Nick Snow
OGJ Washington Editor
WASHINGTON, DC, Nov. 18 -- A proposed greenhouse-gas tailoring rule for large industrial facilities could cause more problems than it solves, a National Petrochemical & Refiners Association official told the US Environmental Protection Agency on Nov. 18.
NPRA Environmental Affairs Director David Friedman said in his prepared testimony that the organization and its members consider the proposal unnecessary and a violation of the federal Clean Air Act’s statutory authority.
In the first of two public hearings on the proposal, Friedman said the proposal: is not a relief rule and does not account for all sources of greenhouse gases; does not adequate address costs and benefits; will not preclude states from issuing permits for smaller facilities; and would create regulatory uncertainty in other ways.
Under the proposed rule, refineries and other large industrial plants that emit at least 25,000 tons/year of greenhouse gases (GHGs) would be required to obtain construction and operating permits. EPA estimates that the program would cover nearly 70% of total US GHG emissions from stationary sources.
“NPRA believes there is a straightforward way to avoid the fundamentally flawed legal position that EPA puts forward in the tailoring rule while obtaining 95% of the [GHG] reduction benefits projected for the Section 302 light-duty vehicle rule,” Friedman said.
The agency should delay its promulgation of the light-duty rule while the National Highway Traffic Safety Administration finalizes its portion early next year, he suggested. “This result would avoid reliance on EPA’s erroneous conclusion that PSD [prevention of significant deterioration under the CAA’s New Source Review] is automatically triggered for all sources upon the effective date of the Section 202 rule,” he said.
‘Troubling precedent’
Friedman noted that the CAA “stipulates unequivocally” that the threshold to issue permits for major stationary sources is 250,000 tons/year, and that EPA lacks legal authority to categorically exempt sources which exceed the law’s major source threshold from permitting requirements. “Taking such action would create a troubling precedent for other agency actions in the future,” he warned.
EPA’s streamlining techniques outlined in the proposed tailoring rule also are not consistent with long-standing federal policies outlined in CAA’s PSD and Title V programs, which would create regulatory uncertainty, according to Friedman. It also is not clear how regulating GHGs would be implemented in the context of other CAA requirements and air pollution regulatory frameworks such as those required to meet the National Ambient Air Quality Standards, per-ton fees for permits, and state PSD program approvals, he said.
“Therefore, altogether, the proposal highlights the perils of forcing [GHG] regulations into the [CAA]. You shouldn’t try to fit a square peg in a round hole,” he maintained.
The proposal also is not a relief rule, Friedman indicated. With 300-400 PSD applications annually already under the CAA, the proposed tailoring rule’s overall effect would be to increase PSD enforcement nearly 40-fold to more than 13,000 facilities without a proper assessment of costs and benefits of such a regulatory expansion, he said.
He cited EPA estimates that it costs $125,000 and takes 866 hr for a plant’s owner or operator to complete a PSD permit application. “That means the cost to industry for the more than 13,000 facilities to file PSD permits will be more than $1.6 billion,” Friedman said.
‘Kicking the can’
“In addition, it is not as if smaller GHG sources will be exempted from these significant filing cost increases,” he continued. “EPA makes clear in the proposed rulemaking that it intends to eventually phase smaller sources into the permitting process. Huge costs will reach smaller facilities, just a few years after our facilities pay these costs.” The proposed program does not save $54 billion, as its cost/benefit analysis calculates, but merely delays the $54 billion which the US economy would have to pay to comply with a PSD program, Friedman said. “We are simply kicking the can down the road and paying later,” he observed.
The proposed tailoring rule also would create regulatory uncertainty since several states’ GHG permitting thresholds are less than the EPA proposal’s 250,000 tons/year, he said. Its preamble discussion also does not answer how EPA could achieve a transition for states with fully approved PSD and Title V permit programs, he added.
“The adjustments for the new applicability thresholds under the tailoring rule could be delayed as the states have to go through the notice and comment rulemaking in order to incorporate new federal requirements and policies into state programs and raise their permitting thresholds to match the federal program,” Friedman said. “Instead of streamlining the permitting program, these factors will mean that the tailoring rule will provide only an additional level of uncertainty for facilities operating throughout the nation.”
Timing also is an issue, he pointed out. The proposal, along with the tailpipe rule, the endangerment rule, and the GHG reporting rule, are among the most important and far-reach rules which EPA has addressed in the past few years, he said, adding that they also are complex and interrelated.
“Industry’s efforts to extend comment periods on these rules have been uniformly rejected,” Friedman said. “We strongly believe that it is more important that these rules be done right and not that they fit into an artificial deadline. These rules are too important to be rushed only to find flaws and unintended consequences. We are only seeking these short comment extensions in order to produce a useful and meaningful end product that benefits both industry and society as a whole.”
Contact Nick Snow at [email protected].
US Government Accountability Office.
