Conditional Approval and Promulgation of Section 182(f) Exemption to the Nitrogen Oxides (NOINFX) Control Requirements for the Dallas- Fort Worth and El Paso Ozone Nonattainment Areas; Texas

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[TX-45-1-6654; FRL-5114-2]

Conditional Approval and Promulgation of Section 182(f) Exemption

to the Nitrogen Oxides (NOX) Control Requirements for the Dallas-

Fort Worth and El Paso Ozone Nonattainment Areas; Texas

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: In this action, the EPA is conditionally approving two

petitions from the State of Texas requesting that the Dallas-Fort Worth

(DFW) and El Paso ozone nonattainment areas be exempted from NOX

control requirements of section 182(f) of the Clean Air Act (CAA) as

amended in 1990. The State of Texas bases its request for DFW upon a

demonstration that the DFW nonattainment area would attain the National

Ambient Air Quality Standards (NAAQS) for ozone by the CAA mandated

deadline without the implementation of the additional NOX controls

required under section 182(f). Similarly, the State bases its exemption

request for El Paso on a demonstration that the El Paso nonattainment

area would attain the ozone NAAQS by the CAA mandated deadline without

implementing the additional NOX controls required under section

182(f), but for emissions emanating from Mexico. These exemptions are

being requested under authority similarly granted under section 182(f)

of the CAA.

EFFECTIVE DATE: This action is effective as of November 21, 1994.

ADDRESSES: Copies of the documents relevant to these actions are

available for public inspection during normal business hours at the

following locations. The interested persons wanting to examine these

documents should make an appointment with the appropriate office at

least 24 hours before the visiting day.

U.S. Environmental Protection Agency, Region 6, Air Programs Branch

(6T6-A), 1445 Ross Avenue, Dallas, Texas 75202-2733.

The Air and Radiation Docket and Information Center, U. S.

Environmental Protection Agency, 401 M Street, SW., Washington, DC

20460.

Texas Natural Resource Conservation Commission, P.O. Box 13087, Austin,

Texas 78711-3087.

FOR FURTHER INFORMATION CONTACT: Ms. Leila Yim Surratt or Mr. Quang

Nguyen, Planning Section (6T-AP), Air Programs Branch, EPA Region 6,

1445 Ross Avenue, Dallas, Texas 75202-2733, telephone (214) 665-7214.

SUPPLEMENTARY INFORMATION:

I. Background

NOX are precursors to ground level (tropospheric) ozone, or

urban ``smog.'' When released into the atmosphere, NOX will react

with volatile organic compounds (VOC) in the presence of sunlight to

form ozone. Tropospheric ozone is an important factor in the nation's

urban air pollution problem.

The 1990 Clean Air Act Amendments (CAAA) made significant changes

to the air quality planning requirements for areas that do not meet the

ozone NAAQS. Subparts 1 and 2 of part D, title I of the CAA as amended

in 1990 contain the air quality planning requirements for ozone

nonattainment areas. Title I includes new requirements to control

NOX emissions in certain ozone nonattainment areas and ozone

transport regions. Section 182(f) requires States to apply the same

requirements to major stationary sources of NOX as are applied to

major stationary sources of VOC. The new NOX requirements are

reasonably available control technology (RACT) and new source review

(NSR). These provisions are explained more fully in the EPA's NOX

Supplement to the General Preamble published in the Federal Register

(FR) on November 25, 1992 (see 57 FR 55620). In addition, the general

and transportation conformity rules (conformity) required by section

176(c) contain new NOX requirements (see 58 FR 63214 and 58 FR

62188), and the vehicle inspection and maintenance rules required by

section 182(c)(3) also contain new NOX requirements (see 57 FR

52989).

El Paso, Texas was designated nonattainment for ozone and

classified as serious pursuant to sections 107(d)(4) and 181(a) of the

CAA. The El Paso nonattainment area consists of El Paso County and

shares a common airshed with Juarez, Mexico. Under section 181(a),

serious areas must attain the ozone NAAQS by 1999. DFW was classified

as moderate with an attainment deadline of 1996. The DFW nonattainment

area consists of Dallas, Tarrant, Denton, and Collin Counties. Please

reference 56 FR 56694 (November 6, 1991, codified for Texas at title 40

of the Code of Federal Regulations in Sec. 81.344).

