Conformity; General Preamble for Exemption From Nitrogen Oxides Provisions

DEPARTMENT OF ENERGY

[FRL-4998-6]

Conformity; General Preamble for Exemption From Nitrogen Oxides

Provisions

AGENCY: Environmental Protection Agency (EPA).

ACTION: General preamble for future proposed rulemakings.

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SUMMARY: This General Preamble clarifies how EPA believes that

nonclassifiable (i.e., submarginal, transitional, and incomplete/no

data) ozone nonattainment areas which are outside the Northeast ozone

transport region and have ambient monitoring data demonstrating

attainment of the national ambient air quality standard for ozone may

be exempted from the conformity rules' nitrogen oxides (NOx)

requirements. This notice also references a recent memorandum which

states EPA's preliminary interpretation for such ozone nonattainment

areas which are classified as marginal or above.

Clarification of EPA policy for areas with monitoring data which

demonstrates attainment is particularly important because many areas

already have such data and appear to qualify for exemption from the

conformity NOx requirements.

In order to avoid repetition, this General Preamble describes

guidance on NOx exemptions with respect to the transportation

conformity rule. However, this guidance for transportation conformity

is intended to also apply with respect to general conformity.

This General Preamble explains EPA's policy generally for future

notice-and-comment rulemakings taking action on requests for NOx

exemptions for specific areas. It contains EPA's preliminary

interpretations of relevant provisions of the Clean Air Act and the

conformity rules. The interpretations contained herein are not binding

as a matter of law until final rulemaking action is taken on each

specific area. Opportunity for public comment on NOx exemption

determinations made by EPA will be provided separately for each area

during these individual rulemakings.

FOR FURTHER INFORMATION CONTACT: For issues related to transportation

conformity, Kathryn Sargeant, Emission Control Strategies Branch,

Emission Planning and Strategies Division, U.S. Environmental

Protection Agency, 2565 Plymouth Road, Ann Arbor, MI 48105. (313) 668-

4441. For issues related to redesignation, David Cole, (919) 541-5565,

and for issues related to general conformity and NOx RACT and NSR, Doug

Grano, (919) 541-3292, Ozone/CO Programs Branch (MD-15), Air Quality

Management Division, U.S. Environmental Protection Agency, Research

Triangle Park, North Carolina 27711.

SUPPLEMENTARY INFORMATION:

I. Background

A. Transportation Conformity Rule

The transportation conformity final rule, entitled ``Criteria and

Procedures for Determining Conformity to State or Federal

Implementation Plans of Transportation Plans, Programs, and Projects

Funded or Approved Under title 23 U.S.C. or the Federal Transit Act,''

was published in the Federal Register on November 24, 1993 (58 FR

62188). This action was required under section 176(c)(4) of the Clean

Air Act, as amended in 1990.

Conformity to an implementation plan is defined in the Clean Air

Act as conformity to an implementation plan's purpose of eliminating or

reducing the severity and number of violations of the national ambient

air quality standards and achieving expeditious attainment of such

standards. In addition, Federal activities may not cause or contribute

to new violations of air quality standards, exacerbate existing

violations, or interfere with timely attainment or required interim

emission reductions towards attainment. The transportation conformity

final rule establishes the process by which the Federal Highway

Administration and the Federal Transit Administration of the United

States Department of Transportation and metropolitan planning

organizations determine the conformity of highway and transit projects.

Under the rule, conformity applies in nonattainment and maintenance

areas.

The transportation conformity rule requires ozone nonattainment and

maintenance areas to perform a regional emissions analysis of motor

vehicle NOx emissions in order to determine the conformity of

transportation plans and programs. This analysis must demonstrate that

the NOx emissions which would result from the transportation

system if the proposed transportation plan and program were implemented

are within the total allowable level of NOx emissions from highway

and transit motor vehicles (``motor vehicle emissions budget''), as

identified in a submitted or approved attainment demonstration or

maintenance plan.

Until an attainment demonstration or (for nonclassifiable areas) a

maintenance plan is approved by EPA, the regional emissions analysis of

the transportation system must also satisfy the ``build/no-build

test.'' That is, the analysis must demonstrate that emissions from the

transportation system if the proposed transportation plan and program

were implemented would be less than the emissions from the

transportation system if only the previously applicable transportation

plan and program were implemented. Furthermore, the regional emissions

analysis must show that emissions from the transportation system if the

transportation plan and program were implemented would be lower than

1990 levels by any nonzero amount.

