Effective as of Nov. 10, 2014, the U.S. Environmental Protection Agency (EPA) approved the Texas program to issue permits for greenhouse gas (GHG) emissions under the Prevention of Significant Deterioration (PSD) program established by the Federal Clean Air Act. In January 2011, EPA had issued what is known as a Federal Implementation Plan (FIP) to allow EPA to issue GHG emission permits in Texas when Texas initially refused to implement the federal program. The Texas legislature subsequently required the Texas Commission on Environmental Quality (TCEQ) to take action to implement the program in Texas.
The TCEQ submitted to EPA a modified State Implementation Plan (SIP) relating to GHG permitting. EPA has now approved the part of the modified SIP relating to GHG permits and will withdraw the FIP. As a result, the program is being transferred to the TCEQ. Sources required to obtain GHG permits under the EPA program will be able to seek a permit for both conventional air emissions and GHG emissions from the TCEQ.
The EPA approval eliminates the dual permitting system with both EPA and TCEQ issuing permits for major projects exceeding the applicable GHG emissions threshold. This change should stream line the air permitting system for large projects and reduce the time it takes to obtain permits required to start construction of new or modified sources subject to GHG permitting requirements. One of the key elements of the Texas legislation is that it exempted the TCEQ GHG permitting process from contested case hearing provisions in order to make the process more efficient.
EPA and the TCEQ will be working cooperatively to address GHG permits now pending before EPA.
The U.S. Supreme Court recently reviewed the EPA GHG permitting program and concluded that GHG permits could only be required of new or modified sources that would have to obtain federal permits anyway for conventional pollutants under the PSD program. These “anyway” sources may be required to include GHGs in their permits depending on the amount of GHG emissions.
Under the Supreme Court decision, EPA is required to develop a de minimis threshold level for GHG sources. In the meantime, EPA is applying a threshold level for PSD permits for new sources that emit or have the potential to emit 75,000 tons per year (tpy) or more of GHGs on a carbon dioxide equivalent (CO2e) basis. For modified sources, a permit would be required when the following apply: (1) the modification is otherwise subject to the PSD for a pollutant other than GHGs; and (2) the modification results in a GHG emissions increase and a net GHG emissions increase equal to or greater than 75,000 tpy CO2e.