[Federal Register Volume 62, Number 20 (Thursday, January 30, 1997)]
[Rules and Regulations]
[Pages 4459-4463]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-2288]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[CO-001-0009a; FRL-5674-7]
Approval and Promulgation of Air Quality Implementation Plans;
Colorado; Revisions to Regulation No's. 3 and 7 for Pioneer Metal
Finishing Inc. and a Revision to Regulation No. 7 for Lexmark
International Inc.
AGENCY: Environmental Protection Agency (EPA).
ACTION: Direct final rule.
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SUMMARY: EPA is approving the revisions to the Colorado State
Implementation Plan (SIP) as submitted by the Governor on August 25,
1995, and October 16, 1995. The revisions consist of amendments to
Regulation No. 3, ``Air Contaminant Emissions Notices,'' and Regulation
No. 7, ``Regulation To Control Emissions of Volatile Organic
Compounds.'' The revisions to Regulations Nos. 3 and 7 for Pioneer
Metal Finishing Inc. (PMF) consist of a source-specific SIP revision to
allow PMF to purchase banked Volatile Organic Compound (VOC) emission
reduction credits (ERC) from Coors Brewing Company (Coors), to enable
PMF to come into compliance with the VOC Reasonable Available Control
Technology (RACT) requirements of Regulation No. 7 (Reg. 7). The
revision to Reg. 7 for Lexmark International Inc. (Lexmark) consists of
a source-specific SIP revision to allow
[[Page 4460]]
Lexmark to utilize the provisions of Reg. 7 to perform crossline
averaging for the purposes of meeting the VOC RACT requirements of Reg.
7. This Federal Register action applies to both of these submittals.
EPA's approval will serve to make these revisions federally enforceable
and was requested by the State of Colorado.
DATES: This final rule is effective March 31, 1997 unless adverse or
critical comments are received by March 3, 1997. If the effective date
is delayed, timely notice will be published in the Federal Register.
ADDRESSES: Written comments should be addressed to:Richard R. Long,
Director, Air Program (8P2-A), United States Environmental Protection
Agency, Region 8, 999 18th Street, suite 500, Denver, Colorado 80202-
2466.
Copies of the documents relevant to this action are available for
public inspection between 8 a.m. and 4 p.m., Monday through Friday at
the following office:
United States Environmental Protection Agency, Region 8, Air
Program, 999 18th Street, suite 500, Denver, Colorado 80202-2466
FOR FURTHER INFORMATION CONTACT: Tim Russ, Air Program (8P2-A), United
States Environmental Protection Agency, Region 8, 999 18th Street,
suite 500, Denver, Colorado 80202-2466; Telephone number: (303) 312-
6479.
SUPPLEMENTARY INFORMATION: Section 110(a)(2)(H)(i) of the Clean Air Act
(CAA), as amended in 1990, provides the State the opportunity to amend
its SIP from time to time as may be necessary. The State is utilizing
this authority of the CAA to update and revise existing regulations
which are part of the SIP.
I. Background to the Action
On March 3, 1978, EPA designated the Denver-Boulder metropolitan
area as nonattainment for the National Ambient Air Quality Standards
(NAAQS) for ozone (43 FR 8976). This designation was reaffirmed by EPA
on November 6, 1991 (56 FR 56694) pursuant to section 107(d)(1) of the
CAA, as amended in 1990. Furthermore, since the Denver-Boulder area had
not shown a violation of the ozone standard during the three-year
period from January 1, 1987 to December 31, 1989, the Denver-Boulder
area was classified as a ``transitional'' ozone nonattainment area
under section 185A of the amended Act.
The current Colorado Ozone SIP was approved by EPA in the Federal
Register on December 12, 1983 (48 FR 55284). The SIP contains Reg. 7
which applies RACT to stationary sources of VOCs. Reg. 7 was adopted to
meet the requirements of section 172(b)(2) and (3) of the 1977 CAA
(concerning the application of RACT to stationary sources 1.)
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\1\ The requirement to apply RACT to existing stationary sources
in a nonattainment area was carried forth under the amended Act in
section 172(c)(1).
