Approval and Promulgation of Section 182(f) Exemption to the Nitrogen Oxides (NOINFX/INF) Control Requirements for the Lake Charles Ozone Nonattainment Area; Louisiana

SUMMARY: The EPA is issuing final approval of a petition from the State

of Louisiana requesting that the Lake Charles marginal ozone

nonattainment area be exempt from applicable nitrogen oxides

(NOX) control requirements of section 182(f) of the Clean

Air Act (Act). The section 182(f) NOX requirement from which

the area will be exempt is NOX new source review (NSR). In

addition, approval of the section 182(f) petition would remove the

NOX general conformity provisions and the NOX

build/no build provisions of the transportation conformity rule. This

document will also correct the drafting error in the proposed rule in

which the Lake Charles area was referred to as the Calcasieu Parish

nonattainment area. This correction is merely a nominal change, since

the Lake Charles nonattainment area contains only Calcasieu Parish.

EFFECTIVE DATE: This action is effective as of May 27, 1997.

ADDRESSES: Copies of the exemption request, public comments and EPA's

responses are available for inspection at the following address:

Environmental Protection Agency, Region 6, Multimedia Planning and

Permitting Division, 1445 Ross Avenue, Suite 700, Dallas, Texas 75202-

2733.

Louisiana Department of Environmental Quality, H. B. Garlock Building,

7290 Bluebonnet, Baton Rouge, Louisiana 70810.

FOR FURTHER INFORMATION CONTACT:

Mr. Matthew Witosky , Air Planning Section (6PD-L), Multimedia

Planning and Permitting Division, EPA Region 6, 1445 Ross Avenue,

Dallas, Texas 75202-2733, telephone (214) 665-7214.

SUPPLEMENTAL INFORMATION:

I. Background

On October 28, 1994, the State of Louisiana submitted a petition to

the EPA requesting that the Lake Charles marginal ozone nonattainment

area be exempt from requirements to implement NOX controls

pursuant to section 182(f) of the Act. Hereafter, any reference to

``section'' shall be considered a reference to a portion of the Act.

The exemption request was based on modeling that demonstrates

additional NOX emission controls within the nonattainment

area will not contribute to attainment of the ozone National Ambient

Air Quality Standard (NAAQS) within the area. Subsequent to the

original request for a waiver, ambient data became available indicating

that area was in attainment of the ozone standard. The EPA is approving

the exemption request based on modeling and monitoring data that

together demonstrate that additional NOX reductions would

not contribute to attainment. As stated in the summary, the Lake

Charles ozone nonattainment area consists only of Calcasieu Parish.

On June 13, 1996, the EPA proposed approval of the NOX

exemption petition for the Lake Charles ozone nonattainment area (61 FR

30024, again, proposed as the Calcasieu Parish nonattainment area).

Adverse comments were received from a single commenter. In addition,

three environmental groups submitted joint adverse comments on the

proposed approvals of NOX exemptions for the Ohio and

Michigan ozone nonattainment areas in August of 1994. These comments

addressed the EPA's general policy regarding NOX exemptions.

The commenters requested that these comments be addressed in all EPA

rulemakings dealing with section 182(f) exemptions.

II. Public Comments

The following discussion summarizes the comments received regarding

the State's petition and/or the EPA's proposed rulemaking and presents

the EPA's responses to these comments.

Comment: Commenters argued that NOX exemptions are

provided for in two separate parts of the Act, in sections 182(b)(1)

and 182(f). Because the NOX exemption tests in sections

182(b)(1) and 182(f)(1) include language indicating that action on such

requests should take place ``when (the 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 section 182(f)(3), must occur during

consideration of an attainment or maintenance plan, unless the area has

been redesignated as attainment.

Response: Section 182(f) contains very few details regarding the

administrative procedures for acting on NOX exemption

requests. The absence of specific guidelines by Congress leaves the EPA

with discretion to establish reasonable procedures consistent with the

requirements of the Administrative Procedures Act (APA).

The EPA disagrees with the commenters regarding the process for

considering NOX exemption requests under section 182(f) and

instead, believes that sections 182(f)(1) and 182(f)(3) provide

independent procedures by which the EPA may act on NOX

exemption requests. The language in section 182(f)(1), which indicates

that the EPA should act on NOX exemptions in conjunction

with action on a plan or a plan revision, does not appear in section

182(f)(3). While section 182(f)(3) references section 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 State

Implementation Plans (SIPs). Additionally, section 182(f)(3) provides

that ``a person'' (which section 302(e) of the Act defines to include a

State) may petition for NOX exemptions ``at any time,'' and

requires the EPA to make its determination within 6 months of the

petition's submission. These key differences lead the 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).

