A rule proposed by the U.S. Environmental Protection Agency (EPA) on Thursday would certify that 13 states lack the authority to apply Prevention of Significant Deterioration (PSD) permits to greenhouse gas (GHG) emissions under their State Implementation Plans. A second rulemaking action, also issued last week, proposes a federal implementation plan (FIP) under which the EPA would assume the authority to issue PSD permits for GHG emissions in states that lack the authority to do so.

The proposed rules would apply to entities planning to build new, large facilities or make major expansions to existing ones. They follow the EPA’s finalized GHG Tailoring Rule, which specifies that beginning in 2011, projects that will increase GHG emissions substantially will require a New Source Review (NSR) PSD permit that addresses GHGs.

The Clean Air Act (CAA) requires states to develop and follow state implementation plans (SIPs) that include requirements for issuing PSD permits. According to the EPA, when federal permitting requirements change, as they did under the Tailoring Rule, states may need to modify these plans.

“Without [the two new] proposals industrial sources of GHGs in some states would not be able to begin construction as of January 2, 2011, the earliest GHG permitting requirements become effective,” the EPA said on Thursday.

In the first proposed rule, the EPA fins that PSD permitting regulations in some State Implementation Plans (SIPs) do not meet CAA requirements, because their programs do not cover GHG emissions. States include Alaska; parts of Arizona; Arkansas; California: Sacramento Metropolitan AQMD; Connecticut; Florida; Idaho; Kansas; Kentucky; Nebraska; Nevada; Oregon; and Texas.

Within 30 days after this rule is published in the Federal Register, each permitting agency identified in the proposed SIP call must submit a letter to EPA that explains its GHG permitting authority status. These states must provide information that documents why their programs cannot cover GHG emissions, the EPA said.

In the second rule, the EPA is proposing a federal implementation plan (FIP) that would apply in any state that is unable to submit, by its specified deadline, a SIP revision to ensure that the state has authority to issue permits under the PSD program for GHG sources.

Under the plan, any source that requires a PSD permit for its GHGs located in an area that is subject to this FIP would be issued a permit by the EPA. The FIP would assure that PSD permitting for GHGs can continue until the state’s required SIP revision is complete.

“States are best-suited to issue permits to sources of GHG emissions. They have long- standing experience working together with industrial facilities under their jurisdiction to process PSD permit applications,” the agency said. “EPA will continue to provide guidance and act as a resource for the states as they make the various required permitting decisions for GHG emissions.”

The two rules will be open for public comment 30 days after publication in the Federal Register. The agency has scheduled a hearing on the FIP proposal for August 25, 2010, and will accept comment on the FIP proposal for 30 days after that hearing.

Sources: EPA, POWERnews