Southern States Energy Board. Recent and Pending EPA Regulations under the Clean Air Act

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2 OUR MISSION Through innovations in energy and environmental policies, programs, and technologies, the Southern States Energy Board enhances economic development and the quality of life in the South.

3 Southern States Energy Board Recent and Pending EPA Regulations under the Clean Air Act May 12, 2016

4 Contents Regulations in black text are enacted and effective. Regulations in blue text are proposed and pending. Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units... 6 Carbon Pollution Emission Guidelines for Existing Stationary Sources: EGUs in Indian Country and U.S. Territories... 8 Model Trading Rules for Greenhouse Gas Emissions from Electric Utility Generating Units Constructed on or Before January 8, 2014 *a.k.a. Clean Power Plan Model Trading Rules... 9 Control of Air Pollution From Motor Vehicles: Tier 3 Motor Vehicle Emission and Fuel Standards... 9 Federal Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter and Ozone in 27 States; Correction of SIP Approvals for 22 States Cross-State Air Pollution Rule Update for the 2008 Ozone National Ambient Air Quality Standards Data Requirements for the 1-Hour Sulfur Dioxide (SO 2 ) Primary National Ambient Air Quality Standard Deferral for Carbon Dioxide (CO 2 ) Emissions From Bioenergy and Other Biogenic Sources Under the Prevention of Significant Deterioration (PSD) and Title V Programs Endangerment and Cause or Contribute Findings for Greenhouse Gases under Section 202(a) of the Clean Air Act (a.k.a. Endangerment Finding) EPA/NHTSA Joint Rulemaking to Establish Light-Duty Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards (Model Years ) EPA/NHTSA Final Rulemaking to Establish 2017 and Later Model Years Light-Duty Vehicle Greenhouse Gas Emissions and Corporate Average Fuel Economy Standards Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units Carbon Pollution Standards for Modified and Reconstructed Stationary Sources: Electric Utility Generating Units Carbon Pollution Emission Guidelines for Existing Stationary Sources: EGUs in Indian Country and U.S. Territories Federal Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter and Ozone in 27 States; Correction of State Implementation Plan (SIP) Approvals for 22 States Fine Particulate Matter National Ambient Air Quality Standards: State Implementation Plan Requirements Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles - Phase Greenhouse Gas Reporting Rule: Revisions and Confidentiality Determinations for Petroleum and Natural Gas Systems.. 26 Hazardous Waste Management System: Identification and Listing of Hazardous Waste: Carbon Dioxide (CO 2 ) Streams in Geologic Sequestration Activities Mandatory Reporting of Greenhouse Gases: Additional Sources of Fluorinated GHGs: Extension of Best Available Monitoring Provisions for Electronics Manufacturing Supplemental Finding that it is Appropriate and Necessary to Regulate Hazardous Air Pollutants from Coal- and Oil-Fired Electric Utility Steam Generating Units Recent and Pending EPA Regulations Under the Clean Air Act

5 National Emission Standards for Hazardous Air Pollutants From Coal and Oil-Fired Electric Utility Steam Generating Units and Standards of Performance for Fossil-Fuel-Fired Electric Utility, Industrial-Commercial-Institutional, and Small Industrial-Commercial-Institutional Steam Generating Units Model Trading Rules for Greenhouse Gas Emissions from Electric Utility Generating Units Constructed on or Before January 8, 2014 *a.k.a. Clean Power Plan Model Trading Rules Modernization of the Accidental Release Prevention Regulations under Clean Air Act National Ambient Air Quality Standards for Ozone National Ambient Air Quality Standards (NAAQS) for Particulate Matter National Emission Standards for Hazardous Air Pollutants for Secondary Aluminum Production National Emission Standards for Hazardous Air Pollutants for Major Sources: Industrial, Commercial, and Institutional Boilers and Process Heaters (BOILER MACT) National Emission Standards for Hazardous Air Pollutants for Mineral Wool Production and Wool Fiberglass Manufacturing National Emission Standards for Hazardous Air Pollutants From the Portland Cement Manufacturing Industry and Standards of Performance for Portland Cement Plants; Final Rule National Emission Standards for Hazardous Air Pollutants for Source Categories: Gasoline Distribution Bulk Terminals, Bulk Plants, and Pipeline Facilities; and Gasoline Dispensing Facilities National Emission Standards for Hazardous Air Pollutants From Coal and Oil-Fired Electric Utility Steam Generating Units and Standards of Performance for Fossil-Fuel-Fired Electric Utility, Industrial-Commercial-Institutional, and Small Industrial-Commercial-Institutional Steam Generating Units National Emission Standards for Hazardous Air Pollutants for Polyvinyl Chloride and Copolymers Production National Emission Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines; New Source Performance Standards for Stationary Internal Combustion Engines (RICE); Amendments Standards of Performance for Greenhouse Gas Emissions for New Stationary Sources: Electric Utility Generating Units.. 44 Standards of Performance for Greenhouse Gas Emissions from New, Modified and Reconstructed Stationary Sources: Electric Utility Generating Unit Standards of Performance for New Residential Wood Heaters, New Residential Hydronic Heaters and Forced-Air Furnaces, and New Residential Masonry Heaters National Emission Standards: Radon Emissions from Operating Uranium Mill Tailings Oil and Natural Gas Sector: Emission Standards for New and Modified Sources Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources Oil and Natural Gas Sector: New Source Performance Standards (NSPS) and National Emission Standards for Hazardous Air Pollutants (NESHAP) Reviews National Ambient Air Quality Standards for Ozone Petroleum Refinery Sector Risk and Technology Review and New Source Performance Standards Phosphoric Acid Manufacturing and Phosphate Fertilizer Production RTR and Standards of Performance for Phosphate Processing Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NSR): Inclusion of Fugitive Emissions; Final Rule; Stay Recent and Pending EPA Regulations Under the Clean Air Act 3

6 Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule Prevention of Significant Deterioration for Particulate Matter Less Than 2.5 Micrometers Significant Impact Levels and Significant Monitoring Concentration: Removal of Vacated Elements Proposed Greenhouse Gas Endangerment and Cause or Contribute Findings Under CAA Section 231for Aircraft, and ANPRM on the International Process for Reducing Aircraft GHGs and Future Standards Protection of Stratospheric Ozone: New Substitute in the Motor Vehicle Air Conditioning Sector Under the Significant New Alternatives Policy (SNAP) Program Renewable Fuel Standard Renewable Identification Number Quality Assurance Program Renewable Fuel Volume Standards, Review of New Sources and Modifications in Indian Country Revisions to Test Method for Determining Stack Gas Velocity Taking Into Account Velocity Decay Near the Stack Walls.. 69 National Emission Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines; New Source Performance Standards for Stationary Internal Combustion Engines (RICE); Amendments Source Determination for Certain Emissions Units in the Oil and Natural Gas Sector Standards of Performance for Greenhouse Gas (GHG) Emissions for New Stationary Sources: Electric Utility Generating Units Standards of Performance for New Stationary Sources and Emission Guidelines for Existing Sources: Commercial and Industrial Solid Waste Incineration Units Standards of Performance for New Residential Wood Heaters, New Residential Hydronic Heaters and Forced-Air Furnaces, and New Residential Masonry Heaters Supplemental Finding that it is Appropriate and Necessary to Regulate Hazardous Air Pollutants from Coal- and Oil-Fired Electric Utility Steam Generating Units Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule Transport Rule (CAIR Replacement Rule); Federal Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter and Ozone, a.k.a. Cross-State Air Pollution Rule (CSAPR) Recent and Pending EPA Regulations Under the Clean Air Act

7 Recent and Pending EPA Regulations Under the Clean Air Act 5

8 C Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units *Existing Source Performance Standards (ESPS) The Presidential Memorandum directed EPA to issue proposed GHG guidelines for existing power plants by no later than June 1, 2014, and to issue final guidelines by no later than June 1, In addition, the Presidential Memorandum directs EPA to, in the guidelines, require states to submit to EPA the implementation plans required under section 111(d) of the CAA by no later than June 30, On June 18, 2014, the EPA proposed emission guidelines for states to follow in developing plans to address GHG emissions from existing fossil-fired EGU, using its authority under CAA 111(d). The Proposed Guidelines were published in the Federal Register on June 18, 2014, as part of the President Climate Change Action Plan. The comment period closed on October 16, The Final Rule was announced on August 3, 2015, and publication in the Federal Register occurred on October 23, On January 21, 2016, the U.S. Court of Appeals for the District of Columbia Circuit denied requests from a broad array of industry and labor groups and more than two dozen states that had asked the court to stay the rule curbing greenhouse gas emissions from power plants while litigation surrounding its legality plays out. On February 9, 2016, the United Sates Supreme Court in a 5-4 decision stayed the rule blocked the implementation of the Clean Power Plan while it is being challenged in court. The incremental cost is the projected additional cost of complying with the guidelines in the year analyzed and includes the amortized cost of capital investment, needed new capacity, shifts between or amongst various fuels, deployment of demand-side EE programs, and other actions associated with compliance. These important dynamics are discussed in more detail in the RIA in the rulemaking docket. The EPA estimates the annual incremental compliance cost for the rate-based approach for final emission guidelines to be $2.5 billion in 2020, $1.0 billion in 2025 and $8.4 billion in 2030, including the costs associated with monitoring, reporting, and recordkeeping (MR&R). The EPA estimates the annual incremental compliance cost for the mass-based approach for final emission guidelines to be $1.4 billion in 2020, $3.0 billion in 2025 and $5.1 billion in 2030, including the costs associated with MR&R. More detailed cost estimates are available in the RIA included in the rulemaking docket. Recent and Pending EPA Regulations Under the Clean Air Act 6

9 Proposes standards of performance for: (1) modified fossil fuel-fired utility boilers and IGCC units, (2) modified natural gas-fired stationary combustion turbines, (3) reconstructed fossil fuel-fired utility boilers and IGCC units, and (4) reconstructed natural gas-fired stationary combustion turbines. Consistent with the requirements of CAA section 111(b), these proposed standards reflect the degree of emission limitation achievable through the application of the best system of emission reduction (BSER) that the EPA has determined has been adequately demonstrated for each type of unit. This final rule comprises three main elements: 1) two subcategory-specific CO 2 emission performance rates resulting from application of the BSER to the two subcategories of affected EGUs; 2) state-specific CO 2 goals, expressed as both emission rates and as mass, that reflect the subcategory-specific CO 2 emission performance rates and each state s mix of affected EGUs the two performance rates; and 3) guidelines for the development, submittal and implementation of state plans that implement those BSER emission performance rates either through emission standards for affected EGUs, or through measures that achieve the equivalent, in aggregate, of those rates as defined and expressed in the form of the state goals. In this final action, the EPA is setting emission performance rates, phased in over the period from 2022 to 2030, for two subcategories of affected fossil fuel-fired EGUs fossil fuel-fired electric utility steam- generating units and stationary combustion turbines. These rates, applied to each state s particular mix of fossil fuel-fired EGUs, generate the state s carbon intensity goal for 2030 (and interim rates for the period ). Each state will determine whether to apply these to each affected EGU or to take an alternative approach and meet either an equivalent statewide rate-based goal or statewide mass-based goal. The EPA does not prescribe how a state must meet the emission guidelines, but, if a state chooses to take the path of meeting a state goal, these final guidelines identify the methods that a state can or, in some cases, must use to demonstrate that the combination of measures and standards that the state adopts meets its state-level CO 2 goals. While the EPA accomplishes the phase- in of the interim goal by way of annual emission performance rates, states and EGUs may meet their respective emission reduction obligations on average over that period following whatever emission reduction trajectory they determine to pursue over that period. CAA section 111(d) creates a partnership between the EPA and the states under which the EPA establishes emission guidelines and the states take the lead on implementing them by establishing emission standards or creating plans that are consistent with the EPA emission guidelines. The EPA recognizes that each state has differing policy considerations including varying regional emission reduction opportunities and existing state programs and measures and that the characteristics of the electricity system in each state (e.g., utility regulatory structure and generation mix) also differ. Therefore, as in the proposal, each state will have the latitude to design a program to meet source-category specific emission performance rates or the equivalent statewide rate- or mass-based goal in a manner that reflects its particular circumstances and energy and environmental policy objectives. Each state can do so on its own, or a state can collaborate with other states and/or tribal governments on multi-state plans, or states can include in their plans the trading tools that EGUs can use to realize additional opportunities for cost savings while continuing to operate across the interstate system through which electricity is produced. A state would also have the option of adopting the model rules for either a rate- or a mass-based program that the EPA is proposing concurrently with this action. To facilitate the state planning process, this final rule establishes guidelines for the development, submittal, and implementation of state plans. The final rule describes the components of a state plan, the additional latitude states have in Recent and Pending EPA Regulations Under the Clean Air Act 7

10 developing strategies to meet the emission guidelines, and the options they have in the timing of submittal of their plans. This final rule also gives states considerable flexibility with respect to the timeframes for plan development and implementation, as well as the choice of emission reduction measures. The final rule provides up to fifteen years for full implementation of all emission reduction measures, with incremental steps for planning and then for demonstration of CO 2 reductions that will ensure that progress is being made in achieving CO 2 emission reductions. States will be able to choose from a wide range of emission reduction measures, including measures that are not part of the BSER. Utilities operating fossil fuel-fired electric generating units Carbon Pollution Emission Guidelines for Existing Stationary Sources: EGUs in Indian Country and U.S. Territories *Existing Source Performance Standards (ESPS) On June 25, 2013, President Obama issued a Presidential Memorandum directing the Environmental Protection Agency (EPA) to work expeditiously to complete greenhouse gas (GHG) standards for the power sector. The agency is using its authority under section 111(d) of the Clean Air Act (CAA) to issue emission guidelines to address GHG emissions from existing power plants. The Presidential Memorandum directs EPA to issue proposed GHG guidelines for existing power plants by no later than June 1, 2014, and to issue final guidelines by no later than June 1, In addition, the Presidential Memorandum directs EPA to, in the guidelines, require states to submit to EPA the implementation plans required under section 111(d) of the CAA by no later than June 30, On June 18, 2014, the EPA proposed emission guidelines for states to follow in developing plans to address GHG emissions from existing fossil-fired EGU, using its authority under CAA 111(d). The Proposed Guidelines were published in the Federal Register on June 18, 2014 as part of the President Climate Change Action Plan. This action is a supplemental proposal and will propose emission guidelines to address GHG emissions from existing fossil fuel-fired EGU on tribal lands and in U.S. territories. The comment period closed on October 16, On February 9, 2016, the United Sates Supreme Court in a 5-4 decision stayed the rule blocked the implementation of the Clean Power Plan while it is being challenged in court. See Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units See Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units Utilities operating fossil fuel-fired electric generating units on tribal lands and in U.S. territories 8 Recent and Pending EPA Regulations Under the Clean Air Act

11 Model Trading Rules for Greenhouse Gas Emissions from Electric Utility Generating Units Constructed on or Before January 8, 2014 *a.k.a. Clean Power Plan Model Trading Rules On October 23, 2015, the EPA proposed a federal plan to implement the greenhouse gas (GHG) emission guidelines (EGs) for existing fossil fuel-fired electric generating units (EGUs) under the Clean Air Act (CAA). The EGs were proposed in June 2014 and finalized on August 3, 2015 as the Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units (also known as the Clean Power Plan or EGs). The comment closed on January 21, The finalized Trading Rules are expected in August N/A The EPA is proposing a federal plan to implement the greenhouse gas emission guidelines (EGs) for existing fossil fuel-fired electric generating units (EGUs) under the Clean Air Act (CAA). The EGs were proposed in June of 2014 and finalized on August 3, 2015, as the Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units (also known as the Clean Power Plan or EGs). The proposal presents two approaches to a federal plan for states and other jurisdictions that do not submit an approvable plan to the EPA: a rate-based emission trading program and a massbased emission trading program. These proposals also constitute proposed model trading rules that states can adopt or tailor for implementation of the final EGs. The federal plan is an important measure to ensure that congressionally mandated emission standards under the authority of the CAA are implemented by states. The stringency of the emission performance levels established in the final EGs will be the same whether implemented through a state plan or a federal plan. The EPA is also proposing enhancements to the CAA section 111(d) framework regulations related to the process and timing for state plan submissions and EPA actions. Electric Utility Generating Units constructed on or before January 8, Control of Air Pollution From Motor Vehicles: Tier 3 Motor Vehicle Emission and Fuel Standards The Final Rule was published on April 28, 2014, and a correction was published on June 30, The Final Rule went into effect on June 27, The costs associated with the rule are dependent on vehicle and engine types. The final cost per vehicle is the result of not only the cost per technology but also the application rate of that technology for each vehicle type. Recent and Pending EPA Regulations Under the Clean Air Act 9

12 This action establishes more stringent vehicle emissions standards and will reduce the sulfur content of gasoline beginning in 2017, as part of a systems approach to addressing the impacts of motor vehicles and fuels on air quality and public health. The gasoline sulfur standard will make emission control systems more effective for both existing and new vehicles and will enable more stringent vehicle emissions standards. The vehicle standards will reduce both tailpipe and evaporative emissions from passenger cars, light-duty trucks, medium-duty passenger vehicles, and some heavy-duty vehicles. This will result in significant reductions in pollutants such as ozone, particulate matter, and air toxics across the country and help state and local agencies in their efforts to attain and maintain health-based National Ambient Air Quality Standards. Motor vehicles are a source of exposure to air pollution both regionally and near roads. These vehicle standards are intended to harmonize with California's Low Emission Vehicle program, thus creating a federal vehicle emissions program that will allow automakers to sell the same vehicles in all 50 states. The vehicle standards will be implemented over the same timeframe as the greenhouse gas/fuel efficiency standards for light-duty vehicles (promulgated by EPA and the National Highway Safety Administration in 2012) as part of a comprehensive approach toward regulating emissions from motor vehicles. Entities potentially affected by this rule include gasoline refiners and importers, ethanol producers, ethanol denaturant producers, butane and pentane producers, gasoline additive manufacturers, transmix processors, terminals and fuel distributors, light-duty vehicle manufacturers, independent commercial importers, alternative fuel converters, and manufacturers and converters of vehicles between 8,500 and 14,000 lbs gross vehicle weight rating (GVWR). Federal Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter and Ozone in 27 States; Correction of SIP Approvals for 22 States *Cross-State Air Pollution Rule (CSAPR), a.k.a. the Transport Rule The Final Rule was published July 11, Updated on July 18, Effective on January 1, 2012, for capping annual emissions of sulfur dioxide (SO 2 ) and nitrogen oxides (NO x ), and on May 1, 2012, for ozone-season NO x. The D.C. Circuit of the U.S. Court of Appeals repealed the rule on August 21, The Court ordered the agency to enforce a 2005 rule known as the Clear Air Interstate Rule (CAIR), until it made a viable replacement to the CSAPR. The U.S. Supreme Court on June 24, 2013, indicated it would review an appeals court rejection of the EPA s CSAPR. The U.S. Supreme Court heard arguments on December 10, On April 29th, 2014, the United States Supreme Court, in a 6-2 decision, reinstated the CSAPR. The majority decision, penned by Justice Ginsburg, held that EPA has authority under the federal Clean Air Act (CAA) to consider costeffectiveness, not just strict proportional responsibility, when allocating emission reduction obligations in upwind states that are necessary to ensure that downwind states attain the relevant National Ambient Air Quality Standards (NAAQS). In 10 Recent and Pending EPA Regulations Under the Clean Air Act

13 addition, the majority held that EPA is not obligated to provide states with an opportunity to revise inadequate State Implementation Plans (SIPs) prior to issuing remedial Federal Implementation Plans (FIPs), even though the criteria for determining the amounts of interstate pollution that significantly contribute to downwind nonattainment might not be clear until EPA has acted. This opinion overturned the D.C. Circuit s split decision in EME Homer City Generation v. EPA, which vacated CSAPR. Results in up to $280 billion in annual benefits. $800 million is projected to be spent annually on this rule in Roughly $1.6 billion per year in capital investments are already underway as a result of CAIR. Replaces the 2005 CAIR, which is temporarily in place. Plants in affected states would have begun reducing emissions as early as January 2012 under CSAPR. The rule applies to SO 2 and NO x emissions levels in 27 states, with the goal of reducing fine particulate matter (PM2.5). The rule would have gone into effect under two phases: the Phase 1 compliance date of 2012, and the Phase 2 compliance date of The rule also establishes two independent trading programs for SO 2 : Group 1 states and Group 2 states. EPA is adopting federal implementation plans, or FIPs, for each of the states covered by this rule. EPA encourages states to replace these FIPs with State Implementation Plans, or SIPs, starting as early as EPA and the states continue to implement CSAPR s predecessor, the Clean Air Interstate Rule (CAIR), pursuant to the stay issued by the D.C. Circuit. Utility industry Cross-State Air Pollution Rule Update for the 2008 Ozone National Ambient Air Quality Standards The EPA promulgated the Cross-State Air Pollution Rule (CSAPR) on July 6, 2011, to address interstate transport of ozone pollution under the 1997 ozone NAAQS and fine particulate matter (PM 2.5) under the 1997 and 2006 PM 2.5 NAAQS. The EPA is proposing to update CSAPR to address interstate emission transport with respect to the 2008 ozone NAAQS. This proposal also responds to the July 28, 2015 remand by the Court of Appeals for the District of Columbia Circuit of certain states' ozone-season nitrogen oxides (NO X) emissions budgets established by CSAPR. The proposal also updates the status of certain states' outstanding interstate ozone transport obligations with respect to the 1997 ozone NAAQS, for which CSAPR provided a partial remedy. The Notice of Proposed Rulemaking was published on December 3, 2015 with an extended comment period that closed on February 1, The Final Rule is expected in September of Recent and Pending EPA Regulations Under the Clean Air Act 11

