E8-19422. Approval and Promulgation of Air Quality Implementation Plans; Virginia; Emission Reductions From Large Stationary Internal Combustion Engines and Large Cement Kilns

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Proposed rule.

SUMMARY:

EPA is proposing to approve State Implementation Plan (SIP) revisions for the Commonwealth of Virginia. These revisions, submitted by the Virginia Department of Environmental Quality (VADEQ), pertain to nitrogen oxides (NO_X) emission reductions from large stationary internal combustion (IC) engines and large cement kilns from five sources located in the Commonwealth. The reductions allow Virginia to meet its remaining obligations under the NO_X SIP Call. This action is being taken under the Clean Air Act (CAA).

DATES:

Written comments must be received on or before September 22, 2008.

ADDRESSES:

Submit your comments, identified by Docket ID Number EPA-R03-OAR-2007-0382 and EPA-R03-OAR-2008-0113 by one of the following methods:

A. www.regulations.gov. Follow the on-line instructions for submitting comments.

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

C. Mail: EPA-R03-OAR-2007-0382 and/or EPA-R03-OAR-2008-0113, Cristina Fernandez, Chief, Air Quality Planning Branch, Mailcode 3AP21, U.S. Environmental Protection Agency, Region III, 1650 Arch Street, Philadelphia, Pennsylvania 19103.

D. Hand Delivery: At the previously listed EPA Region III address. Such deliveries are only accepted during the Docket's normal hours of operation, and special arrangements should be made for deliveries of boxed information.

Instructions: Direct your comments to Docket ID No. EPA-R03-OAR-2007-0382 and/or EPA-R03-OAR-2008-0113. EPA's policy is that all comments received will be included in the public docket without change, and may be made available online at 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 information that you consider to be CBI or otherwise protected through www.regulations.gov or e-mail. The 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 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.

Docket: All documents in the electronic docket are listed in the 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 www.regulations.gov or in hard copy during normal business hours at the Air Protection Division, U.S. Environmental Protection Agency, Region III, 1650 Arch Street, Philadelphia, Pennsylvania 19103. Copies of the State submittal are available at the Virginia Department of Environmental Quality, 629 East Main Street, Richmond, Virginia 23219.

FOR FURTHER INFORMATION CONTACT:

Marilyn Powers, [phone], or by e-mail at [e-mail].

SUPPLEMENTARY INFORMATION:

The Virginia Department of Environmental Quality submitted four separate SIP revisions to meet the NO_X SIP Call requirement to address large stationary IC engines. These submissions were made on February 26, 2007 for Transcontinental Gas Pipeline (Transco) Station 165; March 5, 2007 for Transco Station 170; March 12, 2007 for Transco Station 175; and March 19, 2007 for Transco Station 180. On August 8, 2007, VADEQ submitted a SIP revision to meet the NO_X SIP Call requirement to address NO_X emissions from cement manufacturing in the Commonwealth.

I. Background

EPA issued the NO_X SIP Call (63 FR 57356, October 27, 1998) to require 22 Eastern states and the District of Columbia to reduce specified amounts of one of the main precursors of ground-level ozone, NO_X, in order to reduce interstate ozone transport. EPA found that the sources in these states emit NO_X in amounts that contribute significantly to nonattainment of the 1-hour ozone national ambient air quality standard (NAAQS) in downwind states. In the NO_X SIP Call, the amount of reductions required by states were calculated based on application of available, highly cost-effective controls on certain source categories of NO_X. These source categories included large fossil fuel-fired electric generating units (EGUs) serving a generator with a capacity greater than 25 MWe, fossil fuel-fired non-EGUs (such as large industrial boilers with a capacity greater than 250 MMBtu/hr), large stationary internal combustion engines, and large cement kilns. EPA established a model trading rule for large EGUs and non-EGUs that States could adopt to participate in the EPA-administered NO_X Budget Trading program.

The NO_X SIP Call, including the Technical Amendments which addressed the 2007 EGU budgets (64 FR 26298, May 14, 1999 and 65 FR 11222, March 2, 2000), was challenged by a number of state, industry, and labor groups. A summary of the NO_X SIP Call requirements, including details of the court decisions that were made in response to challenges to the rule and impacts of the court decisions on certain aspects of the rule may be found in EPA's rulemaking dated April 21, 2004 (69 FR 21604) entitled, “Interstate Ozone Transport: Response to Court Decisions on the NO_X SIP Call, NO_X SIP Call Technical Amendments, and Section 126 Rules.” The relevant portions of the April 21, 2004 rulemaking that affect Virginia's obligations under the NO_X SIP Call, and that pertain to the Commonwealth's requirements for Phase II, are discussed in this document to provide background on the SIP revisions for Phase II that were submitted by VADEQ.

