Outer Continental Shelf Air Regulations Delegation Remand

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 55

[FRL-5507-7]

RIN 2060-AG40 and AG39

Outer Continental Shelf Air Regulations Delegation Remand

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The EPA is proposing revision to the outer continental shelf

(OCS) regulations in response to a voluntary remand from the U.S. Court

of Appeals for the District of Columbia Circuit. These regulations

establish air pollution control requirements for certain sources

located on the OCS.

In response to the requirements of section 328 of the Clean Air Act

(Act), on September 4, 1992, EPA promulgated the OCS regulations

setting up two regimes for controlling air pollution from OCS sources

for the purposes of attaining and maintaining Federal air quality

standards and to comply with certain Act requirements for

preconstruction review of new and modified major sources. Sources

located within 25 miles of the States' seaward boundaries (the 25-mile

limit) must comply with regulations which are, in most respects, the

same as the regulations for similar sources located on shore. Sources

beyond the 25-mile limit are required to comply with Federal new source

performance standards (NSPS), requirements for the prevention of

significant deterioration (PSD), and national emission standards for

hazardous air pollutants (NESHAP) related to attainment and maintenance

of ambient air quality standards or the requirements of part C of title

I of the Act. The Federal operating permits program and enhanced

compliance monitoring regulatory requirements will also be incorporated

into part 55 when they are promulgated. In promulgating the OCS

regulations, EPA provided for delegation to State and local agencies

the authority to implement and enforce the regulations for sources

within the 25-mile limit. However, EPA did not provide for delegation

of the authority to implement and enforce the regulations for sources

located beyond the 25-mile limit. The Santa Barbara County Air

Pollution Control District (APCD) filed a petition for review of the

regulations on several issues, including the issue of delegation beyond

the 25-mile limit. Upon EPA's request for a voluntary remand, the court

remanded the delegation issue to EPA for reconsideration.

By this action, EPA is revising the OCS regulations to provide for

delegation to State and local agencies the authority to implement and

enforce the OCS regulations beyond the 25-mile limit. Delegation of the

program to any specific State or local agency will be under separate

action.

DATES: Written comments on the proposed action must be received by EPA

at the address below on or before June 19, 1996.

ADDRESSES: Comments should be submitted to the public docket for this

action is available for public inspection and copying between 8:00 a.m.

and 4:00 p.m., Monday through Friday, at the Air and Radiation Docket

and Information Center (6102), Attention Docket A-95-07, South

Conference Center, Room 4, 401 M Street, SW, Washington, DC 20460. A

reasonable fee for copying may be charged.

FOR FURTHER INFORMATION CONTACT: Mr. David Stonefield, U.S. EPA, MD-15,

Research Triangle Park, NC 27711, telephone (919) 541-5350.

Supplementary Information:

I. Background and Purpose

A. Introduction

The Clean Air Act Amendments of 1990 (Pub. L. 101-549, 104 Stat.

2399 (1990)) added section 328 to the Act and transferred authority to

regulate sources on part of the OCS from the Department of the Interior

(DOI) to EPA. The DOI retained the authority to regulate OCS sources in

the Gulf of Mexico west of 87.5 degrees longitude. As to the remaining

portions of the OCS--the Atlantic, Pacific, and Arctic coasts and the

Gulf of Mexico east of 87.5 degrees--section 328 requires EPA to

establish requirements for the control of air pollution from OCS

sources to attain and maintain Federal and State ambient air quality

standards and to comply with the provisions of part C (for the

prevention of significant deterioration) of title I of the Act. For

sources within 25 miles of the States' seaward boundaries, those

requirements must be the same as would be applicable if the source were

located in the corresponding onshore area (COA). For sources beyond the

25-mile limit, the Administrator had discretion in determining the

requirements. The EPA proposed (56 FR 63774, December 5, 1991) and

promulgated (57 FR 40792, September 4, 1992) regulations to implement

the requirements of section 328. The regulations require, among other

things, that sources located beyond 25 miles of States' seaward

boundaries meet applicable Federal pollution control requirements which

include PSD, NSPS and NESHAP regulations to the extent that they are

rationally related to protection of air quality standards or part C of

title I of the Act (40 CFR 55.13). In addition, EPA stated in the

preamble to the final rule that it would incorporate into the OCS rules

the requirements of the Federal operating permits regulations (40 CFR

part 71) and the enhanced monitoring regulations, when promulgated (57

FR 40803).