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

marginal areas to adopt NSR rules, unless exempted. These rules were

generally due to be submitted to the EPA by November 15, 1992. Thus, in

order to avoid the Act's sanctions, areas seeking

[[Page 29073]]

a NOX exemption would have needed to submit this exemption

request for EPA review and rulemaking action several months before

November 15, 1992. In contrast, the Act specifies that the attainment

demonstrations were not due until November 1993 or 1994 (and the EPA

may take up to 12 months to approve or disapprove the demonstrations).

For marginal ozone nonattainment areas (subject to NOX NSR),

no attainment demonstrations are called for in the Act. For areas

seeking redesignation to attainment of the ozone NAAQS, the Act does

not specify a deadline for submittal of maintenance demonstrations (in

reality, the EPA would generally consider redesignation requests

without accompanying maintenance plans to be unacceptable). Clearly,

the Act envisions the submittal of and EPA action on NOX

exemption requests, in some cases, prior to submittal of attainment or

maintenance demonstrations.

Comment: Commenters contended that section 182(b)(1) is the

appropriate authority for granting interim period transportation

conformity NOX exemptions.

Response: The EPA agreed with the commenters and published an

interim final rule that changed the transportation conformity rule to

reference section 182(b)(1) as the correct authority under the Act for

waiving the NOX ``build/no-build'' and ``less-than-1990

emissions'' tests for certain areas. See 60 FR 44762, (August 29,

1995). A related proposed rule (60 FR 44790), published on the same

day, invited public comment on how the Agency plans to implement

section 182(b)(1) transportation conformity NOX exemptions.

That proposal has since been finalized. See 60 FR 57179 (November 14,

1995). In that final rule, the EPA noted that section 182(b)(1), by its

terms, only applies to moderate and above ozone nonattainment areas.

Consequently, the EPA believes that the interim reduction requirements

of section 176(c)(3)(A)(iii), and the authority provided in section

182(b)(1) to grant relief from those interim reduction requirements,

apply only to those areas subject to section 182(b)(1).

It should be noted that a NOX waiver under section

182(f) removes the NOX general conformity requirements

entirely and would continue to do so. Since general Federal actions are

not subject to section 176(c)(3)(A)(iii), which explicitly references

section 182(b)(1), the EPA will continue to offer relief from

NOX general conformity provisions under section 182(f)(3).

The EPA intends to provide relief to marginal areas, such as Lake

Charles, from transportation conformity provisions through the

authority of section 182(f)(3) because marginal areas are not subject

to section 182(b)(1). The EPA believes this approach is consistent both

with the way NOX requirements in ozone nonattainment areas

are treated under the Act generally, and under section 182(f) in

particular. The basic approach of the Act is that NOX

reductions should apply when beneficial to an area's attainment goals,

and should not apply when unhelpful or counterproductive. Section

182(f) reflects this approach but also includes specific substantive

tests which provide a basis for the EPA to determine when

NOX requirements should not apply. There is no substantive

difference between the technical analysis required to make an

assessment of NOX impacts on attainment in a particular area

whether undertaken with respect to mobile source or stationary source

NOX emissions. Moreover, where the EPA has determined that

NOX reductions will not benefit attainment or would be

counterproductive in an area, the EPA believes it would be unreasonable

to insist on NOX reductions for purposes of meeting

reasonable further progress or other milestone requirements. Thus, even

concerning the conformity requirements of section 176(c)(1), the EPA

believes it is reasonable and appropriate to: (1) Offer relief from the

applicable NOX requirements of the general and

transportation conformity rules in areas where such reductions would

not be beneficial, and (2) rely in doing so on the exemption tests

provided in section 182(f).

In summary, the EPA will continue to process actions not subject to

section 182(b)(1) under section 182(f)(3). The Lake Charles ozone

nonattainment area is not subject to the requirements of section

182(b)(1). Therefore, a transportation conformity NOX waiver

and general conformity waiver may be granted under section 182(f)(3).

Comment: Commenters argued that waiver of NOX control

requirements is unlawful if such a waiver would impede attainment and

maintenance of the ozone standard in downwind areas.

