Phoenix Ozone Nonattainment Area, Clean Air Act Section 182(f) Exemption Petition

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[AZ34-1-6418; FRL-5100-3]

Phoenix Ozone Nonattainment Area, Clean Air Act Section 182(f)

Exemption Petition

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: The EPA is proposing to approve a petition submitted by the

Arizona Department of Environmental Quality (ADEQ) requesting that the

EPA grant an exemption for the Phoenix ozone nonattainment area

(Phoenix Area) from the requirement to implement oxides of nitrogen

(NOX) Reasonably Available Control Technology (RACT). In

accordance with the requirements of the Clean Air Act, as amended in

1990 (the Act or CAA), the Phoenix area may be exempted from the

NOX reduction requirements where the Administrator determines that

net air quality benefits are greater in the absence of NOX

reductions from the sources concerned or that additional NOX

reductions would not contribute to attainment of the national ambient

air quality standard (NAAQS) for ozone. The ADEQ petition uses the

Urban Airshed Model (UAM) to demonstrate that additional NOX

reductions in the Phoenix Area would not contribute to attainment of

the ozone NAAQS. The EPA is proposing to exempt the Phoenix Area from

the requirement to implement NOX RACT and the applicable NOX

general and transportation conformity requirements. The EPA is

proposing approval of this action under provisions of the CAA regarding

plan requirements for nonattainment areas.

DATES: Comments on this proposed action must be received in writing on

or before December 1, 1994.

ADDRESSES: Comments may be mailed to: Daniel A. Meer, Chief, Rulemaking

Section (A-5-3), Air and Toxics Division, U.S. Environmental Protection

Agency, Region IX, 75 Hawthorne Street, San Francisco, CA 94105.

Copies of the exemption petition are available for public

inspection at EPA's Region 9 office during normal business hours.

Copies of the submitted petition may be obtained from the following

locations:

Rulemaking Section (A-5-3), Air and Toxics Division, U.S. Environmental

Protection Agency, Region IX, 75 Hawthorne Street, San Francisco, CA

94105.

Arizona Department of Environmental Quality, 3033 North Central Avenue,

Phoenix Arizona 85012.

Maricopa County Air Pollution Control District, 2406 S. 24th Street,

suite E214, Phoenix, Arizona 85034.

FOR FURTHER INFORMATION CONTACT: Wendy Colombo, Rulemaking Section (A-

5-3), or Scott Bohning, Air Quality Section (A-2-4), Air and Toxics

Division, U.S. Environmental Protection Agency, Region IX, 75 Hawthorne

Street, San Francisco, CA 94105 Telephone: (415) 744-1202; (415) 744-

1293.

SUPPLEMENTARY INFORMATION:

Background

On November 15, 1990, the Clean Air Act Amendments of 1990 were

enacted. Public Law 101-549, 104 Stat. 2399, codified at 42 U.S.C.

7401-7671q. The air quality planning requirements for the reduction of

NOX emissions are set out in section 182(f) of the CAA. On

November 25, 1992, EPA published a NPRM (57 FR 55620) entitled, ``State

Implementation Plans; Nitrogen Oxides Supplement to the General

Preamble; Clean Air Act Amendments of 1990 Implementation of Title I;

Proposed Rule,'' (the NOX Supplement) which describes the

requirements of section 182(f). The November 25, 1992, notice should be

referred to for further information on the NOX requirements and is

incorporated into this document by reference.

Section 182(f) of the Act requires States to apply the same

requirements to major stationary sources of NOX (``major'' as

defined in section 302 and section 182(c), (d), and (e)) as are applied

to major stationary sources of volatile organic compounds (VOCs). These

requirements are RACT and New Source Review (NSR) for major stationary

sources in certain ozone nonattainment areas.

The RACT requirements for major stationary sources of VOCs are

contained in section 182(b)(2), while the NSR requirements are

contained in section 182(a)(2)(C) and other provisions of section 182.

Section 182(b)(2) requires submittal of RACT rules for major stationary

sources of VOC emissions (not covered by a pre-enactment control

technologies guidelines (CTG) document or a post-enactment CTG

document) by November 15, 1992. There were no NOX CTGs issued

before enactment, and EPA has not issued a CTG document for any

NOX sources since enactment of the CAA. Section 182(a)(2)(C)

requires submittal of NSR rules incorporating the new preconstruction

permitting requirements for new or modified sources. The RACT and NSR

rules were required to be submitted by November 15, 1992.

