Clean Air Act Proposed Interim Approval Operating Permits Program; the State of Oklahoma

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[OK001; AD-FRL-5170-3]

Clean Air Act Proposed Interim Approval Operating Permits

Program; the State of Oklahoma

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed interim approval.

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SUMMARY: The EPA proposes source category-limited interim approval of

the operating permits program submitted by the Oklahoma Department of

Environmental Quality (ODEQ) through the Governor of Oklahoma on

January 12, 1994, for the purpose of complying with Federal

requirements for an approvable State program to issue operating permits

to all major stationary sources, with the exception of sources on

Indian country.

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

April 10, 1995.

ADDRESSES: Written comments on this action should be addressed to Ms.

Jole C. Luehrs, Chief, New Source Review Section, at the EPA Region 6

Office listed below. Copies of the State's submittal and other

supporting information used in developing the proposed interim approval

rule are available for inspection during normal business hours at the

following locations. Interested persons wanting to examine these

documents should make an appointment with the appropriate office at

least 24 hours before visiting day.

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

[[Page 13089]] (6T-AN), 1445 Ross Avenue, Suite 700, Dallas, Texas

75202-2733.

Oklahoma Department of Environmental Quality, 4545 North Lincoln

Boulevard., Suite 250, Oklahoma City, Oklahoma 73105-3483.

FOR FURTHER INFORMATION CONTACT: Wm. Nicholas Stone, New Source Review

Section (6T-AN), Environmental Protection Agency, Region 6, 1445 Ross

Avenue, Suite 700, Dallas, Texas 75202-2733, telephone (214) 665-7226.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

As required under title V of the 1990 Clean Air Act Amendments

(sections 501-507 of the Clean Air Act (``the Act'')), EPA has

promulgated rules which define the minimum elements of an approvable

State operating permits program and the corresponding standards and

procedures by which the EPA will approve, oversee, and withdraw

approval of State operating permits programs (see 57 FR 32250 (July 21,

1992)). These rules are codified at 40 Code of Federal Regulations

(CFR) part 70. Title V requires States to develop, and submit to the

EPA, programs for issuing these operating permits to all major

stationary sources and to certain other sources, with the exception of

sources on Indian country.

The Act requires that States develop and submit these programs to

the EPA by November 15, 1993, and that the EPA act to approve or

disapprove each program within one year after receiving the submittal.

The EPA's program review occurs pursuant to section 502 of the Act and

the part 70 regulations which together outline criteria for approval or

disapproval. Where a program substantially, but not fully, meets the

requirements of 40 CFR part 70, and where a State requests source

category-limited interim approval, the EPA may grant the program

interim approval for a period of up to two years. If the EPA has not

fully approved a program by two years after the November 15, 1993, date

or by the end of an interim program, it must establish and implement a

Federal program.

B. Federal Oversight and Sanctions

If the EPA were to finalize this proposed source category-limited

interim approval, it would extend for two years following the effective

date of final interim approval, and could not be renewed. During the

interim approval period, the State of Oklahoma would be protected from

sanctions, and the EPA would not be obligated to promulgate,

administer, and enforce a Federal permits program for the State of

Oklahoma. Permits issued under a program with interim approval have

full standing with respect to part 70, and the State will permit

sources based on the transition schedule submitted with the source

category-limited approval request. This schedule may extend for no more

than five years beyond the interim approval date.

Following final interim approval, if Oklahoma has failed to submit

a complete corrective program for full approval by the date six months

before expiration of the interim approval, the EPA would start an 18-

month clock for mandatory sanctions. If Oklahoma then failed to submit

a corrective program that the EPA found complete before the expiration

of that 18-month period, the EPA would apply sanctions as required by

section 502(d)(2) of the Act, which would remain in effect until the

EPA determined that the State of Oklahoma had corrected the deficiency

by submitting a complete corrective program.

If, following final interim approval, the EPA were to disapprove

Oklahoma's complete corrective program, the EPA would be required under

section 502(d)(2) to apply sanctions on the date 18 months after the

effective date of the disapproval, unless prior to that date Oklahoma

had submitted a revised program and the EPA had determined that it

corrected the deficiencies that prompted the disapproval.

In addition, discretionary sanctions may be applied where warranted

any time after the end of an interim approval period if Oklahoma has

not timely submitted a complete corrective program or the EPA has

disapproved a submitted corrective program. Moreover, if the EPA has

not granted full approval to Oklahoma's program by the expiration of an

interim approval and that expiration occurs after November 15, 1995,

the EPA must promulgate, administer, and enforce a Federal permits

program for Oklahoma upon interim approval expiration.

II. Proposed Action and Implications

A. Analysis of State Submission

1. Support Materials

Pursuant to section 502(d) of the Act, the Governor of each State

is required to develop and submit to the Administrator a part 70

program under State or local law or under an interstate compact meeting

the requirements of title V of the Act. Under the signature of Governor

David Walters, ODEQ requested approval with full authority to

administer the State part 70 program in all areas of the State of

Oklahoma.