II. Applicable EPA Guidance

The CAA specifies in section 182(f) that if one of the conditions

listed below is met, the new NOX requirements would not apply:

1. In any area, the net air quality benefits are greater without

NOX reductions from the sources concerned;

2. In a non-transport region, additional NOX reductions would

not contribute to ozone attainment in the nonattainment area; or

3. In a transport region, additional NOX reductions would not

produce net ozone benefits in the transport region.

In addition, section 182(f)(2) states that the application of the

new NOX requirements may be limited to the extent that any portion

of those reductions are demonstrated to result in ``excess reductions''

of NOx. The NOX provisions of the conformity requirements would

also not apply in an area that is granted a section 182(f) exemption

(see 58 FR 63214 and 58 FR 62188). In addition, certain NOX

provisions of the vehicle inspection and maintenance requirements would

not apply in an area that is granted a section 182(f) exemption (57 FR

52989).

The EPA's Guideline for Determining the Applicability of Nitrogen

Oxides Requirements under Section 182(f) (December 1993) describes how

the EPA intends to interpret the NOX exemption provisions of

section 182(f). In addition, a memorandum signed by John S. Seitz,

Director of the EPA Office of Air Quality Planning and Standards, dated

May 27, 1994, describes certain revisions to the process the EPA

currently intends to follow for granting exemptions from NOX

control requirements.

As described more fully in the Seitz memorandum, petitions

submitted under section 182(f)(3) are not required to be submitted as

State Implementation Plan (SIP) revisions. Consequently, the State is

not required under the CAA to hold a public hearing in order to

petition for an areawide NOX exemption determination. Similarly,

it is not necessary to have the Governor submit the petition.

III. International Border Area

Section 818 of the 1990 CAAA incorporates a new section 179B into

the CAA which contains special provisions for nonattainment areas that

are affected by emissions emanating from outside the United States. The

section 818 provisions are hereinafter referred to as section 179B.

Because the El Paso nonattainment area shares a common airshed with

Juarez, Mexico, the section 179B provisions apply to El Paso.

Under section 179B, the EPA will approve a SIP if the area meets

all other CAA requirements and establishes that implementation of the

plan would achieve attainment of the ozone standard by the CAA

statutory deadline ``but for emissions emanating from outside the

United States.'' Customarily, an area must demonstrate, using EPA

guideline models, that it would attain the relevant NAAQS. Since El

Paso and Juarez, Mexico share an airshed and data are not available for

a Juarez emission inventory, modeling of the entire airshed is not

possible at this time. Current EPA policy allows an area subject to

section 179B, such as El Paso, to perform modeling using only U.S. air

emission data. Such modeling may form an acceptable basis for

demonstrating attainment for analysis purposes required under section

179B. For areas on an international border that demonstrate attainment,

``but for emissions emanating from a foreign country,'' the provisions

of section 179B will keep such areas from being subject to the ``bump

up'' provisions of section 181(b)(2), which require reclassification to

the next higher ozone nonattainment classification if the area fails to

attain the relevant NAAQS by the applicable attainment date. See 57 FR

13498, 13569-13570 (April 16, 1992).

The State of Texas performed Urban Airshed Modeling (UAM) using

only El Paso emissions data, and demonstrated that El Paso would attain

the ozone standard by 1996 ``but for emissions emanating from Mexico.''

The El Paso UAM ozone modeling analysis will be referred to in this

notice as the ``attainment demonstration'' for El Paso.

Although the EPA allows an area such as El Paso to demonstrate

attainment on a basis of U.S.-only modeling, it is understood that

ultimately basin-wide modeling must occur in order to develop a control

strategy in El Paso that will achieve the NAAQS. The United States

entered into the Agreement for Environmental Cooperation along the

U.S.-Mexico Border, referred to as the La Paz Agreement, with Mexico in

1983 to address environmental concerns along the border between the two

countries. Annex V of the Agreement, negotiated in 1989, calls for

basin-wide modeling to be accomplished for the El Paso/Juarez airshed.

The EPA has been working with Mexico and with the Texas Natural

Resource Conservation Commission (TNRCC) to accomplish the basin-wide

modeling. Since the statutory attainment date for serious ozone

nonattainment areas such as El Paso is 1999, concerned agencies intend

to complete such modeling by 1999.

IV. State Submittal

On June 17, 1994, the TNRCC submitted to the EPA two petitions

pursuant to section 182(f), requesting that the DFW and El Paso

nonattainment areas be exempted by the EPA from the NOX control

requirements of section 182(f) of the CAA.

