Prevention of Significant Deterioration (PSD) for Particulate Matter Less Than 2.5 Micrometers (PM2.5)-Increments, Significant Impact Levels (SILs) and Significant Monitoring Concentration (SMC)

Federal RegisterOct 20, 2010

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 51 and 52

[EPA-HQ-OAR-2006-0605; FRL-9210-9]

RIN 2060-AO24

Prevention of Significant Deterioration (PSD) for Particulate Matter Less Than 2.5 Micrometers (PM

2.5

)—Increments, Significant Impact Levels (SILs) and Significant Monitoring Concentration (SMC)

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Final rule.

SUMMARY:

The EPA is amending the requirements for particulate matter less than 2.5 micrometers (PM

2.5

) under the Prevention of Significant Deterioration (PSD) program by adding maximum allowable increases in ambient pollutant concentrations (“increments”) and two screening tools, known as the Significant Impact Levels (SILs) and a Significant Monitoring Concentration (SMC) for PM

2.5

. The SILs for PM

2.5

are also being added to two other New Source Review (NSR) rules that regulate the construction and modification of any major stationary source locating in an attainment or unclassifiable area, where the source's emissions may cause or contribute to a violation of the national ambient air quality standards (NAAQS).

DATES:

This final rule is effective on December 20, 2010.

ADDRESSES:

The EPA has established a docket for this action under Docket ID No. EPA-HQ-OAR-2006-0605. All documents in the docket are listed on the

http://www.regulations.gov

Web Site. Although listed in the index, some information may not be publicly available,

e.g.,

Confidential Business Information (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 through

http://www.regulations.gov

or in hard copy at the Air Docket, EPA/DC, EPA West, Room 3334, 1301 Constitution Avenue, Northwest, Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the Air Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT:

Mr. Dan deRoeck, Air Quality Policy Division, Office of Air Quality Planning and Standards (C504-03), U.S. Environmental Protection Agency, Research Triangle Park, North Carolina 27711, telephone number: (919) 541-5593, facsimile number: (919) 541-5509, e-mail address:

deroeck.dan@epa.gov

SUPPLEMENTARY INFORMATION:

The information in this Supplementary Information section of this preamble is organized as follows:

I. General Information

A. Does this action apply to me?

B. Where can I get a copy of this document and other related information?

II. Purpose

III. Overview of Final PM

2.5

PSD Regulations

A. Increments

B. Significant Impact Levels

C. Significant Monitoring Concentration

IV. Background

A. PSD Program

B. History of Particulate Matter (PM) NAAQS

1. Total Suspended Particulate (TSP) and PM

NAAQS

2. PM

2.5

NAAQS

3. Revised PM

2.5

and PM

NAAQS

C. Implementation of NSR for PM

2.5

D. Increments Under the PSD Program

E. Historical Approaches for Developing Increments

1. Congressional Enactment of Increments for PM and SO

2. EPA's Promulgation of Increments for NO

and PM

a. Increments for NO

Using the “Contingent Safe Harbor” Approach Under Section 166(a) of the Act

b. Increments for PM

Using “Equivalent Substitution” Approach Under Section 166(f) of the Act

V. Final Action on PM

2.5

Increments

A. Decision To Establish PM

2.5

Increments Using “Contingent Safe Harbor Approach” Under Section 166(a)

B. Rationale for the Applicability of Section 166(a)

C. EPA's Interpretation of the Requirements Under Sections 166(a)-(d) of the Act

1. Regulations as a Whole Should Fulfill Statutory Requirements

2. Contingent Safe Harbor Approach

3. The Statutory Factors Applicable Under Section 166(c)

4. Balancing the Factors Applicable Under Section 166(c)

5. Authority for States To Adopt Alternatives to Increments

D. Framework for Pollutant-Specific PSD Regulations for PM

2.5

1. Increment System

2. Area Classifications

3. Permitting Procedures

4. AQRV Review by Federal Land Manager (FLM) and Reviewing Authority

5. Additional Impacts Analysis

6. Installation of BACT

E. Final PM

2.5

Increments

1. Identification of Safe Harbor Increments

2. Data Used by EPA for the Evaluation of the Safe Harbor Increments for PM

2.5

3. Scope of Effects Considered

4. Evaluation of the Health and Welfare Effects of PM

2.5

a. Health Effects

b. Welfare Effects

5. Fundamental Elements of Increments

6. Evaluation of the Safe Harbor Increments

7. Compliance Determinations for the PM

2.5

Increments

a. Modeling Compliance With PM

2.5

Increments

b. Condensable PM

c. PM

2.5

Precursors

F. Final Action on Trigger and Baseline Dates for PM

2.5

Increments

G. Definition of “Baseline Area” for PM

2.5

H. No Final Action With Respect to the Proposed Revocation of PM

Annual Increments

I. Other Comments on Increments

VI. Final Action on PM

2.5

SILs

A. EPA's Determination on SILs for PM

2.5

B. Response to Comments Concerning the SILs

1. Legal Basis for SILs

2. Levels of the SILs

a. Class I SILs

b. Class II and III SILs

3. Relationship Between SILs and AQRVs

4. Form of the SILs

5. SILs for Other Pollutants

VII. Final Action on the PM

2.5

SMC

A. EPA's Determination on the PM

2.5

SMC

B. Response to Comments Concerning the SMC

1. Legal Issues

2. Level of the SMC

C. Correction of Cross Reference in PSD Ambient Monitoring Requirements

VIII. Dates Associated With Implementation of the Final Rule

A. Effective Date of the Final Rule

1. State PSD Programs

2. Federal PSD Program

B. Transition Period

C. SILs and SMC for PM

2.5

IX. Other Regulatory Changes

X. Statutory and Executive Order Reviews

A. Executive Order 12866—Regulatory Planning and Review

B. Paperwork Reduction Act

C. Regulatory Flexibility Act

D. Unfunded Mandates Reform Act

E. Executive Order 13132—Federalism

F. Executive Order 13175—Consultation and Coordination With Indian Tribal Governments

G. Executive Order 13045—Protection of Children From Environmental Health and Safety Risks

H. Executive Order 13211—Actions That Significantly Affect Energy Supply, Distribution, or Use

I. National Technology Transfer and Advancement Act

J. Executive Order 12898—Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations

K. Congressional Review Act

XI. Judicial Review

XII. Statutory Authority

I. General Information

A. Does this action apply to me?

Entities affected by this rule include sources in all industry groups. The majority of sources potentially affected are expected to be in the following groups:

Industry group

NAICS

Electric services

221111, 221112, 221113, 221119, 221121, 221122

Petroleum refining

32411

Industrial inorganic chemicals

325181, 32512, 325131, 325182, 211112, 325998, 331311, 325188

Industrial organic chemicals

32511, 325132, 325192, 325188, 325193, 32512, 325199

Miscellaneous chemical products

32552, 32592, 32591, 325182, 32551

Natural gas liquids

211112

Natural gas transport

48621, 22121

Pulp and paper mills

32211, 322121, 322122, 32213

Paper mills

322121, 322122

Automobile manufacturing

336111, 336112, 336712, 336211, 336992, 336322, 336312, 33633, 33634, 33635, 336399, 336212, 336213

Pharmaceuticals

325411, 325412, 325413, 325414

North American Industry Classification System.

Entities affected by this rule also include State and local permitting authorities, and tribal authorities that implement these regulations.

B. Where can I get a copy of this document and other related information?

In addition to being available in the docket, an electronic copy of this final rule will also be available on the World Wide Web. Following signature by the EPA Administrator, a copy of this final rule will be posted in the regulations and standards section of our NSR home page located at

http://www.epa.gov/nsr

II. Purpose

The purpose of this rulemaking is to finalize certain program provisions under the regulations to prevent significant deterioration of air quality due to emissions of PM

2.5

(

i.e.,

under the PM

2.5

PSD regulations). This final rule supplements the final implementation rule for PM

2.5

, known as the Clean Air Fine Particle Implementation Rule (CAFPIR) that we promulgated on April 25, 2007 (72 FR 20586), and the PM

2.5

NSR Implementation Rule that we promulgated on May 16, 2008 (73 FR 28321). Together, these three rules encompass the elements necessary for implementation of a PM

2.5

program in any area. This final rule is important because it establishes increments, SILs, and an SMC for PM

2.5

to facilitate ambient air quality monitoring and modeling under the PSD regulations for areas designated attainment or unclassifiable for PM

2.5

III. Overview of Final PM

2.5

PSD Regulations

A. Increments

This rulemaking establishes increments for PM

2.5

pursuant to the legal authority contained in section 166(a) of the Clean Air Act (CAA or Act) for pollutants for which NAAQS are promulgated after 1977. The final PM

2.5

increments were identified as Option 1 in the 2007 Notice of Proposed Rulemaking (NPRM) for this action, and are as follows:

Averaging period

NAAQS

(μg/m

)

Increments (μg/m

)

Class I

Class II

Class III

Annual

24-hour

As discussed in more detail in sections V.F and VIII, the increments for PM

2.5

will become applicable on October 20, 2011 in order to comply with section 166(b) of the Act (providing that regulations under section 166(a) “shall become effective one year after the date of promulgation”).

This final rule does not revoke the annual increments for particulate matter less than 10 micrometers (PM

) as proposed under Option 1 in the 2007 NPRM. Thus, we are retaining the 24-hour and annual PM

increments in addition to adding PM

2.5

increments. This outcome is discussed in greater detail in section V.H of this preamble.

B. Significant Impact Levels

This rule establishes SILs for PM

2.5

for evaluating the impact a proposed new source or modification may have on the NAAQS and PSD increments for PM

2.5

. The SILs for PM

2.5

were developed by scaling the existing PM

SILs using a PM

2.5

-to-PM

NAAQS ratio. The final SILs were identified as Option 3 in the 2007 NPRM, and are as follows:

Averaging period

SILs (μg/m

)

Class I

Class II

Class III

Annual

0.06

0.3

24-hour

0.07

1.2

These values will be added to the State implementation plan (SIP) provisions for PSD at 40 CFR 51.166 (as an optional screening tool) and the Federal PSD program at 40 CFR 52.21, as well as under the preconstruction review permit requirements at 40 CFR 51.165(b) and part 51, Appendix S.

See

a more detailed discussion of the SILs, as well as the relevant comments and our responses to them, in section VI of this preamble. The SILs for PM

2.5

are incorporated into the Federal PSD program as well as into the regulations for State-implemented PSD programs, although they are regarded as optional for State programs. The effective date for implementing the SILs under the Federal PSD program is the effective date of this final rule.

See

section VIII of this preamble for further discussion of the effective date.

C. Significant Monitoring Concentration

This final rule establishes the SMC for PM

2.5

as 4 μg/m

2.5

(24-hour average). This value has been developed pursuant to proposed Option 1; however, it should be noted that the value being established in this final rule is lower than the proposed value of 10 μg/m

that was originally developed under Option 1. A more detailed discussion of the proposed SMC is presented in section VII of this preamble, describing the rationale for altering the proposed SMC, and the relevant comments on the proposed SMC and our responses to them. The SMC for PM

2.5

is incorporated into the Federal PSD program as well as into the regulations for State-implemented PSD programs, although they are regarded as optional for State programs. As with the SILs for PM

2.5

, the effective date for implementing the SMC under the Federal PSD program is the effective date of this final rule.

See

section VIII of this preamble for further discussion of the effective date.

IV. Background

A. PSD Program

The NSR provisions of the Act are a combination of air quality planning and air pollution control technology program requirements for new and modified stationary sources of air pollution. In brief, section 109 of the Act requires us to promulgate primary NAAQS to protect public health and secondary NAAQS to protect public welfare. Once we have set these standards, states must develop, adopt, and submit to us for approval SIPs that contain emission limitations and other control measures to attain and maintain the NAAQS and to meet the other requirements of section 110(a) of the Act. Part C of title I of the Act contains the requirements for a component of the major NSR program known as the PSD program. This program sets forth procedures for the preconstruction review and permitting of new and modified major stationary sources of air pollution locating in areas meeting the NAAQS (“attainment” areas) and areas for which there is insufficient information to classify an area as either attainment or nonattainment (“unclassifiable” areas). Most states have SIP-approved preconstruction permit (major NSR) programs. The Federal PSD program at 40 CFR 52.21 applies in some states that lack a SIP-approved permit program, and in Indian country.

The applicability of the PSD program to a major stationary source must be determined in advance of construction and is a pollutant-specific determination. Once a major source is determined to be subject to the PSD program (PSD source), among other requirements, it must undertake a series of analyses to demonstrate that it will use the best available control technology (BACT) and will not cause or contribute to a violation of any NAAQS or increment. For the latter demonstration, the PSD regulations generally require sources to submit for review and approval a source impact analysis and an air quality analysis.

We have delegated our authority to some states to implement the Federal PSD program. The EPA remains the reviewing authority in non-delegated states lacking SIP-approved programs and in Indian country.

The source impact analysis is primarily a modeling analysis designed to show that the allowable emissions increase from the proposed project, in conjunction with other emissions increases from existing sources, will not result in a violation of either the NAAQS or increments. In cases where the source's emissions may adversely affect an area classified as a Class I area, additional review is conducted to protect the increments and special attributes of such an area defined as “air quality related values” (AQRVs).

The air quality analysis must assess the ambient air quality in the area that the proposed project would affect. For this analysis, the owner or operator of the proposed project must submit as part of a complete permit application air quality monitoring data that represent the air quality in the area affected by the proposed source for the 1-year period preceding receipt of the application. Where data may already exist to represent existing air quality, it may be used by the applicant; otherwise, the source owner or operator is responsible for the installation and operation of monitors to collect the necessary data.

Historically, EPA has allowed the use of several types of screening tools to facilitate implementation of the preconstruction review process to reduce the permit applicant's burden and streamline the permitting process for

de minimis

circumstances. These tools include a significant emissions rate (SER), SILs, and a SMC. The SER, defined in tons per year (tpy) for each regulated pollutant, is used to determine whether the emissions increase from any proposed source or modification can be excluded from review on the grounds that the increase of any particular pollutant is

de minimis.

An emission increase for a particular pollutant that is greater than the SER defined in the NSR regulations for that pollutant is considered to be a significant increase.

The SIL, expressed as an ambient pollutant concentration (micrograms per cubic meter (μg/m

)), is used to determine whether the ambient impact of a particular pollutant (once it is determined to be emitted in significant amounts) is significant enough to warrant a complete source impact analysis involving modeling the collective impacts of the proposed project and emissions from other existing sources.

The PSD regulations generally require each PSD applicant to collect 1 year of continuous air quality monitoring data for any pollutant determined to be subject to preconstruction review as part of complete PSD permit application. Using the SMC as a screening tool, expressed as an ambient pollutant concentration (μg/m

), sources may be able to demonstrate that the modeled air

quality impact of emissions from the new source or modification, or the existing air quality level in the area where the source would construct, is less than the SMC,

i.e., de minimis,

and may be allowed to forego the preconstruction monitoring requirement for a particular pollutant at the discretion of the reviewing authority.

See

40 CFR 51.166(i)(5) and 52.21(i)(5).

The basic monitoring exemption provision is part of the original monitoring requirements adopted in the 1980 PSD rulemaking. 45 FR 52676, 52710, August 7, 1980.

When the reviewing authority reaches a preliminary decision to authorize construction of a proposed major new source or major modification, it must provide notice of the preliminary decision and an opportunity for comment by the general public, industry, and other persons that may be affected by the emissions of the proposed major source or major modification. After considering these comments, the reviewing authority may issue a final determination on the construction permit in accordance with the PSD regulations.

