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Indiana Air Pollution Control Board Passes Greenhouse Gas Emergency Rule

12.01.2010

By Jennifer Thompson, Attorney, Bingham Greenebaum Doll LLP

On November 3, 2010, the Indiana Air Pollution Control Board (APCB) passed an emergency rule to incorporate the changes included in the federal Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule, 75 Fed. Reg. 31514 (June 3, 2010).  The Greenhouse Gas (GHG) Emergency Rule, once effective, will temporarily amend 326 IAC 2-2-1, 326 IAC 2-2-4, and 326 IAC 2-7-1 concerning the Prevention of Significant Deterioration (PSD) and Title V permitting programs. In summary, the GHG Emergency Rule regulates GHG as carbon dioxide equivalents (CO2e)  in the PSD and Title V permitting programs as follows:

GHG EMERGENCY RULE
Covered Pollutants

• Addresses emissions of a group of six GHGs:

  o Carbon dioxide (CO2

  o Methane (CH4

  o Nitrous oxide (N2O) 

  o Hydrofluorocarbons (HFCs) 

  o Perfluorocarbons (PFCs) 

  o Sulfur hexafluoride (SF6

• Because some of these GHGs have a higher global warming potential than others, emissions of gases other than CO2 are translated into carbon dioxide equivalents (CO2e) by using the gases’ global warming potentials.  The GHG Emergency Rule uses CO2e as the metric for determining whether sources are covered by permitting programs.  Total GHG emissions are calculated by summing the CO2e emissions of all six constituent GHGs.

January 2, 2011 – June 30, 2011

• Only sources currently subject to the PSD permitting program (i.e., those that are newly-constructed or modified in a way that significantly increases emissions of a pollutant other than GHGs) would be subject to permitting requirements for their GHG emissions under PSD.

• For these projects, only GHG increases of 75,000 tpy or more of total GHGs, on a CO2e basis, would need to determine the Best Available Control Technology (BACT) for their GHG emissions.

• Similarly for the operating permit program, only sources currently subject to the program (i.e., newly constructed or existing major sources for a pollutant other than GHGs) would be subject to Title V requirements for GHG emissions.

• During this time, no sources would be subject to Clean Air Act permitting requirements due solely to GHG emissions.

July 1, 2011 – June 30, 2013

• In this phase, PSD permitting requirements will cover for the first time new construction projects that emit GHG emissions of at least 100,000 tpy even if they do not exceed the permitting thresholds for any other pollutant.

• Modifications at existing facilities that increase GHG emissions by at least 75,000 tpy CO2e will be subject to PSD permitting requirements, even if they do not significantly increase emissions of any other pollutant.

• Operating permit requirements will, for the first time, apply to sources based on their GHG emissions (CO2e basis) even if they would not apply based on emissions of any other pollutant.  Facilities that emit at least 100,000 tpy CO2e will be subject to Title V permitting requirements.

The GHG Emergency Rule will not become effective until January 3, 2011, provided that it is filed with the Indiana Legislative Services Agency (LSA).  Representatives from the Indiana Department of Environmental Management (IDEM) advised that it will not file the GHG Emergency Rule with LSA immediately because the United States Court of Appeals for the D.C. Circuit (which has numerous appeals of the federal GHG Tailoring Rule pending) may issue a stay of effectiveness of the underlying federal requirements. However, absent a change in the underlying federal requirements, IDEM will file the GHG Emergency Rule with LSA by January 2, 2011.

Pursuant to IC § 4-22-2-37.1, the GHG Emergency Rule can only remain in effect for 90 days after the rule is accepted for filing by LSA.  The GHG Emergency Rule may, however, be extended for two additional extension periods by adopting the changes via another emergency rule.  Therefore, IDEM has noticed LSA #10-505, Development of Amendments to Rules Concerning PSD and Title V GHG Tailoring Rule (Section 8 Tailoring Rule), which includes identical changes to the GHG Emergency Rule under a separate rulemaking action pursuant to IC § 13-14-9-8.  IDEM plans to bring the Section 8 Tailoring Rule to the APCB for adoption at the December 1, 2010 APCB Meeting.  IDEM does not expect the Section 8 Tailoring Rule to become effective until March or April of 2011.

IDEM pointed out at the November APCB meeting that the GHG Emergency Rule includes the following sunset provision should the underlying federal requirements be stayed or invalidated while the GHG Emergency Rule is in effect.

"This document expires on the effective date of LSA Document #10-505,the date a withdrawal notice for LSA Document #10-505 is filed with the Publisher, or April 3, 2011, whichever takes place first."  (emphasis added)

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