[Federal Register: November 29, 2005 (Volume 70, Number 228)]
[Rules and Regulations]
[Page 71611-71705]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29no05-8]
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Part II
Environmental Protection Agency
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40 CFR Parts 51, 52, and 80
Final Rule To Implement the 8-Hour Ozone National Ambient Air Quality
Standard; Final Rule
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 51, 52, and 80
[OAR 2003-0079; FRL-7996-8]
RIN 2060-AJ99
Final Rule To Implement the 8-Hour Ozone National Ambient Air
Quality Standard--Phase 2; Final Rule To Implement Certain Aspects of
the 1990 Amendments Relating to New Source Review and Prevention of
Significant Deterioration as They Apply in Carbon Monoxide, Particulate
Matter and Ozone NAAQS; Final Rule for Reformulated Gasoline
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: In this document, we are taking final action on most remaining
elements of the program to implement the 8-hour ozone national ambient
air quality standard (NAAQS or standard). This final rule addresses,
among other things, the following control and planning obligations as
they apply to areas designated nonattainment for the 8-hour ozone
NAAQS: reasonably available control technology and measures (RACT and
RACM), reasonable further progress (RFP), modeling and attainment
demonstrations, and new source review (NSR). We are issuing this rule
so that States and Tribes will know how these statutory control and
planning obligations apply and when State implementation plan (SIP)
revisions are due for these obligations so that the States may develop
timely submissions consistent with the statutory obligations and attain
the NAAQS as expeditiously as practicable but no later than their
maximum attainment dates. The intended effect of the rule is to provide
certainty to States and Tribes regarding development of those plans.
In this rule, we are also finalizing several revisions to the
regulations governing the nonattainment NSR programs mandated by
section 110(a)(2)(C) and part D of title I of the Clean Air Act (CAA).
Finally, this rule addresses what effect the transition to the 8-
hour standard will have on certain aspects of the Reformulated Gasoline
(RFG) program. The nine original mandatory RFG areas, as well as most
other areas that have become mandatory RFG areas by being reclassified
as severe areas under section 181(b) of the CAA, will continue to be
required to use RFG at least until they are redesignated to attainment
for the 8-hour NAAQS. The EPA reserves for future consideration what
effect the transition to the 8-hour standard will have on areas
reclassified as severe areas for the 1-hour NAAQS under section 181(b)
of the CAA that were redesignated to attainment for the 1-hour standard
before revocation of that standard.
EFFECTIVE DATE: This rule is effective on January 30, 2006.
ADDRESSES: The EPA has established a docket for this action under
Docket ID No. OAR-2003-0079. All documents in the docket are listed in
the EDOCKET index at http://www.epa.gov/edocket. Although listed in the
index, some information is not publicly available, i.e., Confidential
Business Information or other information whose disclosure is
restricted by statute. Certain other material, such as copyrighted
material, is not placed on the Internet and will be publicly available
only in hard copy form. Publicly available docket materials are
available either electronically in EDOCKET or in hard copy at the EPA
Docket Center (Air Docket), EPA/DC, EPA West, Room B102, 1301
Constitution Ave., NW., Washington, DC. The Public Reading Room is open
from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal
holidays. The telephone number for the Public Reading Room is (202)
566-1744, and the telephone number for the Office of Air and Radiation
Docket and Information Center is (202) 566-1742.
In addition, we have placed a variety of earlier materials
regarding implementation of the 8-hour ozone NAAQS on the Web site:
http://www.epa.gov/ttn/naaqs/ozone/o3imp8hr.
FOR FURTHER INFORMATION CONTACT: For general information: Mr. John
Silvasi, Office of Air Quality Planning and Standards, U.S.
Environmental Protection Agency, Mail Code C539-02, Research Triangle
Park, NC 27711, phone number (919) 541-5666, fax number (919) 541-0824
or by e-mail at silvasi.john@epa.gov or Ms. Denise Gerth, Office of Air
Quality Planning and Standards, U.S. Environmental Protection Agency,
Mail Code C539-02, Research Triangle Park, NC 27711, phone number (919)
541-5550, fax number (919) 541-0824 or by e-mail at
gerth.denise@epa.gov. For information concerning new source review: Ms.
Janet McDonald, Office of Air Quality Planning and Standards, U.S.
Environmental Protection Agency, Mail Code C539-03, Research Triangle
Park, NC 27711, phone number (919) 541-1450, fax number (919) 541-5509
or by e-mail at mcdonald.janet@epa.gov.
SUPPLEMENTARY INFORMATION:
Outline
I. What is the Background for this Rule?
II. What is Included in this Rule?
III. In Short, What Does this Final Rule Contain?
IV. Final Rule for Phase 2 Elements Other than NSR and RFG
A. Should prescribed requirements of subpart 2 apply in all 8-
hour nonattainment areas classified under subpart 2, or is there
flexibility in application in certain narrowly-defined
circumstances?
B. How will we address long-range transport of ground-level
ozone and its precursors when implementing the 8-hour ozone
standard?
C. How will we address transport of ground-level ozone and its
precursors for rural nonattainment areas, areas affected by
intrastate transport, and areas affected by international transport?
D. How will EPA address requirements for modeling and attainment
demonstration SIPs for areas implementing the 8-hour ozone standard?
E. What requirements for RFP should apply under the 8-hour ozone
standard?
F. Are contingency measures required in the event of failure to
meet a milestone or attain the 8-hour ozone NAAQS?
G. What requirements should apply for RACM and RACT for 8-hour
ozone nonattainment areas?
H. How will the section 182(f) NOX provisions be
handled under the 8-hour ozone standard?
I. Should EPA promulgate a NSR provision to encourage
development patterns that reduce overall emissions?
J. How will EPA ensure that the 8-hour ozone standard will be
implemented in a way which allows an optimal mix of controls for
ozone, PM2.5, and regional haze?
K. What emissions inventory requirements should apply under the
8-hour ozone NAAQS?
L. What guidance should be provided that is specific to Tribes?
M. What are the requirements for Ozone Transport Regions (OTRs)
under the 8-hour ozone standard?
N. Are there any additional requirements related to enforcement
and compliance?
O. What requirements should apply to emergency episodes?
P. What ambient monitoring requirements will apply under the 8-
hour ozone NAAQS?
Q. When will EPA require 8-hour attainment demonstration SIP
submissions?
R. How will the statutory time periods in the CAA be addressed
when we redesignate areas to nonattainment following initial
designations for the 8-hour NAAQS?
V. EPA's Final Rule for New Source Review
A. Background
B. Summary of Final Rule and Legal Basis
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C. Comments and Responses
D. NSR Implementation Under the 8-hour ozone NAAQS
VI. Final Rule for RFG
A. Introduction
B. Background
C. What Action is EPA Taking?
D. Why is EPA Taking This Action?
E. Future Proceedings
F. Miscellaneous Administrative Changes to RFG Regulations
G. Comments and Responses
VII. Other Considerations
A. How will EPA's implementation of the 8-hour ozone NAAQS
affect funding under the Congestion Mitigation and Air Quality
Improvement (CMAQ) Program?
B. What is the relationship between implementation of the 8-hour
standard and the CAA's title V permits program?
C. What action is EPA taking on the Overwhelming Transport
Classification for Subpart 1 Areas?
VIII. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review
B. Paperwork Reduction Act
C. Regulatory Flexibility Act
D. Unfunded Mandates Reform Act
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination with
Indian Tribal Governments
G. Executive Order 13045: Protection of Children from
Environmental Health and Safety Risks
H. Executive Order 13211: Actions That Significantly Affect
Energy Supply, Distribution, or Use
I. National Technology Transfer Advancement Act
J. Executive Order 12898: Federal Actions to Address
Environmental Justice in Minority Populations and Low-Income
Populations
K. Congressional Review Act
L. Petitions for Judicial Review
M. Determination Under Section 307(d)
Appendix A to Preamble--Methods to Account for Non-Creditable
Reductions when Calculating ROP Targets for the 2008 and Later ROP
Milestone Years
Appendix B to Preamble--Glossary Of Terms and Acronyms
I. What Is the Background for This Rule?
On June 2, 2003 (68 FR 32805), we published a proposed rule to
implement the 8-hour ozone NAAQS. The proposal addressed a number of
implementation issues. We proposed one or more options for each issue
addressed in the proposal. Please refer to the proposed rule (68 FR
32802) for a detailed discussion and background information on the 8-
hour ozone NAAQS; the associated litigation; our proposed strategy for
areas to achieve the NAAQS; and the stakeholder process for gathering
input into this effort, among other topics.
On August 6, 2003 (68 FR 46536), we published a notice of
availability of the draft regulatory text for the proposed rule to
implement the 8-hour ozone NAAQS. This notice started a 30-day public
comment period on the draft regulatory text.
On April 30, 2004 (69 FR 23951), we published a final rule that
addressed the following key elements related to implementation of the
8-hour ozone NAAQS: classifications for the 8-hour NAAQS; revocation of
the 1-hour NAAQS (i.e., when the 1-hour NAAQS will no longer apply);
how anti-backsliding principles will ensure continued progress toward
attainment of the 8-hour ozone NAAQS; attainment dates; and the timing
of emissions reductions needed for attainment.
Following publication of the April 30, 2004 final rule, the
Administrator received three petitions, pursuant to section
307(b)(7)(B) of the CAA requesting reconsideration of a number of
aspects of the final rule.\1\ On September 23, 2004, we granted
reconsideration of three issues raised in the Earthjustice Petition. On
February 3, 2005 (70 FR 5593), we published a proposed rule to take
comment on two of these issues: (1) The provision that section 185 fees
would no longer be applicable once the 1-hour NAAQS is revoked and (2)
the timing for determination of what is an ``applicable requirement.''
On May 20, 2005, the final rule on these two issues was signed by the
Administrator of EPA. On April 4, 2005 (70 FR 17018), we published a
proposed rule to take comment on the issue of whether we should
interpret the Act to require areas to retain major NSR requirements
that apply to certain 1-hour ozone nonattainment areas in implementing
the 8-hour standard. We took final action on the NSR issues on June 30,
2005 (70 FR 39413; July 8, 2005).
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\1\ Three petitions for reconsideration of the Phase 1 Rule were
filed by: (1) Earthjustice on behalf of the American Lung
Association, Environmental Defense, Natural Resources Defense
Council, Sierra Club, Clean Air Task Force, Conservation Law
Foundation, and Southern Alliance for Clean Energy; (2) the National
Petrochemical and Refiners Association and the National Association
of Manufacturers; and (3) the American Petroleum Institute, American
Chemistry Council, American Iron and Steel Institute, National
Association of Manufacturers and the U.S. Chamber of Commerce.
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On January 10, 2005, we granted reconsideration of the overwhelming
transport classification issue raised by Earthjustice in their
Petition. At the same time, we denied reconsideration of the issues
they raised in their Petition dealing with the applicability of RFG
when the 1-hour NAAQS is revoked and future 8-hour ozone redesignations
to nonattainment. We intend to publish a proposed rule on the
overwhelming transport classification shortly. We are continuing to
review the issues raised in the National Petrochemical and Refiners
Association and American Petroleum Institute Petitions. Copies of the
Petitions for Reconsideration and actions EPA has taken regarding the
Petitions may be found at: http://www.epa.gov/ttn/naaqs/ozone/o3imp8hr.
In addition, in the April 30, 2004 rule, we established a subpart E
in 40 CFR part 81 ``Identification of Area Designations and
Classifications for the 1-Hour Ozone NAAQS as of June 15, 2004
[Reserved].'' We intend to publish that list shortly.
Concerning the major NSR provisions, today's final regulations were
proposed as part of two different regulatory packages. On July 23, 1996
(61 FR 38250), we proposed changes to the major NSR program, including
codification of the requirements of part D of title I of the 1990 CAA
Amendments for major stationary sources of volatile organic compounds
(VOC), NOX, particulate matter having a nominal aerodynamic
diameter less than or equal to 10 microns (PM10), and CO. On
June 2, 2003 (68 FR 32802), we proposed a rule to implement the 8-hour
ozone NAAQS. In the 2003 action, we proposed a rule to identify the
statutory requirements that apply for purposes of developing SIPs under
the CAA to implement the 8-hour ozone NAAQS (68 FR 32802). We did not
propose specific regulatory language for implementation of NSR under
the 8-hour NAAQS. However, we indicated that we intended to revise the
nonattainment NSR regulations to be consistent with the rule for
implementing the 8-hour ozone NAAQS (68 FR 32844). On April 30, 2004
(69 FR 23951), we published a final rule that addressed classifications
for the 8-hour NAAQS. The April 2004 rule also included the NSR
permitting requirements for the 8-hour ozone standard, which
necessarily follow from the classification scheme chosen under the
terms of subpart 1 and subpart 2.
Also, in our 1996 action, and then again in our June 2, 2003
action, we proposed to amend our nonattainment NSR provisions to
expressly include NOX as an ozone precursor in nonattainment
major NSR programs (61 FR 38297 and 68 FR 32847). We also proposed
that, as provided under CAA section 182(f), a waiver from nonattainment
NSR for NOX as an ozone precursor would be available for
both subpart 1 and subpart 2 areas (68 FR 32846). Moreover, we proposed
to require States to modify their existing programs to include
NOX as an ozone
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precursor in attainment areas (68 FR 32846).
In 1996, we proposed to revise the regulations limiting offsets
from emissions reductions due to shutting down an existing source or
curtailing production or operating hours below baseline levels
(``shutdowns/curtailments''). We proposed substantive revisions in two
alternatives that would ease, under certain circumstances, the existing
restrictions on the use of emission reduction credits from source
shutdowns and curtailments as offsets.
On July 23, 1996, we proposed to revise Sec. 52.24 to incorporate
changes made by the 1990 CAA Amendments related to the applicability of
construction bans (61 FR 38305). To clarify our intent, our proposed 8-
hour ozone NAAQS implementation rule in June 2003 explained that Sec.
52.24(k) remained in effect and would be retained. In that action, we
also proposed that we would revise Sec. 52.24(k) to reflect the
changes in the 1990 CAA Amendments (68 FR 32846). On June 2, 2003 (68
FR 32802), we explained implementation of the major NSR program under
the 8-hour ozone NAAQS during the SIP development period, and proposed
flexible NSR requirements for areas that expected to attain the 8-hour
NAAQS within 3 years after designation.
In this rule, we are also finalizing several revisions to the
regulations governing the nonattainment NSR programs mandated by
section 110(a)(2)(C) and part D of title I of the Clean Air Act (CAA).
First, we are codifying requirements added to part D of title I of the
CAA in the 1990 Amendments related to permitting of major stationary
sources in areas that are nonattainment for the ozone, particulate
matter (PM), and carbon monoxide (CO) NAAQS. Second, we are revising
the criteria for crediting emissions reductions credits from shutdowns
and curtailments as offsets. Third, we are revising the regulations for
permitting of major stationary sources in nonattainment areas in
interim periods between designation of new nonattainment areas and
EPA's approval of a revised SIP. Fourth, we are changing the
regulations that impose a moratorium (ban) prohibiting construction of
new or modified major stationary sources in nonattainment areas where
the State fails to have an implementation plan meeting all of the
requirements of part D. In addition to the changes to the nonattainment
NSR regulations, we also are making one change to the Prevention of
Significant Deterioration (PSD) regulations under part C of title I of
the CAA. We are codifying nitrogen oxides (NOX) as an ozone
precursor in attainment and unclassifiable areas.
Today's changes regarding NSR are based on the proposed rule
published on June 2, 2003 to Implement the 8-hour Ozone National
Ambient Air Quality Standard (NAAQS), as well as the proposed rule
published on July 23, 1996 for ``Prevention of Significant
Deterioration (PSD) and Non-attainment New Source Review (NSR).'' These
changes provide a consistent national program for permitting major
stationary sources under section 110(a)(2)(C) and parts C and D of
title I, including major stationary sources of ozone precursors in
ozone nonattainment areas.
For the reader's convenience, a glossary and list of acronyms
appears in Appendix B of this preamble.
II. What Is Included in This Rule?
Today's action, Phase 2 of the implementation rule, addresses
numerous topics, but primarily focuses on the following key
implementation obligations for areas designated nonattainment for the
8-hour NAAQS: RACT and RACM; RFP; modeling and attainment
demonstrations; and NSR. It also addresses what effect the transition
to the 8-hour standard will have on certain aspects of the RFG program.
III. In Short, What Does This Final Rule Contain?
This summary is intended to give only a convenient overview of our
final rule. It should not be relied on for the details of the actual
rule. The final rule (regulatory text) and the discussion of it in the
sections below should be consulted directly.
Summary of Section IV (Below): Final Rule for Phase 2 Elements Other
Than NSR and RFG
A. Should prescribed requirements of subpart 2 apply in all 8-hour
nonattainment areas classified under subpart 2, or is there flexibility
in application in certain narrowly defined circumstances?
There may be a basis for waiving a prescribed requirement on a
case-by-case basis where imposition of the requirement would create an
absurd result. If a State submits a demonstration that application of a
specific requirement in a specific nonattainment area would create an
absurd result, we will consider application of the absurd results
doctrine at that time. We believe that absurd results that might occur
from application of mandatory control measures would happen only in
rare instances, if at all.
B. How will we address long-range transport of ground-level ozone and
its precursors when implementing the 8-hour ozone standard?
The EPA has issued two major rules to address interstate transport
of ozone pollution. The 1998 NOX SIP Call Rule already is
achieving significant reductions in NOX emissions that
contribute to interstate ozone pollution in the eastern United States.
Nineteen States were required to achieve reductions by May 2004, and
additional reductions are required by May 2007.
On May 12, 2005, EPA published the Clean Air Interstate Rule (CAIR)
in the Federal Register (70 FR 25162). It establishes statewide sulfur
dioxide (SO2) and NOX emissions budgets for
upwind States that significantly contribute to nonattainment or
interfere with maintenance of the fine particle or 8-hour ozone air
quality standards in downwind States. For ozone, this action
established summertime NOX budgets for the District of
Columbia and 25 States in the eastern half of the country, with
reductions to be achieved by 2009 and 2015. The CAIR goes beyond the
SIP call by requiring reductions from additional States and by
requiring further emissions reductions in SIP call States.
C. How will we address transport of ground-level ozone and its
precursors for rural nonattainment areas, areas affected by intrastate
transport, and areas affected by international transport?
1. Rural Transport Nonattainment Areas
The final rule does not contain any revisions to current policy on
rural transport areas under section 182(h). We do not believe there are
any 8-hour nonattainment areas covered under subpart 2 that are
``rural'' and therefore eligible for consideration for coverage under
section 182(h).
2. Intrastate Transport
The final rule does not contain any additional provisions for
addressing intrastate transport for the reasons stated in the proposal.
3. How will EPA address transport of ground-level ozone and its
precursors for areas affected by international transport?
We are not setting forth any regulatory provisions related to
international transport in this rule. Section 179B of the CAA applies
for these purposes. We continue to recommend that States confer with
the appropriate EPA
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Regional Office to establish on a case-by-case basis the technical
requirements for these analyses. These analyses will be subject to
public comment during the State and Federal SIP processes.
D. How will EPA address requirements for modeling and attainment
demonstration SIPs for areas implementing the 8-hour ozone standard?
The final rule retains the following three elements that each
attainment demonstration SIP must include: (1) Technical analyses to
locate and identify sources of emissions that are causing violations of
the 8-hour NAAQS within nonattainment areas (i.e., analyses related to
the emissions inventory required for the nonattainment area), (2)
adopted measures with schedules for implementation and other means and
techniques necessary and appropriate for attainment, and (3)
contingency measures required under section 172(c)(9) of the CAA that
can be implemented without further action by the State or the
Administrator to cover failures to meet RFP milestones and/or
attainment.
1. Attainment Demonstration Due Date
Areas required to submit an attainment demonstration must do so no
later than 3 years after the effective date of designation for the 8-
hour ozone NAAQS.
2. Multi-State Nonattainment Areas
State partners involved in a multi-State ozone nonattainment area
must work together to perform the appropriate modeling analyses to
identify control measures that will enable the area to achieve
attainment as expeditiously as practicable. Each State will be
responsible for its portion of the control program and will be held
accountable for controls identified for implementation within its State
boundaries.
3. Role of Modeling Guidance in Attainment Demonstrations
Attainment demonstrations must be consistent with 40 CFR 51.112. We
will generally review the demonstrations for technical merit using
EPA's most recent modeling guidance at the time the modeled attainment
demonstration is performed.
4. Multi-pollutant Assessments (One-Atmosphere Modeling)
There is no regulatory text on this issue, but the preamble makes
several recommendations concerning multi-pollutant assessments.
E. What requirements for RFP should apply under the 8-hour ozone
standard?
1. General Discussion
We are adopting nearly all the approaches set forth in our proposed
rule for the various 1-hour rate-of-progress (ROP) and 8-hour RFP
issues.
2. What is the content and timing of the plan for addressing the RFP
requirements under section 182(b)(1) for areas covered under subpart 2?
Areas that are classified as moderate under the 8-hour standard
that have already implemented their 15 percent plans under their 1-hour
ozone SIPs would be considered to have met the statutory 15 percent
requirement. Reasonable further progress for the first 6 years from the
baseline year would be covered under the more generic RFP requirements
of subpart 1. Serious and above areas would have to meet 3 percent
reductions per year starting in the baseline year averaged over each 3-
year period out to the attainment year.
An 8-hour nonattainment area that is identical, geographically, to
its predecessor 1-hour nonattainment area (which has already done the
15 percent reduction) will not be required to do another 15 percent
VOC-only reduction plan. For an 8-hour moderate or higher nonattainment
area that contains a 1-hour nonattainment area that has an approved 15
percent VOC ROP plan but also contains areas that do not have an
approved 15 percent VOC ROP plan, the final rule allows States the
choice between two options:
Option 1. Develop a new baseline and new 15 percent VOC ROP
emission reduction target for the entire newly expanded area. Determine
that emissions reductions that occur after the 2002 baseline emissions
inventory year are creditable in the combined new area. The reductions
must be of VOC only.
Option 2. Treat the 8-hour nonattainment area as divided between
the old 1-hour area(s) and the newly added 8-hour area. For the newly
added portion (which had not previously implemented a 15 percent plan),
States must establish a separate 15 percent VOC target under subpart 2.
The previous nonattainment area that fell under the 1-hour standard
will now be subject to the subpart 1 provisions of the CAA and will be
able to credit both VOC and NOX toward meeting the RFP
target for this portion of the nonattainment area. VOC reductions to
meet the 15 percent requirement for the portion of the new 8-hour
nonattainment area that has not yet met this requirement may come from
across the entire 8-hour area.
The subpart 1 RFP provisions addressed by the rule below that are
applicable in the former 1-hour portion of the area depend on the
subpart 2 area's attainment date as follows:
In moderate areas that have an attainment date within 5
years after their 8-hour designation, for which portions of the area
have previously met their 15 percent requirements under the 1-hour
standard, the former 1-hour portion will only be subject to subpart 1
RFP requirements, which will be satisfied with the measures that
demonstrate attainment as expeditiously as practicable. These areas
will not be developing RFP plans separate from their attainment plans.
Thus, for these areas, the only motor vehicle emissions budgets that
will be developed will be for the attainment year.
In moderate areas that have an attainment date beyond 5
years after their 8-hour designation, for which portions of the area
have previously met their 15 percent requirements under the 1-hour
standard, the former 1-hour portion will only be subject to subpart 1
RFP requirements, which will be satisfied with a plan to demonstrate 15
percent emissions reductions (which may be either VOC or NOX
or a combination of both) from 2002 to 2008, and any additional
emissions reductions needed for attainment beyond 2008. Thus, these
areas (the entire 8-hour nonattainment area) would establish a motor
vehicle emission budget for 2008 and for their attainment year.
Serious and above areas will be developing both a 15 percent VOC
plan for the new portion of the 8-hour nonattainment area and an 18
percent VOC/NOX plan for the portion of the area that
previously met its 15 percent requirement. Thus, the RFP plan as a
whole will establish total allowable emissions for 2008 for the entire
8-hour nonattainment area. Therefore, the plans for these areas, as
well as moderate areas that choose option one, will establish motor
vehicle emissions budgets for both 2008 and the attainment year.
3. What baseline year should be required for the emissions inventory
for the RFP requirement?
We are using the 2002 inventory as the baseline inventory for the
RFP requirement for areas designated nonattainment in 2004 primarily
because of timing concerns related to attainment dates and when data is
collected and compiled. However, in response to several comments, we
are allowing States the option of justifying the use of an alternative
baseline year inventory year for RFP.
[[Page 71616]]
4. Should moderate and higher classified areas be subject to prescribed
additional RFP requirements prior to their attainment date?
Moderate areas would have to provide additional emissions
reductions (VOC/NOX) needed to provide for attainment by the
beginning of the ozone season prior to the area's attainment date.
Serious and higher classified areas would need to provide in their SIPs
an additional average of three percent per year emission reduction over
each subsequent 3-year period beyond the initial 6-year period through
the attainment year.
5. What is the timing of the submission of the RFP plan?
For moderate and higher classified areas, the first RFP SIP must be
submitted within 3 years after the area's nonattainment designation.
For areas with a June 15, 2004 effective date, for the 8-hour
designations, the SIP would be due by June 15, 2007. This would provide
up to 3 years for States to develop and submit RFP plans, and 1
additional year (until the end of 2008) for control measures to be
implemented. The RFP SIP for any remaining 3-year periods out to the
attainment date beyond the first 6 years would be required to be
submitted with the attainment demonstration, i.e., within 3 years after
designation. We recommend that States complete their RFP plans as soon
as possible after designation to provide more time for sources to
implement the emissions reductions.
6. How should CAA restrictions on creditable measures be interpreted?
Which national measures should count as generating emissions reductions
credit toward RFP requirements?
All emissions reductions that occur after the baseline emissions
inventory year are creditable for purposes of the RFP requirements in
this section except as specifically provided in section 182(b)(1)(C)
and (D) and section 182(c)(2)(B) of the CAA which exclude four
categories of emissions reductions requirements required to be adopted
prior to 1990.
7. For areas covered only by subpart 1, how should the RFP requirement
be structured?
We are finalizing rules for two rather than three categories of
areas based on the CAA's division of attainment dates for subpart 1
areas under section 172(a)(2). The following are the two scenarios and
the RFP requirements for each:
Scenario A: Areas with attainment dates 5 years or less after
designation (i.e., for most areas on or before June 15, 2009).
Reasonable further progress for these areas would be met by ensuring
emissions reductions needed for attainment are implemented, as noted
above, by the beginning of the ozone season prior to the attainment
date. This would be similar to subpart 2 RFP for areas classified as
marginal.
Scenario B: Areas with attainment dates beyond 5 years after
designation (i.e., beyond 2009).
The RFP plan must show increments of progress from the
baseline emissions inventory year out to the attainment date.
The RFP SIP would first have to provide for a 15 percent
emission reduction from the baseline year within 6 years after the
baseline year (i.e., out to 2008).
The 15 percent RFP SIP would have to be submitted within 3
years after designation (i.e., in 2007).
Either NOX or VOC emissions reductions (or
both) could be used to achieve the 15 percent emission reduction
requirement.
For each subsequent 3-year period (after 2008) out to the
attainment date, the RFP SIP would have to provide for an additional
increment of progress no less than the amount of emissions reductions
that would be roughly proportional to the time between the end of the
first increment (in 2008) and the attainment date. This second RFP SIP
would also have to be submitted within 3 years after the effective date
of designation (i.e., in 2007).
8. Where part of an 8-hour nonattainment area was a 1-hour
nonattainment area with a ROP obligation extending past 2002, can
emissions reductions from the area's 1-hour ROP plan be used as credit
toward meeting the area's 8-hour RFP plan?
Where an area has both 1-hour and 8-hour RFP obligations for the
post-2002 period, the State may rely on emissions reductions from the
1-hour plan in achieving RFP for the 8-hour standard. The State could
develop a new baseline and new RFP emission reduction targets for the
entire 8-hour standard nonattainment area (i.e., the old 1-hour
standard nonattainment area and any newly added portion of the 8-hour
standard nonattainment area). Emissions reductions from measures in the
1-hour ozone SIP that are achieved after the 8-hour ozone NAAQS
baseline year could count (subject to creditability restrictions as
discussed above) toward meeting the RFP requirement for the entire 8-
hour area.
This approach would set an RFP target for the entire 8-hour ozone
nonattainment area. Under this approach, the new RFP target for the 8-
hour standard would replace the previous 1-hour ROP target (while
ensuring that, at a minimum, the emissions reductions required to meet
the old target are met; see 40 CFR 51.905(a)(1)(iii)).
9. Will EPA's ``Clean Data Policy'' apply for purposes of 8-hour RFP,
attainment demonstrations and other related requirements?
We intend to apply the Clean Data Policy, which we had applied
under the 1-hour standard, for purposes of the 8-hour standard. In this
action EPA is finalizing the statutory interpretation that is embodied
in the policy. The text of the final rule encapsulates the statutory
interpretation set forth in the policy.
10. How will RFP be addressed in Tribal areas?
We intend to follow the Tribal Authority Rule (TAR), which provides
Tribes with the ability to develop Tribal implementation plans (TIPs)
to address and implement the NAAQS in Indian country. It further
provides the Tribes with flexibility to develop these plans in a
modular way, as long as the elements of their TIPs are reasonably
``severable.''
11. How will RFP targets be calculated?
Appendix A to the preamble to this final rule provides calculation
procedures for determining the RFP targets. These have been revised
from those in the proposal to account for NOX and for
emissions models in addition to the MOBILE model.
12. Should EPA continue the policy of allowing substitution of controls
from outside the nonattainment area within 100 kilometers for VOC and
200 kilometers for NOX?
We intend to continue to rely on this policy at the current time.
The use of emissions reductions outside the nonattainment area must be
shown to be beneficial toward reducing ozone in the nonattainment area
and must ensure that the reductions meet the standard tests of
creditability (permanent, enforceable, surplus, and quantifiable).
13. When must RFP emissions reductions be achieved?
The target level of emissions must be met by the attainment date of
the attainment year. Section 182(c)(2)(B) requires that RFP be
continued out to the attainment date.
[[Page 71617]]
14. Banked emission reduction credits (including shutdown credits): Can
pre-baseline emission reduction credits be used to satisfy the RFP
requirement?
The baseline emissions should not include pre-enactment
banked emission credits since they were not actual emissions during the
calendar year of enactment of the CAA Amendments of 1990.
Banked emissions reductions credits created prior to
enactment of the CAA Amendments of 1990 are not creditable toward the
15 percent progress requirement. However, for purposes of equity, EPA
encourages States to allow sources to use such banked emissions credits
for offsets and netting as authorized.
When States use such banked credits for offsets and
netting to the extent otherwise creditable under the part D NSR
regulations, these pre-enactment emissions credits must be treated as
growth. Prior guidance on this issue is still relevant for banked
emission reduction credits in relation to the RFP requirement for the
8-hour ozone standard. However, because the rule for implementing the
8-hour ozone standard uses a 2002 baseline year, the prior guidance
should be interpreted with that baseline in mind instead of enactment
of the CAA Amendments of 1990.
F. Are contingency measures required in the event of failure to meet a
milestone or attain the 8-hour ozone NAAQS?
Contingency measures are required to be implemented in the event of
failure to meet a milestone or attain the 8-hour ozone NAAQS and must
accompany the attainment demonstration SIP. All subpart 1 and subpart 2
areas other than marginal areas need contingency measures.
G. What requirements should apply for RACM and RACT for 8-hour ozone
nonattainment areas?
1. Reasonably Available Control Technology (RACT)
For subpart 1 areas that submit a demonstration of attainment for 5
or less years after designation (i.e., do not request an attainment
date extension beyond 5 years after designation), the CAA's RACT
requirement is met with the control requirements associated with a
demonstration that the NAAQS is attained as expeditiously as
practicable.
For subpart 1 areas that submit an attainment demonstration that
requests an attainment date extension (i.e., beyond 5 years after
designation), subpart 2 moderate and above areas, and areas within an
Ozone Transport Region (OTR), a RACT SIP is required covering CTG
sources and major non-CTG sources. The RACT submittal date is 27 months
after designation, except a subpart 1 area shall submit the RACT SIP
with its attainment date extension request.\2\ States must require
sources to implement RACT no later than the first ozone season or
portion thereof which occurs 30 months after the required submittal
date.
---------------------------------------------------------------------------
\2\ This is generally expected with the submission of the
attainment demonstration.
---------------------------------------------------------------------------
Where a RACT SIP is required, State SIPs implementing the 8-hour
standard generally must assure that RACT is met, either through a
certification that previously required RACT controls represent RACT for
8-hour implementation purposes or through a new RACT determination.
States may use existing EPA guidance in making RACT determinations. The
State need not perform a NOX RACT analysis for sources
subject to the State's emission cap-and-trade program where the cap-
and-trade program has been adopted by the State and approved by EPA as
meeting the NOX SIP Call requirements or, in States
achieving CAIR reductions solely from electric generating units (EGUs),
the CAIR NOX requirements.\3\ States are free to conduct
case-by-case RACT determinations, or RACT determinations or
certifications for groups of sources, at their discretion.
---------------------------------------------------------------------------
\3\ Alternatively, a State need not perform a NOX
RACT analysis for sources subject to Federal implementation plan
that implements the emission reductions required by the
NOX SIP call or the CAIR.
---------------------------------------------------------------------------
2. Reasonably Available Control Measures (RACM)
For each nonattainment area required to submit an attainment
demonstration, the State must submit with the attainment demonstration
a SIP revision demonstrating that it has adopted all control measures
necessary to demonstrate attainment as expeditiously as practicable and
to meet any RFP requirements.
H. How will the section 182(f) NOX provisions be handled
under the 8-hour ozone standard?
The final rule allows a person to petition the Administrator for an
exemption from nonattainment major NSR and/or RACT requirements for
major stationary sources of NOX in 8-hour ozone
nonattainment areas and for any area in a section 184 ozone transport
region. The final rule includes an extension of the NOX
waiver provisions to 8-hour ozone nonattainment areas covered under
subpart 1 (as proposed) as well as subpart 2 nonattainment areas. In
addition, the final rule states that a section 182(f) NOX
exemption granted under the 1-hour ozone standard does not relieve the
area from any requirements under the 8-hour ozone standard. A petition
must contain adequate documentation that the exemption provisions in
section 182(f) are met. We recently issued updated guidance on
appropriate documentation regarding section 182(f) for application to
the 8-hour ozone program.\4\
---------------------------------------------------------------------------
\4\ Memorandum dated January 14, 2005, ``Guidance on Limiting
Nitrogen Oxides (NOX) Requirements Related to 8-Hour
Ozone Implementation'' from Stephen D. Page, Director, Office of Air
Quality Planning and Standards, to Air Directors, Regions I-X.
---------------------------------------------------------------------------
I. Should EPA promulgate a NSR provision to encourage development
patterns that reduce overall emissions?
Section V of this preamble below addresses rules for NSR for the 8-
hour ozone standard. We are not at this time issuing any rule related
to Clean Air Development Communities (CADCs).
J. How will EPA ensure that the 8-hour ozone standard will be
implemented in a way which allows an optimal mix of controls for ozone,
fine particulate matter PM2.5), and regional haze?
We are continuing our policy of encouraging each State with an
ozone nonattainment area which overlaps or is nearby a PM2.5
nonattainment area to take all reasonable steps to coordinate the
required revisions for these nonattainment areas and meet reasonable
progress goals for regional haze.
K. What emissions inventory requirements should apply under the 8-hour
ozone NAAQS?
Existing ozone-relevant emissions data element requirements under
40 CFR 51 subpart A are sufficient to satisfy the emissions inventory
data requirements under the 8-hour ozone NAAQS.
L. What guidance should be provided that is specific to Tribes?
Section 301(d) of the CAA recognizes that American Indian Tribal
governments are generally the appropriate authority to implement the
CAA in Indian country. As discussed in the TAR, it is appropriate to
treat Tribes in the same manner as States for purposes of implementing
all of the provisions of the CAA, except those provisions for which EPA
has specifically determined that it is not appropriate to treat Tribes
in the same
[[Page 71618]]
manner as States. (The CAA provisions for which EPA has determined it
is not appropriate to treat Tribes in the same manner as States are
listed in section IV.L. of this preamble.) Examples of CAA provisions
for which EPA has determined it is not appropriate to treat Tribes in
the same manner as States include specific plan submittal and
implementation deadlines.
In implementing this rule, it is important for both States and
Tribes to work together to coordinate planning efforts. Other than in
very limited circumstances, State regulations do not apply to Indian
Country, but SIP control measures could impact downwind areas,
including Indian communities. In addition, nonattainment area
boundaries may include a portion of Indian Country. Coordinated
planning will help ensure that the planning decisions made by the
States and Tribes complement each other and achieve progress toward
meeting the NAAQS.
M. What are the requirements for Ozone Transport Regions (OTRs) under
the 8-hour ozone standard?
Section 184 continues to apply for purposes of the 8-hour standard;
therefore, the current OTR remains in place and the section 184 control
requirements continue to apply for purposes of the 8-hour standard. If
a new OTR is established for purposes of the 8-hour standard pursuant
to section 176A, that area would also be subject to the provisions and
additional control requirements of section 184.
N. Are there any additional requirements related to enforcement and
compliance?
We are not setting forth any additional rule related to compliance
and enforcement.
O. What requirements should apply to emergency episodes?
We have not yet proposed any rule revision related to emergency
episodes (at 40 CFR part 51, subpart H), and the final rule below does
not contain any such rule revision.
P. What ambient monitoring requirements will apply under the 8-hour
ozone NAAQS?
No monitoring requirements are being promulgated as part of this
rulemaking. The preamble discusses current relevant requirements (40
CFR part 58) and anticipated activities.
Q. When will EPA require 8-hour attainment demonstration SIP
submissions?
Modeled attainment demonstrations--where required--must be
submitted within 3 years after the effective date of the area's
nonattainment designation.
R. How will the statutory time periods in the CAA be addressed when we
redesignate areas to nonattainment following initial designations for
the 8-hour NAAQS?
For any area that is initially designated attainment or
unclassifiable for the 8-hour NAAQS and subsequently redesignated to
nonattainment for the 8-hour ozone NAAQS, the attainment date and dates
for submittal of any applicable requirements under subpart 1 or subpart
2 and these regulations would run from the date of redesignation to
nonattainment for the 8-hour NAAQS.
Summary of Section V (Below): EPA's Final Rule for New Source Review
In today's action, we are finalizing previously proposed changes to
three regulations that govern major NSR permitting of major stationary
sources in nonattainment areas--40 CFR 51.165, appendix S of 40 CFR
part 51, and 40 CFR 52.24.
The regulations at 40 CFR 51.165 contain the minimum elements that
a State's preconstruction permitting program for major stationary
sources in nonattainment areas must contain in order for EPA to approve
the State's program into the SIP. In Sec. 51.165, we are making
revisions to incorporate the major stationary source thresholds,
significant emission rates, and offset ratios pursuant to part D of
title I of the CAA, as amended in 1990, for the 8-hour ozone NAAQS, the
CO NAAQS, and the PM10 NAAQS. We are also promulgating final
changes to the requirements for emissions reductions achieved from
shutdowns or curtailments at Sec. 51.165(a)(3)(ii)(C). We are not
currently acting on any other proposed changes to 40 CFR 51.165.
Appendix S of 40 CFR part 51 contains the preconstruction
permitting program that applies to major stationary sources in
nonattainment areas lacking an approved part D NSR program. It applies
during the interim period after EPA designates an area as
nonattainment, but before EPA approves a SIP to implement the
nonattainment NSR requirements for that pollutant (SIP development
period). We are making the same changes to appendix S that we are
making to Sec. 51.165 to implement the CAA as revised by the 1990
Amendments. In addition, we are finalizing revisions to section VI of
appendix S to qualify applicability of this section. This revision is
an outgrowth of the proposed revisions to section VI in the 8-hour
NAAQS implementation proposal (68 FR 32802). We also are removing an
outdated exemption for sources increasing emissions less than 50 tons
per year (tpy).
The regulations at 40 CFR 52.24 contain restrictions on the
construction or modification of major stationary sources, including a
construction ban applicable in circumstances enumerated by the 1977
CAA. These regulations also apply if the Administrator determines
pursuant to CAA section 173(a)(4) that the State is not adequately
implementing the SIP for meeting the part D requirements. today's final
rules codify requirements of the 1990 CAA Amendments related to the
applicability of construction bans. The final rules at Sec. 52.24 also
codify that Sec. 51.165 applies in interpreting the terms in Sec.
52.24. The regulations at 40 CFR 52.24(k) retain the requirement that
appendix S governs permits to construct and operate applied for during
the period between the date of designation as nonattainment and the
date the part D plan for NSR is approved, but is updated to remove the
reference to the construction ban.
In addition to the changes to the nonattainment NSR regulations, we
also are making one change to the PSD regulations under part C of title
I of the CAA. We are codifying NOX as an ozone precursor in
attainment and unclassifiable areas.
Summary of Section VI (Below): Final Rule for RFG
Today's rule specifies that the nine original RFG mandatory areas
must continue to use RFG at least until they are redesignated to
attainment for the 8-hour standard. Similarly, areas that have been
reclassified as severe areas under section 181(b) of the CAA for the 1-
hour NAAQS, and which were not redesignated to attainment for the 1-
hour NAAQS prior to its revocation, must continue to use RFG at least
until they are redesignated to attainment for the 8-hour standard. The
EPA is reserving for future consideration what RFG requirements apply
to areas that were reclassified as severe under the 1-hour standard,
but were redesignated to attainment for that standard before its
revocation. The only such area that was redesignated to attainment
prior to revocation of the 1-hour standard is Atlanta, Georgia. The EPA
is also reserving for future consideration whether areas must continue
using RFG
[[Page 71619]]
after they are redesignated to attainment for the 8-hour standard, for
the original nine mandatory areas as well as the areas reclassified to
severe. Finally, EPA clarifies that the current opt-in rules will
remain in place after the 1-hour standard is revoked. Areas classified
under subpart 2 as marginal or above are eligible to opt-in to the RFG
program.
Summary of Section VII (Below): Other Considerations
A. How will EPA's implementation of the 8-hour ozone NAAQS affect
funding under the Congestion Mitigation and Air Quality Improvement
(CMAQ) Program?
This section describes the relationship between the CMAQ program
and the 8-hour ozone NAAQS implementation program.
B. What is the relationship between implementation of the 8-hour
standard and the CAA's title V permits program?
The interrelationship between implementation of the 8-hour ozone
standard and the title V permits program was not discussed in the
proposed rule. However, various questions have been raised about the
interface between the implementation of the 8-hour ozone standard and
the title V operating permits program. The preamble presents several
questions and answers, mainly dealing with how title V applicability is
affected by the new 8-hr ozone standard and the revocation of the 1-
hour ozone standard.
C. What action is EPA taking on the Overwhelming Transport
Classification for subpart 1 areas?
We are not completing rulemaking on the overwhelming transport
classification in this rulemaking. This section discusses the status of
the rulemaking.
IV. Final Rule for Phase 2 Elements Other Than New Source Review and
Reformulated Gasoline
The discussion of many of the regulatory elements below address
timing of required actions, such as submission dates for SIP revisions.
The discussion is primarily directed toward 8-hour ozone nonattainment
areas for which the effective date of the designation was June 15,
2004. However, a number of areas may have later effective dates for
their designations, such as early action compact areas and areas
subsequently redesignated from attainment to nonattainment for the 8-
hour ozone standard. For these situations, the timing will run from the
effective date of those designations. In cases in this preamble where
we have used June 15, 2004 as a substitute for the ``effective date,''
we are using it only for purposes of those areas with an effective date
of June 15, 2004.
A. Should prescribed requirements of subpart 2 apply in all 8-hour
nonattainment areas classified under subpart 2, or is there flexibility
in application in certain narrowly-defined circumstances?
[Section VI.D. of June 2, 2003 proposed rule (68 FR 32825); no
draft or final regulatory text.]
1. Background
The 1990 CAA Amendments overhauled the CAA's requirements for ozone
nonattainment areas and, in doing so, specified new mandatory measures
for many areas. The approach embodied in subpart 2 was to classify
areas according to the severity of their pollution. Areas with more
serious ozone pollution were given a higher classification that did two
things. First, the successively higher classifications provided a
successively longer maximum timeframe for attaining the ozone NAAQS.
Second, each higher classification mandated specific additional and/or
more stringent obligations than the classification immediately below.
Specifying mandatory measures in the statute was necessary because
States and EPA, prior to 1990, had failed to ensure that SIPs achieved
steady reasonable progress in reducing emissions or to require readily
available measures that were cost effective and necessary to meet the
standard. See generally H.R. Rep. No. 101-490 at 144-48 (1990).
For this rule, we examined the issue of mandatory measures from
both a legal and policy standpoint. Our legal view is guided by the
statutory language in part D of title I of the CAA. In addition, we
were guided by the Supreme Court's view of this language. Our policy
view is guided by past precedents and also the principles we set forth
in our proposed rule (June 3, 2003; 68 FR 32802).
We have consistently interpreted the CAA to mean that once an area
is classified under subpart 2, the subpart 2 requirements apply. While
certain requirements allow for some flexibility in how they apply, the
requirements do not allow for broad waivers. For example, all areas
classified as serious or above must meet the requirement for an
enhanced inspection and maintenance (I/M) program, however, there is
some flexibility in determining what type of I/M program meets the
requirement for an enhanced I/M program. The Supreme Court, in
addressing whether the classification provisions in subpart 2 applied
for purposes of the 8-hour ozone NAAQS found that they did and stated
that EPA's implementation scheme, which would have avoided
classifications under subpart 2, was unreasonable because it would
effectively nullify the subpart 2 provisions that Congress created with
the intent to limit State and EPA discretion. Whitman v. American
Trucking Assoc., 531 U.S. 484-85.
In the proposed rule, we recognized that there is case law doctrine
that might allow a case-by-case waiver from mandatory requirements when
sufficient evidence is presented that application of a specific
requirement in a particular area would cause absurd results.
2. Final Rule
We continue to interpret the CAA to mean that the prescribed
requirements for each classification under subpart 2 apply to areas
with such classification for the 8-hour NAAQS. As we noted in the
preamble to the proposed rule, there may be a basis for waiving a
prescribed requirement on a case-by-case basis where imposition of the
requirement would create an absurd result. However, as stated in the
proposed rule, we believe that absurd results that might occur from
application of mandatory control measures would happen only in rare
instances. If a State submits a demonstration that application of a
specific requirement in a specific nonattainment area would create an
absurd result, we will consider application of the absurd results
doctrine at that time.
3. Comment and Responses
Comment: A number of commenters supported the approach that we
discussed in the proposed rule. Other commenters agreed with the
overall concept that we proposed but felt that we should take
additional factors into consideration if we make case-by-case waivers
from subpart 2 requirements. Several commenters suggested that we take
the cost of controls into consideration when determining if there were
an absurd result while others suggested that we look at relative
control strategy effectiveness, e.g., allowing a demonstration that
NOX reductions are more effective and therefore may be
substituted for mandatory VOC emissions reductions.
Several other commenters stated that we should more broadly allow
substitution of subpart 2 mandatory measures. One commenter felt that
substitution of subpart 2 measures should be allowed as long as the
[[Page 71620]]
substituted measures are at least equivalent to the mandatory measures.
Another commenter stated that we should allow areas to adopt substitute
measures in lieu of subpart 2 measures where the subpart 2 measures
would not be as effective as the substitute measures in reaching
attainment. The commenter stated that we have been overly limited in
our characterization of when subpart 2 measures might be waived to
avoid an absurd result. The commenter believed that we should create a
categorical exemption as an exercise of agency power to allow areas to
substitute NOX for VOC measures or more effective control
measures for less effective control measures when doing so would
expedite attainment. Another commenter urged us to limit the strict
application of subpart 2 measures because the imposition of such
measures creates economic disincentives for companies to locate and
expand in nonattainment areas. A number of commenters stated that they
do not support the vehicle I/M or Stage II vapor recovery programs and
recommended that we provide States with flexibility in meeting these
requirements.
Response: Many of the commenters' suggestions go beyond the
application of an absurd results doctrine and instead suggest broad
waiver of subpart 2 requirements based on a determination that an
alternative or substitute is more effective. We do not believe that we
have the authority to broadly waive measures mandated by Congress. As
noted by the Supreme Court, Congress intended to cabin States'
discretion when it mandated the specific controls under subpart 2. See
e.g., Whitman, 531 U.S. 484-85. (``Whereas subpart 1 gives EPA
considerable discretion to shape nonattainment programs, subpart 2
prescribes large parts of them by law'' and ``EPA may not construe the
statute in a way that completely nullifies textually applicable
provisions meant to limit discretion'').
However, as stated in our proposed rule, we believe that case law
may provide EPA with limited flexibility to waive federally mandated
requirements on a case-by-case basis where application of those
requirements would produce an absurd result. We do not need to conclude
here what precise circumstances would create an absurd result. Rather,
that decision would need to be made on a case-by-case basis in the
context of a specific request. In general, we note that to demonstrate
an absurd result, a State would need to demonstrate that application of
the requirement would result in more harm than benefit. For example,
the programs mandated under subpart 2 are generally effective in
reducing emissions of the two ozone precursors--NOX and
VOC--and because reductions of those precursors generally lead to
improved air quality, we believe that such a demonstration could be
made, if at all, only in rare instances.
With regard to the comment relating to Stage II vapor recovery,
section 202(a)(6) of the CAA does provide for revision or waiver of the
Stage II vapor recovery requirement under certain conditions: ``The
requirements of section 182(b)(3) (relating to stage II gasoline vapor
recovery) for areas classified under section 181 as moderate for ozone
shall not apply after promulgation of such standards and the
Administrator may, by rule, revise or waive the application of the
requirements of such section 182(b)(3) for areas classified under
section 181 as Serious, Severe, or Extreme for ozone, as appropriate,
after such time as the Administrator determines that onboard emissions
control systems required under this paragraph are in widespread use
throughout the motor vehicle fleet.'' Currently, EPA is formulating
policy concerning how widespread use will be determined and has been
seeking participation from affected parties. Further information is
available at: http://www.epa.gov/ttn/naaqs/ozone/ozonetech/stage2/.
