# Implementation of the 2008 National Ambient Air Quality Standards for Ozone: State Implementation Plan Requirements > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A2013-13233 ## Record - **Collection:** Federal Register - **Document type:** Proposed Rule - **Published:** June 6, 2013 - **Citation:** 78 FR 34178 ## Text ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 50, 51, 70 and 71 [EPA-HQ-OAR-2010-0885, FRL-9810-3] RIN 2060-AR34 Implementation of the 2008 National Ambient Air Quality Standards for Ozone: State Implementation Plan Requirements AGENCY: Environmental Protection Agency (EPA). ACTION: Proposed rule. SUMMARY: The EPA is proposing a rule for implementing the 2008 ozone national ambient air quality standards (NAAQS) (the “2008 ozone NAAQS”) that were promulgated on March 12, 2008. This proposed rule addresses a range of state implementation plan requirements for the 2008 ozone NAAQS, including requirements pertaining to attainment demonstrations, reasonable further progress (RFP), reasonably available control technology (RACT), reasonably available control measures (RACM), new source review (NSR) requirements in nonattainment areas, emission inventories, and the timing of state implementation plan (SIP) submissions and of compliance with emission control measures in the SIP. Other issues also addressed in this proposed rule are the revocation of the 1997 ozone NAAQS and anti-backsliding requirements that would apply when the 1997 ozone NAAQS is revoked. DATES: Comments. Comments must be received on or before August 5, 2013. Public Hearings. The EPA plans to hold one public hearing concerning the proposed rule in Washington, DC. The date, time and location will be announced separately. Please refer to SUPPLEMENTARY INFORMATION for additional information on the comment period and the public hearings. Information Collection Request. Under the Paperwork Reduction Act (PRA), comments on the information collection provisions must be received by the Office of Management and Budget (OMB) on or before July 8, 2013. ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2010-0885, by one of the following methods: • www.regulations.gov: Follow the on-line instructions for submitting comments. • Email: a-and-r-docket@epa.gov. • Mail: Air and Radiation Docket and Information Center, Attention Docket ID No. EPA-HQ-OAR-2010-0885, Environmental Protection Agency, 1301 Constitution Ave. NW., Washington, DC 20460. Mail Code: 2822T. Please include two copies if possible. In addition, please mail a copy of your comments on the information collection provisions to the Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), Attn: Desk Officer for EPA, 725 17th St. NW., Washington, DC 20503. • Hand Delivery: Air and Radiation Docket and Information Center, Attention Docket ID No. EPA-HQ-OAR-2010-0885, Environmental Protection Agency in the EPA Headquarters Library, Room Number 3334 in the EPA West Building, located at 1301 Constitution Ave. NW., Washington, DC. The EPA/DC Public Reading Room is open from 8:30 a.m. to 4:30 p.m. Eastern Standard Time (EST), Monday through Friday, Air and Radiation Docket and Information Center. Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-2010-0885. The EPA's policy is that all comments received will be included in the public docket without change and may be made available on-line at www.regulations.gov, including any personal information provided, unless the comment includes information claimed to be confidential business information (CBI) or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through www.regulations.gov or email. The www.regulations.gov Web site is an “anonymous access” system, which means the EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an email comment directly to the EPA without going through www.regulations.gov, your email address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, the EPA recommends that you include your name and other contact information in the body of your comment and with any CD you submit. If the EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, the EPA may not be able to consider your comment. Electronic files should avoid the use of special characters and any form of encryption and be free of any defects or viruses. For additional information about the EPA's public docket, visit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm. For additional instructions on submitting comments, go to the SUPPLEMENTARY INFORMATION section of this document. Docket: All documents in the docket are listed in www.regulations.gov. Although listed in the index, some information is not publicly available, i.e., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically in www.regulations.gov or in hard copy at the Air and Radiation Docket and Information Center in the EPA Headquarters Library, Room Number 3334 in the EPA West Building, located at 1301 Constitution Ave. NW., 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. FOR FURTHER INFORMATION CONTACT: For further general information on this rulemaking, contact Dr. Karl Pepple, Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency, by phone at (919) 54l-2683, or by email at pepple.karl@epa.gov; or Mr. Butch Stackhouse, Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency, phone number (919) 54l-5208, or by email at stackhouse.butch@epa.gov. For information on the public hearings, contact Ms. Pamela S. Long at (919) 541-0641 or by email at long.pam@epa.gov. SUPPLEMENTARY INFORMATION: I. General Information A. Does this action apply to me? Entities potentially affected directly by this proposal include state, local and tribal governments. Entities potentially affected indirectly by this proposal include owners and operators of sources of emissions (volatile organic compounds (VOCs) and nitrogen oxides (NO X )) that contribute to ground-level ozone formation. B. What should I consider as I prepare my comments for the EPA? 1. Submitting CBI. Do not submit CBI information to the EPA through www.regulations.gov or email. Clearly mark the part or all of the information that you claim to be CBI. For CBI information on a disk or CD ROM that you mail to the EPA, mark the outside of the disk or CD ROM as CBI and then identify electronically within the disk or CD ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed to be CBI must be submitted for inclusion in the public docket. Information marked CBI will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. 2. Tips for Preparing Your Comments. When submitting comments, remember to: • Identify the rulemaking by docket number and other identifying information (subject heading, Federal Register date and page number). • Follow directions—The agency may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number. • Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes. • Describe any assumptions and provide any technical information and/or data that you used. • If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced. • Provide specific examples to illustrate your concerns, and suggest alternatives. • Explain your views as clearly as possible, avoiding the use of profanity or personal threats. • Make sure to submit your comments by the comment period deadline identified. C. 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 notice will be posted at http://www.epa.gov/air/ozonepollution/actions.html#impl. D. What information should I know about possible public hearings? The EPA intends to hold one public hearing on this proposal. Further details concerning the public hearing for this proposed rule will be published in a separate Federal Register notice. For updates and additional information on the public hearings, please check the EPA's Web site for this rulemaking at http://www.epa.gov/air/ozonepollution/actions.html#impl. E. How is this notice organized? The information presented in this notice is organized as follows: I. General Information A. Does this action apply to me? B. What should I consider as I prepare my comments for the EPA? C. Where can I get a copy of this document and other related information? D. What information should I know about possible public hearings? E. How is this notice organized? II. Background for Proposal A. The 2008 Ozone NAAQS B. The Challenge of Ozone Implementation C. History of Implementation Rules for the 1997 Ozone NAAQS D. Section 110 SIP Requirements E. Part D Nonattainment Area SIP Requirements III. What are the state implementation plan requirements for the 2008 ozone NAAQS? A. What is the deadline for submitting nonattainment area SIP elements due under Clean Air Act (CAA or Act) section 182 for the 2008 ozone NAAQS? B. What are the requirements for modeling and attainment demonstration SIPs? C. What are the RFP requirements for the 2008 ozone NAAQS? D. How do RACT and RACM requirements apply for 2008 ozone NAAQS nonattainment areas? E. Does the 2008 ozone NAAQS result in any new inspection and maintenance (I/M) programs? F. How does transportation conformity apply to the 2008 ozone NAAQS? G. What requirements for general conformity apply to the 2008 ozone NAAQS? H. What are the requirements for contingency measures in the event of failure to meet a milestone or to attain? I. How do the NSR requirements apply for the 2008 ozone NAAQS? J. What are the emission inventory and emission statement requirements? K. What are the ambient monitoring requirements? L. How can states qualify for a 1-year attainment deadline extension? M. How will the EPA address transport of ozone and its precursors for rural nonattainment areas, multi-state nonattainment areas and international transport? N. How will the section 182(f) NO X provisions be handled? O. Emissions Reduction Benefits of Energy Efficiency/Renewable Energy Policies and Programs, Land Use Planning and Travel Efficiency P. Efforts To Encourage a Multi-Pollutant Approach When Developing 2008 Ozone SIPs Q. How does this proposed rule apply to tribes? R. What are the requirements for the Ozone Transport Region (OTR)? S. Are there any additional requirements related to enforcement and compliance? T. What are the requirements for addressing emergency episodes? U. How does the “Clean Data Policy” apply to the 2008 ozone NAAQS? V. What assistance programs is the EPA considering for implementation of the 2008 ozone NAAQS? W. What is the deadline for states to submit SIP revisions to address the CAA section 185 penalty fee provision for Severe and Extreme areas? IV. What is the EPA proposing to address anti-backsliding issues related to transition from the 1997 ozone NAAQS to the 2008 ozone NAAQS? A. General Background B. Background on Transition From the 1-Hour to the 1997 Ozone NAAQS C. Background on Nonattainment NSR D. Background on Section 185 Fees E. Background on the Contingency Measures Requirement F. What is the EPA proposing regarding anti-backsliding requirements for the 1-hour and 1997 ozone NAAQS? G. Timing of 1997 Ozone NAAQS Revocation and Related Anti-Backsliding Requirements H. What are the applicable requirements for anti-backsliding purposes during the transition to the 2008 ozone NAAQS? I. Application of Transition Requirements to Nonattainment and Attainment Areas J. Satisfaction of Anti-Backsliding Requirements for an Area K. How will the EPA's determination of attainment (“Clean Data”) regulation apply for purposes of the anti-backsliding requirements? L. What is the relationship between implementation of the 2008 ozone NAAQS and the CAA title V permits program? V. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory 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 Concerning Regulations 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. Determination Under Section 307(d) Appendix A to Preamble—Glossary of Terms and Acronyms Appendix B to Preamble—Relevant Rulemakings Concerning Implementation of the 1997 Ozone NAAQS Appendix C to Preamble—Methods to Account for Non-Creditable Reductions When Calculating RFP Targets for the 2008 Ozone NAAQS Appendix D to Preamble—List of Areas Nonattainment for the 2008 Ozone NAAQS in Addition to a Prior Ozone NAAQS Statutory Authority List of Subjects II. Background for Proposal A. The 2008 Ozone NAAQS On March 12, 2008, 1 the EPA revised the primary NAAQS for ozone, designed to protect public health, to a level of 0.075 parts per million (ppm) (annual fourth-highest daily maximum 8-hour concentration, averaged over 3 years). 2 The secondary NAAQS for ozone, designed to protect public welfare, was simultaneously set at the same level (and with the same averaging time) as the primary NAAQS. Since the 2008 primary and secondary NAAQS for ozone are identical, for convenience, we refer to both as “the 2008 ozone NAAQS” or “the 2008 ozone standard.” 1 73 FR 16436. 2 For a detailed explanation of the calculation of the 3-year 8-hour average, see 40 CFR part 50, Appendix I. On September 16, 2009, the EPA announced 3 that it would initiate a rulemaking to reconsider the 2008 ozone NAAQS for various reasons, including the fact the 0.075 ppm level fell outside of the range for the primary standard recommended by the Clean Air Scientific Advisory Committee. Pending the outcome of that reconsideration, the EPA suspended further work on designating areas, and on classifying and developing implementation guidance for areas that would be designated nonattainment for the 2008 NAAQS. In September 2011, the OMB returned for further consideration the EPA's draft rulemaking to reconsider the 2008 ozone NAAQS. 4 The current primary and secondary NAAQS for ozone thus remains at 0.075 ppm, as established in 2008. The 2008 ozone NAAQS retains the same general form and averaging time as the 0.08 ppm NAAQS set in 1997 but is set at a more stringent level. 3 http://yosemite.epa.gov/opa/admpress.nsf/0/85F90B7711ACB0C88525763300617D0D. 4 Memorandum from Cass R. Sunstein to the former EPA Administrator Lisa Jackson, September 2, 2011. B. The Challenge of Ozone Implementation The EPA and the states, and some local and tribal air agencies, are now proceeding with activities to implement the 2008 ozone NAAQS. In rules finalized on April 30, 2012, and May 31, 2012, the EPA formally designated all areas of the country as attainment/unclassifiable, nonattainment or unclassifiable for the 2008 NAAQS. 5 On April 30, 2012, the EPA also finalized a rule that established the approach for classifying ozone nonattainment areas for the 2008 ozone NAAQS based on their air quality concentrations, as well as the deadline for areas in each classification to achieve the 2008 ozone NAAQS. 