Approval and Promulgation of Implementation Plan; Indiana

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[IN75; FRL-6129-7]

Approval and Promulgation of Implementation Plan; Indiana

AGENCY: Environmental Protection Agency.

ACTION: Final rule.

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SUMMARY: The United States Environmental Protection Agency (USEPA) is

approving Indiana's request to grant an exemption for the northwest

Indiana (Lake and Porter Counties) severe ozone nonattainment area from

the applicable Oxides of Nitrogen (NOX) transportation

conformity requirements. The USEPA proposed approval on January 6,

1998. The proposal was based on information the Indiana Department of

Environmental Management (IDEM) submitted to the USEPA as a State

Implementation Plan (SIP) revision request for an exemption under

section 182(b)(1) of the Clean Air Act (Act). The technical basis for

IDEM's request was the urban airshed modeling (UAM) conducted for an

attainment demonstration for the Lake Michigan Ozone Study (LMOS)

modeling domain.

DATES: This rule is effective August 26, 1998.

ADDRESSES: Copies of the SIP revision, public comments and USEPA's

responses are available for inspection at the following address: United

States Environmental Protection Agency, Region 5, 77 West Jackson

Boulevard, Chicago, Illinois 60604. (It is recommended that you

telephone Patricia Morris at (312) 353-8656 before visiting the Region

5 Office.)

FOR FURTHER INFORMATION CONTACT: Patricia A. Morris, Regulation

Development Section (AR-18J), Air Programs Branch, Air and Radiation

Division, United States Environmental Protection Agency, Region 5, 77

West Jackson Boulevard, Chicago, Illinois 60604, Telephone Number (312)

353-8656.

SUPPLEMENTARY INFORMATION:

I. Background

Clean Air Act section 176(c)(3)(A)(iii) requires, in order to

demonstrate conformity with the applicable SIP, that transportation

plans and Transportation Improvement Programs (TIPs) contribute to

emissions reductions in ozone and carbon monoxide nonattainment areas

during the period before control strategy SIPs are approved by USEPA.

This requirement is implemented in 40 CFR 93.119, which establishes

what is known as the ``build/no-build test.'' The conformity

requirements of 176(c)(3)(A) are more fully explained in the notice of

proposed rulemaking (63 FR 456, January 6, 1998).

On July 13, 1994, the States of Illinois, Indiana, Michigan, and

Wisconsin (the States) submitted to the USEPA a petition for an

exemption from the requirements of section 182(f) of the Clean Air Act

(Act). The States, acting through the Lake Michigan Air Directors

Consortium (LADCo), petitioned for an exemption from the Reasonably

Available Control Technology (RACT) and New Source Review (NSR)

requirements for major stationary sources of NOX. The

petition also asked for an exemption from the transportation and

general conformity requirements for NOX in all ozone

nonattainment areas in the Lake Michigan Modeling domain.

On March 6, 1995, the USEPA published a rulemaking proposing

approval of the NOX exemption petition for the RACT, NSR and

transportation and general conformity requirements. A number of

comments were received on the proposal. Several commenters argued that

NOX exemptions are provided for in two separate parts of the

Act, in sections 182(b)(1) and 182(f), but that the Act's

transportation conformity provisions in section 176(c)(3) explicitly

reference section 182(b)(1). In April 1995, the USEPA entered into an

agreement to change the procedural mechanism through which a

NOX exemption from transportation conformity would be

granted (EDF et al. v. USEPA, No. 94-1044, U.S. Court of Appeals, D.C.

Circuit). Instead of a petition under 182(f), transportation conformity

NOX exemptions for ozone nonattainment areas that are

subject to section 182(b)(1) now need to be submitted as a SIP revision

request. The northwest Indiana ozone nonattainment area is classified

as severe and, thus, is subject to section 182(b)(1). Thus, the

NOX waiver for transportation conformity would have been

granted in January 26, 1996, at the same time as the waiver for RACT,

NSR and general conformity except for the technical correction to

require a SIP revision request under 182(b)(1).