The Governor's letter makes no reference to Indian country and

specifically requests full authority over the State of Oklahoma.

Because the Oklahoma permitting authorities have not demonstrated,

consistent with applicable principles of Indian law and Federal Indian

policies, legal authority to regulate sources in Indian country under

the Act, the proposed interim approval of the Oklahoma part 70 program

will not extend to any lands within the exterior boundaries of Indian

country. Though the State has made no demonstration of jurisdiction

over Indian country, the State may at a later time make an adequate

demonstration of authority. Title V sources located within the exterior

boundaries of Indian country in the State of Oklahoma will be subject

to the Federal operating permit program, to be promulgated at 40 CFR

part 71, unless a tribe is delegated a part 70 program. Regulations for

delegation of tribal programs are being developed pursuant to section

301(d) of the Act. Tribes may also have inherent sovereign authority to

regulate air pollutants from sources on Indian country.

The Oklahoma submittal addresses the program description as

required at 40 CFR 70.4(b)(1) by describing how ODEQ intends to carry

out its responsibilities under the part 70 regulations. The program

description is addressed in the following areas: (I) Complete Program

Description, (II) State Permitting Regulations, Guidelines, Policies,

and Procedures, (III) Attorney General's Opinion, (IV) Permitting

Program Documentation, (V) Provisions for Implementing the Operating

Permits Program, (VI) Permit Fee Demonstration, (VII) Compliance

Tracking and Enforcement, and (VIII) Provisions Implementing the

Requirement of Other Titles of the Act (40 CFR 70.4(b)(3) (i) and (v)).

The program description has been deemed to be appropriate for meeting

the requirement of 40 CFR 70.4(b)(1).

Pursuant to 40 CFR 70.4(b)(3), the Governor is required to submit a

legal opinion from the Attorney General (or the attorney for the State

air pollution control agency that has independent legal counsel,

hereafter AG) demonstrating adequate authority to carry out all aspects

of a title V operating permits program. The State of Oklahoma submitted

an AG's Opinion in section III of the ``Program Description'' and a

Supplemental AG's Opinion on February 28, 1994, demonstrating adequate

legal authority as required by Federal law and regulation. The

Supplemental AG's Opinion addresses the delegation of authority for

signature from the [[Page 13090]] Attorney General to the Chief Counsel

for the Air Quality Division who has full authority to represent the

State in all matters relating to the Department's environmental

programs. This opinion with the supplement adequately addresses the

thirteen provisions listed at 40 CFR 70.4(b)(3)(i)-(xiii).

The State statutes cited in the AG's Opinion authorize the

imposition of criminal fines in the amount of $10,000 per violation as

required by 40 CFR 70.11(a)(3)(ii) for knowing violations of applicable

requirements, permit conditions, as well as fee and filing

requirements. Further, these statutes authorize the fine amounts to be

imposed on a per day per violation basis as required by 40 CFR

70.11(a)(3)(ii). The statute at Title 27A O.S. Supplement. 1993,

Section 2-5-116, appears to establish a cap in the amount of $250,000

on criminal penalties. The State is requested to supplement the

Attorney General's Opinion again to clarify that this limit will not

impede the State or EPA from enforcing daily violations with a $10,000

per day per violation fine. This supplemental AG Opinion should be

submitted to the EPA before the publication of the final interim

approval notice.

40 CFR 70.4(b)(4) requires the submission of relevant permitting

program documentation not contained in the regulations, such as permit

forms and relevant guidance to assist in the State's implementation of

its program. The State addresses this requirement in its program

submittal under Attachment 39--``Instructions for Title V Part 70

Operating Permit Application and General Permit Application

Completeness Checklist'', Attachment 40--``Permit Form'', Attachment

41--``Permit Reporting Forms'', and Attachment 42--``Inspection

Protocol, Point Source Inspection Form.''

2. Regulations and Program Implementation

The State of Oklahoma has submitted the Oklahoma Air Quality

Council Regulations (OAC) 252:100-8 ``Operating Permit Regulations''

and OAC 252:100-8-9 ``Permit Fee Requirements,'' for implementing the

State's part 70 program as required by 40 CFR 70.4(b)(2). Sufficient

evidence of their procedurally correct adoption was submitted in the

package on January 7, 1994, showing evidence of adoption which was sent

to the EPA in the State's original submittal. Copies of all applicable

State and local statutes and regulations which authorize the part 70

program, including those governing State administrative procedures,

were submitted with the State's program.

The State submitted as Attachment 1, OAC 252-100-8 titled

``Operating Permits (Part 70)'' (Subchapter 8), as required at 40 CFR

70.4(b)(2). Subchapter 8 follows the rule at 40 CFR part 70 very

closely. Supporting documentation of procedurally correct adoption and

copies of all applicable State statutes and regulations which authorize

the part 70 program, including those governing State administrative

procedures, were submitted with the State's program. Subchapter 8

received written comments from May 7 through October 19, 1993, and

public hearings were held July 13, August 17, September 14, and October

19, 1993. The response to comments was made by ODEQ on October 19,

1993. Sufficient evidence of their procedurally correct adoption was

submitted and meets the requirements of 40 CFR 70.4(b)(2).

