# Findings of Significant Contribution and Rulemaking on Section 126 Petitions for Purposes of Reducing Interstate Ozone Transport > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A99-11559 ## Record - **Collection:** Federal Register - **Document type:** Rule - **Published:** May 25, 1999 - **Citation:** 64 FR 28250 ## Text SUMMARY: In accordance with section 126 of the Clean Air Act (CAA), EPA is taking final action on petitions filed by eight Northeastern States seeking to mitigate what they describe as significant transport of one of the main precursors of ground-level ozone, nitrogen oxides (NOX), across State boundaries. Each petition specifically requests that EPA make a finding that NOX emissions from certain stationary sources emit in violation of the CAA's prohibition on emissions that significantly contribute to ozone nonattainment problems in the petitioning State. If EPA makes such a finding, EPA is authorized to establish Federal emissions limits for the sources. The eight Northeastern States that filed petitions are Connecticut, Maine, Massachusetts, New Hampshire, New York, Pennsylvania, Rhode Island, and Vermont. Today, EPA is making final determinations that portions of six of the petitions are technically meritorious. The technically approvable portions of the petitions will be automatically deemed granted or denied at certain later dates pending certain actions by the States and EPA regarding State submittals in response to the final NOX State implementation plan call (NOX SIP call). This rule describes the schedule and conditions under which applicable final findings on the petitions would be automatically triggered. The EPA intends to implement the section 126 control remedy through a Federal NOX Budget Trading Program. The trading program would apply to sources in the source categories for which a final finding is ultimately granted. In today's rule, EPA is finalizing the general parameters of the trading program. The EPA is committing to promulgate the details of the trading program by July 15, 1999. The EPA is including interim final emissions limitations for affected sources which would apply only if EPA fails to promulgate the trading program prior to a section 126 finding. Mitigation of the transport of ozone and its precursors is important because ozone, which is a primary harmful component of urban smog, has long been recognized, in both clinical and epidemiological research, to adversely affect public health. DATES: The final rule is effective July 26, 1999. ADDRESSES: Documents relevant to this action are available for inspection at the Air and Radiation Docket and Information Center (6102), Attention: Docket No. A-97-43, U.S. Environmental Protection Agency, 401 M Street SW., room M-1500, Washington, DC 20460, telephone (202) 260-7548 between 8:00 a.m. and 5:30 p.m., Monday though Friday, excluding legal holidays. A reasonable fee may be charged for copying. FOR FURTHER INFORMATION CONTACT: General questions concerning today's action should be addressed to Carla Oldham, Office of Air Quality Planning and Standards, Air Quality Strategies and Standards Division, MD-15, Research Triangle Park, NC, 27711, telephone (919) 541-3347, e- mail at [email protected]. Please refer to SUPPLEMENTARY INFORMATION below for a list of contacts for specific subjects discussed in today's action. SUPPLEMENTARY INFORMATION: Availability of Related Information The official record for this rulemaking, as well as the public version, has been established under docket number A-97-43 (including comments and data submitted electronically as described below). A public version of this record, including printed, paper versions of electronic comments, which does not include any information claimed as confidential business information, is available for inspection from 8:00 a.m. to 5:30 p.m., Monday through Friday, excluding legal holidays. The official rulemaking record is located at the address in ADDRESSES at the beginning of this document. In addition, the Federal Register rulemakings and associated documents are located at http:// www.epa.gov/ttn/rto/126. The EPA has issued a separate rule on NOX transport entitled, ``Finding of Significant Contribution and Rulemaking for Certain States in the Ozone Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone'' (see related rulemakings included in the docket for this rulemaking). The rulemaking docket for that rule (Docket No. A-96-56), hereafter referred to as the NOX SIP call, contains information and analyses that are relied upon in the section 126 rulemaking. Documents related to the NOX SIP call rulemaking are available for inspection in docket number A-96-56 at the address and times given above. In addition, the NOX SIP call and associated documents are located at http://www.epa.gov/ttn/otag/sip/index.html. Modeling and air quality assessment information can be obtained in electronic form at http://www.epa.gov.scram001/regmodcenter/t28.htm. Information related to the budget development can be found at http://www.epa.gov/capi. Additional information relevant to this section 126 rulemaking concerning the Ozone Transport Assessment Group (OTAG) is available on the web at http://www.epa.gov/ttn/otag/otag/index.html. If assistance is needed in accessing the system, call the help desk at (919) 541-5384 in Research Triangle Park, NC. The OTAG's technical data are located at http://www.iceis.mcnc.org/OTAGDC. For Additional Information For additional information related to air quality analysis, please contact Carey Jang, Office of Air Quality Planning and Standards; Emissions, Monitoring, and Analysis Division, MD-14, Research Triangle Park, NC 27711, telephone (919) 541-5638. For legal questions, please contact Howard Hoffman, Office of General Counsel, 401 M Street SW., MC-2344, Washington, DC, 20460, telephone (202) 260-5892. For questions regarding the NOX cap-and-trade program, please contact Sarah Dunham, Office of Atmospheric Programs, Acid Rain Division, MC- 6204J, 401 M Street SW, Washington, DC 20460, telephone (202) 564-9087. For questions regarding regulatory cost analyses for electricity generating sources, please contact MaryJo Krolewski, Office of Atmospheric Programs, Acid Rain Division, MC-6204J, 401 M Street SW, Washington, DC 20460, telephone (202) 564-9847. For questions regarding regulatory cost analyses for other stationary sources, please contact Larry Sorrels, Office of Air Quality Planning and Standards, Air Quality Strategies and Standards Division, MD-15, Research Triangle Park, NC 27711, telephone (919) 541-5041. Outline I. Background and Summary of Rulemaking A. Summary of Rulemaking and Affected Sources B. Ozone Transport, Ozone Transport Commission NOX Memorandum of Understanding (OTC NOX MOU), OTAG, the NOX SIP Call, the Revised Ozone [[Page 28251]] National Ambient Air Quality Standard (NAAQS), and Ozone Effects C. Section 126 D. Summary of Section 126 Petitions E. Litigation on Rulemaking Schedule F. Advance Notice of Proposed Rulemaking on Petitions G. Comment Periods and Availability of Key Information 1. Emissions Inventory Corrections 2. Impacts of 1-Hour Standard Revocation 3. Timing of Petition for Review H. Summary of Major Changes Between Proposals and Final Rule II. EPA's Analytical Approach A. EPA's Interpretation of Section 126: Authorization of the Petitions 1. Relationship Among Sections 110(a)(2)(D), 126, and 176A/184 2. Scrivener's Error 3. Interpretation of Emits in Violation of the Prohibition of Section 110 and Integration of Section 126 Controls With SIPs/FIPs Under the NOX SIP Call a. Interpretation of Emits in Violation of the Prohibition of Section 110 b. Integration of Section 126 Controls With SIPs/FIPs Under the NOX SIP Call c. Petitions Deemed Granted Upon Certain Events B. EPA's Interpretation of Section 126: Significant Contribution 1. Significant Contribution Standard a. NPR b. Final Action i. General Meaning of the ``Contribute Significantly'' Provision ii. Varied Circumstances of Air Pollutant Transport iii. Definition of the Significant Contribution Test and Legislative History iv. Application of Significant Contribution Test to Ozone Problems c. Comments and EPA Responses i. Vagueness ii. Collective Contribution iii. Bright Line iv. Other Factors 2. Cost Factor C. EPA's Interpretation of Section 126: 8-Hour NAAQS D. EPA's Interpretation of Section 126: Remedy 1. Three-Year Period 2. Uniform Level of Controls a. Comments b. Response E. Obligations of Downwind States 1. Comments 2. Response F. Effect of 1-Hour Attainment G-H. Weight of Evidence Determination of Named Upwind States I. Identifying Sources 1. Proposed EGU Source Classification 2. Proposed Non-EGU Boiler and Turbine Source Classification 3. Issues Raised by Commenters on EGU/Non-EGU Classification 4. Final Rule EGU/Non-EGU Classification J. Cost Effectiveness of Emissions Reductions 1. Identifying Highly Cost Effective NOX Control Levels 2. Determining the Cost Effectiveness of NOX Controls a. Large EGUs b. Large Non-EGUs c. Large Process Heaters d. Small Sources e. Summary of Control Measures K. Feasibility of NOX Control Implementation Date 1. Cost Assumptions for SCR 2. Technology Deployment 3. Catalyst Supply 4. Outage Periods L. Air Quality Assessment III. EPA's Final Action on Granting or Denying the Petitions A. Technical Determinations B. Action on Whether to Grant or Deny Each Petition 1. Portions of Petitions for Which EPA Is Making an Affirmative Technical Determination 2. Portions of Petitions for Which EPA Is Not Making an Affirmative Technical Determination C. Requirements for Sources for Which EPA Makes a Section 126(b) Finding IV. Section 126 Control Remedy A. Appropriateness of Trading as a Section 126 Remedy B. Relationship of the Section 126 Remedy to the NOX SIP Call and the Proposed FIP C. Federal NOX Budget Trading Program 1. Elements of the Section 126 Remedy Finalized With Today's Rulemaking a. Compliance Schedule and Emission Limitation b. Trading Program Budget c. Compliance Supplement Pool 2. Elements of the Section 126 Remedy not Finalized With Today's Rulemaking D. Default Emission Limitations in the Absence of a Promulgated Federal NOX Budget Trading Program 1. Default Emission Limitations a. Default Emission Limitations for Existing Units b. Default Emission Limitations for New Units 2. July 15, 1999 Allocation Decisions V. Non-ozone Benefits to NOX Reductions VI. Administrative Requirements A. Executive Order 12866: Regulatory Impact Analysis B. Impact on Small Entities 1. Regulatory Flexibility 2. Potentially Affected Small Entities C. Unfunded Mandates Reform Act D. Paperwork Reduction Act E. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks 1. Applicability of Executive Order 13045 2. Children's Health Protection F. Executive Order 12898: Environmental Justice G. Executive Order 12875: Enhancing the Intergovernmental Partnership H. Executive Order 13084: Consultation and Coordination With Indian Tribal Governments I. National Technology Transfer and Advancement Act J. Judicial Review K. Congressional Review Act I. Background and Summary of Rulemaking A. Summary of Rulemaking and Affected Sources In August 1997, eight northeastern States (Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island, Pennsylvania, and Vermont) submitted petitions to EPA under section 126 of the Clean Air Act (CAA) seeking to mitigate what they describe as significant transport of NOX, one of the main precursors of ozone. Each petition requests that EPA make a finding that certain major stationary sources or groups of sources in upwind States emit NOX emissions in violation of the CAA's prohibition on amounts of emissions that contribute significantly to ozone nonattainment or maintenance problems in the petitioning State. All the petitioning States directed their petitions to the 1-hour ozone standard. Originally, only three of the States (Massachusetts, Pennsylvania, and Vermont) also directed their petitions at the 8-hour ozone standard. In rulemakings dated September 30, 1998 and October 21, 1998, EPA proposed action on the petitions. The October notice of proposed rulemaking (NPR) is the longer, more detailed version of the proposal. In aggregate across all the petitions and for both ozone standards (to the extent a petition applied to both standards), EPA proposed to find that sources in 19 States and the District of Columbia are significantly contributing to nonattainment problems in one or more of the petitioning States. The October NPR also proposed a Federal NOX budget trading program as the control remedy for sources that would be subject to any section 126 findings. In the NPR, EPA proposed action under the 1-hour and 8-hour standards as specifically requested in each State's petition. At that time, the Maine and New Hampshire petitions were only directed at the 1-hour standard. On November 30, 1998, both Maine and New Hampshire requested that EPA also evaluate their August 1997 petitions under the 8-hour standard. These requests, in effect, constitute new petitions. In a supplemental notice of proposed rulemaking (SNPR) dated March 3, 1999 (64 FR 10342), EPA proposed action on the new Maine and New Hampshire 8-hour petitions. The SNPR did not affect any sources beyond those already affected by the NPR with respect to the Maine and New Hampshire 1-hour petitions and/or other petitions. The SNPR did not propose any additional control requirements beyond what were [[Page 28252]] proposed in the NPR. The EPA is taking final action on both the NPR and the SNPR in this rule. In today's action, EPA is making final affirmative technical determinations that certain major stationary sources and source categories identified in the section 126 petitions are significantly contributing to nonattainment in, or interfering with maintenance by, one or more petitioning States with respect to one or both of the national ambient air quality standards for ozone (hereafter referred to as affirmative technical determinations). On the basis of these affirmative technical determinations, the petitions naming these sources and source categories will be finally granted (i.e, the section 126 findings will be deemed made) or denied at certain later dates pending certain actions by the States and EPA regarding State submittals in response to the final NOX SIP call. The schedule and conditions under which the applicable final findings on the petitions would be triggered are discussed below in Section I.E. The EPA's analysis of significant contribution is discussed in Section II below. Under the 1-hour ozone standard, EPA is making final affirmative technical determinations as to a subset of sources or source categories named in the petitions from Connecticut, Massachusetts, New York, and Pennsylvania. The source categories for which EPA is making this affirmative technical determination of significant contribution are discussed in Section II. The