The State bases its petitions on a demonstration that NOX

reductions would not contribute to attainment in either area, as

allowed for under the test (2) listed above, because such NOX

reductions would be in excess of the reductions necessary for

attainment. Consistent with the EPA's December 1993 section 182(f)

guidance, the State's excess emissions reductions demonstration is tied

to the attainment demonstration SIP required under section 182(c)(2)(A)

of the CAA.

The State's submission for each petition includes: (1) A letter

from Anthony C. Grigsby, Executive Director of the TNRCC, to Jane N.

Saginaw, Regional Administrator of the EPA Region 6, transmitting the

NOX exemption petition; (2) the petition from the TNRCC

summarizing the State's UAM attainment demonstration results; and (3)

technical reports documenting the State's base case UAM inputs. The

State has also previously submitted to the EPA the 15 percent

Reasonable Further Progress (RFP) SIPs for the DFW and El Paso areas,

as required by section 182(b)(1) of the CAA. The 15 percent RFP SIPs

contain regulations that are estimated to reduce VOC emissions in each

area by 15 percent from 1990 levels, net of any growth that may occur.

The State of Texas supplemented its petitions by submitting to the EPA

in July 1994, two additional technical reports on the UAM for each

area, which contained the following: base case performance evaluation,

attainment year emissions report, and attainment year modeling report.

These additional technical reports provided supplemental detail and

documentation on the modeling information already provided to the EPA

in the State's petitions.

On August 29, 1994, the EPA proposed to conditionally approve the

section 182(f) petitions for the DFW and El Paso areas (see 59 FR

44386). The proposed rulemaking notice provides a detailed discussion

of the EPA's rationale for proposing conditional approval of the

State's petitions and should be referred to. In that notice, the EPA

explained that although the State had completed its attainment

demonstration SIPs for both areas, the SIPs had not yet been adopted by

the State, nor submitted to the EPA. The EPA further explained that the

EPA would not take final action to conditionally approve the petitions

for each area unless and until the State submitted the attainment

demonstration SIPs to the EPA in accordance with section 182(c)(2)(A)

of the CAA.

The TNRCC adopted the attainment demonstration SIP for the DFW area

on September 21, 1994, and submitted it to the EPA on October 3, 1994,

in accordance with section 182(c)(2)(A) of the CAA. Similarly, the

TNRCC adopted the attainment demonstration SIP for the El Paso area on

September 14, 1994, and submitted it to the EPA on October 3, 1994. The

EPA is therefore proceeding to take final action on the section 182(f)

petitions submitted by the TNRCC for the DFW and El Paso areas.

V. Response to Comments

The EPA requested public comments on all aspects of the proposed

action to conditionally approve the section 182(f) petitions for the

DFW and El Paso areas. The EPA received 27 letters of support from the

utility, transportation authority, metropolitan planning organization

and local governments in the DFW area. The EPA received three letters

of support from the City of El Paso, a local utility, and a

metropolitan planning organization in the El Paso area.

Three adverse comment letters were received from environmental

groups, one of which applied only to DFW, while two of which applied to

both DFW and El Paso. One of the letters was submitted by three

environmental groups and contained generic comments objecting to the

EPA's general policy on section 182(f) exemptions. The three

environmental groups who submitted the generic letter requested that it

be included in each EPA rulemaking action for each section 182(f)

petition.

Comment: One group objected to the use of methyl tertiary butyl

ether (MTBE) as a fuel additive in reformulated gasoline. The TNRCC

included the use of reformulated gasoline in its 15 percent RFP SIP for

DFW as a control strategy to reduce VOC emissions.

Response: This comment applies to the State's reformulated gasoline

program, and its 15 percent RFP SIP for the DFW area that had

previously been adopted by the State and submitted to the EPA. The EPA

does not believe that this comment is relevant to the rulemaking action

on the State's petition for a section 182(f) NOX exemption, since

in this action, the EPA is not taking action on the State's

reformulated gasoline program nor its 15 percent RFP plan. The EPA will

rule on those control programs in a separate rulemaking action.

Comment: One group felt that the UAM model for DFW was flawed from

a scientific perspective so as to be inadequate to make sound

predictions of attainment. They cited the fact that only three of the

four episodes initially analyzed by the State had acceptable

performance. In addition, they felt that the emissions inventories were

significantly inaccurate so as to discredit the modeling results.

