Approval and Promulgation of Implementation Plans; California State Implementation Plan Revision; San Joaquin Valley Unified Air Pollution Control District et al.

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[OAQPS CA 13-13-6194; FRL-4852-2]

Approval and Promulgation of Implementation Plans; California

State Implementation Plan Revision; San Joaquin Valley Unified Air

Pollution Control District et al.

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking.

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SUMMARY: EPA is proposing a limited approval and limited disapproval of

revisions to the California State Implementation Plan (SIP) which

concern the control of volatile organic compound (VOC) emissions from

crude oil production wells where production has been enhanced by steam

injection, and during the transfer of organic liquids between storage

units and delivery vessels. The intended effect of proposing limited

approval and limited disapproval of these rules is to regulate

emissions of VOCs in accordance with the requirements of the Clean Air

Act, as amended in 1990 (CAA or the Act). EPA's final action on this

notice of proposed rulemaking (NPR) will incorporate these rules into

the federally approved SIP. EPA has evaluated each of these rules and

is proposing a simultaneous limited approval and limited disapproval

under provisions of the CAA regarding EPA actions on SIP submittals and

general rulemaking authority because these revisions, while

strengthening the SIP, also do not fully meet the CAA provisions

regarding plan submissions and requirements for nonattainment areas.

DATES: Comments must be received on or before April 20, 1994.

ADDRESSES: Comments may be mailed to: Daniel A. Meer, 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 rule revisions and EPA's evaluation report of each

rule are available for public inspection at EPA's Region IX office

during normal business hours. Copies of the submitted rule revisions

are also available for inspection at the following locations:

California Air Resources Board, Stationary Source Division, Rule

Evaluation Section, 2020 ``L'' Street, Sacramento, CA 95814.

San Joaquin Valley Unified Air Pollution Control District, 1999

Tuolumne Street, suite #200, Fresno, CA 93721.

Kern County Air Pollution Control District, 2700 ``M'' Street,

Suite 290, Bakersfield, CA 93301.

South Coast Air Quality Management District, 21865 E. Copley Drive,

Diamond Bar, CA 91765-4182.

FOR FURTHER INFORMATION CONTACT: Mae Wang, 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-

1200.

SUPPLEMENTARY INFORMATION:

Applicability

The rules being acted on in this document are: San Joaquin Valley

Unified Air Pollution Control District (SJVUAPCD) Rule 465.1, Steam-

Enhanced Crude Oil Production Well Vents; Kern County Air Pollution

Control District (KCAPCD) Rule 411.1, Steam-Enhanced Crude Oil

Production Well Vents; and South Coast Air Quality Management District

(SCAQMD) Rule 462, Organic Liquid Loading. These rules were submitted

by the California Air Resources Board (CARB) to EPA on January 28,

1992, May 30, 1991, and May 13, 1991, respectively.

Background

On March 3, 1978, EPA promulgated a list of ozone nonattainment

areas under the provisions of the Clean Air Act, as amended in 1977

(1977 CAA or pre-amended act), that included the Los Angeles-South

Coast Air Basin, and the San Joaquin Valley Area which encompassed the

following eight air pollution control districts (APCDs): Fresno County

APCD, Kern County APCD,1 Kings County APCD, Madera County APCD,

Merced County APCD, San Joaquin County APCD, Stanislaus County APCD,

and Tulare County APCD. 43 FR 8964, 40 CFR 81.305. Because some of

these areas were unable to meet the statutory attainment date of

December 31, 1982, California requested under section 172(a)(2), and

EPA approved, an extension of the attainment date to December 31,

1987.2 40 CFR 52.238. On May 26, 1988, EPA notified the Governor

of California, pursuant to section 110(a)(2)(H) of the pre-amended Act,

that the portions of the California SIP associated with the SCAQMD and

the above districts were inadequate to attain and maintain the ozone

standard, and requested that deficiencies in the existing SIP be

corrected (EPA's SIP-Call). 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. In amended section 182(a)(2)(A) of

the CAA, Congress statutorily adopted the requirement that

nonattainment areas fix their deficient reasonably available control

technology (RACT) rules for ozone and established a deadline of May 15,

1991 for states to submit corrections of those deficiencies.