Response: As a result of these comments, the EPA reevaluated its

position on this issue and has revised previously issued guidance. See

Memorandum, ``Section 182(f) Nitrogen Oxides (NOX)

Exemptions--Revised Process and Criteria,'' dated February 8, 1995,

from John Seitz. As described in this memorandum, the EPA intends to

use its authority under section 110(a)(2)(D) to require a State to

reduce NOX emissions from stationary and/or mobile sources

where there is evidence, such as photochemical grid modeling, showing

that the NOX emissions would contribute significantly to

nonattainment in, or interfere with maintenance by, any other State or

in another nonattainment area within the same State. This action would

be independent of any action taken by the EPA on a NOX

exemption request under section 182(f). That is, the EPA's action to

grant or deny a NOX exemption request under section 182(f)

for any area would not shield that area from the EPA's action to

require NOX emission reductions, if necessary, under section

110(a)(2)(D).

Modeling analyses are underway or will soon be conducted in many

areas for the attainment demonstration SIP revisions required pursuant

to section 182(c)(2)(A). Recent modeling data suggest that certain

ozone nonattainment areas may benefit from reductions in NOX

emissions upwind of the nonattainment areas. For example, the Northeast

Corridor States and the Lake Michigan Ozone Study are considering

attainment strategies which may rely, in part, on NOX

emission reductions hundreds of kilometers upwind. The EPA is working

with the States and other organizations to design and complete studies

which consider upwind sources and quantify their impacts. As the

studies progress, the EPA will continue to work with the States and

other organizations to develop mutually acceptable attainment

strategies.

At the same time as the large scale modeling analyses are being

conducted, States have requested exemptions from NOX

requirements under section 182(f) for certain nonattainment areas in

the modeling domains. Some of these nonattainment areas may impact

downwind nonattainment areas. The EPA intends to address the transport

issue under section 110(a)(2)(D), based on a regional modeling

analysis.

Under section 182(f) of the Act, an exemption from NOX

requirements may be granted for nonattainment areas outside of an ozone

transport region if the EPA determines that ``additional reductions of

(NOX) would not contribute to attainment of the national

ambient air quality standard for ozone in the area.'' 1 As

described in section

[[Page 29074]]

4.3 of the December 13, 1993, EPA guidance document, ``Guideline for

Determining the Applicability of Nitrogen Oxides Requirements Under

Section 182(f),'' the EPA encourages, but does not require, States/

petitioners to consider the impacts on the entire modeling domain since

the effects of an attainment strategy may extend beyond a designated

nonattainment area. Specifically, the guidance encourages States to

consider imposition of the NOX requirements if needed to

avoid adverse impacts in downwind areas, either intra-or interstate.

States need to consider such impacts since they are ultimately

responsible for achieving attainment in all portions of their State and

for ensuring that emissions originating in their State do not

contribute significantly to nonattainment in, or interfere with

maintenance by, any other State. See section 110(a)(2)(D)(i)(I) of the

Act.

---------------------------------------------------------------------------

\1 \ There are three NOX exemption tests specified in

section 182(f). Of these, two are applicable for areas outside of an

ozone transport region: The ``contribute to attainment'' test

described above, and the ``net air quality benefits'' test. EPA must

determine, under the latter test, that the net benefits to air

quality in an area ``are greater in the absence of NOX

reductions'' from relevant sources. 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.

Consequently, as stated in section 1.4 of the December 16, 1993, EPA

guidance, ``[w]here any 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.''

---------------------------------------------------------------------------

In contrast, section 4.4 of the December 16, 1993, guidance states

that the section 182(f) demonstration would not be approved if there is

evidence, such as photochemical grid modeling, showing that the

NOX exemption would interfere with attainment or maintenance

in downwind areas. The guidance further explains that section

110(a)(2)(D) (not section 182(f)) prohibits such impacts. Consistent

with section 4.3 of the guidance, the EPA believes that the section

110(a)(2)(D) and 182(f) provisions must be considered independently,

and hence, has revised section 4.4 of the December 16, 1993, guidance

document. Thus, if there is evidence that NOX emissions in

an upwind area would interfere with attainment or maintenance in a

downwind area, that problem should be separately addressed by the

State(s) or, if necessary, by the EPA in a section 110(a)(2)(D) action.

In addition, a section 182(f) exemption request should be independently

considered by the EPA.

The State of Louisiana is being included in one of the new modeling

analyses referred to above that is being conducted by the EPA, States,

and other agencies as part of the Ozone Transport Assessment Group

(OTAG). The OTAG process is a consultative process among the eastern

States and the EPA. The OTAG assessment process will evaluate regional

and national emission control strategies using improved regional

modeling analyses. The goal of the OTAG process is to reach consensus

on additional regional and national emission reductions that are needed

to support efforts to attain the ozone standard in the eastern United

States. States have committed to submit plans (SIP revisions) that will

show attainment of the ozone standard through local, regional, and

national emission controls.