B. History of Particulate Matter (PM) NAAQS

1. Total Suspended Particulate (TSP) and PM

NAAQS

The EPA initially established NAAQS for PM in 1971, measured by the TSP indicator. Based on the size of the particles collected by the “high-volume sampler,” which at that time was the reference method for determining ambient concentrations, TSP included all PM up to a nominal size of 25 to 45 micrometers. We established both annual and 24-hour NAAQS for TSP.

On July 1, 1987, we revised the NAAQS for PM and changed the indicator from TSP to PM

; the latter indicator includes particles with a mean aerodynamic diameter less than or equal to 10 micrometers. The PM

particles are the subset of inhalable particles small enough to penetrate to the thoracic region (including the tracheobronchial and alveolar regions) of the respiratory tract (referred to as thoracic particles). We established annual and 24-hour NAAQS for PM

, and revoked the NAAQS for TSP. (52 FR 24634).

2. PM

2.5

NAAQS

On July 18, 1997, we again revised the NAAQS for PM in several respects. While we determined that the NAAQS should continue to focus on particles less than or equal to 10 micrometers in diameter, we also determined that the fine and coarse fractions of PM

should be considered separately. We established new annual and 24-hour NAAQS using PM

2.5

(referring to particles with a nominal mean aerodynamic diameter less than or equal to 2.5 micrometers) as the indicator for fine particles. The 1997 NAAQS rule also modified the PM

NAAQS for the purpose of regulating the coarse fraction of PM

(referred to as thoracic coarse particles or coarse-fraction particles; generally including particles with a nominal mean aerodynamic diameter greater than 2.5 micrometers and less than or equal to 10 micrometers, or PM

10-2.5

); however, this part of the rulemaking was vacated during subsequent litigation, leaving the pre-existing 1987 PM

NAAQS in place (62 FR 38652).

3. Revised PM

2.5

and PM

NAAQS

On October 17, 2006, we promulgated revisions to the NAAQS for PM

2.5

and PM

with an effective date of December 18, 2006 (71 FR 61144). We lowered the 24-hour NAAQS for PM

2.5

from 65 µg/m

to 35 µg/m

, and retained the existing annual PM

2.5

NAAQS of 15 µg/m

. In addition, we retained the existing PM

24-hour NAAQS of 150 µg/m

, and revoked the annual PM

NAAQS (set at 50 µg/m

C. Implementation of NSR for PM

2.5

After we established new annual and 24-hour NAAQS based on PM

2.5

as the indicator for fine particles in July 1997, we issued a guidance document titled “Interim Implementation for the New Source Review Requirements for PM

2.5

,” John S. Seitz, Director, Office of Air Quality Planning and Standards, EPA, October 23, 1997. As noted in that guidance, section 165 of the Act implies that certain PSD requirements become effective for a new NAAQS upon the effective date of the NAAQS. Section 165(a)(1) of the Act provides that no new or modified major source may be constructed without a PSD permit that meets all of the section 165(a) requirements with respect to the regulated pollutant. Moreover, section 165(a)(3) provides that the emissions from any such source may not cause or contribute to a violation of any increment or NAAQS. Also, section 165(a)(4) requires BACT for each pollutant subject to PSD regulation. The 1997 guidance stated that sources would be allowed to use implementation of a PM

program as a surrogate for meeting PM

2.5

NSR requirements until certain difficulties were resolved. These difficulties included the lack of necessary tools to calculate the emissions of PM

2.5

and related precursors, the lack of adequate modeling techniques to project ambient impacts, and the lack of PM

2.5

monitoring sites.

On April 5, 2005, we issued a guidance document entitled “Implementation of New Source Review Requirements in PM-2.5 Nonattainment Areas,” Stephen D. Page, Director, Office of Air Quality Planning and Standards, EPA. This memorandum provided guidance on the implementation of the nonattainment major NSR provisions in PM

2.5

nonattainment areas in the interim period between the effective date of the PM

2.5

NAAQS designations (April 5, 2005) and when we promulgate regulations to implement nonattainment major NSR for the PM

2.5

NAAQS. In addition to affirming the continued use of the John S. Seitz guidance memo in PM

2.5

attainment areas, this memo recommended that, until we promulgated the PM

2.5

major NSR regulations, states should use a PM

nonattainment major NSR program as a surrogate to address the requirements of nonattainment major NSR for the PM

2.5

NAAQS.

On November 1, 2005, we proposed a rule to implement the PM

2.5

NAAQS, including proposed revisions to the NSR program. For those states with EPA-approved PSD programs, we proposed to continue the 1997 NSR guidance to use PM

as a surrogate for PM

2.5

, but only during the SIP development period. We also indicated in that proposal that we would be developing increments, SILs, and an SMC in a separate rulemaking,

i.e.,

this final rule. Since there was an interim surrogate NSR program in place,

i.e.,

the PM

Surrogate Policy, EPA decided to first promulgate the non-NSR part of the implementation rule (including attainment demonstrations, designations, control measures,

etc.

). This rule was promulgated as the CAFPIR on April 25, 2007 (72 FR 20586).

The NSR part of the implementation rule was issued separately as a final rule on May 16, 2008 (73 FR 28321), and included sets of NSR regulations for both attainment (PSD) and nonattainment areas (nonattainment NSR) for PM

2.5

. In the May 16, 2008 rule we added one of the important screening tools—the SER—for PM

2.5

. The SER for PM

2.5

is defined as an emissions rate of 10 tpy for direct PM

2.5

emissions. We also listed sulfur dioxide (SO

) and nitrogen oxides (NO

) as precursors of ambient PM

2.5

and defined “significant” as 40 tpy or more of either precursor pollutant. States were allowed up to 3 years from the date of publication in the

Federal Register

revise their SIPs and submit their revised NSR programs to EPA for approval.

D. Increments Under the PSD Program

Under section 165(a)(3) of the Act, a PSD permit applicant must demonstrate that emissions from the proposed construction and operation of a facility “will not cause, or contribute to, air pollution in excess of any (A) maximum allowable increase or maximum allowable concentration for any pollutant * * *.” The “maximum allowable increase” of an air pollutant that is allowed to occur above the applicable baseline concentration for that pollutant is known as the PSD increment. By establishing the maximum allowable level of ambient pollutant concentration increase in a particular area, an increment defines “significant deterioration” of air quality in that area.

For PSD baseline purposes, a baseline area for a particular pollutant emitted from a source includes the attainment or unclassifiable area in which the source is located, as well as any other attainment or unclassifiable area in which the source's emissions of that pollutant are projected (by air quality modeling) to result in a significant ambient pollutant increase.

See, e.g.,

40 CFR 52.21(b)(15)(i). Once the baseline area is established, subsequent PSD sources locating in that area need to consider that a portion of the available increment may have already been consumed by previous emissions increases.

In general, the submittal date of the first complete PSD permit application in a particular area is the operative “baseline date.”

On or before the date of the first complete PSD application, emissions generally are considered to be part of the baseline concentration, except for certain emissions from major stationary sources, as explained in the following discussion of baseline dates. Most emissions increases that occur after the baseline date will be counted toward the amount of increment consumed. Similarly, emissions decreases after the baseline date restore or expand the amount of increment that is available.

Baseline dates are pollutant specific. That is, a complete PSD application establishes the baseline date only for those regulated NSR pollutants that are projected to be emitted in significant amounts (as defined in the regulations) by the applicant's new source or modification. Thus, an area may have different baseline dates for different pollutants.

In practice, three dates related to the PSD baseline concept are important in understanding how to calculate the amount of increment consumed—(1) Trigger date; (2) major source baseline date; and (3) minor source baseline date. The first relevant date is the trigger date. The trigger date, as the name implies, triggers the overall increment consumption process nationwide. Specifically, this is a fixed date, which must occur before the minor source baseline date can be established for the pollutant-specific increment in a particular attainment area.

See,

40 CFR 51.166(b)(14)(ii) and 52.21(b)(14)(ii). For PM (regulated as TSP) and SO

, Congress defined the applicable trigger date as August 7, 1977—the date of the 1977 amendments to the Act when the original statutory increments were established by Congress. For nitrogen dioxide (NO

), we selected the trigger date as February 8, 1988—the date on which we proposed increments for NO

See

53 FR 40656, 40658; October 17, 1988. In this final rule, as described later, we are establishing a separate trigger date for purposes of implementing the PM

2.5

increments.

See

section V.F of this preamble for additional discussion of the trigger date for PM

2.5

The two remaining dates—“minor source baseline date” and “major source baseline date”—as described later, are necessary to properly account for the emissions that are to be counted toward the amount of increment consumed following the national trigger date, in accordance with the statutory definition of “baseline concentration” in section 169(4) of the Act. The statutory definition provides that the baseline concentration of a pollutant for a particular baseline area is generally the air quality at the time of the first application for a PSD permit in the area. Consequently, any increases in actual emissions occurring after that date (with some possible exceptions that we will discuss later) would be considered to consume the applicable PSD increment. However, the statutory definition in section 169(4) also provides that “[e]missions of sulfur oxides and particulate matter from any major emitting facility on which construction commenced after January 6, 1975, shall not be included in the baseline and shall be counted in pollutant concentrations established under this part.”

To make this distinction between the date when emissions resulting from the construction at a major stationary source consume the increment and the date when emissions changes in general (

i.e.,

from both major and minor sources) begin to consume the increment, we established the terms “major source baseline date” and “minor source baseline date,” respectively.

See

40 CFR 51.166(b)(14) and 52.21(b)(14). Accordingly, the “major source baseline date,” which precedes the trigger date, is the date after which actual emissions increases associated with construction at any major stationary source consume the PSD increment. In accordance with the statutory definition of “baseline concentration,” the PSD regulations define a fixed date to represent the major source baseline date for each pollutant for which an increment exists. Congress defined the major source baseline date for the statutory increments for PM and SO

as January 6, 1975. For the NO

increments, which we promulgated in 1988 under our authority to establish an increment system under section 166(a) of the Act, the major source baseline date we selected was February 8, 1988—the date on which we proposed increments for NO

. 53 FR 40656. In both instances, the major source baseline date for the individual increments was set as a date which preceded the date on which the regulations pertaining to those increments were issued. In this final rule, as described later, we are establishing a separate major source baseline date for implementing the PM

2.5

increments.

See

section V.F of this preamble for further discussion of the major source baseline date for PM

2.5

The “minor source baseline date” is the earliest date after the trigger date on which a source or modification submits the first complete application for a PSD permit in a particular area. After the minor source baseline date, any increase in actual emissions (from both major and minor sources) consumes the PSD increment for that area.

Once the minor source baseline date is established, the new emissions increase from that major source consumes a portion of the increment in that area, as do any subsequent actual emissions increases that occur from any new or existing source in the area. When the maximum pollutant concentration increase defined by the increment has been reached, additional PSD permits cannot be issued until sufficient amounts of the increment are “freed up” via emissions reductions that may occur voluntarily, (

e.g.,

via source shutdowns) or by mandatory control requirements imposed by the reviewing authority. Moreover, the air quality in a region cannot deteriorate to a level in excess of the applicable NAAQS, even if all the increment in the area has not been consumed. Therefore, new or modified sources located in areas where the air pollutant concentrations are near the level allowed by the NAAQS may not have full use of the amount of

pollutant concentration increase allowed by the increment.

Under EPA guidance, the actual increment analysis that a proposed new or modified source undergoing PSD review must complete depends on the area impacted by the source's new emissions. We have provided approved air quality models and guidelines for sources to use to project the air quality impact of each pollutant (over each averaging period) for which an increment analysis must be done.

In addition, we established SILs for each pollutant under the permit requirements applicable to new and modified major stationary sources locating in attainment areas that would cause or contribute to a violation of any NAAQS.

See

40 CFR 51.165(b) and part 51, Appendix S, section III.A. These SILs have also been used for implementing the PSD program to identify levels below which the source's modeled impact of a particular pollutant is regarded as

de minimis.

In this final rule, we are establishing SILs (24-hour and annual) for PM

2.5

that are being added to the aforementioned regulations containing SILs for other pollutants, as well as to the PSD regulations in 40 CFR 51.166 and 52.21.

See

further discussion of the SILs for PM

2.5

in section VI of this preamble.

See

EPA's “Guideline on Air Quality Models” at 40 CFR part 51, Appendix W.

In the event that a source's modeled impacts of a particular pollutant are below the applicable SIL at all ambient air locations modeled,

i.e., de minimis

everywhere, EPA's policy for PSD provides that no further modeling analysis is required for that pollutant. Our longstanding policy under the PSD program is that when a preliminary screening analysis based on the SIL is sufficient to demonstrate that the source's emissions throughout the area modeled will not cause or contribute to a violation of the increment, there is no need for a comprehensive source impact analysis involving a cumulative evaluation of the emissions from the proposed source and other sources affecting the area.

Within the impact area of a source subject to PSD, that is, the area within which the proposed project's emissions increase does have a significant impact, increment consumption is calculated using the source's proposed emissions increase, along with other actual emissions increases or decreases of the particular pollutant from any sources in the area, which have occurred since the minor source baseline date established for that area. In addition, the emissions increases or decreases from any major source that has commenced construction since the major source baseline date (which precedes the minor source baseline date) will consume or expand increment. Thus, an emissions inventory of sources whose emissions, in whole or in part, of a particular pollutant consume or expand the available increment in the area must be compiled. The inventory of increment-consuming emissions includes not only sources located directly in the impact area, but sources outside the impact area that affect the air quality for the particular pollutant within the impact area.

The inventory of increment-consuming emissions includes emissions from increment-affecting sources at two separate time periods—the baseline date and the current period of time. For each source that was in existence on the relevant baseline date (major source or minor source), the inventory includes the source's actual emissions on the baseline date and its current actual emissions. The change in emissions over these time periods represents the emissions that consume increment (or, if emissions have gone down, expand the available increment). For sources constructed since the relevant baseline date, all their current actual emissions consume increment and are included in the inventory.

When the inventory of increment-consuming emissions has been compiled, computer modeling is used to determine the change in ambient concentration that will result from these emissions when combined with the proposed emissions increase from the new major source or major modification that is undergoing PSD review. The modeling has generally been guided by the “Guideline on Air Quality Models” (40 CFR part 51, Appendix W), which includes provisions on air quality models and the meteorological data input into these models. The model output (expressed as a change in concentration) for each relevant averaging period is then compared to the corresponding allowable PSD increment.

E. Historical Approaches for Developing Increments

1. Congressional Enactment of Increments for PM and SO

Congress established the first increments defining significant deterioration of air quality in the 1977 Amendments to the Act. These amendments, among other things, added part C to title I, setting out the requirements for PSD. In section 163, Congress included numerical increments for PM and SO

for Class I, II, and III areas.

The three area classes are part of the increment system originally established by Congress. Congress designated Class I areas (including certain national parks and wilderness areas) as areas of special national concern, where the need to prevent deterioration of air quality is the greatest. Consequently, the allowable level of incremental change is the smallest relative to the other area classes,

i.e.,

most stringent, in Class I areas. The increments of Class II areas are larger than those of Class I areas and allow for a moderate degree of emissions growth. For future redesignation purposes, Congress defined a “Class III” classification to allow the redesignation of any existing Class II area for which a State may desire to promote a higher level of industrial development (and emissions growth). Thus, Class III areas are allowed to have the greatest amount of pollutant increase of the three area classes while still achieving the NAAQS. To date, there have been no redesignations made to establish a Class III area.