The transportation conformity rule as currently written provides

for an exemption from these requirements with respect to NOx if

the Administrator determines under section 182(f) of the Clean Air Act

that additional reductions of NOx would not contribute to

attainment. This exemption is explicitly referred to and is described

in similar language in Sec. 51.394(b)(3)(i) (the ``Applicability''

section of the rule) and in the preamble (58 FR 62197, November 24,

1993). The language is repeated in the provisions of the rule regarding

the motor vehicle emissions budget test (Sec. 51.428(a)(1)(ii)) and the

``build/no-build'' test (Secs. 51.436(e), 51.438(e)), although Clean

Air Act section 182(f) is not specifically mentioned.

Section 182(f) of the Clean Air Act contains requirements for--and

in some cases, exemptions for--major stationary NOx sources in

marginal and above ozone nonattainment areas and in an ozone transport

region. EPA guidance for application of section 182(f) in these areas

is briefly described and referenced in the next section of this

preamble. Because the transportation conformity rule covers all

nonattainment areas--including nonclassifiable ozone nonattainment

areas (i.e., submarginal, transitional, incomplete/no data areas) that

are not necessarily covered under section 182(f)--corresponding

guidance is needed for applying in these nonclassifiable ozone

nonattainment areas the section 182(f) NOx exemption referenced in

the transportation conformity rule. This guidance is described below

(section II, ``EPA Policy'') and is consistent with the existing

guidance that applies to the marginal and above areas outside an ozone

transport region. The substantive test for a NOx exemption is the

same in both sets of areas, but in nonclassifiable ozone nonattainment

areas the effect of a NOx exemption is limited solely to the issue

of whether such areas may be exempted from meeting the NOx

requirements of the transportation conformity rule.

B. General Conformity

On November 30, 1993 (58 FR 63214), EPA published the general

conformity final rule, entitled ``Determining Conformity of General

Federal Actions to State or Federal Implementation Plans.'' This action

was required under section 176(c)(4) of the Clean Air Act, as amended

in 1990.

Like the transportation conformity rule, the general conformity

rule exempts an area from considering NOx emissions if the area

has been exempted under section 182(f) of the Clean Air Act (see

definition of ``precursors of a criteria pollutant,'' 58 FR 63248).

In order to avoid repetition, this General Preamble describes

guidance on NOx exemptions with respect to the transportation

conformity rule. However, this guidance for transportation conformity

is intended to also apply with respect to general conformity.

C. Section 182(f) of the Clean Air Act

Section 182(f) of the Clean Air Act requires states to apply the

reasonably available control technology (RACT) and new source review

(NSR) requirements that apply to major stationary sources of volatile

organic compounds to major stationary sources of NOx as well.

NOX RACT is required in moderate and above ozone areas, as well as

in all areas within an ozone transport region. NOX NSR regulations

are required in marginal and above ozone areas, as well as in all areas

within an ozone transport region.

Clean Air Act section 182(f)(1)(A) states that, for nonattainment

areas not within an ozone transport region (as established under Clean

Air Act section 184), these NOX requirements shall not apply if

the Administrator determines that additional reductions of NOX

would not contribute to attainment of the national ambient air quality

standard (NAAQS) for ozone in the area. Furthermore, for areas within

an ozone transport region, section 182(f)(1)(B) states that these

stationary source NOX requirements shall not apply if additional

NOX reductions would not produce net ozone air quality benefits in

the region.

EPA issued limited guidance on section 182(f) exemptions in a

September 17, 1993 memo from Michael H. Shapiro, Acting Assistant

Administrator for Air and Radiation, to the Regional Air Division

Directors entitled, ``State Implementation Plan (SIP) Requirements for

Areas Submitting Requests for Redesignation to Attainment of the Ozone

and Carbon Monoxide (CO) National Ambient Air Quality Standards (NAAQS)

on or after November 15, 1992.'' EPA issued more extensive guidance in

a December 1993 document entitled, ``Guideline for Determining the

Applicability of Nitrogen Oxide Requirements under section 182(f).''

