[Federal Register Volume 62, Number 111 (Tuesday, June 10, 1997)]
[Proposed Rules]
[Pages 31546-31550]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-15091]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 69
[FRL-5836-3]
United States Virgin Islands Proposed Ruling on Petition Pursuant
to Section 325(A)(1) of the Clean Air Act
AGENCY: Environmental Protection Agency.
ACTION: Proposed rule.
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SUMMARY: On May 7, 1996, the Governor of the United States Virgin
Islands sent to the Environmental Protection Agency (``EPA'') a
petition for an exemption (``petition'') from certain requirements of
the Clean Air Act (the ``Act''). The
[[Page 31547]]
petition, submitted pursuant to section 325(a)(1) of the Act, requests
that the Hess Oil Virgin Islands Corp. (HOVIC)) refinery be granted an
exemption from the prohibition on basing emission limitations on
intermittent control strategies (ICS) in section 123 of the Act. Based
upon the EPA's review of the petition and supplemental information
provided by HOVIC, the EPA is proposing to conditionally approve the
petition. The conditions would require that HOVIC switch to a lower
sulfur fuel when the wind direction blows from a defined sector or when
ambient monitors measure an average SO2 concentration above a specified
level. Conditions governing when HOVIC can switch back to the higher
sulfur fuel are also included in this proposed approval. Pursuant to
section 307(d) of the Act, this proposed rule provides a description of
the basis for the petition under section 325(a)(1), the petition and
supporting documentation submitted by HOVIC, and the proposed decision
by the EPA on the petition.
DATES: Comments on this proposed rule must be submitted on or before
July 10, 1997. EPA has not scheduled a public hearing on this proposed
rule. A hearing will be held in New York, N.Y. on this petition if one
is requested on or before July 10, 1997.
ADDRESSES: Comments should be submitted in duplicate to: Steven C.
Riva, Chief, Permitting Section, Air Programs Branch Division of
Environmental Planning and Protection, U.S. Environmental Protection
Agency, Region 2 Office, 290 Broadway, 25th Floor, New York, New York
10007-1866.
Parties who wish to request a hearing should contact Steven C. Riva
at (212) 637-4074. If a hearing is scheduled, a notice will be
published in the Federal Register. Parties wishing to testify should
contact Steven C. Riva. Hearing testimony should be submitted to the
EPA Air Docket in Washington, D.C. and the Region 2 address above.
Docket: Copies of information relevant to this petition are
available for inspection in public docket A-97-08 at the Air Docket of
the EPA, room M-1500, 401 M Street SW., Washington, D.C. (202) 260-
7548, between the hours of 8:00 am to 5:00 pm Monday through Friday. A
copy of the documents contained in the docket are available at USEPA,
Region 2, Division of Environmental Planning and Protection, 25th
Floor, 290 Broadway, New York, NY (212) 637-4074, and is available
between the hours of 8:00 am to 4:00 pm Monday through Friday.
FOR FURTHER INFORMATION CONTACT: Annamaria Colecchia, Permitting
Section, Air Programs Branch, Division of Environmental Planning and
Protection, U.S. Environmental Protection Agency, Region 2 Office, 290
Broadway, 25th Floor, New York, New York 10007-1866, Telephone: (212)
637-4016.
SUPPLEMENTARY INFORMATION:
Background
On May 7, 1996, the Governor of the United States Virgin Islands
submitted a petition to the Administrator of the EPA for an exemption
from certain requirements of the Act. The petition, submitted pursuant
to section 325(a) of the Act, requests that the HOVIC refinery, located
on the island of St. Croix, be granted an exemption from the
prohibition on basing emission limitations on ICS in section 123 of the
Act. HOVIC concurrently submitted a proposed modification to its
existing Prevention of Significant Deterioration (PSD) permit to the
EPA to: (1) increase the charge rate to the Fluid Catalytic Cracking
Unit, (2) increase the production of sulfuric acid, and (3)
redistribute and change the types of fuels processed in the refinery.
The third change, which will substantially reduce emissions of sulfur
dioxide (SO2) below the amount HOVIC is currently permitted to emit,
could cause occasional exceedances of the 24-hr National Ambient Air
Quality Standard (NAAQS) for this pollutant, north of the facility,
during those days that the wind blows onshore for a persistent length
of time. Meteorological data from the twelve months prior to the
petition predicts that these wind conditions will occur only a few
times a year.