In establishing these PSD increments, Congress used the then-existing NAAQS for those pollutants as the benchmark for determining what constitutes “significant deterioration.” Congress established the increments for PM as a percentage of the then-existing PM NAAQS. At the time the Act was amended in 1977, the NAAQS for PM were expressed in terms of ambient concentrations of TSP. Thus, EPA interpreted the statutory increments for PM using the same ambient TSP “indicator.”

2. EPA's Promulgation of Increments for NO

and PM

Congress also provided authority for EPA to promulgate additional increments and to update the original PM increments created by statute. The EPA has promulgated two regulations pursuant to this authority.

a. Increments for NO

Using the “Contingent Safe Harbor” Approach Under Section 166(a) of the Act

Based on section 166(a) of the Act, on October 17, 1988, EPA promulgated increments for NO

to prevent significant deterioration of air quality due to emissions of NO

(53 FR 40656). The EPA based these increments on percentages of the NAAQS in the same way that Congress derived the statutory increments for PM and SO

. Those NO

increments were challenged in 1988 by the Environmental Defense Fund (EDF) when EDF filed suit in the U.S. Court of

Appeals for the District of Columbia Circuit against the Administrator (

Environmental Defense Fund, Inc.

Reilly,

No. 88-1882). The EDF successfully argued that we failed to sufficiently consider certain provisions in section 166 of the Act. The court remanded the case to EPA “to develop an interpretation of section 166 that considers both subsections (c) and (d), and if necessary to take new evidence and modify the regulations.”

See Environmental Defense Fund

EPA,

898 F.2d 183, 190 (D.C. Cir. 1990) (

EDF

EPA

). Section 166(c) of the Act requires the PSD regulations to, among other things, meet the goals and purposes set forth in sections 101 and 160 of the Act. Section 166(d) requires these regulations be at least as effective as the increments established for PM (in the form of TSP) and SO

in section 163 of the Act. The court considered the NO

increment values determined using the percentage-of-NAAQS approach as “safe harbor” increments which met the requirements of section 166(d) of the Act. However, the court also determined that EPA's reliance on such increment levels was contingent upon our completing the analyses required under section 166(c), which provided that the final increment values must address the goals of sections 101 and 160 of the Act to protect public health and welfare, parks, and AQRVs

and to insure economic growth.

The term “air quality related values” is not defined in the Act, but the legislative history provides language saying that “The term `air quality related values' of Federal lands designated as Class I includes the fundamental purposes for which such lands have been established and preserved by the Congress and the responsible Federal agency. For example, under the 1916 Organic Act to establish the National Park Service (16 U.S.C. 1), the purpose of such national park lands `is to conserve the scenery and the natural and historic objects and the wildlife therein and to provide for the enjoyment of the same in such manner and by such means as will leave them unimpaired for the enjoyment of future generations.' ” S. Rep. No. 95-127 at 36 (1977).

In response to the court's decision, we proposed rulemaking on increments for NO

on February 23, 2005 (70 FR 8880) and finalized the rule on October 12, 2005 (70 FR 59582). In the final rule, we established our policy on how to interpret and apply the requirements of sections 166(c) and (d) of the Act. In accordance with the court ruling, we conducted further analyses (considering the health and welfare effects of NO

) and concluded that the existing NO

increments were adequate to fulfill the requirements of section 166(c).

See

70 FR 59586 for our detailed analysis of how pollutant regulations satisfy the requirements of section 166 of the Act. Hence, we retained the existing NO

increments along with other parts of the existing framework of pollutant-specific NO

increment regulations. We also amended the PSD regulations under 40 CFR 51.166 to make it clear that states may seek EPA approval of SIPs that utilize a different approach than EPA used to establish these NO

increments. To receive our approval of an alternative program, a State must demonstrate that its program satisfies the requirements of sections 166(c) and 166(d) of the Act and prevents significant deterioration of air quality from emissions of NO

Under the 2005 NO

regulation, states can adopt measures other than increments as long as they can demonstrate that the measures selected comply with the same criteria and goals of sections 166(c) and (d) of the Act that must be met for increments.

b. Increments for PM

Using “Equivalent Substitution” Approach Under Section 166(f) of the Act

On October 5, 1989, we proposed PM

increments.

See

54 FR 41218. Although section 163 did not expressly define the existing statutory increments for PM in terms of a specific indicator, EPA reasoned that Congress' knowledge that TSP was the indicator for the PM NAAQS, and that the TSP standards were the starting point for the increments levels when the increments were established in 1977, meant that TSP was also the appropriate measure for the PM increments in section 163. As a consequence, EPA believed that the statutory PM increments could not simply be administratively redefined as PM

increments, retaining the same numerical values, following the revision of the PM NAAQS. Rather, we stated our belief that with the promulgation of the PM

NAAQS, EPA had both the responsibility and the authority under sections 166 and 301 of the Act to promulgate new increments for PM to be measured in terms of PM

10.

We further concluded that promulgating PM

increments to replace, rather than supplement, the statutory TSP increments under section 163 represented the most sensible approach for preventing significant deterioration with respect to PM.

See

54 FR 41220-41221.

We promulgated PM

increments to replace the then-existing TSP increments on June 3, 1993 (58 FR 31622). In the interim between proposal and promulgation, Congress enacted the 1990 CAA Amendments. As part of these amendments, Congress amended section 166 to add a new section 166(f). This section specifically authorized EPA to substitute PM

increments for the existing section 163 PM increments based on TSP, provided that the substituted increments are “of equal stringency in effect” as the section 163 increments.

Thus, we were able to replace the TSP increments under section 163 of the Act using PM

increments based directly on the newly enacted authority under section 166(f) of the Act. In the PM

rule, we maintained the existing baseline dates and baseline areas for PM that had been previously established using the TSP indicator. Also, as proposed, we promulgated PM

increments based on an approach we called the “equivalent to statutory increments” approach. Under this approach, we used the original TSP increments as a benchmark for calculating the PM

increments, thereby retaining roughly the same limitations on future deterioration of air quality as was allowed under the TSP increments.

In using this approach, we considered the historical consumption of TSP increment by a sample population of permitted PSD sources, and then determined the PM

increments for each area classification and averaging time that would provide approximately the same percentage of PM

increment consumption, on average, by the same population of sources. Then, all future calculations of increment consumption after the PM

implementation date would be based on PM

emissions.

See

58 FR 31622 and 31625.

V. Final Action on PM

2.5

Increments

In this section of the preamble, we will summarize the considerations that went into our proposed action and describe the final action being taken regarding new regulations for preventing significant deterioration of PM

2.5

air quality—including PM

2.5

increments (sections V.A through V.E, baseline dates and other permit requirements for PM

2.5

(section V.F), baseline areas for PM

2.5

(section V.G), and PM

increments (section V.H).

A. Decision To Establish PM

2.5

Increments Using “Contingent Safe Harbor Approach” Under Section 166(a)

The EPA's 2007 NPRM contained three options for developing numerical PM

2.5

increments. Option 1 used the authority of section 166(a) of the Act to establish increments for PM

2.5

as a new pollutant for which NAAQS were established after August 7, 1977, and established 24-hour and annual PM

2.5

increments (Class I, II, and III) based on the “contingent safe harbor” approach. Options 2 and 3 used the contingent safe harbor approach under section 166(a) to only develop 24-hour PM

2.5

increments (Class I, II, and III), while using the “equivalent substitution”

approach under section 166(f) of the Act to develop annual PM

2.5

increments. Each of these options is discussed in detail in the 2007 NPRM. 72 FR 54123-54138. In addition, significant comments on each of the three options, and our responses to them, are provided in this section V of this preamble.

In this final rule, after considering the available information and comments from interested parties, EPA has decided to select Option 1 and establish increments for PM

2.5

using the “contingent safe harbor” approach in accordance with the authority provided in section 166(a) of the Act.

This final rule establishes increments for PM

2.5

at the following levels:

Averaging period

NAAQS

(µg/m

)

Increments (µg/m

)

Class I

Class II

Class III

Annual

24-hour

B. Rationale for the Applicability of Section 166(a)

In the 2007 NPRM, we expressed our belief that it is permissible to interpret section 166(a) to apply to PM

2.5

. Section 166(a) requires EPA to develop regulations to prevent the significant deterioration of air quality due to emissions of certain named pollutants, and to develop such regulations for any pollutants for which NAAQS are subsequently promulgated. Although EPA has generally characterized the NAAQS for PM

2.5

as a NAAQS for a new indicator of PM, EPA did not replace the PM

NAAQS with the NAAQS for PM

2.5

when the latter NAAQS were promulgated in 1997. Rather, EPA retained the annual and 24-hour PM

NAAQS (retaining PM

as an indicator of coarse particulate matter), and established new annual and 24-hour NAAQS for PM

2.5

as if PM

2.5

was a new pollutant, even though EPA had already developed air quality criteria for PM generally. Thus, for purposes of section 166(a), the promulgation of a NAAQS for PM

2.5

established a NAAQS for an additional pollutant after 1977.

Nine commenters supported our proposed Option 1, although only three of these explicitly expressed support for the use of section 166(a) authority to promulgate PM

2.5

increments. Ten other commenters specifically opposed the use of section 166(a) authority and/or supported the use of section 166(f) authority (on which the annual increments under Options 2A and 2B were based).

One of the commenters who explicitly agreed with our proposed use of section 166(a) authority stated that it is the only option that is legally available. This commenter asserted that section 166(a) plainly applies to PM

2.5

because PM

2.5

is a pollutant for which NAAQS were promulgated after August 7, 1977. This commenter held that EPA's rulemaking duty under section 166(a) is not confined to “new pollutants,” but is triggered by post-1977 NAAQS promulgations, regardless of whether for new or previously regulated pollutants. On the other hand, this commenter noted that by its terms, section 166(f) is limited to authorizing the adoption of PM

increments as a substitute for the statutory TSP increments and does not provide for substitution of PM

2.5

increments for TSP or PM

increments.

The opposing commenters did not believe that section 166(a) provides a legal basis for EPA to promulgate PM

2.5

increments. One of these commenters stated that section 166(a) can only be used for a new pollutant, and PM

2.5

is not a new pollutant.

Another commenter who opposed the use of section 166(a) authority argued that nothing in section 166(a) of the Act can be interpreted to allow it to be used as the basis of increments when EPA revises an existing NAAQS. The commenter explained that, on its face, section 166(a) can only be interpreted to apply to pollutants other than PM and SO

since increments for these pollutants were enacted by Congress in section 163 of the Act. The commenter added that it can be argued that Congress intended to have section 166(a) apply to the four other pollutants specifically listed there.

This commenter found unpersuasive our argument that we are not “substituting” increments (as section 166(f) requires for PM

) but rather adding PM

2.5

increments to the existing PM

increments, and that only section 166(a) allows such an approach (72 FR 54121). The commenter asserted that if EPA had defined a coarse fraction to the particulate matter standards, then that fraction, together with the PM

2.5

standards, would form the set of “substituted” new standards for the existing PM

standards, and, thus, the increments.

The commenter also disagreed with EPA's argument that it can treat PM

2.5

as a new pollutant under section 166(a) of the Act since it has been demonstrated that sub-PM

2.5

particles have distinctly different health and welfare effects than the other forms of PM (

i.e.,

coarse or PM

). The commenter indicated that just as EPA replaced the TSP standards by PM

as a better indicator of health effects, ongoing research has led to establishment of the PM

2.5

standards as a better indicator of certain health effects, and it is the natural outcome of such research that has enabled EPA to separate the effect of total particulate matter into two fractions with distinct effects. The commenter added that given that the definition of particulate matter includes a vast conglomeration of solids and liquids, the finding of differing effects should not come as a surprise. The commenter explained that as is the case of different pollutants having similar effects that are, nonetheless, treated as separate pollutants, the same concept should apply to a range or fraction of particulate matter found to have different effects in establishing it as another indicator and not a different pollutant.

The commenter did not disagree with the specific numerical increments proposed by EPA under Option 1, but did have concerns with the potential consequences of the section 166(a) approach. The commenter's primary concern was the proposal to allow states to substitute other measures in the place of uniform national increments for PM

2.5

. (This is discussed further in section V.C.5 of this preamble.) Another commenter also expressed this concern.

Another commenter who opposed the section 166(a) approach believes that the legal and congressional history regarding the establishment of PM increments shows that Congress added section 166(f) to the Act based on the conviction that without it, EPA had no authority to revise the PM increments for PM

(citing and quoting from S. Rep. No. 228, 101st Cong., 2nd Sess. 75 (1990), reprinted in 1990 U.S.C.C.A.N. 3385, 3461). The commenter concluded that EPA did not have authority in 1987 under section 166(a) to adopt PM

increments, and does not have authority now under section 166(a) to adopt PM

2.5

increments.

We read section 166(a) to authorize EPA to promulgate pollutant-specific PSD regulations meeting the

requirements of sections 166(c) and 166(d) for any pollutant for which EPA promulgates a NAAQS after 1977. Most of the pollutants identified in section 166(a) (NO

, photochemical oxidants, carbon monoxide) are pollutants for which EPA had established NAAQS in 1977 when Congress adopted section 166 of the Act. There was no need for Congress to list other criteria pollutants, SO

and PM, in section 166(a) because Congress had already established increments for these pollutants in section 163 of the Act. In addition to requiring regulations for the enumerated pollutants, we conclude that under section 166 of the Act Congress intended to authorize EPA to establish additional pollutant-specific PSD regulations, potentially containing increments, for any additional pollutants for which EPA promulgated a NAAQS under section 109 of the Act. Furthermore, because the Act refers to pollutants for which EPA promulgates NAAQS after 1977, and does not use the phrase “additional pollutants,” section 166(a) provides authority for EPA to promulgate new increments after revising an existing NAAQS (including NAAQS first promulgated before 1977), when we find that such action is appropriate.

Moreover, any new increments developed pursuant to section 166(a) have no effect on existing increments, as there is no indication therein that an existing increment should be revoked or replaced when additional increments are promulgated. This was the situation following the promulgation of new NAAQS for PM in 1987 when EPA replaced the old NAAQS based on TSP with new ones based on PM

. Had Congress not added new section 166(f) in 1990, increments for PM

could have been developed pursuant to section 166(a) of the Act, but such increments would have had no effect on the original statutory increments for PM (based on TSP). Consequently, seeing no basis for retaining the original increments, Congress added section 166(f) which explicitly provides for the replacement of the existing increments with PM

increments.

One commenter asserted that if EPA establishes increments for PM

2.5

under the authority of section 166(a) on the basis that PM

2.5

is a new pollutant, then it must also establish PM

increments under section 166(a) because (according to the commenter's analysis) PM

is also a new pollutant. In the same analysis, the commenter concluded that EPA must adopt new measures to prevent significant deterioration from coarse PM based on section 166(a).

In this final rule, EPA is not setting or amending any increments for PM

or otherwise taking action with respect to PM

increments. The preexisting annual and 24-hour increments for PM

are being retained.