States where these sources are located are listed in Table II-1. The EPA is also partially denying the 1-hour petitions from Connecticut, Massachusetts, New York, and Pennsylvania, and fully denying the 1-hour petitions from Maine, New Hampshire, and Rhode Island for on one of three reasons described below. First, for some sources or source categories in some States named in these petitions, EPA has information demonstrating these sources and States are not significantly contributing to nonattainment in the relevant petitioning State with respect to the 1-hour ozone standard. Second, for sources in some States EPA does not have adequate information to show that the sources do or do not significantly contribute (see Section III.A). Third, based on air quality monitoring data from 1996 through 1998, EPA believes preliminarily that certain areas in Maine, Massachusetts, New Hampshire, Pennsylvania, and Rhode Island have now achieved the 1-hour standard. Therefore, EPA is not making affirmative technical determinations of significant contribution for any upwind sources with respect to these areas (see Section II.F). The EPA is fully denying the 1-hour petition from Vermont because the 1-hour standard no longer applies in that State (See 63 FR 31014). Five of the petitioning States, Maine, Massachusetts, New Hampshire, Pennsylvania, and Vermont, also directed their petitions at the new 8-hour ozone standard. Under the 8-hour ozone standard, EPA is making final affirmative technical determinations as to a subset of sources named in the petitions from Maine, Massachusetts, New Hampshire, and Pennsylvania. The source categories for which EPA is making the affirmative technical determinations of significant contribution are the same as for the 1-hour standard and are discussed in Section II. The EPA is also denying portions of the petitions either because EPA has information demonstrating that some of the sources or source categories named in these petitions are not significantly contributing to nonattainment in the relevant petitioning State with respect to the 8-hour ozone standard or because EPA does not have adequate information to show that the sources are significantly contributing (see Section III.A). The EPA is denying the Vermont petition in full with respect to the 8-hour ozone standard because Vermont has no current 8-hour ozone nonattainment problems and no future projected nonattainment (i.e., maintenance) problems based on available analyses. In aggregate for all petitions and both ozone standards, the sources and source categories for which EPA is making final affirmative determinations of significant contribution to nonattainment or interference with maintenance (hereafter simply significant contribution) with respect to one or more of the petitioning States are located in the following States: Alabama, Connecticut, Delaware, District of Columbia, Illinois, Indiana, Kentucky, Maryland, Massachusetts, Michigan, Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, Tennessee, Virginia, and West Virginia. Some of the sources that EPA is determining do not significantly contribute to the petitioning States are located in States that are affected by a separate rule on NOX transport, the NOX SIP call. Specifically, EPA is determining that sources in Georgia, South Carolina, and Wisconsin are not significantly contributing to any of the petitioning States that name those States. However, EPA has determined in the NOX SIP call that sources in these three States do significantly contribute to nonattainment problems in other downwind States. In acting on these section 126 petitions, EPA can only consider the impacts on downwind nonattainment problems in the petitioning States, which are all located in the Northeast. In the NOX SIP call, EPA considered impacts on nonattainment problems throughout the eastern half of the United States. Therefore, a determination that sources in certain States are not significantly contributing to any petitioning State for purposes of this action on the section 126 petitions does not alter EPA's conclusions on significant contribution with regard to other States under the NOX SIP call. The section 126 petitions varied with regard to the control requirements they recommend for mitigating the interstate transport. While EPA considered the recommendations, section 126 does not limit EPA to the recommended controls in determining an appropriate remedy. In Section II.J., EPA discusses the emissions limitations that would be necessary to ensure that the affected sources do not or would not emit in violation of the applicable statutory prohibition on significant contribution by upwind States to downwind air quality problems. The control remedy is based on the uniform application of highly cost- effective controls (as determined based on cost per ton of NOX reduced for each type of source). In selecting the control measures, EPA considered the recommendations made by OTAG on July 8, 1997 and the analyses for the NOX SIP call. In today's action, EPA is establishing a section 126 control remedy for sources that would be subject to a future section 126 finding. The EPA intends to implement the control requirements through a Federal NOX cap-and-trade program. The EPA believes a trading program is the most cost-effective approach for achieving emissions reductions from large stationary sources. The EPA envisions that there would be an interstate trading program among section 126 sources, NOX SIP call sources in States that choose to participate in the interstate trading program administered by EPA, and sources subject to a Federal implementation plan under the NOX SIP call. As discussed in Section IV below, EPA is today promulgating the general parameters of the remedy, including, among others, the decision to implement a NOX cap-and-trade program as the control remedy, the control levels the trading program would be based on, the definition of the [[Page 28253]] types of sources that would be subject to the trading program, and the compliance date. By July 15, 1999, EPA will finalize the details of the Federal NOX Budget Trading Program for the section 126 sources (as new 40 CFR part 97). The combined list of existing sources affected by an affirmative technical determination with respect to at least one petition, along with the more specific emissions limitations in the form of tradable allowance allocations, will be provided in the July notice of final rulemaking (NFR). The EPA intends to include new sources in the source categories that are significantly contributing with respect to the petitions from Connecticut, Maine, New Hampshire, New York, and Pennsylvania. The petition from Massachusetts does not cover new sources. In accordance with section 126, sources must comply with the control requirements no later than 3 years from a final positive finding on the petitions. The EPA believes the full 3 years is necessary for compliance. As discussed below, the portions of the petitions for which EPA is making an affirmative technical determination could be deemed granted (the finding deemed made) on November 30, 1999 or May 1, 2000, depending on certain actions by States and EPA regarding implementation plans required in response to the NOX SIP call. As discussed in Section III.C., both of these trigger dates would result in an emission reduction deadline of May 1, 2003. B. Ozone Transport, Ozone Transport Commission NOX Memorandum of Understanding (OTC NOX MOU), OTAG, the NOX SIP Call, the Revised Ozone National Ambient Air Quality Standard (NAAQS), and Ozone Effects Today's action occurs against a background of a major national effort, spanning more than 10 years, to analyze and take steps to mitigate the problem of the transport of ozone and its precursors across State boundaries. This effort has grown more intensive in the past several years with the approval of the OTC NOX MOU by 11 of the Northeastern States and the District of Columbia included in the Northeast Ozone Transport Region (OTR), the completion of the OTAG process (described below), and the promulgation of EPA's NOX SIP call. In addition, on July 18, 1997, EPA issued a revised NAAQS for ozone, which is determined over an 8-hour period (the 8-hour standard) (62 FR 38856). In establishing the 8-hour standard, EPA set the standard at 0.08 parts per million and defined the new standard as a ``concentration-based'' form, specifically the 3-year average of the annual 4th-highest daily maximum 8-hour ozone concentrations. This has resulted in more areas and larger areas with monitoring data indicating nonattainment. Thus, it is even more important to implement regional control strategies to mitigate interstate pollution in order to assist downwind areas in achieving attainment. This new 8-hour standard must now be taken into account, along with the pre-existing 1-hour standard, in resolving transport issues. These issues and events are detailed in the proposed NOX SIP call (62 FR 60318). The 8-hour standard is intended to ultimately replace the 1-hour standard. However, the 1- hour standard will continue to apply to areas not yet in attainment to ensure an effective transition to the new 8-hour standard. In many areas of the country, the 1-hour standard has been revoked because the areas are attaining that standard (63 FR 31013; June 5, 1998 and 63 FR 39432; July 22, 1998). A State may petition under section 126 for both the 1-hour standard, to the extent that it still applies in the petitioning State, and the 8-hour standard. The 1990 CAA set forth many requirements to address nonattainment of the 1-hour ozone NAAQS. Many States have found it difficult to demonstrate attainment of the NAAQS due to the widespread transport of ozone and its precursors. The Environmental Council of the States (ECOS) recommended formation of a national work group to allow for a thoughtful assessment and development of consensus solutions to the problem. This work group, OTAG, was established 4 years ago to undertake an assessment of the regional transport problem in the eastern half of the United States. The OTAG was a collaborative process conducted by representatives from the affected States, EPA, and interested members of the public, including environmental groups and industry, to evaluate the ozone transport problem and develop solutions. The OTAG region included the 37 eastern-most States and the District of Columbia. Through the OTAG process, the States concluded that widespread NOX reductions are needed in order to enable areas to attain and maintain the ozone NAAQS. Based on information generated by OTAG and other available data, EPA determined that twenty- two States and the District of Columbia in the OTAG region are significantly contributing to nonattainment problems in downwind States. Therefore, EPA issued the NOX SIP call (63 FR 57356, October 27, 1998) requiring these jurisdictions to revise their SIPs to include NOX control measures to mitigate the ozone transport. The EPA's response to the section 126 petitions differs from EPA's action in the NOX SIP call rulemaking in several ways. In the NOX SIP call, where EPA concluded that NOX emissions from a State are significantly contributing to nonattainment problems in downwind States, EPA is requiring the State to submit SIP provisions to prohibit an amount of NOX emissions which represents the significant contribution. The State has the discretion to select the mix of control measures for their sources to meet the required statewide NOX emissions reductions. If the State does not make the required SIP submission, or submits an inadequate SIP, EPA is required to promulgate a Federal implementation plan (FIP) within 2 years of EPA's finding of the State failure. In the November 7, 1997 NOX SIP call proposal, EPA announced that it intended to expedite the FIP promulgation in order to assure that the downwind States receive the air quality benefits of regional NOX reductions as soon as practicable. Therefore, the EPA proposed FIPs for all the States affected by the NOX SIP call in conjunction with EPA's issuance of the final NOX SIP call (63 FR 56394). By comparison, section 126 petitions are limited to addressing emissions from upwind stationary sources named in the petitions and not other sectors of the inventory. If EPA grants the petitions, it is EPA, not the States, that promulgates control requirements for the sources. The control remedy for sources named in the petitions that would be subject to future findings under section 126 is consistent with the control assumptions EPA used for these sources in determining the final statewide NOX budgets for States subject to the NOX SIP call. In addition, the Federal NOX Budget Trading Program that EPA intends to promulgate in July for the section 126 sources is the same trading program that EPA proposed to use to achieve reductions from large electric generating units (EGUs) and large non-EGUs if it promulgates a FIP in any State. It is also the same trading program in which States can choose to participate to achieve the majority of the required emissions reductions under the NOX SIP call. Because the NOX SIP call process and the section 126 petition process both address NOX transport in the eastern United States, EPA believes it is important to coordinate the two actions [[Page 28254]] as much as possible. As discussed below in Section I.E., EPA and the petitioning States agreed to a proposed consent decree on the rulemaking schedule for the petitions that takes into consideration the NOX SIP call rulemaking. The court entered a slightly modified consent decree on October 26, 1998. All of the States that submitted section 126 petitions are included in the OTR and participated in the OTAG process. In addition, all of the upwind sources identified in the petitions are located in the OTAG region. All eight petitions rely, in part, on the OTAG analyses for technical justification. The OTAG process concluded in June 1997 prior to the promulgation of the new 8-hour ozone standard and, therefore, the OTAG analyses focused on the 1-hour standard. All the petitions request relief under the 1-hour standard. Five of the petitions also request relief under the new 8-hour standard. In acting on the section 126 petitions, EPA believes that it can only consider 8-hour nonattainment problems for the petitioning States that expressly requested relief under that standard. Under the NOX SIP call, EPA considered both 1-hour and 8-hour nonattainment problems throughout the OTAG region. Ground-level ozone, the main harmful ingredient in smog, is produced in complex chemical reactions when its precursors, volatile organic compounds (VOCs) and NOX, react in the presence of sunlight. The chemical reactions that create ozone take place while the pollutants are being blown through the air by the wind, which means that ozone can be more severe many miles away from the source of emissions