The EPA's GHG Tailoring Rule

by Bill Kovacs

The U.S. Chamber welcomes exemption of small businesses and farms under the EPA’s proposed Prevention of Significant Deterioration and proposed Title V Greenhouse Gas Tailoring Rule required under the Clean Air Act; common sense prevailed at the EPA and we are thankful. However, we fear this proposal rests on shaky legal ground. As a result, EPA may have only kicked the problem down the road -- or into the courthouse -- and may have to regulate all small businesses should some environmental groups prevail in likely lawsuits.

The EPA’s proposed rule puts major roadblocks in the way of U.S. efforts to build new major facilities and projects as the country tries to work its way out of the recession and provide affordable and reliable energy for the future. Specifically, EPA is proposing to require all facilities that emit 25,000 tons of CO2 to secure new permits for these emissions before they can do a major expansion of their facilities or build new facilities. These pre-construction permits cost hundreds of thousands of dollars and can take anywhere from eight months to over a year to complete.

A typical PSD permit costs a regulated entity $125,000 and takes 866 hours to complete, according to EPA data. The requirement to obtain these permits takes effect the second EPA makes the rule effective, the Chamber added. In short, all new construction of major projects that would emit 25,000 tons of CO2 in a year would need to obtain a PSD permit before construction could begin. In addition each regulated entity could be subject to a citizen suit brought against that facility by any citizen anywhere in the United States.