The transportation conformity requirements are found at sections

176(c)(2), (3), and (4) of the Act. The conformity requirements apply

on an areawide basis in all nonattainment and maintenance areas. The

USEPA's transportation conformity rule was amended on August 29, 1995

(60 FR 44762) to reference section 182(b)(1) rather than 182(f) as the

means for exempting areas subject to section 182(b)(1) from the

transportation conformity NOX requirements.

The May 24, 1996, SIP revision request from Indiana was submitted

to meet the requirements in accordance with 182(b)(1). Public hearings

on this SIP revision request were held on June 11, 1996.

In evaluating the 182(b) SIP revision request, the USEPA considered

whether additional NOX reductions would contribute to

attainment of the standard in the northwest Indiana severe ozone

nonattainment area and also in the downwind areas of the LMOS modeling

domain. The USEPA granted a NOX waiver for RACT, NSR, and

general conformity based on the submitted modeling on January 26, 1996,

(61 FR 2428). At the same time and using the same technical support

evaluation, the USEPA would have granted the transportation conformity

waiver but for the technical correction to grant the waiver under

182(b)(1) instead of 182(f). This rulemaking completes the efforts

under this technical correction.

On January 6, 1998, (63 FR 456), the USEPA proposed approval of

Indiana's request to grant an exemption for the northwest Indiana

severe ozone nonattainment area from the applicable NOX

transportation conformity requirements.

II. Public Comments

The USEPA received two sets of comments during the public comment

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period, which ended on February 5, 1998. One set was in favor of the

USEPA proposal, and one set was critical. The following are the

critical comments on the proposal and USEPA's responses to the

comments:

Comment: Indiana has failed to establish a NOX budget

for the ozone nonattainment area. Indiana has yet to develop and submit

such a budget as required by November 1994. Until the attainment

demonstrations, encompassing verifiable and allocated (biogenic, point,

mobile, and area) NOX emission budgets, are submitted and

complete, any determination that required control strategies are not

necessary is premature and unfounded.

Response: Approval of the transportation conformity NOX

waiver does not eliminate the need for a NOX budget

determination. As described in the background section, the waiver

merely removes the requirement for the build/no-build test. It is

anticipated that in the future, Indiana will submit a NOX

transportation budget in its state implementation plan.

Comment: The NOX waiver technical documentation is

outdated, incomplete and inconsistent with USEPA's NOX SIP

call.

Response: USEPA's NOX SIP call proposal published

November 7, 1997, (62 FR 60317) is based on modeling conducted by the

Ozone Transport Assessment Group (OTAG). OTAG used information and

ozone episodes contributed by LADCo and the State of Indiana. USEPA's

NOX SIP call acknowledges the NOX ``disbenefit''

issue and specifically mentions the Lake Michigan states as an area

where the modeling shows a disbenefit. A ``disbenefit'' from

NOX is when reductions in NOX emissions create an

increase in the concentrations of ozone. USEPA's NOX SIP

call encourages local and regional modeling to determine the extent of

the NOX disbenefit; and the appropriate control strategies

to deal with the disbenefit. LADCo is currently conducting modeling to

refine the NOX disbenefit and the State of Indiana, in

cooperation with the other Lake Michigan states, intends to submit the

modeling and analysis in response to the SIP call. Thus, there is

nothing in the most recent modeling which contradicts the phenomenon of

the NOX disbenefit in the Lake Michigan area.

Comment: The Indiana submittal failed to demonstrate that low-level

NOX reductions in the northwest Indiana area would not

improve air quality. While the submittal did analyze domain-wide low-

level NOX reductions, no such analysis was performed for the

specific Indiana counties. The State of Indiana, in coordination with

LADCo, has the capabilities to model NOX emissions from

mobile sources in these counties. Therefore, USEPA should require such

a demonstration before taking final action on this rulemaking.

Response: The LADCo analysis demonstrated that across-the-board

reductions in NOX from point, area, and mobile sources

generally showed a ``disbenefit'' in many areas of the modeling domain.

Further, LADCo performed an analysis which focused on NOX

reductions from point sources. This analysis showed a small increase in

ozone formation. From this result, LADCo concluded that low level

NOX controls, i.e. mobile and area sources, would be

detrimental to air quality in the modeling domain. The LADCo analysis

is consistent with the USEPA NOX waiver policy which

requires consideration of modeling domain wide peak ozone

concentrations.