The petition proposes to prevent these potential exceedances from
occurring by reducing the sulfur content of the fuel processed during
those time periods. Since this constitutes an ICS based on atmospheric
conditions, reliance upon which in an implementation plan is
specifically prohibited by the Act, the petition requested an exemption
from this requirement through provisions available under section 325 of
the Act. Granting HOVIC's petition will make it possible for EPA to
consider, in a separate action, HOVIC's request for a PSD permit
modification. EPA is not entertaining HOVIC's PSD permit modification
request in this action.
Section 325(a) provides, in part, that upon petition of the
Governor of the Virgin Islands, the Administrator of the EPA is
authorized to exempt any persons or source or class of persons or
sources in such territory from any requirement under the Clean Air Act
other than section 112 or any requirement under section 110 or Part D
of Subchapter I necessary to attain or maintain a national ambient air
quality standard.
Description of Petition and Supporting Documents
The petition consists of a seventeen page narrative and eighteen
supporting exhibits. The narrative portion of the petition is organized
into sections that describe: (1) The unique meteorological conditions
of the Virgin Islands, and in particular, HOVIC's location on St.
Croix, (2) the planned permit modification and control options
available at the HOVIC facility, (3) the fuel-switching control
strategy proposed by HOVIC, and (4) the regulatory and statutory basis
for granting the exemption. The supporting exhibits in the petition
include, among other things, existing meteorological monitoring audits,
modeling methodology, NAAQS compliance demonstration and legal
references. Under separate cover, HOVIC submitted an air quality
analysis as part of the complete permit modification request. Other
documentation later submitted by HOVIC in support of this petition
included: (1) Incremental cost analysis; (2) liquid fuel usage; (3) SO2
emissions by unit; (4) analysis of PSD increment consumption; and (5)
additional information on the air quality modeling.
Criteria for Approval
As amended, section 325(a) provides the criteria for approving a
request for an exemption from requirements of the Act and states, in
part, that:
Upon petition by the governor of Guam, American Samoa, the
Virgin Islands, or the Commonwealth of the Northern Mariana Islands,
the Administrator is authorized to exempt any person or source or
class of persons or sources in such territory from any requirement
under this Act other than Section 112 or any requirement under
Section 110 or Part D necessary to attain or maintain a national
primary ambient air quality standard. Such exemptions may be granted
if the Administrator finds that compliance with such requirement is
not feasible or is unreasonable due to unique geographical,
meteorological, or economic factors of such territory or such other
local factors as the Administrator deems significant.
HOVIC's proposed modification involves only SO2 emissions and
approvals governed by section 110 of the Act and involves no
requirements under section 112. On the basis of the language cited
above, the first prerequisite to granting an exemption in this case
under section 325(a)(1) is that
[[Page 31548]]
such an exemption may not be granted from any section 110 requirement
necessary to attain or maintain a national primary ambient air quality
standard. The second prerequisite to granting such a petition is that
the Administrator must find the exempted requirement to be not feasible
or unreasonable due to unique geographical, meteorological, or economic
factors or such other local factors as the Administrator deems
significant.
EPA Evaluation and Proposed Action
The EPA believes that the petition meets the first prerequisite.
That is, as a statutory matter, the prohibition against SIPs relying
upon ICS, contained in section 123, is not a requirement under section
110 necessary to attain or maintain the NAAQS. Moreover, the modeling
analysis presented demonstrates that the proposal will not adversely
affect either attaining or maintaining a NAAQS. However, more complex
issues arise in determining whether the proposal meets the second test.
The petition does not claim that adherence to the prohibition in
section 123 is not feasible. Rather, EPA has been asked to determine
whether, given the local conditions, compliance with the prohibition is
unreasonable.
The petition bases its argument on the unreasonableness of
compliance with the prohibition against SIP reliance upon the use of
ICS given the unique meteorology and geography of the United States
Virgin Islands. A principle reason for Congress' enactment of section
123 was to prevent export of air pollution from one population area to
another. HOVIC argues that the prohibition against ICS was based on the
experience of sources operating on the United States mainland, which
given the Virgin Islands' unique wind patterns and isolation, are not
relevant to HOVIC's circumstances. HOVIC claims that given these
circumstances, it is ``unreasonable'' to require it to undertake a more
expensive control option, the use of a lower sulfur fuel on a continual
basis, in order to comply with the prohibition.