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During 1987 and 1988, EPA Region 8 conducted a review of Reg. 7 for
consistency with the Control Techniques Guidelines documents (CTGs) and
regulatory guidance, for enforceability and for clarity. The CTGs,
which are guidance documents issued by EPA, set forth measures that are
presumptively RACT for specific categories of sources of VOCs. A
substantial number of deficiencies were identified in Reg. 7. In 1987,
EPA published a proposed policy document that included, among other
things, an interpretation of the RACT requirements as they applied to
VOC nonattainment areas (see 52 FR 45044, November 24, 1987). On May
25, 1988, EPA published a guidance document entitled ``Issues Relating
to VOC Regulation Cutpoints, Deficiencies, and Deviations,
Clarification to Appendix D of the November 24, 1987 Federal Register
Notice'' (the ``Blue Book''). A review of Reg. 7 against these
documents uncovered additional deficiencies in the regulation.
On May 26, 1988, EPA notified the Governor of Colorado that the
Carbon Monoxide (CO) SIPs for Colorado Springs and Fort Collins were
inadequate to achieve the CO NAAQS. In that letter, EPA also notified
the Governor that the ozone portion of the SIP had significant
deficiencies in design and implementation, and requested that these
deficiencies be remedied. EPA did not make a formal call for a revision
to the ozone portion of the SIP in the May 1988 letter 2, even
though the Denver-Boulder area was, and continues to be, designated
nonattainment for ozone. The reason for this decision was that no
violations of the ozone NAAQS had been recorded in the nonattainment
area for the previous three years.
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\2\ Under the pre-amended Act, EPA had the authority under
section 110(a)(2)(H) to issue a ``SIP Call'' requiring a State to
correct deficiencies in an existing SIP. Section 110(a)(2)(H) was
not modified by the 1990 Amendments. In addition, the amended Act
contains new section 110(k)(5) which also provides authority for a
SIP Call.
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In a letter dated September 27, 1989, the Governor submitted
revisions to Reg. 7, as adopted by the Colorado Air Quality Control
Commission (AQCC) on September 21, 1989, (effective October 30, 1989)
which partially addressed EPA's concerns. Revisions were made to
numerous sections of Reg. 7, including 7.I Applicability, 7.II General
Provisions, and 7.IX Surface Coating Operations.
In a letter dated August 30, 1990, the Governor submitted
additional revisions to Reg. 7, as adopted by the AQCC on July 19, 1990
(effective August 30, 1990) to address EPA's remaining concerns with
the September 27, 1989, SIP revision. Revisions were made to several
sections of Reg. 7, including sections 7.I.B. and 7.I.C.
(Applicability--Compliance Schedule) requiring all sources to come into
compliance with the revised Reg. 7 by October 31, 1991. Sources which
were in existence prior to the regulation revisions and which were
covered by the then-current regulations were required to maintain
compliance with those provisions.
On May 30, 1995, EPA published a final rule in the Federal Register
(60 FR 28055) that fully approved the Governor's September 27, 1989,
and August 30, 1990, revisions to Reg. 7. The final rule became
effective on June 29, 1995.
A. Pioneer Metal Finishing Inc. (PMF)
In a letter dated January 14, 1991, PMF advised the Tri-County
Health Department (for Adams, Arapahoe, and Douglas Counties) of its
operation. The Air Pollution Control Division (APCD) of the Colorado
Department of Health subsequently determined that the PMF facility was
an emitting source which did not possess a permit from the State. PMF
filed an initial permit application with the State on January 15, 1991.
Upon review of the permit application, the APCD found that PMF was not
in compliance with the VOC RACT requirements of Reg. 7, section IX.,
``Surface Coating Operations,'' subsection L, ``Manufactured Metal
Parts and Metal Products,'' as PMF could not meet the three pounds per
hour or fifteen pounds per day cutoffs for use of non-compliant
coatings. PMF was required to meet the RACT provisions of Reg. 7 by
October 30, 1991, as detailed in section I.B.2 (Applicability to
Existing Sources) of the AQCC revisions to Reg. 7 that appeared in the
Governor's SIP revision submittals dated September 27, 1989, and August
30, 1990.