The Phoenix area is classified as a moderate1 nonattainment

area for ozone; therefore this area is subject to the RACT and NSR

requirements cited above and the November 15, 1992 deadline.2 On

April 13, 1994, the State of Arizona submitted a petition to the EPA

requesting that the Phoenix area be exempted from the requirement to

implement NOX RACT measures pursuant to section 182(f) of the CAA.

The exemption request is based on UAM modeling conducted in accordance

with EPA guidelines.

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\1\ The Maricopa County ozone nonattainment area was

redesignated nonattainment and was classified by operation of law

pursuant to sections 107(d) and 181(a) upon the date of enactment of

the CAA. See 55 FR 56694 (November 6, 1991).

\2\ The State of Arizona was issued a finding of nonsubmittal

for the section 182(f) NOX RACT requirements on April 21, 1993,

and subsequently submitted a commitment on April 23, 1993 to adopt

and submit the NOX RACT rules. The commitment was submitted as

an interim measure to satisfy the NOX RACT requirements, and

proposed that the Maricopa County Bureau of Air Pollution Control

(MCBAPC) would develop the NOX RACT rules for submittal in

January 1994. The rules were to be developed at the same time that

the Maricopa Association of Governments (MAG) was conducting UAM for

the 1994 attainment demonstration requirements. If the UAM modeling

showed that NOX reductions would not contribute to attainment

of the ozone standard, then Arizona would petition for a section

182(f) exemption from the NOX RACT requirements.

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General Criteria--Section 182(f) Exemption Requests

The NOX RACT petition was submitted in accordance with the EPA

guidance document entitled, Guideline for Determining the Applicability

of Nitrogen Oxides Requirements Under Section 182(f) issued on December

16, 1993 (exemption guidance). In addition to the exemption guidance,

EPA's NOX exemption policy is contained in two memoranda\3\

providing that under section 182(f)(1)(A), an exemption from the

NOX requirements may be granted for nonattainment areas outside

the ozone transport region (OTR) if EPA determines that additional

reductions of NOX would not contribute to attainment of the NAAQS

for those areas. EPA's approval of monitoring-based NOX exemptions

are granted on a contingent basis and last for only as long as the

area's monitoring data continue to demonstrate attainment. As described

below, EPA's approval of modeling-based NOX exemptions are also

granted on a contingent basis.

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\3\Michael H. Shapiro, Acting Assistant Administrator for Air

and Radiation, dated September 17, 1993, 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'', and a subsequent revision to this memorandum

from John S. Seitz, Director of EPA's Office of Air Quality Planning

and Standards, issued on May 27, 1994, entitled, ``Section 182(f)

Nitrogen Oxides (NOX) Exemptions--Revised Process and

Criteria''.

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EPA's conformity rules4, 5 also reference the section 182(f)

exemption process as a means for exempting affected areas from NOX

conformity requirements.6 Therefore, ozone nonattainment areas

that are granted areawide section 182(f) exemptions under this approach

will also be exempt from the NOX general and transportation

conformity requirements.

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\4\``Criteria and Procedures for Determining Conformity to State

or Federal Implementation Plans or Transportation Plans, Programs,

and Projects Funded or Approved under Title 23 U.S.C. of the Federal

Transit Act'', November 24, 1993 (58 FR 62188).

5``Determining Conformity of General Federal Actions to

State or Federal Implementation Plans; Final Rule'', November 30,

1993 (58 FR 63214).

\6\The section 182(f) exemption is explicitly referred to and is

described in similar language in 40 CFR 51.394(b)(3)(i), the

``Applicability'' section of the transportation conformity rule, and

in the preamble (see 58 FR 62197, November 24, 1993). The language

is repeated in the provisions of the rule regarding the motor

vehicle emissions budget test [section 51.428(a)(1)(ii)] and the

``build/no-build'' test [sections 51.436(e), 51.438(e)], although

section 182(f) of the Act is not specifically mentioned. In the

general conformity rule, the section 182(f) NOX exemption is

referred to in section 51.852 (definition of ``Precursors of a

criteria pollutant'') and is discussed in the preamble (see 58 FR

63240, November 30, 1993).

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The EPA first provided guidance on NOX exemptions in the

NOX Supplement. The guidance states that EPA would rescind a

NOX exemption in cases where NOX reductions were later found

to be beneficial to an area's ability to attain and maintain the ozone

NAAQS. That is, a modeling-based exemption would last for only as long

as the areas's modeling continues to demonstrate attainment without

NOX reductions from major stationary sources.