HOVIC's interpretation of unreasonable--that without the use of an
ICS, HOVIC would accrue higher production costs it could otherwise
avoid--is not consistent with the rationale given for previous
exemption decisions made by the Agency under section 325. In previous
decisions, petitioners were able to demonstrate significant adverse
impacts to both the source, in terms of significant additional emission
controls, and to the community, which would bear the burden of those
costs and/or a potentially severe energy emergency. These decisions
pointed to the severe impact to the affected community that would
result from not granting the exemption. There is no overriding public
welfare concern presented in this petition. The cost of compliance with
the ICS prohibition would fall entirely to HOVIC, and no argument has
been presented that this cost would entail a severe burden to HOVIC.
The decision to incur these costs is also entirely within the
discretion of HOVIC. Thus, this argument does not itself show that
compliance with the prohibition is unreasonable or infeasible. Given
that sources located in geographic areas not subject to section 325
cannot avail themselves of this exemption, HOVIC should not be entitled
to an exemption merely on the basis that it is located in the Virgin
Islands and desires to save on costs. Rather, the statute requires a
showing of infeasibility or unreasonableness due to unique factors.
However, there are several factors which support granting the
exemption sought in the petition. These factors provide a strong basis
for approving the exemption request in a manner that is consistent with
prior Agency interpretations of the term ``unreasonable'' in section
325. First, since the modeling done in support of this request
demonstrates an exceedance of the 24 hour SO2 NAAQS in the northern
impact area under the proposed 1% sulfur in fuel scenario, it is
possible that the exceedances may already occur under HOVIC's present
permit conditions of 1.5%. EPA believes that the proposed ICS would
provide a remedy to this potential existing air quality concern, and
that more stringent continuous controls may not be a necessary remedy
in this case. Second, the EPA believes that the proposed ICS provides
safeguards to ensure that exceedances will not occur in the future. The
proposed ICS requires the incorporation of several provisions,
including the installation of ambient monitors in the northern impact
zone. These ambient monitors provide not only additional air quality
monitoring but they serve as a mechanism for triggering the sulfur
reduction strategy. This mechanism is in addition to the condition
requiring a reduction in sulfur in fuel based upon a shift in wind
direction. EPA believes that these two mechanisms will ensure that the
NAAQS standard will be protected. Third, the use of ICS is compatible
with the relief that section 325 was designed to provide. The
legislative history of section 325 explicitly addresses the problem of
sources having to adhere to all control requirements of the Act in
areas where this does not result in an air quality benefit. See, e.g.,
129 Cong. Rec. S16486-88 (daily ed. Nov. 17, 1983) (statements of Sen.
Stafford and Sen. Matsunaga); 129 Cong. Rec. 26926 (daily ed. Oct. 3,
1983) (statement of Rep. Lagomarsino). EPA believes that approving the
use of ICS would be an appropriate exemption under section 325 in
certain circumstances. Indeed, the EPA has already approved such an
exemption, in March 1993, for the Island of Guam. See 58 FR 13570 (Mar.
12, 1993), 58 FR 43042 (Aug. 12, 1993)
For these reasons, the EPA is proposing to exempt HOVIC from the
prohibition against the use of ICS for its modification, subject to the
following conditions. These conditions must be included as basic
requirements in any PSD permit modification entertained by EPA. In
addition, the exemption proposed today by EPA is also based upon the
premise that HOVIC must comply with any other PSD permit conditions
deemed necessary by EPA to ensure that these basic requirements are
met. It should be noted that today's action does not represent a
proposed or final PSD permit. Any proposed determination on PSD will
undergo a separate notice and comment procedure. The basic requirements
are as follows:
The protocol to be followed for the ICS shall be set forth in
the revised Prevention of Significant Deterioration Permit
anticipated to be issued to HOVIC; and will include as a minimum,
the following conditions. HOVIC will comply with the details of
these requirements as contained in the specific conditions of the
anticipated PSD permit:1
\1\ The conditions will be specified in detail in the permit.
However, for clarity, the following specifications are assumed for
purposes of this proposal:
--The wind direction will be monitored by a meteorological tower
on HOVIC property, approved by EPA, and will be collected and
reported as 1-hour averages, starting on the hour. If the average
wind direction for a given hour is from within the designated
sector, the wind will be deemed to have flowed from within the
sector for that hour. Each ``day'' or ``block period'', for these
purposes will start at midnight and end the following midnight.