6 That rule, referred to as the “Classifications Rule,” also addressed the revocation of the 1997 ozone NAAQS for purposes related to transportation conformity, and reclassification for certain areas in California. Today's proposed rule, referred to as the “SIP Requirements Rule,” addresses a range of additional issues important for implementing the 2008 ozone NAAQS. 5 The EPA designated 46 areas as nonattainment for the 2008 ozone NAAQS. 6 77 FR 30160, May 21, 2012. In this action, the EPA proposes a rule to address the steps states will take to implement the 2008 ozone NAAQS and the timing of those steps. In accordance with Executive Order (EO) 13563 titled, “Improving Regulation and Regulatory Review,” signed by President Barack Obama on January 18, 2011, which directs governmental agencies to offer and support flexible, common sense approaches, this proposed SIP Requirements Rule is intended to provide the health and environmental protections required under the CAA while maximizing flexibility and minimizing burden for states, who are the primary implementing agencies. Achieving the health benefits required by the CAA will require the combined efforts of federal, state, local, and in some cases tribal governments, each accomplishing the tasks for which it is best suited. For the EPA, that means adopting national standards where it makes sense to do so, such as standards to reduce emissions from sectors that are of national concern, such as mobile sources and many types of industries. It also means providing as much assistance and flexibility as possible to the states as they work to develop and implement their attainment plans. In addition, we are mindful that the requirement to implement the 2008 ozone NAAQS comes at a time when many states are facing substantial resource challenges. The EPA is committed to working in partnership with states and other stakeholders to share the burden of implementing the 2008 ozone NAAQS by promulgating a number of national regulations that will provide significant reductions in ozone precursors. In this preamble, we lay out proposed expectations and requirements for implementation of the 2008 ozone NAAQS. As we have considered the elements of implementation of the NAAQS required under the CAA, it has been our goal to propose approaches that provide flexibility and opportunities for efficiency, without jeopardizing expeditious attainment of the public health and welfare goals, and to identify the ways in which the EPA will provide assistance to the states. We invite comment on any and all aspects of this proposed rule, and encourage suggestions that will increase implementation efficiency, allow the most effective pollution control programs to be implemented and identify additional ways in which the EPA can assist the states to reach attainment within the legal framework of the CAA. The CAA was amended in 1990 to add specific provisions that apply to ozone nonattainment areas. These include timelines for both planning and implementation, and numerous mandates for specific programs to reduce emissions. Since that time, the EPA, states and others have gained a great deal of scientific knowledge and increased understanding of issues related to ozone formation and control. Specifically, we know more about how NO X and VOC interact to form ozone and we have better models for evaluating control strategies. This better understanding allows for more strategic approaches in which public health can serve as the key factor in prioritizing control measures. We also have a better appreciation for the role of interstate transport of ozone, international transport of pollutants and background levels of ozone. In the past 20 years, technology has evolved substantially, particularly with respect to mobile sources, with the result that some of the very specific programs mandated for ozone nonattainment areas, such as Stage II Vapor Recovery and vehicle I/M programs, may not provide the benefits they did originally because the problems that they were designed to address have been largely solved in other ways or technology advances make them no longer relevant. New and creative emission reduction approaches, such as energy efficiency and land use programs, are now being explored that have great promise for improved air quality and other benefits, but may not fit easily into the timelines of the CAA or the EPA's traditional expectations for SIPs. Other innovative approaches, such as I/M programs built around next generation testing technologies like onboard diagnostics (OBD), are available now and the EPA will work with states interested in adopting such programs to ensure their effective implementation. The EPA has explored a number of approaches to address the issues discussed above and has identified several ways to achieve emission reductions through national/regional standards and provide states flexibility and assistance in meeting the CAA requirements to increase implementation efficiency while still ensuring the public health and welfare protection achieved by meeting the ozone NAAQS. In subsequent sections of this preamble, we lay out our proposed approaches, but here are a few examples: 1. Federal control measures: States can rely on emission reductions from federal control measures to help areas attain the 2008 ozone NAAQS or to meet other SIP-related objectives, as long as the federal measures achieve their reductions prior to the relevant SIP-related deadlines. Promulgated and planned federal rules include, but are not limited to: (1) Tier 3 emissions standards for on-road motor vehicles; 7 (2) Maximum Achievable Control Technology (MACT) rules that address hazardous air pollutants (HAPs) that are also VOCs, such as rules associated with oil and gas development, internal combustion engines, incinerators, boilers and cement kilns; and (3) consumer product rules. The emission reductions achieved by these federal rules will reduce the amount of emission reductions individual states will need to achieve through state and local regulations in order for areas to attain the 2008 ozone NAAQS. 7 In addition to the planned Tier 3 emission standards, other new and existing mobile source regulations addressing emissions from new heavy-duty vehicles, non-road equipment and engines, locomotives, marine engines and ocean-going vessels will continue to provide additional emissions reductions as the current fleets are replaced with vehicles, equipment and engines that are certified to more stringent emissions standards or engines are re-built to comply with any applicable requirements. 2. Stage II Vapor Recovery: In a separate Federal Register notice (77 FR 28772; May 16, 2012), the EPA determined that onboard refueling vapor recovery was in widespread use throughout the country and, as a result, the EPA exercised its authority under the CAA to waive the mandatory section 182(b)(3) stage II vapor recovery requirement. This waiver allows states, if they determine it appropriate, to discontinue the requirement for gasoline dispensing facilities (GDFs) in Serious and above nonattainment areas to install and operate Stage II vapor recovery systems, and the requirement for states to inspect such systems, resulting in cost savings for both the states and the owners and operators of GDFs. 3. Attainment demonstrations: The EPA is investigating opportunities for easing the burden on states to conduct air quality modeling to demonstrate attainment, particularly for nonattainment areas initially classified as Moderate or reclassified to Moderate for the 2008 ozone NAAQS. The EPA is exploring options such as making available various emissions, meteorological and boundary conditions inputs, and national scale modeling results that were generated in support of EPA rules, that states could reference as part of their attainment demonstrations. 4. Innovative and creative approaches: EO 13563 specifically requires agencies to “seek to identify, as appropriate, means to achieve regulatory goals that are designed to promote innovation.” The EPA is encouraging innovative and creative approaches to reducing emissions such as improvements in energy efficiency and land use programs, especially since many of the more traditional control measures have already been implemented in many areas. The EPA is committed to working in partnership with states to facilitate the incorporation of such approaches into SIPs. Energy efficiency, renewable energy programs, land use planning and travel efficiency are discussed in more detail in section III.O of this preamble. 5. Updated information: The EPA will continue to assist states' implementation efforts by offering a variety of new compilations of information that will be useful to all states. In 2012, the EPA issued an updated “Menu of Control Measures” document which includes information on NO X and VOC control measures, including efficiencies and costs, for a range of source categories. This menu of measures is located at http://www.epa.gov/airquality/ozonepollution/SIPToolkit/ . In addition, the EPA developed a Web site with information on existing local ozone reduction measures (e.g., ozone action days, ridesharing programs) and a forum for the exchange of ideas about potential state and local measures. This control measure Web site is located at http://www.epa.gov/airquality/ozonestrategy/ . General information about SIP implementation requirements is located at http://www.epa.gov/air/ozonepollution/implement.html . Specific information regarding SIP submittal and approval status is located at http://www.epa.gov/airquality/urbanair/sipstatus/ . 6. Emissions offset relief in Economic Development Zones: The EPA will work with states to identify areas within nonattainment areas as zones to which economic development should be targeted. In these zones, the CAA allows new or modified major sources seeking permits to meet emissions growth offset requirements by drawing from a pool of growth allowances established by the state. This will help ensure clean air requirements can be met in a way that is consistent with economic development in low-employment areas and other areas in need of job growth. 7. Rural transport areas: Section 182(h) of the CAA provides a “rural transport” classification for ozone nonattainment areas that are rural in nature and can demonstrate that sources in the area do not make a significant contribution to ozone concentrations measured in the area or in other areas. These areas are subject to Marginal area requirements, regardless of the area's classification under section 181(a), in recognition of that fact. 8. RFP requirements: The EPA is proposing to provide nonattainment areas classified as Moderate and above the flexibility in certain situations to substitute NO X reductions for VOC reductions in their 15 percent RFP plans. We believe that, given the improved scientific understanding of the formation of ozone, it makes sense, wherever possible, to allow states to credit toward the RFP requirement those reductions that an area most needs to reach attainment. 9. Combining submittals: The EPA is proposing, as an option, to allow states to combine SIP submittals where they believe it will reduce administrative burdens, and to adjust timeframes to provide more time for states to conduct some of the necessary rulemaking or program development activities without compromising expeditious progress towards and attainment of the standards. 10. Encouraging early reductions: Under the “Ozone Advance” program, the EPA is working with states, tribes and local governments to ensure they are aware of the advantages of early action and to provide assistance in taking steps to achieve emission reductions in ozone attainment areas and participating Marginal nonattainment areas. Early reductions may help these areas maintain the 2008 ozone NAAQS. The EPA believes there are significant advantages for states, tribes and local governments to take steps to reduce emissions as early as possible. Early reductions can help to maintain or improve existing air quality, which in turn can help to ensure continued health protection and keep an area in attainment or, if eventually designated as nonattainment under a future ozone NAAQS, help bring the area back into attainment. In addition, efforts to improve local air quality can establish working relationships between key stakeholders that can help achieve emission reductions quickly and in ways that make the most sense to the particular community. The EPA will work closely with states and tribes to provide assistance and flexibility in implementing the 2008 ozone NAAQS consistent with the implementation approaches that are adopted in the final implementation rule. The EPA solicits comment on other suggestions commenters may have for this implementation rule that are consistent with the CAA and provide flexibility to the states for common sense implementation that will provide for timely progress towards attainment of the 2008 ozone standard. C. History of Implementation Rules for the 1997 Ozone NAAQS In 2004 and 2005, the EPA promulgated regulations codified in 40 CFR part 51, subpart X, addressing implementation of the 1997 8-hour ozone NAAQS, revocation of the 1979 1-hour ozone NAAQS, and the anti-backsliding requirements that continued to apply for the revoked 1979 standard. See Federal Register publications at 69 FR 23951, April 30, 2004 (the “Phase 1” Rule) and 70 FR 71612, November 29, 2005 (the “Phase 2” Rule). The EPA received several petitions for reconsideration and several parties submitted petitions for judicial review of those rules. The EPA granted reconsideration of several issues and took final action on those issues. Challenges to those reconsideration actions were consolidated with the challenges to the Phase 1 and Phase 2 Rules. The court upheld portions of the Phase 1 Rule but vacated limited portions concerning the classification of areas under subpart 1 of part D of title I of the CAA and the failure to include three anti-backsliding requirements associated with the revoked 1-hour ozone NAAQS. South Coast Air Quality Management District v. EPA, 472 F.3d 882 (D.C. Cir. 2006) ( South Coast ). Although the court upheld only limited challenges, it seemed to vacate the Phase 1 Rule in its entirety. The EPA requested rehearing and clarification of the ruling, and on June 8, 2007, the court clarified that it vacated the rule only to the extent that it had upheld petitioners' challenges. South Coast Air Quality Management District, et al., v. EPA, 489 F.3d 1245 (D.C. Cir. 2007). Thus, only the following provisions of the Phase 1 Rule were vacated: The provisions that classified some 1997 8-hour ozone nonattainment areas under subpart 1, part D, title I of the CAA; and the provisions that did not retain three anti-backsliding obligations associated with the revoked 1-hour ozone NAAQS: nonattainment NSR, section 185 penalty fees and contingency measures for failure to attain or to make reasonable progress toward attainment. 