Industries, Regulators Push EPA to Expand Flexibility in Greenhouse Gas Permits

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Tailoring Rule on Greenhouse Gases  


Key Development: EPA streamlining efforts for greenhouse gas permitting do not sufficiently alleviate burden, industry groups, air regulators say.

Potential Impact: Instead, they recommend that EPA consider alternatives such as general permitting for greenhouse gases, presumptive BACT determinations, broader use of plantwide applicability limits.

By Andrew Childers  

The Environmental Protection Agency can do more to ease the greenhouse gas permitting burden on affected businesses, industry groups said in comments on the proposed third step of the tailoring rule.

Although EPA's proposal would not alter the emissions thresholds for obtaining greenhouse gas permits under the prevention of significant deterioration and Title V operating permit programs, the agency can go beyond the measures it has suggested to streamline the permitting process, industry groups said.

Their recommendations include broadening use of plantwide applicability limits to include the largest emissions sources, setting source-specific emissions limits that would eliminate the need to determine required controls on a case-by-case basis, and exempting from permitting those facilities whose actual emissions are below the thresholds even if they have the potential to emit more.

State, Local Officials Support Thresholds.

State and local regulators also approved of EPA's decision not to lower the permitting thresholds. That will allow them additional time to develop the resources necessary to issue the permits. State regulators also encouraged EPA to streamline the permitting process.

EPA proposed the third step of its tailoring rule March 8 (77 Fed. Reg. 14,226; 38 DER A-10, 2/28/12).

The proposed rule would retain the existing thresholds for stationary emission sources to obtain prevention of significant deterioration and Title V operating permits for greenhouse gases.

The tailoring rule requires new sources that emit 100,000 tons per year of carbon dioxide-equivalent and existing sources that make modifications that increase their emissions by 75,000 tons per year to obtain the permits.

The comment period on the proposed rule closed April 20.

EPA Proposes Streamlining Permits.

As part of the proposed third step rule, EPA suggested steps to streamline the permitting process such as plantwide applicability limits for emissions or synthetic minor permitsthat would keep them below the permitting thresholds in areas subject to a greenhouse gas prevention of significant deterioration program federal implementation plan.

While the Edison Electric Institute, a power plant trade group, supports EPA's effort to streamline permitting, the options proposed would more likely benefit smaller power plants rather than larger units, it said. Many states have not updated their regulations to include plantwide applicability limits, it said in its comments.

“In general, the limited nature of the proposed options and the complexity of the regulations make [plantwide applicability limits] an unavailable or unattractive option for most if not all” electricity generating units, the Edison Electric Institute said.

Proposals Called 'Limited in Scope.'

A coalition of industry groups, including the American Petroleum Institute, the American Chemistry Council, and the National Association of Manufacturers, said in its comments that EPA's streamlining proposals are “very limited in scope and applicability.”

While the National Association of Clean Air Agencies said in its comments that it “generally supports” EPA's proposal to expand use of plantwide applicability limits for greenhouse gases, it said the proposed rule did not provide specific language on how the limits would be implemented. It asked EPA to propose a separate plantwide applicability limit for greenhouse gases if it chooses to explore that option.

The Sierra Club, the Natural Resources Defense Council, the Environmental Defense Fund, the Center for Biological Diversity, and the Clean Air Task Force said in their comments that EPA's proposal to streamline the permitting requirements was “premature” because the proposed rule does not include the necessary regulatory text.

Presumptive BACT, General Permits Recommended.

EPA should consider alternative permitting approaches such as issuing general permits that allow sources to emit pollutants below specified thresholds without obtaining individual permits or establishing emissions limits for various sources that would be presumed to be the equivalent of best available control technology, eliminating the need to determine required controls on a case-by-case basis, several industry groups said.

The Utility Air Regulatory Group said in its comments that EPA's proposed approaches would do little to ease the burden on the largest emitters. Instead, it recommended EPA broaden its plantwide applicability proposal to allow permitting authorities to consider greenhouse gases in total on a carbon dioxide-equivalent basis rather than individually.

It also asked that EPA guarantee facilities that choose to comply with a plantwide applicability limit will be considered compliant for a period of 10 years even if the agency subsequently lowers the permitting threshold.

Explicit Deadlines in Review Process Urged.

The American Chemistry Council and other industry groups urged EPA to adopt explicit deadlines for reviewing permit applications as a method to streamline the process. TheClean Air Act requires the permits be completed within one year, but it does not provide specific deadlines for steps in the review process.

The National Association of Clean Air Agencies also urged EPA to eliminate “empty permits” for sources that are required to obtain Title V permits for their greenhouse gas emissions but are not required to install any pollution controls.

“NACAA supports this concept as a streamlining measure that could reduce the resources required to administer the Title V permitting program without sacrificing environment protection,” the air regulators said.

A coalition of industry groups, including the American Forest & Paper Association, the American Wood Council, and the American Fuel & Petrochemical Manufacturers, recommended in its comments that EPA allow states to issued cap-based permits and synthetic minor permits. The industry group also said that EPA should exclude from permitting those sources that actually emit 50,000 tons of carbon dioxide-equivalent but have the potential to trigger the permitting thresholds from the need to apply for permits.

EPA's Clean Air Act Advisory Committee has convened a work group to recommend methods to improve the greenhouse gas permitting process. The full committee is expected to review the recommendations and forward them to EPA in October (80 DER A-12, 4/26/12).

Retaining Thresholds Not Justified.

Environmental groups rejected EPA's assertion that state regulators need more time to develop the resources to issue the greenhouse gas permits before lowering the thresholds. The number of actual permit applications have been well below EPA's projections, the Sierra Club, NRDC, the Environmental Defense Fund, the Center for Biological Diversity, and the Clean Air Task Force said.

“In the initial version of the tailoring rule, EPA had no choice but to rely on estimates of demand for [greenhouse gas] permitting. This is no longer the case,” the environmental groups said. “What actually happened during the first year of the phase-in is now known: EPA's estimates of the administrative burdens of permitting [greenhouse gas]-emitting sources were too high. That reality necessarily displaces EPA's original projections, and must inform whatever revised estimates EPA may make of permitting burdens in the next few years. But EPA has not adjusted its predictions downwards.”

EPA in December had estimated that 1,607 permits would be issued each year at the current permitting thresholds even though 18 permits had been issued at the time, the environmental groups said. According to EPA, only 31 companies have received greenhouse gas permits as of April 13.

EPA Must Demonstrate Problem.

Given the low numbers of permit applications to date, the environmental groups said EPA must demonstrate that it would be impossible to lower the permitting thresholds.

“This gulf between reality and estimate must be thoroughly addressed in assessing future expected demand on permitting agencies, but EPA has not provided any new assessment here,” they said.

By Andrew Childers  

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