Control Strategy: Ozone (OINF3); Kentucky

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[KY-80-1-6943; FRL-5200-8]

Control Strategy: Ozone (O3); Kentucky

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The EPA is approving an exemption request from the oxides of

nitrogen (NOX) reasonably available control technology (RACT)

requirement of the Clean Air Act as amended in 1990 (CAA) for the

Kentucky portion of the Huntington-Ashland, moderate ozone (O3)

nonattainment area. The exemption request, submitted by the

Commonwealth of Kentucky through the Department of Environmental

Protection, is based upon the most recent three years of ambient air

monitoring data, which demonstrate that additional reductions of

NOX would not contribute to the attainment of the National Ambient

Air Quality Standard (NAAQS) for O3 in the area. The CAA requires

states with designated nonattainment areas of the NAAQS for O3,

and classified as moderate nonattainment or above, to adopt RACT rules

for major stationary sources of NOX. The CAA provides further that

the NOX requirements do not apply to these areas outside an

O3 transport region if EPA determines that additional reductions

of NOX would not [[Page 21714]] contribute to attainment of the

NAAQS for O3 in the area.

EFFECTIVE DATE: This action will be effective June 2, 1995.

ADDRESSES: A copy of the exemption request is available for inspection

at the following location (it is recommended that you contact Kimberly

Bingham at (404) 347-3555 extension 4195 before visiting the Region 4

office):

United States Environmental Protection Agency, Air, Pesticides, and

Toxics Management Division, Air Programs Branch, Regulatory Planning

and Development Section, Stationary Source Planning Unit, 345 Courtland

Street NE., Atlanta, Georgia 30365.

Department for Environmental Protection Natural, Resources and

Environmental Protection Cabinet, 803 Schenkel Lane, Frankfort,

Kentucky 40601.

FOR FURTHER INFORMATION CONTACT: Kimberly Bingham, Stationary Source

Planning Unit, Regulatory Planning and Development Section, Air

Programs Branch, Air Pesticides and Toxics Management Division, U.S.

Environmental Protection Agency, 345 Courtland Street NE., Atlanta,

Georgia 30365.

SUPPLEMENTARY INFORMATION: The air quality planning requirements for

the reduction of NOX emissions are set out in section 182(f) of

the CAA. Section 182(f) of the CAA requires states with areas

designated nonattainment for O3 and classified as moderate or

above to impose the same control requirements for major stationary

sources of NOX as apply to major stationary sources of volatile

organic compounds (VOCs). Section 182(f) provides further that these

NOX requirements do not apply to areas outside an O3

transport region if EPA determines that additional reductions of

NOX would not contribute to attainment in such areas. In an area

that did not implement the section 182(f) NOX requirements, but

did attain the O3 standard as demonstrated by ambient air

monitoring data (consistent with 40 CFR part 58 and recorded in the

EPA's--Aerometric Information Retrieval system (AIRS)), it is clear

that the additional NOX reductions required by section 182(f)

would not contribute to attainment of the NAAQS.

The criteria established for the evaluation of an exemption request

from the section 182(f) requirements are set forth in an EPA memorandum

from John S. Seitz, Director, Office of Air Quality Planning and

Standards, dated May 27, 1994, entitled ``Section 182(f) Nitrogen

Oxides (NOX) Exemptions--Revised Process and Criteria,'' and an

EPA guidance document entitled ``Guidelines for Determining the

Applicability of Nitrogen Oxides Requirements Under Section 182(f),''

dated December 1993, from EPA, Office of Air Quality Planning and

Standards, Air Quality Management Division.

On November 12, 1993, the Commonwealth of Kentucky submitted to EPA

Region 4 a request to redesignate the Kentucky portion of the

Huntington-Ashland moderate O3 nonattainment area to attainment.

The redesignation request is currently under review and will be

addressed in a separate rulemaking. On August 16, 1994, the

Commonwealth requested that the Kentucky portion of the Huntington-

Ashland area be exempt from the NOX RACT requirement in section

182(f) of the CAA. The 182(f) exemption also relieves the area of all

NOX requirements of the CAA such as New Source Review, General

Conformity, and Inspection/Maintenance. The exemption request is based

upon ambient air monitoring data from 1991, 1992, and 1993, which

demonstrate that the NAAQS for O3 has been attained in the area

without additional reductions of NOX (a violation of the ozone

NAAQS occurs when the average number of exceedances for any O3

monitoring site in a three year period is greater than 1.0).

Only one O3 exceedance was recorded in the Huntington-Ashland

area for the period from 1991 to 1993: Monitor 21-019-0015--0.129ppm

(1993). Thus, there has been no violation of the NAAQS in the area

during this period and the area has maintained the standard through

1994.

