GHG Permitting Update SBO

1. GHG Permitting UpdateSBO / SBEAP Training Juan E. Santiago Air Quality Policy Division, OAQPS May 4, 2011

2. Outline The Final Tailoring Rule Phase In Steps Further Action Burden Reductions Biomass and GHG Permitting Tools Small Business Outreach What Lies Ahead? Upcoming Rules / Actions 2 The next slide illustrates the permitting steps under the tailoring rule. The next slide illustrates the permitting steps under the tailoring rule.

3. The Final Tailoring Rule Issued on May 13, 2010 “Tailors” the requirements to focus PSD and title V permit requirements on the largest emitting facilities Subjects facilities responsible for nearly 70 percent of the national GHG emissions from stationary sources to CAA permitting requirements This includes the nation’s largest GHG emitters—power plants, refineries, and cement production facilities Small farms, restaurants, and commercial facilities are shielded by this rule “The right sources, at the right time, in a manageable way” 3 The next slide illustrates the permitting steps under the tailoring rule. The next slide illustrates the permitting steps under the tailoring rule.

4. Phase In Steps: Step 1 January 2, 2011 to June 30, 2011 No new permitting actions due solely to GHG emissions during this time period; only sources undertaking permitting actions “anyway” for other regulated pollutants will need to address GHG emissions Covers sources responsible for 65% of total national stationary source GHG emissions 4

5. Phase In Steps: Step 1 PSD Permitting Applicability: “Anyway” sources will be subject to the PSD requirements only if they increase GHG emissions by 75,000 tpy CO2e or more Title V Permitting Applicability: Only those sources currently with title V permits will address GHGs, and only when applying for, renewing or revising their permits 5

6. Phase In Steps: Step 2 July 1, 2011 to June 30, 2013 Sources subject to GHG permitting requirements under step 1 will continue to be subject to GHG permitting requirements In addition, sources that emit or have the potential to emit GHGs at or above 100,000 tpy CO2e will also be subject to GHG permitting requirements in title V and possibly in PSD programs 6

7. Phase In Steps: Step 2 PSD Permitting Applicability: Triggered with construction that increases emissions above certain thresholds A newly constructed source (which is not major for another pollutant) will not be subject to PSD unless it emits 100,000 tpy or more on a CO2e basis A modification project at a major stationary source will not be subject to PSD unless it results in a net GHG emissions increase of 75,000 tpy or more on a CO2e basis 7

8. Phase In Steps: Step 2 Title V Permitting Applicability: A GHG emission source (which is not already subject to title V) will not be subject to title V unless it emits 100,000 tpy or more on a CO2e basis. Newly subject sources must apply for a title V permit on or before July 1, 2012 (which is one year from July 1, 2011), unless the permitting authority sets an earlier deadline. Covers sources responsible for nearly 70% of total national stationary source GHG emissions 8

9. Phase In Steps: Step 3 The tailoring rule establishes an enforceable commitment to complete another rulemaking no later than July 1, 2012. We will propose or solicit comment on a possible step 3 of the phase-in plan EPA will consider, during the implementation of step 2, whether it will be possible to administer GHG permitting programs for additional sources. EPA will establish that step 3 would take effect on July 1, 2013, so that permitting authorities and sources can prepare for any additional GHG permitting actions. 9

10. Phase In Steps: Step 3 Step 3, if different from step 2, will not require permitting of sources with GHG emissions below 50,000 tpy CO2e We also commit to explore a wide range of streamlining options on which we plan to take comment in the step 3 proposal In addition, we plan to solicit comment on a permanent exclusion of certain sources from PSD, title V or both 10

11. Phase-in Steps: Further Action EPA will not require permits for smaller sources until April 30, 2016 or later. The rule establishes an enforceable commitment for EPA to complete a study within 5 years projecting the administrative burdens that remain for small sources after EPA has had time to develop (and states have had time to adopt) streamlining measures to reduce the permitting burden for such sources 11

12. Phase-in Steps: Further Action We will use this study to serve as the basis for an additional rulemaking that would take further action to address small sources, as appropriate. We are making an enforceable commitment to complete this rulemaking by April 30, 2016 We plan to solicit comment on a permanent exclusion of certain sources from PSD, title V or both. 12

13. Permitting Steps Under the Tailoring Rule 13

14. 14 Source Burden Reductions from the Tailoring Rule

15. Biomass and GHG Permitting January 12, 2011 letter sent to several Senators and 30 Congressman laying out the plan to address biomass and GHG permitting EPA is undertaking an expedited rulemaking to be completed by July 1, 2011 to defer completely the application of pre-construction permitting requirements to biomass-fired CO2 and other biogenic CO2 emissions for a period of three years. EPA will initiate a scientific examination with partners from other federal agencies and scientists outside the government with relevant expertise to assist the agency in determining how CO2 emissions from biomass should be handled under PSD. EPA has issued interim guidance to help permitting authorities establish a basis for concluding that BACT for GHG at such sources is combustion of biomass fuels alone. 15

16. Tools to facilitate GHG PSD permitting Tools GHG PSD/Title V Guidance GHG control technology white papers for 7 sectors GHG enhancements to the RACT/BACT/LAER Clearing House GHG Mitigation Strategies Database EPA GHG Permitting Action Team Training and outreach Implementation Q&A Biomass Guidance GHG Permitting Information can be found at: http://www.epa.gov/nsr/ghgpermitting.html 16

18. Small Business Outreach Meeting We held an outreach session on November 17, 2009 in Washington DC. The goal was to reach out to small entities to exchange information about the suite of GHG regulations and how they may impact the PSD and Title V permitting of small entities. A report summarizing the results of the meeting was prepared and is available at: www.regulations.gov under docket No. EPA–HQ–OAR–2009–0517. 18

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20. 20 Potential Additional Permitting Actions 550 sources could become newly major at 100K CO2e threshold 900+ potential PSD action per year Source Categories that could be Affected Pulp and paper Lime manufacturing Electronics Manufacturing Chemical production plants Underground coal mines Food and beverage production Landfills Hospitals What Lies Ahead – Tailoring Rule Step 2 The 550 sources would have to undergo some type of permitting action to be affected. The 900+ includes the newly major plus modifications to existing sources that previously did not trigger for conventional pollutants.The 550 sources would have to undergo some type of permitting action to be affected. The 900+ includes the newly major plus modifications to existing sources that previously did not trigger for conventional pollutants.

21. Upcoming Rules / Actions Step 3 Rulemaking To establish thresholds from July 2013 to April 2016 Rule must be completed by July 2012 Levels could stay the same or go as low as 50K Gives us the opportunity to assess the manageability of GHG permitting Biomass Deferral Biomass Scientific Study / GHG Accounting Rule Tailoring Rule Discussed Potential Streamlining Techniques General permits Presumptive BACT Defining PTE for smaller sources Electronic permitting Applying lean techniques to the permitting processes Title V Program Revisions to adopt tailoring rule 5 Year Study / Step 4 Most of these will require State adoption (SIP and title V program changes) 21

22. Questions, Comments, or Feedback? 22