Approval and Promulgation of Air Quality Implementation Plans; Richmond, VirginiaNOINFX/INF Exemption Petition

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[SIPTRAX No.VA062-5019; FRL-5861-2]

Approval and Promulgation of Air Quality Implementation Plans;

Richmond, Virginia--NOX Exemption Petition

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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

Commonwealth of Virginia requesting that the Richmond moderate ozone

nonattainment area be exempt from applicable nitrogen oxides

(NOX) reasonably available control technology (RACT) control

requirements of section 182(f) of the Clean Air Act (Act). This

exemption request, submitted by the Virginia Department of

Environmental Quality, is based upon three years of ambient air

monitoring data which demonstrate that the National Ambient Air Quality

Standard (NAAQS) for ozone has been attained in the Richmond area

without additional reductions of NOX. The effect of this

action is to remove the requirement for NOX RACT contingent

upon continued monitoring of attainment in the Richmond area. The

action will also stop application of the offset sanction imposed on

January 8, 1996 and defer application of future sanctions as of the

effective date of the exemption approval. This action is being taken

under section 182(f) of the Clean Air Act.

EFFECTIVE DATE: This final rule is effective on August 20, 1997.

ADDRESSES: Copies of the documents relevant to this action are

available for public inspection during normal business hours at the

Air, Radiation, and Toxics Division, U.S. Environmental Protection

Agency, Region III, 841 Chestnut Building, Philadelphia, Pennsylvania

19107; Virginia Department of Environmental Quality, 629 East Main

Street, Richmond, Virginia, 23219.

FOR FURTHER INFORMATION CONTACT: Christopher H. Cripps, (215) 566-2179,

at the EPA Region III address above (or via e-mail at

[email protected]).

SUPPLEMENTARY INFORMATION: On December 18, 1995, the Commonwealth of

Virginia's Department of Environmental Quality submitted a

NOX exemption petition that would exempt the Richmond ozone

nonattainment area from the NOX RACT requirement under

section 182(f) of the Act. The exemption request was based upon ambient

air monitoring data for 1993, 1994, and 1995, which demonstrated that

the NAAQS for ozone has been attained in the area without additional

reductions of NOX. Subsequent to the original request for an

exemption, additional ambient data for 1996 became available. The EPA

has reviewed the ambient air monitoring data for 1994, 1995, and 1996

and concludes that the area is still attaining the ozone standard.

The current design value for the Richmond nonattainment area,

computed using ozone monitoring data for 1994 through 1996, is 116

parts per billion (ppb). The average annual number of expected

exceedances is 0.7 for that same time period. For the 1993 to 1995 time

period, the average annual number of expected exceedances was 1.0, and

the corresponding design value was 124 ppb. An area is considered in

attainment of the standard if the average annual number of expected

exceedances is less than or equal to 1.0.

On July 26, 1996, the Commonwealth of Virginia submitted a

redesignation request and complete maintenance plan for the Richmond

ozone nonattainment area based on the 1993 to 1995 air quality

monitoring data. The EPA will be acting on this submittal in a separate

rulemaking document.

On March 19, 1996, the EPA proposed approval of the NOX

exemption petition for the Richmond ozone nonattainment area (61 FR

11170). Also, in a March 19, 1996 interim final rule, EPA made a

determination that the Commonwealth, contingent on continued monitored

attainment of the ozone NAAQS, had corrected the deficiency of failing

to submit NOX RACT rules (61 FR 11162). This interim final

rule did not stop the sanction clock that started under section 179 for

this area on July 8, 1994. However, this interim final rule did stay

the application of the offset sanction and has deferred the application

of the highway sanction. The EPA provided

[[Page 38923]]

the public with an opportunity to comment on the proposed action and on

the interim final rule.

Response to Public Comment

Adverse comments to the proposed exemption and the interim final

rule were received from six commenters. 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. Even though some of

these August 1994 comments are not pertinent to the proposed action,

EPA has addressed them for completeness.

In addition to commenters who fully opposed the exemption, two

letters were received that either conditionally supported the exemption

or that fully supported the exemption but commented adversely on

supplemental information in the preamble of the notice of proposed

rulemaking. One of these two comment letters supported the proposed

exemption only if no further controls on volatile organic compounds

(VOC) would be required in lieu of NOX RACT. The second of

these two comment letters fully supported the exemption and provided

urban airshed modeling results to show further reduction of

NOX would not contribute to attainment although EPA's action

to grant the exemption is based upon ambient air quality data

indicating that the Richmond area has attained the ozone NAAQS and not

upon a modeled demonstration. The following discussion summarizes the

comments received regarding the Commonwealth's petition and EPA's

proposed rulemaking and presents the EPA's responses to these comments.

Comment #1 Certain commenters argued that all

NOX exemption determinations by the EPA, including exemption

actions taken under the petition process established by subsection

182(f)(3), must occur during consideration of a state implementation

plan (SIP) revision. These commenters argued that NOX

exemptions are provided for in two separate parts of the Act, section

182(b)(1) and section 182(f). Because the NOX exemption

tests in subsections 182(b)(1) and 182(f)(1) include language

indicating that action on such requests should take place ``when [EPA]

approves a plan or plan revision,'' these commenters conclude that all

NOX exemption determinations by the EPA, including exemption

actions taken under the petition process established by subsection

182(f)(3), must occur during consideration of an approvable SIP

revision such as attainment demonstrations or maintenance plans, unless

the area has been redesignated as attainment. Several commenters stated

NOX exemptions should only be considered in conjunction with

attainment or maintenance plans whereas one commenter stated

NOX exemptions should only be considered in conjunction with

any implementation plans containing control measures.

