On May 7, 2015, the USEPA published a direct final rule in the Federal Register (www.federalregister.gov/articles/2015/05/07/2015-10628), allowing for the annulling or rescission of certain Prevention of Significant Deterioration (PSD) permits under the Clean Air Act. This step was taken in response to the US Supreme Court’s decision last year in Utility Air Regulatory Group v. EPA, 134 S. Ct. 2427 (2014).

In this decision, the Supreme Court struck down part of the USEPA’s “Tailoring Rule” which mandated that new or modified stationary sources emitting more than a certain threshold quantity of greenhouse gases (GHGs) annually obtain PSD permits, even if they do not emit any other PSD-regulated pollutants at levels that would otherwise trigger the requirement for a PSD permit and compliance without the Tailoring Rule.

The Supreme Court last year ruled against this rewriting of the PSD rule, stating that the USEPA cannot set its own thresholds for GHGs that depart from the thresholds already found in the Clean Air Act, which was approved by Congress. However, the Supreme Court acknowledged that the agency can regulate GHGs, which since the last Clean Air Act amendments has been ruled a pollutant that must be regulated by the Act. The court ruled that under PSD the USEPA can use the rule to limit GHG emissions on “anyway” sources, those that would be subjected to the PSD regulation anyway because they emit one or more traditional PSD pollutants at levels above its/their statutory threshold(s). It just cannot trigger enforcement of the regulation on pollutants which standards were not set in the Clean Air Act approved by Congress.

The USEPA was ordered to amend the changes in PSD due to the “Tailoring Rule” accordingly, and with this publication it has fulfilled this obligation. This direct final rule amends the PSD regulations to not allow the requirement of PSD permits for sources subject to the rule only because of GHG emissions and to begin the rescission process for PSD permits already issued to the sources that had been required to obtain such permits only because of their GHG emissions.

Please note that the new rule itself does not actually rescind any permit issued under these pretenses. It provides only the authority to do so for the issuing entity. PSD is regulated (and permits issued by), in some cases, a state or local program (those states which have PSD enforcement authority delegated by the USEPA) or the USEPA (for the remaining states in which the USEPA itself runs the PSD permitting program). Therefore, a source that wants its PSD permit that had been issued under these circumstances rescinded will need to request this of the agency that issued the PSD permit. In doing so, the source must demonstrate that it did not at the time of application nor still does not qualify as an “anyway” source. While this covers a small number of sources nationwide, it does remove all PSD requirements from them, a welcome relief.

One of the complaints that led to the court cases was the concern that by requiring PSD permits for sources solely on their GHG emissions and because sources in general emit GHGs in much greater quantities than they do pollutants commonly regulated by the Clean Air Act, applying the amended statutory threshold for GHGs could have required the USEPA to issue PSD permits to hundreds of thousands, perhaps millions of sources nationwide that otherwise would not have to go through the trouble of obtaining PSD permits and requiring their enforcement, an expensive proposition. The USEPA did amend PSD to raise the statutory threshold of GHGs to a much higher level. However, there was concern of a large number of facilities and smaller facilities having to address and comply with PSD.

The USEPA published this amendment of PSD as a direct final rule without seeking public comment because the USEPA was responding to a US Supreme Court ruling. If the USEPA does receive adverse comments, however, it could withdraw this direct rule and address the comments in a subsequent new final rule. The due date for submitting any comments is June 8, 2015.

CCES has the experts to evaluate your facility’s greenhouse gas emissions using approved methods and can assess other pollutant emission rates to determine your applicability to PSD and other federal and state air pollution regulations. We can help you strategize to determine cost-effective ways to comply with any regulations that must be achieved. Contact us today at 914-584-6720 or at karell@CCESworld.com.