B. Delegation Authority

Section 328(a)(3) of the Act permits States adjacent to an OCS

source to adopt and submit to EPA regulations for implementing and

enforcing the requirements of that section. It requires that:

[I]f the Administrator [of EPA] finds that the State regulations

are adequate, the Administrator shall delegate to that State any

authority the Administrator has under this Act to implement and

enforce such requirements.

Therefore, in the OCS regulations, EPA included Sec. 55.11 which

authorizes the delegation of the implementation and enforcement

authority to State and local agencies for OCS sources that are located

within the 25-mile limit. However, in the preamble to the proposed and

final rules, EPA stated that it would retain the authority to implement

and enforce the OCS regulations for sources located beyond the 25-mile

limit for two reasons. First, since the sources located beyond the 25-

mile limit are subject only to Federal requirements, the State would

have to adopt two OCS programs, one for sources within the 25-mile

limit and one for sources beyond the limit. Second, it may be difficult

to determine the appropriate agency to receive delegation for sources

located beyond the 25-mile limit (56 FR 63784 and 57 FR 40801-802).

Therefore, in the final

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rule, EPA did not provide for the delegation of the implementation and

enforcement authority for sources beyond the 25-mile limit.

C. Judicial Review

On November 2, 1992, the Santa Barbara County APCD filed a petition

for review of the OCS regulations with the U.S. Court of Appeals for

the District of Columbia Circuit (Santa Barbara County Air Pollution

Control District v. EPA, 31 F. 3rd 1179 (D.C. Cir., 1994)). One of the

issues that the Santa Barbara County APCD raised was EPA's failure to

provide for delegation of the authority to implement and enforce the

OCS regulations for sources located beyond 25 miles from a State's

seaward boundary.1 In reviewing the issue, EPA determined that

section 328 of the Act requires it to delegate any authority the EPA

has under the Act to implement and enforce the requirements of section

328(a) if it determines that the State government has adequate

regulations. Therefore, EPA requested the court to remand this issue to

it for reconsideration.

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\1\ Another issue raised by the Santa Barbara County APCD

petition involved EPA special offset provisions for OCS sources. On

August 12, 1994, the court vacated that portion of the OCS

regulations and remanded it to EPA for further consideration.

Elsewhere in today's Federal Register, EPA is promulgating an

interim final regulation revising the OCS regulation in accordance

with the court's instructions.

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II. Revisions to the Regulations

The OCS regulations contain three references to the delegation

authority beyond the 25-mile limit. The EPA is proposing in each case

to revise the language of the OCS regulations to make clear that EPA

may delegate the authority to implement and enforce the OCS regulations

for the OCS sources beyond the 25-mile limit. Specific regulatory

changes are proposed for Secs. 55.3(c), 55.6(d), and 55.11(a). In

addition, to allow for the delegation of authority for sources beyond

the 25-mile limit, revisions in the wording of other sections are

necessary to clarify the regulations. The specific regulatory changes

proposed include revisions to Sec. 55.2 (definition of nearest onshore

area) and the addition of Sec. 55.11(j).

Section 55.3 establishes the applicability of the regulations for

OCS sources. Section 55.3(c) relates to sources located beyond the 25-

mile limit and excludes those sources from the requirements of

Sec. 55.11, which specifically deals with the delegation of the

authority for implementation and enforcement within the 25-mile limit.

The EPA proposes to delete the reference in Sec. 55.3(c) that provides

that the delegation requirements of Sec. 55.11 do not apply for sources

located beyond the 25-mile limit.

Section 55.6 establishes permit requirements for OCS sources.

Section 55.6(d) relates to sources located beyond the 25=mile limit,

and paragraph (2) states that the Administrator will retain the

authority to implement and enforce the OCS regulations for those

sources. The proposed revisions would delete the existing paragraph (2)

and replace it with a new paragraph (2) which defines the permit

requirements for sources if the program is delegated. The new

provisions prohibit the issuance of permits to operators that have not

demonstrated compliance with all applicable requirements of the OCS

regulations. This new paragraph is identical to the paragraph in

Sec. 55.6(c) for sources located within the 25-mile limit.

Section 55.11 currently establishes the requirements for the

delegation of the implementation and enforcement of the OCS regulations

within the 25-mile limit. The EPA proposes to revise Sec. 55.11(a) to

clarify that the State can request delegation for sources beyond the

25-mile limit, as well as for sources located within the 25-mile limit.

