA section 165(a)(1),
169(1).\14\
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\13\ For convenience, we will use the acronym ``IBR'' for the
various grammatical usages of incorporate by reference, including
the noun form, i.e., IBR, for incorporation by reference; as well as
the verb form, e.g., IBR'd, for incorporated by reference.
\14\ As also discussed elsewhere, this is a narrowing
interpretation of the PSD applicability requirements in CAA section
169(1), which, read literally, apply PSD to ``any air pollutant.''
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(1) Incorporation by Reference
In adopting a particular SIP revision that IBR'd EPA's regulations,
however, Texas intended that IBR to apply to only the EPA regulations
as they read as of the date that Texas adopted the SIP revision. Texas
did not intend that IBR in that SIP revision to apply to subsequent
revisions to those regulations. This became readily apparent during the
course of EPA's review of Texas's SIP revisions. The TACB adopted the
first SIP revision on July 26, 1985.\15\ This SIP revision consisted,
in relevant part, of a revision to TACB Regulation VI--Sec. 116.3.(a)
to add subparagraph (13), which read, in relevant part,
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\15\ TACB Board Order No. 85-7 (July 26, 1985).
(13) The proposed facility shall comply with the Prevention of
Significant Deterioration of Air Quality regulations promulgated by
the [EPA] in the Code of Federal Regulations at 40 CFR 52.21 as
amended * * *, hereby incorporated by
[[Page 25184]]
reference, except for [certain identified] paragraphs [not here
relevant].\16\
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\16\ Id.
The TACB submitted this SIP revision to EPA on December 11,
1985.\17\ EPA responded with a letter to Texas, dated July 3, 1986,
commenting on several aspects of the SIP revision, including inquiring
whether the state had authority to IBR Federal rules prospectively,
asking for ``legal clarification'' on the subject, and recommending
that if the TACB did not have such authority, then the TACB should
clarify the IBR by ``referencing the appropriate date.'' \18\
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\17\ Letter from Mark White, Governor of Texas, to Lee M.
Thomas, Administrator of U.S. EPA, December 11, 1985.
\18\ Letter from William B. Hathaway, Director, Air, Pesticides
and Toxics Division, EPA Region 6, to Allen Eli Bell, Executive
Director, TACB (July 3, 1986). Specifically, EPA stated--State's
authority to IBR Federal rules prospectively--The Board approved and
signed the incorporation of the PSD regulations on July 26, 1985, An
amendment to the Federal PSD regulations [40 CFR 52.21(o)(3), p(1)
and p(3)] occurred on July 12, 1985. However, the TACB proposed to
adopt the Federal regulations and carried out the public
participation process before the July 12, 1985, promulgation date of
the amendments. We need a legal analysis from the state concerning
the TACB's legal authority to incorporate by reference the federal
rules prospectively. We recognize that the proposed federal rules
were unchanged on the final promulgation; however, the Texas Water
Commission believes that the state cannot adopt prospective Federal
rules under the State laws. We would appreciate a legal
clarification on this subject. If the State did not intend
prospective adoption, the rules should be clarified by referencing
the appropriate date.
Id. p. 2 and Enclosure p. 5.
---------------------------------------------------------------------------
Texas responded with a letter dated October 24, 1986,\19\ in which
it stated:
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\19\ Letter from Steve Spaw, Deputy Executive Director, TACB, to
William B. Hathaway, Director, Air, Pesticides and Toxics Division,
EPA Region 6 (October 24, 1986).
An issue of concern * * * is whether the [TACB] intended to
incorporate by reference Federal rules prospectively in the PSD rule
Sec. 116.3(a)(13) and in the stack height rule Sec. 116.3(a)(14).
[A]lthough our intention was not prospective rulemaking and we do
not believe the rule language implies such, we have no specific
objection to including the date of Federal adoption of any Federal
material adopted by reference by the TACB in future SIP revisions
(including the proposed PSD and stack height revisions). By
initiating the public hearing process for PSD rules again (to
incorporate requested revisions), Federal PSD regulations amended on
July 12, 1985 will be subject to the state public participation
process. This should eliminate the concern expressed in your July 3,
1986 letter.\20\
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\20\ Id. 1-2.
Accordingly, on July 17, 1987, the TACB adopted a revision to its
PSD rule, Sec. 116.3(a)(13), so that the rule continued to IBR EPA's
PSD regulatory requirements at 40 CFR 52.21, but referenced the date of
November 7, 1986.\21\ Texas submitted that as a SIP revision to EPA on
October 26, 1987.\22\
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\21\ TACB Board Order No. 87-09 (July 17, 1987). See 12 Tex.
Reg. 2575/2 (August 7, 1987) (discussing revision to section
116.3(a)(13) in response to request from U.S. EPA).
\22\ Letter from William P. Clements, Jr., Governor of Texas, to
Lee M. Thomas, Administrator of U.S. EPA (October 26, 1987).
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However, some 8 months later, by notice published on July 1, 1987,
EPA adopted the PM10 NAAQS,\23\ and thereby subjected to PSD
sources emitting PM10. Recognizing this, the TACB, on July
15, 1988, adopted still another revision to its PSD rule to change the
referenced date to August 1, 1987, and thereby incorporated EPA's
application of PSD to PM10-emitting sources into Texas's PSD
program.\24\ Texas submitted that revised rule to EPA as a SIP revision
on September 29, 1988.\25\ As so revised, the Texas PSD rule (again,
Sec. 116.3(a)(13)) read, in relevant part, as follows:
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\23\ 52 FR 24,634 (July 1, 1987).
\24\ TACB Board Order No. 88-08 (July 15, 1988).
\25\ Letter from William P. Clements, Jr., Governor of Texas, to
Lee M. Thomas, Administrator of U.S. EPA (September 29, 1988).
(13) The proposed facility shall comply with the Prevention of
Significant Deterioration (PSD) of Air Quality regulations
promulgated by the Environmental Protection Agency (EPA) in the Code
of Federal Regulations at 40 CFR 52.21 as amended August 1, 1987 * *
*, except for [certain identified] paragraphs [not here
relevant].\26\
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\26\ TACB Board Order No. 88-08 (July 15, 1988).
EPA proposed to approve this SIP revision, with this iteration of
the Texas PSD rule, by notice dated December 22, 1989,\27\ and EPA
issued a final approval by notice dated June 24, 1992.\28\ In the
preambles to the proposed and final rules, and in supporting documents,
EPA recounted part of this history of Texas revising its regulations to
IBR the current EPA regulatory requirements.\29\
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\27\ 54 FR 52,823.
\28\ 57 FR 28,093.
\29\ 57 FR 28,093, 28,094/2 (June 24, 1992) (final rule); 54 FR
52,823, 52,824/1 (December 22, 1989) (proposed rule); Technical
Support Document: Texas State Implementation Plan for Prevention of
Significant Deterioration, U.S. Environmental Protection Agency, 4
(November 28, 1988). Moreover, Texas submitted another SIP revision
on February 18, 1991, to change the date in section 116.3(a)(13)
from ``August 1, 1987'' to ``October 17, 1988'' to reflect the
amendments to 40 CFR 52.21 as promulgated in the Federal Register on
October 17, 1988 (53 FR 40,656) (Nitrogen Oxides PSD increments).
EPA did not act on this SIP revision when it approved the Texas PSD
program on June 24, 1992, but did approve this SIP revision later,
on September 9, 1994 (59 FR 46,556). See 62 FR 44,084/2.
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This history shows that both EPA and Texas were well aware that
Texas's method of incorporating by reference EPA's regulatory
requirements into Texas's PSD rule was not prospective and therefore
did not automatically update to incorporate a pollutant newly subject
to regulation.\30\ In fact, during the time that EPA was reviewing
Texas's PSD SIP, Texas revised its SIP to apply PSD to PM10,
which EPA subjected to regulation for the first time during that time.
However, after stating simply that it does not intend prospective IBR,
Texas did not explicitly address this issue. That is, Texas did not
acknowledge that following approval of Texas's PSD program, EPA could
well subject to regulation additional pollutants--whether through a
revised NAAQS or regulation under another CAA provision--and Texas did
not discuss how it would respond.\31\ Simply put, Texas failed to look
down the road and address a problem with its PSD SIP--the mechanism for
applying PSD to pollutants newly subject to regulation--that was bound
to recur.
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\30\ It should be noted that although Texas subsequently made
certain commitments, discussed below, none of those commitments, on
its face, suggested that Texas's PSD SIP should be interpreted to
automatically update to incorporate a pollutant newly subject to
regulation.
\31\ Following EPA approval of Texas's PSD program, Texas has
occasionally submitted SIP revisions to update its PSD program to
accommodate further EPA regulatory revisions. See, e.g., 69 FR
43,752, 43,753 (July 22, 2004).
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(2) Legal Authority
The record of Texas's PSD program includes limited references to,
or discussion of, legal authority that may be relevant to whether Texas
provided assurances that it had adequate legal authority to apply PSD
to pollutants newly subject to regulation. The following merit review:
First, in adopting and submitting the PSD SIP revisions, the TACB--
the agency charged with taking that action--relied on its general legal
authority to adopt and submit the SIP revisions. The TACB adopted
regulatory amendments through ``Board Orders,'' and then submitted
those Board Orders to EPA as SIP revisions. The Board Orders typically
cited general authority under the Texas CAA. One example is TACB Board
Order No. 88-08 (July 15, 1988), which revised the Texas PSD rule to
provide a later date for IBR'ing EPA's PSD program, and which comprised
one of the SIP revisions that formed the basis for the Texas PSD
program that EPA approved by notice dated June 24, 1992 (57 FR 28,093).
This Board Order provides, in relevant part, ``Section 3.09(a) of the
Texas CAA gives the Board authority to make rules and regulations
consistent with the general intent and purposes of the Act and to
[[Page 25185]]
amend any rule or regulation it makes'' and ``the Board hereby
certifies that the amendments as adopted have been reviewed by legal
counsel and found to be a valid exercise of the Board's legal
authority.'' Board Order No. 88-08, page 2.
Second, the 1990 CAA Amendments amended CAA section 169(1) to add
another type of source that was subject to PSD: Large municipal
combustors. Shortly after the 1990 amendments, and before issuing final
approval for the Texas PSD program, EPA asked Texas for assurances that
its PSD program would apply to large municipal waste combustors. In a
March 30, 1992, letter, EPA stated the following:
Since we proposed approval of this SIP before enactment of the
1990 Clean Air Act Amendments (CAAA), it is necessary that we
address several issues in the final approval notice in order to be
in conformance with the CAAA.
* * * * *
Municipal Waste Combustion--Section 169(1) is amended by
expanding the list of major emitting facilities that are subject to
PSD requirements if they emit or have the potential to emit 100 tons
per year or more of any regulated pollutant. This list now includes
municipal incinerators capable of charging more than fifty tons of
refuse per day. This requirement has been effective since November
15, 1990, for all applicable PSD sources. In the conference call
[with EPA Region 6], the * * * TACB * * * legal representative said
that the TACB has the existing legal authority, and can and will be
reviewing such sources for PSD applicability and permitting.\32\
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\32\ Letter from A. Stanley Meiburg, Director, Air, Pesticides &
Toxics Division, EPA Region 6, to Steve Spaw, Executive Director,
TACB (March 30, 1992).
Thus, according to this letter, Texas provided oral statements in a
conference call with EPA Region 6 that Texas has legal authority to
apply its state PSD rules to large municipal waste combustors.
Texas responded in a letter dated April 17, 1992:
We understand that you need confirmation in several areas to
conform with the requirements of the 1990 Federal Clean Air Act
Amendment * * * before the final delegation will be made.
* * * * *
We will address as a major source subject to PSD review,
municipal waste combustors capable of cha[n]ging more than 50 tons
of refuse per day as one of the sources subject to PSD review if
they emit or have the potential to emit 100 tons per year or more of
any regulated pollutant.\33\
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\33\ Letter from Steve Spaw, Executive Director, TACB, to A.
Stanley Meiburg, Director, Air, Pesticides and Toxics Division, EPA
Region 6 (April 17, 1992).
Although the TACB Board Order referred to the TACB's general legal
authority, the record reveals no discussion or assurances that this
legal authority was adequate to apply PSD to pollutants newly subject
to regulation. Similarly, the oral assurance that the TACB apparently
provided that it had legal authority to apply PSD to large municipal
combustors, as required under the then-newly enacted 1990 CAA
Amendments, does not address whether Texas had adequate authority to
apply PSD to each pollutant that EPA newly subjects to regulation.
(3) Texas's Commitments
The rulemaking record of EPA's approval of Texas's PSD SIP shows
that Texas provided two commitments that are relevant for present
purposes:
(a) 1987 Texas PSD Commitments Statement
The TACB adopted revisions to TACB Regulation VI on July 17, 1987,
which the Governor submitted on October 27, 1987. Those revisions
included the following statement, which we call the 1987 Texas PSD
Commitments Statement:
Revision To The Texas State Implementation Plan For Prevention
Of Significant Deterioration Of Air Quality
The Texas Air Control Board (TACB) will implement and enforce
the Federal requirements for Prevention of Significant Deterioration
of Air Quality (PSD) as specified in 40 CFR 51.166(a) by requiring
all new major stationary sources and major modifications to obtain
air quality permits as provided in TACB regulation VI, Control of
Air Pollution by Permits for New Construction and Modification. In
addition, the TACB will adhere to the following conditions in the
implementation of the PSD program:
* * * * *
4. Plan assessment
The TACB will review the adequacy of the Texas PSD plan on an
annual basis and within 60 days of the time information becomes
available that an applicable increment may be violated. If the TACB
determines that an increment is being exceeded due to the violation
of a permit condition, appropriate enforcement action will be taken
to stop the violation. If an increment is being exceeded due to a
deficiency in the state PSD plan, the plan will be revised and the
revisions will be subject to public hearing.
This 1987 Texas PSD Commitments Statement does not specifically
address the application of PSD to pollutants newly subject to
regulation. The first paragraph, as quoted previously in this preamble,
commits TACB to require ``all new major stationary sources and major
modifications to obtain air quality permits as provided in TACB
regulation VI * * *,'' but this does not commit TACB to address
pollutants newly subject to regulation. Instead, this limits the TACB
requirement to application of PSD to sources ``as provided in TACB
regulation VI,'' and that regulation VI does not automatically update.
As for ``4, Plan assessment,'' although the first sentence calls for
the TACB to review the adequacy of the Texas PSD plan on an annual
basis, and although the rest of the provision requires a plan revision
if an increment violation is determined to result from a deficiency in
the plan, this does not address what happens when a new pollutant
becomes subject to regulation and does not require a plan revision to
apply to the new pollutant. The fact that Texas agreed to revise the
plan if the plan is found to be deficient and that deficiency results
in an increment being exceeded serves to highlight the lack of any
comparable focus on how the plan would deal with pollutants newly
subject to regulation.
EPA's technical support document supporting its proposed approval
stated, with respect to this 1987 Texas PSD Commitments Statement:
The ``Revision to Texas State Implementation Plan for Prevention
of Significant Deterioration of Air Quality'' specifies how the TACB
will fulfill the requirements of 40 CFR 51.166(a), plan revisions,
and plan assessment. The EPA has reviewed the State's commitment and
has determined that the TACB has addressed the continuous plan
revisions and assessments adequately.\34\
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\34\ Technical Support Document: Texas State Implementation Plan
for Prevention of Significant Deterioration, U.S. Environmental
Protection Agency, 6 (November 28, 1988).
This general discussion by EPA does not indicate that EPA considered
the Texas statement to apply to pollutants newly subject to regulation.
(b) 1989 Texas Commitment Letter
In 1989, as EPA considered Texas's SIP revision submittal, EPA
became concerned that a Texas official had made statements that led EPA
to question whether Texas would adhere to EPA's interpretation that
Best Available Control Technology (BACT) must be implemented through
the Top-Down process.\35\ Accordingly, EPA advised Texas that EPA would
not approve Texas's PSD program unless Texas provided a letter assuring
EPA that Texas would follow EPA requirements in general, and
particularly with respect to the interpretation of BACT. Texas provided
[[Page 25186]]
this letter, which we call the Texas PSD Commitments Letter, on
September 5, 1989.\36\ In this letter, Texas acknowledged EPA's concern
that a Texas official had--
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\35\ Letter from Allen Eli Bell, Executive Director, Texas Air
Control Board to Robert Layton Jr., Regional Administrator, U.S. EPA
(September 5, 1989) 1 (Texas's Commitments Letter).
\36\ Texas's 1989 Commitments Letter, p. 1.
indicated a lack of intent to follow Federal interpretations of the
Clean Air Act and Environmental Protection Agency (EPA) operating
policies, most specifically, the ``Top-Down'' approach for Best
Available Control Technology (BACT) analysis in reviewing PSD permit
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applications.
Texas went on to state:
[Y]ou may be assured that the position of the [Texas Air Control
Board (TACB)] is, and will continue to be, to implement EPA
requirements relative to programs for which we have received State
Implementation Plan approval, and to do so as effectively as
possible. * * * Again, the TACB is committed to the implementation
of EPA decisions regarding PSD program requirements. We look forward
\37\ approval of the PSD revisions and believe EPA will find the
management of that program in Texas to be capable and effective.\38\
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\37\ Sic: the word ``to'' should be between ``forward'' and
``approval''.
\38\ Texas's 1989 Commitments Letter, p. 1.
By notice dated December 22, 1989, EPA proposed to fully approve
Texas's PSD program.\39\ In this proposal, EPA focused on the issue of
how EPA's current and future interpretations of PSD statutory
requirements would be reflected in the state-implemented program. EPA
stated:
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\39\ 54 FR 52,823.
\In adopting the Clean Air Act, Congress designated EPA as the
agency primarily responsible for interpreting the statutory
provisions and overseeing their implementation by the states. The
EPA must approve state programs that meet the requirements of 40 CFR
51.166. Conversely, EPA cannot approve programs that do not meet
those requirements. However, PSD is by nature a very complex and
dynamic program. It would be administratively impracticable to
include all statutory interpretations in the EPA regulations and the
SIPs of the various states, or to amend the regulations and SIPs
every time EPA interprets the statute or regulations or issues
guidance regarding the proper implementation of the PSD program, and
the Act does not require EPA to do so. Rather, action by the EPA to
approve this PSD program as part of the SIP will have the effect of
requiring the state to follow EPA's current and future
interpretations of the Act's PSD provisions and EPA regulations, as
well as EPA's operating policies and guidance (but only to the
extent that such policies are intended to guide the implementation
of approved state PSD programs). Similarly, EPA approval also will
have the effect of negating any interpretations or policies that the
state might otherwise follow to the extent they are at variance with
EPA's interpretation and applicable policies. Of course, any
fundamental changes in the administration of PSD would have to be
accomplished through amendments to the regulations in 40 CFR 52.21
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and 51.166, and subsequent SIP revisions.
54 FR 52,824/2-3.
EPA went on to state that it was basing its proposed approval of
Texas's PSD program on Texas's agreement, as contained in the September
5, 1989, letter, that Texas would ``implement that PSD SIP approved
program in compliance with all of the EPA's statutory interpretations
and operating policies.'' 54 FR 82,825/2. EPA stated--
* * * EPA's approval of the Texas PSD SIP requires the state to
follow EPA's statutory interpretations and applicable policies[],
including those concerning [BACT]. * * *
In support of the discussion above, the Executive Director of
the TACB has submitted a letter, dated September 5, 1989, which
commits the TACB to implement the PSD SIP approved program in
compliance with all of the EPA's statutory interpretations and
operating policies. Specifically, the TACB's letter states that (1)
``* * * you may be assured that the position of the agency is, and
will continue to be, to implement EPA requirements relative to
programs for which we have received [SIP] approval, and to do so as
effectively as possible * * *'', and (2) ``* * * the TACB is
committed to the implementation of the EPA decisions regarding PSD
program requirements * * *''. The EPA has evaluated the content of
this letter and has determined that the letter sufficiently commits
the TACB to carry out the PSD program in accordance with the Federal
requirements as set forth in the [CAA] applicable regulations, and
as further clarified in the EPA's statutory and regulatory
interpretations, including the proper conduct of BACT analyses. The
EPA also interprets this letter as committing the TACB to follow
applicable EPA policies such as the ``Top-Down'' approach. This
letter will be incorporated into the SIP upon the final approval
action.
54 FR 52,825/1-2.
EPA issued a final rule to give full approval to the program by
notice dated June 24, 1992, 57 FR 28,093. In the final rule, EPA
indicated that it had received adverse comments concerning its
statements in the proposal that Texas was required to adopt all of
EPA's interpretations of the PSD requirements. Accordingly, EPA refined
its views. EPA stated:
Comment 1: The commenters expressed concern with the preamble
language in the proposal notice, suggesting that final approval
would require that the State follow EPA's current and future
interpretations of the Act's PSD provisions and EPA regulations as
well as EPA's operating policies and guidance. The commenter
contended that such a condition would be unlawful * * * and would
improperly limit the State's flexibility * * *.