than it is at the source. At ground level, ozone can cause a variety of ill effects to human health, crops and trees. Specifically, ground-level ozone induces the following health effects: Decreased lung function, primarily in children active outdoors, Increased respiratory symptoms, particularly in highly sensitive individuals, Hospital admissions and emergency room visits for respiratory causes, among children and adults with pre-existing respiratory disease such as asthma, Inflammation of the lung, and Possible long-term damage to the lungs. The new 8-hour primary ambient air quality standard will provide increased protection to the public from these health effects. Each year, ground-level ozone above background is also responsible for several hundred million dollars worth of agricultural crop yield loss. It is estimated that full compliance of the 8-hour ozone NAAQS will result in about $500 million of prevented crop yield loss. Ozone also causes noticeable foliar damage in many crops, trees, and ornamental plants (i.e., grass, flowers, shrubs, and trees) and causes reduced growth in plants. Studies indicate that current ambient levels of ozone are responsible for damage to forests and ecosystems (including habitat for native animal species). C. Section 126 As discussed below in Section II.A., section 126 of the CAA authorizes a downwind State to petition EPA for a finding that major stationary sources or groups of sources upwind of the State emit in violation of the prohibition of section 110(a)(2)(D)(i) because, among other reasons, their emissions contribute significantly to nonattainment, or interfere with maintenance, of a NAAQS in the State. If EPA grants the requested finding, the existing sources must shut down in 3 months unless EPA directly regulates the sources by establishing emissions limitations and a compliance period extending beyond 3 months but no later than 3 years from the finding. D. Summary of Section 126 Petitions As discussed in detail in the NPR, the petitions vary as to the type and geographic location of the source categories identified as significant contributors. All the petitions identified source categories; some petitions also provided lists of sources within the specified categories. The source categories include electric generating plants, fossil fuel-fired boilers and other indirect heat exchangers, and certain other related stationary sources that emit NOX. All the petitions target sources in the Midwest; some also target sources in the South and Northeast. The geographic area covered by each petition is shown in Figures F2-F9 of appendix F of part 52. The petitions also vary as to the level of controls they recommend be applied to the sources to mitigate the transport problem. Several recommend EPA establish a 0.15 lb/mmBtu NOx emission limitation and several recommend that controls be implemented through a cap-and-trade program. All of the petitions rely, in part, on OTAG analyses for technical support. In addition, the States submitted a variety of other technical analyses which include computerized urban airshed modeling, wind trajectory analyses, results of a transport study by the Northeast States for Coordinated Air Use Management, and culpability analyses. Table I-1 shows, by petitioner, the named source categories, the named geographic areas, and the requested remedy sought by the petitioning States. The named source categories are worded as they appear in the petitions. A map of the OTAG Subregions is provided in part 52, Appendix F, Figure 1, promulgated as part of this rule. TABLE I-1. EPA's Summary of Section 126 Petitions ------------------------------------------------------------------------ Named source State categories Named States Requested remedy ------------------------------------------------------------------------ CT................ Fossil fuel- Sources in OTAG Establish, at a fired boilers Subregions 2, minimum, or other 6, and 7 and emission indirect heat portion of OTR limitations and exchangers with extending west a schedule of a maximum gross and south of compliance heat input rate CT. Includes consistent with of 250 mmBtu/hr all or parts of the OTC NOX MOU or greater and IN, KY, MI, NC, a, and a cap- electric OH, TN, VA, WV. and-trade utility And OTR States program. Does generating DC, DE, MD, NJ, not request facilities with NY, PA. remedy for OTR a rated output States because of 15 MW or of OTC NOX MOU. greater. ME................ Electric Sources within Establish utilities and 600 miles of compliance steam- Maine's ozone schedule and generating nonattainment emissions units with a areas. Includes limitation of heat input all or parts of 0.15 lb/mmBtu capacity of 250 NC, OH, VA, WV, for electric mmBtu/hr or and OTR States utilities and greater. CT, DE, DC, MD, the OTC NOX MOU MA, NJ, NY, NH, level of PA, RI, VT. control for steam generating units, in a multi-state cap- and-trade NOX market system. MA................ Electricity Sources in Establish generating region within 3 emissions plants. counties on limitation of either side of 0.15 lb/mmBtu the Ohio River or 1.5 lb/MWh in IN, KY, OH, and a WV. compliance schedule. [[Page 28255]] NH................ Fossil fuel- Sources in OTR Establish fired indirect States and OTAG compliance heat exchange Subregions 1 schedule and combustion through 7. emission units and Includes all or limitations no fossil fuel- parts of IL, less stringent fired electric IN, IA, KY, MI, than: generating MO, NC, OH, TN, (a) Phase III facilities VA, WV, WI. OTC NOX MOU which emit ten Also OTR States reductions; and/ tons of NOX or CT, DE, DC, MD, or more per day. MA, ME, NJ, NY, (b) 85% PA, RI, VT. reductions from projected 2007 baseline; and/ or (c) An emission rate of 0.15 lb/ mmBtu. NY................ Fossil fuel- Sources in OTAG Establish, at a fired boilers Subregions 2, minimum, or indirect 6, and 7 and emission heat exchangers portion of OTR limitations and with a maximum extending west a schedule of heat input rate and south of compliance of 250 mmBtu/hr NY. Includes consistent with or greater and all or parts of the OTC NOX electric IN, KY, MI, NC, MOU, and a cap- utility OH, TN, VA, WV. and-trade generating And OTR States program. Does facilities with DC, DE, MD, NJ, not request a rated output PA. remedy for OTR of 15 MW or States because greater. of OTC NOX MOU. PA................ Fossil fuel- AL, AR, GA, IL, Establish fired indirect IN, IA, KY, LA, emission heat exchange MI, MN, MS, MO, limitations and combustion NC, OH, SC, TN, a compliance units with a VA, WV, WI. schedule for a maximum rated cap-and-trade heat input program capacity of 250 requiring: mmBtu/hr or (a) Seasonal greater, and reductions of fossil fuel- the less fired electric stringent of generating 55% from 1990 facilities baseline rated at 15 MW levels, or 0.20 or greater. lb/mmBtu, beginning by May 1999; (b) If necessary, seasonal reductions of the less stringent of 75% from 1990 baseline levels, or 0.15 lb/mmBtu, beginning by May 2003; (c) Such additional reductions as necessary beginning in 2005. RI................ Electricity Sources in Establish generating region within 3 emissions plants. counties on limitation of either side of 0.15 lb/mmBtu Ohio River in or 1.5 lb/MWh IN, KY, OH, WV. and a compliance schedule. VT................ Fossil fuel- Sources located Establish fired electric within a emissions utility geographic area limitation of generating extending 1000 0.15 lb/mmBtu facilities with miles southwest or 1.5 lb/MWh a maximum gross from and a heat input rate Bennington, VT. compliance of 250 mmBtu/hr Includes all or schedule. Does or greater and parts of IL, not request potentially IN, KY, MI, NC, remedy for OTR other OH, TN, VA, WV. States because unidentified Also AL, GA, of OTC NOX MOU. major sources. IA, MO, SC, WI. Also OTR States CT, DE, DC, MD, MA, NJ, NY, PA. ------------------------------------------------------------------------ a The OTC NOX MOU is an agreement among the States in the Ozone Transport Region to reduce ozone season NOX emissions from large utility and industrial combustion sources through implementation of a phased-in regionwide cap-and-trade program. It is described in detail in the NPR. Section 126 allows States to petition EPA for a finding against sources and groups of sources that ``emit'' or ``would emit'' pollution in violation of the section 110(a)(2)(D) prohibition on emissions that significantly contribute to nonattainment problems in the petitioning State. Thus, a finding could potentially apply not only to existing sources within a particular source category, but also to sources that would be built in the future. In the NPR, EPA stated it believed the section 126 petitions are ambiguous as to whether the requested findings are intended to include new sources. For the reasons discussed in the NPR, EPA proposed to interpret all eight section 126 petitions to encompass both existing and new sources. Therefore, if any final findings were triggered for source categories in a particular geographic area, new sources in those source categories locating in that area would also be subject to the section 126 control remedy. The EPA requested that if any of the petitioning States disagreed with this interpretation of its petition, the State submit clarifying comments on this issue. New York and New Hampshire submitted comments that EPA had correctly interpreted their petitions to cover both existing and new sources. The State of Massachusetts commented that it was not seeking a finding with respect to new sources. Therefore, in today's rule, the EPA is concluding that all of the petitions, except the petition from Massachusetts, cover both existing and new sources. E. Litigation on Rulemaking Schedule As discussed in the NPR, on February 25, 1998, the eight petitioning States filed a complaint in the U.S. District Court for the Southern District of New York to compel EPA to take action on the States' section 126 petitions. State of Connecticut v. Browner, No. 98- 1376. The EPA and the eight States filed a proposed consent decree that would establish a schedule for EPA to act on the petitions. Pursuant to CAA section 113(g), the EPA solicited comments on the proposed consent decree, by notice dated March 5, 1998 (63 FR 10874). The comment period closed April 6, 1998. On August 21, 1998, after considering the comments received in the section 113(g) process, EPA requested the Court to enter a slightly modified version of the consent decree. The Court entered the slightly modified consent decree on October 26, 1998. The schedule in the consent decree requires EPA to take final action on at least the technical merits of the petitions by April 30, 1999. The schedule requires the full disposition of the petitions by that date or an alternative final action by that date that would defer the granting or denial of the petitions to certain later dates extending to as late as May 1, 2000. In formulating the consent decree, EPA developed the alternative approach to harmonize the section 126 and NOX SIP call actions. Specifically, paragraphs 5.b. and c. state that: b. Unless EPA takes the final action described in paragraph 6, as to each [[Page 28256]] individual petition, EPA's final action will be to-- (i) Grant the requested finding, in whole or part; and/or (ii) Deny the petition, in whole or part. c. Unless EPA denies a petition in whole, its final action will include promulgation of a remedy under CAA section 126(c) for sources to the extent that a requested finding is granted with respect to those sources. Then paragraph 6 states: 6. EPA shall be deemed to have complied with the requirements of paragraph 5(a) if it instead takes a final action by April 30, 1999, that-- a. makes an affirmative determination concerning the technical components of the ``contribute significantly to nonattainment'' or ``interfere with maintenance'' tests under CAA section 110(a)(2)(D)(i), 42 U.S.C. section 7410(a)(2)(D)(i); b. further provides that: (i) If EPA does not issue a proposed approval of the relevant Upwind State's SIP revision (submitted in response to the NOX SIP call) by November 30, 1999, then the finding will be deemed to be granted as of November 30, 1999, without any further action by EPA; (ii) If EPA issues a proposed approval of said SIP revision by November 30, 1999, but does not issue a final approval of said SIP revision by May 1, 2000, then the finding will be deemed to be granted as of May 1, 2000, without any further action by EPA; (iii) If EPA issues a final approval of said SIP revision by May 1, 2000, EPA must take any and all further actions, if necessary to complete its action under section 126, no later than May 1, 2000; and c. Promulgates a remedy under CAA section 126(c) for sources to the extent that an affirmative determination is made with respect to those sources. As discussed in the NPR, EPA believes that sources in an upwind State should not be considered to be emitting an air pollutant in violation of the section 110 prohibition, and hence EPA should not grant a petition naming such sources, if the State is adhering to the NOX SIP call rule's schedule for submission of an approvable SIP revision, and EPA is acting speedily to approve the SIP--or, failing that, if EPA has promulgated a SIP for the State. After all, if EPA's rule provides a particular path for the development of a plan calling on sources to reduce interstate pollution by May 1, 2003, and under that rule either the upwind State or EPA is moving forward to develop, take action on or promulgate a satisfactory plan meeting that rule and achieving attainment as expeditiously as practicable, it would be difficult to conclude that an affected source in the upwind State ``emits or would emit in violation'' of the prohibition that the plan is not yet required to contain.1 --------------------------------------------------------------------------- \1\ Moreover there does appear to be tension between section 110(a)(2)(D), which does not establish the timing as to when the SIP prohibition needs to be effective against sources (i.e., when sources need to implement controls to reduce emissions) and the timing in section 126, which requires implementation no later than 3 years following a section 126(b) determination. The EPA does not believe that Congress intended section 126 to be used to shorten timeframes for action that EPA has previously determined are approvable for purposes of eliminating significant contribution to nonattainment areas in other States. --------------------------------------------------------------------------- For these reasons, EPA is following the alternative described in paragraph 6 of the consent decree. Thus, EPA is structuring its final action to contain: (1) A series of ``technical determinations'' as to which sources in which States named in the petitions would emit in violation of the section 110 prohibition if the State