PMF is a small facility (approximately ten employees were noted in
the January 15, 1991, permit application) that applies coatings via
spray guns to metal parts and wood products that are brought to PMF by
customers who do not have coating facilities or who find that
establishing individual coating facilities would not be cost-effective.
This work may involve quantities of
[[Page 4461]]
high VOC coatings being used on several different jobs at once.
In a letter dated August 18, 1992, the State indicated that it was
denying PMF's permit application. PMF considered installing VOC RACT
control equipment on its paint booths, but found the costs economically
infeasible for its operation. PMF then proposed various solutions to
its problems of being unable to comply with the revised Reg. 7 limits,
including an outright exemption, less stringent threshold (the five
percent equivalency rule 3), and shifting the compliance
requirements to PMF's customers. None of these solutions was acceptable
to the State or EPA.
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\3\ This EPA rule, which is detailed in the Agency's May 25,
1988, document ``Issues Relating to VOC Regulation Cutpoints,
Deficiencies, and Deviations; Clarification to Appendix D of [the]
November 24, 1987 Federal Register'' (re: the ``Blue Book'').
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A solution to PMF's dilemma began to evolve with the advent of
EPA's Economic Incentive Program (EIP) rules of April 7, 1994 (59 FR
16690). With the development of this emission trading policy, EPA
advised Colorado and PMF that PMF could utilize emission trading as a
means to achieve the RACT requirements of Reg. 7.
EPA's prior policy on emissions trading, entitled ``Emissions
Trading Policy Statement; General Principles for Creation, Banking, and
Use of Emission Reduction Credits; Final Policy Statement and
Accompanying Technical Issues Document'' (51 FR 43814, December 4,
1986), did not address the use of emission trading for the purposes of
achieving compliance with RACT. The EIP rules, however, specifically
addressed the issue of emission trading to achieve compliance for RACT
provisions (see 59 FR 16695 to 16697 and 59 FR 16702 to 16705, April 7,
1994). Based on the provisions in EPA's EIP rules, PMF and Colorado
designed a source-specific revision to the SIP which would allow PMF to
purchase banked VOC emission reduction credits from Coors Brewing
Company (State Emissions Reduction Credit Permit 91AR120R, July 25,
1994) to compensate for PMF's excess VOC emissions that would have
otherwise been reduced by RACT control equipment and/or use of
compliant coatings. The development and adoption of the necessary
revisions to the State's Reg. 3 and Reg. 7 are further explained below
in ``II. Analysis of the State's Submittals''.
B. Lexmark International Inc. (Lexmark)
Colorado's Reg. 7, section IX, establishes VOC emission limitations
for specified surface coating operations and includes provisions to
allow sources to achieve these emission limits through the installation
and operation of RACT control equipment, use of compliant coatings, and
alternative compliance methods as a source specific revision to the
SIP. One such alternative compliance method involves the use of
crossline averaging of emissions. The requirements for crossline
averaging appear in Reg. 7, section IX.5(d). The crossline averaging
provisions of section IX.5(d) were submitted by the Governor in his
September 27, 1989, revision to the SIP and were fully approved by EPA
on May 30, 1995 (see 60 FR 28055).
Lexmark proposed to the AQCC a source-specific revision to the SIP
to enable Lexmark to use crossline averaging as a means of complying
with the emission limitations that apply to Plastic Film Coating
Operations (Reg. 7, section IX.J) and Manufactured Metal Parts and
Metal Products operations (Reg. 7, section IX.L). Crossline averaging
is appropriate in this case as it would allow Lexmark the flexibility
to effect greater emission reductions than otherwise required on
certain production lines and to use those additional emission
reductions to offset emissions from lines where use of abatement
technology is not cost effective. This crossline averaging will be
applied to the facility which Lexmark operates in Boulder, Colorado.
The development and adoption of the necessary revision to the State's
Reg. 7 are further explained below in ``II. Analysis of the State's
Submittals''.
II. Analysis of the State's Submittals
Section 110(k) of the CAA sets out provisions governing EPA's
action on submissions of revisions to a State Implementation Plan. The
CAA also requires States to observe certain procedural requirements in
developing SIP revisions for submittal to EPA. Section 110(a)(2) of the
CAA requires that each SIP revision be adopted after going through a
reasonable notice and public hearing process prior to being submitted
by a State to EPA.