Response 1: The EPA did not intend to suggest that Texas is
required to follow EPA's interpretations and guidance issued under
the Act in the sense that those pronouncements have independent
status as enforceable provisions of the Texas PSD SIP, such that
mere failure to follow such pronouncements, standing alone, would
constitute a violation of the Act. As clarified herein, EPA's intent
is merely to place the State and the public on notice of EPA's
longstanding views that the Agency must continue to oversee the
State's implementation of the PSD SIP * * *.
* * * Texas and other states [have] considerable discretion to
implement the PSD program as they see fit.
* * * PSD-SIP approved states remain free to follow their own
course, provided that state action is consistent with the letter and
spirit of the SIP, when read in conjunction with the applicable
statutory and regulatory provisions.
* * *
Comment 4: One commenter noted that the TACB's letter, dated
September 5, 1989, cannot reasonably be interpreted as a legal
requirement that the State follow the EPA's present and future new
source review interpretations, policies and guidance, including the
BACT ``Top-Down'' approach, because it only commits Texas to
implement properly established EPA requirements and legally-binding
EPA decisions. The commenter said that the Clean Air Act
specifically requires that, if at all, any such change in EPA policy
for BACT determinations be accomplished through notice and comment
rulemaking, and that the EPA first prepare an economic impact
assessment.
Response 4: In certain circumstances, EPA's approval of a SIP
revision through notice-and-comment rulemaking procedures can serve
to adopt specific interpretations or decisions of the Agency. For
example, a state may commit in writing to follow particular EPA
interpretations or decisions in administering the PSD program. As
part of the SIP revision process, EPA may incorporate that State's
commitment into the SIP by reference. This process has been followed
in today's action. Of course, EPA agrees with the commenter that the
Agency must act reasonably in construing the terms of a commitment
letter, so as to avoid approving it in a manner that would
contravene the state's intent in issuing the letter in the first
place. Moreover, the State commitment must be consistent with the
plain language of the applicable statutory or regulatory provisions
at issue. Similarly, EPA cannot unilaterally change the clear
meaning of any approved SIP provision by later guidance or policy.
Rather, as stated in the proposed approval notice, such fundamental
change must be accomplished through the SIP revision process.
Consistent with the terms of the TACB letter dated September 5,
1989, EPA views that letter as a commitment on the part of the TACB
to ``implement EPA program requirements * * * as effectively as
possible,'' and as a commitment ``to the implementation of the EPA
decisions regarding PSD program requirements.'' EPA
[[Page 25187]]
agrees, however, that the TACB letter need not be interpreted as a
specific commitment by the State to follow a ``Top-Down'' approach
to BACT determinations.
57 FR 28,095/1-2; 28,096/1.
As for the fact that Texas's PSD program was limited to pollutants
that were regulated as of the date Texas adopted the program as a SIP
revision, but did not automatically apply to newly regulated
pollutants, the preamble to the final rule alluded to this limitation:
The State's regulation VI requires review and control of air
pollution from new facility construction and modification and allows
the TACB to issue permits for stationary sources subject to this
regulation. Section 116.3(a)(13) of the TACB Regulation VI
incorporates by reference the Federal PSD regulations (40 CFR 52.21)
as they existed on August 1, 1987, which include revisions
associated with the July 1, 1987, promulgation of revised National
Ambient Air Quality Standards for particulate matter (52 FR 24872)
and the visibility NSR requirements noted above.
57 FR 28,094.
However, there is no indication in the preamble for the final rule
that (i) Texas specifically addressed the requirement that its PSD
program apply to pollutants newly subject to PSD, including non-NAAQS
pollutants, or (ii) Texas provided assurances that it had adequate
authority under State law to carry out the PSD program, including
applying PSD to pollutants newly subject to regulation, among them non-
NAAQS pollutants. Nor is there any indication that EPA asked Texas to
do so.\40\
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\40\ See ``Technical Support Document (TSD): State of Texas
State Implementation Plan for Prevention of Significant
Deterioration'' (November 28, 1988).
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As discussed previously, in 1996 EPA proposed, and in 2002
finalized, what we call the NSR Reform Rule,\41\ which included a set
of amendments to the PSD provisions that included revisions to conform
to the 1990 CAA Amendments. See 61 FR 38,250 (July 23, 1996), 67 FR
80,186 (December 31, 2002). The NSR Reform Rule revised the terminology
for PSD applicability. In 2006, Texas submitted a SIP revision to
incorporate the NSR Reform Rule into its PSD program, including
revising its applicability provisions. EPA disapproved this SIP
revision by notice dated September 15, 2010.\42\ Accordingly, the
applicable Texas PSD applicability provisions remain the ones in the
state's currently approved SIP.
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\41\ ``Prevention of Significant Deterioration (PSD) and
Nonattainment New Source Review (NNSR): Baseline Emissions
Determination, Actual-to-Future-Actual Methodology, Plantwide
Applicability Limitations, Clean Units, Pollution Control Projects--
Final Rule,'' 67 FR 80,186 (December 31, 2002) (NSR Reform rule).
\42\ 75 FR 56,424 (September 15, 2010).
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D. Regulatory Background: GHG Rules
1. GHGs and Their Sources
As discussed in detail in the rule EPA calls the ``Endangerment
Finding,'' \43\ greenhouse gases trap the Earth's heat that would
otherwise escape from the atmosphere into space, and form the
greenhouse effect that helps keep the Earth warm enough for life.
Greenhouse gases are naturally present in the atmosphere and are also
emitted by human activities. Human activities are intensifying the
naturally occurring greenhouse effect by increasing the amount of GHGs
in the atmosphere, which is changing the climate in a way that
endangers human health, society, and the natural environment.
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\43\ ``Endangerment and Cause or Contribute Findings for
Greenhouse Gases Under Section 202(a) of the Clean Air Act.'' 74 FR
66,496 (December 15, 2009).
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Some GHGs, such as carbon dioxide (CO2), are emitted to
the atmosphere through natural processes as well as human activities.
Other gases, such as fluorinated gases, are created and emitted solely
through human activities. The well-mixed GHGs of concern directly
emitted by human activities include CO2, methane
(CH4), nitrous oxide (N2O), hydrofluorocarbons
(HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride
(SF6). These six GHGs will, for the purposes of this final
rule, be referred to collectively as ``the six well-mixed GHGs,'' or,
simply, GHGs, and together constitute the ``air pollutant'' upon which
the GHG thresholds in the Tailoring Rule are based. These six gases
remain in the atmosphere for decades to centuries where they become
well-mixed globally in the atmosphere. When they are emitted more
quickly than natural processes can remove them from the atmosphere,
their concentrations increase, thus increasing the greenhouse effect.
The heating effect caused by the human-induced buildup of GHGs in the
atmosphere is very likely the cause of most of the observed global
warming over the last 50 years. A detailed explanation of greenhouse
gases, climate change, and its impact on health, society, and the
environment is included in EPA's technical support document (TSD) for
the Endangerment Finding Final Rule (Docket ID No. EPA-HQ-OAR-2009-
0472-11292).
In the United States, the combustion of fossil fuels (e.g., coal,
oil, gas) is the largest source of CO2 emissions and
accounts for 80 percent of the total GHG emissions. Anthropogenic
CO2 emissions released from a variety of sources, including
fossil fuel combustion and industrial manufacturing processes that rely
on geologically stored carbon (e.g., coal, oil, and natural gas) that
is hundreds of millions of years old, as well as anthropogenic
CO2 emissions from land-use changes such as deforestation,
all perturb the atmospheric concentration of CO2 and cause
readjustments in the distribution of carbon within different
reservoirs. More than half of the energy-related emissions come from
large stationary sources such as power plants, while about a third
comes from transportation. Of the six well-mixed GHGs, four
(CO2, CH4, N2O, and HFCs) are emitted
by motor vehicles. In the United States industrial processes (such as
the production of cement, steel, and aluminum), agriculture, forestry,
other land use, and waste management are also important sources of
GHGs.
Different GHGs have different heat-trapping capacities. The concept
of Global Warming Potential (GWP) was developed to compare the heat-
trapping capacity and atmospheric lifetime of one GHG to another. The
definition of a GWP for a particular GHG is the ratio of heat trapped
by one unit mass of the GHG to that of one unit mass of CO2
over a specified time period. When quantities of the different GHGs are
multiplied by their GWPs, the different GHGs can be summed and compared
on a CO2-equivalent (CO2e) basis. For example,
CH4 has a GWP of 21, meaning each ton of CH4
emissions would have 21 times as much impact on global warming over a
100-year time horizon as 1 ton of CO2 emissions. Thus, on
the basis of heat-trapping capability, 1 ton of CH4 would
equal 21 tons of CO2e. The GWPs of the non-CO2
GHGs range from 21 (for CH4) up to 23,900 (for
SF6). Aggregating all GHGs on a CO2e basis at the
source level allows a facility to evaluate its total GHG emissions
contribution based on a single metric.
2. GHG Regulatory Actions
Over the past year, EPA has completed four distinct actions related
to greenhouse gases under the CAA. The result of these rules, in
conjunction with the operation of the CAA, has been to trigger PSD
applicability for GHG sources on and after January 2, 2011, but to
limit the scope of sources covered by PSD. These actions include, as
they are commonly called, the ``Endangerment Finding'' and ``Cause or
Contribute Finding,'' which we issued in a single
[[Page 25188]]
final action; \44\ the Johnson Memo Reconsideration, noted previously;
the ``Light-Duty Vehicle Rule'' (LDVR or Vehicle Rule); \45\ and the
``Tailoring Rule,'' also noted previously.
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\44\ ``Endangerment and Cause or Contribute Findings for
Greenhouse Gases Under Section 202(a) of the Clean Air Act.'' 74 FR
66,496 (December 15, 2009).
\45\ ``Light-Duty Vehicle Greenhouse Gas Emission Standards and
Corporate Average Fuel Economy Standards; Final Rule.'' 75 FR 25,324
(May 7, 2010).
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a. Endangerment Finding, Vehicle Rule, Johnson Memo Reconsideration
In the Endangerment and Cause or Contribute Finding, which is
governed by CAA section 202(a), the Administrator exercised her
judgment, based on an exhaustive review and analysis of the science, to
conclude that ``six greenhouse gases taken in combination endanger both
the public health and the public welfare of current and future
generations.'' 74 FR at 66,496. The Administrator also found ``that the
combined emissions of these greenhouse gases from new motor vehicles
and new motor vehicle engines contribute to the greenhouse gas air
pollution that endangers public health and welfare under CAA section
202(a).'' Id.
The Endangerment Finding led directly to promulgation of the
Vehicle Rule, also governed by CAA section 202(a), in which EPA set
standards for the emission of greenhouse gases for new motor vehicles
built for model years 2012-2016. 75 FR 25,324. The Vehicle Rule
established the first controls for GHGs under the CAA.
The Johnson Memo Reconsideration--as well as the Tailoring Rule,
which we discuss later--is governed by the PSD and Title V provisions
in the CAA. It was issued to address the automatic statutory triggering
of the PSD and Title V programs for GHGs due to the Vehicle Rule
establishing controls for GHGs. The Johnson Memo Reconsideration
provided EPA's interpretation of a pre-existing definition in its PSD
regulations delineating the ``pollutants'' that are taken into account
in determining whether a source must obtain a PSD permit and the
pollutants each permit must control. The Johnson Memo Reconsideration
stated that when the Vehicle Rule takes effect on January 2, 2011, it
will, in conjunction with the applicable CAA requirements, trigger the
application of PSD to GHG-emitting sources. 75 FR 17,004.
b. Tailoring Rule
In the Tailoring Rule, EPA limited PSD applicability, at the
outset, to only the largest GHG-emitting sources, and to phase-in PSD
applicability, as appropriate, to smaller sources over time. 75 FR
31,514. In the Tailoring Rule, EPA identified the air pollutant that,
if emitted or potentially emitted by the source in excess of specified
thresholds, would subject the source to PSD requirements, as the
aggregate of six GHGs: CO2, CH4, N2O,
HFCs, PFCs, and SF6. EPA based this identification on the
Vehicle Rule, which included applicability provisions specifying that
the rule ``contains standards and other regulations applicable to the
emissions of those six greenhouse gases.'' 75 FR at 25,686
(promulgating 40 CFR 86.1818-12(a)). The Tailoring Rule noted that it
was because the Vehicle Rule subjected to regulation the pollutant that
is comprised of the six GHGs, that PSD was triggered for that pollutant
and that, as a result, the pollutant must be defined for PSD purposes
in the same way as it is identified in the Vehicle Rule. 75 FR 31,527.
The Vehicle Rule identified the pollutant as the aggregate of the six
gases because in the Endangerment Finding, the Administrator found that
those six gases--which she described as long-lived and directly emitted
GHGs -- may reasonably be anticipated to endanger public health and
welfare.
3. Implementation of GHG PSD Requirements
Because PSD is implemented through the SIP system, EPA has taken a
series of actions to address the obligations of states (including
localities and other jurisdictions, as appropriate) to implement PSD
requirements for GHG-emitting sources. EPA has taken these actions
through the Tailoring Rule discussed elsewhere in this preamble and a
series of subsequent actions.\46\
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\46\ A detailed description of EPA's implementation efforts, and
the status of state compliance with those efforts, is included in
Declaration of Regina McCarthy, Coalition for Responsible Regulation
v. EPA, DC Cir. No. 09-1322 (and consolidated cases) (McCarthy
Declaration), including Attachment 1 (Tables 1, 2, and 3), which can
be found in the docket for this rulemaking.
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a. Tailoring Rule
In the Tailoring Rule, EPA incorporated the PSD thresholds for GHGs
in the definition of the term ``subject to regulation.'' As noted
previously, under EPA's PSD regulations, PSD applies to a ``major
stationary source;'' a ``major stationary source'' is defined as a
source that emits 100/250 tons per year (tpy) on a mass basis of a
``regulated NSR pollutant;'' and a ``regulated NSR pollutant,'' in
turn, is defined as, among other things, a pollutant that is ``subject
to regulation'' under the CAA.\47\ In the Tailoring Rule, EPA added a
limitation to the term ``subject to regulation'' so that the only GHG
emissions that would be treated as ``subject to regulation'' (and
therefore subject to PSD) are those emitted at or above specified
thresholds of, depending on the circumstances, 75,000 and/or 100,000
tpy on a CO2e basis.\48\ EPA explained in the Tailoring Rule
that it intends these levels to be the first steps in a phase-in
approach for PSD applicability, and EPA committed in that rule to
conduct additional rulemaking by 2012 and 2016 that would consider
taking additional steps.
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\47\ 40 CFR 51.166(a)(7)(i), (b)(1)(i)(a), (b)(49).
\48\ Specifically, under the revised definition of ``subject to
regulation,'' sources that emit at least the 75,000 and/or 100,000
tpy CO2e threshold amount of GHGs are subject to PSD as
long as the amount of GHG emissions also exceeds, in general, 100/
250 tpy on a mass basis for new sources and zero tpy on a mass basis
for modifications of existing sources. 40 CFR 51.166(b)(48), 75 FR
at 31,606; see EPA Office of Air Quality Planning and Standards,
``PSD and Title V Permitting Guidance for Greenhouse Gases.'' (March
2011 update).
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Some states advised EPA that it is likely they would be able to
implement the Tailoring Rule thresholds by interpreting the term
``subject to regulation'' in their SIPs, and without having to take
further action. A state's ability to take this approach would have
implications for how EPA needed to implement the Tailoring Rule.\49\
Accordingly, in the Tailoring Rule, EPA began a process to gather more
information about how states would implement permitting for GHG-
emitting sources.
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\49\ Specifically, a state's implementation of the Tailoring
Rule in this manner prior to January 2, 2011 would obviate the need
for EPA to narrow its approval of that state's SIP, as EPA had
proposed in the proposed Tailoring Rule. Thus, in the Final
Tailoring Rule, EPA delayed final action on its narrowing proposal
so that EPA could gather information about the process and time-line
for states to implement the Tailoring Rule.
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b. 60-Day Letters
To gather this information, EPA, in the Tailoring Rule, asked
states to submit letters within 60 days of publication of the Tailoring
Rule, which we refer to as the 60-day letters, concerning the status of
their PSD program and their legal authority for applying PSD program to
GHG-emitting sources. This information would help clarify, for each
state, the two central issues for PSD applicability to GHG-emitting
sources: (i) Whether the state has an approved PSD program that applies
to GHG-emitting sources; and (ii) if so, what action the state would
take to limit the applicability of its PSD program to GHG-emitting
sources at or
[[Page 25189]]
above the Tailoring Rule thresholds.\50\ This information would assist
EPA to determine what, if any, action it needed to take with respect to
the states.
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\50\ Alternatively, a state could choose to apply its PSD
program to sources below the Tailoring Rule thresholds and acquire
sufficient resources to implement the program as expanded, but no
state had indicated an intention to proceed in this manner.
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Almost all states submitted 60-day letters, generally by August 4,
2010. The letters, along with other information EPA received through
review of state requirements and further communications with state
officials, indicate that the states, localities, and other
jurisdictions may be divided into three categories, described later in
this preamble, for purposes of EPA's implementation of the PSD program
to GHG-emitting sources.
c. The Three Categories of States and EPA's Implementation Process
The first category, which includes 7 states, 35 subsections of
states, the District of Columbia, American Samoa, Guam, Puerto Rico,
the U.S. Virgin Islands, and Indian Territory, does not have an
approved SIP PSD permitting program. Instead, Federal requirements
apply. Thus, implementation of PSD for GHG-emitting sources in these
jurisdictions is the simplest of all the states: GHG-emitting sources
became subject to PSD and the thresholds in the Tailoring Rule as of
January 2, 2011, without further action.\51\
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\51\ McCarthy Declaration, paragraphs 28-33, page 8, and
Attachment 1, Table 1.
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The second category includes 13 states and a number of districts
within states that have approved PSD SIPs, but those SIPs do not apply
the PSD program to GHG-emitting sources. This group includes Texas,
which is the focus of this action. The implementation process for this
category is discussed later.\52\
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\52\ Id., paragraphs 34-55, pages 8-12, and Attachment 1, Table
2.
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The third category includes the remaining states, which have an
approved SIP PSD program that applies to GHG-emitting sources. As for
the implementation process for this category, some of these states have
indicated that they are able to interpret their SIPs to apply PSD only
to GHG emissions at or above the Tailoring Rule thresholds, and that
they do not need to revise their SIPs to do so. However, most indicated
that they would need to submit SIP revisions to EPA in order to
incorporate the Tailoring Rule thresholds. This means that in these
states, until they do submit their SIP revisions and EPA approves them,
sources emitting GHGs at or above the 100/250 tpy levels are subject to
PSD requirements as of January 2, 2011, if they construct or modify.
EPA has encouraged these states to submit SIP revisions adopting the
Tailoring Rule thresholds as soon as possible and some of these states
have already done so. Moreover, almost all of these states are
proceeding to revise their state law to reflect the Tailoring Rule
thresholds and either did so by January 2, 2011, or very soon
thereafter, or are currently in the process of revising their SIPs. In
the meantime, EPA has finalized what we call the Narrowing Rule so that
as of January 2, 2011, at least for Federal purposes, PSD will apply to
GHG-emitting sources only at the Tailoring Rule thresholds or
higher.\53\ As a result of these state actions and EPA's Narrowing
Rule, as of January 2, 2011, or shortly thereafter, in all or almost
all of these states, only GHG-emitting sources at or above the
Tailoring Rule thresholds are subject to PSD requirements. \54\
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\53\ ``Limitation of Approval of Prevention of Significant
Deterioration Provisions Concerning Greenhouse Gas Emitting Sources
in State Implementation Plans; Final Rule, 75 FR 82535 (December 30,
2010). Specifically, in the Narrowing Rule, EPA narrowed its
approval of the affected states' SIP PSD applicability provisions to
only the extent they apply PSD to GHG-emitting sources at or above
the Tailoring Rule thresholds. In addition, recognizing that GHG-
emitting sources also have permitting obligations under state law,
EPA has strongly encouraged states to revise their state law as
promptly as possible to eliminate the state PSD obligations of
sources below the Tailoring Rule thresholds. McCarthy Declaration
paragraph 92, page 19.
\54\ Id. paragraphs 62-94, pages 13-20, and Attachment 1, Table
3.
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d. SIP Call States, Including Texas
As just noted, the second category, which includes Texas, includes
13 states and some districts within states whose SIPs have an approved
PSD program but do not have the authority to apply that program to GHG-
emitting sources. For most of these states, including Texas, the reason
is that their PSD applicability provision applies to any ``pollutant
subject to regulation'' under the CAA (or a similar term), but other
provisions of state law preclude automatic updating. As a result, this
applicability provision covers only pollutants--not including GHGs--
that were subject to regulation at the time the state adopted the
applicability provision.
