[Federal Register Volume 61, Number 218 (Friday, November 8, 1996)]
[Proposed Rules]
[Pages 57834-57837]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-28595]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[CA 181-0021; FRL-5642-9]
Approval and Promulgation of Implementation Plans; California
State Implementation Plan Revision, South Coast Air Quality Management
District
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
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SUMMARY: EPA is proposing to approve revisions to the California State
Implementation Plan (SIP) for ozone. The revision concerns the control
of oxides of nitrogen (NOX) and oxides of sulfur (SOX)
emissions using an emissions-limiting economic incentive program (EIP),
the NOX and SOX Regional Clean Air Incentives Market
(NOX/SOX RECLAIM). This program, which consists of twelve
rules and associated appendices known as Regulation XX, applies to
facilities in the South Coast Air Quality Management District (SCAQMD)
with four or more tons of NOX or SOX emissions per year from
permitted equipment. The subject facilities, in order to meet annual
emission reduction requirements, will participate in an EIP in order to
reduce emissions at a significantly lower cost. The intended effect of
proposing approval of this rule is to regulate emissions of NOX in
accordance with the requirements of the Clean Air Act, as amended in
1990 (CAA or the Act). EPA's final action on this notice of proposed
rulemaking will incorporate this rule into the federally approved SIP.
EPA has evaluated this rule and is proposing to approve it under
provisions of the CAA regarding EPA actions on SIP submittals, SIPs for
national primary and secondary ambient air quality standards (NAAQS),
and plan requirements for nonattainment areas. Elsewhere in the Federal
Register today, EPA is finalizing a limited approval/limited
disapproval of an earlier version of the RECLAIM program (submitted to
EPA for approval on March 21, 1994); when EPA publishes its final
action approving the August 28, 1996 submittal, the possibility of
sanctions mentioned in the final limited approval/limited disapproval
of the earlier submittal will be removed.
DATES: Comments on this proposed action must be received in writing on
or before December 9, 1996.
ADDRESSES: Comments may be mailed to: Daniel A. Meer, Rulemaking
Section (A-5-3), Air and Toxics Division, U.S. Environmental Protection
Agency, Region 9, 75 Hawthorne Street, San Francisco, CA 94105-3901.
Copies of the rule and EPA's evaluation report are available for
public inspection at EPA's Region 9 office during normal business
hours. Copies of the submitted rule are also available for inspection
at the following locations:
California Air Resources Board, Stationary Source Division, Rule
Evaluation Section, 2020 ``L'' Street, Sacramento, CA 95812.
South Coast Air Quality Management District, 21865 E. Copley Drive,
Diamond Bar, CA 91765-4182.
FOR FURTHER INFORMATION CONTACT: Kenneth Israels, Rulemaking Section
(A-5-3), Air and Toxics Division, U.S. Environmental Protection Agency,
Region IX, 75 Hawthorne Street, San Francisco, CA 94105-3901,
Telephone: (415) 744-1194.
SUPPLEMENTARY INFORMATION:
Applicability
The rule being proposed for approval into the California SIP is:
SCAQMD Regulation XX, NOX/SOX RECLAIM. This rule was
submitted by the California Air Resources Board (CARB) to EPA on August
28, 1996 and found complete on September 17, 1996.
Background
On November 15, 1990, the Clean Air Act Amendments of 1990 (CAA)
were enacted. Pub. L. 101-549, 104 Stat. 2399, codified at 42 U.S.C.
7401-7671q. The air quality planning requirements for the reduction of
NOX emissions through reasonably available control technology
(RACT) are set out in section 182(f) of the CAA. On November 25, 1992,
EPA published a NPRM entitled ``State Implementation Plans; Nitrogen
Oxides Supplement to the General Preamble; Clean Air Act Amendments of
1990 Implementation of Title I; Proposed Rule,'' (the NOX
Supplement) which describes and provides preliminary guidance on the
requirements of section 182(f). The November 25, 1992, notice should be
referred to for further information on the NOX requirements and is
incorporated into this document by reference.
Section 182(f) of the Clean Air Act requires States to apply the
same requirements to major stationary sources of NOX (``major'' as
defined in section 302 and section 182(c), (d), and (e)) as are applied
to major stationary sources of volatile organic compounds (VOCs), in
moderate or above ozone nonattainment areas. The Los Angeles-South
Coast Air Basin is classified as extreme; 1 therefore this area
was subject to the RACT requirements of section 182(b)(2) and the
November 15, 1992 deadline, cited below.
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\1\ The Los Angeles-South Coast Air Basin retained its
designation of nonattainment and classified by operation of law
pursuant to sections 107(d) and 181(a) upon the date of enactment of
the CAA. See 55 FR 56694 (November 6, 1991).
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Section 182(b)(2) requires submittal of RACT rules for major
stationary sources of VOC (and NOX) emissions (not covered by a
pre-enactment control techniques guidelines (CTG) document or a post-
enactment CTG document) by November 15, 1992. There were no NOX
CTGs issued before enactment and EPA has not issued a CTG document for
any NOX sources since enactment of the CAA. The RACT rules
covering NOX sources and submitted as SIP revisions, are expected
to require final installation of the actual NOX controls as
expeditiously as practicable, but no later than May 31, 1995.
On April 7, 1994, EPA published a Notice of Final Rulemaking (NFRM)
concerning EIPs entitled ``Economic Incentive Program Rules,'' (EIP
rules) in order to fulfill the requirements of section 182(g)(4)(A) of
the Act (see 59 FR 16690). The EIP rules establish several requirements
which State programs must meet. These requirements are:
Statement of goals and rationale. This element shall
include a clear statement as to the environmental problem being
addressed, the intended environmental and economic goals of the
program, and the rationale relating the incentive-based strategy to the
program goals.
Program scope. This element shall contain a clear
definition of the sources affected by the program.
[[Page 57835]]
Program baseline. A program baseline shall be defined as a
basis for projecting program results and, if applicable, for
initializing the incentive mechanism (e.g., for marketable permits
programs). The program baseline shall be consistent with, and
adequately reflected in, the assumptions and inputs used to develop an
area's reasonable further progress (RFP) plans and attainment and
maintenance demonstrations, as applicable. The State shall provide
sufficient supporting information from the areawide emissions inventory
and other sources to justify the baseline used in the State or local
EIP.
Replicable emission quantification methods. This program
element, for programs other than those which are categorized as
directionally-sound, shall include credible, workable, and replicable
methods for projecting program results from affected sources and, where
necessary, for quantifying emissions from individual sources subject to
the EIP. Such methods, if used to determine credit taken in attainment,
RFP, and maintenance demonstrations, as applicable, shall yield results
which can be shown to have a level of certainty comparable to that for
source-specific standards and traditional methods of control strategy
development.
Source requirements. This program element shall include
all source-specific requirements that constitute compliance with the
program. Such requirements shall be appropriate, readily ascertainable,
and State and federally enforceable.
Projected results and audit/reconciliation procedures.
This program element includes a commitment to ensure the timely
implementation of programmatic revisions or other measures which the
State, in response to the audit, deems necessary for the successful
operation of the program in the context of overall RFP and attainment
requirements. (see 40 CFR 51.493(f)(3)(i))
Implementation schedule. The program shall contain a
schedule for the adoption and implementation of all State commitments
and source requirements included in the program design.
Administrative procedures. The program shall contain a
description of State commitments which are integral to the
implementation of the program, and the administrative system to be used
to implement the program, addressing the adequacy of the personnel,
funding, and legislative authority.
Enforcement mechanisms. The program shall contain a
compliance instrument(s) for all program requirements, which is legally
binding and enforceable by both the State and EPA. This program element
shall also include a State enforcement program which defines
violations, and specifies auditing and inspections plans and provisions
for enforcement actions. The program shall contain effective penalties
for noncompliance which preserve the level of deterrence in traditional
programs. For all such programs, the manner of collection of penalties
must be specified.
The EIP rule should be referred to for further information on the
EIP requirements and is incorporated into this proposal by reference.
This document addresses EPA's proposed action for SCAQMD Regulation
XX--NOX/SOX RECLAIM. The rule was adopted by the SCAQMD on
December 7, 1995 and May 10, 1996, and submitted by the CARB on August
28, 1996. Regulation XX was found to be complete on September 17, 1996
pursuant of EPA's completeness criteria that are set forth in 40 CFR
Part 51 Appendix V 2 and is being proposed for approval into the
SIP. Elsewhere in the Federal Register today, EPA is finalizing a
limited approval/limited disapproval of an earlier version of the
RECLAIM program (submitted to EPA for approval on March 21, 1994); when
EPA publishes its final action approving the August 28, 1996 submittal,
the possibility of sanctions mentioned in the final limited approval/
limited disapproval of the earlier submittal will be removed.
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\2\ EPA adopted the completeness criteria on February 16, 1990
(55 FR 5830) and, pursuant to section 110(k)(1)(A) of the CAA,
revised the criteria on August 26, 1991 (56 FR 42216).
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NOX emissions contribute to the production of ground level
ozone and smog. The revision concerns the control of oxides of nitrogen
(NOX) and oxides of sulfur (SOX) emissions using an
emissions-limiting EIP, NOX/SOX RECLAIM. This program, which
consists of twelve rules and associated appendices known as Regulation
XX, applies to facilities in the SCAQMD with four or more tons of
NOX or SOX emissions per year from permitted equipment. The
subject facilities, in order to meet annual emission reduction
requirements, will participate in an EIP in order to reduce emissions
at a significantly lower cost. The regulation was adopted as part of
SCAQMD's efforts to achieve the NAAQS for ozone and in response to the
CAA requirements cited above. The following is EPA's evaluation and
proposed action for Regulation XX.
EPA Evaluation and Proposed Action
In determining the approvability of a NOX rule, EPA must
evaluate the rule for consistency with the requirements of the CAA and
EPA regulations, as found in section 110 and part D of the CAA and 40
CFR part 51 (Requirements for Preparation, Adoption and Submittal of
Implementation Plans). EPA's interpretation of these requirements,
which forms the basis for this action, appears in the NOX
Supplement (57 FR 55620) and various other EPA policy guidance
documents.3 Among these provisions is the requirement that a
NOX rule must, at a minimum, provide for the implementation of
RACT for stationary sources of NOX emissions.
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\3\ Among other things, the pre-amendment guidance consists of
those portions of the proposed Post-1987 ozone and carbon monoxide
policy that concern RACT, 52 FR 45044 (November 24, 1987); ``Issues
Relating to VOC Regulation Cutpoints, Deficiencies, and Deviations,
Clarification to Appendix D of November 24, 1987 Federal Register
Notice'' (Blue Book) (notice of availability was published in the
Federal Register on May 25, 1988).
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For the purposes of assisting state and local agencies in
developing NOX RACT rules, EPA prepared the NOX Supplement to
the General Preamble. In the NOX supplement, EPA provides
preliminary guidance on how RACT will be determined for stationary
sources of NOX emissions. While most of the guidance issued by EPA
on what constitutes RACT for stationary sources has been directed
towards application for VOC sources, much of the guidance is also
applicable to RACT for stationary sources of NOX (see section 4.5
of the NOX Supplement). In addition, pursuant to section 183(c),
EPA has issued alternative control technique documents (ACTs) that
identify alternative controls for all categories of stationary sources
of NOX. The ACT documents provide information on control
technology for stationary sources that emit or have the potential to
emit 25 tons per year or more of NOX. However, the ACTs do not
establish a presumptive norm for what is considered RACT for stationary
sources of NOX. In general, the guidance documents cited above, as
well as other relevant and applicable guidance documents, have been set
forth to ensure that submitted NOX RACT rules meet Federal RACT
requirements and are fully enforceable and strengthen or maintain the
SIP.
In evaluating the rule, EPA must also determine whether the section
182(b) requirement for RACT implementation by May 31, 1995 is met. The
NOX/SOX RECLAIM program meets this requirement by
establishing baseline emissions in January 1994 and July 1994 in the
market which are below RACT
[[Page 57836]]
and are annually reduced further below this level.
In determining the approvability of an EIP, EPA must evaluate the
regulation for consistency with the requirements of the CAA and EPA
regulations, as found in section 110 and Part D of the CAA and 40 CFR
Part 51 (Requirements for Preparation, Adoption, and Submittal of
Implementation Plans). The EPA interpretation of these requirements,
which forms the basis for today's action, appears in the various EPA
policy guidance documents listed in footnote 4 of this notice. Among
these provisions is the requirement that an EIP rule must, at a
minimum, be consistent with attainment and RFP requirements found in
the CAA.
For the purpose of assisting state and local agencies in developing
rules which incorporate economic incentive strategies, EPA prepared the
EIP rules, cited above (59 FR 16690). In the EIP rules, EPA provides
guidance on how EIPs can be designed to be consistent with the
attainment and RFP requirements of the CAA. In general, the guidance
documents cited above, as well as other relevant and applicable
guidance documents, have been set forth to ensure that submitted EIPs
meet federal requirements and are fully enforceable and strengthen or
maintain the SIP.
A more detailed discussion of the sources controlled, the controls
required, and justification for why these controls represent RACT can
be found in the Technical Support Document (TSD), dated August, 1996.
The revised RECLAIM program rule (Regulation XX) contains
significant changes which address the deficiencies identified in the
original NPRM, dated February 28, 1995 4 in the following ways:
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\4\ For more information on how these deficiencies were
addressed, please see the TSD which accompanies this rulemaking,
available from EPA Region 9.
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The program no longer allows the use of variances to avoid
compliance with program requirements; the program now meets the
requirements of Section 110(i) of the Act,
The SCAQMD revised the program so that it meets certain
new source review requirements of the Act and Part D, which were listed
as deficiencies in the February 28, 1995 NPRM,
The program no longer allows the use of Executive Officer
discretion in the implementation of certain emissions monitoring
provision, which were listed as deficiencies in the February 28, 1995
NPRM,
The EPA and SCAQMD have agreed upon a permit mechanism to
address the program's references to other programs, notably those
involving the use of mobile source emission reduction credits (MERCs)
to ensure that the program is consistent with Section 110(i) of the
Act, and
The SCAQMD, with the August 28, 1996 submittal, provided
all of the necessary demonstrations to ensure that the requirements of
the EIP rules are being met.
A detailed discussion of the rule provisions and evaluations has
been provided in the TSD available at EPA's Region 9 office (TSD dated
August, 1996).
EPA has evaluated the submitted rule and has determined that it is
consistent with the CAA, EPA regulations and EPA policy. Therefore,
SCAQMD's Regulation XX--NOX/SOX RECLAIM is being proposed for
approval under section 110(k)(3) of the CAA as meeting the requirements
of section 110(a), section 182(b)(2), section 182(f), the NOX
Supplement to the General Preamble, and the EIP rules.
EPA is seeking comment in this NPRM on whether the deficiencies
cited in the final limited approval/limited disapproval of NOX/
SOX RECLAIM found elsewhere in the Federal Register today have
been addressed. EPA believes that the cited deficiencies have been
addressed with the August 28, 1996 submittal of revisions to Regulation
XX.
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
the 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.
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 sections 110 and 301, and subchapter I, part D
of the CAA 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, I certify
that it does not have a significant impact on any small entities
affected. Moreover, due to the nature of the Federal-State relationship
under the CAA, preparation of a flexibility analysis would constitute
Federal inquiry into the economic reasonableness of State action. The
Clean Air Act forbids EPA to base its actions concerning SIPs on such
grounds. Union Electric Co. v. U.S. EPA, 427 U.S. 246, 255-66 (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 rule that includes 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
Federal requirements. Accordingly, no additional costs to State, local,
or tribal governments, or to the private sector, will result from this
action.
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D. Submission to Congress and the General Accounting Office
Under section 801(a)(1)(A) of the Administrative Procedures Act
(APA) as amended by the Small Business Regulatory Enforcement Fairness
Act of 1996, EPA submitted a report containing this rule and other
required information to the U.S. Senate, the U.S. House of
Representatives and the Comptroller General of the General Accounting
Office prior to publication of the rule in today's Federal Register.
This rule is not a ``major rule'' as defined by section 804(2) of the
APA as amended.
E. Petitions for Judicial Review
Under section 307(b)(1) of the Act, petitions for judicial review
of this action must be filed in the United States Court of Appeals for
the appropriate circuit by January 7, 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)).
List of Subjects in 40 CFR Part 52
Environmental protection, Air pollution control, Hydrocarbons,
Incorporation by reference, Intergovernmental relations, Nitrogen
oxides, Ozone, Reporting and recordkeeping requirements, Volatile
organic compound.
Authority: 42 U.S.C. 7401-7671q.
Dated: October 6, 1996.
Felicia Marcus,
Regional Administrator.
[FR Doc. 96-28595 Filed 11-7-96; 8:45 am]
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