From Tailoring To “FIPping” – More GHG Action From The EPA

With the abandonment of federal climate change legislation by the Senate last month, EPA’s efforts to regulate greenhouse gases (GHGs) under the Clean Air Act (CAA) have taken on even greater importance for the estimated 15,500 emission sources nationwide expected to be affected by the new rules. Yesterday, the U.S. EPA announced a pair of proposed rules to help ensure the implementation of permitting requirements for GHGs, set to take effect in January 2011. In May, EPA issued the Tailoring Rule, which “tailored” the CAA threshold for GHGs to ensure that only large emitters would be subject to PSD and Title V permitting requirements.

The current set of proposed rules complements the Tailoring Rule by addressing the nuts and bolts of state permitting programs. Like many other environmental statutes, the CAA operates based on a “cooperative federalism” model ¾ if a state does not establish a permitting program that meets federal standards, the U.S. EPA becomes the permitting authority. In this case, states must modify their State Implementation Plans (SIPs) to incorporate the new GHG requirements.

  • The first proposed rule identifies SIPs that do not currently apply PSD requirements to GHG emitting sources and requires them to be modified. EPA’s “SIP call” is initially addressed to the following 13 states (but the agency has requested that all states review their PSD permitting authority): Alaska, parts of Arizona, Arkansas, parts of California, Connecticut, Florida, Idaho, Kansas, parts of Kentucky, parts of Nebraska, parts of Nevada, Oregon and Texas. Massachusetts, along with several other states, is not directly affected by the SIP call because EPA is the PSD permitting authority.
  • In the second rule, EPA is proposing a Federal Implementation Plan (FIP) that will apply in any state that cannot (or does not) revise its SIP by the New Year. Nevertheless, EPA seems reticent to use the FIP, explaining that “States are best-suited to issue permits to sources of GHG emissions. They have longstanding experience working together with industrial facilities under their jurisdiction to process PSD permit applications.”
  • The proposed rules, which are expected be finalized by the end of 2010, are summarized in greater detail here.

Just as the Tailoring Rule has been challenged by industry and environmental groups alike, it looks like there may be challenges of one kind or another to the new proposed rules. A least one state that looks poised to get “FIPped” is Texas, which recently told EPA it would not implement GHG permitting requirements and filed suit to block the Tailoring Rule on August 2. So much for “cooperative” federalism.

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