14 N/A On July 13, 2015, the EPA published a rule finding that 24 states failed to make complete submissions that address the requirements of section 110(a)(2)(D)(i)(I) related to the interstate transport of pollution as to the 2008 ozone NAAQS. The finding action triggered a 2-year deadline for the EPA to issue FIPs to address the good neighbor provision for these states by August 12, The proposal finds that ozone season emissions of NO x in 23 eastern states affect the ability of downwind states to attain and maintain the 2008 ozone NAAQS. These emissions can be transported downwind as NO x or, after transformation in the atmosphere, as ozone. For these 23 eastern states, the EPA proposes to issue Federal Implementation Plans (FIPs) that generally update the existing CSAPR NO x ozone-season emissions budgets for electricity generating units (EGUs) and implement these budgets via the CSAPR NO x ozone-season allowance trading program. The EPA would finalize a FIP for any state that does not have an approved SIP addressing its contribution by the date this rule is finalized. The EPA is proposing implementation starting with the 2017 ozone season. In conjunction with other federal and state actions, these requirements would assist downwind states in the eastern United States in attaining and maintaining the 2008 ozone standard. The proposed rule would achieve near-term emission reductions from the power sector, lowering ozone season NO x in 2017 by 85,000 tons, compared to baseline 2017 projections without the rule. Fossil fuel-fired electric power generation 12 Recent and Pending EPA Regulations Under the Clean Air Act

15 D Data Requirements for the 1-Hour Sulfur Dioxide (SO 2 ) Primary National Ambient Air Quality Standard The Proposed Rule was published on May 13, The comment period s closure date was July 14, The Final Rule was sent to OMB for Regulatory Review on May 28, 2015 and was published in the Federal Register on August 21, N/A Directs state and tribal air agencies (air agencies) to provide data to characterize current air quality in areas with large sources of sulfur dioxide (SO 2 ) emissions if such areas do not have sufficient air quality monitoring in place to identify maximum 1-hour SO 2 concentrations. The proposed rule describes criteria for identifying the sources around which air agencies would need to characterize SO 2 air quality. It also describes a process and the timetables by which air agencies would characterize the air quality around sources through ambient monitoring and/or air quality modeling techniques and submit such data to the EPA. The EPA has issued separate non-binding draft technical assistance documents on how air agencies can conduct such monitoring or modeling. The air quality data developed by the states in accordance with this rulemaking would be used by the EPA in future rounds of area designations for the 1-hour SO 2 National Ambient Air Quality Standards (NAAQS). Entities potentially affected directly by this proposal include state, local, and tribal governments. Entities potentially affected indirectly by this proposal include owners and operators of sources of SO 2 emissions (such as coal-fired power plants, refineries, smelters, pulp and paper related facilities, chemical manufacturing, and facilities with industrial boilers for power generation) that contribute to ambient SO 2 concentrations and people whose air quality is affected by these facilities. Deferral for Carbon Dioxide (CO 2 ) Emissions From Bioenergy and Other Biogenic Sources Under the Prevention of Significant Deterioration (PSD) and Title V Programs *Deferral Rule The Proposed Rule was published March 21, 2011, and the Final Rule was published on July 20, The Final Rule defers, for a period of three years, greenhouse gas (GHG) permitting requirements for CO 2 emissions from biomass-fired and other biogenic sources. Recent and Pending EPA Regulations Under the Clean Air Act 13

16 On July 12, 2013, the D.C. Circuit of the U.S. Court of Appeals repealed the rule, which was set to expire on July 20, N/A Defers for a period of three years, the application of the PSD and Title V permitting requirements to CO 2 emissions from bioenergy and other biogenic stationary sources (biogenic CO 2 ). Possible affected entities include: electric utilities burning biomass fuels; wood products manufacturing and wood pellet fuel manufacturing; pulp and paper manufacturing; solid waste combustors and incinerators; animal production manure management operations; sewage treatment facilities; solid waste landfills; ethanol manufacturing; and food/beverage processors burning agricultural biomass residues, using fermentation processes, or producing/using biogas from anaerobic digestion of waste materials. 14 Recent and Pending EPA Regulations Under the Clean Air Act

17 E Endangerment and Cause or Contribute Findings for Greenhouse Gases under Section 202(a) of the Clean Air Act (a.k.a. Endangerment Finding) Findings published on December 15, On June 26, 2012, the D.C. Circuit of the U.S. Court of Appeals held that EPA s Endangerment Finding was supported by the record, and the rules based upon the finding were compelled by requirements of the Clean Air Act and the U.S. Supreme Court s decision in Massachusetts v. EPA (2007). On April 18, 2013, a coalition of industry groups filed a petition with U.S. Supreme Court for review of the D.C. Court of Appeals decision and challenged EPA rules, including the Endangerment Finding. On October 15, 2013, the U.S. Supreme Court declined to grant certiorari to a challenge of the Endangerment Finding. No cost estimate provided for greenhouse gas (GHG) regulations that will result from the findings. EPA Administrator Lisa Jackson found that (1) the current and projected concentrations of the six key well-mixed greenhouse gases carbon dioxide (CO 2 ), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6) in the atmosphere threaten the public health and welfare of current and future generations; and (2) the combined emissions of these well-mixed greenhouse gases from new motor vehicles and new motor vehicle engines contribute to the greenhouse gas pollution which threatens public health and welfare. This action was a prerequisite to finalizing the EPA's proposed greenhouse gas emission standards for light-duty vehicles. The EPA states this action does not itself impose any requirements on industry or other entities. EPA/NHTSA Joint Rulemaking to Establish Light-Duty Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards (Model Years ) The Joint Rulemaking was published on April 1, 2010, and became effective on July 6, On June 26, 2012, the D.C. Circuit of the U.S. Court of Appeals upheld EPA's (GHG) regulations issued under the Clean Air Act (Clean Air Act) for passenger vehicles. On April 18, 2013, a coalition of industry groups filed a petition with U.S. Supreme Court for review of the D.C. Court of Appeals decision and challenged EPA rules, including the GHG emissions standards for passenger cars and light duty Recent and Pending EPA Regulations Under the Clean Air Act 15

18 trucks. On October 15, 2013, the U.S. Supreme Court declined to grant certiorari to a challenge of EPA's GHG emissions standards for passenger cars and light duty trucks. A net benefit of $ billion dollars saved with 41.6 billion gallons saved,.99 billion barrels saved, and 521 million metric tons of CO 2. EPA finalized plans to set national emissions standards under section 202 (a) of the CAA to control GHG emissions from passenger cars and light-duty trucks, and medium-duty passenger vehicles, as part of a joint rulemaking with the National Highway Traffic Safety Administration (NHTSA). The standards will be phased in beginning with the 2012 model year through model year They require these vehicles to meet an estimated combined average emissions level of 250 grams of carbon dioxide per mile, equivalent to 35.5 miles per gallon (mpg). Affects companies that manufacture or sell new light-duty vehicles, light-duty trucks, and medium-duty passenger vehicles, as defined under EPA s CAA regulations, and passenger automobiles (passenger cars) and non-passenger automobiles (light trucks) as defined under NHTSA s Corporate Average Fuel Economy (CAFE) regulations. EPA/NHTSA Final Rulemaking to Establish 2017 and Later Model Years Light-Duty Vehicle Greenhouse Gas Emissions and Corporate Average Fuel Economy Standards On May 21, 2010, President Obama issued a Presidential Memorandum requesting that NHTSA and EPA develop through notice and comment rulemaking a coordinated National Program to improve fuel economy and reduce GHG emissions of light-duty vehicles for model years , building on the success of the first phase of the National Program for these vehicles for model years On August 28, 2012, EPA and NHTSA issued a joint Final Rulemaking to extend the National Program of harmonized greenhouse gas and fuel economy standards to model year 2017 through 2025 passenger vehicles. The Final Rule was published on October 15, On April 18, 2013, a coalition of industry groups filed a petition with U.S. Supreme Court for review of the D.C. Court of Appeals decision and challenged EPA rules, including the GHG emissions standards for passenger cars and light duty trucks. On October 15, 2013, the U.S. Supreme Court declined to grant certiorari to a challenge of EPA's GHG emissions standards for passenger cars and light duty trucks. The National Program is estimated to save approximately 4 billion barrels of oil and to reduce GHG emissions by the equivalent of approximately 2 billion metric tons over the lifetimes of those light duty vehicles produced in model years (MYs) The agencies project that fuel savings will far outweigh higher vehicle costs, and the net benefits to 16 Recent and Pending EPA Regulations Under the Clean Air Act

19 society of the MYs National Program will be in the range of $326 billion to $451 billion (7 and 3 percent discount rates, respectively) over the lifetimes of those light duty vehicles sold in MYs The National Program is projected to provide significant savings for consumers due to reduced fuel use. Although the agencies estimate that technologies used to meet the standards will add, on average, about $1,800 to the cost of a new light duty vehicle in MY 2025, consumers who drive their MY 2025 vehicle for its entire lifetime will save, on average, $5,700 to $7,400 (7 and 3 percent discount rates, respectively) in fuel, for a net lifetime savings of $3,400 to $5,000. This estimate assumes gasoline prices of $3.87 per gallon in 2025 with small increases most years throughout the vehicle s lifetime. The EPA and the NHTSA are issuing final rules extending the National Program to further reduce GHG emissions and improve fuel economy for model years MYs 2017 through 2025 light-duty vehicles. EPA is establishing national GHG emissions standards under the CAA, and NHTSA is establishing CAFE standards under the Energy Policy and Conservation Act, as amended by the Energy Independence and Security Act (EISA). EPA s standards apply to passenger cars, light-duty trucks, and medium-duty passenger vehicles, in MYs 2017 through The final standards are projected to result in an average industry fleet-wide level of 163 grams/mile of CO 2 in model year 2025, which is equivalent to 54.5 mpg if achieved exclusively through fuel economy improvements. Affects companies that manufacture or sell new light-duty vehicles, light-duty trucks, and medium-duty passenger vehicles, as defined under EPA s CAA regulations, and passenger automobiles (passenger cars) and non-passenger automobiles (light trucks) as defined under NHTSA s CAFE regulations. Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units *Existing Source Performance Standards (ESPS) The Presidential Memorandum directed EPA to issue proposed GHG guidelines for existing power plants by no later than June 1, 2014, and to issue final guidelines by no later than June 1, In addition, the Presidential Memorandum directs EPA to, in the guidelines, require states to submit to EPA the implementation plans required under section 111(d) of the CAA by no later than June 30, On June 18, 2014, the EPA proposed emission guidelines for states to follow in developing plans to address GHG emissions from existing fossil-fired EGU, using its authority under CAA 111(d). The Proposed Guidelines were published in the Federal Register on June 18, 2014, as part of the President Climate Change Action Plan. The comment period closed on October 16, The Final Rule was announced on August 3, 2015, and publication in the Federal Register occurred on October 23, Recent and Pending EPA Regulations Under the Clean Air Act 17

20 On January 21, 2016, the U.S. Court of Appeals for the District of Columbia Circuit denied requests from a broad array of industry and labor groups and more than two dozen states that had asked the court to stay the rule curbing greenhouse gas emissions from power plants while litigation surrounding its legality plays out. On February 9, 2016, the United Sates Supreme Court in a 5-4 decision stayed the rule blocked the implementation of the Clean Power Plan while it is being challenged in court. The incremental cost is the projected additional cost of complying with the guidelines in the year analyzed and includes the amortized cost of capital investment, needed new capacity, shifts between or amongst various fuels, deployment of demand-side EE programs, and other actions associated with compliance. These important dynamics are discussed in more detail in the RIA in the rulemaking docket. The EPA estimates the annual incremental compliance cost for the rate-based approach for final emission guidelines to be $2.5 billion in 2020, $1.0 billion in 2025 and $8.4 billion in 2030, including the costs associated with monitoring, reporting, and recordkeeping (MR&R). The EPA estimates the annual incremental compliance cost for the mass-based approach for final emission guidelines to be $1.4 billion in 2020, $3.0 billion in 2025 and $5.1 billion in 2030, including the costs associated with MR&R. More detailed cost estimates are available in the RIA included in the rulemaking docket. Proposes standards of performance for: (1) modified fossil fuel-fired utility boilers and IGCC units, (2) modified natural gas-fired stationary combustion turbines, (3) reconstructed fossil fuel-fired utility boilers and IGCC units, and (4) reconstructed natural gas-fired stationary combustion turbines. Consistent with the requirements of CAA section 111(b), these proposed standards reflect the degree of emission limitation achievable through the application of the best system of emission reduction (BSER) that the EPA has determined has been adequately demonstrated for each type of unit. This final rule comprises three main elements: 1) two subcategory-specific CO 2 emission performance rates resulting from application of the BSER to the two subcategories of affected EGUs; 2) state-specific CO 2 goals, expressed as both emission rates and as mass, that reflect the subcategory-specific CO 2 emission performance rates and each state s mix of affected EGUs the two performance rates; and 3) guidelines for the development, submittal and implementation of state plans that implement those BSER emission performance rates either through emission standards for affected EGUs, or through measures that achieve the equivalent, in aggregate, of those rates as defined and expressed in the form of the state goals. In this final action, the EPA is setting emission performance rates, phased in over the period from 2022 to 2030, for two subcategories of affected fossil fuel-fired EGUs fossil fuel-fired electric utility steam- generating units and stationary combustion turbines. These rates, applied to each state s particular mix of fossil fuel-fired EGUs, generate the state s carbon intensity goal for 2030 (and interim rates for the period ). Each state will determine whether to apply these to each affected EGU or to take an alternative approach and meet either an equivalent statewide rate-based goal or statewide mass-based goal. The EPA does not prescribe how a state must meet the emission guidelines, but, if a state 18 Recent and Pending EPA Regulations Under the Clean Air Act

21 chooses to take the path of meeting a state goal, these final guidelines identify the methods that a state can or, in some cases, must use to demonstrate that the combination of measures and standards that the state adopts meets its state-level CO 2 goals. While the EPA accomplishes the phase- in of the interim goal by way of annual emission performance rates, states and EGUs may meet their respective emission reduction obligations on average over that period following whatever emission reduction trajectory they determine to pursue over that period. CAA section 111(d) creates a partnership between the EPA and the states under which the EPA establishes emission guidelines and the states take the lead on implementing them by establishing emission standards or creating plans that are consistent with the EPA emission guidelines. The EPA recognizes that each state has differing policy considerations including varying regional emission reduction opportunities and existing state programs and measures and that the characteristics of the electricity system in each state (e.g., utility regulatory structure and generation mix) also differ. Therefore, as in the proposal, each state will have the latitude to design a program to meet source-category specific emission performance rates or the equivalent statewide rate- or mass-based goal in a manner that reflects its particular circumstances and energy and environmental policy objectives. Each state can do so on its own, or a state can collaborate with other states and/or tribal governments on multi-state plans, or states can include in their plans the trading tools that EGUs can use to realize additional opportunities for cost savings while continuing to operate across the interstate system through which electricity is produced. A state would also have the option of adopting the model rules for either a rate- or a mass-based program that the EPA is proposing concurrently with this action. To facilitate the state planning process, this final rule establishes guidelines for the development, submittal, and implementation of state plans. The final rule describes the components of a state plan, the additional latitude states have in developing strategies to meet the emission guidelines, and the options they have in the timing of submittal of their plans. This final rule also gives states considerable flexibility with respect to the timeframes for plan development and implementation, as well as the choice of emission reduction measures. The final rule provides up to fifteen years for full implementation of all emission reduction measures, with incremental steps for planning and then for demonstration of CO 2 reductions that will ensure that progress is being made in achieving CO 2 emission reductions. States will be able to choose from a wide range of emission reduction measures, including measures that are not part of the BSER. Utilities operating fossil fuel-fired electric generating units Carbon Pollution Standards for Modified and Reconstructed Stationary Sources: Electric Utility Generating Units *Existing Source Performance Standards (ESPS) On June 25, 2013, President Obama issued a Presidential Memorandum directing the Environmental Protection Agency (EPA) to work expeditiously to complete greenhouse gas (GHG) standards for the power sector. The agency is using its authority under section 111(d) of the Clean Air Act (CAA) to issue emission guidelines to address GHG emissions from existing power plants. Recent and Pending EPA Regulations Under the Clean Air Act 19

22 The Presidential Memorandum directed EPA to issue proposed GHG guidelines for existing power plants by no later than June 1, 2014, and to issue final guidelines by no later than June 1, In addition, the Presidential Memorandum directs EPA to, in the guidelines, require states to submit to EPA the implementation plans required under section 111(d) of the CAA by no later than June 30, On June 18, 2014, the EPA proposed emission guidelines for states to follow in developing plans to address GHG emissions from existing fossil-fired EGU, using its authority under CAA 111(d). The Proposed Guidelines were published in the Federal Register on June 18, 2014, as part of the President Climate Change Action Plan. The comment period closed on October 16, The Final Rule was announced on August 3, 2015 and publication in the Federal Register happened on October 23, The incremental cost is the projected additional cost of complying with the guidelines in the year analyzed and includes the amortized cost of capital investment, needed new capacity, shifts between or amongst various fuels, deployment of demand-side EE programs, and other actions associated with compliance. These important dynamics are discussed in more detail in the RIA in the rulemaking docket. The EPA estimates the annual incremental compliance cost for the rate-based approach for final emission guidelines to be $2.5 billion in 2020, $1.0 billion in 2025 and $8.4 billion in 2030, including the costs associated with monitoring, reporting, and recordkeeping (MR&R). The EPA estimates the annual incremental compliance cost for the mass-based approach for final emission guidelines to be $1.4 billion in 2020, $3.0 billion in 2025 and $5.1 billion in 2030, including the costs associated with MR&R. More detailed cost estimates are available in the RIA included in the rulemaking docket. Proposes standards of performance for: (1) modified fossil fuel-fired utility boilers and IGCC units, (2) modified natural gas-fired stationary combustion turbines, (3) reconstructed fossil fuel-fired utility boilers and IGCC units, and (4) reconstructed natural gas-fired stationary combustion turbines. Consistent with the requirements of CAA section 111(b), these proposed standards reflect the degree of emission limitation achievable through the application of the best system of emission reduction (BSER) that the EPA has determined has been adequately demonstrated for each type of unit. This final rule comprises three main elements: 1) two subcategory-specific CO 2 emission performance rates resulting from application of the BSER to the two subcategories of affected EGUs; 2) state-specific CO 2 goals, expressed as both emission rates and as mass, that reflect the subcategory-specific CO 2 emission performance rates and each state s mix of affected EGUs the two performance rates; and 3) guidelines for the development, submittal and implementation of state plans that implement those BSER emission performance rates either through emission standards for affected EGUs, or through measures that achieve the equivalent, in aggregate, of those rates as defined and expressed in the form of the state goals. In this final action, the EPA is setting emission performance rates, phased in over the period from 2022 to 2030, for two subcategories of affected fossil fuel-fired EGUs fossil fuel-fired electric utility steam- generating units and stationary 20 Recent and Pending EPA Regulations Under the Clean Air Act

23 combustion turbines. These rates, applied to each state s particular mix of fossil fuel-fired EGUs, generate the state s carbon intensity goal for 2030 (and interim rates for the period ). Each state will determine whether to apply these to each affected EGU or to take an alternative approach and meet either an equivalent statewide rate-based goal or statewide mass-based goal. The EPA does not prescribe how a state must meet the emission guidelines, but, if a state chooses to take the path of meeting a state goal, these final guidelines identify the methods that a state can or, in some cases, must use to demonstrate that the combination of measures and standards that the state adopts meets its state-level CO 2 goals. While the EPA accomplishes the phase- in of the interim goal by way of annual emission performance rates, states and EGUs may meet their respective emission reduction obligations on average over that period following whatever emission reduction trajectory they determine to pursue over that period. CAA section 111(d) creates a partnership between the EPA and the states under which the EPA establishes emission guidelines and the states take the lead on implementing them by establishing emission standards or creating plans that are consistent with the EPA emission guidelines. The EPA recognizes that each state has differing policy considerations including varying regional emission reduction opportunities and existing state programs and measures and that the characteristics of the electricity system in each state (e.g., utility regulatory structure and generation mix) also differ. Therefore, as in the proposal, each state will have the latitude to design a program to meet source-category specific emission performance rates or the equivalent statewide rate- or mass-based goal in a manner that reflects its particular circumstances and energy and environmental policy objectives. Each state can do so on its own, or a state can collaborate with other states and/or tribal governments on multi-state plans, or states can include in their plans the trading tools that EGUs can use to realize additional opportunities for cost savings while continuing to operate across the interstate system through which electricity is produced. A state would also have the option of adopting the model rules for either a rate- or a mass-based program that the EPA is proposing concurrently with this action. To facilitate the state planning process, this final rule establishes guidelines for the development, submittal, and implementation of state plans. The final rule describes the components of a state plan, the additional latitude states have in developing strategies to meet the emission guidelines, and the options they have in the timing of submittal of their plans. This final rule also gives states considerable flexibility with respect to the timeframes for plan development and implementation, as well as the choice of emission reduction measures. The final rule provides up to fifteen years for full implementation of all emission reduction measures, with incremental steps for planning and then for demonstration of CO 2 reductions that will ensure that progress is being made in achieving CO 2 emission reductions. States will be able to choose from a wide range of emission reduction measures, including measures that are not part of the BSER. Utilities operating fossil fuel-fired electric generating units Recent and Pending EPA Regulations Under the Clean Air Act 21

24 Carbon Pollution Emission Guidelines for Existing Stationary Sources: EGUs in Indian Country and U.S. Territories *Existing Source Performance Standards (ESPS) On June 25, 2013, President Obama issued a Presidential Memorandum directing the Environmental Protection Agency (EPA) to work expeditiously to complete greenhouse gas (GHG) standards for the power sector. The agency is using its authority under section 111(d) of the Clean Air Act (CAA) to issue emission guidelines to address GHG emissions from existing power plants. The Presidential Memorandum directs EPA to issue proposed GHG guidelines for existing power plants by no later than June 1, 2014, and to issue final guidelines by no later than June 1, In addition, the Presidential Memorandum directs EPA to, in the guidelines, require states to submit to EPA the implementation plans required under section 111(d) of the CAA by no later than June 30, On June 18, 2014, the EPA proposed emission guidelines for states to follow in developing plans to address GHG emissions from existing fossil-fired EGU, using its authority under CAA 111(d). The Proposed Guidelines were published in the Federal Register on June 18, 2014 as part of the President Climate Change Action Plan. This action is a supplemental proposal and will propose emission guidelines to address GHG emissions from existing fossil fuel-fired EGU on tribal lands and in U.S. territories. The comment period closed on October 16, The Final Rule was sent to OMB on June 1, 2015 for Regulatory Review and has an expected publication date of August On February 9, 2016, the United Sates Supreme Court in a 5-4 decision stayed the rule blocked the implementation of the Clean Power Plan while it is being challenged in court. See Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units See Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units Utilities operating fossil fuel-fired electric generating units on tribal lands and in U.S. territories 22 Recent and Pending EPA Regulations Under the Clean Air Act

