Approval and Promulgation of Implementation Plan; Indiana

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[IN76-1; FRL-5945-9]

Approval and Promulgation of Implementation Plan; Indiana

AGENCY: Environmental Protection Agency.

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) proposes to approve

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

and Porter Counties) severe ozone nonattainment area from the otherwise

applicable Oxides of Nitrogen (NOX) transportation

conformity requirements. On May 24, 1996, the Indiana Department of

Environmental Management (IDEM) submitted to the EPA a State

Implementation Plan (SIP) revision request for an exemption under

section 182(b)(1) of the Clean Air Act (Act) from the transportation

conformity requirements for NOX for the northwest Indiana

(Lake and Porter Counties) severe ozone nonattainment area. On November

26, 1996, IDEM submitted additional materials, including Public Hearing

documentation to complete the submittal. The request is based on the

urban airshed modeling (UAM) conducted for the attainment demonstration

for the Lake Michigan Ozone Study (LMOS) modeling domain. The rationale

for this proposed approval is set forth below; additional information

is available at the address indicated below.

Dates: Written comments on this proposed action must be received by

February 5, 1998.

ADDRESSES: Written comments should be sent to: J. Elmer Bortzer, Chief,

Regulation Development Section, Air Programs Branch (AR-18J), EPA,

Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604-3590.

Copies of the SIP revision and supporting documentation,

are available for inspection at the following address: United States

Environmental Protection Agency, Region 5, Air and Radiation Division,

77 West Jackson Boulevard, Chicago, Illinois 60604. (It is recommended

that you telephone Patricia Morris at (312) 353-8656 before visiting

the Region 5 Office.)

vard, Chicago, Illinois 60604-3590.

Copies of the SIP revision and supporting documentation,

are available for inspection at the following address: United States

Environmental Protection Agency, Region 5, Air and Radiation Division,

77 West Jackson Boulevard, Chicago, Illinois 60604. (It is recommended

that you telephone Patricia Morris at (312) 353-8656 before visiting

the Region 5 Office.)

FOR FURTHER INFORMATION CONTACT: Patricia A. Morris, Regulation

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

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

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

353-6680.

SUPPLEMENTARY INFORMATION:

I. Background

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

demonstrate conformity with the applicable SIP, that transportation

plans and Transportation Improvement Programs (TIPs) contribute to

emissions reductions in ozone and carbon monoxide nonattainment areas

that do not have motor vehicle emissions budgets. This requirement is

implemented in 40 CFR Sec. 93.119, which establishes the so-called

``build/no-build test.'' This test requires a demonstration that the

``Action'' scenario (representing the implementation of the proposed

transportation plan/TIP) will result in lower motor vehicle emissions

than the ``Baseline'' scenario (representing the implementation of the

current transportation plan/TIP). In addition, the ``Action'' scenario

must result in emissions lower than 1990 levels.

The November 24, 1993 transportation conformity rule \1\ and the

August 15, 1997, final transportation conformity rule amendments:

Flexibility and Streamlining,\2\ do not require the build/no-build test

and less-than-1990 test for NOX as an ozone precursor in

ozone nonattainment areas, where the Administrator determines that

additional reductions of NOX would not contribute to

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

ozone

the

August 15, 1997, final transportation conformity rule amendments:

Flexibility and Streamlining,\2\ do not require the build/no-build test

and less-than-1990 test for NOX as an ozone precursor in

ozone nonattainment areas, where the Administrator determines that

additional reductions of NOX would not contribute to

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

ozone.

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\1\ ``Criteria and Procedures for Determining Conformity to

State or Federal Implementation Plans of Transportation Plans,

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

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

\2\ ``Transportation Conformity Rule Amendments: Flexibili8ty

and Streamlining; Final Rule'' August 15, 1997 (62 FR 43780).