8 The EPA finalized action to re-address the vacated subpart 1 classifications and contingency measures provisions of the Phase 1 Rule. 77 FR 28424, May 14, 2012. The EPA proposed action to re-address the vacated nonattainment NSR provision. 75 FR 51960 (August 24, 2010). We are re-addressing the anti-backsliding requirements for the section 185 fee program for the revoked 1-hour ozone NAAQS and re-proposing further action on the NSR anti-backsliding issues as part of this proposal. 8 The court's June 8, 2007, clarification also confirmed that the December 22, 2006, decision did not establish a requirement that areas continue to demonstrate conformity for the 1-hour ozone NAAQS for anti-backsliding purposes. In the litigation on the Phase 2 Rule, the EPA requested and the court granted a remand of the provision that allowed emission reductions from outside a nonattainment area to be credited toward the RFP requirement for that area, so that the EPA could reconsider that provision in light of the EPA's different treatment of such reductions under the fine particle (PM 2.5 ) implementation rule (72 FR 20586, April 25, 2007). The EPA then issued a revised rule requiring that states include in their baseline all emissions within any area outside of the nonattainment area from which reductions are being credited for rate of progress (ROP) purposes (74 FR 40074, August 11, 2009). On May 13, 2010, the EPA granted a petition for reconsideration of this provision in light of the NO X SIP Call/RACT court decision described below. We proposed a rule to address this reconsideration as it relates to the 1997 ozone NAAQS (75 FR 80420, December 22, 2010), and we discuss this issue in more detail as it relates to the 2008 ozone NAAQS in section III.C.4 of this preamble. On July 10, 2009, the court issued its ruling on the remaining challenged provisions pertaining to the Phase 2 Rule. NRDC v. EPA, 571 F.3d 1245 (D.C. Cir. 2009). The court upheld the Phase 2 Rule in large part, finding most of the challenged provisions to be reasonable interpretations consistent with the statutory mandates in the CAA. The court, however, granted the petitions for review on limited issues. It remanded the EPA's determination that compliance with the NO X SIP Call regional cap-and-trade program would satisfy the area-specific RACT requirement. It also remanded the revisions made to the requirements for NSR offsets in certain areas and vacated the extension of an NSR waiver provision beyond the previous 18-month time limit. The effect of the vacatur of the 18-month time limit is discussed in section III.I of this preamble. A listing of the relevant rulemakings concerning implementation of the 1997 ozone NAAQS appears in Appendix B of this preamble. D. Section 110 SIP Requirements CAA section 110(a) imposes an obligation upon states to make a SIP submission with respect to the 2008 8-hour ozone NAAQS. CAA section 110(a)(1) requires states to submit SIPs that provide for the implementation, maintenance and enforcement of a new or revised NAAQS within 3 years following the promulgation of the new or revised NAAQS, or within such shorter period as the EPA may prescribe. 9 Section 110(a)(2) lists specific requirements that states must meet in these SIP submissions, as applicable. The EPA refers to this type of SIP submission as the “infrastructure” SIP. The requirements for infrastructure SIPs include basic SIP elements such as requirements for monitoring, basic program requirements and legal authority that are designed to assure attainment and maintenance of the NAAQS. The contents of that submission may vary depending upon the facts and circumstances. In particular, the content of such a SIP submission may vary depending upon what provisions the state's existing SIP already contains. Two elements identified in section 110(a)(2) are not governed by the 3-year submission deadline of section 110(a)(1). This includes SIP submissions incorporating necessary local nonattainment area requirements, which are due pursuant to the schedule in section 182. 10 The two section 110 SIP elements not governed by the 3-year submission deadline are: (i) Submissions required by section 110(a)(2)(C) to the extent that subsection refers to a nonattainment area new source review permit program for major sources as required in part D of title I of the CAA; and (ii) submissions required by section 110(a)(2)(I) which pertains to the nonattainment planning requirements of part D of title I of the CAA. The EPA also notes that the D.C. Circuit's recent opinion in EME Homer City Generation v. EPA, 696 F.3d 7, 31 (D.C. Cir. 2012) concluded that a SIP cannot be deemed to lack a required submission or deemed deficient for failure to meet the 110(a)(2)(D)(i)(I) obligation until after the EPA quantifies that obligation. 9 The EPA did not prescribe a shorter period for the 2008 8-hour ozone NAAQS; thus, the SIP submission was due March 12, 2011. 10 Nonattainment area plans required by part D title I of the CAA for the 2008 8-hour ozone NAAQS are due by various dates as established throughout subpart 2 of part D, i.e., reasonably available control measures are due in 2 years under 182(b)(2), reasonable further progress plans and attainment plans for Moderate areas are due in 3 years under 182(b)(1), and attainment demonstrations for Serious and above areas are due in 4 years under 182(c)(2). The EPA has in the past interpreted these dates to run from the effective dates of the nonattainment designations, see 68 FR 32802, 32816-817 (June 2, 2003) (“subpart 2 SIP submittals will be due as a general matter by the same period of time after designation and classification under the 8-hour standard as provided in subpart 2 for areas designated and classified at the time of enactment of the 1990 CAA.”) The designations for the 2008 ozone standard were effective on July 20, 2012. See 77 FR 30088 (May 21, 2012) and 77 FR 34221 (June 11, 2012). In this notice, the EPA is proposing two options for SIP submittal dates for the 2008 ozone NAAQS. See section III.A. In the case of the 2008 8-hour ozone NAAQS, the period during which the EPA was making efforts to reconsider the 2008 NAAQS with the expectation of revising it in the near term extended about 6 months beyond March 12, 2011, the normal deadline for submission of infrastructure SIPs. The EPA therefore did not prepare and issue timely guidance for the states to assist them in preparing their submissions. Also, states were given the impression that if the NAAQS were revised as a result of the reconsideration, the 3-year deadline would reset. However, despite the reconsideration process, March 12, 2011, remained the legally applicable deadline for infrastructure SIPs for the 2008 8-hour ozone NAAQS. The EPA recently responded to a court order requiring the EPA to make findings of failure to submit for certain infrastructure SIPs that had not been found complete by March 12, 2011. 11 11 See 78 FR 2882, January 15, 2013. The EPA recognizes that many states are affected by transported ozone and ozone precursors from upwind states, and that transported pollution may contribute significantly to air pollution that exceeds the NAAQS in those states. The CAA establishes states' responsibilities to address interstate transport through two provisions: section 110(a)(2)(D) (specifying certain of the requirements for the “infrastructure” SIPs) and section 126 (requiring notification to downwind states of planned new or modified sources and providing a petition process through which downwind jurisdictions can seek to have specific sources of transported pollution addressed). This proposed implementation rule, which deals with the required SIP elements for areas designated as nonattainment for the 2008 ozone NAAQS, does not address states' obligations under the CAA to reduce transported pollution. Although, as noted elsewhere in this notice, the EPA intends to issue a guidance memorandum on the required elements of the section 110 infrastructure SIP submittal for the 2008 ozone NAAQS, that memorandum also would not contain guidance on how to meet the requirements of section 110(a)(2)(D)(i)(I), which deals with air pollutant emissions within a state that significantly contribute to nonattainment or interfere with maintenance of the NAAQS in a downwind state. E. Part D Nonattainment Area SIP Requirements In addition to the obligation to submit required section 110 infrastructure SIPs within 3 years of promulgation of a new or revised NAAQS, states with designated nonattainment areas also have the obligation to submit SIPs designed to bring those areas into attainment. SIP requirements applicable to nonattainment areas are found in part D of title I of the CAA. Subpart 1 of part D discusses general requirements for nonattainment areas, including the requirement that states adopt and submit for the EPA's approval detailed SIPs that bring the area into attainment. Subpart 2 of part D contains additional provisions specifically applicable to ozone nonattainment areas. Subpart 2 includes CAA sections 181 through 185B. Section 181 of subpart 2 creates a framework for classifying ozone nonattainment areas into five classification categories based on the severity of their ozone air quality problems. Section 181(a) includes attainment deadlines for each classification category in relation to the time the area is designated nonattainment: Marginal areas are required to attain within 3 years of designation; Moderate areas—within 6 years; Serious areas—within 9 years; Severe-15 areas—within 15 years; Severe-17 areas—within 17 years; and Extreme areas—within 20 years. 12 Section 182 of subpart 2 outlines SIP requirements applicable to ozone nonattainment areas in each classification category. In general, under the framework established by subpart 2, areas classified in higher nonattainment categories are provided with more time to attain the ozone NAAQS but are also subject to more extensive planning and control obligations. 12 Attainment deadlines for the 2008 ozone NAAQS were established in the Classifications Rule, 77 FR 30160, May 21, 2012. Where the Classifications Rule primarily dealt with issues related to CAA section 181, this rule addresses issues related to CAA sections 182 through 185B. Subpart 2 is the focus of much of the discussion of this rule. When a topic is discussed that is not covered by subpart 2, reference will be made to the more general subpart 1 requirements found in CAA sections 171 through 179B, or to other sections of the CAA, as appropriate. As discussed in section II.D of this proposal, section 110(a) infrastructure SIPs will be the topic of a separate guidance document. III. What are the state implementation plan requirements for the 2008 ozone NAAQS? A. What is the deadline for submitting nonattainment area SIP elements due under CAA section 182 for the 2008 ozone NAAQS? Section 182 of the CAA requires states with ozone nonattainment areas to submit various SIP elements within specified time periods after enactment of the CAA Amendments of 1990: (1) An emission inventory for the nonattainment area within 24 months (section 182(a)(1)); (2) a RACT SIP within 24 months (section 182(b)(2)); (3) a 15 percent RFP plan for Moderate and above areas within 3 years (section 182(b)(1)); (4) an attainment plan for Moderate areas within 3 years (section 182(b)(1)); (5) an attainment plan and demonstration for Serious and above areas within 4 years (section 182(c)(2)); and (6) a 3 percent per year RFP plan for Serious and above areas within 4 years (section 182(c)(2)). In the Phase 2 Rule, we interpreted the SIP submittal time periods in section 182 to run from the effective date of designation and classification for the 1997 ozone NAAQS. See 70 FR 71670. However, with regard to attainment demonstrations for Serious and above areas, we provided 3 years, instead of 4 years, to submit an attainment demonstration. Specifically, we promulgated 40 CFR 51.908(a) which required all areas classified Moderate or higher to submit attainment demonstrations based on photochemical grid modeling no later than 3 years after the area's designation for the 1997 8-hour ozone NAAQS. We explained that at the time of the 1990 Amendments, Congress required Serious and above areas to base their attainment demonstrations on photochemical grid modeling, which at that time was a relatively new modeling technique. Congress then gave those areas 4 years to submit an attainment demonstration. In the Phase 2 rulemaking, we determined that photochemical grid modeling should be required for Moderate areas as well as for Serious and above areas, and we explained that the technique was no longer new and that areas did not need 4 years to submit an attainment demonstration based on such modeling. The policy reasons that existed at the time the Phase 2 rule was developed, specifically, the need for timing consistency between subpart 1 and subpart 2 areas within the same region, the timing of the large-scale transport modeling underway at the time, and the option of coordinated planning with the similarly timed PM 2.5 SIPs, are not circumstances faced today by the Serious and higher areas. For purposes of the 2008 ozone NAAQS, the EPA proposes in the alternative the following two approaches regarding the deadlines for submitting the various elements of the state implementation plan. Period of time provided by the statute. Section 182 of the CAA specifies a time period, running from the date of enactment of the 1990 CAA Amendments, for states to submit each required element of the state implementation plan for nonattainment areas. Under this first alternative, the EPA is proposing that the time period specified in section 182 for the submission of each required element ( i.e., 2 years for emission inventories and RACT SIPs, 3 years for 15 percent RFP plans and Moderate area attainment demonstrations and 4 years for 3 percent per year 13 RFP plans and attainment demonstrations from Serious and higher areas), as described above, would apply and that such time periods would run from the effective date of an area's designation for the 2008 ozone NAAQS. State's choice: consolidated SIP submittal due 30 months after designation, or period of time provided by the statute. The EPA's second alternative, which is our preferred alternative, is for the state to have the choice of meeting the statutory deadline for each required SIP element as set out in section 182, or following a consolidated submittal approach. Under the consolidated approach, all of the required SIP elements for a nonattainment area would be submitted at one time, no later than 30 months after the effective date of the area's designation for the 2008 ozone NAAQS. The consolidated approach represents a more expeditious schedule for areas to submit attainment demonstrations and RFP SIPs for the 2008 ozone NAAQS, but it provides slightly more time for submittal of emission inventories and RACT SIPs. We are proposing under this alternative that a state can choose, for a particular nonattainment area, to submit all SIP elements required under section 182 no later than 30 months after the effective date of designation; or the state can choose to submit all SIP elements in accordance with the time provided by the statute. As part of this alternative proposal, a state with more than one nonattainment area can select the option that is most preferable for each area. This alternative proposal applies only to areas designated Moderate and above for the 2008 ozone NAAQS. 