The existing definition of ``nearest onshore area'' (NOA) only

applies to sources within 25 miles of States' seaward boundaries. Under

the existing regulatory scheme for OCS sources in which EPA retained

all authority for sources beyond the 25-mile limit, the definition was

only needed for sources located within 25 miles of States' seaward

boundaries. However, in delegating the authority to implement and

enforce the regulations for sources beyond the 25-mile limit, it will

be necessary to determine the NOA for the source. Therefore, EPA is

proposing to expand the NOA definition by deleting the limitation to

sources within 25 miles of the States' seaward boundaries.

A new subsection ``(j)'' is proposed for Sec. 55.11 to define the

exercise of authority over OCS sources. The delegated agency in the COA

for sources located within the 25-mile limit and the delegated agency

in the NOA for sources located beyond the 25-mile limit will exercise

all delegated authority. If there is no delegated agency in the COA or

NOA, EPA will issue permits and implement and enforce the OCS

regulations. This language mirrors that of Sec. 55.5(c)(4), which

discusses the exercise of authority for sources within the 25-mile

limit.

Section 328(a)(4)(B) of the Act and Sec. 55.5 of the OCS

regulations establish a procedure for areas other than the NOA to be

designated as the COA for sources within the 25-mile limit. Pursuant to

Sec. 55.5, for an area other than the NOA to be designated as the COA,

it must demonstrate, among other things, that it has more stringent air

pollution control regulations than the NOA. Since sources located

beyond the 25-mile limit are subject only to Federal regulations, as

identified in Sec. 55.13, any delegated State or local agency would be

enforcing the same regulations. Therefore, for sources beyond the 25-

mile limit, EPA will delegate the authority to implement and enforce

the OCS regulations only to the State or local agency that is

responsible for the NOA, assuming that the requirements for delegation

are met (Sec. 55.5(b)).

The EPA is also rescinding that preamble language which

specifically states that delegation beyond the 25-mile limit is

unacceptable (57 FR 40794, 40797, 40801, and 40802).

III. Administrative Requirements

A. Executive Order 12866

Under Executive Order 12866, the Agency must determine whether the

regulatory action is significant and therefore subject to the Office of

Management and Budget (OMB) review and the requirements of the

Executive Order. The Order defines significant regulatory action as one

that is likely to result in a rule that may:

(1) Have an annual effect on the economy of $100 million or more or

adversely affect in a material way the economy, productivity,

competition, jobs, the environment, public health or safety or State,

local, or tribal governments or communities;

(2) create a serious inconsistency or otherwise interfere with an

action taken or planned by another Agency;

(3) materially alter the budgetary impact of entitlements, grants,

user fees, or loan programs or the rights and obligations of recipients

thereof; or

(4) raise novel legal or policy issues arising out of legal

mandates, the President's priorities, or the principles set forth in

the Executive Order.

Pursuant to the terms of Executive Order 12866, OMB has determined

that the revisions to the OCS rules are ``significant'' because the OCS

sources would be regulated by two Federal agencies, EPA and DOI. As

such, this action was submitted to OMB for review. Changes made in

response to OMB suggestions or recommendations are documented in the

public record.

B. Unfunded Mandates Act

Section 202 of the Unfunded Mandates Act of 1995 requires that EPA

prepare a budgetary impact statement

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before promulgating a rule that includes a Federal mandate that may

result in expenditures by State, local, and tribal governments, in

aggregate, or by the private sector, of $100 million or more in any 1

year. Section 203 requires EPA to establish a plan for obtaining input

from, informing, educating, and advising any small governments that may

be significantly or uniquely affected by the rule.

Under section 205 of the Unfunded Mandates Act, EPA must identify

and consider a reasonable number of regulatory alternatives before

promulgating a rule for which a budgetary impact statement must be

prepared. The EPA must select from those alternatives the least costly,

most cost-effective, or least burdensome alternative that achieves the

objective of the rule, unless EPA explains why a particular alternative

is not selected or the selection of a particular alternative is

inconsistent with law.

Because this proposed rule does not impose any new mandates on

State, local, or tribal governments, and the rule is estimated to

result in the expenditures by State, local, and tribal governments or

the private sector of less that $100 million in any 1 year, EPA has not

prepared a budgetary impact statement or specifically addressed the

selection of the least costly, most cost-effective, or least burdensome

alternative. Because small governments will not be significantly or

uniquely affected by this rule, EPA is not required to develop a plan

with regard to small governments. However, EPA will work with eligible

State and local air pollution control agencies to assist them in

requesting delegation of authority to implement and enforce the OCS

regulations.