As noted in a prior EPA rulemaking dated November 28, 1994 (59 FR

60709), NOX waivers are approved on a contingent basis; the

waiver applies only so long as air quality analyses, such as from

additional ozone modeling, in an exempted area continue to show

NOX reductions are detrimental to reaching attainment or

would not contribute to attainment. Additionally, in the notice of

proposed rulemaking on the Lake Charles exemption request, 61 FR 30024

(June 13, 1996), the EPA indicated that the NOX exemption

would remain effective for only as long as the area had no ozone

violations, or modeling continued to show that NOX control

activities would not contribute to attainment, in the Lake Charles

area.

Comment: Comments were received regarding the scope of exemption of

areas from the NOX requirements of the conformity rules. The

commenters argued 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 admitted that, in prior

guidance, the EPA has acknowledged the need to amend a drafting error

in the existing transportation conformity rules to ensure consistency

with motor vehicle emissions budgets for NOX, but want the

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.

Response: The EPA's transportation conformity rule 2

originally provided a NOX transportation conformity waiver

if an area received a section 182(f) exemption. As indicated in a

previous response, the EPA has changed the reference from section

182(f) to section 182(b)(1) in the transportation conformity rule since

that section is specifically referenced by the transportation

conformity provisions of the Act. See 60 FR 44762. The EPA has also

consistently held the view that, in order to conform, nonattainment and

maintenance areas must demonstrate that the transportation plan and the

Transportation Improvement Program 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 was not reflected in the transportation conformity rule. The EPA

has amended the rule to correct this error. See 60 FR 57179. However,

the exemptions that are the subject of this final action are being

processed under section 182(f)(3), which does not require the EPA to

act under the authority of section 182(b).

---------------------------------------------------------------------------

\2\ ``Criteria and Procedures for Determining Conformity to

State or Federal Implementation Plans of Transportation Plans,

Programs, and Projects Funded or Approved under Title 23 U.S.C. of

the Federal Transit Act,'' November 24, 1993 (58 FR 62188).

---------------------------------------------------------------------------

Comment: Commenters argued that the Act does not authorize any

waiver of the NOX reduction requirements until conclusive

evidence exists that such reductions are counterproductive.

Response: The EPA does not agree with this comment since it ignores

the 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, the EPA has sought

an approach that reasonably accords with that intent. In addition to

imposing control requirements on major stationary sources of

NOX similar to those that apply for sources of VOC, section

182(f) also provides for an exemption (or limitation) from application

of these requirements if, under one of several tests, the EPA

determines that, in certain areas, NOX reductions would

generally not be beneficial towards attainment of the ozone standard.

In section 182(f)(1), Congress explicitly conditioned action on

NOX exemptions on the results of an ozone precursor study

required under section 185B of the Act. Because of the possibility that

reducing NOX in an 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 Title

I of the Act, to avoid requiring NOX reductions where such

would not be beneficial or would be counterproductive. In describing

these various ozone provisions, including section 182(f), the House

Conference Committee Report states in the pertinent part: ``[T]he

Committee included a separate NOX/VOC [volatile organic

compound] study

[[Page 29075]]

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.''

See H.R. Rep. No. 490, 101st Cong., 2d Sess. 257-258 (1990).

As noted in the response to an earlier comment, the command in

section 182(f)(1) that the EPA ``shall consider'' the section 185B

report taken together with the time period the Act provides 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

the EPA to act on NOX exemption requests, even in the

absence of the additional information that would be included in

affected areas' attainment or maintenance demonstrations. 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

the EPA from revisiting an approved NOX exemption if

warranted by additional, current information.

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

1993 guidance, that section 182(f)(1) of the Act 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), the EPA believes that each test provides an

independent basis for a full or limited NOX exemption.

Only the first test listed above is based on a showing that

NOX reductions are ``counterproductive.'' If one of the

tests is met (even if another test is failed or not applied), the

section 182(f) NOX requirements would not apply or, under

the excess reductions provision, a portion of these requirements would

not apply.

Comment: Commenters provided a generic comment on all section

182(f) actions that three years of ``clean'' data fail to demonstrate

that NOX reductions would not contribute to attainment.

Response: The EPA does not agree with this comment. 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) NOX provisions over that 3-

year period. 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) NOX

provisions, the EPA believes that the Section 182(f) test is met since

``additional reductions of (NOX) would not contribute to

attainment'' of the NAAQS in that area. In all cases, EPA's approval of

the exemption is 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). In the case of Lake Charles, the EPA is

confident that three years of clean data taken together with the

modeling performed to support the request for a waiver are sufficient

evidence to support the issuance of the waiver.