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\1\At that time, Kern County included portions of two air

basins: The San Joaquin Valley Air Basin and the Southeast Desert

Air Basin. The San Joaquin Valley Air Basin portion of Kern County

was designated as nonattainment, and the Southeast Desert Air Basin

portion of Kern County was designated as unclassified. See 40 CFR

81.305 (1991).

\2\This extension was not requested for the following counties:

Kern, Kings, Madera, Merced and Tulare. Thus, the attainment date

for these counties remained December 31, 1982.

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On March 20, 1991, the San Joaquin Valley Unified Air Pollution

Control District (SJVUAPCD) was formed. The SJVUAPCD has authority over

the San Joaquin Valley Air Basin which includes all of the above eight

counties except for the Southeast Desert Air Basin portion of Kern

County. Thus, Kern County Air Pollution Control District (KCAPCD) still

exists, but only has authority over the Southeast Desert Air Basin

portion of Kern County.

Section 182(a)(2)(A) applies to areas designated as nonattainment

prior to enactment of the amendments and classified as marginal or

above as of the date of enactment. It requires such areas to adopt and

correct RACT rules pursuant to pre-amended section 172(b) as

interpreted in pre-amendment guidance.3 EPA's SIP-Call used that

guidance to indicate the necessary corrections for specific

nonattainment areas. The South Coast Air Basin is classified as

extreme, and the San Joaquin Valley Area is classified as serious.

Therefore, the SCAQMD and the APCDs found in the San Joaquin Valley Air

Basin (now collectively known as the SJVUAPCD) were subject to the RACT

fix-up requirement and the May 15, 1991 deadline.4 KCAPCD was

subject to EPA's SIP-Call, but was not subject to the RACT fix-up

requirement and the May 15, 1991 deadline.5

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\3\Among other things, the pre-amendment guidance consists of

those portions of the proposed post-1987 ozone and carbon monoxide

policy that concern RACT, 52 FR 45044 (November 24, 1987); ``Issues

Relating to VOC Regulation Cutpoints, Deficiencies, and Deviations,

Clarification to Appendix D of November 24, 1987 Federal Register

Notice'' (Blue Book) (notice of availability was published in the

Federal Register on May 25, 1988); and the existing control

technique guidelines (CTGs).

\4\The SCAQMD and the SJVUAPCD retained their designations of

nonattainment and were classified by operation of law pursuant to

section 107(d) and section 181(a) upon the date of enactment of the

Clean Air Act Amendments of 1990. See 56 FR 56694 (November 6,

1991).

\5\KCAPCD was not subject to the RACT fix-up requirement and the

May 15, 1991 deadline because the Southeast Desert Air Basin portion

of Kern County was not a pre-enactment nonattainment area, and thus,

was not automatically designated nonattainment on the date of

enactment of the Clean Air Act Amendments of 1990. (See section

107(d) and section 182(a)(2)(A) of the Clean Air Act Amendments of

1990.) However, the KCAPCD is still subject to the requirements of

EPA's SIP-Call because the SIP-Call included all of Kern County. The

substantive requirements of the SIP-Call are the same as those of

the statutory RACT fix-up requirement.

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The State of California submitted many revised rules to EPA for

incorporation into its SIP on May 13, 1991, May 30, 1991 and January

28, 1992, including the rules being acted on in this document. This

document addresses EPA's proposed action for the following rules:

SJVUAPCD Rule 465.1, adopted by the SJVUAPCD on September 19, 1991;

KCAPCD Rule 411.1, adopted by the KCAPCD on May 6, 1991; and SCAQMD

Rule 462, adopted by the SCAQMD on December 7, 1990. SJVUAPCD Rule

465.1 was determined to be complete on April 3, 1992, and KCAPCD Rule

411.1 and SCAQMD Rule 462 were determined to be complete on July 10,

1991 pursuant to EPA's completeness criteria that are set forth in 40

CFR part 51, appendix V6 and are being proposed for limited

approval and limited disapproval.

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\6\EPA adopted completeness criteria on February 16, 1990 (55 FR

5830) and, pursuant to section 110(k)(1)(A) of the CAA, revised the

criteria on August 26, 1991 (56 FR 42216).