Comment: A few commenters disagreed with the approach in our
proposed rule. One commenter stated that we do not have the statutory
authority to create new waivers to subpart 2 requirements. Another
commenter stated that the CAA does not allow case-by-case waivers to
avoid ``absurd'' results. The commenter further stated that doing so
would in effect require us to rewrite the statute by regulation.
Response: As stated above, we agree that we do not have broad
authority to waive subpart 2 requirements and that the CAA itself does
not expressly create authority to waive such requirements. However, the
``absurd results'' line of cases provides that where application of a
statute as written would create a result counter to what Congress
intended, an Agency has limited authority to construe that provision in
a manner than would effectuate Congress' intent.\5\
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\5\ See Holy Trinity Church v. United States, 143 U.S. 457
(1892) (``If literal construction of the words of a statute be
absurd, the act must be so construed to avoid the absurdity.'');
Griffin v. Oceanic Contractors, Inc. 458 U.S. 564 (1982)
(recognizing the absurdity exemption, but concluding that a harsh
penalty provision did not produce results counter to Congress'
intent); Mova Pharm. Corp. v. Shalala, 140 F. 3d 1060 (D.C. Cir.
1998) (recognizing the absurdity exemption, but finding that a
``successful defense'' regulation went beyond the statute was not
necessary to meet Congressional intent.)
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B. How will we address long-range transport of ground-level ozone and
its precursors when implementing the 8-hour ozone standard?
[Section VI.F. of June 2, 2003 proposed rule (68 FR 32827); no
draft or final regulatory text.]
1. Background
Interstate transport can make it difficult or impossible for some
States to meet attainment deadlines for areas within their boundaries
solely by regulating sources within their own boundaries. Section
110(a)(2)(D) of the CAA provides an important tool for addressing the
problem of interstate transport. It provides that a State must include
adequate provisions in its SIP to prohibit sources within the State
from emitting air pollutants in amounts that contribute significantly
to nonattainment, or interfere with maintenance, in one or more
downwind States. Section 110(k)(5) of the CAA authorizes EPA to find
that a SIP is substantially inadequate to meet any CAA requirement,
including the requirements of section 110(a)(2)(D) of the CAA. If we
make such a finding, we must require the State to submit, within a
specified period, a SIP revision to correct the inadequacy. The CAA
further addresses interstate transport of pollution in section 126,
which authorizes any State to petition EPA to regulate emissions from
significant upwind sources of air pollutants in other States.
In addition to requiring States to control interstate air pollution
under section 110(a)(2)(D), the CAA requires States with nonattainment
areas to develop State plans under part D that provide for meeting the
NAAQS as expeditiously as practicable, and for maintaining healthy air
quality in those areas over time. Together, the section 110(a)(2)(D)
and part D provisions provide for upwind State and in-State controls to
ensure that national health-based air quality standards are met and
maintained.
2. Current Approach
In the NOX SIP Call Rule, EPA found the SIPs for certain
States in the eastern U.S. to be substantially inadequate to address
emissions transported to downwind States and required those States to
select and adopt control measures to meet statewide ozone-season
NOX emissions budgets based on highly cost-effective
NOX emissions
[[Page 71621]]
reductions (63 FR 57356, October 27, 1998.) In that rule, we determined
that the same level of emissions reductions was needed to address
transport for both the 1-hour and 8-hour standards.\6\
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\6\ In light of various challenges to the 8-hour NAAQS, we
stayed the 8-hour basis for the NOX SIP Call Rule (65 FR
56245; September 18, 2000).
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The NOX SIP Call Rule is achieving substantial emissions
reductions and air quality improvement well in advance of the
attainment dates of 8-hour nonattainment areas. In the eastern United
States, monitoring data shows a 10 percent improvement between 2002 and
2004 in the seasonal (May-September) average of daily maximum 8-hour
ozone concentrations, after adjustment for meteorological differences.
The EPA believes that the NOX reductions achieved as a
result of the NOX SIP Call are an important factor in this
improvement. The compliance date for achieving the required
NOX reductions under phase I of the NOX SIP Call
was May 31, 2004. All of the 19 affected States and the District of
Columbia submitted complete Phase I SIPs, which EPA approved, in
response to the NOX SIP Call and are implementing their
NOX control programs. State programs to implement the rule
have focused on reducing emissions from electric power generators and
large industrial emitters. The phase II NOX SIP Call Rule,
which responds to court decisions on issues from the original SIP call
rule involving certain types of sources and geographic coverage,
requires additional emissions reductions by May 1, 2007.
The EPA's modeling for the CAIR indicates that ozone levels across
the eastern half of the country will improve substantially by 2010
because of existing requirements--including the NOX SIP
call, federal motor vehicle and nonroad engine regulations, and other
existing State and federal rules. Last year, EPA designated more than
100 areas in that region as having ozone levels not meeting the 8-hour
ozone standard, based on 2001-2003 data. Air quality improvements due
to existing requirements (i.e., without State measures required for
areas designated nonattainment for the 8-hour standard) are projected
to leave only 16 of these areas in nonattainment in 2010. This estimate
is derived from base case CAIR modeling results shown in the final
notice for the CAIR (70 FR 25254, Table VI-12).
On May 12, 2005, EPA published the Clean Air Interstate Rule in the
Federal Register (70 FR 25162). The EPA determined that 28 States and
the District of Columbia contribute significantly to downwind
nonattainment, or interfere with maintenance, of the PM2.5
and 8-hour ozone NAAQS in other States. The rule requires these States
to submit SIP revisions to reduce SO2 and/or NOX
emissions.
To reduce interstate ozone transport, the rule established
statewide ozone-season NOX budgets for 25 States and the
District of Columbia. The budgets are based on the level of emissions
that can be achieved through highly cost-effective controls that EPA
determined are available from EGUs; however, States have flexibility to
choose the measures they will use to achieve the necessary emissions
reductions. Due to feasibility constraints, EPA is requiring the CAIR
budgets to be achieved in two phases. For summertime NOX,
the first phase starts in 2009 (covering 2009-2014); \7\ the second
phase of NOX reductions begins in 2015 (covering 2015 and
thereafter).
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\7\ The CAIR first phase also provides an annual NOX
budget, which also starts in 2009.
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The 25 States that are required to meet a summertime NOX
cap for ozone purposes, along with the District of Columbia, are
Alabama, Arkansas, Connecticut, Delaware, Florida, Illinois, Indiana,
Iowa, Kentucky, Louisiana, Maryland, Massachusetts, Michigan,
Mississippi, Missouri, New Jersey, New York, North Carolina, Ohio,
Pennsylvania, South Carolina, Tennessee, Virginia, West Virginia, and
Wisconsin.
The CAIR is geographically broader and more stringent than EPA's
previous ozone interstate transport rule, the NOX SIP Call,
adopted in 1998.\8\ The CAIR's ozone requirements are based on updated
analyses of the impacts of pollution transported across State borders,
and of highly cost-effective control opportunities for NOX.
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\8\ The CAIR requires summertime NOX reductions in
the following States not covered by the NOX SIP Call:
Arkansas, Florida, Iowa, Louisiana, Mississippi, and Wisconsin. The
NOX SIP Call has requirements for two States not covered
by CAIR ozone requirements: Rhode Island and Georgia. The EPA has
proposed a stay of applicability of the SIP Call to Georgia as an
initial response to a petition for reconsideration on whether
Georgia should be covered.
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As detailed in the final CAIR action, the CAIR rule will further
reduce ozone transport to assist States in their efforts to bring ozone
nonattainment areas into attainment or--in the case of downwind
receptor areas that attain prior to some or all CAIR reductions--
maintain air quality meeting the 8-hour ozone NAAQS. In the CAIR
rulemaking, EPA projected that 39 counties (in the 16 nonattainment
areas referenced above) would have ozone levels exceeding the standard
in 2010 in the absence of further control requirements (i.e., the base
case without CAIR). Most of these counties were projected to be within
a few parts per billion (ppb) of the standard. For the 39 counties, the
average reduction in ozone levels estimated from 2009 CAIR
NOX controls is 0.4 ppb, and the maximum improvement is 1.4
ppb (70 FR 25254, Table VI-12.) The 2009 CAIR NOX
requirements will achieve reductions prior to the maximum attainment
date for downwind 8-hour ozone areas classified as moderate.
We believe that States will be able to demonstrate timely
attainment for most 8-hour ozone nonattainment areas with the help of
emissions reductions from Federal rules. However, we also believe that
a limited number of downwind areas, while showing improvement, are
likely to remain in nonattainment after 2009. This is due to the
severity of projected ozone levels in certain areas, uncertainties
about the levels of emissions reductions that will actually occur, and
persistence of historical difficulties with attaining the 1-hour ozone
standard. The EPA determined in the CAIR that even if all downwind
receptor areas attained on time, many areas will remain close enough to
the standard to be at risk of falling back into nonattainment. The EPA
concluded that the 2015 summertime NOX reductions will
assist attainment and maintenance of the 8-hour standard.\9\
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\9\ For the 22 counties projected to be in nonattainment in 2015
in the absence of further control requirements (i.e., the CAIR base
case), the average ozone reduction in 2015 from CAIR is 1.1 ppb, and
the maximum improvement is 1.6 ppb. (70 FR 25254, 25455, Table VI-
13.)
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In addition to controlling interstate air pollution under section
110(a)(2)(D), EPA national rules and State rules for controlling local
sources of emissions are significantly reducing, and in the future will
further reduce, the amount of pollution transported to 8-hour ozone
nonattainment areas in downwind States. Downwind States, in devising
their attainment and maintenance plans, will be able to take required
upwind reductions into account. Depending on the particular area, the
upwind reductions will help to hasten attainment of the NAAQS, make
attainment and maintenance of the NAAQS less difficult and costly, or
both.
The EPA notes that interstate pollution transport will be further
reduced through cost-effective measures that individual States adopt
for purposes of bringing their ozone
[[Page 71622]]
nonattainment areas into attainment.\10\ Given the potential for
measures adopted by one State to improve air quality downwind, EPA is
supportive of multi-State cooperation on strategies for attaining the
8-hour standard.
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\10\ Many types of sources contribute to ozone transport. The
CAIR reduction requirements are based solely upon potential
reductions from EGUs; EPA did not find other source types highly
cost effective to control.
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3. Comments and Responses
This section addresses the more significant comments received; the
response to comment document addresses other comments also.
Comment: Several commenters thought the June 2, 2003, 8-hour
implementation proposal failed to adequately address transport and
disagreed with our statement that 8-hour transport has been addressed
up front by the NOX SIP Call. Some added that this puts
northeastern States located in the OTR in a situation where their
citizens and businesses are bearing a disproportionate burden of health
and economic impacts compared to upwind States that have fewer control
requirements than OTR States. Some OTR State commenters said that the
rule should address this inequity. One said we cannot assume that
transport has been addressed until after the NOX SIP Call is
implemented and has been evaluated.
Response: The 8-hour ozone implementation rule is not intended as a
rule to address interstate transport of pollution and to achieve
emissions reductions from upwind sources as provided under CAA section
110(a)(2)(D). Rather, its purpose is to interpret nonattainment
requirements (in subparts 1 and 2 of part D of title I) for State plans
to implement the 8-hour NAAQS. We have addressed the section
110(a)(2)(D) obligation through the NOX SIP Call and CAIR,
which provide substantial air quality benefit for downwind areas
significantly affected by transport of pollution from other States.
Comment: Two commenters recommended a regional approach among
States to address transport. One commenter thought that Clear Skies is
the best way to address transport, but absent that, would support a
regional approach. Some commenters thought the 8-hour ozone
implementation proposal ignored the issue that ozone is a regional
problem that can only be solved through regional planning. These
commenters added that instead of incentives for regional planning there
were disincentives. Another commenter thought that EPA unrealistically
expects States to be able to resolve all potential conflicts between
the States by working together in a collaborative process to identify
and adopt appropriate controls that provide for attainment. The
commenter suggested that EPA oversight may be necessary in these
situations. One commenter thought the development of multiple OTRs for
regional planning and coordination may be highly desirable to bring
States with a common problem together to coordinate efforts with the
strength of several States rather than to go-it alone. Another
suggested some criteria for EPA to use if we were to choose to
establish OTRs.
Response: We believe that addressing interstate transport requires
regional approaches and regional cooperation. The EPA has ensured
regional action to reduce interstate ozone transport through the
NOX SIP Call Rule and CAIR. In addition, we note that groups
of States have worked effectively together in the past to address
regional ozone problems. For example, the Lake Michigan Air Directors
Consortium (LADCO) was established in 1990 by the States of Illinois,
Indiana, Michigan, and Wisconsin. The main purpose of LADCO is to
provide technical assessments for and assistance to its member States
on problems of ozone air quality and to provide a forum for its member
States to discuss air quality issues. We will continue to encourage
these multi-State efforts to assess and address ozone nonattainment and
will work with these States as needed to provide support and ensure
progress.
We agree with other commenters that States should work together in
the SIP development process to ensure localized transport is addressed.
States that share an interstate nonattainment area are expected to work
together in developing the nonattainment SIP for that area and in
reducing emissions that contribute to local-scale interstate transport
problems. We would also encourage collaborative efforts even in cases
where there is not a multi-State nonattainment area but where
significant emissions sources in one State might affect air quality in
a nonattainment area in an adjacent State.
In response to comments suggesting that EPA establish additional
transport regions, at this time we do not anticipate formalizing any
additional transport regions. We believe that the NOX SIP
Call and CAIR rules go far to effectively address the kind of transport
that establishment of a transport region would be intended to address,
without the costs of setting up a commission to oversee the transport
region.
Comment: Some commenters stated that we should not rely on the
proposed Clear Skies legislation to reduce emissions transport because
there is no guarantee that the legislation will be enacted. Several
State commenters added that Clear Skies would not provide adequate or
timely emissions reductions. Another commenter suggested that we work
with Congress to enact legislation to allow for the development and use
of a transport argument in attainment demonstrations.
Response: While we still hope that Congress will adopt the
Administration's Clear Skies multi-pollutant legislation, we
acknowledge that the outcome of that process is uncertain. To ensure
that regional transport is addressed in a timely manner, EPA finalized
the CAIR in May 2005 based on our existing regulatory authority.
Comment: One commenter proposed that rather than addressing
transport through national measures, we could include transport as one
of the criteria for determining the adequacy of a SIP. This commenter
supported the multi-State collaborative effort mentioned in the
proposed rule, so that areas work together to address transport as
their SIPs are being developed. The commenter asserted that our
proposed early, top-down approach could significantly hinder SIP
planning for local areas considering the complex chemistry of ozone and
PM2.5 formation.
Response: We believe that the NOX SIP Call and CAIR
help, rather than hinder, SIP planning for nonattainment areas. We
agree that the CAA does allow the States to work together in a
collaborative fashion to assess regional or sub-national transport. The
EPA worked with a State-led effort in the mid-to late-1990's [the Ozone
Transport Assessment Group (OTAG) process] to perform such an
assessment, which documented the magnitude and extent of long-range
transport of ozone and its precursors. At that time, EPA concluded that
without some certainty of what levels of emission controls would be
required in the larger region, States faced great uncertainty regarding
the amounts of ozone and precursor concentrations being transported
into the modeling domain of the nonattainment area for which they were
required to develop their attainment demonstrations. Therefore, EPA
issued the NOX SIP Call--and more recently, CAIR--to
establish the emission reduction responsibilities of upwind States
under section 110(a)(2)(D). In this way, eastern States could then have
a fair degree of certainty regarding required upwind reductions and the
amount of transported emissions to be assumed in their 1-hour ozone
[[Page 71623]]
attainment demonstrations for individual nonattainment areas. Based on
the OTAG experience, we believed that there was high risk that States
working together in a collaborative fashion would not agree on a
regional control strategy within the time the CAA provides for States
to develop 8-hour attainment demonstrations. Therefore, we believe the
commenter is incorrect that the ``top-down'' approach will
significantly hinder SIP planning for the individual areas, and on the
contrary, will provide the certainty needed to complete the attainment
demonstrations in a timely manner.
The commenter also proposed that rather than addressing transport
through national measures, we could include transport as one of the
criteria for determining the adequacy of a SIP. It is true that section
110(a)(2)(D)(i)(I) requires a SIP to ``contain adequate provisions * *
* prohibiting, consistent with the provisions of this title, any source
or other type of emissions activity within the State from emitting any
air pollutant in amounts which will--(I) contribute significantly to
nonattainment in, or interfere with maintenance by, any other State
with respect to any such national primary or secondary ambient air
quality standard * * *'' Furthermore, sections 110(a)(1) and (2) of the
CAA require States to submit SIPs that implement, maintain, and enforce
a new or revised NAAQS within 3 years of promulgation of the standard.
Among other things, these SIP revisions must address a State's
significant contribution of pollution to nonattainment and maintenance
problems in other States under section 110(a)(2)(D). On March 10, 2005,
EPA officially notified States that they have failed to submit SIPs to
satisfy this requirement of the CAA with respect to the 8-hour ozone
and PM2.5 NAAQS (70 FR 21147; April 25, 2005). The finding
starts a 2-year clock for EPA to issue a final Federal Implementation
Plan (FIP) that will address the requirements of section 110(a)(2)(D)
unless a SIP revision correcting the deficiency is approved by EPA
before the FIP is promulgated. The EPA plans to issue guidance
regarding how States could satisfy the section 110(a)(2)(D)
requirement. For States affected by CAIR, an approved SIP responding to
the CAIR would satisfy the requirement and turn off the FIP clock.
C. How will we address transport of ground-level ozone and its
precursors for rural nonattainment areas, areas affected by intrastate
transport, and areas affected by international transport?
[Section VI.G. of June 2, 2003 proposed rule (68 FR 32828); no
draft or final regulatory text.] \11\
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\11\ This section of the proposal also addressed multi-State
nonattainment areas. The discussion of multi-State nonattainment
areas is now covered under the discussion below on attainment
demonstrations and modeling.
---------------------------------------------------------------------------
1. Rural Transport Nonattainment Areas
a. Background
In the June 2, 2003 proposal, we noted that section 182(h) of the
CAA (under subpart 2) recognizes that the ozone problem in a rural
transport area is almost entirely attributable to emissions from upwind
areas. This section provides that the only requirements applicable to
an area classified under subpart 2 that we determine is a rural
transport area are the minimal requirements specified for marginal
areas, i.e., those areas expected to attain within 3 years after
designation. The timing for attainment for these areas will depend on
the schedule for adoption and implementation of control measures in the
upwind areas. We did not propose any revision to current policy and
practices related to the rural transport area provisions under section
182(h).
b. Summary of Final Rule
The final rule does not contain any revisions to current policy on
rural transport areas under section 182(h).\12\
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\12\ Based on current information, we do not believe there are
any 8-hour nonattainment areas covered under subpart 2 that are
``rural'' and therefore eligible for consideration for coverage
under section 182(h). Existing policy on rural transport areas
includes the ``General Preamble for the Implementation of Title I of
the Clean Air Act Amendments of 1990; Proposed Rule,'' April 16,
1992 (57 FR 13505).
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c. Comments and Responses
Comment: Several commenters favored the proposed approach of not
revising our current policies with regard to subpart 2 areas that meet
the criteria for being a rural transport area under section 182(h).
Response: We agree with these comments.
Comment: Several commenters urged us to provide more flexibility
such as extending the provision to other areas whose problems are
caused by transport but that do not qualify as rural under section
182(h).
Response: These commenters did not suggest any legal mechanism for
granting the flexibility provided under section 182(h) to areas that do
not qualify as rural under section 182(h). We have not found any such
legal mechanism and, therefore, the final rule does not extend the
flexibility provided under section 182(h) to additional areas.
2. Intrastate Transport
a. Background
In the proposed rule, we noted that a number of State air agency
representatives had voiced concern about intrastate transport of ozone
and precursor emissions and asked EPA to address this concern. We
indicated that the CAA requires individual States, as an initial
matter, to deal with intrastate transport. We also pointed out that a
State could recommend designation of nonattainment areas that are large
enough to encompass upwind and downwind areas of the State and require
that the individual jurisdictions work together on an attainment plan
that accounts for transport and results in attainment by the attainment
date for the entire nonattainment area. We also solicited comments on
other ways of addressing intrastate transport within the context of the
CAA provisions.
b. Summary of Final Rule
The final rule does not contain any additional provisions for
addressing intrastate transport for the reasons stated in the proposal.
However, as indicated in the Phase 1 Rule published on April 30, 2004,
for subpart 1 areas, States and EPA could consider intrastate transport
in determining the attainment date for an area.\13\ In identifying the
appropriate attainment date for an area, the State should consider
measures to address intrastate transport of pollution from sources
within its jurisdiction.
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\13\ Intrastate transport also could be considered in
determining the attainment date that is as expeditious as
practicable for subpart 2 areas, but if the date were later than
allowed for the area's classification, the State would need to
request bump-up of the area to a higher classification for that date
to be approved.
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c. Comments and Responses
Comment: Two commenters recommended that States have regulatory
authority to require controls as necessary regarding the problem of
intrastate transport. They asserted that nonattainment areas should
work with upwind contributing areas within the State to address
regional transport within the State.
Response: As provided in the proposed rule (68 FR 32829), we agree
with the commenters that States have the obligation and authority to
address the transport of pollution from one area
[[Page 71624]]
of the State to a different area of the State.
Comment: Several comments recommended an intrastate transport
classification.
Response: Our response to those comments is in the response to
comment document for the Phase 1 Rule of April 30, 2004. (Docket
document OAR-2003-0079-0717; p. 68.)
3. How will EPA address transport of ground-level ozone and its
precursors for areas affected by international transport?
a. Background
As discussed in the proposal, international transboundary transport
of ozone and ozone precursors can contribute to exceedances of the
NAAQS. It is possible that the international transport of air
pollutants may affect the ability of some areas to attain and maintain
the 8-hour ozone NAAQS. Section 179B of the CAA (International Border
Areas), applies to nonattainment areas that are affected by emissions
emanating from outside the United States. This provision requires EPA
to approve a SIP for an ozone nonattainment area if it meets all of the
requirements applicable under the CAA, other than a requirement that
the area demonstrate attainment and maintenance of the ozone NAAQS by
the applicable attainment date, and the State establishes to EPA's
satisfaction that the SIP would be adequate to attain and maintain the
ozone NAAQS by the applicable attainment date but for emissions
emanating from outside the United States. The preamble to the proposed
rule recommended that States should confer with the appropriate EPA
Regional Office to establish on a case-by-case basis the technical
requirements for these analyses.
b. Final Rule
As in the proposal, we are not setting forth any regulatory
provisions related to international transport. Section 179B of the CAA
applies for these purposes. We continue to recommend that States confer
with the appropriate EPA Regional Office to establish on a case-by-case
basis the technical requirements for analyses to support showings under
section 179B. These analyses will be subject to public comment during
the State and Federal SIP processes.
c. Comments and Responses
Comment: Several commenters addressed the discussion of
international transport in the proposed rule. Two commenters suggested
that EPA is placing too high a burden on States to make a demonstration
that a nonattainment area would attain but for international transport
(e.g., assessing emissions from foreign countries). These commenters
stated that EPA has the appropriate resources and technical expertise
to evaluate international transport and highlighted certain data EPA
has gathered and modeling EPA has performed. The commenters suggested
that EPA should re-evaluate relevant policies regarding section 179B of
the CAA to ensure they are streamlined and not unnecessarily burdensome
on States in making an international transport demonstration. Another
commenter thought that the proposed rule does not adequately address
ozone from international sources, especially in a situation where a
State does not have jurisdiction over most of the significant sources
of ozone or access to available data for modeling in that region.
Another commenter encouraged EPA to expand its view of the
applicability of section 179B and allow consideration of the impact on
attainment of smoke from crop burning activities in Southern Mexico and
Central America.
Response: The CAA, not EPA's proposed rule, places the burden on
States to demonstrate that an area would be able to attain but for
emissions from sources located outside the United States. However, EPA
agrees with the commenters that EPA has been performing numerous
activities that will provide data that States may be able to rely on as
they develop these demonstrations. We recognize that adequate data for
foreign sources may not be available to States. Therefore, modeling,
according to the modeling guidance for attainment demonstrations, may
not be possible in all cases. Because the availability of information
and the causes of international pollution vary significantly from one
area to another, EPA continues to believe that the best approach for
addressing international transport is for States to work with EPA on an
area-by-area basis to determine what is the best available information
and the best method for analysis that fits the unique situation for
each area.
Regarding consideration under section 179B of the impact on
attainment of smoke from crop burning activities in Southern Mexico and
Central America, in many cases it may not be possible to confidently
quantify the impacts to the total ozone loadings from individual
foreign sources that are hundreds or even thousands of miles from the
U.S. border. Particularly since 1998, when spring fires in Mexico and
Central America were very severe, EPA has received much information
about the potential impacts from such occurrences on ozone and PM
levels in the United States. A prime lesson learned from those
experiences is that a well-designed, detailed analysis is required
before one can estimate the degree of influence from such fires. In
many cases, sufficient data will not exist to draw such a conclusion.
Case-by-case consultation between EPA and the State will help determine
how best to consider this information in attainment planning.
With respect to the applicability of section 179B to areas affected
by emissions from very distant, foreign sources, EPA currently has not
taken a position. If and when there are any SIP submittals that request
a section 179B dispensation on such a basis, EPA will examine those
submittals on a case-by-case basis, including focusing on the
sufficiency of the technical demonstration, in order to make a
determination of section 179B applicability.
The EPA considers international transport of pollution an important
issue. The EPA is engaged in several international efforts that will
allow us to better understand the linkages between air pollution
sources in other countries and their impacts on public health and air
quality in the United States. The EPA has cooperative agreements with
both Canada and Mexico to investigate international border transport.
The information generated by these partnerships will assist States in
evaluating international transport affecting 8-hour nonattainment
areas.
D. How will EPA address requirements for modeling and attainment
demonstration SIPs for areas implementing the 8-hour ozone standard?
[Section VI.H. of June 2, 2003 proposed rule (68 FR 32830); Sec.
51.908 in draft and final regulatory text.]
As noted in the proposal, an attainment demonstration SIP consists
of (1) technical analyses to locate and identify sources of emissions
that are causing violations of the 8-hour NAAQS within nonattainment
areas (i.e., analyses related to the emissions inventory required for
the nonattainment area), (2) adopted measures with schedules for
implementation and other means and techniques necessary and appropriate
for attainment, (3) commitments, in some cases, to perform a mid-course
review (MCR), and (4) contingency measures required under section
172(c)(9) of the CAA that can be implemented without further action by
the State or the Administrator to cover failures to meet RFP milestones
and/or
[[Page 71625]]
attainment. The final rule retains three of these four elements, the
exception being the requirement for a commitment to perform a MCR. As
noted below, EPA will assess whether a MCR is needed on a case-by-case
basis in reviewing individual attainment demonstrations.
In the Phase 1 Rule, Sec. 51.908 contained only the requirement
related to the timing of implementation of the emissions reductions
needed for attainment. In today's final rule, that provision is
retained as paragraph (d) of Sec. 51.908, and other requirements
related to modeling and attainment demonstrations appear in the
remaining paragraphs of Sec. 51.908.
In the proposal, we also solicited public comment on the guidance
related to multi-pollutant assessments (as discussed below), areas with
earlier and later attainment dates, MCR, modeling guidance, and multi-
State nonattainment areas. These topics are discussed below. Associated
with the attainment demonstration also are the RFP/ROP plans and the
SIP submission concerning RACM, both of which we discussed elsewhere in
the preamble to the proposed rule and which are discussed in later
sections of this preamble.
1. Areas With Early Attainment Dates
a. Background
The proposal noted that under section 182(a), marginal areas, which
have a maximum attainment date of 3 years after designation, are not
required to perform a complex modeling analysis using photochemical
grid modeling. We noted that areas covered under either subpart 1 or 2
with ozone concentrations close to the level of the NAAQS [e.g., within
0.005 parts per million (ppm)] \14\ will most likely come into
attainment within 3 years after designation as nonattainment without
any additional local planning as a result of national and/or regional
emission control measures that are scheduled to occur. We noted that
regional scale modeling for national rules, such as the NOX
SIP Call and Tier II motor vehicle tailpipe standards, projects major
ozone benefits for the 3-year period of 2004-2006. Attainment for many
areas classified as marginal is further indicated by subsequent
modeling used to support the CAIR. This 3-year period coincides with
the period that would be used to determine whether an area attains the
8-hour standard within 3 years after designation for areas classified
as marginal.
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\14\ Even though the June 2, 2003 proposal contained the
reference to the 0.005 ppm criterion, the draft regulatory text
issued for public comment did not contain a reference to this
criterion.
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If existing modeling for a marginal area does not indicate the area
will attain with the current planned control measures, EPA encouraged
the areas to request reclassification to moderate and encouraged the
State or Tribe to develop an attainment demonstration using
photochemical grid modeling. (See 68 FR 32831; June 2, 2003.) Even
though modeling is not required, it may be prudent.
In the proposal, we noted that many subpart 1 areas are projected
through regional modeling to come into attainment within 3 years after
designation with current control programs. Therefore, we proposed that
no additional modeled attainment demonstration would be required for
areas with air quality observations close to the level of the standard
and where regional or national modeling exists that is appropriate for
use to demonstrate the area will attain the 8-hour standard within 3
years after designation (i.e., based on data from 2004-2006).
We proposed that areas subject only to subpart 1 may request an
attainment date no later than 3 years following designation for the 8-
hour NAAQS by submitting within 1 year of the designation a SIP that
demonstrates the area will attain within 3 years following designation.
The demonstration must include modeling results and analyses that the
State is relying on to support its claim. Such modeling must be
consistent with EPA guidance and must be appropriate for the area.
b. Summary of Final Rule
Although we proposed that subpart 1 areas requesting an attainment
date within 3 years after designation should submit their attainment
demonstration within 12 months, we have removed that provision from the
final rule. A subpart 1 area is free to choose to submit its attainment
demonstration at any time prior to the 3-year due date.\15\ As is the
case with all required attainment demonstrations, the demonstration
must be submitted no later than 3 years following designation and must
be appropriate for use in the area. We anticipate that most subpart 1
areas will be included in the modeling analyses conducted by areas with
later attainment dates. States are encouraged to use these available
analyses, as well as future EPA national or regional modeling. The
demonstration must include modeling results and analyses that the State
or Tribe is relying on to support its claim. Such modeling should be
consistent with EPA guidance and should be applicable and appropriate
for the area.\16\ If acceptable available modeling does not demonstrate
attainment, the area would need to submit a local modeled attainment
demonstration.
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\15\ The EPA notes that 8-hour ozone nonattainment areas are
also free to develop early SIPs with motor vehicle emissions budgets
for transportation conformity purposes in advance of a complete SIP
attainment demonstration. For more information on establishing an
early 8-hour ozone SIP and how it could be used for conformity,
please refer to EPA's July 1, 2004, conformity final rule (69 FR
40019).
\16\ If an assessment indicates that a regional modeling
analysis is not applicable to a particular nonattainment area,
additional local modeling would be required.
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c. Comments and Responses
Comment: Several commenters recommended that the requirement for
attainment demonstrations from all subpart 1 areas be eliminated.
Response: Section 172(c)(1) clearly requires that nonattainment
areas ``* * * shall provide for attainment of the national primary
ambient air quality standards.'' To meet this requirement, a State must
demonstrate that the area will attain by a specified date and identify
and adopt the control measures that will bring the area into
attainment. We see no authority for waiving this requirement for areas.
Comment: What are the requirements for subpart 1 areas requesting
attainment dates within 3 years of designation?
Response: Subpart 1 areas must submit their attainment
demonstrations within 3 years after designation.
2. Areas With Later Attainment Dates
a. Background
For areas with attainment dates of more than 3 years after
designation, regardless of whether they are covered under subpart 1 or
subpart 2 (except marginal areas), we proposed to require them to
submit an attainment demonstration SIP. This proposal was reflected in
Sec. 51.908(b) and (c) of the draft regulatory text. We stated that
local, regional and national modeling developed to support Federal or
local controls could be used provided the modeling is consistent with
EPA's modeling guidance. Several States have invested considerable time
and resources in regional 8-hour ozone modeling projects following this
guidance. Where exceedances of the 8-hour ozone standard are more
pervasive and widespread than they were for the 1-hour ozone standard,
we recommended that States work together in multi-State modeling
efforts and
[[Page 71626]]
leverage off work under development and resources spent on these
projects.
b. Summary of Final Rule
Subpart 1 areas with attainment dates later than 3 years after
designation and areas classified as moderate or higher under Sec.
51.903, are required to submit an attainment demonstration no later
than 3 years after the effective date of designation for the 8-hour
ozone NAAQS. Areas with an effective date of designation of June 15,
2004 are required to submit an attainment demonstration no later than
June 15, 2007. These demonstrations must be consistent with section
51.112, including appendix W. In addition, for the review of technical
adequacy, we will generally rely on our most recent modeling guidance
at the time the modeled attainment demonstration is performed. We will
be making available a final version of the modeling guidance related to
developing attainment demonstrations for the 8-hour ozone standard.\17\
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\17\ U.S. EPA, (November 4, 2005), Guidance on the Use of Models
and Other Related Analyses in Attainment Demonstrations for the 8-
Hour Ozone NAAQS, EPA-454/R-05-002, http://www.epa.gov/ttn/scram,
(Modeling Guidance, File name: ozone-final.pdf).
---------------------------------------------------------------------------
Areas required to submit an attainment demonstration are encouraged
to follow the procedures described in this guidance. Local, regional
and national modeling developed to support Federal or local controls
generally may be used provided the modeling is consistent with EPA's
modeling guidance at the time the modeled attainment demonstration is
performed.\18\
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\18\ The guidance may not apply to a particular situation,
depending upon the circumstances. The EPA and State decision makers
retain the discretion to adopt approaches on a case-by-case basis
that differ from this guidance where appropriate. Any decisions by
EPA regarding a particular SIP demonstration will only be made based
on the statute and regulations, and will only be made following
notice and opportunity for public review and comment. Therefore,
interested parties will be able to raise questions and objections
about the contents of this guidance and the appropriateness of its
application for any particular situation.
---------------------------------------------------------------------------
c. Comments and Responses
We received no comments on this topic per se; comments on the
timing of submission of attainment demonstrations is discussed
elsewhere. We noted in the proposal that comments on the modeling
guidance were welcome at any time and that we would consider those
comments in any future revision of that document. We noted that
comments submitted on the modeling guidance document would not be
docketed as part of this rulemaking, nor would a comment/response
summary of these comments be a part of the final 8-hour ozone
implementation rule since they will not affect the rule itself. We will
address those comments at the time we issue the final modeling
guidance.
3. Multi-State Nonattainment Areas
a. Background
As discussed in the June 2003 proposal, section 182(j) of the CAA
defines a multi-State ozone nonattainment area as an ozone
nonattainment area, portions of which lie in two or more States.
Section 182(j)(1)(A) and (B) set forth certain requirements for such
areas. First, each State in which a multi-State ozone nonattainment
area lies must take all reasonable steps to coordinate the
implementation of the required revisions to SIPs for the given
nonattainment area [section 182(j)(1)(A)]. Next, section 182(j)(1)(B)
requires the States to use photochemical grid modeling or any other
equally effective analytical method approved by us for demonstrating
attainment. We are prevented by section 182(j) from approving any SIP
revision submitted under that section if a State has failed to meet the
above requirements.
To address the provisions of section 182(j)(1)(A), States that
include portions of a multi-State ozone nonattainment area should
develop a joint work plan as evidence of early cooperation and
integration. The work plan should include a schedule for developing the
emissions inventories, and the attainment demonstration for the entire
multi-State area. Each State within a multi-State ozone nonattainment
area is responsible for meeting all the requirements relevant to the
given area. Care should be taken to coordinate strategies and
assumptions in a modeled area with those in other, nearby modeled areas
in order to ensure that consistent, plausible strategies are developed.
Section 182(j)(2) for multi-State nonattainment areas recognizes
that one State may not be able to demonstrate attainment for the
nonattainment area if other States in which portions of the
nonattainment area are located do not adopt and submit the necessary
attainment plan for the area. In such cases, even though the area as a
whole would not have an approvable attainment demonstration, the
sanction provisions of section 179 will not apply in the portion of the
nonattainment area located in a State that submitted an attainment
plan.
b. Summary of Final Rule
As discussed in the proposal, State partners involved in a multi-
State ozone nonattainment area must work together to perform the
appropriate modeling analyses to identify control measures that will
enable the area to achieve attainment as expeditiously as practicable.
Each State will be responsible for its portion of the control program
and therefore will be held accountable for controls identified for
implementation within its State boundaries. The modeling analyses
should encompass the entire multi-State nonattainment area as well as
adjacent counties which may contribute to the nonattainment problem.
State plans should address local transport within the region and its
contribution to nonattainment in the multi-State area. Consideration of
long-range transport and its contributions to nonattainment is
discussed in section IV.B. of this preamble. Multi-State nonattainment
areas are subject to the same modeling and attainment demonstration
requirements of the final rule that apply to all other areas. Marginal
multi-State nonattainment areas do not have to submit a modeled
attainment demonstration because section 182(a) exempts marginal areas
from the requirement to submit an attainment demonstration.
c. Comments and Responses
Comment: Several commenters encouraged us to clearly define in the
rule how multi-State nonattainment areas will be treated if all or a
portion of an area is subject only to subpart 1. One of these
commenters requested a clarification that photochemical grid modeling
will not be required for multi-State areas classified under subpart 1
or areas that are classified as marginal. The commenter's reasoning was
that such modeling is unnecessary since they are close to achieving the
8-hour NAAQS and will be in attainment before the modeling can be
completed.
Response: We agree with these commenters that since section 182(a)
exempts marginal areas from the requirement to submit an attainment
demonstration, such areas need not develop an attainment demonstration.
Section 182(j) of the CAA requires that multi-State areas use
photochemical grid modeling as part of their attainment demonstrations
while Section 172 (Subpart 1 areas) of the CAA does not explicitly
require photochemical grid modeling. For subpart 1 areas that do not
seek an attainment date of 3 years or less after designation, we make
no distinction between multi-State and
[[Page 71627]]
single-State subpart 1 nonattainment areas. All subpart 1 nonattainment
areas are required to submit an attainment demonstration that relies on
photochemical grid modeling, either one that has already been performed
that is appropriate for use in the area, or a new one. We do not
believe that techniques other than those based on photochemical grid
modeling will provide credible assurance that an area will achieve the
8-hour ozone standard by the area's attainment date.
Comment: One commenter requested that we perform the modeling for
multi-State areas. Two commenters stated that if any additional
photochemical modeling is required for such areas pursuant to CAA
182(j)(1)( B), then EPA should refine previous modeling; perform new
modeling; or approve a less resource-intensive, alternate method that
fulfills the requirement. The commenters asserted that we should assist
the States in coordinating the development of the attainment/
maintenance plans and ensure that areas involving multiple EPA Regions
are not hampered by jurisdictional conflicts and inconsistencies.
Response: The EPA has conducted, and will continue to conduct,
regional and national scale modeling that covers most of the ozone
nonattainment areas. Both single State and multi-State nonattainment
areas will be able to make use of EPA modeling, where appropriate. The
EPA will work with States to determine the steps necessary for the
proper use of EPA modeling in a local attainment demonstration. States
that plan to use EPA modeling in lieu of local modeling should be
prepared to justify the local use of the regional projections as well
as conduct additional analyses to monitor progress towards attainment.
The EPA will continue to work with States to coordinate the development
of consistent attainment/maintenance plans.
4. Role of Modeling Guidance in Attainment Demonstrations
a. Background
The proposal noted that section 182(b)(1)(A) requires ozone
nonattainment areas to develop an attainment demonstration which
provides for reductions in VOC and NOX emissions ``as
necessary to attain the national primary ambient air quality standard
for ozone.'' Section 172(c), requires areas covered under subpart 1 to
demonstrate attainment. For a subpart 1 area that does not qualify for
an attainment date within 3 years after designation, we proposed to
require the State to develop and submit a modeled attainment
demonstration.\19\
---------------------------------------------------------------------------
\19\ As noted above in the discussion of subpart 1 areas with
early attainment dates, although the draft regulatory text in Sec.
51.908(a) was structured such that no attainment demonstration was
needed for subpart 1 areas that received an attainment date within 3
years after the effective date of the nonattainment designation,
this was misleading, since the draft Sec. 51.904(b)(2) provision
that affected these areas required submission of a demonstration of
attainment within 3 years after designation. The final regulatory
text in Sec. 51.908(b) clarifies this point.
---------------------------------------------------------------------------
We noted that section 182(c)(2)(A) provides that for serious and
higher-classified areas the ``attainment demonstration must be based on
photochemical grid modeling or any other analytical method determined
by the Administrator, in the Administrator's discretion, to be at least
as effective.'' A photochemical grid model should meet several general
criteria for it to be a candidate for consideration in an attainment
demonstration. We noted that, unlike in previous guidance,\20\ we did
not propose recommending a specific photochemical grid model for use in
the attainment demonstration for the 8-hour NAAQS for ozone. At
present, there is no single model which has been extensively tested and
shown to be clearly superior or easier to use than other available
models. Criteria for attainment demonstrations are contained in 40 CFR
51.112, including appendix W (i.e., ``EPA's Guideline on Air Quality
Models,'' 68 FR 18440, April 15, 2003). Appendix W refers to EPA's
``Use of Models and Other Analyses in Attainment Demonstrations for the
8-Hour Ozone NAAQS'' and lists a set of general requirements that an
air quality model should meet to qualify for use in an attainment
demonstration for the 8-hour ozone NAAQS.\21\ The proposal described
alternatives available to the States and the scope and coverage of the
draft guideline. The draft regulatory text of 2003 addressed this
requirement in Sec. 51.908(d).
---------------------------------------------------------------------------
\20\ U.S. EPA, (1991), Guideline for Regulatory Application of
the Urban Airshed Model, EPA-450/4-91-013. Available at: http://www.epa.gov/scram001/tt25.htm
; see document DRAFT8HR.
\21\ U.S. EPA, (May 1998), Draft Guidance on the Use of Models
and Other Analyses in Attainment Demonstrations for the 8-Hour Ozone
NAAQS, EPA-454/R-99-004, http://www.epa.gov/ttn/scram, (Modeling
Guidance, File name: DRAFT8HR).
---------------------------------------------------------------------------
We noted that we were planning to make substantial changes to the
draft version of this document before finalizing the attainment
demonstration aspects of the implementation rule. We said we welcomed
public comments on the guidance at any time and would consider those
comments in any future revision of the document. However, we said we
would not consider comments on the technical merits of the modeling
guidance in this present rulemaking.
b. Summary of Final Rule
The final rule [Sec. 51.908(c)] requires each attainment
demonstration to be consistent with the provisions of Sec. 51.112,
including appendix W to 40 CFR part 51. In addition, we will generally
review the demonstrations for technical merit using EPA's most recent
modeling guidance at the time the modeling relied on in the attainment
demonstration is performed. This guidance will generally have the State
provide (1) technical analyses to locate and identify sources of
emissions that are causing violations of the 8-hour NAAQS within
nonattainment areas, (2) adopted measures with schedules for
implementation and other means and techniques necessary and appropriate
for attainment that are needed for attainment, with implementation no
later than the beginning of the attainment year ozone season \22\
(e.g., prior to 2009 ozone season for areas with June 15, 2010
attainment dates), and (3) contingency measures required under section
172(c)(9) of the CAA that can be implemented without further action by
the State or the Administrator to cover emissions shortfalls in RFP
plans and failures to attain.
---------------------------------------------------------------------------
\22\ See 40 CFR 51.900(g) for definition.
---------------------------------------------------------------------------
c. Comments and Responses
Comment: One commenter recommended that EPA must ensure that
attainment demonstrations are based on scientifically valid regional
airshed modeling rather than scientifically invalid linear proportional
rollback and weight-of-evidence methods.
Response: Criteria for attainment demonstrations are contained in
40 CFR 51.112, including appendix W (i.e., ``EPA's Guideline on Air
Quality Models,'' 68 FR 18440, April 15, 2003). Appendix W cites EPA's
``Use of Models and Other Analyses in Attainment Demonstrations for the
8-Hour Ozone NAAQS'' and describes a set of general criteria that an
air quality model and its application should meet to qualify for use in
an attainment demonstration for the 8-hour ozone NAAQS.\23\ The draft
guidance was developed through a collaborative process, which included
review from the scientific community, and it has been revised to
reflect recent review comments. The procedures described are considered
a scientifically
[[Page 71628]]
valid use of regional and urban airshed modeling. The modeled
attainment test makes use of the model derived relationship between
ozone and its precursors. It does not, as is the case with proportional
rollback, assume equal proportions of the precursors will provide an
equally proportional reduction in ozone. For example, it does not
assume that 20 percent reduction in precursors will provide 20 percent
improvement in ozone.
---------------------------------------------------------------------------
\23\ U.S. EPA, (1998), Draft Guidance on the Use of Models and
Other Analyses in Attainment Demonstrations for the 8-Hour Ozone
NAAQS, EPA-454/R-99-004, http://www.epa.gov/ttn/scram, (Modeling
Guidance, File name: DRAFT8HR).
---------------------------------------------------------------------------
The guidance also identifies additional data which, if available,
should enhance the credibility of model results and results of other
analyses used in a weight of evidence determination. The EPA believes
use of weight of evidence is appropriate as do many in the scientific
community. Weight of evidence is a credible approach for considering
inherent uncertainties in a modeling application. As noted above, we
will be making available a final version of the modeling and attainment
demonstration guidance for the 8-hour ozone standard.\24\
---------------------------------------------------------------------------
\24\ U.S. EPA, (2005), Guidance on the Use of Models and Other
Related Analyses in Attainment Demonstrations for the 8-Hour Ozone
NAAQS, EPA-454/R-05-002, http://www.epa.gov/ttn/scram, (Modeling
Guidance, File name: ozone-final.pdf).
---------------------------------------------------------------------------
Comment: All attainment demonstrations should be subject to the
same rigorous standards.
Response: The EPA envisions that the final 8-hour ozone modeling
guidance will be available for use by the majority of subpart 1 areas
and subpart 2 areas classified as moderate and above. However, due to
the unique nature of the ozone problem in many areas, EPA will accept
various applications of the guidance. Although EPA anticipates all
areas will follow the guidance closely, there will be variation based
on availability of new and improved data methods and field study data.
The EPA is always striving to make best use of available data and
improvements in methodologies as the science and our understanding of
ozone formation and transport in different parts of the country
increases. Unique to many areas is the source receptor configuration,
level of precursor data collected and the model's ability to simulate
unique factors influencing the formation and transport of ozone. As
more information becomes available in particular areas, EPA expects
more rigorous demonstrations will be provided. Areas close to attaining
the standard for which there is a better understanding of the
meteorology and the relationships between precursor emissions and ozone
may not require as much rigor. These decisions will be made on a case-
by-case basis and the public will be able to express their views during
the State SIP development and EPA review process.
Comment: The EPA cannot adopt or change the Draft Guidance, use it
for regulatory purposes, or require States to use it for regulatory
purposes, without subjecting it to separate notice-and-comment
rulemaking.
Response: The final rule [Sec. 51.908(c)] requires each attainment
demonstration to be consistent with the provisions of 40 CFR 51.112,
including appendix W. However, we are not adopting the Guidance as a
rule. The EPA plans to use the current (2005) guidance and future
updates as a benchmark for reviewing the technical analysis submitted
in support of 8-hour ozone attainment demonstrations. The guidance
document is not a regulation. Therefore, it does not impose binding,
enforceable requirements on any party, and may not apply to a
particular situation based upon the circumstances. The EPA and State
decision makers have the discretion to adopt approaches on a case-by-
case basis that differ from this guidance where appropriate. Any
decisions by EPA regarding adequacy of a particular SIP to meet the 8-
hour ozone NAAQS will be based on the CAA and our regulations.
Therefore, interested parties are free to raise questions and
objections about the appropriateness of the application of this
guidance to a particular situation during the State SIP development and
EPA review process.
Comment: One commenter requested an opportunity to review and
comment on the revised guidance prior to the ``final'' release.
Response: States, Tribes and others were given an opportunity to
comment on the revised draft guidance prior to release. Also, EPA
received additional comments on the draft guidance during the comment
period on the implementation rule. The EPA has reviewed and considered
the comments and will be releasing the final guidance. For more
information and updates to the modeling guidance for ozone, visit EPA's
Technology Transfer Network Support Center for Regulatory Air Models
(TTN/SCRAM) on the Internet, http://www.epa.gov/ttn/scram/. Even though
the guidance will be issued in final form shortly, EPA is always open
to suggestions for future improvements to the guidance, including the
incorporation of methodologies and procedures that increase accuracy
and credibility of results. Such suggestions may be made to EPA
regional or headquarters modeling contacts listed at the above TTN/
SCRAM web site.
Comment: The EPA should carefully consider the resources that will
be needed to perform the requisite modeling for multiple areas in many
States.
Response: States/Tribes are encouraged to share and leverage
resources currently being used in regional model applications that
affect multiple areas. There is much opportunity for common use of data
and methodologies among the modeling requirements for the regional haze
program, the PM2.5 attainment demonstrations and the ozone
attainment demonstrations that should make the overall exercise less
onerous. States and Tribes are encouraged to model multiple precursor
strategies for multiple areas and review their efficacy for all three
programs.
Comment: Any photochemical grid model utilized must either be in
the public domain or licensed for unlimited use by any person for
purposes of modeling within the area.