Comment: Commenters stated that the modeling required by the EPA is

insufficient to establish that NOX reductions would not

contribute to attainment since only one level of control,

``substantial'' reductions, is required to be analyzed. As such, the

waiver does not provide a complete picture of the effect larger amounts

of NOX reductions will have on ozone levels. They further

explained that an area must submit an attainment plan that can be

approved before the EPA can know whether NOX reductions will

aid or undermine attainment.

Response: As described in the EPA's December 1993 NOX

exemption guidance, photochemical grid modeling is generally needed to

document cases where NOX reductions are counterproductive to

net air quality, do not contribute to attainment, do not show a net

ozone benefit, or include excess reductions. The UAM or, in a transport

region, the Regional Oxidant Model are acceptable models for these

purposes.

The EPA guidance also states that application of UAM should be

consistent with techniques specified in the EPA ``Guideline on Air

Quality Models (Revised)'' (December 1993). Further, application of UAM

should also be consistent with procedures contained in the EPA

``Guideline for Regulatory Application of the Urban Airshed Model''

(July 1991). Thus, episode selection for the section 182(f)

demonstration should be consistent with the UAM guidance for SIP

attainment demonstrations.

The EPA believes these analyses are appropriate to determine, in a

directional manner, whether or not NOX reductions are

expected to be beneficial to the air quality in the area/region. These

analyses described in the EPA's December 1993 guidance may be less

precise than an attainment demonstration required under section 182(c).

As discussed in the proposed rule, the EPA believes that the State's

UAM demonstration together with the ambient air quality data showing

that the area is attaining the ozone standard support the granting of

an exemption from the NOX requirements of section 182(f) of

the Act.

Although many ozone nonattainment areas used photochemical grid

modeling, required by the Act for their attainment demonstrations, to

apply for a NOX exemption, the Act did not require marginal

areas like Lake Charles to perform such modeling for the purpose of an

attainment demonstration. Thus, where such an area can make an adequate

showing of the effects of NOX reductions with respect to

attainment through alternative means that are otherwise consistent with

relevant guidance, the EPA could approve the area's demonstration.

The Louisiana Department of Environmental Quality (LDEQ) submitted

the results of a photochemical grid modeling exercise that was carried

out, in conjunction with Lake Charles' attainment efforts, to determine

if the area was the object of ozone and precursor transport. The EPA

acknowledges that the modeling performed for this exercise does not

precisely replicate the procedures EPA guidance suggests be used to

support a 182(f) exemption petition. Nonetheless, the EPA believes the

modeling analysis that was performed by LDEQ, combined with the area's

clean air data, is comprehensive enough to determine that the area

merits an exemption.

Comment: Commenters argued that the Act does not authorize delaying

implementation of NOX controls if attainment modeling is not

complete.

Response: The EPA believes the modeling analyses submitted are

appropriate to determine, in a directional manner, whether

NOX reductions are expected to be beneficial with respect to

the air quality in the area/region. Furthermore, subsequent

[[Page 29076]]

monitoring data indicate the area has come into attainment, obviating

NOX controls to reach attainment.

Comment: One commenter stated that the EPA must rely on the recent

National Academy of Sciences (NAS) report in its review of

NOX waivers. The commenter pointed out that the NAS report

found that to reduce transported ozone NOX reductions are

needed.

Response: The NAS report and the EPA's companion report both

support the conclusion that, as a general matter for ozone

nonattainment areas across the country, NOX reductions in

addition to VOC reductions will be needed to achieve attainment. This

general conclusion, however, must be assessed in the context of the

more detailed analysis provided in those same reports. For example, the

NAS report notes that NOX reductions can have either a

beneficial or detrimental effect on ozone concentrations, depending on

the locations and emission rates of VOC and NOX sources in a

region. The effect of NOX reductions depends on the local

VOC/NOX ratio and a variety of other factors. In its report

issued pursuant to section 185B of the Act, the EPA stated that

``[a]pplication of gridded photochemical models on a case by case basis

is required to determine the efficacy of NOX controls,

because the ozone response to precursor reductions is area specific.''

The analyses performed in the Lake Charles area demonstrate no

reduction in ozone concentrations as a result of NOX control

in the modeling domain. Based on these modeling results, the area meets

the test under section 182(f)(1)(A) of the Act required to support a

waiver from the NOX requirements of section 182(f). The

effect that NOX controls in the Lake Charles area may have

on ozone levels in the eastern U.S. will be addressed in the OTAG

process. Again, the EPA notes that the modeling and subsequent ambient

data support the conclusion that NOX controls are not

necessary for attainment.