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SJVUAPCD Rule 465.1 and KCAPCD Rule 411.1 control the emission of

VOCs from crude oil production wells where production has been enhanced

by steam injection. SCAQMD Rule 462 controls emissions of VOCs during

the transfer of organic liquids between storage tanks and delivery

vessels. VOCs contribute to the production of ground level ozone and

smog. These rules were originally adopted as part of the districts'

efforts to achieve the National Ambient Air Quality Standard (NAAQS)

for ozone and have been revised in response to EPA's SIP-Call and the

section 182(a)(2)(A) CAA requirement. The following is EPA's evaluation

and proposed action for these rules.

EPA Evaluation and Proposed Action

In determining the approvability of a VOC rule, EPA must evaluate

the rule for consistency with the requirements of the CAA and EPA

regulations, as found in section 110 and part D of the CAA and 40 CFR

part 51 (Requirements for Preparation, Adoption, and Submittal of

Implementation Plans). The EPA interpretation of these requirements,

which forms the basis for today's action, appears in the various EPA

policy guidance documents listed in footnote 3. Among those provisions

is the requirement that a VOC rule must, at a minimum, provide for the

implementation of RACT for stationary sources of VOC emissions. This

requirement was carried forth from the pre-amended Act.

For the purpose of assisting state and local agencies in developing

RACT rules, EPA prepared a series of Control Technique Guideline (CTG)

documents which specify the minimum requirements that a rule must

contain in order to be approved into the SIP. The CTGs are based on the

underlying requirements of the Act and specify the presumptive norms

for what is RACT for specific source categories. Under the CAA,

Congress ratified EPA's use of these documents, as well as other Agency

policy, for requiring States to ``fix-up'' their RACT rules. See

section 182(a)(2)(A). The CTG documents applicable to SCAQMD Rule 462,

Organic Liquid Loading, are entitled: Control of Hydrocarbons from Tank

Truck Gasoline Loading Terminals, EPA-450/2-77-026; Control of Volatile

Organic Compound Leaks from Gasoline Tank Trucks and Vapor Collection

Systems, EPA-450/2-78-051; and Control of Volatile Organic Emissions

from Bulk Gasoline Plants, EPA-450/2-77-035. For some source

categories, such as steam-enhanced crude oil production wells, EPA did

not publish a CTG. In such cases, the District will make a

determination of what controls are required to satisfy the RACT

requirement, by reviewing the operations of facilities with the

affected source category. In that review, the technological and

economic feasibility of the proposed controls were considered.

Additionally, for both CTG and non-CTG categories, the Districts may

rely on EPA policy documents, such as the Blue Book, to ensure that VOC

rules are fully enforceable and strengthen or maintain the SIP.

SJVUAPCD Rule 465.1, Steam-Enhanced Crude Oil Production Well

Vents, is a revision of current SIP approved rules from two of the

eight districts which combined to form SJVUAPCD. The two SIP approved

rules are Fresno Rule 413.1, Steam Drive Well Vents--Crude Oil

Production, and Kern Rule 411.1, Steam Drive Wells--Crude Oil

Production.

SJVUAPCD Rule 465.1 and KCAPCD's submitted Rule 411.1 are nearly

identical. These rules contain the following revisions from the current

SIP rules:

1. Added definitions, recordkeeping, and test methods.

2. Deleted emissions averaging and emissions offsetting.

3. Added limited exemptions and an allowable leak schedule.

4. Revised compliance schedules.

KCAPCD Rule 411.1 also specifies a more stringent emissions

reduction requirement than its current SIP rule.

SCAQMD Rule 462, Organic Liquid Loading, contains the following

significant changes from the current SIP rule:

1. Added definitions and recordkeeping requirements.

2. Deleted Executive Officer discretion in approving equivalent

control systems.

3. Added more stringent loading requirements and organic vapor

emissions limit.

EPA has evaluated these rules for consistency with the CAA, EPA

regulations, and EPA policy and has found that the revisions address

and correct many deficiencies previously identified by EPA. These

corrected deficiencies have resulted in clearer, more enforceable

rules. Furthermore, the addition of more stringent standards in KCAPCD

submitted Rule 411.1 and SCAQMD Rule 462 should lead to more emission

reductions.

