Monterey Bay Ozone Nonattainment Area; Clean Air Act Section 182(f) Exemption Petition

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[CA82-1-6509; FRL-5125-4]

Monterey Bay 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

Monterey Bay Unified Air Pollution Control District (MBUAPCD)

requesting that the Monterey Bay ozone nonattainment area (Monterey Bay

Area) be exempted 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 Monterey Bay Area may be exempted from the

NOX reduction requirements where the Administrator determines that

the 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 in areas outside the ozone

transport region (OTR). The MBUAPCD is using three years of ambient

monitoring data to demonstrate that additional NOX reductions in

the Monterey Bay Area would not contribute to attainment of the ozone

NAAQS. The EPA is proposing to exempt the Monterey Bay 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 January 19, 1995.

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

Source Rulemaking (A-5-3), Air & 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 IX 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.

Monterey Bay Unified Air Pollution Control District, Rule Development

Section, 24580 Silver Cloud Court, Monterey, CA 93940.

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

5-3), Air and Toxics Division, U.S. Environmental Protection Agency,

Region IX, 75 Hawthorne Street, San Francisco, CA 94105 Telephone:

(415) 744-1202.

SUPPLEMENTARY INFORMATION:

Applicability

The MBUAPCD submitted the NOX exemption petition to EPA on

April 26, 1994. Final approval of the petition exempts the Monterey Bay

Area from implementing the NOX RACT and the NOX general and

transportation conformity requirements of the CAA.

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). 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 Monterey Bay 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. On April 21, 1993 the State of California was issued a

finding of nonsubmittal for MBUAPCD for the section 182(f) NOX

RACT requirements.

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\1\ The Monterey Bay 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).

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The MBUAPCD identified two categories for which major stationary

sources of NOX exist and rules are required. These categories

apply to NOX emissions from utility power boilers and minerals

processing kilns. The MBUAPCD submitted Rule 431, Emissions from

Utility Power Boilers on November 18, 1993, and Rule 435, Control of

Nitrogen Oxides from Kilns on September 28, 1994. The rules were found

complete by EPA on December 27, 1993 and October 21, 1994,

respectively, and EPA stopped the 18-month sanctions clock for the

NOX RACT requirements on October 21, 1994.

On April 26, 1994, the MBUAPCD submitted a petition to the EPA

requesting that the Monterey Bay Area be exempted from the requirement

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

the CAA. On July 21, 1994, the Association of Monterey Bay Area

Governments requested that EPA also grant an exemption from the

NOX conformity requirements, also pursuant to section 182(f) of

the CAA. The exemption request is based on three years of clean

monitoring data from 1991 through 1993.

Criteria for Evaluation of 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 memoranda2

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

NOX requirements may be granted for nonattainment areas outside

the OTR if EPA determines that additional reductions of NOX would

not contribute to attainment of the NAAQS for those areas. In cases

where a nonattainment area is demonstrating attainment with three

consecutive years of air quality monitoring data, without having

implemented the section 182(f) NOX provisions, it is clear that

the contribute to attainment test is met, although additional

reductions of NOX might contribute to maintenance.

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\2\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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Thus, a State may submit a petition for a section 182(f) exemption

based on air quality monitoring data. The EPA's approval of the

exemption, if warranted, would be granted on a contingent basis (i.e.,

the exemption would last for only as long as the area's monitoring data

continue to demonstrate attainment).

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 MBUAPCD has not yet implemented NOX RACT, and

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

State or any downwind areas that shows that granting the NOX

exemption for the Monterey Bay Area would interfere with attainment or

maintenance in downwind areas.

EPA's conformity rules3,4 also reference the section 182(f)

exemption process as a means for exempting affected areas from NOX

conformity requirements.5 Therefore, ozone nonattainment areas

that are granted areawide section 182(f) exemptions will also be exempt

from the NOX conformity requirements.

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\3\''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).

\4\''Determining Conformity of General Federal Actions to State

or Federal Implementation Plans; Final Rule'', November 30, 1993 (58

FR 63214).

