Massachusetts May be Most Restrictive State, Continuing to Regulate Sources with as Little as 1 Ton Per Year of Potential GHG Emissions

On August 2, 2013, the Massachusetts Department of Environmental Protection (MassDEP) published a final rule that “tailors” the requirements of its major source operating permit program, bringing the state’s operating permit applicability threshold for greenhouse gas (“GHG”) emissions into line with federal requirements.

MassDEP did not similarly “tailor” its plan approval applicability threshold for GHG emissions under its minor source permitting program, thus bringing many small process sources into the plan approval program on the basis of small quantities of GHG emissions.  MassDEP’s failure to tailor its minor source permitting program means that Massachusetts now has among the most restrictive GHG permitting programs in the country for process related GHG emissions, requiring an air permit for stationary sources with a potential to emit of just one ton per year of GHGs. 

MassDEP’s Title V Operating Permit Program

Under its new rule, MassDEP establishes the following operating permit applicability thresholds for GHG emissions:

1. 100 tons GHG mass basis, which is defined as the sum of the potential to emit (pte) in tons per year (tpy) of the six GHGs prior to multiplying each by its associated global warming potential as set forth in 40 CFR part 98; and

2. 100,000 tpy of carbon dioxide equivalent (CO₂e), which is computed by adding together the mass amount of emissions in tons per year for each of the six GHGs multiplied by the global warming potential for each gas as set forth in 40 CFR part 98.

These changes are consistent with a portion of the U.S. Environmental Protection Agency’s (“EPA’s”) “tailoring rule,” which increases the GHG emissions permitting thresholds for major sources regulated under the federal Clean Air Act (“CAA”).  See Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule, 75 Fed. Reg. 31514 (June 3, 2010). 

Without the changes in the federal rule, major source construction and operating permits would have been required for facilities that emit as low as 100 tpy of GHGs.  Similarly, without the changes in the MassDEP rules, major source operating permits would be required for facilities in the Commonwealth that emit as low as 100 tpy of GHGs.

In tailoring its GHG emissions thresholds, EPA recognized that GHGs should be treated differently than other pollutants under the CAA’s permitting programs and sought to avoid greatly increasing the number of required permits, and thus to avoid imposing undue costs on small sources, overwhelming the resources of permitting agencies, and severely impairing the function of air permitting programs.  Specifically, EPA warned of “permitting gridlock” and invoked the judicial doctrines of “absurd results” and “administrative necessity” as rationales for adopting the 100,000 tpy threshold.  Id., at 31517.  EPA decided at that time to defer a decision on whether to reduce the threshold from 100,000 tpy to a future date.

EPA reconsidered the 100,000 tpy GHG threshold in a final rule published on July 12, 2012.  See 77 Fed. Reg. 41051 (July 12, 2012). In that rule, EPA found that the states had made little progress in developing a GHG permitting infrastructure, nor had they developed the significant streamlining approaches that would be necessary to address the flood of applications that would ensue if the threshold were reduced below 100,000 tpy. As an example, EPA estimated that reducing the threshold to 50,000 tpy of GHGs would increase the permitting burdens on states by 40% over the 100,000 tpy threshold and by 99% over the level that existed pre-GHG permitting. Id., at 41057.

Additionally, and importantly, EPA determined that reducing the threshold significantly would not have a commensurate impact on reducing GHG emissions. EPA stated:

Our analysis shows that as the thresholds go lower, the number of sources increases dramatically, but the volume of GHG emission emitted by each additional source gets smaller and smaller…. Thus, the additional reductions in GHG emissions from lowering the thresholds…would be small under any circumstances even if the thresholds were lowered to 50,000…tpy CO₂e. This small amount of incremental environmental benefit from lowering the thresholds, coupled with the additional burden associated with permitting these sources…supports the reasonableness of our determination not to lower the thresholds… 

Id., at 41058.

MassDEP’s Minor Source Permitting Program

In contrast to EPA’s decision to retain its 100,000 tpy permitting threshold and reject a 50,000 tpy threshold, the surprising aspect of MassDEP’s “tailoring rule” is that it does not revise the state construction permitting threshold of 1 tpy for GHG emissions contained in the state’s minor source permitting program.  While many common smaller sources of criteria pollutant emissions in Massachusetts are exempt from minor source permitting on the basis of permitting exemptions, there are other common smaller sources of GHG emissions that do not appear to fit within the existing exemptions, and in Massachusetts the threshold for requiring a minor source permit for those activities is 1 ton of potential emissions.   

Massachusetts’ minor source permitting program applies to the construction, substantial reconstruction, alteration, or subsequent operation of facilities that emit contaminants to the ambient air.  See 310 CMR 7.02.   MassDEP rules require an air permit for any stationary source with a potential to emit of just one ton per year or more of any single criteria or non-criteria pollutant.  Id.GHGs are regulated as a non-criteria pollutant.  The permitting rules contain exemptions for a variety of common small emission sources, such as emergency generators, small boilers, biomass heaters, fuel dispensing facilities, paint spray booths, and welding, but these exemptions were not adopted with GHG emission sources in mind.

Small sources of GHG emissions that could now be subject to GHG permitting requirements in Massachusetts include a variety of agricultural activities (e.g., soils, livestock and manure management), composting activities, venting or leaking of natural gas from gas lines, dental and veterinary anesthesia activities, and even wastewater treatment (i.e., septic system) venting. 

One ton of GHG emissions is exceedingly small.  By way of comparison,  EPA has calculated that the average household electricity consumption results in just under 7.3 tons of CO₂ emissions in a year. This would be actual emissions – the potential emissions that MassDEP requires you to consider to determine if permitting is required would be far higher.  Further, if a state permit is necessary, a source is required to adopt best available control technology (“BACT”) to reduce GHG emissions.  See 310 CMR 7.08.

Because MassDEP chose not to tailor the minor source permitting program applicability threshold for GHGs, in Massachusetts, some sources appear to be required to obtain permits and install BACT pollution controls if they have a very small potential to emit GHGs. 

Consequences of MassDEP’s Limited Tailoring Rule

Massachusetts may well be the only state in the nation that imposes such a low GHG emissions threshold. By choosing not to tailor the minor source GHG applicability threshold, MassDEP has taken a path that is starkly different than the one EPA pursued in promulgating the federal “tailoring rule.”  MassDEP has taken an initial step to tailor its GHG permitting program, but has only applied its tailoring rule to major sources, consistent with the federal program.  For minor sources, which EPA does not regulate, MassDEP has chosen not to limit applicability, and as a result there is the potential that some very small sources across the Commonwealth are now subject to new GHG permitting requirements.

It is not clear at this point just what the impact of this limited tailoring decision will be, nor is it clear what MassDEP will require small sources to adopt as BACT to control very small sources of GHG emissions. Permitting application forms have been revised to include BACT information but only over time will the effect of these requirements become known.