After proposing action by notice dated September 2, 2010,\55\ EPA
promulgated the final SIP call for 13 states, including Texas, by
notice signed on December 1, 2010, and published on December 13, 2010,
75 FR 77,698, which we call the GHG PSD SIP Call or, simply, the SIP
call.\56\ In this action, consistent with the requirements of CAA
section 110(k)(5), EPA (i) issued a finding that the SIPs for 13 states
(comprising 15 state and local programs) are ``substantially inadequate
to * * * comply with any requirement of this Act'' because their PSD
programs do not apply to GHG-emitting sources as of January 2, 2011;
(ii) issued a SIP call requiring submission of a corrective SIP
revision; and (iii) established a ``reasonable deadline[] (not to
exceed 18 months after the date of such notice)'' for the submission of
the corrective SIP revision. This deadline ranges, for different
states, from 3 weeks to 12 months after the date of the final SIP call,
as discussed later in this preamble.
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\55\ ``Action to Ensure Authority to Issue Permits under the
Prevention of Significant Deterioration Program to Sources of
Greenhouse Gas Emissions: Finding of Substantial Inadequacy and SIP
Call--Proposed Rule,'' 75 FR 53,892 (September 2, 2010); ``Action to
Ensure Authority to Issue Permits under the Prevention of
Significant Deterioration Program to Sources of Greenhouse Gas
Emissions: Federal Implementation Plan--Proposed Rule,'' 75 FR
53,883 (September 2, 2010).
\56\ ``Action to Ensure Authority to Issue Permits under the
Prevention of Significant Deterioration Program to Sources of
Greenhouse Gas Emissions: Finding of Substantial Inadequacy and SIP
Call--Final Rule,'' 75 FR 77,698 (December 13, 2010).
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EPA justified its finding that the affected SIPs are
``substantially inadequate'' to comply with CAA requirements on grounds
that (i) the CAA requires that PSD requirements apply to any stationary
source that emits specified quantities of any air pollutant subject to
regulation under the CAA, and those PSD requirements must be included
in the approved SIPs; (ii) as of January 2, 2011, GHG-emitting sources
will become subject to PSD; (iii) as a result, the CAA requires PSD
programs to apply to GHG-emitting sources; and (iv) accordingly, the
failure of any SIP PSD applicability provisions to apply to GHG-
emitting sources means that the SIP fails to comply with these CAA
requirements.
In the SIP call proposal, EPA discussed in some detail the SIP
submittal deadline under CAA section 110(k)(5). Under this provision,
in issuing a SIP call, EPA ``may establish reasonable deadlines (not to
exceed 18 months after the date of such notice) for the submission of
such plan revisions.'' EPA proposed to allow each of the affected
states up to 12 months from the date of signature of the final finding
of substantial inadequacy and SIP call within which to submit the SIP
revision, unless, during the comment period, the state expressly
advised that it would not object to a shorter period--as short as 3
weeks from the date of signature of the
[[Page 25190]]
final rule--in which case EPA would establish the shorter period as the
deadline. EPA stated that, assuming that EPA were to finalize the SIP
call on or about December 1, 2010, as EPA said it intended to do in the
proposal, then the earliest possible SIP submittal deadline would be
December 22, 2010.
EPA made clear that the purpose of establishing the shorter period
as the deadline for any interested state is to accommodate states that
wish to ensure that a FIP is in effect as a backstop to avoid any gap
in PSD permitting. EPA also made clear that if a state did not advise
EPA that it does not object to a shorter deadline, then the 12-month
deadline would apply. EPA emphasized that for any state that receives a
deadline after January 2, 2011, the affected GHG-emitting sources in
that state may be delayed in their ability to receive a Federally
approved permit authorizing construction or modification. This is
because after January 2, 2011, these sources may not have available a
permitting authority to review their permit applications until the date
that EPA either approves the SIP submittal or promulgates a FIP.
EPA asked that each of the affected states write EPA a letter
during the comment period to identify the deadline for SIP submission
to which the state would not object if EPA established. We call these
the 30-day letters. Each affected state wrote a 30-day letter to EPA,
as requested. Except for Texas, each state identified a SIP submittal
deadline, which differed among the states, and which ranged from three
weeks to 12 months. In the final SIP call, EPA established SIP
submittal deadlines identified by the states, except that EPA
established a deadline of 12 months for Texas, in accordance with EPA's
proposal. Except for Texas, each state explained in its 30-day letter
and in subsequent communications with EPA, that it was planning on
either receiving a FIP or adopting a SIP and that it chose a deadline
that would result in having either the FIP or an approved SIP, as
appropriate, in place by January 2, 2011 or soon enough thereafter so
as to avoid any hardship to its sources. In the final SIP call, EPA
justified approving this 3-week-to-12-month time period, although
expeditious, as meeting the CAA section 110(k)(5) requirement to be a
``reasonable'' deadline in light of: (i) The SIP development and
submission process; (ii) the preference of the state; and (iii) the
imperative to minimize the period when sources will be subject to PSD
but will not have available a PSD permitting authority to act on their
permit application and therefore may face delays in constructing or
modifying.
In the final SIP call, based on the states' 30-day letters and
other communications, EPA established a SIP submittal deadline of
December 22, 2010, for seven states. Each of the states indicated that
it did not expect to submit a SIP revision by that date and instead
expected to receive a FIP. On December 23, 2010, for each of the seven
states, EPA issued a finding of failure to submit its corrective SIP
revision by that deadline, and EPA promulgated a FIP.
Except for Texas, EPA expected each of the other states subject to
the SIP call to adopt a SIP revision and receive EPA approval of it, or
receive a FIP, within the first half of 2011, and, in most cases,
substantially sooner. Although none of these states had a permitting
authority in place as of January 2, 2011, none of these states expected
that gap to pose meaningful difficulties for sources because, depending
on the state, the gap would be brief, and the state did not expect any
sources to seek a permit during the gap, or even if the state had been
the permitting authority during the gap, it could not have completed
processing the permits during that time.\57\
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\57\ McCarthy Declaration, p. 12, paragraph 55.
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As discussed later, Texas has responded to the SIP call differently
than the other states. As a result, its GHG-emitting sources do face
the prospect of permitting delays. This rulemaking action addresses
that situation.
4. Summary of the Effect of EPA's Implementation Actions in States
Other Than Texas
EPA recently summarized the status of its implementation efforts,
for all three categories of sources, as follows:
Overall, EPA has received information about the status of 99
jurisdictions (49 states,\58\ 4 territories, 45 localities, and the
District of Columbia), and included that information in Attachment
1. Of these jurisdictions, 94 will have, for Federal law purposes, a
PSD permitting program for GHG emissions at the Tailoring Rule
thresholds on Jan. 2, 2011. Of these 94 entities, 84 will have made
any necessary amendments to state or local law to ensure that state
or local permits are not required for GHG emissions below Tailoring
Rule thresholds. By the end of the first quarter of 2011, only one
jurisdiction will not have authority to permit GHG sources, and that
jurisdiction will obtain authority by July 1, 2011 and in the
meantime, does not expect large sources seeking permits for their
GHGs. In addition, by the end of the first quarter of 2011, all but
one more state will have made any necessary amendments to state or
local law to ensure that permits are not required for GHG emissions
below Tailoring Rule levels. 1 program with GHG permitting authority
at the lower statutory levels has not yet determined how, and on
which timeline, it will incorporate the Tailoring Rule thresholds
into its state law.\59\
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\58\ California's PSD program is administered in its entirety by
local jurisdictions.
\59\ McCarthy Declaration, p. 20, paragraph 98. There have been
a few changes in the status of individual states since this time,
but the overall picture remains the same. EPA has been in close
communication with almost every state and many other jurisdictions,
along with multi-state organizations such as the National
Association of Clean Air Agencies (NACAA). In addition to the
letters that states have sent responding to the Tailoring Rule (the
60-day letters) and proposed SIP Call (the 30-day letters), EPA
officials, primarily through the Regional Offices, have had numerous
communications with their state counterparts. It is as a result of
the prompt action taken by the states that implementation efforts
have been so successful to date.
Thus, under EPA's implementation program, (i) in every state, (a)
only sources at or above the Tailoring Rule thresholds will be subject
under Federal law to obtain a PSD permit when they construct or modify
as of January 2, 2011, and (b) only those same sources will be subject
under state law to obtain a PSD permit when they construct or modify as
of January 2, 2011 or very soon thereafter; and (ii) in every state,
except for Texas, as of January 2, 2011 or very soon thereafter, GHG
sources that construct or modify will be able to receive permits when
they need them, so that the sources will not face obstacles to
constructing and modifying. Again, Texas has responded to EPA's
implementation program in a manner that has resulted in its sources
facing obstacles to constructing and modifying, as discussed next,
which this rulemaking addresses.
5. EPA's Implementation Approach for Texas and Texas's Response
The following describes the progress to date of implementing PSD
for GHG emissions in Texas, based on extensive communications between
EPA and TCEQ. It should be borne in mind, as noted earlier, that Texas
is in the second of the three categories of states: that is, it has an
approved PSD program that does not apply to GHGs-emitting sources.
a. Texas's 60-Day Letter
Texas's 60-day letter provides the State's clearest articulation of
its response to EPA's efforts to implement PSD for GHG-emitting sources
at the Tailoring Rule thresholds beginning January 2, 2011. As noted
previously, in the preamble to the final Tailoring Rule, EPA asked each
state to send EPA a
[[Page 25191]]
letter within 60 days to identify which category the state was in and
what action the state intended to take. Specifically, with regard to
sources in Category 2, EPA stated:
In our proposed rule, we also noted that a handful of EPA-
approved SIPs fail to include provisions that would apply PSD to GHG
sources at the appropriate time. This is generally because these
SIPs specifically list the pollutants subject to the SIP PSD program
requirements, and do not include GHGs in that list, rather than
include a definition of NSR regulated pollutant that mirrors the
Federal rule, or because the state otherwise interprets its
regulations to limit which pollutants the state may regulate. At
proposal, we indicated that we intended to take separate action to
identify these SIPs, and to take regulatory action to correct this
SIP deficiency.
We ask any state or local permitting agency that does not
believe its existing SIP provides authority to issue PSD permits to
GHG sources to notify the EPA Regional Administrator by letter, and
to do so no later than August 2, 2010. This letter should indicate
whether the state intends to undertake rulemaking to revise its
rules to apply PSD to the GHG sources that will be covered under the
applicability thresholds in this rulemaking, or alternatively,
whether the state believes it has adequate authority through other
means to issue Federally-enforceable PSD permits to GHG sources
consistent with this final rule. For any state that lacks the
ability to issue PSD permits for GHG sources consistent with this
final rule, we intend to undertake a separate action to issue a SIP
call, under CAA section 110(k)(5). As appropriate, we may also
impose a FIP through 40 CFR 52.21 to ensure that GHG sources will be
permitted consistent with this final rule.
75 FR 31,582/3.
With regard to states in category 3, EPA requested that in the
states' 60-day letter,
the state should explain whether it will apply EPA's meaning of the
term ``subject to regulation'' and if so, whether the state intends
to incorporate that meaning of the term through interpretation, and
without undertaking a regulatory or legislative process. If a state
must undertake a regulatory or legislative process, then the letter
should provide an estimate of the time needed to adopt the final
rules. If a state chooses not to adopt EPA's meaning by
interpretation, the letter should address whether the state has
alternative authority to implement either our tailoring approach or
some other approach that is at least as stringent, whether the state
intends to use that authority. If the state does not intend to
interpret or revise its SIP to adopt the tailoring approach or such
other approach, then the letter should address the expected
shortfalls in personnel and funding that will arise if the state
attempts to carry out PSD permitting for GHG sources under the
existing SIP and interpretation.
For any state that is unable or unwilling to adopt the tailoring
approach by January 2, 2011, and that otherwise is unable to
demonstrate adequate personnel and funding, we will move forward
with finalizing our proposal to limit our approval of the existing
SIP.
75 FR 31,582/3.
On August 2, 2010, Texas submitted its 60-day letter, signed by the
Texas Attorney General and the Chairman of the Texas Commission on
Environmental Quality.\60\ In that letter, Texas responded specifically
to EPA's request that ``any state * * * that does not believe its
existing SIP provides authority to issue PSD permits to GHG sources to
notify [EPA and] * * * indicate whether the state intends to * * *
revise its rules to apply PSD to * * * GHG sources'' by stating:
``Texas has neither the authority nor the intention of interpreting,
ignoring, or amending its laws in order to compel the permitting of
greenhouse gas emission.'' Id. p. 1. Texas offered several explanations
for this position. First, Texas noted:
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\60\ Letter from Bryan W. Shaw, Chairman, Texas Commission on
Environmental Quality, and Greg Abbott, Attorney General of Texas,
to Hon. Lisa Jackson, Administrator, U.S. Environmental Protection
Agency, and Dr. Alfredo ``Al'' Armendariz, Regional Administrator,
U.S. Environmental Protection Agency, Region 6 (August 2, 2010)
(Texas's 60-day letter), included in the docket for this rulemaking.
Texas' stationary source permitting program encompasses all
``federally regulated new source review pollutants,'' including,
``any pollutant that otherwise is subject to regulation under the
[federal Clean Air Act].'' 30 Tex. Admin. Code Sec. 116.12(14)(D).
The rules of the Texas Commission on Environmental Quality (TCEQ),
like the EPA's rules, do not define the phrase ``subject to
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regulation.''
Id. p. 2. Texas then explained that it had several objections to
interpreting the phrase ``subject to regulation'' to allow regulation
of GHGs. For one thing, according to Texas, long-standing state case
law precluded the term--and the PSD applicability provisions
generally--from automatically incorporating newly regulated pollutants.
Specifically, Texas said: \61\
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\61\ In this explanation, Texas was referring to the PSD
applicability provision that Texas adopted under State law in 2006,
which differed slightly from the applicability provision approved
into the SIP in 1993.
* * * Texas' stationary source permitting program encompasses
all ``federally regulated new source review pollutants,'' including
``any pollutant that otherwise is subject to regulation under the
[federal Clean air Act].'' 30 Tex. Admin. Code Sec. 116.12(14)(D).
This delegation of legislative authority to the EPA is limited
solely to those pollutants regulated when Texas Rule 116.12 was
adopted (1993) and last amended (2006). As the Texas Supreme Court
has explained, ``The general rule is that when a statute is adopted
by a specific descriptive reference, the adoption takes the statute
as it exists at that time, and the subsequent amendment thereof
would not be within the terms of the adopting act.'' Trimmer v.
Carlton, 296 S.W. 1070 (1927). Thus, in order for Texas Rule 116.12
to pass constitutional muster, it must be limited to adopting by
reference the definition of ``subject to regulation'' in existence
when Rule 116.12 was last amended in 2006. In other words, Texas
Rule 116.12 cannot delegate authority to the EPA to define ``subject
to regulation'' in 2010 to include pollutants that were not
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``subject to regulation'' in 2006.
Id. at 4.
Secondly, Texas took the position that PSD applies only to NAAQS
pollutants, and not non-NAAQS pollutants. Texas stated:
The only sensible interpretation of the Clean Air Act is one
that requires the EPA to promulgate a National Ambient Air Quality
Standard (NAAQS) for greenhouse gases before the EPA can require PSD
permitting of greenhouse gases. * * * EPA, however, has not
developed a NAAQS for greenhouse gases. * * *
Id. at 4-5.
Texas provided a more detailed exposition of its view that PSD
applies only to NAAQS pollutants in its challenges before the DC
Circuit to EPA's GHG actions, where Texas moved to stay the
Endangerment Finding, the Vehicle Rule, and the Johnson Memo
Reconsideration (Texas's Motion to Stay Three GHG Actions).\62\ (In a
separate motion, Texas also moved to stay the Tailoring Rule.\63\)
There, Texas reiterated arguments based on the text of some of the CAA
PSD provisions that, in Texas's view, lead to the conclusion that the
CAA precludes applying PSD to non-NAAQS. As noted previously, these
arguments were raised by commenters to the Tailoring Rule. Texas
concluded that EPA's efforts to apply PSD to GHGs--
thus violates the CAA. Moreover, [EPA's] interpretation of the CAA
is not entitled to deference because the text of the statute is
unambiguous. Chevron, U.S.A. v. NRDC, 467 U.S. 837, 842 (1984) (the
Agency must give effect to the unambiguously expressed intent of
Congress). Accordingly, EPA's attempt to short cut the CAA's NAAQS
[[Page 25192]]
process in order to regulate GHG emissions from stationary sources
through PSD and Title V must fail.\64\
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\62\ ``State of Texas's Motion For A Stay Of EPA's Endangerment
Finding, Timing Rule, and Tailpipe Rule,'' Coalition for Responsible
Regulation v. EPA, No. 09-1322 (and consolidated cases) (September
15, 2010). On December 10, 2010, the DC Circuit denied Texas's, and
other parties', motions to stay. Order, Coalition for Responsible
Regulation v. EPA, No. 09-1322 (and consolidated cases) (December
10, 2010).
\63\ ``State of Texas's Motion For A Stay Of EPA's Greenhouse
Gas Tailoring Rule,'' Coalition for Responsible Regulation v. EPA,
No. 09-1322 (and consolidated cases) (September 15, 2010) (Texas's
Motion to Stay the Tailoring Rule).
\64\ Texas's Motion to Stay Three GHG Actions, at 27.
At the close of its 60-day letter, Texas added, ``In the event a
court concludes EPA's actions comport with the law, Texas specifically
reserves and does not waive any rights under the Federal Clean Air Act
or other law with respect to the issues raised herein.'' \65\
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\65\ Id. at 5.
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b. Texas's 30-Day Letter
As noted previously, in the GHG PSD SIP call proposal, EPA proposed
to establish, for each affected state, a deadline of 12 months from the
date of signature of the final SIP call for submitting the corrective
SIP revision, unless the state expressly advised EPA in its 30-day
letter that it would not object to a shorter period. Texas submitted a
30-day letter on October 4, 2010,\66\ and in that letter, voiced
various objections to the proposed SIP call. Texas reiterated its view
that PSD is limited to NAAQS pollutants, and therefore cannot apply to
GHGs, and added that the SIP call is ``based on an impermissible
interpretation of the [Clean Air Act]. EPA cannot * * * impose
permitting through [the PSD] program without first setting a NAAQS.* *
* '' Texas 30-day letter p. 2, 4. EPA responded to those objections in
the final SIP call.\67\
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\66\ ``Texas Commission on Environmental Quality Comments on
Actions to Ensure Authority to Issue Permits Under the Prevention of
Significant Deterioration Program to Sources of Greenhouse Gas
Emissions, Finding of Substantial Inadequacy and SIP Call, Docket ID
No. EPA-HQ-OAR-2010-0107, FRL-9190-7 Federal Implementation Plan
(FIP), Docket ID No EPA-HQ-OAR-2010-0107, FRL-9190-8 (October 4,
2010) (Texas 30-day letter).
\67\ Final SIP Call, 75 FR at 77,706/2-3 and n. 18.
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In its 30-day letter, Texas went on to discuss the SIP submission
schedule and FIP that EPA proposed, but Texas declined EPA's invitation
to identify a specific deadline for the state's SIP submission. As a
result, in the final SIP call, EPA was obliged to establish the default
SIP submission deadline for Texas of December 1, 2011, in accordance
with EPA's proposal. Because Texas has clearly stated that it does not
intend, and, in its view, does not have the authority, to adopt a SIP
revision to respond to the SIP Call, including to apply PSD to GHG-
emitting sources, EPA expects to promulgate a FIP to continue to apply
PSD to these sources in December, 2011. But, again, because Texas did
not identify an earlier deadline for its SIP submittal, the earliest
that EPA could promulgate such a FIP would be December 2, 2011. Under
this approach, due to the position Texas has taken, absent further
action, sources in Texas could not expect to have a permitting
authority with authority to issue preconstruction permits for their GHG
emissions until that December 2, 2011, date. As a result, absent
further action, sources in Texas would face obstacles in constructing
or modifying before that date.
Texas's 30-day letter indicates that Texas was well aware of the
consequences of its decision not to identify a specific deadline for
its SIP submission, but had several reasons for making that decision.
These included its view, again, that PSD applies only to NAAQS
pollutants, and also that EPA was required to employ a different
process for requiring a SIP revision, one that would have provided the
state with 3 years to adopt a SIP revision. Texas 30-day letter at 4-5.
In addition, Texas asserted that there is no reason to allow EPA to
promulgate an early FIP for the benefit of Texas's sources because, in
Texas's view, for practical reasons, EPA could not issue those permits
for the ``foreseeable future'' anyway. Specifically, Texas explained
that EPA had not issued guidance for determining BACT, the key element
of a PSD permit for a GHG source. Texas added that even after EPA
issued that guidance, BACT will, in Texas's view, remain uncertain and
contentious, and the guidance will be of limited usefulness until the
control technology is proven. Id. at 5. Texas added that ``[i]ndustry
should be particularly concerned about EPA's lack of resources and
experience to issue these permits.* * * '' Id. at 6. Texas concluded,
``The result of all this is that, even under a FIP, it is unlikely that
construction of new major GHG sources or major modifications will
commence in the foreseeable future.'' Id. at 6.