13 Typically submitted in 3-year increments, thus as 9 percent RFP plans that produce average reductions of 3 percent per year. The consolidated approach may be preferable for some states because it would allow them to undertake a more coordinated and less burdensome planning process, including only having one period for public review and opportunity for public hearing for all the SIP elements involved. (Note that all states that include part of a multi-state nonattainment area would need to consult with each other and adopt the same SIP submittal deadline(s) with respect to the entire multi-state area.) Moreover, we believe that the 30-month timeframe would be reasonable for many areas. Those states with areas currently classified as Moderate and above for the 2008 ozone NAAQS have significant experience preparing modeled attainment demonstrations and many are participating in ongoing modeling with nearby states to address regional ozone issues. Thus, for some areas it may be less burdensome to submit all ozone SIP elements concurrently within 30 months of designation. We note that an added benefit of earlier completion of the attainment planning process is that it provides states and sources with additional time to implement the measures adopted as part of the RFP plan and attainment demonstration. 14 This is particularly critical for Moderate areas, which have only 6 years to attain the standard. The EPA designated most areas on April 30, 2012, with an effective date 60 days after publication in the Federal Register . Thus, attainment demonstrations would be due under this option for most areas by January 2015, prior to the beginning of the 2015 ozone season. The EPA believes that the later due date for emission inventories and RACT SIPs under this option would provide for a de minimis delay. Implementation of the RACT requirements would still occur on the schedule established by CAA section 182(b)(2)(C). From an accountability standpoint, if the 30 months elapse with no SIP submittal from the state, the EPA will assume by default that the state has chosen to take the amount of time allowed by the statute for the attainment plan and demonstration, and is late with the RACT and emissions inventory SIP and thus potentially subject to a finding of failure to submit. 14 Emission reductions resulting from implementation of RACT, RFP and other state and federal requirements may, in some cases, not be sufficient to demonstrate attainment. States are responsible for adopting any additional measures needed to attain the NAAQS. These additional measures would be submitted by the state as part of the attainment plan and demonstration. B. What are the requirements for modeling and attainment demonstration SIPs? An attainment demonstration consists of: (1) Technical analyses, such as base year and future year modeling, to locate and identify sources of emissions that are contributing to violations of the 2008 ozone NAAQS within the nonattainment area (i.e., analyses related to the emissions inventory for the nonattainment area and the emission reductions necessary to attain the standard); (2) a list of adopted measures (including RACT controls) with schedules for implementation and other means and techniques necessary and appropriate for demonstrating RFP and attainment as expeditiously as practicable but no later than the outside attainment date for the area's classification; (3) a RACM analysis; and 4) contingency measures required under section 172(c)(9) of the CAA that can be implemented without further action by the state or the Administrator to cover emissions shortfalls in RFP plans and failures to attain. Penalty fee programs for failure to attain in Severe and Extreme areas are also associated with or are part of the attainment demonstration and are addressed in other sections of this proposal. 1. Marginal Areas Under section 182(a), Marginal areas have up to 3 years from designation to attain the NAAQS, and are not required to submit an attainment demonstration. When Congress amended the CAA in 1990, it anticipated that nonattainment areas with ozone concentrations close to the level of the NAAQS would likely come into attainment within 3 years after designation as nonattainment without any additional local planning. Although states are not required to develop attainment demonstrations for Marginal areas, there may be modeling completed by the EPA or other state organizations which may provide useful information regarding whether Marginal areas may be expected to attain by their attainment dates. For example, as part of the Cross State Air Pollution Rule (CSAPR), the EPA modeled the expected improvements in air quality from existing federal, state and local controls. We encourage states to use available modeling information to examine the likelihood of whether a Marginal area would attain within 3 years. Where such modeling indicates that a Marginal area is unlikely to attain the standard by its attainment date without the implementation of additional controls, we strongly encourage states or local agencies to work to get the necessary emission reduction measures in place in order to meet the ozone NAAQS within the 3-year timeframe. Marginal areas that do not attain the standard by the required date are required to be reclassified (or “bumped up”) to the Moderate classification, which would require the application of mandatory planning and control requirements. If it is not possible to implement sufficient additional controls for a Marginal area to attain by the 3-year maximum attainment date, states may wish to consider voluntarily requesting reclassification to the Moderate classification. The EPA intends to offer assistance to the states as they consider the most appropriate course of action for Marginal areas that may be at risk of failing to meet the NAAQS within the applicable 3 year timeframe: whether to adopt additional controls or seek a voluntary reclassification to the next higher category. Early reclassification would provide more time for adopting and implementing the control measures needed for attainment by the Moderate area attainment date than the area would have if it is reclassified after it fails to attain within 3 years of designation. If an area is reclassified based on an EPA determination that the area failed to attain by its attainment date, the state would likely have only 18 to 24 months to adopt and implement controls by the beginning of the final full ozone season before the Moderate area deadline because the statute requires areas to attain by the latest acceptable attainment date for any classification regardless of when the area is reclassified. 2. Moderate Areas Section 182(b)(1)(A) requires states with Moderate (and higher classified) ozone nonattainment areas to develop an attainment demonstration that provides for reductions in VOC and NO X emissions “as necessary to attain the national primary ambient air quality standard for ozone.” Although not specifically required by the statute, in the Phase 1 Rule for the 1997 ozone NAAQS, the EPA required states with Moderate and above areas to submit photochemical grid modeling or another equivalent analytical method to satisfy the attainment demonstration requirement for each area, which is the CAA requirement that applies for Serious and above areas (CAA section 182(c)(2)(A)). The EPA explained that it was reasonable to do so because this modeling was generally available and reasonable to employ. The EPA is proposing to continue to require states with an area classified as Moderate to submit an attainment demonstration based on photochemical modeling or another equivalent analytical method that is determined to be at least as effective, as is required under the Act for Serious and above areas and multi-state nonattainment areas. 15 15 State plans for single nonattainment areas that include more than one state (multi-state nonattainment areas) are also required to have photochemical modeling ( see CAA section 182(j)(1)(B)). This requirement explicitly allows for alternative analytical methods to be substituted for or used to supplement a photochemical modeling-based assessment of an emissions control strategy. Any alternative analysis should be based on technically credible methods and provide for the timely submittal of the attainment demonstration and implementation of SIP controls. States should review the EPA modeling guidance and consult their appropriate EPA regional office before proceeding with alternative analyses. 3. Serious and Above Areas For Serious and higher-classified areas, we continue to believe that photochemical modeling is the most technically credible method of estimating future year ozone concentrations based on projected VOC and NO X precursor emissions. States with areas classified as Serious and higher must submit an attainment demonstration based on photochemical modeling or an alternative analytical method determined by the Administrator to be at least as effective. 4. What guidance is there for using models to demonstrate attainment? The procedures for modeling ozone as part of an attainment demonstration are well developed and described in the EPA's “Guidance on the Use of Models and Other Analyses for Demonstrating Attainment of Air Quality Goals for Ozone, PM 2.5, and Regional Haze.” 16 This guidance document, as it currently exists, can be used by states developing attainment demonstration SIPs for the 2008 ozone NAAQS. The EPA is considering updates to the guidance to address ozone modeling for the 2008 ozone NAAQS. We will issue any updates as needed. 16 The modeling guidance can be found at the following Web site: http://www.epa.gov/scram001/guidance/guide/final-03-pm-rh-guidance.pdf. All photochemical modeling in support of an attainment demonstration should be consistent with the EPA's ozone modeling guidance. States with areas that were nonattainment for the 1997 ozone NAAQS or are nonattainment today have invested considerable resources in local and/or regional ozone modeling analyses. We encourage states to work together to leverage the work and resources from these existing analyses, as well as to develop new analyses for the 2008 ozone NAAQS as appropriate. The application of air quality models requires a substantial effort by state agencies and the EPA. Therefore, in order to maximize efficient use of time and resources, states should work closely with the appropriate EPA regional offices in executing each step of the modeling process. Coordination with the EPA during the modeling process will help increase the likelihood that the EPA will be able to approve the modeling-based attainment demonstration. 5. High Electricity Demand Days (HEDD) The current modeling guidance addresses, among many other considerations, episode selection and accounting for potentially higher VOC and/or NO X emissions during high energy demand periods. A study has identified high NO X emissions from electric generating units (EGUs) in the Northeast Corridor on summer days when demand for electricity is high 17 and has labeled these days as “High Electricity Demand Days” (HEDD). This study indicates that NO X emissions from EGUs during periods of high electricity demand in the Northeast may be significantly greater than emissions that occur on an average summer day. This spike in NO X emissions is due to increased power demand on hot summer days to meet air conditioning and other electric power needs. High electricity demand days require production of additional power from load-following EGUs and/or peaking unit EGUs, which are less frequently used compared to base-load EGUs. In the Northeast Corridor, these units have tended to be less well controlled than base-load EGUs. 17 “High Electric Demand Day and Air Quality in the Northeast.” White Paper Prepared by the Northeast States for Coordinated Air Use Management. June 5, 2006. Available at: http://www.nescaum.org/. High energy demand summer days tend to coincide with ozone episodes, which may be in part due to the fact that NO X emissions on these days can greatly exceed average summer day NO X emissions from electric power generation. There has been some study of control measures to reduce NO X emissions on HEDDs. 18 18 See, e.g., Chris James and Jeremy Fisher, Ph.D. Reducing Emissions in Connecticut on High Electric Demand Days (HEDD): A Report for the CT Department of Environmental Protection and the U.S. Environmental Protection Agency. July 25, 2008. Synapse Energy Economics, Inc. 22 Pearl St., Cambridge, MA 02139. Since NO X emissions from electric power generation are a significant contributor to the total NO X emissions for many ozone nonattainment areas, states that experience this phenomenon should be careful to fully account for it by ensuring that these emissions are included in photochemical modeling of episode days on which the phenomenon occurs. In order to properly account for HEDD emissions, careful attention should be paid to the temporalization of emissions to the specific day and hour of the day when these emissions occur. We note that the current modeling guidance 19 already addresses episode selection and development of accurate emissions input information during peak ozone periods. We will consider whether additional updates to the modeling guidance are needed to address modeling of the HEDD phenomenon. 