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Greenhouse Gas Regulations Under the Clean Air Act

Greenhouse Gas Regulations Under the Clean Air Act. Mack McGuffey Troutman Sanders LLP. CO2. It’s an “air pollutant,” right? So what’s the big deal?. Massachusetts v. EPA , 549 U.S. 497 (2007)

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Greenhouse Gas Regulations Under the Clean Air Act

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  1. Greenhouse Gas Regulations Under the Clean Air Act Mack McGuffey Troutman Sanders LLP

  2. CO2

  3. It’s an “air pollutant,” right? So what’s the big deal? • Massachusetts v. EPA, 549 U.S. 497 (2007) • Stevens: “On its face, the definition [of ‘air pollutant’] embraces all airborne compounds of whatever stripe.” • Scalia: “It follows that everything airborne, from Frisbees to flatulence, qualifies as an ‘air pollutant.’” • Proposed Endangerment Finding, 74 Fed. Reg. 18,886 (Apr. 24, 2009) • “Today the Administrator is proposing to find that greenhouse gases in the atmosphere endanger the public health and welfare of current and future generations.”

  4. It’s an “air pollutant,” right? So what’s the big deal? • Proposed Light Duty Vehicle Rule (LDVR), 74 Fed. Reg. 49,454 (Sept. 28, 2009) • Johnson Memorandum Reconsideration, 75 Fed. Reg. 17,004 (Apr. 2, 2010) • “PSD permitting requirements will not apply to a newly regulated pollutant until a regulatory requirement to control emissions of that pollutant ‘takes effect.’” Once the LDVR “takes effect” on January 2, 2011, PSD and Title V automatically apply to greenhouse gases.

  5. It’s an “air pollutant,” right? So what’s the big deal? • Proposed Tailoring Rule, 74 Fed. Reg. 55,292 (Oct. 27, 2009) • At a 25,000-tpy CO2e threshold, “the program will remain of a manageable size, so that permitting authorities will be able to process permit applications and issue permits, which sources must have to construct or expand.”

  6. It’s an “air pollutant,” right? So what’s the big deal? 400,000 Public Comments • Without the rule, literally millions of new major sources would require millions of new permits • Proposed threshold would have been 50 times more stringent than any other thresholds (think 2 tpy NOxor 500,000 tpy CO2) • No guidance on control requirements for CO2 • Even state agencies that previously complained about EPA’s lack of progress of CO2 request a higher threshold and guidance on how to implement the rule

  7. A Bigger Boat Final PSD & Title V GHG Tailoring Rule, 75 Fed. Reg. 31514 (June 3, 2010) • 75,000 tpy PSD significance threshold • 100,000 tpy Title V major source threshold • EPA promises not to go below 50,000 tpy until at least 2016 • Phased implementation, beginning with currently regulated sources

  8. A Bigger Boat STEP I: January 2, 2011 Applies to “anyway” sources (sources and projects that would trigger Title V and PSD “anyway”) • Projects that would trigger PSD anyway must address GHG in their PSD permits (unless already permitted by January 2, 2011) • Sources that already have a Title V permit must add GHG requirements during next revision or renewal (not the Mandatory GHG Reporting Rule, but any new PSD or state GHG requirements)

  9. A Bigger Boat STEP 2: July 1, 2011 Applies to any other source or major modification above the thresholds • Projects that would not otherwise trigger PSD, but increase GHG emissions by > 75,000 tpy CO2e • Sources that do not already have a Title V permit with > 100,000 tpy CO2e potential to emit (PTE) PSD Transition Policy: Sources that have already “begun actual construction” of a project are exempt

  10. A Bigger Boat STEP 3: July 1, 2013? EPA promises to complete another rulemaking to address even smaller sources by July 1, 2012 that could result in even lower thresholds by July 1, 2013 (50,000 tpy CO2e)

  11. Possible Leaks • “Begin Actual Construction?” “[A] Step 2 source that was not required to obtain a PSD permit before Step 2 begins would need to obtain a PSD permit addressing GHGs if it has not yet begun actual construction prior to Step 2.” “[A] Step 2 source that does not anticipate the ability to begin actual construction before Step 2 begins should have enough lead time to submit a PSD permit application and obtain the necessary permit without significantly delaying the project further.”

  12. Possible Leaks • State Implementation • Because most states implement their own PSD and Title V permitting programs, it may be necessary for them to revise their regulations before implementing the Tailoring Rule. • Some states are already beginning the revision process. • EPA has asked for comment from states as to whether they may simply interpret their rules to apply the Tailoring Rule, new EPA rulemaking may be forthcoming.

  13. Possible Leaks • CO2e and Mass-Based Cap? Example: A modification project results in a 5 tpy increase of SF6 (with a GWP value of 23,900), but also results in a 100 tpy reduction in CO2. “[T]here would be a net decrease of GHG emissions on a mass basis (5 tpy – 100 tpy = –95 tpy). Because there is no mass-based increase of GHG, this project does not trigger PSD, despite the fact that the net GWP-adjusted emissions increase of SF6 in this example would equal 119,500 tpy of CO2e ….”

  14. Possible Leaks • CO2 BACT? “Through this final rule we are not amending our regulations or issuing guidance on BACT for GHGs. … [W]e recognize the need to develop and issue technical and policy guidance for permitting of GHGs, and we plan to accomplish it through a separate effort that will involve stakeholder input.” TRUST US.

  15. Possible Leaks • Biogenic Emissions? Count ‘em. “We are mindful of the role that biomass or biogenic fuels and feedstocks could play in reducing anthropogenic GHG emissions … Nevertheless, we have determined that our application of the ‘absurd results,’ ‘administrative necessity,’ and one-step-at-a-time legal rationales that support this rule … does not provide sufficient basis to exclude emissions of CO2 from biogenic sources.”

  16. Possible Leaks • Major for GHGs, major for all? Example: A project at a minor source increases NOx by 41 tpy, PSD? What if that source has a PTE > than 100,000 tpy CO2e, even though the project does not increase GHGs, PSD? Tailoring Rule: “[T]he pollutant GHGs shall [] be subject to regulation: … [a]t an existing stationary source that emits or has the potential to emit 100,000 tpy CO2e, when such stationary source undertakes a physical change or change in the method of operation that will result in an emissions increase of 75,000 tpy CO2e or more.” “‘subject to regulation’ is one of four terms that should be considered not to apply literally in the case of GHG sources.”

  17. Possible Leaks • Other Regulatory Programs Triggered by Endangerment Finding? • NAAQS • NSPS • MACT

  18. Greenhouse Gas Regulations Under the Clean Air Act Mack McGuffey Troutman Sanders LLP

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