Response: The EPA disagrees with this comment that the UAM modeling

demonstration for DFW is flawed. Due to the large number of factors

that influence ozone formation, the EPA agrees that the UAM model

cannot precisely predict the exact relationship between VOC, NOX,

and ozone. However, if the model performs within certain bounds of

accuracy, the EPA believes that the model can and should be used to

develop the attainment strategy since Congress clearly intended that

photochemical grid modeling be used to form the basis of a control

strategy plan. The EPA has established general criteria to evaluate the

relative accuracy of a given modeling demonstration, and believes that

models that meet those criteria are accurate enough to form the basis

of the attainment strategy.

The EPA's ``Guideline for Regulatory Application of the Urban

Airshed Model'' generally requires that three episodes with acceptable

model performance be used in the attainment demonstration. Because

Texas had three episodes which exhibited acceptable performance, Texas'

attainment modeling is fully consistent with the EPA's requirements. In

addition, the EPA's model performance criteria apply to each individual

episode rather than across episodes. Therefore, it is inaccurate to

conclude that the model was 75 percent accurate because only three of

the four episodes exhibited acceptable model performance.

The EPA disagrees with the comment that the emissions inventories

were too inaccurate to produce acceptable modeling results. The EPA

evaluated the State's 1990 base year emissions inventories and a final

approval was published in the FR on November 8, 1994.

Comment: One group stated that NOX controls should be required

because NOX emissions cause other adverse health and environmental

effects besides contributing to ozone formation.

Response: The EPA agrees that high NOX emissions can

contribute to air pollution problems independent of their role in ozone

formation; however, the EPA disagrees that the NOX controls

required under section 182(f) of the CAA should be implemented in the

DFW area regardless of their impact on ozone. Because ambient air

monitoring shows that the DFW area is in attainment for the nitrogen

dioxide NAAQS standard, the EPA does not believe that the current level

of NOX emissions pose a public health or environmental risk in the

DFW area. In addition, section 182(f)(2)(B)(i) specifically provides

for an exemption in cases where NOX emission reductions would not

contribute to the attainment of the NAAQS for ozone in the area. The

TNRCC has demonstrated that the NOX reductions required by section

182(f) would be in excess of the emission reductions necessary for

attaining the ozone NAAQS. Finally, for the purposes of reducing acid

rain deposition, certain NOX sources will still be required to

reduce NOX emissions under Title IV of the CAA. For these reasons,

the EPA does not believe that the NOX controls required under

section 182(f) of the CAA should be implemented in the DFW area

regardless of their impact on ozone.

Comment: One group questioned whether the current ozone standard of

120 parts per billion provides sufficient protection of public health.

Response: The EPA does not believe that this comment is relevant to

this rulemaking action on the section 182(f) petitions for DFW and El

Paso. The EPA is currently reviewing the ozone primary and secondary

standards and will address concerns over the current ozone standard

through a separate rulemaking process. If the standard is revised, the

EPA will determine at that time what action is appropriate for

attainment SIPs and NOX exemption petitions that had previously

been approved.

Comment: One group felt that EPA's action to propose conditional

approval of the State's exemption petitions without the attainment SIPs

was premature and denied adequate public input on the issue. They

commented that EPA should wait until the State actually submits the

attainment SIPs before making any determination as to the feasibility

of the two areas actually achieving the NAAQS for ozone.

Response: The EPA disagrees with this comment for several reasons.

The EPA does not believe its action proposing approval of the petitions

was premature. As explained in the FR notice which proposed approval of

the petitions (see 59 FR 44386), the attainment demonstrations rely on

VOC regulations contained in the 15 percent RFP SIPs which had

previously gone through public comment, State adoption, and submission

to the EPA. For this reason, the EPA did not anticipate that the

substance of the final attainment demonstration SIPs would differ from

what had already been submitted to the EPA by the TNRCC in the section

182(f) exemption petitions. In addition, the EPA further explained that

the EPA would not take final action to conditionally approve the

petitions for each area unless and until the State had submitted the

attainment demonstration SIPs to the EPA in accordance with section

182(c)(2)(A) of the CAA. Therefore, the EPA has waited until the State

submitted its attainment SIPs before making any final determination.

The EPA believes the public has had adequate opportunity for public

comment. The control strategies contained in the attainment SIPs had

previously gone through public comment and State adoption as part of

the 15 percent RFP SIP. In addition, the State proposed the attainment

SIPs on July 27, 1994. The State's public comment period on the

attainment SIPs closed September 2, 1994, while the comment period on

the EPA's proposed action to conditionally approve the petitions closed

on September 28, 1994. The proposed attainment SIPs were therefore

available for public review for two months prior to and during the

EPA's public comment period on the proposed action on the petitions.

