Approval and Promulgation of Implementation Plans; Georgia: Prevention of Significant Deterioration; Greenhouse Gas Tailoring Rule and Fine Particulate Matter Revision

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Proposed rule.

SUMMARY:

EPA is proposing to approve a draft revision to the Georgia State Implementation Plan (SIP), submitted by the State of Georgia, through the Georgia Department of Natural Resources' Environmental Protection Division (EPD), to EPA on September 30, 2010, for parallel processing. The proposed revision makes two changes for which EPA is proposing approval in today's rulemaking. First, the proposed SIP revision modifies Georgia's New Source Review (NSR) Prevention of Significant Deterioration (PSD) program. Specifically, the proposed SIP revision establishes appropriate emission thresholds for determining which new stationary sources and modification projects become subject to Georgia's PSD permitting requirements for their greenhouse gas (GHG) emissions. Second, the proposed SIP revision incorporates provisions for implementing the PSD program for fine particulate matter (PM_2.5). The first component of this proposed SIP revision is necessary because without it, on January 2, 2011, PSD requirements would apply at the 100 or 250 tons per year (tpy) levels provided under the Clean Air Act (CAA or Act), which would overwhelm Georgia's permitting resources. The second component of this proposed SIP revision (addressing the PM_2.5 national ambient air quality standard (NAAQS)) is necessary to comply with Federal regulations related to PSD permitting. EPA is proposing approval of Georgia's September 30, 2010, SIP revision because the Agency has made the preliminary determination that this SIP revision is in accordance with the CAA and EPA regulations regarding PSD permitting for GHGs and the PM_2.5 NAAQS.

DATES:

Comments must be received on or before December 29, 2010.

ADDRESSES:

Submit your comments, identified by Docket ID No. EPA-R04-OAR-2010-0816 by one of the following methods:

1. http:// www.regulations.gov: Follow the on-line instructions for submitting comments.

2. E-mail: benjamin.lynorae@epa.gov.

3. Fax: (404) 562-9019.

4. Mail: EPA-R04-OAR-2010-0816, Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960.

5. Hand Delivery or Courier: Ms. Lynorae Benjamin, Chief, Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. Such deliveries are only accepted during the Regional Office's normal hours of operation. The Regional Office's official hours of business are Monday through Friday, 8:30 to 4:30, excluding Federal holidays.

Instructions: Direct your comments to Docket ID No. “EPA-R04-OAR-2010-0816.” EPA's policy is that all comments received will be included in the public docket without change and may be made available online at http://www.regulations.gov,, including any personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit through http://www.regulations.gov or e-mail, information that you consider to be CBI or otherwise protected. The http://www.regulations.gov Web site is an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through http://www.regulations.gov,, your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. For additional information about EPA's public docket visit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm.

Docket: All documents in the electronic docket are listed in the http://www.regulations.gov index. Although listed in the index, some information is not publicly available, i.e., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically in http://www.regulations.gov or in hard copy at the Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. EPA requests that if at all possible, you contact the person listed in the FOR FURTHER INFORMATION CONTACT section to schedule your inspection. The Regional Office's official hours of business are Monday through Friday, 8:30 to 4:30, excluding Federal holidays.

FOR FURTHER INFORMATION CONTACT:

For information regarding the Georgia SIP, contact Ms. Twunjala Bradley, Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. Ms. Bradley's telephone number is (404) 562-9352; e-mail address: bradley.twunjala@epa.gov. For information regarding the GHG Tailoring Rule and the PM_2.5 NAAQS PSD requirements, contact Ms. Heather Abrams, Air Permits Section, at the same address above. Ms. Abrams' telephone number is (404) 562-9185; e-mail address: abrams.heather@epa.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. What action is EPA proposing in today's Notice?

II. What is the background for the action proposed by EPA in today's Notice regarding PSD Permitting Requirements for GHG-emitting sources?

III. What is the relationship between today's proposed action and EPA's proposed GHG SIP Call and GHG FIP?

IV. What is the background for the action proposed by EPA in today's Notice regarding the PSD Permitting Requirements for the PM_2.5 NAAQS?

V. What is EPA's analysis of Georgia's proposed SIP revision?

VI. Proposed Action

VII. Statutory and Executive Order Reviews

I. What action is EPA proposing in today's Notice?

On September 30, 2010, EPD submitted a draft revision to EPA for approval into the Georgia SIP to establish appropriate emission thresholds for determining which new or modified stationary sources become subject to Georgia's PSD permitting requirements for GHG emissions. Final approval of Georgia's September 30, 2010, SIP revision will put in place the GHG emission thresholds for PSD applicability set forth in EPA's Tailoring Rule, ensuring that smaller GHG sources emitting less than these thresholds will not be subject to permitting requirements when these requirements begin applying to GHGs on January 2, 2011. Additionally, Georgia's September 30, 2010, SIP revision incorporates Federal requirements into Georgia's SIP for PSD permitting related to the PM_2.5 NAAQS. Pursuant to section 110 of the CAA, EPA is proposing to approve these changes into the Georgia SIP.

Because this draft SIP revision is not yet State-effective, Georgia requested that EPA “parallel process” the SIP revision. Under this procedure, the EPA Regional Office works closely with the State while developing new or revised regulations. Generally, the State submits a copy of the proposed regulation or other revisions to EPA before conducting its public hearing. EPA reviews this proposed State action and prepares a notice of proposed rulemaking. EPA publishes this notice of proposed rulemaking in the Federal Register and solicits public comment in approximately the same time frame during which the State is holding its public hearing. The State and EPA thus provide for public comment periods on both the State and the Federal actions in parallel.