or EPA were to fall off track in putting a timely and satisfactory plan in place; (2) determinations that the petitions will automatically be deemed granted or denied on the basis of the events set forth in paragraph 6; and (3) the remedial requirements that will apply to the sources receiving affirmative technical determinations if a petition naming those sources is ultimately deemed granted. The EPA received comments on the NPR that the section 126 petitions were inappropriately driving the timetable for submission of the SIPs required under the NOX SIP call; that is, that upwind States were not given adequate time to develop and submit their SIP revision, but that if they failed to do so on the mandated schedule, a section 126 finding would be deemed to be made. For the reasons discussed below, EPA does not believe that the link between the section 126 petitions and the NOX SIP call SIPs is inappropriate. Further, as stated in the final NOX SIP call, while EPA believes it is advantageous to coordinate the section 126 and NOX SIP call actions, EPA disagrees that this constrained EPA from being responsive to public comments and considering alternative compliance dates. F. Advance Notice of Proposed Rulemaking on Petitions In accordance with the schedule in the then proposed consent decree, on April 30, 1998, EPA published in the Federal Register (63 FR 24058) an advance notice of proposed rulemaking (ANPR) on the section 126 petitions. The ANPR provided EPA's preliminary identification of source categories named in the petitions that emit NOX in amounts that significantly contribute to nonattainment problems in the petitioning States, provided EPA's preliminary assessment of the types of recommended emissions limitations and compliance schedules, provided EPA's preliminary assessment of the remedy the Agency would propose for approvable petitions, discussed legal and policy issues raised under section 126, and outlined the rulemaking schedule for the petitions. The ANPR solicited comment on all of the issues and preliminary assessments. The EPA received a number of comments on the ANPR from industry, States, and environmental groups. These comments covered the full spectrum of issues discussed in the ANPR and were carefully considered in the development of the section 126 NPR. The EPA indicated in the ANPR that it would respond to the ANPR comments, if any response were appropriate, when EPA responded to comments on the section 126 NPR. The EPA established the informal comment period for the ANPR to solicit information that would be helpful in the deliberative process for the rulemaking proposal. The EPA appreciates the early, thoughtful input from the commenters. In the NPR, EPA noted that its proposed positions superseded the preliminary positions taken in the ANPR. The majority of commenters on the ANPR submitted new comments on the NPR to specifically address EPA's detailed proposal. The EPA has responded to all significant comments on the proposal either in this preamble or in the Response to Comments document that accompanies this rulemaking. G. Comment Periods and Availability of Key Information The EPA provided a 60-day comment period on the NPR and a 40-day comment period on the SNPR. As discussed below, in response to commenter's requests, EPA reopened the NPR comment period on two occasions, to take further comment on source-specific emissions inventory data and on the impacts of the proposed revocations of the 1- hour standard on the section 126 rulemaking. Some commenters requested that the NPR comment period be extended on all issues. The very limited amount of time allowed in the consent decree between the deadline for the proposed rule and the deadline for the final rule constrained EPA from providing longer comment periods for every issue. However, EPA received a number of comments after the close of the comment periods which EPA considered in developing the final rule. Commenters representing the interests of upwind sources and States stated that they had not been given a meaningful opportunity to comment on various aspects of today's rulemaking, either because important documents had not been made available to them, or [[Page 28257]] because, in the commenters' view, EPA has not been open-minded to the perspective of the upwind sources and States. For the reasons described in the Response to Comments document, EPA believes that the appropriate information was timely made available to the public, and that EPA has been open-minded to the views of, and has carefully reviewed the comments of, all commenters concerning today's rulemaking. The major issues raised in the comments are responded to throughout the preamble of this final rule. A comprehensive summary of all other significant comments, along with EPA's response, is provided in the Response to Comments document, that has been placed in the docket for this rulemaking (Docket No. A-97-43). 1. Emissions Inventory Corrections By action dated January 13, 1999 (64 FR 2416), EPA reopened the comment period on source-specific emission inventory data. This comment period was established in conjunction with the extended period for the public to submit emissions inventory revisions for the purpose of the NOX SIP call. The EPA received numerous requests to allow more time to submit revisions to the source-specific data used to establish each State's base inventory and budget in the NOX SIP call. By action dated December 24, 1998, (63 FR 71220), EPA extended the opportunity for submitting emission inventory corrections for the NOX SIP call until February 22, 1999. Because the section 126 action and the NOX SIP call rely on the same emissions inventory information, EPA extended the comment period for the section 126 action as well. The EPA committed to revise the emissions inventory to reflect the new data, as appropriate, by the end of April 1999. The EPA will use the revised inventory in identifying the individual sources subject to today's affirmative technical determinations and in assigning their NOX allowance allocations for purposes of the Federal NOX Budget Trading Program. This information will be provided in the July notice of final rulemaking. 2. Impacts of 1-Hour Standard Revocation By action dated March 2, 1999 (64 FR 10118), EPA reopened the NPR comment period to allow comment on how the proposed section 126 action may be affected by a separate proposed action by EPA (63 FR 69598, December 17, 1998) to revoke the 1-hour ozone standard for certain areas in States that had submitted section 126 petitions. The affected areas are Boston-Lawrence-Worcester, Massachusetts-New Hampshire; Portland, Maine; Portsmouth-Dover-Rochester, New Hampshire; and Providence, Rhode Island. The comment period was reopened in response to two requests. In that notice, EPA indicated its position that if EPA promulgates a final determination that the 1-hour standard no longer applies for those designated nonattainment areas, the contributions from sources in upwind States to those areas would no longer constitute a basis for EPA to approve the petitioning States' requested findings as to the 1-hour standard for those areas. The EPA is finalizing action on the revocation notice in the same timeframe as today's final action. In addition, EPA is in the process of proposing to revoke the 1-hour standard in another area in one of the petitioning States, Pittsburgh, Pennsylvania, because the area has achieved clean air based on 1996- 1998 monitoring data. In today's rulemaking, EPA confirms its position that the areas in the petitioning States for which EPA is revoking the 1-hour standard no longer provide a basis for EPA to make positive findings under section 126 for the 1-hour standard. 3. Timing of Petition for Review Commenters stated that if EPA takes action to approve the technical merits of a section 126 petition by April 30, 1999, but findings on the petitions are not deemed made until some later date, then the April 30 action should be deemed ``final action'' reviewable by a court of law regardless of the fact that EPA would not be making findings on the petitions until some later date. Section 307(b) of the CAA identifies which court has venue to hear a petition for review of final agency action and the timing by which any such petition must be filed. For the reasons described in section VI of this preamble, EPA is determining that final action regarding the section 126 petitions is nationally applicable and of nationwide scope or effect for purposes of section 307(b)(1). Therefore, venue lies with the U.S. Court of Appeals for the D.C. Circuit. With respect to timing, section 307(b)(1) generally provides that any petition for review must be filed within sixty days of publication of agency final action in the Federal Register. Whether a petition to review the decisions in this rule would be properly reviewable at this time by the Court of Appeals is a question to be addressed and decided by the court, not EPA. H. Summary of Major Changes Between Proposals and Final Rule This summary describes the major changes that have occurred since publication of the NPR and SNPR. Section 126 Control Remedy In the NPR, EPA proposed to implement as the section 126 remedy a new Federal NOX Budget Trading Program. That program would consist of a capped, market-based trading system applicable to all sources for which a final affirmative finding is ultimately granted. The Agency intended to finalize all aspects of the section 126 remedy by April 30, 1999. In today's notice, EPA finalizes the general parameters of the remedy--including the decision to implement a capped, market-based trading program, identification of the sources subject to the program, specification of the basis for the total tonnage cap, and specification of the compliance date. The details of the trading program, including unit-by-unit allocations, will be finalized in a separate action no later than July 15, 1999. As part of today's action, the EPA is also establishing interim final emissions limitations that will be imposed in the event a finding under section 126 is made and the Administrator does not promulgate the Federal NOX Budget Trading Program regulations before such finding. 1-Hour Standard Attainment In the section 126 NPR, EPA proposed which upwind States contain sources of emissions named in the petitions that contribute significantly to nonattainment problems in the petitioning States under the 1-hour ozone standard, and where petitions were based on it, the 8- hour ozone standard. After publication of the section 126 NPR on October 21, 1998, EPA preliminarily determined that proposed to determine that the 1-hour ozone standard no longer applied to certain nonattainment areas, including several areas in the petitioning States based on 1996-1998 air quality monitoring data. These areas, however, continue to monitor violations of the 8-hour standard. Because EPA believes, preliminarily, that these areas no longer have 1-hour nonattainment problems based on the 1996-1998 data, they can no longer provide a basis for EPA to make affirmative findings under section 126 that upwind sources are significantly contributing to nonattainment with respect to the 1-hour standard. Therefore, EPA is denying portions of [[Page 28258]] the 1-hour petitions related to these areas. The determination to delete these areas as 1-hour receptor areas has no impact on the determinations of which sources are significantly contributing to downwind nonattainment. Maine's 8-Hour Petition and North Carolina Sources In the section 126 NPR, the upwind States that were named by the petitioners and which were proposed to contain sources that make a significant contribution to 8-hour nonattainment problems in the petitioning States were based on the upwind-downwind linkages found to be significant in the NOX SIP call. The exception to this in today's rule is Maine's petition for relief from emissions sources in North Carolina. In its petition, Maine requested relief from large stationary sources within a 600-mile radius of the southwestern-most nonattainment area in Maine. This radius includes several counties in the extreme northeastern portion of North Carolina that do not contain sources of the type and size identified in Maine's petition. Thus, even though EPA found in the NOX SIP call that emissions in North Carolina contribute significantly to 8-hour nonattainment in Maine, EPA is denying Maine's petition relative to North Carolina because there are no section 126 sources located in the portion of North Carolina covered by Maine's petition. II. EPA's Analytical Approach The EPA described its analytical approach in the NPR, (63 FR 56299). The EPA received numerous comments on various aspects of its approach. After considering these comments, EPA has determined to maintain the principal elements of its approach. The major comments are summarized below. A. EPA's Interpretation of Section 126: Authorization of the Petitions This section lays out EPA's legal interpretation of sections 126 and 110(a)(2)(D), the key statutory provisions that authorize today's action. First, EPA describes how these provisions authorize EPA to address interstate transport problems and how they relate to sections 176A and 184, which are the other two main interstate transport provisions under the Act. Second, EPA explains its interpretation that the reference in section 126 to section 110(a)(2)(D)(ii) is a scrivener's error and the correct reference is to section 110(a)(2)(D)(i). Third, EPA discusses its interpretation of the phrase ``emits in violation of the prohibition'' of section 110 and explains how this interpretation provides direction for coordinating EPA's actions on the section 126 petitions and the NOX SIP call. 1. Relationship Among Sections 110(a)(2)(D), 126, and 176A/184 Subsection (a) of section 126 requires, among other things, that SIPs require major proposed new (or modified) stationary sources to notify nearby States for which the air pollution levels may be affected by the fact that such sources have been permitted to commence construction. Subsection (b) provides: Any State or political subdivision may petition the Administrator for a finding that any major source or group of stationary sources emits or would emit any air pollutant in violation of the prohibition of section 110(a)(2)(D)(ii) * * * or this section. Subsection (c) of section 126 states that-- [I]t shall be a violation of this section and the applicable implementation plan in such State [in which the source is located or intends to locate]-- (1) For any major proposed new (or modified) source with respect to which a finding has been made under subsection (b) of this section to be constructed or to operate in violation of the prohibition of section 110(a)(2)(D)(ii) * * * or this section, or (2) for any major existing source to operate more than three months after such finding has