On March 3, 2000, the United States Court of Appeals for the District of Columbia Circuit (DC Circuit) issued its decision on the NO_X SIP Call. Michigan v. EPA, 213 F.3rd 663 (DC Dir. 2000). While the DC Circuit ruled largely in favor of EPA in support of its requirements under the 1-hour ozone NAAQS, it also ruled, in part, against EPA on certain issues. The rulings against EPA included two areas of the NO_X SIP Call that were remanded and vacated, and two areas in which EPA was found to have failed to provide adequate notice of changes in the rule. In the latter case, the rulings included a failure to provide adequate notice of the change in the definition of EGU as applied to cogeneration units that supply electricity to a utility power distribution system for sale in certain specified amounts, and a failure to provide adequate notice of the change in the control level EPA assumed for large stationary internal combustion (IC) engines. The portions of the NO_X SIP Call that were upheld by the Court were termed “Phase I” of the rule. With the exception of the remand of the EGU growth factors used in the NO_X SIP Call and the requirements for the 8-hour ozone NAAQS (which EPA stayed due to uncertainty created by the court rulings), those portions of the NO_X SIP Call that had been remanded back to EPA were finalized in the April 21, 2004 rulemaking (69 FR 21604) and termed “Phase II” of the rule.

The April 21, 2004 rule finalized specific changes to the definition of EGUs as applied to cogeneration units, finalized the control levels assumed for large stationary IC engines in the NO_X SIP Call, adjusted States' total budgets (as necessary) to reflect these changes, established a SIP submittal date of April 1, 2005 for states to address the Phase II portion of the budget, and set a compliance date of May 1, 2007 for all affected sources to meet Phase II. As a result of these changes, states that were not already meeting their total NO_X SIP Call emission reduction obligations were required to submit a SIP revision by April 1, 2005 to reduce ozone season NO_X emissions by an incremental amount equivalent to the reductions achieved by controlling IC engines to prescribed levels. The IC engines that comprise the subject States' Phase II inventory were compiled by EPA and termed the EPA's NO_X SIP Call Engine Inventory (65 FR 1222, March 2, 2000). As finalized in the April 21, 2005 rulemaking, the amount of the incremental reductions required was based upon the level of reductions that would occur if large natural gas-fired stationary IC engines were controlled to a level of 82 percent, and large diesel and dual fuel stationary IC engines were controlled to a level of 90 percent.

The change to the definition of cogeneration units did not have an impact on the Phase I budget previously established for Virginia. Therefore, in order to meet its Phase II obligations, the State was required only to achieve the incremental reductions that EPA calculated based on controlling stationary IC engines to prescribed levels. As in Phase I of the NO_X SIP Call, states have flexibility in how they achieve the incremental reductions required under Phase II.

In the NO_X SIP Call Engine Inventory, EPA identified 17 lean burn engines in Virginia that met the definition of large, natural gas-fired IC engines. EPA determined a reduction target of 3343 tons of NO_X based on a reduction level of 82 percent. In the NO_X SIP Call inventory, EPA identified five large cement kilns and determined a reduction target of 173 tons of NO_X based on a control level of 30 percent for this source category.

Virginia's Phase I NO_X SIP Call trading program was approved as part of the Virginia SIP on November 12, 2002 (67 FR 68544), with the exception of its flow control provision, which was conditionally approved. The conditional approval was converted to a full approval on August 25, 2004 (69 FR 52174). The Phase II change to the definition of cogen units did not affect the Phase I budget previously established for Virginia and will not be discussed in any detail here, but a full discussion may be found in the April 21, 2005 rulemaking. In order to meet its NO_X SIP Call Phase II obligations, the Commonwealth is required only to achieve the incremental reductions that EPA calculated based on a controlling large IC engines to prescribed levels.

In the November 12, 2002 approval, it was noted that the SIP revision did not establish requirements for cement manufacturing kilns and stationary internal combustion engines, and that Virginia was still obligated to submit SIP revisions for additional reductions required to meet the State's overall emissions budget.

II. Summary of SIP Revisions

The table below identifies the sources and the individual state operating permits that are the subject of this rulemaking, followed by a summary of the SIP revisions for each source category. The Technical Support Document (TSD) for this rulemaking contains additional details pertaining to EPA's analysis of the State submittals.

Large IC Engines and Cement Kilns Subject to the NO_X SIP Call in Virginia

Source name	Location	Permit/order or registration No.	Source type
Transcontinental Gas Pipeline Corp. Station 165	Pittsylvania County	Registration No. 30864	Large natural gas-fired internal combustion engine.
Transcontinental Gas Pipeline Corp. Station 170	Appomattox County	Registration No. 30863	Large natural gas-fired internal combustion engine.
Transcontinental Gas Pipeline Corp. Station 175	Fluvanna County	Registration No. 40789	Large natural gas-fired internal combustion engine.
Transcontinental Gas Pipeline Corp. Station 180	Orange County	Registration No. 40782	Large natural gas-fired internal combustion engine.
Roanoke Cement Corporation	Botetourt County	Registration No. 20232	Cement manufacturing.

A. Large Stationary IC Engines

VADEQ determined that one company, Transco, owns all of the potentially affected sources in the State, and chose to impose 3343 tons of NO_X emission reductions from 19 engines located at four stations. VADEQ issued federally enforceable State operating permits for these Transco stations. The operating permit requirements for the engines include NO_X emission rate limits and limits on hours of operation during the ozone season to achieve the required emission reductions. The permits also include provisions for testing, parametric monitoring, reporting, and recordkeeping to ensure the terms of the permits are met.