Comment: Indiana and Michigan counties now in violation of the

ozone NAAQS will benefit from low-level NOX emissions

reductions.

Response: Regional modeling is currently being conducted to

determine more precisely where NOX reductions give a

disbenefit. The OTAG modeling demonstrated that elevated and low-level

NOX reductions across many states will generally reduce

transported ozone. The USEPA NOX SIP call proposed on

November 7, 1997, proposed statewide budgets for NOX. The

State has the ability to decide what NOX reductions would be

most beneficial, after consideration of downwind benefits and local

disbenefits. The States are currently conducting additional modeling in

the Lake Michigan area to determine where NOX reductions are

most beneficial. It is premature to subject transportation sources in

Lake and Porter Counties to NOX reductions until this

additional modeling is completed and USEPA finalizes the SIP call

notice and Indiana submits its plan for NOX reductions.

Comment: USEPA's PM2.5 NAAQS requires an additional net

air quality benefit analysis.

Response: The USEPA timeline for implementation of the

PM2.5 NAAQS begins with setting up a monitoring network and

collecting data for several years before designating areas under the

new NAAQS. At this time, the USEPA does not know which areas will be

designated nonattainment for PM2.5, nor are there any

control strategies currently proposed for PM2.5. The

transportation conformity requirement is to enable attainment of the

one hour ozone standard. In this notice, USEPA is only waiving the

transportation conformity build/no-build test, which requires

reductions in NOX in ozone nonattainment areas.

Comment: The USEPA has failed to adequately consider the net

environmental benefits (such as acid rain reduction) of NOX

emissions reductions in Lake and Porter Counties.

Response: As stated above, the LADCo analysis demonstrated that

across the board reductions in NOX from point, area, and

mobile sources showed both benefits and disbenefits in the modeling

domain. Further, the transportation conformity rule does not require

the build/no-build test for NOX as an ozone precursor in

ozone nonattainment areas where the Administrator determines that

additional reductions of NOX would not contribute to

attainment of the National Ambient Air Quality Standard (NAAQS) for

ozone. A net benefit analysis for all environmental benefits is not

required since this requirement is specific to ozone nonattainment.

Comment: The USEPA and Indiana failed to perform the appropriate

environmental justice analysis. The USEPA has failed to consider the

spatial impact of where reductions could be anticipated and where

increases might occur with and without NOX conformity

compliance in northwest Indiana and southeast Chicago. The USEPA is

expected to address the full range of environmental implications

including: (1) Will the rulemaking increase already unacceptable levels

of air toxics in these communities? (2) Will this rulemaking increase

already unacceptable levels of fine particulate matter in these

communities? (3) Will the sprawl included by the proposal--or the

elevated speed limits allowed--disproportionately impact at-risk

populations? (4) Will this proposal further exacerbate the difficulty

of low income and unemployed citizens in the region commuting to

employment opportunities?

Response: As discussed in the January 6, 1998, proposed approval,

the role that NOX emissions play in producing ozone at any

given place and time is complex. Modeling shows that controlling low

level NOX in northwest Indiana could in fact increase ozone

concentrations in local urban areas particularly the minority areas in

Lake County, Indiana and southeast Chicago. This disbenefit is caused

by the reaction of nitrogen oxide with ozone, which locally reduces

ozone concentrations, and is referred to as ozone scavenging. Since

emissions of NOX from fuel combustion sources, whether

internal combustion engines or stationary combustion sources, such as

industrial boilers, contain significant

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amounts of NO, it is expected that ozone concentrations immediately

downwind of such NOX sources will be reduced through ozone

scavenging. Therefore, reducing NOX emissions can lead to

increased ozone concentrations in the vicinity of the controlled

NOX emission sources, while causing a reduction in ozone

concentrations further downwind. Reducing NOX emissions in

VOC-limited areas (areas with low VOC emissions relative to

NOX emissions) may produce minimal ozone reductions or even

ozone increases. This pattern of NOX scavenging is

demonstrated in the LADCo modeling. Therefore, controlling low level

NOX in northwest Indiana could in fact increase ozone

concentrations in local urban areas particularly the minority areas in

Lake County, Indiana and southeast Chicago. This, in fact, is what the

LADCo modeling demonstrated.