Response #1 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 SIP

revisions. 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 new source review (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 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 an EPA action on NOX

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

maintenance demonstrations.

Comment #2 Commenters argued that for various reasons

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

reductions would not contribute to attainment and that EPA's policy

erroneously equates the absence of a violation for one three-year

period with ``attainment''. Two commenters argued that three years of

violation-free data could be reflecting an economic downturn that

resulted in temporarily lower than normal emissions.

Several of these commenters argued that three years of data without

a violation might be only the result of favorable weather conditions.

One commenter argued that the weather in 1995 was in fact abnormal in

that the Richmond area experienced high-altitude winds which prevented

stagnation.

Response #2 The EPA does not agree with the comment that

three years of air quality monitoring data is an insufficient basis to

grant an exemption under section 182(f). In cases where a nonattainment

area outside an ozone transport region 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, in the absence of approved

maintenance and contingency plans and an approved redesignation

request, 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).

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

officially redesignated to attainment under section 107(d)(3)(E) of the

Act. The section 107 criteria are more

[[Page 38924]]

comprehensive than the Act requires with respect to NOX

exemptions under section 182(f). If all the criteria, other than that

related to air quality data, for redesignation are met, EPA would act

to redesignate an area to attainment of the ozone NAAQS based upon only

(and at least) three years of violation-free data.

In addition to air quality monitoring data showing attainment,

under section 107, EPA can only redesignate an area to attainment if

EPA has fully approved a maintenance plan. One of EPA's criteria for an

approvable maintenance plan is that the plan demonstrate maintenance

with the standard for a period of twelve years after the submission of

the maintenance plan. One method of demonstrating maintenance is a

showing that future year emissions of each of the ozone precursors

including NOX will remain stable or decline over the twelve-

year period. In the absence of such redesignation with an approved

maintenance plan, EPA's approval of the exemption is granted on a

contingent basis.

EPA must, as a legal matter, use the ambient air quality monitoring

data and related evaluation methodologies to determine if an area is

attaining or violating the ozone NAAQS and base its action on the

particular facts of each exemption petition. Therefore, the EPA cannot

require that states seeking exemption from NOX provisions

based on monitoring data estimate what emissions might have been under

different economic conditions. The EPA cannot require that states

seeking exemptions from NOX provisions based on monitoring

data estimate what ozone concentrations might have been under different

meteorological conditions. Furthermore, the determination of compliance

with the ozone NAAQS uses air quality monitoring data over a three year

period and therefore accounts for fluctuations in meteorology.

Comment #3 One commenter stated that because the

Virginia petition did not take into account meteorological fluctuations

any perceived trends in ambient ozone monitoring data are a poor basis

for an exemption, and cited the conclusions in the report of the

National Academy of Sciences (NAS) ``Rethinking the Ozone Problem in

Urban and Regional Air Pollution'' [National Academy Press, Wash., DC,

1991] by the National Research Council that year-to-year variability in

ozone concentrations are attributable to meteorological fluctuations.

This commenter also cited the conclusion in this NAS report that the

current use of the second-highest daily maximum 1-hour concentration in

a given year as the principal measure to assess ozone trends is not a

reliable measure of progress in reducing ozone and that more

statistically robust methods should be used. This commenter noted that

there were seven ozone nonattainment areas (Kansas City, San Francisco,

Memphis, Detroit, Cincinnati, Pittsburgh and Muskegon) which violated

the ozone NAAQS in 1995 that had been redesignated to attainment since

1990 or had redesignation requests pending. The commenter also argued

that a conclusion based solely upon three years of ``clean'' data fails

to demonstrate that NOX reductions would not contribute to

attainment because in the absence of reliable methods for monitoring

reductions in precursor emissions EPA cannot conclude that real

progress in reducing ozone has been made.

Response #3 EPA does not agree with the comment. As

noted in the response to an earlier comment, EPA must, as a legal

matter, use the current ozone standard and related evaluation

methodologies to determine if an area is attaining or violating the

ozone NAAQS and base its action on the particular facts of each

exemption petition. The cited NAS report and 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.

However, as stated in the response to an earlier comment, EPA believes

that an area outside an ozone transport region qualifies for an

exemption under section 182(f) when the area is demonstrating

attainment with 3 consecutive years of air quality monitoring data

without having implemented the section 182(f) NOX

provisions. For the Richmond area the issue is whether the additional

reductions from the requirements of section 182(f) would contribute to

attainment of the ozone NAAQS in the Richmond area. The reductions

required under section 182(f) are ``additional'' in the sense that

these reductions will occur in addition to other requirements of the

Act. For example, the Clean Air Act mandated a number of new control

measures such as those required under Title II concerning national

standards for new motor vehicles which will reduce both NOX

and VOC emissions as cars built prior to these standards are replaced

by those required to meet these standards. For the reasons stated in

the previous response, EPA believes there is a basis for granting a

NOX exemption for the Richmond area on a contingent basis

(in the absence of approved maintenance and contingency plans and an

approved redesignation request).

Comment #4 One of these commenters provided newspaper

articles which reported that the Richmond area was slated for

construction of one major new manufacturing facility and was one of a

few areas under consideration for location of another major new

manufacturing facility. This commenter noted that future ozone

precursor emissions growth is likely.