25 F Federal Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter and Ozone in 27 States; Correction of State Implementation Plan (SIP) Approvals for 22 States *Cross-State Air Pollution Rule (CSAPR) The Final Rule was published July 11, Updated on July 18, Effective on January 1, 2012, for capping annual emissions of sulfur dioxide (SO 2 ) and nitrogen oxides (NO x ), and on May 1, 2012, for ozone-season NO x. The D.C. Circuit of the U.S. Court of Appeals repealed the rule on August 21, The Court ordered the agency to enforce a 2005 rule known as the Clear Air Interstate Rule (CAIR), until it made a viable replacement to the CSAPR. The U.S. Supreme Court on June 24, 2013, indicated it would review an appeals court rejection of the EPA s CSAPR. The U.S. Supreme Court heard arguments on December 10, On April 29th, 2014, the United States Supreme Court, in a 6-2 decision, reinstated the CSAPR. The majority decision, penned by Justice Ginsburg, held that EPA has authority under the federal Clean Air Act (CAA) to consider costeffectiveness, not just strict proportional responsibility, when allocating emission reduction obligations in upwind states that are necessary to ensure that downwind states attain the relevant National Ambient Air Quality Standards (NAAQS). In addition, the majority held that EPA is not obligated to provide states with an opportunity to revise inadequate State Implementation Plans (SIPs) prior to issuing remedial Federal Implementation Plans (FIPs), even though the criteria for determining the amounts of interstate pollution that significantly contribute to downwind nonattainment might not be clear until EPA has acted. This opinion overturned the D.C. Circuit s split decision in EME Homer City Generation v. EPA, which vacated CSAPR. Results in up to $280 billion in annual benefits. $800 million is projected to be spent annually on this rule in Roughly $1.6 billion per year in capital investments are already underway as a result of CAIR. Replaces the 2005 CAIR, which is temporarily in place. Plants in affected states would have begun reducing emissions as early as January 2012 under CSAPR. The rule applies to SO 2 and NO x emissions levels in 27 states, with the goal of reducing fine particulate matter (PM2.5). The rule would have gone into effect under two phases: the Phase 1 compliance date of 2012, and the Phase 2 compliance date of The rule also establishes two independent trading programs for SO 2 : Group 1 states and Group 2 states. EPA is Recent and Pending EPA Regulations Under the Clean Air Act 23

26 adopting federal implementation plans, or FIPs, for each of the states covered by this rule. EPA encourages states to replace these FIPs with State Implementation Plans, or SIPs, starting as early as EPA and the states continue to implement CSAPR s predecessor, the Clean Air Interstate Rule (CAIR), pursuant to the stay issued by the D.C. Circuit. A short note published on EPA s website states, EPA is reviewing the opinion. At this time, CAIR remains in place and no immediate action from States or affected sources is expected." Utility industry Fine Particulate Matter National Ambient Air Quality Standards: State Implementation Plan Requirements The Proposed Rule was published on March 23, The extended comment period closed on May 29, The Final Rule was sent to OMB on May 5, 2016 and the expected publication date is October N/A The EPA is proposing requirements that state, local and tribal air agencies would have to meet as they implement the current and future national ambient air quality standards (NAAQS) for fine particulate matter (PM 2.5). Specifically, this notice provides details on how the EPA proposes that air agencies meet the statutory state implementation plan (SIP) requirements that apply to areas designated nonattainment for any PM 2.5NAAQS, such as: general requirements for attainment plan due dates and attainment dates; emissions inventories; attainment demonstrations; provisions for demonstrating reasonable further progress; quantitative milestones; contingency measures; and nonattainment New Source Review (NNSR) permitting programs, among other things. The Proposed Rule clarifies the specific attainment planning requirements that would apply to PM 2.5NAAQS nonattainment areas based on their classification (either Moderate or Serious), and the process for reclassifying Moderate areas to Serious. Additionally in this notice, the EPA is proposing to revoke the 1997 primary annual standard because the EPA revised the primary annual standard in The EPA first established the PM 2.5 NAAQS in 1997, completed a review of those standards in 2006, and most recently completed a review of the PM 2.5 NAAQS on December 14, Entities potentially affected directly by this Proposed Rule include state, local and tribal governments and air pollution control agencies responsible for attainment and maintenance of the NAAQS. Entities potentially affected indirectly by this proposed rule as regulated sources include owners and operators of sources that emit PM 2.5, sulfur dioxide (SO 2 ), oxides of nitrogen (NO x ), volatile organic compounds (VOC) and/or ammonia (NH 3 ). Others potentially affected indirectly by this proposed rule include members of the general public who live, work, or recreate in areas affected by elevated ambient PM2.5 levels in areas designated nonattainment for a PM2.5 NAAQS. 24 Recent and Pending EPA Regulations Under the Clean Air Act

27 G Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles - Phase 2 The Notice of Proposed Rulemaking was published on July 13, The extended comment period closes on October 1, The Final Rule is projected in August of N/A EPA and NHTSA, on behalf of the Department of Transportation, are each proposing rules to establish a comprehensive Phase 2 Heavy-Duty (HD) National Program that will reduce greenhouse gas (GHG) emissions and fuel consumption for new on-road heavy-duty vehicles. This technology-advancing program would phase in over the long-term, beginning in the 2018 model year and culminating in standards for model year 2027, responding to the President's directive on February 18, 2014, to develop new standards for the next decade. NHTSA's proposed fuel consumption standards and EPA's proposed carbon dioxide (CO 2 ) emission standards are tailored to each of four regulatory categories of heavy-duty vehicles: Combination tractors; trailers used in combination with those tractors; heavy-duty pickup trucks and vans; and vocational vehicles. The proposal also includes separate standards for the engines that power combination tractors and vocational vehicles. Certain proposed requirements for control of GHG emissions are exclusive to EPA programs. These include EPA's proposed hydrofluorocarbon standards to control leakage from air conditioning systems in vocational vehicles, and EPA's proposed nitrous oxide (N 2 O) and methane (CH 4 ) standards for heavy-duty engines. Additionally, NHTSA is addressing misalignment in the Phase 1 standards between EPA and NHTSA to ensure there are no differences in compliance standards between the agencies. In an effort to promote efficiency, the agencies are also proposing to amend their rules to modify reporting requirements, such as the method by which manufacturers submit pre-model, mid-model, and supplemental reports. EPA's proposed HD Phase 2 GHG emission standards are authorized under the Clean Air Act and NHTSA's proposed HD Phase 2 fuel consumption standards authorized under the Energy Independence and Security Act of These standards would begin with model year 2018 for trailers under EPA standards and 2021 for all of the other heavy-duty vehicle and engine categories. The agencies estimate that the combined standards would reduce CO 2 emissions by approximately 1 billion metric tons and save 1.8 billion barrels of oil over the life of vehicles and engines sold during the Phase 2 program, providing over $200 billion in net societal benefits. As noted, the proposal also includes certain EPAspecific provisions relating to control of emissions of pollutants other than GHGs. EPA is seeking comment on non-ghg emission standards relating to the use of auxiliary power units installed in tractors. In addition, EPA is proposing to clarify the classification of natural gas engines and other gaseous-fueled heavy-duty engines, and is proposing closed crankcase standards for emissions of all pollutants from natural gas heavy-duty engines. EPA is also proposing technical amendments to EPA rules that apply to emissions of non-ghg pollutants from light-duty motor vehicles, marine diesel Recent and Pending EPA Regulations Under the Clean Air Act 25

28 engines, and other nonroad engines and equipment. Finally, EPA is proposing to require that rebuilt engines installed in new incomplete vehicles meet the emission standards applicable in the year of assembly, including all applicable standards for criteria pollutants. Companies that manufacture, sell, or import into the United States new heavy-duty engines and new Class 2b through 8 trucks, including combination tractors, all types of buses, vocational vehicles including municipal, commercial, recreational vehicles, and commercial trailers as well as3/4-ton and 1-ton pickup trucks and vans. The heavy-duty category incorporates all motor vehicles with a gross vehicle weight rating of 8,500 lbs or greater, and the engines that power them, except for medium-duty passenger vehicles already covered by the greenhouse gas standards and corporate average fuel economy standards issued for light-duty model year vehicles. Greenhouse Gas Reporting Rule: Revisions and Confidentiality Determinations for Petroleum and Natural Gas Systems The Proposed Rule was published on March 10, The comment period closed on April 24, N/A The EPA is proposing revisions and confidentiality determinations for the petroleum and natural gas systems source category and the general provisions of the Greenhouse Gas Reporting Rule. In particular, the EPA is proposing to revise certain calculation methods, amend certain monitoring and data reporting requirements, clarify certain terms and definitions, and correct certain technical and editorial errors that have been identified during the course of implementation. This action also proposes confidentiality determinations for new or substantially revised data elements contained in these proposed amendments, as well as proposes a revised confidentiality determination for one existing data element. Pipeline transportation of natural gas; Natural gas distribution; Crude petroleum and natural gas extraction; and Natural gas liquid extraction 26 Recent and Pending EPA Regulations Under the Clean Air Act

29 H Hazardous Waste Management System: Identification and Listing of Hazardous Waste: Carbon Dioxide (CO 2 ) Streams in Geologic Sequestration Activities The Proposed Rule was published on August 8, The EPA sent the Final Rule to the Office of Management and Budget in April The Final Rule was published on January 3, 2014 and became effective on March 4, N/A Revises the regulations for hazardous waste management under the Resource Conservation and Recovery Act (RCRA) to conditionally exclude CO 2 streams that are hazardous from the definition of hazardous waste, provided these hazardous streams are captured from emission sources, are injected into Class VI Underground Injection Control (UIC) wells for purposes of geologic sequestration, and meet certain conditions. EPA is taking this action because the Agency believes that the management of these CO 2 streams, when meeting certain conditions, does not present a substantial risk to human health or the environment, and therefore additional regulation pursuant to RCRA's hazardous waste regulations is unnecessary. EPA expects that this amendment will substantially reduce the uncertainty associated with identifying these CO 2 streams under RCRA subtitle C, and will also facilitate the deployment of GS by providing additional regulatory certainty. Power plants Recent and Pending EPA Regulations Under the Clean Air Act 27

30 M Mandatory Reporting of Greenhouse Gases: Additional Sources of Fluorinated GHGs: Extension of Best Available Monitoring Provisions for Electronics Manufacturing The Final Rule was published June 22, 2011,and sections of it became effective on June 30, The deadline extended to September 30, 2011, for comments related to some provisions related to electronics manufacturing. On February 10, 2012, EPA issued a final action to amend the Electronics Manufacturing source category of the Greenhouse Gas Reporting Rule. N/A Typically, EPA makes determinations related to business confidentiality under the Clean Air Act on a case-by-case basis. However, for the Greenhouse Gas Reporting Program (GHGRP), EPA has taken a categorical approach for addressing claims of confidential business information (CBI) that identifies the data elements that will be treated as CBI in advance of reporting. This approach was necessary due to the thousands of entities reporting under the GHGRP and the hundreds of data elements across the rule. Because of this volume, case-by-case determinations of confidentiality would inhibit timely release of the data. Furthermore, EPA followed this approach, in part, in order to provide to reporters, in advance of their required reporting, consistency and stability regarding the confidential treatment of the data that they are required to report. Electronics manufacturers Supplemental Finding that it is Appropriate and Necessary to Regulate Hazardous Air Pollutants from Coal- and Oil-Fired Electric Utility Steam Generating Units *Mercury and Air Toxics Standards (MATS) Considering Costs in Appropriate and Necessary Finding The U.S. Supreme Court remanded the Mercury and Air Toxics Standards or "MATS" rule to the DC Circuit Court after finding that the EPA had not properly considered cost as part of the "Appropriate and Necessary" Finding that was required under Clean Air Act section 112(n)(1)(A). 28 Recent and Pending EPA Regulations Under the Clean Air Act

31 The EPA issued a notice through the supplemental finding that details how the Agency explicitly considered cost and that such consideration of cost does not alter the EPA's previous determination that it is appropriate to regulate hazardous air pollutant emissions from coal- and oil-fired electric utility steam generating units. OMB received the Notice of Proposed Rule Making on October 21, 2015 and it was published in the Federal Register on December 1, Comments were accepted from December 1, 2015 until January 15, The Final Rule was sent to OMB on April 6, 2016 and the expected publication date is June The MATS Regulatory Impact Analysis reports estimates of compliance costs of $8.6 billion and $7.4 billion in 2020 and 2030, respectively. Compliance cost estimates are, therefore, highest in Incremental annual capital expenditures represent approximately $2.4 billion of the $9.6 billion in annual costs in Responds to the Supreme Court's decision that the EPA must consider cost in the initial determination that regulation of HAP emissions from EGUs is appropriate under CAA section 112. The EPA provides detailed information on how the agency has taken cost into account in evaluating whether regulation of HAP from coal- and oil-fired electric utility steam generating units is appropriate. The analyses presented do not affect or alter other aspects of the appropriate and necessary interpretation or finding, or the CAA section 112(d) emission standards promulgated in MATS. These analyses also do not alter the Regulatory Impact Analysis (RIA) prepared for the final MATS. Specifically, the EPA did not accepting comment on the scientific or technical aspects of the 2000 appropriate and necessary finding and subsequent reaffirmation. These findings include that mercury and other HAP emissions are hazardous to public health and the environment, that EGUs are the largest emitter of many HAP, that effective control strategies for HAP emissions are available, and that HAP hazards remain after implementation of other CAA provisions. The EPA is only accepting comment on the consideration of cost aspect presented in this proposed supplementary finding. Therefore, the EPA is not opening for comment or proposing to revise any other aspects of the appropriate and necessary interpretation or finding, or the MATS standards themselves, as part of this action. The final MATS standards were supported by an extensive administrative record and based on available control technologies and other practices already used by the better-controlled and lower-emitting EGUs, and the EPA previously concluded that the standards are achievable and reduce hazards to public health and the environment from HAP emitted by EGUs. 76 FR (MATS proposal); 77 FR 9304 (MATS final). In addition, the public had ample opportunity to comment on all aspects of the CAA section 112(d) standards, the RIA, and the appropriate and necessary finding beyond the consideration of cost; and the EPA responded to all of the significant comments. Also, the Supreme Court's decision neither calls into question nor reverses the portions of the D.C. Circuit Court's opinion unanimously rejecting all other challenges to the appropriate and necessary interpretation and finding and the HAP emission standards that the EPA promulgated in the final MATS rule. Industry, states, environmental organizations, and public health organizations challenged many aspects of the EPA's appropriate and necessary finding and the MATS emissions standards, including: (1) The EPA's reliance on the CAA section 112(c)(9) delisting criteria for determining the Recent and Pending EPA Regulations Under the Clean Air Act 29

32 level of risk worth regulating; (2) the EPA's decision not to consider cost in making the appropriate and necessary determination and listing of EGUs; (3) the EPA's use of identified environmental harms as a basis for finding it appropriate and necessary to regulate HAP emissions from EGUs; (4) the EPA's consideration of the cumulative impacts of HAP emissions from EGUs and other sources in determining whether EGUs pose a hazard to public health or the environment; (5) the EPA's regulation of EGUs pursuant to CAA section 112(d) after adding EGUs to the section 112(c) list pursuant to the appropriate and necessary finding; (6) the EPA's determination that all HAP from EGUs should be regulated; (7) the EPA's technical basis for concluding that EGUs pose a hazard to public health or the environment; (8) the EPA's determination to regulate all EGUs as defined in CAA section 112(a)(8) in the same manner whether or not the individual units are located at major or area sources of HAP; (9) the EPA's emissions standards for mercury and acid gas HAP, including the EPA's decision not to set health based emission standards for acid gas HAP; (10) the EPA's use of certified data submitted by regulated parties; (11) the EPA's denial of a delisting petition filed by an industry trade group; (12) the EPA's decision not to subcategorize a certain type of EGU; and (13) the EPA's decision to allow EGUs to average HAP emissions among certain EGUs. Fossil fuel-fired electric utility steam generating units National Emission Standards for Hazardous Air Pollutants From Coal and Oil-Fired Electric Utility Steam Generating Units and Standards of Performance for Fossil-Fuel-Fired Electric Utility, Industrial- Commercial-Institutional, and Small Industrial-Commercial-Institutional Steam Generating Units *Mercury and Air Toxics Standards for Utilities (MATS) The Final Rule was published on February 16, 2012, and went into effect on April 16, Corrections to the rule were published on April 19, EPA stayed the effective date of the rule on August 2, 2012, and granted reconsideration on November 30, 2012, which reopened the public comment period. The public comment period on December 12, 2012, was extended to January 7, On April 24, 2013, the EPA published the Notice of Final Action on Reconsideration and finalized reconsideration of all the issues included in the Proposed Rule except those related to startup and shutdown. On June 25, 2013, the EPA withdrew the rule and reopened the public comment period for the proposed reconsideration to solicit additional input on specific issues raised during the initial public comment period related to the proposed revisions to the requirements and definitions related to periods of startup and shutdown. On April 15, 2014, U.S. Court of Appeals for the D.C. Circuit s upheld the Environmental Protection Agency s (EPA s) February 2012-finalized Mercury and Air Toxics Standards (MATS), ruling in a 2 1 decision that the agency is not required to take costs into account when it promulgates rules that are appropriate and necessary to address hazards to public health. 30 Recent and Pending EPA Regulations Under the Clean Air Act

33 April 16, 2015, is the compliance date for MATS with some utilities receiving site specific extensions to April 16, On April 25, 2015, the EPA completed the review of the remaining requests to reconsider certain aspects of the Mercury and Air Toxics Standards (MATS) for power plants. The EPA decided to deny all remaining requests - a step that affirms the agency s approach in the final MATS rule and provides stakeholders with certainty moving forward. On June 29, 2015, the U.S. Supreme Court held " EPA must consider cost including cost of compliance before deciding whether regulation is appropriate and necessary... It will be up to the [EPA] to decide (as always, within the limits of reasonable interpretation) how to account for cost. The Supreme Court remanded the rule to D.C. Circuit Court for reconsideration. The estimated net benefits of the Proposed Rule at a 3 percent discount rate are $27 to $80 billion or $24 to $71 billion at a 7 percent discount rate. Proposes new NESHAP from coal- and oil-fired electric utility steam generating units (EGUs) under the CAA and proposes revised NSPS for fossil fuel-fired EGUs by reducing emissions of the HAP listed in CAA section 112(b), such as limiting mercury, arsenic, acid gases and other toxic pollution from power plants. It also proposes several amendments, technical clarifications, and corrections to existing NSPS provisions for fossil fuel-fired EGUs and large and small industrialcommercial-institutional steam generating units. The Final Rule sets standards for all hazardous air pollutants (HAPs) emitted by coal- and oil-fired electric generating units (EGUs) with a capacity of 25 megawatts or greater. All regulated EGUs are considered major under the final rule. EPA did not identify any size, design or engineering distinction between major and area sources. Fossil fuel-fired electric utility steam generating units; fossil fuel-fired electric utility steam generating units owned by the Federal government; fossil fuel-fired electric utility steam generating units owned by municipalities; and fossil fuel-fired electric utility steam generating units in Indian country. Model Trading Rules for Greenhouse Gas Emissions from Electric Utility Generating Units Constructed on or Before January 8, 2014 *a.k.a. Clean Power Plan Model Trading Rules On October 23, 2015, the EPA proposed a federal plan to implement the greenhouse gas (GHG) emission guidelines (EGs) for existing fossil fuel-fired electric generating units (EGUs) under the Clean Air Act (CAA). The EGs were proposed in June 2014 and finalized on August 3, 2015 as the Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units (also known as the Clean Power Plan or EGs). The comment closed on January 21, The finalized Trading Rules are expected in August Recent and Pending EPA Regulations Under the Clean Air Act 31

34 N/A The EPA is proposing a federal plan to implement the greenhouse gas emission guidelines (EGs) for existing fossil fuel-fired electric generating units (EGUs) under the Clean Air Act (CAA). The EGs were proposed in June of 2014 and finalized on August 3, 2015, as the Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units (also known as the Clean Power Plan or EGs). The proposal presents two approaches to a federal plan for states and other jurisdictions that do not submit an approvable plan to the EPA: a rate-based emission trading program and a massbased emission trading program. These proposals also constitute proposed model trading rules that states can adopt or tailor for implementation of the final EGs. The federal plan is an important measure to ensure that congressionally mandated emission standards under the authority of the CAA are implemented by states. The stringency of the emission performance levels established in the final EGs will be the same whether implemented through a state plan or a federal plan. The EPA is also proposing enhancements to the CAA section 111(d) framework regulations related to the process and timing for state plan submissions and EPA actions. Electric Utility Generating Units constructed on or before January 8, Modernization of the Accidental Release Prevention Regulations under Clean Air Act On March 14, 2016, the EPA under a Notice of Proposed Rule Making proposed to amend its Risk Management Program regulations in response to Executive Order The comment period closed on May 13, 2016, and a Final Rule is expected in December of N/A The purpose of the action is to improve safety at facilities that use and distribute hazardous chemicals. In response to catastrophic chemical facility incidents in the United States, including the explosion that occurred at the West Fertilizer facility in West, Texas, on April 17, 2013 that killed 15 people, President Obama issued Executive Order 13650, Improving Chemical Facility Safety and Security, on August 1, The action amends EPA's Risk Management Program regulations at 40 CFR part 68. These regulations apply to stationary sources (also referred to as facilities ) that hold specific regulated substances in excess of threshold quantities. These facilities are required to assess their potential release impacts, undertake steps to prevent releases, plan for emergency response to releases, and summarize this information in a risk management plan (RMP) submitted to EPA. The release 32 Recent and Pending EPA Regulations Under the Clean Air Act