been made with respect to it. However, subsection (c) further provides that EPA may permit the continued operation of such major existing sources beyond the 3-month period, if such sources comply with EPA-promulgated emissions limits within 3 years of the date of the finding. Section 110(a)(2)(D) provides the requirement that a SIP contain adequate provisions-- (i) Prohibiting, consistent with the provisions of this title, any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will-- (I) Contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect to [any] national * * * ambient air quality standard, or (II) Interfere with measures required to be included in the applicable implementation plan for any other State under part C to prevent significant deterioration of air quality or to protect visibility. (ii) Insuring compliance with the applicable requirements of sections 126 and 115 (relating to interstate and international pollution abatement) * * * In the 1990 Clean Air Act Amendments, Congress added section 184, which delineates a multistate ozone transport region (OTR) in the Northeast, requires specific additional controls for all areas (not only nonattainment areas) in that region, and establishes the Ozone Transport Commission (OTC) for the purpose of recommending to EPA regionwide controls affecting all areas in that region. At the same time, Congress added section 176A, which authorizes the formation of transport regions for other pollutants and in other parts of the country. In the NPR, EPA proposed the view that, with respect to existing stationary sources, sections 126(b)-(c) and 110(a)(2)(D), read together, authorize a downwind State to petition EPA for a finding that major stationary sources or groups of sources upwind of the State emit in violation of the prohibition of section 110(a)(2)(D)(i) because, among other reasons, their emissions contribute significantly to nonattainment, or interfere with maintenance, of a NAAQS in the State. If EPA grants the requested finding, the existing sources must shut down in 3 months unless EPA directly regulates the sources by establishing emissions limitations and a compliance period extending beyond 3 months but no later than 3 years from the finding. In accordance with section 302(j) of the CAA, the term major stationary source means ``any stationary facility or source which directly emits, or has the potential to emit, one hundred tons per year or more of any air pollutant. . . .'' For the purpose of this rulemaking the relevant pollutant is NOX emissions. The EPA received numerous comments arguing that section 126(b) should not be read to authorize the petitions, which ask EPA to implement controls on upwind sources on grounds that, under section 110(a)(2)(D), they contribute significantly to nonattainment problems downwind. According to these commenters, Congress, in the 1990 Clean Air Act Amendments, dealt with interstate ozone transport by establishing sections 176A and 184 as the key provisions, and revising section 110(a)(2)(D) to assure that it did not apply outside the context of section 184. For the reasons discussed below, EPA believes that following the 1990 Clean Air Act Amendments, section 126(b) and 110(a)(2)(D) retain independent effect and authorize the petitions. Please note that the discussion below assumes that the references in section 126 to section 110(a)(2)(D)(ii) are a scrivener's error and instead should be read to refer to section 110(a)(2)(D)(i). See section II.A.2. below for further explanation of the error. Background: The CAA, as amended in 1990, has four key provisions that relate to the issue of interstate transport of air pollution and air pollution precursors: [[Page 28259]] sections 110(a)(2)(D), 126, 176A, and 184. In attempting to resolve disputes over specific interpretations of these provisions, it makes sense to consider these provisions together as the set of statutory requirements that carry out Congress' desired approach to the problem of interstate transport. The provisions should be read in a manner that will best bring meaning to each provision and allow it to fit rationally into the overall statutory context. A stated purpose of the CAA is ``to protect and enhance the quality of the Nation's air resources so as to promote the public health and welfare and the productive capacity of its population.'' CAA, section 101(b)(1). To understand how the interstate transport provisions interact with one another and fit into the CAA's overall scheme to achieve its clean air purposes, it is useful to step back and consider how these provisions came into being in their current forms. Relevant information includes earlier draft and adopted versions of the provisions themselves, statements by Congress regarding the provisions, and judicial rulings on EPA interpretations of the provisions. It is also useful to recognize the larger factual context in which Congress was operating while developing these provisions, both in terms of the current understandings of the environmental problems that Congress was attempting to remedy and of the political context for Congressional action. The relevant legislative history is largely that of the 1970, 1977 and 1990 CAA Amendments, although the pre-1970 provisions are useful to indicate the approach that Congress rejected in adopting the first version of the current section 110(a)(2)(D). As with most environmental policy issues, our understanding of the problem of interstate transport of pollutants and pollution precursors, our ability to measure it, and the legal means employed to address it have become increasingly sophisticated over time. Prior to the adoption of the 1970 CAA, conflicts between states over air pollution most frequently concerned the relatively local air quality effects inflicted on inhabitants of one state by a facility located on the other side of the state border. The 1970 CAA contained an interstate pollution provision that could potentially have been applied to long distance transport disputes, but those did not appear to be Congress' main concern. See S. Comm. on Public Works, National Air Quality Standards Act of 1970, S. Rep. No. 91-1196, 91st Cong., 2d Sess., 13 (1970) reprinted in 1 Committee on Public Works, 93d Cong., 2d Sess., A Legislative History of the Clean Air Act Amendments of 1970, 413 (1974) (hereinafter 1970 Legislative History). By the time Congress passed the 1977 Amendments, however, both the federal and state governments and the general public had become increasingly aware that a significant portion of certain air pollution problems in some states likely derived from activities in other states, including more distant states. In fact, the provisions of the 1970 CAA, as implemented, had exacerbated long-range interstate transport problems by implicitly encouraging dispersion through tall smoke stacks as a remedy for local air quality problems. By 1990, our increasing awareness of the long-range transport problem was bolstered by more sophisticated measurement and modeling techniques. As understanding of the problem became more sophisticated over time, so did Congress' approach to ameliorating the problem. From 1970 to 1990, Congress steadily increased the number and power of the tools available to both EPA and the states to address interstate pollution transport. This expansion of authority under the CAA was driven by an ongoing situation in which increased recognition of the problem was accompanied by no actual reduction in transport over a 20-year period. In fact, the set of actions comprised by the NOx SIP call and the proposed FIP is EPA's first significant attempt to require reduction of interstate transport of pollutants. While certain downwind states affected by the problem have made serious attempts to impel reductions by upwind states, none of these attempts has been effective to date. This factual context, both in terms of the extent of the effects of interstate pollutant transport on downwind states' citizens' health, environments, and economies, and in terms of the continued failure of the federal or state governments to have any direct effect on the problem, is critical to understanding Congress' intent in adopting the 1990 CAA provisions on interstate transport. In addressing interstate pollution transport, there are several central issues with which Congress has had to grapple. In its simplest form, interstate transport raises questions of how to provide recourse for a state experiencing health or welfare impacts from sources beyond the state's control. To the extent that we have decided that there are certain minimum national standards for air pollutants that must be met to protect health and welfare, this first issue is a matter of creating a mechanism for the downwind state to impel emission reductions in the upwind state. The issue becomes more complicated in the more common situation where both the upwind and downwind states contribute pollutants causing the exceedance of the national standards. This situation adds the need to allocate responsibility (and therefore cost) for making the reductions necessary to meet the standards, which involves both economic and equity aspects. Where the air in the downwind area is cleaner than the standards require, it also raises the issue of the extent to which the downwind state can ``reserve'' its cleaner air either for environmental purposes or to provide a margin for future economic growth. All of these questions are further complicated where there are multiple upwind and downwind states contributing to and experiencing an air pollution problem. With each of these situations, there is also the continuing question of the extent to which these issues should be resolved by the states involved and the extent to which solutions may or must be imposed by the federal government. Pre-1970 Provisions: The Clean Air Act of 1963 and the Air Quality Act of 1967 both included provisions to address interstate air pollution, but neither had much effect on the problem. See generally, Clean Air Act, Public Law 88-206, 77 Stat. 392, (1963); Air Quality Act of 1967, Public Law 90-148, 81 Stat. 485 (1967). These early statutes generally provided for far less of a federal role in pollution control than the 1970 CAA. On interstate pollution, they took the approach that it was an issue between states, and hence that states needed to cooperate to develop a solution. See Vickie L. Patton, The New Air Quality Standards, Regional Haze, and Interstate Air Pollution Transport, 28 Envtl. L. Rep. 10155, 10157-10160 (1998); Geoffrey L. Wilcox, New England and the Challenge of Interstate Ozone Pollution Under the Clean Air Act of 1990, 24 Boston College Envtl. Affairs L. Rev. 1, 13-14 (1996). The federal government would facilitate such cooperation, but would not force it and would rarely step in to impose a solution in the absence of state resolution. Over time, as the approach of state cooperation has consistently failed to produce reductions from upwind states, Congress has given more authority to the federal government to break the deadlock between upwind and downwind states, although a strong political and policy interest in letting states solve state problems has produced continued attempts at driving consensus solutions. The CAA of 1963 provided that either a downwind state or Department of Health, Education, and Welfare (HEW) could convene an intergovernmental [[Page 28260]] conference on a particular interstate pollution issue. Section 5(c)(1)(A), (c)(1)(C), 77 Stat. at 396. The conference would make findings, and HEW could recommend on that basis that the upwind state take certain actions to reduce emissions. Section 5(d), 77 Stat. at 397. If the upwind state failed to act, HEW could hold a public hearing to decide whether to recommend abatement measures again. Section5(e), 77 Stat. at 397. Finally, if the upwind state failed again to implement the recommended measures, HEW could refer the issue to the U.S. Attorney General who could bring an enforcement action. Section 5(f), 77 Stat. at 397-398. While they produced progress on a few interstate pollution problems, the provisions were generally criticized as ineffectual, particularly due to the long burdensome process required before the upwind state could be forced to act. Patton, supra at 10157. The Air Quality Act of 1967 added a regional air quality planning approach, which was appropriate for addressing interstate pollution issues, but still lacked a mechanism to force action. See Air Quality Act of 1967, Public Law 90-148, 81 Stat. 485 (1967). 1970 Clean Air Act: In the face of a widespread lack of progress addressing the nation's air pollution problems, Congress significantly changed its approach in adopting the 1970 CAA. Congress moved from a decentralized approach dependent on state action to a cooperative federalism approach, with uniform minimum standards and federal authority to step in where the states failed to act. In the 1970 CAA, in then section 110(a)(2)(E), Congress first adopted language embodying the concept that sources located in one state should not be allowed to interfere with attainment or maintenance of a NAAQS in another state. See Clean Air Act Amendments of 1970, Public Law 91-604, 84 Stat. 1676. EPA was to approve a state implementation plan if, among other requirements, ``it contains adequate provisions for intergovernmental cooperation, including measures necessary to insure that emissions of air pollutants from sources located in any air quality control region will not interfere with the attainment or maintenance of such primary or secondary standard in any portion of such region outside of such State or in any other air quality control region.'' Public Law 91-604 section 110(a)(2)(E). While the final statutory language and the Senate Committee Report (discussing almost identical language) emphasized intergovernmental cooperation as the mechanism, the intent was that states develop air quality programs that ``at the minimum must prevent facilities in one State from contributing to the violation of ambient air quality standards in an adjacent State * * *.'' S. Rept. No. 91- 1196 at 13, reprinted in 1970 Legislative History at 413. Although the statutory language was sufficiently broad to encompass the long-range transport issues that have emerged as the more difficult problem, it appears that Congress initially conceptualized the problem as more of a short-range transport issue, with pollution from a facility on one side of a state border affecting a community on the other side.2 --------------------------------------------------------------------------- \2\ See, e.g., H.R. 17255, which would have amended section 108(c) of the CAA to provide that state plans should contain ``adequate provisions for intergovernmental cooperation, including, in the case of any area covering part or all of more than one State and designated as an air quality control region . . . appropriate provisions for dealing with interstate air pollution problems, . . .'' (limiting the interstate pollution provisions to states that are part of a single air quality control region). H.R. 17255, 91st Cong., 2d Sess. Sec. 4(a)(1) (1970), reprinted in 2 1970 Legislative History at 914. Note also that most of the abatement conferences held at that time, which addressed the more contentious interstate air pollution issues, concerned conflicts between adjacent states. See Air Pollution--1970: Hearings Before the Subcomm. on Air and Water Pollution of the Senate Comm. on Public Works, 91st Cong., 2d Sess. (March 17, 1990), reprinted in 2 1970 Legislative History at 1098-1103. --------------------------------------------------------------------------- The EPA implemented sections 110(a)(2)(E) of the 1970 CAA through regulations focusing on information exchange rather than requirements to control emissions. Patton, supra, at 10162; Wilcox, supra, at 15-16. The regulations required only that the SIP assure that the state will transmit information to other states regarding factors, such as construction of new plants, that may significantly affect air quality in the same or adjoining air quality regions. 