Response #4 The EPA's decisions on whether or not to

grant a NOX waiver are not dependent on estimates of what emissions may

be in future years. As explained in the response to a previous comment,

EPA must, as a legal matter, use the ambient air quality monitoring

data and related evaluation methodologies to determine if an area is

attaining or violating the ozone NAAQS and base its action on the

particular facts of each exemption petition. As also explained in the

response to a previous comment, a determination that an area is in

``attainment'' based on three years of clean data does not result in

official redesignation to attainment until the other requirements of

section 107(d)(3)(E) of the Act are met. These other requirements

include a demonstration of continued maintenance for twelve years after

submittal of the redesignation request and maintenance plan. Such a

demonstration may be based upon a showing that emissions of ozone

precursors will remain stable or decline relative to the emissions in

the attainment year inventory or be based upon photochemical modeling

that a future year mix of ozone precursor emissions will not result in

violation of the ozone NAAQS. Either method for a demonstration of

maintenance sets emission budgets for ozone precursors. In all cases,

in the absence of approved maintenance and contingency plans and an

approved redesignation request, 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).

Comment #5 Many commenters opposed the exemption based

on 3 years of clean data where there is evidence that shows the

exemption interferes with attainment or maintenance in downwind areas.

Several commenters noted that either one or both of EPA's December 1993

guidance and May 27, 1994 policy prohibits granting a section 182(f)

exemption based on 3 years of clean data if evidence exists showing

that the exemption would interfere with attainment or maintenance in

[[Page 38925]]

downwind areas. Such conditions should also apply to exemption requests

based on modeling.

One commenter provided evidence that shows NOX

reductions in the Richmond area provide ozone benefits in large areas

of the ozone transport region. Several commenters referenced results of

regional oxidant modeling (ROM) performed by the EPA and mentioned in

the notice of proposed rulemaking for this action that show regional

NOX control is needed in combination with localized VOC

control in order to attain the ozone NAAQS throughout the Ozone

Transport Region (OTR); thus, control of NOX emissions

throughout the eastern United States will contribute to significant

reductions in peak ozone levels within the OTR. Several commenters

asked EPA to re-evaluate the February 8, 1995 memorandum from John S.

Seitz, Director, Office of Air Quality and Standards, entitled

``Section 182(f) Nitrogen Oxides (NOX) Exemptions--Revised

Process and Criteria'' to require that exemptions only be granted to

areas that do not interfere with attainment or maintenance in downwind

areas. Three of these commenters contend that EPA cannot segregate

action under section 182(f) from the requirements of section

110(a)(2)(D).

One of these commenters also opposed the interim final rule to stay

sanctions because it ignores the detrimental effects on air quality on

areas downwind.

Response #5 As a result of comments on previous NOX

exemptions, the EPA reevaluated its position on this issue and has

revised previously-issued guidance. See the 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 State's

need in response to a call by EPA for revisions to state implementation

plans (SIP call), for example, area from the EPA's action to require

additional NOX emission reductions from sources in that

area, if necessary, under section 110.

Recent modeling data suggest that certain ozone nonattainment areas

may benefit from reductions in NOX emissions upwind of the

nonattainment areas. The EPA is working with the States and other

organizations to design and complete studies which consider upwind

sources and quantify their impacts. At the same time, 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)(1)(A) 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.'' 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. The 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.

As described in section 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.

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 Commonwealth of Virginia is being included in modeling analyses

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.

On January 10, 1997 (62 FR 1420) EPA issued a notice of intent to

issue a SIP call to reduce regional transport of ozone. In this notice,

in accordance with section 110(k)(5) and 110(a)(2)(D) of the Clean Air

Act (Act), the EPA announced its plans to require States to submit SIP

measures to ensure that emission reductions are achieved as needed to

allow current nonattainment areas to prepare attainment demonstrations

for the current NAAQS. This action will reflect the technical work done

by OTAG and other pertinent regional and urban scale analyses of ozone

transport.

[[Page 38926]]

Furthermore, this exemption in no way insulates or alleviates the

Commonwealth of Virginia from any future obligations to secure

additional NOX reductions, perhaps even from among sources

in the Richmond area, should technical evidence, including but not

limited to that which may result from the OTAG process, indicate that

such reductions are required because NOX emissions generated

in Virginia interfere with the ability of another state or legally

responsible jurisdiction to attain and maintain the NAAQS for ozone,

and EPA makes such a finding.

Comment #6 One commenter asked EPA to require NOX RACT

immediately under section 110(a)(2)(D) if the Commonwealth's petition

for an exemption from NOX RACT is approved.

Response #6 The EPA does not agree with this comment for two

reasons. First, EPA noted in the Technical Support Document for this

action that the level of reductions required under section 110 may be

greater or less than that required by RACT, depending upon the

circumstances. The EPA established general policy for NOX

RACT in the ``NOX Supplement to the General Preamble for

Implementation of Title I'' (57 FR 55620, November 25, 1992) and

established NOX RACT presumptive emission limits for four

categories of utility boilers. These limits require reductions on the

order of 25 to 50 percent from emission rates prior to control. The

ozone transport assessment process described previously has evaluated

regional and national emission control strategies for NOX

that considered levels of reductions well in excess of 50 percent.

Therefore RACT alone may not be a significant level of control.

Secondly, the geographic scope of the January 10, 1997 notice of intent

to issue SIP calls for areas throughout the OTAG domain that are

contributing significantly to ozone pollution in downwind areas

includes Virginia. The SIP call process will therefore address the

transport of ozone from all areas influencing the various ozone

nonattainment areas in the eastern half of the United States. As noted

in the response to an earlier comment, EPA's position is that an action

to grant or deny a NOX exemption request under section

182(f) for any area would not shield that area if additional

NOX emission reductions are determined to be necessary to

meet the requirements of section 110(a)(2)(D).