35 prevention steps vary depending on the type of process, but progressively gain specificity and rigor over three program levels (i.e., Program 1, Program 2, and Program 3). The major provisions of the proposed rule include several changes to the accident prevention program requirements, as well as enhancements to the emergency response requirements, and improvements to the public availability of chemical hazard information. Petroleum refineries; large chemical manufacturers; water and wastewater treatment systems; chemical and petroleum wholesalers and terminals; food manufacturers, packing plants, and other cold storage facilities with ammonia refrigeration systems; agricultural chemical distributors; midstream gas plants; and a limited number of other sources, including Federal installations that use RMP-regulated substances. Recent and Pending EPA Regulations Under the Clean Air Act 33

36 N National Ambient Air Quality Standards for Ozone * Ozone Rule, a.k.a. Ozone NAAQS Review On March 23, 2008, the EPA published a final rule to revise the primary and secondary NAAQS for ozone to provide increased protection of public health and welfare. In subsequent litigation, the U.S. Court of Appeals for the District of Columbia Circuit upheld the EPA's 2008 primary O₃ standard, but remanded the 2008 secondary standard. State of Mississippi v. EPA, 744 F. 3d 1334 (D.C. Cir. 2013). With respect to the primary standard, the court held that the EPA reasonably determined that the existing primary standard, set in 1997, did not protect public health with an adequate margin of safety and required revision. In upholding the EPA's revised primary standard, the court dismissed arguments that the EPA should have adopted a more stringent standard. The court remanded the secondary standard to the EPA after rejecting the EPA's explanation for setting the secondary standard identical to the revised 8-hour primary standard. The court held that because the EPA had failed to identify a level of air quality requisite to protect public welfare, the EPA's comparison between the primary and secondary standards for determining if requisite protection for public welfare was afforded by the primary standard failed to comply with the CAA. The schedule to complete this review was established by a federal court order, which requires the EPA sign a proposal by December 1, 2014, and makes a final determination by October 1, The Proposed Rule was published on December 17, The comment period closed on March 17, The Final Rule was sent to OMB for regulatory review on August 28, 2015, and the Final Rule was published in the Federal Register on October 26, The Final Rule was effective on December 28, N/A Based on its review of the air quality criteria for ozone (O 3 ) and related photochemical oxidants and national ambient air quality standards (NAAQS) for O 3, the Environmental Protection Agency (EPA) is revising the primary and secondary NAAQS for O 3 to provide requisite protection of public health and welfare, respectively. The EPA is revising the levels of both standards to parts per million (ppm), and retaining their indicators (O 3 ), forms (fourth-highest daily maximum, averaged across three consecutive years) and averaging times (eight hours). The EPA is making corresponding revisions in data handling conventions for O 3 and changes to the Air Quality Index (AQI); revising regulations for the 34 Recent and Pending EPA Regulations Under the Clean Air Act

37 prevention of significant deterioration (PSD) program to add a transition provision for certain applications; and establishing exceptional events schedules and providing information related to implementing the revised standards. The EPA is also revising the O 3 monitoring seasons, the Federal Reference Method (FRM) for monitoring O 3 in the ambient air, Federal Equivalent Method (FEM) analyzer performance requirements, and the Photochemical Assessment Monitoring Stations (PAMS) network. Along with exceptional events schedules related to implementing the revised O 3 standards, the EPA is applying this same schedule approach to other future new or revised NAAQS and removing obsolete regulatory language for expired exceptional events deadlines. The EPA is making minor changes to the procedures and time periods for evaluating potential FRMs and equivalent methods, including making the requirements for nitrogen dioxide (NO 2 ) consistent with the requirements for O 3, and removing an obsolete requirement for the annual submission of Product Manufacturing Checklists by manufacturers of FRMs and FEMs for monitors of fine and coarse particulate matter. With regard to the primary standard, the EPA is revising the level of the standard to ppm to provide increased public health protection against health effects associated with long- and short-term exposures. The EPA is retaining the indicator (O 3 ), averaging time (8-hour) and form (annual fourth-highest daily maximum, averaged over 3 years) of the existing standard. This action provides increased protection for children, older adults, and people with asthma or other lung diseases, and other at-risk populations against an array of adverse health effects that include reduced lung function, increased respiratory symptoms and pulmonary inflammation; effects that contribute to emergency department visits or hospital admissions; and mortality. The decisions on the adequacy of the current standard and the appropriate level for the revised standard are based on an integrative assessment of an extensive body of new scientific evidence, which substantially strengthens what was known about O 3 -related health effects in the last review. The revised standard also reflects consideration of a quantitative risk assessment that estimates public health risks likely to remain upon just meeting the current and various alternative standards. Based on this information, the Administrator concludes that the current primary O 3 standard is not requisite to protect public health with an adequate margin of safety, as required by the CAA, and that revision of the level to ppm is warranted to provide the appropriate degree of increased public health protection for at-risk populations against an array of adverse health effects. In concluding that a revised primary standard set at a level of ppm is requisite to protect public health with an adequate margin of safety, the Administrator relies on several key pieces of information, including: (a) A level of ppm is well below the O 3 exposure concentration shown to cause the widest range of respiratory effects (i.e., ppm) and is below the lowest O 3 exposure concentration shown to cause the adverse combination of decreased lung function and increased respiratory symptoms (i.e., ppm); (b) a level of ppm will eliminate, or nearly eliminate, repeated occurrence of these O 3 exposure concentrations (this is important because the potential for adverse effects increases with frequency of occurrence); (c) a level of ppm will protect the large majority of the population, including children and people with asthma, from lower exposure concentrations, which can cause lung function decrements and airway inflammation in some people (i.e., ppm); and (d) a level of ppm will result in important reductions in the risk of O 3 -induced lung function decrements as well as the risk of O 3 -associated hospital admissions, emergency department visits, and mortality. In addition, the revised level of the primary standard is within the range that CASAC advised the Agency to consider. Recent and Pending EPA Regulations Under the Clean Air Act 35

38 The EPA is also revising the level of the secondary standard to ppm to provide increased protection against vegetation-related effects on public welfare. The EPA is retaining the indicator (O 3 ), averaging time (8-hour) and form (annual fourth-highest daily maximum, averaged over 3 years) of the existing secondary standard. This action, reducing the level of the standard, provides increased protection for natural forests in Class I and other similarly protected areas against an array of vegetation-related effects of O 3. The Administrator is making this decision based on judgments regarding the currently available welfare effects evidence, the appropriate degree of public welfare protection for the revised standard, and currently available air quality information on seasonal cumulative exposures that may be allowed by such a standard. In making this decision on the secondary standard, the Administrator focuses on O 3 effects on tree seedling growth as a proxy for the full array of vegetation-related effects of O 3, ranging from effects on sensitive species to broader ecosystemlevel effects. Using this proxy in judging effects to public welfare, the Administrator has concluded that the requisite protection will be provided by a standard that generally limits cumulative seasonal exposures to 17 ppm-hours (ppm-hrs) or lower, in terms of a 3-year W126 index. Based on air quality analyses that indicate such control of cumulative seasonal exposures will be achieved with a standard set at a level of ppm (and the same indicator, averaging time, and form as the current standard), the Administrator concludes that a standard revised in this way will provide the requisite protection. In addition to providing protection of natural forests from growth-related effects, the revised standard is also expected to provide increased protection from other effects of potential public welfare significance, including crop yield loss and visible foliar injury. Thus, based on all of the information available in this review, the Administrator concludes that the current secondary O 3 standard is not requisite to protect public welfare as required by the CAA, and that this revision will provide appropriate protection against known or anticipated adverse effects to the public welfare. The rule will require states with areas determined to be in non-attainment with the new standards to prepare state implementation plans to come into compliance through emissions control programs. The majority of emissions sources of man-made nitrogen oxides (NO x ) and volatile organic compounds emissions, which contribute to ground-level ozone formation, are mobile sources, industrial processes (which include consumer and commercial products), and the electric power industry. Other emissions sources include agricultural sources. National Ambient Air Quality Standards (NAAQS) for Particulate Matter The Proposed Rule was published on June 29, The Final Rule was published on January 15, 2013, and became effective on March 18, N/A 36 Recent and Pending EPA Regulations Under the Clean Air Act

39 Based on its review of the air quality criteria and the NAAQS for particulate matter (PM), the EPA proposes to make revisions to the primary and secondary NAAQS for PM to provide requisite protection of public health and welfare, respectively, and to make corresponding revisions to the data handling conventions for PM and ambient air monitoring, reporting, and network design requirements. The EPA also proposes revisions to the Prevention of Significant Deterioration (PSD) permitting program with respect to the proposed NAAQS revisions. With regard to primary standards for fine particles (generally referring to particles less than or equal to 2.5 micrometers (mm) in diameter, PM2.5), the EPA proposes to revise the annual PM2.5 standard by lowering the level to within a range of 12.0 to 13.0 micrograms per cubic meter (mg/m3), so as to provide increased protection against health effects associated with long- and short-term exposures (including premature mortality, increased hospital admissions and emergency department visits, and development of chronic respiratory disease) and to retain the 24-hour PM2.5 standard. The EPA proposes changes to the Air Quality Index (AQI) for PM2.5 to be consistent with the proposed primary PM2.5 standards. With regard to the primary standard for particles generally less than or equal to 10 mm in diameter (PM10), the EPA proposes to retain the current 24- hour PM10 standard to continue to provide protection against effects associated with short-term exposure to thoracic coarse particles (i.e., PM10-2.5). With regard to the secondary PM standards, the EPA proposes to revise the suite of secondary PM standards by adding a distinct standard for PM2.5 to address PM-related visibility impairment and to retain the current standards generally to address non-visibility welfare effects. The proposed distinct secondary standard would be defined in terms of a PM2.5 visibility index, which would use speciated PM2.5 mass concentrations and relative humidity data to calculate PM2.5 light extinction, translated to the deciview (dv) scale, similar to the Regional Haze Program; a 24- hour averaging time; a 90th percentile form averaged over 3 years; and a level set at one of two options either 30 dv or 28 dv. Power plants, industrial boilers, automobiles, construction sites, unpaved roads, and farms National Emission Standards for Hazardous Air Pollutants for Secondary Aluminum Production The Residual Risk and Technology Review Amendments were initiated on June 8, The Notice of Proposed Rulemaking was sent to the Office of Management and Budget on January 9, 2012, and the Proposed Rule was published on February 14, 2012, with a comment period closing on April 13, A Supplemental Notice of Proposed Rulemaking was issued on December 8, 2014 with a comment period until January 22, 2015, and on January 15, 2015, with a comment period until February 6, The Final Rule was published and became effective on July 29, N/A Recent and Pending EPA Regulations Under the Clean Air Act 37

40 This action supplements the notice of proposed rulemaking for the national emissions standards for hazardous air pollutants (NESHAP) for secondary aluminum production, which was published in the Federal Register on February 14, In that action, the EPA proposed decisions concerning the residual risk and technology review for the Secondary Aluminum Production source category and proposed amendments to correct and clarify rule requirements. This supplemental proposal presents a revised risk review (including a revised inhalation risk assessment, a refined multipath way risk assessment, and an updated ample margin of safety analysis) and a revised technology review for the Secondary Aluminum Production source category. Similar to the 2012 proposal, the EPA found risks due to emissions of air toxics to be acceptable from this source category and identified no cost-effective controls under the updated ample margin of safety analysis or the technology review to achieve further emissions reductions. Therefore, the EPA is proposing no revisions to the numeric emission standards based on these revised analyses. However, this supplemental proposal supplements and modifies several of the proposed technical corrections and rule clarifications that were originally presented in the February 14, 2012 proposal; withdraws the previous proposal to include affirmative defense provisions in the regulation; proposes alternative compliance options for the operating and monitoring requirements for sweat furnaces; and provides a revised cost analysis for compliance testing. This action, if finalized, would result in improved monitoring, compliance and implementation of the rule. The Secondary Aluminum Production source category includes any facility using clean charge, aluminum scrap or dross from aluminum production, as the raw material and performing one or more of the following processes: scrap shredding, scrap drying/delacquering/decoating, thermal chip drying, furnace operations (i.e., melting, holding, sweating, refining, fluxing or alloying), recovery of aluminum from dross, in-line fluxing or dross cooling. National Emission Standards for Hazardous Air Pollutants for Major Sources: Industrial, Commercial, and Institutional Boilers and Process Heaters (BOILER MACT) Final rule published March 21, 2011, and effective on May 20, (DELAYED) May 18, 2011 The EPA issued the Boiler maximum Achievable Control Technology (MACT) reconsideration proposal on December 2, The EPA took final action on reconsideration of certain issues related to the emission standards to control hazardous air pollutants from new and existing industrial, commercial and institutional boilers at area sources which were issued under section 112 of the CAA. As part of this action, the EPA amended certain compliance dates for the standard and making technical corrections to the final rule to clarify definitions, references, applicability and compliance issues raised by petitioners and other stakeholders affected by the rule. The EPA took final action on the proposed reconsideration. This final rule became effective on February 1, Recent and Pending EPA Regulations Under the Clean Air Act

41 Net Benefit of $18-$52 billion in Sets emissions standards for hazardous air pollutants (e.g., particulate matter, hydrogen chloride, mercury) for boilers and process heaters located at major sources. Standards for major sources will be based on the MACT. Affects industrial boilers, institutional boilers, commercial boilers, and process heaters. A process heater is defined as a unit in which the combustion gases do not directly come into contact with process material or gases in the combustion chamber (e.g., indirect fired). A boiler is defined as an enclosed device using controlled flame combustion and having the primary purpose of recovering thermal energy in the form of steam or hot water. National Emission Standards for Hazardous Air Pollutants for Mineral Wool Production and Wool Fiberglass Manufacturing The rulemaking was initiated in November of Multiple notices of proposed rulemakings appeared throughout with the last extended comment period closing on January 1, The Final Rule was published and became effective on July 29, The total annualized costs for the proposed rule are estimated at $548,000 (2010$). The EPA is proposing amendments to the national emissions standards for hazardous air pollutants for Mineral Wool Production and Wool Fiberglass Manufacturing to address the results of the residual risk and technology review that the EPA is required to conduct by the Clean Air Act. The proposed Mineral Wool Production amendments include emissions limits for carbonyl sulfide, hydrogen fluoride and hydrochloric acid for cupolas; add combined collection and curing processes as new regulated sources; and include emissions limits for formaldehyde, phenol and methanol for combined collection and curing operations. Modifications to the testing and monitoring and related notification, recordkeeping and reporting requirements are also proposed. The proposed amendments for the Wool Fiberglass Manufacturing source category include emissions limits for chromium compounds, hydrogen fluoride, hydrochloric acid and particulate matter for glass-melting furnaces at major sources; revised emissions limits for formaldehyde, and the addition of emissions limits for phenol and methanol for bonded product lines at major sources; and modifications to testing and monitoring and related notification, recordkeeping and reporting requirements. Recent and Pending EPA Regulations Under the Clean Air Act 39

42 Wool Fiberglass Manufacturing Facilities National Emission Standards for Hazardous Air Pollutants From the Portland Cement Manufacturing Industry and Standards of Performance for Portland Cement Plants; Final Rule The Final Rule published September 9, 2011, and was effective November 8, Amended on January 18, Reconsideration granted by the EPA on May 17, Amended Final Rules published and effective on February 12, Net Benefits of both NESHAP and New Source Performance Standards (NSPS) in 2013: $6.5 to $17 billion (3 percent discount rate) or $5.8 to $15 billion (7 percent discount rate) Non-monetized Benefits: 4,400 tons of NO x (includes energy disbenefits); 5,200 tons of organic hazardous air pollutants (HAP); 5,900 tons of hydrogen chloride (HCl); 16,400 pounds of mercury (Hg);Health effects from HAPs, nitrogen dioxide (NO 2 ), and sulfur dioxide (SO 2 ) exposure; ecosystem effects; and visibility impairment. Finalizes amendments to the NESHAP from the Portland Cement Manufacturing Industry and to the NSPS for Portland Cement Plants. The final amendments to the NESHAP add or revise, as applicable, emission limits for Hg, total hydrocarbons (THC), and particulate matter (PM) from new and existing kilns located at major and area sources, and for HCl from new and existing kilns located at major sources. The standards for new kilns apply to facilities that commence construction, modification, or reconstruction after May 6, The final amendments to the NSPS add or revise, as applicable, emission limits for PM, opacity, nitrogen oxides (NO x ), and sulfur dioxide (SO 2 ) for facilities that commence construction, modification, or reconstruction after June 16, The final rule also includes additional testing and monitoring requirements for affected sources. Portland Cement Manufacturing Plants National Emission Standards for Hazardous Air Pollutants for Source Categories: Gasoline Distribution Bulk Terminals, Bulk Plants, and Pipeline Facilities; and Gasoline Dispensing Facilities The Final Rules with amendments published and effective January 24, Recent and Pending EPA Regulations Under the Clean Air Act

43 The amendments do not contain a Federal mandate that may result in expenditures of $100 million or more for state, local, and tribal governments, in the aggregate, or the private sector in any one year. The amendments clarify certain provisions and correct typographical errors in the rule text for a rule the EPA previously determined did not include a Federal mandate that may result in an estimated cost of $100 million or more (69 FR 5061, February 3, 2004). This action promulgates amendments to the NESHAP for the following Source Categories: Gasoline Distribution Bulk Terminals, Bulk Plants, and Pipeline Facilities; and Gasoline Dispensing Facilities, which EPA promulgated on January 10,2008, and amended on March 7, Operations at area sources that transfer and store gasoline, including bulk terminals, bulk plants, pipeline facilities, and gasoline dispensing facilities. National Emission Standards for Hazardous Air Pollutants From Coal and Oil-Fired Electric Utility Steam Generating Units and Standards of Performance for Fossil-Fuel-Fired Electric Utility, Industrial- Commercial-Institutional, and Small Industrial-Commercial-Institutional Steam Generating Units *Mercury and Air Toxics Standards for Utilities (MATS) The Final Rule was published on February 16, 2012, and went into effect on April 16, Corrections to the rule were published on April 19, EPA stayed the effective date of the rule on August 2, 2012, and granted reconsideration on November 30, 2012, which reopened the public comment period. The public comment period on December 12, 2012, was extended to January 7, On April 24, 2013, the EPA published the Notice of Final Action on Reconsideration and finalized reconsideration of all the issues included in the Proposed Rule except those related to startup and shutdown. On June 25, 2013, the EPA withdrew the rule and reopened the public comment period for the proposed reconsideration to solicit additional input on specific issues raised during the initial public comment period related to the proposed revisions to the requirements and definitions related to periods of startup and shutdown. On April 15, 2014, U.S. Court of Appeals for the D.C. Circuit s upheld the Environmental Protection Agency s (EPA s) February 2012-finalized Mercury and Air Toxics Standards (MATS), ruling in a 2 1 decision that the agency is not required to take costs into account when it promulgates rules that are appropriate and necessary to address hazards to public health. April 16, 2015, is compliance date for MATS with some utilities receiving site specific extensions to April 16, Recent and Pending EPA Regulations Under the Clean Air Act 41

44 On April 25, 2015, the EPA completed the review of the remaining requests to reconsider certain aspects of the Mercury and Air Toxics Standards (MATS) for power plants. The EPA decided to deny all remaining requests - a step that affirms the agency s approach in the final MATS rule and provides stakeholders with certainty moving forward. On June 29, 2015, the U.S. Supreme Court held " EPA must consider cost including cost of compliance before deciding whether regulation is appropriate and necessary... It will be up to the [EPA] to decide (as always, within the limits of reasonable interpretation) how to account for cost. The Supreme Court remanded the rule to D.C. Circuit Court for reconsideration. The estimated net benefits of the Proposed Rule at a 3 percent discount rate are $27 to $80 billion or $24 to $71 billion at a 7 percent discount rate. Proposes new NESHAP from coal- and oil-fired electric utility steam generating units (EGUs) under the CAA and proposes revised NSPS for fossil fuel-fired EGUs by reducing emissions of the HAP listed in CAA section 112(b), such as limiting mercury, arsenic, acid gases and other toxic pollution from power plants. It also proposes several amendments, technical clarifications, and corrections to existing NSPS provisions for fossil fuel-fired EGUs and large and small industrialcommercial-institutional steam generating units. The Final Rule sets standards for all hazardous air pollutants (HAPs) emitted by coal- and oil-fired electric generating units (EGUs) with a capacity of 25 megawatts or greater. All regulated EGUs are considered major under the final rule. EPA did not identify any size, design or engineering distinction between major and area sources. Fossil fuel-fired electric utility steam generating units; fossil fuel-fired electric utility steam generating units owned by the Federal government; fossil fuel-fired electric utility steam generating units owned by municipalities; and fossil fuel-fired electric utility steam generating units in Indian country. National Emission Standards for Hazardous Air Pollutants for Polyvinyl Chloride and Copolymers Production The Final Rule was published in January 2012 and effective on April 17, Total capital costs: Option 1 (MACT floor): $16 million Option 2 (MACT floor and beyond): $370 million 42 Recent and Pending EPA Regulations Under the Clean Air Act