See

section V.H. Similarly, EPA is not taking any action with respect to coarse PM in this rule. For these reasons, the commenter's arguments on what authority must be used to set increments for PM

and/or coarse PM, and that EPA has some obligation to take action with respect to coarse PM, are not on point for this rule. Thus, no substantive response to this comment is needed. Nevertheless, as mentioned earlier, Congress provided explicit authority under section 166(f) of the Act to address increments for PM

10,

because it intended for such increments to be substitute increments for the original statutory increments for PM measured as TSP. Thus, the PM

increments legally supersede the original statutory increments for PM. Had the PM

increments been developed under section 166(a), which prior to the 1990 Act Amendments was the only authority available for developing new increments, then the original statutory PM increments would have remained in effect in addition to the PM

increments.

One commenter expressed general objections to EPA's legal rationale for the PM

2.5

increments proposal, asserting that we failed to expressly state and support our legal authority for the PM

2.5

increments, offering two possible sources of authority (“contingent safe harbor,” “equivalent substitution,” or possibly a combination of the two) but never stating our legal position with clarity. The commenter agreed with EPA's assessment that the PM

2.5

increments should and must fulfill the legal requirements of the Act (72 FR 54121), and added that it is the government's burden of proof to establish its legal authority for action. The commenter stated that it would be arbitrary and capricious to promulgate these regulations for which EPA has not stated legal authority.

We do not disagree that the 2007 NPRM described two different legal authorities for the two different options for establishing increments, but we disagree that these discussions did not clearly present the alternative legal bases that the Agency was considering for taking action in this rule. In particular, we clearly described our legal authority for developing the 24-hour and annual PM

2.5

increments under section 166(a) of the Act, which is the basis on which we are taking final action in this rule.

First, we expressly stated that Option 1 was based on the statutory authority of section 166(a) of the Act.

See

72 FR 54123 (Under the first option, “we would use the authority of section 166(a) of the Act to develop new increments for PM

2.5

”). Second, we provided a discussion of this authority both in general (

see

72 FR 54118-54119 and 54120-54123), and how it would be applied to establish increments for PM

2.5

(

see

72 FR 54119-120 and 54123-136).

We also believe that we sufficiently described how section 166(f) might provide alternative authority for establishing increments for PM

2.5

(see,

e.g.,

72 FR 54120-54121), but will not address that in detail here because the increments in this rule are not based on section 166(f) authority.

We now believe that section 166(a) provides the most straightforward approach for developing increments for a pollutant or pollutant indicator for which no increments have yet been established. Our position is also consistent with the comments we received which supported the delay in implementation of the PM

2.5

increments, opposed the potential for two sets of definitions for “major source baseline date” and “trigger date” for the PM

2.5

increment system, and highlighted the complexities involved with having to establish and maintain two sets of emissions inventories for the 24-hour and annual PM

2.5

increments. (

See

further description of relevant comments in section VIII of this section.)

C. EPA's Interpretation of the Requirements Under Sections 166(a)-(d) of the Act

In section 166(a) of the Act, Congress directed EPA to develop pollutant-specific regulations to prevent significant deterioration of air quality. Congress further specified that such regulations meet specific requirements set forth in sections 166(c) and 166(d) of the Act. We stated in the 2007 NPRM that because we believed that section 166(a) could be applied to the development of increments for PM

2.5

, we would follow the interpretation of sections 166(a)-(d) that the Agency adopted in its most recent NO

increments rule. 70 FR 59582, October 12, 2005. That particular interpretation and application was upheld in

Environmental Defense

EPA,

489 F.3d 1320 (D.C. Cir. 2007).

The EPA's interpretation of these provisions is grounded on five principles and conclusions. First, we read section 166 of the Act to direct EPA to conduct a holistic analysis that considers how a complete system of regulations will collectively satisfy the

applicable criteria, rather than evaluating one individual part of a regulatory scheme in isolation. Second, we use a “contingent safe harbor” approach which calls for EPA to first determine an increment that is at least as effective as the increments in section 163 of the Act, as required under section 166(d) and then to conduct further analysis to determine if additional measures are necessary to fulfill the requirements of section 166(c). Third, we interpret section 166(c) of the Act to identify eight statutory factors that EPA must apply when promulgating pollutant-specific regulations to prevent significant deterioration of air quality. Fourth, where these factors are at odds with each other, we interpret the statute to require EPA to use its judgment to balance the conflicting factors. Fifth, we recognize that the requirements of section 166 may be satisfied by adopting other measures besides an increment and that EPA may allow states to demonstrate that alternatives to increments contained in a SIP meet the requirements of sections 166(c) and 166(d). Below is a brief discussion of each of these five principles and conclusions. A more detailed description of each of these is contained in the 2007 NPRM at 72 FR 54121-54123.

1. Regulations as a Whole Should Fulfill Statutory Requirements

Section 166(a) of the Act directs EPA to develop pollutant-specific regulations to prevent the significant deterioration of air quality. Sections 166(c) and 166(d) provide detail on the contents of those regulations, but do not necessarily require the same type of increment system Congress created in section 163 of the Act. The EPA interprets section 166 to require that the entire system of PSD regulations (the framework and details, as described in section V.D of this preamble) for a particular pollutant must, as a whole, satisfy the criteria in sections 166(c) and 166(d) of the Act.

2. Contingent Safe Harbor Approach

Section 166(c) of the Act describes the kinds of measures to be contained in the regulations to prevent significant deterioration of air quality called for in section 166(a) and specifies that these regulations are to “fulfill the goals and purposes” set forth in sections 160 and 101 of the Act. Section 166(d) of the Act directs EPA to “fulfill such goals and purposes” by providing “specific measures at least as effective as the increments established in section 163 * * *.” Thus, EPA reads section 166(d) to require that the Agency identify “safe harbor” pollutant-specific PSD regulations adopted under section 166.

The EPA reads section 166(c) to require that the Agency conduct further review to determine whether, based on the criteria in section 166(c), EPA's pollutant-specific PSD regulations under section 166 should contain measures that are different from the “safe harbor” identified under section 166(d). The EPA construes section 166(d) to require that the measures be “at least as effective” as the statutory increments set forth in section 163.

To apply the “contingent safe harbor” approach for PM

2.5

, we first identified “safe harbor” increments for each area classification (Class I, II, or III), using: (1) Equivalent percentages of the NAAQS as the percentages used for developing the statutory increments; (2) the same pollutant as the NAAQS,

i.e.,

2.5

, and (3) the same time (averaging) periods as were used for the PM

2.5

NAAQS. We concluded that this approach would ensure that the increments would be “at least as effective as the increments established in section 163,” as required by section 166(d). Second, EPA conducted further review to determine whether the “safe harbor” increments, in conjunction with existing elements of the PSD program or additional measures proposed under section 166 to augment the increments, sufficiently fulfill the criteria in subsection (c) of section 166.

In this review, we weighed and balanced the criteria set forth in subsection (c) (and, as provided in subsection (c), the incorporated goals and purposes of the Act in section 101 and the PSD program in section 160) to determine whether additional measures might be needed to satisfy the criteria in subsection (c).

See

section V.E.6 of this preamble for further discussion of our evaluation, comments on the evaluation, and our response to them.

3. The Statutory Factors Applicable Under Section 166(c)

The EPA interprets section 166(c) of the Act to establish eight factors to be considered in the development of PSD regulations for the pollutants covered by this provision. These eight factors included the three criteria stated in section 166(c) and the five goals and purposes identified in section 160 of the Act (which, as noted below, also cover the goals and purposes set forth in section 101). The three stated criteria in section 166(c) indicate that PSD regulations for specific pollutants should provide: (1) Specific numerical measures for evaluating permit applications; (2) a framework for stimulating improved control technology, and (3) protection of air quality values. The five goals and purposes in section 160 are incorporated into the analysis by virtue of the fourth criterion in section 166(c), which directs that EPA's pollutant-specific PSD regulations “fulfill the goals and purposes” set forth in sections 160 and 101 of the Act. We construed the term “fulfill the goals and purposes,” as used in section 166(c), to mean that EPA should apply the goals and purposes listed in section 160 as factors applicable to pollutant-specific PSD regulations established under section 166. The Agency's view is that PSD measures that satisfy the specific goals and purposes of section 160 also satisfy the more general purposes and goals identified in section 101 of the Act.

See

72 FR 54122.

One commenter disagreed with our interpretation that the goals and purposes of section 160 also satisfy all of those in section 101. This commenter asserted that although there is some overlap between the two sections, they are not identical. As an example, the commenter noted that section 101 expressly states that a primary goal of the Act is to promote pollution prevention—a goal not stated in section 160. The commenter asserted that, although the proposed increments would limit some pollution increases, there was no provision in the proposal that would require or promote pollution prevention.

We disagree with the commenter and continue to believe that measures that satisfy the specific goals and purposes of section 160 also satisfy the more general purposes and goals identified in section 101 of the Act. As we stated in the 2005 NO

increment rulemaking, the overall goals and purposes of the Act listed in sections 101(b) and 101(c) are general goals regarding protecting and enhancing the nation's air resources and controlling and preventing pollution. Because these broad goals are given more specific meaning in section 160, EPA does not believe it is necessary to consider them in detail when evaluating whether PSD regulations satisfy the criteria in section 166(c). 70 FR 59587 FN 3.

Regarding pollution prevention specifically, we believe that this general goal is encompassed in, and given more specific meaning by, sections 160(1), 160(2), and 160(4) of the Act. These sections spell out the specific purposes under the PSD program for the general section 101 goals of controlling and preventing pollution. We believe that any requirement to limit or reduce emissions serves to promote pollution prevention, which is often the most cost

effective means of lowering pollutant emissions.

In addition to citing the purposes set out in section 160, section 166(c) includes the criterion that pollutant-specific PSD regulations should provide a framework for stimulating improved control technology. As discussed subsequently in sections V.D.1 and V.D.6 of this preamble, we believe that this criterion is fulfilled by the system of increments for PM

2.5

and by the requirement for PSD permittees to apply BACT to minimize PM

2.5

emissions. In stimulating improved control technology generally, these elements of the PSD program also promote pollution prevention. As noted previously, pollution prevention is often the most cost effective means of control, particularly for new sources and new process lines at existing sources. In addition, because BACT is a case-by-case determination that considers cost and collateral environmental impacts, pollution prevention, where technically feasible, often fairs well in BACT analyses because it is typically free from the negative environmental impacts that result from the use of add-on air pollution control devices.

4. Balancing the Factors Applicable Under Section 166(c)

While the eight factors in section 166(c) are generally complementary, there are circumstances where some of the objectives may be in conflict with each other. In these situations, some degree of balance or accommodation is inherent in the requirement to establish regulations that satisfy all of these factors. As first discussed in our 2005 NO

increments rulemaking (70 FR 59582 at 59587), we believe this balancing test derives primarily from the third goal and purpose set forth in section 160: To insure economic growth consistent with the preservation of existing clean air resources. A more detailed discussion of how the balancing of factors should be interpreted is contained in the 2007 NPRM at 72 FR 54122-54123.

One commenter claimed that EPA “incorrectly and repeatedly asserts” that a goal of section 160 of the Act is to insure economic growth. The commenter claimed that neither section 160 nor section 101 of the Act uses language to support a goal of promoting or maximizing opportunities for economic growth. Instead, the commenter asserted that both sections state only that any growth that does occur must be consistent with protection of air quality. The commenter concluded that “EPA's notion that the need to satisfy the other requirements of Section 166 and other goals and purposes in Sections 101 and 160 can never preclude additional emissions from economic growth unlawfully elevates such growth over all other statutory factors.”

The language in section 160(3) provides that one of the purposes of the PSD program is “to insure that economic growth will occur in a manner consistent with the preservation of existing clean air resources.” The commenter suggests that this language can only be read as if the statutory phrase “economic growth” actually said “any economic growth that does occur” such that section 160(3) says “to insure that any economic growth that does occur will occur in a manner consistent with the preservation of existing clean air resources.” We disagree; the phrasing used by Congress is “to insure that economic growth will occur.” Thus, we believe the plain language of the statute supports EPA's reading that section 160(3) requires a balancing of the goals of (1) economic growth and (2) preservation of existing clean air resources. At a minimum, if the language were to be considered ambiguous enough to allow the commenter's reading, then the Agency's interpretation is also a reasonable reading of the statutory language.

5. Authority for States To Adopt Alternatives to Increments

While section 166 of the Act authorizes EPA to promulgate increments for pollutants listed under section 166(a), we have also interpreted the section to allow states to employ approaches other than increments to prevent significant deterioration of air quality, so long as such an approach otherwise meets the requirements of sections 166(c) and 166(d). This interpretation was explained in the 2005 NO

increment rulemaking (70 FR 59611-59612), in which we amended the PSD regulations at 40 CFR 51.166 by adding new paragraph (c)(2) to codify this statutory authority. Under the existing provision in 40 CFR 51.166(c)(2), states may seek EPA approval of SIPs that use an alternative approach to increments if the State can demonstrate that the alternative program satisfies the requirements of sections 166(c) and 166(d). However, the current language at paragraph (c)(2) states the authority for states to adopt alternative measures only with respect to increments for NO

. To clarify our interpretation that the authority to adopt alternative measures covers any pollutant listed in section 166(a), we are revising 40 CFR 51.166(c)(2) to make it inclusive to all applicable pollutants rather than just NO

Two commenters supported our proposal to revise paragraph (c)(2) to include PM

2.5

, while four State/local agency commenters expressed opposition. An environmental commenter agreed that the Act allows for other approaches, but believes that such approaches must be in addition to the national increments. Specifically, this commenter stated that “although EPA can provide for states to adopt approaches in addition to increments in order to fulfill the statutory purposes, the agency must make clear that states cannot adopt approaches that are less protective that the national increments.” This commenter further stated that “to the extent that EPA is suggesting that it can allow states to adopt PSD programs that do not include the minimum Federal increments, that position is contrary to the statute.”

As in the 2005 NO

increment rulemaking, we are codifying the basic principle that states can seek to use alternative measures without defining any specific type of alternative program that would be approved or otherwise creating standards beyond the requirements of sections 166(c) and 166(d). Instead, we plan to make determinations on a case-by-case basis when a State submits a specific alternative approach for EPA to approve as part of a SIP. In making those determinations, we will address the specific alternative measures as states propose them to the Agency in light of the requirements of sections 166(c) and 166(d), including whether the alternative program is “at least as effective as the increments established in section 163,” as required in section 166(d).

The four State/local agency commenters opposing the revision to 40 CFR 51.166(c)(2) expressed the importance of using uniform national increments for PM

2.5

. One commenter argued that a nationally inconsistent approach to PM

2.5

in attainment areas could result in a patchwork of State PSD regulations—and the exact kinds of economic repercussions that Congress wished to avoid. The same commenter argued that varying increment-equivalent measures could also result in an uneven playing field for industry and could exacerbate difficulties between states experiencing transport problems.

Another opposing commenter was concerned that allowing states to adopt alternatives to increments would likely lead to a “mish-mash” of State approaches which defeats the intention of Congress that there be uniformity in PSD rules to avoid economic

dissimilarities from State to State that could allow interstate competition for industry based upon which State offers the best (least expensive) environmental compliance regulations. Another commenter objected to allowing the use of alternatives to increments by stating that such alternative allowances undermine the desired national consistency, and EPA has failed to even identify any Act programs which would benefit from this approach.

While we acknowledge the potential problems identified by the commenters associated with allowing states to adopt alternative approaches to the numerical increments that we are establishing, we also note that section 166(d) expressly gives EPA some latitude in promulgating regulations that will be at least as effective as the increments in section 163, by stating that such regulations “may contain air quality increments, emission density requirements, or other measures.” Thus, EPA is authorized to provide that states may consider alternatives to the increments established in this rule. That said, the statutory authority is not a blank check for states to do as they please, but enables states to consider options that may provide a meaningful way for them to manage their air resources within the framework allowed by the statutory PSD requirements.

