New GHG Regulations for Minor Sources Create Major Regulatory Challenges

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A host of industrial facilities across the country face being subject to permitting rules and other regulatory requirements under the Environmental Protection Agency’s (EPA) Greenhouse Gas Tailoring Rule. The rule stands to impact facilities that were previously considered "minor" sources of air pollution – including gas processing plants, fractionating plants, compressor stations and other midstream energy assets.

Background: The New GHG Rules

On January 2, 2011, greenhouse gases (GHG) became subject to the federal requirements of the Prevention of Significant Deterioration (PSD) permitting program, requiring states to revise their Implementation Plans (SIP) to include permitting requirements for GHGs. Disagreeing with the Environmental Protection Agency’s (EPA) regulation of GHGs, Texas chose not to revise its SIP, instead filing several challenges against the regulations in both the 5th Circuit and D.C. Circuit. Although EPA effectively became the permitting authority for GHG emissions in Texas on January 12, 2011 after a previously issued stay was lifted, a Federal Implementation Plan (FIP) was issued on May 3, 2011 officially designating EPA as the permitting authority for GHG-emitting sources in Texas.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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