In order to reduce uncertainty for sources and permitting
authorities, EPA has issued guidance for use in determining BACT,
provided training for permitting authorities and sources, and is
continuing to maintain and update resources for use in making these
determinations. These resources include question and answer documents
and white papers on proven and emerging technologies for reducing
greenhouse gas emissions in different industries as well as continued
close interaction between sources, permitting authorities, and EPA.
It should be noted that Texas stated in filings before the DC
Circuit in which it challenged the Tailoring Rule that it believed 167
projects in Texas would be affected by the lack of a permitting
authority during 2011.\68\
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\68\ Texas's Motion to Stay the Tailoring Rule, pp. 2, 16.
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IV. Final Action and Response to Comments
In this action, EPA is taking the following actions to ensure that
there is a mechanism for large, GHG-emitting sources in Texas to obtain
PSD permits under a program that complies with the CAA. First, EPA is
determining that the Administrator's action approving the Texas SIP PSD
program was in error under CAA section 110(k)(6).
Second, EPA, in the same manner as its past action to approve the
Texas SIP PSD program, is revising such action as appropriate without
requiring any further submission from Texas. Id. The appropriate
revision is to convert the previous approval to a partial approval and
partial disapproval. The partial approval applies to the extent that
Texas's PSD program actually covers pollutants that are required to be
included in PSD. The partial disapproval applies to the extent that
Texas failed to address or to include assurances of adequate legal
authority (required under CAA section 110(a)(2)(E)(i)) for the
application of PSD to each newly regulated pollutant, including non-
NAAQS pollutants, under the CAA. Note that as an alternative basis to
CAA section 110(k)(6) for taking these first two steps, EPA relies on
its inherent administrative authority to reconsider its previous
action.
Third, in this rulemaking, EPA is promulgating a FIP to apply
appropriate measures to assure that EPA's PSD regulatory requirements
will apply to non-NAAQS pollutants that are newly subject to regulation
under the CAA that the Texas PSD program does not already cover. At
present, the only such pollutant is GHGs. Therefore, EPA's FIP will at
present apply the EPA regulatory PSD program for the GHG portion of PSD
permits for GHG-emitting sources in Texas, and EPA commits to take
whatever steps are appropriate if, in the future, Texas fails to apply
PSD to another newly regulated non-NAAQS pollutant. In light of the
immediate need of Texas's GHG-emitting sources for a permitting
authority to process their permit applications for GHGs, this rule will
be effective on May 1, 2011.
[[Page 25193]]
A. Response to General Comments on the Operation of the PSD Program
1. Comments on the Self-Executing Nature of the PSD Program
Several commenters disagreed with EPA's position regarding section
165(a) of the CAA and argue that EPA's decision to regulate GHGs had no
self-executing effect on the permitting requirements applicable to
sources in Texas. These commenters state that the only CAA requirements
that are self-executing are found in CAA section 168, a section of the
statute that incorporated PSD changes made in the 1977 amendments to
the Act. Instead, according to these commenters, GHG-emitting sources
became subject to PSD requirements through EPA's revisions to the PSD
regulations in 40 CFR 51.166, and those regulations provide states 3
years to revise their SIPS to incorporate changes in the PSD program.
Accordingly, one commenter asserted that rather than imposing a
``construction permitting moratorium'' upon EPA's adoption of a new
minimum PSD requirement, the PSD rules provide states a reasonable
period of time for incorporating a new minimum PSD requirement, with
prospective effect, into SIPs, during which time the EPA-approved SIP
continues in force and the state may continue to issue permits under
that SIP without addressing the new minimum requirement promulgated by
EPA.
2. EPA Response
EPA indicated in the proposal for this rulemaking, 75 FR at 82,388/
2, that in earlier rulemakings, EPA took comment on and resolved the
issue of whether the CAA PSD requirements apply by their terms, so that
EPA was not soliciting comment on that issue in this rulemaking. In
those earlier rulemakings, EPA concluded that the CAA PSD requirements
do apply by their terms, so that sources in a state are subject to PSD
for their emissions of pollutants newly subject to regulation even if
the state has an approved SIP that does not apply PSD to those
pollutants. See 75 FR 31,514 (June 3, 2010) and 75 FR 77,698 (December
13, 2010). As noted earlier in this preamble, notwithstanding the
proposal, EPA did receive comments on this issue in this rulemaking.
Because EPA resolved this issue in those earlier rulemakings, and those
dissatisfied with that resolution may challenge it in court--and in
fact are so doing--and because the present rulemaking is based on those
rulemakings, EPA is not obliged to respond to those comments in this
rulemaking.
Even so, for the sake of completeness, and without reopening this
issue in this rulemaking, EPA does provide the following response. EPA
disagrees with these commenters and EPA continues to take the view that
the CAA PSD requirements apply by their terms to pollutants newly
subject to regulation, regardless of whether a state with an approved
SIP applies PSD to such pollutants. As discussed at length in the
preamble to the final PSD GHG SIP call (75 FR 77,707-77,709, Dec 13.
2010), the CAA requirements (i) prohibit a ``major emitting facility''
from constructing or modifying without obtaining a permit that meets
the PSD requirements, CAA section 165(a)(1); and (ii) define a ``major
emitting facility'' as a source that emits a specified quantity of
``any air pollutant,'' CAA section 169(1), which EPA has long
interpreted as any pollutant subject to regulation. 40 CFR
52.166(b)(49)(iv). In this manner, the CAA requirements for PSD
applicability are what we call automatically updating, that is, at the
very time EPA regulates a previously unregulated pollutant, any source
emitting that pollutant in sufficient quantities becomes a ``major
emitting facility,'' and that source cannot construct or modify without
receiving a PSD permit. That is, PSD applies to that pollutant at the
time it becomes subject to regulation, without further regulatory
action by EPA.
EPA regulations have codified this automatically updating aspect of
the CAA PSD requirements. See 43 FR 26,380, 26,403/3, 26,406 (June 19,
1978) (promulgating 40 CFR 51.21(b)(1)(i)) and 42 FR 57,479, 57,480,
57,483 (November 3, 1977) (proposing 40 CFR 51.21(b)(1)(i)) (applying
PSD requirements to a ``major stationary source'' and defining that
term to include sources that emit specified quantities of ``any air
pollutant regulated under the Clean Air Act''). Most recently, in our
2002 NSR Reform rule, EPA reiterated these requirements, although
changing the terminology. 67 FR 80,186 (December 31, 2002).
Specifically, EPA required that emissions of ``any regulated NSR
pollutant'' be subject to PSD requirements when emitted in specified
quantities by sources and defined that term to include pollutants
regulated under certain CAA requirements, as well as ``any pollutant
that otherwise is subject to regulation under the [CAA].'' 40 CFR
52.166(b)(49)(iv). EPA made clear in the preamble to the NSR Reform
rule that PSD applicability was automatically updating. 67 FR 80,240.
GHG-emitting sources became subject to PSD due to the operation of
these CAA and regulatory provisions, in conjunction with the Light-Duty
Vehicle Rule. The latter rule subjected GHGs to regulation for the
first time, as of January 2, 2011, so that, by operation of the CAA PSD
provisions and the associated regulatory provisions, PSD automatically
applied to GHG-emitting stationary sources as of that date. The
Tailoring Rule codified in 40 CFR 51.166 an interpretation that, read
in conjunction with the Light-Duty Vehicle Rule regulations, had the
effect of establishing the January 2, 2011 date by which GHGs became
subject to regulation, see 40 CFR 51.166(b)(48) along with a phase-in
schedule, see id at 51.166(b)(48)(iv)-(v). However, contrary to
commenters arguments, the Tailoring Rule did not itself require that
PSD apply to GHG-emitting sources, and the provisions that the
Tailoring Rule incorporated into 40 CFR 51.166(b)(48), as just
described, did not impose that requirement.
Accordingly, commenters are incorrect in arguing that the
authorization for states to submit PSD SIP revisions within a three-
year period, under 40 CFR 51.166(a)(6), means that PSD does not apply
to GHG-emitting sources until states submit such a SIP revision.
Section 51.166(a)(6) provides, in relevant part: ``Any State required
to revise its implementation plan by reason of an amendment to this
section * * * shall adopt and submit such plan revision to the
Administrator for approval no later than three years after such
amendment is published in the Federal Register''; and ``[a]ny [such]
revision * * * shall take effect no later than the date of its approval
and may operate prospectively. 40 CFR 51.166(a)(6)(i), (iii) (emphasis
added). There are several reasons why this provision does not mean that
PSD does not apply to GHG-emitting sources until after a state revises
its SIP in accordance with the Tailoring Rule. For one thing, because
this provision is a regulation, it cannot, no matter how it is
interpreted, override the CAA requirements that apply PSD requirements
to GHG-emitting sources so that those CAA requirements do not take
effect as of January 2, 2011.
For another, this provision does not apply to the requirement that
GHG-emitting sources became subject to PSD as of January 2, 2011. GHG-
emitting sources became subject to PSD by operation of the CAA and
existing regulations, in conjunction with the Light-Duty Vehicle Rule,
not because of any amendment to 40 CFR 51.166. The Tailoring Rule did
amend section 51.166, but, again, those amendments did not impose PSD
applicability on
[[Page 25194]]
GHG-emitting sources; rather, they clarified the date of PSD
applicability for GHG-emitting sources and provided a timetable for
phasing-in PSD applicability. Therefore, no state is required ``by
reason of an amendment to * * * section [51.166]'' to revise its SIP to
apply PSD to GHG-emitting sources, and as a result, any three-year
delay in section 51.166 does not apply to PSD applicability for GHG-
emitting sources.
3. Comments on Stationary Sources' Ability To Rely on Approved State
SIP
Several industry commenters stated that in light of their
contention that the PSD program is not self-executing, as discussed
earlier in this preamble, then it follows that stationary sources do
not violate the CAA if they get permits in accordance with the
requirements of an approved state SIP, and they may lawfully construct
or modify in accordance with the terms of those permits, even though
those permits do not cover their GHG emissions. According to these
commenters, sources in Texas need only look to the content of Texas's
existing SIP in determining the permitting requirements with which they
must comply and sources in Texas can obtain permits now, without
addressing GHGs, and lawfully construct or modify in accordance with
those permits. One commenter states that CAA Section 113(a)(1)
``provides a shield to these sources so long as they comply with the
applicable SIP.'' Commenters cited the recent decision of the 7th
Circuit, United States v. Cinergy Corporation, 623 F.3d 455 (7th Cir.
2010) to support the opinion that actions taken in compliance with an
approved SIP are valid.
4. EPA Response
Here, too, EPA stated in the proposal for this rulemaking that
because EPA addressed this comment in earlier rulemakings on which this
rulemaking is based--including the Tailoring Rule and the GHG PSD SIP
Call--EPA was not soliciting comment on this issue and was not required
to respond to such comments. 75 FR at 82,388/2, see 75 FR 31,514 (June
3, 2010) and 75 FR 77,698 (December 13, 2010). Even so, for the sake of
completeness, and without re-opening this issue in this rulemaking, EPA
provides the following response: EPA disagrees with the comment. As we
stated earlier in this preamble, EPA has long interpreted the PSD
applicability provisions in the CAA to be self-executing,\69\ that is,
they apply by their terms so that a source that emits any air pollutant
subject to regulation becomes subject to PSD--and, therefore, cannot
lawfully construct or modify without obtaining a PSD permit--and these
provisions apply by their terms in this manner regardless of whether
the state has an approved SIP PSD program. What is more, until an
applicable implementation plan is in place--either an approved SIP or a
FIP--no permitting authority is authorized to issue a permit to the
source.
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\69\ EPA likewise did not reopen this issue in this rulemaking.
---------------------------------------------------------------------------
In the recent Cinergy decision, the 7th Circuit confronted a case
that, at the district court level, involved both nonattainment NSR and
PSD claims, with the appeal involving a substantive nonattainment NSR
issue and an evidentiary PSD issue. However, in its opinion, the 7th
Circuit described the substantive nonattainment NSR issue as if it
applied to both nonattainment NSR and PSD. On that issue, the Court
held that sources could continue to abide by permitting requirements in
an existing SIP until amended, even if that SIP does not comport with
the law. Again, notwithstanding the Court's broader description of the
case, that holding applied only to the nonattainment NSR claims
because, again, only those claims were before the Court on that issue.
United States v. Cinergy Corp., 623 F.3d 455 (7th Cir. 2010). In stark
contrast to the nonattainment provisions actually at issue in Cinergy--
which are not self-executing and must therefore be enforced through a
SIP--PSD is self-executing; it is the statute (CAA section 165), not
just the SIP, that prohibits a source from constructing a project
without a permit issued in accordance with the Clean Air Act.
B. Determination That EPA's Previous Approval of Texas's PSD Program
was in Error
In this action, EPA is determining that EPA's previous approval of
Texas's PSD program was in error under CAA section 110(k)(6). In
applying CAA section 110(k)(6), EPA must first ``determine[] that the
Administrator's action approving * * * [the Texas PSD program] was in
error * * *.'' EPA has determined that the Texas PSD program had flaws
at the time Texas submitted it and EPA approved it, so that EPA's
approval was in error.
1. Gaps in Texas's PSD Program Concerning Application of PSD to
Pollutants Newly Subject to Regulation and Concerning Assurances of
Legal Adequacy
Texas's PSD program, although approved by EPA, contained important
gaps concerning the application of PSD to pollutants newly subject to
regulation, including non-NAAQS pollutants, and Texas's legal authority
for doing so.
a. Gaps in Texas's PSD Program at the Time of EPA Approval
The application of the PSD program to pollutants newly subject to
regulation, including non-NAAQS pollutants, is a key component of the
program. As noted earlier in this preamble, it is EPA's long-standing
position that PSD applies to all such pollutants, and most of the
states' PSD programs do apply to such pollutants automatically, as soon
as those pollutants become subject to regulation.
In particular, as noted previously, EPA made clear to Texas during
1980 and again during 1983 that PSD applies to non-NAAQS pollutants.
Because Texas's PSD program, unlike that of most states, did not
automatically apply to such pollutants, it was important that during
the time when Texas submitted SIP revisions and EPA acted on them,
1985-1992, that Texas address the application of PSD to pollutants
newly subject to regulation, including non-NAAQS pollutants.
It is clear from the record that both Texas and EPA were well aware
that the Texas PSD rules' IBR of EPA PSD regulatory requirements did
not automatically update. Indeed, when EPA promulgated the NAAQS for
PM10, a previously unregulated pollutant, and thereby
subjected that pollutant to PSD for the first time, Texas revised its
PSD rules to update the IBR and thereby assure that the state PSD
program applied to PM10.
Had Texas recognized that following approval of its PSD program,
EPA would in all likelihood continue to subject previously unregulated
pollutants to regulation, and therefore to PSD for the first time,
Texas could have addressed how it would handle that situation. For
example, Texas could have provided assurances that the state would
apply PSD to such pollutants, and could have included those assurances
in the form of a SIP revision or as a separate letter. Texas could also
have provided information as to the method and timing for applying PSD
to such pollutants. The most likely method would be through a separate
SIP revision, which would apply PSD specifically with respect to that
pollutant. By comparison, as noted earlier in this preamble, Texas
committed to submit a SIP revision if a SIP inadequacy led to an
increments violation. Alternatively, another method would be to adopt
the approach of most other states and adopt a SIP revision to update
the program to apply
[[Page 25195]]
automatically to any pollutant newly subject to regulation.
In addition, depending on how it addressed the need to update its
PSD program to apply to pollutants newly subject to regulation, Texas
could have addressed the timing of that action. The timing would most
likely relate to the time necessary to adopt and submit a SIP revision.
This timing issue is important because the sources emitting pollutants
are subject to PSD under the CAA as soon as the pollutants become
subject to regulation, but if the SIP PSD program does not
automatically apply to the sources, then the state does not have
authority to issue permits to the sources as soon as the sources become
required to obtain the permits.
However, there is no indication in the record of Texas's SIP
submissions that Texas specifically addressed this issue of the
treatment of pollutants that would newly become subject to PSD after
Texas's PSD SIP was approved, or that Texas provided any such
information as to method or timing. Nor is there any indication in the
record that during this 1985-92 period, EPA identified this issue and
sought such information from Texas. As noted elsewhere in this
preamble, although both Texas and EPA were well aware that the Texas
SIP did not automatically update to include pollutants newly subject to
regulation, both failed to look down the road and anticipate that EPA
would in all likelihood newly subject more pollutants to regulation. As
noted elsewhere in this rulemaking, because the SIP did not address PSD
applicability to pollutants newly subject to regulation, the SIP did
not meet CAA requirements.
Texas did provide the 1987 Texas PSD Commitments Statement, in
which Texas agreed to ``implement and enforce the federal requirements
for [PSD] as specified in [EPA regulations] by requiring all new major
stationary sources and major modifications to obtain air quality
permits as provided in TACB regulation VI, Control of Air Pollution by
Permits for New Construction and Modification.'' However, this 1987
statement does not specifically address the application of PSD to
pollutants newly subject to regulation. As just quoted, it commits TACB
to require ``all new major stationary sources and major modifications
to obtain air quality permits as provided in TACB regulation VI* * *'',
but that regulation VI does not automatically update, and therefore
does not apply to pollutants newly subject to regulation, and does not
further address such pollutants.
Texas also provided the 1989 Texas PSD Commitments Letter, in which
Texas generally committed ``to implement EPA requirements relative to
[PSD].'' However, as quoted previously, this phrasing is general and
therefore cannot be read to commit to apply PSD to pollutants newly
subject to regulation, including non-NAAQS pollutants. Nor did the
letter identify the method and timing for doing so. Accordingly, we do
not read this letter as a commitment by Texas to apply PSD to each
newly regulated pollutant, including non-NAAQS pollutants, whether
through a SIP revision or some other method, or on any particular time-
table. Moreover, although EPA approved the Texas PSD program in
reliance on the letter, EPA indicated, in the final approval preamble,
that the scope and binding impact of the letter were limited and that
Texas retained discretion in implementing the PSD program.
In approving Texas's rule, EPA did not recognize that Texas's SIP
did not address pollutants newly subject to regulation. In its 1992
approval rulemaking, EPA noted that ``any fundamental changes in the
administration of PSD would have to be accomplished through amendments
to the regulations in 40 CFR Sec. Sec. 52.21 and 51.166, and
subsequent SIP revisions,'' and added:
The EPA did not intend to suggest that Texas is required to
follow EPA's interpretations and guidance issued under the Act in
the sense that those pronouncements have independent status as
enforceable provisions of the Texas PSD SIP, such that mere failure
to follow such pronouncements, standing alone, would constitute a
violation of the Act* * *.
* * *PSD-SIP approved states remain free to follow their own
course, provided that state action is consistent with the letter and
spirit of the SIP, when read in conjunction with the applicable
statutory and regulatory provisions.
57 FR 28,094-28,095 (June 24, 1992). EPA made these statements in
response to comments that EPA should not require that (i) the Texas PSD
program must automatically incorporate any revision to the PSD program
that EPA might adopt, such as a revision to how the central
technological requirement--best available control technology (BACT)--is
determined; or (ii) that the Texas PSD program incorporate any new
interpretation or guidance that EPA may issue with respect to PSD.
Rather, according to these statements, EPA would revise the PSD program
through regulatory changes and Texas would adopt them through SIP
revisions, and Texas retained discretion as to whether to follow
revisions to EPA interpretation or guidance. However, these statements
do not concern EPA's newly subjecting pollutants to regulation, and
thereby triggering PSD requirements for those pollutants, because that
action does not constitute a ``fundamental change[] in the
administration of PSD * * * accomplished through amendments to the
regulations in 40 CFR 52.21 and 51.166. * * *.'' Nor is that action any
type of new interpretation or guidance for the PSD program itself.
Rather, that action is a regulatory action outside the PSD program that
has the effect of newly subjecting a pollutant to regulation; does not
alter the underlying requirements of the PSD program; and instead,
simply makes an incremental addition (however large the increment may
be) to the types of pollutants subject to the existing PSD program.
In addition, the rulemaking record for Texas's PSD program does not
indicate that Texas provided, as required under CAA section
110(a)(2)(E)(i), assurances that Texas had adequate legal authority to
carry out the PSD program, including, insofar as relevant for this
rulemaking, applying PSD to pollutants newly subject to regulation,
among them non-NAAQS pollutants. Some 15 years previously, in Texas's
1972 submission of its original SIP, the state had provided assurances
of legal authority to carry out the SIP, and EPA had approved those
assurances. But the record for the PSD SIP submission does not indicate
whether, or how, that legal authority applied to PSD applicability to
such pollutants. In submitting the PSD SIP program, the TACB provided
general references to legal authority, but the TACB did not indicate
whether PSD applies to such pollutants either. Nor did the 1989 Texas
PSD Commitments Letter specifically identify legal authority to apply
PSD to such pollutants. Nor did the assurance of legal authority to
apply the Texas PSD program to large municipal waste combustors, as
required by the 1990 CAA Amendments, assurances which Texas apparently
made in a 1992 conference call with EPA Region 6 officials, and which
were referenced in a letter from the Region to TACB, address legal
authority to apply PSD to pollutants that newly become subject to PSD
as a result of EPA regulation.\70\
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\70\ Letter to Steve Spaw, Executive Director, Texas Air Control
Board, from A. Stanley Meiburg, Director, Air Pesticides, and Toxics
Division, Region 6, USEPA, Request for Commitments for Prevention of
Significant Deterioration (PSD) Program. March 30, 1992.