D. Framework for Pollutant-Specific PSD Regulations for PM

2.5

In the 2007 NPRM, we proposed to apply the same basic framework for pollutant-specific PSD regulations for PM

2.5

that we used in our 2005 NO

increments regulations. Specifically, we proposed adopting an increment and area classification system for PM

2.5

and applying the statutory AQRV review process to PM

2.5

as well. We also indicated that while some of the factors applicable under section 166(c) are fulfilled by using this type of framework for pollutant-specific PSD regulations under section 166(a) of the Act, this framework of regulations also needs to satisfy the other applicable factors. Thus, the details of our regulations (such as the characteristics of the increments themselves) are important, and we evaluated the effectiveness of the framework in conjunction with more detailed elements of our regulations. As discussed in the following subsections, we believe our obligations under section 166(c) of the Act are satisfied when the PSD regulations collectively satisfy the factors applicable under 166(c) of the Act.

1. Increment System

An increment-based program satisfies the requirements under 166(c) to provide “specific numerical measures against which permit applications may be evaluated.” An increment is the maximum allowable level of ambient pollutant concentration increase that is allowed to occur above the applicable baseline concentration in a particular area. As such, an increment defines “significant deterioration.” Establishing an increment system for PM

2.5

will fulfill two of the factors applicable under section 166(c): (1) Providing specific numerical measures to evaluate permit applications, and (2) stimulating improved control technology.

First, under section 165(a)(3) of the Act, a permit applicant must demonstrate that emissions from the proposed construction and operation of a facility “will not cause, or contribute to, air pollution in excess of any (A) maximum allowable increase or maximum allowable concentration for any pollutant * * *.” Once the baseline date associated with the application for the first new major stationary source or major modification in an area is established, the new emissions from that source consume a portion of the increment in that area, as do any subsequent emissions increases that occur from any source in the area. When the maximum pollutant concentration increase defined by the increment has been reached, additional PSD permits cannot be issued until sufficient amounts of the increment are “freed up” via emissions reductions that may be required by the reviewing authority. Thus, an increment is a quantitative value that establishes a “maximum allowable increase” for a particular pollutant. It functions, therefore, as a specific numerical measure that can be used to evaluate whether an applicant's proposed project will cause or contribute to air pollution in excess of allowable levels.

Increments also satisfy the second factor in section 166(c) by providing “a framework for stimulating improved control technology.” Increments establish an incentive to apply improved control technologies in order to avoid violating the increment and to “free up” available increment to promote continued economic growth. These control technologies may become the basis of BACT determinations elsewhere, as the technologies become more commonplace and the costs tend to decline.

One commenter stated that, although increments may encourage the use of existing control technologies, EPA has not cited any evidence that increments actually stimulate the development of improved technologies. Moreover, the commenter asserted that even if increments provide the incentive asserted by EPA, any encouragement of improved control technology is wholly incidental and hardly amounts to a “framework” whose purpose is to stimulate such technology.

We continue to believe that the total program, encompassing increments and BACT, does provide an appropriate framework to stimulate BACT in such a way that it is not simply “wholly incidental,” as the commenter claims. The fact that economic growth in an area must occur within a defined amount of allowable air quality deterioration should logically lead to the application of improved pollution control technology as the amount of deterioration increases, and should not be regarded as an incidental consequence. As stated in the 2007 NPRM, Congress envisioned that the increments they originally established would serve as an incentive: “The incremental ceiling should serve as an incentive to technology, as a potential source may wish to push the frontiers of technology in a particular case to obtain greater productive capacity with the limits of the increments.” S. Rep. 95-127 at 18, 30 (3 LH at 1392, 1404). We, too, believe that as the available increment in an area becomes smaller, and as states try to preserve some of the remaining increments for future growth, it will be necessary to require sources to install more stringent controls in that area. Such levels of control ultimately must be considered in subsequent BACT evaluations in other PSD areas throughout the country. Admittedly, the increasing stringency of control technologies over time, as observed in EPA's BACT/Lowest Achievable Emission Rate (LAER) Clearinghouse, supports but cannot in itself conclusively demonstrate that the PSD program has already stimulated development of improved control technology; there are undoubtedly a number of factors that could cause such trends. Nevertheless, even the need to require a more stringent BACT determination in only a few PSD areas (due to dwindling increment availability) necessitates consideration of that level of control for all other PSD sources wherever they may decide to locate. In any event, while the commenter generally questions the effectiveness of the increments as an incentive for tightening BACT, they provided no evidence that more stringent BACT is not related to the

increment system established as an integral part of the PSD program.

2. Area Classifications

In this final rule, EPA is establishing the same three-tiered area classification system for PM

2.5

that is applicable to the increments for NO

and other pollutants under the PSD program and the Act. Accordingly, areas that are currently Class I for other pollutants will also be Class I for PM

2.5

and all other areas will be Class II for PM

2.5

unless we redesignate the area based on a request by a State or tribe pursuant to the process in section 164 of the Act and EPA's regulations at 40 CFR 51.166(g) and 52.21(g).

As explained earlier in section IV.E.1, Class I areas are areas where very clean air is most desirable. In contrast, Class III areas are designed as those areas in which a State wishes to permit the highest relative level of industrial development, and thus allow the largest incremental increase in pollution. Areas that are not especially sensitive and where states have not provided for a higher level of industrial growth are classified as Class II. When Congress established this three-tiered scheme for SO

and PM, it intended that Class II areas be subject to an increment that allows “moderately large increases over existing pollution.” H.R. Rep. 95-294, 4 LH at 2609.

Establishing increments at different levels for each of the three area classifications helps to fulfill two of the factors applicable under section 166(c) of the Act. First, establishing the smallest increments in Class I areas helps fulfill EPA's obligation to establish regulations that “preserve, protect, and enhance the air quality” in parks and special areas. Class I areas are primarily the kinds of parks and special areas covered by section 160(2) of the Act. Second, by providing for two additional area classifications with increment levels that are higher but still protective, the area classification system helps satisfy the goal in section 160(3) of the Act that EPA “insure that economic growth will occur in a manner consistent with preservation of clean air resources.” In those areas where clean air resources may not require as much protection, more growth is allowed. By employing an intermediate level (Class II areas) and higher level (Class III areas), this classification scheme helps ensure that growth can occur where it is needed (Class III areas) without putting as much pressure on existing clean air resources in other areas where some growth is still desired (Class II areas).

By requesting that EPA redesignate an existing Class II area to Class III, states may accommodate economic growth and air quality in areas where the Class II increment is too small to allow the siting of new or modified sources. The procedures specified by the Act for such a redesignation require a commitment by the State government to create such an area, extensive public review, local government participation in the SIP area redesignation process, and a finding that the redesignation will not result in the applicable increment being exceeded in a nearby Class I or Class II area.

See

sections 164(a) and (b) of the Act. (No State has yet requested a Class III redesignation.) The EPA believes that the three-tiered classification system has allowed for economic growth, consistent with the preservation of clean air resources.

However, an area classification system alone may not completely satisfy the factors applicable under section 166(c) of the Act. The increment that is employed for each class of area is also relevant to an evaluation of whether the area classification system achieves the goals of the PSD program. We briefly discuss the characteristics of increments in section V.E.5.

One commenter took issue with our assessment of the two factors that we believe a classification system helps to fulfill. As discussed previously in section V.C.4, the commenter asserted that EPA has unlawfully interpreted section 160(3) of the Act to elevate economic growth over all other statutory factors. As explained in greater detail in section V.C.4, we disagree that our interpretation elevates economic growth over other factors, and believe that the plain language of the statute supports EPA's reading that section 160(3) requires a balancing of the goals of (1) economic growth and (2) preservation of existing clean air resources.

The commenter also stated that EPA has failed to demonstrate that the classification system and safe harbor increments, in combination with the other elements of the regulatory framework, will “preserve, protect, and enhance the air quality” in parks and special areas as required under section 160(2) of the Act. These comments and our response to them are found in section V.E.6 of this preamble where we discuss our evaluation of the safe harbor increments.

3. Permitting Procedures

Two of the factors applicable under section 166(c) are fulfilled by the case-by-case permit review procedures that are built into our existing PSD regulations. The framework of our existing PSD regulations employs the preconstruction permitting system and procedures required under section 165 of the Act. These requirements are generally reflected in 40 CFR 51.166 and 52.21 of EPA's PSD regulations. These permitting and review procedures, which apply to construction of new major sources and to major modifications, fulfill the goals set forth in sections 160(4) and 160(5) of the Act. These goals require that PSD programs in one State not interfere with the PSD programs in other states and that PSD programs assure that any decision to permit increased air pollution is made after careful evaluation and public participation in the decision-making process. For the same reasons discussed in our proposal for the pollutant-specific NO

increments regulations (70 FR 8896, February 23, 2005), we believe these factors are also fulfilled for PM

2.5

by employing the permit review procedures.

4. AQRV Review by Federal Land Manager and Reviewing Authority

In this final rule, we apply the existing requirements to evaluate impacts on AQRVs in Class I areas (

see

existing 40 CFR 51.166(p) and 52.21(p)) to PM

2.5.

The existing requirements for an AQRV review, which Congress applied to SO

and TSP, provide Federal land managers (FLMs) with the responsibility to review source impacts on site-specific AQRVs in Class I areas and to bring any alleged adverse impacts to the attention of the reviewing authority. Under an increment approach, we consider this review to be an additional measure that helps satisfy the factors in sections 166(c) and 160(2) which require EPA's pollutant-specific PSD regulations to protect (1) air quality values, and (2) parks and other special areas, respectively.

Two State/local agency commenters supported our proposal to apply the requirements to evaluate impacts on AQRV in Class I areas to PM

2.5

review. However, one commenter indicated that FLM review does not and cannot assure the prevention of all significant PM

2.5

-related deterioration because it applies only to the construction or modification of very large stationary sources (

e.g.,

factories and power plants) affecting Class I areas. This commenter pointed out that Class I areas do not include Bureau of Land Management wilderness and wilderness study areas (encompassing more than 15 million acres), 341 of the nation's 390 national park units (only 49 national parks are Class I), and many U.S. Forest Service lands (including a number of wilderness areas). The commenter added that FLM

review does not help to fulfill section 160(2)'s goal of preserving and protecting air quality in “other areas of special national or regional natural, recreational, scenic, or historic value,” such as State and local parks, wildlife refuges, recreation areas, lakes, and historic areas, none of which are Class I areas. In addition, the commenter noted that FLM review does not apply to emissions increases from sources of PM

2.5

and precursor pollution other than major stationary sources, such as motor vehicles and non-major industrial sources (which are sources that emit substantial amounts of PM

2.5

and precursors).

Alabama Power

Costle,

636 F.2d 323, 362 (D.C. Cir. 1979) (

Alabama Power

) (expressly recognizing that “[s]ignificant deterioration may occur due to increased emissions from unregulated minor sources.”).

The commenter also asserted that FLM review is of limited reach even where it does apply. Under the current PSD regulations, a State must consider an FLM's objections and must justify its decision in writing when it disagrees with those objections, but the State can still issue a PSD permit over those objections unless emissions are predicted to cause an exceedance of the applicable increment. The commenter believes that, given these limitations, EPA cannot plausibly claim that the existing provision for FLM review ensures the preservation, protection, and enhancement of air quality for parks and natural areas throughout the nation as required by section 160(2) of the Act.

In our rulemakings addressing PSD for NO

, EPA extended the AQRV review procedures set forth in 40 CFR 51.166(p) and 52.21(p) to cover NO

. These AQRV review procedures were established based on section 165(d) of the Act, and they were originally applied only in the context of the statutory increments for PM and SO

. However, because they also address many of the factors applicable under section 166(c) of the Act, EPA also applied them to NO

through regulation. In this final rule, we are amending the existing PSD regulations to extend, as proposed, the AQRV review procedures to include PM

2.5

by explicitly including PM

2.5

in the regulatory text that now simply references “particulate matter.”

See

new 40 CFR 51.166(p)(4) and 52.21(p)(5).

Section 165(d) creates a scheme in which the FLM and reviewing authority must review the impacts of a proposed new or modified source's emissions on AQRVs. The Act assigns to the FLM an “affirmative responsibility” to protect the AQRVs in Class I areas. This is in notable contrast to the reviewing authority's responsibility for protecting the increments—including Class I increments. The FLM may object to or concur in the issuance of a PSD permit based on the impact, or lack thereof, that new emissions may have on any affected AQRV that the FLM has identified and for which information is available to the general public. If the proposed source's emissions are shown not to cause or contribute to a violation of a Class I increment, the FLM may still prevent issuance of the permit by demonstrating to the satisfaction of the reviewing authority that the source or modification will have an adverse impact on AQRVs. Section 165(d)(2)(C). On the other hand, if the proposed source is shown to cause or contribute to a violation of a Class I increment, the reviewing authority (State or EPA) shall not issue the permit unless the owner or operator demonstrates to the satisfaction of the FLM that there will be no adverse impact on AQRVs.

Thus, the showing of compliance with the increment determines whether the FLM or the permit applicant has the burden of satisfactorily demonstrating whether or not the proposed source's emissions would have an adverse impact on AQRVs.

In any event, the FLM plays an important and material role by raising these issues for consideration by the reviewing authority, which in the majority of cases will be the State.

Even if such a waiver of the Class I increment is allowed upon a finding of no adverse impact, the source must comply with such emissions limitations as may be necessary to ensure that alternative increments specified in the rules for SO

or PM are not exceeded. The alternative increments are generally at the level of the Class II increments, with the lone exception being a more restrictive 3-hour increment for SO

. Section 165(d)(2)(C)(iv). The EPA made this provision applicable to the PSD provisions for NO

at the level of the NO

Class II increment (53 FR 3704; 53 FR 40656) and substituted the PM

Class II increments for the statutory alternative PM increments, which were based on TSP (58 FR 31622). This final rule expands this provision to include the PM

2.5

Class II increments as well.

See

40 CFR 51.166(p)(4) and 52.21(p)(5).

In response to concerns that Class I increment would hinder growth in areas surrounding the Class I area, Congress established Class I increments as a means of determining where the burden of proof should lie for a demonstration of adverse effects on AQRVs.

See

Senate Debate, June 8, 1977 (3 LH at 725).

Extending the AQRV review procedures of the PSD regulations to PM

2.5

helps to provide protection with respect to potential adverse effects from PM

2.5

for parks and special areas (which are generally the Class I areas subject to this review) not afforded by the increment system alone. As discussed later, we believe the factors applicable under section 166(c) of the Act can be fulfilled when the review of AQRVs is applied in conjunction with increments and other aspects of our PSD regulations. In those cases where the increment is not violated and the reviewing authority agrees that a proposed project will adversely affect AQRVs, the parks and other special areas will be protected by denying issuance of the permit or by requiring the applicant to modify the project to alleviate the adverse impact.

We read the legislative history to show that Congress intended the AQRV review provisions of section 165(d) to provide a special layer of protection, beyond that provided by increments. The Senate committee report stated the following:

A second test of protection is provided in specified Federal land areas (Class I areas), such as national parks and wilderness areas; these areas are also subjected to a review process based on the effect of pollution on the area's air quality related values.”