Finally, the EPA's action to approve the petitions is conditioned

upon the EPA finally approving the modeling portion of the attainment

SIPs, which will provide another opportunity for comment on the

adequacy of the attainment SIPs as a basis for the section 182(f)

exemptions.

Comment: Three groups provided a generic comment arguing that

NOX exemptions are provided for in two separate parts of the CAA,

section 182(b)(1) and section 182(f). Because the NOX exemption

tests in subsections 182(b)(1) and 182(f)(1) include language

indicating that action on such requests should take place ``when [EPA]

approves a plan or plan revision,'' these commenters conclude that all

NOX exemption determinations by the EPA, including exemption

actions taken under the petition process established by subsection

182(f)(3), must occur during consideration of an approvable attainment

or maintenance plan, unless the area has been redesignated as

attainment. These commenters also argue that even if the petition

procedures of subsection 182(f)(3) may be used to relieve areas of

certain NOX requirements, exemptions from the NOX conformity

requirements must follow the process provided in subsection 182(b)(1),

since this is the only provision explicitly referenced by section

176(c), the CAA's conformity provisions.

Response: The EPA disagrees with the commenters regarding the

process for considering exemption requests under section 182(f), and

instead believes that subsections 182(f)(1) and 182(f)(3) provide

independent procedures by which the EPA may act on NOX exemption

requests. The language in subsection 182(f)(1), which indicates that

the EPA should act on NOX exemptions in conjunction with action on

a plan or plan revision, does not appear in subsection 182(f)(3). And,

while subsection 182(f)(3) references subsection 182(f)(1), the EPA

believes that this reference encompasses only the substantive tests in

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

requirement that the EPA act on exemptions only when acting on SIPs.

Additionally, paragraph (3) provides that ``person[s]'' (which section

302(e) of the CAA defines to include States) may petition for NOX

exemptions ``at any time,'' and requires the EPA to make its

determination within six months of the petition's submission. These key

differences lead the EPA to believe that Congress intended the

exemption petition process of paragraph (3) to be distinct and more

expeditious than the longer plan revision process intended under

paragraph (1).

The CAA requires conformity with regard to federally-supported

NOX-generating activities in relevant nonattainment and

maintenance areas. However, EPA's conformity rules explicitly provide

that these NOX requirements would not apply if the EPA grants an

exemption under section 182(f). In response to the comment that section

182(b)(1) should be the appropriate vehicle for dealing with exemptions

from the NOX requirements of the conformity rule, the EPA notes

that this issue has previously been raised in a formal petition for

reconsideration of the EPA's final transportation conformity rule and

in litigation pending before the U.S. Court of Appeals for the District

of Columbia Circuit on the substance of both the transportation and

general conformity rules. The issue, thus, is under consideration

within the EPA, but at this time remains unresolved. Additionally,

subsection 182(f)(3) requires that NOX exemption petition

determinations be made by the EPA within six months. The EPA has stated

in previous guidance that it intends to meet this statutory deadline as

long as doing so is consistent with the public notice requirements of

the Administrative Procedures Act. Absent the EPA action now, this

deadline, as it applies with respect to the DFW and El Paso exemption

requests, which were submitted in June 1994, would not be met. The EPA,

therefore, believes that until a resolution of this issue is achieved,

the applicable rules governing this issue are those that appear in the

EPA's final conformity regulations, and the EPA remains bound by their

existing terms.

Comment: Three groups provided a generic comment on all section

182(f) actions that the modeling required by EPA is insufficient to

establish that NOX reductions would not contribute to attainment

since only one level of NOX control, i.e., ``substantial''

reductions, is required to be analyzed. They further explained that an

area must submit an approvable attainment plan before EPA can know

whether NOX reductions will aid or undermine attainment.

Response: The EPA does not believe that this comment is applicable

to the DFW or El Paso actions because attainment plans have been

submitted for both areas in conjunction with the section 182(f)

petitions. The TNRCC based its petitions for DFW and El Paso on a

demonstration that the NOX reductions would be in excess of the

reductions necessary for attainment. In contrast, the above comment

refers to section 182(f) petitions that are based on a demonstration

that NOX reductions would not contribute to attainment. Such a

demonstration requires that various emission reduction scenarios be

modeled which include substantial reductions of NOX.