19 http://www.epa.gov/scram001/guidance/guide/final-03-pm-rh-guidance.pdf. 6. Modeled Attainment Test Models are used to test whether control measures to be adopted in the SIP are likely to result in attainment of the standard. The modeled attainment test for the ozone NAAQS under the EPA's guidance uses a combination of ambient ozone data and modeled ozone concentrations to estimate future year air quality. The attainment test is applied at each monitor location within or near a designated nonattainment area. Models are used in a relative sense to estimate the response of measured air quality to future changes in emissions. Future air quality is estimated by multiplying recent monitored values by the modeled relative response to projected future changes in emissions. 20 The EPA additionally recommends application of an attainment test to be performed in unmonitored areas. The recommended attainment test methodology for unmonitored areas has been used in recent 8-hour ozone SIPs developed for the 1997 ozone NAAQS. To make it easier for states to apply the attainment tests, both the monitor-based test and the unmonitored area test have been incorporated in a software package called the “Modeled Attainment Test Software” (MATS). The MATS is available for no charge at: http://www.epa.gov/scram001/modelingapps_mats.htm. 20 The EPA's guidance on attainment demonstrations ( Guidance on the Use of Models and Other Analyses for Demonstrating Attainment of Air Quality Goals for Ozone, PM 2.5 , and Regional Haze , April 2007) recommends that states may supplement the attainment test with other evidence in a “weight of evidence” determination of whether the nonattainment area is likely to attain the NAAQS by its deadline. The EPA intends to recommend in a forthcoming update of this guidance that other evidence that can be considered includes recent monitored values that have been adjusted so that they better represent the air quality that would have existed in the absence of any unusual natural or anthropogenic events (if any) that influenced ozone concentrations on the monitored days. The EPA intends to apply certain eligibility conditions to this recommendation. Specifically, the EPA intends to apply an eligibility approach that is like the set of eligibility criteria in the Exceptional Events Rule. However, we will not apply the “no exceedance but for” concept that is part of the provision in 50.14(c)(3)(iv)(D) that limits the EPA approvals for data exclusion to situations in which there would have been no exceedance or violation of the NAAQS “but for” the event. In this way, the EPA guidance will effectively recommend that states can apply Exceptional Events Rule-like considerations to situations in which an event has exacerbated the level of a NAAQS exceedance (but that did not cause the exceedance in the “but for” sense) on historical days that occur during the ambient data base year period that is used in the attainment test to project future air quality. The EPA expects there to be limited situations where this potential adjustment would make a difference between future year estimated attainment and nonattainment. The EPA intends to work with state air agencies in the development of the planned update to our guidance on this topic. 7. What future year(s) should be modeled in attainment demonstrations? The future modeling year should be selected such that all emissions control measures relied on for attainment will have been implemented by that year. Note that for purposes of the 1997 ozone NAAQS and as we are proposing here for the 2008 ozone NAAQS, control measures relied upon to demonstrate attainment should be implemented by the beginning of the last full ozone season prior to the area's attainment date. To demonstrate attainment, the modeling results for the nonattainment area must predict that emissions reductions implemented by the beginning of the last full ozone season preceding the attainment date will result in ozone concentrations that meet the level of the standard. 21 Because an area must attain “as expeditiously as practicable,” additional considerations are necessary before a future modeling year can be established. For example, although the maximum attainment date for a Moderate area designated in 2012 would be December 31, 2018, under the 2008 ozone NAAQS Classifications Rule, the state would need to conduct a RACM analysis (CAA section 172(c)(1)) to determine if it can advance the area's attainment date by at least a year. 22 Results of the RACM analysis may indicate attainment can be achieved earlier (e.g., by December 2016 or December 2017) through implementation of reasonably available control measures prior to the beginning of an earlier ozone season. For instance, if emission reductions sufficient to demonstrate attainment are implemented prior to the 2016 ozone season, then in this example the attainment year and the future projection year should be 2016. We strongly recommend that the state discuss the selection of the future year(s) to model with the appropriate EPA regional office as part of the modeling protocol development process. 21 Note that for purposes of the 8-hour ozone NAAQS, a determination of attainment (or failure to attain), which EPA is required to make after the attainment date has passed, is based on the most recent 3 complete years of data prior to the area's attainment date. Attainment date extensions are only available if the 4th maximum 8-hour average ozone concentration in the attainment year is below the level of the standard. 22 See section III.D.2 of this proposal for a discussion of RACM analysis requirements. 8. Multi-State Nonattainment Areas The CAA requirement for multi-state ozone nonattainment areas (CAA section 182(j)) requires each state in which a portion of a multi-state ozone nonattainment area is located to use photochemical grid modeling or any other analytic method determined by the Administrator to be at least as effective and to take all reasonable steps to coordinate, substantively and procedurally, the development, submittal and implementation of SIPs applicable to the various states within the nonattainment area. The EPA interprets CAA section 182(j) to require coordination on all aspects of nonattainment SIPs, including the development of an attainment demonstration. C. What are the RFP requirements for the 2008 ozone NAAQS? 1. Background Areas that are designated nonattainment for ozone must achieve RFP toward attainment of the ozone NAAQS. Part D of the CAA contains three separate provisions regarding RFP. Under subpart 1, section 172(c)(2) contains a general requirement that nonattainment SIPs must provide for reasonable further progress; this provision does not define RFP, but provides authority for the Administrator to do so. Sections 182(b)(1) and 182(c)(2)(B) under subpart 2 contain specific percent reduction targets for ozone nonattainment areas classified as Moderate and above and Serious and above, respectively. For Moderate and above areas, section 182(b)(1) requires a 15 percent reduction in VOC emissions from the baseline anthropogenic emissions over the 6-year period between designation and the Moderate area maximum attainment date. For Serious and above areas, section 182(c)(2)(B) requires an additional 3 percent per year reduction in VOC emissions beginning 6 years after designation until the attainment date. 23 For the additional RFP requirement for Serious and above areas, section 182(c)(2)(B) allows NO X reductions to be substituted for VOC reductions under certain conditions. Note that the 15 percent requirement must be met by the end of the 6-year period regardless of whether the state attains the NAAQS prior to that point. The 3 percent per year requirement for Serious and above areas runs until the attainment date. 23 CAA section 182(c)(2)(B) states that Serious and above areas must achieve additional reductions of at least 3 percent per year “averaged over each consecutive 3-year period.” Thus it is equivalent to a nine percent additional reduction in baseline emissions for each subsequent 3-year period. The Phase 2 Rule interpreted the requirements of subpart 2 as they would apply to areas for the 1997 ozone NAAQS. With respect to RFP, the Phase 2 Rule interpreted the section 182(b)(1) 15 percent RFP requirement such that an area that had already met the 15 percent RFP requirement for VOC under the 1-hour ozone NAAQS (for the first 6 years after the RFP baseline year for the 1-hour ozone NAAQS) would not have to fulfill that requirement again. Instead, Moderate areas would be treated like areas covered under section 172(c)(2), and Serious and above areas would be covered under section 182(c)(2)(B). For the purposes of the 1997 ozone NAAQS, the EPA interpreted section 172(c)(2) to require Moderate areas to obtain 15 percent ozone precursor emission reductions over the first 6 years after the baseline year for the 1997 ozone NAAQS, and interpreted section 182(c)(2)(B) to require Serious and above areas to obtain 18 percent ozone precursor emission reductions in that 6 year period. Under the section 172(c)(2) and 182(c)(2)(B) RFP requirements, NO X emission reductions could be substituted for VOC reductions. This provision of the Phase 2 Rule was upheld in NRDC v. EPA, 571 F.3d 1245 (D.C. Cir. 2009). 2. In general, what is the EPA proposing as the RFP requirements for the 2008 ozone NAAQS? The EPA is proposing a number of provisions to address issues relevant to implementing RFP under the 2008 ozone NAAQS: (1) The timing for the submission of RFP plans; (2) restrictions on emission reduction measures that can be used to fulfill the RFP requirements under subpart 2; 3) the RFP plan requirements of section 182(b)(1) of the CAA for nonattainment areas classified as Moderate or higher under the 2008 ozone NAAQS for which no portion of such areas previously fulfilled the 15 percent RFP requirement for VOC in section 182(b)(1); (4) the RFP plan requirements for nonattainment areas classified as Moderate or higher under the 2008 ozone NAAQS which consist entirely of former nonattainment areas that under a prior ozone NAAQS fulfilled the 15 percent RFP requirement for VOC in section 182(b)(1); (5) the RFP plan requirements for nonattainment areas classified as Moderate or higher under the 2008 ozone NAAQS which consist partially of former nonattainment areas that under a prior ozone NAAQS fulfilled the 15 percent RFP requirement for VOC in section 182(b)(1); and (6) proposed procedures for calculating RFP targets. Hereafter in the discussion of RFP requirements within this section, when we use the term “2008 nonattainment area” we mean “nonattainment area classified as Moderate or higher under the 2008 ozone NAAQS.” a. What is the deadline for submitting RFP plans? As detailed in section III.A of this preamble, the EPA is proposing two options regarding the deadline(s) for submittal of the various SIP elements required for an ozone nonattainment area based on its classification for the 2008 ozone NAAQS. The first option is that the required SIP elements would be due in the time frame provided for such elements in section 182, with the specified time periods running from the effective date of designation for the 2008 ozone NAAQS. Thus, the RFP plan addressing the first 6-year period for Moderate and higher classified areas would be due 3 years from the effective date of designation; and the RFP plan addressing the additional 3 percent per year requirement for Serious and higher classified areas would be due 4 years from the effective date of designation. The second option is to give states the choice to either submit the various SIP elements required for an area according to the timeframes specified by statute or to submit all of the required SIP elements within 30 months of the effective date of designation for the 2008 ozone NAAQS; in other words, the state would submit one consolidated SIP, including all RFP obligations, no later than 30 months from the effective date of designation. For the same reasons discussed in section III.A of this preamble (related to SIP due dates), the EPA believes that it may be reasonable, and preferred by some states, to allow states to submit the RFP plans within 30 months in conjunction with all other required SIP elements. We are soliciting comment on options for submission deadlines as listed in this section and section III.A. b. Restrictions on Emission Reduction Measures That Can Fulfill the RFP Requirement The CAA places certain restrictions on the emission reductions that are creditable toward meeting the RFP requirements. To be creditable, the reductions must meet the conditions in CAA sections 182(b) and 182(c), including that reductions: • Must be from measures required in the SIP, in a title V permit, or from rules promulgated by the EPA; • Must occur during the RFP period; • May not come from the pre-1990 EPA rules for motor vehicle exhaust and evaporative emissions; and • May not come from the EPA rules limiting the Reid vapor pressure (RVP) of gasoline that were implemented by 1992. 24 24 CAA section 182(b)(1)(D)(ii) states that “Regulations concerning Reid vapor pressure promulgated by the Administrator by November 15, 1990, or required to be promulgated under section 7545(h) of this title” are not creditable toward required RFP reductions. We are proposing that, except as specifically provided in section 182(b)(1)(D) of the CAA, all SIP-approved or federally promulgated emissions reductions that occur after the baseline emissions inventory year are creditable for purposes of the RFP requirements, provided the reductions meet the standard requirements for creditability. 25 That is, to receive SIP credit, the reductions must be enforceable, quantifiable, permanent and surplus. We promulgated a regulatory provision adopting this same interpretation for purposes of implementing the 1997 ozone NAAQS. See 40 CFR 51.910(a)(2). CAA section 182(b)(1)(D) imposes limitations on specific measures for which states may take credit for RFP reductions required under CAA sections 182(b)(1) and 182(c)(2)(B). We are also proposing that all emission reductions creditable toward meeting RFP requirements must be from sources located within the nonattainment area. Section C.4 below discusses this issue in further detail. 