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Therefore, the Texas PSD SIP submittal contained gaps: it did not
address the application of PSD to pollutants newly subject to
regulation,
[[Page 25196]]
including non-NAAQS pollutants; and it did not include any information
concerning Texas's methods or timing for doing so. Nor did the program
provide assurances that the state had adequate legal authority to apply
PSD to such pollutants.
b. Recent Statements by Texas That Confirm the Gaps in Texas's PSD
Program
Texas has recently made several statements that confirm that at the
time EPA approved the state's PSD program, that program had the gaps
described previously.
(1). Gap Concerning Application of PSD to All Pollutants Newly Subject
to Regulation, Including Non-NAAQS Pollutants
First, Texas has made clear its view that it is not required to
apply PSD to non-NAAQS pollutants that are newly subject to regulation,
including GHGs. Specifically, in its August 2, 2010, 60-day letter,
Texas stated that it interprets the CAA PSD applicability provisions to
apply only to NAAQS pollutants, and therefore to not include non-NAAQS
pollutants, among them GHGs. Texas asserted that ``the only sensible
interpretation of the CAA'' is that PSD applies to only NAAQS
pollutants. Texas 60-day letter, p. 4. Indeed, in its court challenge
to EPA's four GHG rules, Texas stated that its interpretation is
mandated under Chevron step 1. There, Texas stated that EPA's
``interpretation of the CAA [that PSD applies to non-NAAQS pollutants]
is not entitled to deference because the text of the statute is
unambiguous. Chevron, U.S.A. v. NRDC, 467 U.S. 837, 842 (1984) (the
Agency must give effect to the unambiguously expressed intent of
Congress).'' \71\ As noted previously, EPA responded at length to this
argument in the Tailoring Rule and in EPA's response in the court
challenge to EPA's GHG rules. EPA asserts that the CAA mandates that
PSD apply to non-NAAQS pollutants, including GHGs, once they become
subject to regulation; and EPA is not reopening this issue on the
merits in this rulemaking.
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\71\ See Texas ``Motion to Stay Three GHG Actions'' 27,
Coalition for Responsible Regulation v. EPA, No. 09-1322 (and
consolidated cases).
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For present purposes, however, what is important is that Texas
takes the position that under a Chevron step 1 reading of the CAA, the
PSD program does not apply to non-NAAQS pollutants. This position has
important ramifications for how Texas must interpret EPA's PSD
applicability regulations and for the meaning of Texas's SIP PSD
applicability provisions. As noted previously, under EPA's current
regulations, PSD applies to ``any pollutant that otherwise is subject
to regulation under the [CAA].'' 40 CFR 52.166(b)(49)(iv). These
regulations have read this way since they were revised in EPA's 2002
NSR Reform Rule, and the regulations that predated them were phrased in
much the same way: They applied PSD to ``any air pollutant regulated
under the Clean Air Act.'' \72\ These regulations are based on the CAA
PSD applicability requirements, and as a result, cannot apply PSD to
any pollutants that the CAA does not itself subject to PSD.
Accordingly, although Texas did not specifically address the meaning of
EPA's regulations in its 60-day letter or court filings, it must be
that in Texas's view, these EPA regulations may lawfully apply PSD to
only NAAQS pollutants.
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\72\ See 43 FR 26,380, 26,403/3, 26,406 (June 19, 1978)
(promulgating 40 CFR 51.21(b)(1)(i)) and 42 FR 57,479, 57,480,
57,483 (November 3, 1977) (proposing 40 CFR 51.21(b)(1)(i))
(applying PSD requirements to a ``major stationary source'' and
defining that term to include sources that emit specified quantities
of ``any air pollutant regulated under the Clean Air Act'').
---------------------------------------------------------------------------
Texas's EPA-approved SIP PSD applicability provisions apply PSD to
``any air pollutant subject to regulation under the [Clean Air] Act.''
Although these Texas provisions mirror EPA's provisions--which, again,
Texas appears to interpret as limited to applying PSD only to NAAQS
pollutants--Texas is authorized to apply its provisions more
expansively than the EPA regulations. This is because a state must
comply with CAA requirements as a minimum, but retains authority to
impose additional or more stringent requirements. CAA section 116.
Therefore, it is in accordance with Texas's view that the CAA and EPA
regulatory requirements for PSD applicability be limited to NAAQS
pollutants, that Texas would nevertheless consider itself authorized--
but not required--to apply its PSD program to particular non-NAAQS
pollutants. This position would allow Texas, in effect, to choose which
non-NAAQS pollutants to subject to PSD, and which not.
In fact, Texas has clearly stated that it does not consider itself
required to apply its PSD program to one non-NAAQS pollutant in
particular: GHGs. In its 60-day letter, Texas stated: ``Texas has
neither the authority nor the intention of interpreting, ignoring, or
amending its laws in order to compel the permitting of greenhouse gas
emissions.'' Texas 60-day letter, at 1. Texas's letter went on to
provide numerous reasons for why it did not believe EPA lawfully
subjected GHGs to PSD; why, in any event, EPA was required to allow
states more time before PSD would apply to GHG-emitting sources; and,
as noted previously, why, in any event, Texas's SIP does not
automatically update to apply PSD to newly regulated pollutants. Id. at
5.
With this statement--that ``Texas has neither the authority nor the
intention of interpreting, ignoring, or amending its laws in order to
compel the permitting of greenhouse gas emissions''- Texas has made
clear that it does not view itself as obligated to apply PSD to GHGs
under the CAA. Thus, this statement is fully consistent with, and
highlights, Texas's view that it is not obligated to apply PSD to each
newly regulated non-NAAQS, including, of course, GHGs.\73\
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\73\ It should be noted that Texas has applied its PSD program
to non-NAAQS pollutants because Texas has IBR'd EPA's PSD regulatory
requirements and those requirements apply to non-NAAQS pollutants.
However, as noted earlier, Texas has made clear that it has no
intention of submitting a SIP revision to apply PSD to GHGs. All
this is consistent with the view described previously that Texas
interprets its PSD applicability provision to authorize it to apply
PSD to non-NAAQS pollutants at Texas's discretion, but that Texas
does not view itself as required to apply PSD to non-NAAQS
pollutants.
---------------------------------------------------------------------------
These statements from Texas are significant because they confirm
that Texas's PSD program, as approved by EPA, had an important gap:
Texas did not address the applicability of its PSD program to
pollutants newly subject to regulation, including non-NAAQS pollutants,
such as by providing assurances that Texas would take action to apply
PSD to such pollutants or describing the methods (such as SIP revision)
and timing for doing so. Moreover, Texas's recent statements are
consistent with the view that Texas's silence on the subject at the
time of the PSD SIP action means that Texas did not, at that time, view
itself as obligated to apply PSD to each pollutant.\74\
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\74\ By the same token, we see nothing in these recent
statements to indicate that Texas views itself as rescinding any
pre-existing understanding that it would apply PSD to each such
pollutant.
---------------------------------------------------------------------------
In particular, Texas's recent statement that the CAA PSD provisions
are clear by their terms, as a matter of Chevron step 1, that they do
not apply to non-NAAQS pollutants, suggests that Texas would have
viewed the CAA PSD provisions the same way at the time Texas submitted
its PSD program. As noted earlier, the Texas Attorney General and the
Chairman of the Texas Commission on Environmental Quality, who are the
joint signatories of Texas's
[[Page 25197]]
60-day letter, are of the view that ``[t]he only sensible
interpretation of the Clean Act'' is that PSD applies only to NAAQS
pollutants, and not non-NAAQS pollutants. Texas 60-day letter, p. 4.
Texas has confirmed its reading--and clarified that it is based on a
Chevron step 1 interpretation--in filings before the DC Circuit. The
fact that these high state officials view this reading of the CAA as,
again, ``[t]he only sensible reading,'' indicates that in the past,
Texas is less likely to have adopted the opposite reading, which would
be that the CAA mandates that PSD applies to non-NAAQS pollutants.
Statutory provisions whose meaning is clear on their face, at least to
a particular reader, would not be expected to have had a different or
uncertain meaning to that same reader at an earlier point in time. By
the same token, Texas's insistence, noted previously, that it does not
have the intention or authority to apply PSD to one non-NAAQS in
particular, GHGs, suggests that Texas could well have expressed the
same view, had the issue arisen, at the time EPA approved Texas's PSD
program.
We further note that Texas itself appears to take the position that
an agency's present interpretation of its regulations should be
presumed to have been the agency's past interpretation of those
regulations, so that Texas's current interpretation that its PSD
program does not apply to at least one non-NAAQS, GHGs, should be
presumed to be Texas's interpretation of its PSD program in the past,
including at the time Texas submitted its program as a SIP revision to
EPA and EPA approved it. Specifically, in its 60-day letter, Texas
noted that in the Tailoring Rule, EPA asked states to consider whether
their SIPs that include the term ``subject to regulation'' can be
interpreted to incorporate the Tailoring Rule thresholds on grounds
that the state interprets that term as being sufficiently open-ended.
75 FR 51,581/2. Texas stated,
In the Tailoring Rule you have asked TCEQ to report to you by
August 2, 2010, whether it would ``interpret'' the undefined phrase
``subject to regulation'' in TCEQ Rule 116.12 consistent with the
newly promulgated definition in EPA Rule 51.166, in all its
specifics and particulars. That is, you have effectively requested
that Texas agree to regulate greenhouse gases in the exact manner
and method proscribed by the EPA.
In other words, you have asked Texas to agree that when it
promulgated its air quality permitting program rules for pollutants
``subject to regulation'' in 1993, that Texas really meant to define
the term ``subject to regulation'' as set forth in the dozens of
paragraphs and subparagraphs of EPA Rule 51.166, first promulgated
in 2010.
Texas 60-day letter, p. 3. In these statements, Texas appears to reveal
Texas's own understanding of the circumstances under which Texas can be
said to give the term ``subject to regulation'' a particular
interpretation, and that is if Texas interpreted that term that same
way at the time that Texas first promulgated the term in 1993. By that
same logic, Texas's position, as stated in its 60-day letter, that it
``has neither the authority nor the intention of interpreting,
ignoring, or amending its laws in order to compel the permitting of
greenhouse gas emissions'' would have applied to ``its laws''--
including the SIP PSD requirements--at the time that Texas adopted
those rules. Therefore, it seems reasonable to conclude that just as
Texas does not currently view its PSD program as applying to all newly
regulated non-NAAQS pollutants, Texas did not, at the time it submitted
and EPA approved its PSD program, view its PSD program as applying to
all newly regulated non-NAAQS pollutants.
By the same token, Texas's recent statements also confirm that the
assurances Texas provided in its 1989 Texas PSD Commitments Letter
cannot be interpreted as having committed Texas to apply PSD to all
pollutants newly subject to regulation, including non-NAAQS pollutants.
The assurances, by their terms, were phrased generally and did not
address the application of PSD to such pollutants; and EPA, in the
preamble for the final approval of Texas's PSD SIP, indicated that the
scope and binding impact of the assurances were limited.\75\ Texas's
recent direct statements that PSD does not cover non-NAAQS pollutants
indicates that the generally phrased assurances in the letter, whatever
they meant, did not mean that Texas would apply PSD to each newly
regulated pollutant, including non-NAAQS pollutants.
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\75\ 57 FR at 28,095/2, 28,096/1.
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As a result, it stands to reason that at the time Texas submitted
its PSD program, Texas did not view the CAA as mandating the
application of PSD to at least certain pollutants newly subject to
regulation, non-NAAQS pollutants. But at a minimum, it can be said that
Texas's PSD program contained a gap: EPA required that PSD apply to
each pollutant newly subject to regulation, including non-NAAQS
pollutants; Texas's program applied only to pollutants already subject
to regulation at the time Texas adopted its program, not to
subsequently regulated pollutants, including non-NAAQS; and Texas did
not address its program's applicability to such pollutants, including
how or when its program would so apply. This gap is significant because
it facilitates Texas's current position, with which EPA disagrees, that
PSD does not apply to non-NAAQS pollutants.
(2). Gap Concerning Assurances of Adequate Legal Authority
Texas's statement in its 60-day letter that it ``has neither the
authority nor the intention of interpreting, ignoring, or amending its
laws in order to'' apply PSD to GHG-emitting sources also highlights
that Texas's PSD program had a gap in its failure to provide
``necessary assurances'' of adequate legal authority to carry out the
PSD program.
It is possible that at the time that Texas submitted its PSD
program, Texas considered itself under the same limits in its legal
authority. At a minimum, in light of these recent statements that it
does not have authority to apply PSD to at least one newly regulated,
non-NAAQS, GHGs, it is apparent that at the time that Texas submitted
its PSD program, Texas did not provide the ``necessary assurances''
that it ``will have adequate * * * authority under State * * * law to
carry out such implementation plan (and is not prohibited by any
provision of * * * State law from carrying out such implementation plan
or portion thereof).'' CAA section 110(a)(2)(E)(i) (emphasis added).
``[C]arrying out such implementation plan'' includes, in the case of
the Texas PSD SIP program, fully implementing the SIP in a manner
consistent with the CAA, and that includes the applicability of PSD to
each pollutant newly subject to regulation, including non-NAAQS
pollutants.
2. Flaws in PSD Program
The Texas PSD program's gaps--which are, again, that Texas did not
address the applicability of PSD to all pollutants newly subject to
regulation, including non-NAAQS pollutants; and Texas did not provide
assurances of adequate legal authority to do so--mean that the state's
PSD program has flaws. These flaws were present at the time that EPA
approved Texas's PSD program. Moreover, these flaws are significant.
They have figured prominently into the present situation in which EPA
takes the position that Texas is obligated under the CAA and EPA
regulations to apply its PSD program to a newly regulated pollutant--
GHGs--but Texas takes the opposite position.
[[Page 25198]]
a. Comments on the Flaws in PSD Program
Several commenters, including both the Texas Commission on
Environmental Quality (TCEQ) and the Texas Attorney General, object to
EPA's determination that the Texas SIP is flawed. TCEQ comments that
nothing in `` * * * the CAA or federal PSD rules require that state PSD
programs apply to pollutants newly subject to regulation.'' The Texas
Attorney General states that 40 CFR 51.166 does not require automatic
updating of SIPs to incorporate pollutants that subsequently become
subject to regulation.
b. Response to Comments
EPA disagrees with these comments. Contrary to the TCEQ's comments,
as discussed elsewhere in this rulemaking preamble, the PSD
requirements in the CAA and regulations do require that PSD SIPs
address the applicability of PSD to pollutants newly subject to
regulation. As discussed previously, the CAA PSD provisions and EPA's
PSD regulations are clear that PSD applies to each newly regulated
pollutant, whether a NAAQS pollutant or a non-NAAQS pollutant.
Moreover, the CAA is clear that SIPs must include provisions to assure
that CAA requirements are met. See CAA section 110(a)(2)(J) (each SIP
must ``meet the applicable requirements of * * * part C * * * (relating
to prevention of significant deterioration of air quality * * *)''; CAA
section 161 (``each applicable implementation plan shall contain
emission limitations and such other measures as may be necessary, as
determined under regulations promulgated under this part, to prevent
significant deterioration of air quality in each region [to which PSD
applies]''). Accordingly, each PSD SIP must include provisions that
address how PSD will apply to pollutants newly subject to regulation.
As noted earlier in this preamble, there are several different ways for
SIP to address PSD applicability to such pollutants, but SIPs must
adopt one of those ways.
With respect to the Texas Attorney General, the comment that EPA's
regulations do not require automatic updating of SIPs to incorporate
such pollutants misses the point. In the Interim Final Rule and the
proposal, EPA did not identify the gap in Texas's SIP PSD provisions as
based on the lack of automatic updating to apply PSD to each pollutant
newly subject to regulation. Rather, EPA identified the gap as the
failure of the State, at the time it submitted and EPA approved the PSD
program, to address such pollutants. The State could have specifically
acknowledged the issue of the applicability of PSD to newly regulated
pollutants and addressed that issue in several different ways.
Providing an automatic updating mechanism is one way, which is what
most of the other states do. Second, the State could have committed, in
either the SIP itself or in a letter accompanying the SIP submittal,
that the State would adopt and submit for approval SIP revisions to
apply PSD to newly regulated pollutants, and the State could have
indicated a schedule for it to do so. Third, it is possible that more
general assurances by the State to address the issue could have passed
muster. In addition, there may be other ways to address this issue. The
record does not indicate that Texas specifically identified the issue
or identified any ways that Texas would address the issue. Moreover, as
discussed earlier in this preamble, Texas failed to demonstrate that it
had adequate legal authority to regulate these pollutants.
3. EPA's Error in Approving Texas's PSD Program
In this rulemaking, EPA is ``determin[ing]'' that EPA's action
fully approving Texas's PSD program was ``in error'' within the meaning
of CAA section 110(k)(6). This section contains EPA's basis for that
determination.
a. CAA Section 110(k)(6) Error Correction
Under the familiar Chevron two-step framework for interpreting
administrative statutes, an agency must, under Chevron step 1,
determine whether ``Congress has directly spoken to the precise
question at issue.'' If so, ``the court, as well as the agency, must
give effect to the unambiguously expressed intent of Congress.''
However, under Chevron step 2, if ``the statute is silent or ambiguous
with respect to the specific issue, the question for the court is
whether the agency's answer is based on a permissible construction of
the statute.'' Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 842-43
(1984).
As noted previously, the term ``error'' in CAA section 110(k)(6) is
not defined and, as a result, should be given its ordinary, everyday
meaning. The dictionary definition of ``error'' is ``a mistake'' or
``the state or condition of being wrong in conduct or judgment,''
Oxford American College Dictionary 467 (2d ed. 2007); or ``1) an act,
assertion, or belief that unintentionally deviates from what is
correct, right or true 2) the state of having false knowledge * * * 4)
a mistake * * * .'' Webster's II New Riverside University Dictionary
442 (Houghton Mifflin Co. 1988). These definitions are broad, and
include all unintentional, incorrect or wrong actions or mistakes.
Moreover, CAA section 110(k)(6) authorizes EPA to ``determine[]''
that its action was in error, and does not direct or constrain that
determination in any manner. That is, the provision does not identify
any factors that EPA must, or may not, consider in making the
determination. This further indicates that this provision confers broad
discretion upon EPA.
b. Gaps in Texas PSD Program
As previously discussed, the Texas SIP PSD program was flawed
because it contained gaps: Texas did not address the applicability of
PSD to all pollutants newly subject to regulation, including non-NAAQS
pollutants; and Texas did not provide assurances of adequate legal
authority to do so. EPA did not address these gaps in its action on
Texas SIP PSD program and instead, EPA fully approved the PSD program.
Therefore, EPA's action in fully approving Texas's SIP PSD program
in the face of these flaws was ``in error'' under CAA section
110(k)(6), in accordance with Chevron step 1. ``[E]rror'' should be
defined broadly to include any mistake, and approval of a flawed SIP is
a mistake. Moreover, this flaw is significant because it affects the
applicability of the PSD program to a pollutant and, as a result, to an
entire set of sources.
Even if the term ``error'' is not considered unambiguously to
encompass, under Chevron step 1, the mistake that EPA made in approving
the Texas PSD SIP, and instead is considered ambiguous on this
question, then under Chevron step 2 EPA has sufficient discretion to
determine that its approval action meets the definition of ``error.''
That is, under CAA section 110(k)(6), the breadth of the term ``error''
and of the authorization for EPA to ``determine[]'' when it made an
error, mean that EPA has sufficient discretion to identify the gaps in
Texas's PSD program as flawed and to identify EPA's action in approving
Texas's PSD SIP in the face of those flaws as an error.
c. Comments and Responses on the Use of CAA Sec. 110(k)(6)
Comment: One commenter supported EPA's use of CAA section Sec.
110(k)(6) to correct its previous approval of the Texas PSD program.
This commenter asserted that the use of this mechanism is appropriate
in this case, where serious flaws in Texas's SIP have become glaringly
apparent, and, if left uncorrected, would cause immediate harm. EPA
agrees with this commenter's assessment that this action is necessary
[[Page 25199]]
to correct this error in the Texas program.
Several other commenters, however, challenged the use of section
110(k)(6) in this instance. Commenters stated that section 110(k)(6) of
the Act has been understood and was intended by Congress to be used as
authority to make corrections of a ``technical'' or ministerial nature,
such as ``typographical errors.'' This section was not, according to
commenters intended as a means to make unilateral, substantive changes
in SIPs or major policy changes. These commenters view EPA's action
here as directly contrary to the Act's cooperative federalism scheme.
