Tinkering, Tailoring: EPA Issues New Rule for Greenhouse Gases Under Clean Air Act

On May 13, 2010, the day after Sens. Kerry (D-Mass.) and Lieberman (D-Conn.) released a draft of a new Senate global climate bill, EPA issued a final rule to "tailor" Clean Air Act (CAA) requirements for greenhouse-gas (GHG) emissions. The new tailoring rule affects the scope of two CAA programs:

the Prevention of Significant Deterioration (PSD) program for pre-construction and pre-modification review, and the Title V permitting program. EPA had issued its proposed tailoring rule on September 30, 2009, the same day Sens. Boxer (D-Calif.) and Kerry introduced their comprehensive global climate bill in the Senate, which has gone nowhere. Just as the new draft Kerry/Lieberman bill would cut back significantly on the 2009 Boxer/Kerry bill, EPA's final tailoring rule is much more lenient in scope and applicability than the tailoring rule EPA proposed in 2009. And the new final tailoring rule is orders of magnitude more lenient in scope and applicability than the terms of the CAA would appear to require. It is the terms of the CAA, after all, that are being tailored.

The basics of EPA's new final tailoring rule are summarized as follows, with a comparison to the 2009 proposed rule and the relevant CAA provisions in brackets where pertinent.

Starting January 2, 2011 Through June 30, 2011 — Step 1

Only new constructions/modifications already subject to PSD on the basis of other pollutants would be subject to PSD for GHG emissions. [EPA's 2009 proposed tailoring rule did not provide a phase-in period limited to projects already subject to PSD.]

For these permits, only GHG increases of 75,000 tons per year (tpy) or more of total GHG, on a CO2e basis,1 would trigger the need to determine the Best Available Control Technology (BACT) for GHG emissions. [EPA's 2009 proposed tailoring rule requested comment on a range of 10,000 –25,000 tpy increase as a "modification" trigger.]

Only sources currently subject to the Title V permit program on the basis of other pollutants would be subject to Title V requirements for GHGs.

After June 30, 2011 — Step 2

PSD permitting requirements will apply to any new source with GHG emissions of at least 100,000 tpy. [EPA's 2009 proposed tailoring rule specified 25,000 tons. The CAA specifies 100 or 250 tpy, depending upon the type of source.

Existing source modifications that increase GHG emissions by at least 75,000 tpy will be subject to PSD. [EPA's 2009 proposed tailoring rule requested comment on a range of 10,000 –...