A. Pioneer Metal Finishing Inc. (PMF)
The adoption of the necessary revisions to the SIP for PMF to
achieve compliance with the VOC RACT provisions of Reg. 7 was handled,
essentially, as a two-step process. First, changes were required to
sections V.A., V.C.1, V.C.3, V.C.5, V.D.6, V.D.7, V.D.9, V.E., V.F.,
V.F.5, V.F.7, V.F.8.l, V.F.14, and V.F.15, of Reg. 3 (which contains
Colorado's emission trading provisions), to allow Emission Reduction
Credits (ERCs) to be used for bubble, netting, offset transactions, and
alternative compliance methods. In addition, a change was necessary to
section II.D.1 of Reg. 7, so that sources could use an alternative
emission control plan or, in PMF's case, an alternative compliance
method. To accomplish this, the AQCC held a public hearing on October
20, 1994, directly after which the AQCC adopted the revisions to Reg. 3
and Reg. 7. These revisions became effective on December 30, 1994. The
Governor submitted these revisions to Reg. 3 and Reg. 7 by a letter
dated October 16, 1995. In his October 16, 1995, letter, however, the
Governor asked for conditional approval as these SIP revisions must
first be approved by the Colorado General Assembly as required by the
Colorado Air Pollution Prevention and Control Act (CAPPCA). The CAPPCA
is strictly a State-only mandated requirement that any revision to the
SIP must first be approved by the State General Assembly prior to the
Governor asking EPA for final approval of the revision to the SIP. EPA
received this revision to the SIP on October 17, 1995. Due to
unresolved EPA legal issues involving the CAPPCA, EPA took no action on
the Governor's submittal and, by operation of law under the provisions
of section 110(k)(1)(B) of the CAA, the submittal became complete on
April 17, 1996. By a letter dated June 25, 1996, the Governor advised
that certain revisions to the SIP, which had previously been submitted
for conditional approval, had been approved by the Colorado General
Assembly and should now be considered by EPA for final approval and
inclusion in the SIP. Mention of the particular revisions to Reg. 3 and
Reg. 7, however, was inadvertently left out of the Governor's June 25,
1996, letter. This concern was noted and corrected in a supplemental
letter, dated July 1, 1996, from Douglas Lempke, Acting Technical
Secretary for the AQCC, on behalf of the Governor.
The second step in this two-step process involved specific
revisions to Reg. 7, which required a new section IX.L.2.c through
IX.L.2.c.xv, that included 15 source-specific provisions allowing PMF
to use emission trading to demonstrate compliance with the VOC RACT
provisions of Reg. 7. The AQCC held a public hearing on February 16,
1995, directly after which the AQCC adopted the PMF revisions to Reg.
7. These revisions became effective on April 30, 1995. The Governor
submitted these particular revisions to Reg. 7 by a letter dated August
25, 1995. In his August 25, 1995, letter, however, the Governor asked
for conditional approval as these SIP revisions must first be approved
by the Colorado General
[[Page 4462]]
Assembly as required by the CAPPCA as described above. EPA received
this revision to the SIP on August 28, 1995. Again, due to the
unresolved EPA legal issues involving the CAPPCA, EPA took no action on
the Governor's submittal and by operation of the provisions of section
110(k)(1)(B) of the CAA, the submittal became complete on February 28,
1996. By a letter dated June 25, 1996, the Governor advised that
certain revisions to the SIP, which had previously been submitted for
conditional approval, had been approved by the Colorado General
Assembly and should now be considered by EPA for final approval and
inclusion in the SIP. Again, mention of the particular revisions to
Reg. 7 was inadvertently left out of the Governor's June 25, 1996,
letter. This concern was noted and corrected in a supplemental letter,
dated July 1, 1996, from Douglas Lempke, Acting Technical Secretary for
the AQCC, on behalf of the Governor.