The following requirements, set out in the EPA's part 70 rule, are

addressed in the State's submittal: (a) provisions to determine

applicability (40 CFR 70.3(a)), OAC 252-100-8-3; (b) provisions to

determine complete applications (40 CFR 70.5(a)(2)), OAC 252-100-8-5;

(c) public participation (40 CFR 70.7(h)), OAC 252-100-8-7(i); (d)

provisions for minor permit modifications (40 CFR 70.7(e)(2)), OAC 252-

100-8-7(e); (e) provisions for permit content (40 CFR 70.6(a)), OAC

252-100-8-6; (f) provisions for operational flexibility (40 CFR

70.4(b)(12)), OAC 252-100-8-6(h); and (g) enforcement provisions (40

CFR 70.4(b)(5) and 70.4(b)(4)(ii)), OAC 252-100-8-6(b-c) and the AG

Opinion.

Following is a discussion of certain specific provisions in the

State's submission as they relate to requirements of 40 CFR part 70:

(a) Applicability criteria, including any criteria used to

determine insignificant activities or emissions levels (40 CFR

70.4(b)(2) and 70.3(a)): Applicability criteria are listed at OAC

252:100-8-3 with ``applicable requirement'' defined at OAC 252:100-8-2.

The regulations at OAC 252:100-8-2 defines a ``major source.'' The

State included a paragraph (4) to this definition which does not allow

aggregation of emission sources at oil and gas wells, compressor

stations, and pump stations for criteria pollutants. Paragraph (4) is

in conflict with the rule because oil and gas sources may not be

aggregated to determine major source status for Hazardous Air

Pollutants only. Therefore, as a condition for full approval, the

regulations at OAC 252:100-8-2, ``major source,'' must be revised to

delete paragraph (4).

Oklahoma's ``major source'' definition creates the possibility that

sources that would otherwise be major under part 70 would not be major

due to the non-aggregation provision for oil and gas facilities. Non-

aggregation of oil and gas units is provided only for the emission of

hazardous air pollutants in the Federal rule. 40 CFR 70.2 requires all

sources located on contiguous or adjacent properties, under common

control, and belonging to a single major industrial grouping to be

considered as the same source. The Oklahoma permit regulations could

cause certain part 70 major sources, as defined in 40 CFR 70.2, or

portions of such sources, to be treated as separate sources. This could

cause some part 70 sources to be exempted from coverage by part 70

permits which must ensure all part 70 requirements for these sources

are met. The EPA considers Oklahoma's misinterpretation of the non-

aggregation provision for criteria pollutants to allow an unknown

number of oil and gas facilities to avoid title V of the Act. The EPA

expects that any permits issued by the State will address all

applicable requirements, as required by 40 CFR 70.7(a)(1)(iv).

The State of Oklahoma submitted under the signature of the

Executive Director of the ODEQ, Mark Coleman, a request dated January

23, 1995, for the EPA to grant source category-limited interim approval

allowing more time to permit these extra sources and correct the

regulations. In the original submittal the Governor of Oklahoma

delegated the authority to submit non-regulatory changes under the

signature of the Executive Director of the ODEQ. Because the request

for source category-limited interim approval requires a regulatory

change, the EPA must receive a formal request under the Governor's

signature before the EPA can publish final interim approval in the

Federal Register. The request included a revised transition schedule

that demonstrates the State will permit at least 60% of its sources and

at least 80% of its emissions during the first three years. The request

is consistent with the policy memo from John Seitz, Director of the

Office of Air Quality Planning and Standards dated August 2, 1993. The

EPA can grant source category-limited interim approval to States whose

programs do not provide for permitting all required sources if the

State makes a showing that two criteria were met: 1) that there were

``compelling reasons'' for the exclusions and 2) that all required

sources will be permitted on a schedule that ``substantially meets''

the requirements of part 70. The EPA considers Oklahoma's

misinterpretation of use of the non-aggregation provision

[[Page 13091]] for criteria pollutants to be a compelling reason for

granting this type of interim approval. Further, the revised transition

plan demonstrates that all part 70 sources will be permitted on a

schedule that substantially meets the requirements of part 70.

The EPA is therefore proposing to grant Oklahoma source category-

limited interim approval. Source category-limited interim approval will

allow Oklahoma to implement the revised transition schedule to permit

all part 70 sources during the transition period after the permit

regulations have been revised. As a condition of this interim approval,

the State must revise the regulations at OAC 252:100-8-7(a)(5)(A) and

OAC 252:100-8-5(b)(2) to reflect the new transition schedule for

permitting existing sources consistent with the rule at 40 CFR part 70.