After Georgia submits the formal State-effective SIP revision request (including a response to all public comments raised during the State's public participation process), EPA will prepare a final rulemaking notice for the SIP revision. If changes are made to the SIP revision after EPA's notice of proposed rulemaking, such changes must be acknowledged in EPA's final rulemaking action. If the changes are significant, then EPA may be obliged to re-propose the action. In addition, if the changes render the SIP revision not approvable, EPA's re-proposal of the action would be a disapproval of the revision.

In addition to changes to address PSD permitting requirements for GHGs and PM_2.5, Georgia's September 30, 2010, SIP revision also includes: (1) A provision that excludes facilities that produce ethanol through a natural fermentation process from the definition of “chemical process plants” in the major NSR source permitting program; and (2) a provision that incorporates by reference changes pursuant to EPA's Fugitive Emissions Rule, 73 FR 77882 (December 19, 2008). In today's proposed rulemaking, EPA is not proposing to take action on Georgia's changes to its PSD regulations to exclude facilities that produce ethanol through a natural fermentation process from the definition of “chemical process plants” in the major NSR permitting program, nor is EPA proposing to take action on Georgia's changes to incorporate the provisions of the Fugitive Emission Rule.

II. What is the background for the action proposed by EPA in today's Notice regarding PSD permitting requirements for GHG-emitting sources?

Today's proposed action on the Georgia SIP primarily relates to EPA's “Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule,” Final Rule (the Tailoring Rule). 75 FR 31514. In the Tailoring Rule, EPA established appropriate GHG emission thresholds for determining the applicability of PSD requirements to GHG-emitting sources. These applicability thresholds were designed to ensure that smaller GHG sources will not be subject to GHG permitting requirements. While Georgia already has authority to issue PSD permits governing GHGs when PSD requirements begin applying to GHGs on January 2, 2011, Georgia needs to amend its SIP to incorporate the Tailoring Rule's applicability thresholds. Today's notice announces EPA's proposed approval of a revision to Georgia's SIP that would put these applicability thresholds in place.

A. What are GHGs and their sources?

A detailed explanation of GHGs, climate change and the impact on health, society, and the environment is included in EPA's technical support document for EPA's GHG endangerment finding final rule (Document ID No. EPA-HQ-OAR-2009-0472-11292 at http://www.regulations.gov). The endangerment finding rulemaking is discussed later in this rulemaking. A summary of the nature and sources of GHGs is provided below.

GHGs trap the Earth's heat that would otherwise escape from the atmosphere into space and form the greenhouse effect that helps keep the Earth warm enough for life. GHGs are naturally present in the atmosphere and are also emitted by human activities. Human activities are intensifying the naturally occurring greenhouse effect by increasing the amount of GHGs in the atmosphere, which is changing the climate in a way that endangers human health, society, and the natural environment.

Some GHGs, such as carbon dioxide (CO₂), are emitted to the atmosphere through natural processes as well as human activities. Other gases, such as fluorinated gases, are created and emitted solely through human activities. The well-mixed GHGs of concern directly emitted by human activities include CO₂, methane (CH₄), nitrous oxide (N₂ O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF₆), hereafter referred to collectively as “the six well-mixed GHG,” or, simply, GHGs. Together these six well-mixed GHGs constitute the “air pollutant” upon which the GHG thresholds in EPA's Tailoring Rule are based. These six gases remain in the atmosphere for decades to centuries where they become well-mixed globally in the atmosphere. When they are emitted more quickly than natural processes can remove them from the atmosphere, their concentrations increase, thus increasing the greenhouse effect.

In the U.S., the combustion of fossil fuels (e.g., coal, oil, gas) is the largest source of CO₂ emissions and accounts for 80 percent of the total GHG emissions by mass. Anthropogenic CO₂ emissions released from a variety of sources, including through the use of fossil fuel combustion and cement production from geologically stored carbon (e.g., coal, oil, and natural gas) that is hundreds of millions of years old, as well as anthropogenic CO₂ emissions from land-use changes such as deforestation, perturb the atmospheric concentration of CO₂, and the distribution of carbon within different reservoirs readjusts. More than half of the energy-related emissions come from large stationary sources such as power plants, while about a third come from transportation. Of the six well-mixed GHGs, four (CO₂, CH₄, N₂ O, and HFCs) are emitted by motor vehicles. In the U.S., industrial processes (such as the production of cement, steel, and aluminum), agriculture, forestry, other land use, and waste management are also important sources of GHGs.

Different GHGs have different heat-trapping capacities. The concept of Global Warming Potential (GWP) was developed to compare the heat-trapping capacity and atmospheric lifetime of one GHG to another. The definition of a GWP for a particular GHG is the ratio of heat trapped by one unit mass of the GHG to that of one unit mass of CO₂ over a specified time period. When quantities of the different GHGs are multiplied by their GWPs, the different GHGs can be summed and compared on a carbon dioxide equivalent (CO₂ e) basis. For example, CH₄ has a GWP of 21, meaning each ton of CH₄ emissions would have 21 times as much impact on global warming over a 100-year time horizon as 1 ton of CO₂ emissions. Thus, on the basis of heat-trapping capability, 1 ton of CH₄ would equal 21 tons of CO₂ e. The GWPs of the non-CO₂ GHG range from 21 (for CH₄) up to 23,900 (for SF₆). Aggregating all GHG on a CO₂ e basis at the source level allows a facility to evaluate its total GHG emissions contribution based on a single metric.