45 Total annualized costs: Option 1: $20 million Option 2: $129 million Total HAP reduction: Option 1: 1,570 tons per year Option 2: 2,619 tons per year The rule establishes emission standards for hazardous air pollutants from polyvinyl chloride and copolymers production located at major and area sources. The rule includes requirements to demonstrate initial and continuous compliance with the proposed emission standards. The standards apply at all times, including during periods of startup, shutdown, and malfunctions. The proposed standards also include continuous monitoring provisions and reporting requirements. Facilities that polymerize vinyl chloride monomer to produce polyvinyl chloride and/or copolymers products National Emission Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines; New Source Performance Standards for Stationary Internal Combustion Engines (RICE); Amendments *RICE EPA proposed the rule on June 7, The period for public comment ended on July 23, The Final Rule was published on January 30, 2013, and it became effective on April 1, On June 28, 2013, EPA granted reconsideration of three issues raised in the petitions for reconsideration of the January 30, 2013, Final Amendments to the 2010 RICE NESHAP. On August 29, 2013, the EPA published a request for public comments and the comment period closed on November 4, The three issues were: Timing for compliance with the ultra low sulfur diesel fuel requirement for emergency compression ignition stationary engines that operate for emergency demand response, voltage/frequency deviations or local reliability; Timing of and information required for the reporting requirement for emergency stationary engines that operate for emergency demand response, voltage/frequency deviations or local reliability; and Conditions for operation of an engine for up to 50 hours per year in non-emergency situations as part of a financial arrangement with another entity. Recent and Pending EPA Regulations Under the Clean Air Act 43

46 The expected implementation date was January 1, According to the EPA, these final amendments will reduce the capital and annual costs of the original 2010 amendments by $287 million and $139 million, respectively. The EPA estimates that with these final amendments, the capital cost of compliance with the 2010 amendments to the RICE NESHAP in 2013 is $840 million and the annual cost is $490 million (2010$). These costs are identical to the costs estimated for the amendments to the RICE NESHAP proposed on June 7, 2012, since the changes from the proposal do not affect the costs of the rule in the year The EPA is proposing amendments to the national emission standards for HAPs for stationary RICE under section 112 of the CAA. The proposed amendments include alternative testing options for certain large spark ignition (generally natural gas-fueled) stationary RICE, management practices for a subset of existing spark ignition stationary RICE in sparsely populated areas, and alternative monitoring and compliance options for the same engines in populated areas. The EPA is also proposing to include a limited temporary allowance for existing stationary emergency area source engines to be used for peak shaving and non-emergency demand response. In addition, the EPA is proposing to increase the hours that stationary emergency engines may be used for emergency demand response. Any industry using a stationary internal combustion engine for electric power generation, transmission, or distribution. Users could include: medical and surgical hospitals; and crude petroleum and natural gas producers. National security also uses stationary combustion engines for electric power generation. Standards of Performance for Greenhouse Gas Emissions for New Stationary Sources: Electric Utility Generating Units *New Source Performance Standards (NSPS) On June 25, 2013, President Obama issued a Presidential Memorandum directing the Environmental Protection Agency (EPA) to work expeditiously to complete greenhouse gas (GHG) standards for the power sector. The agency is using its authority under section 111(d) of the Clean Air Act (CAA) to issue emission guidelines to address GHG emissions from existing power plants. The Presidential Memorandum directed EPA to issue proposed GHG guidelines for existing power plants by no later than June 1, 2014, and to issue final guidelines by no later than June 1, In addition, the Presidential Memorandum directs EPA to, in the guidelines, require states to submit to EPA the implementation plans required under section 111(d) of the CAA by no later than June 30, On June 18, 2014, the EPA proposed emission guidelines for states to follow in developing plans to address GHG emissions from existing fossil-fired EGU, using its authority under CAA 111(d). The Proposed Guidelines were published in the Federal Register on June 18, 2014, as part of the President Climate Change Action Plan. The comment period closed on October 16, Recent and Pending EPA Regulations Under the Clean Air Act

47 The Final Rule was announced on August 3, 2015 and publication in the Federal Register is expected in October of On February 9, 2016, the United Sates Supreme Court in a 5-4 decision stayed the rule blocked the implementation of the Clean Power Plan while it is being challenged in court. The incremental cost is the projected additional cost of complying with the guidelines in the year analyzed and includes the amortized cost of capital investment, needed new capacity, shifts between or amongst various fuels, deployment of demand-side EE programs, and other actions associated with compliance. These important dynamics are discussed in more detail in the RIA in the rulemaking docket. The EPA estimates the annual incremental compliance cost for the rate-based approach for final emission guidelines to be $2.5 billion in 2020, $1.0 billion in 2025 and $8.4 billion in 2030, including the costs associated with monitoring, reporting, and recordkeeping (MR&R). The EPA estimates the annual incremental compliance cost for the mass-based approach for final emission guidelines to be $1.4 billion in 2020, $3.0 billion in 2025 and $5.1 billion in 2030, including the costs associated with MR&R. More detailed cost estimates are available in the RIA included in the rulemaking docket. Proposes standards of performance for: (1) modified fossil fuel-fired utility boilers and IGCC units, (2) modified natural gas-fired stationary combustion turbines, (3) reconstructed fossil fuel-fired utility boilers and IGCC units, and (4) reconstructed natural gas-fired stationary combustion turbines. Consistent with the requirements of CAA section 111(b), these proposed standards reflect the degree of emission limitation achievable through the application of the best system of emission reduction (BSER) that the EPA has determined has been adequately demonstrated for each type of unit. This final rule comprises three main elements: 1) two subcategory-specific CO 2 emission performance rates resulting from application of the BSER to the two subcategories of affected EGUs; 2) state-specific CO 2 goals, expressed as both emission rates and as mass, that reflect the subcategory-specific CO 2 emission performance rates and each state s mix of affected EGUs the two performance rates; and 3) guidelines for the development, submittal and implementation of state plans that implement those BSER emission performance rates either through emission standards for affected EGUs, or through measures that achieve the equivalent, in aggregate, of those rates as defined and expressed in the form of the state goals. In this final action, the EPA is setting emission performance rates, phased in over the period from 2022 to 2030, for two subcategories of affected fossil fuel-fired EGUs fossil fuel-fired electric utility steam- generating units and stationary combustion turbines. These rates, applied to each state s particular mix of fossil fuel-fired EGUs, generate the state s carbon intensity goal for 2030 (and interim rates for the period ). Each state will determine whether to apply these to each affected EGU or to take an alternative approach and meet either an equivalent statewide rate-based goal or statewide mass-based goal. The EPA does not prescribe how a state must meet the emission guidelines, but, if a state chooses to take the path of meeting a state goal, these final guidelines identify the methods that a state can or, in some cases, must use to demonstrate that the combination of measures and standards that the state adopts meets its state-level Recent and Pending EPA Regulations Under the Clean Air Act 45

48 CO 2 goals. While the EPA accomplishes the phase- in of the interim goal by way of annual emission performance rates, states and EGUs may meet their respective emission reduction obligations on average over that period following whatever emission reduction trajectory they determine to pursue over that period. CAA section 111(d) creates a partnership between the EPA and the states under which the EPA establishes emission guidelines and the states take the lead on implementing them by establishing emission standards or creating plans that are consistent with the EPA emission guidelines. The EPA recognizes that each state has differing policy considerations including varying regional emission reduction opportunities and existing state programs and measures and that the characteristics of the electricity system in each state (e.g., utility regulatory structure and generation mix) also differ. Therefore, as in the proposal, each state will have the latitude to design a program to meet source-category specific emission performance rates or the equivalent statewide rate- or mass-based goal in a manner that reflects its particular circumstances and energy and environmental policy objectives. Each state can do so on its own, or a state can collaborate with other states and/or tribal governments on multi-state plans, or states can include in their plans the trading tools that EGUs can use to realize additional opportunities for cost savings while continuing to operate across the interstate system through which electricity is produced. A state would also have the option of adopting the model rules for either a rate- or a mass-based program that the EPA is proposing concurrently with this action. To facilitate the state planning process, this final rule establishes guidelines for the development, submittal, and implementation of state plans. The final rule describes the components of a state plan, the additional latitude states have in developing strategies to meet the emission guidelines, and the options they have in the timing of submittal of their plans. This final rule also gives states considerable flexibility with respect to the timeframes for plan development and implementation, as well as the choice of emission reduction measures. The final rule provides up to fifteen years for full implementation of all emission reduction measures, with incremental steps for planning and then for demonstration of CO 2 reductions that will ensure that progress is being made in achieving CO 2 emission reductions. States will be able to choose from a wide range of emission reduction measures, including measures that are not part of the BSER. Utilities operating fossil fuel-fired electric generating units Standards of Performance for Greenhouse Gas Emissions from New, Modified and Reconstructed Stationary Sources: Electric Utility Generating Unit *Existing Source Performance Standards (ESPS) On June 25, 2013, President Obama issued a Presidential Memorandum directing the Environmental Protection Agency (EPA) to work expeditiously to complete greenhouse gas (GHG) standards for the power sector. The agency is using its authority under section 111(d) of the Clean Air Act (CAA) to issue emission guidelines to address GHG emissions from existing power plants. The Presidential Memorandum directed EPA to issue proposed GHG guidelines for existing power plants by no later than June 1, 2014, and to issue final guidelines by no later than June 1, In addition, the Presidential Memorandum directs 46 Recent and Pending EPA Regulations Under the Clean Air Act

49 EPA to, in the guidelines, require states to submit to EPA the implementation plans required under section 111(d) of the CAA by no later than June 30, On June 18, 2014, the EPA proposed emission guidelines for states to follow in developing plans to address GHG emissions from existing fossil-fired EGU, using its authority under CAA 111(d). The Proposed Guidelines were published in the Federal Register on June 18, 2014, as part of the President Climate Change Action Plan. The comment period closed on October 16, The Final Rule was announced on August 3, 2015 and publication in the Federal Register occurred in October of On February 9, 2016, the United Sates Supreme Court in a 5-4 decision stayed the rule blocked the implementation of the Clean Power Plan while it is being challenged in court. The incremental cost is the projected additional cost of complying with the guidelines in the year analyzed and includes the amortized cost of capital investment, needed new capacity, shifts between or amongst various fuels, deployment of demand-side EE programs, and other actions associated with compliance. These important dynamics are discussed in more detail in the RIA in the rulemaking docket. The EPA estimates the annual incremental compliance cost for the rate-based approach for final emission guidelines to be $2.5 billion in 2020, $1.0 billion in 2025 and $8.4 billion in 2030, including the costs associated with monitoring, reporting, and recordkeeping (MR&R). The EPA estimates the annual incremental compliance cost for the mass-based approach for final emission guidelines to be $1.4 billion in 2020, $3.0 billion in 2025 and $5.1 billion in 2030, including the costs associated with MR&R. More detailed cost estimates are available in the RIA included in the rulemaking docket. Proposes standards of performance for: (1) modified fossil fuel-fired utility boilers and IGCC units, (2) modified natural gas-fired stationary combustion turbines, (3) reconstructed fossil fuel-fired utility boilers and IGCC units, and (4) reconstructed natural gas-fired stationary combustion turbines. Consistent with the requirements of CAA section 111(b), these proposed standards reflect the degree of emission limitation achievable through the application of the best system of emission reduction (BSER) that the EPA has determined has been adequately demonstrated for each type of unit. This final rule comprises three main elements: 1) two subcategory-specific CO 2 emission performance rates resulting from application of the BSER to the two subcategories of affected EGUs; 2) state-specific CO 2 goals, expressed as both emission rates and as mass, that reflect the subcategory-specific CO 2 emission performance rates and each state s mix of affected EGUs the two performance rates; and 3) guidelines for the development, submittal and implementation of state plans that implement those BSER emission performance rates either through emission standards for affected EGUs, or through measures that achieve the equivalent, in aggregate, of those rates as defined and expressed in the form of the state goals. Recent and Pending EPA Regulations Under the Clean Air Act 47

50 In this final action, the EPA is setting emission performance rates, phased in over the period from 2022 to 2030, for two subcategories of affected fossil fuel-fired EGUs fossil fuel-fired electric utility steam- generating units and stationary combustion turbines. These rates, applied to each state s particular mix of fossil fuel-fired EGUs, generate the state s carbon intensity goal for 2030 (and interim rates for the period ). Each state will determine whether to apply these to each affected EGU or to take an alternative approach and meet either an equivalent statewide rate-based goal or statewide mass-based goal. The EPA does not prescribe how a state must meet the emission guidelines, but, if a state chooses to take the path of meeting a state goal, these final guidelines identify the methods that a state can or, in some cases, must use to demonstrate that the combination of measures and standards that the state adopts meets its state-level CO 2 goals. While the EPA accomplishes the phase- in of the interim goal by way of annual emission performance rates, states and EGUs may meet their respective emission reduction obligations on average over that period following whatever emission reduction trajectory they determine to pursue over that period. CAA section 111(d) creates a partnership between the EPA and the states under which the EPA establishes emission guidelines and the states take the lead on implementing them by establishing emission standards or creating plans that are consistent with the EPA emission guidelines. The EPA recognizes that each state has differing policy considerations including varying regional emission reduction opportunities and existing state programs and measures and that the characteristics of the electricity system in each state (e.g., utility regulatory structure and generation mix) also differ. Therefore, as in the proposal, each state will have the latitude to design a program to meet source-category specific emission performance rates or the equivalent statewide rate- or mass-based goal in a manner that reflects its particular circumstances and energy and environmental policy objectives. Each state can do so on its own, or a state can collaborate with other states and/or tribal governments on multi-state plans, or states can include in their plans the trading tools that EGUs can use to realize additional opportunities for cost savings while continuing to operate across the interstate system through which electricity is produced. A state would also have the option of adopting the model rules for either a rate- or a mass-based program that the EPA is proposing concurrently with this action. To facilitate the state planning process, this final rule establishes guidelines for the development, submittal, and implementation of state plans. The final rule describes the components of a state plan, the additional latitude states have in developing strategies to meet the emission guidelines, and the options they have in the timing of submittal of their plans. This final rule also gives states considerable flexibility with respect to the timeframes for plan development and implementation, as well as the choice of emission reduction measures. The final rule provides up to fifteen years for full implementation of all emission reduction measures, with incremental steps for planning and then for demonstration of CO 2 reductions that will ensure that progress is being made in achieving CO 2 emission reductions. States will be able to choose from a wide range of emission reduction measures, including measures that are not part of the BSER. Utilities operating fossil fuel-fired electric generating units 48 Recent and Pending EPA Regulations Under the Clean Air Act

51 Standards of Performance for New Residential Wood Heaters, New Residential Hydronic Heaters and Forced-Air Furnaces, and New Residential Masonry Heaters *New Source Performance Standards (NSPS) EPA published the Proposed Rule on February 3, The comment period closed on May 5, The Final Rule was published on March 16, The EPA estimates the proposed NSPS's total annualized average nationwide costs would be $15.7 million (2010$) over the 2014 through 2022 period. The economic impacts for industries affected by this proposed rule over this same period range from 4.3 percent for manufacture of wood heater/stove models to 6.4 percent compliance cost-to-sales estimate for manufacture of single burn rate wood heater models. These impacts do not presume any pass-through of impacts to consumers. With pass-through to consumers, these impact estimates to manufacturers will decline proportionate to the degree of pass-through. The EPA is proposing to amend the Standards of Performance for New Residential Wood Heaters and to add two new subparts: Standards of Performance for New Residential Hydronic Heaters and Forced-Air Furnaces and Standards of Performance for New Residential Masonry Heaters. This proposal is aimed at achieving several objectives for new residential wood heaters and other wood-burning appliances, including applying updated emission limits that reflect the current best systems of emission reduction; eliminating exemptions over a broad suite of residential wood combustion devices; strengthening test methods as appropriate; and streamlining the certification process. This proposal does not include any requirements for heaters solely fired by gas, oil or coal. In addition, it does not include any requirements associated with appliances that are already in use. The EPA continues to encourage state, local, tribal, and consumer efforts to change out (replace) older heaters with newer, cleaner, more efficient heaters, but that is not part of this federal rulemaking. Manufacturers, owners and operators of wood heaters, pellet heaters/stoves, hydronic heaters, and masonry heaters. Manufacturers, owners and operators of forced-air furnaces. Manufacturers, owners, operators and testers of masonry heaters. Testers of wood heaters, pellet heaters/stoves, hydronic heaters and masonry heaters. National Emission Standards: Radon Emissions from Operating Uranium Mill Tailings The Proposed Rule was published on May 2, 2014 and the extended comment period closed on October 29, The Final Rule was published and became effective on July 29, Recent and Pending EPA Regulations Under the Clean Air Act 49

52 Implementing all four GACTs would result in unit cost (per pound of U 3 O 8 ) increases of about two percent, six percent, and five percent at conventional, ISL, and heap leach type uranium recovery facilities, respectively. The EPA is proposing to revise certain portions of the National Emission Standards for Hazardous Air Pollutants (NESHAP) for radon emissions from operating uranium mill tailings. The proposed revisions are based on EPA's determination as to what constitutes generally available control technology or management practices (GACT) for this area source category. The EPA also proposing to add new definitions to this rule, revise existing definitions and clarify that the rule applies to uranium recovery facilities that extract uranium through the in-situ leach (ISL) method and the heap leach method. The rule impacts three types of operating uranium recovery facilities: (1) Conventional uranium mills; (2) ISL facilities; and (3) heap leach facilities. The affected sources at these uranium recovery facilities include conventional impoundments, non-conventional impoundments where tailings are contained in ponds and covered by liquids (examples of these affected sources are evaporation or holding ponds that may exist at conventional mills, ISL facilities and heap leach facilities), and heap leach piles. 50 Recent and Pending EPA Regulations Under the Clean Air Act

53 O Oil and Natural Gas Sector: Emission Standards for New and Modified Sources Consistent with the White House Methane Strategy and the January 14, 2015, announcement of the EPA's approach to achieving methane and volatile organic compounds (VOC) reductions from the oil and natural gas sector, this action will finalize amendments to the 2012 new source performance standards (NSPS) for this sector. The proposed rule published September 18, 2015, included methane and VOC standards for sources not covered by the 2012 Oil and Gas NSPS, such as completions of hydraulically fractured oil wells, pneumatic pumps and fugitive emissions at well sites and compressor stations. The proposal also included methane standards for sources covered in the 2012 NSPS. In addition, in response to the reconsideration petitions received for the 2012 NSPS and the 2013 amendments to the NSPS, the proposal addressed the issues for which the EPA is granting reconsideration. On December 4, 2016 the comment period, which was extended several times, was closed. A revised Final Rule, which was sent to the Office of Management and Budget on April 4, 2016, is expected in June of N/A New Source Performance Standards (NSPS) regulate criteria pollutants from new stationary sources. Two NSPS (subparts KKK and LLL) for the oil and natural gas industry were promulgated in Section 111 of the Clean Air Act (CAA) requires that NSPS be reviewed every 8 years and revised as appropriate. National Emission Standards for Hazardous Air Pollutants (NESHAP) regulate hazardous air pollutants (HAP) from new and existing stationary sources. Two NESHAP (subparts HH and HHH) for the oil and natural gas industry were promulgated in Section 112 of the CAA requires that NESHAP be reviewed every 8 years and revised as appropriate. In addition, section 112(f) requires that each category regulated under section 112(d) be reviewed to ensure that such regulations provide for an ample margin of safety to protect public health (i.e. address "residual risk" for each category). The current action included the required reviews under sections 111 and 112. Because the existing regulations were narrow in scope, the reviews resulted in broadening the scope of operations and emission points covered by the NSPS and MACT. Crude petroleum and natural gas extraction; natural gas liquid extraction; natural gas distribution; pipeline distribution of crude oil; and pipeline transportation of crude oil Recent and Pending EPA Regulations Under the Clean Air Act 51

54 Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources A Notice of Proposed Rule Making was published in the Federal Register on September 15, 2015 and the extended comment period closed on December 14, During the comment periods, several public meetings were held by the EPA. The Final Rule was released on May 12, 2016 and is effective 60 days after the date of publication in the Federal Register. The cost estimates for compliance are $240 million for 2020 and $360 million for The EPA estimates cost benefits of $290 million in 2010 and $540 million in Prior to this final rule, the EPA had established standards for emissions of VOC and sulfur dioxide (SO 2 ) for several sources in the source category. In this action, the EPA finalizes standards at subpart OOOOa, based on its determination of the best system of emissions reduction (BSER) for reducing emissions of greenhouse gases (GHGs), specifically methane, as well as VOC across a variety of additional emission sources in the oil and natural gas source category (i.e., production, processing, transmission, and storage). The EPA includes requirements for methane emissions in this action because methane is one of the six well-mixed gases in the definition of GHGs and the oil and natural gas source category is one of the country s largest industrial emitters of methane. The final requirements include standards for GHG emissions (in the form of methane emission limitations) and standards for VOC emissions. The NSPS includes both VOC and GHG emission standards for certain new, modified, and reconstructed equipment, processes, and activities across the oil and natural gas source category. Oil and gas related industries Oil and Natural Gas Sector: New Source Performance Standards (NSPS) and National Emission Standards for Hazardous Air Pollutants (NESHAP) Reviews The Final Rule was published on August 16, 2012.Compliance dates varied from October 2012 to October This EPA finalized and enacted amendments to new source performance standards for the oil and natural gas sector on September 23, The revised compliance date was April 15, A cost estimate was not published for the Final Amendments on September 23, Under the Final Rule on August 16, 2012, the estimated total capital cost to comply with the final amendments to 40 CFR part 63, subpart HH for major sources in the Oil and Natural Gas Production source category were approximately $ Recent and Pending EPA Regulations Under the Clean Air Act

