EPA To Significantly Raise Initial Greenhouse Gas Threshold

The U.S. Environmental Protection Agency (EPA) announced at a Senate Interior Appropriations Subcommittee hearing on EPA's FY 2011 Budget that it will set an initial stage of stationary-source greenhouse-gas (GHG) emissions threshold of at least 75,000 tons a year—and possibly more than 100,000 tons a year—for power plants and other industrial projects for the regulations between 2011 to 2012. EPA may still require projects such as power plants and refineries that applied in prior years to apply for new greenhouse-gas permits.

State regulators warned the EPA that its initial threshold of 25,000 tons a year was too low and would cover far more facilities than the agency realized or regulators are able to process, the EPA has decided to substantially raise the threshold. The new standards EPA is planning to set under new regulations are due out as soon as later this month. EPA is raising the threshold due to the belief that the regulations could potentially compromise business health and econonmic growth.

The EPA says it intends to pursue regulation of smaller sources after 2016. Some state regulators say that would cover up to six million facilities, including large bakeries, churches, hospitals and small mom-and-pop businesses. The Center is disappointed in this delay because we believe most innovations would have come from the creativity of the smaller businesses. The threshold level and timeline is critical to thousands, if not tens of thousands, of businesses such as power plants, refineries, cement kilns, steel mills and chemical plants. With a higher level, fewer facilities would be required to comply.

The regulations are being proposed under the New Source Review (NSR) instead of Ambient Air Quality Criteria Pollutant regulations. The current thresholds for criteria pollutants such as lead, sulfur dioxide and nitrogen dioxide, are 100 and 250 tons per year (tpy). These thresholds are in effect now, and are appropriate for criteria pollutants. However, they are not feasible for GHGs. Without the tailoring rule, these lower thresholds would take effect automatically for GHGs with the adoption of any EPA rule that controls or limits GHG emissions. The proposed thresholds would continue to preserve the ability of the NSR and title V operating permit programs to achieve and maintain public health and environmental protection goals while avoiding an administrative burden that would prevent state and local permitting authorities from processing CAA permits efficiently.

EPA Administrator Lisa P. Jackson appeared before the subcommitttee, which is chaired by Senator Dianne Feinstein (D., Calif.), on Wednesday, March 3 (Webcast). Administrator Jackson stated that if a facility is smaller than 75,000 tons for the next two years, it would not need a permit. The permit requirements are applied to the years 2011-2012. Two-thirds of the stationary-source emissions are from sources emitting more than 100,000 tons per year.

Industry officials are concerned that if EPA requires anybody who's applied for a permit but not obtained final approval to go back and get new greenhouse-gas permits, it will significantly delay any number of important projects already in the pipeline. Administrator Jackson assured that she was making the decision to avoid absurd results and to aid the administrative process. State regulators say they lack the resources—both money and staff—to handle the expected influx of new permit applications. The U.S. Chamber of Commerce and the National Association of Manufacturers have warned that the regulations would lead to lawsuits and damage the economy. The EPA said it would regulate with a sensitivity to the economy. (WSJ, 3/3/2010, Fact Sheet -- Proposed Rule: Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule)