E9-12557. Approval and Promulgation of Implementation Plans; Kentucky; NOX

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Proposed rule.

SUMMARY:

EPA is proposing to approve the State Implementation Plan (SIP) revisions submitted by the Commonwealth of Kentucky on September 12, 2005, and March 24, 2006. The first revision provides Kentucky's response to EPA's regulations entitled, “Finding of Significant Contribution and Rulemaking for Certain States in Ozone Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone,” otherwise known as the “Nitrogen Oxides (NO_X) SIP Call Phase I.” The second revision responds to EPA's regulations entitled, “Interstate Ozone Transport: Response to Court Decisions on the NO_X SIP Call, NO_X SIP Call Technical Amendments, and Section 126 Rules,” otherwise known as the “ NO_X SIP Call Phase II.” The NO_X SIP Call Phase II revision satisfies EPA's rule that requires Kentucky to submit Phase II revisions necessary to achieve applicable, incremental reductions of NO_X. The intended effect of the Phase II SIP revision is to reduce emissions of NO_X originating in the Commonwealth of Kentucky to help attain and maintain the national ambient air quality standard for ozone. The March 24, 2006, final submittal stopped the federal implementation plan clock that started on February 8, 2006, when EPA made a finding that Kentucky failed to submit the required SIP for Phase II of the NO_X SIP Call by April 1, 2005.

DATES:

Comments must be received on or before June 29, 2009.

ADDRESSES:

Submit your comments, identified by Docket ID No. EPA-R04-OAR-2005-KY-0003, by one of the following methods:

1. http://www.regulations.gov: Follow the on-line instructions for submitting comments.

2. E-mail: [e-mail].

3. Fax: [phone].

4. Mail: EPA-R04-OAR-2005-KY-0003, Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960.

5. Hand Delivery or Courier: Lynorae Benjamin, Chief, Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. Such deliveries are only accepted during the Regional Office's normal hours of operation. The Regional Office's official hours of business are Monday through Friday, 8:30 to 4:30, excluding federal holidays.

Instructions: Direct your comments to Docket ID No. EPA-R04-OAR-2005-KY-0003. EPA's policy is that all comments received will be included in the public docket without change and may be made available Online at http://www.regulations.gov, including any personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit through http://www.regulations.gov or e-mail, information that you consider to be CBI or otherwise protected. The http://www.regulations.gov Web site is an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through http://www.regulations.gov, your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. For additional information about EPA's public docket visit the EPA Docket Center homepage at http://www.epa.gov/​epahome/​dockets.htm.

Docket: All documents in the electronic docket are listed in the http://www.regulations.gov index. Although listed in the index, some information is not publicly available, i.e., CBI 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 http://www.regulations.gov or in hard copy at the Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. EPA requests that if at all possible, you contact the person listed in the FOR FURTHER INFORMATION CONTACT section to schedule your inspection. The Regional Office's official hours of business are Monday through Friday, 8:30 to 4:30, excluding Federal holidays.

FOR FURTHER INFORMATION CONTACT:

Nacosta C. Ward, Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. The telephone number is [phone]. Ms. Ward can also be reached via electronic mail at [e-mail].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background

II. Analysis of State's Submittal

III. Proposed Action

IV. Statutory and Executive Order Reviews

I. Background

On October 27, 1998, EPA published a final rule known as the “NO_X SIP Call” (63 FR 57356), and later known as the “NO_X SIP Call Phase I.” The NO_X SIP Call Phase I required 22 states, including the Commonwealth of Kentucky, to meet NO_X emission budgets during the ozone season (March through September) to reduce the amount of ground level ozone that is transported across the eastern United States. EPA identified NO_X emission reductions by source category when they could be achieved by using cost-effective measures. These source categories include electric generating units (EGUs), non-EGUs, internal combustion engines (ICEs) and cement kilns. For each affected jurisdiction, EPA determined NO_X emission budgets based on the implementation of cost effective controls. The budgets were to be met by the year 2007. Phase I of the NO_X SIP Call gave states the flexibility to decide which source categories to regulate to meet its statewide budget. During Phase I, Kentucky regulated EGUs, non-EGUs and cement kilns, but chose not to address ICEs. See, 67 FR 17624, 17625 (April 11, 2002) (Approval and Promulgation of Implementation Plans: Kentucky: Nitrogen Oxides Budget and Allowance Trading Program).

A number of parties, including certain states as well as industry and labor groups, challenged Phase I of the NO_X SIP Call rule. On March 2, 2000, EPA published additional technical amendments to the NO_X SIP Call in the Federal Register (64 FR 26298 and 65 FR 11222, respectively). On March 3, 2000, the United States Court of Appeals for the District of Columbia Circuit Court (D.C. Circuit Court) issued its decision on the NO_X SIP Call, ruling in favor of EPA on all the major issues. Michigan v. EPA, 213 F.3d 663 (D.C. Cir. 2000). However, the D.C. Circuit Court remanded four specific elements to EPA for further action: The definition of EGU; the level of control for stationary internal combustion engines; the geographic extent of the NO_X SIP Call for Georgia and Missouri; and the inclusion of Wisconsin. On January 31, 2002, the Kentucky Environmental and Public Protection Cabinet (KEPPC) submitted final revisions to its SIP that complied with the requirements of Phase I of the NO_X SIP Call. EPA approved the revisions on April 11, 2002, 67 FR 17624, which became effective on June 10, 2002.

On April 21, 2004, EPA published a final rule, addressing the remanded portion of the NO_X SIP Call Rule. This rule is entitled, “Interstate Ozone Transport: Response to Court Decisions on the NO_X SIP Call, NO_X SIP Call Technical Amendments, and Section 126 Rules,” and is otherwise known as the “NO_X SIP Rule Phase II” (69 FR 21604). The action promulgated specific changes in response to the Court's ruling on Phase I of the Rule. Specifically, it finalized certain aspects of the definitions of EGU and non-EGU, and the control level assumed for large stationary ICEs. For large, natural gas fired, stationary ICEs the control level was set at 82 percent, because the vast majority of large natural gas-fired ICEs are lean burn. For diesel and dual fuel stationary ICEs the control level was set at 90 percent since on average they are rich burn, diesel and dual fuel ICEs. The April 21, 2004, rule also finalized partial state budgets for Georgia, Missouri, Alabama, and Michigan, changes to statewide NO_X budgets, the SIP submittal dates for the required states to address the Phase II portion of the budget, the SIP submittal dates for Georgia and Missouri, the compliance date for all covered sources, and the exclusion of Wisconsin from the NO_X SIP Call (69 FR 21604, April 21, 2004). The final rule also required states that submitted NO_X SIP Call Phase I revisions, to submit by April 1, 2005, Phase II SIP revisions as needed to achieve the necessary incremental reductions of NO_X. Phase II requires emissions reductions that are relatively small, representing less than 10 percent of the total reductions required by Phase I of the NO_X SIP Call.

Phase II of the NO_X SIP Call required Kentucky to reduce the Phase I NO_X emissions originating in the Commonwealth from 165,075 tons (Phase I budget) to 162,519 tons (Phase II budget) of NO_X emissions. (69 FR 21604, 2162, April 21, 2004). This represents a 4,224 ton reduction of NO_X emissions in Kentucky. The budget numbers for Phase II for each affected state were based on the Phase I emission inventory as revised in the “Technical Amendment to the Finding of Significant Contribution and Rulemaking for Certain States for Purposes of Reducing Regional Transport of Ozone,” which was published on March 2, 2000. However, EPA approved a revised Phase I Budget for Kentucky in a revision to the NO_X SIP Call submitted on April 11, 2002 (67 FR 17624). Therefore, the final Kentucky Phase II Budget in the April 21, 2004, notice is inaccurate because it is based on the previous Phase I Budget.

On January 23, 2004, EPA wrote a letter to KEPPC clarifying that based on current rules and regulations, including 63 FR 57356, 57416 (October 27, 1998), and 40 CFR 96.2, EPA was allowing each state with one or more carbon monoxide (CO) boiler combusting CO from fluidized catalytic cracking units (FCCUs) to determine whether all of the Commonwealth's FCCU-CO boilers were covered by the NO_X SIP Call trading program. There is currently only one facility in Kentucky with FCCU-CO boilers (the Ashland Oil facility, located in Ashland, Kentucky). Kentucky elected to exclude all FCCU-CO boilers in the Commonwealth from the NO_X trading program. Today's action removes the requirement from the Kentucky SIP that such units comply with the NO_X SIP Call Phase I by exempting them from the non-EGU portion of the Kentucky NO_X budget. However, Kentucky is still able to meet the phase II budgets through other reductions. For more information regarding the specifics of Phase I source categories and budgets, see 67 FR 17624 (April 11, 2002).

Kentucky is achieving the Phase II goal by setting the control level for large, stationary ICEs at 82 percent, and for diesel and dual fuel stationary ICEs at 90 percent. The application of control levels to ICEs represents a reduction in NO_X emissions originating in Kentucky. Therefore, the large stationary ICE portion of Kentucky's non-EGU NO_X trading budget is being reduced by 2,491 tons of NO_X emissions.