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Clean Air Act section 176(c)(3)(A)(iii), which is the conformity

provision requiring contributions to emission reductions before SIPs

with emissions budgets have been submitted, specifically references

Clean Air Act section 182(b)(1). That section requires submission of

State plans that, among other things, provide for specific annual

reductions of volatile organic compounds (VOCs) and NOX

emissions ``as necessary'' to attain the ozone standard by the

applicable attainment date. Section 182(b)(1) further states that its

requirements do not apply in the case of NOX for those ozone

nonattainment areas for which EPA determines that additional reductions

of NOX would not contribute to ozone attainment.

For ozone nonattainment areas, the process for submitting waiver

requests and the criteria used to evaluate them are explained in the

December 1993 EPA document ``Guidelines for Determining the

Applicability of Nitrogen Oxides Requirements Under Section 182(f),''

and the May 27, 1994, and February 8, 1995, memoranda from John S

onal reductions

of NOX would not contribute to ozone attainment.

For ozone nonattainment areas, the process for submitting waiver

requests and the criteria used to evaluate them are explained in the

December 1993 EPA document ``Guidelines for Determining the

Applicability of Nitrogen Oxides Requirements Under Section 182(f),''

and the May 27, 1994, and February 8, 1995, memoranda from John S.

Seitz, Director of the Office of Air Quality Planning and Standards, to

Regional Air Division Directors, titled ``Section 182(f) NOX

Exemptions--Revised Process and Criteria.''

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

Wisconsin (the States) submitted to the EPA a petition for an exemption

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

States, acting through the Lake Michigan Air Directors Consortium

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

Control Technology (RACT) and New Source Review (NSR) requirements for

major stationary sources of NOX. The petition also asked for

an exemption from the transportation and general conformity

requirements for NOX in all ozone nonattainment areas in the

Region.

On March 6, 1995, the EPA published a rulemaking proposing approval

of the NOX exemption petition for the RACT, NSR and

transportation and general conformity requirements. A number of

comments were received on the proposal. Several commenters argued that

NOX exemptions are provided for in two separate parts of the

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

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

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

agreement to change the procedural mechanism through which a

NOX exemption from transportation conformity would be

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

Circuit)

f the

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

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

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

agreement to change the procedural mechanism through which a

NOX exemption from transportation conformity would be

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

Circuit). As a result, instead of a petition under 182(f),

transportation conformity NOX exemptions for ozone

nonattainment areas that are subject to section 182(b)(1) are to be

submitted as a SIP revision request. The northwest Indiana (Lake and

Porter Counties) ozone nonattainment area is classified as severe (part

of the Chicago severe nonattainment area) and, thus, is subject to

section 182(b)(1). The EPA approved the NOX exemption for

the States of Illinois, Indiana, Wisconsin and Michigan for RACT, NSR

and general conformity on January 26, 1996, (61 FR 2428).

The transportation conformity requirements are found at sections

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

on an area-wide basis in all nonattainment and maintenance areas. The

EPA's transportation conformity rule was amended on August 29, 1995 (60

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

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

transportation conformity NOX requirements.

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

to meet the requirements of 182(b)(1). A public hearing on this SIP

revision request was held on June 11, 1996.

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

whether additional NOX reductions would contribute to

attainment of the standard in the Lake and Porter Counties ozone

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

domain.

The role that NOX emissions play in producing ozone at

any given place and time is complex

ion request was held on June 11, 1996.

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

whether additional NOX reductions would contribute to

attainment of the standard in the Lake and Porter Counties ozone

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

domain.

The role that NOX emissions play in producing ozone at

any given place and time is complex. In the presence of sunlight,

nitrogen dioxide (NO2) photo-dissociates into nitrogen oxide

(NO) and a single oxygen atom. The oxygen atom reacts with molecular

oxygen (O2) to form ozone (O3). NO, on the other

hand, near its source area readily reacts with ozone to form

O2 and NO2. The generated NO2 is then

free to photo-dissociate and lead to ozone formation further downwind.