Comment: The commenter stated that NOX emission

reductions will not only reduce transported ozone, but will also

improve visibility, especially in downwind Class I areas.

Response: The NOX exemption test Louisiana is relying on

(pursuant to section 182(f)(1)(A)) requires an assessment of only the

contribution of NOX emissions reductions toward ozone

attainment.

Comment: One commenter argued that the EPA Administrator has an

obligation, under section 110(a)(2)(D), to prohibit any activity in a

State which will contribute significantly to nonattainment in, or

interfere with maintenance by, any other State. To this end, a

``superregional'' NOX strategy should be adopted before the

Administrator grants any section 182(f) NOX exemption or, at

the very least, NOX exemptions should be restricted to

expire if the OTAG and the EPA are unsuccessful in completing the

requirements outlined in the EPA's March 2, 1995, attainment guidance

document.

Response: As discussed earlier in the response concerning transport

to downwind areas, the EPA intends to use its authority under section

110(a)(2)(D) to require a State to reduce NOX emissions from

stationary and/or mobile sources where there is evidence, such as

photochemical grid modeling, showing that the NOX emissions

would contribute significantly to nonattainment in, or interfere with

maintenance by, any other State or in another nonattainment area within

the same State. This action would be independent of any action taken by

EPA on a NOX exemption request under section 182(f). In

reference to the latter part of the comment, the EPA has granted all

NOX waivers on a contingent basis.

Comment: One commenter contended that the monitors which observed

the highest ozone concentrations in Calcasieu Parish ceased operating

in 1992, leaving an ozone monitoring network which does not appear to

monitor the area of the highest concentration.

Response: As the commenter points out, the Lake Charles monitoring

network underwent changes in 1992, when the State was obligated to move

two monitors. When the Westlake monitor was originally established over

10 years ago, the site required improvement in order to marginally meet

the siting criteria (see 40 CFR part 58, Appendix E titled Probe Siting

Criteria for Ambient Air Quality Monitoring--Ozone). After reviewing

the Westlake monitoring site in 1991 and reconsidering site conditions,

LDEQ and the EPA agreed that this monitoring site should be relocated.

The Westlake monitoring site was subsequently relocated in September

1992 to its present location on John Stine Road. The Vinton monitor was

moved in 1992 because an adequate land lease could not be obtained.

This monitor was relocated to its present location on Paul Bellow Road.

Both sites meet the criteria for establishment of monitoring sites. The

current monitoring network meets EPA-specified regulatory requirements,

and adequately reflects air quality in the nonattainment area.

Comment: A commenter stated that the EPA did not consider the

effects of the prolonged regional economic recession particularly

affecting the Lake Charles, Louisiana area. The commenter alleged that

reduced economic activity in Lake Charles from 1993 to 1995 likely

resulted in temporary reductions in ozone and ozone precursor emissions

from sources in Calcasieu Parish. They further asserted that as the

regional economic conditions improve, there will likely be a return of

ozone exceedances and violations similar to those observed in 1990-

1992.

Response: The EPA does not agree with the comment that states

seeking waivers of NOX provisions are required to estimate

and model what emissions might have been had economic conditions been

more favorable. The State followed established procedures and EPA

policy regarding the development of an emissions inventory for modeling

purposes. The EPA approved the Lake Charles emissions inventory at 60

FR 13908 on March 15, 1995. As stated in the proposed rule, if the EPA

later determines through subsequent analysis, such as through

photochemical grid analysis that NOX reductions would be

beneficial in Lake Charles, the area would be removed from exempt

status and would be required to adopt the NOX provisions of

the NSR and conformity rules except to the extent that NOX

reductions are shown to be ``excess reductions.''

Comment: The commenter contended that the EPA omits any comment on

NOX emissions in proximity to the oxygen depleted ``dead

zone'' in the Gulf of Mexico. Further, the commenter asked why the EPA

is permitting atmospheric nitrogen deposition from NOX

emissions. The commenter alleged that NOX emissions from

Calcasieu Parish will need to be reduced to mitigate nitrogen

deposition damage in other areas, including Class I areas.

Response: The EPA does not agree with this comment. No Class I

areas are known to be affected by NOX emissions in Lake

Charles. In addition, the requirements imposed by section 182 of the

Act are to bring about attainment of the ozone standard in ozone

nonattainment areas, and are independent of other requirements and

controls under the Act, and any other applicable statutes that may

address nitrogen deposition damage. The EPA's NOX waiver

policy was developed to prevent the imposition of requirements of

section 182 that do not contribute to that attainment. The other

beneficial affects those requirements might have on visibility are not

grounds to maintain or waive section 182 requirements.