B. Lexmark International Inc. (Lexmark)
The source-specific revisions to Reg. 7, for crossline averaging
for Lexmark's operations, involved changes to Reg. 7 which required a
new section IX.A.12 through IX.A.12.a.(xi), that included 11 source-
specific requirements for Lexmark to demonstrate compliance with VOC
RACT crossline averaging provisions. The AQCC held a public hearing on
May 18, 1995, directly after which the AQCC adopted the Lexmark
revisions Reg. 7. These revisions became effective on July 30, 1995.
The Governor submitted revisions to Reg. 7 by a letter dated August 25,
1995. In his August 25, 1995, letter, however, the Governor asked for
conditional approval as the SIP revisions must first be approved by the
Colorado General Assembly as required by the CAPPCA, as described
above. EPA received this revision to the SIP on August 28, 1995. Again,
due to the unresolved EPA legal issues involving the CAPPCA, EPA took
no action on the Governor's submittal and by operation of the
provisions of section 110(k)(1)(B) of the CAA, the submittal became
complete on February 28, 1996. By a letter dated June 25, 1996, the
Governor advised that certain revisions to the SIP, which had
previously been submitted for conditional approval, had been approved
by the Colorado General Assembly and should now be considered by EPA
for final approval and inclusion in the SIP. Again, mention of the
revision to Reg. 7, however, was inadvertently left out of the
Governor's June 25, 1996, letter. This concern was noted and corrected
in a supplemental letter, dated July 1, 1996, from Douglas Lempke,
Acting Technical Secretary for the AQCC, on behalf of the Governor.
III. Final Action
EPA is approving the Reg. 3 and Reg. 7 revisions that were adopted
by the AQCC on October 20, 1994, February 16, 1995, and May 18, 1995.
All supporting documentation for these revisions is contained in the
Technical Support Document (TSD) for this action.
EPA is publishing this action without prior proposal because the
Agency views this as a noncontroversial amendment and anticipates no
adverse comments. However, in a separate document in this issue of the
Federal Register, EPA is proposing to approve the SIP revision should
adverse or critical comments be filed. This action will be effective
March 31, 1997 unless, by March 3, 1997, adverse or critical comments
are received.
If EPA receives such comments, this action will be withdrawn before
the effective date by publishing a subsequent document that will
withdraw the final action. All public comments received will then be
addressed in a subsequent final rule based on this action serving as a
proposed rule. EPA will not institute a second comment period on this
action. Any parties interested in commenting on this action should do
so at this time. If no such comments are received, the public is
advised that this action will be effective March 31, 1997.
Nothing in this action should be construed as permitting or
allowing or establishing a precedent for any future request for
revision to any State Implementation Plan. Each request for revision to
any State Implementation Plan shall be considered separately in light
of specific technical, economic, and environmental factors and in
relation to relevant statutory and regulatory requirements.
IV. Administrative Requirements
A. Executive Order 12866
This action has been classified as a Table 3 action for signature
by the Regional administrator under the procedures published in the
Federal Register on January 19, 1989 (54 FR 2214-2225), as revised by a
July 10, 1995 memorandum from Mary Nichols, Assistant Administrator for
Air and Radiation. The Office of Management and Budget (OMB) has
exempted this regulatory action from E.O. 12866 review.
B. Regulatory Flexibility Act
Under the Regulatory Flexibility Act, 5 U.S.C. 600 et. seq., EPA
must prepare a regulatory flexibility analysis assessing the impact of
any proposed or final rule on small entities. 5 U.S.C. 603 and 604.
Alternatively, EPA may certify that the rule will not have a
significant impact on a substantial number of small entities. Small
entities include small businesses, small not-for-profit enterprises,
and government entities with jurisdiction over populations of less than
50,000.
SIP approvals under section 110 and subchapter I, part D of the
Clean Air Act do not create any new requirements, but simply approve
requirements that the State is already imposing. Therefore, because the
Federal SIP-approval does not impose any new requirements, the
Administrator certifies that it does not have significant impact on any
small entities affected. Moreover, due to the nature of the Federal-
State relationship under the CAA, preparation of a regulatory
flexibility analysis would constitute Federal inquiry into the economic
reasonableness of state action. The CAA forbids EPA to base its actions
concerning SIPs on such grounds. Union Electric Co. v. U.S. EPA, 427
U.S. 246, 256-66 (1976); 42 U.S.C. 7410(a)(2).