For full part 70 approval, the ODEQ will be required to revise its

permit regulations so no source or portion of a source which would be

defined as a major under 40 CFR 70.2 will be exempt from part 70

requirements because the emissions of an oil or gas unit have not been

aggregated. Additionally, the State must formally request source

category-limited interim approval under the Governor's signature

because this approval action requires the regulatory changes outlined

above. This formal request under the Governor's signature must be

received by the EPA before this approval action can be published as

final in the Federal Register.

The regulations at OAC 252:100-8-3(e) address insignificant

activities. Emissions of one pound per hour of criteria pollutants or

emissions of toxic pollutants less than the de minimis listed at OAC

252:100-41-43(a)(5) are considered insignificant. Further, the State

regulations consider increases in potential to emit at a facility to be

insignificant if the increase is less than 10% of the permit limit or

10% of the facility's baseline potential to emit. This insignificant

level is available to any permit action (modification or renewal) and

must be identified in the application. Emissions of 1 lb/hr based on

the source's potential to emit are reasonable. However, to consider a

percentage change in the potential to emit or a permit limit as

insignificant is not reasonable. As the regulations are currently

written, a permitted source could exceed a permit limit by 10% without

liability. Also, 10% of a high permit limit could mask a permit

modification from preconstruction review. For these reasons, the

language at OAC 252:100-8-3(e)(3) must be revised to delete the

allowance of any percentage of the permit limit or change in the

potential to emit as an insignificant emission level. Further, the

language at OAC 252:100-8-3(e)(1) must be amended to base the 1 lb/hr

insignificant emissions level on the source's potential to emit.

The ODEQ will maintain a list of insignificant activities that need

not be quantified on the application as well as a list of activities

the Department considers to be ``trivial.'' Trivial activities are not

required to be identified on the application. The Federal rule at part

70 allows a list of insignificant activities and emission levels which

need not be included in permit applications be submitted as part of a

State's part 70 program, and approved by the Administrator. However,

the list of insignificant activities and the list of trivial activities

mentioned in the State regulations were not submitted as part of the

part 70 program, and part 70 does not allow for the substitution of the

State permitting authority's approval for the Administrator's approval,

which is required by 40 CFR 70.5(c). Furthermore, 40 CFR 70.5(c)

clarifies that if the insignificant activities are exempted because of

size or production rate, a list of these insignificant activities must

be included in the application. Therefore, for full part 70 approval,

the regulations at OAC 252:100-8-3(e) must be revised to reflect the

requirements at 40 CFR 70.5(c).

The State's insignificant emissions levels will allow for an

emissions threshold that could allow significant emissions to avoid

appearing on the application. As a condition of full approval, the

State must amend the language at OAC 252:100-8-3(e) so that the

insignificant emissions rate of 1 lb/hr for criteria pollutants will be

based on potential to emit instead of actual emissions. Additionally,

the language at OAC 252:100-8-3(e)(3) must be revised to delete the

allowance of any percentage of the permit limit or change in the

potential to emit as an insignificant emission level. An application

may not omit information needed to determine the applicability of, or

to impose any applicable requirement, or to evaluate the fee amount

required. Further, any list of insignificant activities or trivial

activities must be approved by the EPA prior to its use.

(b) Provisions to determine complete applications are listed at OAC

252:100-8-5(d) and 5(b)(8). Complete application forms, model permit

forms, permit reporting forms, and instructions are located in

Attachments 39, 40, 41, and 42. These application forms may be amended

without rulemaking to facilitate changes required by new applicable

requirements. These provisions meet the requirements of 40 CFR 70.5

(a)(2) and (c).

(c) Provisions for public participation are found at OAC 252:100-8-

7(i) and review by the EPA and affected States at OAC 252:100-8-8. The

State regulations provide for adequate public participation and notice

to affected States for permit issuance, renewals, and reopenings. The

regulations provide standing only for those who have provided written

comments during public review. The State must clarify that judicial

review is available to all affected parties for all final permit

actions including minor modifications and administrative amendments. As

a condition of full approval, the provision at OAC 252:100-8-7(j) must

be clarified to assure that all final permit actions are subject to

judicial review.

The regulations at OAC 252:100-8-7(i)(1)(E) and at OAC 252:100-8-

7(j)(2)(A) provide standing for written comments only during public

review. As a condition of full approval, these provisions in the

regulations must be revised to delete the word ``written,'' thus

providing standing for oral comments during the public participation

process. With these required changes, the provisions meet the

requirements of 40 CFR 70.7(h).

(d) The rule at 40 CFR 70.7(e)(2)(i) specifies criteria for minor

permit modifications. These criteria are adequately incorporated in the

State regulations at OAC 252:100-8-7(e)(1)(A). These provisions are

more stringent than the rule at 40 CFR 70.7(e) because they include

State-only requirements as well as federally enforceable requirements.

The provisions at OAC 252:100-8-7(e) meet the requirements at 40 CFR

70.7(e).