The reaction of NO with ozone, which locally reduces ozone

concentrations, is referred to as ozone scavenging and is one of the

primary local sinks for ozone in the lower atmosphere in and near NO

source areas. Since emissions of NOX from fuel combustion

sources, whether internal combustion engines or stationary combustion

sources, such as industrial boilers, contain significant amounts of NO,

it is expected that ozone concentrations immediately downwind of such

NOX sources will be reduced through ozone scavenging.

Therefore, reducing NOX emissions can lead to increased

ozone concentrations in the vicinity of the controlled NOX

emission sources, whereas reducing NOX

combustion engines or stationary combustion

sources, such as industrial boilers, contain significant amounts of NO,

it is expected that ozone concentrations immediately downwind of such

NOX sources will be reduced through ozone scavenging.

Therefore, reducing NOX emissions can lead to increased

ozone concentrations in the vicinity of the controlled NOX

emission sources, whereas reducing NOX

emissions may lead to reduction in ozone concentrations further

downwind. Reducing NOX emissions in VOC-limited areas (areas

with low VOC emissions relative to NOX emissions) may

produce minimal ozone reductions or even ozone increases.

As outlined in relevant EPA guidance, the use of photochemical grid

modeling is the recommended approach for testing the contribution of

NOX emission reductions to attainment of the ozone standard.

This approach simulates conditions over the modeling domain that may be

expected at the attainment deadline for three emission reduction

scenarios: (1) Substantial VOC reductions, (2) substantial

NOX reductions, and (3) both VOC and NOX

reductions. If the area wide predicted maximum one-hour ozone

concentration for each day modeled under scenario (1) is less than or

equal to those from scenarios (2) and (3) for the corresponding days,

the test is passed and the section 182(f) NOX emissions

reduction requirements would not apply.

In making this determination under section 182(b)(1) that the

NOX requirements do not apply, or may be limited in the Lake

Michigan area, the EPA has considered the national study of ozone

precursors completed pursuant to section 185B of the Act. The EPA has

based its decision on the demonstration and the supporting information

provided in the SIP revision request.

II. Summary of Submittal

In making this determination under section 182(b)(1) that the

NOX requirements do not apply, or may be limited in the Lake

Michigan area, the EPA has considered the national study of ozone

precursors completed pursuant to section 185B of the Act. The EPA has

based its decision on the demonstration and the supporting information

provided in the SIP revision request.

II. Summary of Submittal

On May 24, 1996, the State of Indiana submitted as a revision to

the SIP, a request for a waiver from the transportation conformity

NOX requirements for northwest Indiana (Lake and Porter

Counties). The submittal included the LMOS UAM modeling for the

attainment demonstration for 3 ozone episodes during 1991. The modeling

supported the request by documenting that NOX reductions in

the LMOS modeling domain would not contribute to attainment and, in

fact, would be detrimental to the goal of reaching attainment. The IDEM

held a public hearing on the submittal on June 11, 1996.

Pursuant to 40 CFR Part 93, Subpart A, 40 CFR Part 51, Subpart T,

the SIP revision request seeks an exemption from the transportation

conformity requirements for NOX in the northwest Indiana

(Lake and Porter Counties) severe ozone nonattainment area. The States

have utilized the UAM to demonstrate that reductions in NOX

in the LMOS modeling domain will not contribute to attainment of the

ozone standard. To conduct the modeling analysis, the following steps

were followed: (a) emissions were projected to 1996 (the deadline for

implementation of the 15 percent reasonable further progress reduction)

and 2007 (the attainment deadline for the severe nonattainment areas)

from the 1990 base year, (b) it was assumed that a 40 percent VOC

emission reduction beyond that achieved as a result of emission

controls mandated by the Act would be necessary to attain the ozone

standard in the LMOS modeling domain, (c) a 40 percent NOX

emission reduction in grid B (that portion of the LMOS modeling domain

that is essentially composed of the ozo

evere nonattainment areas)