C. Unfunded Mandates
Under section 202 of the Unfunded Mandates Reform Act of 1995
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA
must prepare a budgetary impact statement to accompany any proposed or
final rules that include a Federal mandate that may result in estimated
costs to State, local, or tribal governments in the aggregate; or to
private sector, of $100 million or more. Under section 205, EPA must
select the most cost-effective and least burdensome alternative that
achieves the objectives of the rule and is consistent with statutory
requirements. Section 203 requires EPA to establish a plan for
informing and advising any small governments that may be significantly
or uniquely impacted by the rule.
EPA has determined that the approval action promulgated does not
include a Federal mandate that may result in estimated costs of $100
million or more to either State, local, or tribal governments in the
aggregate or to the private sector. This Federal action approves pre-
existing requirements under State or local law, and imposes no new
requirements. Accordingly, no additional costs to State, local, or
tribal governments, or to the private sector, result from this action.
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D. Petitions for Judicial Review
Under section 307(b)(1) of the CAA, petitions for judicial review
of this action must be filed in the United States Court of Appeals for
the appropriate circuit by March 31, 1997. Filing a petition for
reconsideration by the Administrator of this final rule does not affect
the finality of this rule for the purposes of judicial review nor does
it extend the time within which a petition for judicial review may be
filed, and shall not postpone the effectiveness of such rule or action.
This action may not be challenged later in proceedings to enforce its
requirements (see section 307(b)(2) of the CAA).
E. Executive Order 12866
The Office of Management and Budget has exempted this rule from the
requirements of section 6 of Executive Order 12866.
List of Subjects in 40 CFR Part 52
Environmental protection, Air pollution control, Hydrocarbons,
Incorporation by reference, Intergovernmental relations, Ozone,
Reporting and recordkeeping requirements, Volatile organic compounds.
Note: Incorporation by reference of the State Implementation
Plan for the State of Colorado was approved by the Director of the
Federal Register on July 1, 1980.
Dated: December 2, 1996.
Jack W. McGraw,
Acting Regional Administrator.
40 CFR part 52 is amended as follows:
PART 52--[AMENDED]
1. The authority citation for part 52 continues to read as follows:
Authority: 42 U.S.C. 7401-7671q.
Subpart G--Colorado
2. Section 52.320 is amended by adding paragraph (c)(78) to read as
follows:
Sec. 52.320 Identification of plan.
* * * * *
(c) * * *
(78) Revisions to the Colorado State Implementation Plan were
submitted by the Governor of the State of Colorado on August 25, 1995,
and October 16, 1995. The revisions consist or amendments to Regulation
No. 3, ``Air Contaminant Emissions Notices'' and to Regulation No. 7,
``Regulation To Control Emissions of Volatile Organic Compounds.''
These revisions involve source-specific State Implementation Plan
requirements for emission trading for Pioneer Metal Finishing Inc. and
crossline averaging for Lexmark International Inc.
(i) Incorporation by reference.
(A) Revisions to Regulation No. 3, 5 CCR 1001-5, sections V.A.
(Purpose), V.C.1 , V.C.3, V.C.5 (Definitions), V.D.6, V.D.7, V.D.9
(Procedure for Certification of Emissions Reductions and Approval of
Transactions), V.E. (Criteria for Certification of Emissions
Reductions), V.F., V.F.5, V.F.7, V.F.8.l, V.F.14, and V.F.15 (Criteria
for Approval of all Transactions) and Revisions to Regulation No. 7, 5
CCR 1001-9, section II.D.1.a (Alternative Control Plans and Test
Methods) became effective on December 30, 1994. The new section
IX.L.2.c through IX.L.2.c.xv (Manufactured Metal Parts and Metal
Products) to Regulation No. 7, 5 CCR 1001-9, applicable to Pioneer
Metal Finishing Inc., became effective on April 30, 1995. The new
section IX.A.12 through IX.A.12.a.(xi) (General Provisions) to
Regulation No. 7, 5 CCR 1001-9, applicable to Lexmark International
Inc., became effective July 30, 1995.
* * * * *
[FR Doc. 97-2288 Filed 1-29-97; 8:45 am]
BILLING CODE 6560-50-F
