On December 7 2017 Environmental Protection Agency (EPA) Administrator Scott Pruitt issued a guidance memo clarifying the agency's interpretation of the Clean Air Act's New Source Review (NSR) regulations, including outlining when and under what criteria the EPA will consider the emission projections that a source makes under the rules. Entitled New Source Review Preconstruction Permitting Requirements: Enforceability and Use of the Actual-to-Projected-Actual Applicability Test in Determining Major Modification Applicability, the memo is part of the EPA's implementation of the president's directive to streamline regulatory permitting requirements for manufacturing and other facilities.

According to the guidance, the EPA will focus on the fact that the source is obliged "to perform pre-project NSR applicability analyses and document and maintain records of such analyses". As such, the EPA's policy is now as follows:

"when a source owner or operator performs a pre-project NSR applicability analysis in accordance with the calculation procedures in the regulations, and follows the applicable recordkeeping and notification requirements in the regulations, that owner or operator has met the pre-project source obligations of the regulations, unless there is clear error (e.g., the course applies the wrong significance threshold)."

The EPA does not intend to substitute its judgement for that of the owner or operator by "second-guessing the owner or operator's emissions projections". Therefore, as long as the source follows the right process, the EPA will not second guess the result. Moreover, the EPA emphasised that it will look at the arc of post-project data – and not initiate enforcement without a showing of increased post-project emissions.

For further information on this topic please contact Samuel B Boxerman, Terence T Healey or Kenneth W Irvin at Sidley Austin LLP office by telephone (+1 202 736 8000) or email ([email protected], [email protected] or [email protected]). The Sidley Austin LLP website can be accessed at www.sidley.com.