As described in Chapter 6 of the EPA's December 1993 section 182(f)

guidance, the excess reductions demonstration used by the TNRCC for DFW

and El Paso must be tied to the areas' attainment demonstration SIPs.

This test must show that the excess reductions are reductions in excess

of those specified in the attainment demonstration required by section

182, and either contained in the approved SIP or as adopted by the

State to meet the section 182 attainment demonstration requirement, and

submitted to the EPA for approval. The EPA believes that the more

precise modeling analysis contained in the State's attainment

demonstration SIP is required for the excess reduction test because the

demonstration must show that a specific portion of the total area-wide

NOX emissions is not beneficial under one of the three tests

listed above. The tie to the attainment demonstration assures that an

excess reductions petition would not arbitrarily be based on small

emissions and would not undermine the State's control strategy.

In addition, the EPA's guidance specifies that photochemical grid

modeling is generally needed to document cases where NOX

reductions do not contribute to attainment or include excess

reductions. The UAM is an acceptable model for these purposes. The EPA

guidance also states that application of UAM should be consistent with

techniques specified in the EPA ``Guideline on Air Quality Models

(Revised).'' Further, application of UAM should also be consistent with

procedures contained in the EPA ``Guidelines for Regulatory Application

of the Urban Airshed Model'' (July 1991).

Comment: Three groups provided a generic comment on all section

182(f) actions that three years of ``clean'' data fail to demonstrate

that NOX reductions would not contribute to attainment.

Response: The EPA does not believe that this comment is applicable

to the DFW and El Paso actions because neither area has based its

section 182(f) petition on ``clean'' air monitoring data.

Comment: Three groups provided a generic comment on all section

182(f) actions that a waiver of NOX controls is unlawful if such

waiver will impede attainment and maintenance of the ozone standard in

separate downwind areas.

Response: The EPA believes that, while this generic comment may be

applicable to proposed NOX exemption actions for other areas, it

is not applicable to the DFW and El Paso exemption actions because the

EPA is unaware of, and the comment itself does not specify, any

downwind area for which NOX transport is of concern. This is

unlike the case regarding comments received by the EPA for certain

areas for which NOX exemptions are pending such as in Ohio, for

example, where the downwind areas of concern are clearly identified as

areas in the Northeast Ozone Transport Region. It should also be noted

that neither DFW nor El Paso is located near or within an ozone

transport region.

Comment: Three groups provided a generic comment on all actions

exempting areas from the NOX requirements of the conformity rules

that such exemptions waive only the requirements of section 182(b)(1)

to contribute to specific annual reductions, not the requirement that

conformity SIPs contain information showing the maximum amount of motor

vehicle NOX emissions allowed under the transportation conformity

rules and, similarly, the maximum allowable amounts of any such

NOX emissions under the general conformity rules. The commenters

admit that, in prior guidance, the EPA has acknowledged the need to

amend a drafting error in the existing transportation conformity rules

to ensure consistency with motor vehicle emissions budgets for

NOX. The commenters, however, want the EPA to explicitly affirm

this obligation in FR actions on NOX exemptions and to avoid

granting waivers until a budget controlling future NOX increases

is in place.

Response: In its ``Conformity; General Preamble for Exemption From

Nitrogen Oxides Provisions,'' 59 FR 31238, 31241 (June 17, 1994), the

EPA reiterated its view that in order to conform, nonattainment and

maintenance areas must demonstrate that their transportation plans and

transportation improvement plans are consistent with the motor vehicle

emissions budget for NOX even where a conformity NOX waiver

has been granted. Due to a drafting error, that view is not reflected

in the current transportation conformity rules. As the commenters

correctly note, the EPA states in its June 17 notice that it intends to

remedy the problem by amending the conformity rule. Although that

notice specifically mentions only requiring consistency with the

approved maintenance plan's NOX motor vehicle emissions budget,

the EPA also intends to require consistency with the attainment

demonstration's NOX motor vehicle emissions budget. The DFW and El

Paso exemptions, however, were submitted pursuant to section 182(f)(3),

and the EPA does not believe it is appropriate to delay the statutory

deadline for acting on these petitions until the conformity rule is

amended. As noted earlier in response to a previous issue raised by

these commenters, this issue has also been raised in a formal petition

for reconsideration of the EPA's final transportation conformity rule

and in litigation pending before the U.S. Court of Appeals for the

District of Columbia Circuit on the substance of both the

transportation and general conformity rules. This issue, thus, is under

consideration within the EPA, but at this time remains unresolved. The

EPA, therefore, believes that until a resolution of this issue is

achieved, the applicable rules governing this issue are those that

appear in the EPA's final conformity regulations, and the EPA remains

bound by their existing terms.