Comment #7 One commenter stated it was inappropriate to issue the

NOX exemption and interim final rule prior to final action

on the request that EPA exercise its authority under section

110(a)(2)(D) made by the State of New York in the November 1994 SIP

revision for an attainment demonstration for the New York City

metropolitan area.

Response #7 The EPA does not agree with this comment for the

reasons discussed in the previous two responses. The EPA continues to

believe that actions under section 110(a)(2)(D) are independent of any

action taken by the EPA on a NOX exemption request under

section 182(f). However, the EPA's action to grant or deny a

NOX exemption request under section 182(f) for any area

would not shield that area if additional NOX emission

reductions are determined to be necessary to meet the requirements of

section 110(a)(2)(D). In the January 10, 1997 notice of intent, the EPA

announced its plans to require certain States to submit additional SIP

measures to ensure that emission reductions are achieved as needed to

allow current nonattainment areas to prepare attainment demonstrations

for the current NAAQS. This action will reflect the technical work done

by OTAG and other pertinent regional and urban scale analyses of ozone

transport.

Comment #8 One commenter asserted that exemptions should be granted

considering transport issues under section 110(2)(2)(D) and referenced

a ``limited exemption'' granted for the State of Maine. The limited

exemption was ``based upon a demonstration that NOX

emissions in the Northern Maine area are not impacting Maine's moderate

ozone nonattainment areas or any other area in the Ozone Transport

Region during the time periods when elevated ozone levels are monitored

in these areas.''

Response #8 As noted in the response to an earlier comment, EPA

does not agree that exemptions granted under section 182(f) for areas

outside an ozone transport region must consider transport under section

110(a)(2)(D). 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.

Only the first and third tests are applicable for areas inside an

ozone transport region; the ``net air quality benefits test'' and the

``net ozone air quality benefit'' test. The EPA must determine, under

the first test, that the net benefits to air quality in an area ``are

greater in the absence of NOX reductions'' from relevant

sources. Under the third test, EPA must determine ``that additional

NOX reductions would not produce net ozone benefits in the

transport region.'' The exemption for Northern Maine was granted under

the third test (60 FR 66749, December 26, 1995). Therefore, the

exemption petition for Northern Maine had to consider net ozone

benefits in areas within the transport region that are downwind of that

State.

Comment #9 In addition to stating that perceived trends are a poor

basis for a conclusion and three years of data fail to consider

meteorological fluctuations, one commenter said that sections

110(a)(2), 161 and 162 of the Act, obligate EPA to protect the public

health by ensuring that the air quality standards are attained and then

maintained, not simply to respond after a violation has occurred.

(EPA's response to the interplay of section 182(f) and section

110(a)(2) of the Act is also noted in the response to previous

comments.)

Response #9 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.

Sections 161 and 162 deal with requirements for areas designated

``attainment'' of the ozone (and any other) NAAQS. Section 182(f)

authorizes when a nonattainment area may be exempted from the

NOX RACT requirement for purposes of attaining the ozone

NAAQS; however, the exemption does not preclude future NOX

controls needed for maintenance of

[[Page 38927]]

the ozone NAAQS that may be required once the area has been

redesignated to attainment. The EPA has not interpreted the

``contribute to attainment'' language in the section 182(f)(1)(A) test

to mean ``contribute to attainment and maintenance.'' (Refer to the May

27, 1994, John S. Seitz, Director, Office of Air Quality Planning and

Standards, memorandum entitled ``Section 182(f) Nitrogen Oxides

(NOX) Exemptions--Revised Process and Criteria''.)

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

reductions would not be necessary. 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 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).

Therefore, EPA has concluded that the determination of the benefits of

NOX reductions required under section 182(f)(1)(A) is

limited to a determination of whether such reductions would contribute

only to ``attainment'' of the ozone NAAQS and need not consider the

benefits for maintenance in areas that have been redesignated to

attainment of the ozone NAAQS.

Comment #10 Several commenters stated that the exemption should not

be granted because the Act does not authorize any exemption of the

NOX reduction requirements until conclusive evidence exists

that such reductions are counter-productive.

Response #10 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

reductions 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 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 any one of the

tests is met, the section 182(f) NOX requirements would not

apply or, under the excess reductions provision, a portion of these

requirements would not apply.

Comment #11 Many commenters opposed the exemption because it

ignored the other benefits of NOX reductions. Other benefits

noted were reduction of nitrogen loading to waterways, bays and

estuaries, especially noted was the Chesapeake Bay, reduction of other

(non-ozone) secondary pollution, such as fine particulate matter,

formed from NOX-VOC mixtures, and reduction of acid

deposition. One of these commenters wondered if EPA can relieve an

ozone nonattainment area of the NOX RACT requirement where

the Commonwealth is not meeting alternative requirements for nitrogen

controls in water discharges.

Response #11 The EPA does not agree nor does the Act require that

decisions regarding granting of a NOX exemption be made

contingent on addressing other environmental benefits such as those

raised by the commenters. As noted in the responses to the two previous

comments, based upon the plain language of section 182(f) and relevant

legislative history, the EPA believes that each of the three tests

discussed in section 182(f) provides an independent basis for a full or

limited NOX exemption. Only the ``net air quality test'' is

based on a showing that NOX reductions provide environmental

benefits beyond attainment of the ozone NAAQS. In addition, based upon

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

Act regarding NOX reductions and upon the relevant

[[Page 38928]]

legislative history, EPA has concluded that the determination of the

benefits of NOX reductions required under the ``contribute

to attainment'' test is limited to a determination of whether such

reductions would contribute only to ``attainment'' of the ozone NAAQS

and need not consider the benefits in relation to other environmental

media. Moreover, some of the pollution problems to which NOX

emissions contribute are addressed by separate Titles of the Clean Air

Act or other environmental statutes.