S. Rep. 95-127, at 17, 4 LH at 1401.

As we stated in the NO

increment rule, we believe the term “air quality values” should be given the same meaning as “air quality related values.” Legislative history indicates that the term “air quality value” was used interchangeably with the term “air quality

value” (AQRV) regarding Class I lands.

See

S. Rep. 95-127, at 12, reprinted at 3 LH at 1386, 1410 (describing the goal of protecting “air quality values” in “Federal lands—such as national parks and wilderness areas and international parks,” and in the next paragraph and subsequent text using the term “air quality related values” to describe the same goal);

id.

at 35, 36 (“The bill charges the Federal land manager and the supervisor with a positive role to protect

air quality values

associated with the land areas under the jurisdiction of the [FLM]” and then describing the statutory term as “air quality related values”). H.R. Report 95-564 at 532 (describing duty of Administrator to consider “air quality values” of the tribal and State lands in resolving an appeal of a tribal or State redesignation, which is described in the final bill as “air quality related values”).

The commenter is correct that the FLM (or AQRV) review applies only to Class I areas, and not to other “special” areas such as the numerous State and local parks and some other areas that could be seen as being covered by the protective purposes of section 160(2) of the Act. This level of coverage by FLM review to protect AQRVs was established by Congress when it enacted the PSD program, including the purposes set out in section 160(2). Thus, we conclude that Congress believed that the special areas not designated as Class I areas were properly addressed by the other elements of the PSD program. As discussed further in the next section, one such element is the requirement for sources to conduct an “additional impacts analysis,” which includes an

analysis of the impacts on visibility, soils, and vegetation of the proposed source and associated growth, regardless of the classification of the area impacted by the source. Note also that states have the option under the Act of designating additional areas as Class I areas and providing for AQRV review for these State Class I areas if they believe that there are areas within their borders that merit such protection.

The commenter is not correct in saying that the review to protect AQRVs does not apply to emissions increases from sources other than major stationary sources. While it is generally true that a major stationary source may trigger the analysis as part of the required PSD review for new major stationary sources and major modifications where such source's emissions increase may affect a Class I area, the review itself includes the impacts on an AQRV of other emissions in the area, including emissions from non-major sources. In addition, states may adopt requirements in their State implementation plans to require certain minor sources seeking a permit to undergo an AQRV analysis if they choose to do so.

We agree with the commenter that the AQRV review has certain limitations in that a State can, under some circumstances, issue a PSD permit over the objection of the FLM. Here again, Congress enabled this outcome when it provided that a permit would not be issued when the FLM demonstrates “to the satisfaction of the State” that the source will have an adverse impact on AQRVs in a Class I area. Section 165(d)(2)(C)(ii). We read this provision to reflect Congress's judgment on the appropriate balance between State and FLM discretion in the reach of AQRV review. That said, when a reviewing authority declines to follow a determination of adverse impact by the FLM, the reviewing authority is expected to provide a rational basis for doing so, and a reviewing authority's rejection of an FLM's finding may not be arbitrary and capricious. As stated by EPA's Environmental Appeals Board in

In the Matter of: Hadson Power 14—Buena Vista,

4 E.A.D. 258, 1992 WL 345661 (October 5, 1992)(in Section II.A):

States do not have unfettered discretion to reject an FLM's adverse impact determination. If a State determines that an FLM has not satisfactorily demonstrated an adverse impact on AQRVs from the proposed facility, the State must provide a “rational basis” for such a conclusion, “given the FLMs' affirmative responsibility and expertise regarding the Class I areas within their jurisdiction.” 50 FR 28549, July 12, 1985. Arbitrary and capricious rejections of adverse impact determinations are not sustainable. (citations omitted).

In sum, the commenter correctly enumerated some of the limitations of the AQRV review under the Act. However, such review is only one element of the full PSD program, which must be evaluated against the statutory requirements in their entirety. We continue to believe, as previously stated, that under an increment approach, FLM review for AQRV impacts is an additional measure that helps satisfy the factors in sections 166(c) and 160(2) of the Act (which require EPA's pollutant-specific PSD regulations to protect (1) air quality values, and (2) parks and other special areas, respectively) in balance with the other statutory factors. We add that the AQRV review requirements of the existing regulations mirror these requirements in the Act, which reflect Congress' judgment of how AQRV review should properly be used to promote the purposes of the program as set out in section 160 of the Act.

5. Additional Impacts Analysis

The “additional impacts analysis” requirements set forth in our part 51 and 52 PSD regulations also help fulfill the criteria and goals and purposes in sections 166(c) and 160. The additional impacts analysis involves a case-by-case review of potential harm to visibility, soils, and vegetation in Class II and III areas that could occur from the construction or modification of a PSD source.

Sections 51.166(o)(1) and 52.21(o)(1) of the PSD regulations require that a permit provide the following analysis:

An analysis of the impairment to visibility, soils and vegetation that would occur as a result of the source or modification and general commercial, residential, industrial and other growth associated with the source or modification. The owner or operator need not provide an analysis of the impact on vegetation having no significant commercial or recreational value.

This requirement was based on section 165(e)(3)(B) of the Act, which provides that EPA establish regulations that require “an analysis of the ambient air quality, climate and meteorology, terrain, soils and vegetation, and visibility at the site of the proposed major emitting facility and in the area potentially affected by emissions from such facility * * *.”

As mentioned in the previous section, one commenter argued that the provisions for protection of Class I areas are of no help in fulfilling the goal set forth in section 160(2) of the Act to preserve and protect air quality in the countless “other areas of special national or regional natural, recreational, scenic, or historic value” such as State and local parks, wildlife refuges, recreation areas, lakes and historic areas, none of which were originally defined by Congress as Class I areas.

We acknowledge that the special provisions for protecting Class I areas are not applicable for protecting areas that are not designated as “Class I.” However, we believe that the “additional impacts analysis” provisions are especially helpful for satisfying the requirements of section 166(c) in Class II and Class III areas, including the types of areas described by the commenter, that are not Class I areas but are worthy of special protection beyond what might be provided by the NAAQS and increments. 40 CFR 51.166(o) and 52.21(o). These areas are not subject to the special AQRV review that applies only in Class I areas. While the additional impacts analysis is not as intensive a review as the AQRV analysis required in Class I areas, the requirement to consider impairments to visibility, soils, and vegetation through the additional impacts analysis contributes to satisfying the factors applicable under section 166(c) of the Act in all areas, including Class II and Class III areas.

6. Installation of BACT

The requirement that new sources and modified sources subject to PSD apply BACT is an additional measure that helps to satisfy the factors in sections 166(c), 160(1), and 160(2) of the Act. This requirement, based on section 165(a)(4) of the Act, is already included in EPA's PSD regulations for all pollutants generally and thus, in the 2007 NPRM we considered it to be a part of the regulatory framework for the Agency's pollutant-specific regulations for PM

2.5

. 40 CFR 51.166(j) and 52.21(j). Our existing regulations define “best available control technology” as “an emission limitation * * * based on the maximum degree of reduction for each pollutant subject to regulation under the Act * * * which the Administrator, on a case-by-case basis, taking into account energy, environmental, and economic impacts and other costs, determines is achievable for such source through application of production processes or available methods, systems, and techniques * * *.” 40 CFR 51.166(b)(12) and 52.21(b)(12). This pollutant control technology requirement, in practice, has required significant reductions in the pollutant emissions increases from new and modified sources while also stimulating the on-going improvement of control

technology. The control of PM

2.5

emissions through the application of BACT helps to protect air quality values, public health and welfare, and parks and other special areas.

E. Final PM

2.5

Increments

Based on our evaluation of the effects of PM

2.5

and a balancing of the criteria in section 166(c) of the Act (and the incorporated goals and purposes of the Act contained in section 101 and the statutory PSD program in section 160 of the Act), EPA has concluded that the “safe harbor” increments for PM

2.5

(which satisfy section 166(d) of the Act) are sufficient to fulfill the criteria in section 166(c) when combined with the other measures described earlier that we apply to PM

2.5

. Since several of the eight factors applicable under section 166(c) are satisfied by adopting the framework and other measures described earlier, our development of these increments for PM

2.5

was guided by the four remaining factors that may not be fully satisfied by the framework and other measures: (1) Protecting AQRVs; (2) protecting the public health and welfare from reasonably-anticipated adverse effects; (3) protecting the air quality in parks and special areas, and (4) insuring economic growth.

In accordance with the “contingent safe harbor” approach, to determine the specific characteristics of the proposed increments, we first established safe harbor increments representing the level of effectiveness necessary to satisfy the “at least as effective as” requirement in section 166(d) of the Act and then conducted further analysis to determine if additional measures are necessary to fulfill the requirements of section 166(c).

We have paraphrased these factors here and in other sections to facilitate the explanation of our reasoning. However, we recognize, as we did in our regulation for NO

, that the statutory language is broader than the shorthand we use here for convenience.

1. Identification of Safe Harbor Increments

Using the percentage-of-NAAQS approach under proposed Option 1, as explained in section V.C.2 of this preamble, we derived the following safe harbor increments for PM

2.5

Averaging period

NAAQS

(µg/m

)

Increments (µg/m

)

Class I

Class II

Class III

Annual

24-hour

The table shows PM

2.5

NAAQS levels (primary and secondary NAAQS) at 15 µg/m

for the annual averaging time and 35 µg/m

for the 24-hour averaging time.

See

40 CFR 50.7. From these NAAQS levels, we calculated the safe harbor increments based on the same percentages that were used by Congress to establish the original PM increments (measured as TSP) in section 163 of the Act,

i.e.,

6.6 percent of the NAAQS for Class I areas, 25 percent of the NAAQS for Class II areas, and 50 percent of the NAAQS for Class III areas. We have concluded that increments with these characteristics are sufficient to satisfy the requirement in section 166(d) that we adopt increments (or other PSD regulations) that are “at least as effective as” the increments established in section 163 of the Act.

See EDF

EPA,

898 F.2d at 188, 190.

Nine commenters supported proposed Option 1, either explicitly or implicitly supporting our method of calculating the safe harbor increments used to develop increments for PM

2.5

. One of these commenters, while agreeing with the safe harbor increment approach under Option 1, disagreed with our analysis of the adequacy of the safe harbor increments, as discussed in other sections of this preamble. One commenter who opposed Option 1 (based on the belief that section 166(a) of the Act is not the appropriate basis for PM

2.5

increments) nevertheless supported the percentage-of-NAAQS approach for developing PM

2.5

increments under the statutory authority at section 166(f).

A commenter who opposed our proposal to calculate increments using percentages of the NAAQS argued that this approach for setting the PM

2.5

increments is not scientifically supported. This commenter indicated that basing the PM

2.5

increments on the same percentage of the NAAQS that were used to set PM

increments based on the TSP NAAQS ignores the relationship between PM

and PM

2.5

emissions, which may be much different than the relationship between TSP and PM

emissions. The commenter argued that, because the ratio of PM

2.5

to PM

emissions is 0.8, it appears that using the percentages proposed by EPA would indirectly restrict PM

/TSP emissions and air quality impacts to proportionally lower levels than the PM

increments in order to avoid exceeding the PM

2.5

increments. The commenter conceded that using the 0.8 factor to set PM

2.5

increments may seem too high, but asserted that using the safe harbor approach would set increments for PM

2.5

that are too low.

We conclude that the commenter is mistaken in saying that the PM

2.5

increments use the same percentage of the NAAQS that were used to set the PM

NAAQS. We adopted the PM

increments using the “equivalent substitution” approach set forth under section 166(f) of the Act. Under that approach, rather than calculating the PM

increments as specific percentages of the PM

NAAQS (using the same percentages that Congress used for setting the statutory increments for PM and SO

), EPA determined the levels of the PM

increments that could represent an equivalent amount of increment consumed, as if the TSP increments were still in effect.

See

58 FR 31622, June 3, 1993, at 31626-31627. Nevertheless, the commenter is correct that, in cases where the ratio of PM

2.5

to PM

emissions is 0.8 for an individual source, the source may have to reduce its PM

emissions more than would otherwise be necessary to meet the PM

increments in order to control its PM

2.5

emissions sufficiently to meet the safe harbor PM

2.5

increments.

This is because the safe harbor PM

2.5

increments are less than 80 percent of the PM

increments. For example, the Class II 24-hour PM

2.5

safe harbor increment (9 µg/m

) is only 30 percent of the corresponding PM

increment (30 µg/m

Note that the PM

increment may still be more limiting in areas where much of that increment has already been consumed.

The underlying reason that the safe harbor PM

2.5

increments are so much less than the PM

increments is that the PM

2.5

NAAQS are much less than the PM

NAAQS.

This is the result of the evolution in our knowledge about the health and welfare effects of PM, in particular the effects of the fine PM

represented by PM

2.5

. We believe that it is fitting for PM

2.5

increments to reflect our greater knowledge about PM

2.5

effects (as embodied in the NAAQS), rather than to simply maintain the control level required by the PM

increments as suggested by the commenter. If this results in PM

2.5

increments that are more limiting than PM

increments, we believe that this outcome is appropriate in light of our statutory requirement to prevent significant deterioration of air quality as it relates to PM

2.5

The 24-hour PM

2.5

NAAQS (35 µg/m

) is about 23 percent of the 24-hour PM

NAAQS (150 µg/m

2. Data Used by EPA for the Evaluation of the Safe Harbor Increments for PM

2.5

We evaluated whether measures other than the safe harbor increments are necessary by analyzing primarily the scientific and technical information on the health and welfare effects of PM

2.5

contained in the June 2005 OAQPS Staff Paper which accompanied the last full review of the PM NAAQS completed in 2006.

The review completed in 2006 updated the previous review, which began in 1994 and resulted in revised standards for PM in 1997.

Section 166(a) of the Act provides that EPA establish pollutant-specific PSD regulations, such as increments, after the establishment of a NAAQS for the applicable pollutants. The Act provides that EPA will promulgate new PSD regulations under section 166, including new increments if appropriate, within 2 years from the promulgation of any NAAQS after 1977. Within that time frame, the health and welfare information used for the setting of the NAAQS would also be “current” for purposes of establishing pollutant-specific PSD regulations. We believe this timing reflects congressional intent that EPA consider the same body of information concerning a pollutant's health and welfare effects when it promulgates the NAAQS and subsequent PSD increments (or other measures) defining significant air quality deterioration for the same pollutant. However, when we used that same information as the basis for our proposed pollutant-specific PSD regulations, we evaluated that information under the legal criteria in section 166 of the Act rather than the criteria in section 109 applicable to the promulgation of NAAQS.

See EDF

EPA,

898 F.2d at 190.

At the time of our proposal of PM

2.5

increments, we had just completed a review of the PM

2.5

NAAQS. Thus, the information used in the NAAQS review was current and timely for purposes of establishing pollutant-specific PSD regulations for PM

2.5

. On October 17, 2006, based primarily on considerable new data on the air quality and human health effects for PM

2.5

directly, EPA revised the primary and secondary NAAQS to provide increased protection of public health and welfare by retaining the level of the annual standard and tightening the level of the 24-hour standard from 65 to 35 μg/m

while retaining the 24-hour PM

NAAQS and revoking the annual PM

NAAQS. The information contained in both the 2004 Criteria Document and 2005 Staff Paper that was used for the latest review of the PM NAAQS was also considered for the purpose of evaluating the PM

2.5

increments that we have established in this final rule.