If EPA later determines that NOX reductions are beneficial

based on new photochemical grid modeling in an area initially exempted,

the area would be removed from exempt status and would be required to

implement the NOX requirements, except to the extent modeling

shows that the NOX reductions are excess reductions.7 A

determination that the NOX exemption no longer applies would mean

that the NOX general and transportation conformity provisions

would again be applicable (see 58 FR 63214; 58 FR 62188; 59 FR 31238)

to the affected area. The NOX requirements would also re-apply,

although some reasonable time period after the EPA determination may be

provided for sources to meet the RACT limits. EPA expects this time

period to be as expeditious as practicable, taking into account any

current and applicable State or Federal regulations.

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\7\Section 182(f)(2) states that the application of the new

NOX requirements may be limited to the extent necessary to

avoid excess reductions of NOX as determined by applying tests

similar to the net air quality benefits test, the contribute to

attainment test, and the net ozone air quality benefits test.

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The subsequent modeling analyses alluded to above need not be

limited to the purpose of demonstrating attainment in the 1994 SIP

revisions. For example, future modeling might also be initiated to

resolve issues related to transport of ozone and ozone precursors into

downwind nonattainment areas. State or local officials might want to

consider a strategy that phases in NOX reductions only after

certain VOC reductions are implemented. As improved emission

inventories and ambient data become available, planning officials may

choose to remodel. In addition, alternative control strategy scenarios

might be considered in subsequent modeling analyses in order to improve

the cost-effectiveness of the attainment plan.

EPA's exemption guidance provides that pursuant to the requirements

of section 110(a)(2), States should consider evidence, such as

photochemical grid modeling, which shows that granting the NOX

exemption would interfere with attainment or maintenance in downwind

areas. The State of Arizona has not yet implemented NOX RACT, and

at the time of this notice, EPA has not received evidence from the

Phoenix Area or any downwind areas that shows that granting the

NOX exemption for the Phoenix Area would interfere with attainment

or maintenance in downwind areas.

Exemption Modeling Requirements

The policy documents cited above which contain guidance on the

petition requirements state that the modeling performed for the

petition should follow the Guideline on Regulatory Application of the

Urban Airshed Model, EPA-450/91-013, July 1991, (UAM guideline). The

UAM guideline describes procedures for the appropriate use of UAM, such

as for attainment demonstrations required of all ozone nonattainment

areas.

Section 182(f) of the CAA recognizes that although VOC and NOX

emissions are both precursors to ozone, in certain circumstances the

reduction of NOX emissions can actually increase ozone

concentrations. This occurs because two competing groups of chemical

reactions are affected by NOX. NOX emissions reduction

reduces one of the basic materials needed for ozone production, but it

also enhances the formation of hydrocarbon radicals, thus increasing

another basic ozone ingredient. Which effect dominates, if any, depends

on the ratio of VOC to NOX in the atmosphere, temperature, and

other factors. The atmosphere is said to be ``NOX-limited'' if

NOX reductions decrease peak ozone concentrations, and ``VOC-

limited'' if NOX reductions increase peak ozone concentrations.

UAM can simulate ozone photochemistry to determine the effects of VOC

and NOX emission reductions on ozone. Therefore, if these

simulations demonstrate that NOX emission reductions are of no

benefit or are counter-productive, then an exemption under section

182(f) would apply.

The NOX exemption guidance sets forth two possible tests for

showing that NOX emission reductions are of no benefit or are

counter-productive to ozone attainment for areas outside the OTR. The

petition must show that one or both of these tests is/are passed.

(i) Net air quality benefit: Show that the required NOX

reductions from the potential exempted sources are counter-productive

for overall air quality, primarily considering the modeled effect on

the number of ozone NAAQS exceedances. Also considered are welfare,

visibility, toxic pollutants, the effect on secondary PM10

formation, etc. This must include UAM modeling reflecting an area's

submitted ozone attainment demonstration, with adopted control

measures.

(ii) Contribute to attainment: This test uses UAM modeling to show

that substantial reductions of VOC emissions result in lower ozone

levels than substantial reductions of NOX emissions AND combined

reductions of VOC and NOX emissions.8 The maximum one-hour

ozone concentrations from these three scenarios are then compared.

These three UAM simulations need not be tied to an actual attainment

demonstration9, but the modeled ``NOX reductions should be as

source-specific as possible, rather than across-the-board'' (p.27), and

should reflect ``baseline'' NOx reductions that are expected to occur

without the exemption.

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\8\``Substantial VOC reduction'' means that required to show

attainment, and ``substantial NOx reduction'' means a similar

percentage reduction.