Most recently, EPA has clarified and, in part, revised its guidance in

a May 27, 1994 memorandum from John S. Seitz, Director of the Office of

Air Quality Planning and Standards, to Regional Air Division Directors,

``Section 182(f) NOX Exemptions--Revised Process and Criteria.''

All of these guidance documents are available by request from the

contacts listed above.

Taken together, these guidance documents state that if an area (not

within an ozone transport region) has attained the ozone standard, as

demonstrated by adequate monitoring data consistent with EPA guidance,

it is clear that additional NOX reductions would not contribute to

attainment. Therefore, such an area would meet the test under section

182(f)(1)(A) for an exemption from NOX NSR and RACT requirements.

II. EPA Policy

A. Transportation Conformity and Section 182(f) Exemptions

The transportation conformity rule states that its NOX

provisions do not apply when the Administrator has determined under

section 182(f) of the Clean Air Act that ``additional reductions of

NOX would not contribute to attainment.'' Although two other

passages of the transportation conformity rule use this language (which

is borrowed from section 182(f)(1)(A)'s test for areas outside an ozone

transport region) without specifically referring to section 182(f), EPA

believes there is no appropriate basis to interpret this identical

language differently under the transportation conformity rule than

under the Clean Air Act. Consequently, EPA believes this common

language should be interpreted similarly for purposes of both section

182(f) and conformity NOX exemptions. Therefore, EPA is providing

guidance which would exempt nonclassifiable ozone nonattainment areas

outside an ozone transport region from the conformity rule's NOX

provisions on the same substantive basis as the applicable section

182(f) test.1

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\1\ As explained in footnote 6 of the May 27, 1994 memorandum

from John Seitz, referenced above, for purposes of the NOX

exemption test, EPA is interpreting the term ``contribute to

attainment'' to mean that the State (or petitioner) need only show

whether additional NOX reductions would contribute to

attainment, not whether such reductions would contribute to

attainment and maintenance. EPA believes that Congress could

reasonably have believed it appropriate to require that States

impose reasonably available control technology (RACT) and new source

review (NSR) requirements on NOX sources for areas in

nonattainment, but that the States could be left to decide for

themselves whether to impose these NOX controls or other

measures for maintenance purposes, even if these controls could

``contribute'' to maintenance. EPA believes this rationale also

applies in the conformity context, where EPA believes it is

reasonable to allow States that have attained the NAAQS to decide

for themselves how best to ensure maintenance of the standard. And,

as explained below, EPA has conditioned the monitoring-based section

182(f) and conformity exemptions on continued monitoring data that

do not show violations of the NAAQS. This will provide an additional

incentive for States to track NOX emissions (and limit such

emissions, where necessary) to ensure that future violations do not

occur.

EPA notes that its conclusion regarding the relevance of

maintenance may well be different for other Clean Air Act provisions

where the test is whether emissions reduction measures are

``necessary'' for attainment, even if maintenance is not explicitly

mentioned. See section 211(c)(4)(C) (allowing States to overcome

federal preemption of State fuel controls where ``necessary'' to

achieve a NAAQS) and section 184(c) (providing for EPA approval of

ozone transport commission recommendations of additional control

measures ``necessary'' to bring any area in the region into

attainment). It may make less sense to disregard maintenance to

disallow more stringent fuel controls under section 211 or to

disapprove additional controls under section 184 where these

measures not only contribute to but are ``necessary'' for

maintenance. The rationale that the State might appropriately retain

discretion to choose other options to ensure maintenance makes less

sense when the specific measures in question are ``necessary.''

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The transportation conformity rule applies to all nonattainment and

maintenance areas, and does not distinguish between nonclassifiable

nonattainment and other nonattainment areas. Consequently, EPA

interprets the transportation conformity rule's reference to the need

for nonattainment areas to obtain a section 182(f) exemption in order

to be relieved of the NOX conformity requirements to include

nonclassifiable ozone nonattainment areas (i.e., submarginal,

transitional, incomplete/no data areas), even though such areas are not

subject to Clean Air Act section 182(f) itself. This means that ozone

nonattainment areas, including nonclassifiable ozone nonattainment

areas, can only be exempted from the NOX provisions of the

transportation conformity rule if EPA determines that the area

satisfies the substantive test required for an areawide section 182(f)

exemption, through a process similar to that required for section

182(f) exemptions which are not related to conformity.