--The SO2 concentrations will be measured by ambient monitors
installed for the purposes of this ICS by instruments near HOVIC
property approved by EPA. The data will be collected according to
EPA approved ``SLAMS'' procedures, but will, for these purposes, be
averaged by the hour, starting on the hour.
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(1) The switch to a lower sulfur fuel (0.5%) will take place when:
(a) The winds blow from a 45 degree sector defined as 143 to 187
degrees inclusive, where zero degrees is due north, for at least 6
consecutive hours during a 24-hour block period or any 12
[[Page 31549]]
non-consecutive hours during a 24-hour block period. Or:
(b) one of HOVIC's ICS monitors measures an average ambient SO2
concentration that is 75% of the 24-hour NAAQS during any rolling 24-
hour average. (75% of the 24-hour NAAQS = 274 ug/m3 or 0.105 ppm).
(2) The switch back to the higher sulfur fuel (1.0%) may occur
under one of the following three conditions:
(a) If the ICS was triggered by (1)(a) above, the switch back may
occur when the winds blow outside the sector listed in (1)(a) for at
least 3 consecutive hours following the period during which the winds
were blowing inside the sector. Or:
(b) If the ICS was triggered by (1)(b) above, the switch back may
occur after all of HOVIC's ICS ambient monitors measure a 24-hour
average concentration which is less than 75% of the NAAQS for at least
one 24-hour block period following any occurrence when the monitor
measured the concentration which was 75% of the NAAQS. Or:
(c) If the ICS was triggered by both (1)(a) and (b) above, the
switch back may occur when both of the conditions in (2) (a) and (b)
are met.
(3) The protocol may be modified by EPA to protect against
exceedances of the sulfur dioxide NAAQS.
(4) In the event that there is an exceedance of the NAAQS, HOVIC
will report the exceedance to EPA and recommend corrective action as
well as amendments to the protocol to ensure the protection of the
NAAQS.
Other conditions of this exemption under section 325 of the Act are
set forth as follows:
(5) HOVIC must comply with all fuel switching requirements,
contained in HOVIC's PSD permit.
(6) This exemption shall take effect only in the event that a final
PSD permit modification becomes effective.
(7) The Administrator may terminate the exemption through
rulemaking procedures upon determining that HOVIC's use of the ICS is
causing or contributing to an exceedance of the NAAQS.
Administrative Requirements
Regulatory Flexibility
The Regulatory Flexibility Act, (RFA) generally requires an agency
to conduct a regulatory flexibility analysis of any rule subject to
notice an comment rulemaking requirements unless the agency certifies
that the rule will not have a significant economic impact on a
substantial matter of small entities. Small entities include small
businesses, small not-for-profit enterprises and small governmental
jurisdictions. This proposed rule would not have a significant impact
on a substantial number of small entities because the proposed
rulemaking will apply only to the Hess Oil Virgin Islands refinery on
St. Croix, U.S. Virgin Islands. This facility is not a small entity,
and the action granting the petition will relieve the source from
restrictions that would otherwise apply. Therefore, the Administrator
certifies that this action will not have a significant economic impact
on a substantial number of small entities.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, EPA
generally must prepare a written statement, including a cost benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures to State, local, and Tribal governments, in
the aggregate, of $100 million or more in any one year. Before
promulgating an EPA rule for which a written statement is needed,
section 205 of the UMRA generally requires EPA to identify and consider
a reasonable number of regulatory alternatives and adopt the least
costly, most cost-effective or least burdensome alternative that
achieves the objectives of the rule. The provisions of section 205 do
not apply when they are inconsistent with applicable law. Under section
204 of the UMRA, EPA generally must develop a process to permit elected
officials of State, local and Tribal governments (or their designated
employees with authority to act on their behalf) to provide meaningful
and timely input in the development of regulatory proposals containing
significant Federal intergovernmental mandates. These consultation
requirements build upon those of Executive Order 12875 (``Enhancing the
Intergovernmental Partnership''). Before EPA establishes any regulatory
requirements that may significantly or uniquely affect small
governments, including Tribal governments, it must have developed under
section 203 of the UMRA a small government agency plan. The plan must
provide for notifying potentially affected small governments, enabling
officials of affected small governments to have meaningful and timely
input in the development of EPA regulatory proposals with significant
Federal intergovernmental mandates, and informing, educating, and
advising small governments on compliance with the regulatory
requirements.