\9\If an exemption is being requested for only certain NOX

sources, then the chosen test is to determine whether just the

``excess emission reductions'' from these sources would be counter-

productive; in this case, the test must be tied to an actual

submitted attainment demonstration.

The UAM guideline describes procedures for applying UAM, such as

choosing ozone episodes and the geographical domain to model, setting

emissions and meteorological inputs, setting boundary conditions to the

model, and evaluating the model's performance. The reliance of the

NOX exemption guidance on the UAM guideline is intended to ensure

that the model is used in a scientifically appropriate manner. Portions

of the UAM guideline that are specific to SIP attainment demonstrations

may not always be applicable to modeling used specifically for NOX

exemptions.

Description of Submitted Petition

The petition submitted by the ADEQ first briefly describes the

methodology used. Then, citing UAM modeling results of simulations

required for the chosen exemption test (the contribute to attainment

test), it concludes that the test is passed. In an appendix (Exhibits

1-4), the petition notes revisions to the emission inventory input made

after the cited Addenda to the MAG 1993 Ozone Plan for the Maricopa

County Area was prepared, and includes descriptions and graphs of UAM

modeling performance indicators and concentration results cited in the

main text.

The contribute to attainment test applied in the petition requires

a showing that substantial reductions of VOC yield a lower ozone peak

than do reductions of NOX, and of both VOC and NOX. In order

to make the modeling as source-specific as possible (required by the

exemption guidance), UAM simulations were also performed to examine the

effects of possible NOX RACT reductions at specific NOX

sources in the Maricopa County nonattainment area.

The ozone episodes chosen for modeling were the August 9-10, 1992

episode, which is the base case modeling described in Exhibit 2 (of the

petition) in an abbreviated form, and the June 13-14, 1993 episode. The

petition notes that there is only a single meteorological regime

associated with ozone NAAQS violations in Phoenix, due to stable

weather patterns, its ``island'' location which isolates the area from

other urban complexes, and its generally even distribution in size and

location of NOX emissions throughout the area. The reduction

levels chosen for the three 1996 modeled scenarios for each simulation

are as follows:

Episode 1

(1) A 20% VOC reduction, and a 0% NOX reduction;

(2) a 0% VOC reduction, and a 60% NOX reduction; and

(3) a 40% reduction of both VOC and NOX.

The results of these reduction simulations are described and

illustrated in Exhibit 1 of the petition. The ozone peaks are 11.9

parts per hundred million (pphm), 16.5 pphm, and 12.8 pphm,

respectively. Since the 11.9 pphm value, corresponding to the VOC-only

reduction, is the lowest, the test is passed. Also noted for this

scenario is the lowest area covered by high ozone concentrations.

Episode 2

(1) A 20% VOC reduction, and a 0% NOX reduction;

(2) a 0% VOC reduction, and a 20% NOX reduction; and

(3) a 20% reduction of both VOC and NOX.

The results of these reduction simulations are described and

illustrated in attachment 1 of the Technical Support Document (TSD).

The ozone peaks are 11.1 pphm, 14.6 pphm, and 13.0 pphm, respectively.

Since the 11.1 pphm value, corresponding to the VOC-only reduction, is

the lowest, this test is also passed.

The petition also describes modeling of 1996 emissions (including

adopted and committed control measures), with and without RACT applied

to specific NOX sources (this modeling is explained in attachment

1 of the TSD). Exhibit 1 of the petition states that the total NOX

reductions from potential NOX RACT measures for the August episode

is 50.6% of the large point source emissions, or 5.4% of the total

NOX emissions for the second day of the ozone episode (August 10).

These yielded a 0.1 pphm ozone increase. For the June episode, with a

52.5% reduction in elevated point source NOX emissions and a 6.9%

reduction in total NOX emissions, the results showed no impact on

the maximum simulated concentration. As referred to above, a more

detailed discussion of the petition can be found in the Technical

Support Document, dated October 1994.

Evaluation of Submitted Petition

The petition correctly utilizes an appropriate test from the

NOX exemption guidance. The ``contribute to attainment'' test is

available to nonattainment areas outside an OTR, and need not be tied

to an adopted and submitted attainment demonstration.

The single meteorological regime and the August 9-10, 1992 and June

13-14, 1993 ozone episodes used in the three required reduction

scenarios are described in the modeling protocol used for the Phoenix

Area's ozone attainment demonstration due November 15, 1994. For

attainment demonstrations, the UAM guideline requires an area with a

single regime to model three episodes of that meteorological type. The

intent in requiring that the UAM guideline be followed is to ensure

that the UAM is utilized in a scientifically appropriate manner and to

ensure that multiple meteorological regimes are addressed, if

necessary. However, in cases where an area is using intensive data from

a field study, a minimum of two episodes is acceptable. This is

appropriate where a field study is conducted that provides more

comprehensive data for the modeling analysis. The field study was

conducted during the summer of 1992 and provided more air quality and

meteorological data than is routinely available.