[[Page 29077]]

The EPA notes that the Breton National Wildlife refuge, the nearest

Class I area to the Lake Charles nonattainment area, is approximately

394 kilometers from the nonattainment area and over 300 kilometers from

the modeling domain used to develop the NOX waiver. Since

Lake Charles is not now considered a transport area for ozone or ozone

precursors, the State is not required to evaluate the effect of a

NOX waiver on regional haze, adverse impact on visibility

(unless part of an established integral vista), or ozone attainment, in

the Refuge.

To address the substance of the comment, the EPA consulted the

Department of Interior's (DOI) officials in charge of air quality and

visibility in Breton National Wildlife Refuge. The DOI has no evidence

that NOX sources in Calcasieu Parish are upwind of or are

affecting air quality in this Class I protected area. The EPA believes

there is a very small probability that sources in the Parish could be

affecting this Class I area. The meteorological and air quality

modeling provided in the petition indicate no potential for transport

from the Lake Charles area to the Refuge. As evidence, air flow

patterns from the model indicate that typical wind directions are

northeasterly and southeasterly, clearly not in the direction of the

protected area. The DOI concurred with this assessment. It should be

noted that if this Class I area were within 100 kilometers of the

Calcasieu nonattainment area, new pollution sources within the

nonattainment area would be subject to different requirements under the

nonattainment new source review program or the prevention of

significant deterioration program, to prevent deterioration of air

quality in the protected area.

Finally, at 61 FR 29719 on June 12, 1996, the EPA published an

Advance Notice of Proposed Rulemaking, in which the EPA informed the

public that the EPA was combining the timing for its decision to retain

or revise the current standards for particulate matter and ozone. The

document also announced the EPA's intention to develop an integrated

strategy for implementation of potential new ozone and particulate

matter standards, and the regional haze program. The EPA will be

accepting comments on the integration of control requirements for ozone

precursors and gaseous emissions that contribute to the formation of

fine particulate. The EPA invites the commenter to provide their

comments to the EPA pursuant to the proposal of these new standards in

November of 1996.

III. Effective Date

The EPA has opted to make this regulation effective May 27, 1997 to

minimize delay by the EPA. As noted above, section 182(f)(3) provides

for EPA action on NOX exemption requests within six months

of receipt, and the State originally requested the waiver over two

years ago. Under the APA, 5 U.S.C. 553(d)(1), the EPA is authorized to

establish an effective date for a substantive rule that is less than

thirty days after publication if the rule ``relieves a restriction.''

The approval of the section 182(f) exemption for the Lake Charles ozone

nonattainment area is a substantive rule that relieves the restrictions

associated with the Act's title I requirements to control

NOX emissions. The EPA is also making this action effective

as soon as possible to expedite an overdue action. Hence, this action

is effective on May 27, 1997.

IV. Final Action

Although adverse comments were received, the EPA does not find

these comments of sufficient merit to alter its proposed action on this

NOX exemption request. Therefore, in this action, the EPA

approves the 182(f) NOX exemption petition submitted by the

State of Louisiana for the Lake Charles ozone nonattainment area.

Approval of the exemption waives the Federal requirements for

NOX NSR, NOX transportation conformity, and

NOX general conformity applicable to the Lake Charles ozone

nonattainment area.

The EPA believes that all section 182(f) exemptions that are

approved should be approved only on a contingent basis. As described in

the EPA's NOX Supplement to the General Preamble (57 FR

55628, November 25, 1992), the EPA would rescind a NOX

exemption in cases where NOX reductions were later found to

be beneficial in the area's attainment plan. That is, a modeling based

exemption would last for only as long as the area's modeling continued

to demonstrate attainment without the additional NOX

reductions required by section 182(f). Similarly, if an area that

received an exemption based on clean air quality data which shows that

the area is attaining the ozone standard experiences a violation prior

to redesignation of the area to attainment, the exemption would no

longer be applicable.

If the EPA later determines, because of an ozone violation or based

on new photochemical grid modeling, that NOX reductions

would be beneficial in Lake Charles, the area would be removed from

exempt status and would be required to adopt the applicable

NOX provisions of the NSR and conformity rules except to the

extent that NOX reductions are shown to be ``excess

reductions.'' In the rulemaking action which removes the exempt status,

the EPA would provide specific information regarding the reapplication

of the NSR rules and the conformity rules.

V. Regulatory Action

The EPA is issuing final approval of the request for a petition

from the State of Louisiana requesting that the Lake Charles marginal

ozone nonattainment area be exempt from applicable NOX

control requirements. The section 182(f) NOX requirement

from which the area will be exempt is NOX NSR. In addition,

approval of the section 182(f) petition would remove the NOX

general conformity provisions and the NOX build/no build

provisions of the transportation conformity rule.

