Approval and Promulgation of Implementation Plans; California State Implementation Plan Revision; South Coast Air Quality Management District

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[CA 009-0028; FRL-5694-9]

Approval and Promulgation of Implementation Plans; California

State Implementation Plan Revision; South Coast Air Quality Management

District

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing a limited approval and limited disapproval of

revisions to the California State Implementation Plan (SIP) for ozone.

The revisions concern the control of oxides of nitrogen (NOX) from

boilers, process heaters, and internal combustion engines. The intended

effect of proposing limited approval and limited disapproval of these

rules is to regulate emissions of NOX in accordance with the

requirements of the Clean Air Act, as amended in 1990 (CAA or the Act).

EPA's final action on this proposed rulemaking will incorporate these

rules into the Federally approved SIP. EPA has evaluated these rules

and is proposing a simultaneous limited approval and limited

disapproval under provisions of the CAA regarding EPA actions on SIP

submittals and general rulemaking authority because these revisions,

while strengthening the SIP, also do not fully meet the CAA provisions

regarding plan submissions and requirements for nonattainment areas.

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

or before March 31, 1997.

ADDRESSES: Comments may be mailed to: Andrew Steckel, Rulemaking Office

(AIR-4), Air Division, U.S. Environmental Protection Agency, Region IX,

75 Hawthorne Street, San Francisco, CA 94105-3901.

Copies of the rules and EPA's evaluation report of each rule are

available for public inspection at EPA's Region IX office during normal

business hours. Copies of the submitted rules are also available for

inspection at the following locations:

South Coast Air Quality Management District, 21865 E. Copley Drive,

Diamond Bar, CA 91765-4182.

California Air Resources Board, Stationary Source Division, Rule

Evaluation Section, 2020 ``L'' Street, Sacramento, CA 95814.

FOR FURTHER INFORMATION CONTACT: Mae Wang, Rulemaking Office (AIR-4),

Air Division, U.S. Environmental Protection Agency, Region IX, 75

Hawthorne Street, San Francisco, CA 94105, Telephone: (415) 744-1200.

SUPPLEMENTARY INFORMATION:

Applicability

The rules being proposed for limited approval and limited

disapproval are South Coast Air Quality Management District (SCAQMD)

Rule 1109, Emissions of Oxides of Nitrogen from Boilers and Process

Heaters in Petroleum Refineries, adopted by SCAQMD on August 5, 1988;

and Rule 1110.2, Emissions from Gaseous- and Liquid-Fueled Internal

Combustion Engines, adopted on December 9, 1994.

Background

On November 15, 1990, the Clean Air Act Amendments of 1990 (CAA)

were enacted. Pub. L. 101-549, 104 Stat. 2399, codified at 42 U.S.C.

7401-7671q. The air quality planning requirements for the reduction of

NOX emissions through reasonably available control technology

(RACT) are set out in section 182(f) of the CAA. On November 25, 1992,

EPA published a notice of proposed rulemaking (NPR) entitled ``State

Implementation Plans; Nitrogen Oxides Supplement to the General

Preamble; Clean Air Act Amendments of 1990 Implementation of Title I;

Proposed Rule,'' (the NOX Supplement) which describes the

requirements of section 182(f). The NOX Supplement should be

referred to for further information on the NOX requirements and is

incorporated into this document by reference.

Section 182(f) of the CAA requires States to apply the same

requirements to major stationary sources of NOX (``major'' as

defined in section 302 and sections 182 (c), (d), and (e)) as are

applied to major stationary sources of volatile organic compounds

(VOCs), in moderate or above ozone nonattainment areas. The Los

Angeles-South Coast Air Basin is classified as extreme;1 therefore

this area was subject to the RACT requirements of section 182(f),

section 182(b)(2), and the November 15, 1992 deadline, cited below.

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\1\ The Los Angeles-South Coast Air Basin Area retained its

designation of nonattainment and was classified by operation of law

pursuant to sections 107(d) and 181(a) upon the date of enactment of

the CAA. See 55 FR 56694 (November 6, 1991).

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Section 182(b)(2) requires submittal of RACT rules for major

stationary sources of VOC emissions (not covered by a pre-enactment

control technique guidelines (CTG) document or a post-enactment CTG

document) by November 15, 1992. There were no NOX CTGs issued

before enactment and EPA has not issued a CTG document for any NOX

sources since enactment of the CAA. The RACT rules covering NOX

sources and submitted as SIP revisions are expected to require final

installation of the actual NOX controls as expeditiously as

practicable, but no later than May 31, 1995.

