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Kentucky Resources Council, PO Box 1070, Frankfort, KY 40602 Phone [502] 875-2428

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PO Box 1070, Frankfort, KY 40602  Phone 502.875.2428, Fax 502.875.2845

EPA Would Likely Assume Direct Permitting Of GHG Emissions Under HJR 49  Posted: February 8, 2011

February 8, 2011

Hon. Joe Fischer
Kentucky House of Representatives
Frankfort, Kentucky 40601

Hon. Ben Waide
Kentucky House of Representatives
Frankfort, Kentucky 40601

Hon. Jim Gooch, Jr., Chair
Kentucky House of Representatives
Frankfort, Kentucky 40601

Re: HJR 49

Dear Representatives Fischer, Waide and Chairman Gooch:

I’m writing to convey my concern regarding the consequences of prohibiting the state Division for Air Quality from enforcing limits on emission of carbon dioxide. The direct result of enactment of HJR 49 would be that the U.S. Environmental Protection Agency would assume control and responsibility over the permitting of carbon dioxide and other greenhouse gas emissions for major sources under the PSD (Prevention of Significant Deterioration) program, thus bifurcating the permitting process and potentially delaying the issuance of air permits for new industrial facilities.

As you know, the U.S. Environmental Protection Agency has indicated an intent to move forward to adopt, for “major stationary sources” as defined in the Tailoring Rule, limitations on the emission of carbon dioxide and other “greenhouse” gases. On September 2, 2010, EPA proposed a rulemaking affecting both Kentucky and Jefferson County, Kentucky (which as you know operates the air pollution control program in Metro Louisville), that proposed a Federal Implementation Plan (FIP) which would apply to any state that “is unable to submit, by its deadline, a corrective State implementation plan (SIP) revision to ensure that the State has authority to issue permits under the Clean Air Act’s (CAA or Act) New Source Review Prevention of Significant Deterioration (PSD) program for sources of greenhouse gases (GHGs).” The proposal to institute a FIP for Kentucky and Metro Louisville was accompanied by a rulemaking published that same day proposing a finding of “Substantial Inadequacy and SIP Call” for 13 states, including Kentucky “on grounds that their SIPs do not appear to apply the PSD Program to GHG-emitting sources.”

In order to maintain authority over permitting of major sources with respect to GHG, the state Division of Air Quality revised two state regulations, 401 KAR 51:001 and 52:001, and plans to submit those to the U.S. Environmental Protection Agency before March 31, 2011 in order to avoid a FIP and potential sanctions.

In comments on the state revision to the regulations, the Kentucky Chamber of Commerce expressed disagreement with EPA’s actions, but supported the Division for Air Quality “efforts to maintain its status as the permit issuing authority for Kentucky business. The Chamber supports action by the Cabinet to obtain delegated authority under an EPA-issued FIP for implementation of greenhouse gas permitting without submittal of a SIP revision package in the short term.”

The decision on whether to continue to maintain a delegated permitting program for air pollutants is ultimately a legislative determination. I do want you to be aware, however, that if the state Division for Air Quality and the Metro Louisville Air Pollution Control District are prohibited, as they would be under this resolution, from imposing mandated controls on GHG emissions when those controls are adopted by EPA, then EPA intends to assume direct responsibility for reviewing and acting upon those portion of the GHG portion of air pollution permits for affected industrial sources. The result will be a bifurcated permitting process, and the timeliness of permitting of major economic development projects would be out of the state’s hands.

I fully understand your displeasure with EPA’s proposed controls on GHG emissions, and as I have told the committee last session, I believe that a preferred approach to curbing GHG emissions is that proposed by the United States Climate Action Partnership (USCAP), a group of businesses and environmental organizations that have together called on Congress to enact strong legislation to require significant reductions of greenhouse gas emissions. USCAP Members include a number of companies with a strong Kentucky presence, including Alcoa, Chrysler, Dow Chemical, Duke Energy, DuPont, Exelon, Ford, GE, Honeywell, Johnson & Johnson, PepsiCo, PG&E, Shell, Siemens Corporation, and Weyerhaeuser. In the absence of Congressional action, EPA is obligated to go forward, after the endangerment finding, to develop mechanisms for curbing GHG emissions. As it does, HJR 49 raises the question of whether EPA should also do the PSD permitting for Kentucky’s major GHG sources.

All best regards,

/Fitz/
Tom FitzGerald
Director

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