55 million. The total capital cost for the final amendments to 40 CFR part 63, subpart HHH for major sources in the Natural Gas Transmission and Storage source category is estimated to be approximately $140,000. All costs are in 2008 dollars. The total estimated net annual cost to industry to comply with the final amendments to 40 CFR part 63, subpart HH for major sources in the Oil and Natural Gas Production source category is approximately $3.3 million. The total net annual cost for final amendments to 40 CFR part 63, subpart HHH for major sources in the Natural Gas Transmission and Storage source category is estimated to be approximately $180,000. These estimated annual costs include: (1) The cost of capital, (2) operating and maintenance costs, (3) the cost of monitoring, inspection, recordkeeping and reporting (MIRR), and (4) any associated product recovery credits. All costs are in 2008 dollars. The estimated total capital cost to comply with the final NSPS is approximately $25 million in 2008 dollars. The total estimated net annual cost to industry to comply with the final NSPS is estimated to be approximately $170 million in 2008 dollars. This annual cost estimate includes: (1) The cost of capital, (2) operating and maintenance costs, and (3) the cost of MIRR. This estimated annual cost does not take into account any producer revenues associated with the recovery of salable natural gas and hydrocarbon condensates. When revenues from additional product recovery are considered, the final NSPS is estimated to result in a net annual engineering cost savings overall. When including the additional natural gas recovery in the engineering cost analysis, the EPA assumed that producers are paid $4/Mcf for the recovered gas at the wellhead. The engineering analysis cost analysis assumes the value of recovered condensate is $70 per barrel. Based on the engineering analysis, about 43 billion cubic feet of natural gas and 160,000 barrels of condensate are estimated to be recovered by control requirements in Using the price assumptions, the estimated revenues from natural gas and condensate recovery are approximately $180 million in 2008 dollars. Using the engineering cost estimates, estimated natural gas product recovery and natural gas product price assumptions, the net annual engineering cost savings is estimated for the final NSPS to be about $15 million. Totals may not sum due to independent rounding. If voluntary action is not deducted from the baseline, capital costs for the NSPS are estimated at $25 million and annualized costs without revenues from product recovery for the NSPS are estimated at $330 million. In this scenario, given the assumptions about product prices, estimated revenues from product recovery are $350 million, yielding an estimated cost of savings of about $22 million. As the price assumption is very influential on estimated annualized engineering costs, the EPA performed a simple sensitivity analysis of the influence of the assumed wellhead price paid to natural gas producers on the overall engineering annualized costs estimate of the final NSPS. At $4.22 per thousand cubic feet (Mcf), the price forecast reported in the 2011 Annual Energy Outlook in 2008 dollars, the annualized cost savings for the final NSPS are estimated at about $24 million. As indicated by this difference, the EPA has chosen a relatively conservative assumption (leading to an estimate of few savings and higher net costs) for the engineering costs analysis. The natural gas price at which the final NSPS breaks-even from an estimated engineering costs perspective is around $3.66/Mcf. A $1/Mcf change in the wellhead natural gas price leads to a $43 million change in the annualized engineering costs of the final NSPS. Consequently, annualized engineering costs estimates would increase to about $29 million under a $3/Mcf price or decrease to about -$58 million under a $5/Mcf price. The EPA revised the NSPS for volatile organic compounds from leaking components at onshore natural gas processing plants and NSPS for sulfur dioxide emissions from natural gas processing plants. The EPA also established standards for certain oil and gas operations not covered by the existing standards. In addition to the operations covered by the existing standards, the newly established standards will regulate volatile organic compound emissions from gas wells, centrifugal Recent and Pending EPA Regulations Under the Clean Air Act 53

56 compressors, reciprocating compressors, pneumatic controllers and storage vessels. This action also finalizes the residual risk and technology review for the Oil and Natural Gas Production source category and the Natural Gas Transmission and Storage source category. This action includes revisions to the existing leak detection and repair requirements. In addition, the EPA has established in this action emission limits reflecting maximum achievable control technology for certain currently uncontrolled emission sources in these source categories. This action also includes modification and addition of testing and monitoring and related notification, recordkeeping and reporting requirements, as well as other minor technical revisions to the NESHAP. This action finalizes revisions to the regulatory provisions related to emissions during periods of startup, shutdown, and malfunction. Crude petroleum and natural gas extraction; natural gas liquid extraction; natural gas distribution; pipeline distribution of crude oil; and pipeline transportation of crude oil National Ambient Air Quality Standards for Ozone * Ozone Rule, a.k.a. Ozone NAAQS Review On March 23, 2008, the EPA published a final rule to revise the primary and secondary NAAQS for ozone to provide increased protection of public health and welfare. In subsequent litigation, the U.S. Court of Appeals for the District of Columbia Circuit upheld the EPA's 2008 primary O₃ standard, but remanded the 2008 secondary standard. State of Mississippi v. EPA, 744 F. 3d 1334 (D.C. Cir. 2013). With respect to the primary standard, the court held that the EPA reasonably determined that the existing primary standard, set in 1997, did not protect public health with an adequate margin of safety and required revision. In upholding the EPA's revised primary standard, the court dismissed arguments that the EPA should have adopted a more stringent standard. The court remanded the secondary standard to the EPA after rejecting the EPA's explanation for setting the secondary standard identical to the revised 8-hour primary standard. The court held that because the EPA had failed to identify a level of air quality requisite to protect public welfare, the EPA's comparison between the primary and secondary standards for determining if requisite protection for public welfare was afforded by the primary standard failed to comply with the CAA. The schedule to complete this review was established by a federal court order, which requires the EPA sign a proposal by December 1, 2014, and makes a final determination by October 1, The Proposed Rule was published on December 17, The comment period closed on March 17, The Final Rule was sent to OMB for regulatory review on August 28, 2015, and the Final Rule was published in the Federal Register on October 26, The Final Rule was effective on December 28, Recent and Pending EPA Regulations Under the Clean Air Act

57 N/A Based on its review of the air quality criteria for ozone (O 3 ) and related photochemical oxidants and national ambient air quality standards (NAAQS) for O 3, the Environmental Protection Agency (EPA) is revising the primary and secondary NAAQS for O 3 to provide requisite protection of public health and welfare, respectively. The EPA is revising the levels of both standards to parts per million (ppm), and retaining their indicators (O 3 ), forms (fourth-highest daily maximum, averaged across three consecutive years) and averaging times (eight hours). The EPA is making corresponding revisions in data handling conventions for O 3 and changes to the Air Quality Index (AQI); revising regulations for the prevention of significant deterioration (PSD) program to add a transition provision for certain applications; and establishing exceptional events schedules and providing information related to implementing the revised standards. The EPA is also revising the O 3 monitoring seasons, the Federal Reference Method (FRM) for monitoring O 3 in the ambient air, Federal Equivalent Method (FEM) analyzer performance requirements, and the Photochemical Assessment Monitoring Stations (PAMS) network. Along with exceptional events schedules related to implementing the revised O 3 standards, the EPA is applying this same schedule approach to other future new or revised NAAQS and removing obsolete regulatory language for expired exceptional events deadlines. The EPA is making minor changes to the procedures and time periods for evaluating potential FRMs and equivalent methods, including making the requirements for nitrogen dioxide (NO 2 ) consistent with the requirements for O 3, and removing an obsolete requirement for the annual submission of Product Manufacturing Checklists by manufacturers of FRMs and FEMs for monitors of fine and coarse particulate matter. With regard to the primary standard, the EPA is revising the level of the standard to ppm to provide increased public health protection against health effects associated with long- and short-term exposures. The EPA is retaining the indicator (O 3 ), averaging time (8-hour) and form (annual fourth-highest daily maximum, averaged over 3 years) of the existing standard. This action provides increased protection for children, older adults, and people with asthma or other lung diseases, and other at-risk populations against an array of adverse health effects that include reduced lung function, increased respiratory symptoms and pulmonary inflammation; effects that contribute to emergency department visits or hospital admissions; and mortality. The decisions on the adequacy of the current standard and the appropriate level for the revised standard are based on an integrative assessment of an extensive body of new scientific evidence, which substantially strengthens what was known about O 3 -related health effects in the last review. The revised standard also reflects consideration of a quantitative risk assessment that estimates public health risks likely to remain upon just meeting the current and various alternative standards. Based on this information, the Administrator concludes that the current primary O 3 standard is not requisite to protect public health with an adequate margin of safety, as required by the CAA, and that revision of the level to ppm is warranted to provide the appropriate degree of increased public health protection for at-risk populations against an array of adverse health effects. In concluding that a revised primary standard set at a level of ppm is requisite to protect public health with an adequate margin of safety, the Administrator relies on several key pieces of information, including: (a) A level of ppm is well below the O 3 exposure concentration shown to cause the widest range of Recent and Pending EPA Regulations Under the Clean Air Act 55

58 respiratory effects (i.e., ppm) and is below the lowest O 3 exposure concentration shown to cause the adverse combination of decreased lung function and increased respiratory symptoms (i.e., ppm); (b) a level of ppm will eliminate, or nearly eliminate, repeated occurrence of these O 3 exposure concentrations (this is important because the potential for adverse effects increases with frequency of occurrence); (c) a level of ppm will protect the large majority of the population, including children and people with asthma, from lower exposure concentrations, which can cause lung function decrements and airway inflammation in some people (i.e., ppm); and (d) a level of ppm will result in important reductions in the risk of O 3 -induced lung function decrements as well as the risk of O 3 -associated hospital admissions, emergency department visits, and mortality. In addition, the revised level of the primary standard is within the range that CASAC advised the Agency to consider. The EPA is also revising the level of the secondary standard to ppm to provide increased protection against vegetation-related effects on public welfare. The EPA is retaining the indicator (O 3 ), averaging time (8-hour) and form (annual fourth-highest daily maximum, averaged over 3 years) of the existing secondary standard. This action, reducing the level of the standard, provides increased protection for natural forests in Class I and other similarly protected areas against an array of vegetation-related effects of O 3. The Administrator is making this decision based on judgments regarding the currently available welfare effects evidence, the appropriate degree of public welfare protection for the revised standard, and currently available air quality information on seasonal cumulative exposures that may be allowed by such a standard. In making this decision on the secondary standard, the Administrator focuses on O 3 effects on tree seedling growth as a proxy for the full array of vegetation-related effects of O 3, ranging from effects on sensitive species to broader ecosystemlevel effects. Using this proxy in judging effects to public welfare, the Administrator has concluded that the requisite protection will be provided by a standard that generally limits cumulative seasonal exposures to 17 ppm-hours (ppm-hrs) or lower, in terms of a 3-year W126 index. Based on air quality analyses that indicate such control of cumulative seasonal exposures will be achieved with a standard set at a level of ppm (and the same indicator, averaging time, and form as the current standard), the Administrator concludes that a standard revised in this way will provide the requisite protection. In addition to providing protection of natural forests from growth-related effects, the revised standard is also expected to provide increased protection from other effects of potential public welfare significance, including crop yield loss and visible foliar injury. Thus, based on all of the information available in this review, the Administrator concludes that the current secondary O 3 standard is not requisite to protect public welfare as required by the CAA, and that this revision will provide appropriate protection against known or anticipated adverse effects to the public welfare. The rule will require states with areas determined to be in non-attainment with the new standards to prepare state implementation plans to come into compliance through emissions control programs. The majority of emissions sources of man-made nitrogen oxides (NO x ) and volatile organic compounds emissions, which contribute to ground-level ozone formation, are mobile sources, industrial processes (which include consumer and commercial products), and the electric power industry. Other emissions sources include agricultural sources. 56 Recent and Pending EPA Regulations Under the Clean Air Act

59 P Petroleum Refinery Sector Risk and Technology Review and New Source Performance Standards The EPA finalized and enacted amendments to new source performance standards for the oil and natural gas sector on September 23, The revised compliance date was April 15, On June 30, 2014, the EPA proposed amendments to the national emission standards for hazardous air pollutants for petroleum refineries to address the risk remaining after application of the standards promulgated in 1995 and The EPA is also proposing new requirements related to emissions during periods of startup, shutdown and malfunction to ensure that the standards are consistent with court opinions issued since promulgation of the standards. The comment period closed on October 28, The Final Rule was published in the Federal Register on December 1, 2015 and became effective on February 1, All petroleum product refiners will incur annual compliance costs of much less than 1 percent of their sales. For all firms, the minimum cost-to-sales ratio is <0.01 percent; the maximum cost-to-sales ratio is 0.87 percent; and the mean cost-tosales ratio is 0.03 percent. Therefore, the overall economic impact of this proposed rule should be minimal for the refining industry and its consumers. In addition, the EPA performed a screening analysis for impacts on small businesses by comparing estimated annualized engineering compliance costs at the firm-level to firm sales. The screening analysis found that the ratio of compliance cost to firm revenue falls below 1 percent for the 28 small companies likely to be affected by the proposal. For small firms, the minimum cost-to-sales ratio is <0.01 percent; the maximum cost-to-sales ratio is 0.62 percent; and the mean cost-to-sales ratio is 0.07 percent. The action finalizes the residual risk and technology review conducted for the Petroleum Refinery source categories regulated under national emission standards for hazardous air pollutants (NESHAP) Refinery MACT 1 and Refinery MACT 2. It also includes revisions to the Refinery MACT 1 and MACT 2 rules in accordance with provisions regarding establishment of MACT standards. This action also finalizes technical corrections and clarifications for the new source performance standards (NSPS) for petroleum refineries to improve consistency and clarity and address issues related to a 2008 industry petition for reconsideration. Implementation of this final rule will result in projected reductions of 5,200 tons per year (tpy) of hazardous air pollutants (HAP), which will reduce cancer risk and chronic health effects. Petroleum Refineries Recent and Pending EPA Regulations Under the Clean Air Act 57

60 Phosphoric Acid Manufacturing and Phosphate Fertilizer Production RTR and Standards of Performance for Phosphate Processing This final action was effective on August 19, 2015 upon its publication in the Federal Register. N/A The action finalizes the residual risk and technology review conducted for the Phosphoric Acid Manufacturing and Phosphate Fertilizer Production source categories regulated under national emission standards for hazardous air pollutants (NESHAP). In addition, this action finalizes an 8-year review of the current new source performance standards (NSPS) for five source categories. EPA is also taking final action addressing Clean Air Act (CAA) provisions related to emission standards for hazardous air pollutants, review and revision of emission standards, and work practice standards. The final amendments to the Phosphoric Acid Manufacturing NESHAP include: Numeric emission limits for previously unregulated mercury (Hg) and total fluoride emissions from calciners; work practice standards for hydrogen fluoride (HF) emissions from previously unregulated gypsum dewatering stacks and cooling ponds; clarifications to the applicability and monitoring requirements to accommodate process equipment and technology changes; removal of the exemptions for startup, shutdown, and malfunction (SSM); adoption of work practice standards for periods of startup and shutdown; and revised recordkeeping and reporting requirements for periods of SSM. The final amendments to the Phosphate Fertilizer Production NESHAP include: Clarifications to the applicability and monitoring requirements to accommodate process equipment and technology changes; removal of the exemptions for SSM; adoption of work practice standards for periods of startup and shutdown; and revised recordkeeping and reporting requirements for periods of SSM. The revised NESHAP for Phosphoric Acid Manufacturing facilities will mitigate future increases of Hg emissions from phosphate rock calciners by requiring pollution prevention measures. Further, based on the 8-year review of the current NSPS for these source categories, the EPA determined that no revisions to the numeric emission limits in those rules are warranted. Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NSR): Inclusion of Fugitive Emissions; Final Rule; Stay On June 1, 2011, a rulemaking effectuated a stay of the final rule titled, "Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NSR): Reconsideration of Inclusion of Fugitive Emissions" (Fugitive Emissions Rule), published on December 19, That rule required that fugitive emissions be included in determining whether a physical or operational change results in a major modification only for sources in industries that have been designated by the Clean Air Act. The rule supersedes the stay of the Fugitive Emissions Rule provisions issued on March 31, 2010, and thereby corrects inadvertent errors contained in that stay. This action also extends the stay until EPA completes its reconsideration of the Fugitive Emissions Rule. 58 Recent and Pending EPA Regulations Under the Clean Air Act

61 N/A EPA stayed for 18 additional months, the rule establishing how fugitive emissions should be treated for NSR permitting. Rule will affect electric services, petroleum refining, industrial inorganic chemicals, industrial organic chemicals, miscellaneous chemical products, natural gas transport, pulp and paper mills, automobile manufacturing, pharmaceuticals, mining, agriculture, fishing, and hunting. Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule *Tailoring Rule The Final Rule was published and became effective on June 3, In 2012, a D.C. Circuit panel denied the challenges to the endangerment finding and the tailpipe rule and dismissed the challenges to the timing and tailoring rules for lack of standing. On April 18, 2013, a coalition of industry groups filed a petition with the U.S. Supreme Court for review of the D.C. Court of Appeals decision and challenged EPA rules, including the tailoring rule, and various aspects of EPA s greenhouse gas regulations, including: the agency s scientific endangerment finding for greenhouse gases; the tailpipe rule setting greenhouse gas standards for mobile sources; and the timing and tailoring rules which phased in regulation of stationary sources of greenhouse gases under the prevention of significant deterioration program. The Supreme Court will not consider the substance of the tailoring rule, but rather EPA's authority to enact the tailoring rule based on the adoption of the tailpipe rule. The Supreme Court heard oral arguments on February 24, On June 23, 2014, the Supreme Court held that EPA could not require stationary sources to obtain air pollution permits and install pollution controls because they emit only a specified amount of greenhouse gases. The court also ruled that EPA unlawfully interpreted the Clean Air Act when it revised the numeric tonnage thresholds for greenhouse gases that force factories, power plants, and industrial facilities to obtain a permit. However, the ruling's impact on EPA's larger regulatory regime is likely limited because in a separate part of the decision, EPA won the votes of seven justices who held the agency could require facilities to limit greenhouse gas emissions if they already qualified for the permit program because of emissions of conventional air pollutants. N/A Recent and Pending EPA Regulations Under the Clean Air Act 59

62 Sets thresholds to which the EPA seeks to phase in regulation of GHG emissions from industrial and large stationary sources under: (1) the PSD program which is a preconstruction review and permitting program that requires installation of Best Available Control Technology (BACT) pollution control equipment; and (2) the Title V program, which is an operating permit program administered by state authorities. Absent the rule, EPA s view is that under the endangerment finding and subsequent light-duty vehicle rule, PSD permitting requirements would be triggered for almost 41,000 entities and Title V permitting requirements for approximately 6 million entities. The rule also commits to take certain actions on future steps addressing smaller sources but excludes certain smaller sources from PSD and Title V permitting for GHG emissions until at least April 30, Agriculture, fishing, and hunting; mining utilities (electric, natural gas, other systems); manufacturing of food, beverages, tobacco, textiles, leather, wood product, paper, petroleum, coal, chemical, rubber product, chemical products, nonmetallic mineral products, primary and fabricated metal, machinery, computer, and electronic products, electrical equipment, appliances, components, transportation equipment, furniture, and related products; waste management and remediation; hospitals, nursing, and residential care facilities; personal and laundry services; residential/private households; and nonresidential (commercial) buildings Prevention of Significant Deterioration for Particulate Matter Less Than 2.5 Micrometers Significant Impact Levels and Significant Monitoring Concentration: Removal of Vacated Elements On January 22, 2013, the United States Court of Appeals for the District of Columbia Circuit (the Court) granted a request from the EPA to vacate and remand to the EPA portions of two Prevention of Significant Deterioration (PSD) regulations, promulgated in 2010 under the authority of the Clean Air Act (CAA), regarding the Significant Impact Levels (SILs) for particulate matter less than 2.5 micrometers (PM2.5). The Court further vacated the portions of the PSD regulations establishing a PM2.5Significant Monitoring Concentration (SMC). The EPA is amending its regulations to remove the vacated PM2.5 SILs and SMC provisions from the PSD regulations in the Code of Federal Regulations (CFR). This action is exempt from notice-and-comment rulemaking because it is ministerial in nature. The EPA will initiate a separate rulemaking in the future regarding the PM2.5 SILs that will address the Court s remand. N/A This final action removes from the CFR the affected PM2.5 SILs and SMC provisions vacated by the Court s decision. Because the Court specifically vacated and remanded the PM2.5 SILs in sections (k)(2) and 52.21(k)(2), the EPA is removing the text and reserving the paragraphs in sections (k)(2) and 52.21(k)(2). The Court explicitly declined to 60 Recent and Pending EPA Regulations Under the Clean Air Act

63 vacate the PM2.5 significance levels at section (b)(2), and accordingly the EPA not taking any final action to make any change to that section. Moreover, because the Court vacated the SMC provisions in 40 CFR51.166(i)(5)(i)(c) and 52.21(i)(5)(i)(c), the EPA is revising the existing concentration for the PM2.5 SMC listed in sections (i)(5)(i)(c) and 52.21(i)(5)(i)(c) to zero micrograms per cubic meter (0 µg/m3). The EPA is not entirely removing PM2.5 as a listed pollutant in the SMC provisions because to do so might lead to the issuance of permits that contradict the holding of the Court as to the statutory monitoring requirements. Both sections (i)(5)(iii) and 52.21(i)(5)(iii) permit the reviewing authority to exempt a permit applicant from the monitoring requirements if [t]he pollutant is not listed in paragraph (i)(5)(i) of this section. Were EPA to completely remove PM2.5 from the list of pollutants in sections (i)(5)(i)(c) and 52.21(i)(5)(i)(c)of the PSD regulations, PM2.5 would no longer be a listed pollutant and the paragraph (iii)provision could be interpreted as giving reviewing authorities the discretion to exempt permit applicants from the requirement to conduct monitoring for PM2.5, in contravention of the Court s decision and the CAA. Instead, the EPA is revising the concentration listed in sections (i)(5)(i)(c) and 52.21(i)(5)(i)(c) to 0 µg/m3. This means that there is no air quality impact level below which a reviewing authority has the discretion to exempt a source from the PM2.5 monitoring requirements. By continuing to include PM2.5 as a pollutant in the list contained in sections (i)(5)(i) and 52.21(i)(5)(i), with the numerical value replaced with 0 µg/m3, the EPA avoids any concern that paragraph (iii) of the two affected sections could be applied to excuse permit applicants from adequately addressing the monitoring requirement for PM2.5. The EPA is taking this action as a Final Rule without providing an opportunity for public comment or a public hearing because the EPA finds that the Administrative Procedure Act (APA) good cause exemption applies here. Factories, industrial boilers and power plants Proposed Greenhouse Gas Endangerment and Cause or Contribute Findings Under CAA Section 231for Aircraft, and ANPRM on the International Process for Reducing Aircraft GHGs and Future Standards The Notice of Proposed Rulemaking was published on July 1, The comment period closed on August 31, The Final Rule was sent to OMB on May 5, 2016, and the publication of the Final Rule is expected in July of This rulemaking responds to a petition EPA received in Dec that requested that EPA make an endangerment finding for aircraft GHGs and regulate these emissions under Section 231 of the Clean Air Act (CAA). Petitioner filed a lawsuit in 2010 on this matter, and the D.C. District Court in 2012 ruled that the CAA required EPA to make a final determination on whether aircraft GHG emissions cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare. N/A Recent and Pending EPA Regulations Under the Clean Air Act 61