As for the other environmental and social implications, this

rulemaking addresses NOX reduction for meeting the ozone

standard and merely waives the build/no-build reduction requirement for

transportation sources. NOX from the transportation plan is

not expected to increase significantly and thus will not increase air

toxics or fine particulates. It is through the transportation planning

process that transportation decisions are made.

This transportation conformity waiver is not expected to adversely

affect the transportation options of minority populations in northwest

Indiana. In fact, letters from IDEM and Indiana Department of

Transportation and the Northwestern Indiana Regional Planning

Commission indicate that the NOX transportation waiver, will

allow transportation planning to be simplified and allow federal

funding of transportation improvements to proceed.

Comment: The Indiana request utilizes the BEIS-I inventory for

biogenic emissions. OTAG concluded that the BEIS-II inventory is the

preferred inventory for UAM analyses.

Response: The BEIS-I was the approved and most appropriate biogenic

emissions inventory available to LADCo when the NOX modeling

analysis was performed. Any subsequent modeling performed by LADCo will

utilize the BEIS-II biogenic emissions inventory.

Comment: OTAG concluded that both elevated and low level

NOX reductions are effective in reducing ozone levels. These

conclusions were based extensively on OTAG modeling, and are

significant and relevant to USEPA's action on this rule. The modeling

clearly demonstrated the efficacy of reducing low-level (mobile source)

NOX in controlling ozone. The conclusions of the policy

group were that such reductions were cost effective, and beneficial to

reduce transport to downwind areas.

Response: It should be noted that OTAG concluded that States must

have the opportunity to conduct additional local and subregional

modeling to assess appropriate, type, and timing of controls. OTAG

further concluded that States can work together, in coordination with

USEPA, toward developing local SIPs including an evaluation of possible

local NOX disbenefits. In addition, OTAG modeling results

demonstrated a significant potential for NOX control

disbenefits in the Lake Michigan area.

Comment: OTAG concluded that disbenefit analyses found ozone

increases to be less frequent and severe than USEPA concluded based on

the July 13, 1994 LADCo 182(f) NOX waiver submittal.

Response: The OTAG fine grid analysis utilized a 12 km grid as

compared to the LADCo fine grid of 4 km. This disparity in fine grid

size can de-emphasize the NOX disbenefit at the local

urbanized area. OTAG concluded that some areas will experience local

NOX disbenefits at more frequent pronounced levels when

finer grids are considered.

Comment: In previous rulemakings on similar NOX waiver

requests, USEPA committed to incorporate the OTAG findings in future

USEPA rulemakings. OTAG recommendations are now complete, OTAG findings

are clear, and USEPA has validated these OTAG findings in proposing its

NOX SIP call. This proposal is inconsistent with and even

undermines the USEPA NOX SIP call.

Response: The summary of OTAG findings states that NOX

reductions decrease and increase ozone: decreases occur domain wide;

increases are confined to a few days in a few urban areas.

The USEPA's recently proposed regional NOX rulemaking

uses the OTAG findings to identify States which contribute

significantly to ozone problem areas in other states. In addition, the

proposed rulemaking establishes State wide NOX budgets for

the year 2007.

A section of the rulemaking also solicits comments on approaches

that can be used to address the disbenefit issue in areas such as Lake

Michigan. Subsequent modeling by the LADCo States will need to address

the disbenefit issue as it pertains to the NOX budget, ozone

transport, and attainment. It is premature at this time to require

NOX reductions from transportation sources in northwest

Indiana before completion of modeling, finalization of the

NOX SIP call and preparation of the State implementation

plan to address state NOX reductions.

IV. USEPA Action

In this final action, USEPA is approving the transportation

conformity NOX waiver SIP revision for the State of Indiana.

In light of the modeling completed thus far and considering the

importance of the Ozone Transport Assessment Group process and

attainment plan modeling efforts the USEPA notes that it may reexamine

the impact of this NOX waiver as future modeling becomes

available. In the near future, USEPA intends to require appropriate

States to submit SIP measures to achieve emissions reductions of ozone

precursors needed to prevent significant transport of ozone. The USEPA

will evaluate the States' submitted SIP measures and available refined

modeling to determine whether the NOX waiver should remain

in place, or whether USEPA will require a new plan revision.