Response: For the reasons noted earlier in this preamble, the
natural meaning of the term ``error'' in the error correction provision
is broad and as a result, the provision applies by its terms to any
mistake. The explicit legislative history of the provision--what
Congress said in the various reports and statements accompanying its
passages--is sparse and does not illuminate its meaning. Because there
is nothing in the statute or legislative history that suggests that
Congress intended a meaning narrower than the natural meaning of the
term, the natural meaning of the term controls. Commenters' assertions
that this provision is limited to ``technical'' errors or
``typographical errors'' are conclusory and wholly unsupported.
For the reasons discussed elsewhere in this preamble, Texas's SIP
was flawed and as a result, EPA's action in approving that flawed SIP
was in error.
As a result, this rulemaking action is simply the correction of an
error, as authorized under CAA Sec. 110(k)(6). Contrary to some
comments, this action is not based on a policy shift in EPA's
administration of the PSD program. Nor does this action upset
federalism concerns or constitute a claim of authority to unilaterally
revise any action on any SIP submittal. EPA does not read section
110(k)(6) to provide unlimited discretion to act on SIP submissions,
only to provide authority to make error corrections.
Comment: Commenters went on to assert that other historical uses of
CAA section 110(k)(6) were uncontroversial edits to remove Federal
enforceability of regulatory requirements that had been included or
retained inadvertently and were made at the state's request. In
contrast, according to these commenters, this rule imposes new
requirements contrary to the state's wishes.
Response: EPA's previous use of the error correction provision
makes clear that EPA has corrected errors many years after they
occurred, and that EPA has corrected errors that are broader than
merely technical or typographical errors. In addition, EPA's most
recent use of the error correction provision was in the PSD Narrowing
Rule, in which EPA again corrected errors in SIP approvals that
occurred many years ago, and which relied on as broad an application of
section 110(k)(6) as in the present rulemaking. Moreover, in the GHG
PSD Narrowing Rule, EPA relied on the error correction mechanism
without having first been asked to do so by some of the affected
states, and, in fact, in the face of negative comments by some of the
affected states. Even so, the PSD Narrowing Rule was not challenged in
Court by any party.
In any event, for the reasons noted earlier in this preamble, EPA's
action in this rulemaking qualifies as an error correction within the
meaning of CAA section 110(k)(6). Whether the affected state--or any
other party--agrees or disagrees that the SIP that is the subject of
the error correction is flawed is not a criteria under CAA section
110(k)(6).
Comment: A commenter raised several concerns about EPA's
interpretation of other provisions of CAA section 110(k)(6). For
convenience, the relevant provisions state: ``Whenever the
Administrator determines that the Administrator's action approving,
disapproving, or promulgating any plan or plan revision (or part
thereof), area designation, redesignation, classification, or
reclassification was in error, the Administrator may in the same manner
as the approval, disapproval, or promulgation revise such action as
appropriate without requiring any further submission from the State.''
A commenter focused on the requirement that EPA's action must be
``in the same manner'' as the action that EPA is correcting, and argued
that this requirement limits EPA to, as a substantive matter, applying
the same standard to Texas's SIP today as it did to the SIP when it was
approved in 1992 and using the same record; and as a procedural matter,
taking the same action, which, in this case, prevents EPA from
converting an approval to a disapproval.
Response: EPA disagrees with this reading of the phrase ``in the
same manner.'' This phrase is not defined in section 110(k)(6). As a
matter of Chevron step 1, or, in the alternative, Chevron step 2, the
phrase refers to Administrative Procedure Act or, if applicable, CAA
section 307(d) procedures. Thus, if the original action were a notice-
and-comment rulemaking under the Administrative Procedure Act, then the
error correction must follow the same procedure.\76\ We see no basis
for reading the phrase ``in the same manner'' more narrowly to limit an
error correction of an approval to be only another approval, and not a
disapproval. That strained reading is inconsistent with the purpose of
the section, which is to allow for the correction of errors, a process
that may well require reversing the initial action if found to be in
error. Although EPA sees no basis for the substantive requirements that
the commenter reads into the phrase, the record for the present
action--which includes the relevant documents in the record for the
1992 approval--makes clear that EPA's 1992 action was in error, and
nothing in CAA section 110(k)(6) limits the record for an error
correction more narrowly.
---------------------------------------------------------------------------
\76\ By comparison, if the original action were not a notice-
and-comment action (such as a classification under CAA section
172(a)(1)(B)), then the correction must follow whatever process
applied to the original action.
---------------------------------------------------------------------------
Comment: A commenter argued that EPA ignored the phrase ``revise
such action.'' The commenter believes that section 110(k)(6) affords
EPA no discretion to ``revise'' an approval action into a disapproval
but instead limits the Agency to revising the contents of ``such
action'' that it previously undertook. The commenter asserted that EPA
does not ``revise'' an action by substituting another action for it;
rather, EPA must take the same type of action, a reading reinforced by
the requirement that the Agency act ``in the same manner as the
[original action].'' The EPA may not ``reconsider'' or ``replace'' a
SIP-related action. The commenter indicated that in this way, section
110(k)(6) is not a mechanism for revisiting a decision but for
correcting mistakes in an action--using this section to reverse an
approval offends both the participation requirements and the principles
of the Act's SIP provisions.
Response: Section 110(k)(6) authorizes EPA to ``revise'' the action
it determines to be in error ``as appropriate.'' The term ``revise'' is
not defined in section 110(k)(6). Its natural meaning is to ``change''
or ``modify.'' Webster's II New Riverside University Dictionary (1988)
at 1005. As a matter of Chevron step 1, or, in the alternative, Chevron
step 2, the term is broad enough to encompass changing or modifying an
approval to a disapproval. This is particularly so in light of the
authorization under section 110(k)(6) to revise the action in error
``as appropriate.'' Used in this context, the term ``appropriate''
indicates EPA is under a constraint of reasonableness in
[[Page 25200]]
revising the action, but is not under the other constraints that
commenter suggests. Thus, if EPA has a basis for revising an approval
to a disapproval, then EPA may do so on grounds that this type of
revision is ``appropriate.''
Comment: A commenter stated that EPA ignored the phrase ``as
appropriate.'' The commenter stated that this language serves to ``keep
EPA within bounds'' and explained that EPA may revise an earlier action
only ``as appropriate'' to correct its error in undertaking the earlier
action, and not to effect a change in policy. The commenter added the
following reasons (which are discussed further in other sections of
this document) that EPA's actions are not appropriate: (i) It is not
``appropriate'' to single out Texas's SIP submission for disapproval
based on a purported deficiency that is present in other states' SIPs.
(ii) It is not ``appropriate'' to exercise section 110(k)(6)'s error
correction provisions where EPA is simultaneously exercising its powers
under section 110(k)(5), which affords states procedural protections
EPA has refused to afford under section 110(k)(6).
Response: The term ``as appropriate'' should be viewed as
highlighting the significant discretion that EPA has under the error
correction provision to ``revise'' the action it found to be in error,
as discussed earlier in this preamble. EPA responds elsewhere in this
rulemaking preamble to the specific reasons the commenter gives as to
why the commenter believes EPA's action was not appropriate.\77\ It
should be noted here that the various considerations the commenter
cites would suggest the commenter's agreement that the term
``appropriate'' allows EPA to consider a wide range of factors, that
is, to exercise broad discretion.
---------------------------------------------------------------------------
\77\ The commenter added that it is not ``appropriate'' to
exercise section 110(k)(6)'s error correction provisions to change a
SIP approval into a disapproval where the Agency has made no finding
that the purported SIP submission deficiency will directly harm
public health or welfare. Commenter appears to suggest that section
110(k)(6) should be read to include the constraint that the
provision is available only if EPA finds that error it seeks to
correct. EPA sees no basis in the terms, legislative history, or
logic of section 110(k)(6), or in EPA's previous error-correction
actions, for reading this constraint into section 110(k)(6).
---------------------------------------------------------------------------
Comment: One commenter questioned whether EPA had made a mistake
because the action taken to approve the SIP was what EPA intended to do
and was not done unintentionally.
Response: EPA acted purposefully in fully approving the Texas SIP,
but that does not mean that the full approval did not carry any element
of an inadvertent error. As noted elsewhere in this rulemaking
preamble, EPA and Texas both failed to look down the road and recognize
that in all likelihood, EPA would newly subject additional pollutants
to regulation, and thereby trigger the application of PSD to those
additional pollutants, so that Texas's SIP needed to--but did not--
address that situation.
c. Alternative Basis for Error Correction
As explained previously, we view Texas's recent statements that the
CAA does not apply to non-NAAQS pollutants and that Texas has neither
the authority nor the intention to apply PSD to GHGs as an indication
that at the time Texas submitted its PSD program, Texas did not address
the applicability of its program to pollutants newly subject to
regulation or provide assurances that it had legal authority to apply
its program to such pollutants. Absent specific evidence to the
contrary, we are not inclined to conclude that at the time EPA approved
the Texas PSD program in 1992, Texas in fact had filled those gaps--by,
for example, providing assurances that it would apply PSD to each newly
regulated non-NAAQS pollutants and had the legal authority to do so--
but that more recently, Texas has failed to comply with those
assurances. The CAA is based on a partnership between the states and
the Federal government, and we think it more consonant with the
principles of that partnership to interpret the evidence as indicating
that Texas never addressed the gap or provided the requisite
assurances.
However, in the alternative, if one were to conclude that during
the course of Texas's submittal of, and EPA's action on, the State's
PSD program, Texas did in fact, address the applicability of its
program to newly regulated pollutants and did in fact provide the
requisite assurances, so that no gaps in Texas's PSD program existed at
that time, then Texas's recent statements would amount to failing to
comply with, or even rescinding, those assurances. Under these
circumstances, EPA would still consider its previous approval of
Texas's PSD SIP to have been in error. This is because if Texas should
be considered to have addressed the issue and to have provided the
appropriate assurances, then EPA should be considered to have based its
approval on those assurances. For example, EPA stated in approving the
Texas PSD program that EPA was relying on the 1989 Texas PSD
Commitments Letter. Rescinding or failing to comply with those
assurances--if that is what Texas is considered to have done--would
eliminate the basis for EPA's approval. Compare CAA section 110(k)(4)
(authorizing EPA to approve a SIP revision based on a commitment by the
state to adopt certain measures by a date certain, but if the state
does not do so, then the conditional approval is treated as a
disapproval).
C. Error Correction: Conversion of Previous Approval to Partial
Approval and Partial Disapproval
Under CAA section 110(k)(6), once EPA determines that its previous
action approving a SIP revision was in error, EPA ``may ... revise such
action as appropriate without requiring any further submission from the
State. * * *'' Under this provision, EPA may revise its previous full
approval of Texas's PSD program as appropriate, without requiring any
submission from Texas.
This provision offers EPA a great deal of discretion in revising
its previous action. For one thing, the use of the term ``may'' means
that this provision simply authorizes, and does not require, EPA to
revise its previous action even after EPA has determined the error, and
that, in turn, implies that EPA has discretion in determining how to
revise its previous action. Moreover, if EPA does decide to revise its
previous action, EPA may do so in any way that is ``appropriate.'' The
term ``appropriate'' offers EPA significant latitude in deciding what
type of revision to do.
Here, EPA is revising its previous full approval of Texas's PSD
program to be a partial approval and partial disapproval. Specifically,
EPA is retaining the approval of Texas's PSD program to the extent of
the pollutants that the PSD program already does cover. This amounts to
a partial approval. In addition, EPA is disapproving the Texas PSD
program to the extent it has not addressed the applicability of its PSD
program to each pollutant newly subject to regulation, including non-
NAAQS pollutants, and because it has not provided assurances of
adequate legal authority to apply its PSD program to such sources.
D. Reconsideration Under CAA Section 301, Other CAA Provisions, and
Case Law
As an alternative to the error correction provision of CAA section
110(k)(6), EPA is using its inherent administrative authority to
reconsider its prior approval actions as a basis for revising its
previous full approval of the Texas PSD program to a partial approval
and partial disapproval. This authority
[[Page 25201]]
lies in CAA section 301(a), read in conjunction with CAA section 110
and case law holding that an agency has inherent authority to
reconsider its prior actions.
As noted earlier, EPA approved the Texas PSD program by notice
dated June 24, 1992, 57 FR 28,093, under the authority of CAA section
110(k)(3)-(4). These provisions authorize EPA to approve a SIP
submittal ``as a whole,'' ``approve [the SIP submittal] in part and
disapprove [it] in part,'' or issue a ``conditional approval'' of a SIP
submittal. EPA issued a full approval under CAA section 110(k)(3).
In its approval action under that provision, EPA retained inherent
authority to revise that action. The courts have found that an
administrative agency has the inherent authority to reconsider its
decisions, unless Congress specifically proscribes the agency's
discretion to do so. See, e.g., Gun South, Inc. v. Brady, 877 F.2d 858,
862 (11th Cir. 1989) (holding that agencies have implied authority to
reconsider and rectify errors even though the applicable statute and
regulations do not provide expressly for such reconsideration);
Trujillo v. General Electric Co., 621 F.2d 1084, 1086 (10th Cir. 1980)
(``Administrative agencies have an inherent authority to reconsider
their own decisions, since the power to decide in the first instance
carries with it the power to reconsider'').
Section 301(a) of the CAA, read in conjunction with CAA section
110(k)(3) and the case law just described, provides statutory authority
for EPA's reconsideration action in this rulemaking. Section 301(a)
authorizes EPA ``to prescribe such regulations as are necessary to
carry out [EPA's] functions'' under the CAA. Reconsidering prior
rulemakings, when necessary, is part of ``[EPA's] functions'' under the
CAA--in light of EPA's inherent authority as recognized under the case
law to do so--and as a result, CAA section 301(a) confers authority
upon EPA to undertake this rulemaking.
EPA finds further support for its authority to narrow its approval
in APA section 553(e), which requires EPA to give interested persons
``the right to petition for the issuance, amendment, or repeal of a
rule;'' and CAA section 307(b)(1), which expressly contemplates that
persons may file a petition for reconsideration under certain
circumstances (at the same time that a rule is under judicial review).
These authorizations for other persons to petition EPA to amend or
repeal a rule suggest that EPA has inherent authority, on its own, to
issue such amendment or repeal. This is because EPA may grant a
petition from another person for an amendment to or repeal of a rule
only if justified under the CAA, and if such an amendment or repeal is
justified under the CAA, then EPA should be considered as having
inherent authority to initiate the process on its own, even without a
petition from another person.
EPA recently used its authority to reconsider prior actions and
limit its prior approval of a SIP in connection with California
conformity SIPs. See, e.g., 68 FR 15,720, 15723 (discussing prior
action taken to limit approvals); 67 FR 69,139 (taking final action to
amend prior approvals to limit their duration); 67 FR 46,618 (proposing
to amend prior approvals to limit their duration, based on CAA sections
110(k) and 301(a)). EPA had previously approved SIPs with emissions
budgets based on a mobile source model that was current at the time of
EPA's approval. Later, EPA updated the mobile source model. But, even
though the model had been updated, emissions budgets would continue to
be based on the older, previously approved model in the SIPs, rather
than the updated model. To rectify this problem, EPA conducted a
rulemaking that revised the previous SIP approvals so that the
approvals of the emissions budgets would expire early, when the new
ones were submitted by states and found adequate, rather than when a
SIP revision was approved. This helped California more quickly adjust
its regulations to incorporate the newer model. In this rule, EPA is
using its authority to reconsider and limit its prior approval of SIPs
generally in the same manner as it did in connection with California
conformity SIPs.
EPA is relying, in the alternative, on this inherent authority to
convert its previous approval of Texas's PSD program to a partial
approval and partial disapproval for the same reasons discussed
previously in connection with the ``error'' correction provision of CAA
section 110(k)(6). That is, EPA approved Texas's PSD program even
though that program had significant flaws because Texas did not address
the applicability of its PSD program to all pollutants newly subject to
regulation, including non-NAAQS, and that Texas had adequate legal
authority to do so.
EPA's inherent authority to reconsider its previous action also
supports revising its previous action in the same manner, and for the
same reasons, as under CAA section 110(k)(6), as described earlier.
That is, in light of the flaws in the Texas PSD program, EPA is
revising EPA's previous full approval to be a partial approval (to the
extent of the pollutants regulated under the CAA that are subject to
Texas's PSD program) and a partial disapproval (to the extent Texas's
program does not address pollutants newly subject to regulation,
including non-NAAQS pollutants).
1. Comments Received on Reconsideration Under Section 301(a)
Several commenters questioned EPA's ability to use section 301(a)
given that EPA already has the authority to take this action through
the SIP revision process. There is no gap for the Agency to fill with
its general rulemaking authority, so, according to these commenters,
EPA cannot use this section of the CAA to authorize this SIP revision
without going through the notice and comment process required for a SIP
revision. One commenter goes on to question whether the enactment of
section 110(k)(6) would have been necessary if EPA had authority under
section 301(a).
2. Response to Comments
EPA's inherent authority to reconsider its actions in conjunction
with CAA section 301(a) is not limited by the availability of the SIP
revision process. That process entails the state submitting a revised
SIP submission and EPA acting on it, which is fundamentally different
than EPA reconsidering its action on the initial SIP submission without
the state needing to submit a SIP revision. In addition, the
reconsideration authority is broader than the section 110(k)(6)
authority because the former is not necessarily limited to the
correction of errors. And if, as commenters argue, the section
110(k)(6) authority is limited to only technical or typographical
errors, then the reconsideration authority is substantially broader.
For these reasons, the reconsideration authority should not be
considered to have been pre-empted or otherwise eliminated by the
availability of either the SIP revision process or the error correction
process.
As for reasons why Congress would have added section 110(k)(6) if
the reconsideration authority already existed, several reasons present
themselves. Congress may have intended to codify into the CAA the
reconsideration authority, which otherwise would have remained in the
case law. In doing so, Congress established the criteria and process
for error corrections. In addition, three years prior to the enactment
of the 1990 CAA Amendments, the U.S. Court of Appeals for the Third
Circuit (3rd Circuit) handed down a decision in Concerned Citizens of
Bridesburg v. U.S. EPA, 836 F.2d 777 (1987), which imposed severe
limits on EPA's
[[Page 25202]]
authority to reconsider its actions. As discussed elsewhere in this
preamble, although the legislative history is not explicit, section
110(k)(6) suggests by its terms that Congress intended the provision to
in effect overturn that decision.
E. Relationship of This Action to GHG PSD SIP Call
As noted previously, EPA has recently taken another action
concerning Texas's PSD program as that program relates to GHGs: the GHG
PSD SIP call, which we published by notice dated December 13, 2010, 75
FR 77,698. This section describes the relationship of this error-
correction/partial-disapproval/FIP action to the SIP call. For
convenience, the background for the SIP call, although described in
detail earlier in this preamble, is reiterated here.
EPA promulgated the SIP call under CAA section 110(k)(5), which
provides:
Whenever the Administrator finds that the applicable
implementation plan for any area is substantially inadequate to * *
* comply with any requirement of [the CAA], the Administrator shall
require the State to revise the plan as necessary to correct such
inadequacies. The Administrator * * * may establish reasonable
deadlines (not to exceed 18 months) after [notifying the state of
the inadequacies] for the submission of such plan revisions.
In the SIP call, EPA made a finding that the PSD SIPs of each of 13
states, including Texas, do not apply to GHG-emitting sources and
therefore are ``substantially inadequate to * * * comply with [the PSD
applicability] requirement[s]'' of the CAA.
Accordingly, EPA required each state, including Texas, to submit a
corrective SIP revision. EPA established a deadline for the SIP
submittal for each state as 12 months from the date of the SIP call, or
December 1, 2011, unless the state indicated in its 30-day letter that
it did not object to an earlier deadline. Each state for which EPA
would finalize the SIP call submitted a 30-day letter, and each, except
for Texas, indicated a date sooner than December 1, 2011. Texas did not
indicate any particular date and, as a result, EPA established December
1, 2011 as Texas's deadline. In addition, EPA stated that if Texas or
any of the other states failed to submit its corrective SIP revision by
its deadline, EPA intended to promulgate a FIP immediately thereafter.
The timing of the SIP call--both the time that EPA promulgated the
SIP call and the deadlines it established for SIP submittals--was
driven by the fact that the affected states did not have authority to
issue PSD permits to GHG-emitting sources and as a result, those
sources could face delays in construction and modification when they
became subject to PSD as early as January 2, 2011. EPA designed the SIP
call to maximize the opportunity of each affected state to assure that
its sources would have a permitting authority available as of that date
or a later date, if the state concluded that a later date would not
leave its sources facing delays. EPA did so by allowing each state
flexibility for its SIP submittal deadline.
Each of the affected states except Texas responded with a plan that
would assure that its sources would not confront permitting delays.