64 Pursuant to section 231(a)(2)(A) of the Clean Air Act (CAA or Act), the Administrator proposes to find that greenhouse gas (GHG) emissions from aircraft engines used in certain types of aircraft (referred to as covered aircraft throughout this notice) contribute to air pollution that endangers public health and welfare. Covered aircraft would be those aircraft to which ICAO has agreed the international CO 2 standard would apply: (5) subsonic jet aircraft with a maximum takeoff mass (MTOM) greater than 5,700 kilograms, and subsonic propeller-driven (e.g., turboprop) aircraft with a MTOM greater than 8,618 kilograms. Examples of covered aircraft would include smaller jet aircraft such as the Cessna Citation CJ2+ and the Embraer E170, up to and including the largest commercial jet aircraft the Airbus A380 and the Boeing 747. Other examples of covered aircraft would include larger turboprop aircraft, such as the ATR 72 and the Bombardier Q400. In this proposed action, the EPA relies primarily on the extensive scientific and technical evidence in the record supporting the Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act; Final Rule, 74 FR 66496, (December 15, 2009) (collectively referred to as the 2009 Endangerment Finding in this action). This includes the major, peer-reviewed scientific assessments that were used to address the question of whether GHGs in the atmosphere endanger public health and welfare, and on the analytical framework and conclusions upon which the EPA relied in making that finding. The Administrator's view is that the body of scientific evidence amassed in the record for the 2009 Endangerment Finding also compellingly supports an endangerment finding under CAA section 231(a). Furthermore, this proposed finding under section 231 reflects the EPA's careful consideration not only of the scientific and technical record for the 2009 Endangerment Finding, but also of science assessments released since 2009, which, as illustrated below, strengthen and further support the judgment that GHGs in the atmosphere may reasonably be anticipated to endanger public health and welfare. No information or analyses published since late 2009 suggest that it would be reasonable for the EPA to now reach a different or contrary conclusion for purposes of CAA section 231(a)(2)(A) than the Agency reached for purposes of section 202(a). However, as explained below, in proposing this finding for purposes of section 231, the EPA is not reopening or revising its prior findings under CAA section 202. The Administrator is proposing to define the air pollution referred to in section 231(a)(2)(A) of the CAA to be the mix of six well-mixed GHGs: CO 2, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride. This is the same definition that was used for the finding for purposes of section 202(a). It is the Administrator's judgment that the total body of scientific evidence compellingly supports a positive endangerment finding that elevated concentrations of the six well-mixed GHGs constitute air pollution that endangers both the public health and the public welfare of current and future generations within the meaning of section 231(a) of the Clean Air Act. Under section 231 of the CAA, the Administrator must also determine whether emissions of any air pollutant from a class or classes of aircraft engines cause or contribute to the air pollution that may reasonably be anticipated to endanger public health or welfare. Following the rationale outlined in the 2009 Endangerment Finding, the Administrator in this action is proposing to use the same definition of the air pollutant as was used for purposes of section 202(a) for purposes of making the cause or contribute determination under section 231(a) that is, the aggregate group of the same six well-mixed GHGs. Based on the data summarized in section V, the Administrator is proposing to find that GHG emissions from aircraft engines used in covered aircraft, contribute to the air pollution that endangers public health and welfare under section 231(a). 62 Recent and Pending EPA Regulations Under the Clean Air Act

65 The Administrator's proposed findings come in response to a citizen petition submitted by Friends of the Earth, Oceana, the Center for Biological Diversity, and Earthjustice (Petitioners) requesting that the EPA issue an endangerment finding and standards under section 231(a)(2)(A) of the Act for the GHG emissions from aircraft. The EPA is not proposing or taking action under any other provision of the CAA. Further, the EPA anticipates that ICAO will adopt a final CO 2 emissions standard in February This proposal, and any final endangerment and cause or contribute findings for aircraft engine GHG emissions, are also part of preparing for a possible subsequent domestic rulemaking process to adopt standards that are of at least equivalent stringency as the anticipated ICAO CO 2 standards. Once an international standard is finalized by ICAO, member states are then required to adopt standards that are of at least equivalent stringency to those set by ICAO. Section II. D provides additional discussion of the international aircraft standard-setting process. Manufactures and sellers of aircraft Protection of Stratospheric Ozone: New Substitute in the Motor Vehicle Air Conditioning Sector Under the Significant New Alternatives Policy (SNAP) Program The Final Rule was published on June 6, 2012, with an effective date of August 6, Incorporates 2011 SNAP Regulations. EPA has determined that this rule will not result in expenditures of $100 million or more for State, Local, and Tribal governments, in the aggregate, or the private sector in any one year. This rule lists carbon dioxide (CO 2 ) or R 744, as acceptable substitute, subject to use conditions, in the motor vehicle air conditioning (MVAC) end-use for motor vehicles (i.e., passenger cars, light-duty and heavy-duty vehicles) within the refrigeration and air-conditioning sector. This final rule only concerns the use of CO 2 in MVAC systems designed specifically for the use of CO 2 refrigerant. The substitute is non-ozone depleting and therefore does not contribute to stratospheric ozone depletion. Automobile Manufacturers and Motor Vehicle Air Conditioning Manufacturers Recent and Pending EPA Regulations Under the Clean Air Act 63

66 R Renewable Fuel Standard Renewable Identification Number Quality Assurance Program The Final Rule was published on July 18, 2014 and became effective on September 16, The quality assurance program is voluntary. Even though the program is voluntary, there will likely be costs associated with an individual party's participation in the quality assurance program, and in Section IV the EPA provides estimates of some elements of the costs of participation. However, the fact that the quality assurance program will be voluntary means that a decision to participate will be made independently by each regulated party. Making the program voluntary allows the regulated parties to choose whether any costs incurred by participating will be less than the current costs in the marketplace resulting from efforts to verify, acquire, trade, and use RINs and the risk of buying fraudulent RINs associated with such activities. Although the EPA cannot say that the voluntary QAP provisions will reduce the cost of the RFS program, The EPA expects that parties will only choose to use these voluntary provisions if they believe doing so will reduce their risk of purchasing fraudulent RINs and possibly save them money when compared to the oversight actions they are currently implementing. Under the Renewable Fuel Standard (RFS) program, producers and importers of renewable fuel generate Renewable Identification Numbers (RINs) that are used by petroleum refiners and importers to demonstrate compliance with their renewable fuel volume obligations. Several cases of fraudulently generated RINs, however, led to inefficiencies and a significant reduction in the overall liquidity in the RIN market, resulting in greater difficulty for smaller renewable fuel producers to sell their RINs. This action finalizes additional regulatory provisions that are intended to assure reasonable oversight of RIN generation and promote greater liquidity in the RIN market, which in turn helps ensure the use of the required renewable fuel volumes. The rule includes a voluntary quality assurance program and related provisions intended to meet these goals. The program also includes elements designed to make it possible to verify the validity of RINs from the beginning of Entities potentially affected by this final rule are those involved with the production, distribution, and sale of transportation fuels, including gasoline and diesel fuel or renewable fuels such as ethanol and biodiesel. Renewable Fuel Volume Standards, The Notice of Proposed Rulemaking was published in the Federal Register on June 10, The comment period closed on July 27, Recent and Pending EPA Regulations Under the Clean Air Act

67 The Final Rule was published on December 14, 2015 with an effective date of February 12, N/A Under section 211 of the Clean Air Act, the Environmental Protection Agency (EPA) is required to set renewable fuel percentage standards every year. The action establishes the annual percentage standards for cellulosic biofuel, biomassbased diesel, advanced biofuel, and total renewable fuel that apply to all motor vehicle gasoline and diesel produced or imported in the years 2014, 2015, and The EPA is establishing a cellulosic biofuel volume for all three years that is below the applicable volume specified in the Act, and is also rescinding the cellulosic biofuel standard for Relying on statutory waiver authorities, the EPA is adjusting the applicable volumes of advanced biofuel and total renewable fuel for all three years. The 2016 standards are expected to spur further progress in overcoming current constraints in renewable fuel distribution infrastructure, which in turn is expected to lead to substantial growth over time in the production and use of renewable fuels. In this action, the EPA is also establishing the applicable volume of biomass-based diesel for The EPA is setting the compliance and attest reporting deadlines for the years 2013, 2014, and 2015, as well as finalizing regulatory amendments to clarify the scope of the existing algal biofuel pathway. The national volume targets of renewable fuel that are intended to be achieved under the RFS program each year (absent an adjustment or waiver by EPA) are specified in CAA section 211(o)(2). The statutory volumes for 2014, 2015, and 2016 are shown in Table I.A-1. The cellulosic biofuel and BBD categories are nested within the advanced biofuel category, which is itself nested within the total renewable fuel category. This means, for example, that each gallon of cellulosic biofuel or BBD that is used to satisfy the individual volume requirements for those fuel types can also be used to satisfy the requirements for advanced biofuel and total renewable fuel. Applicable Volumes Specified in the Clean Air Act Cellulosic biofuel Biomass-based diesel Advanced biofuel Renewable fuel Under the RFS program, EPA is required to determine and publish annual percentage standards for each compliance year. The percentage standards are calculated to ensure use in transportation fuel of the national applicable volumes of the four types of biofuel (cellulosic biofuel, BBD, advanced biofuel, and total renewable fuel) that are set forth in the statute or established by EPA in accordance with the Act's requirements. The percentage standards are used by obligated parties (generally, producers and importers of gasoline and diesel fuel) to calculate their individual compliance obligations. Each of the four percentage standards is applied to the volume of non-renewable gasoline and diesel that each obligated party produces or imports during the specified calendar year to determine their individual volume obligations with respect to the four renewable fuel types. The individual volume obligations determine the number of RINs of each renewable fuel type that each obligated party must acquire and retire to demonstrate compliance. Recent and Pending EPA Regulations Under the Clean Air Act 65

68 The EPA is establishing the annual applicable volume requirements for cellulosic biofuel, advanced biofuel, and total renewable fuel for 2014, 2015, and 2016, and for BBD for 2014, 2015, 2016, and The table below provides the statutory provisions and associated criteria relevant to determining the national applicable volumes used to set the percentage standards in this final rule. Applicable volumes Cellulosic biofuel Biomass-based diesel 12 Advanced biofuel Clean Air Act reference 211(o)(7)(D)(i) 211(o)(7)(A) 211(o)(2)(B)(ii) and (v) 211(o)(7)(A) 211(o)(7)(D)(i) 211(o)(7)(A) Total renewable fuel 211(o)(7)(D)(i) 211(o)(7)(A) Statutory Provisions for Determination of Applicable Volumes Criteria provided in statute for determination of applicable volume Required volume must be lesser of volume specified in CAA section 211(o)(2)(B)(i)(III) or EPA's projected volume in coordination with other federal agencies. EPA may waive the statutory volume in whole or in part if implementation would severely harm the economy or environment of a State, region, or the United States, or if there is an inadequate domestic supply. Required volume for years after 2012 must be at least 1.0 billion gallons, and must be based on a review of implementation of the program, coordination with other federal agencies, and an analysis of specified factors. EPA may waive the statutory volume in whole or in part if implementation would severely harm the economy or environment of a State, region, or the United States, or if there is an inadequate domestic supply. If applicable volume of cellulosic biofuel is reduced below the statutory volume to the projected volume, EPA may reduce the advanced biofuel and total renewable fuel volumes in CAA section 211(o)(2)(B)(i)(I) and (II) by the same or lesser volume. No criteria specified. EPA may waive the statutory volume in whole or in part if implementation would severely harm the economy or environment of a State, region, or the United States, or if there is an inadequate domestic supply. If applicable volume of cellulosic biofuel is reduced below the statutory volume to the projected volume, EPA may reduce the advanced biofuel and total renewable fuel volumes in CAA section 211(o)(2)(B)(i)(I) and (II) by the same or lesser volume. No criteria specified. EPA may waive the statutory volume in whole or in part if implementation would severely harm the economy or environment of a State, region, or the United States, or if there is an inadequate domestic supply. By re-proposing the 2014 standards along with a proposed rule for the 2015 and 2016 standards, the EPA was not only able to formulate a proposed rule for public comment that takes into account the fact that 2014 is over, but was also able to coordinate the treatment of 2014 with the treatment of 2015, where part of the year has likewise already passed. The EPA withdrew the November 29, 2013, NPRM, and the June 10, 2015, NPRM replaced and superseded that earlier proposed rule. The timing of this final rule is being issued consistent with terms of a final consent decree entered into by the EPA on April 10, This consent decree resolves pending litigation concerning EPA's failure to establish standards for 2014 and 2015 by the statutory deadlines and includes a requirement for EPA to promulgate final standards for 2014 and 2015 by November 30, The statutory authorities that provide direction to EPA for how to modify or set the applicable standards differ for the four categories of renewable fuel. Under the statute, EPA must annually determine the projected volume of cellulosic biofuel production for the following year. If the projected volume of cellulosic biofuel production is less than the applicable volume specified in section 211(o)(2)(B)(i)(III) of the statute, EPA must lower the applicable volume used to set the annual cellulosic biofuel percentage standard to the projected volume of production during the year. In Section IV of the final rule, EPA presents an analysis of cellulosic biofuel production and the final applicable volumes for 2014, 2015, and This analysis is based on an assessment of actual cellulosic biofuel supply in 2014 and parts of 2015, estimates from EIA, an 66 Recent and Pending EPA Regulations Under the Clean Air Act

69 evaluation of producers' production plans and progress to date following discussions with cellulosic biofuel producers, and review of comments received in response to the NPRM. With regard to BBD, CAA section 211(o)(2)(B) specifies the applicable volumes of BBD to be used in the RFS program only through year For subsequent years the statute sets a minimum volume of 1 billion gallons, and directs EPA to set the required volume after review of the renewable fuels program, consultation with USDA and DOE as well as consideration of a number of factors. In Section III of the preamble, the EPA discusses its assessment of statutory and other relevant factors and its final volume requirements for BBD for 2014, 2015, 2016, and EPA finalized growth in the required volume of BBD in such a way that both the BBD market and other advanced biofuels will grow. Regarding advanced biofuel and total renewable fuel, Congress provided several mechanisms through which those volumes could be reduced if necessary. If the EPA lowers the applicable volume of cellulosic biofuel below the volume specified in CAA section 211(o)(2)(B)(i)(III), it also has the authority to reduce the applicable volumes of advanced biofuel and total renewable fuel by the same or a lesser amount. The EPA refers to this as the cellulosic waiver authority. The EPA may also reduce the applicable volumes of any of the four renewable fuel types under the general waiver authority provided at CAA section 211(o)(7)(A) if it finds that implementation of the statutory volumes would severely harm the economy or environment of a State, region, or the United States, or if there is inadequate domestic supply. Section II of the final rule describes the EPA s use of the cellulosic waiver authority to reduce volumes of advanced biofuel and total renewable fuel and the general waiver authority to further reduce volumes of total renewable fuel. Exercise of EPA s waiver authorities is necessary to address important realities, including: Substantial limitations in the supply of cellulosic biofuel, Insufficient supply of other advanced biofuel to offset the shortfall in cellulosic biofuel, and Practical and legal constraints on the ability of the market to supply renewable fuels to the vehicles that can use them. The EPA believes these realities justify the exercise of the authorities Congress provided it to waive the statutory volumes. At the same time, the EPA states that it is mindful that the primary objective of the statute is to increase renewable fuel use over time. For the total renewable fuel requirement in this rule, the EPA uses the waiver authorities only to the extent necessary to derive applicable volumes that reflect the maximum supply that can reasonably be expected to be produced and consumed by a market that is responsive to the RFS standards. This is a challenging task not only in light of the myriad complexities of the fuels market and how individual aspects of the industry might change in the future, but also because the EPA cannot precisely predict how the market will respond to the volume-driving provisions of the RFS program. Thus, the determination of the final total renewable fuel volume requirement is one that the EPA believes necessarily involves considerable exercise of judgment. Based on the assessment of available renewable fuel supply, and after consultation with the Departments of Agriculture and Energy, adjustments to the statutory targets for total renewable fuel are warranted for 2014, 2015, and While the final volume requirements for 2014 and 2015 are either equal to actual supply or (for 2015) a projection from actual supply, the volume requirement for 2016 will lead to growth in supply beyond the levels achieved in the past, based on the expectation that the market can and will respond to the standards. Recent and Pending EPA Regulations Under the Clean Air Act 67

70 For the advanced biofuel volume requirements, EPA is using the cellulosic waiver authority to derive a volume requirement for 2014 that is based on actual supply; a volume requirement for 2015 that is based on actual supply during months for which data are available, and a projection from those levels for the remaining months in the year; and a volume requirement for 2016 that is reasonably attainable and which to a significant extent will result in backfilling the shortfall in cellulosic biofuel volumes with other advanced biofuels that also provide substantial GHG emission reductions. Entities involved with the production, distribution, and sale of transportation fuels, including gasoline and diesel fuel or renewable fuels such as ethanol, biodiesel, renewable diesel, and biogas. Review of New Sources and Modifications in Indian Country A Final Rule was published on July 1, 2011, and became effective on August 30, The EPA published a Proposed Rule on Tuesday, June 4, The EPA submitted the Final Rule for publication in the Federal Register on May 9, The Final Rule took effect 30 days from its publication in the Federal Register. Subject to the Executive Order (65 FR 67249, November 9, 2000), the EPA may not issue a regulation that has tribal implications, that imposes substantial direct compliance costs and that is not required by statute, unless the federal government provides the funds necessary to pay the direct compliance costs incurred by tribal governments or the EPA consults with tribal officials early in the process of developing the proposed regulation and develops a tribal summary impact statement. The EPA has concluded that this Final Rule will have tribal implications. However, it will neither impose substantial direct compliance costs on tribal governments, nor preempt tribal law. This final rule will have tribal implications since it revises the federal Indian country minor NSR program, which applies to both tribally owned and privately owned sources in Indian country. As with the existing rule, the revised rule will be implemented by the EPA, or a delegate tribal agency assisting the EPA with administration of the rules, until replaced by an EPA-approved tribal implementation plan. The effect of this final rule will be to simplify compliance with, and administration of, the federal Indian country minor NSR program, so any impact on tribes would be in the form of reduced burden and cost. The purpose of the 2013 rule is to propose and seek comment on three revisions to the Tribal minor NSR rule 1 that will streamline implementation by adding more exempted units/activities, clarifying language related to construction and relocation of true minor sources. Specifically, the EPA proposes to add seven categories of units/activities that will be listed as exempt from the Tribal minor NSR rule because their emissions are deemed insignificant. Listing these categories explicitly will mean that many applicants and reviewing authorities will not need to calculate potential emissions for activities that can be deemed insignificant. In the preamble to the Tribal minor NSR rule, EPA committed to considering 68 Recent and Pending EPA Regulations Under the Clean Air Act

71 the addition of exempt units/activities to the list in that Final rule, as requested by commenters. The EPA states that the Proposed Rule fulfills that commitment. In 2011, the EPA issued the Federal Implementation Plan (FIP) under the Clean Air Act (CAA) for Indian country. The FIP includes two New Source Review (NSR) regulations for the protection of air resources in Indian country. The first rule applies to new and modified minor stationary sources (minor sources) and to minor modifications at existing major stationary sources (major sources) throughout Indian country. The second rule (nonattainment major NSR rule) applies to new and modified major sources in areas of Indian country that are designated as not attaining the NAAQS. These rules will be implemented by EPA or a delegate Tribal agency assisting EPA with administration of the rules, until replaced by an EPA-approved implementation plan. Owners and operators of emission sources in all industry groups located in Indian country, EPA and Tribal governments that are delegated administrative authority to assist EPA with the implementation of these federal regulations. Specifically: oil and gas production/operations; crude petroleum and natural gas extraction; natural gas liquid extraction; sand and gravel mining; electric power generation; natural gas distribution; sewage treatment facilities; sand and shot blasting operations; animal food manufacturing; beef cattle complex, slaughter house, and meat packing plant; sawmills; softwood veneer and plywood manufacturing; millwork (wood products mfg);printing operations (lithographic);asphalt hot mix; chemical preparation; clay and ceramics operations (kilns);concrete batching plant; fiber glass operations; casting foundry (iron);fabricated structural metal; surface coating operations; fabricated metal products; machinery manufacturing; wood kitchen cabinet manufacturing; grain elevator; gasoline bulk plant; gasoline station; professional, scientific, and technical services; solid waste landfill; and other (natural gas-fired boilers). Revisions to Test Method for Determining Stack Gas Velocity Taking Into Account Velocity Decay Near the Stack Walls Proposed Rule published August 25, Final action was expected in June of 2012, but has yet to be taken up by the EPA. EPA expects the proposed revised method will only be used by small entities if the use of the revised method results in overall cost savings due to the voluntary nature of the method. Proposes revising the voluntary test method for determining stack gas velocity taking into account the velocity decay near the stack or duct walls. Recent and Pending EPA Regulations Under the Clean Air Act 69