Nothing in this action should be construed as permitting or

allowing or establishing a precedent for any future request for

revision to any SIP. Each request for revision to the SIP shall be

considered separately in light of specific technical, economic, and

environmental factors and in relation to relevant statutory and

regulatory requirements.

VI Administrative Requirements

A. Executive Order (E.O.) 12866

This action has been classified as a Table I action for signature

by the Administrator under the procedures published in the Federal

Register on January 19, 1989 (54 FR 2214-2225), as revised by a July

10, 1995, memorandum from Mary Nichols, Assistant Administrator for Air

and Radiation. The Office of Management and Budget (OMB) has exempted

this regulatory action from E.O. 12866 review.

B. 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. See 5 U.S.C. 603 and

604. Alternatively, the 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.

The SIP approvals under section 110 and subchapter I, part D of the

Act do not create any new requirements but simply approve requirements

that the State is already imposing. Therefore,

[[Page 29078]]

because the Federal SIP 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 flexibility analysis would

constitute Federal inquiry into the economic reasonableness of State

action. The Act forbids the EPA to base its actions concerning SIPs on

such grounds. See Union Electric Co. v. U.S. EPA, 427 U.S. 246, 255-66

(1976); 42 U.S.C. 7410(a)(2).

C. Unfunded Mandates

Under section 202 of the Unfunded Mandates Reform Act of 1995

signed into law on March 22, 1995, EPA must prepare a budgetary impact

statement to accompany any proposed or final rule that includes a

Federal mandate that may result in estimated costs to State, local, or

tribal governments in the aggregate; or to the private sector, of $100

million or more. Under section 205, the EPA must select the most cost-

effective and least burdensome alternative that achieves the objectives

of the rule and is consistent with statutory requirements. Section 203

requires the EPA to establish a plan for informing and advising any

small governments that may be significantly or uniquely impacted by the

rule.

The EPA's final action relieves requirements otherwise imposed

under the Act and, hence, does not impose any federal intergovernmental

mandates, as defined in section 101 of the Unfunded Mandates Act. This

action also will not impose a mandate that may result in estimated

costs of $100 million or more to either state, local, or tribal

governments, in the aggregate, or to the private sector. Since this

action will not significantly impact any small governments, the EPA is

not required to establish a plan pursuant to section 203.

D. Submission to Congress and the General Accounting Office

Under 5 U.S.C. section 801(a)(1)(A) as added by the Small Business

Regulatory Enforcement Fairness Act of 1996, the EPA submitted a report

containing this rule and other required information to the U.S. Senate,

the U.S. House of Representatives and the Comptroller General of the

General Accounting Office prior to publication of this rule in today's

Federal Register. This rule is not a ``major rule'' as defined by 5

U.S.C. section 804(2).

E. Petitions for Judicial Review

Under section 307(b)(1) of the Act, petitions for judicial review

of this action must be filed in the United States Court of Appeals for

the appropriate circuit by July 28, 1997. Filing a petition for

reconsideration by the Administrator of this final rule does not affect

the finality of this rule for the purposes of judicial review nor does

it extend the time within which a petition for judicial review may be

filed, and shall not postpone the effectiveness of such rule or action.

This action may not be challenged later in proceedings to enforce its

requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Oxides of

nitrogen, Incorporation by reference, Intergovernmental relations,

Ozone.

Dated: May 22, 1997.

Carol M. Browner,

Administrator.

40 CFR part 52 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 T--Louisiana

2. Section 52.992 is amended by adding paragraph (d) to read as

follows:

Sec. 52.992 Area-wide nitrogen oxides (NOX) exemptions.

* * * * *

(d) The LDEQ submitted to the EPA on October 28, 1994, a petition

requesting that the Lake Charles marginal ozone nonattainment area be

exempted from the NOX control requirements of the Act. The

Lake Charles nonattainment area consists of Calcasieu Parish. The

exemption request was based on photochemical grid modeling which shows

that reductions in NOX would not contribute to attainment in

the nonattainment area. On May 27, 1997, the EPA approved the State's

request for an area-wide exemption from the following requirements:

NOX new source review, NOX general conformity,

and NOX transportation conformity requirements. The waiver

was granted on the basis of modeling, and ambient air quality data

demonstrating the area has attained the ozone NAAQS.

[FR Doc. 97-14100 Filed 5-28-97; 8:45 am]

BILLING CODE 6560-50-P