CO2 and PSD – In or Out?

On December 18, 2008, in one of his final acts as U.S. EPA Administrator, Stephen Johnson issued an interpretive memo to U.S. EPA’s Regional Administrators that addressed the regulation of CO2 for a power project in Utah under the Federal New Source Review (NSR) Prevention of Significant Deterioration (PSD) air permitting rules.  The memo focused on the definition of “regulated NSR pollutants” included in the PSD rules at 40 CFR §52.21(b)(50).  Johnson indicated that from the date of the memo, U.S. EPA would exclude pollutants from the definition if they only require monitoring or reporting under the Clean Air Act (CAA).  In other words, if there are no standards for a particular pollutant, it wouldn’t meet the definition of a regulated NSR pollutant and therefore it wouldn’t be regulated under the PSD program.  From U.S. EPA’s perspective, CO2 was out. 

However, two months later on February 17, 2009, U.S. EPA’s new Administrator under the Obama administration, Lisa Jackson, issued a letter to the Sierra Club granting reconsideration of Johnson’s decision.   This was in response to a suit and petition that the Sierra Club and other parties had filed seeking reconsideration of U.S. EPA’s position expressed in the December 18 interpretive memo.  The petition was granted in order to allow for public comment on the issues raised in that memo.  Jackson stated that U.S. EPA was declining action that would stay the effectiveness of the memo while comments were sought on it and related decisions, and that a notice of proposed rulemaking would be published to respond to the petition for reconsideration.  Jackson also went on to point out that the memo was not binding for states issuing permits under their own State Implementation Plans (SIPs).  The National Association of Manufacturers (NAM) is challenging the decision by Lisa Jackson to reconsider the Johnson memo.

Lisa Jackson, in testimony to Congress, indicated that she believes CO2 can be effectively regulated under the CAA while still avoiding a scenario where hundreds of thousands of sources would be subject to regulation because of the 100 or 250 ton per year major source thresholds.  Industry is not convinced that the flexibility needed to distinguish between CO2 and other regulated NSR pollutants in the CAA exists to support this approach.  Recent air permitting projects in South Dakota, Utah, and Georgia are currently in litigation involving CO2 emissions. 

While U.S. EPA studies the public comments on the Johnson memo and other interested parties prepare their comments, what effect will the result have on the project you are planning or the PSD application you are preparing?  A recommended first step is to determine your state agency’s position on CO2.  Next, even if your state is declining to address CO2, ALL4 still strongly recommends quantifying your CO2 emissions.  The new Administration is prioritizing climate change and regardless of what program oversees CO2, (CAA program or a new Congressional action), CO2 emissions from your source will eventually be regulated.