72 Rule will affect fossil fuel-fired electric utility steam generating units owned by industry, Federal, State/local and Tribal governments. National Emission Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines; New Source Performance Standards for Stationary Internal Combustion Engines (RICE); Amendments *RICE EPA proposed the rule on June 7, The period for public comment ended on July 23, The Final Rule was published on January 30, 2013, and it became effective on April 1, On June 28, 2013, EPA granted reconsideration of three issues raised in the petitions for reconsideration of the January 30, 2013, Final Amendments to the 2010 RICE NESHAP. On August 29, 2013, the EPA published a request for public comments and the comment period closed on November 4, The three issues were: Timing for compliance with the ultra low sulfur diesel fuel requirement for emergency compression ignition stationary engines that operate for emergency demand response, voltage/frequency deviations or local reliability; Timing of and information required for the reporting requirement for emergency stationary engines that operate for emergency demand response, voltage/frequency deviations or local reliability; and Conditions for operation of an engine for up to 50 hours per year in non-emergency situations as part of a financial arrangement with another entity. The expected implementation date was January 1, According to the EPA, these final amendments will reduce the capital and annual costs of the original 2010 amendments by $287 million and $139 million, respectively. The EPA estimates that with these final amendments, the capital cost of compliance with the 2010 amendments to the RICE NESHAP in 2013 is $840 million and the annual cost is $490 million (2010$). These costs are identical to the costs estimated for the amendments to the RICE NESHAP proposed on June 7, 2012, since the changes from the proposal do not affect the costs of the rule in the year The EPA is proposing amendments to the national emission standards for HAPs for stationary RICE under section 112 of the CAA. The proposed amendments include alternative testing options for certain large spark ignition (generally natural gas-fueled) stationary RICE, management practices for a subset of existing spark ignition stationary RICE in sparsely populated areas, and alternative monitoring and compliance options for the same engines in populated areas. The EPA is 70 Recent and Pending EPA Regulations Under the Clean Air Act

73 also proposing to include a limited temporary allowance for existing stationary emergency area source engines to be used for peak shaving and non-emergency demand response. In addition, the EPA is proposing to increase the hours that stationary emergency engines may be used for emergency demand response. Any industry using a stationary internal combustion engine for electric power generation, transmission, or distribution. Users could include: medical and surgical hospitals; and crude petroleum and natural gas producers. National security also uses stationary combustion engines for electric power generation. Recent and Pending EPA Regulations Under the Clean Air Act 71

74 S Source Determination for Certain Emissions Units in the Oil and Natural Gas Sector The Proposed Rule was released on September 15, The extended comment period closed on December 4, The Final Rule, which was sent to the Office of Management and Budget on April 4, 2016, is projected to be released in June of N/A The EPA is proposing to clarify the term adjacent in the definitions of: building, structure, facility or installation used to determine the stationary source for purposes of the Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NNSR) programs and major source in the title V program as applied to the oil and natural gas sector. The EPA has previously issued guidance on how to assess adjacency for this industry, but the use of the guidance has been challenged, resulting in uncertainty for the regulated community and for permitting authorities. The EPA is proposing to clarify how properties in the oil and natural gas sector are determined to be adjacent in order to assist permitting authorities and permit applicants in making consistent source determinations for this sector. In this action, the EPA is proposing two options for determining whether two or more properties in the oil and natural gas sector are adjacent for purposes of defining the stationary source in the PSD and NNSR programs, and major source for the title V program (referred to collectively as source ). The preferred option would define adjacent for the oil and natural gas sector in terms of proximity. The EPA is co-proposing and taking comment on an alternative option to define adjacent in terms of proximity or functional interrelatedness. This additional clarification will assist permitting authorities in making major stationary source determinations for the oil and gas sector. The lack of clarity in some of the terms used to determine the source to be addressed in these programs has resulted in confusion for the regulated community and for permitting authorities, including the EPA's regions. Oil and natural gas sector Standards of Performance for Greenhouse Gas (GHG) Emissions for New Stationary Sources: Electric Utility Generating Units *New Source Performance Standards (NSPS) On June 25, 2013, President Obama issued a Presidential Memorandum directing the Environmental Protection Agency (EPA) to work expeditiously to complete greenhouse gas (GHG) standards for the power sector. The agency is using its 72 Recent and Pending EPA Regulations Under the Clean Air Act

75 authority under section 111(d) of the Clean Air Act (CAA) to issue emission guidelines to address GHG emissions from existing power plants. The Presidential Memorandum directed EPA to issue proposed GHG guidelines for existing power plants by no later than June 1, 2014, and to issue final guidelines by no later than June 1, In addition, the Presidential Memorandum directs EPA to, in the guidelines, require states to submit to EPA the implementation plans required under section 111(d) of the CAA by no later than June 30, On June 18, 2014, the EPA proposed emission guidelines for states to follow in developing plans to address GHG emissions from existing fossil-fired EGU, using its authority under CAA 111(d). The Proposed Guidelines were published in the Federal Register on June 18, 2014, as part of the President Climate Change Action Plan. The comment period closed on October 16, The Final Rule was announced on August 3, 2015, and publication in the Federal Register occurred on October 23, On January 21, 2016, the U.S. Court of Appeals for the District of Columbia Circuit denied requests from a broad array of industry and labor groups and more than two dozen states that had asked the court to stay the rule curbing greenhouse gas emissions from power plants during litigation. The litigation of the Climate Change Action plan was placed on an aggressive timetable by the Court of Appeals. On February 9, 2016, the United Sates Supreme Court in a 5-4 decision stayed implementation of the Climate Change Action Plan during litigation. Standards of Performance for New Stationary Sources and Emission Guidelines for Existing Sources: Commercial and Industrial Solid Waste Incineration Units Published March 21, 2011, and effective on May 20, May 18, 2011 The effective dates of the Final rules published in the Federal Register are delayed until such time as judicial review is no longer pending or until the EPA completes its reconsideration of the rules, whichever is earlier. Option 1 MACT floor: Net Benefits: $60 to $550 million (3 percent discount rate); and $30 to $470 million (7 percent discount rate). Non-monetized Benefits: 25,000 tons of CO, 470 tons of HCl, 260 pounds of Hg, 0.95 tons of Cd, 4.1 tons of Pb, 92 grams of dioxins/furans, health effects from NO 2 and SO 2 exposure, ecosystem effects, and visibility impairment. Recent and Pending EPA Regulations Under the Clean Air Act 73

76 Option 2 Beyond-the-Floor: Net Benefits: $130 to $770 million (3 percent discount rate); and $90 to $660 million (7 percent discount rate). Non-monetized Benefits: 25,000 tons of CO, 470 tons of HCl, 260 pounds of Hg, 0.95 tons of Cd, 4.1 tons of Pb, 92 grams of dioxins/furans, health effects from NO 2 and SO 2 exposure, ecosystem effects, and visibility impairment. Responds to the 2001 voluntary remand of the December 1, 2000,NSPS and emission guidelines for commercial and industrial solid waste incineration units and the vacatur and remand of several definitions by the District of Columbia Circuit Court of Appeals in In addition, this action includes the five-year technology review of the NSPS and emission guidelines required under section 129 of the CAA. This action also promulgates other amendments that EPA believes are necessary to address air emissions from commercial and industrial solid waste incineration units. Mining, oil and gas exploration operations; pipeline operators; facilities using a solid waste incinerator; utility providers; manufacturers of wood products, manufacturers of pulp; paper and paperboard; manufacturers of furniture and related products; manufacturers of chemicals and allied products; manufacturers of plastics and rubber products; manufacturers of cement; nonmetallic mineral product manufacturing; manufacturers of machinery; manufacturers of transportation equipment; merchant wholesalers; durable goods; and retail trade Standards of Performance for New Residential Wood Heaters, New Residential Hydronic Heaters and Forced-Air Furnaces, and New Residential Masonry Heaters *New Source Performance Standards (NSPS) The EPA published the Proposed Rule on February 3, The comment period closed on May 5, On July 1, 2014, the EPA issued a Notice of Data Availability (NODA) in support of the Proposed Rule with a comment period closing on July31, On December 10, 2014, the EPA sent the Final Rule to the Office of Management and Budget for regulatory review. Regulatory review was completed on February 2, 2015 and the Final Rule has a consent decree of February 3, Publication in the Federal Register occurred in in February of The EPA estimates the proposed NSPS's total annualized average nationwide costs would be $15.7 million (2010$) over the 2014 through 2022 period. The economic impacts for industries affected by this proposed rule over this same period range from 4.3 percent for manufacture of wood heater/stove models to 6.4 percent compliance cost-to-sales estimate for 74 Recent and Pending EPA Regulations Under the Clean Air Act

77 manufacture of single burn rate wood heater models. These impacts do not presume any pass-through of impacts to consumers. With pass-through to consumers, these impact estimates to manufacturers will decline proportionate to the degree of pass-through. The EPA is proposing to amend the Standards of Performance for New Residential Wood Heaters and to add two new subparts: Standards of Performance for New Residential Hydronic Heaters and Forced-Air Furnaces and Standards of Performance for New Residential Masonry Heaters. This proposal is aimed at achieving several objectives for new residential wood heaters and other wood-burning appliances, including applying updated emission limits that reflect the current best systems of emission reduction; eliminating exemptions over a broad suite of residential wood combustion devices; strengthening test methods as appropriate; and streamlining the certification process. This proposal does not include any requirements for heaters solely fired by gas, oil or coal. In addition, it does not include any requirements associated with appliances that are already in use. The EPA continues to encourage state, local, tribal, and consumer efforts to change out (replace) older heaters with newer, cleaner, more efficient heaters, but that is not part of this federal rulemaking. Manufacturers, owners and operators of wood heaters, pellet heaters/stoves, hydronic heaters, and masonry heaters. Manufacturers, owners and operators of forced-air furnaces. Manufacturers, owners, operators and testers of masonry heaters. Testers of wood heaters, pellet heaters/stoves, hydronic heaters and masonry heaters Supplemental Finding that it is Appropriate and Necessary to Regulate Hazardous Air Pollutants from Coal- and Oil-Fired Electric Utility Steam Generating Units *MATS Considering Costs in Appropriate and Necessary Finding The U.S. Supreme Court remanded the Mercury and Air Toxics Standards or "MATS" rule to the DC Circuit Court after finding that the EPA had not properly considered cost as part of the "Appropriate and Necessary" Finding that was required under Clean Air Act section 112(n)(1)(A). The EPA issued a notice through the supplemental finding that details how the Agency explicitly considered cost and that such consideration of cost does not alter the EPA's previous determination that it is appropriate to regulate hazardous air pollutant emissions from coal- and oil-fired electric utility steam generating units. OMB received the Notice of Proposed Rule Making on October 21, 2015 and it was published in the Federal Register on December 1, Comments were accepted from December 1, 2015 until January 15, The Final Rule was sent to OMB on April 6, 2016 and the expected publication date is June Recent and Pending EPA Regulations Under the Clean Air Act 75

78 The MATS Regulatory Impact Analysis reports estimates of compliance costs of $8.6 billion and $7.4 billion in 2020 and 2030, respectively. Compliance cost estimates are, therefore, highest in Incremental annual capital expenditures represent approximately $2.4 billion of the $9.6 billion in annual costs in Responds to the Supreme Court's decision that the EPA must consider cost in the initial determination that regulation of HAP emissions from EGUs is appropriate under CAA section 112. The EPA provides detailed information on how the agency has taken cost into account in evaluating whether regulation of HAP from coal- and oil-fired electric utility steam generating units is appropriate. The analyses presented do not affect or alter other aspects of the appropriate and necessary interpretation or finding, or the CAA section 112(d) emission standards promulgated in MATS. These analyses also do not alter the Regulatory Impact Analysis (RIA) prepared for the final MATS. Specifically, the EPA did not accepting comment on the scientific or technical aspects of the 2000 appropriate and necessary finding and subsequent reaffirmation. These findings include that mercury and other HAP emissions are hazardous to public health and the environment, that EGUs are the largest emitter of many HAP, that effective control strategies for HAP emissions are available, and that HAP hazards remain after implementation of other CAA provisions. The EPA is only accepting comment on the consideration of cost aspect presented in this proposed supplementary finding. Therefore, it is not opening for comment or proposing to revise any other aspects of the appropriate and necessary interpretation or finding, or the MATS standards themselves, as part of this action. The final MATS standards were supported by an extensive administrative record and based on available control technologies and other practices already used by the better-controlled and lower-emitting EGUs, and the EPA previously concluded that the standards are achievable and reduce hazards to public health and the environment from HAP emitted by EGUs. 76 FR (MATS proposal); 77 FR 9304 (MATS final). In addition, the public had ample opportunity to comment on all aspects of the CAA section 112(d) standards, the RIA, and the appropriate and necessary finding beyond the consideration of cost; and the EPA responded to all of the significant comments. Also, the Supreme Court's decision neither calls into question nor reverses the portions of the D.C. Circuit Court's opinion unanimously rejecting all other challenges to the appropriate and necessary interpretation and finding and the HAP emission standards that the EPA promulgated in the final MATS rule. Industry, states, environmental organizations, and public health organizations challenged many aspects of the EPA's appropriate and necessary finding and the MATS emissions standards, including: (1) The EPA's reliance on the CAA section 112(c)(9) delisting criteria for determining the level of risk worth regulating; (2) the EPA's decision not to consider cost in making the appropriate and necessary determination and listing of EGUs; (3) the EPA's use of identified environmental harms as a basis for finding it appropriate and necessary to regulate HAP emissions from EGUs; (4) the EPA's consideration of the cumulative impacts of HAP emissions from EGUs and other sources in determining whether EGUs pose a hazard to public health or the environment; (5) the EPA's regulation of EGUs pursuant to CAA section 112(d) after adding EGUs to the section 112(c) list pursuant to the appropriate and necessary finding; (6) the EPA's determination that all HAP from EGUs should be regulated; (7) the EPA's technical basis for concluding that EGUs pose a hazard to public health or the environment; (8) the EPA's determination to 76 Recent and Pending EPA Regulations Under the Clean Air Act

79 regulate all EGUs as defined in CAA section 112(a)(8) in the same manner whether or not the individual units are located at major or area sources of HAP; (9) the EPA's emissions standards for mercury and acid gas HAP, including the EPA's decision not to set health based emission standards for acid gas HAP; (10) the EPA's use of certified data submitted by regulated parties; (11) the EPA's denial of a delisting petition filed by an industry trade group; (12) the EPA's decision not to subcategorize a certain type of EGU; and (13) the EPA's decision to allow EGUs to average HAP emissions among certain EGUs. Fossil fuel-fired electric utility steam generating units Recent and Pending EPA Regulations Under the Clean Air Act 77

80 T Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule *Tailoring Rule The Final Rule was published and became effective on June 3, In 2012, a D.C. Circuit panel denied the challenges to the endangerment finding and the tailpipe rule and dismissed the challenges to the timing and tailoring rules for lack of standing. On April 18, 2013, a coalition of industry groups filed a petition with the U.S. Supreme Court for review of the D.C. Court of Appeals decision and challenged EPA rules, including the tailoring rule, and various aspects of EPA s greenhouse gas regulations, including: the agency s scientific endangerment finding for greenhouse gases; the tailpipe rule setting greenhouse gas standards for mobile sources; and the timing and tailoring rules which phased in regulation of stationary sources of greenhouse gases under the prevention of significant deterioration program. The Supreme Court will not consider the substance of the tailoring rule, but rather EPA's authority to enact the tailoring rule based on the adoption of the tailpipe rule. The Supreme Court heard oral arguments on February 24, On June 23, 2014, the Supreme Court held that EPA could not require stationary sources to obtain air pollution permits and install pollution controls because they emit only a specified amount of greenhouse gases. The court also ruled that EPA unlawfully interpreted the Clean Air Act when it revised the numeric tonnage thresholds for greenhouse gases that force factories, power plants, and industrial facilities to obtain a permit. However, the ruling's impact on EPA's larger regulatory regime is likely limited because in a separate part of the decision, EPA won the votes of seven justices who held the agency could require facilities to limit greenhouse gas emissions if they already qualified for the permit program because of emissions of conventional air pollutants. N/A Sets thresholds to which the EPA seeks to phase in regulation of GHG emissions from industrial and large stationary sources under: (1) the PSD program which is a preconstruction review and permitting program that requires installation of Best Available Control Technology (BACT) pollution control equipment; and (2) the Title V program, which is an operating permit program administered by state authorities. Absent the rule, EPA s view is that under the endangerment finding and subsequent light-duty vehicle rule, PSD permitting requirements would be triggered for almost 41,000 entities and Title V permitting requirements for approximately 6 million entities. The rule also commits to take certain actions on future steps addressing smaller sources but excludes certain smaller sources from PSD and Title V permitting for GHG emissions until at least April 30, Recent and Pending EPA Regulations Under the Clean Air Act

81 Agriculture, fishing, and hunting; mining utilities (electric, natural gas, other systems); manufacturing of food, beverages, tobacco, textiles, leather, wood product, paper, petroleum, coal, chemical, rubber product, chemical products, nonmetallic mineral products, primary and fabricated metal, machinery, computer, and electronic products, electrical equipment, appliances, components, transportation equipment, furniture, and related products; waste management and remediation; hospitals, nursing, and residential care facilities; personal and laundry services; residential/private households; and nonresidential (commercial) buildings Transport Rule (CAIR Replacement Rule); Federal Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter and Ozone, a.k.a. Cross-State Air Pollution Rule (CSAPR) The Final Rule was published July 11, 2011 and updated on July 18, Effective on January 1, 2012, for capping annual emissions of sulfur dioxide (SO 2 ) and nitrogen oxides (NO x ), and on May 1, 2012, for ozone-season NO x. The D.C. Circuit of the U.S. Court of Appeals repealed the rule on August 21, The Court ordered the agency to enforce a 2005 rule known as the Clear Air Interstate Rule (CAIR), until it made a viable replacement to the CSAPR. The U.S. Supreme Court on June 24, 2013, indicated it would review an appeals court rejection of the EPA s CSAPR. The U.S. Supreme Court heard arguments on December 10, On April 29th, 2014, the United States Supreme Court, in a 6-2 decision, reinstated the CSAPR. The majority decision, penned by Justice Ginsburg, held that EPA has authority under the federal Clean Air Act (CAA) to consider costeffectiveness, not just strict proportional responsibility, when allocating emission reduction obligations in upwind states that are necessary to ensure that downwind states attain the relevant National Ambient Air Quality Standards (NAAQS). In addition, the majority held that EPA is not obligated to provide states with an opportunity to revise inadequate State Implementation Plans (SIPs) prior to issuing remedial Federal Implementation Plans (FIPs), even though the criteria for determining the amounts of interstate pollution that significantly contribute to downwind nonattainment might not be clear until EPA has acted. This opinion overturned the D.C. Circuit s split decision in EME Homer City Generation v. EPA, which vacated CSAPR. Results in up to $280 billion in annual benefits. $800 million is projected to be spent annually on this rule in Roughly $1.6 billion per year in capital investments are already underway as a result of CAIR. Replaces the 2005 CAIR, which is temporarily in place. Plants in affected states would have begun reducing emissions as early as January 2012 under CSAPR. The rule applies to SO 2 and NO x emissions levels in 27 states, with the goal of reducing fine particulate matter (PM2.5). Recent and Pending EPA Regulations Under the Clean Air Act 79

82 The rule would have gone into effect under two phases: the Phase 1 compliance date of 2012, and the Phase 2 compliance date of The rule also establishes two independent trading programs for SO 2 : Group 1 states and Group 2 states. EPA is adopting federal implementation plans, or FIPs, for each of the states covered by this rule. EPA encourages states to replace these FIPs with State Implementation Plans, or SIPs, starting as early as EPA and the states continue to implement CSAPR s predecessor, the Clean Air Interstate Rule (CAIR), pursuant to the stay issued by the D.C. Circuit. Utility industry 80 Recent and Pending EPA Regulations Under the Clean Air Act

83 List of Acronyms ANPRM AQI BACT CAA CAFE CAIR CBI CCS Cd CEMS CFC CFR CH4 CO CO 2 CPMS CSAPR dv EAF EG EGU Advanced Notice of Proposed Rulemaking Air Quality Index Best Available Control Technology Clean Air Act Corporate Average Fuel Economy Clean Air Interstate Rule confidential business information carbon capture and storage cadmium continuous emissions monitoring systems chlorofluorocarbon Code of Federal Regulations methane carbon monoxide carbon dioxide continuous parameter monitoring systems Cross-State Air Pollution Rule deciview Electric Arc Furnace emissions guidelines electric generating units Recent and Pending EPA Regulations Under the Clean Air Act 81

84 EISA EPA FIP GHG GHGRP HAP HCl HFC HFO Hg HMIWI l/cyl lb LMAPCD m3 MACT MassDEP Mcf mg MIRR mpg MVAC MWe Energy Independence and Security Act United States Environmental Protection Agency Federal Implementation Plan greenhouse gas Greenhouse Gas Reporting Program hazardous air pollutant hydrogen chloride hydrofluorocarbon hydrofluoroolefin mercury hospital/medical/infectious waste incinerators liters per cycle pound Louisville Metro Air Pollution Control District cubic meter Maximum Achievable Control Technology Massachusetts Department of Environmental Protection thousand cubic feet milligram monitoring, inspection, recordkeeping, and reporting miles per gallon motor vehicle air conditioning megawatt electric MWh megawatt hour 82 Recent and Pending EPA Regulations Under the Clean Air Act

85 MY N2O NAAQS NESHAP NGCC NHTSA NO 2 NO x NSPS NSR O&M OMB ORVR OTR Pb PEMS PFC PGVP PM ppb ppm PS PSD RCRA model years nitrous oxide National Ambient Air Quality Standards National Emission Standards for Hazardous Air Pollutants natural gas combined cycle National Highway Traffic Safety Administration nitrogen dioxide nitrogen oxides New Source Performance Standards New Source Review operating and maintenance Office of Management and Budget onboard refueling vapor recovery Ozone Transport Region lead predictive emissions monitoring systems perfluorocarbon Protocol Gas Verification Program particulate matter parts per billion parts per million Performance Specification Prevention of Significant Deterioration Resource Conservation and Recovery Act Recent and Pending EPA Regulations Under the Clean Air Act 83

86 RICE SF6 SIP SNAP SO 2 SSI THC UIC Reciprocating Internal Combustion Engines sulfur hexafluoride State Implementation Plan Significant New Alternatives Policy sulfur dioxide sewage sludge incinerators total hydrocarbons Underground Injection Control 84 Recent and Pending EPA Regulations Under the Clean Air Act

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