EPA has determined that this proposed rule does not contain a
Federal mandate that may result in expenditures of $100 million or more
for State, local and tribal governments, in the aggregate, or the
private sector in any one year. This is because this proposed rule is
essentially ``deregulatory'' in nature, relieving, subject to
conditions, the sole regulated entity of restrictions that would
otherwise apply. This proposed rule should result in resource savings
to the Hess Oil Virgin Islands refinery that would not likely be
obtained in the absence of today's proposed rule. Thus, today's
proposed rule is not subject to the requirements of sections 202, 204
and 205 of the UMRA. With respect to section 203 of the UMRA, EPA has
determined that this rule contains no regulatory requirements that
might significantly or uniquely affect small governments. As previously
stated, EPA believes the rule will reduce the regulatory burden on the
regulated community, without imposing additional significant or unique
burdens on the Virgin Islands to implement today's proposed rule.
Executive Order 12866
This action has been classified as a Table 3 action by the
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.
List of Subjects in 40 CFR Part 69:
Environmental protection, Air pollution control.
Dated: May 30, 1997.
Carol M. Browner,
Administrator.
For the reasons stated in the preamble, the Environmental
Protection Agency proposes to amend 40 CFR part 69 as set forth below:
PART 69--[AMENDED]
1. The authority citation for part 69 continues to read as follows:
Authority: Sec. 325(b), Clean Air Act, as amended (42 U.S.C.
7625-1).
2. Subpart D is added consisting of Sec. 69.41 to read as follows:
[[Page 31550]]
Subpart D--The U.S. Virgin Islands
Sec. 69.41 New exemptions.
(a) Pursuant to section 325(a) of the Clean Air Act and a petition
submitted by the Governor of the Virgin Islands, the Administrator
conditionally exempts certain units from certain CAA requirements.
(b) An exemption of the prohibition, under section 123 of the Clean
Air Act, on reliance upon the use of ICS of fuel switching in an
implementation plan is granted for the Hess Oil Virgin Islands (HOVIC)
refinery on St. Croix with the following conditions:
(1) The switch to a lower sulfur fuel (0.5%) will take place when:
(i) The winds blow from a 45 degree sector defined as 143 to 187
degrees inclusive, where zero degrees is due north, for at least 6
consecutive hours during a 24-hour block period or any 12 non-
consecutive hours during a 24 hour block period, or:
(ii) One of HOVIC's ICS monitors measures an average ambient SO2
concentration that is 75% of the 24-hour NAAQS during any rolling 24-
hour average. (75% of the 24-hour NAAQS = 274 ug/m3 or 0.105 ppm).
(2) The switch back to the higher sulfur fuel (1.0%) may occur
under one of the following three conditions:
(i) If the ICS was triggered by paragraph (b)(1)(i) of this
section, the switch back may occur when the winds blow outside the
sector listed in paragraph (b)(1)(i) of this section for at least 3
consecutive hours following the period during which the winds were
blowing inside the sector, or
(ii) If the ICS was triggered by paragraph (b)(1)(ii) of this
section, the switch back may occur after all of HOVIC's ICS ambient
monitors measure a 24-hour average concentration which is less than 75%
of the NAAQS for at least one 24-hour block period following any
occurrence when the monitor measured the concentration which was 75% of
the NAAQS, or
(iii) If the ICS was triggered by both paragraph (b)(1)(i) and
paragraph (b)(1)(ii) of this section, the switch back may occur when
both of the conditions in paragraph (b)(2)(i) of this section and
paragraph (b)(2)(ii) of this section.
(3) The protocol may be modified by EPA to protect against
exceedances of the sulfur dioxide NAAQS.
(4) In the event that there is an exceedance of the NAAQS, HOVIC
will report the exceedance to EPA and recommend corrective action as
well as amendments to the protocol to ensure the protection of the
NAAQS.
(5) HOVIC must comply with all fuel switching requirements,
contained in HOVIC's PSD permit.
(6) This exemption shall take effect only in the event that a final
PSD permit modification becomes effective.
(7) The Administrator may terminate the exemption through
rulemaking procedures upon determining that HOVIC's use of the ICS is
significantly causing or contributing to an exceedance of the NAAQS.
[FR Doc. 97-15091 Filed 6-9-97; 8:45 am]
BILLING CODE 6560-50-M