from the 1990 base year, (b) it was assumed that a 40 percent VOC

emission reduction beyond that achieved as a result of emission

controls mandated by the Act would be necessary to attain the ozone

standard in the LMOS modeling domain, (c) a 40 percent NOX

emission reduction in grid B (that portion of the LMOS modeling domain

that is essentially composed of the ozone nonattainment areas within

the modeling domain) beyond the projected emission levels was assumed

for all anthropogenic NOX emissions, (d) a 40 percent VOC

emission reduction and a 40 percent NOX reduction in grid B

beyond projected emission levels were assumed for all anthropogenic VOC

and NOX emissions and (e) the ozone modeling results for

(b), (c), and (d) were compared considering the modeled domain-wide

peak ozone concentrations and temporal and spatial extent of modeled

ozone concentrations above 120 parts per billion (ppb).

For all modeled days using 1996 and 2007 conditions, domain-wide

peak ozone concentrations for ``VOC-only'' controls were found to be

lower than or equal to those for ``NOX-only'' controls or

those for ``VOC plus NOX'' controls. In addition,

consideration of daily peak ozone isopleth maps (these maps are

included in the documentation of the section 182(b) SIP revision

request) shows that the ``VOC-only'' control scenario leads to the

smallest areas with predicted peak ozone concentrations exceeding 120

ppb.

Additional sensitivity tests were conducted for a 40 percent

NOX emission reduction that was applied only to point

sources in Grid B for episode 2 and 1996 conditions for both an assumed

NOX reduction alone and a 40 percent reduction in both VOCs

and NOX

uest) shows that the ``VOC-only'' control scenario leads to the

smallest areas with predicted peak ozone concentrations exceeding 120

ppb.

Additional sensitivity tests were conducted for a 40 percent

NOX emission reduction that was applied only to point

sources in Grid B for episode 2 and 1996 conditions for both an assumed

NOX reduction alone and a 40 percent reduction in both VOCs

and NOX. These sensitivity tests compared to the scenarios

with across the board anthropogenic NOX reductions

demonstrated that control of ground level NOX sources (such

as transportation sources) did not contribute to attainment of the

standard and in fact increased the domain wide peak ozone

concentrations exceeding 120 ppb and the number of hours that exceeded

120 ppb. This result was more pronounced than with the point source

only NOX control.

III. Analysis of the Submittal

Review of the modeling results shows a very definite directional

signal indicating that application of NOX controls in the

northwest Indiana (Lake and Porter Counties) severe ozone nonattainment

area would exacerbate peak ozone concentrations in the LMOS modeling

domain. The LMOS modeling domain includes Chicago, Northwest Indiana,

Western Michigan and Eastern Wisconsin. The States and LADCo have

completed the validation process for the UAM modeling system used in

the demonstration of attainment for the LMOS modeling domain and EPA

has approved the validation. Documentation of the modeling validation

is included in the SIP revision request materials.

Although ozone concentrations modeled further downwind from the

urban source areas increase as a result of increased NOX

point source emissions, this is not the case with the ground level

NOX sources. Modeling results with low level NOX

source reductions are included in the documentation and show a

disbenefit when NOX emissions are reduced. LADCo and the

States view the potential increase in outflow ozone concentrations with

increasing NOX point source emissions to be marginal

ease as a result of increased NOX

point source emissions, this is not the case with the ground level

NOX sources. Modeling results with low level NOX

source reductions are included in the documentation and show a

disbenefit when NOX emissions are reduced. LADCo and the

States view the potential increase in outflow ozone concentrations with

increasing NOX point source emissions to be marginal. More

importantly, the SIP revision request demonstrates that additional

reductions in NOX would not contribute to attainment of the

ozone standard in the LMOS domain. These results are believed to be

consistent with EPA's section 185B report to Congress. Therefore, based

on the report's conformance with EPA guidance, the EPA believes the

State of Indiana's demonstration is adequate, and thus is proposing to

approve the transportation conformity waiver request. It is noted by

LADCo, however, that subsequent modeling analyses may lead to an ozone

attainment plan which includes, for specified portions of the LMOS

domain only, both NOX and VOC emission controls. Indiana and

the other LADCO states have indicated their intent to review the need

for NOX reduction in the nonattainment area.