B. What are the general requirements of the PSD program?

1. Overview of the PSD Program

The PSD program is a preconstruction review and permitting program applicable to new major stationary sources and major modifications at existing stationary sources. The PSD program applies in areas that are designated “attainment” or “unclassifiable” for a national ambient air quality standard (NAAQS). The PSD program is contained in part C of title I of the CAA. The “nonattainment NSR” program applies in areas not in attainment of a NAAQS or in the Ozone Transport Region, and it is implemented under the requirements of part D of title I of the CAA. Collectively, EPA commonly refers to these two programs as the major NSR program. The governing EPA rules are contained in 40 CFR 51.165, 51.166, 52.21, 52.24, and part 51, Appendices S and W. There is no NAAQS for CO₂ or any of the other well-mixed GHGs, nor has EPA proposed any such NAAQS; therefore, unless and until EPA takes further such action, the nonattainment NSR program does not apply to GHGs.

The applicability of PSD to a particular source must be determined in advance of construction or modification and is pollutant-specific. The primary criterion in determining PSD applicability is whether the proposed project is sufficiently large (in terms of its emissions) to be a major stationary source or modification, both of which are described below. EPA has implemented these requirements in its regulations, which use somewhat different terminology than the CAA does, for determining PSD applicability.

a. Major Stationary Sources

Under PSD, a “major stationary source” is any source belonging to a specified list of 28 source categories that emits or has the potential to emit 100 tpy or more of any air pollutant subject to regulation under the CAA, or any other source type that emits or has the potential to emit such pollutants in amounts equal to or greater than 250 tpy. See, e.g., 40 CFR 52.21(b)(1). We refer to these levels as the 100/250-tpy thresholds. A new source with a potential to emit (PTE) at or above the applicable “major stationary source threshold” is subject to major NSR. These limits originate from section 169 of the CAA, which applies PSD to any “major emitting facility” and defines the term to include any source that emits or has a PTE of 100 or 250 tpy, depending on the source category. Note that the major source definition incorporates the phrase “subject to regulation,” which, as described later, will begin to include GHGs on January 2, 2011, under our interpretation of that phrase as discussed in the recent memorandum entitled, “EPA's Interpretation of Regulations that Determine Pollutants Covered by Federal Prevention of Significant Deterioration (PSD) Permit Program.” 75 FR 17004 (April 2, 2010).

b. Major Modifications

PSD also applies to existing sources that undertake a “major modification,” which occurs when: (1) There is a physical change in, or change in the method of operation of, a “major stationary source;” (2) the change results in a “significant” emissions increase of a pollutant subject to regulation (equal to or above the significance level that EPA has set for the pollutant in 40 CFR 52.21(b)(23)); and (3) there is a “significant net emissions increase” of a pollutant subject to regulation that is equal to or above the significance level (defined in 40 CFR 52.21(b)(23)). Significance levels, which EPA has promulgated for criteria pollutants and certain other pollutants, represent a de minimis contribution to air quality problems. When EPA has not set a significance level for a regulated NSR pollutant, PSD applies to an increase of the pollutant in any amount (that is, in effect, the significance level is treated as zero).

2. General Requirements for PSD

This section provides a very brief summary of the main requirements of the PSD program. One principal requirement is that a new major source or major modification must apply best available control technology (BACT), which is determined on a case-by-case basis taking into account, among other factors, the cost effectiveness of the control and energy and environmental impacts. EPA has developed a “top-down” approach for BACT review, which involves a decision process that includes identification of all available control technologies, elimination of technically infeasible options, ranking of remaining options by control and cost effectiveness, and then selection of BACT. Under PSD, once a source is determined to be major for any regulated NSR pollutant, a BACT review is performed for each attainment pollutant that exceeds its PSD significance level as part of new construction or for modification projects at the source, where there is a significant increase and a significant net emissions increase of such pollutant.

In addition to performing BACT, the source must analyze impacts on ambient air quality to assure that its emissions do not cause or contribute to violation of any NAAQS or PSD increments and must analyze impacts on soil, vegetation, and visibility. In addition, sources or modifications that would impact Class I areas (e.g., national parks) may be subject to additional requirements to protect air quality related values (AQRVs) that have been identified for such areas. Under PSD, if a source's proposed project impacts a Class I area, the Federal Land Manager is notified and is responsible for evaluating a source's projected impact on the AQRVs and recommending either approval or disapproval of the source's permit application based on anticipated impacts.