Comment: Three groups provided a generic comment on all section

182(f) actions that the CAA does not authorize delaying implementation

of NOX controls if modeling is not complete.

Response: The EPA does not believe that this comment is applicable

to the DFW or El Paso actions because complete attainment modeling has

been submitted for both areas, as part of the attainment SIPs, in

conjunction with the section 182(f) petitions.

VI. Effective Date

This rulemaking is effective as of November 21, 1994. The

Administrative Procedure Act (APA) 5 U.S.C. 553(d)(1), permits the

effective date of a substantive rule to be less than thirty days after

publication of the rule if the rule ``relieves a restriction.'' Since

the approval of the section 182(f) exemptions for the DFW and El Paso

areas, is a substantive rule that relieves the restrictions associated

with the CAA title I requirements to control NOX emissions, the

NOX exemption approval may be made effective upon signature by the

EPA Administrator.

VII. Final Action

In this action, the EPA is conditionally approving1 the 182(f)

NOX exemption petitions submitted by the State of Texas for the

DFW and El Paso ozone nonattainment areas, conditioned upon the EPA

approving the modeling portion of the attainment demonstration SIPs. If

the EPA proposes to disapprove the modeling portion of the SIPs, the

EPA will also propose disapproval of the section 182(f) NOX

exemption petitions, based on the fact that the technical basis for the

exemption is no longer valid. Upon final disapproval of the modeling

portion of the attainment SIPs, the EPA will issue a final disapproval

of the section 182(f) NOX exemption petitions as well.

---------------------------------------------------------------------------

\1\This conditional approval is distinct from the conditional

approval authority granted under section 110(k)(4), which pertains

to SIP actions. As discussed in the previously cited John S. Seitz

memorandum dated May 27, 1994, concerning the EPA's processing of

section 182(f) petitions, these NOX exemptions petitions are

not revisions to the SIP.

---------------------------------------------------------------------------

There are several consequences if the EPA disapproves the section

182(f) NOX exemption petitions based on the conclusion that the

attainment SIPs were not approved by the EPA. The State would be

required to submit NOX RACT rules and implement the relevant

NOX conformity, NSR, and vehicle inspection and maintenance

requirements for the DFW and El Paso areas. The EPA would issue a

finding of nonsubmittal of the NOX RACT rules. As provided under

section 179(a) of the CAA, if the State did not make a complete

submittal within 18 months after the finding of failure to submit, the

EPA would be required to impose the requirement to provide two-to-one

NSR offsets. If the State had not corrected its deficiency within six

months after imposing the offset sanction, the EPA would impose a

second sanction, on highway funding. Any sanction the EPA imposes must

remain in place until the EPA determines that the State has corrected

the deficiency. In addition, the finding of failure to submit would

trigger the 24-month clock for the EPA to impose a Federal

Implementation Plan as required by section 110(c)(1) of the CAA.

The EPA believes that all section 182(f) exemptions that are

approved, should be approved only on a contingent basis. As described

in the EPA's NOX Supplement to the General Preamble (57 FR 55628,

November 25, 1992), the EPA would rescind a NOX exemption in cases

where NOX reductions were later found to be beneficial in the

area's attainment plan. That is, a modeling based exemption would last

for only as long as the area's modeling continued to demonstrate

attainment without the additional NOX reductions required by

section 182(f).

If the 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

adopt the NOX RACT and NSR rules, except to the extent that

modeling shows NOX reductions to be ``excess reductions.'' In the

rulemaking action which removes the exempt status, the EPA would

specify a schedule for States to adopt the NOX RACT and NSR rules

and for sources to comply with the NOX RACT emission limits.

The subsequent modeling analyses mentioned above need not be

limited to the purpose of demonstrating attainment in the 1994 SIP

revisions without the need for NOX controls required under section

182(f). For example, future modeling might also be initiated to resolve

issues related to transport of ozone and ozone precursors into downwind

nonattainment areas. An area 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, areas 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.

In summary, the EPA is conditionally approving the section 182(f)

exemptions for the DFW and El Paso areas, conditioned upon EPA's

approval of the modeling portion of the attainment demonstrations for

these areas. These exemptions will remain effective for only as long as

modeling in each nonattainment area continues to show that NOX

control activities would not be beneficial in the DFW or El Paso

nonattainment areas.