The 2004 Criteria Document and 2005 Staff Paper are the products of a rigorous process that is followed to validate and interpret the available scientific and technical information, and provided the basis for recommending the PM

2.5

NAAQS. In accordance with the Act, the NAAQS process begins with the development of “air quality criteria” under section 108 for air pollutants that “may reasonably be anticipated to endanger public health or welfare” and that come from “numerous or diverse” sources. Section 108(a)(1). For each NAAQS review, the Administrator must appoint “an independent scientific review committee composed of seven members of the National Academy of Sciences, one physician, and one person representing State air pollution control agencies,” known as the Clean Air Scientific Advisory Committee (CASAC). Section 109(d)(2)(A). The CASAC is charged with recommending revisions to the criteria document and NAAQS, and advising the Administrator on several issues, including areas in which additional knowledge is required to appraise the adequacy and basis of existing, new, or revised NAAQS. Section 109(d)(2)(B),(C).

“Air quality criteria” must reflect the latest scientific knowledge on “all identifiable effects on public health or welfare” that may result from a pollutant presence in the ambient air. Section 108(a)(2). The scientific assessments constituting air quality criteria generally take the form of a “criteria document,” a rigorous review of all pertinent scientific studies and related information. The EPA also develops a “staff paper” to “bridge the gap” between the scientific review and the judgments the Administrator must make to set standards.

See Natural Resources Defense Council

EPA

(“

NRDC ”

), 902 F.2d 962, 967 (D.C. Cir. 1990). Both documents undergo extensive scientific peer review as well as public notice and comment.

See, e.g.,

62 FR 386542.

3. Scope of Effects Considered

The effects of ambient PM

2.5

concentrations may include effects from secondarily-formed PM

2.5

. Thus, when we analyzed the data in this rulemaking, we evaluated the health and welfare effects of both direct PM

2.5

and secondarily-formed PM

2.5

that may result from the transformation of other pollutants such as SO

and NO

. This was consistent with the approach we described for addressing these effects in the review of our pollutant-specific NO

increments regulations. 70 FR 59590.

4. Evaluation of the Health and Welfare Effects of PM

2.5

Airborne PM is not a specific chemical entity, but rather is a mixture of liquid and solid particles from different sources and of different sizes, compositions, and properties. Particle size distributions show that atmospheric particles exist in two classes: Fine particles and coarse particles. The indicator for fine particles is PM

2.5

, which represents that population of particles that is mostly less than 2.5 micrometers in size. The indicator for thoracic coarse particles is “PM

10-2.5

,” which represents particles sized between 2.5 and 10 micrometers. In the last two reviews of the PM NAAQS, EPA concluded that these two indicators, because of their different sources, composition, and formation processes, should be treated as separate subclasses of PM pollution for purposes of setting ambient air quality standards.

Fine PM is derived directly from combustion material that has volatilized and then condensed to form primary PM or from precursor gases, such as SO

and NO

, reacting in the atmosphere to form secondary PM. Major components of fine particles are sulfates, strong acid, ammonium nitrate, organic compounds, trace elements (including metals), elemental carbon, and water. Primary and secondary fine particles have long lifetimes in the atmosphere (days to weeks) and travel long distances (hundreds to thousands of kilometers). They tend to be uniformly distributed over urban areas and larger regions, especially in the eastern United States. As a result, they are not easily traced back to their individual sources.

a. Health Effects

The EPA reported important progress since the last PM NAAQS review in advancing our understanding of potential mechanisms by which ambient PM

2.5

, alone and in combination with other pollutants, is causally linked to a

number of key health effects. The more extensive and stronger body of evidence used by EPA to study the health effects of PM

2.5

in our latest review identified a broader range of effects than those previously documented, involving premature mortality and indices of morbidity (including respiratory hospital admissions and emergency room visits, school absences, work loss days, restricted activity days, effects on lung function and symptoms, morphological changes, and altered host defense mechanisms) associated with both long-term and short-term exposure to PM

2.5

. A more detailed discussion of the health effects associated with PM

2.5

is contained in the 2007 NPRM. 72 FR 54127-54128. In addition, an overview of the scientific and technical evidence considered in the 2004 Criteria Document and 2005 Staff Paper can be found in our proposed rule for revising the NAAQS for PM (71 FR 2619, January 17, 2006).

b. Welfare Effects

Ambient PM alone, and in combination with other pollutants, can have a variety of effects on public welfare. While visibility impairment is the most noticeable effect of fine particles present in the atmosphere, both fine and coarse particles can have other significant welfare-related effects, including effects on vegetation and ecosystems, materials (

e.g.,

soiling and corrosion), and climate change processes.

In reaching our decision in 2006 to revise the suite of PM secondary standards, EPA factored in several key conclusions from the scientific and technical information contained in the 2004 Criteria Document and 2005 Staff Paper. These conclusions included the following: (1) PM-related visibility impairment is principally related to fine particle levels, and most directly related to instantaneous levels of visual air quality associated with short-term averaging periods; (2) PM

2.5

concentrations can be used as a general surrogate for visibility impairment in urban areas; (3) any secondary NAAQS for visibility protection should be considered in conjunction with the regional haze program as a means of achieving appropriate levels of protection against PM-related visibility impairment in urban, non-urban, and Class I areas nationwide; (4) the available evidence is not sufficient to support distinct secondary standards for fine or coarse particles for any non-visibility related welfare effects; and (5) the secondary standards should be considered in conjunction with protection afforded by other programs intended to address various aspects of air pollution effects on ecosystems and vegetation, such as the acid deposition program and other regional approaches to reducing pollutants linked to nitrate or acidic deposition.

In this rulemaking, EPA has reviewed the scientific and technical information concerning welfare related effects considered in the 2004 Criteria Document and 2005 Staff Paper to determine whether there is any basis for modifying the safe harbor increments developed for PM

2.5

to satisfy the criteria under sections 166(c) and 160 of the Act. Our review included information on visibility impairment, and effects on vegetation and other ecosystem components, materials and soiling, and climate changes. A detailed discussion of the various welfare effects we considered for evaluating the safe harbor increments for PM

2.5

is contained in the 2007 NPRM. 72 FR 54128-54133.

5. Fundamental Elements of Increments

As we have previously noted, under the model established in the Act and prior EPA regulations, the function of an increment is not like that of the NAAQS in that an increment is not intended to set a uniform ambient pollutant concentration “ceiling” across the United States.

See

70 FR 59600. Instead, while both increments and NAAQS generally serve to limit ambient air pollution levels, increments are designed to allow a uniform amount of pollutant concentration increase for each area in the United States having a particular classification,

i.e.,

Class I, II, or III. The amount of the allowable increase is measured against a baseline air quality level that is typically different for each particular area.

Because the baseline air quality level varies from one location to another, and is not established for a particular area until a source proposing to construct in that area submits a complete PSD permit application, it is not possible to determine what the maximum ambient pollutant concentration attainable will be for a given area (to be used to determine the protection afforded by an increment against potential adverse environmental effects) until the specific baseline air quality level is known.

It should be noted, however, that an increment does not allow air pollution levels in an area to increase beyond the ambient concentration of a pollutant that would exceed the level allowed by the NAAQS.

For the reasons described in our NO

increments rule, our objective is to establish uniform increments, consistent with the increments for SO

and PM originally established by Congress, that allow the same level of deterioration for each area of the country having the same classification. 70 FR 59601. It is important to understand that increments are not intended to reduce ambient concentrations of an air pollutant below existing baseline levels in each area, but rather to define a level of allowable increase in pollutant concentrations above baseline levels, and to identify the level at which “significant” deterioration occurs for each area, in accordance with its specific classification. 70 FR 59600.

6. Evaluation of the Safe Harbor Increments

As indicated earlier (in section V.E.2 of this preamble), mindful of the considerations made about the fundamental characteristics of the increments, we reviewed the scientific and technical evidence available for the 2005 review of the NAAQS for PM in order to determine whether, and to what extent, the “safe harbor” increments might need to be modified in order to protect air quality values, health and welfare, and parks while insuring economic growth consistent with the preservation of clean air resources in accordance with sections 166(c) and 160 of the Act. As we did in our evaluation of the safe harbor NO

increments (70 FR 59603-59606), we relied on an approach that evaluates how protective the safe harbor PM

2.5

increments are by comparing the marginal pollutant concentration increases allowed by the safe harbor increment levels against the pollutant concentrations at which various environmental responses occur.

We analyzed the available evidence from both a quantitative and qualitative perspective to reach a decision about whether we should modify the contingent safe harbor PM

2.5

increments and whether we have sufficient information to select a specific alternative level, averaging time, or pollutant indicator for the increments. As a result of our analysis, we proposed to conclude that it was not necessary to modify the safe harbor increments to protect human health, address non-visibility welfare effects, or further protect visibility. This analysis is described in detail in the 2007 NPRM.

After considering the comments on our evaluation of the safe harbor increments and the conclusions we reached in the 2007 NPRM (summarized in the following paragraphs), we continue to believe that the safe harbor increments for PM

2.5

(which satisfy section 166(d) of the Act) are sufficient to fulfill the criteria in section 166(c) of the Act (and the incorporated goals and purposes of the Act in section 101 and the PSD program in section 160) when

combined with the other measures described earlier that we apply to PM

2.5

. Consequently, this final rule establishes the PM

2.5

increments at the level of the proposed safe harbor increments.

An environmental group submitted extensive comments arguing that the PM

2.5

safe harbor increments are not sufficient to meet the Act's requirements for PSD and that our analysis was inadequate, and two other commenters submitted more narrowly targeted comments in this area. A summary of the major comments, along with our responses, follows. A more detailed treatment of the comments can be found in the Response to Comments document for this rulemaking, which is available in the rulemaking docket.

Docket No. EPA-HQ-OAR-2006-0605 can be accessed on line at

http://www.regulations.gov.

The environmental group commenter stated that EPA has not complied with section 166(c) of the Act because the Agency has not made a finding or demonstrated that the PM

2.5

PSD rules will (as required by section 160(2) of the Act) preserve, protect, and enhance the air quality in parks and special areas. The commenter asserted that EPA offered only vague assertions that the proposed increments would “satisfy” the statutory factors and that they, along with other programs, would “help” to fulfill the statutory purposes. The commenter went on to argue that EPA sought to excuse its failure to show fulfillment of the statutory purposes by asserting that it cannot develop a uniform, quantitative, dose-response relationship between fine particle levels and certain ecosystem impacts (citing 72 FR 54134), but that, even if true, such a claim does not excuse the agency from satisfying its statutory duty under section 166(c).

We conclude that the 2007 NPRM demonstrated that the safe harbor increments, in combination with the other aspects of the regulatory framework, fulfill the statutory requirements despite the scientific uncertainties. We reiterate that finding today. The fact that we did not, in the 2007 NPRM, explicitly state this as a finding does not diminish the demonstration made there and reiterated in this preamble.

The environmental group commenter believes that the relationship between PM

2.5

and adverse effects can be quantified to a greater extent than stated by EPA. Regarding acid rain and other adverse ecological impacts, the commenter asserted that critical loads can be established as a way of quantifying and limiting the PM

2.5

contribution to degradation, and noted that critical loads are now used by authorities in Europe, have been endorsed by leading North American scientists, and have been used by Federal land management agencies. To comply with section 166(c), the commenter believes that EPA must establish a mechanism to supplement the nationally uniform increments with additional measures, including a requirement to establish area-specific critical loads or equally protective limits, where necessary to protect and enhance air quality in specific parks and natural areas.

With regard to the critical load concept, we agree conceptually with the commenter that critical loads could be used to supplement the existing increments, especially as a means of protecting the known sensitive ecosystems within Class I areas. While we disagree that the critical loads concept can be used as an effective replacement to increments for limiting air quality degradation, we believe that the concept offers considerable promise in helping to protect sensitive receptors in specific Class I areas. However, we do not believe that it would be appropriate at this time to establish a requirement for area-specific critical loads under the PSD program. In our 2005 PSD rule for NO

increments, we indicated that states could propose using information on critical loads as part of their approach for managing air quality in their individual SIP-approved PSD programs, but sufficient information was not yet available for EPA to incorporate the use of critical loads into the national PSD program.

See

70 FR 59613.

The concept of critical loads is useful for estimating how much pollution a particular ecosystem can experience on a prolonged basis without showing adverse effects. In addition to addressing the opportunity for using critical loads under its NO

increment rule, EPA has addressed the concept of critical loads in the last review of the PM NAAQS and currently in the secondary NO

/SO

NAAQS review.

To date in the United States, critical loads have had their primary application in the area of atmospheric deposition of sulfur (S) and nitrogen (N). In the last review of the PM NAAQS, EPA found that ambient PM was contributing to the total load of pollutants entering the U.S. ecosystem annually. However, the review also concluded that there were “insufficient data for the vast majority of U.S. ecosystems that differentiate the PM contribution to total N [nitrate] or S [sulfate] deposition to allow for practical application of this approach as a basis for developing national standards to protect sensitive U.S. ecosystems from adverse effects related to PM deposition.” The 2005 Staff Paper for the PM NAAQS, in reaching this conclusion, addressed various important factors, including (1) the lack of a long-term, historic database of annual speciated PM deposition rates to establish relationships between PM deposition and ecosystem responses; (2) uncertainty in predicting the amount of PM deposited to sensitive receptors from measured concentrations of PM in the ambient air; and (3) the unique nature of each ecosystem and the current inability to extrapolate with confidence any effect from one ecosystem to another. The 2005 Staff Paper recommended that EPA give serious attention to the critical load concept and recommended the collection of data from a “greater variety of ecosystems over longer time scales to determine how ecosystems respond to different loading rates over time.” 2005 Staff Paper at page 7-19.

In the 2005 OAQPS Staff Paper reviewing the NAAQS for PM, EPA cited the following accepted definition of “critical load”: “quantitative estimate of an exposure to one or more pollutants below which significant harmful effects on specified sensitive elements of the environment do not occur according to present knowledge.”

See

page 6-45.

The review of the secondary NAAQS for NO

and sulfur oxides (SO

), which is currently underway, is evaluating ecological effects due to the atmospheric deposition of NO

and SO

. The two main targeted effects are acidification and nutrient enrichment in both aquatic and terrestrial ecosystems. This review is attempting to use critical loads to evaluate the impact of current depositional loads and alternative loads in several case study areas. However, as mentioned earlier, the estimation of ecosystem critical loads expressed in terms of PM requires long-term ecosystem-level data on speciated PM deposition rates for which an adequate database is currently lacking for most sites in the United States.

The environmental group commenter also asserted that the safe harbor increments would allow PM

2.5

air quality to deteriorate to the level of the NAAQS in many locations. According to the commenter's analysis, at 55 percent of the locations with PM

2.5

monitors that were not already exceeding the PM

2.5

NAAQS, 24-hour PM

2.5

concentrations would be allowed to increase up to the level of the NAAQS. In addition, the analysis showed that for 84 percent of locations not already exceeding the NAAQS, the 24-hour PM

2.5

concentrations would be allowed to increase to a level of 30 μg/

or more. The commenter believes that allowing such levels would not be protective of public health, given that we stated in the 2007 NPRM that we had previously found that PM

2.5

concentrations less than a range of 30-35 μg/m

(24-hour average) were protective of public health (citing 72 FR 54128).