Because there are no NAAQS or PSD increments established for GHGs, the requirement to demonstrate that a source does not cause or contribute to a violation of the NAAQS is not applicable to GHGs. Furthermore, consistent with EPA's statement in the Tailoring Rule, EPA believes it is not necessary for applicants or permitting authorities to assess impacts from GHGs in the context of the additional impacts analysis or Class I area provisions of the PSD regulations for the following policy reasons. Although it is clear that GHG emissions contribute to global warming and other climate changes that result in impacts on the environment, including impacts on Class I areas and soils and vegetation, due to the global scope of the problem, climate change modeling and evaluations of risks and impacts of GHG emissions typically are conducted for emission changes orders of magnitude larger than the emissions from individual projects that might be analyzed in PSD permit reviews. Quantifying the exact impacts attributable to a specific GHG source obtaining a permit in specific places and points would not be possible with current climate change modeling. Given these considerations, GHG emissions would serve as the more appropriate and credible proxy for assessing the impact of a given facility. Thus, EPA believes that the most practical way to address the considerations reflected in the Class I area and additional impacts analysis is to focus on reducing GHG emissions to the maximum extent. In light of these analytical challenges, compliance with the BACT analysis is the best technique that can be employed at present to satisfy the additional impacts analysis and Class I area requirements of the rules related to GHGs.

However, if PSD is triggered for a GHG-emitting source, all regulated NSR pollutants that the source emits in significant amounts would be subject to PSD requirements. Therefore, if a facility triggers review for regulated NSR pollutants that are non-GHG pollutants for which there are established NAAQS or increments, the air quality, additional impacts, and Class I requirements must be satisfied for those pollutants and the applicant and permitting authority are required to conduct the necessary analysis.

Pursuant to existing PSD requirements, the permitting authority must provide notice of its preliminary decision on a source's application for a PSD permit and must provide an opportunity for comment by the public, industry, and other interested persons. After considering and responding to comments, the permitting authority must issue a final determination on the construction permit. Usually NSR permits are issued by a State or local air pollution control agency that has its own authority to issue PSD permits under a permit program that has been approved by EPA for inclusion in its SIP. In some areas, EPA has delegated its authority to issue PSD permits under Federal regulations to the State or local agency. In other areas, EPA issues the permits under its own authority.

C. What are the CAA requirements to include the PSD program in the SIP?

The CAA contemplates that the PSD program be implemented in the first instance by the States and requires that States include PSD requirements in their SIPs. CAA section 110(a)(2)(C) requires that—

Each implementation plan * * * shall * * * include a program to provide for * * * regulation of the modification and construction of any stationary source within the areas covered by the plan as necessary to assure that national ambient air quality standards are achieved, including a permit program as required in part [C] * * * of this subchapter.

CAA section 110(a)(2)(J) requires that—

Each implementation plan * * * shall * * * meet the applicable requirements of * * * part C of this subchapter (relating to significant deterioration of air quality and visibility protection).

CAA section 161 provides that—

[E]ach applicable implementation plan shall contain emission limitations and such other measures as may be necessary, as determined under regulations promulgated under this part [C], to prevent significant deterioration of air quality in each region * * * designated * * * as attainment or unclassifiable.

These provisions, read in conjunction with the PSD applicability provisions as well as other provisions such as the BACT provision under CAA Section 165(a)(4), mandate that SIPs include PSD programs that are applicable to, among other things, any air pollutant that is subject to regulation. As discussed below, this includes GHGs on and after January 2, 2011.

A number of States do not have PSD programs approved into their SIPs. In those States, EPA's regulations at 40 CFR 52.21 govern, and either EPA or the State as EPA's delegatee acts as the permitting authority. However, most States have PSD programs that have been approved into their SIPs, and these States implement their PSD programs and act as the permitting authority. Georgia has a SIP-approved PSD program.

D. What actions has EPA taken concerning PSD requirements for GHG-emitting sources?

1. What are the Endangerment Finding, the Light Duty Vehicle Rule, and the Johnson Memo Reconsideration?

By notice dated December 15, 2009, and pursuant to CAA section 202(a), EPA issued two findings regarding GHGs that are commonly referred to as the “Endangerment Finding” and the “Cause or Contribute Finding.” “Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act,” 74 FR 66496. In the Endangerment Finding, the Administrator found that six long-lived and directly emitted GHGs—CO₂, CH₄, N₂ O, HFCs, PFCs, and SF₆—may reasonably be anticipated to endanger public health and welfare. In the Cause or Contribute Finding, the Administrator “defin[ed] the air pollutant as the aggregate group of the same six * * * greenhouse gases,” 74 FR at 66536, and found that the combined emissions of this air pollutant from new motor vehicles and new motor vehicle engines contribute to the GHG air pollution that endangers public health and welfare.

By notice dated May 7, 2010, EPA published what is commonly referred to as the “Light-Duty Vehicle Rule” (LDVR), which for the first time established Federal controls on GHGs emitted from light-duty vehicles. “Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards; Final Rule.” 75 FR 25324. In its applicability provisions, the LDVR specifies that it “contains standards and other regulations applicable to the emission * * * of six greenhouse gases,” including CO₂, CH₄, N₂ O, HFCs, PFCs, and SF₆. 75 FR at 25686 (40 CFR 86.1818-12(a)).

