The US Environmental Protection Agency (USEPA) recently released the final piece of the greenhouse gas (GHG) permitting puzzle, a guidance entitled “PSD and Title V Permitting Guidance for Greenhouse Gases.” With the January 2011 implementation of the Tailoring Rule requiring large industrial sources to obtain permits for GHG emissions, this guidance aims to assist permitting authorities in enacting GHG permitting programs. In particular, the 97-page document addresses Prevention of Significant Deterioration (PSD) applicability to GHG and BACT (Best Available Control Technology), and other PSD requirements. The guidance also discusses Title V applicability requirements and GHGs, as well as permitting requirements for Title V permits with regard to GHGs.

As background, new major stationary sources and major modifications at existing major stationary sources are required under the Clean Air Act to obtain an air permit before commencing construction. If the new source or major modification is planned for an area in which the national ambient air quality standards (NAAQS) are met or are “unclassifiable,” PSD requirements apply. PSD requirements obligate any new major stationary sources and major modifications to apply BACT for the source. Since there are no NAAQS for GHGs (or any proposed by USEPA), the entire United States is “unclassifiable” for GHG and subject to PSD, so all new major stationary sources and major modifications to which GHG emission regulations apply will require BACT for GHG emissions.

So . . . what is BACT in the context of GHGs? And how would a regulated entity achieve BACT? Broadly speaking, BACT is an emissions limitation that is based on the highest degree of control that can be achieved by a particular facility. But the guidance does not define or require a specific control option for a particular type of source because BACT is to be determined on a case-by-case basis. This new guidance provides the basic information that permit writers and applicants need to address GHGs. With regard to PSD and GHGs, not surprisingly USEPA recommends that permitting authorities use the BACT process to look at all available emission reduction options for GHGs. After taking into account technical feasibility, cost and other economic, environmental and energy considerations, permitting authorities should narrow the options and select the best one. USEPA anticipates that, in most cases, this process will show that the most cost-effective way for industry to reduce GHG emissions will be through energy efficiency.

Interestingly, USEPA is soliciting public feedback on the guidance over the next few weeks on any aspect of the guidance that contains technical or calculation errors, or where the guidance would benefit from additional clarity.

In the next week, we will be providing analysis on portions of the guidance that should be of interest to you and your facilities. The first of these niche publications will address Title V permitting under the guidance for sources with pending Title V renewal applications not issued in draft before January 2, 2011. Stay tuned.