\5\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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EPA Evaluation

Attainment of the ozone NAAQS is determined based on the expected

number of exceedances in a calendar year. Ozone attainment must rely on

three complete, consecutive calendar years of quality-assured air

quality monitoring data, collected in accordance with 40 CFR parts 50

and 58, including Appendices. The method for determining attainment of

the ozone NAAQS is contained in 40 CFR part 50, Sec. 50.9 and appendix

H to that Section.6 appendix H of 40 CFR part 50 explains how to

determine when the expected number of days per calendar year with

maximum hourly average concentrations above 0.12 ppm ozone is equal to

or less than 1. This section also discusses how to account for

incomplete data sets. The EPA ``Guideline for the Interpretation of

Ozone Air Quality Standards'' elaborates on Appendix H. In general,

expected exceedances are calculated by averaging actual exceedances at

each monitoring site over a three year period. An area is in attainment

of the standard if this average results in expected exceedances for

each monitoring site of 1.0 or less per calendar year.

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\6\See EPA Guidance ``Procedures for Processing Requests to

Redesignate Areas to Attainment,'' John Calcagni, Director, Air

Quality Management Division, September 4, 1992, p. 2.

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At the monitoring sites used to evaluate the attainment status of

Monterey County, there has been only one exceedance of the ozone NAAQS.

This exceedance was monitored in 1991 at the Pinnacles site. There have

been no violations of the ozone NAAQS during the 1991-1993 period.

Based on ambient air monitoring data for the years 1991-1993 (including

data from the Pinnacles site which helped form the basis for the

Monterey County nonattainment designation of 1990), it is clear that

additional reductions of NOX would not contribute to attainment of

the ozone standard. For further information regarding the monitoring

sites data, please see attachments 1 and 2 to the Technical Support

Document, dated October 1994.

The EPA is proposing to approve the Monterey Bay Area section

182(f) NOX RACT exemption request based upon the evidence provided

by the MBUAPCD and the MBUAPCD's compliance with the requirements

outlined in the EPA guidance. Continuation of the section 182(f)

exemption, once granted, is contingent upon the continued monitoring

and continued attainment and maintenance of the ozone NAAQS in the

affected area in accordance with 40 CFR part 58. If a violation of the

ozone NAAQS is monitored in the Monterey Bay Area (consistent with the

requirements contained in 40 CFR part 58 and recorded in AIRS), EPA

will provide notice in the Federal Register. 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 RACT 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. If a nonattainment area is

redesignated to attainment of the ozone NAAQS, NOX RACT is to be

implemented as provided for in the EPA-approved maintenance plan.

This action proposes to exempt the Monterey Bay ozone nonattainment

area from implementing the NOX RACT and the applicable general and

transportation conformity requirements for NOX. The final action

on this proposal serves 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, the

24-month Federal Implementation Plan (FIP) clock is stopped. The 18-

month sanctions clock was stopped on October 21, 1994 when EPA made a

completeness determination for the second of two rules submitted to

meet the NOX RACT requirements. Upon EPA's final approval of the

NOX exemption, MBUAPCD will recind the two NOX RACT rules

previously submitted to meet the CAA requirements.

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

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 January 19, 1995. 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 in later proceedings to enforce its

requirements. Section 307(b)(2).

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Hydrocarbons,

Incorporation by reference, Intergovernmental relations, Nitrogen

dioxide, Nitrogen oxides, Ozone, Reporting and recordkeeping

requirements, Volatile organic compounds.

Dated: December 9, 1994.

Felicia Marcus,

Regional 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 F--California

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

read as follows:

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

EPA is approving a Section 182(f) exemption request submitted by

the Monterey Bay Unified Air Pollution Control District on April 21,

1994. The approval exempts the Monterey Bay ozone nonattainment area

from the oxides of nitrogen (NOX) control 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 NOX and the NOX related

requirements of general and transportation conformity regulations. If a

violation of the ozone NAAQS occurs in the Monterey Bay area, the

exemption shall no longer apply.

[FR Doc. 94-31230 Filed 12-19-94; 8:45 am]

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