Comment #12 One commenter contended that the air quality monitoring

data alone does not support this exemption proposal. The commenter

stated the actual measured ozone concentrations reflect the Richmond

nonattainment area's failure to consistently attain the federal

standard. The air quality levels are below EPA's definition of an

exceedance of the ozone NAAQS at 0.125 parts per million (ppm), but are

greater than the ozone NAAQS of 0.12 ppm. The commenter protested

rounding of ozone concentration measurements less than or equal to 124

ppb down to 120 ppb. The commenter stated that had the EPA adhered to a

``brightline'' 120 ppb standard the Richmond area would be in violation

of the ozone NAAQS. The commenter stated that more control of

NOX should be required in the Richmond area because the

ozone concentrations are routinely at or above the current ozone NAAQS.

The commenter contended that the ozone readings for 1995 were more than

``twice'' the current standard.

Response #12 For the reasons provided below, EPA does not agree

with the commenter's conclusions. As stated in 40 CFR 50.9, the ozone

``standard is attained when the expected number of days per calendar

year with maximum hourly average concentrations above 0.12 parts per

million (235 ug/m\3\) is equal to or less than 1, as determined by

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

of Ozone Air Quality Standards'' (EPA-450/4-79-003, January 1979),

which notes that the stated level of the standard is taken as defining

the number of significant figures to be used in comparison with the

standard. For example, a standard level of 0.12 ppm means that

measurements are to be rounded to two decimal places (0.005 rounds up

to 0.01). Thus, 0.125 ppm is the smallest concentration value in excess

of the level of the ozone standard. Likewise, the calculated expected

exceedances are rounded to zero decimal places. Thus, the smallest sum

of expected exceedances for any one monitor that cause the 3-year

average to exceeds 1 would be 3.2. Before proposing the exemption, EPA

had analyzed the 1993 to 1995 air quality monitoring data in accordance

with Appendix H and had determined that the expected number of days per

calendar year maximum hourly average concentrations above 0.12 parts

per million (235 ug/m\3\) did not exceed 1. Because the largest sum of

expected exceedances for the 1993 to 1995 data at any one monitor was

3.1, the standard was not exceeded. The largest recorded one-hour,

maximum ozone concentration recorded in the 1993 to 1995 period was

0.154 ppm which is well less than twice the standard of 0.12 ppm. It is

true that during 1995 three monitoring locations in the Richmond area

each recorded one valid monitored exceedance of the 0.12 ppm standard

during 1995. However, the form of the ozone NAAQS requires the use of a

3-year period to determine the average number of exceedances per year.

The determination of expected number of exceedances is performed on a

monitor by monitor basis. An area with more than one monitor would

violate the standard if the expected number of days per calendar year

maximum hourly average concentrations above 0.12 parts per million

exceeds 1 at any one monitor. The EPA has determined that the Richmond

area did not violate the ozone NAAQS based upon monitoring data for

1993 to 1995 and has continued without violation through 1996.

Comment #13 One commenter said that NOX reductions would

benefit the Richmond area as demonstrated by the Urban Airshed Modeling

performed by the Virginia Department of Environmental Quality for the

May 15, 1995, Virginia Attainment Demonstration SIP submittal for

Richmond.

Response #13 The EPA does not agree with this comment. The EPA

considered the Attainment Demonstration submittal for Richmond in the

Technical Support Document (TSD) for the notice of proposed rulemaking.

The EPA's evaluation weighed the air quality monitoring more heavily

than the attainment demonstration. The reason for doing so was

discussed in the TSD and is summarized and clarified below.

In section 4.3 of the December 1993 EPA applicability guidance, the

``contribute to attainment'' test is described for the case where an

exemption request is submitted with a redesignation request with

violation-free monitoring data for the most recent three years. This

policy was amended in the May 27, 1994 Seitz memo to allow a petition

for a section 182(f) exemption to be submitted prior to a redesignation

request. The same section of the guidance (since amended as discussed

above under transport) requires EPA to deny the petition if creditable

modeling shows that NOX reduction in the area seeking the

section 182(f) is necessary for a downwind area to attain or maintain

the ozone NAAQS. The guidance is silent on the case where modeling and

monitoring results in the area are at odds.

Under the policy set forth in a May 10, 1995 memorandum from John

S. Seitz, Director, OAQPS, entitled ``Reasonable Further Progress,

Attainment Demonstration, and Related Requirements for Ozone

Nonattainment Areas Meeting the Ozone National Ambient Air Quality

Standard'', EPA concluded that the requirements for reasonable further

progress towards attainment, the attainment demonstration itself, and

certain attainment-related requirements are moot when an area is

monitoring attainment of the NAAQS. The determination that these

requirements are waived would remain effective as long as the area

remains free of violations of the ozone NAAQS. In a recent Federal

Register notice EPA has acted to waive these requirements for the

Richmond area based upon air quality monitoring data for 1993 to 1996.

See 62 FR 32204 (June 13, 1997). The reasonable further progress,

attainment demonstration and related requirements become permanently

moot if and when the area is redesignated to attainment. To redesignate

an area to attainment, EPA must determine that, among other things, the

area is free of violations of the ozone NAAQS, that attainment was the

result of real, permanent, quantifiable reductions in precursor

emissions and that maintenance of the standard is demonstrated. The EPA

does not require the maintenance demonstration to be air quality

modeling based where a demonstration is made that the future year

emission inventories will remain at or below the inventory of the

attainment year.