On December 18, 2008, EPA issued a memorandum, “EPA's Interpretation of Regulations that Determine Pollutants Covered by Federal Prevention of Significant Deterioration (PSD) Permit Program” (known as the “Johnson Memo” or the “PSD Interpretive Memo,” and referred to in this preamble as the “Interpretive Memo”), that set forth EPA's interpretation regarding which EPA and State actions, with respect to a previously unregulated pollutant, cause that pollutant to become “subject to regulation” under the Act. Whether a pollutant is “subject to regulation” is important for the purposes of determining whether it is covered under the Federal PSD permitting program. The Interpretive Memo established that a pollutant is “subject to regulation” only if it is subject to either a provision in the CAA or regulation adopted by EPA under the CAA that requires actual control of emissions of that pollutant (referred to as the “actual control interpretation”). On February 17, 2009, EPA granted a petition for reconsideration on the Interpretive Memo and announced its intent to conduct a rulemaking to allow for public comment on the issues raised in the memorandum and on related issues. EPA also clarified that the Interpretive Memo would remain in effect pending reconsideration.

On April 2, 2010, EPA published a notice conveying its decision to continue applying (with one limited refinement) the Interpretive Memo's interpretation of “subject to regulation.” “Reconsideration of Interpretation of Regulations that Determine Pollutants Covered by Clean Air Act Permitting Programs,” 75 FR 17004. EPA concluded that the “actual control interpretation” is the most appropriate interpretation to apply given the policy implications. However, EPA refined the Agency's interpretation in one respect: EPA established that PSD permitting requirements apply to a newly regulated pollutant at the time a regulatory requirement to control emissions of that pollutant “takes effect” (rather than upon promulgation or the legal effective date of the regulation containing such a requirement). In addition, based on the anticipated promulgation of the LDVR, EPA stated that the GHG requirements of the vehicle rule would take effect on January 2, 2011, because that is the earliest date that a 2012 model year vehicle may be introduced into commerce. In other words, the compliance obligation under the LDVR does not occur until a manufacturer may introduce into commerce vehicles that are required to comply with GHG standards, which will begin with model year 2012 and will not occur before January 2, 2011.

2. What is EPA's Tailoring Rule?

On June 3, 2010 (effective August 2, 2010), EPA promulgated a final rulemaking, the Tailoring Rule, for the purpose of relieving overwhelming permitting burdens that would, in the absence of the rule, fall on permitting authorities and sources. 75 FR 31514. EPA accomplished this by tailoring the applicability criteria that determine which GHG emission sources become subject to the PSD program of the CAA. In particular, EPA established in the Tailoring Rule a phase-in approach for PSD applicability and established the first two steps of the phase-in for the largest GHG-emitters. Additionally, EPA committed to certain follow-up actions regarding future steps beyond the first two, discussed in more detail later in this notice.

For the first step of the Tailoring Rule, which will begin on January 2, 2011, PSD requirements will apply to major stationary source GHG emissions only if the sources are subject to PSD anyway due to their emissions of non-GHG pollutants. Therefore, in the first step, EPA will not require sources or modifications to evaluate whether they are subject to PSD requirements solely on account of their GHG emissions. Specifically, for PSD, Step 1 requires that as of January 2, 2011, the applicable requirements of PSD, most notably, the BACT requirement, will apply to projects that increase net GHG emissions by at least 75,000 tpy CO₂ e, but only if the project also significantly increases emissions of at least one non-GHG pollutant.

The second step of the Tailoring Rule, beginning on July 1, 2011, will phase in additional large sources of GHG emissions. New sources that emit, or have the potential to emit, at least 100,000 tpy CO₂ e will become subject to the PSD requirements. In addition, sources that emit or have the potential to emit at least 100,000 tpy CO₂ e and that undertake a modification that increases net GHG emissions by at least 75,000 tpy CO₂ e will also be subject to PSD requirements. For both steps, EPA notes that if sources or modifications exceed these CO₂ e-adjusted GHG triggers, they are not covered by permitting requirements unless their GHG emissions also exceed the corresponding mass-based triggers in tpy.

EPA believes that the costs to the sources and the administrative burdens to the permitting authorities of PSD permitting will be manageable at the levels in these initial two steps and that it would be administratively infeasible to subject additional sources to PSD requirements at those times. However, EPA also intends to issue a supplemental notice of proposed rulemaking in 2011, in which the Agency will propose or solicit comment on a third step of the phase-in that would include more sources, beginning on July 1, 2013. In the Tailoring Rule, EPA established an enforceable commitment that the Agency will complete this rulemaking by July 1, 2012, which will allow for one year's notice before Step 3 would take effect.

In addition, EPA committed to explore streamlining techniques that may well make the permitting programs much more efficient to administer for GHG, and that therefore may allow their expansion to smaller sources. EPA expects that the initial streamlining techniques will take several years to develop and implement.

In the Tailoring Rule, EPA also included a provision that no source with emissions below 50,000 tpy CO₂ e and no modification resulting in net GHG increases of less than 50,000 tpy CO₂ e will be subject to PSD permitting before at least 6 years (i.e., April 30, 2016). This is because EPA has concluded that at the present time, the administrative burdens that would accompany permitting sources below this level would be so great that even with the streamlining actions that EPA may be able to develop and implement in the next several years, and even with the increases in permitting resources that EPA can reasonably expect the permitting authorities to acquire, it would be impossible to administer the permit programs for these sources until at least 2016.

As EPA explained in the Tailoring Rule, the threshold limitations are necessary because without them PSD would apply to all stationary sources that emit or have the potential to emit more than 100 or 250 tons of GHG per year beginning on January 2, 2011. This is the date when EPA's recently promulgated LDVR takes effect, imposing control requirements for the first time on CO₂ and other GHGs. If this January 2, 2011, date were to pass without the Tailoring Rule being in effect, PSD requirements would apply to GHG emissions at the 100/250 tpy applicability levels provided under a literal reading of the CAA as of that date. From that point forward, a source owner proposing to construct any new major source that emits at or higher than the applicability levels (and which therefore may be referred to as a “major” source) or modify any existing major source in a way that would increase GHG emissions would need to obtain a permit under the PSD program that addresses these emissions before construction or modification could begin.