Thus, for nonclassifiable ozone nonattainment areas outside the

Northeast ozone transport region, EPA will consider requests for

determinations that additional NOX reductions would not contribute

to attainment if such areas already have air quality data that

demonstrate attainment of the ozone standard, that are consistent with

40 CFR part 58 requirements, and that are recorded in EPA's Aerometric

Information Retrieval System (AIRS). Once made, this determination

would relieve an area of the transportation conformity rule's NOX

provisions. A more thorough explanation of the conditions and process

for obtaining the 182(f) exemption is given in the May 27, 1994 Seitz

memorandum.

B. Condition on NOX Exemptions for Areas Outside the Ozone

Transport Region With Monitoring Data Demonstrating Attainment

If a NOX transportation conformity exemption request is based

solely on monitoring data demonstrating attainment, EPA's approval of

the exemption, if otherwise warranted, will be granted on a contingent

basis, i.e., the exemption would last for only as long as the area's

monitoring data continues to demonstrate attainment. If subsequently it

is determined that the area has violated the standard, the exemption,

as of the date of the determination, would no longer apply. EPA would

notify the state that the exemption no longer applies, and would also

provide notice to the public in the Federal Register. Existing

transportation plans and TIPs and past conformity determinations will

not be affected by a determination that the NOX exemption no

longer applies, but new conformity determinations would have to observe

the NOX requirements of the conformity rule. The State must

continue to operate an appropriate air quality monitoring network, in

accordance with 40 CFR part 58, to verify the attainment status of the

area. The air quality data relied on for the above determinations must

be consistent with 40 CFR part 58 requirements and other relevant EPA

guidance and recorded in EPA's Aorometric Information Retrieval System

(AIRS).

C. Areas Inside an Ozone Transport Region

Section 182(f) of the Clean Air Act provides a different test for

exempting areas in an ozone transport region from NOX requirements

(see section I.C. of this preamble). In particular, that test requires

a demonstration that shows additional NOX reductions would not

produce net ozone benefits in the transport region as a whole. Since

the requirement for meeting this test is substantially different from

that needed to meet the contribute-to-attainment test in section

182(f)(1)(A), and since the language in the conformity rule clearly

does not reflect the language of the test provided for areas in an

ozone transport region, the determination of how such areas would

qualify for an exemption from the rule's NOX requirements merits

more consideration before EPA can issue appropriate guidance. Today's

guidance therefore applies only to NOX exemptions for areas

outside the Ozone Transport Region.

As noted previously, requests for conformity NOX exemptions

must consider the nonattainment area as a whole. With respect to

transportation conformity, NOX exemptions will not be granted for

portions of nonattainment areas. Therefore, nonattainment areas with

portions both inside and outside the Ozone Transport Region will be

treated for purposes of such exemption requests as areas inside the

Ozone Transport Region, and for the present time, will not be eligible

for an exemption based on monitoring data as described in this notice.

EPA will give further consideration to areas in the Ozone Transport

Region, and if EPA does propose to exempt some of these areas, they

will be addressed in state-specific rulemaking notices unless another

general preamble providing guidance for such areas is published first.

III. Process for Receiving a NOX Exemption Based on Monitoring

Data for Nonclassifiable Areas

EPA believes that section 182(f) sets up two separate procedures by

which EPA may act on NOX exemption requests. Subsections 182(f)

(1) and (2) direct that action on NOX exemption determination

requests should take place ``when [EPA] approves a plan or plan

revision.'' This language appears to contemplate that exemption

requests submitted under these paragraphs are limited to states, since

states are the entities authorized under the Act to submit plans or

plan revisions. By contrast, subsection 182(f)(3) provides that

``person[s]2'' may petition for a NOX determination ``at any

time'' after the ozone precursor study required under section 185B of

the Act is finalized,\3\ and gives EPA a limit of six months after

filing to grant or deny such petitions. Although subsection 182(f)(3)

references section 182(f)(1), EPA believes that paragraph (f)(3)'s

reference to paragraph (f)(1) encompasses only the substantive tests in

paragraph (f)(1) (and, by extension, paragraph (f)(2)), not the

requirement in paragraph (f)(1) for EPA to grant exemptions only when

acting on plan revisions.

