On February 24th, U.S. EPA announced that it would keep in tact the greenhouse gas (GHGs) thresholds for when federal permitting requirements would be triggered. In announcing that it would not ratchet down the trigger thresholds, EPA said state permitting authorities need more time to develop proper infrastructure as well as expertise in GHG permitting.
Under EPA’s Tailoring Rule, EPA put in place much higher thresholds for when federal permitting would be triggered than appear in the Clean Air Act. The Act says any source with emissions of a regulated pollutant of 100/250 tons per year (tpy) should obtain a federal permit. This threshold would apply to GHGs but for the Tailoring Rule.
EPA said that applying 100/250 tpy triggers would result in hundreds of thousands of federal permits. Therefore, to avoid these "absurd results" EPA relaxed the standard through the Tailoring Rule. Step 1 of the Tailoring Rule applied to sources that trigger federal permitting anyway. Step 2 instituted a 100,000 tpy threshold for GHGs emitting from new sources and existing sources and any increase of 75,000 tpy of GHGs from existing sources would trigger permitting.
In Step 3 of the Tailoring Rule EPA was to examine the progress the states made in implementing the new trigger thresholds for GHGs. EPA said it would consider whether to lower the threshold to 50,000 tpy.
EPA’s Step 3 Keeps 100,000 TPY and 75,000 TPY Triggers in Place
Under EPA’s proposed Step 3 rule, new facilities with GHGs emissions of 100,000 tons per year (tpy) of carbon dioxide equivalent (CO2e) will be required to obtain a federal air permit (known as a "PSD permit"). Existing facilities that emit 100,000 tpy of CO2e and make changes that increase the GHG emission by at least 75,000 tpy CO2e will also trigger a PSD permit. Facilities that must obtain a PSD permit anyway in order to include other regulated pollutants, must also address GHG emission increases of 75,000 tpy or more of CO2e. New and existing sources with GHG emissions above 100,000 tpy CO2e must also obtain operating permits.
The proposal is in the 45 day public comment period after it is published in the federal register. There will also be a public hearing on March 20, 2012.
EPA’s Walks Tightrope in Administering the Tailoring Rue
In my last post, I discussed the current legal challenge to EPA’s climate change regulations, including the Tailoring Rule. I pointed out that the challenge to the Tailoring Rule is the most likely to succeed because EPA claims it can re-write a statute (the Clean Air Act) through regulation.
In arguing it has the authority to change the trigger standards in the Clean Air Act through rulemaking, EPA points to the legal theory that applying the statutory thresholds (100/250 tpy) would result in absurd results- thousands of permits that would flood both EPA and the states.
The tightrope EPA is walking is that, even if it has the legal authority to support the Tailoring Rule, it must still eventually ratchet down the GHG triggers to 100/250 tpy. In an election year, it was highly unlikely EPA would have moved the thresholds down to 50,000 tpy of CO2e in Step 3 of the Tailoring Rule as EPA previously suggested it might do.
EPA made the right choice. However, EPA action comes at the same time when the Tailoring Rule is being challenged in federal court. The Court may be less likely to buy EPA’s argument that it will get to the 100/250 thresholds eventually when it decided to keep in place the initial thresholds and not demonstrate progress toward reaching the statutory thresholds..