B. Cement Manufacturing

Four long, dry cement kilns that were included as part of the 1995 NO_X SIP Call inventory were permanently shut down in 1996. The remaining preheater kiln was reconfigured and upgraded as a precalciner kiln to handle the capacity of the facility. VADEQ submitted a demonstration that the emissions from the reconfigured preheater/precalciner kiln in 2005 has resulted in at least a 30 percent reduction from the four long, dry kilns and one preheater kiln that existed in 1995. The demonstration shows that the kiln is maximizing fuel efficiency while minimizing NO_X emissions, consistent with EPA's “Alternative Control Techniques Document—NO_X emissions from Cement Manufacturing” (EPA-453/R94-004). The demonstration also shows that the overall emission rate change from 1995 to 2005 is well over 30 percent. In addition, low NO_X burners were installed on the kiln in 2006. VADEQ issued a State Operating Permit for the low NO_X burners on December 22, 2004, and on June 18, 2007 modified the operating permit to indicate that the preheater/precalciner configuration with low NO_X burners implements the requirements of the NO_X SIP Call.

III. General Information Pertaining to SIP Submittals From the Commonwealth of Virgina

In 1995, Virginia adopted legislation that provides, subject to certain conditions, for an environmental assessment (audit) “privilege” for voluntary compliance evaluations performed by a regulated entity. The legislation further addresses the relative burden of proof for parties either asserting the privilege or seeking disclosure of documents for which the privilege is claimed. Virginia's legislation also provides, subject to certain conditions, for a penalty waiver for violations of environmental laws when a regulated entity discovers such violations pursuant to a voluntary compliance evaluation and voluntarily discloses such violations to the Commonwealth and takes prompt and appropriate measures to remedy the violations. Virginia's Voluntary Environmental Assessment Privilege Law, Va. Code Sec. 10.1-1198, provides a privilege that protects from disclosure documents and information about the content of those documents that are the product of a voluntary environmental assessment. The Privilege Law does not extend to documents or information (1) that are generated or developed before the commencement of a voluntary environmental assessment; (2) that are prepared independently of the assessment process; (3) that demonstrate a clear, imminent and substantial danger to the public health or environment; or (4) that are required by law.

On January 12, 1998, the Commonwealth of Virginia Office of the Attorney General provided a legal opinion that states that the Privilege law, Va. Code Sec. 10.1-1198, precludes granting a privilege to documents and information “required by law,” including documents and information “required by Federal law to maintain program delegation, authorization or approval,” since Virginia must “enforce Federally authorized environmental programs in a manner that is no less stringent than their Federal counterparts. * * *” The opinion concludes that “[r]egarding § 10.1-1198, therefore, documents or other information needed for civil or criminal enforcement under one of these programs could not be privileged because such documents and information are essential to pursuing enforcement in a manner required by Federal law to maintain program delegation, authorization or approval.”

Virginia's Immunity law, Va. Code Sec. 10.1-1199, provides that “[t]o the extent consistent with requirements imposed by Federal law,” any person making a voluntary disclosure of information to a state agency regarding a violation of an environmental statute, regulation, permit, or administrative order is granted immunity from administrative or civil penalty. The Attorney General's January 12, 1998 opinion states that the quoted language renders this statute inapplicable to enforcement of any Federally authorized programs, since “no immunity could be afforded from administrative, civil, or criminal penalties because granting such immunity would not be consistent with Federal law, which is one of the criteria for immunity.”

Therefore, EPA has determined that Virginia's Privilege and Immunity statutes will not preclude the Commonwealth from enforcing its program consistent with the Federal requirements. In any event, because EPA has also determined that a state audit privilege and immunity law can affect only state enforcement and cannot have any impact on Federal enforcement authorities, EPA may at any time invoke its authority under the CAA, including, for example, sections 113, 167, 205, 211 or 213, to enforce the requirements or prohibitions of the state plan, independently of any state enforcement effort. In addition, citizen enforcement under section 304 of the CAA is likewise unaffected by this, or any, state audit privilege or immunity law.

IV. Proposed Action

EPA's review of the submittals indicates that the Commonwealth of Virginia has met the additional emission reduction requirements to comply with its overall emissions budget under the NO_X SIP Call. The SIP revisions address Virginia's remaining obligations under the NO_X SIP Call, therefore, EPA proposes to approve them into the Virginia SIP. EPA is soliciting public comments on the issues discussed in this document. These comments will be considered before taking final action.

V. Statutory and Executive Order Reviews

Under the Clean Air Act, 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 Clean Air Act. Accordingly, this action merely proposes to approve 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 Clean Air Act; 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 action proposing approval of Virginia's remaining emission reductions under the NO_X SIP Call 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
• Air pollution control
• Intergovernmental relations
• Nitrogen dioxide
• Ozone
• Reporting and recordkeeping requirements

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

Dated: August 14, 2008.

William T. Wisniewski,

Acting Regional Administrator, Region III.