On July 3, 2012, EPA finalized “Step 3” of its GHG Tailoring Rule by keeping the CO2e permitting thresholds at their current levels. These thresholds determine when Clean Air Act permits under the New Source Review Prevention of Significant Deterioration program are required.
By deciding not to lower the permitting threshold to include small sources, EPA has acknowledged that obtaining PSD permits is a challenge to many proposed industrial construction programs. The Agency stated that reducing the thresholds is not warranted because state permitting authorities have not had the time to develop the “necessary infrastructure and increase their GHG permitting expertise and capacity” and because EPA and the states have not had the “opportunity to develop streamlining measures to improve permit implementation.”
GHG permitting has become a burden for companies that are trying to process projects through regulatory agencies. Whether the State or EPA is the permitting authority, GHG permitting is still being developed and closely reviewed by EPA in an attempt to ensure national consistency. This results in permit applications containing detailed analyses of alternatives, impacts of the proposed projects, and cost alternatives that normally are not anticipated by project teams.
EPA also finalized provisions allowing a GHG-only source to avoid PSD permitting by obtaining a plantwide applicability limitation (PAL) that is based only on CO2e emissions. A PAL allows a facility to make changes without triggering PSD as long as the GHG emissions do not exceed the specified level. This regulatory tool can be helpful to avoid PSD permitting, but it requires detailed monitoring and recordkeeping and may unnecessarily limit production at the facility.© 2013 Bracewell & Giuliani LLP