40 CFR 51.21(c) (1977) (superseded). In a challenge by NRDC, the Eighth Circuit upheld the regulations as a ``legitimate means to attain ``intergovernmental cooperation'' as contemplated by Congress in the statute.'' Wilcox, supra, at 15, quoting NRDC v. EPA, 483 F.2d 690, 692 (8th Cir. 1973). The result of EPA's approach was that the states made virtually no progress on control of interstate pollution under the 1970 Act. See Patton, supra, at 10161, 19; Wilcox, supra, at 18; S. Comm. on Envt. and Public Works, Clean Air Act Amendments of 1977, S. Rept. 95-127, 95th Cong., 1st, Sess. 41 (1977), reprinted in S. Comm. on Envt. and Public Works, 95th Cong. 2d. Sess., 3 A Legislative History of the Clean Air Act Amendments of 1977, 1415 (1978) (hereinafter 1977 Legislative History) (noting that the 1970 Act failed to specify any abatement procedure if a source in one state emitted air pollutants that adversely affected another state, and ``[a]s a result, no interstate enforcement actions have taken place, resulting in serious inequities among several States, where one State may have more stringent implementation plan requirements than another State.''). 1977 Clean Air Act: In developing the 1977 Amendments to the CAA, both Houses of Congress focused on interstate pollution as a major area of concern, and the 1977 Amendments made significant changes to the statute intended to address the problem. See S. Rept. 95-127 at 41, reprinted in 3 1977 Legislative History at 1415. The Report of the House Committee on Interstate and Foreign Commerce provided an extensive discussion of the interstate pollution problem, a portion of which ran as follows: In the committee's view, however, the existing law (as interpreted by the Administrator) is an inadequate answer to the problem of interstate air pollution. This is so for five basic reasons. First, an information exchange without adequate procedures to act on that information is simply insufficient. Second, an effective interstate air pollution control program must include not only prevention of interstate air pollution from new sources but also abatement of pollution from existing sources. Third, an effective program must also be designed to prevent significant deterioration * * * of air quality and to protect visibility under section 116 of the bill from interstate air pollution. Fourth, an effective program must not rely on prevention or abatement action by the State in which the source of the pollution is located, but rather by the State * * * which receives the pollution and the harm, and thus which has the incentive and need to act. Fifth, an effective program must include a Federal mechanism for resolving disputes which cannot be decided through cooperation and consultation between the States or persons involved * * *. The problem of interstate air pollution remains a serious one that requires a better solution * * *. H. Comm. on Interstate and Foreign Commerce, 95th Cong., 1st Sess., Clean Air Act Amendments of 1977, H. Rept. 95-294, 330 (1977) reprinted in 4 1977 Legislative History at 2797. The Senate Committee on the Environment and Public Works also viewed the 1970 provisions as inadequate, particularly in their failure to ``specify any abatement procedure'' if a source in one state emitted air pollutants that ``adversely affected the air quality control efforts of another State.'' S. Rept. 95-127 at 41 reprinted in 3 1977 Legislative History at 1415. The Committee noted that ``[a]s a result, [[Page 28261]] no interstate enforcement actions have taken place, resulting in serious inequities among several States, where one State may have more stringent implementation plan requirements than another State.'' Id. This put plants in the states with more stringent control measures ``at a distinct economic and competitive disadvantage.'' Id. at 42, 1416. The revisions were ``intended to equalize the positions of the States with respect to interstate pollution by making a source at least as responsible for polluting another State as it would be for polluting its own ``State.'' Id. To address the interstate pollution problem, the 1977 Amendments modified section 110(a)(2)(E) and added a new section 126. See Clean Air Act Amendments of 1977, Public Law 95-95, 91 Stat. 685. The House Committee Report discussed how these provisions together incorporated ``the five elements for an effective program for control of interstate pollution.'' H. Rept. 95-294 at 330, reprinted in 4 1977 Legislative History at 2797. The most critical strengthening elements were a direct requirement that SIPs prohibit emissions in amounts that would prevent attainment or maintenance by any other state of a NAAQS, and a mechanism for downwind states to petition EPA to bar emissions from any major source in violation of that prohibition. The revised section 110(a)(2)(E) required SIPs to contain: Adequate provisions (i) prohibiting any stationary source within the State from emitting any air pollutant in amounts which will (I) prevent attainment or maintenance by any other State of any such national primary or secondary ambient air quality standard, or (II) interfere with measures required to be included in the applicable implementation plan for any other State under part C to prevent significant deterioration of air quality or to protect visibility, and (ii) insuring compliance with the requirements of section 126, relating to interstate pollution abatement. Public Law 95-95. While overall this made the SIP requirements for interstate pollution more stringent, the provision was limited to emissions from stationary sources, and Congress later removed this limitation in the 1990 Amendments. The new section 126 included both notification requirements and a petition process. First, each SIP had to require notice to all nearby States in which the air pollution levels might be affected of each major existing or proposed new source that ``may significantly contribute to levels of air pollution in excess of the national ambient air quality standards in any air quality control region outside the State.'' Public Law 95-95. Second, section 126 provided that a state could petition EPA for a finding that any new or existing ``major source emits or would emit any air pollutant in violation of the prohibition of section 110(a)(2)(E).'' Public Law 95-95. EPA had to act on the petition within 60 days, and if EPA made the finding, it would be a violation of the SIP for the source either to be constructed or operate in violation of section 110(a)(2)(E) or for the source to operate for more than three months after the finding. The EPA could allow the source to continue to operate beyond that period if it complied with ``such emission limitations and compliance schedules'' set by EPA ``to bring about compliance with * * * section 110(a)(2)(E) as expeditiously as practicable,'' but the source would have to comply by three years from the date of the finding, at the latest. Public Law 95-95. Congress made clear that it intended section 126 to provide an additional means of attacking interstate pollution that would supplement, not replace, the SIP requirement under section 110(a)(2)(e). This petition process is intended to expedite, not delay, resolution of interstate pollution conflicts. Thus, it should not be viewed as an administrative remedy which must be exhausted prior to bringing suit under section 304 of the act. Rather, the committee intends to create a second and entirely alternative method and basis for preventing and abating interstate pollution. The existing provision prohibiting any stationary source from causing or contributing to air pollution which interferes with timely attainment or maintenance or [sic] a national ambient air standard (or a prevention of significant deteriorating [sic] or visibility protection plan) in another State is retained. A new provision prohibiting any source from emitting any pollutant after the Administrator has made the requisite finding and granted the petition is an independent basis for controlling interstate air pollution. H. Rep. 95-294 at 331, reprinted in 4 1977 Legislative History at 2798. A commentator summarizes the significance of and inter-relationship between these two provisions in the following manner: New section 126 had several remarkable features. Importantly, it enabled downwind states to initiate action against interstate pollution. While section 126 required upwind states to identify sources potentially contributing to interstate pollution thereby informing potential petitions, the petitions themselves were not dependent on the cooperation of the upwind state. States suffering from interstate pollution could independently obtain information and petition EPA for abatement action. Section 126 also provided a powerful federal remedial tool. It authorized direct, expeditious federal abatement of pollution. Additionally, it allowed objection to and corresponding remediation of transported pollution at any time, not just when EPA was reviewing an upwind state plan for compliance with the transport prohibition. The petition process together with the SIP prohibition on transport provided reinforcing checks on interstate transport. The section 110 provisions restricted the source state from adopting, and prohibited EPA from approving, state plans allowing interstate air pollution. Section 126 provided a backstop in the event prohibited pollution nevertheless occurred. It created a formal process for downwind states to enforce the section 110 prohibition by bringing interstate pollution concerns to EPA's attention and thereby enabling injured states to safeguard their interests. Patton, supra, at 10165-10166. Despite Congress' provision of significantly improved tools to address interstate pollution, in implementing these 1977 CAA provisions EPA did not require reduction of interstate pollution. While EPA has received a number of petitions under section 126, it has granted none of them prior to this action. Nor had the Agency found a SIP inadequate on the basis of interstate transport, until the OTC LEV SIP call. See 60 FR 4712 (January 24, 1995). See Patton, supra, 10166-10172; Wilcox, supra, at 21-27 for detailed discussion of EPA's rejection of downwind states' efforts to obtain relief under these provisions. Clean Air Act Amendments of 1990: Congress adopted the CAA Amendments of 1990 in the context of our continued failure to make significant progress on several air pollution fronts, including tropospheric ozone and acid rain, both of which are caused at least in part by interstate transport of pollutants. See Lieberman, S. Debate on H. Conf. Rep. 101-952, 101st Cong., 2d Sess., 10/27/90, reprinted in S. Comm. on Envt. and Public Works, I A Legislative History of the Clean Air Act Amendments of 1990, 103d Cong., 1st Sess., 1055 (1993) (hereinafter 1990 Legislative History) (``In the years since the Clean Air Act was amended--back in 1977--the air has become dirtier and more dangerous. Our uphill climb against the ravages of pollution has turned into a downhill fall, and only now are we realizing the real impact of our failure to act.''). By 1990, there was also a greater awareness that problems such as ozone pollution of the eastern U.S. were unlikely ever to be successfully addressed without controlling interstate pollution transport. As stated in the Senate Committee Report, ``[a]reas in some States may be unable to attain the ozone [[Page 28262]] standard despite implementation of stringent emissions control because of pollution transported into such areas from other States * * *. The transport problem in the northeast, and perhaps other regions as well, is serious enough that additional efforts must be made on an interstate basis to control emissions, including emissions from attainment areas.'' S. Comm. on Env't and Public Works, Clean Air Act Amendments of 1989, S. Rep. 101-228, 101st Cong., 1st Sess., 48 (1989) reprinted in V 1990 Legislative History at 8388. See also Lautenberg, S. Debate on H. Conf. Rep. 101-952, 101st Cong., 2d Sess., 10/26/90, reprinted in I 1990 Legislative History at 1106 (``In New Jersey, the Department of Environmental Protection says that on some days even if we shut down the entire State, we would be in violation of some health standards because of pollution coming over from other states.''); S. Rep. 101- 228, 101st Cong., 1st Sess. at 49 (1989), reprinted in V 1990 Legislative History at 8389 (``The model suggests that even if all emissions sources were eliminated within the tri-state area [New York, New Jersey and Connecticut], violations of the ozone standard would still occur. This means substantial reductions in emissions from areas upwind from the New York metropolitan area must be achieved if this area is to attain the air quality standards.''). The CAA Amendments of 1990 are widely viewed as one of the most detailed, complex, and prescriptive pieces of environmental legislation yet adopted. See Wilcox, supra, at 27. In light of EPA's lack of progress on several major air pollution problems under the 1977 provisions, including interstate pollution, Congress responded by strengthening existing federal tools and adding new ones that could be used to achieve emissions reductions, and by establishing numerous new mandates and deadlines to force action by states and EPA. See, e.g., sections 169B, 172, 174, 175A, 176, 176A, 179, 181, 182, 183, 184, 185, 186, 187, 188, 191, 192, and 401-416. See also, Lieberman, Senate Debate on S. 1630, 1/31/90, reprinted in IV 1990 Legislative History at 5077 (``Indeed, it is in part the lack of support of EPA which in the past has prevented the effort to institute regional controls from being successful.''). The provisions that were either new or strengthened included several targeting interstate pollution--the acid rain provisions, the regional haze provisions, the eastern ozone transport commission provisions, and general provisions for interstate transport. Congress strengthened the existing interstate pollution transport provisions in sections 110(a)(2)(D) (the successor to section 110(a)(2)(E)) and 126, and added two new interstate pollution provisions in sections 176A and 184. See H. Debate, 5/21/90, Clean Air Facts, reprinted in II 1990 Legislative History at 2558 (``Stronger interstate transport provisions.