This document addresses EPA's proposed action for SCAQMD Rule 1109,

Emissions of Oxides of Nitrogen from Boilers and Process Heaters in

Petroleum Refineries, and Rule 1110.2, Emissions from Gaseous- and

Liquid-Fueled Internal Combustion Engines. The SCAQMD adopted Rule 1109

on August 5, 1988, and the rule was submitted by the California Air

Resources Board (CARB) to EPA on March 26, 1990. Rule 1110.2 was

adopted on December 9, 1994, and submitted on April 13, 1995. The above

rules were found to be complete on June 20, 1990, and May 2, 1995,

respectively, pursuant to EPA's completeness criteria that are set

forth in 40 CFR Part 51 Appendix V,2 and are being proposed for

limited approval and limited disapproval into the SIP.

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\2\ EPA adopted the completeness criteria on February 16, 1990

(55 FR 5830) and, pursuant to section 110(k)(1)(A) of the CAA,

revised the criteria on August 26, 1991 (56 FR 42216).

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Rule 1109 and Rule 1110.2 control NOX emissions from refinery

boilers and process heaters, and internal combustion (I/C) engines.

NOX emissions contribute to the production of ground level ozone

and smog. These rules were adopted as part of SCAQMD's efforts to

achieve the National Ambient Air Quality Standards for ozone and in

response to the CAA requirements cited above. The following is EPA's

evaluation and proposed action for these rules.

EPA Evaluation and Proposed Action

In determining the approvability of a NOX rule, EPA must

evaluate the rule for consistency with the requirements of the CAA and

EPA regulations, as found in section 110 and Part D of the CAA, and 40

CFR Part 51 (Requirements for Preparation, Adoption and Submittal of

Implementation Plans). EPA's interpretation of these requirements,

which forms the basis for this action, appears in the NOX

Supplement and various other EPA policy guidance documents.3 Among

these provisions is

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the requirement that a NOX rule must, at a minimum, provide for

the implementation of RACT for major stationary sources of NOX

emissions.

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\3\ Among other things, the pre-amendment guidance consists of

those portions of the proposed post-1987 ozone and carbon monoxide

policy that concern RACT, 52 FR 45044 (November 24, 1987); and

``Issues Relating to VOC Regulation Cutpoints, Deficiencies, and

Deviations, Clarification to Appendix D of November 24, 1987 Federal

Register Notice'' (Blue Book) (notice of availability was published

in the Federal Register on May 25, 1988).

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For the purposes of assisting State and local agencies in

developing NOX RACT rules, EPA prepared the NOX Supplement to

the General Preamble, cited above (57 FR 55620). In the NOX

Supplement, EPA provides guidance on how RACT will be determined for

stationary sources of NOX emissions. While most of the guidance

issued by EPA on what constitutes RACT for stationary sources has been

directed towards application for VOC sources, much of the guidance is

also applicable to RACT for stationary sources of NOX (see section

4.5 of the NOX Supplement). In addition, pursuant to section

183(c), EPA has issued alternative control technique documents (ACTs)

that identify alternative controls for all categories of stationary

sources of NOX. The ACT documents provide information on control

technology for stationary sources that emit or have the potential to

emit 25 tons per year or more of NOX. However, the ACTs will not

establish a presumptive norm for what is considered RACT for stationary

sources of NOX. In general, the guidance documents cited above, as

well as other relevant and applicable guidance documents, have been set

forth to ensure that submitted NOX RACT rules meet Federal RACT

requirements and are fully enforceable and strengthen or maintain the

SIP.

SCAQMD Rule 1109 controls emissions of nitrogen oxides from boilers

and process heaters located in petroleum refineries with rated

capacities greater than 40 MBtu per hour heat input. The rule requires

units to meet a 0.03 pound per million Btu heat input limit in

accordance with a phased time schedule. The emission limits will

strengthen the SIP, but this rule contains deficiencies which must be

corrected. Those deficiencies include Executive Officer discretion in

approving continuous emission monitoring equipment and test methods,

insufficient records to determine compliance, and an unapprovable

provision for an alternative emission control plan.

Rule 1110.2 controls NOX, carbon monoxide (CO), and reactive

organic gases (ROG) from I/C engines. The emission limits in this rule

are 36 ppm for NOX, 2000 ppm for CO, and 250 ppm for ROG. Certain

types of units specifically identified in the rule may have an

allowable NOX emission limit of approximately 45 ppm. In setting

these limits, the SCAQMD considered emission reductions, control

technologies, cost-effectiveness, and environmental impacts. EPA agrees

that the limits incorporated into SCAQMD Rule 1110.2 are consistent

with the Agency's guidance and policy for making RACT determinations,

and that these limits satisfy the RACT requirement. The limits of Rule

1110.2 will strengthen the SIP, but this rule contains deficiencies

with respect to the requirements of the CAA and EPA regulations as

interpreted in the various policy guidance documents discussed earlier.

Certain existing units are not required to be in compliance until the

year 2004, which is well beyond the statutory May 31, 1995 deadline,

and the rule allows for Executive Officer discretion in approving

continuous emission monitoring equipment and test methods for

determining compliance with emission limits.