EPA has reviewed the ambient air monitoring data for O3

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

recorded in AIRS) submitted by the Commonwealth of Kentucky in support

of the exemption request and has determined that a violation of the

O3 NAAQS has not occurred in the Huntington-Ashland, Kentucky

portion area for the relevant three year period. Because the Kentucky

portion of the Huntington-Ashland area is meeting the O3 NAAQS,

this exemption request for the area meets the applicable requirements

contained in the EPA policy and guidance documents referenced above.

Continuation of the section 182(f) exemption granted herein is

contingent upon continued monitoring and continued maintenance of the

O3 NAAQS for the entire Huntington-Ashland area. If a violation of

the O3 NAAQS is monitored in the Kentucky portion of the

Huntington-Ashland area, EPA will provide notice in the Federal

Register. A determination that the NOX exemption no longer applies

would mean that the NOX RACT provision (see 58 FR 63214 and 58 FR

62188) would immediately be applicable to the affected area. Although

the NOX RACT requirements would be applicable, some reasonable

period of notice is necessary to provide major stationary sources

subject to the RACT requirements time to purchase, install, and operate

any required controls. Accordingly, the Commonwealth may provide

sources a reasonable time period to meet the RACT emission limits after

the EPA determination that NOX RACT requirements are necessary.

EPA expects the time period to be as expeditious as practicable, but in

no case longer than 24 months.

The EPA proposed approval of the Commonwealth of Kentucky's request

for an exemption request from NOX and RACT requirements of the CAA

as amended in 1990 (60 FR 5881). Comments were received supporting the

exemption request. However, the National Resources Defense Council

(NRDC), Sierra Defense Club, and EDF submitted adverse comments to Mary

Nichols on August 24, 1994, addressing all Federal Register notices

proposing to approve section 182(f) NOX exemption requests. The

EPA has responded to the adverse comments by issue as set forth below.

NRDC Comment 1

Certain commenters argued 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.

EPA Response

Section 182(f) contains very few details regarding the

administrative [[Page 21715]] procedure for acting on NOX

exemption requests. The absence of specific guidelines by Congress

leaves EPA with discretion to establish reasonable procedures,

consistent with the requirements of the Administrative Procedure Act

(APA).

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 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).

Section 182(f)(1) appears to contemplate that exemption requests

submitted under these paragraphs are limited to States, since States

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

revisions. By contrast, section 182(f)(3) provides that ``person[s]''

may petition for a NOX determination ``at any time'' after the

ozone precursor study required under section 185B of the Act is

finalized, and gives EPA a limit of 6 months after filing to grant or

deny such petitions. Since individuals may submit petitions under

paragraph (3) ``at any time'' this must include times when there is no

plan revision from the State pending at EPA. The specific timeframe for

EPA action established in paragraph (3) is substantially shorter than

the timeframe usually required for States to develop and for EPA to

take action on revisions to a SIP. These differences strongly suggest

that Congress intended the process for acting on personal petitions to

be distinct--and more expeditious--from the plan-revision process

intended under paragraph (1). Thus, EPA believes that paragraph (3)'s

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

paragraph (1) [and, by extension, paragraph (2)], not the requirement

in paragraph (1) for EPA to grant exemptions only when acting on plan

revisions.

With respect to major stationary sources, section 182(f) requires

States to adopt NOX NSR and RACT rules, unless exempted. These

rules were generally due to be submitted to EPA by November 15, 1992.

Thus, in order to avoid the CAA sanctions, areas seeking a NOX

exemption would need to submit their exemption request for EPA review

and rulemaking action several months before November 15, 1992. In

contrast, the CAA specifies that the attainment demonstrations are not

due until November 1993 or 1994 (and EPA may take 12-18 months to

approve or disapprove the demonstration). For marginal ozone

nonattainment areas (subject to NOX NSR), no attainment

demonstration is called for in the CAA. For maintenance plans, the CAA

does not specify a deadline for submittal of maintenance

demonstrations. Clearly, the CAA envisions the submittal of and EPA

action on exemption requests, in some cases, prior to submittal of

attainment or maintenance demonstrations.

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 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, EPA notes that

this issue has previously been raised in a formal petition for

reconsideration of 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 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 Administrative Procedure Act.

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

achieved, the applicable rules governing this issue are those that

appear in EPA's final conformity regulations, and EPA remains bound by

their existing terms.

NRDC Comment 2

Three years of ``clean'' data fail to demonstrate that NOX

reductions would not contribute to attainment. EPA's policy erroneously

equates the absence of a violation for one three-year period with

``attainment.''