25 Note that section III.C.2.f. below discusses the EPA's proposal regarding removal of the requirement to calculate non-creditable emissions for pre-1990 vehicles. c. What are the RFP plan requirements for 2008 ozone nonattainment areas for which no portion of the area has previously been required to meet the 15 percent RFP requirement for VOC in section 182(b)(1) of the CAA? Section 182(b)(1) of the CAA requires ozone nonattainment areas classified as Moderate or higher to submit a RFP plan to achieve a 15 percent reduction in VOC baseline emissions over a 6-year period following the baseline year. If the area is classified Serious or higher, section 182(c)(2)(B) of the CAA requires an additional RFP plan to achieve an average of 3 percent additional emissions reductions per year for each subsequent 3-year period after the conclusion of the initial 6-year RFP period specified by section 182(b)(1). We are proposing that the RFP plan for a 2008 nonattainment area must provide for a 15 percent reduction in VOC emissions from the baseline emissions in the 6 years following the baseline emissions inventory year if no portion of that 2008 nonattainment area has already fulfilled the 15 percent RFP plan requirement for VOC. 26 If such 2008 nonattainment area is classified as Serious or higher, the RFP plan for that 2008 nonattainment area must in addition achieve an average of three percent additional emissions reductions per year for each subsequent 3-year period after the conclusion of the initial 6-year period specified by section 182(b)(1). We promulgated a similar regulatory provision adopting this interpretation for purposes of implementing the 1997 ozone NAAQS. See 40 CFR 51.910(a)(1)(i). 26 “Fulfilled the 15 percent RFP plan requirement for VOC” means EPA has approved an RFP plan for the geographic area as meeting the 15 percent RFP plan requirement for VOC specified in section 182(b)(1) of the CAA under a prior ozone NAAQS, whether it is the 1-hour ozone NAAQS or the 1997 8-hour ozone NAAQS. In the alternative, we are proposing to allow an area to meet the 15 percent RFP requirement in whole or in part with NO X reductions in lieu of VOC reductions if that area can demonstrate that it has in fact achieved a 15 percent reduction in VOC emissions from a 1990 baseline. There are two reasons that we believe it makes sense to allow areas to substitute NO X for VOC in the 15 percent RFP plans. First, our understanding of the effects of reductions of VOC and NO X on ambient ozone levels has greatly improved since the 1990 CAA Amendments were enacted, and there are technical tools more readily available to help states predict the combination of VOC and/or NO X that will be most effective in reducing ozone in a particular area. In many areas we now know that NO X reductions will have a far greater effect than VOC reductions on reducing ambient ozone concentrations. In fact, in some areas background levels of naturally-occurring VOC are so high that reductions in manmade VOC have limited effect on ozone. Since the purpose of the RFP provisions in section 182 is to foster the achievement of reasonable further progress toward attainment, we believe that it makes the most sense to allow states to credit toward the RFP requirement those reductions that an area most needs to reach attainment. Second, the mix of emissions across the country and in specific areas is very different than it was in 1990 because of emission controls that have gone into effect over the last 20 years. A variety of national and local VOC control measures affecting mobile and stationary sources have already substantially reduced the levels of manmade VOC. Since 1990, the EPA has issued aggressive national rules to reduce tailpipe VOC emissions from on-road vehicles and from non-road engines. The EPA has also reduced evaporative emissions and vehicle refueling emissions through vehicle onboard refueling vapor recovery systems. VOC emissions from most major industrial sectors have also been substantially reduced through controls required to meet relatively stringent standards for hazardous air pollutants. The EPA has also promulgated national rules limiting the VOC content of the most ubiquitous paints/coatings and consumer products. These efforts have substantially reduced the anthropogenic VOC emissions inventory such that additional area-specific VOC reductions will be increasingly difficult to achieve. As a further alternative, if we do not finalize the proposal above to allow any area to substitute NO X reductions for VOC reductions where such area can demonstrate that it has achieved a 15 percent reduction in VOC emissions from a 1990 baseline, we are proposing to allow such substitution only for areas located in the Ozone Transport Region (OTR) that would be subject to the 15 percent RFP requirement for the first time as a designated nonattainment area for the 2008 ozone NAAQS. Although attainment areas in the OTR were not required to adopt 15 percent RFP plans under section 184 of the CAA, they were required to adopt certain VOC reduction measures such as enhanced vehicle I/M plans in metropolitan statistical areas (MSAs) with a population of 100,000 or more, and RACT for all sources covered by a control technique guideline (CTG). At the time of the 1990 Amendments it was expected that VOC reductions from those measures would account for a significant portion of the 15 percent RFP requirement for areas designated nonattainment. Thus, since attainment areas in the OTR were required to adopt and implement many of the same measures that applied in nonattainment areas, we are proposing that such areas should be treated as having met the 15 percent RFP requirement if they can demonstrate that they did, in fact, achieve a 15 percent reduction in VOC emissions between 1990 and 1996 (even though they of course would not have submitted a 15 percent plan as they were not subject to the 15 percent requirement at that time). In such a case, the area would be treated the same as a nonattainment area that previously met the 15 percent requirement, as discussed below in section III.C.2.d. 27 Specifically, these areas would still be required to submit a plan to achieve a 15 percent emission reduction, but could substitute NO X reductions for VOC in such plan. 27 The EPA's official on-road emissions model, MOVES, currently allows states to model emissions in 1990 and 1999 and later years, but not in 1996. EPA will evaluate whether the capability of modeling emissions in 1996 needs to be added to MOVES, or whether some other methodology can be used for this analysis. d. What are the RFP plan requirements for 2008 ozone nonattainment areas that consist entirely of one or more nonattainment areas for a former ozone NAAQS or pieces of nonattainment areas for a former ozone NAAQS where such areas fulfilled the 15 percent RFP plan requirement for VOC for that former ozone NAAQS? This provision covers any 2008 nonattainment area 28 which consists entirely of a nonattainment area or portions of nonattainment areas for which we previously approved an RFP plan as meeting the 15 percent RFP plan requirement for VOC in section 182(b)(1) of the CAA. Such a 2008 nonattainment area could consist of one or more 1-hour nonattainment areas, one or more nonattainment areas under the 1997 ozone NAAQS, or a combination of nonattainment areas for either the 1-hour or 1997 ozone NAAQS. However, all portions of the area that are a part of the 2008 nonattainment area must have an approved 15 percent RFP plan for either the 1-hour or the 1997 ozone NAAQS. 29 28 77 FR 30088, May 21, 2012. 29 The following nonattainment areas were nonattainment for both the 1-hour and the 1997 ozone NAAQS, and remained the same size under the 2008 ozone NAAQS compared to the 1997 ozone NAAQS: Baltimore, MD; Los Angeles-San Bernardino Counties (West Mojave Desert), CA; Los Angeles-South Coast Air Basin, CA; Riverside County (Coachella Valley), CA; Sacramento Metro, CA; San Joaquin Valley, CA; and Ventura County, CA. We are proposing that such 2008 nonattainment areas have met the CAA requirement for a 15 percent VOC reduction plan and are not required to fulfill that requirement again. As we did for the 1997 ozone NAAQS, we propose to interpret the RFP requirement in section 172(c)(2) to mean that a Moderate area must achieve a 15 percent reduction in baseline VOC emissions, but that NO X emission reductions may be substituted for the VOC reductions in the manner specified in section 182(c)(2)(C). Under section 182(c)(2)(B), Serious and higher classified areas would be required to achieve an average of 3 percent emission reductions per year for each 3-year period following the baseline year (i.e., a total of 18 percent emissions reduction in the first 6 years) and NO X emission reductions could be substituted as provided under section 182(c)(2)(C). e. What are the RFP plan requirements for 2008 ozone nonattainment areas that include portions consisting of all or a piece of one or more nonattainment areas for a previous NAAQS and which fulfilled the 15 percent RFP plan requirement for VOC for that previous NAAQS and portions that have never been subject to or never have fulfilled the 15 percent RFP plan requirement for VOC for a previous NAAQS? This provision addresses those areas that include all or part of a nonattainment area under a former ozone NAAQS that fulfilled the 15 percent RFP plan requirement for VOC and all or part of an area that was not subject to or did not meet the 15 percent requirement for a former ozone NAAQS. The most common situation in which this would arise is when a 2008 nonattainment area consists of a former nonattainment area and additional surrounding areas (e.g., all or part of surrounding counties) that have not previously been designated nonattainment for ozone. For such 2008 nonattainment areas, we are proposing that the state choose between two approaches for addressing the 15 percent RFP requirement. First, the state could choose to treat the entire area as an area that never met the 15 percent requirement, and meet the requirements of subsection III.C.2.c of this section, described previously. Second, the state could choose to treat the 2008 nonattainment area as divided into two portions: the former non-RFP plan portion and the former RFP plan portion. For the former non-RFP plan portion of the 2008 nonattainment area, the plan would establish a separate 15 percent VOC reduction requirement under section 182(b)(1) of subpart 2. However, VOC emissions reductions to meet the 15 percent requirement may come from across the entire 2008 nonattainment area, provided that the former RFP plan portion of the area also has a VOC reduction target as part of its RFP plan for the 2008 ozone NAAQS. If the RFP plan for the 2008 ozone NAAQS for the former nonattainment area relies solely on NO X reductions, then the portion of the nonattainment area never before subject to nonattainment requirements is still responsible for the 15 percent VOC reductions. For the former RFP plan portion of the 2008 nonattainment area, the RFP requirements in section 172(c)(2) will apply if the 2008 nonattainment area is classified as Moderate as described previously in this document in subsection III.C.2.d of this section. Also, as described in subsection III.C.2.d of this section, CAA section 182(c)(2)(B) RFP requirements will apply if the 2008 ozone NAAQS nonattainment area is classified as Serious or higher. f. How should states account for non-creditable reductions when calculating RFP emission reduction targets? Section 182(b)(1)(D) specifies four categories of control measures that are not creditable toward the 15 percent RFP requirement under CAA section 182(b)(1)(A): (i) Measures related to motor vehicle exhaust or evaporative emissions promulgated by January 1, 1990; (ii) regulations concerning RVP promulgated by November 15, 1990; (iii) measures to correct previous RACT requirements; and (iv) measures required to correct I/M programs. With the exception of the first category, reductions from these measures were achieved many years ago, so the question of creditability is moot for RFP credit for the 2008 ozone NAAQS. For the motor vehicle standards, a small amount of reduction is still occurring due to fleet turnover. In Appendix A to the preamble of the Phase 2 Rule (70 FR 71696, as amended by 71 FR 58498, October 4, 2006), we presented methodologies for accounting for non-creditable emission reductions consistent with requirements of section 182(b)(1)(D)(i) of the CAA. The procedures vary with the types of areas. The EPA also issued a memorandum that supplements the Appendix. 30 We are proposing as one alternative to eliminate the obligation for states to continue to perform this calculation because these reductions are now very small and will continue to further decrease in future years. The calculation of non-creditable reductions is based on the impact of pre-1990 model year vehicles on the total emissions inventory. In 2011, pre-1990 model year vehicles are estimated to account for only 2 percent of vehicle miles traveled (VMT), 5 percent of total on-road VOC emissions and 3 percent of total on-road NO X emissions using national estimates of fleet composition, activity and emissions from the EPA's latest emissions model. By 2017, the first year for which non-creditable reductions must be calculated for the 2008 ozone NAAQS, pre-1990 model year vehicles will be 27 years old and older. These vehicles will account for approximately 0.2 percent of total VMT, 0.6 percent of total on-road VOC emissions and 0.4 percent of total on-road NO X emissions in 2017, using national estimates of fleet composition, activity and emissions from the EPA's latest emissions model. Local results may vary, but the non-creditable reductions associated with the turnover of these vehicles everywhere will be a very small fraction of the total on-road VOC emissions inventory by 2017 and will continue to decrease over future years. Accounting for all other emission sources, on-road VOC emissions typically constitute less than half of the total VOC inventory and about half of the total NO X inventory, so these percentages would be further reduced in the context of the total emissions inventory. Calculating non-creditable reductions will continue to be a very resource-intensive process requiring multiple modeling runs and extensive staff time. We are proposing to remove the burden of performing this calculation for purposes of RFP for the 2008 ozone NAAQS based on the de minimis nature of these non-creditable reductions. If the final rule requires states to account for these non-creditable reductions, we are proposing in the alternative that the calculation should be performed as described in Appendix C to this preamble. 