EPA Seeks To Change Thresholds in Clean Air Act

On December 23, AGC submitted comments on an EPA proposed "tailoring rule" that would change the thresholds specific to greenhouse gas emissions as they would apply to two stationary source permitting programs under the Clean Air Act: (1) new construction and major modification permits and (2) operating permits. EPA proposed this tailoring rule in anticipation of the regulation of greenhouse gases from stationary sources under the Clean Air Act, which is triggered once the Agency begins regulating mobile sources under the Act . EPA is expected to do so in 2010 when it finalizes new standards for motor vehicles. The proposed Prevention of Significant Deterioration/Title V under the Clean Air Act for Greenhouse Gas Tailoring Rule would temporarily raise the greenhouse gas emissions applicability thresholds for covered stationary sources under the existing Prevention of Significant Deterioration (PSD) and the Title V permitting programs to 25,000 metric tons per year carbon dioxide equivalent (tpy CO2e).  The 25,000 metric tpy CO2e threshold is the same amount that EPA is using in the Mandatory Reporting Rule and the same amount identified in recent legislation debated in Congress. If finalized, facilities that meet the 25,000 metric tpy CO2e applicability threshold would need to obtain construction and operating permits under the Clean Air Act.  Should EPA keep the current thresholds of 100-250 tons per year, EPA estimates that nearly a million buildings would be affected by the PSD permitting program and more than six million new facilities would need Title V permits.  In its proposed rule, EPA asserts the proposal is necessary to prevent state permitting authorities from being paralyzed by permit applications.  State permitting authorities have expressed concern to EPA that they do not have the staff and EPA has not provided enough time to accommodate large increases in permits.  Permitting authorities already are facing budget and staffing constraints, and the typical PSD permit currently takes an average of 319 days to process. Whereas AGC can appreciate that EPA seeks to raise the threshold to reduce and/or delay the impact of these two programs on small businesses, AGC agrees with the Small Business Administration that the proposed revised thresholds are too low and that the phase in period for lowering the threshold should be longer.  Small businesses will receive only temporary and uncertain protection.  EPA also has proposed to re-evaluate and possibly lower the thresholds in the next few years, which would bring more facilities under the applicability thresholds in the permitting programs.  Moreover, questions exist regarding the legality of EPA action to change the Clean Air Act without congressional direction, so this temporary protection may be challenged in short order.  AGC has long warned of the danger in regulating greenhouse gas emissions under the Clean Air Act and prefers congressional action to address these emissions.  The Act was intended to regulate criteria pollutants from distinct and limited sources where the benefits of reducing those emissions are measurable and local, not to address ubiquitous and global greenhouse gases from many (if not all) sources where reducing those emissions will not have a measurable benefit at the local level.  Other programs in the Act require states to reduce emissions of criteria pollutants or suffer penalties including a loss of federal funding; should these programs also be triggered for greenhouse gas emissions, states will be unable to demonstrate a reduction in local greenhouse gas emissions (i.e., be in "attainment"). To read AGC's December 23 comment letter, click here. To read an overview of legislative and regulatory developments in 2009, click here. For additional background information, visit the AGC Legislative Action Center. Click here.