Under these circumstances, many small sources would be burdened by the costs of the individualized PSD control technology requirements and permit applications that the PSD provisions, absent streamlining, require. Additionally, State and local permitting authorities would be burdened by the extraordinary number of these permit applications, which are orders of magnitude greater than the current inventory of permits and would vastly exceed the current administrative resources of the permitting authorities. Permit gridlock would result since the permitting authorities would likely be able to issue only a tiny fraction of the permits requested.

The Tailoring Rule's thresholds are based on CO₂ e for the aggregate sum of six GHGs that constitute the pollutant that will be subject to regulation, which we refer to as GHG. These gases are CO₂, CH₄, N₂ O, HFCs, PFCs, and SF₆. Thus, in EPA's Tailoring Rule, EPA provided that PSD applicability is based on the quantity that results when the mass emissions of each of these gases is multiplied by the GWP of that gas, and then summed for all six gases. However, EPA further provided that in order for a source's GHG emissions to trigger PSD requirements, the quantity of the GHG emissions must equal or exceed both the applicability thresholds established in the Tailoring Rule on a CO₂ e basis and the statutory thresholds of 100 or 250 tpy on a mass basis. Similarly, in order for a source to be subject to the PSD modification requirements, the source's net GHG emissions increase must exceed the applicable significance level on a CO₂ e basis and must also result in a net mass increase of the constituent gases combined.

In the Tailoring Rule, EPA adopted regulatory language codifying the phase-in approach. As explained in that rulemaking, many State, local and Tribal area programs will likely be able to immediately implement the approach without rule or statutory changes by, for example, interpreting the term “subject to regulation” that is part of the applicability provisions for PSD permitting. EPA has requested permitting authorities to confirm that they will follow this implementation approach for their programs, and if they cannot, then EPA has requested that they notify the Agency so that we can take appropriate follow-up action to narrow Federal approval of their programs before GHGs become subject to PSD permitting on January 2, 2011. On August 2, 2010, Georgia provided a letter to EPA confirming that the State has the authority to issue PSD permits governing GHG emissions as of January 2, 2011, but explaining that Georgia needs to amend its SIP to enable it to implement the Tailoring Rule thresholds. See the docket for this proposed rulemaking for a copy of Georgia's letter.

3. What is the GHG SIP Call?

By Federal Register notice dated September 2, 2010, EPA proposed the GHG SIP Call. In that action, along with the companion GHG FIP rulemaking published at the same time, EPA took steps to ensure that in the 13 States that do not appear to have authority to issue PSD permits to GHG-emitting sources at present, either the State or EPA will have the authority to issue such permits by January 2, 2011. EPA explained that although for most States either the State or EPA is already authorized to issue PSD permits for GHG-emitting sources as of that date, our preliminary information shows that these 13 States have EPA-approved PSD programs that do not appear to include GHG-emitting sources and therefore do not appear to authorize these States to issue PSD permits to such sources. Therefore, EPA proposed to find that these 13 States' SIPs are substantially inadequate to comply with CAA requirements and, accordingly, proposed to issue a SIP Call to require a SIP revision that applies their SIP PSD programs to GHG-emitting sources. In the companion GHG FIP rulemaking, EPA proposed a FIP that would give EPA authority to apply EPA's PSD program to GHG-emitting sources in any State that is unable to submit a corrective SIP revision by its deadline. Georgia was not one of the States for which EPA proposed a SIP Call.

III. What is the relationship between today's proposed action and EPA's proposed GHG SIP Call and GHG FIP?

As noted above, by notice dated September 2, 2010, EPA proposed the GHG SIP Call. At the same time, EPA proposed a FIP to apply in any State that is unable to submit, by its deadline, a SIP revision to ensure that the State has authority to issue PSD permits to GHG-emitting sources. As discussed in Section IV of this rulemaking, Georgia interprets its current PSD regulations as providing it with the authority to regulate GHGs, and as such, Georgia is not included on the list of areas for the proposed SIP call. Additionally, Georgia would not be subject to the FIP to implement GHG for PSD applicability. Georgia's September 30, 2010, proposed SIP revision (the subject of this rulemaking) merely modifies Georgia's SIP to establish appropriate thresholds for determining which stationary sources and modification projects become subject to permitting requirements for GHG emissions under the PSD program of the CAA.

IV. What is the background for the action proposed by EPA in today's Notice regarding the PSD Permitting Requirements for the PM_2.5 NAAQS?

Today's proposed action on the Georgia SIP also relates to EPA's “Implementation of the New Source Review (NSR) Program for Particulate Matter Less Than 2.5 Micrometers (PM_2.5)” Final Rule (the NSR PM_2.5 Rule). 73 FR 28321 (May 16, 2008). In the NSR PM_2.5 Rule, EPA finalized regulations to implement the NSR program for fine particulate matter. As a result of EPA's final NSR PM_2.5 Rule, States are required to provide SIP submissions no later than May 16, 2011, to address those requirements for both the PSD and nonattainment NSR programs. Georgia's September 30, 2010, SIP revision addresses the PSD requirements for the PM_2.5 NAAQS. Georgia will provide a subsequent SIP revision to address the nonattainment NSR requirements for the PM_2.5 NAAQS. More detail on the NSR PM_2.5 Rule can be found in EPA's May 16, 2008, final rule and is summarized below.

