EPA Proposes to Require Updates to the Sacramento Air Quality Management District’s State Implementation Plan and Twelve Other SIPs to Address Greenhouse Gas Emissions

On September 2, 2010, the U.S. Environmental Protection Agency (EPA) released two draft rules for implementing the EPA’s new permitting requirements under the Clean Air Act’s Prevention of Significant Deterioration (PSD) Program. That program, which is part of the EPA’s new greenhouse gas (GHG) Tailoring Rule, will restrict emissions from new and modified large stationary sources beginning January 2, 2011.

The first draft rule released this month is a proposed determination that thirteen State Implementation Plans (SIPs) adopted under the Clean Air Act are “substantially inadequate” because their PSD programs do not apply to new or modified GHG-emitting sources. Sacramento Air Quality Management District’s SIP is among the SIPs identified as “substantially inadequate.” Other states that would be required to update their SIPs include Oregon, Nevada, Arizona, and Alaska. The new rule would require that the non-compliant states issue revised SIPs within 12 months of issuance of the final rule (slated for December 2010). The second draft rule proposes that EPA would assume responsibility for GHG emissions permitting for those states that do not timely submit compliant SIPs through a Federal Implementation Plan (FIP).

EPA’s authority to regulate GHG emissions through PSDs has been challenged in court and Congress is expected to vote this fall on whether to block or delay EPA’s regulation of GHG emissions under existing Clean Air Act requirements. Unless Congress or the courts intervene, the EPA’s GHG Tailoring Rule will go into effect in January 2011.