EPA has evaluated the submitted rules described above for

consistency with the CAA, EPA regulations, and EPA policy, and although

these rules will strengthen the SIP, they still contain deficiencies

which were required to be corrected pursuant to the section

182(a)(2)(A) requirement of Part D of the CAA. A more detailed

discussion of the sources controlled, the limits required,

justification for why these limits satisfy RACT, and the rule

deficiencies can be found in the Technical Support Document (TSD) for

each rule, available from the U.S. EPA Region IX office. Because of the

deficiencies, these rules are not consistent with the interpretation of

section 172 of the 1977 CAA as found in the Blue Book and may lead to

rule enforceability problems. As a result, these rules are not

approvable pursuant to section 182(a)(2), section 182(b)(2), section

182(f) and Part D of the CAA.

For the reasons mentioned above, EPA cannot grant full approval of

these rules under section 110(k)(3) and Part D. Also, because the

submitted rules are not composed of separable parts which meet all the

applicable requirements of the CAA, EPA cannot grant partial approval

of the rules under section 110(k)(3). However, EPA may grant a limited

approval of the submitted rules under section 110(k)(3) in light of

EPA's authority pursuant to section 301(a) to adopt regulations

necessary to further air quality by strengthening the SIP. The approval

is limited because EPA's action also contains a simultaneous limited

disapproval. In order to strengthen the SIP, EPA is proposing a limited

approval of the SCAQMD's submitted Rule 1109 and Rule 1110.2, under

sections 110(k)(3) and 301(a) of the CAA as meeting the requirements of

section 110(a) and Part D.

At the same time, EPA is also proposing a limited disapproval of

these rules because they contain deficiencies which must be corrected

in order to fully meet the requirements of section 182(a)(2), section

182(b)(2), section 182(f), and Part D of the Act. Under section

179(a)(2), if the Administrator disapproves a submission under section

110(k) for an area designated nonattainment, based on the submission's

failure to meet one or more of the elements required by the Act, the

Administrator must apply one of the sanctions set forth in section

179(b) unless the deficiency has been corrected within 18 months of

such disapproval. Section 179(b) provides two sanctions available to

the Administrator: highway funding and offsets. The 18 month period

referred to in section 179(a) will begin on the effective date of EPA's

final limited disapproval. Moreover, the final disapproval triggers the

Federal Implementation Plan (FIP) requirement under section 110(c). It

should be noted that the rules covered by this NPR have been adopted by

the SCAQMD and are currently in effect in the SCAQMD. EPA's final

limited disapproval action will not prevent the SCAQMD or EPA from

enforcing these rules.

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.

Regulatory Process

Regulatory Flexibility Act

Under the Regulatory Flexibility Act, 5 U.S.C. section 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 sections 603

and 604. Alternatively, EPA may certify that the rule will not have a

significant economic 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.

Limited approvals under section 110 and 301 and subchapter I, Part

D of the CAA do not create any new requirements, but simply approve

requirements that the State is already imposing. Therefore, because the

Federal SIP-approval does not impose any new requirements, it does not

have a significant impact on affected small

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entities. Moreover, due to the nature of the Federal/State relationship

under the CAA, preparation of a regulatory flexibility analysis would

constitute Federal inquiry into the economic reasonableness of State

action. The CAA forbids EPA to base its actions concerning SIPs on such

grounds. Union Electric Co. v. U.S. E.P.A. , 427 U.S. 246, 256-66

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

Unfunded Mandates

Under Sections 202, 203, and 205 of the Unfunded Mandates Reform

Act of 1995 (``Unfunded Mandates Act''), signed into law on March 22,

1995, EPA must undertake various actions in association with proposed

or final rules that include a Federal mandate that may result in

estimated costs of $100 million or more to the private sector or to

State, local, or tribal governments in the aggregate.

Through submission of this State implementation plan revision, the

State and any affected local or tribal governments have elected to

adopt the program provided for under Part D of the Clean Air Act. These

rules may bind State, local, and tribal governments to perform certain

actions and also require the private sector to perform certain duties.

The rules being proposed for limited approval and limited disapproval

by this action will impose no new requirements because affected sources

are already subject to these regulations under State law. Therefore, no

additional costs to State, local, or tribal governments or to the

private sector result from this action. EPA has also determined that

this proposed action does not include a mandate that may result in

estimated costs of $100 million or more to State, local, or tribal

governments in the aggregate or to the private sector.

Executive Order 12866

This action has been classified as a Table 3 action for signature

by the Regional Administrator under 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 has exempted this

regulatory action from review under Executive Order 12866.

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Hydrocarbons,

Intergovernmental relations, Nitrogen dioxide, Ozone, Reporting and

recordkeeping requirements, Volatile organic compounds.

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

Dated: February 12, 1997.

Felicia Marcus,

Regional Administrator.

[FR Doc. 97-4966 Filed 2-27-97; 8:45 am]

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