Response: The EPA modeling guidance supports this comment which is
addressed in section 10 of the modeling guidance. ``Applicable models''
may be used, if they are non-proprietary. A ``non-proprietary'' model
is one whose source code is available for free or for a reasonable
cost. Further, the user must be free to revise the code to perform
diagnostic analyses and/or to improve the model's ability to describe
observations in a credible manner.
Comment: One commenter recommended that EPA update its guidance in
40 CFR 51, appendix W to include a discussion of the role of weight-of-
evidence as part of a modeling demonstration, and to make any updates
in appendix W subject to public review.
Response: In regard to the role of weight of evidence, EPA does not
plan to revise appendix W. Use of weight of evidence is dependent on
local information only available when the technical analysis for a
specific model application is under development. Therefore, use of
weight of evidence is considered on a case-by-case basis as the
appropriate Regional Office works with the State as it develops its SIP
and during the State adoption process and during EPA's SIP approval
process. Any weight of evidence analysis is available for public
review.
5. Mid-Course Review (MCR)
a. Background
The proposal noted that a MCR provides an opportunity to assess
whether a nonattainment area is or is not making sufficient progress
toward attainment of the 8-hour ozone standard, as predicted in its
attainment demonstration. We noted that a
[[Page 71629]]
commitment to perform a MCR is a critical element of an attainment
demonstration that employs a long-term projection period and relies on
weight of evidence. Because of the uncertainty in long-term
projections, we said we believed such attainment demonstrations need to
contain provisions for periodic review of monitoring, emissions, and
modeling data to assess the extent to which refinements to emission
control measures are needed.
A number of States participated in a consultative process with EPA,
which resulted in the development of the 1-hour MCR guidance.\25\ We
noted that we would update the 1-hour MCR policy and technical guidance
to include 8-hour metrics and that we were soliciting comment on
appropriate revisions. We proposed that the final MCR guidance
incorporating 8-hour metrics would be available at the time we issue
our final implementation rule.
---------------------------------------------------------------------------
\25\ Memorandum of March 28, 2002, from Lydia N. Wegman and J.
David Mobley, re: ``Mid-Course Review Guidance for the 1-Hour Ozone
Nonattainment Areas that Rely on Weight-of-Evidence for Attainment
Demonstration.'' Located at URL: http://www.epa.gov/scram001/guidance/guide/policymem33d.pdf
.
---------------------------------------------------------------------------
The proposal briefly described the procedure for performing a MCR.
The proposal noted that States would not have to commit in advance to
adopt new control measures as a result of the MCR process. Based on the
MCR, if we determine sufficient progress has not been made, we would
determine whether additional emissions reductions are necessary from
the State(s) in which the nonattainment area is located or upwind
States or both. We would then require the appropriate State(s) to adopt
and submit new measures to bring about the necessary emissions
reductions within a specified period. We anticipated that these
findings would be made as calls for SIP revisions under section
110(k)(5) and, therefore, the period for submission of the measures
would be no longer than 18 months after the EPA finding. Thus, we
proposed that States complete the MCR 3 or more years before the
applicable attainment date to ensure that any additional controls that
may be needed can be adopted in sufficient time to reduce emissions by
the start of the ozone season in the attainment year.
b. Summary of Final Rule
The final regulatory text does not contain a requirement for the
MCR. In reviewing attainment demonstrations from individual States,
however EPA will assess the need for a MCR for areas with an attainment
date beyond 6 years after the effective date of the area's designation
in the context of whether the attainment demonstration and any weight
of evidence analysis is supportable without a commitment by the State
to perform a MCR.
The 8-hour ozone modeling guidance \26\ is expected to identify
measurements and activities to support subsequent reviews of an
attainment demonstration SIP (i.e., MCR), such as improvements in air
quality monitoring, meteorology and emission measurements. Even though
the proposal noted that we expected to revise the existing 1-hour MCR
guidance, EPA now believes the 1-hour MCR guidance coupled with the 8-
hour modeling guidance provides sufficient guidance. States should
consult with EPA prior to using a methodology other than the one
developed through the public consultative process.
---------------------------------------------------------------------------
\26\ U.S. EPA, (2005), Guidance on the Use of Models and Other
Related Analyses in Attainment Demonstrations for the 8-Hour Ozone
NAAQS, EPA-454/R-05-002, http://www.epa.gov/ttn/scram, (Modeling
Guidance, File name: ozone-final.pdf).
---------------------------------------------------------------------------
Guidance for performing a MCR for the 1-hour ozone NAAQS identifies
several methods for reviewing whether the existing SIP is sufficient
for the area to attain by its attainment date.\27\ These guidance
documents should provide adequate information for developing protocols
for performing MCRs for the 8-hour ozone NAAQS. States/Tribes should
prepare protocols which identify analyses and data bases to be used to
support a MCR and discuss these with the appropriate EPA Regional
Office prior to performing a MCR. If we determine that additional
guidance is needed, we will issue updated guidance in a timeframe
suitable to support the timely completion of MCRs.
---------------------------------------------------------------------------
\27\ Memorandum of March 28, 2002, from Lydia N. Wegman and J.
David Mobley, re: ``Mid-Course Review Guidance for the 1-Hour Ozone
Nonattainment Areas that Rely on Weight-of-Evidence for Attainment
Demonstration.'' Located at URL: http://www.epa.gov/scram001/guidance/guide/policymem33d.pdf
.
---------------------------------------------------------------------------
c. Comments and Responses
Comment: Requiring the MCR 3 or more years prior to the attainment
date is not reasonable or feasible for some areas. The EPA needs to
recognize that for moderate and lower classifications the MCR would be
due at the time of the SIP submittal. Mid-course review should be
required only for areas with nonattainment classifications of serious
or greater, as at least 3 years of monitored data are required for a
MCR, after the implementation of controls. One commenter recommended
that EPA make the MCR process part of the requirements for RFP and ROP.
Response: The final regulatory text does not require a MCR; as
noted above, EPA will assess on a case-by-case basis whether a MCR
would be needed in the context of a particular attainment
demonstration.
Comment: The EPA should develop proper analysis techniques so that
meteorological conditions do not affect a nonattainment area's
perceived progress towards attainment. A MCR should also include an
evaluation of ozone transport into the nonattainment area and control
implementation in upwind areas.
Response: Assessments of transport are covered in the MCR guidance.
The EPA is improving methods for determining the ozone trends and how
they are affected by meteorology. The latest information will be made
available.
Comment: The EPA needs to release the revised MCR guidance before
the final rule is issued in order for it to be reviewed and commented
on during the public comment period.
Response: The final rule does not incorporate any MCR guidance by
reference. The 8-hour ozone modeling guidance \28\ is expected to
identify measurements and activities to support subsequent reviews of
an attainment demonstration SIP (i.e., MCR), such as improvements in
air quality monitoring, meteorology and emission measurements. Guidance
for performing a MCR for the 1-hour ozone NAAQS identifies several
methods for reviewing whether a SIP is on track to attain within
prescribed time limits.\29\ These guidance documents should provide
adequate information for developing protocols for performing MCRs for
the 8-hour ozone NAAQS. States/Tribes should prepare protocols which
identify analyses and data bases to be used to support a MCR and
discuss these with the appropriate EPA Regional Office prior to
performing a MCR. If we determine that additional guidance is needed,
we will issue updated guidance in a timeframe suitable to support
completion of MCR's within established deadlines.
---------------------------------------------------------------------------
\28\ U.S. EPA, (2005), Guidance on the Use of Models and Other
Related Analyses in Attainment Demonstrations for the 8-Hour Ozone
NAAQS, EPA-454/R-05-002, http://www.epa.gov/ttn/scram, (Modeling
Guidance, File name: ozone-final.pdf).
\29\ Memorandum of March 28, 2002, from Lydia N. Wegman and J.
David Mobley, re: ``Mid-Course Review Guidance for the 1-Hour Ozone
Nonattainment Areas that Rely on Weight-of-Evidence for Attainment
Demonstration.'' Located at URL: http://www.epa.gov/scram001/guidance/guide/policymem33d.pdf
.
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[[Page 71630]]
6. Multi-Pollutant Assessments (One-Atmosphere Modeling) \30\
---------------------------------------------------------------------------
\30\ Use of models that are capable of simulating transport and
formation of multiple pollutants simultaneously. For example, for
ozone and fine particles, it is critical that the model simulate
photochemistry, which includes interactions among the pollutants and
their precursors.
---------------------------------------------------------------------------
a. Background
The proposal noted that many factors affecting formation and
transport of secondary fine particles (i.e., PM2.5
components) are the same as those affecting formation and transport of
ozone. The proposal, therefore, noted that models and data analysis
intended to address visibility impairment need to be capable of
simulating transport and formation of both secondary fine particles and
ozone. At a minimum, modeling should include previously implemented or
planned measures to reduce ozone, secondary fine particles, and
visibility impairment. An integrated assessment of the impact controls
have on ozone, secondary fine particles, and regional haze provides
safeguards to ensure ozone controls will not preclude optimal controls
for secondary fine particles and visibility impairment.
The concept of modeling control impacts on all three programs is
further strengthened by the alignment of the implementation process for
ozone and secondary fine particles. As the dates for attainment
demonstration and planning SIPs for the three programs are anticipated
to be fairly close, the practicality of using common data bases and
analysis tools for all three programs is viable and encourages use of
shared resources.
The proposal noted that States that undertake multi-pollutant
assessments as part of their attainment demonstration would assess the
impact of their ozone attainment strategies on secondary fine particles
and visibility or perform a consistent analysis for ozone, secondary
fine particles, and visibility. To facilitate such an effort, we
encouraged States to work closely with established regional haze
Regional Planning Organizations (RPOs) and the jurisdictions
responsible for developing PM2.5 implementation plans. We
encouraged States to perform similar multi-pollutant assessments as
part of their ozone attainment demonstrations, considering the control
programs that are in place at the time of the assessment. Multi-
pollutant assessments are discussed elsewhere in this proposed
rulemaking.
b. Summary of Final Rule
There is no regulatory text on the issue of multi-pollutant
assessments, but we recommend the following:
Attainment demonstration modeling should include
previously implemented or planned measures to reduce ozone, secondary
fine particles, and visibility impairment.
An integrated assessment of the impact controls have on
ozone, secondary fine particles, and regional haze is encouraged to
promote efficiencies in strategies for achieving all three goals.
States are also encouraged to use common data bases and
analysis tools for all three programs and work closely with established
regional haze RPOs and the jurisdictions responsible for developing
PM2.5 implementation plans.
States are encouraged to follow EPA's lead and perform
similar multi-pollutant assessments as part of their ozone attainment
demonstrations, considering the control programs that are in place at
the time of the assessment.
c. Comments and Responses
Comments: The EPA received several comments on the recommendation
that States perform multi-pollutant assessments as part of their ozone
attainment demonstrations. Almost all of the comments agreed with the
basic rationale behind encouraging an analysis of the expected ozone,
PM2.5, and visibility impacts of a given set of air quality
control measures associated with an 8-hour ozone attainment
demonstration. The comments differed on whether multi-pollutant
assessments should be required or only encouraged. The commenters who
urged EPA to encourage rather than require a multi-pollutant assessment
provided reasons for why they believe a multi-pollutant assessment is
not possible at this time. One commenter indicated that the proposal
was unclear as to whether the multi-pollutant assessments were
required.
One commenter recommended that EPA require, in certain unspecified
cases, nonattainment areas to perform an integrated control strategy
assessment to ensure that ozone controls will not preclude optimal
controls for secondary fine particles and visibility impairment.
Conversely, several other commenters expressed the opinion that the
multi-pollutant assessment should not be a requirement of an ozone
attainment demonstration. Several reasons were offered for why the
assessment should remain optional: (1) That the state of the science
for assessing PM2.5 and visibility is not yet sufficient for
providing meaningful input to the regulatory process, (2) that the
additional resources necessary to model the atmosphere as a single
system would result in an undue burden on the States, and (3) that
requiring a PM2.5 and visibility assessment would result in
delayed attainment due to the additional time necessary to complete
such an analysis.
Response: The EPA continues to believe that encouraging, but not
requiring, multi-pollutant assessments is the most sound approach for
total air quality management given the schedule by which ozone
attainment demonstrations are legally required. Much progress has been
made on improving the available PM2.5 models and inputs to
these models over the past 3 years. As a result, EPA believes that the
available tools are able to support air quality planning. Further
improvements are likely over the next several years; much of which will
be driven by the RPO's. By working closely with the appropriate RPO's,
States can reduce the burden associated with one-atmosphere modeling
analyses. However, EPA recognizes that many States have already
invested resources in an ozone-only modeling platform analysis which is
typically conducted over a finite number of episode days and for
geographic regions that are typically less than (in time) and smaller
than (in space) what might be required in a multi-pollutant assessment.
By encouraging States to consider such assessments, EPA hopes to speed
the process of the transition to more integrated air quality planning
tools while yielding sound multi-pollutant control strategies. It is
prudent for areas to perform these multi-pollutant assessments earlier
as it will lessen the planning burden in the long-term since later
planning activities for PM2.5 and regional haze will need to
consider the effects of emission control measures adopted for the ozone
attainment plan.
7. What baseline emission inventory should be used for the attainment
demonstration?
[Not addressed in the June 2, 2003 proposal; Sec. 51.909 of the
draft regulatory text.]
The June 2, 2003 proposal did not discuss baselines for purposes of
the attainment demonstration. (It did, however, discuss baselines for
RFP demonstrations.) Section 51.909 of the draft regulatory text
provided that 2002 should be used as the baseline emission inventory
year for purposes of both RFP and the attainment demonstration for
areas with an effective date of
[[Page 71631]]
designation of June 15, 2004. We recognize, however, that some areas
have already begun to perform modeling for their attainment
demonstrations using baseline year inventories earlier than the 2002
inventory, and because the 2002 inventory may not be in a format to
readily be used for photochemical grid modeling.\31\ Therefore, the
final rule does not specify a baseline for purposes of the attainment
demonstration and modeling. As discussed more fully in the section of
the preamble regarding RFP, the specification of 2002 as a baseline
year for RFP purposes (for areas with an effective date of designation
of June 15, 2004) appears in the RFP provisions of 40 CFR 51.910.
Section 51.909 remains reserved.
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\31\ The EPA guidance on baseline years is found in the
memorandum of November 18, 2002, from Lydia Wegman and Peter
Tsirigotis, ``2002 Base Year Emission Inventory SIP Planning: 8-hr
Ozone, PM2.5 and Regional Haze Programs.'' This document
is available at the following Web site: http://www.epa.gov/ttn/oarpg/meta.442.1.202baseinv.pdf.
That document noted, ``The EPA is
aware that some areas have already begun on a voluntary basis to
model for purposes of the 8-hour ozone standard. These areas may
continue to use modeling from previous base years for each set of
meteorological episode conditions for use in their SIP submittals if
these studies are still applicable for an attainment
demonstration.''
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8. Voluntary Reclassifications (``Bump-Ups'')
Although we believe most 8-hour nonattainment areas will attain the
standard by their statutory attainment date, we recognize that some
areas classified under subpart 2 may need additional time beyond the
statutory attainment date for their area to attain as expeditiously as
practicable. As discussed in the Phase 1 Rule (69 FR at 23959, col. 3),
in the event an area cannot practicably attain by the maximum date for
its classification, the Clean Air Act provides the opportunity for more
time. An area regulated under subpart 2 can receive a later maximum
attainment date through a State request to bump-up to a higher
classification (e.g. from moderate to serious). The Act requires EPA to
grant a State request to reclassify an area to a higher classification;
the State plan still must provide for attainment as expeditiously as
practicable. Although bump-up means that certain additional specified
requirements apply, an area may already be meeting most or all of these
specified requirements due to controls previously adopted to implement
the 1-hour ozone standard. This is because some areas had 1-hour
classifications that were higher (and more restrictive) than the areas'
8-hour classification,\32\ and because the Phase 1 final implementation
rule for the 8-hour O3 NAAQS contains anti-backsliding provisions
generally requiring areas to continue implementing measures required
for the 1-hour classification. Although there may not be additional
mandatory control measures required because the areas may already have
such measures in place, an area that needs more time to attain may need
additional emission reductions to reach attainment.
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\32\ Although some 8-hour ozone nonattainment areas have
additional areas beyond the boundary of the former 1-hour
nonattainment area and thus would be faced with new requirements for
the higher classification.
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E. What requirements for RFP should apply under the 8-hour ozone
standard?
[Section VI.I. of June 2, 2003 proposed rule (68 FR 32832); Sec.
51.909 and Sec. 51.910 in draft; Sec. 51.910(d) in final regulatory
text.]
1. General Discussion
a. Background
As noted in the June 2, 2003 proposal, section 172(c)(2), which is
located in subpart 1, requires State plans for nonattainment areas to
require RFP. Section 171(1) of the CAA defines RFP to mean ``such
annual incremental reductions in emissions of the relevant air
pollutant as are required by this part [part D of title I] or may
reasonably be required by the Administrator for the purpose of ensuring
attainment of the applicable [NAAQS] by the applicable date.''
Subpart 2 provides more specific RFP requirements for ozone areas
classified under section 181.\33\ In particular, subpart 2 specifies
the base year emissions inventory upon which RFP is to be planned for
and implemented, the increments of emissions reductions required over
specified time periods, and the process for determining whether the RFP
milestones were achieved.
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\33\ Note that Sec. 51.900 provides the following definitions:
(p) Reasonable further progress (RFP) means for the purposes of
the 8-hour NAAQS, the progress reductions required under section
172(c)(2) and section 182(b)(1) and (c)(2)(B) and (c)(2)(C) of the
CAA.
(q) Rate of progress (ROP) means for purposes of the 1-hour
NAAQS, the progress reductions required under section 172(c)(2) and
section 182(b)(1) and (c)(2)(B) and (c)(2)(C) of the CAA.
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Subpart 2 does not specify RFP requirements for marginal areas.
Section 182(b)(1)(A) mandates a 15 percent VOC emission reduction,
accounting for growth, between 1990 and 1996 for moderate and above
ozone nonattainment areas. Furthermore, section 182(c)(2)(B) of the CAA
requires each serious and above ozone nonattainment area to submit a
SIP revision providing for an actual VOC emission reduction of at least
3 percent per year averaged over each consecutive 3-year period
beginning in 1996 until the area's attainment date (referred to as the
post-1996 ROP plan for the 1-hour standard). Section 182(c)(2)(C) of
the CAA allows for substitution of NOX for VOC emissions
reductions for reductions required under section 182(c)(2)(B). The
EPA's policy, NOX Substitution Guidance (December 15, 1993;
available at http://www.epa.gov/ttn/oarpg/t1pgm.html), addresses the
substitution of NOX emissions reductions for VOC emissions
reductions. The baseline emissions inventory for determining the
required ROP reductions for the 1-hour standard is specified in section
182 as 1990.
The requirements for RFP under subparts 1 and 2, as described
above, are the minimum required for an area. More reductions may be
necessary for attainment within the nonattainment area. Moreover, an
upwind area that contributes to nonattainment in a downwind area in the
same State may need reductions in order for the downwind area to reach
attainment by its required attainment date. As we noted above in
section IV.D.8., we recognize that some areas classified under subpart
2 may need additional time beyond the statutory attainment date for
their current classification to attain the 8-hour standard as
expeditiously as practicable. In the event an area cannot practicably
attain by the maximum date for its classification, the CAA provides the
opportunity for more time. An area regulated under subpart 2 can
receive a later maximum attainment date through a State request to
bump-up to a higher classification (e.g. from moderate to serious).
Although a higher classification would mandate additional control
measures, in fact there may not be additional mandatory control
measures required because the area may already have such measures
because of its classification for the 1-hour standard and the anti-
backsliding provisions. However, an area that needs more time to attain
may also need additional emissions reductions to reach attainment.
These reductions may be achieved through implementation of measures
that are necessary to demonstrate RFP requirements or additional
reductions beyond RFP may be needed. Preliminary analyses indicate that
already required control measures (e.g., motor vehicle and
[[Page 71632]]
nonroad-engine rules, CAIR, etc.) may largely or fully fulfill RFP
requirements for many areas and that they will provide substantial
progress toward attainment for most areas.
Many areas may have significant creditable reductions as a result
of Federal motor vehicle and nonroad rules, the NOX SIP
Call, and the CAIR. With the statutory exceptions enumerated above,
assured emissions reductions that will occur in an area after the base
year can be credited toward meeting an RFP emission reduction
milestone.
To reduce interstate ozone transport, the CAIR (described above in
section IV.B.) established statewide ozone-season NOX
budgets for 25 States and the District of Columbia (i.e., the eastern
part of the U.S. where all 8-hour nonattainment areas are classified as
moderate or below). As noted above, the first phase of NOX
reductions under CAIR starts in 2009 (covering 2009-2014); the second
phase of NOX reductions begins in 2015 (covering 2015 and
thereafter).
With respect to timing of reductions, the following table shows how
summertime NOX reductions from local CAIR sources that will
be achieved by May 1, 2009, or earlier can assist in demonstrating RFP.
------------------------------------------------------------------------
Type of 8-hour nonattainment Relationship of CAIR
area RFP requirement * and RFP
------------------------------------------------------------------------
--Subpart 1 areas with Meet RFP through CAIR reductions not
attainment dates within 5 showing of required prior to
years of designation; expeditious ozone season
attainment. preceding latest
attainment date.
--Subpart 2 moderate areas
for which of expeditious
attainment is no later than
5 years after designation.
Subpart 1 areas with Must demonstrate RFP CAIR reductions in
attainment dates 6-10 years through their 2009 can help
from designation. attainment date. fulfill RFP
requirement.
Subpart 2 marginal areas.... No subpart 2 RFP Not applicable.
requirement for
marginal areas.
Subpart 2 moderate areas Subject to RFP CAIR NOX reductions
with an attainment date similar to subpart in 2009 can help
later than 5 years after 1 areas; must fulfill RFP
designation. demonstrate RFP requirement.
through their
attainment date.
Subpart 2 moderate-and-above 15% VOC reduction CAIR 2009 NOX
areas that did not required between reductions can help
implement 15% VOC 2002 and 2008; demonstrate
reductions for 1-hour ozone continued progress continued progress
standard. required through after 2008
attainment date. attainment date.
------------------------------------------------------------------------
* RFP requirement descriptions in table are abbreviated; RFP
requirements are more precisely described elsewhere in preamble and
rule text.
The CAIR provisions do not require States to require emissions
reductions prior to January 1, 2009. However, States may choose to
require or some sources may elect to apply CAIR-level NOX
controls earlier than that date. If such controls are made enforceable
in the SIP (e.g., through a specific rule), the State may take RFP
credit for such emissions reductions for the RFP period (i.e., an RFP
period ending earlier than December 31, 2008) during which the
reductions occur.
The RFP provisions in the CAA for both subpart 1 and subpart 2
areas require that actual emissions be reduced from the baseline by the
milestone year. Only emissions reductions required to be achieved
during an RFP period may be credited toward the State's RFP obligation
for that period. In developing their RFP plans, States will have to
provide their best estimate of the CAIR-affected sources that are
expected to actually reduce emissions to meet the CAIR requirements and
those that are expected to meet CAIR through holding allowances and not
actually reducing emissions.
Local CAIR NOX reductions that States must require by
May 1, 2015, could assist in meeting RFP for an area that is bumped up
to severe and demonstrates attainment cannot be achieved before the end
of the 2015 ozone season.
b. Summary of Final RFP Features
We are adopting nearly all the approaches set forth in our proposed
rule for the various 8-hour RFP issues. We are making exceptions where
convincing arguments were presented by commenters for a suitable
alternative or where, through reassessment of the issue, EPA was able
to develop a better option that still reflects the concepts in the
original proposal. The issues for which we have adopted approaches that
vary from the proposal are: (a) The timing of the submission of the RFP
plan; (b) the structuring of RFP requirements in subpart 1 areas; (c)
the implementation of RFP in areas designated for the 8-hour ozone
standard that entirely or in part encompass an area that was designated
nonattainment for the 1-hour ozone standard; and (d) the substitution
of controls from outside the nonattainment area within 100 kilometers
(km) for VOC and 200 km for NOX. These changes are discussed
in the sections below.
In developing an approach for addressing the RFP requirements for
the 8-hour ozone standard, we are adopting the following:
The same baseline year would be used both to address
growth (in emissions, vehicle miles traveled (VMT) or otherwise) and to
calculate the RFP target level. The baseline year of 2002 applies for
areas with an 8-hour ozone nonattainment designation effective in June
2004.
Emissions reductions from outside the nonattainment area
up to 100 km for VOC and 200 km for NOX (and statewide for
areas that are part of a regional strategy) would be allowed consistent
with (a) the concepts in EPA's existing December 1997 interim
implementation policy for 1-hour ozone NAAQS \34\, and (b) with the
constraint that in all cases the distances in the policy provide only a
general policy presumption that, if used, would need data in the record
showing that reductions from sources in the specific locations outside
the nonattainment area benefit the nonattainment area. This is
discussed further below in section IV.E.12. of this preamble.
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\34\ Memorandum of December 29, 1997 from Richard D. Wilson to
Regional Administrators, Regions I-X re ``Guidance for Implementing
the 1-Hour Ozone and Pre-Existing PM10 NAAQS.'' Located at URL:
http://www.epa.gov/ttn/oarpg/t1/memoranda/iig.pdf. This policy
recognized that VOC emissions up to 100 km and NOX
emissions up to 200 km from the nonattainment area could be relied
on for RFP. Those distances resulted from Federal Advisory Committee
Act discussions cited earlier and generally represent transport of 1
to 2 days. We still believe it is appropriate to allow this credit.
However, as noted below, because we received concerns about this
policy outside the rulemaking process, we are in the process of
subjecting this policy to a technical review and may revise it in
light of that review.
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For all 8-hour nonattainment areas classified under
subpart 2 as moderate
[[Page 71633]]
and above that had not met the 15 percent VOC emission reduction
requirement for the 1-hour standard, the RFP requirements specified in
subpart 2 would apply, namely a 15 percent VOC emission reduction,
accounting for growth, in the first 6 years after the baseline year for
moderate and above ozone nonattainment areas. In addition, for all 8-
hour nonattainment areas classified as serious and above, the RFP
provisions in subpart 2 require a VOC or NOX emission
reduction of at least three percent per year averaged over each
consecutive 3-year period beginning 6 years after the baseline year.
(See section 182(c)(2)(B)).
Areas classified under subpart 2 as moderate that had met
the 15 percent VOC emission reduction requirement for the 1-hour
standard are treated in the final rule like areas covered under subpart
1.
Areas classified under subpart 2 as serious and above that
had met the 15 percent VOC emission reduction requirement for the 1-
hour standard would be subject to the RFP requirement in section 172(e)
and the final rule would require them to obtain an average of 3 percent
annual reductions of VOC and/or NOX emissions reductions for
the first 6 years after the baseline year and every subsequent 3 years
out to their attainment date.
The periods for RFP under subpart 2 for the 8-hour ozone
NAAQS run from the date of the baseline year, and would be equivalent
to the periods Congress established in subpart 2, which applied for the
1-hour NAAQS. Thus, the first 15 percent reduction would be required
for the 6-year period starting after the end of the last day of the
baseline year (e.g., January 1, 2003-December 31, 2008). The first 3-
year period for the subsequent (average of) three percent per year
emission reduction requirement in serious and higher areas would begin
6 years after the end of the last day of the baseline year (e.g.,
January 1, 2009-December 31, 2011). However, the last period for any
area would end on the attainment date for the area.
Subpart 1 areas with attainment dates 5 years or less
after designation can meet the RFP requirement by achieving the
emission reductions necessary to attain as expeditiously as
practicable. These emissions reductions must be implemented by the
beginning of the full ozone season prior to the attainment date (See 40
CFR Sec. 1.908).\35\ For subpart 1 areas with attainment dates beyond
5 years after designation, the RFP SIP must provide for a 15 percent
emission reduction (either NOX and/or VOC) from the baseline
year within 6 years after the baseline year. For each subsequent 3-year
period out to the attainment date, the RFP SIP would have to provide
for an additional increment of progress. The increment for each 3-year
period would be a portion of the remaining emission reductions needed
for attainment beyond those reductions achieved for the first increment
of progress (e.g., beyond 2008 for areas designated nonattainment in
June 2004). Specifically, the amount of reductions needed for
attainment should be divided by the number of years needed for
attainment after the first increment of progress in order to establish
an ``annual increment.'' For each 3-year period out to the attainment
date, the area must achieve roughly the portion of reductions
equivalent to three annual increments.\36\
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\35\ With today's rulemaking, this provision is now codified as
40 CFR 51.908(d).
\36\ For example, if the area's attainment date is 2014, and a
total of 30 percent reduction is needed between the end of 2008 and
the attainment date (a 6-year period) to reach attainment, the
``annual increment'' would be 5 percent (i.e., \1/6\ of 30 percent).
Thus, the area must achieve roughly the portion of reductions
equivalent to three annual increments or 15 percent during the first
3 years (2009, 2010, 2011), and the remaining amount over the next 3
years (2012, 2013, 2014). Additional discussion of what is meant by
``roughly proportional'' appears in he full discussion of RFP for
subpart 1 areas in section IV.E.7. of this preamble.
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Subpart 2 moderate or higher areas that had not met the 15
percent VOC reduction requirement under the 1-hour standard would be
subject to section 182(b)(1) for the 8-hour standard and would need to
obtain the emissions reductions within 6 years after the baseline year
(e.g., for areas designated in June 2004, the reductions would need to
occur by the end of 2008, based on a baseline year 2002).
Reductions from any Federal and regional measures
promulgated after 1990 (except those measures that were not creditable
under the CAAs creditability provisions (section 182(b)(1)(D)) and
achieved after the baseline year are creditable for the RFP
requirement.
Allow use of the ``Clean Data Policy.''
c. Comments and Responses
This set of comments and responses on our proposal on RFP are of a
general nature. Comments and responses on specific topics appear with
the sections below on those topics.
Comment: One commenter stated that EPA's proposed 8-hour ozone rule
would sharply slow momentum to implement health protective emission
reduction strategies in areas with unhealthful air quality. It would
curtail the effectiveness of transportation conformity in areas with
inadequate air quality, including both old and new ozone nonattainment
areas. It would do this by proposing to eliminate any further RFP
requirements for pollution reduction in existing 1-hour ozone areas.
Response: The EPA has developed anti-backsliding provisions to
ensure continuing progress toward attainment of the ozone NAAQS. Under
these provisions, areas that are nonattainment for the 8-hour standard
must continue to meet most obligations for the 1-hour standard,
including RFP requirements. Those provisions (adopted as part of the
Phase 1 Rule published April 30, 2004) will ensure areas maintain
progress in achieving emissions reductions in areas with unhealthful
air quality. Additionally, 8-hour ozone nonattainment areas with
attainment dates later than 5 years after designation must meet
specified increments of reductions as provided in more detail below.
Comment: Another commenter recommends that EPA not strictly
interpret the CAA requirement of a 15 percent reduction in VOC in the
first 6 years. If reductions in VOC would not assist the area in
progress toward attainment and if an area can provide an analysis that
it is at least as sensitive to NOX controls, then the area
should be able to reduce NOX emissions for RFP requirements.
Response: We addressed in general those comments that recommended
alternatives to the mandatory measures of subpart 2 (which includes the
RFP requirement) in the response to comments above under the topic,
``Should prescribed requirements of subpart 2 apply in all 8-hour
nonattainment areas classified under subpart 2, or is there flexibility
in application in certain narrowly-defined circumstances?'' We conclude
in that section that EPA has no discretion to broadly waive mandatory
requirements. However, we noted that case law may provide support for
case-by-case waivers where implementation of a measure would produce an
absurd result.
Comment: One commenter stated that EPA should consider highly
reactive VOC reductions that achieve ozone reductions equivalent to an
average of 3 percent per year reduction of VOC and/or NOX as
meeting RFP requirements.
Response: The CAA's RFP provisions do not appear to provide for
variations
[[Page 71634]]
in the required percent reduction in VOC based on differences of
reactivity of the various VOC compounds. However, EPA is participating
with a group called the Reactivity Research Working Group, along with
representatives from States, industry and universities, to study the
scientific aspects of reactivity and to try to determine if more cost-
effective and greater ozone reductions can be achieved through use of
the concept. The requirement to obtain the required percent reduction
of total VOCs remains, and if EPA decides to propose a change, it would
be undertaken in a separate rulemaking action.
2. What is the content and timing of the plan for addressing the RFP
requirements under section 182(b)(1) and 182(c)(2)(B) for areas covered
under subpart 2?
[Section VI.I.3 of June 2, 2003 proposed rule (68 FR 32833); Sec.
51.910(a)(1)(ii) of the draft and final regulatory text.]
a. Background
Section 182(b)(1) requires areas classified as moderate and above
to submit a plan to achieve a 15 percent reduction in VOC emissions
over a 6-year period following the baseline year. Section 182(c)(2)(B)
requires serious and above areas to achieve an average of nine percent
additional emissions reductions for each subsequent 3-year period. We
proposed two options regarding how this requirement might apply for
purposes of implementing the 8-hour NAAQS.
(i) Option 1. Require 15 percent VOC reductions within 6 years
after the baseline year for all areas designated moderate and above for
the 8-hour ozone NAAQS. After 6 years, all serious and above areas
would be required to achieve a nine percent reduction in VOC and/or
NOX emissions every 3 years, i.e., an average of three
percent per year, until attainment.
(ii) Option 2. For those areas that have an approved 15 percent
plan for their 1-hour ozone SIPs, an additional 15 percent VOC
reduction is not necessary. Subpart 2 areas that have approved 15
percent plans for the 1-hour ozone standard would be considered to have
met the statutory 15 percent requirement. Instead, such an area that is
classified as moderate for the 8-hour standard would be subject to the
general RFP requirements of subpart 1 in the same manner as subpart 1
areas. Such an area that is classified as serious and above for the 8-
hour standard would be subject to the RFP requirement in section
182(c)(2)(B) and would have to include in their SIPs an RFP plan that
would achieve an average of three percent per year of VOC and/or
NOX over each 3-year period starting at the end of the
baseline year out to their attainment year.
We recognized in the proposal that for serious and above areas it
would be difficult to adopt and implement emission controls that would
provide for the first nine percent emission reduction within 3 years
after nonattainment designation. Therefore, consistent with what
Congress did under section 182(b)(1), we proposed to allow the first
RFP increment to be averaged over 6 years. We proposed that an area
classified serious or above submit its RFP plan within 2 years after
designation such that it provides for 18 percent emissions reductions
(VOC and/or NOX) over the first 6 years from the baseline
year (e.g., January 1, 2003 to December 31, 2008 using the proposed
2002 baseline year). Then, within 3 years after designation, submit a
plan that provides 9 percent emissions reductions (VOC and/or
NOX) over each of the next 3-year periods until the area's
attainment date (e.g., from January 1, 2009 to the attainment date).
The proposal noted that this option recognizes previous efforts by
areas that submitted 15 percent plans as required under the 1-hour
ozone NAAQS and provides flexibility to States to use a mix of
NOX and VOC reductions as appropriate to meet the additional
ROP/RFP requirements. For many areas of the country, particularly in
the Eastern U.S. outside major metropolitan areas, there is a greater
need for NOX reductions rather than VOC reductions to bring
about reduced ambient ozone levels. Areas do not have the flexibility
to control NOX under the 15 percent requirement--
NOX substitution is only allowed under section 182 for the
post-1996 RFP requirement (three percent per year averaged over 3
years). We believe that the statute can be interpreted to require the
mandatory 15 percent VOC reduction only once for a given area.
Once the 15 percent VOC reduction requirements have been met, an
area would instead be subject to the other RFP requirements of the CAA.
In some cases, such as for serious and above areas, this might result
in an obligation to achieve greater emissions reductions, i.e., 18
percent rather than 15 percent for the 6-year period, but the area
would have the flexibility to choose either VOC or NOX
reductions as appropriate. We indicated in the proposal that we
preferred this second option because it provides more flexibility for
the RFP plan to be consistent with the area's needs in attaining the
standard. The draft regulatory text incorporated this option.
The proposal did not specifically address an 8-hour area that is
partially comprised of one or more 1-hour ozone nonattainment areas
with approved 15 percent plans and one or more areas that were not
previously subject to the 15 percent requirement.
b. Summary of Final Rule
We are adopting the second option described in the Background
above, as adjusted in response to comment.
1. Final rule for 8-hour areas comprised in total of one or more 1-
hour nonattainment areas with approved 15 percent plans for the 1-hour
standard.
Those 8-hour areas that are composed entirely of one or more 1-hour
areas that have approved 15 percent plans for their 1-hour ozone SIPs,
will be considered to have met the 15 percent VOC requirement in
section 182(b)(1). Such areas that are classified as moderate would
instead be subject to the more general RFP requirements of subpart 1.
As discussed below, the subpart 1 requirement would depend on the
moderate area's attainment date as follows:
Moderate areas that have an attainment date of 5 years or
less after their 8-hour designation, for which all portions of the area
have previously met their 15 percent requirements under the 1-hour
standard, will be subject to subpart 1 RFP requirements, which will be
satisfied with measures that demonstrate attainment as expeditiously as
practicable.
Moderate areas that have an attainment date beyond 5 years
after their 8-hour designation, for which all portions of the area have
previously met their 15 percent requirements under the 1-hour standard,
will be subject to subpart 1 RFP requirements, which will be satisfied
with a plan to demonstrate 15 percent emissions reductions (which may
be either VOC or NOX or a combination of both) from 2002 to
2008, and any additional emission reductions needed for attainment
beyond 2008.
Such areas that are classified as serious or above would be subject
to the RFP requirements of section 182(c)(2)(B) and would need to
submit a plan achieving an average of 3 percent reductions per year
over the 6 years following the baseline year and then an average of 3
percent per year for each subsequent 3-year period out to the
attainment year.\37\
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\37\ As discussed below in section 5 (the discussion of the
timing of submission of the RFP plan) the RFP plan would have to be
submitted within 3 years after designation (not 2 years as
proposed).
---------------------------------------------------------------------------
[[Page 71635]]
2. Final rule for 8-hour areas comprised in part of one or more 1-
hour attainment areas with an approved 15 percent plan for the 1-hour
standard and in part of one or more areas without approved 15 percent
plans for the 1-hour standard.
For 8-hour moderate areas that include all or part of one or more
1-hour areas with an approved 1-hour 15 percent plan, but also include
areas that were not subject to the 1-hour 15 percent plan, the final
rule would allow the area to choose between two alternative approaches
that are consistent with the proposed rule.
Approach 1. Develop a new baseline and new 8-hour 15
percent VOC ROP emission reduction target for the entire 8-hour area.
Emissions reductions that occur after the 2002 baseline emissions
inventory year are creditable except as limited by section 182, as
described elsewhere in this final rule. The reductions must be of VOC
only.
Approach 2.
Treat the 8-hour nonattainment area as divided between
portions of the area that are subject to an approved 15 percent VOC-
only plan for the 1-hour standard and the portions of the area that are
not subject to a 15 percent plan for the 1-hour standard.
For those areas not subject to an approved 15 percent plan
for the 1-hour standard, States must establish a separate 15 percent
VOC target under subpart 2. VOC emissions reductions to meet the 15
percent requirement may, however, come from across the entire 8-hour
nonattainment area.
For the portion of the area with an approved 15 percent
plan for the 1-hour standard, the subpart 1 RFP requirements will apply
if the area is classified as moderate for the 8-hour standard and the
section 182(c)(2)(B) RFP requirement will apply if the area is
classified as serious or above for the 8-hour standard. These
requirements would apply as described above for areas comprised
entirely of areas with approved 15 percent plans for the 1-hour
standard.
c. Comments and Responses
Comment: One commenter expressed concern that for a number of
subpart 2 areas that were nonattainment for the 1-hour standard,
especially those dominated by mobile source emissions and/or those with
existing stringent stationary source controls, it may be difficult to
achieve another 18 percent precursor emission reduction within 6 years
from the baseline year and then an additional 3 percent per year
precursor reduction after that until the area's attainment date.
Specific areas were mentioned such as the South Coast District of
California and the Houston-Galveston Area, which the commenter
indicated will be well beyond best available control technology (BACT)
controls and in some cases at or near lowest achievable emission rate
(LAER) NOX controls on stationary sources making them
dependent on mobile source fleet turnover for SIP RFP emissions
reductions. The commenter further suggested that EPA should have
available approved policy options that allow areas in such predicaments
to maintain approved SIPs if additional emissions reductions are not
available to meet RFP requirements and/or if available emission
reduction techniques might be counterproductive to other local and
regional air quality goals.
Response: We addressed in general those comments that recommended
alternatives to the mandatory measures of subpart 2 (which includes the
RFP requirement) in the response to comments above under the topic,
``Should prescribed requirements of subpart 2 apply in all 8-hour
nonattainment areas classified under subpart 2, or is there flexibility
in application in certain narrowly-defined circumstances?'' We
concluded in that section that EPA has no discretion to broadly waive
mandatory requirements. However, we noted that case law may provide
support for case-by-case waivers where implementation of a measure
would produce an absurd result. Additionally, we note that section
182(b)(1)(A)(ii) specifically addresses the situation where an area
demonstrates that it cannot achieve the required 15 percent reduction.
It provides that an area may achieve less than the 15 percent VOC
reduction required where the State demonstrates (1) NSR requirements
apply as they would in an area classified as extreme except that the
terms ``major source'' and ``major stationary source'' shall include
any source with the potential to emit at least 5 tpy of VOCs; (2) RACT
is required for all major sources (i.e., a source with the potential to
emit at least 5 tons per year of VOCs; and (3) the plan includes all
measures that can feasibly be implemented in light of technological
achievability.\38\
---------------------------------------------------------------------------
\38\ Section 182(c)(2)(B)(ii) also contains a similar RFP
provision for serious and higher classified areas that allows less
than 3 percent of baseline emissions each year after the initial 15
percent reduction after designation and classification.
---------------------------------------------------------------------------
Comment: Another commenter supported EPA in recognizing the
previous efforts of areas to meet ROP requirements under the 1-hour
standard. The commenter concurred with EPA's preferred option, which
allows States the flexibility to choose a combination of NOX
and VOC strategies to meet ROP/RFP requirements consistent with an
area's need to meet the standard.
Response: We agree with the commenter that if an area has already
met the 15 percent VOC emission reduction requirement for the 1-hour
standard, the area should not be required to meet that requirement a
second time for the 8-hour standard but instead will be subject to the
other applicable RFP provisions of the CAA.
Comment: One commenter preferred Option 1 as more protective of air
quality and more consistent with the requirements of the CAA. Option 1
would require States to develop RFP plans based on severity and local
situation. Option 2 has some attractive features by recognizing
progress that States have already made. This commenter believed that
Option 2 is problematic, however, because it relies on plans developed
based on 1990 to 1996 emissions. This time period has passed.
One commenter believed EPA to be completely without authority to
waive the 15 percent RFP plan requirement, which is an explicit mandate
of subpart 2. A 15 percent ROP plan under the 1-hour standard cannot
possibly satisfy the 15 percent RFP plan obligation for the 8-hour
standard, because the new RFP requirement is designed to implement a
revised NAAQS and is measured from a different baseline year. They
further believe that EPA offers no plausible legal rationale for
waiving the 15 percent ROP requirement, and, indeed, none exists.
Moreover, although the agency proposed to require RFP demonstrations
for the first 6 years for serious and severe areas, there is no lawful
or rational basis for exempting moderate areas from this statutory
requirement. Allowing States to rely on their 1-hour 15 percent ROP
demonstrations is further unsupportable because those demonstrations
are almost certainly no longer valid.
Response: The EPA acknowledges that under subpart 2 we must require
15 percent VOC reductions for all moderate and above areas, but we
maintain that if an area has met this requirement while subject to
section 182(b)(1)(A) for the 1-hour standard, they will not have to
meet it again for the 8-hour standard. The EPA believes that the CAA is
quite clear that the SIP must provide for a 15 percent reduction in
baseline VOC emissions for some period after 1990 in an area subject to
section 182(b)(1)(A), and, consequently, the SIP for any area newly
subject to section 182(b)(1)(A) must provide for a 15 percent reduction
[[Page 71636]]
in VOC baseline emissions. But, EPA disagrees that the CAA plainly
requires that the SIP for an area must require a second 15 percent
reduction in VOC baseline emissions under a revised ozone standard. The
EPA believes that section 182(b)(1)(A) limits our discretion only to
the extent that we cannot let the SIP for any area classified as
moderate or worse for the 8-hour standard avoid a demonstration that
the SIP contains sufficient measures to achieve a 15 percent reduction
in VOC baseline emissions and further limits our discretion to allow
NOX substitution for the 15 percent RFP demonstration
requirement under section 182(b)(1)(A).
If serious and above areas have already met the 15 percent
requirement under the 1-hour standard, they must meet the next RFP
requirement, namely, the section 182(c)(2)(B) RFP requirement, which
will actually achieve greater reductions, i.e., 3 percent per year over
6 years for a total of 18 percent, but they can meet it with either VOC
or NOX reductions. For moderate areas that have already met
the 15 percent VOC emission reduction requirement for the 1-hour
standard, EPA believes appropriate RFP under subpart 1 should be
achieved. For purposes of RFP under subpart 1, there is nothing that
limits such reductions to VOC. This provision simply requires
reasonable annual incremental reductions towards attainment by the
applicable attainment date, and this could be achieved by either VOC or
NOX emissions reductions or a combination of both.
Section 182(b)(1)(A) is the only statutory provision that limits
State discretion to substitute NOX reductions for VOC
reductions. This applies only for purposes of the initial 15 percent
reduction requirement for the 6-year period after the baseline year.
Comment: Another commenter believed the subpart 2 provisions of the
CAA do not allow for NOX for VOC substitutions for the
initial 15 percent RFP requirements.
Response: We agree that the 15 percent requirement in section
182(b)(1) does not allow the substitution of NOX for VOC.
However, the RFP requirements in section 172(c)(2) and 182(c)(2)(B) are
not constrained by that limitation and either VOC or NOX
emissions reductions may be counted toward meeting RFP under those two
provisions.
Comment: Some commenters believed an additional 15 percent VOC
reduction should not be necessary for 8-hour areas that encompass in
whole or in part a 1-hour nonattainment area with an approved 15
percent plan. Such areas should simply be required to achieve whatever
NOX or VOC emissions reductions are needed for attainment.
One commenter noted that the proposed Sec. 51.910(a)(ii) did not
address all boundary change scenarios consistent with our proposed
approach found in section VI.I.9. of the June 2, 2003 proposed rule (68
FR 32835).
Response: We agree with the commenter that an area with an approved
15 percent plan for the 1-hour standard is not required to adopt a
second 15 percent plan under section 182(b)(1) for purposes of the 8-
hour standard. However, if a portion of the 8-hour area was not subject
to an approved 15 percent plan for the 1-hour standard, section
182(b)(1) applies to that portion of the 8-hour area and may be met by
one of two approaches described above and in the regulatory text. We
agree with the second commenter who noted that the proposed rule did
not explicitly address all possible boundary scenarios; we believe we
have fully addressed these different boundary scenarios in the final
rule in a manner consistent with the proposal.
Comment: A commenter indicated that they preferred to work with EPA
in the development of an alternative that will eliminate or minimize
the planning burdens associated with development of a 15 percent RFP
plan for one town. One alternative might be the development of a
``comparability demonstration,'' showing that the town had implemented
the same controls that had been previously responsible for achieving a
15 percent reduction in VOCs in the l-hour ozone nonattainment area
associated with the 8-hour nonattainment area including this town.
Response: We are willing to work with individual areas as they
develop their 8-hour 15 percent plans and to help them avoid
unnecessary planning burdens. We believe that the portion of an 8-hour
area not subject to an approved 1-hour 15 percent plan may be able to
meet the 15 percent obligation for the 8-hour standard if the area
adopts the same VOC control measures (for example, VOC RACT at the same
source thresholds, I/M, etc. * * *) as in the portion of the 8-hour
nonattainment area subject to a 15 percent plan for the 1-hour standard
and if the area has the same mix of emissions sources as in the area
subject to the 15 percent plan for the 1-hour standard. We anticipate
we could propose approval of a SIP on this basis where supported by the
record.
Comments on Draft Regulatory Text
Comment: Another commenter generally supported the RFP provisions
but suggested that in section 51.910(a)(1)(ii)(A) of the draft
regulatory text, we insert the language shown in bold:
``An area classified as moderate or higher that has the same boundaries
as an area for which EPA fully approved a 15 percent plan for the 1-
hour NAAQS is not subject to section 182(b)(1) of the CAA for the 8-
hour NAAQS, but instead--(A) If classified as moderate, is subject to
RFP under section 172(c)(2) of the CAA and shall meet that obligation
by submitting 3 years after the effective date of its designation a SIP
revision that provides for implementation of all emission reductions of
VOCs and/or NOX needed for attainment by the beginning of the ozone
season in the area's attainment year.'' The commenter claimed this
language is consistent with the approach EPA has taken in other
provisions of this draft.
Response: The commenter's concern is noted. Section 51.910 has been
restructured for reasons noted elsewhere in this preamble and it
addresses the commenter's concern.
Comment: One commenter suggested that Sec. 51.910(a)(3) of the
draft regulatory text be revised to allow (even if conditional)
NOX reductions to be substituted for VOC reductions (for any
ROP or RFP requirement) whenever such reductions would ``result in a
reduction in ozone concentrations at least equivalent to that which
would result from the amount of VOC emission reductions required.''
Response: As noted above we do not believe the CAA allows
substitution of NOX for VOC to meet the 15 percent
requirement of section 182(b)(1).