A. Fine Particulate Matter and the NAAQS for PM _2.5

Fine particles in the atmosphere are made up of a complex mixture of components. Common constituents include sulfate (SO₄); nitrate (NO₃); ammonium; elemental carbon; a great variety of organic compounds; and inorganic material (including metals, dust, sea salt, and other trace elements) generally referred to as “crustal” material, although it may contain material from other sources. Airborne particulate matter (PM) with a nominal aerodynamic diameter of 2.5 micrometers or less (a micrometer is one-millionth of a meter, and 2.5 micrometers is less than one-seventh the average width of a human hair) are considered to be “fine particles” and are also known as PM_2.5. “Primary” particles are emitted directly into the air as a solid or liquid particle (e.g., elemental carbon from diesel engines or fire activities, or condensable organic particles from gasoline engines). “Secondary” particles (e.g., sulfate and nitrate) form in the atmosphere as a result of various chemical reactions.

On July 18, 1997, EPA revised the NAAQS for PM to add new standards for fine particles, using PM_2.5 as the indicator. (Previously EPA used PM₁₀ (inhalable particles smaller than, or equal to 10 micrometers in diameter) as the indicator for the PM NAAQS.) EPA established health-based (primary) annual and 24-hour standards for PM_2.5, setting an annual standard at a level of 15 micrograms per cubic meter (µg/m³) and a 24-hour standard at a level of 65 µg/m³. 62 FR 38652. At the time the 1997 primary standards were established, EPA also established welfare-based (secondary) standards identical to the primary standards. The secondary standards are designed to protect against major environmental effects of PM_2.5, such as visibility impairment, soiling, and materials damage. On October 17, 2006, EPA revised the primary and secondary NAAQS for PM_2.5. In that rulemaking, EPA reduced the 24-hour NAAQS for PM_2.5 to 35 µg/m³ and retained the existing annual PM_2.5 NAAQS of 15 µg/m³. 71 FR 61144.

B. Implementation of NSR for the PM _2.5 NAAQS

After EPA promulgated the NAAQS for PM_2.5 in 1997, the Agency issued a guidance document entitled “Interim Implementation of New Source Review Requirements for PM_2.5.” John S. Seitz, EPA, October 23, 1997 (the “Seitz memo”). The Seitz memo was designed to help States implement PSD requirements pertaining to the new PM_2.5 NAAQS in light of known technical difficulties posed by PM_2.5, including the lack of necessary tools to calculate the emissions of PM_2.5 and related precursors, the lack of adequate modeling techniques to project ambient impacts, and the lack of PM_2.5 monitoring sites. Specifically, the Seitz memo authorized sources to use implementation of a PM₁₀ program as a surrogate for meeting PM_2.5 PSD requirements until EPA resolved these technical difficulties.

On May 16, 2008, EPA finalized a rule to implement the 1997 PM_2.5 NAAQS, including changes to the NSR program. See 73 FR 28321. The 2008 NSR PM_2.5 Rule revised the NSR program requirements to establish the framework for implementing preconstruction permit review for the PM_2.5 NAAQS in both attainment and nonattainment areas. In summary, the NSR PM_2.5 Rule: (1) Requires NSR permits to address directly emitted PM_2.5 and precursor pollutants (2) establishes significant emission rates for direct PM_2.5 and precursor pollutants; (3) allows interpollutant trading under the PM_2.5 nonattainment NSR program; and (4) requires States to address condensable PM in establishing enforceable emission limits. With two exceptions, the 2008 NSR PM_2.5 Rule requires that major stationary sources seeking permits must begin directly satisfying the PM_2.5 requirements as of the effective date of the rule, rather than relying on PM₁₀ as a surrogate. The first exception is a “grandfathering” provision in the Federal PSD program at 40 CFR 52.21(i)(1)(xi). This grandfathering provision applied to sources that had applied for, but had not yet received, a final and effective PSD permit before the July 15, 2008 effective date of the May 2008 final rule. The second exception was that States with SIP-approved PSD programs could continue to implement the Seitz Memo's PM₁₀ Surrogate Policy for up to three years (until May 2011) or until the individual revised State PSD programs for PM_2.5 are approved by EPA, whichever comes first. For additional information on the NSR PM_2.5 Rule, see 73 FR 28321.

On February 11, 2010, EPA proposed to repeal the grandfathering provision for PM_2.5 contained in the Federal PSD program at 40 CFR 52.21(i)(1)(xi), and to end early the PM₁₀ Surrogate Policy applicable in States that have a SIP-approved PSD program. 75 FR 6827. In support of this proposal, EPA explained that the PM_2.5 implementation issues that led to the adoption of the PM₁₀ Surrogate Policy in 1997 have been largely resolved to a degree sufficient for sources and permitting authorities to conduct meaningful permit-related PM_2.5 analyses. EPA has not yet taken final action on this proposal.