EPA Response

The EPA has separate criteria for determining if an area should be

redesignated to attainment under section 107 of the CAA. The section

107 criteria are more comprehensive than the CAA requires with respect

to NOX exemptions under section 182(f).

Under section 182(f)(1)(A), an exemption from the NOX

requirements may be granted for nonattainment areas outside an ozone

transport region if EPA determines that ``additional reductions of

[NOX] would not contribute to attainment'' of the ozone NAAQS in

those areas. In some cases, an ozone nonattainment area might attain

the ozone standard, as demonstrated by 3 years of adequate monitoring

data, without having implemented the section 182(f) NO

provisions over that 3-year period. The EPA believes that, in cases

where a nonattainment area is demonstrating attainment with 3

consecutive years of air quality monitoring data without having

implemented the section 182(f) NO provisions, it is clear

that the section 182(f) test is met since ``additional reductions of

[NOX] would not contribute to attainment'' of the NAAQS in that

area. 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).

NRDC Comment 3

Comments were received regarding exemption of areas from the

NOX requirements of the conformity rules. They argue 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, EPA has acknowledged the need to amend a

drafting error in the existing transportation conformity rules to

[[Page 21716]] ensure consistency with motor vehicle emissions budgets

for NOX, but want EPA in actions on NOX exemptions to

explicitly affirm this obligation and to also avoid granting waivers

until a budget controlling future NOX increases is in place.

EPA Response

With respect to conformity, EPA's conformity rules, provide a

NOX waiver if an area receives a section 182(f) exemption. In its

``Conformity; General Preamble for Exemption From Nitrogen Oxides

Provisions,'' 59 FR 31238, 31241 (June 17, 1994), EPA reiterated its

view that in order to conform nonattainment and maintenance areas must

demonstrate that the transportation plan and TIP 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, EPA states in the June 17th 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,

EPA also intends to require consistency with the attainment

demonstration's NOX motor vehicle emissions budget. However, the

exemptions were submitted pursuant to section 182(f)(3), and 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 Agency'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 Agency, 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 Agency's final conformity regulations, and the Agency

remains bound by their existing terms.

NRDC Comment 4

The CAA does not authorize any waiver of the NOX reduction

requirements until conclusive evidence exists that such reductions are

counter-productive.

EPA Response

EPA does not agree with this comment since it ignores Congressional

intent as evidenced by the plain language of section 182(f), the

structure of the Title I ozone subpart as a whole, and relevant

legislative history. By contrast, in developing and implementing its

NOX exemption policies, EPA has sought an approach that reasonably

accords with that intent. Section 182(f), in addition to imposing

control requirements on major stationary sources of NOX similar to

those that apply for such sources of VOC, also provides for an

exemption (or limitation) from application of these requirements if,

under one of several tests, EPA determines that in certain areas

NOX reductions would generally not be beneficial. In subsection

182(f)(1), Congress explicitly conditioned action on NOX

exemptions on the results of an ozone precursor study required under

section 185B. Because of the possibility that reducing NOX in a

particular area may either not contribute to ozone attainment or may

cause the ozone problem to worsen, Congress included attenuating

language, not just in section 182(f) but throughout the Title I ozone

subpart, to avoid requiring NOX reductions where it would be

nonbeneficial or counterproductive. In describing these various ozone

provisions (including section 182(f), the House Conference Committee

Report states in pertinent part: ``[T]he Committee included a separate

NOX/VOC study provision in section [185B] to serve as the basis

for the various findings contemplated in the NOX provisions. The

Committee does not intend NOX reduction for reduction's sake, but

rather as a measure scaled to the value of NOX reductions for

achieving attainment in the particular ozone nonattainment area.'' H.R.

Rep. No. 490, 101st Cong., 2d Sess. 257-258 (1990). As noted in

response to an earlier comment by these same commenters, the command in

subsection 182(f)(1) that EPA ``shall consider'' the 185B report taken

together with the timeframe the Act provides both for completion of the

report and for acting on NOX exemption petitions clearly

demonstrate that Congress believed the information in the completed

section 185B report would provide a sufficient basis for EPA to act on

NOX exemption requests, even absent the additional information

that would be included in affected areas' attainment or maintenance

demonstrations. However, while there is no specific requirement in the

Act that EPA actions granting NOX exemption requests must await

``conclusive evidence'', as the commenters argue, there is also nothing

in the Act to prevent EPA from revisiting an approved NOX

exemption if warranted due to better ambient information.