Comment: One commenter stated that draft Sec. 51.910(a)(1)(ii)
eliminates the 15 percent requirement for areas that have already
achieved this requirement under the 8-hour standard and supported that
change. However, they further state that the strict criteria of ``same
boundaries'' should be revisited because there may be limited changes
in the nonattainment areas ``boundaries'' when areas are designated for
the 8-hour standard. Such changes should not negate this provision. A
broader definition needs to apply to this section to allow for changes
to boundaries in nonattainment areas between 1-hour and 8-hour
designations where such changes do not substantially alter the
geographical or population characteristics for the area.
Another commenter supports an exemption for 8-hour nonattainment
areas that have met the 15 percent ROP requirement for the 1-hour
NAAQS. The commenter requests that EPA clarify the criteria that the
area must have the same geographic boundaries to qualify for the
[[Page 71637]]
exemption. This means that in the geographic areas for which a State
has an approved 15 percent plan, the 15 percent requirement will not
apply, and the 15 percent requirement is only intended to apply to the
new geographic areas of the 8-hour nonattainment area, and that the 15
percent reduction of emissions from the new areas could come from the
entire nonattainment area to satisfy this requirement.
Response: As we explain in our summary of the final rule, we have
recognized that there are a variety of boundary scenarios for 8-hour
nonattainment areas in relation to the boundaries of areas for the 1-
hour standard. We have modified the draft regulatory text such that the
final rule speaks in terms of 8-hour areas that include all or part of
an area with an approved 15 percent plan for the 1-hour standard. For
those portions of the 8-hour area with an approved 1-hour 15 percent
plan, the 8-hour area is not required to develop a second 15 percent
plan under section 182(b)(1) for purposes of the 8-hour standard, but
instead will be subject to section 172(c)(2) if it is an 8-hour
moderate area or subject to section 182(c)(2)(B) if it is classified as
serious or above for the 8-hour standard. If the 8-hour area includes
both areas that were subject to an approved 15 percent plan for the 1-
hour standard and areas that were not, then the 8-hour area can choose
whether to develop a section 182(b)(1) 15 percent plan for the entire
8-hour area or to develop a 182(b)(1) plan only for the area not
previously subject to such a plan and to treat the remaining portions
of the area under section 172(c)(2) or 182(c)(2)(B), as described
above.
As noted, EPA does not believe the statute allows it to relieve any
area that has not already met the 15 percent requirement for the 1-hour
standard from the obligation to meet that requirement except as
provided in section 182(b)(1)(A)(ii).
3. What baseline year should be required for the emissions inventory
for the RFP requirement?
[Section VI.I.4. of June 2, 2003 proposed rule (68 FR 32833); Sec.
51.909 of the draft regulatory text; Sec. 51.910(d) of the final
regulatory text.]
a. Background
The baseline inventory for RFP (under subpart 2) is used as the
starting point for the determination of a target level of emissions for
the future year RFP and as the baseline from which creditable
reductions are determined. We designated ozone nonattainment areas in
April 2004. Under the ``Consolidated Emissions Reporting Rule'' (67 FR
39602; June 10, 2002) revised emissions inventories are required for
the years 2002 and 2005; therefore, we proposed to require use of the
2002 inventory as the baseline inventory for the RFP requirement. This
would be the most recent inventory available at the time of
designation. We issued a memorandum identifying 2002 as the anticipated
emissions inventory base year for the SIP planning process to address
the 8-hour ozone and the PM2.5 standards.\39\
---------------------------------------------------------------------------
\39\ Memorandum of November 18, 2002, from Lydia Wegman and
Peter Tsirigotis, ``2002 Base Year Emission Inventory SIP Planning:
8-hr Ozone, PM2.5 and Regional Haze Programs.'' This
document is available at the following Web site: http://www.epa.gov/ttn/oarpg/meta.442.1.2002baseinv.pdf
.
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b. Summary of Final Rule
As set forth in our proposed rule, for areas designated
nonattainment for the 8-hour ozone NAAQS with an effective date of June
15, 2004, we are requiring States to use the 2002 inventory as the
baseline inventory for the RFP requirement. As noted in the proposal,
the inventory for the 2002 calendar year would be the most recently
available inventory at the time of designation in 2004. However, in
response to several comments, we are allowing States the option of
justifying the use of an alternative baseline inventory year for RFP.
To justify an alternative, the State would have to demonstrate how the
alternative year meets the CAA's provisions for RFP and provide a
rationale for why it is appropriate to use the alternative baseline
year rather than 2002 to comply with the CAA's RFP provisions. We
believe that for multi-State nonattainment areas, several States must
agree on a single baseline. Even if a State chooses an alternative
baseline inventory year for RFP, 2002 remains the valid baseline year
for transportation conformity purposes as described in 40 CFR 93.119.
The baseline year test is used only in conformity determinations prior
to the submission of a SIP that establishes motor vehicle emissions
budgets (e.g., an RFP SIP). Therefore, areas using the baseline year
test would continue to use 2002 as the baseline year for conformity
purposes because an area's baseline year would not be changed until an
RFP SIP is submitted. Once an RFP SIP is submitted and the motor
vehicle emissions budgets in that SIP are found adequate or are
approved the area would no longer use the baseline year test. Instead
the area would use the adequate or approved budgets in the RFP SIP in
conformity determinations.
The baseline emissions inventory is calculated as of the effective
date of an area's nonattainment designation using the most recent
calendar year for which a complete inventory is required to be
submitted to EPA under subpart A of 40 CFR part 51, subpart A. Under 40
CFR part 51, subpart A, States are required to submit a comprehensive
inventory on 3-year cycles within 17 months after the close of the
reporting period. Thus, the 2002 inventory was due 17 months after the
December 31, 2002 close of the reporting period, i.e., was due by June
1, 2004. For those areas designated nonattainment for the 8-hour ozone
NAAQS effective June 15, 2004 (69 FR 23858; April 30, 2004), the
baseline emissions inventory should be based on the calendar year 2002
because the 2002 inventory was due under 40 CFR part 51, subpart A,
prior to the time of designation. For areas with an effective
nonattainment designation in the future, the baseline inventory will be
for the calendar year of the most recent triennial inventory as of the
date of designation.\40\ As provided above, the State may use an
alternative baseline only if it is demonstrated that it is consistent
with the CAA and the State demonstrates why it is appropriate.
---------------------------------------------------------------------------
\40\ For example, where the effective date of designation to
nonattainment for an area for the 8-hour ozone NAAQS is after June
1, 2007 but before June 1, 2010, the baseline inventory will be for
calendar year 2005.
---------------------------------------------------------------------------
c. Comments and Responses
Comment: Some commenters agreed there is a reasonable basis to
select 2002 as the date of emissions inventories for the purpose of
establishing creditable reductions from the inventory. States are not
required by the CAA to adopt the year of the nonattainment designation
for the 8-hour standard as the basis for their planning, even though
that was the case under the 1990 CAA Amendments. The commenter claims
there are a variety of measures that would be implemented after 2002
that local jurisdictions would like to be able to account for as new
emissions reductions in their modeling demonstrations. The commenter
thus believes that reductions between these years ``should count.'' In
addition, this was the most recent quality assured/quality controlled
inventory used to support the States' recommendations for proposed
nonattainment designations on July 15, 2003.
Several commenters recommended that the baseline year (starting the
6-year period for RFP) be set for the year in which designations were
made (i.e., 2004).
[[Page 71638]]
Response: The EPA has decided to establish 2002 as the baseline
year for RFP SIPs in conformity with both the language of the CAA and
the inventory year cycle. Of reasonable importance is the need to
maintain consistency with the periodic inventory for use in various
milestone considerations such as RFP, milestone compliance
demonstration, attainment, and contingency plans. In addition, while
there would be a difference in the RFP requirement based on the choice
of the RFP baseline, there should be little if any difference in terms
of emissions reductions needed to demonstrate timely attainment. If we
use 2002, the baseline may be higher but areas can take credit for any
2002-2004 emissions reductions from federally enforceable control
measures. If we use 2004, the baseline may be lower but areas can't
take credit for measures that produce emissions reductions between
2002-2004. Depending on the area, the difference should be minimal in
terms of the difference in the amount of reductions needed to reach
attainment and what new measures are necessary to get there. We believe
it is reasonable to select an inventory year for which States were
already required to produce an inventory rather than requiring States
to produce an additional inventory (e.g., for 2004) that is not
otherwise required. Moreover, requiring the use of an inventory for the
designation year would cause delay, as it would take the States 1-2
years after the end of 2004 to produce the inventory which would be the
basis for selecting controls to achieve the necessary reductions for
RFP and for modeling attainment. However, we are allowing States the
option of justifying the use of an alternative baseline emission
inventory, provided it meets the requirement of the CAA's RFP
provisions. As noted above, the use of an alternative year for the
baseline inventory for RFP does not change the requirement to use 2002
as the baseline year for transportation conformity as described in 40
CFR 93.119.
Comment: Another commenter referred to EPA's proposal language
regarding the RFP SIP that would have required submission of the RFP
plan within 2 years after designation. They stated that EPA is missing
the point in that the attainment and RFP submission dates established
in subpart 2 are to allow States a sufficient amount of time to achieve
the mandated goals.
That commenter referred to another alternative that would amend the
proposal to require a 1990, rather than 2002 baseline for those areas
not having a previously-approved 15 percent RFP plan. They further
commented that although a 1990 baseline would not eliminate the
planning burden associated with this requirement, it would go far
towards minimizing the necessary additional work.
Response: We disagree with the commenters who urged use of the 1990
inventories as the baseline for planning for the 8-hour NAAQS. Use of
the 1990 baseline would be unreasonable now since it would have to be
substantially recalculated due to changes in emission calculating
methodologies. Furthermore, a 1990 inventory was only required for
nonattainment areas as of enactment of the 1990 CAA Amendments and
therefore may not exist for a number of areas that are currently
designated nonattainment for the 8-hour standard. Finally, we believe
that reliance on emissions reductions that may have occurred well
before 8-hour designations and classifications should not be counted as
making progress toward attainment.
Comment: Another commenter noted that the 18 percent reduction for
serious areas would have to be achieved by 2008. This is 6 years after
the base year. The commenter noted that the 2 years that would remain
after SIP submission (from the proposed SIP due date of 2006 until
2008) would be totally inadequate to achieve either the 15 percent
reduction in VOCs or the 18 percent reduction in VOCs and/or
NOX. The commenter noted the CAA provides for submission of
RFP plans within 3 years (from 1990) in section 182(b)(1)(A) and 4
years in section 182(c)(2).
Response: The final rule reflects a change from the proposal to
allow submission of the RFP plan up to 3 years from the date of
designation. We do not believe the RFP provisions of subpart 2 of the
Act provides relief from the requirement to obtain the specified
percent reductions from the RFP baseline within the time constraints
specified in those provisions.
Comment: A comment on draft regulatory text Sec. 51.909 noted that
EPA specified various program milestone dates, which were derived from
the relationship of these dates to the expected date of initial
designation. The commenter recommends deleting all such specific date
references from the regulation, to avoid the need for revising
regulations if the initial designations are not concluded as expected.
This should be replaced by a generic approach, for example by requiring
the most recent year's data to be used as the baseline in the second
sentence of Sec. 51.909. Deleting the calendar-specific dates would
not change the result if the designations occur as planned, yet would
allow for more recent data to be used if factors beyond the agency's
control create a delay in designations. This approach also will allow
the regulation to apply to future area designation changes, such as
areas that are redesignated nonattainment at some point in the future.
Such specific dates are more appropriately included as examples in
agency guidance or within the preamble of a final rule with a
discussion of how they are derived. The regulation itself should retain
only the generic relationship between the milestone and the effective
date of designation, which is the approach taken elsewhere in the rule.
Response: Because the designations have already taken effect at
this point, we believe it is appropriate to specify 2002 as the
presumptive baseline year. The final version of the rule (now Sec.
51.910(d)) provides general language regarding the appropriate baseline
year for areas that have an effective date of a nonattainment
designation in the future.\41\
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\41\ We note that even though the draft regulatory text was
structured to place the specification of the baseline year for RFP
(as well as for attainment demonstrations) in Sec. 51.909, the
final rule places the RFP baseline year requirement in Sec. 51.910.
---------------------------------------------------------------------------
4. Should moderate and higher classified areas be subject to prescribed
additional RFP requirements prior to their attainment date?
[Section VI.I.5 of June 2, 2003 proposed rule (68 FR 32834); no
draft regulatory text; section 51.910(a)(1)(i) of final regulatory
text.]
a. Background
As noted in the proposal, for areas initially classified moderate
and higher for the 1-hour ozone standard, the baseline inventory was
defined as 1990 in the CAA Amendments. Therefore, the 6-year period for
the initial 15 percent RFP requirement ended in the same year as the
attainment date for moderate areas, viz., 1996. For areas classified
moderate and higher under the 8-hour ozone standard, however, we
proposed that the 15 percent RFP target level of emissions would be
calculated for the 6-year period after the 2002 baseline year, i.e.,
2003-2008. Moderate areas would be required to meet an attainment date
no later than 6 years after the area is designated nonattainment for
the 8-hour standard. Since the effective date of designation of
nonattainment areas is June 15, 2004, the outside statutory attainment
date would be June 15, 2010. This leaves approximately a 1\1/2\ year
gap between the end of the 6-year period for the 15 percent RFP
requirement (i.e., December 31, 2008) and the maximum statutory
attainment
[[Page 71639]]
date. If we were to also require moderate areas to obtain an additional
three percent per year emission reduction beyond 2008 for the 1\1/2\
additional years out to 2010, the RFP requirement could be more than
what we believe Congress intended for moderate areas under subpart 2.
Additional three percent per year reductions were only required for
serious and higher classified ozone nonattainment areas. We proposed
that the only specific RFP requirement applicable for moderate areas is
the 15 percent VOC requirement between the end of 2002 and the end of
2008. However, section 172(c)(2), which requires areas to meet RFP
generally, would apply for any period for which RFP is not addressed in
subpart 2. For purposes of section 172(c)(2), RFP means annual
incremental reductions as may be required by the Administrator for
purposes of ensuring attainment [CAA Section 171(1)]. Therefore, we
proposed a moderate area would need to provide any additional emissions
reductions--VOC and/or NOX--needed to provide for attainment
by the area's attainment date. In proposing this approach for this
circumstance, we interpreted the subpart 1 RFP requirement to mean that
the area must achieve whatever further reduction is needed for
attainment in the remaining period prior to the attainment date (2009
through June 15, 2010).
We proposed that serious and higher classified areas would need to
provide in their SIPs an additional average of three percent per year
emission reduction over each subsequent 3-year period beyond the
initial 6-year period through the attainment year, consistent with what
Congress specified in section 182(c)(2)(B) of the CAA.
b. Summary of Final Rule
In the final rule, we are taking the approach we proposed. We are
not prescribing additional increments of reductions for the 1\1/2\
years before the maximum attainment date for moderate areas. Such areas
must provide for any additional emissions reductions (VOC/
NOX) needed to provide for attainment by the beginning of
the ozone season prior to the area's attainment date.\42\ Serious and
higher classified areas would need to provide in their SIPs an
additional average of three percent per year emission reduction over
each subsequent 3-year period beyond the initial 6-year period through
the attainment year.
---------------------------------------------------------------------------
\42\ We note that areas must implement controls prior to the
beginning of the last full ozone season preceding the attainment
date. For moderate areas designated as of June 15, 2004, such
reductions would be needed by the beginning of the 2009 ozone
season.
---------------------------------------------------------------------------
c. Comments and Responses
Comment: One commenter suggested that following the statutory
timetable rather than the one proposed by EPA would eliminate the
problem of how to handle the ``1\1/2\ year gap between the end of the
6-year period for the 15 percent RFP requirement (i.e., December 31,
2008, as proposed by EPA) and the attainment date.'' The commenter
continued by saying that no such gap is contemplated by subpart 2,
which provides in section 18l(b)(l) that moderate area's attainment
dates and their 15-percent VOC RFP date are to be the same: 6 years
after their designation and classification.
Response: As provided in an earlier response, we do not believe the
CAA requires the end of the 15 percent RFP period and the attainment
date to be the same.
Comment: Another commenter noted the proposal states that the only
specific RFP requirement applicable for moderate areas is the 15
percent VOC requirement between the end of 2002 and the end of 2008.
However, section 172(c)(2) also applies, requiring areas to meet RFP
generally. Therefore, a moderate area would still also have to provide
any additional emissions reductions--VOC and/or NOX, i.e.,
whatever is needed to provide for attainment by the beginning of the
ozone season prior to the area's attainment date. The commenter agrees
that any additional emissions reductions needed to achieve attainment
are the only reductions that should be required of moderate areas.
Response: We agree with the commenter, and our rule requires that
for purposes of meeting RFP beyond 2008 until the area's attainment
date, moderate areas must reduce VOC and NOX emissions as
necessary to attain by the area's attainment date.
5. What is the timing of the submission of the RFP plan?
[Section VI.I.6 of June 2, 2003 proposed rule (68 FR 32834); Sec.
51.910 of the draft and final regulatory text (several locations).]
a. Background
As noted in the proposal, section 182(b)(1) requires that moderate
and higher classified areas submit their 15 percent RFP plans within 3
years after 1990. Obviously, applying the statute as written is absurd,
since we are well past that date. The CAA uses identical language for
identifying area's attainment dates under subpart 2. In our Phase 1
Rule, for purposes of attainment dates for the 8-hour NAAQS, we
interpreted the CAA's language referring to the date of enactment of
the 1990 CAA Amendments to mean the date of designations for the 8-hour
standard. We noted in the proposal that if we applied the same
interpretation for RFP plans, i.e., that they should be submitted
within 3 years after the area's nonattainment designation date (i.e.,
in 2007 if the area has an effective designation in 2004), the plans
would have to be implemented within 1 year after submission to ensure
the 15 percent emissions reductions are achieved by the end of the
relevant 6-year period (i.e., December 2008). We indicated concern that
this might not provide sources with sufficient time to achieve the
reductions by the required deadline. Therefore, we proposed that the
RFP SIP be submitted within 2 years after nonattainment designation--
namely by 2006 for areas designated in 2004. This would provide for 2
years for the State to develop and submit its RFP plan, and another 2
years for the control measures to be implemented.
We also proposed that an area classified serious or above submit
within 2 years after designation its RFP plan that provides for 18
percent emissions reductions (VOC and/or NOX) over the first
6 years from the baseline year and then submit within 3 years after
designation a RFP plan that provides nine percent emissions reductions
(VOC and/or NOX) over each of the next 3-year periods until
the area's attainment date.
b. Summary of Final Rule
In the final rule, we are taking a different approach than proposed
in light of concerns raised by States in public comments. These
commenters stated that they would need more than 2 years for
development, adoption and submission of RFP plans for the increment of
progress over the first 6 years after the baseline year. The EPA agrees
with the several commenters who urged that 3 years was more consistent
with the CAA. Additionally, 3 years is a more reasonable time period
for submission because it allows States the necessary time to move
regulatory actions through their legislative processes and allows
States to consider RFP in conjunction with their attainment
demonstrations. Therefore, for moderate and higher classified areas,
the first RFP SIP must be submitted within 3 years after the area's
nonattainment designation. For areas with a June 15, 2004 effective
date for the 8-hour designations, the SIP would be due by June 15,
2007. This would
[[Page 71640]]
provide up to 3 years for States to develop and submit RFP plans, and 1
additional year (until the end of 2008) for control measures to be
implemented. The RFP SIP for any remaining 3-year periods out to the
attainment date beyond the first 6 years also would be submitted with
the attainment demonstration, i.e., within 3 years after designation.
However, since States maintain the flexibility to submit plans early to
provide more time for implementation of their SIP control measures, we
recommend that States complete their RFP plans as soon as possible
after designation to provide as much time as possible for sources to
implement the emissions reductions. Furthermore, States may also begin
implementing their control measures before submission to EPA as part of
their SIPs, which would provide additional time sources may need to
comply.
c. Comments and Responses
Comment: Several commenters opposed EPA's proposal to shorten to 2
years the statutory 3-year period for development and submittal of 15-
percent VOC RFP plans. They claim this proposal violates the guarantee
of 3 years for plan development to the State in section 182(b)(l)(A)
and is contrary to EPA's basic proposed principle that [quoting from
the proposal] ``subpart 2 SIP submittals will be due as a general
matter by the same period of time after designation and classification
under the 8-hour standard as provided in subpart 2 for areas designated
and classified at the time of enactment of the 1990 CAA.'' The
commenters contended that subpart 2 gives EPA no authority to shorten
the statutory 3-year period. In contrast, Congress in subpart 1
authorized EPA to set a schedule for nonattainment SIP submissions.
Congress, therefore, knew how to give EPA discretion to shorten SIP
submission deadlines according to the commenters; it did not do so in
subpart 2.
Concerning the timing of submission of the RFP plan, another
commenter was concerned that the States may not have sufficient
photochemical modeling and ambient air analyses to indicate the best
mix of RFP SIP controls. Additionally, in areas dominated by mobile
source emissions, it may not be feasible to implement control measures
to achieve the RFP target within the 2 years after the proposed
required RFP SIP submission date as EPA has suggested. The commenter
suggested that EPA develop policy options that allow areas in such
predicaments to maintain approved SIPs if emissions reductions are not
available to meet RFP requirements and/or if available emission
reduction techniques might be counterproductive to other local and
regional air quality goals.
Another commenter stated revisions to State emission reduction
measures cannot be adopted easily in a 2-year time period because they
require administrative action and frequently State legislation to
approve. This period can lengthen when proposed measures like enhanced
vehicle I/M involve controversial actions affecting the public.
Logistically, a State must establish a regulation by administrative
action with public input before (though sometimes after) such a measure
is approved by the state's legislature. A number of jurisdictions'
legislatures are only in regular session to consider such measures
several months or, in alternate years. Thus, it is unreasonable for
States to have only 2 years from their nonattainment designations to
adopt new measures.
Another commenter referenced the case NRDC v. EPA, 22 F. 3d 1125,
1135 (D.C. Cir., 1994), where the Court considered the propriety of
EPA's extension of the deadlines by which States had to submit elements
of their SIPs. The Court upheld EPA's decision to extend the deadline
for submission of a SIP given EPA's failure to meet its own deadline
for providing certain necessary guidance to the States. The Court
allowed EPA to use the extraordinary remedy of a deadline extension in
this instance because Congress would have intended that the deadline be
extended to provide a party the full statutory time for acting on the
agency guidance. The commenter referenced CAA section 126(c) where EPA
may set a compliance deadline ``as expeditiously as possible, but in no
case later than 3 years after the date of such finding.''
One commenter noted that CAA section 182(b)(1)(A) as modified by
section 181(b)(1) requires for moderate areas that the RFP SIP be
submitted 3 years after designation. The commenter disagreed with the
RFP plan requirement to submit the plan 2 years after the effective
date of the nonattainment designation as not being consistent with or
supported by these CAA sections. The resources involved in developing,
proposing and adopting any SIP revision are not insignificant. In order
to ensure the most efficient use of resources, the commenter contended
that EPA should not require this SIP revision sooner than the
submission of the attainment demonstration, 3 years after the effective
date of the designations. Allowing States 3 years to submit the RFP
plan is consistent with existing CAA requirements.
Response: After consideration of the comments, we have changed the
final rule to be consistent with the approach advocated by a number of
commenters. In consideration of the 2004 designation and the need to
achieve the 2008 RFP reductions by December 2008, it seems reasonable
to EPA that States first be given sufficient time after designation to
formulate RFP plans. Therefore, the final rule allows States up to 3
years after designation to submit their RFP SIPs. However, to the
extent States are relying on newly developed rules to meet all or part
of the RFP requirement, we recommend that States adopt those rules as
soon as possible after designation to provide as much time as possible
for sources to achieve the emissions reductions.
6. How should CAA restrictions on creditable measures be interpreted?
Which national measures should count as generating emissions reductions
credit toward RFP requirements?
[Section VI.I.7 of June 2, 2003 proposed rule (68 FR 32834); Sec.
51.910(a)(4) of the draft regulatory text; Sec. 51.910(a)(3) of the
final regulatory text.]
a. Background
Section 182(b)(1) contains provisions that limit creditability
toward meeting RFP for certain limited emission reduction measures
required prior to the enactment of the CAA Amendments of 1990. We noted
in the proposal that we believe these specific restrictions should
continue to apply for purposes of the 8-hour NAAQS. The proposal noted
that Congress intended to prevent areas from taking credit for RFP only
for those specific measures that were already adopted and in place (or
required to be in place) prior to the date of enactment of the CAA
Amendments of 1990 (November 15, 1990). We said that this same holds
true for the RFP requirement as it applies to the 8-hour ozone
standard, namely preventing credit toward the mandatory RFP percent
reductions for continuing reductions from those specific measures cited
in the CAA that were already adopted and in place (or required to be
adopted and in place) prior to the date of enactment of the CAA
Amendments of 1990. There is no indication in the CAA that this
exclusion should be changed. Congress mandated many emissions
reductions in the 1990 CAA Amendments with no indication that they
should not be credited to meeting RFP or attainment of any existing or
revised NAAQS. Therefore, we proposed that all
[[Page 71641]]
emissions reductions that occur from all Federal and any other measures
not otherwise identified in section 182(b)(1)(C) and (D) and that occur
after the baseline emissions inventory year would be creditable for the
RFP requirement. A number of examples demonstrating emissions
reductions that would be creditable toward the RFP requirement were set
forth in our proposal.
b. Summary of Final Rule
We are taking the approach we proposed, under which all emissions
reductions that occur after the baseline emissions inventory year are
creditable for purposes of the RFP requirements in this section except
as specifically provided in section 182(b)(1)(C) and (D) and section
182(c)(2)(B) of the CAA. The restriction imposed by section
182(b)(1)(D) limits crediting reductions from the following four
categories:
Corrections to or additions of RACT rules as required by
CAA section 182(a)(2)(A).
Corrections to I/M programs for areas where the SIP
included or was required to include a schedule for I/M implementation
under the CAA in effect immediately before November 15, 1990.
Regulations concerning Reid Vapor Pressure (RVP)
promulgated by EPA before November 15, 1990 or required to be
promulgated under CAA section 211(h).
Motor vehicle exhaust or evaporative emissions measures
promulgated by EPA by January 1, 1990.
c. Comments and Responses
Comment: One commenter supported EPA's proposal to allow credit
towards RFP requirements of all emissions reductions, which occur after
the baseline emissions inventory year (2002) from all Federal, and any
other measures not otherwise identified under section 182(b)(1)(D).
This would include reductions from cleaner fuels and engines,
reductions from ongoing 1-hour SIP controls and VOC reductions from
implementation of MACT standards after the baseline year. The commenter
stated that this proposed approach would be critical in a number of
areas that already have stringent stationary source controls and/or in
areas dominated by mobile source emissions.
Response: The EPA acknowledges this comment of support for our
final action.
Comment: Another commenter believed that early voluntary emissions
reductions prior to 2003, and not required under the CAA, should also
be creditable toward RFP requirements. The commenter recommended that
EPA's final rule clarify that States be allowed credit for RFP for
early voluntary emissions reductions occurring prior to 2003. As a
company that has proactively taken measures to reduce NOX
emissions through innovative Combustion Initiative (an enhanced
efficiency technology), the commenter believed that EPA's regulations
should take these efforts into account as they have resulted in real
improvements to air quality. Another commenter stated that companies
who made voluntary reductions prior to 2003 would be penalized for
having undertaken such voluntary measures and, thus disallowing credit
for these reductions provides disincentives for voluntary reductions.
Response: Voluntary reductions that occur prior to January 1, 2003
will be reflected in the area's baseline inventory. This lower baseline
means that fewer reductions will be needed to achieve RFP.\43\ Allowing
an area to take credit for reducing emissions that are not included in
the inventory would result in ``double counting'' of those emissions
reductions.
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\43\ For example, if an area had VOC emissions in 2001 of 100
tons per day, and a source reduces emissions by 10 tons per day in
2002, the baseline emissions will be 90 tons per day. Thus, the area
will need to achieve 13.5 tons per day reduction to meet its 15
percent requirement, rather than 15 tons per day. However, the area
cannot take credit in the 15 percent plan for the 10 tons per day of
emissions that are not part of the baseline inventory.
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Comment: One commenter suggested that areas should be able to take
credit for MACT standards that may reduce VOC for which compliance is
required after the 2002 baseline year. The commenter said it would be
helpful to States if EPA produced a document detailing the expected VOC
reductions after implementation of MACT standards. States could claim
these reductions toward any reductions required to meet their target.
The commenter suggested that the most useful way to express the
reduction would be as a percent of the 2002 emissions.
Response: The EPA agrees that areas can take credit in RFP plans
for post-2002 VOC reductions from MACT standards. We are considering
whether to develop the recommended guidance.
Comment: One commenter objected to EPA's proposal to allow States
to claim RFP credit from any reductions achieved through post-1990
adoption of the types of measures listed in section 182(b)(1)(D). The
commenter further stated that section 182(b)(1)(D) prohibits granting
RFP credit for any measures contained on the list. Congress wanted the
RFP reductions to be new reductions rather than emission cuts that
would have occurred anyway. In the case of 8-hour nonattainment areas,
the baseline year will be 2002. Therefore, according to the commenter,
to be consistent with subpart 2, EPA must disallow RFP credit for
measures listed in section 182(b)(1)(D) adopted any time prior to 2002.
Another commenter urged EPA to consider a hybrid approach that
gives States credit for approved RFP plans that go beyond 2002,
provided that the Plan is evaluated on a 2002 baseline. This approach
would give States credit for ongoing emissions reductions, recognize
the need to address the 8-hour standard as the ozone standard (rather
than rely on plans developed to meet the 1-hour standard), and
potentially avoid some unneeded controls.
Another commenter recommended that EPA not allow emissions
reductions credit for all emissions reductions occurring after the
baseline year. Emissions reductions to satisfy the RFP requirements of
CAA section 182(b)(1) and 182(c)(2)(B) are required to be achieved by
submitting ``a revision to the applicable implementation plan to
provide for * * * emissions reductions.'' The commenter argued that
emissions reductions already required by, or accounted for in, the
applicable implementation plan may not be credited toward the new RFP
requirements. For example, reductions that were required to be achieved
by SIP or other requirements, but which were not achieved in practice
prior to the baseline year, should not be credited toward meeting the
new RFP reductions required after the baseline year. Only new measures
submitted with the new SIP revision may be credited for this purpose.
Response: The EPA believes that, with certain exceptions (see CAA
section 182(b)(1)(C) and (D)), any reductions that occur after 2002 are
creditable towards RFP and attainment and that it should not matter
when the State initially adopted or EPA promulgated the measures that
produce those reductions. The CAA does not mandate the approaches
advocated in the comments. While the comments cite phrases in the CAA
that might be read to support the approach advocated in the comments,
EPA believes such an interpretation is at odds with other provisions of
the CAA. In addition to the restriction imposed by section 182(b)(1)(D)
on crediting certain measures, section 182(b)(1)(C) places only two
restrictions on creditability of reductions towards RFP: first,
reductions are creditable if they result from measures in the
applicable implementation plan, i.e., the approved
[[Page 71642]]
SIP or from rules promulgated by EPA, or from the applicable
requirements \44\ that are incorporated into a title V permit; and
secondly, only those reductions that have actually occurred after the
baseline year and before the milestone date may be credited towards a
RFP milestone. The requirement that the reductions result from measures
in the applicable implementation plan or EPA regulations, or applicable
requirements contained in a title V operating permit imposes no
restriction that such measures must be enacted after the date of
designation or after the baseline year. This restriction only requires
that the measure approved into the SIP be a rule promulgated by EPA or
be an applicable requirement included in a title V permit issued before
or concurrently with approval of the RFP SIP revisions, and that the
reductions occur after the baseline year and before the milestone date.
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\44\ Applicable requirements are federally-enforceable
requirements under the CAA that are created elsewhere but
incorporated into a title V permit. See the definition of
``Applicable requirement'' in 40 CFR 70.2 and 71.2.
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While this provision limits EPA's discretion to allow credit
towards the RFP requirement from any reduction that does not fit into
any of the three aforementioned classes of measures, EPA does not see
anything in the statute that mandates the adoption of the approach
advocated in the comments. In fact, EPA believes the opposite is the
case.
The same argument (i.e., that creditable RFP measures must be
measures adopted/promulgated after designation or after the baseline
year) could have been made for the various programs mandated by the
1990 CAA Amendments. These mandated measures included RACT requirements
under section 182(b)(2), Stage II vapor recovery under section
182(b)(3), motor vehicle I/M under sections 182(b)(4) and 182(c)(3),
RFG under section 211(k), and the Tier 1 motor vehicle standards under
title II. The EPA believes the statute is plain that Congress
envisioned that all of these would be adopted after 1990 and in most
cases implemented before 1996 because the statute contains enforceable
deadlines for submission of the requisite SIP revisions or promulgation
of the EPA rules. In many cases, they contain required implementation
dates before 1996. Congress clearly did not limit credit for RFP for
any of these measures. In our proposed rulemaking, EPA specifically
proposed allowing use of reductions resulting from any measure as long
as the reductions meet the creditability criteria of section
182(b)(1)(C) for the very reason EPA concluded Congress did not intend
to impose the sort of limit on creditability advocated in the comments
for the 1-hour standard and for any revised standard.
In summary, the statute says that only four specific categories of
emissions reductions are restricted. It does not refer to or include
any post-1990 rules' emissions reductions as restricted and only speaks
to creditability in terms of when the reductions occurred, not when the
rules or measures were adopted. As explained in the proposal and the
preceding paragraphs, Congress had reason to limit creditability of
pre-1990 rules, mandated many post-90 rules and allowed these rules to
be credited towards post-90 RFP, and nothing in the statute leads us to
believe that Congress would not have wanted them to also be creditable
to post-2002 RFP. The EPA believes it is appropriate to allow credit
toward RFP for emissions reductions other than reductions from the four
categories specified in the CAA pursuant to section 182(b)(1)(D).
Language that was once pertinent to the schedule of the 1990 CAA
Amendments should be reinterpreted now to mean emissions reductions are
creditable toward emissions reductions requirements to the extent they
actually occur during the relevant ROP period and after the baseline
year.
7. For areas covered only by subpart 1, how should the RFP requirement
be structured?
[Section VI.I.8. of June 2, 2003 proposed rule (68 FR 32834); Sec.
51.910(b) of the draft and final regulatory text.]
a. Background
The proposal noted that the RFP requirement under subpart 1 is more
general than that under subpart 2, and EPA thus has more flexibility in
determining what RFP means under subpart 1. For instance, the State may
rely on emissions reductions of VOC or NOX, or a combination
of both to meet its RFP requirement whereas subpart 2 limits the
initial 15 percent to VOC emissions reductions. However, we
acknowledged the concern about treating in a similar manner areas under
subpart 1 that have an ozone problem similar to areas covered under
subpart 2.
We proposed scenarios for three types of subpart 1 areas: (a) Areas
with attainment dates 3 years or less after designation, (b) Areas with
attainment dates between 3 to 6 years after designation, and (c) Areas
with attainment dates beyond 6 years after attainment.
Areas with attainment dates 3 years or less after
designation.
We proposed these areas would be treated similar to areas under
subpart 2 that are classified as marginal, which do not have an RFP
requirement. We proposed such an area would not be subject to a
separate RFP requirement, but RFP would be met by demonstrating the
area could attain the standard by its attainment date.
Areas with attainment dates between 3 to 6 years after
designation.
These areas would have attainment dates similar to subpart 2 areas
classified as moderate. We proposed two options for these areas:
Option 1. This option would require the RFP plan to be
submitted with the attainment demonstration within 3 years after
designation of the nonattainment area and RFP would be met by a SIP
that provides for attainment as expeditiously as practicable. Where
areas have only 3 years after SIP submission before attainment, this
option recognizes that there may be only a short amount of time
available to achieve any specified emissions reductions to meet RFP.
The draft regulatory text incorporated this option.
Option 2. This option would require these areas to be
treated in a manner similar to subpart 2 areas classified as moderate.
The RFP SIP would have to provide for a 15 percent emission reduction
from the baseline year within 6 years after the baseline year. The RFP
SIP would have to be submitted within 2 years after designation.
However, since the area is subject only to subpart 1, VOC or
NOX emissions reductions could be relied on to meet the 15
percent reduction requirement, consistent with EPA's NOX
substitution policy.\45\ Also, we solicited comment on whether a
percentage other than 15 percent should be required as the minimum.
Additional measures that would provide the remaining portion of the
emissions reductions needed for attainment would have to be submitted
with the area's attainment demonstration within 3 years after
designation.
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\45\ NOX Substitution Guidance. December 15, 1993
(available at http://www.epa.gov/ttn/oarpg/t1pgm.html).
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Areas with attainment dates beyond 6 years after
designation.
These areas would have attainment dates similar to areas classified
under subpart 2 as serious or higher. We proposed that the RFP plan
show increments of progress from the baseline emissions inventory year
out to the attainment date. The RFP SIP would
[[Page 71643]]
first have to provide for a 15 percent emission reduction from the
baseline year within 6 years after the baseline year. The 15 percent
RFP SIP would have to be submitted within 2 years after designation.
However, since the area is subject only to subpart 1, NOX
emissions reductions could be substituted for some or all of the 15
percent reduction requirement, consistent with EPA's NOX
substitution policy. Also, we solicited comment on whether a percentage
other than 15 percent would be more appropriate. For each subsequent 3-
year period out to the attainment date, another RFP SIP would have to
provide for an additional increment of progress no less than the amount
of emissions reductions that would be proportional to the time between
the end of the first increment to the attainment date. This second RFP
SIP would have to be submitted at the same time as the attainment
demonstration, namely within 3 years after designation.
b. Summary of Final Rule
We are finalizing rules for two, rather than three, categories of
areas based on the CAA's division of attainment dates for subpart 1
areas under section 172(a)(2). This provision requires that subpart 1
areas must attain as expeditiously as practicable but no later than 5
years after designation as a nonattainment area. It also allows the
Administrator to extend the attainment date beyond that 5 year period
``* * * for a period no greater than 10 years from the date of
designation as nonattainment, considering the severity of nonattainment
and the availability and feasibility of pollution control measures.''
The two scenarios for RFP for subpart 1 areas are based on whether the
area does or does not receive an extended attainment date. The
following are the two scenarios and the RFP requirements for each:
Scenario A: Areas with attainment dates 5 years or less after
designation (i.e., on or before June 15, 2009 for areas designated June
15, 2004).
As noted elsewhere in this preamble, for areas classified under
subpart 1, emissions reductions needed for attainment must occur by the
beginning of the ozone season preceding the attainment date. Thus, to
enable a SIP to demonstrate attainment by June 15, 2009, the area must
achieve all necessary reductions by the beginning of the 2008 ozone
season. The final rule provides that RFP for these areas would be met
by ensuring emissions reductions needed for attainment are implemented
as noted above by the beginning of the ozone season prior to the
attainment date.
Scenario B: Areas with attainment dates more than 5 years after
designation (i.e., beyond June 15, 2009 for those areas designated June
15, 2004). For these areas:
The RFP plan must show increments of progress from the
baseline emissions inventory year out to the attainment date.
The RFP SIP would first have to provide for a 15 percent
emission reduction from the baseline year through the 6th year after
the baseline year (e.g., from January 1, 2003 through December 31,
2008).
The 15 percent RFP SIP must be submitted within 3 years
after designation (e.g., by June 15, 2007).
However, since the area is subject only to subpart 1,
NOX or VOC emissions reductions (or both) could be used to
achieve the 15 percent emission reduction requirement.
For each subsequent 3-year period out to the attainment
date, the RFP SIP would have to provide for an additional increment of
progress. The increment for each 3-year period would be a portion of
the remaining emission reductions needed for attainment beyond those
reductions achieved for the first increment of progress (e.g., beyond
2008 for areas designated nonattainment in June 2004). Specifically,
the amount of reductions needed for attainment should be divided by the
number of years needed for attainment after the first increment of
progress in order to establish an ``annual increment.'' For each 3-year
period out to the attainment date, the area must achieve roughly the
portion of reductions equivalent to three annual increments.\46\ This
second RFP SIP must also be submitted within 3 years after the
effective date of designation (i.e., by June 15, 2007).
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\46\ For example, if the area's attainment date is 2014, and a
total of 30 percent reduction is needed between the end of 2008 and
the attainment date (a 6-year period) to reach attainment, the
``annual increment'' would be 5 percent (i.e., \1/6\ of 30 percent).
Thus, the area must achieve roughly the portion of reductions
equivalent to 15 percent (3 x 5 percent) during the first 3 years
(2009, 2010, 2011), and the remaining amount over the next 3 years
(2012, 2013, 2014). By using the word ``roughly'' in the regulatory
text, EPA does not intend that States would be able to delay
substantial emission reductions from one 3-year period to the next.
Rather, EPA intends this modifier to allow small deviations from the
amount of emission reductions that would be needed to meet a 3-year
RFP requirement. For example, assume that the ``annual increment''
of reductions needed for an area to reach attainment (after the
initial 6-year RFP obligation) is 5 tons per day and that the area
has 6 additional years until attainment. Thus, for each of the two
3-year periods until attainment, the area would need ``roughly'' 15
tons per day, so long as the total for both periods is equivalent to
or greater than 30 tons per day (i.e., the total reductions needed
for attainment). Assuming the area could achieve 14 tons per day
during the first 3-year period, and achieve the remaining 16 tons
per day during the second 3-year period, we believe this would be
consistent with achieving ``roughly the portion of reductions
equivalent to three annual increments.'' We do not believe, however,
that use of the word roughly allows States to delay substantial
emission reductions. Thus, in the example above, it would not be
appropriate for the State to delay reductions of several tons per
day until the second 3-year period.
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While the adopted rule is not identical to any of the proposed
options, we believe it is a logical outgrowth of our three proposed
scenarios. The adopted approach is more stringent than certain of the
proposed options and less stringent than others. Since this final
decision incorporates elements of the three proposed scenarios, we
believe it is similar in result to the three scenarios proposed.
c. Comments and Responses
Comment: One commenter stated that EPA has no authority to adopt
``Option 1'' for areas with attainment dates between 3 and 6 years
after designation, because that option would waive any showing of RFP.
Response: The EPA acknowledges that Congress prescribed specific
RFP requirements under subpart 2, but for subpart 1 provided more
flexibility.
Our rule does not eliminate RFP obligations for subpart 1 areas. We
are not requiring any specific percent reduction for subpart 1 areas
with near-term attainment dates. The measures that bring about near-
term attainment represent all the reductions that are reasonable to
require as annual incremental progress towards attainment. The EPA is
not compelled to require a 15 percent emission reduction for all
subpart 1 areas, especially in those cases where a full 15 percent is
not needed in order to reach attainment. However, we believe that it is
generally appropriate to require the full 15 percent for areas with
long-term attainment dates to ensure interim progress towards
attainment.
Comment: Some commenters supported the proposal that ties the
required RFP showing to the attainment date. Specifically, these
commenters supported the proposal that areas with attainment dates of 3
years or less should have no separate RFP requirement, consistent with
the requirement applicable to marginal areas under subpart 2. In
addition, support was shown for Option 1 for subpart 1 areas with an
attainment date between 3 and 6 years following designations. Under
Option 1, areas
[[Page 71644]]
would have to show an adequate rate of reduction in order to achieve
attainment by the deadline, but there would be no specific percentage
reduction required.
Response: We acknowledge the support of these comments.
Comment: Another commenter believed that a 15 percent emissions
reductions requirement should only be required where such reductions
would meaningfully advance the date of attainment. The RFP requirement
in subpart 1 requires that the SIP provide for ``reasonable further
progress,'' and where emissions reductions would not create
``reasonable further progress'' either in the area itself or in
downwind areas, there is no basis under subpart 1 to require such
specific emissions reductions. They further said that requiring a
potentially expensive reduction in emissions in those cases where that
reduction would not improve air quality was not justified based on a
notion of ``equity'' with similar areas classified under subpart 2 and
noted that such an interpretation was not required by the statute or
sensible. That some subpart 2 areas might have to reduce emissions by a
specified percentage even where such reductions would yield no positive
environmental benefits is an unfortunate result of the Congress'
decision to limit EPA's discretion under subpart 2--which in turn is a
result of a far less sophisticated understanding of the dynamics of
ozone creation in 1990 than exists now--and where EPA has the
discretion not to dictate an ineffective and inefficient result, it
must exercise that discretion.
Response: We addressed in general those comments that recommended
alternatives to the mandatory measures of subpart 2 (which includes the
RFP requirement) in the response to comments above under the topic,
``Should prescribed requirements of subpart 2 apply in all 8-hour
nonattainment areas classified under subpart 2, or is there flexibility
in application in certain narrowly-defined circumstances?'' We conclude
in that section that EPA has no discretion to broadly waive mandatory
requirements. However, we noted that case law may provide support for
case-by-case waivers where implementation of a measure would produce an
absurd result.
8. Where Part of an 8-hour Nonattainment Area Was a 1-hour
Nonattainment Area With a ROP Obligation Extending Past 2002, Can
Emissions Reductions From the Area's 1-hour ROP Plan Be Used as Credit
Toward Meeting the Area's 8-hour RFP Plan?
[Section VI.I.9. of June 2, 2003 proposed rule (68 FR 32835); no
draft or final regulatory text.]
a. Background
We proposed the following approach to address this issue. Where an
area has both 1-hour and 8-hour RFP obligations for the post-2002
period, the State may rely on emissions reductions from the 1-hour plan
in achieving RFP for the 8-hour standard. The State could develop a new
baseline and new RFP emission reduction targets for the entire 8-hour
standard nonattainment area (i.e., the old 1-hour standard
nonattainment area and any newly added portion of the 8-hour standard
nonattainment area). Emissions reductions from measures in the 1-hour
ozone SIP that are achieved after the 8-hour ozone NAAQS baseline year
could count (subject to creditability restrictions as discussed above)
toward meeting the RFP requirement for the entire 8-hour area.
This approach would set a RFP target for the entire 8-hour ozone
nonattainment area. Under this approach, the new RFP target for the 8-
hour standard would replace the previous 1-hour ROP target (while
ensuring that, at a minimum, the emissions reductions required to meet
the old target are met; see 40 CFR 51.905(a)(1)(iii)).
b. Summary of Final Rule
We are adopting the approach from the proposal.
c. Comments and Responses
Comment: One commenter agreed with the approach outlined in the
proposal but cautioned that the States would have to ensure that the
target is at least as stringent as the 1-hour ROP target, thus ensuring
no backsliding on the 1-hour NAAQS requirements. Under this approach,
the State would have to develop a new baseline and new RFP emission
reduction targets for the entire 8-hour standard nonattainment area.
Emissions reductions from measures in the 1-hour ozone SIP that are
achieved after the 8-hour ozone NAAQS baseline year could count
(subject to credibility restrictions as discussed in the proposed
rulemaking) toward meeting the RFP requirement for the entire 8-hour
area. The new RFP target for the 8-hour standard would replace the
previous 1-hour ozone target (while ensuring that, at a minimum, the
emissions reductions required to meet the old target are met).
Response: We agree with the commenter that the emission reduction
targets under the 8-hour standard must be at least as stringent as the
1-hour targets. Section IV.E.3. of this preamble discusses the
requirements for RFP for several situations relative to the area's
former obligations under the 1-hour standard and the current
obligations under the 8-hour standard. The obligations of an area under
the anti-backsliding provisions of 40 CFR 51.905(a)(1)(iii) would still
apply, meaning that emissions reductions under the 1-hour ROP
requirements would still be required as if the 1-hour standard had
never been revoked. Therefore, the new 8-hour emission target for the
8-hour area would be logically at least as stringent as under the 1-
hour area for a given time period.
9. Will EPA's ``Clean Data Policy'' Apply for Purposes of 8-hour RFP,
Attainment Demonstrations and Other Related Requirements?
[Section VI.I.10 of June 2, 2003 proposed rule (68 FR 32835); no
draft regulatory text; section 51.918 of final rule.]
a. Background
As noted in the proposal, we issued a policy on May 10, 1995, which
allows EPA to determine that an area has attained the standard and that
certain planning requirements (e.g., RFP and attainment demonstrations)
will not apply so long as the area remains in attainment.\47\ This is
referred to as the ``Clean Data Policy.'' We proposed that this policy
would remain effective for purposes of areas that EPA determines have
attained the 8-hour ozone NAAQS.
---------------------------------------------------------------------------
\47\ Memorandum of May 10, 1995, ``RFP, Attainment
Demonstration, and Related Requirements for Ozone Nonattainment
Areas Meeting the Ozone National Ambient Air Quality Standard,''
from John S. Seitz, Director, Office of Air Quality Planning and
Standards. Available at: http://www.epa.gov/ttn/oarpg/t1/memoranda/clean15.pdf
.
---------------------------------------------------------------------------
b. Summary of Final Rule
In the proposed rule, we indicated that the Clean Data Policy,
which we had applied under the 1-hour standard, should apply for
purposes of the 8-hour standard. We are adopting this approach. In this
action EPA is finalizing the statutory interpretation that is embodied
in the policy. The text of the final rule encapsulates the statutory
interpretation set forth in the policy. Determinations as to whether
individual areas have attained the 8-
[[Page 71645]]
hour standard and thus qualify for application of the policy will be
made in the context of rulemakings for those individual areas.
The EPA has applied the Clean Data Policy in rulemakings under the
1-hour ozone standard to both subpart 1 areas, e.g., San Francisco Bay
Area (69 FR 21717; April 22, 2004) and subpart 2 areas, e.g., St.
Louis, Missouri (68 FR 25418; May 12, 2003). The EPA will also apply
the policy to both subpart 1 and subpart 2 areas under the 8-hour
standard.
c. Comments and Responses
Comment: One commenter stated that EPA's ``Clean Data Policy'' is
unlawful with respect to both the 1-hour and 8-hour NAAQS. A commenter
argued that EPA also has no authority to waive the attainment
demonstration and RFP plans mandated by subpart 2 on the pretext that
an area has clean data. The CAA unambiguously requires these plans for
any area designated nonattainment for the pollutant ozone, and gives
EPA no power whatsoever to waive such plan requirements.