Most states--7 of the 13 states--indicated they would not object to
EPA's establishing a SIP submittal date of December 22, 2010,
recognizing that as a practical matter, that meant that EPA would
promulgate a FIP on December 23, 2010. An eighth state (Kentucky) took
the same approach for one of its counties (Jefferson County), except
that it selected the slightly later date of January 1, 2011.\78\ Five
states (including Kentucky for the rest of its state) indicated a later
date, and again, one indicated a date as late as July 1, 2011. This
means that purely as a legal matter, there would be no permitting
authority in place in those five states to issue GHG permits on January
2, 2011, when GHG-emitting sources became subject to PSD. Even so, the
later dates were acceptable to each of the five states because (i) they
intended to submit a SIP revision by their date, and (ii) they did not
expect the lack of a permitting authority during the period before
their deadline to place their sources at risk for delays in
construction or expansion.
---------------------------------------------------------------------------
\78\ Action to Ensure Authority to Issue Permits Under the
Prevention of Significant Deterioration Program to Sources of
Greenhouse Gas Emissions: Finding of Substantial Inadequacy and SIP
Call 75 FR 77,698 (December 13, 2010).
---------------------------------------------------------------------------
Texas responded differently than the other states. In its 30-day
letter, Texas did not indicate a particular date for its SIP submittal,
and as a result, EPA, as we had proposed, established Texas's deadline
at December 1, 2011. But shortly before submitting its 30-day letter,
Texas stated, in its 60-day letter, that ``Texas has neither the
authority nor the intention of interpreting, ignoring, or amending its
laws in order to compel the permitting of greenhouse gas emission.''
\79\ Texas has never qualified this statement, and as a result, EPA
reads this statement to indicate that Texas does not intend to submit a
SIP revision as required under the SIP call.
---------------------------------------------------------------------------
\79\ Texas's 60-day letter, p. 1.
---------------------------------------------------------------------------
This means that a permitting authority for GHG-emitting sources
would not be in place until EPA promulgated a FIP, no earlier than
December 2, 2011. Importantly, Texas has indicated that this one-year
delay in the availability of a permitting authority would, in fact,
mean that under EPA's interpretation of the CAA, Texas's sources would
face delays in constructing and modifying.\80\ Moreover, Texas
indicated that during 2011, some 167 construction or modification
projects would be affected,\81\ which are significantly more sources
than any other state.
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\80\ Texas 30-day letter, at 5, 6; Texas ``Motion to Stay Three
GHG Actions'' 40-41, Coalition for Responsible Regulation v. EPA,
No. 09-1322 (and consolidated cases).
\81\ See Texas ``Motion to Stay Three GHG Actions'' 41,
Coalition for Responsible Regulation v. EPA, No. 09-1322 (and
consolidated cases).
---------------------------------------------------------------------------
Moreover, Texas's indication that it does not intend to submit a
SIP revision, and that it does not consider its PSD program as being
required to apply to non-NAAQS pollutants, including GHGs, has cast a
spotlight on underlying flaws in Texas's fully approved PSD SIP, and
that, in turn, has brought into play the error-correction provision in
CAA section 110(k)(6). All this is discussed in detail earlier in this
preamble, but to reiterate for convenience: CAA section 110(k)(6)
provides, ``Whenever the Administrator determines that the
Administrator's action approving * * * any [SIP] * * * was in error,
the Administrator may * * * revise such action as appropriate.* * *''
Here, the Texas SIP was flawed at the time EPA approved it because it
did not address, or assure adequate legal authority for, application of
the PSD program to pollutants newly subject to regulation, including
non-NAAQS pollutants. As a result, EPA has the authority to determine
that its full approval of the SIP was ``in error'' and to convert that
action to a partial approval and partial disapproval; and as a result
of that, EPA is authorized to promulgate a FIP immediately.
This is an important reason why EPA is proceeding with this error-
correction/partial approval and partial disapproval rulemaking at this
time. This approach allowed EPA to implement a FIP immediately as an
interim rule, instead of waiting until December, 2011, and as a result,
EPA has been able to act as the permitting authority in Texas and in
that capacity, allow Texas sources to avoid delays in construction or
modification. This same approach allows EPA to continue to keep the FIP
in place and continues to act as the permitting authority so that there
are no gaps in coverage for sources to obtain permits.
[[Page 25203]]
With the interim final rule and the present rulemaking, EPA has
both (i) promulgated a SIP call and established a SIP deadline of
December 1, 2011 for Texas, under CAA section 110(k)(5); and (ii)
corrected its error in previous fully approving Texas's PSD program by
converting that action to a partial approval and partial disapproval,
under CAA section 110(k)(6), and then promulgating a FIP immediately,
under CAA section 110(c)(1)(B). For the reasons just discussed, each of
these actions is fully justified under the applicable CAA provisions.
Moreover, there is no preclusion against taking both of these
actions with respect to Texas at this time, for the following reasons:
First, the two actions are based on CAA provisions--CAA section
110(k)(5) (SIP call), and section 110(k)(6) (error correction)--that
overlap, so that it is to be expected that circumstances may arise in
which both apply. If EPA approves a flawed SIP, then circumstances
could well arise under which EPA has a basis for concluding both that
(i) the SIP is ``substantially inadequate'' to meet a CAA requirement,
under CAA section 110(k)(5); and (ii) EPA's action in approving the SIP
was ``in error,'' under CAA section 110(k)(6). The same flaw in the SIP
would be the basis for each of those actions.\82\
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\82\ In contrast, situations could also arise in which EPA has a
basis for imposing a SIP call but not issuing an error correction
because the SIP currently has a substantial inadequacy but was not
flawed at the time of its submittal and approval.
---------------------------------------------------------------------------
This is the case with EPA's two actions concerning Texas. As EPA
stated in the SIP call, the basis for the finding of ``substantial
inadequacy'' was the failure of Texas's approved SIP PSD program to
apply to GHGs, which was rooted in the program's failure to apply
pollutants newly subject to regulation. As EPA stated earlier in this
preamble, the basis for the determination that EPA's previous full
approval of Texas's SIP was ``in error'' was the gap in the SIP due to
the SIP's failure to address, or assure that it has adequate legal
authority for, the application to pollutants newly subject to
regulation.\83\
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\83\ In this case, the substantial inadequacy for which EPA
issued the SIP call, which was the PSD program's failure to apply to
GHGs, is narrower than the flaw in the SIP for which EPA is issuing
the error correction, which is the PSD program's failure to address,
or assure legal authority for, application of PSD to all pollutants
newly subject to regulation. In another case, it is conceivable that
the opposite would be true, that the substantial inadequacy would be
broader than the flaw in the SIP for which EPA issues the error
correction. In that case, if EPA imposed a FIP after the deadline
for SIP submittal related to the SIP call, the FIP would be broader
than the FIP imposed after the disapproval related to the error
correction.
---------------------------------------------------------------------------
Second, each provision, by its terms, is discretionary to EPA, and
neither provision precludes the application of the other. CAA section
110(k)(5) applies ``[w]henever the Administrator finds'' that the SIP
is substantially inadequate. CAA section 110(k)(6) applies ``[w]henever
the Administrator determines'' that her previous action was in error.
Neither provision references the other. Neither provision includes any
requirement or limitation that constrains the application of the other
at any time.
Third, each provision serves a different purpose and when applied
to this case--including in conjunction with the FIP provision in CAA
section 110(c)(1)--leads to a different outcome, but each outcome is
neither dependent on, or compromised by, the other outcome. CAA section
110(k)(5), as applied in the current case, is focused on a present
problem with the SIP, that is, a ``substantial[] inadequacy'' that
currently exists. This provision mandates that EPA require a corrective
SIP revision to address that inadequacy, but further provides that EPA
must allow a reasonable deadline for the state to submit the SIP
revision. In the GHG PSD SIP call, EPA allowed states to, in effect,
choose within a range of deadlines. But if the state fails to submit
the required SIP revision by its deadline, then EPA is required to
promulgate a FIP under CAA section 110(c)(1)(A). CAA section 110(k)(6),
as it applies in the current case, is focused on a past problem with
SIP, that is, a flaw that existed at the time EPA approved the SIP, so
that EPA's approval was ``in error.'' This provision authorizes EPA to
convert the approval to a disapproval, but does not mandate that the
state submit a new SIP revision. This is because the state has already
submitted a SIP revision, the one that is flawed, and EPA has acted on
it. Instead, EPA is required to promulgate a FIP under CAA section
110(c)(1)(B), and EPA may do so immediately. The FIP will remain in
place until the state submits, and EPA approves, a SIP revision.
Viewing the two provisions as applied here together: (i) CAA
section 110(k)(5) allows EPA to exercise its discretion to make a
finding that Texas's SIP is ``substantially inadequate,'' and then to
establish a SIP submittal schedule for Texas, one that is consistent
with whatever choice as to deadline Texas had available to it; and (ii)
CAA section 110(k)(6) allows EPA to exercise its discretion to convert
its previous approval of Texas's SIP, which EPA made ``in error,'' to a
disapproval, and then to promulgate a FIP immediately. The requirement
that Texas submit a corrective SIP revision and do so by a date
certain--a date that Texas exercised some control over--serves the
useful function of establishing a mechanism and a timeframe for Texas
to address the substantial inadequacy in its PSD SIP.\84\ The immediate
promulgation of a FIP serves the useful purpose of assuring the
availability of a permitting authority as of January 2, 2011, so that
Texas sources will not face delays in their plans to construct or
modify. Importantly, the immediate promulgation of a FIP through this
rulemaking does not compromise in any manner the SIP submittal deadline
established for Texas through the SIP call. After EPA's promulgation of
the FIP, Texas remains obligated to submit the corrective SIP revision
by December 1, 2011. As soon as Texas does submit that SIP revision and
EPA approves it, EPA will rescind the part of the FIP that concerns
GHGs. It is always the case that when EPA has promulgated a FIP of any
type in a particular state, the state remains obligated to adopt a SIP
revision. Nothing about a FIP impedes the state from doing so; and when
the state does so and EPA approves the SIP revision, then EPA rescinds
the FIP.
---------------------------------------------------------------------------
\84\ We recognize that Texas has indicated that it does not
intend to submit a SIP revision, but this does not eliminate the
utility of establishing a SIP submittal schedule.
---------------------------------------------------------------------------
It is true that one of the purposes of the SIP call, as applied
here, was to allow states to in effect select an early FIP--by
selecting an early SIP submittal date and then not submitting a SIP by
that date--so as to assure the availability of a permitting authority
for their sources by that early date. And it is further true that
Texas, in its 30-day letter, chose not to select such an early date
and, on the contrary, stated its opposition to a FIP; yet, in this
present rulemaking, EPA is promulgating an immediate FIP for Texas. But
this does not mean that the present rulemaking has compromised the SIP
call or any choices made available to Texas in the SIP call. The focus
of the SIP call, as it related to Texas, was the finding of a
substantial inadequacy in Texas's PSD program, the imposition of a
requirement for Texas to submit a corrective SIP revision, and--based
on Texas's choice--the establishment of a deadline of December 1, 2011
for Texas to do so. The promulgation of an immediate FIP through the
present rulemaking does not disturb that. Texas remains subject to the
December 1, 2011, SIP submittal schedule that EPA established for it,
based on Texas's decision not to respond directly to
[[Page 25204]]
EPA's request that Texas itself identify a deadline.\85\ Texas's
expressed opposition to a FIP does not preclude EPA from imposing one
as justified through the present rulemaking.
---------------------------------------------------------------------------
\85\ In any event, to conclude that the promulgation of a FIP
under this error-correction rulemaking compromised the SIP call
rulemaking would be tantamount to concluding that the SIP call
should somehow take priority over this error correction. There would
be no basis for taking that position. Each action is fully
justifiable in its own right. The process of completing one before
the other does not give the first one a priority simply because it
is first any more than that process would give the second a priority
because the latter is more recent.
---------------------------------------------------------------------------
It is also true that, as EPA stated in the SIP call, ``federalism
principles * * * underlie the SIP call process and the SIP system as a
whole,'' and that means that ``in the first instance, it is to the
state to whom falls the responsibility of developing pollution controls
through an implementation plan.'' 75 FR 77,710/2. And it is further
true that the immediate promulgation of a FIP through the present
error-correction action means that a FIP will be in place in Texas
before the December 1, 2011 deadline established under the SIP call for
Texas to adopt its SIP. However, imposition of the FIP is fully
justified under this error-correction action, as discussed previously,
and is essential to assure that Texas sources will not face delays in
construction or modification, a risk that Texas acknowledges will occur
under EPA's interpretation of the applicable CAA requirements. In any
event, Texas's statement that ``Texas has neither the authority nor the
intention of interpreting, ignoring, or amending its laws in order to
compel the permitting of greenhouse gas emission,'' \86\ as we read it,
is tantamount to a direct statement that it does not intend to submit a
GHG PSD SIP revision, and is a direct statement that it does not intend
to require its sources to obtain permits for their GHG emissions.
Accordingly, it is difficult to see how it could meaningfully be
claimed that an early FIP, promulgated through this rulemaking, could
displace any prerogatives Texas may have under the SIP call to develop
its own SIP revision before the imposition of a FIP or to exercise
control over the permitting of GHG emissions of its sources. Similarly,
Texas has stated that it does not believe that EPA's FIP will be
effective because, according to Texas, EPA will be unable to issue
permits for a lengthy period due to uncertainty over how to apply PSD
requirements to GHG-emitting sources.\87\ Accordingly, it is difficult
to see how it could meaningfully be claimed that a FIP, which Texas
considers ineffective, could adversely affect Texas's interests.
---------------------------------------------------------------------------
\86\ Texas 60-day letter, p. 1.
\87\ Texas 30-day letter.
---------------------------------------------------------------------------
It is also true that under the principles of federalism that
underlie the SIP system, states exercise some discretion over controls
for their industry, so that a state may impose more stringent controls
than minimum CAA requirements. CAA section 116. But this discretion
does not mean that Texas is authorized to create the circumstances
under which its sources face delays in constructing or modifying and
EPA is precluded from promulgating a FIP--when justified under this
rulemaking--for the purpose of protecting those sources against such
delays. Absent this action, Texas sources would face delays in
construction and modification resulting from Texas's decision during
the course of the SIP call to neither adopt a SIP promptly nor
facilitate an early FIP. Those delays do not result from Texas's
decision to impose more stringent controls than the CAA requires. On
the contrary, Texas's action is inconsistent with one of the purposes
of the PSD provisions, which is ``to insure that economic growth will
occur in a manner consistent with the preservation of clean air
resources.'' CAA section 160(3). EPA is justified in interpreting and
applying CAA section 110(k)(6) to correct errors related to Texas's SIP
PSD program in order to effectuate this purpose of PSD. The DC Circuit
has held that the terms of the PSD provisions should be interpreted
with the PSD purposes in mind, New York v. EPA, 413 F.3d 3, 23 (DC
Cir.), rehearing en banc den., 431 F.3d 801 (2005), and the same should
be true of CAA section 110(k)(5) as applied to PSD requirements.
F. Relationship of This Rulemaking to Other States
EPA is not, at this time, undertaking a similar error-correction
rulemaking for any of the other states that are subject to the SIP
call. EPA has discretion as to whether and when to undertake such a
rulemaking, and each of the other states has chosen a course of action
that at present appears to assure that its large GHG-emitting sources
will have a permitting authority available when the sources need one,
and therefore will not face delays in constructing or modifying. As a
result, EPA has not inquired into whether any of these other states
have flaws in their SIP PSD programs as Texas does.
1. Comments on the Relationship of This Rulemaking to Other States
Industry commenters, in addition to the State of Texas, raised
concerns about this rule treating Texas differently than other states.
Other states, such as Arizona, Arkansas, Connecticut, Florida, Idaho,
and Kansas, do not have SIPs that automatically update to incorporate
new requirements, and so regulate new pollutants in a ``stepwise''
fashion, according to these commenters. Moreover, these commenters
argue that EPA's approval of Texas's SIP cannot be considered to have
been in error because, they say, EPA approved other SIPs that, like
Texas's, did not automatically apply PSD to each pollutant newly
subject to regulation.
Several industry commenters also stated that they believe that
EPA's rationale for this rule, read in conjunction with EPA's PSD
Narrowing Rule 75 FR 8253682,536 (December 30, 2010) makes it
impossible for a state to ever have an approvable SIP. This is because,
according to these commenters, states can only have an approvable SIP
if they automatically incorporate Federal requirements when EPA adopts
them. However, the PSD Narrowing Rule was required because those states
that do ``impose PSD applicability on new pollutants in an
unconstrained manner'' in their SIPs do not ensure that states have
adequate funding and personnel to implement the new SIP requirements,
according to commenters.
2. Response to Comments
EPA disagrees with the comments that we are singling out Texas for
unfair treatment for its failure to automatically update its SIP to
incorporate new requirements. Texas is, in fact, unlike each of these
other states. Texas, uniquely among all the states, has stated that it
will not implement PSD requirements for GHGs either by revising or
committing to revise its SIP. It is this refusal that has shined a
spotlight on EPA's error in previously approving Texas's SIP, for the
reasons discussed earlier in this preamble. Moreover, each of the other
states identified by commenters has taken measures to ensure that
permitting for GHG-sources in its state will be available. Arizona,
Arkansas, Florida, and Idaho each have a FIP in place to allow EPA to
issue permits to GHG-emitting sources. Connecticut has submitted a SIP
revision to enable the state to assume responsibility for PSD
permitting of these sources. Kansas already has an approved SIP that
applies PSD to GHGs. Accordingly, it has never been necessary for EPA
to inquire, and EPA has not inquired, into whether these states have
flaws in their PSD SIPs. In addition, the error correction provision is
discretionary: it provides that EPA ``may'' undertake an
[[Page 25205]]
error correction when it finds that its previous action was in error.
Accordingly, even if EPA did inquire into the SIP PSD program approvals
in these other states, EPA would not be required to issue an error
correction for them. In light of the fact that these states are
addressing their GHG-emitting sources as described previously, EPA sees
no need at present to consider an error-correction action with respect
to those states. Finally, EPA disagrees with the commenters' argument
that EPA's approval of these several other PSD SIPs--despite their lack
of an automatic updating mechanism--means that EPA's approval of
Texas's PSD SIP was not in error. As discussed elsewhere in this
rulemaking preamble, the Texas SIP was flawed because it did not
address the applicability of PSD to pollutants newly subject to
regulation, not because it did not automatically apply PSD to such
pollutants. Commenters have not shown that the several other SIPs they
discuss did not address the applicability of PSD to pollutants newly
subject to PSD in some way other than automatic updating. And if any
other of the SIPs, or even all of them, did not do so, then it is
possible that those SIPs were flawed in the same manner as Texas's, and
that in approving them, EPA repeated the same error that it made in
approving Texas's SIP. But to reiterate, section 110(k)(6) is
discretionary with EPA and EPA has no reason to review those SIPs.
EPA also disagrees with the commenters that contend that no SIP
could possibly be approvable given the rationales presented for this
rule and the SIP Narrowing Rule. In this action, EPA identifies as the
flaw in the SIPs the failure to address the applicability of PSD to
newly regulated pollutants (along with the failure to provide adequate
assurances of legal authority to apply PSD to such pollutants). As
noted earlier in this preamble, there are several ways that states
could address this flaw, and although providing for automatic updating
is one way--and the one that most states have adopted--it is not the
only way. A state could, for example, commit to adopt a SIP revision to
apply PSD to a newly regulated pollutant. In the course of addressing
the applicability of PSD to a newly regulated pollutant, the state
could address any associated resource issues. Moreover, as EPA
explained in the SIP Narrowing rule, the flaw that needed correcting by
that rule was the ``combination of that unconstrained applicability and
the failure of the SIP to plan for adequate resources for that
applicability, and to do so on the appropriate time-table.'' (emphasis
added) 75 FR 82,542 (December 30, 2010). There are, in fact, some
states that were able to revise their SIPs before January 2, 2011. Six
other states and four districts within states were able to interpret
their SIPs to regulate GHG emissions only above the Tailoring Rule
thresholds, and needed no further action by EPA. There is, then, no
``conundrum'' for a state that does not adopt EPA regulations by
reference.
G. Federal Implementation Plan
1. Authority To Promulgate a FIP
In this rulemaking, EPA is promulgating a FIP to apply EPA's PSD
regulatory program to GHG-emitting sources in Texas and to commit to
take action as appropriate with respect to pollutants that become newly
subject to regulation.
The CAA authority for EPA to promulgate a FIP is found in CAA
section 110(c)(1), which provides--
The Administrator shall promulgate a Federal implementation plan
at any time within 2 years after the Administrator * * * (B)
disapproves a State implementation plan submission in whole or in
part, unless the State corrects the deficiency, and the
Administrator approves the plan or plan revision, before the
Administrator promulgates such [FIP].
As indicated earlier in this notice, EPA is partially disapproving
Texas's PSD program by correcting EPA's previous full approval to be a
partial approval and partial disapproval. Accordingly, under CAA
section 110(c)(1)(B), EPA is required to promulgate a PSD FIP for
Texas.
The FIP must be designed to address the flaws in Texas's PSD
program. As discussed earlier in this preamble, the Texas PSD program
contains significant gaps: It does not address, or provide assurances
of adequate legal authority for, application to pollutants newly
subject to regulation, including non-NAAQS pollutants. As a practical
matter, at present, the only pollutant the program does not address is
GHGs. Accordingly, the FIP applies the EPA regulatory PSD program to
GHGs. In addition, the FIP commits to address pollutants that become
newly subject to regulation, as appropriate.