On September 12, 2005, the KEPPC submitted a draft of its SIP regulation revisions, intended to meet the requirements of the NO_X SIP Call Phase II. A public hearing was conducted on October 21, 2005. On March 24, 2006, SIP revisions were submitted in their final form. The March 24, 2006, submittal stopped the federal implementation plan clock that started under the Clean Air Act (CAA) following EPA's February 8, 2006, finding that Kentucky failed to submit the required SIP revisions for Phase II of the NO_X SIP Call by April 1, 2005 (71 FR 6347, February 8, 2006).

II. Analysis of State Submittal

The September 12, 2005, and March 24, 2006, proposed revisions to the Kentucky SIP include changes to regulation 401 KAR 51:150, which are consistent with EPA requirements for Phase II of the NO_X SIP Call. In addition, the proposed revisions included a change to regulation 401 KAR 51:160, which is consistent with EPA requirements for Phase I of the NO_X SIP Call. The Phase II revisions require the Cabinet to set NO_X emission levels for large stationary ICEs, including large utility and industrial boilers (i.e., engines emitting more than one ton of NO_X per average ozone season day in 1997), except FCCU-CO boilers, at 82 percent. The combination of the Kentucky regulations addressing NO_X emissions from large utility and industrial boilers, cement kilns and ICEs achieve all the necessary NO_X reductions required to meet NO_X Phase II requirements for Kentucky. In light of these reductions, the projected 2007 control period NO_X emissions for the various categories are as follows in tons per year:

• Total EGU NO_X Budget—36,504.
• Total Non-EGU NO_X—Budget 26,259.
• Total NO_X Budget for Stationary Area Sources—31,807.
• Total NO_X Budget for Nonroad Mobile Sources—15,025.
• Total NO_X Budget for Highway Mobile Sources—53,268.^[1]

• Total NO_X Budget for Kentucky—162,863.

The revised non-EGU NO_X budget was 28,750 tons in the January 31, 2002, SIP revision and revised to 26,259 tons in the September 2005 SIP Revision. The large boilers/turbines were reduced from 179 to 64 NO_X ozone season tons due to FCCU-CO boilers being exempted from that category. The large cement kilns remained the same at 1,091 NO_X ozone season tons. The large ICEs went from 3,083 to 577 NO_X ozone season tons by applying the appropriate Phase II reductions. Small and other sources increased from 24,397 to 24,527 tons due to moving Ashland Oil from the large boilers/turbines to this portion of the non-EGU budget. Additionally, there was an error in Kentucky's original inventory for units at the Texas Gas-Jeffersontown facility, resulting in eight more units than initially included in the small/other sources budget. The chart below summarizes the budgets:

Summary of Non-EGU NO_X Emissions Budget

Portion of the non-EGU NOX emissions budget	January 31, 2002 NOX SIP Call SIP revision submittal (NOX ozone season tons)	March 24, 2006 NOX SIP Call SIP revision submittal (NOX ozone season tons)
Large Boilers/Turbines*	179	64
Large Cement Kilns	1091	1091
Large ICEs	3083	577
Small/Other Sources	24,397	24,527
Total Non-EGU Emissions	28,750	26,259
* Non-EGU budget that is part of the NOX SIP Call cap and trade program.

III. Proposed Action

EPA is proposing to approve the aforementioned changes to the SIP, including Kentucky's NO_X SIP Call Phase II budget. This SIP revision is consistent with section 110 of the CAA.

IV. Statutory and Executive Order Reviews

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this proposed action merely approves State law as meeting Federal requirements and does not impose additional requirements beyond those imposed by State law. For that reason, this proposed action:

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.);
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.

List of Subjects in 40 CFR Part 52

• Environmental protection
• Incorporation by reference
• Air pollution control
• Carbon monoxide
• Intergovernmental relations
• Nitrogen dioxide
• Ozone
• Particulate matter
• Reporting and recordkeeping requirements
• Volatile organic compounds

Authority: 42 U.S.C. 7401 et seq.

Dated: May 18, 2009.

Beverly H. Banister,

Acting Regional Administrator, Region 4.

Footnotes

1.  This NO_X Budget is not intended for the purposes of implementing transportation conformity requirements. Refer to the attainment demonstration, maintenance plan or reasonable further progress plan for the particular nonattainment and/or maintenance area(s) for the appropriate motor vehicle emissions budget for an area for transportation conformity purposes.