Several other commenters supported the continued use of the ``Clean
Data Policy.''
Response: The EPA believes that the Clean Data Policy comports with
the provisions of the CAA in regard to attainment demonstrations, ROP
plans, RACM, contingency measures and other related requirements. The
Clean Data Policy, issued on May 10, 1995, sets forth EPA's
interpretation that where EPA has determined that an area has attained
the standard, certain SIP requirements are suspended (e.g., RFP) for so
long as the area remains in attainment.
As set forth in its May 10, 1995 policy, EPA believes it is
reasonable to interpret the provisions regarding RFP and attainment
demonstrations, along with certain other related provisions, as not
requiring further submissions to achieve attainment for so long as the
area is in fact attaining the standard. Under the policy, EPA is not
granting an exemption from any applicable requirements under part D.
Rather, EPA has interpreted these requirements of subparts 1 and 2 as
not applying for so long as the area remains in attainment with the
standard. This is not a waiver of requirements that by their terms
apply; it is a determination that certain requirements are written so
as to be operative only if the area is not attaining the standard.
The EPA has explained in other rulemaking actions on the 1-hour
ozone standard its rationale for the reasonableness of this
interpretation of the CAA and incorporates these explanations by
reference. See, for example, 67 FR 49600 (July 31, 2002); 65 FR 37879
(June 19, 2000) (Cincinnati-Hamilton, Ohio-Kentucky); 61 FR 20458 (May
7, 1996) (Cleveland-Akron-Lorain, Ohio); 66 FR 53094 (October 19, 2001)
(Pittsburgh-Beaver Valley, Pennsylvania); 60 FR 37366 (July 20, 1995);
61 FR 31832-33 (June 21, 1996) (Grand Rapids, MI); 60 FR 36723 (July
18, 1995) (Salt Lake and Davis Counties, Utah); 68 FR 25418 (May 12,
2003) (St. Louis, Missouri); 69 FR 21717 (April 22, 2004) (San
Francisco Bay Area). The EPA has also set forth its legal rationale for
the Clean Data Policy in briefs filed in the 10th, 7th, and 9th
Circuits, and hereby incorporates those briefs insofar as relevant
here. See Sierra Club v. EPA, No. 95-9541 (10th Cir.), Sierra Club v.
EPA, No. 03-2839, 03-3329 (7th Cir.), Our Children's Earth Foundation
v. EPA, No. 04-73032 (9th Circuit).
As stated in the policy, the attainment demonstration, RFP
requirements and contingency measure requirement are designed to bring
an area into attainment. Once this goal has been achieved, it is
appropriate to suspend the obligation that States submit plans to meet
these goals, so long as the area continues to attain the relevant
standard.
The Tenth, Seventh and Ninth Circuits have upheld EPA rulemakings
applying the Clean Data Policy. See Sierra Club v. EPA, 99 F. 3d 1551
(10th Circuit, 1996), Sierra Club v. EPA, 375 F. 3d 537 (7th Circuit,
2004) and Our Children's Earth Foundation v. EPA, No. 04-73032 (9th
Circuit, June 28, 2005) memorandum opinion.
Comment: A commenter said that although subpart 2 contains some
narrowly crafted exceptions [e.g., CAA 182(b)(1)(A)(ii)], there are no
exceptions based on clean data. In the past, EPA has cited a Tenth
Circuit decision, Sierra Club v. EPA, 99 F. 3d 1551 (10th Circuit,
1996), as supporting the Clean Data Policy. The commenter contended
that case was wrongly decided and has been superseded by the Supreme
Court decision in Whitman v. American Trucking Assoc., Inc., 531 U.S.
457 (2001). There, the Court held that subpart 2 eliminates regulatory
discretion previously allowed to EPA under subpart 1, and noted that
subpart 2 prescribes large parts of nonattainment programs, for
example, section 182. The requirements for RFP and attainment
demonstrations are among those subpart 2 nonattainment programs that
Congress prescribed by law, thereby eliminating EPA discretion to
accept something less. See also Sierra Club v. EPA, 293 F. 3d 155 (D.C.
Circuit, 2002) (holding that EPA is without authority to infer
exceptions to attainment deadlines and to explicit subpart 2
requirements for RFP plans).
Response: The EPA believes that the Tenth Circuit correctly decided
Sierra Club v. EPA and that the comments misconstrue both Whitman and
Sierra Club v. EPA, 293 F. 3d 155 (D.C. Circuit, 2002) (Sierra Club
2002). The Sierra Club 2002 case addressed the statutory requirements
applicable to an area not attaining the standard. The issue of the
requirements of part D of title I of the CAA that must continue to be
met by areas that EPA has determined are monitoring attainment of the
standard was not before the court. As discussed below, the Sierra Club
2002 decision upheld EPA's determination that the RACM provision under
section 172(c)(1) requires only additional measures that could
contribute to RFP or attainment, which is an element of EPA's
application of the Clean Data Policy. To this limited extent, Sierra
Club 2002 is relevant to EPA's interpretation that the policy will
apply for the 8-hour ozone standard, and the decision supports EPA's
interpretation. However, the other issues addressed in the decision
(extension of the statutory attainment date for areas affected by ozone
transport, the content of a demonstration of RFP toward attainment, and
whether contingency measures must be submitted as part of an attainment
demonstration or plan for RFP) did not relate to the Clean Data Policy
or how the subpart 2 requirements apply to areas attaining the
standard.
The issue addressed by the Clean Data Policy is whether an area
that has attained the standard (as evinced by air quality monitoring
data) still needs to submit a demonstration of how the area will
achieve enough reductions to demonstrate that it will ``attain the
NAAQS,'' a plan to obtain reasonable periodic reductions towards the
goal of attainment and other related requirements.
The EPA continues to believe that the statutory requirement for an
attainment demonstration--a SIP revision which identifies the level of
future reductions needed to achieve the NAAQS and any additional
adopted measures needed to achieve these future reductions--is written
so as to be inapplicable once the NAAQS is attained.
In addition, EPA believes that the RACM requirements are a
``component'' of an area's attainment demonstration under section
172(c)(1). General Preamble 57 FR 13560; April 16, 1992. Thus, since
for the same reason the attainment demonstration no longer
[[Page 71646]]
applies by its own terms, RACM also no longer applies. The EPA has
consistently interpreted this provision to require only implementation
of potential RACM measures that could contribute to reasonable further
progress or to attainment. General Preamble 57 FR 13498; April 16,
1992. Thus, where an area is already attaining the standard, no
additional RACM measures are required.\48\
---------------------------------------------------------------------------
\48\ [The EPA's interpretation that the statute requires only
implementation of RACM measures that would advance attainment was
upheld by the United States Court of Appeals for the Fifth Circuit
(Sierra Club v. EPA, 314 F. 3d 735, 743-745, 5th Cir. 2002) and by
the United States Court of Appeals for the D.C. Circuit (Sierra Club
v. EPA, 294 F. 3d 155, 162-163, D.C. Cir. 2002). See also the final
rulemakings for Pittsburgh-Beaver Valley, Pennsylvania, 66 FR 53096
(October 19, 2001) and St. Louis, 68 FR 25418 (May 12, 2003).]
---------------------------------------------------------------------------
Likewise, EPA concludes that the provision for RFP--a plan for
annual incremental reductions leading to attainment--is also expressed
in terms that show that RFP is unnecessary in areas attaining the
standard. For areas in attainment, there is no longer a need to plan
for measures to meet that goal. Similarly, EPA continues to believe
that the contingency measure requirements of section 172(c)(9) no
longer apply in an area that is attaining the standard since those
``contingency measures are directed at ensuring RFP and attainment by
the applicable date.'' (See 57 FR 13564; April 16, 1992). The section
182(c)(9) contingency measure requirement also no longer applies once
an area has attained the standard.
Section 172(c)(2) of the CAA and the related provisions of subpart
2 provide that RFP is required only where an area continues to violate
the standard. By definition, the ``reasonable further progress''
provision requires only such reductions in emissions as are necessary
to attain the NAAQS by the attainment date. If an area has attained the
standard, the stated purpose of the RFP provision has been fulfilled.
Also, section 172(c)(1) and the related provisions of subpart 2 require
SIPS to provide for attainment of the NAAQS. (See also section
182(b)(1)(A)(i) which requires that SIPS for moderate ozone
nonattainment areas must ``provide for such specific annual reductions
in emissions of [VOCs] and [NOX] as necessary to attain the
[ozone NAAQS]'' by the applicable attainment date). When an area has
attained the NAAQS, there is no need for a plan demonstrating how it
will reach attainment, and thus the attainment demonstration provision
no longer applies. Similarly section 172(c)(9) and the related
provisions of subpart 2 provide that SIPs in nonattainment areas shall
provide for contingency measures to be undertaken if the area fails to
make RFP or to attain the NAAQS by the applicable attainment date.
Since contingency measures are required only if RFP or attainment is
not achieved, there is no need for them where the area has attained the
standard. The language of these statutory provisions indicates that
when an area has attained the standard these requirements no longer
apply as the purpose of these provisions--attainment--has been
accomplished.
The EPA believes that Whitman does not provide a basis to
reconsider our position on the Clean Data Policy. In Whitman, the Court
was addressing EPA's stated approach that subpart 2 did not apply for
purposes of implementing the 8-hour NAAQS. In the Phase 1 rule, EPA
addressed the Court's decision and concluded that subpart 2 does apply.
The issue here is not whether it applies, but how those requirements
apply under a specific situation where an area has attained the NAAQS.
That issue was not addressed by the Court in Whitman. The decision in
Whitman has no bearing on the question of whether an area that has
demonstrated attainment must nonetheless submit an attainment
demonstration plan and related requirements. Thus, Whitman does not
undermine the Tenth Circuit's reasoning in Sierra Club v. EPA, 99 F. 3d
1551 (10th Circuit, 1996). See also the post-Whitman decisions in
Sierra Club v. EPA, 375 F. 3d 537 (7th Circuit, 2004), and Our
Children's Earth Foundation v. EPA, No. 04-73032, memorandum opinion
(9th Circuit, June 28, 2005) rejecting challenges to the Clean Data
Policy and upholding redesignation actions based on the policy.
10. How will RFP be addressed in Tribal areas?
[Section VI.I.11. of June 2, 2003 proposed rule (68 FR 32835); no
draft or final regulatory text.]
a. Background
The TAR provides flexibility for Tribes in the preparation of a TIP
to address the NAAQS. As mentioned in the proposed rulemaking, the TAR
provides the Tribes with the ability to develop TIPs to address and
implement the NAAQS in Indian country. It further provides the Tribes
with flexibility to develop these plans in a modular way, as long as
the elements of their TIPs are reasonably ``severable.'' For example,
each TIP submission must include a demonstration that the Tribe has
authority to develop and run its program, the ability to enforce its
rules, and the capacity and resources to implement the program it
adopts. Therefore, it may include one or two source-specific
requirements but may not include provisions for RFP and other SIP
requirements. The proposal noted that these TIPs can be an important
step in addressing an overall air quality plan to achieve health and
environmental goals on Tribal lands. Where a Tribe chooses not to
address a specific planning element, EPA may be obligated to step in.
Such action would not preclude a Tribe from addressing those elements
at a later time.
b. Summary of Policy
We intend to take the approach noted in the proposal. There is no
regulatory text for this intention.
c. Comments and Responses
No comments were received on this portion of the proposal.
11. How will RFP targets be calculated?
[Section VI.I.12. of June 2, 2003 proposed rule (68 FR 32836);
Sec. 51.910(c) of the draft and final regulatory text.]
a. Background
We proposed a methodology for the calculation of RFP target levels
of emissions that is based on the method we developed for the 1-hour
standard, while taking into account our interpretation of CAA
restrictions on creditable emissions and our proposal to use the 2002
inventory as the baseline inventory for the RFP requirement. The CAA
specifies four types of measures that were not creditable toward the 15
percent RFP requirement. These are:
(1) Any measure relating to motor vehicle exhaust or evaporative
emissions promulgated by the Administrator by January 1, 1990.
(2) Regulations concerning Reid Vapor Pressure (RVP) promulgated
after 1990 or required under section 211(h).
(3) Measures required under section 182(a)(2)(A) to correct
deficiencies in SIPs regarding VOC RACT regulations required prior to
enactment of the CAA Amendments of 1990.
(4) State regulations submitted to correct deficiencies in I/M
existing or required programs.
These four types of measures were all expected to result in a
decrease in emissions between 1990 and 1996. Of these four types of
measures, RACT and I/M program corrections and the 1992 RVP
requirements were completely in place by 1996 and therefore are already
accounted for in the 2002 baseline. As a result, they would produce no
additional reductions between 2002 and 2008 or later milestone years.
[[Page 71647]]
However, the pre-1990 Federal Motor Vehicle Control Program (FMVCP)
will continue to provide additional benefits during the first two
decades of the 21st century as remaining vehicles meeting pre-1990
standards are removed from the vehicle fleet. Because these benefits
are not creditable for RFP purposes, in order to calculate the target
level of emissions for future RFP milestone years (i.e., 2008, 2011,
etc.), States must first calculate the reductions that would occur over
these future years as a result of the pre-1990 FMVCP. We proposed three
methods to properly account for the non-creditable reductions when
calculating RFP targets for the 2008 and later RFP milestone years.
b. Summary of Final Rule
The calculation methods have been revised slightly from those in
the proposal. The revisions now account for NOX reductions
and take account of other mobile emissions models other than the MOBILE
model. The methods appear as appendix A to this preamble. These methods
are consistent with the requirements of sections 182(b)(1)(C) and (D)
and 182(c)(2)(B) of the CAA.
c. Comments and Responses
Comment: One commenter agreed that the base emission level should
be decreased by reductions that occur from the pre-1990 FMVCP standards
(1990 I/M program and fuel RVP of 9.0 or 7.8 psi). However, the
commenter further recommended that the reductions from pre-1990 FMVCP
standards be calculated using the I/M program and fuel properties in
effect during the new baseline year of 2002.
The commenter claimed an advantage of the recommended change is
that it removes from the non-creditable reductions from the pre-1990
FMVCP standards, creditable reductions from controls implemented prior
to 2003 (such as improvements to the I/M program or cleaner gasoline).
The commenter claimed that the EPA proposal specifies using the
MOBILE6 command NO CAA in the calculation of the non-creditable
emissions reductions. The commenter concurred that this command could
be used, but recognized that some of the controls in effect during 2002
cannot be modeled with this command. (Refer to technical specifics of
this comment in the response to comment document).
Response: The EPA does not agree with the commenter that the non-
creditable pre-1990 FMVCP reductions should be calculated using the I/M
program and fuel properties in effect during the new baseline year of
2002. Including the I/M program and fuel properties in effect in 2002
in the calculation of non-creditable reductions would not accurately
account for reductions that are the result of pre-1990 Federal motor
vehicle control measures. The EPA believes that the methods provided in
the final rule accurately identify the non-creditable reductions from
pre-1990 motor vehicle standards and provide appropriate credit for all
post-1990 control measures.
12. Should EPA continue the policy of allowing substitution of controls
from outside the nonattainment area within 100 kilometers for VOC and
200 kilometers for NOX?
[Section VI.I.2. of June 2, 2003 proposed rule (68 FR 32833); no
draft or final regulatory text.]
a. Background
The proposal noted [68 FR 32833] that EPA currently has a policy
that allows States to take credit for RFP for NOX and VOC
controls that occur outside the nonattainment areas [``Guidance for
Implementing the 1-Hour Ozone and Pre-Existing PM10 NAAQS,
December 29, 1997'']. Specifically, the guidance allows credit for VOC
reductions occurring up to 100 km outside the area and for
NOX reductions occurring up to 200 km outside the area
(statewide where a regional NOX control strategy is being
implemented). The policy indicates that credit may be taken only for
emissions reductions from measures not otherwise mandated by the CAA.
As explained in the policy, EPA believes that this additional
flexibility for crediting reductions outside nonattainment areas is
consistent with the CAA. We noted in the proposed policy that
reductions from outside a nonattainment area within the geographic
limits contribute to progress toward attainment within the area (61 FR
65758).
Under this approach, the geographic area for substitution of VOC
emissions reductions is 100 km from the nonattainment area and the
geographic area for substitution of NOX reductions is 200 km
from the nonattainment area with the possibility for additional
expansion of the NOX substitution area as follows. Nitrogen
oxides emissions reductions from anywhere within the State may be
credited for those States that participate in a regional NOX
control strategy such as the NOX SIP Call. All other States
implementing a NOX substitution strategy for RFP would be
restricted to a distance of 200 km from the nonattainment area, unless
a substitution for a greater distance is accompanied by adequate
technical justification. Substitutions are restricted to intrastate
areas unless two or more States involved reach mutual agreement. The
EPA notes that in all cases the distances in the policy provide only a
general policy presumption that, if used, would need data resources in
the record showing that reductions from sources in the specific
locations in attainment areas benefit the nonattainment area. See LEAN
v. EPA, 382 F. 3d 575 5th Circuit, 2004.
b. Summary of Final Rule
States may continue to rely on emissions reductions from outside
the nonattainment area for credit toward their RFP obligations.\49\ In
doing so, States should ensure that the reductions meet the standard
tests of creditability (permanent, enforceable, surplus, and
quantifiable) and are shown to be beneficial toward reducing ozone in
the nonattainment area.
---------------------------------------------------------------------------
\49\ Last September, the EPA Office of Inspector General
submitted a report (outside the rulemaking process) outlining
concerns and recommendations with respect to the potential for
double counting of emissions reductions and problematic equity
issues. U.S. EPA Office of the Inspector General. In responding to
that report, we indicated that we would consider the various
recommendations as we assess existing policies and guidance in
parallel to the rulemaking for implementing the 8-hour ozone
standard. [Evaluation Report: EPA and States Not Making Sufficient
Progress in Reducing Ozone Precursor Emissions In Some Major
Metropolitan Areas. Report No. 2004-P-00033. September 29, 2004.]
[Memorandum from Jeffrey R. Holmstead to J. Rick Beusse, ``Response
to the Office of the Inspector General (OIG) Evaluation Report, EPA
and States Not Making Sufficient Progress in Reducing Ozone
Precursor Emissions in Some Major Metropolitan Areas,'' Report No.
2004-P-00033. December 29, 2004. March 25, 2005.]
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c. Comments and Responses
Comment: Several commenters supported this feature of EPA's
proposal regarding RFP because it allows the States flexibility to
tailor control strategies to address the issues specific to a
particular nonattainment area.
The commenters supported codification (68 FR 32833, column 1) in
the final rule of the December 29, 1997 guidance memo (``Guidance for
Implementing the 1-Hour Ozone and Pre-Existing PM10 NAAQS'')
that allows emissions reductions from outside the nonattainment area to
be creditable toward RFP. One commenter agreed that States ought to be
able to account for regional emissions in their attainment
demonstrations. On the other hand, the commenter was concerned that the
Agency might allow jurisdictions to ``credit'' emissions reductions
from sources up to 100 km for VOC and 200 km for NOX toward
15 percent RFP plans, and this in turn could encourage jurisdictions in
need of these tonnage
[[Page 71648]]
reductions to regulate without a sound basis. The commenter contended
that while ozone is known to be a ``regional pollutant,'' EPA has
failed to establish in this rulemaking any technical basis for allowing
States to impose regulations on sources outside the nonattainment area
boundaries without independent justification of the impact of such
sources on an area's failure to attain the standard.
Response: We developed our 1997 policy as a result of the modeling
results relating to the NOX SIP Call (see, for example, 63
FR 57355, October 27, 1998, and 69 FR 21604, April 21, 2004). These
modeling analyses demonstrate that significant contribution to
nonattainment resulted not only from source emissions within a
nonattainment area but also from source emissions over a much broader
area. Not only can these emissions from outside the nonattainment area
affect air quality within the nonattainment area, in some cases it
might be necessary to include and control emission sources located in
the nearby areas in order to attain the standard. We believe it is
appropriate to allow States to take credit for reductions from sources
outside their nonattainment areas where data indicate that those
emissions affect air quality in the nonattainment areas.
We note that section 182(c)(2)(C), which provides for the
substitution of NOX controls for VOC, speaks in terms of
reductions of ozone concentrations rather than strictly reductions in
emissions. This provision led us to conclude that Congress' intent for
the ROP requirement is to lower ozone concentrations within the
nonattainment area. It is consistent with that intent that emissions
reductions from outside the nonattainment area that will reduce ozone
concentrations in the nonattainment area should be creditable in RFP
demonstrations. We also believe that the CAA is clear that both the 15
percent plan requirement of section 182(b)(1) and the 3 percent per
year requirement of section 182(c)(2) are specific varieties of RFP
requirements.\50\ Section 171(1) of the CAA states that, for purposes
of part D of title I, RFP ``means such annual incremental reductions in
emissions of the relevant air pollutant as are required by this part or
may reasonably be required by the Administrator for the purpose of
ensuring attainment of the applicable NAAQS by the applicable date.''
Thus, whether dealing with the general RFP requirement of section
172(c)(2), or the more specific RFP requirements of subpart 2 for
classified ozone nonattainment areas (i.e., the 15 percent plan
requirement of section 182(b)(1) and the 3 percent per year requirement
of section 182(c)(2)), the purpose of RFP is to ensure attainment by
the applicable attainment date. Emissions reductions strategies applied
to sources outside the nonattainment area may help decrease ambient
ozone levels within the designated area. Since RFP/ROP is progress
towards attainment, specific, annual emissions reductions from
geographic areas outside the nonattainment area boundaries that
contribute to lower ambient ozone levels in the nonattainment area
would fall within the scope of ``such annual incremental reductions in
emissions of the relevant air pollutant as are required * * * for the
purpose of ensuring attainment of the applicable NAAQS by the
applicable date.''
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\50\ The EPA notes that paragraph (1) of subsection 182(b) is
entitled ``Plan Provisions for Reasonable Further Progress'' and
that subparagraph (B) of paragraph 182(c)(2) is entitled
``Reasonable Further Progress Demonstration,'' thereby making it
clear that both the 15 percent plan requirement of section 182(b)(1)
and the 3 percent per year requirement of section 182(c)(2) are
specific varieties of RFP requirements.
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Comment: One commenter requested clarification that if the 100 km/
200 km area extends into adjacent States that reductions in those
States should also be creditable, especially with regard to the
implementation of Federal measures.
Response: We intend to look into this issue further in the future
as part of the overall reassessment of the 100 km/200 km credit issue.
Comment: Another commenter expressed confusion by the provision to
allow creditable reductions be made outside nonattainment areas. They
asked if reductions made outside a nonattainment area actually bring
that nonattainment area into compliance with the standard, then
shouldn't those outside areas be designated nonattainment by
definition? The commenter contended that this contradiction is
unacceptable, and a fatal flaw of current designation efforts and this
implementation proposal.
Response: The commenter appears to be commenting on the designation
process as well as the implementation rule. To the extent that the
commenter has concerns about the process EPA used for designating areas
as nonattainment, those issues should have been raised prior to the
time EPA promulgated designations in April 2004. The EPA is not taking
any action in this rulemaking to establish the procedures for
designating areas or to designate areas. In the designation process
that was completed in April 2004, EPA provided guidance to areas
regarding how to determine the boundaries of nonattainment areas in
light of the statutory definition of ``nonattainment,'' which provides
that an area will be designated nonattainment if it is either violating
the NAAQS or is a ``nearby'' area that ``contributes to ambient air
quality'' in an area that is violating the standard.\51\ The CAA does
not establish a hard-and-fast set of rules for determining ``nearby''
or ``contributes to,''--i.e., it does not specify a distance that is
nearby or a specific level of emissions that is deemed to ``contribute
to'' nonattainment. Nor did EPA establish a hard-and-fast set of rules;
rather the guidance provided a broad set of factors for States and EPA
to consider in determining the boundaries of each nonattainment area.
Thus, it is not inconsistent with the statute that there are areas that
were not designated nonattainment, but that have emissions that affect
air quality in a nonattainment area.
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\51\ Memorandum from John Seitz, ``Boundary Guidance on Air
Quality Designations for the 8-Hour Ozone National Ambient Air
Quality Standards (NAAQS or Standard).'' March 28, 2000. Found at:
http://www.epa.gov/ozonedesignations/guidance.htm.
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Comments on Draft Regulatory Text
Comment: One commenter recommended that EPA state, either in the
preamble to this rule or in the rule itself, that any VOC emissions
reductions within 100 km and any NOX emissions reductions
within 200 km of the nonattainment boundary, including reductions in
adjacent States, are creditable for RFP plan purposes. They also
suggested that EPA provide that reductions from voluntary measures
should be incorporated into the baseline emissions inventory
calculation.
Another commenter stated that EPA does not specify in Sec.
51.910(a)(4) that in areas where the 3 percent annual reduction is
required, those reductions must be achieved within the statutorily
defined baseline ``area.'' [CAA section 182(b)(1)(B)]. The commenter
stated that we issued initial NOX substitution guidance in
1993 that required RFP reductions to be achieved from sources within
the designated nonattainment area. The commenter noted that
subsequently, we attempted to unlawfully allow RFP reductions to be
obtained from sources within the modeling domain. The commenter
advocated that we clarify that the CAA requires creditable reductions
to be obtained only from sources within the designated nonattainment
areas.
Response: We believe that the policy does not need to be
incorporated into a rule. Since areas must include record
[[Page 71649]]
support for application of the policy in an area demonstrating that
emissions from regulated sources affect ambient air quality in the
specific nonattainment area, individual rulemaking in the context of an
area's SIP must be conducted in any event to implement the policy. The
EPA believes that any reductions that in fact result in improved air
quality within the nonattainment area can be credited to RFP
demonstrations. Voluntary emissions reductions that are used to satisfy
RFP requirements--or any requirements under the CAA--must meet EPA's
criteria for creditability of such reductions, particularly the
inclusion in the baseline of the emissions from the sources that would
be producing the voluntary reductions. As explained elsewhere in
response to another comment on the policy of allowing substitution of
controls from outside the nonattainment area within 100 km for VOC and
200 km for NOX, EPA disagrees with the comment that the CAA
limits the scope of creditable emissions reductions to only those
reductions in emissions emanating from within the nonattainment area
boundaries. We also address elsewhere the comment relating to allowance
of RFP credit from emissions reductions outside the State in which the
nonattainment area is located.
13. When must RFP emissions reductions be achieved?
[Section VI.I. of June 2, 2003 proposed rule (several locations
starting at 68 FR 32832); several locations including Sec.
51.910(a)(1) of the draft and final regulatory text.]
a. Background
Section 51.910(a)(1) of the draft regulatory text provided that for
areas initially designated nonattainment for the 8-hour NAAQS, the
initial 6-year period for RFP shall run from January 1, 2003 to
December 31, 2008. Section 182(c)(2)(B), applicable to serious and
above areas, requires that RFP be continued out to the attainment date.
Therefore, Sec. 51.910(a)(2) of the draft regulatory text provided,
``For each area classified as serious or higher under Sec. 51.903, the
State must submit no later than 3 years after the effective date of the
area's nonattainment designation a SIP revision consistent with section
182(c)(2)(B) of the CAA for each 3 year period following the initial 6-
year period addressed under paragraph (a)(1)(ii)(B) of this section
until the area's attainment date. For areas initially designated
nonattainment for the 8-hour NAAQS the 3-year periods referenced in
section 182(c)(2)(B) of the Act shall begin January 1, 2009.''
In applying the requirement of section 182(c)(2)(B), it is
necessary to know the attainment date for the area. The attainment date
is not necessarily the maximum allowed under part D of the CAA, but
must be ``as expeditious as practicable'' but no later than the maximum
statutory date (e.g., 9 years after designation for a serious area).
Thus, for purposes of determining the period for which RFP is needed,
the State must have completed an attainment demonstration and RACM
analysis (discussed elsewhere in this preamble) to demonstrate that the
attainment date selected is as expeditious as practicable.
There are several other provisions that bear on the issue of when
emissions reductions must be achieved for purposes of the RFP
requirements. The Phase 1 Rule, Sec. 51.900(g) sets forth the
following definition: ``Attainment year ozone season shall mean the
ozone season immediately preceding a nonattainment area's attainment
date.'' Also, Sec. 51.908 \52\ (What is the required time frame for
obtaining emission reductions to ensure attainment by the attainment
date?) provides: ``For each nonattainment area, the State must provide
for implementation of all control measures needed for attainment no
later than the beginning of the attainment year ozone season.'' Thus,
if the latest attainment date allowed by the CAA for a serious area
designated in 2004 is June 15, 2013, the (complete) ozone season
preceding that date would occur in 2012. However, if all of the
reductions necessary to achieve attainment are in place prior to that
ozone season, then the most expeditious attainment date would in fact
be just after the end of that ozone season in 2012 (assuming the RACM
analysis did not compel a more expeditious attainment year). Thus, in
light of the Phase 1 rule, the latest possible attainment date for all
areas will be just after the end of the ozone season in the year prior
to the outside attainment date identified in the statute for the area's
classification.\53\
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\52\ With this rulemaking, this provision is codified as 40 CFR
51.908(d).
\53\ With the exception of areas with year-round ozone seasons,
in which case the latest attainment date may be earlier in the year
of the outside attainment date identified in the statute.
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Consistent with the manner in which ROP plans under the 1-hour
ozone standard were developed, the RFP baseline for 2002 will have a
typical summer day tons/day basis. As such, the attainment year target
will also be a typical summer day target. Thus, the target level of
emissions must be met by the attainment date of the attainment
year.\54\
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\54\ Note that 40 CFR 51.900(g) defines ``Attainment year ozone
season'' as the ozone season immediately preceding a nonattainment
area's attainment date.
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As noted above, section 182(c)(2)(B) requires that RFP be continued
out to the attainment date. Thus, to some extent, the RFP requirement
may help determine the attainment date. In the example discussed above
of a serious area, the first milestone year after 2008 by which an
annual average of 3 percent emissions reductions would have to be
achieved over each 3-year period (i.e., 9 percent over 3 years) would
be 2011, with an additional annual average of 3 percent per year
between the end of 2011 and the attainment year (if the attainment year
is beyond 2011). The maximum statutory attainment year under the
discussion above would be 2013, but, for the reasons explained above
concerning the date by which emissions reductions must be achieved, the
actual maximum attainment year would generally be the year prior, viz.,
2012. If for example this area needs an additional 7 percent emission
reduction for attainment purposes beyond 2008, however, RFP would
require implementation of the entire 7 percent no later than the end of
2011. Since that is the amount needed for attainment, the area would
actually achieve attainment by 2011, and the attainment date would then
have to be no later than 2011. If the area did not achieve this 7
percent reduction until the end of 2011, the RFP requirement in this
case could not require the full 9 percent reduction. Thus, since RFP is
only needed up to the attainment date, should the area achieve the 7
percent earlier in the year it would have achieved attainment and no
further ROP would be required. Therefore, in this example, RFP would
not require more reductions than needed for attainment. Furthermore,
the RFP requirement by itself would not force an attainment year
earlier than 2011 for this case (e.g., 2010--2 years after 2008), since
the 7 percent reduction over 2 years is greater than an annual average
of 3 percent, which is beyond that required by the RFP requirement. In
summary, RFP reductions end at the attainment date, and as shown the
RFP requirement would not result in emissions reductions greater than
needed for attainment.
b. Summary of Final Rule
For each area classified as moderate or higher, the State's 15
percent VOC
[[Page 71650]]
emission reduction plan must provide for the emissions reductions to be
achieved by the end of the 6-year period after the baseline year. The
6-year period referenced in section 182(b)(1) of the CAA shall begin
January 1 of the year following the year used for the baseline
emissions inventory. For areas initially designated nonattainment for
the 8-hour NAAQS, the 6-year period runs from January 1, 2003 to
December 31, 2008.
For each area classified as serious or higher, the State's RFP plan
must provide a 3 percent annual emission reduction requirement averaged
over every 3-year period after the initial 6-year period. For areas
initially designated nonattainment for the 8-hour NAAQS, the first 3-
year period would run from January 1, 2009 to December 31, 2011. The
final increment of progress must be achieved no later than the
attainment date for the area.
To summarize, for areas designated nonattainment for the 8-hour
NAAQS with an effective date of June 15, 2004, the rule would establish
the following:
The 6-year period in section 51.910(a)(1)(i)(A) and
(ii)(C)(1) would run from January 1, 2003 to December 31, 2008.
The first 3-year period in section 51.910(a)(1)(i)(B)
would run from January 1, 2009 to December 31, 2011.
The baseline emissions inventory in section 51.910(d)
would be for calendar year 2002.
c. Comments and Responses
No comments were received on the proposal concerning the timing of
emissions reductions needed for RFP.
14. Banked Emission Reduction Credits (Including Shutdown Credits)
Can pre-baseline emission reduction credits be used to satisfy the
RFP requirement? [No discussion in June 2, 2003 proposal; no draft or
final regulatory text.]
a. Background
This topic was not discussed in the proposed rulemaking, but we
believe that questions that have arisen on this topic bear some
discussion here.
The CAA provides the following definition in section 182(b)(1)(D)
regarding the 15 percent VOC RFP requirement:
Baseline emissions. For purposes of subparagraph (A), the term
``baseline emissions'' means the total amount of actual VOC or
NOX emissions from all anthropogenic sources in the area
during the calendar year of the enactment of the Clean Air Act
Amendments of 1990, excluding * * * [emphasis added.]
The April 1992 General Preamble provides:
The adjusted base year inventory (i.e., baseline emissions) must
contain only actual emissions occurring in the base year, 1990,
within the designated nonattainment area boundaries. The baseline
emissions should not include pre-enactment banked emission credits
since they were not actual emissions during the calendar year of
enactment [57 FR 13507; April 16, 1992; emphasis added].
and
Pre-enactment banked emissions reductions credits are not creditable
toward the 15 percent progress requirement. However, for purposes of
equity, EPA encourages States to allow sources to use such banked
emissions credits for offsets and netting. When States use such
banked credits for offsets and netting to the extent otherwise
creditable under the Part D NSR regulations, these pre-enactment
emissions credits must be treated as growth. Consequently, this
``growth'' must be accounted for, as is the case with all other
anticipated growth, in order to ensure that it does not interfere
with the 15 percent rate of progress requirement (which is ``net''
of growth). In addition, when such growth emissions are used as
offsets, they must be applied in accordance with the offset ratio
prescribed for the area of concern (e.g., 1.3 to 1 for severe areas,
etc.). All pre-enactment banked credits must be included in the
nonattainment area's attainment demonstration for ozone to the
extent that the State expects that such credits will be used for
offsets or netting prior to attainment of the ambient standards.
Credits used after that date will need to be consistent with the
area's plan for maintenance of the ambient standard [57 FR 13508].
The EPA's 1992 guidance on calculating the 15 percent emission
target \55\ contained the following:
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\55\ Guidance on the Adjusted Base Year Emissions Inventory and
the 1996 Target for the 15 Percent Rate-of-Progress Plans. Ozone/
Carbon Monoxide Programs Branch, U.S. Environmental Protection
Agency, Office of Air Quality Planning and Standards, Research
Triangle Park, NC 27711. EPA-452/R-92-005. October 1992.
4.3 Pre-enactment Banked Emissions Reduction Credits. If the State
has an emissions credit bank that meets the EPA's requirements under
an earlier policy statement [\56\], the State is allowed to use its
pre-enactment banked emissions reduction credits to facilitate the
location of new sources in nonattainment areas during the 1990-1996
period. However, because these reduction credits represent emissions
that are not included in the 1990 base year inventory, any
additional emissions that result from the use of banked credits must
be treated as growth in order to ensure that the 15 percent VOC
emissions reduction requirement is achieved. Also, it is important
to note that the use of pre-enactment banked emissions credits must
be in accordance with the offset ratios prescribed in the CAA
Amendments (e.g., 1.3 to 1 in severe areas.)
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\56\ 51 FR 233 ``Emissions Trading Policy Statement; General
Principles for Creation, Banking and Use of Emission Reduction
Credits; Final Policy Statement and Technical Issues Document.''
December 4, 1986. This document has been replaced by Improving Air
Quality with Economic Incentive Programs, January 2001, available at
http://www.epa.gov/region07/programs/artd/air/policy/search.htm.
The 1992 guidance document provides an example calculation of the
above guidance.
b. Interpretation for 8-Hour Ozone NAAQS
The guidance provided above is still relevant for banked emission
reduction credits in relation to the RFP requirement for the 8-hour
ozone standard. However, because the rule for implementing the 8-hour
ozone standard uses a 2002 baseline year, the above guidance should be
read--for purposes of implementing the 8-hour ozone RFP requirement--by
substituting ``pre-enactment banked emission credits'' with ``pre-2002
banked emission credits.'' A pre-2002 banked emission credit is one
that was generated before January 1, 2002 and that is certified in a
bank that EPA has approved for such purposes. For a discussion of the
use of shutdown/curtailment credits for offsets and netting, see
section V.B.1.a of this preamble. For a discussion of the use of
emission reduction credits for offsets and netting, see section V.D.5
of this preamble.
F. Are contingency measures required in the event of failure to meet a
milestone or attain the 8-hour ozone NAAQS?
[Section VI.J. of June 2, 2003 proposed rule (68 FR 32837); no
draft or final regulatory text.]
1. Background
Under the CAA, 8-hour ozone nonattainment areas subject only to
subpart 1, as well as those classified under subpart 2 as moderate,
serious, severe, and extreme must include in their SIPs contingency
measures consistent with sections 172(c)(9) and 182(c)(9), as
applicable. Contingency measures are additional controls to be
implemented in the event the area fails to meet a RFP milestone or
fails to attain by its attainment date. These contingency measures must
be fully adopted rules or measures which are ready for implementation
quickly upon failure to meet milestones or attainment.
For additional background information, see the Proposal (68 FR
32802, June 2, 2003). Other related information can be found in the
following applicable guidance documents:
``Contingency Measures for Ozone and Carbon Monoxide (CO)
[[Page 71651]]
Redesignations,'' Memorandum from G.T. Helms, Chief, Ozone/Carbon
Monoxide Programs Branch, June 1, 1992,
``Procedures for Processing Requests to Redesignate Areas
to Attainment,'' Memorandum from John Calcagni, Director, Air Quality
Management Division, September 4, 1992,
``Guidance for Growth Factor, Projections, and Control
Strategies for the 15 percent Rate-of-Progress Plans,'' (EPA-452/R-93-
002), March 1993,
``Early Implementation of Contingency Measures for Ozone
and Carbon Monoxide (CO) Nonattainment Areas,'' Memorandum from G.T.
Helms, Chief, Ozone/Carbon Monoxide Programs Branch, August 13, 1993,
``Guidance on Issues Related to the 15 Percent Rate-of-
Progress Plans,'' Memorandum from Michael H. Shapiro, Acting Assistant
Administrator for Air and Radiation to the Regional Division Directors,
August 23, 1993,
``Clarification of Issues Regarding the Contingency
Measures that are due on November 15, 1993 for Moderate and Above Ozone
Nonattainment Areas,'' Memorandum from D. Kent Berry, Acting Director,
Air Quality Management Division, November 8, 1993, and
``Guidance on the Post 1996 Rate-of-Progress Plan (ROP)
and Attainment Demonstration,'' (EPA-452/R-93-015), January 1994.
2. Summary of Final Rule
We are adopting the approach taken in our proposal. All subpart 1
and subpart 2 areas other than marginal areas are required to adopt
contingency measures to be implemented in the event of failure to meet
a RFP milestone or to attain the 8-hour ozone NAAQS. The contingency
measures SIP should accompany the attainment demonstration SIP required
for submission by June 15, 2007.
It should be noted that the CAA requires States to identify
contingency measures that will go into effect without further action on
the part of the State or EPA. We believe this language means that
contingency measures should be adopted regulations but also recognize
that some additional State or local action may be necessary (such as
notification of sources) before implementation.
Under subpart 2, areas that are nonattainment for the 8-hour ozone
NAAQS that have unused adopted contingency measures for the 1-hour
ozone NAAQS may use those measures as appropriate as contingency
measures for the 8-hour NAAQS.
For subpart 1 areas, States should follow EPA's existing guidance
for subpart 2 areas. We intend to provide additional guidance only if
needed.
3. Comments and Responses
Comment: Two commenters raised concerns about the difficulty some
areas may have in identifying what they referred to as ``reserve'' or
``unused'' measures for the 1-hour standard that could be used as
contingency measures for the 8-hour standard for subpart 2 areas. These
commenters requested protection for areas that have no ``leftover''
measures to be used in the event of failure to meet the milestone. The
commenters contended that EPA needs to have policies that do not
penalize areas that have implemented all feasible measures to attain
the standard and may not have any identified contingency measures left.
Response: The commenters appear to be asking EPA to drop the
requirement for a nonattainment area SIP to contain contingency
measures. The commenters have not provided a legal rationale why they
believe it is possible to do this. The purpose of contingency measures
is to have a quickly implementable backup plan of action should primary
measures fail to bring a nonattaining area to the requisite level (be
it attainment of the NAAQS or meeting a RFP milestone). It is up to
each State to determine what measures the State will commit to
implement should failure occur. We note that States may rely on
regional and national control measures as well as local control
measures to meet the contingency measure obligation.
A list of example contingency measures has been provided. See
section 9.5 of ``Guidance for Growth Factor, Projections, and Control
Strategies for the 15 percent Rate-of-Progress Plans,'' (EPA-452/R-93-
002), March 1993. The States have the responsibility of determining
what contingency measures are most appropriate for their area(s). To
allow nonattaining areas with seemingly few potential contingency
measures to opt out of the contingency measure requirement is counter
to the contingency measure provision in the CAA. The EPA does not see
any way to interpret the clear language of the statute other than as
requiring contingency measures in all nonattainment areas other than
marginal subpart 2 areas. It should also be noted that the CAA's
requirement for an area's SIP to demonstrate attainment by the
attainment date is not limited to the adoption only of those measures
that are ``feasible.''
Comment: One commenter alleged EPA's proposal to allow Federal
measures that result in additional emissions reductions beyond RFP or
attainment to qualify as contingency measures is legally invalid. The
commenter further stated that contingency measures must consist of
control requirements that will be taken off the shelf and undertaken if
and when a RFP or attainment failure occurs. In other words,
contingency measures must be new measures not Federal or local measures
that already exist.
Response: The CAA states that contingency measures are to be
``specific measures to be undertaken if the area fails to make
reasonable further progress, or to attain * * * by the attainment
date.'' The April 16, 1992 General Preamble provided the following
guidance: ``States must show that their contingency measures can be
implemented with minimal further action on their part and with no
additional rulemaking actions such as public hearings or legislative
review. In general, EPA will expect all actions needed to affect full
implementation of the measures to occur within 60 days after EPA
notifies the State of its failure.'' (57 FR 13512). This could include
Federal measures and local measures already scheduled for
implementation.
The EPA has approved numerous SIPs under this interpretation--i.e.,
that use as contingency measures one or more Federal or local measures
that are in place and provide reductions that are in excess to the
attainment demonstration or RFP plan. (62 FR 15844, April 3, 1997; 62
FR 66279, December 18, 1997; 66 FR 30811, June 8, 2001; 66 FR 586 and
66 FR 634, January 3, 2001.) The key is that the statute requires extra
reductions that are not relied on for RFP or attainment and that are in
the demonstration to provide a cushion while the plan is revised to
meet the missed milestone. In other words, contingency measures are
intended to achieve reductions over and beyond those relied on in the
attainment and RFP demonstrations. Nothing in the statute precludes a
State from implementing such measures before they are triggered. In
fact, a recent court ruling upheld contingency measures that were
previously required and implemented where they were in excess of the
attainment demonstration and RFP SIP. See LEAN v. EPA, 382 F. 3d 575
5th Circuit, 2004.
Comment: One commenter supported EPA's proposal to continue to
observe existing policies regarding contingency measures for areas
covered under
[[Page 71652]]
subpart 2 for the 8-hour standard. Additionally, the commenter
anticipated that EPA's additional guidance on the contingency measure
requirement for subpart 1 will be patterned after the subpart 2
requirement.
Response: The EPA acknowledges the commenter's support of our
proposal that subpart 2 8-hour ozone nonattainment areas may rely on
our existing contingency measure guidance. As provided above, both
subpart 1 and subpart 2 areas should rely on that guidance for purposes
of adopting contingency measures.
G. What requirements should apply for RACM and RACT for 8-hour ozone
nonattainment areas?
[Section VI.K. of June 2, 2003 proposed rule (68 FR 32837); Sec.
51.912 in draft and final regulatory text.]
The first subsection of this section covers RACT and the second
subsection covers RACM.
1. Reasonably Available Control Technology (RACT)
a. Background
As described in more detail in the June 2 proposal, subpart 1 of
part D includes a requirement that an attainment plan provide for the
implementation of all RACM as expeditiously as practicable, including
such reductions that may be obtained through RACT. Under subpart 2,
marginal areas are required to correct pre-1990 RACT requirements and
new RACT requirements are specified for moderate and above ozone
nonattainment areas. Additionally, States must adopt RACT for all areas
in an OTR. The RACT requirement applies to both ozone precursors--
NOX and VOC. Since 1990, we have issued guidance documents
on the RACT requirements in subpart 2. Prior to enactment of the CAA
Amendments of 1990, EPA also issued detailed guidance documents on RACT
for ozone nonattainment area SIPs.\57\
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\57\ The EPA defined RACT as the lowest emission limitation that
a particular source is capable of meeting by the application of
control technology that is reasonably available considering
technological and economic feasibility (44 FR 53762; September 17,
1979).
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Section 183(c) of the CAA requires EPA to ``revise and update such
documents [i.e., Control Techniques Guidelines and Alternative Control
Techniques] as the Administrator determines necessary.'' As new or
updated information becomes available States should consider the new
information in their RACT determinations. States should consider the
new information in any RACT determinations or certifications that have
not been issued by the State as of the time such an update becomes
available.\58\
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\58\ In addition, EPA is considering related recommendations
from the Air Quality Management Work Group to the Clean Air Act
Advisory Committee (CAAAC) dated January 2005 [available at: http://www.epa.gov/air/caaac/aqm.html#library
] in response to the recent
National Research Council report on Air Quality Management in the
United States (January 2004) [available for sale; individual pages
available for viewing at http://www.nap.edu/books/0309089328/html].
One of the recommendations to the CAAAC is that ``for the SIPs
States are required to submit over the next several years, EPA and
States, locals, and Tribes should promote the consideration of
multipollutant impacts, including the impacts of air toxics, and
where there is discretion, select regulatory approaches that
maximize benefits from controlling key air toxics, as well as ozone,
PM2.5 and regional haze.'' As part of this effort, EPA
intends in the future to develop updated technology guidance with
respect to source categories emitting multiple pollutants in large
amounts. At this time, however, we think it is unlikely that updated
technology guidance will be available in time for the RACT SIPs due
in 2006.
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The June 2, 2003 proposal addressed several aspects of the RACT
requirement. For subpart 1 areas, we proposed several options. We
proposed in one option to interpret the CAA in a manner similar to that
under subpart 2 by requiring areas covered under subpart 1 to face
different RACT requirements based on the magnitude of the ozone problem
in the area (i.e., the area's design value). In another option, we
proposed that RACT would be met if the area were able to demonstrate
attainment of the standard as expeditiously as practicable with
emission control measures in the SIP. We also proposed as an early
attainment incentive that RACT would be met in an area which
demonstrates attainment within 3 years and submits the demonstration
within 1 year. We proposed the RACT submittal dates for subpart 1 areas
would be within 2 years after designation.
For subpart 2 areas, we proposed to apply RACT as specified in
subpart 2. We proposed (in the draft regulatory text) to require that
States submit their subpart 2 RACT SIPs within 2 years after the
nonattainment designation. In addition, we proposed the date for
affected sources to implement RACT in subpart 2 areas would be 30
months after the required submittal date. We also proposed that States
may use current EPA guidance in making RACT determinations;
consequently, in some cases, sources previously evaluated under the 1-
hour ozone RACT requirement and sources subject to the NOX
SIP Call cap-and-trade program could be determined to meet the 8-hour
ozone RACT requirement.
b. Summary of Final Rule
For subpart 1 areas that do not request an attainment date
extension (i.e., an attainment date beyond 5 years after designation),
RACT will be met with control requirements sufficient to demonstrate
that the NAAQS is attained as expeditiously as practicable. The RACT
submittal date for these areas is the same as the submittal date for
the attainment plan. This submission date is no later than 3 years
after designation.
For subpart 1 areas that request an attainment date extension
(i.e., an attainment date beyond 5 years after designation), the State
shall submit the RACT SIP with its attainment date extension
request.\59\ For subpart 2 moderate and above areas, and areas within
an OTR, RACT is required with the RACT submittal and is due 27 months
after designation. States must require sources to implement RACT no
later than the first ozone season or portion thereof which occurs 30
months after the required submittal date.
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\59\ This is generally expected with the submission of the
attainment demonstration.
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Where a RACT SIP submission (separate from the attainment
demonstration) is required (except certain subpart 1 areas, as
described two paragraphs prior to this, and except certain sources
subject to the NOX SIP Call or CAIR, as described below),
State SIPs implementing the 8-hour standard must assure that RACT is
met, either through a certification that previously required RACT
controls represent RACT for 8-hour implementation purposes or through a
new RACT determination. States may use existing EPA guidance in making
RACT determinations. Where a State has adopted and EPA has approved a
control measure as RACT for a specific major stationary source or
source category for the 1-hour ozone NAAQS, and absent data indicating
that the previous RACT determination is no longer appropriate, the
State may submit a certification that the source is subject to a SIP-
approved RACT requirement. Such certification shall be accompanied by
appropriate supporting information, such as consideration of
information received from public commenters.
