Last week, EPA issued guidance to its Regional Administrators that addresses some of the questions raised by the decision in Utility Air Regulatory Group v. United States Environmental Protection Agency, 134 S.Ct. 2427 (U.S. June 23, 2014) (“UARG”). As discussed in our posts of June 23rd and July 14th, that decision raised several issues that must be clarified, including how to treat requirements in states that have adopted the Tailoring Rule approach and how to apply the prevention of significant deterioration (“PSD”) permitting provisions to modifications of major sources of emissions.
For example, several states have adopted EPA’s Tailoring Rule approach into their state implementation plans (“SIPS’) and EPA has approved many of those SIP provisions. Although EPA notes that it will no longer apply or enforce federal provisions, including EPA approved SIP provisions, that require a source to obtain permits if GHGs are the only pollutant involved. Many state level requirements, however, remain in effect until further actions are taken and may trigger permitting requirements under state law despite the UARG decision.
In light of this, EPA noted the need for Regional personnel to confer with local, state, and tribal permitting authorities and with applicants to explore plans to respond to the UARG decision. The document notes that while some state laws might automatically be modified based on the Supreme Court decision, EPA does not read the UARG decision as precluding states that have adopted GHG permit requirements into their SIPs from retaining those requirements. This makes it critical for facilities undergoing any permitting actions now, or in the near future, to coordinate closely with state, local, and tribal agencies and with EPA.
In addition, EPA has always recognized the PSD permitting program should not be triggered by de minimis increases in emissions of PSD pollutants, and it developed significance levels for purposes of determining when net emissions increases are more than de minimis. The Court in UARG expressly stated EPA may require “anyway sources” to comply with GHG BACT “only if the source emits more than a de minimis amount” of GHGs. The Court noted the 75,000 tons per year (“TPY”) threshold of the Tailoring Rule might be considered a de minimis threshold if EPA justifies that level.
In the July 24th guidance memorandum, EPA states that it intends to continue applying BACT to GHG at “anyway sources” and, pending further developments, to process PSD permit applications for “anyway sources” using a 75,000 tpy C02e (and greater than zero on a mass basis) threshold to determine whether a permit must include a BACT limitation for greenhouse gases.