In addition, the State of Texas and EPA have committed to data-

gathering and modeling throughout the El Paso-Juarez air basin in

accordance with Annex V of the La Paz Agreement for Environmental

Cooperation on the U.S.-Mexico Border. Once the data are collected and

basin-wide modeling is concluded, the EPA, the State of Texas, and the

Republic of Mexico can develop a binational control strategy that will

result in improved air quality throughout the airshed. If EPA review of

modeling and air quality data confirms that NOX control

requirements on local U.S. sources would not be beneficial, the

exemption would be sustained. In contrast, if the EPA determines that

NOX control requirements would be beneficial, the exemption would

be rescinded.

Regulatory Process

Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., the 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, the EPA may certify that the rule will not have a

significant economic impact on a substantial number of small entities.

Small entities include small businesses, small not-for-profit

enterprises, and government entities with jurisdiction over populations

of less than 50,000.

Approvals of NOX exemption petitions under section 182(f) of

the CAA do not create any new requirements. Therefore, because the

Federal approval of the petitions does not impose any new requirements,

the EPA certifies that it does not have a significant impact on

affected small entities. 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 the 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)).

If the conditional approval is converted to a disapproval based on

the State's failure to meet the condition upon which the approval is

granted, it will not affect any existing State requirements applicable

to small entities. Federal disapproval of the State submittal does not

affect its State-enforceability. Moreover, the EPA's disapproval of the

submittal does not impose a new Federal requirement. Therefore, the EPA

certifies that this disapproval action would not have a significant

impact on a substantial number of small entities because such

disapproval would not remove existing State requirements, nor does it

substitute a new Federal requirement.

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

of this action must be filed in the U.S. Court of Appeals for the

appropriate circuit by January 27, 1995. Filing a petition for

reconsideration by the Administrator of this final 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 rule or action.

This action may not be challenged later in proceedings to enforce its

requirements. (See section 307(b)(2).)

Executive Order 12866

Under Executive Order 12866 (58 FR 51735 (October 4, 1993)), the

EPA must determine whether the regulatory action is ``significant'',

and therefore subject to Office of Management and Budget (OMB) review

and the requirements of the Executive Order. It has been determined

that this rule is not a ``significant regulatory action'' under the

terms of Executive Order 12866, and is therefore not subject to OMB

review.

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Hydrocarbons,

Intergovernmental relations, Nitrogen dioxide, Ozone, Volatile organic

compounds.

Dated: November 21, 1994.

Carol M. Browner,

Administrator.

40 CFR part 52 is amended as follows:

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

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

Subpart SS--Texas

2. Section 52.2308 is added to read as follows:

Sec. 52.2308 Area-wide nitrogen oxides (NOX) exemptions.

(a) The Texas Natural Resource Conservation Commission (TNRCC)

submitted to the EPA on June 17, 1994, a petition requesting that the

Dallas ozone nonattainment area be exempted from the NOX control

requirements of section 182(f) of the Clean Air Act (CAA) as amended in

1990. The Dallas nonattainment area consists of Dallas, Tarrant,

Denton, and Collin counties. The exemption request was based on a

photochemical grid modeling which shows that the Dallas nonattainment

area would attain the National Ambient Air Quality Standards (NAAQS)

for ozone by the CAA mandated deadline without the implementation of

the additional NOX controls required under section 182(f). On

November 21, 1994, the EPA conditionally approved this exemption

request, conditioned upon the EPA approving the modeling portion of the

Dallas attainment demonstration SIP.

(b) The TNRCC submitted to the EPA on June 17, 1994, a petition

requesting that the El Paso ozone nonattainment area be exempted from

the NOX control requirements of section 182(f) of the Clean Air

Act (CAA) as amended in 1990. The El Paso nonattainment area consists

of El Paso county, and shares a common airshed with Juarez, Mexico. The

exemption request was based on a photochemical grid modeling which

shows that the El Paso nonattainment area would attain the NAAQS for

ozone by the CAA mandated deadline without the implementation of the

additional NOX controls required under section 182(f), but for

emissions emanating from Mexico. On November 21, 1994, the EPA

conditionally approved this exemption request, conditioned upon the EPA

approving the modeling portion of the El Paso attainment demonstration

SIP.

[FR Doc. 94-29195 Filed 11-25-94; 8:45 am]

BILLING CODE 6560-50-P