30 Memorandum from William T. Harnett re: “8-Hour Ozone National Ambient Air Quality Standards (NAAQS) Implementation—Reasonable Further Progress (RFP),” August 15, 2006. See first Q & A. g. Alternative Approaches To Achieving RFP In the spirit of the Executive Order 13563 titled, “Improving Regulation and Regulatory Review,” signed by President Barack Obama on January 18, 2011, which directs federal agencies to offer and support flexible, common sense approaches, the EPA is taking comment on allowing states to use additional alternative approaches to achieving RFP goals. One alternative is an air quality-based approach that would measure RFP in terms of actual ambient air quality improvements tied to an area's percent emission reduction requirements. Such an approach would involve work on the part of the state to translate an area's RFP emissions reduction targets (tons) into ozone improvement targets (ppb) based on air quality modeling or other appropriate analyses. The emission reduction targets for the area should be expressed in terms of the pollutant (VOC or NO X ) which, when reduced, is most effective in reducing ozone concentrations in the area. Under this approach, RFP milestones would be satisfied if the area implements the target emissions reduction strategies and achieves the targeted ozone air quality improvement over the relevant RFP assessment period. This approach would retain a state's accountability for making consistent incremental progress while focusing on the most direct measurement of improvement, namely air quality. A similar approach is already included in the implementation rules that govern SIP development for the PM 2.5 NAAQS ( See 40 CFR 51.1009(g) and (h)). Another alternative approach would be to adjust (or “weight”) the amount of RFP credit given for reductions of individual species (or similar groups) of VOCs based on their ozone forming potential (i.e., photochemical reactivity). Accordingly, reductions of VOCs with relatively high photochemical reactivity would be given more credit toward RFP requirements and reductions of VOCs with relatively low photochemical reactivity would be given less credit toward those requirements. For example, reducing one ton of a highly reactive VOC (i.e., with 1.5 times the ozone forming potential of an average VOC) could be given a RFP credit of 1.5 tons, reducing one ton of a low reactive VOC (i.e., with 0.5 times the ozone forming potential of an average VOC) could be given a RFP credit of 0.5 tons, and reducing one ton of a VOC with average reactivity could be given a RFP credit of 1.0 tons. Such an approach provides an incentive for states to target those VOC reductions that will have the greatest impact on actual ozone formation. In order to use this approach, the EPA and/or states would need to develop more detailed operational parameters, guidelines or rules derived from scientific assessment. For both of these alternative approaches, the EPA is seeking comment on the usefulness and practicality of the approach, and specifically on whether there is adequate legal basis under the CAA to approve SIPs that would employ these approaches. 3. What baseline year may states use for the emission inventory for the RFP requirement? The baseline inventory for RFP is used as the starting point for determining a target level of emission reductions to meet the RFP requirement—in other words, it is the baseline from which creditable reductions are determined. Section 182(b)(1)(B) of the CAA, as amended in 1990, states that the term “baseline emissions” is defined as the total amount of actual VOC (or NO X ) emissions from all anthropogenic sources in the area during the calendar year 1990. The initial 6-year RFP period covered the 6 years following the baseline year, 1991-1996, ending in the year that areas classified as Moderate under the 1-hour NAAQS were required to attain that NAAQS. For the 2008 ozone NAAQS, the EPA is proposing that states should use as the baseline year for RFP the calendar year for the most recently available triennial emission inventory at the time RFP plans are developed. We promulgated a regulatory provision adopting this same interpretation for purposes of implementing the 1997 ozone NAAQS. See 40 CFR 51.910(d). A triennial emissions inventory under the Air Emissions Reporting Requirements (AERR) Rule (73 FR 76539; December 17, 2008) is required for the year 2011 and was required to be submitted to the EPA by December 31, 2012. For the 1997 ozone NAAQS, our regulations also provided that a state has flexibility to use an alternative baseline year if it shows that the alternative year is appropriate and justifiable. We are proposing to allow similar flexibility for the 2008 ozone NAAQS. A RFP baseline year of 2011 is analogous to the approach provided for RFP in the CAA as amended in 1990. The CAA required a 1990 baseline for the 15 percent RFP requirement which lined up the 6-year 15 percent RFP period with the 1996 attainment date for Moderate areas under the 1-hour NAAQS. For the 2008 ozone NAAQS, initial area designations were effective in 2012 and the 6-year RFP period from a baseline of 2011 (i.e., January 1, 2012-December 31, 2017) would line up reasonably well with the Moderate area attainment date of 2018. As noted above, the AERR Rule required states to report emissions for calendar year 2011 to the EPA by December 31, 2012. This is about 2.5 years before the July 20, 2015, deadline for 15 percent RFP plans to be submitted. The EPA believes this timing is reasonable for areas designated nonattainment in 2012 and allows time for states to develop and submit an RFP plan, as well as time to implement measures to satisfy the RFP requirement by December 31, 2017. If a state chooses 2011 as a baseline year for a Moderate area designated nonattainment in 2012, the 15 percent reduction requirement covers the period from January 1, 2012, to December 31, 2017. The 6-year period concludes one year prior to the December 31, 2018, attainment date. Areas using 2011 as a base year would thus have to achieve whatever additional emissions reductions are needed to provide for attainment of the standard by December 31, 2018. This corresponds to the approach taken in the Phase 2 Rule (70 FR 71615-71616). However the EPA is also proposing that states have the option of selecting an appropriate and justifiable alternate year as a baseline year for RFP. If states choose a pre-2011 baseline year, the EPA is proposing that the 6-year period for achieving the 15 percent reduction starts in January of the year following the selected baseline year. When a year prior to 2011 is chosen as the baseline year, the 6-year period thus concludes more than one year prior to the start of the attainment year for the area. In this situation, the EPA is proposing that the area is responsible for a 3 percent emissions reduction each year after the initial 6-year period has concluded up to the beginning of the attainment year. For example, if 2009 is chosen as a baseline year for a Moderate area, the 15 percent reductions cover the period from January 1, 2010 to December 31, 2015. The area would need to generate an additional 3 percent emissions reduction per year for the years 2016 and 2017. As in the Phase 2 Rule and consistent with CAA section 182(c)(2), Serious and higher classified areas would need to provide in their SIPs an additional average of 3 percent per year emission reduction over each subsequent year beyond the initial 6-year period through the attainment year (70 FR 71616). We are proposing that for a multi-state nonattainment area, all states associated with the nonattainment area must consult and agree on the same alternate year to use as the baseline year for RFP. 4. Can emission reductions from sources located outside the nonattainment area boundary apply toward RFP? a. Background Under the EPA's initial Phase 2 Rule, 31 certain emission reductions from outside a nonattainment area can be credited toward meeting the 1997 ozone NAAQS RFP requirement. See 70 FR 71647-49. For the same reasons provided in our proposed rule 32 to revise this provision for the 1997 ozone NAAQS, the EPA is proposing to not allow states to rely on credit for emission reductions from outside the nonattainment area to meet RFP obligations for the 2008 ozone NAAQS. 31 See Final Rule to Implement the 8-Hour Ozone National Ambient Air Quality Standard—Phase 2 (70 FR 71612, November 29, 2005). 32 Reasonable Further Progress Requirements for the 1997 8-Hour Ozone National Ambient Air Quality Standard (75 FR 80420, December 22, 2010). The language in the CAA's baseline emissions provision for determining the emissions reductions required for RFP purposes (sections 182(b)(1)(B) and 182(c)(2)(B)) is almost identical to the language in the CAA's RACT provision (section 172 (c)(1)). The issue of taking credit for reductions from outside the nonattainment area was raised in the context of the RACT provision and decided by the court in NRDC v. EPA, 571 F.3d 1245 (DC Cir. 2009). The court there held that “the RACT requirement calls for reductions in emissions from sources in the area; reductions from sources outside the nonattainment area do not satisfy the requirement.” NRDC at 1256. We note the similarity in language in the several provisions of the CAA, but also the difference between RACT, which is a source specific requirement, and RFP, which is not. b. Proposal The EPA is therefore proposing that for the 2008 ozone NAAQS states may not take credit for VOC or NO X reductions occurring outside the nonattainment area for purposes of meeting the 15 percent and 3 percent RFP requirements of sections 172(c)(2), 182(b)(1) and (c)(2)(B). This approach would mean that RFP credit for meeting the 15 percent VOC requirement for Moderate and above ozone nonattainment areas in section 182(b)(1) and the additional 3 percent per year requirement for Serious and above ozone nonattainment areas in section 182(c)(2)(B) could come only from emission reductions from within the nonattainment area. The EPA notes that the required 15 percent and 3 percent reductions are calculated from the baseline emissions inventory for the nonattainment area, which reflects only emissions within the nonattainment area. In nonattainment areas where there are few significant local emission sources, and thus relatively small emission inventories, the required reduction percentages would similarly translate into only small required emission reductions. Areas still can and should, where appropriate, rely on out-of-area reductions for purposes of demonstrating attainment. There is no limitation under the attainment demonstration provisions of the CAA that restricts states from considering outside-the-area reductions as part of the modeled attainment demonstration for an area. As EPA has previously said, in determining the attainment date that is as expeditious as practicable, the state should consider impacts on the nonattainment area of intrastate transport of pollution from sources within its jurisdiction, and potential reasonable measures to reduce emissions from those sources. At the same time, the EPA recognizes that not allowing credit for reductions outside the nonattainment area will make it more challenging for some areas, such as the areas adjacent to the South Coast nonattainment area in California, namely, Coachella Valley, West Mojave Desert and Ventura County in California, to meet their RFP requirements and may foreclose some cost-effective opportunities for emissions reductions. Despite the court's opinion in NRDC, the EPA continues to believe that there remain valid policy reasons for giving states incentive to focus on obtaining emission reductions that are the most beneficial and cost effective for achieving air quality progress and attaining the ozone standards. The EPA believes there may be cases where the most beneficial and cost-effective reductions are from sources located outside the nonattainment area boundaries. In these cases, we believe it would be good policy to credit the emission reductions toward meeting RFP requirements. To this end, the EPA is also taking comment on whether there is a clear legal rationale for allowing credit for reductions outside the nonattainment area to satisfy the RFP requirements for the 2008 ozone NAAQS. We encourage commenters to consider how the baseline emission inventory should be determined if reductions from outside the nonattainment area were able to be creditable for RFP requirements. If the EPA receives comment that provides a clear legal justification for this approach, we will seriously consider including this approach in the final rule. The EPA requests comments on the proposal and its implications for the 2008 ozone NAAQS. D. How do RACT and RACM requirements apply for 2008 ozone NAAQS nonattainment areas? 1. Reasonably Available Control Technology a. Background Subpart 1 of part D of the CAA includes a requirement that an attainment plan must provide for the implementation of all RACM as expeditiously as practicable, including such reductions that may be obtained through RACT. 33 Subpart 2 requires Marginal ozone nonattainment areas to correct pre-1990 RACT requirements and requires Moderate and above areas to adopt RACT rules for all VOC and NO X sources covered by existing or new CTGs and for all other major sources of VOC and NO X (unless the state has received a NO X waiver). Additionally, states must adopt RACT for all VOC and NO X sources covered by a CTG, and for all other major sources of VOC and NO X in the OTR (CAA section 184(b)(1)). 33 The EPA has defined RACT as the lowest emission limitation that a particular source is capable of meeting by the application of control technology that is reasonably available considering technological and economic feasibility (December 9, 1976 memorandum from Roger Strelow, Assistant Administrator for Air and Waste Management, to Regional Administrators, “Guidance for Determining Acceptability of SIP Regulations in Non-Attainment Areas” and also in 44 FR 53762; September 17, 1979). Since the 1970s, the EPA has issued CTGs that establish presumptive RACT-level control requirements for various source categories. The CTGs usually identify a particular control level which the EPA recommends as being RACT. In some cases, the EPA has issued Alternative Control Techniques guidelines (ACTs) for source categories. 34 ACTs differ from CTGs in that they present a range for possible control options but do not identify any particular option as the presumptive norm for what is RACT. Section 183(c) of the CAA requires the EPA to “revise and update [CTGs and ACTs] as the Administrator determines necessary.” The EPA issued eleven new CTGs from 2006 through 2008. 