C. Paperwork Reduction Act

These rule revisions do not contain any information collection

requirements subject to review by the OMB under the Paperwork Reduction

Act of 1980, 44 U.S.C. Sec. 3501, et seq.

D. Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) of 1980 requires Federal

agencies to identify potentially adverse impacts of Federal rules upon

small entities. Small entities include small businesses, organizations,

and governmental jurisdictions. In instances where significant economic

impacts are possible on a substantial number of these entities,

agencies are required to perform a regulatory flexibility analysis.

Furthermore, EPA Guidelines for Implementing the Regulatory Flexibility

Act, issued on April 9, 1992, require the Agency to determine whether

regulations will have any economic impacts on small entities. These

revisions to the OCS regulations do not, in themselves, impose any

requirements on small entities, nor require or exclude small entities

from meeting the requirements of the OCS regulations. As a result, EPA

has determined that these revisions will not have a significant impact

on a substantial number of small entities.

Therefore, as required under Sec. 605 of the RFA, 5 U.S.C. 605, I

certify that these revisions do not have a significant impact on a

substantial number of small entities.

List of Subjects in 40 CFR Part 55

Environmental protection, Administrative practice and procedures,

Air pollution control, Continental shelf, Intergovernmental relations,

Nitrogen oxides, Ozone, permits, Reporting and recordkeeping

requirements, Sulfur oxides.

Dated: May 13, 1996.

Carol M. Browner,

Administrator.

For reasons set out in the preamble, 40 CFR part 55 is proposed to

be amended as set forth below.

PART 55--OUTER CONTINENTAL SHELF AIR REGULATIONS

1. The authority citation for part 55 continues to read as follows:

Authority: Section 328 of the Clean Air Act (42 U.S.C. 7401 et

seq.) as amended by Public Law 101-549.

Sec. 55.2 [Amended]

2. In Sec. 55.2 the introductory text of the definition of

``Nearest Onshore Area'' is proposed to be amended by adding a comma

after ``OCS source'' and removing the words ``located within 25 miles

of the States' seaward boundary,'' which follows.

3. Section 55.3 is proposed to be amended by revising paragraph (c)

to read as follows:

Sec. 55.3 Applicability.

* * * * *

(c) The OCS sources located beyond 25 miles of States' seaward

boundaries shall be subject to all the requirements of this part,

except the requirements of Secs. 55.4, 55.5, 55.12 and 55.14 of this

part.

* * * * *

4. Section 55.6 is proposed to be amended by revising paragraph

(d)(2) to read as follows:

Sec. 55.6 Permit requirements.

* * * * *

(d) * * *

(1) * * *

(2) The Administrator or delegated agency shall not issue a permit

to operate to any existing OCS source that has not demonstrated

compliance with all the applicable requirements of this part.

* * * * *

5. Section 55.11 is proposed to be amended by revising paragraph

(a) and by adding paragraph (j) to read as follows:

Sec. 55.11 Delegation.

(a) The governor or the governor's designee of any State adjacent

to an OCS source subject to the requirements of this part may submit a

request, pursuant to section 328(a)(3) of the Act, to the Administrator

for the authority to implement and enforce the requirements of this OCS

program (i) within 25 miles of the State's seaward boundary and/or

beyond 25 miles of the State's seaward boundary. Authority to implement

and enforce Secs. 55.5, 55.11, and 55.12 of this part will not be

delegated.

* * * * *

(j) Delegated Authority.

The delegated agency in the COA for sources located within 25 miles

of the State's seaward boundary or the delegated agency in the NOA for

sources located beyond 25 miles of the State's seaward boundary will

exercise all delegated authority. If there is no delegated agency in

the COA for sources located within 25 miles of the State's seaward

boundary, or in the NOA for sources located beyond 25 miles of the

State's seaward boundary, the EPA will issue the permit and implement

and enforce the requirements of this part. For sources located within

25 miles of the State's seaward boundary, the Administrator may retain

the authority for implementing and enforcing the requirements of this

part if the NOA and COA are in different States.

[FR Doc. 96-12627 Filed 5-17-96; 8:45 am]

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