For purposes of meeting the NOX RACT requirement, the
State need not perform (or submit) a NOX RACT analysis for
sources subject to the state's emission cap-and-trade program where the
cap-and-trade program has been adopted by the State that meets the
NOX SIP Call requirements or, in States achieving CAIR
reductions solely from EGUs, the CAIR NOX requirements. The
EPA believes that the SIP provisions for
[[Page 71653]]
those sources meet the ozone NOX RACT requirement. A State
that is relying on this conclusion for the affected sources should
document this reliance in its RACT SIP.
Additionally, RACT is considered met for cement kilns and
stationary internal combustion engines that are subject to a SIP
approved as meeting the NOX SIP Call obligation to install
and operate controls that are expected to achieve at least a 30 percent
and 82 percent reduction, respectively, from uncontrolled levels. A
State that is relying on this conclusion for the affected sources
should document this reliance in its RACT SIP.
A State may meet the NOX RACT requirement by showing
that the weighted average emission rate from a broad range of sources
in the nonattainment area subject to RACT meet RACT requirements.
At their discretion, States are free to conduct a case-by-case RACT
determination for any source--or RACT determinations or certifications
for groups of sources.
As discussed below in greater detail, States may use information
gathered from prior BACT or LAER analyses, to the extent it remains
valid, to help complete a RACT determination. Similarly, emissions
standards developed under 111(d) and NSR/PSD settlement agreements may
be considered. This will allow States, in a number of cases, to rely on
these prior determinations for purposes of showing that a source is
meeting RACT requirements.
For VOC sources subject to MACT standards, States may streamline
their RACT analysis by including a discussion of the MACT controls and
considerations relevant to VOC RACT. We believe that this will allow
States, in many cases, to rely on the MACT standards for purposes of
showing that a source has met VOC RACT.
Consistent with the proposed regulatory text for this rule [section
51.912(b)(1)], the final rule provides that, for purposes of meeting
the RACT obligations under section 182(b)(2)(C) of the CAA for major
stationary sources of VOCs and under section 182(f) of the CAA for
major stationary sources of NOX, the definition of major
stationary source in section 302 of the CAA, as modified by the major
source definition in either section 182(b), (c), (d) or (e) of the CAA
as applicable to the area's classification, applies.
Although we drafted more extensive regulatory language for several
aspects of the RACT program in the proposal, we believe it is
sufficient to describe EPA's views on the details of the RACT program
in today's preamble and in other guidance [e.g., the NOX
Supplement to the General Preamble, November 25, 1992 (57 FR 55620)].
Thus, some detailed portions of the proposed regulatory text regarding
RACT were not retained in the final rule (in particular paragraph
(b)(2) ``Prior RACT Determinations'').
c. Comments and Responses
Comments: For subpart 2 ozone nonattainment areas, several States
expressed agreement with the proposed approach for implementing RACT
consistent with section 182 of the CAA.
Response: The EPA agrees with these comments.
Comments: For subpart 1 ozone nonattainment areas, EPA received
several comments for and against the options proposed for addressing
RACT.
Several State and industry commenters supported EPA's proposed
approach that RACT would be met if the area is able to demonstrate
attainment of the standard as expeditiously as practicable with
emission control measures in the SIP. The reasons provided by these
commenters were generally as follows: States should be able to use
their discretion in determining which control strategies are the most
effective in addressing a particular area's air quality problem;
flexibility is needed as areas differ in sensitivity to NOX
and VOC reductions; EPA's regional modeling shows these requirements
are unnecessary in many areas; and many of these areas violate the
ozone standard primarily or entirely due to transport.
The EPA also received comments, primarily from several States and
environmental groups, opposing the approach that RACT would be met by
control measures that are part of a SIP demonstrating attainment of the
standard as expeditiously as practicable. These commenters made the
following points: since section 172(c)(1) of the CAA explicitly
mandates RACT ``at a minimum'' in all nonattainment areas, Congress
plainly intended to require RACT as a floor level of control technology
in addition to any measures needed to demonstrate timely attainment;
even where RACT does not advance attainment, it is needed in order to
reduce the severity and number of violations; under this approach, the
statutory RACT provisions add nothing to the statutory attainment
mandate--which violates basic canons of statutory interpretation; RACT
in nonattainment areas will substantially reduce transport of ozone and
ozone precursors; for equity reasons, sources in similar areas should
be subject to the same control; and RACT is a useful tool that should
not be abandoned through flexibility mechanisms.
Response: The general RACT provision under subpart 1 in the
statute, is found in section 172(c)(1). It is a portion of the RACM
provision found in that same section. Our long-standing interpretation
of the RACM provision is that areas need only submit such RACM as will
contribute to timely attainment and meet RFP, and that measures which
might be available but would not advance attainment or contribute to
RFP need not be considered RACM. This interpretation has been upheld in
several recent court cases. See Sierra Club v. EPA, 294 F.39 155, 162
(D.C. Circuit, 2002) (concerning the Metropolitan Washington, D.C.,
attainment demonstration) and Sierra Club v. EPA, No. 01-60537 (5th
Circuit, 2002) (concerning the Beaumont attainment demonstration).
Since subpart 1 RACT is a portion of RACM, these cases also support a
conclusion that, where we are dealing only with section 172 RACT, it is
reasonable to require only such RACT as will meet RFP and advance
attainment. In view of these court cases, EPA disagrees with the
comments listed above opposing the approach that, in subpart 1 areas,
RACT would be met by control measures in a SIP demonstrating attainment
of the standard as expeditiously as practicable and meeting RFP.
The EPA generally agrees with comments that States should have
flexibility to determine which control strategies are the most
effective in reaching attainment as expeditiously as practicable and
providing for RFP, and the CAA gives primary authority to States and
local governments to select the mix of controls necessary to meet the
NAAQS. In addition, EPA believes that section 172(c) is not the
appropriate section of the CAA to address the transport of ozone and
ozone precursors; EPA has conducted and is conducting rulemaking
pursuant to sections 110 and 126 for that purpose.
Finally, some commenters suggested, for equity reasons, that
sources in similar areas should be subject to the same control. In the
proposal, EPA suggested subpart 1 and 2 areas with the 8-hour ozone
design values above 91 ppb should be subject to VOC and NOX
RACT requirements. The EPA also proposed that RACT would be met in an
area which demonstrates attainment within 3 years and submits the
demonstration within 1 year. In the final rule, EPA has addressed
equity concerns by taking portions of these two proposals, such that
subpart 1 and subpart 2 areas with attainment
[[Page 71654]]
deadlines longer than 5 years after designation must meet the same RACT
requirements. We believe longer than 5 years is more appropriate than
the 3 years proposed for this requirement since this approximates the
maximum attainment date for subpart 2 (moderate) areas subject to RACT
and since this approach is consistent with the manner in which ROP/RFP
requirements are treated in the final rule.
Therefore, in subpart 1 areas that do not request an extension
beyond the initial 5 years after designation, the final rule indicates
that RACT would be met by the emission control measures in a SIP that
demonstrates attainment of the standard as expeditiously as practicable
and meets RFP. In addition, the final rule requires subpart 1 areas
with maximum attainment deadlines longer than 5 years after designation
to meet the same RACT requirements as subpart 2 areas. This approach
minimizes the RACT inequity with subpart 2 areas and provides
flexibility for subpart 1 areas demonstrating attainment within 5
years.
Comment: One commenter believes that new marginal nonattainment
areas should be subject to RACT under the 8-hour standard just as they
would have been subject to RACT immediately prior to the CAA Amendments
of 1990.
Response: Section 182(a) provides that marginal and higher
classified areas for the 1-hour standard with pre-1990 RACT obligations
had to submit corrections to their RACT rules within 6 months after
classification under the 1990 CAA Amendments. To the extent that any 8-
hour ozone nonattainment areas did have this obligation, they already
met it. See footnote 60 in the June 2, 2003 proposal. The CAA does not
require RACT for marginal areas other than the obligation to
``correct'' pre-1990 RACT requirements.
Comment: The EPA received several comments for and against the
proposal that States may use a prior RACT determination with respect to
the 1-hour ozone standard for purposes of meeting the RACT requirements
for the 8-hour ozone standard. Further, EPA received comments on the
proposal that a new RACT determination is required in cases where the
initial RACT analysis under the 1-hour standard for a specific source
or source category concluded that no additional controls were
necessary.
Several State and industry commenters supported EPA's proposed
approach that a prior RACT analysis under the 1-hour ozone standard
should meet RACT requirements under the 8-hour standard where major
sources or source categories were previously reviewed and controls
applied to meet RACT. These commenters stated that RACT is not specific
to any particular ozone standard, such that once a source has met RACT,
it has met RACT, whether or not the ozone standard is revised to become
more (or less) stringent; just as with the 15 percent VOC requirement,
the statute provides no basis for duplicative imposition of RACT; and
there is no basis in the statute to read in a new requirement for RACT.
In addition, some industry commenters stated that EGUs which meet title
IV NOX control requirements would also meet the
NOX RACT requirement.
The EPA also received comments from several States opposing EPA's
proposed approach. These commenters believe the NOX and VOC
guidance is too old, needs updating and, in the case of NOX
controls, the improvement over the last 3 years has been dramatic with
controls previously considered to be BACT (and therefore generally
considered at the time to be more stringent than RACT) are now
considered to be merely RACT. In addition, one State suggested the
presumptive RACT level should be revised to at least 85 percent control
or that NOX RACT should be defined as up to $10,000/ton of
pollutant removed.
Two States disagreed with EPA's proposal that a new RACT
determination should be required in cases where the initial RACT
analysis under the 1-hour NAAQS found that no additional controls were
necessary for a specific source or source category. They indicated such
re-analysis would be an unwise use of resources because it would not
yield significant benefits. Further, they do not agree that a RACT
determination is warranted for major VOC or NOX sources not
in existence during the previous RACT determination, because new
sources in 1-hour nonattainment areas have been permitted pursuant to
the requirements for NSR and, where applicable, have already been
subject to more stringent control requirements.
Several State and industry commenters recommended that RACT
requirements apply for major sources in any portion of the 8-hour
nonattainment area not subject to a RACT program for the 1-hour
standard.
Response: In 1992, EPA set presumptive NOX RACT for
boilers as combustion modification, consistent with title IV acid rain
requirements. For all other NOX stationary source
categories, EPA guidance in 1994 indicated States should consider in
their RACT determinations technologies that achieve 30-50 percent
reduction within a cost range of $160-1300 per ton of NOX
removed. In the NOX SIP Call Rule, we reviewed all major
NOX source categories and stated in the final rule that the
NOX SIP Call controls, at less than $2,000/ton, represent
reductions beyond those required by RACT. The suggestion of one State
that EPA's RACT guidance should be revised to reflect 85 percent
control and $10,000/ton of pollutant removed is inconsistent with EPA's
previous conclusions regarding what level of control represents RACT
and because the comment lacked supporting documentation that the
suggested values represent feasible control levels for the many source
categories affected by the RACT program.
Many areas subject to the major source RACT requirement under the
8-hour ozone standard have previously addressed the RACT requirement
with respect to the 1-hour ozone standard. For example, major sources
located in States of the Ozone Transport Commission were subject to the
NOX RACT requirement in the mid-1990s. We believe that, in
many cases, a new RACT determination under the 8-hour standard would
result in the same or similar control technology as the initial RACT
determination under the 1-hour standard because the fundamental control
techniques, as described in the CTGs and ACTs, are still applicable. In
cases where controls were applied due to the 1-hour ozone RACT
requirement, we expect the incremental emissions reductions from
application of a second round of controls would be small and,
therefore, the cost for advancing that small additional increment of
reduction would not be reasonable. In such cases, EPA believes the cost
per ton of NOX removed associated with installing a second
round of RACT controls (and perhaps the removal of initial RACT
controls) is likely to be beyond the costs assumed in our current
guidance noted above ($160-$1300/ton). In contrast, a RACT analysis for
uncontrolled sources would be much more likely to find that RACT level
controls are economically and technically feasible.
The CTGs and ACTs for VOC were completed over a period from the
late 1970s to mid-1990s and have not been updated. The CTGs are still
used to presumptively define VOC RACT. The EPA issued NOX
ACT documents between 1992 and 1995. In September 2000, updates to the
NOX ACT documents were completed for stationary internal
combustion engines and cement kilns. The NOX and VOC ACTs
describe available control techniques and their cost effectiveness, but
do not define presumptive RACT levels as the CTGs do. Updating the
[[Page 71655]]
ACTs would not, by itself, change EPA's NOX or VOC RACT
guidance, but it could provide information that would lead to a new
conclusion as to which control measures constitute RACT for a specific
source or source category. Since RACT can change over time as new
technology becomes available or the cost of existing technology
decreases, EPA does not agree with comments that once a source has met
RACT, it has met RACT whether or not the ozone standard is revised.
We agree that progress has been made in improving the cost
effectiveness of some NOX and VOC controls. States and other
interested parties should consider available information that may
supplement the CTG and ACT documents. In cases where additional
information is presented, for example, as part of notice-and-comment
rulemaking on a RACT SIP submittal, States (and EPA) would necessarily
consider the additional data in reviewing what control obligation is
consistent with RACT. Similarly, we encourage States to use the latest
information available in making RACT determinations, whether that
information is in CTGs, ACTs, or elsewhere.
The EPA agrees that it is more efficient for EPA to broadly assess
what is RACT for a specific source category than for States to conduct
source-by-source RACT determinations, especially considering that
States need to initiate RACT programs in the near future (as discussed
in a separate comment/response). The EPA's current RACT guidance may be
used for purposes of the 8-hour standard. At the same time, we agree
with comments that many of the CTGs/ACTs have not been revised since
issued and thus may not provide the most accurate picture of current
control options. Therefore, we believe States must consider new
information that has become available and certify that a 1-hour ozone
RACT determination, even where controls were required, still represents
an appropriate RACT level of control for the 8-hour ozone program. In
the alternative, the State should revise the SIP to reflect a modified
RACT requirement for specific sources or source categories.
In summary, we believe the current NOX and VOC RACT
guidance, including CTGs and ACTs, may continue to be used by States in
making RACT determinations with respect to the 8-hour ozone standard.
States should ensure that their SIPs accurately reflect RACT based on
the current availability of technically and economically feasible
controls.
Therefore, in portions of 8-hour ozone nonattainment areas where
major sources or source categories were previously reviewed and
controls applied to meet the RACT requirement under the 1-hour
standard, States should review and, if appropriate, accept the initial
RACT analysis as meeting the RACT requirements for the 8-hour standard.
Absent data indicating that the previous RACT determination is no
longer appropriate, the State need not submit in its SIP a new RACT
requirement for these sources. In such cases, the State should submit a
certification as part of its SIP revision, with appropriate supporting
information, such as consideration of new data, that these sources are
already subject to SIP-approved requirements that still meet the RACT
obligation. There are cases where the initial RACT analysis under the
1-hour standard for a specific source or source category concluded that
no additional controls were necessary. In such cases, a new RACT
determination is needed to consider whether more cost-effective control
measures have become available for sources that were not previously
regulated. A re-analysis may determine that controls are now
economically and technically feasible and should be required to meet
RACT. Furthermore, in this situation, we expect the incremental
emissions reductions to be significant, compared to the uncontrolled
emissions levels. Thus, the cost per ton of emissions controlled is
more likely to make controls ``reasonably available'' than where a
source had already installed controls to meet RACT for the 1-hour
standard. In all cases where additional information is presented as
part of notice-and-comment rulemaking, including a RACT SIP submittal
for sources previously controlled, States (and EPA) must consider the
additional information as part of that rulemaking.
We agree with several State and industry comments that RACT
requirements apply for major sources in any portion of the 8-hour
nonattainment area not subject to a RACT program for the 1-hour
standard.
Some commenters objected to EPA's proposal that any major VOC or
NOX source that did not exist during a previous RACT
determination must be subject to a RACT determination as part of the
SIP for the 8-hour ozone standard. These commenters stated that the
BACT or LAER provisions would assure at least RACT level controls on
such sources. We agree this should be true in many cases, but not all.
The BACT/LAER analyses do not automatically ensure compliance with RACT
since the regulated pollutant or source applicability may differ and
the analyses may be conducted many years apart. States may, however,
rely on information gathered from prior BACT or LAER analyses for the
purposes of showing that a source has met RACT to the extent the
information remains valid. We believe that the same logic holds true
for emissions standards for municipal waste incinerators under CAA
section 111(d) and NSR/PSD settlement agreements. Where the State is
relying on these standards to represent a RACT level of control, the
State should present their analysis with their determination during the
SIP adoption process.
For VOC sources subject to MACT standards, States may streamline
their RACT analysis by including a discussion of the MACT controls and
relevant factors such as whether VOCs are well controlled under the
relevant MACT air toxics standard, which units at the facility have
MACT controls, and whether any major new developments in technologies
or costs have occurred subsequent to the MACT standards. We believe
that there are many VOC sources that are well controlled (e.g., through
add-on controls or through substitution of non-VOC non-HAP materials
for VOC HAP materials) because they are regulated by the MACT
standards, which EPA developed under CAA section 112. Any source
subject to MACT standards must meet a level that is as stringent as the
best-controlled 12 percent of sources in the industry. Examples of
these HAP sources that may effectively control VOC emissions include
organic chemical plants subject to the hazardous organic NESHAP (HON),
pharmaceutical production facilities, and petroleum refineries.\60\ We
believe that, in many cases, it will be unlikely that States will
identify emission controls more stringent than the MACT standards that
are not prohibitively expensive and are thus unreasonable. We believe
this will allow States, in many cases, to rely on the MACT standards
for purposes of showing that a source has met VOC RACT.
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\60\ However, there are some MACT categories for which it may
not be possible to determine the degree of VOC reductions from the
MACT standard without additional analysis; for example, the
miscellaneous metal parts and products (40 CFR part 60, subpart
MMMM) due to the uncertainty of the compliance method that will be
selected.
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Comments: Some commenters pointed out that many companies have
employed averaging programs for NOX SIP Call compliance and
want this option preserved under the 8-hour ozone standard since
requiring sources
[[Page 71656]]
to individually meet NOX RACT requirements would greatly
increase the costs of compliance at sources already subject to the
NOX cap-and-trade program without achieving greater
emissions reductions.
Response: In some cases, a facility or a group of sources in a
nonattainment area might choose to meet NOX RACT by adopting
an emissions averaging concept within the area; e.g., over-controlling
one or more large units and not controlling other units. We agree with
comments that emission averaging and cap-and-trade programs such as the
NOX SIP Call Rule achieve emissions reductions at lower
costs. The EPA's NOX RACT guidance, published on November
25, 1992 (57 FR 55625), was, in part, for the purpose of ``enhancing
the ability of States to adopt market-based trading systems for
NOX'' and to encourage States to ``structure their RACT
requirements to inherently incorporate an emissions averaging concept
(i.e., installing more stringent controls on some units in exchange for
lesser control on others).'' EPA believes that such cap-and-trade
programs are beneficial ways to achieve the greatest overall reductions
in the most cost-effective manner. Consistent with previous
guidance,\61\ EPA continues to believe that RACT can be met on average
by a group of sources within a nonattainment area rather than at each
individual source. Therefore, states can show that SIP provisions for
these sources meet the ozone RACT requirement using the averaging
approach.
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\61\ The EPA's NOX RACT guidance (NOX
General Preamble at 57 FR 55625) encourages States to develop RACT
programs that are based on ``areawide average emission rates.''
Thus, EPA's existing policy provides for States to submit a
demonstration as part of their RACT submittal showing that the
weighted average emission rate from sources in the nonattainment
area subject to RACT meet RACT requirements.
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Finally, EPA believes that sources complying with the
NOX SIP call trading system meet their RACT obligation, for
reasons explained later in this section.
Comments: Several State and industry commenters supported EPA's
proposed approach concerning RACT and the NOX SIP Call.
These commenters stated that the level of emissions reductions required
by the NOX SIP Call is far greater than the level of
reductions achieved by controls that have been determined to be
NOX RACT. One State encouraged EPA to provide this approach
to other areas subject to approved cap-and-trade programs in addition
to those areas affected by the NOX SIP Call.
The EPA also received comments, primarily from several States and
environmental groups, opposing the approach. These commenters stated
that there are no exceptions to the RACT mandates in either subpart 1
or subpart 2 for sources subject to NOX SIP Call cap-and-
trade programs, and EPA is without authority to invent such an
exception. Because the NOX SIP Call's cap-and-trade program
does not require emission control technologies to be installed at a
particular source, some commenters conclude that RACT requirements are
necessary and appropriate to ensure that all sources implement at least
a minimum level of control. One State indicated there have been
numerous cases where sources subject to the NOX SIP Call
have not had to install controls comparable to RACT. Commenters also
suggested that RACT is intended to be a benchmark for control
technology at individual stationary sources, not a level of regional
reductions. In addition, some commenters noted that the NOX
SIP Call requirements are specific to the ozone season, where RACT
requirements are year-round. Consequently, these commenters recommended
that EPA should also consider non-ozone related nitrogen issues,
including fine particles, visibility, nitrification and acidification
of watersheds and eutrophication of coastal waters all of which would
be reduced with year-round controls.
Response: In 2009, when sources in areas designated nonattainment
for the 8-hour standard in June 2004 must comply with RACT, the
NOX SIP call trading program is subsumed by the CAIR trading
program. As described below, EPA believes that sources meet ozone
NOX RACT requirements if they comply with the NOX
SIP Call trading program or, in States where all CAIR reductions are
achieved by EGUs, rules implementing CAIR. Accordingly, a State need
not perform a NOX RACT analysis for non-EGU sources that
after 2008 continue to be subject to a SIP that regulates those non-EGU
sources equally or more stringently than the State's current rules
meeting the NOX SIP call. In a NOX SIP Call State
that ensures such reductions from non-EGUs, the State need not perform
a NOX RACT analysis for EGU sources if the State retains a
summer season EGU budget under CAIR that is at least as restrictive as
the EGU budget that was approved in the State's NOX SIP call
SIP. In addition, the State need not perform a NOX RACT
analysis for EGUs subject to a State cap-and-trade program that meets
CAIR and achieves CAIR NOX reductions solely from EGUs. As
noted above, the SIP should document that the State is relying on EPA's
conclusion in this preamble that these levels of control meet RACT for
the covered sources.
The EPA believes the RACT mandate in subpart 1 and subpart 2
applies in specific geographic areas but does not necessarily require
every major source to install controls. For example, as discussed in a
separate comment/response, where we are dealing only with subpart 1
RACT, we only require such RACT as will advance attainment or meet RFP.
Thus, EPA does not agree with commenters who conclude that RACT
requirements are necessary and appropriate to ensure that all sources
implement at least a minimum level of control or that RACT is intended
to be a benchmark for control technology at all individual stationary
sources.
Some commenters pointed out that the NOX SIP Call
requirements are specific to the ozone season, yet RACT requirements
are year-round. Although there are some exceptions, EPA agrees that
RACT usually is an application of controls year-round; thus, there
would be non-ozone-related nitrogen benefits, including fine particles,
visibility, nitrification and acidification of watersheds and
eutrophication of coastal waters due to year-round controls. While the
commenters are correct that the NOX SIP call reductions must
be achieved during the 5 months of the ozone season critical for high
ozone concentrations for affected States, we believe that the RACT
requirement will be satisfied for sources covered by the NOX
SIP Call. In addition to operating advanced controls at least in the
ozone season, many sources have installed combustion controls that
function all the time; emissions reductions from these controls will
occur year round.
(i) NOX SIP Call: All States submitting SIP revisions to
meet the NOX SIP Call (October 27, 1998; 63 FR 57356)
elected to require large boilers and turbines to comply with an
emissions cap-and-trade program consistent with EPA's model cap-and-
trade rule. As a result, the covered sources are already subject to a
stringent control program.\62\ As described in the June 2, 2003
proposal, these sources collectively achieve more emissions reductions
within the SIP
[[Page 71657]]
Call area than would be required by application of RACT requirements to
each source in that area. At the time that EPA promulgated the
NOX SIP Call rule, EPA estimated that in the NOX
SIP Call control case, EGUs would achieve a 64 percent reduction beyond
the base case requirements,\63\ and that the non-EGUs subject to the
States' cap-and-trade program would achieve a 60 percent reduction from
uncontrolled levels.\64\ These EGU and non-EGU reductions were clearly
beyond the 30-50 percent expected from a RACT program.\65\ We stated in
the final NOX SIP Call rule that the reductions achieved by
that program ``. . . represent reductions beyond those required by
Title IV or Title I RACT.'' In addition, because the cap-and-trade
program covers units serving a 25 megawatt generator, it may achieve
emission reductions from many units that are below the general
NOX RACT threshold of 100 tpy for sources in the East.
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\62\ The cost of purchasing allowances will often be higher than
the cost for achieving a RACT level of control. In the 1998
NOX SIP Call Rule, average costs of compliance were
estimated at about $1500/ton and average RACT level costs are less
than $1300/ton. Recent estimates of the projected cost of allowances
are about $2000-4000/ton (NOX Budget Trading Program,
2003 Progress and Compliance Report, August 2004, EPA-430-R-04-010).
\63\ The EPA's 1992 NOX RACT guidance provides that
the controls required under title IV of the CAA are RACT controls
and specifies emission rates three times larger than the rates later
used for coal-fired units in the NOX SIP Call (0.45-0.50
lb/mmBtu versus 0.15). Base case refers to the situation absent
NOX SIP call controls.
\64\ 63 FR 57434-5.
\65\ Memorandum of March 16, 1994, from D. Kent Berry re:
``Cost-Effective Nitrogen Oxides (NOX) Reasonably
Available Control Technology (RACT).'' U.S. Environmental Protection
Agency, Research Triangle Park, North Carolina.
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EPA generally has the discretion to determine whether a State
submitted rule is consistent with the RACT requirements for a
particular source in the context of approving individual RACT SIPs. The
NOX SIP Call is estimated to achieve a beyond-RACT degree of
control regionally, and sources were required to install any controls
needed for compliance no later than May 2004. Under these
circumstances, EPA believes that the NOX SIP call
constitutes RACT for those sources covered by the NOX SIP
Call, regardless of the manner of compliance of individual sources
(e.g., control equipment installation or purchase of allowances from
other sources). EPA is making this finding now for all areas in the
NOX SIP call region, such that States need not submit RACT
analyses for sources subject to the NOX SIP call that are in
compliance with a SIP approved as meeting the NOX SIP call.
A State that is relying on this conclusion for affected sources should
document this reliance in its RACT SIP.
Whether our judgment that non-EGU sources subject to the
NOX SIP Call trading system meet RACT will continue to apply
in the future depends upon how the State chooses to make the transition
from the NOX SIP Call trading system to the CAIR trading
system. After 2008, EPA will no longer administer the NOX
SIP Call trading system and will only administer the CAIR trading
system. A State subject to the NOX SIP Call has three
choices for the transition. One, a State can bring its non-EGU sources
that are subject to the NOX SIP Call trading program into
the CAIR trading program with the same emissions budget allowed by the
State's current NOX SIP Call rules. Two, a State can adopt a
SIP that regulates those non-EGU sources at least as stringently as the
State's current NOX SIP Call rules, but does not move those
sources into the CAIR trading program. Three, a State can adopt a new
SIP that meets its NOX SIP Call responsibilities, in whole
or in part, by regulating sources other than the non-EGU sources
regulated by the State's current NOX SIP Call trading
program rules. We believe it is unlikely that States will choose the
third option, given that its non-EGU sources already would have
complied with the NOX SIP Call requirements. Under the first
two options, we believe that these non-EGU sources would continue to
satisfy RACT. Under the third option, the State would need to determine
whether non-EGU sources that had participated in the NOX SIP
Call trading program continue to meet RACT (either individually, or
through averaging among sources within the nonattainment area).
Finally, as proposed, in cases where States have adopted controls
for cement kilns consistent with the NOX SIP Call (i.e., 30
percent reduction), the State may choose to accept the NOX
SIP Call requirements as meeting the NOX RACT requirements
for the 8-hour standard and need not perform a new NOX RACT
analysis for those sources. In its RACT SIP submission, the State
should identify the cement plants that are subject to NOX
SIP Call controls and that, therefore, are already subject to a SIP-
approved requirement consistent with RACT. The EPA received comments
from States supporting the proposal. Similarly, EPA believes a State
may choose to accept the Phase II NOX SIP Call control level
for stationary internal combustion engines \66\ as meeting the
NOX RACT requirements and identify these obligations as RACT
level controls in its RACT SIP.
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\66\ As described in the April 21, 2004 rule (69 FR 21608).
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(ii) CAIR: The EPA has determined that EGU sources complying with
CAIR requirements meet ozone NOX RACT requirements in States
where CAIR reductions are achieved from EGUs only.
As discussed more fully in the CAIR final rulemaking, EPA has set
the 2009 CAIR NOX cap at a level that, assuming the
reductions are achieved from EGUs, would result in EGUs installing
emission controls on the maximum total capacity on which it is feasible
to install emission controls by those dates. The 2015 NOX
cap is specifically designed to eliminate all NOX emissions
from EGUs that are highly cost effective to control (the first cap
represents an interim step toward that end).\67\ In general, we expect
that the largest-emitting sources will be the first to install
NOX control technology and that such control technology will
gradually be installed on progressively smaller-emitting sources until
the ultimate cap is reached.
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\67\ CAIR achieves about 80% of its NOX emission
reductions in 2009 (remainder in 2015).
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We do not believe that requiring source-specific RACT controls on
EGUs in nonattainment areas will reduce total NOX emissions
from sources covered by CAIR below the levels that would be achieved
under CAIR alone. Furthermore, we believe that source-specific RACT
could result in more costly emission reductions on a per ton basis. If
States chose to require smaller-emitting sources in nonattainment areas
to meet source-specific RACT requirements by 2009 (the required
compliance timing for RACT), they would likely use labor and other
resources that would otherwise be used for emission controls on larger
sources. Because of economies of scale, more boiler-makers and other
resources may be required per megawatt of power generation for smaller
units than larger units. Thus, the cost of achieving such reductions
would be greater on a per ton basis. In any event, the imposition of
source-specific control requirements on a limited number of sources
also covered by a cap-and-trade program would not reduce the total
emissions from sources subject to the program. Under a cap-and-trade
program such as CAIR, there is a given number of allowances that equals
a given emission level. Source-specific control requirements may affect
the temporal distribution of emissions (by reducing banking and thus
delaying early reductions) or the spatial distribution of emissions (by
moving them around from one place to another), but it does not affect
total emissions. If source-specific requirements were targeted at the
units that can be controlled most cost effectively, then the imposition
of source-specific controls would achieve the same result as the
projected CAIR cap-and-trade program. If not, however,
[[Page 71658]]
the imposition of source-specific requirements would make any given
level of emission reduction more costly than it would be under the cap-
and-trade program alone. Thus, the combination of source-specific RACT
and CAIR would not reduce the collective total emissions from EGUs
covered by CAIR, but would likely achieve the same total emissions
reductions as CAIR alone, in a more costly way. As a result, we believe
that EGUs subject to the CAIR NOX controls meet the
definition of RACT for NOX (in States that require all CAIR
NOX reductions from EGUs). EPA is making this finding now
for all areas in the CAIR region, such that States need not submit RACT
analyses for sources subject to CAIR that are in compliance with a SIP
approved as meeting CAIR.
Under CAIR, a State may elect to meet its State budget for
NOX emissions solely through requiring reductions from EGUs
or through requiring reductions from a combination of sources,
including non-EGUs. If the State requires reductions from sources other
than EGUs, it is not eligible to participate in the EPA-administered
CAIR trading program. Additionally, separate provisions of the CAIR
rule allow States to choose to allow large NOX sources that
are not EGUs to opt-in to the program. If only part of the CAIR
reductions are required from EGUs, and the balance of the reductions
obtained from non-EGU sources, then the stringency of CAIR EGU control
would be diminished to some extent (an amount that cannot be determined
until a State submits a SIP indicating which sources are participating
in the program). Therefore, in these cases, the above rationales for
our judgment that CAIR satisfies RACT would not apply. However, even
where a State allows opt-ins from other source categories to meet CAIR
emission levels, if a State transitions from the NOX SIP
call level of control to CAIR by the first two transition options for
non-EGUs discussed above, the NOX RACT requirement would be
met for EGUs (and the State would not need to conduct RACT analyses for
these EGUs) if the State retains a summer season EGU budget under CAIR
that is at least as restrictive as the EGU budget that was set in the
state's NOX SIP call SIP. Otherwise, the State would need to
conduct RACT analyses for EGUs (either on an individual basis, or using
the averaging approach within the nonattainment area).
For clarity, we would note that a State has discretion to require
beyond-RACT NOX reductions from any source (including CAIR
or NOX SIP Call sources), and has an obligation to
demonstrate attainment as expeditiously as practicable. In certain
areas, States may require NOX controls based on more
advanced control technologies to provide for attainment of the ozone
standards.
Comments: Several States expressed support for the proposed RACT
submittal date of 2 years after designation for subpart 1 and subpart 2
areas. Other commenters suggested the RACT submittal date for subpart 1
areas should be 3 years after designation in order to coincide with the
attainment demonstration submittal deadline and to allow a more
efficient use of resources. In addition, comments from industry
suggested a 48-60 month period is needed for installation of controls,
rather than the 30 month period proposed.
Response: As described in an earlier comment/response, in subpart 1
areas that do not request an extension of their attainment date, RACT
is met with the control requirements associated with a demonstration
that the NAAQS is attained as expeditiously as practicable. The EPA
agrees with commenters that it would be more efficient, in these areas,
if the date for submittal of the RACT rules were to coincide with
submittal of the attainment demonstration since RACT is closely tied to
the attainment demonstration. Therefore, in the final rule, the RACT
submittal date for these areas is the same as the submittal date for
the attainment plan, which is 3 years after designation (June 2007).
Although EPA is not setting a specific RACT rule implementation
deadline for these areas, as provided in the Phase 1 rule, all controls
necessary for attainment must be implemented by the beginning of the
attainment year ozone season. For example, States would need to require
implementation no later than May 1, 2008 where the area has a June 15,
2009 attainment date.\68\ In some cases, the time from State rule
adoption to installation of controls by sources may be relatively
short; in other cases, sources may need more time. Therefore, EPA
encourages States to adopt rules expeditiously (prior to the June 2007
deadline, where possible) so that sources have more than sufficient
time to install the controls prior to the start of the attainment year
ozone season.
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\68\ This assumes the ozone season in this example begins May 1.
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For subpart 2 moderate and above areas and areas within an OTR, the
final rule is similar to provisions in section 182 of the CAA which
require States to submit RACT rules for these areas within 24 months
after the designation. Several commenters supported this approach.
Since some States may rely on submittal of SIP revisions meeting CAIR
to also satisfy RACT for some sources, the final rule extends the
proposed RACT submittal date of 24 months to 27 months after
designation (September 15, 2006), to be consistent with the date for
submittal of the CAIR SIP (September 10, 2006).
For areas subject to the 27-month RACT submittal date, EPA believes
the proposed 30-month period for installation of controls is
reasonable, given that this is the statutorily-prescribed period \69\
(for the areas covered under subpart 2) and based on our prior
experience with States adopting and implementing RACT requirements. For
instance, subsequent to submission of the NOX RACT SIP
revisions for the 1-hour standard subject to the 30-month CAA period,
EPA approved NOX RACT SIP submittals in some areas which had
been exempt from the requirements, including the Dallas and Houston
areas, which required implementation within 2 years from the State
adoption date. Also, the EPA recently determined that a 24-month period
is adequate for stationary internal combustion engines to install low
emission combustion controls (April 21, 2004; 69 FR 21633).
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\69\ In the 1990 CAA Amendments, Congress specifically added
RACT requirements for major sources in section 182. Section 182
required the RACT rules to be implemented ``as expeditiously as
practicable'' but no later than 30 months after the submittal
deadline.
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The 48 to 60-month period (June 15, 2011) for installation of
controls suggested by some commenters was not adequately supported with
a justification that more time is necessary. In addition, as described
in an earlier comment/response, EPA anticipates that many sources which
applied controls due to RACT requirements with the 1-hour ozone
standard will not need to install new controls for the 8-hour standard.
Thus, because fewer sources will be subject to new requirements to meet
RACT for the 8-hour standard than were subject to the 1-hour standard,
there will be less demand for control equipment. States and many
sources face a reduced burden compared to the same CAA requirement in
the 1990s.
Since the ozone season (40 CFR part 58, appendix D) does not begin
for many areas until May 1, however, for areas with an effective date
of designation of June 15, 2004, the final rule allows sources until
the beginning of the area's 2009 ozone season (generally May 1,
[[Page 71659]]
2009) rather than March 15, 2009\70\ to install controls. Installation
of controls before the 2009 ozone season is sufficient to provide the
benefits for timely attainment of the ozone standard in areas with a
2010 or later attainment date.\71\ And the short delay (generally
between March 15, 2009 and May 1, 2009) will cause no harm since it is
prior to the ozone season, which is when ozone levels are most likely
to be at harmful levels. Sources meeting NOX RACT through
compliance with CAIR would be subject to the CAIR NOX caps
beginning January 1, 2009. Additionally, some areas have ozone seasons
that begin earlier than March 15, 2009 and would need to ensure sources
are complying by that earlier date.
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\70\ 57 months from June 15, 2004 effective date of designation
(27 months to submission plus 30 months to implementation).
\71\ Note, since the CAA requires attainment as expeditiously as
practicable, some moderate nonattainment areas may have an
attainment date earlier than June 15, 2010.
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For subpart 1 areas that request an attainment date extension
(i.e., an attainment date beyond 5 years after designation), the final
rule sets the RACT submittal and implementation dates the same as
required for subpart 2 moderate and above areas, except subpart 1 areas
are required to submit the RACT SIP with its attainment date extension
request.
2. Reasonably Available Control Measures (RACM)
a. Background
As noted in the June 2, 2003 proposed rule, subpart 1 of part D
includes general requirements for all designated nonattainment areas,
including a requirement that a nonattainment plan provide for the
implementation of all RACM as expeditiously as practicable, including
such reductions that may be obtained through RACT. We have also issued
guidance for implementing the RACM provisions of the CAA that
interprets that provision to require a demonstration that the State has
adopted all reasonable measures to meet RFP requirements and to
demonstrate attainment as expeditiously as practicable and thus that no
additional measures that are reasonably available will advance the
attainment date or contribute to RFP for the area.\72\ The RACM
requirement, which is set forth in section 172(c)(1) of the CAA,
applies to all nonattainment areas that are required to submit an
attainment demonstration, whether covered under only subpart 1 or also
subpart 2. The June 2, 2003 proposal noted that EPA had issued policies
and procedures related to RACM. The draft regulatory text (section
51.912(d)) provided that for each nonattainment area required to submit
an attainment demonstration under Sec. 51.908, the State would have to
submit with the attainment demonstration a SIP revision demonstrating
that it has adopted all control measures necessary to demonstrate
attainment as expeditiously as practicable and to meet any RFP
requirements.
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\72\ ``State Implementation Plans; General Preamble for Proposed
Rulemaking on Approval of Plan Revisions for Nonattainment Areas''
44 FR 20372 at 20375. ``Provide for implementation of all reasonably
available control measures (RACM) as expeditiously as practicable,
insofar as necessary to assure reasonable further progress and
attainment by the required date * * *''
``State Implementation Plans; General Preamble for the
Implementation of Title I of the Clean Air Act Amendments of 1990;
Proposed Rule.'' 57 FR 13498 at 13560 (April 16, 1992). In part this
guidance said, ``The EPA * * * indicated that where measures that
might in fact be available for implementation in the nonattainment
area could not be implemented on a schedule that would advance the
date for attainment in the area, EPA would not consider it
reasonable to require implementation of such measures. The EPA
continues to take this interpretation of the RACM requirement.'' As
an example, with regard to one possible list of measures (TCMs under
section 108(f) of the Act) that guidance said, ``* * * based on
experience with implementing TCM's over the years, EPA now believes
that local circumstances vary to such a degree from city-to-city
that it is inappropriate to presume that all section 108(f) measures
are reasonably available in all areas. It is more appropriate for
States to consider TCM's on an area-specific, not national, basis
and to consider groups of interacting measures, rather than
individual measures.''
``Guidance on the Reasonably Available Control Measures (RACM)
Requirement and Attainment Demonstration Submissions for Ozone
Nonattainment Areas.'' John S. Seitz, Director, Office of Air
Quality Planning and Standards. November 30, 1999. Web site:
http://www.epa.gov/ttn/oarpg/t1pgm.html.
Memorandum of December 14, 2000, from John S. Seitz, Director,
Office of Air Quality Planning and Standards, re: ``Additional
Submission on RACM from States with Severe One-Hour Ozone
Nonattainment Area SIPs.''
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b. Summary of final rule
Section 51.912(d) of the final rule reflects our proposal and draft
regulatory text. For each nonattainment area required to submit an
attainment demonstration under Sec. 51.908, the State must submit with
the attainment demonstration a SIP revision demonstrating that it has
adopted all control measures necessary to demonstrate attainment as
expeditiously as practicable and to meet any RFP requirements.
In the CAIR rulemaking (May 12, 2005, 70 FR 25221 et seq.), EPA
found that the control installations projected to result from the CAIR
NOX and SO2 caps in 2009 and 2010 would be as
much as feasible from EGUs across the CAIR region by those dates. EPA
concluded that the CAIR compliance dates represent an aggressive
schedule that reflects the limitations of the labor pool, and
equipment/vendor availability, and need for electrical generation
reliability for installation of NOX emission controls. We
believe that the CAIR rule appropriately reflects the constraints the
EGU sector faces in achieving NOX reductions (and the CAIR
SO2 reductions) in a way that is as expeditious as
practicable. States should recognize these constraints in developing
their own compliance schedules for NOX emission controls in
meeting their CAIR and RACM responsibilities. However, the CAIR rule
did not specify which sources should install emissions control
equipment or reduce emission rates to a specific level in order to meet
the SO2 and NOX caps under CAIR.
Based on our experience developing the NOX SIP Call,
CAIR, and the proposed Clear Skies Legislation, we believe that many
power companies will develop their strategies for complying with CAIR
based, in part, on consultations with air quality officials in the
areas in which their plants are located. Because power plants are
generally major emission sources, the operators of those plants
typically have ongoing relationships with State and local officials
that will be involved in developing air quality plans. We are aware
that, in the past, companies have worked with air quality officials to
meet their emission control obligations under a cap-and-trade approach
such as the NOX SIP Call while also addressing the concerns
of air quality officials about the air quality impacts of specific
plants. This has led to controlling emissions from power plants located
in or near specific ozone nonattainment areas. A number of companies
have indicated that such collaboration will be even more important as
the States in which they are located address multiple air quality goals
(e.g., visibility, interstate air pollution, local attainment of
standards for multiple pollutants).
The EPA expects similar consultations between States and power
sector companies on which plants will be controlled under CAIR,
considering local attainment needs in planning for CAIR compliance.
This consultation might promote opportunities to provide improved air
quality earlier for large numbers of people. Power companies may
identify economic advantages in situating CAIR controls to help the
local area attain; for example, it might need to control fewer
facilities for the area to reach attainment. These benefits may
outweigh any additional marginal costs
[[Page 71660]]
the company might incur by forgoing less costly controls on another
more distant plant. In any event, the intent of these consultations
would not be to upset market behavior or incentives. With respect to
ozone, we anticipate that these consultations will affect individual
control decisions for a few areas.
In this regard, EPA notes that CAIR SIPs will be due in 2006, while
local 8-hour ozone attainment plans will be due in 2007. The EPA
suggests that consultations on location of CAIR controls would be
timely during State development of the CAIR SIP.
As States implement the RACM provisions in conjunction with their
attainment demonstration, we recognize that for some moderate areas and
some subpart 1 areas it may be difficult to demonstrate attainment in
less than 5 years due to the time needed to adopt and implement
controls, and the need to achieve significant emissions reductions to
advance the attainment date. However, the State will need to assess
RACM to determine whether the attainment date could be sooner than 5
years from designation for each nonattainment area.
EPA believes that while areas projected to attain within 5 years of
designation as a result of existing national measures should still be
required to conduct a RACM analysis, such areas may be able to conduct
a limited RACM analysis that does not involve additional air quality
modeling beyond that used for the attainment demonstration. A limited
analysis of this type could involve the review of available reasonable
measures, the estimation of potential emissions reductions, the
evaluation of the time needed to implement these measures, and
anticipated levels of regional controls affecting ozone in the
nonattainment area. In lieu of conducting air quality modeling to
assess the impact of potential RACM measures, existing modeling
information could be considered in determining the magnitude of
emissions reductions that could significantly affect air quality and
potentially result in earlier attainment. If the State, in consultation
with EPA, determines from this initial, more limited RACM analysis that
the area may be able to advance its attainment date through
implementation of reasonable measures, then the State must conduct a
more detailed RACM analysis, involving air quality modeling analyses,
to assess whether it can advance the attainment date.
c. Comments and Responses
Comment: One commenter asked that we clarify whether old SIP
measures become RACM.
Response: Under EPA's policy concerning RACM, there are no measures
that are automatically deemed RACM. The determination of whether a SIP
contains all RACM requires an area-specific analysis that there are no
additional economically and technologically feasible control measures
(alone or in conjunction with others) that will advance the attainment
date.\73\ The April 16, 1992, ``General Preamble'' provides some
guidance on measures that the State should consider in making its RACM
determination, including ``any measure that a commenter indicates
during a public comment period is reasonably available should be
closely reviewed by the planning agency to determine if it is in fact
reasonably available for implementation in the area in light of local
circumstances.'' Such measures can be rejected as not being RACM if
they will not advance attainment or provide for RFP or if they are not
economically or technologically feasible.
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\73\ Ibid.
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Comment: One commenter recommended that EPA revise its policy
permitting SIPs to exclude otherwise feasible and potentially RACM that
achieve emissions reductions in increments less than the amount
necessary to advance the attainment date by a full year. The commenter
believed this was an onerous standard that has stymied development of
new control measures, particularly transportation control measures. The
commenter believed EPA's RACM standard is especially harmful to the
ability to provide SIP credit for Smart Growth land use, due to the
long timeframe over which land is developed and redeveloped. The
commenter believes that ever-increasing suburbanization of our nation
inflates the growth rate in VMT, thereby neutralizing improvements in
vehicle emissions. The commenter claimed that a significant air quality
improvement strategy for the 21st Century is compact mixed use
pedestrian-friendly development near frequent transit and believed that
changing land use plans in this direction will benefit air quality by
reducing the rate of growth in VMT and emissions. The commenter
recommended that EPA be aware of this and revise its RACM standard to
encourage local governments to alter their land use plans by providing
a mechanism to give credit for air quality beneficial land use changes.
Response: We do not believe our RACM policy has ``stymied''
development of new control technologies. New emission reduction
technologies have surfaced and continue to surface to meet market
demands resulting in part from CAA requirements, which include the
requirements to demonstrate attainment as expeditiously as practicable
and to make RFP toward attainment. In addition, control measures that
produce emissions reductions can be approved into SIPs whether or not
such measures meet the definition of RACM. Our RACM policy merely
interprets the CAA as not mandating measures that do not contribute to
expeditious attainment and timely RFP. The policy does not limit the
potential for States to develop any control measures they wish,
including land use measures. In fact, we have prepared a separate
guidance document on how areas can develop and receive SIP credit for
land use control measures.\74\ We conclude, however, that to require
areas to adopt and implement as RACM every control technology or
measure that obtains a small amount of emissions reductions--even if
such measure would not advance the attainment date or is not required
to meet RFP requirements--is not justified. Such a policy would be
extremely burdensome to planning agencies, would detract from the
effort to develop more reasonable and effective controls to meet the
NAAQS, and would not be necessary to meet the statutory goal of
expediting attainment. For these reasons, and because such a
requirement is not mandated by the statute, we are not adopting such a
policy.
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\74\ Improving Air Quality Through Land Use Activities;
Transportation and Regional Programs Division, Office of
Transportation and Air Quality, U.S. Environmental Protection
Agency. EPA420-R-01-001. January 2001.
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Comment: One commenter believed that the RACM requirements for
subpart 1 areas should be designed so as to not require extensive and
unneeded control due to the fact that in most or all cases these
controls will not be needed for the area to attain.
Response: We believe the current RACM guidance, which applies to
both subpart 1 and subpart 2 areas, works to avoid extensive and
unneeded controls, while ensuring that areas meet the health-based
NAAQS as expeditiously as practicable.
Comment: One commenter believed our RACM guidance provides only
minimum requirements to ensure attainment as expeditiously as
[[Page 71661]]
practicable and believes that every nonattainment area must be required
to consider adoption of measures that have been implemented in other
areas, including the South Coast of California, so as to achieve
progress and attainment as expeditiously as practicable. An area should
be allowed to reject such measures only upon a showing that they are
not practicable due to specified unique circumstances. The commenter
urged that given the importance of this issue to fair, expeditious and
lawful implementation of the 8-hour standard, EPA's final 8-hour
standard implementation rule must explicitly require compliance with
this guidance.
Response: To meet the RACM provision of the CAA, the State must
determine as part of its attainment demonstration whether there are
additional measures that are feasible that would expedite attainment.
In addition, EPA's RACM policy indicates that areas should consider all
candidate measures that are potentially available, including any that
have been suggested for the particular nonattainment area.\75\ Although
areas should consider all available measures, including those being
implemented in other areas such as California, areas need adopt
measures only if they are both economically and technologically
feasible and will advance the attainment date or are necessary for RFP.
This interpretation of the section 172 requirements has recently been
upheld by several courts. See, e.g., Sierra Club v. EPA, et al., 294 F.
3d 155 (D.C. Circuit, 2002).