35 For nonattainment areas classified as Moderate or higher, states are required to address RACT for the source categories covered by CTGs. 34 See http://www.epa.gov/air/ozonepollution/SIPToolkit/ctgs.html. 35 CTGs updated from 2006 through 2008: Industrial Cleaning Solvents; Offset Lithographic Printing and Letterpress Printing; Flexible Package Printing; Flat Wood Paneling Coatings; Paper, Film, and Foil Coatings; Large Appliance Coatings; Metal Furniture Coatings; Miscellaneous Metal and Plastic Parts Coatings; Fiberglass Boat Manufacturing; Miscellaneous Industrial; and Automobile and Light-Duty Truck Assembly Coatings. Some of the CTGs specify the minimum size of sources to which they apply. Where a CTG does not specify the minimum size of sources to which it applies or there is no CTG for a source category, states are required to apply the RACT requirement to sources in a nonattainment area that exceed the size threshold corresponding to the statutory definition of “major stationary source.” Section 302 of the CAA defines major stationary source as a source that emits 100 tons per year (tpy) or more of any air pollutant, and for ozone the air pollutants of concern are NO X and VOC. That 100 tpy threshold, however, is modified by subsections 182(c)-(f) of the CAA, which define a major source for Serious areas as a source that emits more than 50 tpy of VOC or NO X ; for Severe areas as a source that emits more than 25 tpy of VOC or NO X ; and for Extreme areas as a source that emits more than 10 tpy of VOC or NO X . 36 36 Note, however, that an area may have obligations under anti-backsliding provisions based on classification under the 1-hour and/or the 1997 8-hour ozone NAAQS. Those obligations may result in a lower major source threshold for purposes of applying RACT than the classification associated with the 2008 ozone NAAQS. The CAA required states to submit RACT SIPs for Moderate and higher classified areas within 2 years after enactment of the 1990 CAA Amendments and required implementation as expeditiously as practicable but no later than May 31, 1995, or 54 and one-half months following enactment of the 1990 Amendments (i.e., no later than 30 and one-half months after the required RACT SIP submission date). In considering modification to existing RACT guidance, 37 the EPA believes there are two principles worth emphasizing: 37 May 18, 2006 memorandum from William T. Harnett, Director, Air Quality Policy Division, to Regional Air Division Directors, “RACT Qs & As—Reasonable Available Control Technology (RACT): Questions and Answers.” 1. The implementation rules should conform closely to the clearly articulated goal of the CAA that states implement measures that provide for attainment of the ozone standard as expeditiously as practicable. 2. The implementation rules should enable, if not encourage, the adoption of emission reduction strategies that will be the most effective, and the most cost effective, at reducing ozone levels. b. Proposal i. Substantive Requirements RACT SIPs must contain adopted RACT regulations, certifications where appropriate that existing provisions are RACT, and/or negative declarations that there are no sources in the nonattainment area covered by a specific CTG source category. States must provide notice and opportunity for public comment on their RACT submission even where the state determines to certify that the existing provisions remain RACT or where the state submits a negative declaration. States must also submit appropriate supporting information for their RACT submission as described in the Phase 2 Rule. See 70 FR 71652. States should use current EPA guidance and any other information available in making RACT determinations. 38 The EPA recognizes that existing CTGs and ACTs for many source categories have not been revised in a number of years. However, in most cases, more recent technical information is available in other forms, such as the BACT/LAER Clearinghouse; SIPs for other nonattainment areas, in particular those areas with higher classifications; the “Menu of Control Measures” for NO X and VOC; and emissions standards developed under CAA section 111(d) and NSR/prevention of significant deterioration (PSD) settlement agreements. As part of their RACT SIP submission, states should provide adequate documentation that they have considered control technology that is economically and technologically feasible. The analysis of economic and technological feasibility should be based on information that is current as of the time of development of the RACT SIP for the 2008 ozone NAAQS. In other words, it is not sufficient for states to rely on previous RACT determinations without considering more recent information. Where public commenters submit specific information to a state about controls that are alleged to be reasonably available in light of technological and economic feasibility, the state should consider such information in developing its RACT SIP. The EPA generally considers controls that have been achieved in practice by other existing sources in the same source category to be technologically and economically feasible. In some cases, states may conclude that sources already subject to RACT for the 1-hour and/or 1997 ozone NAAQS are also meeting the 2008 ozone NAAQS RACT requirement. 38 EPA's CTGs and ACTs are located at http://www.epa.gov/air/ozonepollution/SIPToolkit/ctgs.html. The EPA's NO X RACT guidance (Nitrogen Oxides Supplement to the General Preamble, 57 FR 55625; November 25, 1992) encouraged states to develop RACT programs that are based on “area wide average emission rates.” Additional guidance on area-wide RACT provisions is provided by EPA's January 2001 economic incentive program guidance titled, “Improving Air Quality with Economic Incentive Programs.” 39 Thus, the EPA's existing policy recognizes the approach of states submitting a demonstration as part of their NO X RACT SIP submittal showing that the weighted average NO X emission rate from sources in the nonattainment area subject to RACT meets NO X RACT requirements. 39 http://www.epa.gov/ttn/oarpg/t1/memoranda/eipfin.pdf . As part of their RACT submission, states have the option of demonstrating that compliance with a regional trading program by certain sources within a nonattainment area will achieve RACT-level reductions for those sources within the nonattainment area. The analysis would need to consider current control technology and cost effectiveness information as part of any such demonstration, and to show that the trading program achieves emission reductions greater than or equal to reductions that would be achieved through a source-specific application of RACT in the nonattainment area. In the preamble to the Phase 2 Rule, the EPA explained that states could, in certain circumstances, conclude that sources (EGUs and some non-EGUs), in compliance with the requirements of regional trading programs established by the NO X SIP Call and/or the Clean Air Interstate Rule (CAIR), have met their ozone NO X RACT requirements with respect to the 1997 ozone standards. See 70 FR 71612, 71656-58. EPA subsequently modified its guidance regarding when compliance with CAIR may satisfy NO X RACT requirements for EGUs in CAIR states. See 72 FR 31727, 31730-37. On July 10, 2009, in NRDC v. EPA, the Court of Appeals for the DC Circuit remanded the provision of the Phase 2 Rule determining that compliance with the NO X SIP Call satisfies NO X RACT because EPA had failed to show that compliance with the NO X SIP Call would achieve at least RACT-level reductions in each nonattainment area. 40 The court held that “[b]ecause the EPA has not shown that the NO X SIP call compliance will result in at least RACT-level reductions in emissions from sources within each nonattainment area, the EPA's determination that compliance with the NO X SIP call satisfies the RACT requirement is inconsistent with the “in the area” requirement and thus violates the plain text of [section] 172 (c)(1).” 41 Additionally, the court emphasized that “the RACT requirement calls for reductions in emissions from sources in the area; reductions from sources outside the nonattainment area do not satisfy the requirement . . . Accordingly, participation in the NO X SIP call would constitute RACT only if participation entailed at least RACT-level reductions in emissions from sources within the nonattainment area.” 40 In view of its decision in North Carolina v. EPA, in which the Court had previously remanded the CAIR, the Court deferred consideration of the litigant's challenge insofar as it related to the CAIR program. 41 See NRDC v. EPA, 571 F.3d 1245. The EPA believes that the concerns expressed by the court about the agency's approach to the NO X RACT requirement for sources, including EGUs, and the emissions reductions required by the NO X SIP Call raise significant questions about the EPA's approach to the comparable issues related to compliance with the CAIR. The EPA has not analyzed whether participation in either the NO X SIP call or CAIR would achieve reductions at least equivalent to what would be achieved if RACT requirements were applied on a source-specific basis in nonattainment areas for the 2008 ozone NAAQS. The analysis the EPA prepared for the Phase 2 Rule addressed only nonattainment areas for the 1997 ozone NAAQS. Moreover, since source-specific control assumptions would need to be developed in order to determine the overall reduction level achievable in a nonattainment area through source-specific application of RACT, the EPA believes states are in a better position than EPA to conduct this analysis. The statute, as interpreted by the court in NRDC v. EPA, provides that RACT SIPs must demonstrate that RACT-level emission reductions are achieved within the relevant nonattainment area. Thus, and for the reasons explained above, it does not allow states to, without providing such demonstration, rely upon the participation of a source in a regional cap-and-trade program to satisfy RACT requirements. However, as noted above, states retain the option of demonstrating that compliance with a regional trading program by certain sources within a nonattainment area, will achieve RACT-level reductions for those sources within the nonattainment area. For clarity, we also note that a state has discretion to require beyond-RACT reductions from any source, and has an obligation to demonstrate attainment as expeditiously as practicable. Thus, states may require VOC and NO X reductions that are “beyond RACT” if such reductions are needed in order to provide for timely attainment of the ozone NAAQS. The EPA is soliciting comment on modifying existing guidance to provide additional flexibility in implementing the section 182(b)(2) RACT requirements. In some nonattainment areas additional reductions of anthropogenic VOC emissions have been scientifically demonstrated to have a limited impact on reducing ozone concentrations. We are soliciting comment on whether such a demonstration is an appropriate factor to consider in determining what is “reasonable” in a RACT analysis. This modification to existing guidance is being explored in the spirit of the Executive Order 13563 titled, “Improving Regulation and Regulatory Review,” signed by President Barack Obama on January 18, 2011, which directs governmental agencies to offer and support flexible, common sense approaches. The EPA recognizes that limited state and federal resources need to be used where they will produce the best environmental benefit, and that we should attempt to accommodate air quality management approaches that will be a better use of public and private resources and lead to more expeditious attainment. In some areas, additional VOC reductions may be of little value in further reducing ozone, and may be far less effective than NO X reductions (which may be quicker to implement and lower cost). Under such circumstances, the EPA is taking comment on whether state RACT determinations could take into consideration, in the evaluation of what is economically feasible, the potential air quality benefit (or lack thereof) of further VOC controls. Commenters should discuss the specific circumstances and limitations to which an air quality benefit factor would apply. For example, commenters should address whether this approach would (or can) be limited to cases where it can be scientifically demonstrated that additional VOC controls are ineffective in reducing ambient ozone concentrations. In addition, commenters are encouraged to provide specific examples of where modeling has demonstrated that anthropogenic VOC reductions have “negligible effect.” Commenters, if possible, should also provide a defensible threshold for defining “ineffective,” and define a test for concluding that the effect of additional VOC reductions would be “negligible.” The EPA is also interested in comments that address whether this flexibility should be provided on an individual source basis, or also on a source category basis. Any approaches suggested by commenters should also address how public health and welfare will be impacted. Finally, commenters are encouraged to provide an explanation as to the specific legal basis for supporting the suggested approach. For VOC sources subject to MACT standards, our policy is to allow states to streamline their RACT analysis by including a discussion of the MACT controls and considerations relevant to VOC RACT. Historically, in many cases, states have been able to rely on MACT standards for purposes of showing that a source has met VOC RACT. States need to take care to ensure that any MACT controls relied on for RACT adequately address all VOCs and not just those that are also HAPs. For example, if a manufacturer complies with MACT by reformulating products to remove HAPs but the production process still releases non-HAP VOCs, the state would need to justify why the MACT meets the RACT requirement for that source or would need to develop an appropriate RACT rule to address non-HAP VOCs. ii. Timing We are proposing two alternatives for when states would be required to submit RACT SIPs. Under the first alternative, states with Moderate and higher classified areas would be required to submit RACT SIPs within the period specified in section 182(b) with the time running from the effective date of an area's designation for the 2008 ozone NAAQS (i.e., within 2 years from the effective date of designation). Under the second alternative, states would be given the choice of submitting RACT SIPs for Moderate and higher classified areas either as part of a consolidated SIP submittal 30 months after the effective date of designation, or within the period of time provided in section 182(b), as described above. The 30-month option would align the submission date for the RACT SIP with the proposed submission date for other SIP elements for the area's classification in order to relieve states of the added burden that can result from processing different SIP elements at different times. We are also proposing a spe [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2013-13233. Public record. Not legal advice.