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Oct 2009
October 02, 2009

EPA Announces Two Proposed Rules for Regulating the Emission of Greenhouse Gases

On September 30, 2009, the U.S. Environmental Protection Agency (“EPA”) released two separate but related proposals regarding the regulation of greenhouse gas (“GHG”) emissions. While there is extensive administrative and litigation related background to these proposals dating back over several years, the proposals can be briefly summarized.

  1. As a consequence of the U.S. Supreme Court’s decision in Massachusetts v EPA, which held that EPA had the authority under the federal Clean Air Act (“Act”) to address GHG emissions, EPA has proceeded under Section 202 of the Act to make the preliminary determinations necessary to regulate GHG emissions from light duty motor vehicles. See 74 FR 49454 (Sept 28, 2009). EPA anticipates these proposed rules will take effect no later than March 2010.

  2. The Prevention of Significant Deterioration (“PSD”) provisions of the Act apply to pollutants “regulated under the Act” or “regulated pollutants,” except pollutants regulated as Hazardous Air Pollutants under Section 112 of the Act. EPA is now proposing, in a draft released September 30, 2009, to clarify the meaning of “regulated under the Act” or “regulated pollutant” to mean any pollutant subject to a control requirement under the Act. In EPA’s view, this means that when GHG regulations take effect for light duty vehicles, GHGs will become pollutants “regulated under the Act” and in turn bring GHGs within the purview of the PSD provisions of the Act.

  3. If potential emissions of a regulated pollutant for a new source exceed 100 tons per year (“tpy”), then the PSD provisions are triggered by statute for 28 source categories. For all other sources, the triggering threshold is 250 tpy. Sources meeting either of these thresholds are considered “major sources.” EPA has established alternate thresholds for modifications of existing major sources for certain pollutants, e.g., 40 tpy for nitrogen oxide emissions. EPA recognizes that applying the existing PSD threshold framework to GHG emissions would overwhelm the permitting capabilities of the states and EPA. As a consequence, on September 30, 2009, EPA proposed to establish by rule different thresholds for GHGs. Under EPA’s proposal, GHG emissions from a proposed new source would not become subject to PSD unless the potential to emit exceeded 25,000 tpy (as opposed to 100 or 250 tpy). PSD would not be triggered for a modification of an existing source unless the modification would increase the potential to emit GHGs from the source by “some amount.” EPA is taking comment on what value should be used, but has proposed a range of between 10,000 and 25,000 tpy.

  4. The Act’s Title V provisions apply to sources with the potential to emit more than 100 tpy of a regulated pollutant. EPA is also proposing to make the Title V threshold for GHGs 25,000 tpy.

The drafts released on the 30th are expected to be noticed in the Federal Register shortly. A 60 day comment period will be afforded, after which EPA will make a final decision. Given EPA’s expressed intentions, absent Congressional action or a D.C. Circuit Court stay of rules once promulgated, the Act’s PSD provisions, including the requirement to satisfy best available control technology standards, must be expected to apply to GHG emissions by the spring of 2010.

Warner Norcross & Judd LLP has one of the largest and most experienced environmental practice groups in the Midwest. Our regulatory practice has and remains focused upon assisting clients understand and work through the complex issues that can arise under EPA and state rules implementing federal statutes, including the Clean Air Act. We are prepared to answer your questions relating to the implications of these proposals.

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