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\75\ In ``AState Implementation Plans; General Preamble for the
Implementation of Title I of the Clean Air Act Amendments of 1990;
Proposed Rule,'' we noted in the discussion of the RACM requirement
that ``In addition, any measure that a commenter indicates during
the public commenter period is reasonably available for a given area
should be closely reviewed by the planning agency to determine if it
is in fact reasonably available for implementation in the area in
light of local circumstances.'' The discussion of RACM in that
document contains other relevant history concerning the RACM
requirement.
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Comment: Several commenters agreed with our proposal to require
that the RACM analysis and measures be submitted within 3 years after
the effective date of designation for the 8-hour NAAQS.
Response: We acknowledge the support of the comments on the
submission timing of the RACM requirements.
H. How will the section 182(f) NOX provisions be handled under the 8-
hour ozone standard?
[Section VI.L. of June 2, 2003 proposed rule (68 FR 32840); Sec.
51.913 in draft and final regulatory text.]
1. Background
While NOX emissions are necessary for the formation of
ozone in the lower atmosphere, a local decrease in NOX
emissions can, in some cases, increase local ozone concentrations. This
potential ``NOX disbenefit'' resulted in Congress including
the NOX exemption provisions in section 182(f) of the CAA
for areas classified under subpart 2. Section 182(f) requires States to
apply the same requirements to major stationary sources of
NOX as are applied to major stationary sources of VOC under
subpart 2. The relevant requirements are RACT and nonattainment major
NSR for major stationary sources of NOX in certain ozone
nonattainment areas and throughout States in the OTR.\76\ In addition,
section 182(f) specifies circumstances under which these NOX
requirements would be limited or would not apply (``NOX
exemption''). Further, areas granted a NOX exemption under
section 182(f) may be exempt from certain requirements of EPA's motor
vehicle I/M regulations and from certain Federal requirements of
general and transportation conformity.\77\
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\76\ See 57 FR 55622 (``Nitrogen Oxides Supplement to the
General Preamble,'' published November 25, 1992).
\77\ As stated in EPA's I/M (November 5, 1992; 57 FR 52950) and
conformity rules (60 FR 57179 for transportation rules and 58 FR
63214 for general rules), certain NOX requirements in
those rules do not apply where EPA grants an areawide exemption
under section 182(f).
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In the June 2, 2003 action, we indicated the NOX
requirements and exemption provisions in section 182(f) would apply for
subpart 2 nonattainment areas and in OTRs.\78\ In addition, we proposed
to allow subpart 1 nonattainment areas to seek a NOX
exemption, where appropriate. Further, we proposed that areas
previously granted a NOX exemption under the 1-hour ozone
standard would need to request an exemption for purposes of the 8-hour
standard in order to account for any new information that may point to
a different conclusion with respect to the 8-hour standard. Recently,
we invited comment \79\ on draft guidance intended to update the
existing 1-hour ozone guidance \80\ regarding section 182(f) for
application to the 8-hour ozone program. We issued the updated final
guidance regarding section 182(f) on January 14, 2005.\81\
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\78\ 68 FR 32840.
\79\ September 1, 2004 at 69 FR 53378.
\80\ The EPA's primary guidance regarding section 182(f) is
contained in the ``Guideline for Determining the Applicability of
Nitrogen Oxide Requirements under Section 182(f),'' issued by John
S. Seitz, Director, Office of Air Quality Planning and Standards, to
the Regional Division Directors, December 16, 1993.
\81\ Memorandum dated January 14, 2005, ``Guidance on Limiting
Nitrogen Oxides (NOX) Requirements Related to 8-Hour
Ozone Implementation'' from Stephen D. Page, Director, Office of Air
Quality Planning and Standards, to Air Directors, Regions I-X.
---------------------------------------------------------------------------
2. Summary of Final Rule
As proposed, the final rule allows a person to petition the
Administrator for a NOX exemption under section 182(f) for
an area classified under subpart 2 or located in an OTR or under our
regulations for any other area designated nonattainment for the 8-hour
ozone NAAQS. As with the 1-hour ozone standard, the NOX
exemption provision in section 182(f) applies to subpart 2 ozone
nonattainment areas and in a section 184 OTR. In addition, the final
rule extends to subpart 1 ozone nonattainment areas the opportunity to
petition the Administrator for an exemption from nonattainment major
NSR and/or RACT requirements in a manner consistent with section 182(f)
provisions. The petition must contain adequate documentation that the
provisions of section 182(f) and/or our regulations are met. We
recently issued \82\ updated guidance on appropriate documentation
regarding section 182(f) for application to the 8-hour ozone program.
In addition, the final rule states that a section 182(f) NOX
exemption granted under the 1-hour ozone standard does not relieve the
area from any requirements under the 8-hour ozone standard. That is, a
new petition with respect to 8-hour ozone must be submitted to EPA and
must be approved by EPA before an area is exempt from any 8-hour ozone
standard NOX requirements.
---------------------------------------------------------------------------
\82\ Memorandum dated January 14, 2005, ``Guidance on Limiting
Nitrogen Oxides (NOX) Requirements Related to 8-Hour
Ozone Implementation'' from Stephen D. Page, Director, Office of Air
Quality Planning and Standards, to Air Directors, Regions I-X.
---------------------------------------------------------------------------
3. Comments and Responses
Comments: Several commenters supported EPA's proposal to make
NOX waivers available to 8-hour nonattainment areas and all
areas in an OTR under either subpart 1 or subpart 2, pursuant to the
provisions of section 182(f) of the CAA. Some commenters stated that
requiring a new NOX waiver for the 8-hour standard amounts
to rescinding the existing waivers. Another commenter asked what is
needed to maintain an exemption. One commenter stated that EPA should
make it clear that there is no presumption that a NOX waiver
granted under section 182(f) of the CAA for the 1-hour ozone standard
[[Page 71662]]
is continued for the 8-hour standard. Other commenters recommended that
the NOX waiver should automatically apply for the 8-hour
ozone standard in areas where EPA previously granted a NOX
waiver under the 1-hour ozone standard. One commenter stated that the
technical basis for granting waivers under the l-hour NAAQS remains
valid.
Response: We agree with comments supporting the proposal to apply
the section 182(f) exemption provisions to subpart 2 nonattainment
areas and OTRs and to extend these protections to subpart 1 areas
through regulation.
Since a NOX exemption granted for the 1-hour ozone
standard was completed through notice-and-comment rulemaking, the
exemption remains effective for the 1-hour standard unless and until
EPA completes rulemaking to remove or revise the waiver for a specific
area. This rulemaking on the 8-hour ozone implementation program does
not rescind any existing 1-hour NOX waiver provision.
However, for areas previously granted a NOX waiver under
the 1-hour ozone standard, a petitioner would need to seek a new waiver
for purposes of the 8-hour ozone standard. The EPA does not believe
NOX waivers--including those granted under the 1-hour ozone
standard--should always be permanent. As sources are regulated and the
mix of pollutants is altered, circumstances could show that
NOX reductions will begin to provide a benefit. In several
cases, the 1-hour NOX waiver has been removed in subsequent
rulemaking actions.\83\ Indeed, when EPA issued waivers under the 1-
hour ozone standard, we stated that the NOX waivers would be
removed where new information became available and the rationale for
the initial NOX waiver no longer was supported. For example,
the waiver may be removed through rulemaking if subsequent modeling
data demonstrated an ozone attainment benefit from NOX
emission controls.
---------------------------------------------------------------------------
\83\ E.g: Recision of NOX waiver for the Dallas-Fort
Worth area on April 20, 1999 (64 FR 19283). Also, the temporary
waiver for Houston and Beaumont (originally granted April 19, 1995,
expired December 31, 1997). (60 FR 19515).
---------------------------------------------------------------------------
Given that many NOX waiver actions were based on air
quality and dispersion modeling analyses made in the mid-1990s for
purposes of the 1-hour standard, EPA believes that newer data and
analyses should be used to determine if a NOX waiver under
the 8-hour ozone standard is warranted. Many NOX waivers
were simply based on whether an area had ambient air quality showing
attainment of the 1-hour ozone standard; this is not an appropriate
basis for a waiver under the 8-hour ozone standard since areas may be
attaining the 1-hour standard but exceeding the 8-hour standard. Some
NOX waivers were based on dispersion modeling. In some
cases, the modeling later proved inadequate as attainment was not met
in the forecast year. In other cases, those modeling analyses have been
replaced with more recent analyses. The EPA believes that
NOX waivers under the 8-hour ozone standard should be
supported by analyses specific to the 8-hour ozone standard and should
consider relevant information developed after the 1-hour waivers were
granted.
The EPA believes the NOX waivers may not be granted
except through notice-and-comment rulemaking action. That is, since EPA
approval of a waiver request would change SIP requirements, EPA must
conduct notice-and-comment rulemaking on that request. The EPA believes
this requirement precludes automatic approval of 8-hour NOX
waiver requests based on previously issued 1-hour NOX
waivers.
Comment: Some commenters urged EPA to expand the section 182(f)
waiver to VOC RACT as well as NOX RACT. One commenter states
that EPA has substantially more discretion under subpart 1 than it does
under subpart 2, and to fail to exercise that discretion to avoid
ineffective and inefficient requirements (through NOX and
VOC waivers) would be irresponsible, and an abuse of its discretion.
Response: The EPA disagrees with these comments. We do not see any
provision in the CAA that would give us the authority to create such an
exemption. While Congress could have created a VOC waiver at the same
time the section 182(f) NOX waiver provisions were enacted,
Congress chose not to do so. The Congress further provided for
additional review and study under section 185B ``to serve as the basis
for the various findings contemplated in the NOX
provisions'' (H.R. Rep. 490 at 257). Under section 185B, EPA, in
conjunction with the National Academy of Sciences (NAS), conducted a
study on the role of ozone precursors in tropospheric ozone formation.
The final section 185B report incorporates this NAS report along with
an EPA report addressing the availability and extent of NOX
controls. With respect to VOC, the NAS report states that ``control of
VOCs never leads to a significant increase in ozone.'' \84\ Thus, the
section 185B report does not support a waiver provision for VOC. While
dispersion modeling analyses show that NOX emissions
reductions can be counterproductive under certain circumstances (the
reason for the NOX waiver provision), we do not see a
similar case for VOC.
---------------------------------------------------------------------------
\84\ December 1991 NAS report, Rethinking the Ozone Problem in
Urban and Regional Air Pollution, page 377.
---------------------------------------------------------------------------
Comment: One commenter stated that the draft guidance does not
contain a discussion of the linkages between 182(f) NOX
exemptions and certain other regional NOX reduction
requirements such as the NOX SIP Call and the proposed
``Clean Air Interstate Rule.'' The commenter believed EPA has an
obligation to assess the impact of any section 182(f) exemption request
under the provisions of section 110(a)(2)(D), including the potential
for emissions exempted from controls to contribute to downwind
nonattainment or to interfere with the maintenance of any NAAQS.
Response: As discussed in section 4.2 of the draft 8-hour exemption
guidance, EPA encourages States/petitioners to include consideration of
air quality effects that may extend beyond the designated nonattainment
area. States should consider such impacts since they are ultimately
responsible for achieving attainment in all portions of their State and
for ensuring that emissions originating in their State do not
contribute significantly to nonattainment in, or interfere with
maintenance by, any other State. However, EPA believes NOX
exemptions under section 182(f) of the CAA and interstate transport of
emissions under section 110(a)(2)(D) of the CAA can be considered
independently. Section 110(a)(2)(D) requires States to reduce emissions
from stationary and/or mobile sources where there is evidence showing
that such emissions would contribute significantly to nonattainment or
interfere with maintenance in other States. In some cases, then, EPA
may grant an exemption from certain NOX requirements and, in
a separate action, require NOX emission decreases under
section 110(a)(2)(D). Thus, a NOX exemption doesn't affect
an obligation of a State to meet a NOX budget established
under a NOX SIP Call or other transport rule.
I. Should EPA promulgate a NSR provision to encourage development
patterns that reduce overall emissions?
[Section 0.9. of the June 2, 2003 proposed rule (68 FR 32849). No
draft or final regulatory text.]
Note: Section V of this preamble below addresses rules for NSR
for the 8-hour ozone standard. This section addresses only the June
2, 2003 proposal related to Clean Air Development Communities
(CADC).
[[Page 71663]]
1. Background
In the June 2, 2003 proposal, we considered two options designed to
recognize the air quality benefits which can accrue when areas site new
sources and plan development in a manner that results in overall
reduced emissions. We proposed to define a community that changes its
development patterns in such a way that air emissions within the
nonattainment area are demonstrably reduced as a CADC. As a result of
becoming a CADC, an area would obtain a certain amount of flexibility
in its NSR program.
In the first option, we proposed that a CADC would have a more
flexible NSR program by: (1) Being subject to subpart 1 NSR as opposed
to subpart 2 NSR; (2) lowering NSR major source thresholds for these
areas to make them similar to the thresholds for PSD areas; and (3)
allowing areas that meet certain development criteria (development
zones) to receive NSR offsets from State offset pools. In the second
option, we proposed that a CADC would be able to receive a pool of NSR
offset credits equal to the reduced emissions from new development
patterns. Credits from the pool could be provided to any new or
modified source in a ``development zone'' as offsets.
We also requested comments on the options and encouraged comments
suggesting other ways of encouraging development patterns that would
result in lower emissions.
2. Summary of Final Rule
The EPA is not at this time issuing any rule related to CADCs.
3. Comments and Responses
Comments: The EPA received numerous comments on the proposal, some
supporting and others opposing the CADC provision. A number of the
commenters noted that the proposal did not appear to have enough
detail. A summary of the comments appears in the response to comment
document.
Response: The EPA appreciates the many comments it has received on
this section. The EPA agrees with a number of commenters that while the
ideas in this section are interesting and designed to achieve useful
goals, much more work is needed in a separate effort to work through
the many issues involved. Therefore, EPA will not move forward with
this particular effort at this time.
However, EPA does not plan to ignore the issue. The EPA will be
looking to bring a group of stakeholders together to see if the group
can come up with and support one or more ways that we can use existing
programs and authorities to create positive incentives and tools for
communities to reduce sprawl. The process will not be designed to work
only through the specific issues in establishing a program to encourage
CADCs as outlined in the proposal, but will be open to all ideas.
Issues related to community development, land use and ``sprawl''
will have transportation and air quality implications. Therefore, EPA
will work closely with DOT in addressing these issues.
J. How will EPA ensure that the 8-hour ozone standard will be
implemented in a way which allows an optimal mix of controls for ozone,
PM2.5, and regional haze?
[Section VI.P. of June 2, 2003 proposed rule (68 FR 32852); no
draft or final regulatory text.]
1. Background
As noted in the proposal, in many cases, States will be developing
strategies to attain both the 8-hour ozone and PM2.5 NAAQS
in the same nonattainment area or in nonattainment areas that have some
area or areas in common. Additionally, requirements for regional haze
apply to all areas. Certain ozone control measures may also be helpful
as part of a PM2.5 control strategy or a regional haze plan.
Similarly, controls for PM2.5 may lead to reductions in
ozone or regional haze. Because the precursors for ozone and
PM2.5 may be transported hundreds of kilometers, regional
scale impacts may also be relevant to consider. While EPA expects that
strategies to decrease ozone concentrations will not adversely affect
strategies to attain the PM2.5 NAAQS, we also believe
integration of ozone, PM2.5, and regional haze planning will
reduce overall costs of meeting multiple air quality goals.
2. Summary of final rule
We are encouraging each State with an ozone nonattainment area that
overlaps or is nearby a PM2.5 nonattainment area to take all
reasonable steps to coordinate the SIP development processes for these
nonattainment areas and to coordinate the development of these SIPs
with the state's SIP to address the reasonable progress goals for
regional haze. Specifically, EPA encourages States conducting modeling
analyses for ozone to separately estimate effects of a strategy on the
following: mass associated with sulfates, nitrates, organic carbon,
elemental carbon, and all other species. However, while we believe such
coordination may reduce the overall costs to States for implementing
these programs, this final rule does not require the State to
coordinate these three planning efforts.
3. Comments and Responses
Comments: Several commenters supported EPA's recommendation for
States to integrate planning for 8-hour ozone, PM2.5, and
regional haze. These commenters agreed that the integration of ozone,
PM2.5 and regional haze controls will reduce the overall
costs of meeting multiple air quality goals and that EPA should
continue to synchronize the SIP planning requirements for these
pollutants to aid in this integration. One commenter asked EPA to
clarify that this analysis is not an approvability issue associated
with an 8-hour attainment demonstration. Other commenters recommended
that EPA require nonattainment areas to perform an integrated control
strategy assessment to ensure ozone controls will not preclude optimal
controls for secondary fine particles and visibility impairment.
Response: We recognize the importance of integrating planning for
8-hour ozone, PM2.5, and regional haze as much as possible,
given the overlap in technical work and likely control strategies. None
of the commenters, however, has identified legal authority that allows
EPA to require nonattainment areas to perform an integrated control
strategy assessment to ensure ozone controls will not preclude optimal
controls for secondary fine particles and visibility impairment.
Therefore, we will continue to encourage States to coordinate their
work, but it is not a requirement and, thus, not an approvability
issue.
Comments: Other commenters encouraged EPA to identify flexibility
so that areas may be provided more time if they are developing a multi-
pollutant strategy. Commenters stated that it is imperative that SIP
obligations and attainment dates with respect to these regulated air
pollutants be harmonized and that regulatory requirements and deadlines
be closely coordinated. One commenter stated this may require certain
deadlines be extended and that they believe Congress would not be
opposed to extending deadlines in the name of efficiency.
Response: To the extent our legal authority allows, we are working
to harmonize SIP timelines for ozone, PM2.5, and regional
haze. This 8-hour ozone implementation rule is necessarily based on the
existing CAA and does not assume any changes to the CAA that may occur
in the future. Thus, we cannot extend the submission dates for 8-hour
ozone SIPs so that they match
[[Page 71664]]
the later submission dates for PM2.5 and regional haze SIPs.
However, there is a substantial overlap in planning periods that will
allow States to coordinate planning efforts among programs, without
postponing implementation.
K. What emissions inventory requirements should apply under the 8-hour
ozone NAAQS?
[Section VI.Q. of June 2, 2003 proposed rule (68 FR 32853); Sec.
51.915 in draft and final regulatory text.]
1. Background
Section 182(a)(1) requires that marginal and above ozone
nonattainment areas submit an emission inventory 2 years after
designation as nonattainment in 1990. For nonattainment areas
classified under subpart 2 for the 8-hour ozone standard, we proposed
to interpret this to mean that an emission inventory would be required
2 years after designation (i.e., in 2006 if EPA designates areas in
2004). The Consolidated Emission Reporting Rule (CERR) in 40 CFR part
51, subpart A, requires States to submit comprehensive statewide
triennial emission inventories, beginning with the 2002 inventory year,
regardless of an area's attainment status. Because these emission
inventories will be available, we proposed that the data elements
required for emission inventories by the CERR could be used to prepare
the emissions inventories under the 8-hour NAAQS. The draft regulatory
text, however, did not contain a specific requirement that the emission
inventory be submitted as a SIP revision within 2 years after
designation.
For subpart 1 areas, section 172, paragraphs (b) and (c)(3) require
submission of the nonattainment area emission inventory as part of the
SIP by a date established by EPA, which cannot be later than 3 years
after designation as a nonattainment area. However, the June 2, 2003
proposal did not specify a deadline for submission of the emission
inventory for subpart 1 areas.
The proposal also noted that we would be updating the April 1999
``Emissions Inventory Guidance for Implementation of Ozone and
Particulate Matter National Ambient Air Quality Standards (NAAQS) and
Regional Haze Regulations,'' EPA-454/R-99-006. This guidance has been
updated and now is available as: ``Emission Inventory Guidance for
Implementation of Ozone and Particulate Matter National Ambient Air
Quality Standards (NAAQS) and Regional Haze Regulations'', EPA-454/R-
05-001.\85\ This guidance complements the CERR by providing guidance on
how to prepare data for emissions inventory SIP submissions.
---------------------------------------------------------------------------
\85\ (available at: http://www.epa.gov/ttn/chief/eidocs/eiguid/index.html
)
---------------------------------------------------------------------------
2. Summary of Final Rule
Section 51.915 of the final rule reflects our June 2, 2003 proposal
but is different from the draft regulatory text. To ensure
comprehensive treatment of emission inventory requirements, the final
rule contains language addressing the deadlines for submission of
emission inventories for both subpart 1 and subpart 2 areas. The
deadlines reflect the statutory requirements of no later than 3 years
after designation for a subpart 1 area, and no later than 2 years after
designation for subpart 2 areas. Existing emissions reporting
requirements in 40 CFR part 51, subpart A are sufficient to satisfy the
emissions inventory data requirements under the 8-hour ozone NAAQS.
Consistent with the statutory schedule in section 182(a)(1) of the CAA,
the final regulatory text in section 51.915 requires submission of an
emission inventory no later than 2 years after designation as part of a
subpart 2 SIP. Consistent with the statutory schedule in paragraphs (b)
and (c)(3) of section 172 of the CAA, the final regulatory text in
section 51.915 requires submission of an emission inventory no later
than 3 years after designation as part of a subpart 1 SIP.
In its guidance titled, ``Public Hearing Requirements for 1990
Base-Year Emissions Inventories for Ozone and Carbon Monoxide
Nonattainment Areas,'' September 29, 1992, EPA set forth its
interpretation of a ``de minimis'' deferral of the public hearing
requirement and the requirement for EPA to approve or disapprove
emissions inventories under section 110(k). The EPA intends to follow
this guidance in implementation of the emissions inventory requirements
under the 8-hour ozone standard, under which areas could defer holding
public hearings on their inventories and EPA could defer approving such
inventories until the time the areas adopt and submit their attainment
demonstrations and/or RFP plans.
Existing emissions reporting requirements in 40 CFR part 51,
subpart A can be applied to determine the data elements required for
emissions inventories under the 8-hour ozone NAAQS (see, e.g. Tables
2A, 2B, 2C, and 2D). Where appropriate, the State may use the data
elements developed under part 51, subpart A in preparing its emissions
inventory under the 8-hour ozone NAAQS. Also, EPA expects the States to
consult the guidance document ``Emission Inventory Guidance for
Implementation of Ozone and Particulate Matter National Ambient Air
Quality Standards (NAAQS) and Regional Haze Regulations'', EPA-454/R-
05-001, and to submit inventories that are appropriate for the
geographic area at issue and consistent with this guidance.\86\ We
expect the State to include in its SIP submission documentation
explaining how the emissions data were calculated.
---------------------------------------------------------------------------
\86\ The CERR requires emissions inventory data on a statewide
basis.
---------------------------------------------------------------------------
3. Comments and Responses
Comment: Several commenters said that the proposal does not discuss
specific requirements above and beyond those in the CERR. However, the
proposal does mention one EPA guidance document, ``Emissions Inventory
Guidance for Implementation of Ozone and Particulate Matter National
Ambient Air Quality Standards (NAAQS) and Regional Haze Regulations''.
This document states that ``The EPA developed this guidance document to
complement the CERR and to provide specific guidance to State and local
agencies and Tribes on how to develop emissions inventories for 8-hour
ozone, PM2.5, and regional haze SIPs.'' Since the 8-hour
emissions inventory requirements are the same for the CERR, there
should be no additional, special requirements needed in emissions
inventory development for the proposed 8-hour rule.
Response: In its proposal, when EPA referred to the CERR emissions
inventory requirements as satisfying requirements for emissions
inventories under the 8-hour standard, EPA was referring to the
requirements for data elements. The EPA did not mean to imply that the
emissions inventories developed under the CERR, which are statewide,
would satisfy all aspects of SIP inventories developed for SIP
submissions under the 8-hour standard. While the CERR sets forth
requirements for data elements, EPA guidance complements these
requirements and indicates how the data should be prepared for SIP
submissions. The 2002 emission inventory submitted as a SIP element
under the 8-hour ozone SIP process is not necessarily the same as the
2002 emission inventory submitted under the CERR. The two inventories
differ in some important ways. For example, the CERR inventory was due
June 1, 2004, while the SIP inventory due dates are later. Because of
this time
[[Page 71665]]
lapse, the State may choose to revise some of the data from the CERR
when it prepares its SIP inventory because of improvements in emission
estimates. The SIP inventory also must be approved by EPA as a SIP
element and is subject to public hearing requirements where the CERR is
not. Because of the regulatory significance of the SIP inventory, EPA
will need more documentation on how the SIP inventory was developed by
the State as opposed to the documentation required for the CERR
inventory. In addition, the geographic area encompassed by some aspects
of the SIP submission inventory will be different from the statewide
area covered by the CERR emissions inventory. The guidance document
``Emissions Inventory Guidance for Implementation of Ozone and
Particulate Matter National Ambient Air Quality Standards (NAAQS) and
Regional Haze Regulations'' \87\ provides details on how States should
prepare their emission inventory SIP submittals and discusses these and
other relevant topics. If a State's 2005 emission inventory (or a later
one) becomes available in time to use for an area subsequently
redesignated nonattainment, then that inventory should be used. We also
encourage the cooperation of the Tribes and the State and local
agencies in preparing their emissions inventories.
---------------------------------------------------------------------------
\87\ EPA-454/R-05-001, August 2005 (available at: http://www.epa.gov/ttn/chief/eidocs/eiguid/index.html
).
---------------------------------------------------------------------------
Comment: One commenter was concerned with the timing of the release
of the final version of the NONROAD model (used to estimate mobile
source emissions from nonroad sources). The commenter agreed that the
draft version out for comment during the comment period was superior to
previous calculation methodology and should be used for planning
purposes. However, EPA needs to be cognizant of how disruptive to the
planning process it is for new versions of emissions models to be
released and incorporated in the middle of the development of a SIP.
The commenter strongly encourages EPA to expedite the review and
approval of any new models that will ultimately be used by States.
Response: We acknowledge that the timing of the release of new
models can sometimes complicate the SIP planning process. In this case,
the timing of the final release of the NONROAD is dependent on the
timing of the new nonroad standards final rule. We will do what we can
to expedite the release of a new version of NONROAD that reflects the
emissions benefits of the nonroad rule as soon as possible. In
addition, we intend to provide guidance on the use of NONROAD that
allows for completion of ongoing work with the current version of
NONROAD if switching to the new version would cause significant delay.
The EPA has included similar language in previous SIP policy guidance
for the MOBILE model.
Comment: One commenter urged EPA to improve the quality of
PM2.5 rates in MOBILE6.2 so that areas will have a more
reliable tool for creating a 2002 base-year inventory and for
developing SIP revisions. The commenter was concerned about developing
PM2.5 emissions inventories because PM2.5
emissions factors in MOBILE6.2 are based largely on the old Part
5 emission model and are not as sophisticated as the rates for
CO, NOX, and VOC. The commenter also expressed concern about
the lack of knowledge and techniques available for performing on-road
mobile source fine particulate emissions inventories. Metropolitan
Planning Organizations (MPOs) and air quality agency staff need to have
a more reliable tool and acceptable methods for creating base year
PM2.5 inventories and for SIP planning.
Response: This comment is not directly relevant to the 8-hour ozone
implementation rule. However in the interest of providing clarification
on the issues raised by the commenter, we provide the following
background information. Particulate emission factors in MOBILE6.2 are
based on the best technical information available at the time the model
was developed and we believe that it is the best available tool for
estimating on-road emission factors for PM2.5. We are
currently collecting additional PM data which will be incorporated in
future versions of the EPA mobile source emission factor model. We
continue to work to improve models and inventory methods for all
pollutants. We have released technical guidance on the use of MOBILE6.2
and on methods for developing annual inventories in SIPs and conformity
analyses to help MPOs and air quality agency staff perform on-road
mobile source fine particulate analyses.
Comment: One commenter stated that since the CERR requires
inventories every 3 years, that the CERR should replace the Emission
Statement Reporting Program (ESRP) requirement, which was required
before the CERR was adopted.
Response: The ESRP is statutorily prescribed in section 182
(a)(3)(B) of the CAA. The emission statement requirement satisfies a
different need from the periodic emissions inventory requirement,
namely that affected sources themselves have to report to the State
their updated emissions information, whereas the emissions inventory
requirement is a requirement on States to compile and make available to
EPA an emissions inventory. We believe that the ESRP is a complementary
program to the CERR and makes it easier for States to satisfy their
CERR reporting requirements by providing data to the States from the
sources.
Comment: One commenter said that persistent inaccuracies in
official emissions inventories have hindered regulatory acknowledgment
and mitigation of the automobile VOC and CO gross polluter problem. The
EPA should develop realistic emissions inventories and require States
to do the same. Known errors in these inventories continue to misdirect
emission reduction efforts. In particular, too little focus has been
placed on the potential for rapid, substantial VOC and CO reductions
from the in-use automobile fleet.
Response: We agree that realistic emissions inventories are
important to properly direct emission reduction efforts. Current
emission factor models and inventory methods are far superior to
previous models and methods and we are working to continually improve
models and methods for developing emissions inventories for on-road and
nonroad vehicles and equipment.
Comment: One commenter stated that the official emissions
inventories generated and used by EPA and State regulatory agencies for
SIP planning and implementation have been shown repeatedly to suffer
from serious inaccuracies and biases. Problems with inventories include
errors in the total amount of emissions, as well as errors in the
apportionment of emissions among various source categories. The most
serious inventory problems center on VOC and CO, while problems with
NOX inventories appear to be more modest. Since emissions
inventories are a fundamental input to the process of choosing
pollution reduction measures and to the modeling used to demonstrate
future attainment of NAAQS, an inaccurate inventory is likely to lead
to poor policy choices in terms of cost, effectiveness, or both.
Response: We agree that emissions inventories are fundamental
inputs to the air quality management process. We continue to strive to
work with State and local agency partners to develop emissions
inventories that best reflect the real world and will thus assist in
identifying control strategies to make
[[Page 71666]]
RFP and attain the NAAQS. One should be aware, however, that it is
impossible to develop an emissions inventory for an area that is 100
percent accurate. Part of the problem is that most sources--including
mobile sources--don't monitor and report emissions continuously, and
therefore we and the States must use other methods to estimate
emissions from them. Thus, emission inventories are by nature estimates
of actual releases to the atmosphere. The EPA believes that current
emission inventories are sufficiently accurate to support the air
quality management decisions that are derived from the application of
emission inventories and air quality models. The emissions data
generated and used by EPA and State regulatory agencies for SIP
planning and implementation is the best available. Although inventories
are often criticized as lacking accuracy, seldom do critics supply
better information.
Comment: One commenter stated that the Agency proposes that the
latest approved version of the MOBILE model should be used to estimate
emissions from on-road transportation systems. The commenter
recommended that if there are other models that meet EPA performance
criteria and are scientifically peer reviewed, they should also be
acceptable [e.g., the California mobile model, ``EMission FACtor''
(EMFAC)].
Response: We believe that MOBILE is the best available tool for
estimating emissions from on-road transportation systems outside of
California. We are working to continually improve emission factor
models and inventory methods for on-road vehicles. The EMFAC is not
designed to be able to estimate fleet, activity, fuel, and
environmental characteristics outside of California and is not a
reasonable substitute for MOBILE in States other than California.
Comment: One commenter supported the use of MOBILE6 in the 8-hour
emissions inventory analyses and believed that EPA should change the
guidance with respect to the use of MOBILE6 from ``should be used'' to
``must be used.'' The commenter cautioned that MOBILE6 still
significantly over-predicts emissions from passenger cars and light
duty trucks for many reasons including the following: (1) The model
does not adequately account for the benefits of onboard diagnostic
regulation in non-I/M areas; and (2) the model does not reflect the
decline in trips per day versus vehicle age.
Response: The EPA's January 18, 2002 SIP and conformity policy
guidance document (``Policy Guidance on the Use of MOBILE6 for SIP
Development and Transportation Conformity,'' memo from John Seitz and
Margo Oge to EPA Regional Air Division Directors) states, ``In general,
EPA believes that MOBILE6 should be used as expeditiously as possible.
The Clean Air Act requires that SIP inventories and control measures be
based on the most current information and applicable models that are
available when a SIP is developed.'' The EPA's February 14, 2004 SIP
and conformity policy guidance document (``Policy Guidance on the Use
of MOBILE6.2 and the December 2003 AP-42 Method for Re-Entrained Road
Dust for SIP Development and Transportation Conformity'', memo from
Margo Oge and Steve Page to EPA Regional Air Division Directors)
updates this by stating that ``All states other than California should
use MOBILE6.2 for future VOC, NOX, and CO SIP and conformity
analyses in order to take full advantage of the improvements
incorporated in this version.'' MOBILE6.2 is the most current
applicable model and is based on the best information available at the
time of its development and release. Therefore, EPA has indicated that
it should be used.
We do not believe that more on-board diagnostic benefits in non-I/M
areas was justified based on available data at the time of the release
of MOBILE6.2. Likewise, we did not have sufficient data to develop
alternative assumptions about the relationship between trips per day
and vehicle age. We are working to continually improve emission factor
models and inventory methods for on-road vehicles and will review these
issues during the development of the next emission factor model.
L. What guidance should be provided that is specific to Tribes?
[Section VI.R. of June 2, 2003 proposed rule (68 FR 32854); no
draft or final regulatory text.]
1. Background
As noted in the preamble to the proposal, the TAR (40 CFR, part
49), which implements section 301(d) of the CAA, gives Tribes the
option of developing TIPs which can then be submitted to EPA for
approval. Unlike States, Tribes are not required to develop
implementation plans. Under the TAR, eligible Tribes are treated in the
same manner as a State when implementing the CAA; however, EPA has
determined that Tribes are not required to meet plan submittal and
implementation deadlines in the CAA, e.g., 110(a)(1), 172(a)(2), 182,
187, and 191.\88\
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\88\ See 40 CFR part 49.4(a). In addition, EPA determined it was
not appropriate to treat Tribes similarly to States with respect to
provisions of the CAA requiring as a condition of program approval
the demonstration of criminal enforcement authority or providing for
the delegation of such criminal enforcement authority. See 40 CFR
part 49.4(g). To the extent a Tribe is precluded from asserting
criminal enforcement authority, the Federal government will exercise
primary criminal enforcement responsibility. See 40 CFR part 49.8.
In such circumstances, Tribes seeking approval for CAA programs
provide potential investigative leads to an appropriate Federal
enforcement agency.
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The TAR provides flexibility for Tribes in the preparation of a TIP
to address the NAAQS. The ``modular approach'' was described in the
June 2, 2003 proposal of this rule. The TAR indicates that EPA
ultimately has the responsibility for implementing CAA programs in
Indian country, as necessary or appropriate, if Tribes choose not to
implement those provisions. The EPA may find it necessary to develop a
FIP to reduce emissions from sources in Indian country where the Tribe
has not developed a TIP to address an air quality problem.
Finally, as discussed in the June 2, 2003 proposal, it is important
for both States and Tribes to work together to coordinate planning
efforts since many nonattainment areas may include both Tribal land and
non-Tribal land. Coordinated planning will help ensure that the
planning decisions made by the States and Tribes complement each other
and that the nonattainment area makes reasonable progress toward
attainment and ultimately attains the NAAQS. In reviewing and approving
the individual TIPs and SIPs, we will make certain they do not conflict
with the overall air quality plan for an area.
Section 301(d) of the CAA recognizes that eligible Indian Tribes
are generally the appropriate non-Federal authority to implement the
CAA in Indian country. As stated in the TAR, it is appropriate to treat
eligible Tribes in the same manner as States, except for certain
identified provisions, including provisions relating to plan submittal
and implementation deadlines, 40 CFR section 49.3, 49.4. Therefore,
when we discuss the role of the State in implementing this rule, we are
also generally referring to eligible Tribes, with the above exception.
As we noted in the June 2, 2003 proposal, States have an obligation
to notify Tribes as well as other States in advance of any public
hearing(s) on their State plans that will significantly impact such
jurisdictions. Under 40 CFR 51.102(d)(5), States must notify the
[[Page 71667]]
affected States of hearings on their SIPs; this requirement extends to
Tribes under 301(d) of the CAA and the TAR. (40 CFR part 49).
Therefore, affected Tribes that have achieved ``treatment in the same
manner as States'' status must be informed of the contents of such
plans and the extent of documentation to support the plans. In addition
to this mandated process, we encourage States to extend the same notice
to all Tribes for the reasons noted in the comment and response below.
As a matter of policy, EPA intends to consult with and assist all
Tribes, regardless of whether a Tribe has received Treatment in the
same manner as a State (TAS) approval for the purpose of implementing
its own TIP, and we encourage States to do the same.
Understanding the content of a SIP will be important to Tribes
located next to areas that are required to adopt SIPs, particularly to
Tribes who do not choose or have the capacity to develop a TIP.
Therefore, EPA intends to offer Tribes the opportunity for consultation
on activities potentially affecting the achievement and maintenance of
the NAAQS in Indian country. In addition, we expect States to work with
Tribes with land that is part of the same air quality area during the
SIP development process and to coordinate with Tribes as they develop
the SIPs. In the case where the State models projected emissions and
air quality under the SIP, the Tribes should be made aware of these
modeling analyses. Tribes may wish to determine if the Tribal area has
been affected by upwind pollution and whether projected emissions from
the Tribal area have been considered in the modeling analysis.
Generally, Tribal lands have few major sources, but in many cases,
air quality in Indian country is affected by the transport--both long
range and shorter distance transport--of pollutants. In many cases,
Tribal nonattainment problems caused by upwind sources will not be
solved by long-range transport policies, as the Tribes' geographic
areas are small. Tribes are sovereign entities, and not political
subdivisions of States. Strategies used for intrastate transport are
not always available. Most of the strategies and policies used by
States in dealing with short-range transport are not available to
Tribes, e.g., requiring local governments to work together and
expanding the area to include the upwind sources. Unlike Tribes, States
can generally require local governments to work together, or make the
nonattainment area big enough to cover contributing and affected areas.
We believe that it is also unfair to Tribes to require disproportionate
local regulatory efforts to compensate for upwind emissions. In many
cases, attainment could not be reached even if emissions from the Tribe
were zero.
To address these concerns, in the June 2, 2003 proposal, we took
comment on the following: EPA will review SIPs for their effectiveness
in preventing significant contributions to nonattainment in downwind
Tribal areas with the same scrutiny it applies to reviewing SIPs with
respect to impacts on downwind States. Where a Tribe has ``treatment in
the same manner as States,'' EPA will support the Tribes in reviewing
upwind area SIPS during the State public comment period.
2. Summary of Policy
We intend to take the approach noted in the proposal.
3. Comments and Responses
Comment: One commenter was concerned about the transport of
pollutants, including ozone precursors from urbanized areas into areas
of Indian country. The commenter expressed strong support for the
proposed 8-hour implementation rule statement that ``EPA will review
SIPS for their effectiveness in preventing significant contributions to
nonattainment in downwind Tribal areas with the same scrutiny it
applies to impacts on downwind States. Where a Tribe has `treatment in
the same manner as States,' EPA will support the Tribe in reviewing
upwind area SIPs during the State public comment period.'' This
commenter asked for clarification on the nature of EPA's support for
Tribes without TAS status. The commenter also asked if EPA would
support Tribes without TAS approval in reviewing upwind area SIPs and
provide technical assistance in interpreting SIP documentation.
Response: In the TAR, we stated that the CAA protections against
interstate pollutant transport apply with equal force to States and
eligible Tribes. We stated that the prohibitions and authority
contained in sections 110(a)(2)(D) and 126 of the CAA apply to eligible
Tribes in the same manner as States. (See 63 FR 7254, 7260; February
12, 1998). Section 110(a)(2)(D) requires, among other things, that
States include provisions in their SIPs that prohibit any emissions
activity within the State from significantly contributing to
nonattainment, interfering with maintenance of the NAAQS or PSD or
visibility protection programs in another State. In addition, section
126 authorizes any State or eligible Tribe to petition EPA to enforce
these prohibitions against a State containing an allegedly offending
source or group of sources.
We intend to consult with and assist Tribes during the TIP and SIP
development process, regardless of whether a Tribe has received TAS
approval for the purpose of implementing its own TIP. Executive Orders
and EPA Indian policy generally call for EPA to be proactive with the
Tribes. Executive Order 13175, entitled ``Consultation and Coordination
with Indian Tribal Governments'' requires EPA to develop an accountable
process to ensure ``meaningful and timely input by Tribal officials in
the development of regulatory policies that have Tribal implications.''
As part of EPA's ongoing efforts to actively involve Tribal officials
in the development of programs which have Tribal implications, EPA in
the July 18, 2000 ``Guidance on 8-hour Ozone Designations for Indian
Tribes'' established a consultation process with each Tribe that EPA
used throughout the designations process regardless of whether a
particular Tribe has received an eligibility determination to implement
section 107 of the CAA. In summary, EPA intends, as a matter of policy,
to consult with and assist interested Tribal governments, regardless of
their TAS status, in ensuring that the NAAQS are achieved in Indian
country, including working with those Tribes located downwind from a
polluting area.
Comment: One commenter also asked us to explain how we envision our
role in maintaining continued consultation with Tribes throughout the
SIP development process.
Response: We intend to continue to offer Tribes the opportunity for
consultation on activities potentially affecting attainment and
maintenance of the NAAQS in Indian country. In addition, we expect
States to work with Tribes with land that is part of a nonattainment
area in the SIP development process and to inform Tribes of the content
of these SIPs as they develop them. States should coordinate with
Tribes when projecting emissions from counties or other areas which
include areas of Indian country to ensure that assumptions regarding
demographics, economic activity, commuting patterns, etc. are accurate
for the Tribal portions. Where the State models project future
emissions under the SIP and their effect on air quality, then Tribes
should be made aware of these modeling analyses in order to determine
if their Indian country is being affected by upwind pollution and
whether this impact has been considered in the modeling analyses.
[[Page 71668]]
States have an obligation under 40 CFR 51.102(d)(5) to notify other
States in advance of any public hearing(s) on their State plans which
will significantly impact those other entities. This CAA requirement
for States to notify other parties extends to Tribes under section
301(d) and the TAR.
Historically, States have not always understood their
responsibility to coordinate with other affected entities, including,
where appropriate, Tribes. States may not know how to contact Tribes,
particularly when Tribal air programs are not well developed. It may be
difficult for a State to obtain a copy of the control requirements for
Indian country. We can assist States in identifying and contacting
Tribes. When developing control strategies and making policy decisions,
States, should as appropriate, coordinate with Tribes at the earliest
opportunity. Where States utilize stakeholder-based consensus processes
to develop SIP strategies, we recommend that Tribes be provided the
opportunity to participate in the process.
We have begun providing training to Tribes about how to participate
in SIP development and implementation. Many Tribes may not possess the
resources to develop a TIP or may decide not to develop a TIP. Some
will develop robust air quality programs, which may or may not include
a TIP. We intend to work with Tribes with all levels of air management
programs. In general, where areas of Indian country have poor air
quality, it is most likely as a result of transported pollution
sources. We recognize that the manner in which States construct the SIP
and what sources the SIP controls may impact Indian country located in
downwind areas.
Comment: One commenter raised concerns about the practical impacts
of the NSR program on Indian Tribes. The commenter noted that Tribes
have long traditions of environmental stewardship and recognize their
responsibility to protect the health of their citizens. However, the
commenter noted that Tribes have the right to pursue industrial and
economic development. While that development must comply with all
current environmental standards, the Tribes should not be burdened with
requirements that in effect subsidize non-Tribal sources of pollution.
Under the nonattainment NSR program, new major sources locating in
a nonattainment area are required to obtain emissions reductions,
referred to as offsets. The commenter stated that this requirement
poses a hardship on an Indian reservation located in a larger
nonattainment area. The new source wishing to locate on the reservation
must obtain offsets from elsewhere in the nonattainment area; there are
not usually enough sources on the reservation to supply the needed
emissions reductions. When a Tribe is located in such a nonattainment
area, efforts to increase economic development may be stalled by an
inability of new sources to obtain offsets. The commenter concluded
that this requirement is unfair to Tribes because of past barriers to
economic development in Indian country. The commenter also stated that
in many cases air pollution is transported onto the reservation.
Response: The EPA acknowledges that offsets are a concern for
Tribes. We are currently evaluating potential options for addressing
this concern.
M. What are the requirements for OTRs under the 8-hour ozone standard?
[Section VI.S. of June 2, 2003 proposed rule (68 FR 32855); Sec.
51.916 in draft and final regulatory text.]
1. Background
Section 176A of the CAA provides EPA with authority to establish
interstate transport regions where transport of air pollutants from one
or more States contributes significantly to a violation of a NAAQS in
one or more other States.
Section 184 of the CAA establishes additional provisions for OTRs.
Section 184(a) specifically established an OTR comprising 12 Northeast
and Mid-Atlantic States and the District of Columbia in order to
address the longstanding problem of interstate ozone pollution in that
region. To date, the existing OTR is the only transport region for any
pollutant that has been established. The general provisions of section
176A apply to any OTR established under section 184.
Section 184(b) sets forth specific VOC and NOX
regulatory requirements to be applied throughout the entire OTR, in
both attainment and nonattainment areas, to reduce interstate
pollution. These additional regional regulatory requirements are NSR
(for VOC and NOX), RACT (for VOC and NOX),
enhanced vehicle I/M, and Stage II vapor recovery (for vehicle
refueling) or a comparable measure. In general, these requirements
duplicate requirements for certain ozone nonattainment areas that are
classified under subpart 2. In the proposal, we indicated that we
believed that under section 184 the current OTR will remain in place
and remain subject to the section 184 control requirements for purposes
of the 8-hour standard.
2. Summary of Final Rule
Section 184 continues to apply for purposes of the 8-hour standard.
The current OTR remains in place and the section 184 control
requirements continue to apply for purposes of the 8-hour standard.
Today's rule describes RACT requirements for portions of an OTR
that are not classified moderate or above. Consistent with the RACT
requirement for areas classified as moderate and above for the 8-hour
standard, the State must submit a SIP revision that meets the RACT
requirements of section 184 of the CAA for each area in the OTR that is
designated as attainment or unclassifiable or that may be classified
marginal, or that is under Sec. 51.904 of this subpart. A major
stationary source for these areas is defined as a source which directly
emits, or has the potential to emit, 100 tpy or more of NOX
or 50 tpy or more of VOC. For any areas in the OTR, the State is
required to submit the RACT revision no later than September 16, 2006
(27 months after designation for the 8-hour NAAQS) and must provide for
implementation of RACT as expeditiously as practicable but no later
than May 1, 2009 (first day of the first ozone season that is 30 months
after the RACT SIP is due).
We believe that this does not result in any new regulatory
requirements for any area in the OTR because these regulatory
requirements are not associated with an area's designation or
classification and already apply regionwide under the 1-hour ozone
standard. If a new OTR is established for purposes of the 8-hour
standard pursuant to section 176A, that area would also be subject to
the provisions and control requirements of section 184.
3. Comments and Responses
Comments: The EPA received two comments supporting our
interpretation of section 184 with regard to the 8-hour standard. One
commenter further asserted that for any areas that might be added to
the OTR, or for any new OTR, if modeling shows that the control
requirements from section 184 are not appropriate and should not be
required, then EPA has the discretion to exempt such areas from those
requirements. The commenter pointed to a portion of the decision in
Alabama Power v. Costle, 636 F. 2d. 323 (D.C. Circuit, 1979).
Response: Regarding the comment about modeling, we are not prepared
to determine whether the de minimis doctrine established by the court
in Alabama Power would be available in the situation the commenter
describes.
[[Page 71669]]
As the court in that case explained, such a determination would first
require EPA to assess whether Congress, in enacting section 184 of the
CAA, was so prescriptive as to foreclose granting such waivers. Since
that issue of statutory interpretation for the described situation is
not presently before the Agency, EPA is not addressing whether de
minimis authority exists under section 184.
N. Are there any additional requirements related to enforcement and
compliance?
[Section VI.T. of June 2, 2003 proposed rule (68 FR 32855); no
draft or final regulatory text.]
1. Background
In the proposal, we noted that section 172(c)(6) requires
nonattainment SIPs to ``include enforceable emission limitations, and
such other control measures, means or techniques * * * as well as
schedules and timetables for compliance, as may be necessary or
appropriate to provide for attainment * * *'' We also noted that the
current guidance, ``Guidance on Preparing Enforceable Regulations and
Compliance Programs for the 15 Percent Rate-of-Progress Plans (EPA-452/
R-93-005, June 1993)'' is relevant to rules adopted for SIPs under the
8-hour ozone NAAQS and should be consulted for purposes of developing
appropriate nonattainment plan provisions under section 172(c)(6). We
proposed no specific regulatory provisions related to compliance and
enforcement.
2. Summary of Final Rule
As in the proposal, we are not setting forth any additional
regulatory text related to compliance and enforcement.
3. Comments and Responses
We received no comments on the proposed approach of handling
enforcement and compliance provisions related to SIPs for the 8-hour
ozone standard.
O. What requirements should apply to emergency episodes?
[Section VI.U. of June 2, 2003 proposed rule (68 FR 32856); no
draft or final regulatory text.]
1. Background
In the June 2, 2003 proposal, we noted that subpart H of 40 CFR
part 51 specifies requirements for SIPs to address emergency air
pollution episodes and for preventing air pollutant levels from
reaching levels determined to cause significant harm to the health of
persons. We noted that we anticipate proposing a separate rulemaking in
the future to update portions of that rule.
2. Summary of Final Rule
We have not yet proposed any rule revision related to emergency
episodes, and the final rule below does not contain any such rule
revision.
3. Comments and Responses
We received no comments on this aspect of the proposal.
P. What ambient monitoring requirements will apply under the 8-hour
ozone NAAQS?
[Section VI.V. of June 2, 2003 proposed rule (68 FR 32856); no
draft or final regulatory text.]
1. Background
Ozone monitoring data play an important role in designations,
control strategy development, and related implementation activities. We
did not propose any revisions to current ambient monitoring
requirements listed in 40 CFR part 58.
