EPA Finalizes Rule for Flexible Air Permits

December 8, 2009
Client Alert Newsletter December 2009

On January 13, 2009, at the end of the Bush Administration, the U.S. Environmental Protection Agency ("EPA") issued a final rule authorizing states to issue air quality operating permits which "pre-authorize" sources to institute certain operational changes and alternative operating scenarios. The rule sought to clarify EPA's position that air quality operating permits issued under Title V of the Clean Air Act could include provisions governing various operating conditions, as well as reflecting approved replicable methodologies. EPA observed that the objective of these provisions of the Title V permit program was to provide sources with greater flexibility to institute changes without additional permit approvals in order to promptly respond to market changes.

Shortly following the transition to the Obama Administration, however, EPA determined to reconsider this rulemaking action. EPA's announced reconsideration caused significant uncertainty among permitting agencies, since they had understood EPA's final regulation to merely clarify pre-existing regulatory authority. On October 6, 2009, EPA resolved any uncertainty in this context by finalizing the January 2009 regulation, and affirming the authorization afforded state permitting authorities to include these flexible permitting provisions within air quality operating permits.

Flexible air permitting provisions can provide significant benefit to facilities by allowing rapid transition among operating scenarios, without the need for securing prior permitting approval from state agencies. In order to secure these benefits, facilities must properly request inclusion of relevant operating scenarios in the context of original permit applications, and work with state permitting authorities to ensure that the permit provisions accurately account for foreseeable operating scenarios and consider applicable regulatory standards under each such scenario.