--The Swift/Eckart amendment includes stronger provisions for emission controls in interstate ozone transport regions, as sought by many Northeast and Mid-Atlantic states.''). All of the descriptions of the amendments in the legislative history refer to the changes made to strengthen and supplement the provisions. See discussion below. Congress made several changes to sections 110(a)(2)(E) and 126 to overcome EPA's limiting interpretations under the 1977 language, making them easier to apply and more effective in controlling interstate pollution. The Chafee-Baucus Statement of Senate Managers states that the bill ``amends section 126 and section 302(h) of the Clean Air Act to strengthen to [sic] prohibitions on emissions that result in interstate pollution.'' Chafee-Baucus Statement of Senate Managers reprinted in I 1990 Legislative History at 886. In describing the changes to section 110, the Senate Committee Report states that ``[p]rovisions in existing law requiring SIPs to take into account the effect of emissions on other States are strengthened.'' S. Comm. on Envt. and Public Works, Clean Air Act Amendments of 1989, S. Rept. 101- 228, 101st Cong., 1st Sess. 19 (1989), reprinted in V 1990 Legislative History at 8359. The Senate Committee Report further states ``[s]ection 110(a)(2)(E) is replaced by new section 110(c)(4), which, together with changes made to section 126 * * * , improve the effectiveness of the Act as a means of dealing with interstate air pollution.'' 3 Id. at 21, 8361. --------------------------------------------------------------------------- \3\ Section 110(c)(4) was largely identical to the final version of section 110(a)(2)(D), except that it contained one additional provision and did not contain the clause ``consistent with the provisions of this title.'' See S. 1630, 101st Cong., 2d Sess. Sec. 101(c) (1990), reprinted in III 1990 Legislative History at 4140-4141. --------------------------------------------------------------------------- One significant change to section 110(a)(2)(E), which became section 110(a)(2)(D), was that Congress extended the prohibition beyond stationary sources to cover other emissions activities, thereby allowing downwind states to obtain relief from an upwind state's pollution emanating from any source. The 1977 version of section 110 required the SIP to contain adequate provisions ``prohibiting any stationary source within the State * * *,'' (emphasis added) which was replaced with ``prohibiting, consistent with the provisions of this title, any source or other type of emissions activity within the State * * *'' (emphasis added). Congress also changed the language of the criteria for showing that the downwind state is harmed by pollution transport. Rather than barring emissions of air pollutants ``in amounts which will (I) prevent attainment or maintenance by any other State'' (emphasis added), Congress modified section 110(a)(2)(D) to bar emissions of air pollutants ``in amounts which will-- (I) contribute significantly to nonattainment in, or interfere with maintenance by, any other State'' (emphasis added). Finally, Congress expanded the prohibition to require SIPs to insure compliance with international pollution abatement requirements under section 115, as well as interstate pollution abatement requirements under section 126. In describing the amendments to section 110(a)(2)(E), the Senate Committee Report stated: Where prohibitions in existing section 110(a)(2)(E) apply only to emissions from a single source, the amendment includes ``any other type of emissions activity,'' which makes the provision effective in prohibiting emissions from, for example, multiple sources, mobile sources, and area sources. For interstate pollution to violate current law, it must ``prevent attainment.'' Since it may be impossible to say that any single source or group of sources is the one which actually prevents attainment, the bill changes ``prevent attainment or maintenance'' to ``contribute significantly to nonattainment or interfere with maintenance by,'' thus clarifying when a violation occurs. Id. at 21, 8361. The only other change discussed in the Report was an additional strengthening provision that was not included in the adopted amendments. Congress also made it easier for downwind states to use section 126 by allowing downwind states to petition based on pollution derived from ``any major source or a group of stationary sources'' (emphasis added), not just from a major source, as under the previous version. As there are usually multiple sources in the upwind state contributing to transported pollution, it is far more difficult to prove that any one particular source, rather than the entire set of contributing upwind sources, prevents attainment or maintenance (or contributes significantly to nonattainment or interferes with maintenance) in the downwind state. In describing the amendment to section 126 contained in H.R. 3030, which was identical to the adopted language, the House Committee [[Page 28263]] Report mentions only the strengthening effect of the changes. ``Section 126 of the Clean Air Act, concerning interstate air pollution, is amended to provide that when evaluating the impact of one State's emissions on another State under this section, it is not necessary to focus only on the impacts of a single major source. The evaluation of whether pollution from one State is having a greater than permissible impact on another State is to extend as well to a group of stationary sources.'' H. Comm. on Energy and Commerce, Clean Air Act Amendments of 1990, H. Rept. 101-490, 101st Cong., 2d Sess. 274 (1990), reprinted in II 1990 Legislative History at 3298.4 --------------------------------------------------------------------------- \4\ Note that this is the sum total description of the section 126 amendment in the House Committee Report. This version of the House bill also contained in the 176A and 184 provisions, which the House Committee Report did not describe at all. See H. Rep. 101-490, 101st Cong., 2d Sess. at 274, reprinted in II 1990 Legislative History at 3298. --------------------------------------------------------------------------- Congress also strengthened section 126 by adding ``this section'' in several places in section 126(b) and (c). This addition explicitly allowed a finding that a source would emit or is emitting in violation of section 126, in addition to a finding that the source would emit or is emitting in violation of the prohibition of section 110(a)(2)(D). The amendments also made continued operation after a section 126 finding a violation of section 126 itself, in addition to being a violation of the applicable SIP. In addition, Congress adopted changes to the definitions of ``air pollutant'' and ``welfare'' that made the interstate transport provisions clearly applicable to emissions of precursors to air pollution, not just emissions of the NAAQS pollutants. This overrode EPA's previous limiting interpretation that when reviewing a SIP revision, EPA could only consider the impacts on interstate pollution of the particular pollutant controlled under the SIP, not any other pollution impacts that result from transformation of the pollutant. See, e.g., Connecticut v. U.S. EPA, 696 F.2d 147, 162 (2d Cir. 1982); Connecticut Fund for the Env't v. U.S. EPA, 696 F.2d 169, 177 (2d Cir. 1982); Patton, supra, at 10166. Congress also adopted provisions to establish interstate transport commissions, giving states and EPA a new tool to use to tackle the intractable interstate pollution problem. Section 176A provides general provisions for the creation and functioning of interstate transport regions and interstate transport commissions, while in section 184 Congress directly established the Northeast Ozone Transport Region. The transport commission approach is based on a recognition that regional problems require regional, rather than state-by-state, solutions, and a good way to achieve regional solutions may be for the affected states to develop them and the federal government to require their implementation. This maximizes information for decision-making, generates political support for the outcome, and increases the likelihood that states will implement identified solutions. Under section 176A(a), EPA may establish by rule a transport region for a pollutant whenever the interstate transport of air pollutants from one or more states contributes significantly to a violation of a NAAQS in one or more other states. The transport region would include both the contributing and affected states. EPA may establish the transport region on its own, or may act upon a petition from a Governor of any state. Section 176A(b) requires establishment of a transport commission for each transport region. The commission is to be comprised of a representative of the Governor and an air pollution control official from each state in the transport region, an EPA Headquarters representative, and a representative of each affected EPA Region. The transport commission is to assess interstate pollution transport throughout the region, assess strategies for mitigating the transport, and recommend to EPA measures necessary for SIPs to meet the requirements of section 110(a)(2)(D). Under section 176A(c), the transport commission may request EPA to find under section 110(k)(5) that the SIPs for one or more of the states in the region are inadequate to meet the requirements of section 110(a)(2)(D). The EPA must act to approve, disapprove or partially approve and partially disapprove the recommendations within eighteen months of receipt. Section 184 contains additional provisions applicable specifically to ozone transport regions and establishes the northeastern ozone transport region by operation of law. Section 184(b) requires each state in an ozone transport region to adopt SIP revisions containing specified control measures related to motor vehicle inspection and maintenance programs, reasonably available control technology for control of VOCs, and vehicle refueling controls. Section 184(c) lays out a process for an ozone transport commission to develop and EPA to act on recommendations for additional control measures necessary to bring any area in the region into attainment. EPA must approve, disapprove, or partially approve and partially disapprove the recommendations within nine months of their receipt. Upon full or partial approval of the recommendations, EPA must issue a SIP call under section 110(k)(5) requiring the relevant states to revise their SIPs to include the recommended measures to meet the requirements of section 110(a)(2)(D). If EPA disapproves the recommendations, EPA must explain why the disapproved measures are not necessary to bring any area in the region into attainment and must recommend equal or more effective actions that the commission could take to conform the recommendations to the section 184 requirements. Section 184(d) requires EPA to promulgate criteria requiring that the best available air quality monitoring and modeling techniques be used to determine the contribution of sources in one area to concentrations of ozone in a nonattainment area. Comments: A number of commenters argue that Congress modified section 126 and section 110(a)(2)(D) in the 1990 Amendments to eliminate EPA's authority to take action against upwind sources, except upon a recommendation from a transport commission established under section 176A or section 184. They argue that the adoption of sections 176A and 184, combined with the addition of the language ``consistent with the provisions of this title'' in section 110(a)(2)(D) and the amended cite to section 110(a)(2)(D)(ii) in section 126, eliminates EPA's authority to act under section 126(b) and (c), except with respect to failures to notify under section 126(a). One commenter also cites section 110(k)(5) to support the argument that EPA may not act to address interstate transport problems except upon the recommendation of an interstate transport commission established under section 176A or section 184. Response: Congress viewed the creation of interstate transport commissions as a valuable new approach to resolving interstate pollution problems that would encourage the affected states to help design a solution. As stated by Senator Lieberman, ``[t]he creation of a regional air quality commission is an important and creative part of the bill. It recognizes that it is impossible to put a cleanup bubble over an individual State. It puts some responsibility on the States to be good neighbors.'' S. Debate on H. Conf. Rep. 101-952, 10/27/90, reprinted in I 1990 Legislative History at 1053. Commenters argue that these new interstate transport commission provisions are the exclusive means for [[Page 28264]] EPA to address interstate pollution transport. However, nothing in the structure or language of the interstate pollution provisions themselves, their discussion in the legislative history, or the historical development of the statutory authorities to address interstate pollution through successive versions of the CAA, supports the assertion that the new provisions were intended to replace, rather than supplement, EPA's existing authority to address interstate pollution problems under section 110(a)(2)(D) and section 126. First, a straightforward interpretation of the CAA language and structure leads to the conclusion that there are four fully effective provisions providing multiple tools for EPA and states to use to address interstate pollution problems. It is a canon of statutory construction that statutes should be interpreted, if possible, to give full effect to all of the statutory language. See Alabama Power Co. v. EPA, 40 F.3d 450, 455 (D.C. Cir. 1994) (a statute ``is to be interpreted to give consistent and harmonious effect to each of its provisions.'') (Emphasis added, citation omitted). The simplest interpretation of the inter-relationship of these four provisions addressing interstate transport is that each one plays a role in a rational system for upwind states, downwind states and EPA to work together to develop and implement solutions for interstate pollution transport. Section 110(a)(2)(D) establishes one of the basic requirements that each state must address in its air pollution planning efforts--the SIP must contain adequate provisions prohibiting emissions that contribute significantly to nonattainment in, or interfere with maintenance by, any other state. This provision places the primary responsibility to prohibit such emissions on the upwind state, but requires EPA to evaluate the adequacy of a state's SIP submission in this respect and potentially to disapprove the SIP on these grounds. A SIP disapproval will eventually trigger sanctions against the state if it does not revise the submission to contain adequate provisions for control of interstate transport. While the downwind states are the parties with the greatest incentive to obtain emissions reductions upwind, section 110(a)(2)(D) only provides a limited role for downwind states. They may object to EPA's proposed approval of a SIP submission on the grounds that it fails to control interstate transport as required by section 110(a)(2)(D), but cannot initiate action on interstate pollution transport under this provision. 