The EPA has noted two deficiencies in the administrative amendments

procedure at OAC 252:100-8-7(d). This procedure is designed to make

simple changes to the permit that do not require public, affected

State, or EPA review. The rule at 40 CFR 70.7(d)(1)(iii) allows

administrative amendments to be used to require more frequent

monitoring at the facility. The regulations at OAC 252:100-8-7(d)(1)(C)

allow ``. . . more or less . . .'' frequent monitoring. Also, OAC

252:100-8-7(d)(1)(E) allows changes processed under Subchapter 7 using

enhanced New Source Review (NSR) procedures to be incorporated into the

operating permit under an administrative amendment.

The administrative amendment procedure cannot be used to make the

[[Page 13092]] monitoring requirements less stringent. Therefore, as a

condition for full approval, the State must revise the administrative

amendment procedure to delete the words ``. . . or less . . .'' from

OAC 252:100-8-7(d)(1)(C).

The regulations do not define or specify the NSR procedures

mentioned and therefore require clarification. The rule at 40 CFR

70.7(d)(1)(v) requires that the procedures used for enhanced NSR are

substantially equivalent to the requirements of 40 CFR 70.7 and 40 CFR

70.8 that would be applicable to the change if it were subject to

review as a permit modification, and has compliance requirements

substantially equivalent to those contained in 40 CFR 70.6. Subchapter

7 has not been submitted as a SIP revision and the EPA will reserve

comment on Subchapter 7 until it is submitted. Until the EPA has

completed its review of the State Implementation Plan (SIP) revision

and has approved it, the EPA expects that the State will interpret the

term ``enhanced'' in OAC 252:100-8-7(d)(1)(E) consistent with the EPA's

definition of that term, so that changes processed under the State's

NSR program will be eligible for incorporation into the title V permit

through administrative amendment only if those changes have been

processed consistent with the requirements of 40 CFR 70.7(d)(1)(v), as

explained above. Interpreted in this way, the State's program is

eligible for interim approval.

Therefore, as a condition for full approval, the State must revise

the regulations at OAC 252:100-8-7(d)(1)(E) to define or specify

``Enhanced New Source Review procedures'' and to submit a SIP revision

for Subchapter 7 that reflects these procedures.

(e) Provisions for permit content are found at OAC 252:100-8-6. The

State regulations contain all of the provisions at 40 CFR 70.6. The

language in the State regulations is often verbatim with the rule.

Adequate provisions are made for permit duration, permit shield,

general permits, temporary sources, and emergency situations. The

regulations at OAC 252:100-8(a)(3)(C)(iii)(I) define ``prompt''

reporting of exceedances as 24 hours after the occurrence. The

provisions at OAC 252:100-8-6(a) include the phrase ``To the extent

practicable . . .'' This phrase indicates that the State has discretion

in what constitutes an applicable requirement. In order to receive full

approval, the State must remove the phrase ``to the extent

practicable.'' Until this revision is made, the permits issued by the

State shall meet the requirements of 40 CFR 70.6 and include all

applicable requirements.

(f) Provisions for operational flexibility and alternative

scenarios are listed at OAC 252:100-8-6(h). This section meets the

requirements of 40 CFR 70.4(b)(12), 70.5(c)(7), and 70.6(a)(10).

(g) Provisions for compliance tracking and enforcement are

described in Section VII of the submittal. The State commits to submit

annual information concerning the State's enforcement activities in

part A of this section. Attachment 42 contains an Inspection Protocol

and Point Source Inspection Form. Attachment 48 is the latest

Enforcement Memorandum of Agreement. Attachment 49 contains the Air

Quality Program Enforcement Action Report. Attachment 50 contains a

tracking list for Administrative Orders and Consent Orders. The AG

Opinion discussed above outlines the State's authority to enforce all

aspects of the program. These submission elements meet the requirements

for compliance tracking and reporting at 40 CFR 70.4(b)(4)(ii) and (5).

These submission elements meet the enforcement authority requirements

at 40 CFR 70.4(b)(2), 70.4(b)(3)(vii), and 70.4(9).

The State of Oklahoma has the authority to issue a variance from

requirements under Title 27A O.S. Supplement. 1993, Section 2-5-109.

The EPA regards this provision as wholly external to the program

submitted for approval under part 70, and consequently is proposing to

take no action on this provision of State law. The EPA has no authority

to approve provisions of State law, such as the variance provision

referred to, which are inconsistent with the Act. The EPA does not

recognize the ability of a permitting authority to grant relief from

the duty to comply with a federally enforceable part 70 permit, except

where such relief is granted through the procedures allowed by part 70.

A part 70 permit may be issued or revised (consistent with part 70

permitting procedures) to incorporate those terms of a variance that

are consistent with applicable requirements. A part 70 permit may also

incorporate, via part 70 permit issuance or modification procedures,

the schedule of compliance set forth in a variance. However, the EPA

reserves the right to pursue enforcement of applicable requirements

notwithstanding the existence of a compliance schedule in a permit to

operate. This is consistent with 40 CFR 70.5(c)(8)(iii)(C), which

states that a schedule of compliance ``shall be supplemental to, and

shall not sanction noncompliance with, the applicable requirements on

which it is based.''