2. Timing of FIP
EPA is promulgating the FIP in this rulemaking, so that it takes
effect immediately upon the partial disapproval. This timing for FIP
promulgation is authorized under CAA section 110(c)(1), which
authorizes us to promulgate a FIP ``at any time within 2 years after''
EPA disapproves a SIP submission in whole or in part. The quoted
phrase, by its terms, establishes a two-year period within which EPA
must promulgate the FIP, and provides no further constraints on timing.
Accordingly, this provision gives EPA discretion to promulgate the FIP
at any point in time within that two-year period, and in this
rulemaking, EPA is promulgating the FIP immediately.
The reason why we are exercising our discretion to promulgate the
FIP immediately is to minimize any period of time during which larger-
emitting sources in Texas may be under an obligation to obtain PSD
permits for their GHGs when they construct or modify, but no permitting
authority is authorized to issue those permits. We believe that acting
immediately is in the best interests of the regulated community. Note
that for similar reasons, in EPA's recently promulgated SIP call, EPA
stated that if a state failed to submit its required SIP revision by
its deadline, EPA would immediately make a finding of failure to submit
and immediately thereafter promulgate a FIP. 75 FR 53,889/2.
The lack of constraints in CAA section 110(c)(1)(B) stands in
contrast to other CAA provisions that do impose requirements for the
timing of proposals. See CAA sections 109(a)(1)(A), 111(b)(1)(B). In
light of the lack of constraints, EPA was free to promulgate the FIP
concurrently with the disapproval action.
3. Substance of GHG PSD FIP
a. Components of FIP
The FIP consists of two components. The first mirrors the GHG PSD
FIP that EPA promulgated for seven states for which EPA issued the PSD
GHG SIP call and, subsequently, issued a finding of failure to submit a
required SIP submittal. Thus, this component of the FIP consists of the
EPA regulations found in 40 CFR 52.21, including the PSD applicability
provisions, with a limitation to assure that, strictly for purposes of
this rulemaking, the FIP applies only to GHGs. Under the PSD
applicability provisions in 40 CFR 52.21(b)(50), the PSD program
applies to sources that emit the requisite amounts of any ``regulated
NSR pollutant[s],'' including any air pollutant ``subject to
regulation.'' However, Texas's partially approved SIP already applies
PSD to other air pollutants. To appropriately limit the scope of the
FIP, EPA amends 40 CFR 52.21(b)(50), as incorporated into the Texas
FIP, to limit the applicability provision to GHGs.
[[Page 25206]]
We adopt this FIP because, as we stated in the proposed GHG PSD
FIP--
it would, to the greatest extent possible, mirror EPA regulations
(as well as those of most of the states). In addition, this FIP
would readily incorporate the phase-in approach for PSD
applicability to GHG sources that EPA has developed in the Tailoring
Rule and expects to develop further through additional rulemaking.
As explained in the Tailoring Rule, incorporating this phase-in
approach--including Steps 1 and 2 of the phase-in as promulgated in
the Tailoring Rule--can be most readily accomplished through
interpretation of the terms in the definition ``regulated NSR
pollutant,'' including the term ``subject to regulation.''
In accordance with the Tailoring Rule, * * * the FIP would apply
in Step 1 of the phase-in approach only to ``anyway sources'' (that
is, sources undertaking construction or modification projects that
are required to apply for PSD permits anyway due to their non-GHG
emissions and that emit GHGs in the amount of at least 75,000 tpy on
a CO2e basis) and would apply in Step 2 of the phase-in
approach to both ``anyway sources'' and sources that meet the
100,000/75,000-tpy threshold (that is, (i) sources that newly
construct and would not be subject to PSD on account of their non-
GHG emissions, but that emit GHGs in the amount of at least 100,000
tpy CO2e, and (ii) existing sources that emit GHGs in the
amount of at least 100,000 tpy CO2e, that undertake
modifications that would not trigger PSD on the basis of their non-
GHG emissions, but that increase GHGs by at least 75,000 tpy
CO2e).
Under the FIP, with respect to permits for ``anyway sources,''
EPA will be responsible for acting on permit applications for only
the GHG portion of the permit, and the state will retain
responsibility for the rest of the permit. Likewise, with respect to
permits for sources that meet the 100,000/75,000-tpy threshold, our
preferred approach--for reasons of consistency--is that EPA will be
responsible for acting on permit applications for only the GHG
portion of the permit, that the state permitting authorities will be
responsible for the non-GHG portion of the permit, and EPA will
coordinate with the state permitting authority as needed in order to
fully cover any non-GHG emissions that, for example, are subject to
BACT because they exceed the significance levels.
75 FR 53,889/3 to 53,890/1.
This formulation of the FIP is authorized because it is part of the
``appropriate'' action EPA is authorized to take as part of EPA's
correction of its previous, erroneous full approval, under CAA section
110(k)(6).
The second component of the FIP consists of a commitment that EPA
will take such action as is appropriate to ensure that pollutants that
become newly subject to regulation are subject to the FIP. If a
pollutant becomes newly subject to regulation in the future, and if
Texas does not take steps to subject it to its PSD program, then EPA
will take the appropriate action.
b. Dual Permitting Authorities
In the GHG PSD FIP proposal, commenters raised concerns about how
having EPA issue the GHG portions of a permit while allowing states
under a FIP to continue to be responsible for issuing the non-GHG
portions of a PSD permit will work in practice. Commenters specifically
identified the potential for a source to be faced with conflicting
requirements and the need to mediate among permit engineers making BACT
decisions.
We well recognize that dividing permitting responsibilities between
two authorities--EPA for GHGs and the state, Texas, in this case, for
all other pollutants--will require coordination between the two
authorities to avoid duplication, conflicting determinations, and
delays. We note that this situation is not without precedent. In many
instances, EPA has been the PSD permitting authority but the state has
accepted a delegation for parts of the PSD program, so that a source
has had to go to both the state and EPA for its permit. In addition,
all nonattainment areas in the nation are in attainment or are
unclassifiable for at least one pollutant, so that every nonattainment
area is also a PSD area. In some of these areas, the state is the
permitting authority for nonattainment NSR and EPA is the permitting
authority for PSD. As a result, there are instances in which a new or
modifying source in such an area has needed a nonattainment NSR permit
from the state and a PSD permit from EPA.
EPA is working expeditiously to develop recommended approaches for
EPA regions and affected states to use in addressing the shared
responsibility of issuing PSD permits for GHG-emitting sources. EPA
delegated the authority to issue PSD permits to GHG-emitting sources to
one state, and is working toward similar delegations in other states.
In addition, EPA has provided training and guidance for permitting
authorities in determining GHG BACT for these sources.
In addition, we note that the concern over dual permitting
authorities would become moot if Texas were either to submit and EPA
approve a SIP revision that applies PSD to GHGs or request a delegation
of permitting responsibility. If it did request and receive a
delegation, it would be responsible for issuing both the GHG part and
the non-GHG part of the permit, and that would moot concerns about
split-permitting.
4. Period for GHG PSD FIP To Remain in Place
In the FIP proposal, we stated our intention to leave any
promulgated FIP in place for as short a period as possible, and to
process any corrective SIP revision submitted by the state to fulfill
the requirements of the SIP call as expeditiously as possible.
Specifically, we stated:
After we have promulgated a FIP, it must remain in place until
the state submits a SIP revision and we approve that SIP revision.
CAA section 110(c)(1). Under the present circumstances, we will act
on a SIP revision to apply the PSD program to GHG sources as quickly
as possible. Upon request of the state, we will parallel-process the
SIP submittal. That is, if the state submits to us the draft SIP
submittal for which the state intends to hold a hearing, we will
propose the draft SIP submittal for approval and open a comment
period during the same time as the state hearing. If the SIP
submittal that the state ultimately submits to us is substantially
similar to the draft SIP submittal, we will proceed to take final
action without a further proposal or comment period. If we approve
such a SIP revision, we will at the same time rescind the FIP.
75 FR 53,889/2-3.
We continue to have these same intentions. Thus, we reaffirm our
intention to leave the GHG PSD FIP in place only as long as is
necessary for the state to submit and for EPA to approve a SIP revision
that includes PSD permitting for GHG-emitting sources. As discussed in
more detail later in this preamble, EPA continues to believe that the
states, including Texas, should remain the primary permitting
authority.
Specifically, EPA will rescind the FIP, in full or in part, if (i)
Texas submits, and EPA approves, a SIP revision to apply Texas's PSD
program to GHG-emitting sources, (ii) Texas provides assurances that in
the future, it will apply its PSD program to all pollutants newly
subject to regulation, including non-NAAQS pollutants, and (iii) Texas
provides ``necessary assurances'' under CAA section 110(a)(2)(E)(ii)
that it ``will have adequate * * * authority under State law'' to apply
its PSD program to such pollutants.
In addition, if Texas does not submit a SIP revision by December 1,
2011, in response to the SIP Call, EPA intends to promulgate, on or
about December 2, 2011, the FIP associated with the SIP call. The GHG
provisions of the FIP promulgated with this error correction rulemaking
will be fully consistent with the provisions in the FIP associated with
the SIP call. The remaining components of the FIP promulgated with this
error correction rulemaking,
[[Page 25207]]
which concern other non-criteria pollutants other than GHGs, will also
remain in place.
5. Primacy of Texas's SIP Process
This action to partially approve and partially disapprove Texas's
SIP PSD program and to promulgate a FIP is secondary to our overarching
goal, which is to assure that it will be Texas that will be the
permitting authority. EPA continues to recognize that Texas is best
suited to the task of permitting because the state and its sources have
experience working together in the state PSD program to process permit
applications. EPA seeks to remain solely in its primary role of
providing guidance and acting as a resource for Texas as it makes the
various required permitting decisions for GHG emissions.
Accordingly, we are prepared to work closely with Texas to help it
promptly develop and submit to us a SIP revision that extends its PSD
program to GHG-emitting sources and that assures that the program will
apply to each pollutant newly subject to regulation in the future. If
Texas submits such a SIP revision, we intend to promptly act on it, and
if we approve it, then we intend to rescind the FIP immediately. Again,
EPA's goal is to have in place in Texas the necessary permitting
authority by the time businesses seeking construction permits need to
have their applications processed and the permits issued--and to
achieve that outcome by means of engaging with Texas directly through a
concerted process of consultation and support.
EPA is taking up the additional task of partially disapproving
Texas's PSD program and promulgating the FIP at this time only because
the Agency believes it is compelled to do so by the need to assure
businesses, to the maximum extent possible and as promptly as possible,
that a permitting authority is available to process PSD permit
applications for GHG-emitting sources once they become subject to PSD
requirements. At the same time, we invite Texas to accept a delegation
of authority to implement the FIP, so that it will still be the state
that processes the permit applications, albeit operating under Federal
law.
V. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulations and Regulatory Review
Under Executive Orders (EO) 12866 (58 FR 51,735, October 4, 1993)
and 13563 (76 FR 3,821, January 21, 2011), this action is a
``significant regulatory action'' because it raises novel legal or
policy issues. Accordingly, EPA submitted this action to the Office of
Management and Budget (OMB) for review under EOs 12866 and 13563 and
any changes made in response to OMB recommendations have been
documented in the docket for this action.
B. Paperwork Reduction Act
This action does not impose any new information collection burden.
The 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 respectively.
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 comments rulemaking requirements under the Administrative
Procedure Act 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 rule on small
entities, small entity is defined as: (1) A small business as defined
in the U.S. Small Business Administration's (SBA) regulations at 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.
Although this rule would lead to Federal permitting requirements
for certain sources, those sources are large emitters of GHGs. After
considering the economic impacts of this rule on small entities, I
certify that this action will not have a significant economic impact on
a substantial number of small entities. This final rule will not impose
any requirements on small entities.
D. Unfunded Mandates Reform Act
This action contains no Federal mandates under the provisions of
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA, 2 U.S.C.
1531-1538) for state, local or Tribal governments or the private
section. The action imposes no enforceable duty on any state, local or
Tribal governments or the private sector. With this action, EPA is only
revising its previous approval of the Texas PSD SIP to be a partial
approval and partial disapproval and promulgating a FIP to address the
deficiencies as authorized by the CAA. Thus, this rule is not subject
to the requirements of sections 202 or 205 of UMRA.
This action 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.
E. Executive Order 13132--Federalism
This action does not have federalism implications. It will not have
substantial direct effects on Texas, on the relationship between the
national government and Texas, or on the distribution of power and
responsibilities among the various levels of government, as specified
in Executive Order 13132. The CAA specifies conditions under which
states may request, and EPA may approve state implementation of CAA
requirements. The CAA also specifies the action EPA is to take,
including issuing a FIP, when states have not met their requirements
under the CAA. This rulemaking does not change that distribution of
power between the states and EPA. With this action, EPA is only
revising its previous approval of the Texas PSD SIP to be a partial
approval and partial disapproval and promulgating a FIP to address the
deficiencies identified in the Texas SIP as authorized by the CAA.
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 solicited comment on the proposal for this action.
Comments from state government organizations are addressed within this
preamble and supporting materials available in the docket for this
rulemaking.
F. Executive Order 13175--Consultation and Coordination With Indian
Tribal Governments
This action does not have Tribal implications, as specified in
Executive Order 13175 (65 FR 67,249, November 9, 2000). In this action,
EPA is not addressing any Tribal implementation plans. This action is
limited to Texas's
[[Page 25208]]
PSD SIP. Thus, Executive Order 13175 does not apply to this action.
G. Executive Order 13045--Protection of Children From Environmental
Health Risks and Safety Risks
EPA interprets EO 13045 (62 FR 19,885, 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 has the
potential to influence the regulation. This action is not subject to EO
13045 because EPA is only revising its previous approval of the Texas
PSD SIP to be a partial approval and partial disapproval and
promulgating a FIP to address the deficiencies as authorized by the
CAA.
H. Executive Order 13211--Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
This action is not a ``significant energy action'' as defined in
Executive Order 13211 (66 FR 28,355 (May 22, 2001)), because it is not
likely to have a significant adverse effect on the supply,
distribution, or use of energy. With this action, EPA is only revising
its previous approval of the Texas PSD SIP to be a partial approval and
partial disapproval and promulgating a FIP to address the deficiencies
as authorized by the CAA. This action will provide energy facilities in
Texas that are large emitters of GHG a mechanism to get necessary PSD
permits to construct or modify.
I. National Technology Transfer and Advancement Act
Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Public Law 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. NTTAA directs EPA to provide
Congress, through OMB, explanations when the Agency decides not to use
available and applicable voluntary consensus standards.
This rulemaking does not involve technical standards. Therefore,
EPA is not considering 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 7,629, February 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 U.S.
EPA has determined that this final rule will not have
disproportionately high and adverse human health or environmental
effects on minority or low-income populations because it does not
affect the level of protection provided to human health or the
environment. With this action, EPA is only revising its previous
approval of the Texas PSD SIP to be a partial approval and partial
disapproval and promulgating a FIP to address the deficiencies as
authorized by the CAA.
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 1996,
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. Section 808 allows the issuing agency to
make a rule effective sooner than otherwise provided by the CRA if the
agency makes a good cause finding that notice and public procedure is
impracticable, unnecessary, or contrary to the public interest. This
determination must be supported by a brief statement, 5 U.S.C. 808(2).
As stated previously, EPA has made such a good cause finding, including
the reasons therefore, and established an effective date of May 1,
2011. EPA will submit a report containing this rule and other required
information to the United States Senate, the United States House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. This action is not
a ``major rule'' as defined by 5 U.S.C. 804(2).
VI. Judicial Review
Section 307(b)(1) of the CAA specifies which Federal Courts of
Appeal have jurisdiction to hear petitions for review of which final
actions by EPA. This section provides, in part, that petitions for
review must be filed in the Court of Appeals for the District of
Columbia Circuit: (i) When the agency action consists of ``nationally
applicable regulations promulgated, or final actions taken, by the
Administrator,'' or (ii) when such action is locally or regionally
applicable, if ``such action is based on a determination of nationwide
scope or effect and if in taking such action the Administrator finds
and publishes that such action is based on such a determination.''
This rule is based on a determination of nationwide scope or
effect. Texas's response to the SIP call--including Texas's statements
that it does not intend to submit a SIP revision and its decision not
to identify a SIP submittal deadline, which have placed its sources at
risk for delays in construction or modification--led us to determine
that we should examine whether there may be a flaw in Texas's SIP that
was present at the time of our approval. We then conducted a closer
inquiry and on the basis of that, we are concluding that in fact a flaw
was present. As a result, we are authorized to undertake an error
correction, as we are doing in this rulemaking. For all other states
subject to the SIP call, their response to the SIP call--which did not
raise the concerns Texas's did and which assured that their sources
would not be at risk for delays in construction or modification--led us
to determine that it was not necessary to examine further whether their
SIPs were flawed at the time we approved them. That determination--
whether to examine the SIPs further--is a determination of nationwide
scope or effect because it affected Texas and the 12 other states
subject to the SIP call. Further indication that this is a
determination is of nationwide scope or effect is that EPA is making it
as part of the complex of rules EPA has promulgated to implement the
GHG PSD program for each of the states in the nation. Those rules
include (i) the Tailoring Rule and the Johnson Memo Reconsideration,
which revise EPA regulations to incorporate the Tailoring Rule
thresholds, and which apply in each state that does not have an
approved SIP PSD program, and therefore operates under EPA's
regulations; (ii) the SIP Call, which applies in each state that has an
EPA-approved SIP PSD program but does not apply that program to GHG-
emitting sources; and (iii) the PSD Narrowing rule, which applies in
each state that has an EPA-approved SIP PSD program
[[Page 25209]]
that does apply to GHG-emitting sources.
Thus, under section 307(b)(1) of the Act, judicial review of this
final action is available by filing of a petition for review in the
U.S. Court of Appeals for the District of Columbia Circuit by July 5,
2011.
Pursuant to CAA section 307(d)(1)(B), this action is subject to the
requirements of CAA section 307(d) to the extent it promulgates a FIP
under CAA section 110(c). In addition, pursuant to CAA section
307(d)(1)(V), which authorizes the Administrator to determines that
actions other than those specifically listed in CAA section 307(d)(1)
are subject to the provisions of CAA section 307(d), EPA is making that
determination for this action to the extent it constitutes an error
correction under CAA section 110(k)(6); a rescission of EPA's previous
approval and a limited approval and disapproval of Texas's PSD SIP,
under CAA section 110(k)(3); or any other action.
IX. Statutory Authority
The statutory authority for this action is provided by sections
101, 110, 114, 116, 301, and 307(d) of the CAA as amended (42 U.S.C.
7401, 7410, 7414, 7416, 7601, and 7607(d)).
List of Subjects in 40 CFR Part 52
Air pollution control, Carbon dioxide, Carbon dioxide equivalents,
Carbon monoxide, Environmental protection, Greenhouse gases,
Hydrofluorocarbons, Incorporation by reference; Intergovernmental
relations, Lead, Methane, Nitrogen dioxide, Nitrous oxide, Ozone,
Particulate matter, Perfluorocarbons, Reporting and recordkeeping
requirements, Sulfur hexafluoride, Sulfur oxides, Volatile organic
compounds.
Dated: April 22, 2011.
Lisa P. Jackson,
Administrator.
For the reasons set out in the preamble, title 40, chapter I of the
Code of Federal Regulations is amended as follows:
PART 52--[Amended]
0
1. The authority citation for part 52 continues to read as follows:
Authority: 42 U.S.C. 7401 et seq.
0
2. Section 52.2305 is added to read as follows:
Sec. 52.2305 What are the requirements of the Federal Implementation
Plan (FIP) to issue permits under the Prevention of Significant
Deterioration requirements to sources that emit greenhouse gases?
(a) The requirements of sections 160 through 165 of the Clean Air
Act are not met to the extent the plan, as approved, for Texas does not
apply with respect to emissions of the pollutant GHGs from certain
stationary sources. Therefore, the provisions of Sec. 52.21 except
paragraph (a)(1) are hereby made a part of the plan for Texas for:
(1) Beginning on May 1, 2011, the pollutant GHGs from stationary
sources described in Sec. 52.21(b)(49)(iv), and
(2) Beginning July 1, 2011, in addition to the pollutant GHGs from
sources described under paragraph (a)(1) of this section, stationary
sources described in Sec. 52.21(b)(49)(v).
(b) For purposes of this section, the ``pollutant GHGs'' refers to
the pollutant GHGs, as described in Sec. 52.21(b)(49)(i).
(c) In addition, the United States Environmental Protection Agency
shall take such action as is appropriate to assure the application of
PSD requirements to sources in Texas for any other pollutants that
become subject to regulation under the Federal Clean Air Act for the
first time after January 2, 2011.
[FR Doc. 2011-10285 Filed 4-29-11; 8:45 am]
BILLING CODE 6560-50-P