5 See, e.g., State of New York v. U.S. EPA, 710 F.2d 1200 (6th Cir. 1983) (upholding EPA's approval of a SIP revision for Tennessee and rejecting New York's claim that the revision violated the requirements of section 110(a)(2)(E)). --------------------------------------------------------------------------- \5\ Under section 553(e) of the Administrative Procedure Act, a downwind state could petition EPA to issue a SIP call under section 110(k)(5) on the grounds that an upwind state's SIP failed to meet section 110(a)(2)(D). See 5 U.S.C. 553(e). However, EPA would have discretion to decide when to act on the petition, subject only to a lawsuit for unreasonable delay under section 304(a) of the CAA. In contrast, section 126 establishes a nondiscretionary duty and deadlines for EPA to act on a petition under that section, which a state may enforce through a citizen suit under section 304. --------------------------------------------------------------------------- Congress adopted section 126 to give downwind states a stronger tool to impel action by EPA and upwind states. First, section 126(a) gives downwind states access to emissions information that may be necessary for them to identify the upwind sources of their nonattainment or maintenance problems. Second, section 126(b) and (c) allows downwind states to petition EPA directly to make a finding that upwind sources are emitting air pollutants in violation of the section 110(a)(2)(D)(i) prohibition on emissions that contribute significantly to nonattainment in, or interfere with maintenance by, any other state. If EPA makes a finding under section 126, EPA must directly regulate the sources of the upwind emissions. Relief does not depend upon any action by the upwind states, as is necessary for a SIP revision. Thus, where currently approved SIPs do not contain adequate provisions protecting downwind states from pollution transport, section 126 provides powerful recourse to the entities most motivated to reduce transport. It allows the downwind states to initiate action and gives EPA authority to implement a solution directly, without requiring additional state response. The sections 176A and 184 provisions on interstate transport commissions supplement this scheme in two key respects. These sections provide a stronger action-forcing tool for a situation where a majority of upwind and downwind states have developed a compromise solution to pollution transport in a region, but EPA has not acted to support implementation of that solution. See S. Rep. 101-228, 101st Cong., 1st Sess. at 51 (1989), Leg. Hist V. at 8391 (``A regional ozone transport commission is one important way to address these problems identified by modeling and monitoring. State air quality directors in the northeast have been cooperating for several years to develop a regional solution to the ozone problem. Lack of support by EPA and lack of authority to institute needed regional controls (both in attainment and nonattainment areas) have prevented this effort from being more successful.'') The transport commission approach contemplates that all affected states in an interstate transport region will come together with EPA and identify emission control measures supported by at least a majority of the states. Under the more specific provisions of section 184, the transport commission will forward the recommended emission control measures to EPA, which then must take action to approve or disapprove the recommended measures pursuant to criteria contained in section 184. Establishment of an interstate transport commission also may help improve the political viability of potential solutions to interstate transport problems, and hence increase the likelihood that such solutions will be implemented through state and EPA actions. Bringing the states together as a body to develop solutions emphasizes the shared responsibility for the problem and the need to address it through compromise and mutual agreement. Access to a shared body of information increases the likelihood of reaching similar conclusions, although, of course, the same information will always be analyzed somewhat differently in light of different state interests. Participation in a formal analysis and decision-making process increases the parties' investment in the outcomes, thereby enhancing political support for the recommended actions. Finally, enhanced political support for the recommendations makes it easier for EPA to require implementation of those recommendations. See Section I.B. for discussion of how the OTAG process has fulfilled some of these functions in this proceeding. While Congress clearly saw the opportunities provided by a state process for developing regional solutions, the process is designed to promote consensus solutions where those are possible, but has no mechanism for forcing action where states remain strongly divided. Recommendations may only be made by vote of the majority of the states represented. Where the transport commission approach works and produces recommendations to EPA, the solutions developed may well be optimal in terms of effectiveness and acceptability. However, there is simply no forcing function to ensure that the transport commission process will ever identify any, let alone an adequate, solution to any particular interstate [[Page 28265]] transport problem. In fact, the northeast ozone transport commission established by operation of law under section 184 has produced only one recommendation to EPA, which was approved by EPA but overturned in litigation. Moreover, apart from the establishment of the northeast ozone transport commission by operation of law, EPA has discretion as to whether even to establish a transport region, and hence transport commission, to address a given interstate transport problem. See CAA, section 176A (``Whenever, on the Administrator's own motion or by petition from the Governor of any State, the Administrator has reason to believe that the interstate transport of air pollutants from one or more States contributes significantly to a violation of a national ambient air quality standard in one or more other States, the Administrator may establish, by rule, a transport region * * *.'') (emphasis added). Thus, the regional transport commissions provide a potentially useful tool, but by no means a panacea, for the interstate pollution problem. Despite the inherent limitation in the transport commission approach--a structure that builds in a significant possibility that it may never actually act to reduce any interstate pollution--commenters argue that Congress intended to rely solely upon this one potential approach and strip from EPA and downwind states the existing alternative tools to address the problem that Congress had so carefully developed in the 1970 and 1977 Amendments. It is hardly logical to presume from the adoption of these transport commission provisions (in the absence of any statutory language to that effect) that Congress intended them also to divest EPA of authority to act at all in the absence of a formal recommendation from a majority of affected states. Such a presumption is inconsistent with both Congress' expressions of concern about the effect of interstate transport on downwind states and Congress' support for unilateral federal action if states continued to fail to address the problem. See, e.g., Lieberman, S. Debate on H. Conf. Rep. 101-952, 101st Cong., 2d Sess., 10/27/90, reprinted in I 1990 Legislative History at 1053 (``Another provision of the bill which is an important part of our effort to control air pollution transported from other areas is the requirement that the Federal Government intervene and promulgate a plan of emission controls in an area where the State fails to act. This provision guarantees that if States sending pollution to Connecticut are not doing their jobs in controlling pollution, Connecticut will be assured that the Federal Government will step in and do the job.'') Commenters claim that allowing EPA to act on interstate transport problems without a recommendation from a transport commission reads section 176A and 184 out of the CAA. This is nonsense. The transport commission provisions provide a structure, authority and incentive for state-driven solutions to regional pollution problems. The EPA has strong legal and policy-based reasons to encourage such consensus-based solutions and implement them where they emerge. Providing EPA independent authority to act in the absence of a transport commission or where the commission has failed to produce any recommendations does not undermine the transport commission's authority, much less render those provisions meaningless. Rather, by increasing the likelihood of some action even in the absence of a recommendation, EPA's authority may well encourage states to develop their own consensus-based solutions in preference over imposition of requirements developed by EPA. The logical interpretation of the structure of the Act is that the transport commission provisions complement, but do not replace, the other interstate pollution provisions contained in section 110(a)(2)(D)(i) and section 126 specifying requirements for SIPs and providing for direct reductions from sources, even in the absence of any regional agreement. Second, the language of the provisions simply does not support the commenters' arguments. Section 126 states that ``[a]ny state * * * may petition the Administrator for a finding that any major source or group of stationary sources emits or would emit any air pollutant in violation of the prohibition of section 110(a)(2)(D)(ii) or this section.'' Sections 176A and 184 provide authority to establish, and for the northeastern ozone transport region directly establish, transport regions and transport commissions. There is no language in either section 126, or the sections that supposedly largely negate section 126(b) and (c), suggesting that section 126 is superseded by sections 176A and 184 or that all three provisions do not remain in effect. Moreover, in the 1990 legislation, Congress amended section 126 to strengthen its effectiveness by broadening its scope without any indication that it intended to simultaneously dramatically curtail EPA's authority under that provision. See Chafee-Baucus Statement of Senate Managers, reprinted in I 1990 Legislative History at 886 (stating that the bill ``amends section 126 and section 302(h) of the Clean Air Act to strengthen to [sic] prohibitions on emissions that result in interstate pollution.''). The amendments made it a prohibition of section 126 itself, as well as of the applicable SIP (as the previous version provided), for a source to continue to operate for more than three months after EPA makes a finding under section 126. They also explicitly allowed a finding that a source would emit or is emitting in violation of section 126, in addition to the pre-existing language allowing a finding that the source would emit or is emitting in violation of the prohibition of section 110(a)(2)(D). Under the commenters' interpretation of the amended version of section 126, Congress strengthened the petition process while limiting its applicability to violations of notification requirements. This interpretation necessarily presumes that Congress intended to enhance EPA's power to enforce through source shut-downs a requirement with no direct environmental impacts, while removing EPA's pre-existing independent authority to reduce the actual emissions. The commenters claim that the petition process under section 126(b) and (c) is now limited to petitions claiming that an upwind state has violated section 126(a) by failing to provide information to a downwind state regarding certain sources of emissions in the upwind state. Section 126(a) requires a SIP to include a requirement to provide information to downwind states for each major new or existing source regarding emissions ``which may significantly contribute to levels of air pollution in excess of the national ambient air quality standards' in those downwind states. Commenters are arguing that EPA could shut down a source under section 126 because it had failed to comply with the notification requirements, but could not shut down such a source because it was emitting prohibited quantities of air pollution. Moreover, the notification requirement applies to each major proposed new or modified source that (a) is subject to part C of title I (relating to prevention of significant deterioration of air quality) or (b) may significantly contribute to levels of air pollution in excess of the NAAQS downwind. Thus, under the commenters' interpretation, the notification requirement, and hence the shut down remedy for its violation, potentially applies to sources that do not actually significantly contribute to downwind air pollution, while no [[Page 28266]] longer applying to sources because they do so contribute. The language of the statute does not indicate that Congress intended this result, and its inherent irrationality strongly suggests the contrary. Commenters also rely on the revised language of section 110(a)(2)(D) and the new section 110(k)(5) to argue that sections 176A and 184 are now the sole authorities for addressing interstate pollution transport. The commenters point to the new language in section 110(a)(2)(D)(i), which requires SIPs to prohibit, ``consistent with the provisions of this title'' (emphasis added), emissions that contribute significantly to nonattainment or interfere with maintenance. They also note that section 110(k)(5), which Congress added in the 1990 Amendments, gives EPA authority to call for a SIP revision when a plan fails ``to mitigate adequately the interstate pollutant transport described in section 176A or section 184.'' The commenters argue that together, these provisions bar EPA from acting under se [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A99-11559. Public record. Not legal advice.