The December 1993 guidance is silent on situations where EPA must

consider an exemption petition based upon air quality monitoring data

that is not consistent with air quality modeling. The EPA has

determined nonattainment areas can be exempted from certain other

nonattainment requirements contingent upon continued monitoring of

attainment. The EPA therefore has granted greater weight to the air

quality monitoring data than the air quality modeling data when

considering this exemption petition.

[[Page 38929]]

Comment #14 Several commenters argued that the monitoring network

in Richmond does not adequately cover this large airshed. All argued

that the four monitors cannot reflect all areas where an exceedance of

the ozone NAAQS may occur. One stated that according to the Virginia

Department of Environmental Quality the four monitors are not placed in

high-activity areas in order to more ``accurately reflect consistent

ambient concentrations,'' that is, the monitors are placed to measure

``background'' or ``diluted'' concentrations. One commenter argued that

to address the inadequacies of the monitoring networks the Act

establishes several prerequisites before an area can be redesignated to

attainment and that three-years of data do not address any potential

increases in NOX emissions.

Response #14 The EPA does not agree with these comments because the

current monitoring network meets EPA-specified regulatory requirements

(see 40 CFR part 58), and adequately reflects air quality in the

nonattainment area.

Comment #15 Comments were received regarding the process

by which the reapplication of the NOX RACT requirement and

sanctions in the event a violation is monitored. One commenter stated

the notice of proposed rulemaking and the interim final rule contained

conflicting statements regarding staying and deferring imposition of

sanctions. The commenter noted that the interim final rule mentions

that the stay and deferment of sanctions will occur while the EPA

completes the rulemaking process on the Commonwealth's petition. In

contrast the commenter noted that the notice of proposed rulemaking

stated the 2:1 offset sanction cannot be lifted until either a

NOX RACT SIP is deemed complete by the EPA or the exemption

under section 182(f) is granted. Another commenter asked EPA to clarify

what steps will be taken regarding reapplication of NOX RACT

in the event a violation of the ozone NAAQS occurs in the future.

Response #15 The purpose of the interim final rule was to stay, for

the duration of EPA's rulemaking process on the exemption petition,

further application of the 2:1 offset sanction which went into effect

in the Richmond ozone nonattainment area as of January 8, 1996 as a

result of the July 8, 1994 finding of failure to submit. On July 8,

1994, EPA sent a letter to the Governor of Virginia stating that, under

section 179 of the Act, EPA made a finding that Virginia failed to

submit a SIP revision for NOX RACT. This finding commenced

the sanctions process outlined by section 179. The two to one (2:1)

offset sanction went into effect 18 months later.

The interim final rule also established the procedure by which

sanctions would be reapplied if, based upon comments to the proposed

and/or interim final rules, EPA determined that the petition was not

approvable. The basis for staying and deferring sanctions in the

interim final rule was that EPA had concluded that the Commonwealth was

eligible for an exemption from the NOX RACT requirement,

under section 182(f) and, therefore, was no longer subject to the

requirement for which the July 8, 1994 finding of failure to submit was

issued. If, based upon comment, EPA determined that the exemption

petition was in fact unapprovable then the basis for the interim final

rule would no longer exist. Therefore, the interim final rule provided

that sanctions would be applied at the time of a final action

disapproving the NOX exemption petition (or, if action is

re-proposed, at the time of the proposed disapproval).

The notice of proposed rulemaking also had to address how sanctions

would be affected if EPA approved the exemption. Basically, the notice

of proposed rulemaking proposed, on the effective date of the exemption

approval, to stop application of the 2:1 offset sanction and to defer

application of the highway sanction which was to take effect July 8,

1996. In essence, final approval (contingent upon continued monitoring

of attainment) of the exemption petition would continue the stay and

deferment of sanctions initiated by the interim final rule. However,

the stay would be lifted, should a monitored violation of the ozone

NAAQS be recorded under the conditions set forth in the notice of

proposed rulemaking. These conditions were:

``If there is a violation of the ozone NAAQS in any portion of

the Richmond ozone nonattainment area while this area is designated

nonattainment for ozone, the exemption will no longer be applicable

as of the date of any such determination. Should this occur, EPA

will provide notice both of the exemption revocation and of the date

sanctions will re-apply in the Federal Register. A determination

that the NOX exemption no longer applies would mean that

the NOX requirements become once more applicable to the

affected area, that the sanctions would be reinstated, and that

deferred sanctions would be imposed on the date originally due or

the effective date of the notice, whichever is later.'' See 61 FR

11172.

The contingent nature of the exemption lasts only as long as the

Richmond area is designated nonattainment. If prior to redesignation to

attainment, a violation of the ozone NAAQS is monitored in the Richmond

area and recorded in AIRS, then the section 182(f) exemption would no

longer apply. In the rulemaking action which removes the exempt status,

the EPA would provide specific information regarding the reapplication

of the NOX RACT requirement and sanctions. Because

NOX RACT is a nonattainment area requirement, once the area

is redesignated to attainment, NOX RACT is no longer

required for purposes of attainment. Once the Richmond area is

redesignated to attainment, then the response to a violation of the

ozone NAAQS would be addressed in the manner prescribed by the approved

maintenance plan. NOX RACT would be implemented to the

extent as required under the approved maintenance plan.

Because the sanctions were applied pursuant to a finding that the

Commonwealth of Virginia failed to submit a state implementation plan

(SIP) revision for NOX RACT, both the notice of proposed

rulemaking and interim final rules noted that, even if the exemption

were granted, a NOX RACT SIP for the Richmond ozone

nonattainment area that meets the completeness criteria of section

110(k) would permanently correct the July 8, 1994 finding of failure to

submit and would permanently lift sanctions. If prior to redesignation

to attainment, a violation of the ozone NAAQS is monitored in the

Richmond area and recorded in AIRS, then the section 182(f) exemption

would no longer apply, and the only way to lift sanctions would be

through submittal of a complete NOX RACT SIP for the

Richmond area.