The environmental group commenter's analysis showed similar results for the proposed annual PM

2.5

increments. The commenter asserted that PM

2.5

concentrations would be allowed to increase up to the level of the annual NAAQS in 55 percent of the locations that are currently in attainment, and that 87 percent of these sites would be allowed PM

2.5

concentrations of 12 μg/m

or higher. Again, the commenter believes that allowing annual concentrations at or above 12 μg/m

would not be protective of public health, based on our statement in the 2007 NPRM that we had previously found that PM

2.5

concentrations less than a range of 12-15 μg/m

(annual average) were protective of public health (citing 72 FR 54128).

We do not believe that increments must be set at levels that ensure that the full amount of increment will be available in all locations. The statutory provisions in the PSD program have always been clear that a source must demonstrate that it will comply with both the NAAQS and increments for any pollutant. Consistent with congressional intent, the PSD program does not allow a source to violate the NAAQS just because its emissions will not cause the increments to be exceeded. If the increments were to be developed in such a way that all areas, taking into account current ambient air quality status, would be able to utilize the full amount of increment, then the increment levels would have to be unnecessarily stringent in areas that are substantially cleaner than levels allowed by the NAAQS.

Congress recognized that all areas of the country might not be able to utilize the full amount of increment when they provided provisions within the Act requiring that both the NAAQS and increments must continue to be met at all times. In areas where the full amount of increment is not available due to levels of pollution approaching the NAAQS, states may need to require emissions reductions at existing sources to accommodate the desired amount of economic growth. Hence, we do not believe it is reasonable to unduly restrict economic growth in cleaner areas by setting more restrictive increments to help maintain air quality levels below the NAAQS in areas which are currently only marginally attainment.

In addition, we disagree with the commenter's assertion that the increments will not protect public health. In setting the PM

2.5

NAAQS at 35 μg/m

(24-hour) and 15 μg/m

(annual), EPA concluded that these levels protect public health with an adequate margin of safety. Regardless of the level at which the increments are set, no source is permitted to cause the NAAQS to be exceeded. That is, as noted previously, the upper bound on the permissible concentration of PM

2.5

is determined by the increment or the NAAQS, whichever is more restrictive in each particular case. Thus, the entire framework of the PM

2.5

regulations, including the safe harbor increments, is protective of public health. In asserting otherwise, the commenter has misconstrued our statements in this regard.

In the 2007 NPRM section on the health effects of PM

2.5

(72 FR 54127-54128), we discussed the fact that we considered setting the 24-hour NAAQS in the range of 30 to 35 μg/m

and the annual NAAQS in the range of 12 to 15 μg/m

. However, we concluded in setting the NAAQS that 35 μg/m

(24-hour) and 15 μg/m

(annual) are protective of public health with an adequate margin of safety. We did not say, nor do we believe, that PM

2.5

concentrations must be below 30 μg/m

(24-hour average) or 12 μg/m

(annual average) to protect public health.

The environmental group commenter believes that there is a quantifiable relationship between visibility impairment and PM

2.5

levels, citing the 2007 NPRM discussion (72 FR 54135) as well as the most recent Criteria Document and Staff Paper for PM

2.5

. The commenter pointed out that in the 2007 NPRM (72 FR 54135), EPA observed that the proposed Class II short-term safe harbor increment of 9 μg/m

, if combined with the estimated daily background levels in most areas (

i.e.,

10 μg/m

), would be below the minimum values recommended in the 2005 Staff Paper for the secondary short-term standard for PM

2.5

(which was 20 μg/m

). Rather than supporting the adequacy of 9 μg/m

as an increment level to protect visibility, the commenter believes that this shows that the safe harbor increment is inadequate because consumption of an increment of 9 μg/m

combined with background levels alone would cause an area to reach within 1 μg/m

of the staff-recommended value of 20 μg/m

. The commenter added that most areas would have PM

2.5

pollution from motor vehicles and stationary sources in concentrations substantially greater than background levels, easily placing these areas above 20 μg/m

(citing the 2005 Staff Paper at 2-77).

The environmental group commenter went on to assert that the safe harbor PM

2.5

increments will not be sufficient to protect visibility in parks and other natural areas. In the 2007 NPRM, we stated that a 24-hour average PM

2.5

concentration of 20 μg/m

correlates to a visual range of approximately 25 to 35 kilometers. 72 FR 54129. The commenter asserted that this visual range distance falls far short of what the National Park Service considers to be good visibility for national parks, adding that the National Park Service has stated that visibility used to be 90 miles (145 km) on average in eastern parks, and 140 miles (225 km), on average in western parks.

The commenter stated that the safe harbor increments would allow parks and other natural areas to experience PM

2.5

pollution that is correlated with a 25-35 km visual range.

The commenter cited

http://www.nps.gov/shen/naturescience/visibility_and_haze.htm

for historic visibility in national parks.

The visibility impairment issue is more complex than suggested by the environmental group commenter. In addition to predicting what the maximum ambient change in air quality is for a particular area, a visibility impairment assessment considers such things as the frequency, magnitude, and duration of visibility impacts in order to conclude that an adverse impact will occur.

In addition, the environmental group commenter misconstrued the illustration we included in the 2007 NPRM. We noted that the lowest level we considered as a secondary PM

2.5

NAAQS was 20 μg/m

, which was considered to address visibility issues in urban areas. We also noted that in most areas, the estimated 98th percentile of daily background concentrations is less than 10 μg/m

. In adding the Class II safe harbor increment (9 μg/m

) to the 98th percentile of background levels, we were simply showing that even in the worst case, the combination of the safe harbor increment and background PM

2.5

would not exceed the most stringent level we considered for the secondary PM

2.5

NAAQS. The commenter presented this rough, worst-case calculation as if it represented the typical situation that would result from the safe harbor increments. In addition, the environmental group commenter's statements do not apply to parks and special areas that are classified as Class

I areas because the safe harbor increments for such areas are much lower.

Another commenter stated that the proposed 24-hour Class I increment (2 μg/m

) would not be protective of AQRVs, particularly visibility. This commenter noted that the National Park Service uses a 5 percent change in light extinction from estimated natural conditions as the threshold for “adverse impacts” to Class I visibility. The commenter indicated that depending on the constituents of the ambient PM

2.5

and the humidity, a concentration of 2 μg/m

in a typical Class I area would result in a change in light extinction ranging from 13 to 80 percent in the Western United States and from 8 to 50 percent in the Eastern United States and, therefore, would likely constitute “adverse impacts” to Class I visibility. While acknowledging that the FLM may still determine that the visibility in the Class I area is adversely affected by an increase in concentration that is less than the increment, this commenter pointed out that we stated in the 2007 NPRM that “generally speaking an increment should not be so large that it routinely results in substantially more pollution in Class I areas than is generally acceptable under the AQRV approach” (citing 72 FR 54135). The commenter concluded that the proposed 24-hour PM

2.5

increment does not meet this test and recommended that EPA set a lower PM

2.5

24-hour increment.

This commenter appears to have identified a worst-case scenario in terms of increment concentrations, and although we agree with the visibility impacts related to those concentrations discussed in the comment, we do not believe the proposed increment level compromises the protection of visibility or other AQRVs. Although the “AQRV test” uses 5 percent light extinction as a screening threshold, the determination of adverse impact is made on a case-by-case basis taking into account the geographic extent, intensity, duration, frequency, and time of visibility impairment and how these factors correlate with visitation to the Class I area. The suggestion that the 5 percent threshold is routinely exceeded by PSD sources or that an absolute worst-case scenario is occurring to the geographic extent, intensity, duration, and frequency that would warrant an adverse impact determination is unsupported, especially considering the relatively few adverse impact determinations that have been made in the past. It is, however, important to note that the AQRV analysis is independent of the PSD increment analysis; whether or not the increment is projected to be exceeded does not determine the need for an AQRV analysis. The determination that a facility does or does not cause an adverse impact on a Class I area is not solely contingent upon the PSD increment, so we do not believe that lowering the proposed increment is necessarily more protective of the AQRV.

With respect to these two commenters' concerns about visibility protection, we continue to believe that the increments cannot be expected to be the sole means of protecting various welfare concerns. In the 2007 NPRM, we stated that “visibility protection in Class I areas is more adequately provided by the AQRV process.” Congress defined AQRVs to specifically include visibility and left it for the FLMs to define other special attributes of Class I areas that warranted special protection. We also noted that Congress has established several visibility programs that target emissions reductions to achieve desired visibility benefits.

See

72 FR 54135. Collectively, these protective programs, along with the totality of the PSD program, offer an effective means of addressing unique local problems that cannot be addressed solely by uniform national increments.

However, the environmental group commenter asserted that these other programs will not fulfill the statutory purposes. As discussed previously in sections V.D.4 and 5, the commenter does not believe that FLM review in the AQRV process and the air quality impacts analysis required by section 165(a) of the Act are adequate. We disagree;

see

sections V.D.4 and 5 for more detail on the comments and our responses.

The environmental group commenter also noted that we cited the regional haze program as a justification for adopting less protective PSD rules (referring to 72 FR 54135), but the commenter pointed out that the haze program applies only to Class I areas and does not apply at all to the majority of the nation, which is Class II. The commenter further noted that we stated in the 2007 NPRM that “some State and local governments have also developed programs to improve visual air quality in specific urban areas” (citing 72 FR 54135), and pointed out that we gave no specific information on such programs, nor any information about the visibility protection that they provide beyond that provided by the proposed increments. The commenter asked that we identify the specific State and local programs, and that we specify how much visibility protection such programs are providing.

The commenter is correct that the regional haze program directly addresses only Class I areas. As we have discussed before, these are the areas that Congress defined as deserving of the most protection under PSD, including the visibility protection provisions in subpart 2 of title I, part C of the Act, which is the statutory basis for the regional haze program. While Class I areas are the target for the regional haze program, we believe that many areas of the nation will receive collateral visibility benefits from this program. As emissions of the pollutants that cause regional haze are reduced, many areas in the paths of transport will benefit. In addition, as discussed previously in section V.D.5 of this preamble, PSD applicants must prepare an analysis of “other impacts,” including visibility impacts, in areas other than Class I areas.

Regarding State and local visibility programs, in the 2005 Staff Paper EPA described several existing programs to improve visual air quality in urban areas. These programs were located in Denver, CO; Phoenix, AZ; and Lake Tahoe, CA. Also, the states of California and Vermont have each established standards to protect visibility.

See

the 2005 Staff Paper, pages 6-17 through 6-23.

The environmental group commenter cited the 2007 NPRM (72 FR 54135) where we said that the use of “distinct PM increments for visibility protection is not the most effective means of addressing the visibility problem.” The commenter believes that this claim is based on false premises, including the idea (discussed previously) that other programs effectively protect visibility nationwide, and the idea that the only option is a “distinct” PM increment for visibility protection. As to the latter, the commenter stated that EPA can strengthen the safe harbor increment to ensure visibility protection and need not adopt a separate “visibility” increment. In addition, the commenter asserted that EPA has ignored the statutory mandate that the PSD rules fulfill the statutory goals and purposes, and that we cannot shirk that statutory duty merely because we claim some other type of action would be “more effective.”

We continue to believe that Class I area visibility protection under the PSD program is appropriately addressed via the AQRV process. As mentioned previously, Congress explicitly included “visibility” as an AQRV for which FLMs would have an affirmative responsibility to protect in Class I areas under their jurisdictions. Where the FLM successfully demonstrates that there

would be an adverse impact on the AQRV (

e.g.,

visibility), a State cannot issue a PSD permit, even when the source's emissions do not violate the PM

2.5

increments. In addition, we continue to believe that the analysis of other impacts, including visibility, in non-Class I areas is the appropriate means of addressing visibility protection in these areas, as envisioned by Congress when it enacted the PSD provisions of the Act.

As a result, we do not believe it is necessary to create a distinct increment (

e.g.,

with a different averaging period) or to lower the safe harbor increments to protect visibility in urban, non-urban, or Class I areas across the United States. We reach this conclusion in proper consideration of the other, more direct approaches being used to address visibility problems in the United States. The primary such approach, the regional haze program, is within the PSD framework for PM

2.5

. Note that part C of title I of the Act, “Prevention of Significant Deterioration of Air Quality,” includes subpart 2, which is the statutory basis for the regional haze program. Regarding our consideration of other State and local visibility protection measures that are outside the PSD framework, we do not believe it is reasonable to disregard these area-specific measures that focus on the preferences of individual communities where a uniform national increment for visibility protection generally cannot.

The environmental group commenter also stated that the proposed PSD rules fail to ensure fulfillment of the “enhancement goal” set out in the Act. The commenter noted that section 101(a) states as the Act's first purpose: “to protect and enhance the quality of the Nation's air resources,” while section 160(2) states that the purpose of the PSD program is to “preserve, protect, and enhance” air quality in parks and other special areas. The commenter asserted that the proposed rule did not address these enhancement requirements or explain how the proposed increments would fulfill those requirements.

This same issue was raised in the 2005 PSD rule affirming the NO

increments. At that time we expressed our belief that the goal to enhance air quality in national parks and wilderness areas is implemented through the regional haze program while the PSD program focuses on preserving and protecting air quality in these areas. However, when a PSD increment violation is identified, we agree that EPA may require a State to revise its SIP to correct the violation.

See

40 CFR 51.166(a)(3). Otherwise, we do not interpret these PSD provisions to authorize us to direct states in their SIPs to achieve reductions in emissions from existing sources for PSD purposes.

We recognized at that time, and continue to believe, that the growth management goals of PSD may also be fulfilled when the states adopt controls on existing sources that would reduce emissions and allow growth from new sources and major modifications to existing sources without causing significant deterioration. Under the increment approach, we have interpreted the PSD rules to allow states to require reductions from existing sources in order to expand the allowable increments and, thereby, allow for more growth under the PSD program. However, we have never required states to do so because, in the absence of an increment violation, we do not believe section 166 and other provisions in part C of title I of the Act give us the legal authority to mandate such reductions for PSD purposes.

Another commenter stated that the PM

2.5

increments should be twice the recommended levels because scientific studies do not support the need for such low levels for protection of health and welfare. The commenter believes that increments at the proposed levels would jeopardize the goal of providing opportunities for economic growth. The commenter expressed concern over EPA's use of epidemiologic studies and questioned the ability of such studies to provide a reliable evaluation of health risks. The commenter claimed that epidemiologic studies are capable of finding association between a substance or exposure and a health effect but rarely capable of determining if there is causation, while toxicological studies using randomized trials are specifically designed to determine causation. The commenter added that other factors providing evidence for causation include dose-response relationships, consistency, and repeatability of studies, which the commenter said are not present in the studies cited by EPA. The commenter specifically referred to two studies, acknowledged by EPA to show no evidence of a dose-response relationship gradient between PM

2.5

and specific health related effects.

We disagree with the commenter's recommendation that the increments should be twice the proposed (and final) levels. The scientific studies to which the commenter referred pertain to studies that EPA used to determine the health-based NAAQS for PM

2.5

, and we do not believe it is relevant to this rule to respond to comments related to the setting of the NAAQS. The NAAQS are designed to protect public health and welfare; increments then are intended to insure that air quality in clean areas is not allowed to deteriorate significantly, and the PSD regulations insure that any such deterioration does not lead to air pollution levels that exceed the levels defined by the NAAQS.

As discussed previously, we are finalizing this rulemaking using the safe harbor approach under section 166(a) of the Act. Using this approach, we calculated the “safe harbor” increments as percentages of the NAAQS comparable to the percentages that Congress used to establish the original statutory increments for PM and SO

. These values represent the level of effectiveness necessary to satisfy section 166(d) of the Act, and could be tightened if necessary based on further analysis to determine if

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