In addition, the EPA believes (as described in EPA's December 1993

guidance) that section 182(f)(1) of the CAA provides that the new

NOX requirements shall not apply (or may be limited to the extent

necessary to avoid excess reductions) if the Administrator determines

that any one of the following tests is met:

(1) In any area, the net air quality benefits are greater in the

absence of NOX reductions from the sources concerned;

(2) In nonattainment areas not within an ozone transport region,

additional NOX reductions would not contribute to ozone attainment

in the area; or

(3) In nonattainment areas within an ozone transport region,

additional NOX reductions would not produce net ozone air quality

benefits in the transport region.

Based on the plain language of section 182(f), EPA believes that

each test provides an independent basis for receiving a full or limited

NOX exemption. Only the first test listed above is based on a

showing that NOX reductions are ``counter-productive.'' If one of

the tests is met (even if another test is failed), the section 182(f)

NOX requirements would not apply or, under the excess reductions

provision, a portion of these requirements would not apply.

Pollution Probe (Ontario 9-27-94)

Air Quality Comment

Several commenters stated that the air quality monitoring data

alone does not support this exemption proposal. The air quality levels

are below USEPA's definition of an exeedance of the ozone NAAQS at

0.125 ppm, but are greater than the ozone NAAQS of 0.120 ppm.

EPA Response

For the reasons provided below, EPA does not agree with the

commenter's conclusion. As stated in 40 CFR 50.9, the ozone ``standard

is attained when the expected number of days per calendar year with

maximum hourly average concentrations above 0.12 parts per million (235

g/m3) is equal to or less than 1, as determined by

Appendix H.'' Appendix H references EPA's ``Guideline for

Interpretation of Ozone Air Quality Standards'' (EPA-450/4-79-003,

January 1979), which notes that the stated level of the standard is

taken as defining the number of significant figures to be used in

comparison with [[Page 21717]] the standard. For example, a standard

level of 0.12 ppm means that measurements are to be rounded to two

decimal places (0.005 rounds up to 0.01). Thus, 0.125 ppm is the

smallest concentration value in excess of the level of the ozone

standard.

Final Action

EPA is approving Kentucky's request to exempt the Kentucky portion

of the Huntington-Ashland area moderate O3 nonattainment area from

the section 182(f) NOX RACT requirement. This approval is based

upon the evidence provided by Kentucky and the Commonwealth's

compliance with the requirements outlined in the applicable EPA

guidance. If a violation of the O3 NAAQS occurs in the Kentucky

portion of the Huntington-Ashland area, the exemption from the NOX

RACT requirement of section 182(f) of the CAA in the applicable area

shall no longer apply. This action will be effective June 2, 1995.

Under section 307(b)(1) of the CAA, 42 U.S.C. 7607(b)(1), petitions

for judicial review of this action must be filed in the United States

Court of Appeals for the appropriate circuit by July 3, 1995. Filing a

petition for reconsideration by the Administrator of this final rule

does not affect the finality of this rule for 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) of the CAA, 42

U.S.C. 7607(b)(2)).

The OMB has exempted these actions from review under Executive

Order 12866.

This action is not a SIP revision and is not subject to the

requirements of section 110 of the CAA. The authority to approve or

disapprove exemptions from NOX requirements under section 182 of

the CAA was delegated to the Regional Administrator from the

Administrator in a memo dated July 6, 1994, from Jonathan Cannon,

Assistant Administrator, to the Administrator, titled, ``Proposed

Delegation of Authority: `Exemptions from Nitrogen Oxide Requirements

Under Clean Air Act Section 182(f) and Related Provisions of the

Transportation and General Conformity Rules'--Decision Memorandum.''

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. This rule approves an exemption from a CAA requirement.

Therefore, I certify that it does not have a significant impact on any

small entities affected.

List of Subjects in 40 CFR Part 52

Air pollution control, Carbon monoxide, Hydrocarbons,

Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate

matter, Reporting and recordkeeping requirements, Sulfur oxides.

Dated: April 17, 1995.

Patrick M. Tobin,

Acting Regional Administrator.

Part 52, chapter 1, title 40, of the Code of Federal Regulations is

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 II--Kentucky

2. Section 52.937 is added to read as follows:

Sec. 52.937 Review of new sources and modifications.

(a) Approval--EPA is approving the section 182(f) oxides of

nitrogen (NOX) reasonably available control technology (RACT)

exemption request submitted by the Kentucky Department for

Environmental Protection on August 16, 1994, for the Kentucky portion

of the Huntington-Ashland ozone (O3) moderate nonattainment area.

This approval exempts this area from implementing NOX RACT on

major sources of NOX. If a violation of the O3 NAAQS occurs

in the area, the exemption from the requirement of section 182(f) of

the CAA in the applicable area shall not apply.

(b) [Reserved]

[FR Doc. 95-10826 Filed 5-2-95; 8:45 am]

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