3. Permit Fee Demonstration

The regulations at OAC 252:100-8-9 specify an annual fee of $25 per

ton per year based on actual or allowable emissions at the facility as

reflected in the emission inventory. This fee is based on 1995 dollars

for the first year and will be adjusted each year afterward to reflect

the difference between the Consumer Price Index (CPI) for the previous

year to the CPI for 1989. The original submittal from the State did not

contain a detailed fee analysis. Instead, the regulations at OAC

252:100-8-9(d)(1)(B) specify that the ODEQ must complete a detailed

workload analysis mandated by State law to be conducted by an

independent consultant with a review of the fee and adjustment of the

fee as necessary. The State submitted the workload analysis and fee

demonstration to the EPA for review on November 7, 1994. The formal

submission to the program was made in a letter dated January 23, 1995,

from the Executive Director of the ODEQ to the EPA. The fee

demonstration recommends a fee of $15.19 per ton in 1995 dollars and

will be adjusted each year to the 1989 CPI as provided for in the

regulations.

Though the fee reflected in the fee demonstration is less than the

$25 per ton fee listed in the Act, the State has shown that it will

provide sufficient funding based on the applicable requirements in

effect at the time of the program submittal. Based on the anticipated

emissions, the State expects the $15.19 per ton fee to generate over

$4,250,000 the first year. These funds will adequately pay for the

anticipated costs of the program as demonstrated in the detailed

workload analysis.

Therefore, based on its review, the EPA proposes approval for the

fee structure and workload analysis of the Oklahoma part 70 program.

The EPA solicits comment on the fee during the comment period for this

proposed approval action and will respond to any comments before taking

final action. The EPA is recommending approval of the $15.19 per ton

fee and deems the analysis and fee demonstration adequate in accordance

with 40 CFR part 70.

4. Provisions Implementing the Requirements of Other Titles of the Act

The State of Oklahoma acknowledges that its request for approval of

a part 70 program is also a request for approval of a program for

delegation of unchanged section 112 standards under the authority of

section 112(l) as they apply to part 70 sources. Upon receiving

approval under section 112(l), the State may receive delegation of any

new authority required by section 112 of the Act through the delegation

process. [[Page 13093]]

The State also has the option at any time to request, under section

112(l) of the Act, delegation of section 112 requirements in the form

of State regulations which the State demonstrates are equivalent to the

corresponding section 112 provisions promulgated by the EPA. At this

time, the State plans to use the mechanism of incorporation by

reference to adopt unchanged Federal section 112 requirements into its

regulations.

The radionuclide National Emission Standard for Hazardous Air

Pollutants (NESHAP) is a section 112 regulation and therefore, also an

applicable requirement under the State operating permits program for

part 70 sources. There is not yet a Federal definition of ``major'' for

radionuclide sources. Therefore, until a major source definition for

radionuclides is promulgated, no source would be a major section 112

source solely due to its radionuclide emissions. However, a

radionuclide source may, in the interim, be a major source under part

70 for another reason, thus requiring a part 70 permit. The EPA will

work with the State in the development of its radionuclide program to

ensure that permits are issued in a timely manner.

Section 112(g) of the Act requires that, after the effective date

of a permits program under title V, no person may construct,

reconstruct or modify any major source of hazardous air pollutants

unless the State determines that the maximum achievable control

technology (MACT) emission limitation under section 112(g) will be met.

Such determination must be made on a case-by-case basis where no

applicable limitations have been established by the Administrator.

During the period from the title V effective date to the date the State

has taken appropriate action to implement the final section 112(g) rule

(either adoption of the unchanged Federal rule or approval of an

existing State rule under 112(l)), Oklahoma intends to implement

section 112(g) of the Act through the State's preconstruction process.

The State of Oklahoma commits to appropriately implementing and

enforcing the existing and future requirements of sections 111, 112 and

129 of the Act, and all MACT standards promulgated in the future, in a

timely manner.

The regulations at OAC 252:100-8-6(i) provide for the permitting of

acid rain sources. The EPA commented on these regulations on October 1,

1993, and recommended that the State incorporate by reference the

Federal acid rain permit requirements. The State has agreed to change

OAC 252:100-8-6(i) to incorporate by reference the acid rain permit

requirements and has drafted this revision as an emergency rule. The

State must submit this regulatory revision for incorporation by

reference of the acid rain permitting rules before this approval action

can be published as final in the Federal Register.

5. Enforcement Provisions

The State describes compliance tracking and enforcement under

Section VII of the submittal. Oklahoma commits to submit annual

information concerning the State's enforcement activities in part A of

this section. As required at 40 CFR 70.4(b)(4)(ii) and 70.4(b)(5), the

Enforcement Memorandum of Understanding, signed by the State and the

EPA on July 22, 1993, appears in the submittal as Attachment 48.