The USEPA also reserves the right to require NOX

emission controls for transportation sources under section 110(a)(2)(D)

of the Act if future ozone modeling demonstrates that such controls are

needed to achieve the ozone standard in downwind areas.

Nothing in this action should be construed as permitting, allowing

or establishing a precedent for any future request for revision to any

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

separately in light of specific technical, economic, and environmental

factors and in relation to relevant statutory and regulatory

requirements.

V. Administrative Requirements

A. Executive Order 12866

The Office of Management and Budget has exempted this regulatory

action from Executive Order 12866 review.

B. Executive Order 13045

This final rule is not subject to Executive Order 13045, entitled

``Protection of Children from Environmental Health Risks and Safety

Risks,'' because it is not an ``economically significant'' action under

Executive Order 12866.

C. Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) generally requires an agency

to conduct a regulatory flexibility analysis of any rule subject to

notice and comment rulemaking requirements unless the agency certifies

that the rule will not

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have a significant economic impact on a substantial number of small

entities. Small entities include small businesses, small not-for-profit

enterprises, and small governmental jurisdictions.

This final rule will not have a significant impactr on a

substantial number of small entities because SIP approvals under

section 110 and subchapter I, part D of the Act do not create any new

requirements, but simply approve requirements that the State is already

imposing. Therefore, because the Federal SIP approval does not impose

any new requirements, I certify that this action will not have a

significant economic impact on a substantial number of small entities.

Moreover, due to the nature of the Federal-State relationship under the

Act, preparation of a flexibility analysis would constitute Federal

inquiry into the economic reasonableness of the State action. The Clean

Air Act forbids EPA to base its actions concerning SIPs on such

grounds. Union Electric Co. v. EPA., 427 U.S. 246, 256-66 (1976); 42

U.S.C. 7410(a)(2).

D. Unfunded Mandates

Under section 202 of the Unfunded Mandates Reform Act of 1995,

signed into law on March 22, 1995, EPA must undertake various actions

in association with any proposed or final rule that includes a Federal

mandate that may result in estimated costs to state, local, or tribal

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

or more. This federal action does not impose any new federal

requirements. Accordingly, no additional costs to state, local, or

tribal governments, or the private sector, result from this action.

E. Submission to Congress and the Comptroller General

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the

Small Business Regulatory Enforcement Fairness Act of 1996, generally

provides that before a rule may take effect, the agency promulgating

the rule must submit a rule report, which includes a copy of the rule,

to each House of the Congress and to the Comptroller General of the

United States. EPA will submit a report containing this rule and other

required information to the U.S. Senate, the U.S. House of

Representatives, and the Comptroller General of the United States prior

to publication of the rule in the Federal Register. This action is not

a ``major rule'' as defined by 5 U.S.C. 804(2). This rule will be

effective.

F. Petitions for Judicial Review

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

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

the appropriate circuit by September 25, 1998. 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, Intergovernmental

relations, Oxides of Nitrogen, Ozone, Transportation-air quality

planning, Transportation conformity.

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

Dated: July 15, 1998.

David A. Ullrich,

Acting Regional Administrator.

Part 52, Chapter I, title 40 of the Code of Federal Regulations 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 P--Indiana

2. Section 52.777 is amended by adding paragraph (t) to read as

follows:

Sec. 52.777 Control strategy: Photochemical Oxidants (hydrocarbons).

* * * * *

(t) Approval--On May 24, 1996, the Indiana Department of

Environmental Management submitted a revision to the ozone State

Implementation Plan for Lake and Porter Counties. The submittal

pertained to a plan for the implementation of the Federal

transportation conformity requirements in accordance with 40 CFR part

51 subpart T--Conformity to State or Federal Implementation Plans of

Transportation Plans, Programs, and Projects Developed, Funded or

Approved Under Title 23 U.S.C. or the Federal Transit Act.

* * * * *

[FR Doc. 98-19931 Filed 7-24-98; 8:45 am]

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