Georgia's September 30, 2010, submittal addresses the PSD requirements related to EPA's May 16, 2008, NSR PM_2.5 Rule. Though EPA has not finalized a repeal of the PM_2.5 grandfathering provision at 40 CFR 52.21(i)(1)(xi), Georgia elected not to include this provision in its SIP submittal.

V. What is EPA's analysis of Georgia's SIP revision?

On September 30, 2010, EPD provided a revision to Georgia's SIP to EPA for parallel processing and eventual approval. The proposed change pertaining to PSD permitting for GHGs is necessary because without it PSD requirements would apply for GHGs, as of January 2, 2011, at the 100- or 250-tpy levels provided under the CAA. This would greatly increase the number of required permits, imposing undue costs on small sources; which would overwhelm Georgia's permitting resources and severely impair the function of the program. The proposed change pertaining to PSD permitting for PM_2.5 is necessary to comply with Federal requirements. More detail regarding EPA's analysis of the proposed changes to Georgia's SIP (as provided in the September 30, 2010, submittal) is provided below.

A. Analysis Regarding Georgia's Changes To Incorporate the Tailoring Rule

The State of Georgia's September 30, 2010, proposed SIP revision establishes thresholds for determining which stationary sources and modification projects become subject to permitting requirements for GHG emissions under Georgia's PSD program. Specifically, Georgia's September 30, 2010, proposed SIP revision incorporates by reference the Federal Tailoring Rule provisions at 40 CFR 52.21 (as amended June 3, 2010, and effective August 2, 2010), into the Georgia SIP (Georgia's Regulation 391-3-1-.02(7)—Prevention of Significant Deterioration of Air Quality) to address the thresholds for GHG permitting applicability.

Georgia is currently a SIP-approved State for the PSD program, and has incorporated by reference EPA's 2002 NSR reform revisions for PSD at 40 CFR 52.21 into its SIP. The State has informed EPA that it interprets SIP Rule 391-3-1-.02(7), which includes the preconstruction review program required by Part C of title I of the CAA, as providing it with authority to issue PSD permits governing GHGs. Georgia's current PSD program incorporates by reference the Federal requirements, found at 40 CFR 52.21 (adopted prior to the promulgation of EPA's Tailoring Rule), into the State's major source PSD program (which applies to major stationary sources having the potential to emit at least 100-tpy or 250-tpy or more of a regulated NSR pollutant, depending on the type of source or modifications constructing in areas designated attainment or unclassifiable with respect to the NAAQS).

This current SIP revision to Georgia's Regulation 391-3-1-.02(7) (the subject of this proposed rulemaking) incorporates by reference the provisions at 40 CFR 52.21 as amended by the promulgation of the Tailoring Rule. Specifically, Georgia's September 30, 2010 revision updates its existing incorporation by reference of the Federal NSR program to include the relevant Federal Tailoring Rule provisions set forth at 40 CFR 52.21. EPA has preliminarily determined that Georgia's proposed SIP revision is consistent with the Tailoring Rule. Furthermore, EPA has preliminarily determined that this revision to Georgia's SIP is consistent with section 110 of the CAA. See, e.g., Tailoring Rule, 75 FR at 31561.

B. Analysis Regarding Georgia's Changes To Incorporate the NSR PM_2.5 Requirements for PSD

Georgia's Regulation 391-3-1-.02(7) (the subject of this proposed rulemaking) also incorporates by reference the provisions at 40 CFR 52.21 as amended by the promulgation of the NSR PM_2.5 Rule for PSD. Specifically, Georgia's September 30, 2010, revision updates its existing incorporation by reference of the Federal NSR program to include the relevant Federal NSR PM_2.5 Rule provisions for PSD set forth at 40 CFR 52.21. However, in light of EPA's proposed rulemaking to repeal the PM_2.5 “grandfathering” provision, as noted in section IV.B. above, Georgia's revision excludes adoption of the relevant Federal rule provision, 40 CFR 52.21(i)(1)(ix). EPA has preliminarily determined that Georgia's proposed SIP revision is consistent with the NSR PM_2.5 Rule for PSD. Furthermore, EPA has preliminarily determined that this revision to Georgia's SIP is consistent with section 110 of the CAA.

VI. Proposed Action

EPA is proposing to approve Georgia's September 30, 2010, SIP revision, relating to PSD requirements for GHG-emitting sources and for the PM_2.5 NAAQS. Specifically, Georgia's September 30, 2010, proposed SIP revision establishes appropriate emissions thresholds for determining PSD applicability with respect to new and modified GHG-emitting sources in accordance with EPA's Tailoring Rule, and incorporates Federal requirements related to PSD for the PM_2.5 NAAQS. EPA has made the preliminary determination that this SIP revision is approvable because it is in accordance with the CAA and EPA regulations regarding PSD permitting for GHGs and for the PM_2.5 NAAQS.

VII. Statutory and Executive Order Reviews

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve State choices, provided that they meet the criteria of the CAA. Accordingly, this proposed action merely approves the State's law as meeting Federal requirements and does not impose additional requirements beyond those imposed by the State's law. For that reason, this proposed action:

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.);
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, this proposed rule does not have Tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the State, and EPA notes that it will not impose substantial direct costs on Tribal governments or preempt Tribal law.

List of Subjects in 40 CFR Part 52

• Environmental protection
• Air pollution control
• Intergovernmental relations, and Reporting and recordkeeping requirements

Authority: 42 U.S.C. 7401 et seq.