We indicated in the proposal that we do plan to modify the existing
ozone monitoring requirements in a separate rulemaking as part of
implementation of the National Ambient Air Monitoring Strategy (NAAMS),
including adoption of a national strategy introducing national core
monitoring sites (NCore) as a replacement for traditional national air
monitoring stations/State and local air monitoring stations (NAMS/
SLAMS) monitoring currently codified at 40 CFR part 58. Part of the
NCore network would include the existing ozone monitoring sites that
currently support the NAAQS-related activities. The regulatory
modifications are expected to include ozone monitoring requirements
based upon the population of an area and its historical/forecasted
ozone air quality values.
We indicated in the proposal that as part of ongoing air quality
monitoring network assessments (outside the scope of this present
rulemaking), each State, local, and Tribal air monitoring agency is
being asked to assess the adequacy of its air pollution monitoring
networks, including those sites that measure ozone. We said we would
work with these agencies to develop network plans to ensure approval of
all network designs. It is expected that the number and location of the
original sites will be very similar to the current network. However, on
a local basis, there will be some relocation, addition, and removal of
ozone sites as a result of regional network assessments.
In addition, we stated that we anticipate that we will include a
requirement for measuring multiple air pollutants, including ozone
precursors at select locations. The NCore sites are expected to include
high-sensitivity nitrogen oxide (NO) and total reactive oxides of
nitrogen (NOy) measurements at locations across the nation to support
the tracking of emission reduction strategy efforts such as the
NOX SIP Call, the CAIR and, if created, a statute codifying
the Administration's Clear Skies Act, which addresses NOX
reductions across the nation.
Section 182(c)(1) of the CAA requires that enhanced ozone (e.g.,
precursor) monitoring be conducted in any ozone nonattainment area
classified as serious, severe, or extreme. Our regulations reflecting
the statutory requirements are found at 40 CFR part 58. This is known
as the Photochemical Assessment Monitoring Stations (PAMS) program.
The proposal noted that the PAMS monitoring requirements (referred
to as ``enhanced monitoring'' under section 182(c)(1) of the CAA) are
retained in areas designated as 1-hour ozone serious, severe, and
extreme nonattainment areas. Areas that are designated serious or above
under the 8-hour ozone NAAQS are not currently addressed in 40 CFR part
58 for ozone precursor monitoring, although such areas are subject to
the section 182(c)(1) provision. We anticipated that the revisions to
the monitoring regulations would also cover all areas that are
classified as serious or above for the 8-hour NAAQS, including any area
that is bumped up to serious or above for the 8-hour NAAQS.
2. Summary of Final Rule
There is no change from the proposal. No monitoring requirements
are being promulgated as part of this rulemaking. EPA still expects to
separately propose a number of amendments to the monitoring
requirements, along the lines described above, in December 2005.
3. Comments and Responses
Comment: One commenter noted that the NAAMS, which will likely
influence the future of the ozone monitoring network, is based on the
presumption that less criteria pollutant monitoring is needed and that
resources must be shifted into measures that support other analyses.
The commenter pointed out that many States have already curtailed their
criteria pollutant monitoring networks in order to meet program
requirements. The commenter argued that we should support and maintain
the ozone monitoring network since the
[[Page 71670]]
data is used as the basis of attainment determinations and the tracking
of progress.
Response: While we did discuss some aspects of the NAAMS in the
proposed rule, this rulemaking effort does not affect the ambient
monitoring requirements listed in 40 CFR part 58. As such, comments on
the NAAMS are not germane to this action. As noted above, we are
working on a separate rulemaking effort to amend the ambient monitoring
requirements. Commenters should raise any concerns they have regarding
the NAAMS during the comment period on that action.
We recognize that ozone continues to pose a significant
environmental threat. The NAAMS does not recommend curtailing ozone
monitoring, but rather recommends that State and local agencies perform
assessments of their ozone networks to assure that the available
resources are used to maximum benefit. We do not foresee significant
changes to the existing ozone network as a result of these assessments.
The NAAMS does recommend that resources be shifted from criteria
pollutant monitoring to other monitoring initiatives (e.g., air toxics)
for those criteria pollutants whose ambient concentrations are well
below their respective NAAQS. Specifically, the strategy recommends
significant reductions in total suspended particulate (TSP),
PM10, SO2, CO and NO2 monitoring.
Comment: Two commenters questioned the appropriateness of making
high sensitivity NOX and CO measurements at NCore Level 2
sites which may be in urban areas.
Response: This rulemaking effort does not affect the ambient
monitoring requirements listed in 40 CFR part 58. As such, comments on
the appropriateness of making high sensitivity NOX and CO
measurements in urban areas are not germane to this action.
Comment: One commenter urged the continued support of the PAMS
program. The commenter points out that the PAMS' data has been used to
evaluate (and improve) emissions inventories, apply observation-based
models, evaluate photochemical grid-based models, and assess
effectiveness of control programs. The commenter argues that while
fine-tuning the PAMS requirements may be appropriate, the program
should be maintained.
Response: As part of the anti-backsliding provisions of the Phase 1
rule, the PAMS monitoring requirements are retained in areas designated
as 1-hour ozone serious, severe, and extreme nonattainment areas at the
time of a designation of nonattainment for the 8-hour standard. [See 40
CFR 51.900(f)(9)]. In addition, areas that are designated serious or
above under the 8-hour ozone NAAQS will also be required to comply with
the PAMS monitoring requirements. Also, if an area is bumped up to
serious or above for the 8-hour NAAQS, it would be required to conduct
the appropriate PAMS monitoring.
Currently, 40 CFR part 58 does not specifically apply to areas for
purposes of the 8-hour standard. As discussed above, we are working on
a separate rulemaking effort to amend the ambient monitoring
requirements. We expect these revisions to ensure that all areas that
are classified as serious or above for the 8-hour NAAQS are covered by
the PAMS regulations. However, even in the absence of the applicability
of these regulations, the enhanced monitoring requirement of section
182(c)(1) applies.
Q. When will EPA require 8-hour attainment demonstration SIP
submissions?
[Section VI.W. of June 2, 2003 proposed rule (68 FR 32856); Sec.
51.908(e) in draft regulatory text and Sec. 51.908(d) of final
regulatory text.]
1. Background
In the June 2, 2003 action, we proposed that required attainment
demonstrations, which will be based on photochemical grid modeling for
all areas must be submitted within 3 years after designation. However,
we proposed that a subpart 1 area that desires an attainment date
within 3 years after designation would have to provide a demonstration
within 1 year after designation.
We noted that the proposed time of submission is expected to result
in as close as possible a synchronization of the 8-hour ozone and
PM2.5 attainment demonstration SIP submittal dates.
2. Summary of Final Rule
The final rule provides that attainment demonstrations--where
required--must be submitted within 3 years after the effective date of
the area's nonattainment designation. As noted in section IV.D.1.
above, the final rule does have a separate provision addressing
submission of an early attainment demonstration.
On June 18, 2004 (69 FR 34076), EPA announced it was reconsidering
the boundaries of the Las Vegas, NV, 8-hour ozone nonattainment area.
The EPA deferred the effective date of the designation until September
13, 2004, and that this reconsideration would not affect the time SIPs
would be due for the Clark County nonattainment area.
3. Comments and Responses
Comment: Several commenters believed some areas would need longer
than 3 years to submit their attainment demonstration. At least one of
these commenters noted that section 182(c)(2) allows up to 4 years
(rather than 3 years) for submission of a modeled attainment
demonstration for serious and above areas. One commenter recommended
that EPA should consider extending attainment-modeling deadlines for
nonattainment areas that are not currently contained within the 1-hour
boundary, but will now be included in the 8-hour boundary. At least one
commenter agreed with the timing we proposed.
Response: For the reasons stated in the proposal, we believe it is
appropriate to require that the modeled attainment demonstrations be
submitted within 3 years after designation. In addition, we note the
following:
In general, the CAA requires these submissions no later
than 3 years following designation. See sections 172(b) and 182(b) of
the CAA. At the time of enactment of the CAA Amendments of 1990,
Congress allowed areas that used the recently developed and complex
photochemical grid model an extra year (4 years rather than 3 years) to
submit their attainment demonstration. Photochemical grid modeling is
now a process more familiar to users for purposes of developing
attainment demonstrations, and all areas will be using these models for
purposes of their attainment demonstrations and can be completed with
the time frame established in this rule. There is no distinction
between the tools used for attainment modeling that would justify
additional time for these areas to submit attainment demonstrations.
Further, where appropriate, existing modeling exercises (e.g., regional
analyses, RPO analyses, older 1-hour analyses) may be leveraged for use
in certain cases. In most cases, it will not be necessary to conduct a
modeling exercise ``from scratch.''
We do not believe it is appropriate or desirable to
require States to submit attainment demonstrations for areas designated
nonattainment under the 8-hour standard at different times for
different areas. We recognize that photochemical grid modeling--
required by the CAA for interstate moderate nonattainment areas, as
well as serious and higher--classified areas--will be performed on
large enough scales to address transport and will in most cases
encompass a number of nonattainment
[[Page 71671]]
areas. These numerous nonattainment areas may differ by classification
(some areas may be intrastate moderate areas, some interstate moderate
areas, and others serious and above nonattainment areas). Some areas
that may require attainment demonstrations may be subject to subpart 1
while others may be subject to subpart 2.
The control strategies that may be modeled for all the
areas in the modeling domain will likely be modeled simultaneously,
especially if all the areas are located in a single State.
We also note that an area's RFP plan and the RACM
demonstration under section 172(c)(1) are due within 3 years after
designation. For the reasons stated in sections describing those
requirements, it is appropriate that the attainment demonstration, the
RFP plan, and the RACM demonstration be submitted at the same time.
In light of these reasons, we do not believe it is consistent with
the CAA and reasonable to require submission of attainment
demonstrations no later than 3 years following designation.
Although we proposed that subpart 1 areas requesting an attainment
date within 3 years after designation should submit their attainment
demonstration within 12 months, the final rule does not include such a
provision (see section IV.D.1 above for a further discussion of this).
R. How will the statutory time periods in the CAA be addressed when we
redesignate areas to nonattainment following initial designations for
the 8-hour NAAQS?
[Section VI.B. of June 2, 2003 proposed rule (68 FR 32816); Sec.
51.906 in draft and final regulatory text.]
1. Background
We noted in the proposal that section 181(b) of the CAA provides
that for areas designated attainment or unclassifiable for ozone
immediately following enactment of the 1990 CAA Amendments and
subsequently redesignated to nonattainment, the period to the maximum
statutory attainment date would run from the date the area is
classified under subpart 2.\89\ Thus, if an area designated as
attainment for the 1-hour ozone standard in 1990 was redesignated to
nonattainment for the 1-hour ozone standard in January 2002 and
classified as moderate, the area's 1-hour attainment date would be no
later than 6 years following January 2002, i.e., January 2008. Section
172(a)(2) of the CAA provides for attainment dates to be calculated
from the time the area is designated nonattainment.
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\89\ Section 181(b) provides that ``any absolute, fixed date
applicable in connection with any such requirement is extended by
operation of law by a period equal to the length of time between the
date of enactment of the CAAA of 1990 and the date the area is
classified under this paragraph.'' Under section 181(b), the date of
classification is the same as the date of redesignation to
nonattainment.
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We also noted in the proposal that most of the SIP submittal dates
in subpart 2 are set as a fixed period from the date of enactment of
the 1990 CAA Amendments, which was also the date of designation and
classification by operation of law for most subpart 2 areas. Section
181(b)(1) of the CAA provides that any fixed dates applicable in
connection with any such requirements under section 110, subpart 1 and
subpart 2 will be extended by operation of law to a period equal to the
length of time between the date of enactment of the 1990 CAA Amendments
and the date that an area is subsequently designated and classified.
2. Final Rule
We are adopting the approach set forth in the proposed rule. For
any area that is initially designated attainment or unclassifiable for
the 8-hour NAAQS and subsequently redesignated to nonattainment for the
8-hour ozone NAAQS, the periods for the attainment date and dates for
submittal of any applicable requirements under subpart 1 or subpart 2
would run from the date of redesignation to nonattainment of the 8-hour
NAAQS. This is consistent with section 181(b), which gives areas
redesignated to nonattainment the same amount of time to submit plans
and to attain the standard as areas initially designated nonattainment.
3. Comments and Responses
Comment: One commenter asked what the reasoning was behind the time
period extension and if this is an attempt to provide equity, based on
the wording of the draft regulatory text.
Response: As stated above, section 181(b)(1) of the CAA provides
for extending by operation of law any absolute, fixed date applicable
in connection with a nonattainment requirement by a period equal to the
length of time between the date of enactment of the CAA Amendments of
1990 and the date the area is classified and redesignated as
nonattainment. Thus, an area redesignated to nonattainment for the 1-
hour standard and classified as moderate would have been given 3 years
to submit an attainment demonstration and up to 6 years to attain,
which are the same time periods given to an area designated
nonattainment and classified by operation of law at the time of the
1990 CAA Amendments. Since it does not make sense to run deadlines from
the date of the CAA Amendments of 1990, we have adopted an approach
consistent with the intent of that section--that the statutory time
periods run from the date of redesignation to nonattainment.
V. EPA's Final Rule for New Source Review
A. Background
1. The Major NSR Program
The major NSR program contained in parts C and D of title I of the
CAA is a preconstruction review and permitting program applicable to
new and modified major stationary sources of air pollutants regulated
under the CAA. In areas not meeting health-based NAAQS and in OTRs, the
program is implemented under the requirements of section 110(a)(2)(C)
and part D of title I of the CAA. We call this program the
``nonattainment'' major NSR program. Subpart 1 of part D of title I
contains general requirements for nonattainment areas for any criteria
pollutant and subpart 2 contains provisions specifically for ozone
nonattainment areas. Subparts 3 and 4 contain provisions specifically
for CO monoxide and PM10, respectively. In Whitman v.
American Trucking Associations, [531 U.S. 457, 482-86 (2001)], the
Supreme Court reviewed EPA's implementation strategy for the revised 8-
hour ozone NAAQS, and remanded it to EPA to develop a reasonable
resolution of the roles of subparts 1 and 2 in classifying areas for
and implementing the revised ozone standard.\90\
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\90\ For a more complete discussion of this decision and its
implications, see 69 FR 23956; April 30, 2004.
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In areas meeting the NAAQS (``attainment'' areas) or for which
there is insufficient information to determine whether they meet the
NAAQS (``unclassifiable'' areas), the NSR requirements under part C of
title I of the CAA apply. We call this program the PSD program.
Collectively, we also commonly refer to the attainment and
nonattainment programs as the major NSR program. These regulations are
contained in 40 CFR 51.165, 51.166, 52.21, 52.24, and part 51, appendix
S. Of these, the nonattainment area regulations are contained in 40 CFR
51.165, 52.24, and part 51, appendix S.
The major NSR provisions of the CAA are implemented primarily
through SIP-approved State preconstruction permitting programs. As
provided in section 172(c)(5) of the CAA, the SIP
[[Page 71672]]
must require permits for the construction and operation of new or
modified major stationary sources in accordance with section 173 of the
CAA. Subpart 2 of title I of the CAA sets forth additional SIP
requirements for ozone nonattainment areas, including preconstruction
permitting requirements.\91\
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\91\ In some cases, subpart 1 and subpart 2 requirements are
inconsistent or overlap. To the extent that subpart 2 addresses a
specific obligation, the provisions in subpart 2 control (68 FR
32811; June 2, 2003).
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The minimum permitting requirements States must meet before EPA can
approve a State's nonattainment major NSR program into a SIP are found
in part D of title I and 40 CFR 51.165. However, some States are
lacking a SIP-approved major NSR program for the 8-hour ozone NAAQS.
This may be because the State has never had a nonattainment area in
which it needed to apply a nonattainment NSR program or because the
approved program does not apply to an 8-hour ozone nonattainment area.
As discussed in section V.D of this preamble, EPA is providing States 3
years to develop and submit an approvable nonattainment major NSR
program for the 8-hour NAAQS. The regulations at 40 CFR 52.24(k)
specify that appendix S governs permits to construct and operate in a
nonattainment area or in any area designated under section 107(d) of
the CAA as attainment or unclassifiable for ozone that is located in an
OTR that a source applies for during this SIP development period (the
interim period between the effective date of designations and the date
that EPA approves a nonattainment major NSR program).
Appendix S is an interpretation of 40 CFR subpart I (including
Sec. 51.165), and has historically reflected substantially the same
requirements as those in Sec. 51.165, subject to a limited exemption
in section VI. This includes the requirement that a source comply with
LAER and obtain offsetting emissions reductions. Pursuant to section
52.24(k), where necessary, appendix S governs nonattainment major NSR
permitting of ozone precursors in 8-hour ozone nonattainment areas and
all areas within the OTR, including areas designated attainment/
unclassifiable, during the SIP development period. Thus, consistent
with section 110(a)(2)(C), permitting of new and modified stationary
sources in the area will be regulated as necessary to ensure that the
NAAQS are achieved.
As we describe further in section V.A.2 of this preamble, today's
final regulations were proposed as part of two different regulatory
packages. On July 23, 1996 (61 FR 38250), we proposed changes to the
major NSR program, including codification of the requirements of part D
of title I of the 1990 CAA Amendments.\92\ On June 2, 2003 (68 FR
32802), we proposed a rule to implement the 8-hour ozone NAAQS. On
April 30, 2004, we promulgated the Phase 1 final rule and you will find
a summary of the regulatory development process and stakeholder
development for that rulemaking at 69 FR 23951.
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\92\ On December 31, 2002, we finalized five actions from that
proposal related to the applicability of the NSR regulations. For a
summary of the regulatory development process and stakeholder
development for that rulemaking, see 67 FR 80188.
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2. What We Proposed
a. Proposed Changes to Incorporate the 1990 CAA Amendments
On July 23, 1996 (61 FR 38250), we proposed changes to Sec. 51.165
and appendix S to incorporate requirements in part D of title I of the
1990 CAA Amendments for ozone, CO, and PM10 nonattainment
areas. Concerning ozone, we proposed (among other things) to codify the
following provisions from section 182 of the CAA:
Major stationary source thresholds (ranging from 10 to 100
tpy, depending on classification),
Significant emission rates (ranging from 0 to 25 tpy),
Offset ratios (ranging from 1.1:1 to 1.5:1), and
Special modification provisions implementing CAA sections
182(c), (d), and (e) for serious, severe, and extreme ozone
nonattainment areas.
In the 1996 proposal, we proposed that the major stationary source
thresholds and offset ratios of CAA section 182 (subpart 2 of part D)
would apply to all major stationary sources of VOC and NOX
to implement major NSR under the 1-hour ozone NAAQS. This proposal is
consistent with the 1991 and 1992 Transition Policy Memos explaining
major NSR requirements under the 1990 CAA Amendments.\93\ These memos
also explained that permits must comply with the new statutory
requirements for major NSR under the 1-hour NAAQS after the deadlines
set by Congress, regardless of the delay in incorporating them into
SIPs.
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\93\ John S. Seitz, ``New Source Review (NSR) Program
Transitional Guidance,'' March 11, 1991. We provided additional
transitional guidance for nonattainment areas in our September 3,
1992 memorandum, New Source Review (NSR) Program Supplemental
Transitional Guidance on Applicability of New Part D NSR Permit
Requirements, from John S. Seitz, Director, Office of Air Quality
Planning and Standards.
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Our 1996 proposal predated promulgation of the 8-hour ozone NAAQS
and thus did not explain the details of implementation of these
standards under Sec. 51.165 or appendix S. For a discussion of
implementation of the 1-hour and 8-hour ozone NAAQS under Sec. 51.165
and appendix S, see section V.D. of this preamble.
Also, in our 1996 action, and then again in our June 2, 2003
action, we proposed to amend our nonattainment NSR provisions to
expressly include NOX as an ozone precursor in nonattainment
major NSR programs (61 FR 38297, 68 FR 32847). We also proposed that,
as provided under CAA section 182(f), a waiver from nonattainment NSR
for NOX as an ozone precursor would be available for both
subpart 1 and subpart 2 areas (68 FR 32846).
On June 2, 2003, we proposed a rule to identify the statutory
requirements that apply for purposes of developing SIPs under the CAA
to implement the 8-hour ozone NAAQS (68 FR 32802). Specifically, we
proposed two options-one in which all nonattainment areas would be
classified and regulated under subpart 2 of part D of title I, and one
in which some nonattainment areas would be regulated under the less
restrictive requirements of subpart 1 and some would be classified and
regulated under subpart 2. For areas classified under subpart 2--those
with a 1-hour ozone design value at or above 0.121 ppm--the
classifications set forth in subpart 2 (marginal, moderate, etc.) would
govern part D SIPs for the 8-hour ozone standard, with each area's
classification determined by a modified version of the subpart 2
classification table containing 1-hour design values and translated 8-
hour design values for each classification. The NSR permitting
requirements for the 8-hour ozone standard necessarily follow from the
classification scheme chosen under the terms of subpart 1 and subpart
2. We did not propose specific regulatory language for implementation
of NSR under the 8-hour NAAQS. However, we indicated that we intended
to revise the nonattainment NSR regulations to be consistent with the
rule for implementing the 8-hour ozone NAAQS (68 FR 32844).
Concerning CO, in 1996 we proposed the following:
Major stationary source threshold of 50 tpy for serious
nonattainment areas in which the Administrator has determined that
stationary sources are significant contributors to CO levels,
[[Page 71673]]
Significant emission rate of 50 tpy for serious
nonattainment areas in which the Administrator has determined that
stationary sources are significant contributors to CO levels.
Concerning PM10, in 1996, we proposed to amend our
nonattainment NSR regulations to incorporate requirements of the 1990
CAA Amendments and establish significant emission rates. Specifically,
we proposed the following:
Major stationary source threshold of 100 tpy
PM10 or any specific PM10 precursor in moderate
PM10 nonattainment areas,
Major stationary source threshold of 70 tpy
PM10 or any specific PM10 precursor in serious
PM10 nonattainment areas, and
Significant emission rate of 15 tpy PM10 and 40
tpy PM10 precursors.
b. Proposed Changes To Criteria for Emission Reduction Credits From
Shutdowns and Curtailments
In 1996 we proposed to revise the regulations limiting offsets from
emissions reductions due to shutting down an existing source or
curtailing production or operating hours below baseline levels
(``shutdowns/curtailments''). The prior regulations at Sec.
51.165(a)(3)(ii)(C) provided that such emissions reductions could be
used as offsets if the State lacked an approved attainment
demonstration, unless the shutdown/curtailment occurred after the date
the new source permit application was filed or the applicant could
establish that the proposed new source is a replacement for the
shutdown/curtailed source. We proposed to revise the existing
provisions for crediting emissions reductions by restructuring existing
Sec. 51.165(a)(3)(ii)(C)(1) and (2) for clarity without changing the
current requirements therein. [See proposed Sec. 51.165
(a)(3)(ii)(C)(1) through (4)]. We also proposed substantive revisions
in two alternatives that would ease, under certain circumstances, the
existing restrictions on the use of emission reduction credits from
source shutdowns and curtailments as offsets. We explained that easing
the restrictions may be warranted by the 1990 CAA Amendments, in which
Congress significantly reworked the attainment planning requirements of
part D of title I of the CAA such that an approved attainment
demonstration is unnecessary.
The revised CAA emphasizes the emission inventory as the first
requirement in planning, includes new provisions keyed to the inventory
requirements, and mandates several adverse consequences for States that
fail to meet the planning or emissions reductions requirements related
to inventories.\94\ In 1993, we issued a policy memorandum addressing
the use of shutdown credits for offsets in ozone nonattainment areas
and areas in the OTR in light of the new statutory requirements.\95\
According to our longstanding policy, we emphasized that sources may
use emission reduction credits generated from shutdowns and
curtailments as offsets if the State continues to include the emissions
in the emissions inventory for attainment demonstration and RFP
milestone purposes. We proposed two alternatives to revise the
regulations that limit a source's use of emissions reductions as
offsets if the reductions were achieved by shutting down an existing
emissions unit or curtailing production or operating hours of a unit
(shutdowns/curtailments).
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\94\ For a complete discussion of how the 1990 CAA Amendments
attainment planning requirements relate to shutdown/curtailment
credits (61 FR 38311; July 23, 1996).
\95\ Use of Shutdoen Credits for Offsets, July 21, 1993, John S.
Seitz, Director, Office of Air Quality Planning and Standards.
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Under Alternative 1, we proposed to allow emissions reductions from
shutdowns and curtailments from sources located in ozone nonattainment
areas that lack an EPA-approved attainment demonstration to be used as
offsets or netting credits, if the emissions reductions occur after
November 15, 1990 and the area is current with part D ozone
nonattainment planning requirements. See proposed Sec.
51.165(a)(3)(ii)(C)(5) and (6) [Alternative 1]. Proposed Alternative 2
generally would have allowed emissions reductions from source shutdowns
and source curtailments in all nonattainment areas and for all
pollutants to be used as offsets or netting credits when such
reductions occur after the base year of the emissions inventory for
that pollutant. See proposed Sec. 51.165(a)(3)(ii)(C)(5) [Alternative
2]. The 1996 proposal retained the provision that the permitting
authority may consider the shutdown or curtailment to have occurred
after the date of its most recent emissions inventory if the inventory
explicitly includes as current existing emissions the emissions from
such previously shutdown or curtailed sources.
c. Proposed Changes to Revise the Construction Ban Provisions
On July 23, 1996, we proposed to revise Sec. 52.24(a) to
incorporate changes made by the 1990 CAA Amendments related to the
applicability of construction bans. Under the 1977 Amendments, section
110(a)(2)(I) of the CAA required EPA to place certain areas under a
federally imposed construction moratorium (ban) that prohibited the
construction of new or modified major stationary sources in
nonattainment areas where the State failed to have an implementation
plan meeting all of the requirements of part D. The 1990 CAA Amendments
removed these provisions from the CAA. However, in section 110(n)(3) of
the CAA (Savings Clause), the 1990 CAA Amendments retained the
prohibition in cases where it was applied prior to the 1990 CAA
Amendments based upon a finding by the Administrator that the area: (1)
Lacked an adequate NSR permitting program (as required by section
172(b)(6) of the 1977 CAA); or (2) the State plan failed to achieve the
timely attainment of the NAAQS for SO2 by December 31, 1982.
All other construction bans pursuant to section 110(a)(2)(I) are lifted
as a result of the new statutory provision. This includes previously
imposed construction bans based upon a finding that the plan for the
area did not demonstrate timely attainment and maintenance of the ozone
or CO NAAQS. In accordance with the amended section 110(n)(3) of the
CAA, any remaining construction ban continues in effect until the
Administrator determines that the SIP meets either the amended part D
permit requirements, or the requirements under subpart 5 of part D for
attainment of the NAAQS for SO2, as applicable.
We note that Sec. 52.24(k) was not retained in our proposed rule
text. However, the preamble did not in any manner indicate that EPA
believed that NSR permits complying with appendix S were not required
during the SIP development period where necessary. To clarify our
intent, our proposed 8-hour ozone NAAQS implementation rule explained
that Sec. 52.24(k) remained in effect and would be retained. In that
action, we also proposed that we would revise Sec. 52.24(k) to reflect
the changes in the 1990 CAA Amendments (68 FR 32846). The prior
language at section 52.24(k) allowed States to issue permits under
appendix S for a maximum period of 18 months after designation. After
this time, if the nonattainment area did not have an approved part D
NSR permit program, the construction ban would apply. However, the 1990
CAA Amendments to the construction ban provisions altered the
provisions of the construction ban such that it would not apply when a
State lacked an approved part D NSR program in the
[[Page 71674]]
future. Thus, the 1990 CAA Amendments supersede that portion of prior
Sec. 52.24 dealing with the construction ban but leave unaltered the
requirement that appendix S continues to apply through Sec. 52.24(k).
We explained that we have interpreted this language to allow States or
EPA to issue permits under appendix S from designation to approval even
if the time period between designation and approval exceeds 18 months,
and proposed to revise Sec. 52.24(k) to properly reflect this
interpretation.
We also proposed regulatory text to reflect the revisions to CAA
section 173(a)(4). Before the State can issue a nonattainment major NSR
permit, the reviewing authority must first find pursuant to section
173(a)(4) that the ``Administrator has not determined that the
applicable implementation plan is not being adequately implemented for
the nonattainment area'' in accordance with the requirements of part D.
We stated our intent to make this determination by sending a letter to
the permitting authority, and publishing a subsequent action in the
Federal Register, but we solicited comment on the need to undertake
notice-and-comment procedures before taking final action.
Section 113(a)(5) of the CAA provides that EPA may issue an order
prohibiting the construction or modification of any major stationary
source in any area, including an attainment area, where the
Administrator finds that the State is not in compliance with the NSR
requirements. Specifically, EPA may issue an order under section
113(a)(5) banning construction in an area whenever the Administrator
finds that a State is not acting in compliance with any requirement or
prohibition of the CAA relating to construction of new sources or the
modification of existing sources. To codify the requirements of section
113(a)(5), we proposed new language in Sec. 52.24(c).
We proposed to remove the transition provisions under existing
Sec. 52.24(c) and (g). These paragraphs were proposed to be removed
because they were originally designed to clarify the applicable
requirements for permits issued prior to the initial SIP revisions
required by the 1977 CAA Amendments.
In addition to the significant changes already discussed, we
proposed several minor changes to Sec. 52.24. These minor changes
included: (1) The addition of requirements applicable to transport
regions; (2) the inclusion of requirements applicable to criteria
pollutant precursors; (3) incorporation of the definitions proposed in
Sec. 51.165(a); (4) revisions to the language at Sec. 52.24(h)(2);
and (5) revisions to Sec. 52.24(j).
d. Proposed Changes on Applicability of Appendix S and the Transitional
NSR Program
On June 2, 2003 (68 FR 32802), we explained implementation of the
major NSR program under the 8-hour ozone NAAQS during the SIP
development period, and proposed flexible NSR requirements for areas
that expected to attain the 8-hour NAAQS within 3 years after
designation. We stated that the existing regulation codified at 40 CFR
Sec. 52.24(k) requires that permits be issued in compliance with
appendix S during this time, and that a State would have to continue
implementing part D nonattainment requirements under appendix S unless
the source was eligible for flexibility under section VI of the
appendix (68 FR 32846-48).
Our June 2, 2003 proposal would limit the circumstances under which
section VI of appendix S applies (68 FR 32844). Under the existing
regulatory structure of section VI, major new sources and major
modifications located in nonattainment areas for which the attainment
date has not yet passed may avoid the requirement to comply with LAER
and obtain source-specific offsets if the new emissions will not
interfere with an area's ability to reach attainment by its attainment
date. Because we believed that most new emissions in 8-hour
nonattainment areas would generally not meet this criteria of non-
interference, we proposed to apply section VI only in areas that
qualify for a ``transitional classification'' (68 FR 32846).
Accordingly, we called this revised section VI the Transitional NSR
Program. We proposed that the program would apply only in nonattainment
areas that: (1) Are attaining the 1-hour NAAQS; (2) are subject to
subpart 1 (rather than subpart 2) of part D of title I; (3) for which
the State submitted an attainment plan by April 15, 2004 that
demonstrates attainment within 3 years after designation; (4) and for
which the State submitted an attainment plan containing any additional
local control measures needed for attainment of the 8-hour standard (68
FR 32847). We also proposed that the sources using section VI would be
required to comply with BACT.
On August 6, 2003 (68 FR 46536), we solicited comment on additional
options for implementing major NSR under the 8-hour NAAQS, including a
major rewrite of appendix S that would include the proposed changes to
section VI. We also solicited comment on two alternatives to appendix S
for implementing NSR in newly designated nonattainment areas during the
transitional SIP development period. One alternative was a Federal part
D NSR regulatory program for major new and modified sources, to be
codified at 40 CFR 52.10, under which EPA would be responsible for
permitting unless a State took delegation of the program. The other
alternative was application of the Federal PSD program at 40 CFR 52.21
in such newly designated nonattainment areas. Commenters stated that
neither of those alternatives was sufficiently developed for public
comment, and we have not pursued them further.
One other proposal affects appendix S applicability. In 1978 (43 FR
26408; June 19, 1978) and 1979 (44 FR 3276; January 16, 1979), we
proposed that applicability under PSD and appendix S respectively be
based on uncontrolled emissions, but sources would be exempt from
control requirements unless the increase in allowable emissions was at
least 50 tpy, 1,000 pounds per day, or 100 pounds per hour. The U.S.
Court of Appeals for the District of Columbia Circuit, however, ruled
that major source applicability should be based on potential to emit,
rather than uncontrolled emissions. Alabama Power Co. v. Costle, 606
F.2d 1068 (D.C. Circuit, 1979), amended 636 F. 3d 323, 356-57 (D.C.
Circuit, 1980). The court also ruled that EPA had exceeded its
authority in establishing the 50 tpy exemption and remanded the
exemption for reconsideration. In response, we proposed removing the 50
tpy exemption from the PSD rules and appendix S in the 1979 Notice of
Proposed Rulemaking (NPRM) (44 FR 51930). We finalized these changes in
1980, but we inadvertently did not remove the change in all the places
in appendix S where it was located, specifically footnotes 5 and 8 to
IV.D.
e. Proposed Changes To Identify NOX as an Ozone Precursor in
Attainment and Unclassifiable Areas
Currently, only VOCs are expressly regulated as ozone precursors
under the PSD regulations. Recognizing the role of NOX in
ozone formation and transport, we proposed to amend our PSD regulations
to expressly include NOX as an ozone precursor in attainment
and unclassifiable areas. Moreover, we proposed to require States to
modify their existing programs to include NOX as an ozone
precursor in these areas (68 FR 32846).
[[Page 71675]]
B. Summary of Final Rule and Legal Basis
1. Final Action and Legal Basis for Changes to Incorporate the 1990 CAA
Amendments
a. Final Changes to Incorporate the 1990 CAA Amendments
In today's final action, we revised Sec. 51.165 and appendix S to
incorporate the major stationary source thresholds, significant
emission rates, and offset ratios for sources of ozone precursors
pursuant to part D, subpart 1 and subpart 2 of title I of the 1990 CAA
Amendments. [See Sec. 51.165(a)(1)(iv), (a)(1)(v), (a)(1)(x), (a)(8),
(a)(9) and section II. A. 4, 5, and 10 and section IV.G and H of
appendix S.] Accordingly, consistent with statutory requirements and
the final rules in 40 CFR part 51, subpart X (Provisions for
Implementation of 8-hour Ozone NAAQS), today's final rules in Sec.
51.165 require States' part D NSR SIPs implementing the 8-hour ozone
standard to include provisions meeting subpart 1 of part D of the CAA,
and subpart 2 as applicable, based on the area's classification. (We
note 40 CFR part 51, subpart X includes the specific provisions for
determining whether an area is designated and classified under subpart
1 or subpart 2 and these rules are explained in the preamble to those
final rules at 69 FR 23954.) Also, appendix S requires States or EPA to
issue permits during the SIP development period consistent with these
requirements. Specifically, under subpart 1, the major stationary
source threshold is 100 tpy, and an offset ratio of at least 1:1
applies. Under subpart 2, the major stationary source threshold ranges
from 10 to 100 tpy, depending on the classification of the
nonattainment area in which the source is located. The applicable
offset ratios range from 1:1 to 1:5, also depending on the
classification of the nonattainment area in which the source is
located.
We also finalized as proposed in 1996 and 2003 that the NSR
requirements applicable to major stationary sources of VOC (including
provisions regarding major modifications, significant emission rates,
and offsets) apply to NOX emissions. These requirements
apply in all 8-hour ozone nonattainment areas, including subpart 1 and
subpart 2 areas. These requirements apply except where the
Administrator determines, according to the standards set forth in
section 182(f), that NOX requirements for major stationary
sources, including nonattainment major NSR requirements, would not
apply or would be limited (``NOX waiver''). [See Sec.
51.165(a)(8) and appendix S.] According to Sec. 51.913(c), a section
182(f) NOX exemption granted under the 1-hour ozone standard
does not relieve the area from any requirements under the 8-hour ozone
standard, including nonattainment major NSR for major stationary
sources of NOX. We discuss whether a NOX waiver
under section 182(f) applies in a particular area and the effects of
NOX waivers on RACT in section IV.H. of this preamble.
We are not taking final action to implement the special
modification provisions at CAA sections 182(c), (d), and (e) for
serious, severe, and extreme ozone nonattainment areas at this time. We
are evaluating additional issues related to implementation of these
requirements and anticipate taking final action in the future.
As proposed on July 23, 1996 (61 FR 38250), we have incorporated
requirements in part D of title I of the 1990 CAA Amendments for CO.
[See Sec. 51.165(a)(1)(iv)(A)(1)(v) and (a)(1)(x)(D) and appendix S.]
We have also made final changes to incorporate the requirements of
the 1990 CAA Amendments concerning PM10 nonattainment areas.
Specifically, we have promulgated as proposed in 1996 the major
stationary source thresholds and significant emission rates for
PM10 in PM10 nonattainment areas. [See Sec.
51.165(a)(1)(iv)(A)(1)(vi) and (a)(1)(x). See also appendix S at
II.A.4.(i)(a)(6) and II.A.4.(i).] We have not taken final action on our
1996 proposed rules for PM10 precursors. Instead, we plan to
propose regulations concerning PM precursors as part of the
PM2.5 NAAQS implementation rule. We also plan to address
requirements for stationary sources of PM in that action.
b. Legal Basis for Changes To Incorporate the 1990 CAA Amendments
In areas not meeting health-based NAAQS and in the OTR, the major
NSR program is implemented under the requirements of section
110(a)(2)(C) and part D of title I of the CAA. Subpart 1 of part D of
title I contains general requirements for nonattainment areas for any
criteria pollutant. Subpart 2 contains provisions specifically for
ozone nonattainment areas. Subpart 3 contains provisions specifically
for CO nonattainment areas. Subpart 4 contains provisions specifically
for PM10 nonattainment areas. On July 23, 1996 (61 FR
38250), we proposed changes to Sec. 51.165 and appendix S to
incorporate requirements in part D of title I of the 1990 CAA
Amendments for ozone, CO, and PM10 nonattainment areas.
We promulgated a new 8-hour ozone NAAQS on July 18, 1997. We
indicated that we anticipated that States would implement the 8-hour
ozone NAAQS under the less prescriptive subpart 1 requirements. In
February 2001, the Supreme Court ruled that the statute was ambiguous
as to the relationship of subparts 1 and 2 for purposes of implementing
the 8-hour ozone NAAQS. In Whitman v. American Trucking Associations,
[531 U.S. 457, 482-86 (2001)], the Supreme Court reviewed EPA's
implementation strategy for the revised 8-hour ozone NAAQS, and
remanded it to EPA to develop a reasonable resolution of the roles of
subparts 1 and 2 in classifying areas for and implementing the revised
ozone standard. On April 30, 2004, we promulgated a final rule to
implement the 8-hour ozone NAAQS (69 FR 23951), in which some
nonattainment areas would be regulated under the less restrictive
requirements of subpart 1 and some would be classified and regulated
under subpart 2. All ozone nonattainment areas have now been
categorized subpart 1 or subpart 2 areas in 40 CFR part 81. Now that we
have designated and classified nonattainment areas, the NSR program
requirements (including the specific major stationary source
thresholds, significant emission rates, and offset ratios associated
with each classification) are determined by reference to subpart 1 and
subpart 2, as codified in Sec. 51.165 and appendix S through this
rulemaking. Thus, as described in further detail in section V.A.2 of
this preamble, we have incorporated the requirements of the 1990 CAA
Amendments for major stationary sources of ozone precursors in ozone
nonattainment areas as proposed in 1996, and codified those
requirements for the 8-hour standard consistent with the designation
and classification scheme finalized in the 8-hour ozone implementation
rule (69 FR 23951) promulgated in response to Whitman v. American
Trucking Associations, 531 U.S. 457 (2001).
Concerning CO, section 187(c) of the CAA unambiguously establishes
the major stationary source threshold of 50 tpy codified today for
serious nonattainment areas where the Administrator has determined that
stationary sources contribute significantly. It is also reasonable to
set the significant emission rate at 50 tpy in those serious
nonattainment areas where 50 tpy is the major stationary source
threshold. The regulations at Sec. 51.165(a)(1)(iv)(A)(2) require that
if a modification itself would constitute a major stationary source,
the modification is subject to major NSR.
Concerning PM10, section 189 of the CAA unambiguously
establishes the
[[Page 71676]]
major stationary source threshold as 70 tpy in serious nonattainment
areas. Also, EPA has the authority to exempt de minimis emissions from
the reach of a rule. See Alabama Power, 636 F.2d at 360-61. Previously,
EPA has defined the PM10 significant emission rate (that is,
de minimis cut-off level) as at or above 15 tpy for purposes of
determining which modifications are insignificant and thus exempt from
PSD review (52 FR 24672, 24694-96; July 1, 1987). We believe it is
reasonable to use the same significant emission rate in the
nonattainment NSR program. This is consistent with our past practice of
applying the same significant emissions rates for each pollutant in the
PSD and nonattainment NSR programs.
We also revised appendix S to incorporate the requirements of the
1990 CAA Amendments to part D of title I of the CAA. These changes are
necessary to make appendix S consistent with part D. As we discuss in
section V.B.3.b of this preamble, we have determined that Congress
intended for permitting equivalent to the part D NSR provisions to
apply during the SIP development period through the use of appendix S
(subject to the limited section VI exemption). In light of this
determination, there is no reasonable basis for declining to implement
the NSR requirements in the 1990 CAA Amendments during that period.\96\
Additionally, appendix S provides on its face that it is an
interpretation of the NSR permitting rules in 40 CFR subpart I,
including Sec. 51.165. Therefore, it is necessary to have appendix S
reflect substantially the same requirements as are in Sec. 51.165.\97\
Thus, we proposed to amend appendix S in this manner in the 1996 NSR
proposal. We also are mindful of the Supreme Court's decision in
American Trucking Associations. Although the decision did not directly
address NSR implementation during the SIP development period, the Court
emphasized the importance of creating a role for subpart 2 in
implementation of the 8-hour ozone NAAQS. We believe this suggests the
need to create a role for subpart 2 in appendix S, in contrast to the
exclusive subpart 1 scheme currently embodied in appendix S.
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\96\ The 1991 NSR transitional guidance issued to address
implementation of the 1990 CAA Amendments acknowledged that appendix
S did not contain at that time the newly enacted part D provisions,
and further provided that the new requirements of part D to title I
did not apply until November 15, 1992 for the ozone nonattainment
areas; June 30, 1992, for the PM10 nonattainment areas;
and 3 years from designation for most CO nonattainment areas. NSR
Program Transitional Guidance, at A5 (March 11, 1991). We later
clarified that the 1990 CAA Amendments did apply to all permits
after those deadlines passed. NSR Supplemental Program Transitional
Guidance on Applicability of New Part D NSR Requirements at 3
(September 3, 1992).
\97\ Thus, EPA has typically conformed appendix S to the part D
nonattainment NSR permitting provisions governing SIPs at 40 CFR
Sec. 51.165 (originally codified at Sec. 51.18) whenever those
regulations were revised. See, for example, 45 FR 52676 (August 7,
1980); 47 FR 27554 (June 25, 1982); 49 FR 43210 (October 26, 1984);
54 FR 27274 (June 28, 1989); 57 FR 3941 (February 3, 1992).
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2. Final Action and Legal Basis for Changes to Criteria for Emission
Reduction Credits From Shutdowns and Curtailments
a. Final Changes to Criteria for Emission Reduction Credits From
Shutdowns and Curtailments
The final revisions lift the requirement to have an approved
attainment plan before using preapplication credits from shutdowns or
curtailments as offsets. They also facilitate the availability of
creditable offsets, consistent with the requirements of section 173 of
the CAA. We revised the provisions at Sec. 51.165(a)(3)(ii)(C) and
appendix S concerning emission reduction credits generated from
shutdowns and curtailments as proposed in Alternative 2 of the 1996
proposal, with one exception. We agree with the commenter who found the
regulatory term ``most recent emissions inventory'' confusing. We have
revised Sec. 51.165(a)(3)(C)(1) accordingly, specifying that the
shutdown or curtailment must have occurred after ``the last day of the
base year for the SIP planning process.'' For the 8-hour ozone NAAQS,
the base year is 2002.\98\ Additionally, today's final provisions allow
a reviewing authority to consider a prior shutdown or curtailment to
have occurred ``after the last day of the base year if the projected
emission inventory used to develop the attainment demonstration
explicitly includes the emissions from such previously shutdown or
curtailed emissions unit.'' This provision is consistent with the
previous regulation which also allowed the reviewing authority to treat
prior shutdowns or curtailments as occurring after the date of the most
recent emissions inventory, but we have modified the regulatory
language to clarify the appropriate emissions inventory. This
regulatory language is consistent with our previous guidance on how
emission reduction credits from shutdowns and curtailments are used in
attainment planning.\99\ The base year inventory includes actual
emissions from existing sources and would not reflect emissions from
units that were shutdown or curtailed before the base year, as these
emissions are not ``in the air.'' To the extent that these emission
reduction credits are considered available for use as offsets and are
thus ``in the air'' for purposes of demonstrating attainment, they must
be included in the projected emissions inventory used in the attainment
demonstration along with other growth in emissions over the base year
inventory. This step assures that emissions from shutdown and curtailed
units are accounted for in attainment planning.\100\ As with the prior
rules, reviewing authorities thus retain the ability to consider a
prior shutdown or curtailment to have occurred after the last day of
the base year if emissions from the shutdown or curtailment are
accounted for in the attainment demonstration. However, in no event may
credit be given for shutdowns that occurred before August 7, 1977, a
provision carried over from the previous regulation.
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\98\ 68 FR 32833. See also ``2002 Base Year Emission Inventory
SIP Planning: 8-hr Ozone, PM2.5 and Regional Haze Programs,'' U.S.
EPA, pg. 1 (November 18, 2002).
\99\ See 57 FR 13553. After the 1990 CAA Amendments were
enacted, 1990 was the base year for 1-hour ozone NAAQS attainment
planning purposes. See 57 FR 13502. The EPA encouraged States to
allow sources to use pre-enactment banked emissions reductions
credits for offsetting purposes. States have been allowed to do so
if the restored credits meet all other offset creditability
criteria, and States consider such credits as part of the attainment
emissions inventory when developing their post-enactment attainment
demonstration.
\100\ For a discussion of emission inventories for the 8-hour
ozone standard, see our emission inventory guidance, ``Emissions
Inventory Guidance for Implementation of Ozone and Particulate
Matter National Ambient Air Quality Standards (NAAQS) and Regional
Haze Regulations--Final,'' at http://www.epa.gov/ttn/chief/eidocs/eiguid/index.html.
For a discussion of emission projections used in
attainment demonstrations, see Emission Inventory Improvement
Program, Volume X, Emission Projections, December 1999, available at
http://www.epa.gov/ttn/chief/eiip/techreport/.
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The other changes to the proposed rule text also are nonsubstantive
and instead clarify the restrictions on credits from shutdowns or
curtailments. Specifically, the proposed rule retained the requirement
for an approved attainment demonstration, but made that requirement
inapplicable where the credits occurred after the last day of the base
year for the SIP planning process or where they were included in the
most recent emissions inventory. The final rule recognizes there is no
requirement for an approved attainment demonstration in those
circumstances, and thus deletes the reference to that former
requirement.
We note that the requirements for emissions reductions used as
offsets and for netting differ from those for emission reduction
credits used for RFP and ROP.
[[Page 71677]]
Section IV.E.14. of this preamble discusses requirements for emission
reduction credits used for RFP and ROP. For a more detailed discussion
of emission reduction credits for offsets and netting under the 8-hour
ozone NAAQS, see section V.D.5. of this preamble.
b. Legal Basis for Changes to Criteria for Emission Reduction Credits
From Shutdowns and Curtailments
The revisions to the rules governing use of emissions reductions
from shutdowns/curtailments as offsets are warranted by the more
detailed attainment planning and sanction provisions of the 1990 CAA
Amendments. These provisions specifically address air quality concerns
in nonattainment areas lacking EPA-approved attainment demonstrations.
As a threshold matter, we note that CAA section 173 does not mandate
the prior restrictions on shutdown credits, specifically, the
requirement to have an approved attainment demonstration. (See 48 FR
38742, 38751; August 25, 1983). Rather, in promulgating these
restrictions in 1989, EPA recognized that it had a large degree of
discretion under the CAA to shape implementing regulations, as well as
the need to exercise that discretion such that offsets are consistent
with RFP as required in CAA section 173. (See 54 FR 27286, 27292; June
28, 1989). Originally, EPA believed that areas without approved
attainment demonstrations lacked adequate safeguards to ensure that
shutdown/curtailment credits would be consistent with RFP. We thus
subjected those areas to more restrictive requirements to ensure a link
between the new source and the source being shutdown/curtailed (that
is, shutdown/ curtailment must occur after application for a new or
modified major source is filed).
The 1990 CAA Amendments changed the considerations involved. As
discussed above, for areas subject to subpart 2, Congress emphasized
the emission inventory requirement in section 172(c)(3) as a
fundamental tool in air quality planning. Congress also added new
provisions keyed to the inventory requirement, including specific
attainment from the base year emissions inventory or subsequent revised
inventories. Where the emission reduction credits pre-date the base
year, State and local agencies must include the credits from the
shutdown/curtailment in the projected emissions inventory used to
develop the attainment demonstration. Subpart 4 sets forth specific
reduction strategies and milestones for attainment of the PM\10\
standards. Additionally, there are now several adverse consequences
where States fail to meet the planning or emissions reductions
requirements of the CAA. For example, the CAA contains mandatory
increased new source offset sanctions at a 2:1 ratio where the
Administrator finds that a State failed to submit a required attainment
demonstration. In areas that are subject to subpart 2 and subpart 4,
failure to attain the air quality standard by the attainment deadline
results in the area being bumped up to a higher classification.
Additional regulatory requirements are imposed as a result of the
higher classification. These statutory changes justify shif