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\2\Section 302(e) of the Act defines the term ``person'' to

include states.

\3\The final section 185B report was issued July 30, 1993.

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Accordingly, petitions submitted under subsection 182(f)(3) are not

required to be submitted as state implementation plan (SIP) revisions.

Consequently, the state is not required under the Act to hold a public

hearing in order to petition for an areawide NOX exemption

determination under section 182(f)(3) (see Clean Air Act sections

110(a) (1) and (2)). For similar reasons, if the state is submitting an

areawide petition under subsection 182(f)(3), it is unnecessary to have

the Governor submit the petition. However, because of the need for

consistency with the AIRS data and the requirements of 40 CFR part 58,

EPA believes that, particularly in cases where the NOX exemption

request (including a request for exemption from the NOX

requirements of the conformity rules) is based on monitoring data, if

such data is contained in a petition submitted by a person other than

the state, the petition should be coordinated with the state air

agency. Lack of endorsement by the state air agency will require more

scrutiny by EPA, and therefore EPA's processing of the petition will

likely take more time.

EPA will grant or deny a petition for an areawide NOX

transportation conformity exemption through a full rulemaking process.

This may involve a direct final rule or a notice of proposed rulemaking

followed by a final rule. Either process allows opportunity for public

comment. For areas which are relying on monitoring data which

demonstrates attainment, the notice and comment will provide

opportunity for comment on the preliminary interpretations contained in

this General Preamble. These rulemakings will also offer opportunity

for comment on the appropriateness of using monitoring data which is

consistent with the requirements in 40 CFR part 58 and consistent with

the data recorded in AIRS as the basis of EPA's approval and rescission

of the contingent NOX exemption. If EPA issues a final rulemaking

concluding that it will use such air quality monitoring data in making

subsequent determination that an area has violated the standard, no

further notice and comment will be required in order to rescind the

NOX exemption in the event that such data subsequently indicates

that a violation has occurred.

EPA is preparing a delegation of authority to Regional

Administrators to make determinations under section 182(f) for areas

which are outside the Ozone Transport Region and which have three years

of monitoring data demonstrating attainment. This delegation would

allow the rulemaking for 182(f) determinations to be conducted by EPA's

regional offices.

IV. Effect of a NOX Transportation Conformity Exemption on

Transportation Planning

This section applies to both classified and nonclassifiable areas.

Once EPA makes a finding under a separate notice which grants a

NOX transportation conformity exemption, an area is relieved of

the transportation conformity rule's requirements for regional analysis

of NOX emissions.

However, EPA plans to amend the transportation conformity rule to

require that once an area's maintenance plan is approved, any

previously approved NOX conformity exemption no longer applies.

The area must then demonstrate as part of its conformity determinations

that the transportation plan and TIP are consistent with the motor

vehicle emissions budget for NOX where such a budget is

established by the maintenance plan. As currently written, none of the

transportation conformity rule's NOX requirements would ever apply

to an area once such an area had received a NOX transportation

conformity exemption.

EPA believes that it is crucial for maintenance areas to

demonstrate consistency with the maintenance plan's motor vehicle

NOX emissions budget because that budget represents the level of

motor vehicle NOX emissions needed for continued maintenance.

However, the maintenance plan's NOX motor vehicle emissions budget

for the purposes of transportation conformity will not necessarily

require annual NOX emission reductions throughout the ten-year

period.

EPA intends to promptly amend the conformity rule as stated above,

so that NOX motor vehicle emissions budgets in maintenance plans

will begin to apply at the time or shortly after those plans are

approved.

V. Administrative Requirements

Regulatory Flexibility Act

Whenever EPA is required by section 553 of the Administrative

Procedures Act or any other law to publish general notice and proposed

rulemaking for any proposed rule, EPA shall propose and make available

for public comment an initial regulatory flexibility analysis.

The regulatory flexibility requirements do not apply for this

General Preamble because it is not a regulatory action in the context

of the Administrative Procedures Act or the Regulatory Flexibility Act.

Dated: June 8, 1994.

Carol M. Browner,

Administrator.

[FR Doc. 94-14416 Filed 6-16-94; 8:45 am]

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