Since 1996 is the required attainment year for a moderate ozone

nonattainment area, the 1996 year is appropriate for use in the

analysis using UAM simulations.

The NOX and VOC reduction levels used in the test were

``substantial'' within the meaning of the exemption guidance, and

provide a reasonable basis for comparisons of their effect on ozone.

The additional simulations of NOX RACT reductions at specific

sources meet the exemption guidance requirement that the test be as

source-specific as possible, and further substantiate the conclusion

that implementation of NOX RACT for major stationary sources would

not contribute to attainment.

EPA Proposed Action

This action proposes to exempt the Phoenix ozone nonattainment area

from implementing the NOX RACT requirements and the general and

transportation conformity regulations for NOX. It is based on UAM

modeling for two episodes in the Phoenix area which demonstrate that

NOX reductions do not contribute to attainment. The final action

on this proposal will serve as a final determination that the finding

of nonsubmittal for the NOX RACT requirements has been corrected

and that on the effective date of the final action on this proposal,

any Federal Implementation Plan (FIP) clock is stopped.

Nothing in this action should be construed as permitting or

allowing or establishing a precedent for any future implementation

plan. Each request for a section 182(f) exemption shall be considered

separately in light of specific technical, economic, and environmental

factors and in relation to relevant statutory and regulatory

requirements.

Regulatory Process

The Office of Management and Budget has exempted this regulatory

action from Executive Order 12866 review.

Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., EPA

must prepare a regulatory flexibility analysis assessing the impact of

any proposed or final rule on small entities. 5 U.S.C. 603 and 604.

Alternatively, EPA may certify that the rule will not have a

significant impact on a substantial number of small entities. Small

entities include small businesses, small not-for-profit enterprises and

government entities with jurisdiction over population of less than

50,000.

This exemption action does not create any new requirements, but

allows suspension of the indicated requirements for the life of the

exemption. Therefore, because the proposed approval does not impose any

new requirements, I certify that it does not have a significant impact

on any small entities affected. Moreover, due to the nature of the

Federal-state relationship under the CAA, preparation of a regulatory

flexibility analysis would constitute Federal inquiry into the economic

reasonableness of state action. The CAA forbids EPA to base its actions

concerning SIPs on such grounds. Union Electric Co. v. U.S. E.P.A., 427

U.S. 246, 256-66 (S. Ct. 1976); 42 U.S.C. 7410 (a)(2).

Under section 307(b)(1) of the CAA, petitions for judicial review

of this action must be filed in the United States Court of Appeals for

the appropriate circuit by December 1, 1994. Filing a petition for

reconsideration by the Administrator of this rule does not affect the

finality of this rule for the purposes of judicial review nor does it

extend the time within which a petition for judicial review may be

filed, and shall not postpone the effectiveness of such a rule.

This action may not be challenged later in proceedings to enforce

its requirements. Section 307(b)(2).

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Hydrocarbons,

Intergovernmental relations, Nitrogen dioxide, Ozone, Reporting and

recordkeeping requirements, Volatile organic compounds.

Dated: October 25, 1994.

Carol M. Browner,

Administrator.

Part 52, chapter I, title 40 of the Code of Federal Regulations is

proposed to be amended as follows:

PART 52--[AMENDED]

1. The authority citation for part 52 continues to read as follows:

Authority: 42 U.S.C. 7401-7671q.

Subpart D--Arizona

2. Subpart D is proposed to be amended by adding Sec. 52.235 to

read as follows:

Sec. 52.235 Control strategy for ozone: Oxides of nitrogen.

EPA is approving an exemption request submitted by the State of

Arizona on April 13, 1994 for the Maricopa County ozone nonattainment

area from the NOX RACT requirements contained in section 182(f) of

the Clean Air Act. This approval exempts the area from implementing

reasonably available control technology (RACT) for major stationary

sources of nitrogen oxides (NOX) and the NOX related

requirements of general and transportation conformity regulations. The

exemption is based on Urban Airshed Modeling as would last for only as

long as the area's modeling continues to demonstrate attainment without

NOX reductions from major stationary sources.

[FR Doc. 94-27018 Filed 10-31-94; 8:45 am]

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