Although these rules will strengthen the SIP, they still contain

deficiencies which were required to be corrected pursuant to the

section 182(a)(2)(A) requirement of part D of the CAA. SJVUAPCD Rule

465.1 and KCAPCD 411.1 have similar deficiencies associated with lack

of clarity in specifying rule applicability, an unapprovable provision

which exempts equipment modifications from New Source Review, and

insufficient recordkeeping requirements. SCAQMD Rule 462 lacks clarity

in specifying source applicability, and references unapproved and

insufficient test methods. A detailed discussion of rule deficiencies

can be found in the Technical Support Document for each rule which is

available from the U.S. EPA, Region IX office. Because of these

deficiencies, the rules are not fully approvable pursuant to the

section 182(a)(2)(A) of the CAA because they are not consistent with

the interpretation of section 172 of the 1977 CAA as found in the Blue

Book and may lead to rule enforceability problems.

Because of the above deficiencies, EPA cannot grant full approval

of these rules under section 110(k)(3) and part D. Also, because the

submitted rules are not composed of separable parts which meet all the

applicable requirements of the CAA, EPA cannot grant partial approval

of the rules under section 110(k)(3). However, EPA may grant a limited

approval of the submitted rules under section 110(k)(3) in light of

EPA's authority pursuant to section 301(a) to adopt regulations

necessary to further air quality by strengthening the SIP. The approval

is limited because EPA's action also contains a simultaneous limited

disapproval. In order to strengthen the SIP, EPA is proposing a limited

approval of SJVUAPCD Rule 465.1, KCAPCD Rule 411.1, and SCAQMD 462

under sections 110(k)(3) and 301(a) of the CAA.

At the same time, EPA is also proposing a limited disapproval of

these rules because they contain deficiencies that have not been

corrected as required by section 182(a)(2)(A) of the CAA, and, as such,

the rules do not fully meet the requirements of part D of the Act.

Under section 179(a)(2), if the Administrator disapproves a submission

under section 110(k) for an area designated nonattainment, based on the

submission's failure to meet one or more of the elements required by

the Act, the Administrator must apply one of the sanctions set forth in

section 179(b) unless the deficiency has been corrected within 18

months of such disapproval. Section 179(b) provides two sanctions

available to the Administrator: Highway funding and offsets. The 18

month period referred to in section 179(a) will begin on the effective

date of EPA's final limited disapproval. Moreover, the final

disapproval triggers the federal implementation plan (FIP) requirement

under section 110(c). It should be noted that the rules covered by this

NPR have been adopted by SJVUAPCD, KCAPCD and SCAQMD, and are currently

in effect in those districts. EPA's limited disapproval action in this

NPR does not prevent SJVUAPCD, KCAPCD, SCAQMD or EPA from enforcing

these rules.

Nothing in this action should be construed as permitting or

allowing or establishing a precedent for any future request for

revision to any state implementation plan. Each request for revision to

the state implementation plan 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 populations of less than

50,000.

Limited approvals under sections 110 and 301 and subchapter I, part

D of the CAA do not create any new requirements, but simply approve

requirements that the State is already imposing. Therefore, because the

federal SIP-approval does not impose any new requirements, 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).

EPA's limited disapproval of the State request under sections 110

and 301 and subchapter I, part D of the CAA does not affect any

existing requirements applicable to small entities. Federal disapproval

of the state submittal does not affect its state enforceability.

Moreover, EPA's limited disapproval of the submittal does not impose

any new federal requirements. Therefore, EPA certifies that this

limited disapproval action does not have a significant impact on a

substantial number of small entities because it does not remove

existing requirements nor does it impose any new federal requirements.

This action has been classified as a Table 2 action by the Regional

Administrator under the procedures published in the Federal Register on

January 19, 1989 (54 FR 2214-2225), as revised by an October 4, 1993

memorandum from Michael H. Shapiro, Acting Assistant Administrator for

Air and Radiation. A future notice will inform the general public of

these tables. On January 6, 1989, the Office of Management and Budget

(OMB) waived Table 2 and Table 3 SIP revisions (54 FR 2222) from the

requirements of section 3 of Executive Order 12291 for a period of two

years. EPA has submitted a request for a permanent waiver for Table 2

and Table 3 SIP revisions. OMB has agreed to continue the waiver until

such time as it rules on EPA's request. This request continues in

effect under Executive Order 12866 which superseded Executive Order

12291 on September 30, 1993.

List of Subjects in 40 CFR Part 52

Air pollution control, Hydrocarbons, Intergovernmental relations,

Ozone, Reporting and recordkeeping requirements.

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

Dated: March 8, 1994.

John Wise,

Regional Administrator.

[FR Doc. 94-6391 Filed 3-18-94; 8:45 am]

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