On February 27, 2012, EPA proposed not to change its greenhouse gas (“GHG”) permitting thresholds for the Prevention of Significant Deterioration (“PSD”) and Title V Operating Permit programs.  Under the proposal, smaller emissions sources will continue to be exempt from obtaining a PSD permit, while larger GHG emissions sources will continue to require a PSD permit.

The current threshold requires new facilities with 100,000 tons or more of CO2 emissions equivalent per year to obtain a PSD permit.  Existing facilities that emit 100,000 tons of CO2 emissions equivalent and make modifications that increase emissions of CO2 equivalent by 75,000 tons a year must also obtain a PSD permit.  In addition, new and existing sources that emit 100,000 tons or more of CO2 equivalent must obtain a Title V operating permit.

In a press release, EPA announced that after conferring with states, “the current approach is working well, and state permitting agencies are currently managing PSD permitting requests.”  Since December 1, 2011, 18 PSD permits have been issued.  Others, however, have argued that the PSD threshold has brought construction to a halt, and that the 18 permits issued is nominal compared to the hundreds of permits that are normally issued.

Oral arguments were held on February 28-29, 2012, on EPA’s GHG regulations.  The PSD permitting program was one of the issues argued.

In addition to maintaining the current GHG thresholds, EPA also proposed steps to streamline the PSD permitting process for sources that are already covered by EPA’s program.  The rule would revise PSD regulations to allow for plant-wide applicability limitations for GHGs.  These limitations will allow for site-specific emissions levels, and a source may make changes without a PSD permit so long as the plant-wide applicability limit is not exceeded.

Comments will be accepted for 45 days after the proposed rule is published in the Federal Register.  EPA will hold a public hearing on March 20, 2012, in Arlington, Virginia to hear comments.

A copy of EPA’s press release can be found here.