Attachment 42 contains an Inspection Protocol and Point Source

Inspection Form. Attachment 49 contains the Air Quality Program

Enforcement Action Report. Attachment 50 contains a tracking list for

Administrative Orders and Consent Orders. The AG Opinion discussed

above outlines the State's authority to enforce all aspects of the

program. This statement of authority is required at 40 CFR

70.4(b)(3)(vii).

The compliance tracking and enforcement information in the

submittal serves to describe the current processes in place to track

air permits and conduct enforcement actions. These elements meet the

requirements for compliance tracking and reporting at 40 CFR 70.4(b)

(4)(ii) and (5). Further, these elements meet the enforcement authority

requirements at 40 CFR 70.4(b)(2), 70.4(b)(3)(vii), and 70.4(9).

6. Technical Support Document

The results of this review will be shown in a document entitled

``Technical Support Document,'' which will be available in the docket

at the locations noted above. The technical support documentation shows

that all operating permits program requirements of 40 CFR part 70 and

relevant guidance were met by the submittal with the exception of those

requirements described below.

7. Summary

The State of Oklahoma submitted to the EPA, under a cover letter

from the Governor, the State's operating permits program on January 7,

1994. The submittal has adequately addressed all sixteen elements

required for full approval as discussed in part 70 with the exception

of the issues described in section B below. The State of Oklahoma

addressed appropriately all requirements necessary to receive source

category-limited interim approval of the State operating permits

program pursuant to title V of the Act, 1990 Amendments and 40 CFR part

70. The EPA is proposing source category-limited interim approval for

the part 70 program submittal for the State of Oklahoma.

B. Options for Approval/Disapproval and Implications

The EPA is proposing to grant source category-limited interim

approval to the operating permits program submitted by the State of

Oklahoma on January 7, 1994. Interim approvals under section 502(g) of

the Act do not create any new requirements, but simply approve

requirements that the State is already imposing.

If promulgated, the State must make the following changes to

receive full approval:

(1) Criminal Penalty Cap

As discussed in section A.1 above, the State must provide a

supplemental Attorney General's Opinion to clarify the implementation

of the criminal penalty statute in such a way that preserves the

integrity of the Act. This supplement must be submitted to the EPA

before final action on this proposal is taken.

(2) Definition of ``Major Source''

As discussed in section A.2.a above, the State must revise OAC

252:100-8-2, ``major source'' by deleting paragraph (4). This revision

will make the definition consistent with the rule at part 70. Also, the

State must revise the regulations to reflect the transition schedule

proposed for source category-limited interim approval.

(3) Revision of Insignificant Activities

As discussed in section A.2.a above, the State must amend the

language at OAC 252:100-8-3(e) so that the insignificant emissions rate

of 1 lb/hr for criteria pollutants will be based on potential to emit

instead of actual emissions. Further, the language at OAC 252:100-8-

3(e)(3) must be revised to delete the allowance of any percentage of a

permit limit or change in the potential to emit as an insignificant

emission level. Also, an application may not omit information needed to

determine the applicability of, or to impose, any applicable

requirement, or to evaluate the fee amount required. Further, any list

of insignificant activities or trivial activities must be approved by

the EPA prior to its use, as required at 40 CFR 70.5(c).

[[Page 13094]]

(4) Revision of Permit Content

The regulations at OAC 252:100-8-6(a) must be revised to remove the

phrase ``To the extent practicable. . .'' Until this revision is made,

the permits issued by the State shall meet the requirements of 40 CFR

70.6 and include all applicable requirements.

(5) Revision to Provide Standing

As discussed in section A.2.c above, the State must revise OAC

252:100-8-7(i)(1)(E) and OAC 252:100-8-7(j)(2)(A) to delete the word

``written'' so that oral comments have standing with judicial review of

the permitting process. Also, the State must clarify OAC 252:100-8-7(j)

so that judicial review is available to all affected parties for all

final permit actions including minor modifications and administrative

amendments.

(6) Administrative Amendment Procedure

As discussed in section A.2.d above, the State must revise OAC

252:100-8-7(d)(1)(C) to delete the words, ``. . . or less . . .''.

Further, the provisions at OAC 252:100-8-7(d)(1)(E) must be clarified

to require enhanced NSR procedures that are substantially equivalent to

the requirements of 40 CFR 70.7 and 40 CFR 70.8 for a change subject to

review as a permit modification and compliance requirements

substantially equivalent to those contained in 40 CFR 70.6. The State

must submit a SIP revision for Subchapter 7 that incorporates enhanced

NSR procedures that meet the requirements listed at 40 CFR 70.7 and 40

CFR 70.8 for a change subject to review as a permit modification, and

has compliance requirements substantially equivalent to those contained

in 40 CFR 70.6.