EPA acknowledges that the precise terminology regarding

reapplication of sanctions after an approval of the exemption petition

differed slightly in the interim final rule and the proposed rule. The

EPA intended the description of the reapplication of sanctions after an

exemption approval in the interim final rule to summarize the detailed

proposal language contained in the notice of proposed rulemaking. In

response to this comment, the final rule clarifies the process for

reapplication of sanctions after an exemption approval in the event of

a monitored violation as set forth in the notice of proposed rulemaking

and defines the role of a complete NOX RACT SIP revision

submittal in terminating sanctions.

Comment #16 One commenter supported the exemption but

expressed concerns that the exemption will result in stricter

regulation on emissions of other pollutants, specifically on VOC. The

commenter encouraged EPA not to approve any additional VOC control

[[Page 38930]]

regulations adopted by the Commonwealth that are needed in lieu of an

exemption from NOX RACT. The commenter asked that any final

approval address further VOC regulation and asked EPA to clarify that

NOX RACT will be required before any additional VOC control.

Response #16 The EPA does not agree with this comment.

As explained in the response to previous comments (refer to responses

to comments numbers 9 and 10) in section 182(f)(1), Congress included

attenuating language, not just in section 182(f), but throughout Title

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

reductions would not provide net benefits or contribute to attainment.

No such similar language is found concerning VOC reductions in section

182(f) or elsewhere in Title I of the Act. Because today's action is

taken under section 182(f) EPA has no basis for conditioning the

exemption on future VOC regulation.

Comment #17 One commenter fully supported the proposed

action, but commented negatively on the portion of the preamble dealing

with other possible benefits of NOX reductions in the

Richmond area. One commenter stated that the proposal alleges several

other environmental effects of additional NOX reductions. If

such benefits exist, they should be addressed in the context of

regulations dealing with those specific environmental effects, not in

context of regulations dealing with attainment of the ozone NAAQS. The

commenter said any conclusion regarding benefits on transport of ozone

from reducing NOX emissions are premature pending the

outcome of the studies underway by OTAG. The commenter also noted that

the compensation for future growth in NOX emissions is an

issue to be addressed in a maintenance plan.

Response #17 The EPA included discussion of the

potential other environmental effects of NOX reductions to

inform the public that the action proposed could affect air quality in

ways not related to attainment of the ozone NAAQS. Nowhere in the

proposal did EPA state that the EPA's proposed action was based upon

other than a determination that the NOX reductions required

under section 182(f) would not contribute to attainment. As explained

in the response to previous comments, 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

showing that the NOX emissions would contribute

significantly to nonattainment in, or interfere with maintenance by,

any other State, and this action would be independent of any action

taken by the EPA on a NOX exemption request under section

182(f). As noted in that earlier response, EPA began that process in a

January, 10, 1997 Federal Register notice. Further in an earlier

response, EPA noted it has not interpreted ``contribute to attainment''

in section 182(f)(1)(A) to mean ``contribute to attainment and

maintenance.'' Therefore, the demonstration that an area qualifies for

an exemption under section 182(f)(1)(A) is limited to the effects of

the section 182(f) requirements on attainment.

Comment #18 Some commenters stated that the modeling

required by EPA is insufficient to establish that NOX

reductions would not contribute to attainment since only one level of

NOX control, i.e., ``substantial'' reductions, is required

to be analyzed. They further explained that an area must submit an

approvable attainment plan before EPA can know whether NOX

reductions will aid or undermine attainment.

Response #18 As discussed in the Notice of Proposed

rulemaking and in the responses to previous comments, the basis for

granting this exemption on a contingent basis (i.e., the exemption

would last for only as long as the area's monitoring data continue to

demonstrate attainment) is ambient air monitoring data.

Therefore this comment is not pertinent to the granting of the

exemption for the Richmond area. But EPA has included this comment

because it was one of the ``standing'' comments as discussed previously

in the introduction to the ``Response to Public Comment'' portion of

this notice.

Comment #19 Commenters contended that section 182(b)(1) is the

appropriate authority for granting interim period transportation

conformity NOX exemptions.

Response #19 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.

The final rule for that proposal has since been promulgated. 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). The EPA, however, is not granting a NOX

exemption from the interim period transportation conformity

requirements by today's action because the Commonwealth submitted its

NOX petition pursuant to section 182(f).

Comment #20 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 during

the period before submission of conformity SIPs, not the requirement

that conformity SIP revisions 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 have wanted the EPA,

in actions on NOX exemptions, to explicitly affirm this

obligation and to also avoid granting exemptions until a budget

controlling future NOX increases is in place.

Response #20 The EPA's transportation conformity rule originally

provided a NOX transportation conformity exemption if an

area received a section 182(f) exemption. See 58 FR 62188 (November 24,

1993). 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 (August 29, 1995). 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

exemption has been granted. Due to a drafting error, that view was not

reflected in the transportation conformity rule. The EPA

[[Page 38931]]

has amended the rule to correct this error. See 60 FR 57179 (November

14, 1995).

Final Action

EPA approves the 182(f) NOX exemption petition submitted

by the Commonwealth of Virginia for the Richmond ozone nonattainment

area. Approval of the exemption waives the Federal requirements for

NOX RACT applicable to the Richmond 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 for attainment of the ozone NAAQS in an area's attainment

plan. That is, 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, prior to redesignation of the area to attainment, a violation

of the ozone NAAQS is monitored in Richmond (consistent with the

requirements contained in 40 CFR part 58 and recorded in AIRS), the

section 182(f) exemption would no longer apply, as of the date EPA

makes a determination that a violation has occurred. The EPA would

notify the area that the exemption no longer applies, and would also

provide notice to the public in the Federal Register.

