In testimony before the Senate Appropriations Subcommittee on Interior and Related Agencies on March 3, 2010, Administrator Lisa Jackson of the Environmental Protection Agency indicated that EPA plans to move forward with adopting the Greenhouse Gas (“GHG”) Tailoring Rule (74 Fed.Reg. 55,292) later this month.  The Tailoring Rule is intended to ameliorate the impact of GHGs becoming “regulated pollutants” under the Clean Air Act Prevention of Significant Deterioration and Title V programs, which would otherwise be fully triggered by the enactment of another EPA proposed rule concerning GHG emissions from cars and light duty trucks. (74 Fed.Reg. 49,454)

Jackson announced that the applicability threshold for coverage of sources under PSD will initially be 75,000 TPY CO2e rather than 25,000 TPY as proposed.  This threshold would apply in 2011 and 2012, but would later be reduced to lower thresholds.  She estimated that approximately 1,700 sources would initially be subject to PSD in these first two years, with the estimated affected sources climbing to 3,000 in 2013.  Jackson also indicated that PSD requirements would be applicable to permit applications in the pipeline this year but that EPA would not drag its feet on reviewing those.

The primary GHGs are carbon dioxide (‘CO’), methane (‘CH4”) and nitrous oxides (“N2O”). To put these on an equal footing for purposes of comparison of their global warming potential, they must be converted to carbon dioxide equivalents. The common unit is referred to as a carbon dioxide equivalent or CO2e. While methane and nitrous oxides are emitted in lesser quantities than CO2, they have a much higher global warming potential. To convert to tons CO2e, use by the factors below (all in metric tons):

  • 1 ton of carbon dioxide = 1 ton CO2e
  • 1 ton of methane (CH4) = 23 tons CO2e
  • 1 ton of nitrous oxide (N2O) = 310 tons CO2e

Thus, sources emitting 75,000 TPY of CO, 3,260 TPY methane, or 242 TPY of nitrous oxide, or any combination of these that totals 75,000 TPY CO2e will be subject to the PSD requirements of the tailoring rule at the outset (all in metric tons).

Administrator Jackson indicated in response to questions from Senator Lisa Murkowski of Alaska that EPA is considering adopting regulations under the New Source Performance Standards for GHGs from electric power plants and perhaps for other sources later. She hinted that these control rules would likely affect sources at a threshold of somewhere between 50,000 and 75,000 TPY. Murkowski quizzed the Administrator concerning why EPA is moving towards regulation of GHGs if she favors Congressional legislation to address GHGs. Jackson responded that the approach under the Tailoring Rule will not be inconsistent as EPA is likely to have a significant role in regulating GHGs under any Congressional action. She also indicated that EPA was required to address whether GHGs endanger public health and welfare pursuant to the United States Supreme Court decision in Massachusetts v. EPA (127 S.Ct. 1438)(2007).