(7) Review of the Fee

As discussed in section A.3 above, the EPA has reviewed the

workload analysis and fee demonstration submitted November 7, 1994, and

is recommending approval of the proposed fee of $15.19 per ton. The EPA

will consider comments made during the comment period for this approval

action and will reserve final action on the fee for the final interim

approval notice.

(8) Acid Rain Incorporation by Reference

As discussed in section A.4 above, the State must revise OAC

252:100-8 to incorporate the acid rain requirements and submit this

revision to the EPA before final action on this proposal is taken.

Evidence of these regulatory revisions and their procedurally

correct adoption must be submitted to the EPA within 18 months of the

EPA's approval of the Oklahoma part 70 program. This interim approval,

which may not be renewed, extends for a period of up to two years.

During the interim approval period, the State is protected from

sanctions for failure to have a program, and the EPA is not obligated

to promulgate a Federal permits program in the State. Permits issued

under a program with interim approval have full standing with respect

to 40 CFR part 70, and the State will permit sources based on the

transition schedule submitted with the source category-limited approval

request. This schedule may extend for no more than five years beyond

the interim approval date.

If the interim approval is converted to a disapproval, 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.

The scope of Oklahoma's part 70 program that the EPA proposes to

approve in this notice would apply to all part 70 sources (as defined

in the approved program) within the State of Oklahoma, except any

sources of air pollution over which an Indian Tribe has jurisdiction.

See, e.g., 59 FR 55813, 55815-18 (November 9, 1994). The term ``Indian

Tribe'' is defined under the Act as ``any Indian tribe, band, nation,

or other organized group or community, including any Alaska Native

village, which is federally recognized as eligible for the special

programs and services provided by the United States to Indians because

of their status as Indians.'' See section 302(r) of the Act; see also

59 FR 43956, 43962 (August 25, 1994); 58 FR 54364 (October 21, 1993).

Requirements for approval, specified in 40 CFR 70.4(b), encompass

section 112(l)(5) approval requirements for delegation of section 112

standards as promulgated by the EPA as they apply to part 70 sources.

Section 112(l)(5) requires that the State's program contain adequate

authorities, adequate resources for implementation, and an expeditious

compliance schedule, which are also requirements under Part 70.

Therefore, the EPA is also proposing to grant approval under section

112(l)(5) and 40 CFR part 63.

III. Proposed Rulemaking Action

In this action, the EPA is proposing source category-limited

interim approval of the part 70 program submitted by the State of

Oklahoma. The program was submitted by the State to the EPA for the

purpose of complying with Federal requirements found at the 1990

Amendments, title V and at part 70, which mandates that States develop,

and submit to the EPA, programs for issuing operating permits to all

major stationary sources and certain other sources, with the exception

of Indian country. Therefore, the EPA is also promulgating approval

under section 112(l)(5) and 40 CFR 63.91 of the State's program for

receiving delegation of section 112 standards that are unchanged from

Federal standards as promulgated. This program for delegations only

applies to sources covered by the part 70 program.

The EPA has reviewed this submittal of the Oklahoma part 70 program

and is proposing source category-limited interim approval. Certain

defects in the State's regulations preclude the EPA from granting full

approval of the State's part 70 program at this time. The EPA is

proposing to grant interim approval, subject to the State obtaining the

needed regulatory revisions within 18 months after the Administrator's

approval of the Oklahoma title V program pursuant to 40 CFR 70.4.

IV. Administrative Requirements

A. Request for Public Comments

The EPA is requesting comments on all aspects of this proposed

rule. Copies of the State's submittal and other information relied upon

for the proposed interim approval are contained in a docket maintained

at the EPA Regional Office. The docket is an organized and complete

file of all the information submitted to, or otherwise considered by,

the EPA in the development of this proposed rulemaking. The principal

purposes of the docket are:

(1) To allow interested parties a means to identify and locate

documents so that they can effectively participate in the rulemaking

process; and

(2) To serve as the record in case of judicial review. The EPA will

consider any comments received by April 10, 1995.

B. Executive Order 12866

The Office of Management and Budget has exempted this regulatory

action from Executive Order 12866 review.

C. Regulatory Flexibility Act

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 impact on a substantial [[Page 13095]] 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.

Part 70 program approvals under section 502 of the Act do not

create any new requirements, but simply approve requirements that the

State is already imposing. Therefore, because the Federal part 70

program 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

Act, preparation of a regulatory flexibility analysis would constitute

Federal inquiry into the economic reasonableness of State action. The

Act forbids the EPA to base its actions concerning part 70 programs 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. section 7410(a)(2)).

List of Subjects in 40 CFR Part 70

Administrative practice and procedure, Air pollution control,

Checklist, Environmental protection, Intergovernmental relations,

Memorandum of understanding, Operating permits, Options for approval/

disapproval and implications, Permit fee demonstration.

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

Dated: February 22, 1995.

William B. Hathaway,

Acting Regional Administrator (6M).

[FR Doc. 95-5981 Filed 3-9-95; 8:45 am]

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