If the exemption is revoked, the area must comply with any

applicable NOX requirements set forth in the Act. The

NOX RACT requirements would also be applicable, with a

reasonable time provided as necessary to allow major stationary sources

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

required controls. The EPA believes that the Commonwealth may provide

sources a reasonable time period after the EPA determination to

actually meet the RACT emission limits. The EPA expects such time

period to be as expeditious as practicable, but in no case longer than

24 months.

This action stops application of the offset sanction imposed on

January 8, 1996 and defers application of future sanctions on the

effective date of the exemption approval. Sanctions would then remain

stopped or deferred contingent upon continued monitoring that

demonstrates continued attainment of the ozone NAAQS in the entire

Richmond ozone nonattainment area. If there is a violation of the ozone

NAAQS in any portion of the Richmond ozone nonattainment area while

this area is designated nonattainment for ozone, the exemption will no

longer be applicable as of the date of any such determination. Should

this occur, EPA will provide notice both of the exemption revocation

and of the date sanctions will re-apply in the Federal Register. A

determination that the NOX exemption no longer applies would

mean that the NOX requirements become once more applicable

to the affected area, that the sanctions would be reinstated, and that

deferred sanctions would be imposed on the date originally due or the

date specified in the notice, whichever is later.

The sanctions were applied pursuant to a finding that the

Commonwealth of Virginia failed to submit a state implementation plan

(SIP) revision for NOX RACT. Therefore, if prior to

redesignation to attainment, the sanctions have been reapplied, they

then can only be permanently lifted by submittal of a NOX

RACT SIP for the Richmond ozone nonattainment area that meets the

completeness criteria of section 110(k).

If Richmond is redesignated to attainment of the ozone NAAQS,

NOX RACT is to be implemented as provided for as contingency

measures in the maintenance plan.

Nothing in this action should be construed as permitting or

allowing or establishing a precedent for any future request for

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

the state implementation plan shall be considered separately in light

of specific technical, economic, and environmental factors and in

relation to relevant statutory and regulatory requirements.

Administrative Requirements

A. Executive Order 12866

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

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

disapprove exemptions from NOX requirements under section

182 of the Act was delegated to the Regional Administrator from the

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

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

Delegation of Authority: `Exemptions from Nitrogen Oxide Requirements

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

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

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., EPA

must prepare a regulatory flexibility analysis assessing the impact of

any proposed or final rule on small entities. 5 U.S.C. 603 and 604.

Alternatively, EPA may certify that the rule will not have a

significant impact on a substantial number of small entities. Small

entities include small businesses, small not-for-profit enterprises,

and government entities with jurisdiction over populations of less than

50,000. Today's determination does not create any new requirements, but

suspends the indicated requirements. Therefore, because this action

does not impose any new requirements, I certify that it does not have a

significant impact on any small entities affected.

C. Unfunded Mandates

Under section 202 of the Unfunded Mandates Reform Act of 1995

(``Unfunded Mandates Act''), 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

private sector, of $100 million or more. Under section 205, 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 EPA to establish a plan for

informing and advising any small governments that may be significantly

or uniquely impacted by the rule. The EPA has determined that the

action promulgated does not include a Federal 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. This

Federal action does not create any new requirements, but suspends the

indicated requirements. Accordingly, no additional costs to State,

local, or tribal governments, or to the private sector, result from

this action.

D. Submission to Congress and the General Accounting Office

Under section 801(a)(1)(A) as added by the Small Business

Regulatory Enforcement Fairness Act of 1996, 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

[[Page 38932]]

General of the General Accounting Office prior to publication of the

rule in today's Federal Register. This rule is not a ``major rule'' as

defined by section 804(2).

E. Petitions for Judicial Review

Under section 307(b)(1) of the Clean Air Act, petitions for

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

of Appeals for the appropriate circuit by September 19, 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, Carbon monoxide,

Hydrocarbons, Intergovernmental relations, Nitrogen dioxide, Ozone,

Particulate matter, Reporting and recordkeeping requirements, Sulfur

oxides.

Dated: July 8, 1997.

W. Michael McCabe,

Regional Administrator, Region III.

40 CFR part 52, subpart VV of chapter I, title 40 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 VV--Virginia

2. Section 52.2428 is amended by redesignating the existing text as

paragraph (a) and adding paragraph (b) to read as follows:

Sec. 52.2428 Control Strategy: Carbon monoxide and ozone.

(a) * * *

(b) EPA is approving an exemption request submitted by the Virginia

Department of Environmental Quality on December 18, 1995 for the

Richmond ozone nonattainment area, which consists of the counties of

Charles City, Chesterfield, Hanover and Henrico, and of the cities of

Richmond, Colonial Heights and Hopewell, from the oxides of nitrogen

(NOX) requirements for reasonably available control

technology (RACT). This approval exempts the Richmond ozone

nonattainment area from implementing the NOX RACT

requirements contained in section 182(f) of the Clean Air Act. The

exemption is based on ambient air monitoring data. The exemption is

applicable during the period prior to redesignation of the Richmond

area to attainment of the National Ambient Air Quality Standard for

ozone only as long as ambient air quality monitoring data for the

Richmond ozone nonattainment area continue to demonstrate attainment

without NOX reductions from major stationary sources of

NOX.

[FR Doc. 97-19090 Filed 7-18-97; 8:45 am]

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