Monitoring data, such as concentrations of non-methane hydrocarbons

and NOX and derived/monitored ozone production potentials of

air parcels, collected for the urban source areas during the 1991 field

study, generally support the approval of the NOX waiver.

However, the primary basis for approval of the NOX waiver is

the modeling results submitted in support of the waiver. The 1991 field

data by themselves do not provide adequate support for the waiver,

since these data

onditions would

imply a greater sensitivity of ozone concentrations to changes to VOC

emissions; the reverse would be true for NOX limited

conditions) and tracked the ozone and ozone precursor concentrations in

the urban plumes as they moved downwind. The analyses indicated VOC-

limited conditions in the Chicago/Northwest Indiana and Milwaukee areas

and NOX-limited conditions further downwind. These results

imply that VOC controls in the Chicago/Northwest Indiana, Milwaukee,

and Western Michigan areas would be more effective at reducing peak

ozone concentrations within the Lake Michigan ozone nonattainment

areas.

The consistency between the modeling results and the ambient data

analysis results for all episodes with joint data supports the view

that the UAM modeling system developed in the LMOS may be used to

investigate the relative merits of VOC versus NOX emission

controls. The UAM-V results for all modeled episodes point to the

benefits of VOC controls versus NOX controls in reducing the

modeled domain peak ozone concentrations.

For a more detailed analysis of the modeling analysis results,

please see the August 22, 1994 memorandum entitled ``Technical Review

of a Four State Request for a Section 182(f) Exemption from Oxides of

Nitrogen (NOX) Reasonably Available Control Technology

(RACT) and New Source Review (NSR) Requirements'', which is contained

in the docket for this action.

The EPA believes LADCo's UAM application has adequately met the

requirement to demonstrate that NOX controls within the

Northwest Indiana (Lake and Porter Counties) severe ozone nonattainment

area and through out the LMOS domain will not contribute, but instead

will interfere with attainment of the ozone standard. The modeling

demonstration has been used to support the approval of a NOX

exemption for the States of Illinois, Indiana, Wisconsin and Michigan

for Ract, NSR and general conformity (see 61 FR 5291)

Northwest Indiana (Lake and Porter Counties) severe ozone nonattainment

area and through out the LMOS domain will not contribute, but instead

will interfere with attainment of the ozone standard. The modeling

demonstration has been used to support the approval of a NOX

exemption for the States of Illinois, Indiana, Wisconsin and Michigan

for Ract, NSR and general conformity (see 61 FR 5291). The modeling has

also been used to support transportation conformity NOX

waivers under 182(b) for the Chicago ozone nonattainment area in

Illinois (see 61 FR 5291), and, Muskegon County in Michigan (see 62 FR

50512).

In considering the importance of the Ozone Transport Assessment

Group (OTAG) process and attainment plan modeling efforts, the results

of OTAG technical work are now available. The EPA published on November

7, 1997, a notice of proposed rulemaking which proposes to set State

wide NOX budgets for 22 states including the State of

Indiana. The proposed rulemaking would require appropriate States

(including Indiana) to submit SIP measures to ensure emissions

reductions of NOX needed to prevent significant transport of

ozone. The States have the flexibility to determine which sources are

the most appropriate from which to require reductions of

NOX. The EPA, however, has based the proposed NOX

budgets primarily on reductions from stationary sources such as

utilities and industrial boilers. The EPA explains in the notice of

proposed rulemaking the basis for the proposal and rationale.

IV. EPA Action

The EPA is proposing approval of the transportation conformity

NOX waiver SIP revision for the State of Indiana.

The EPA reserves the right to require NOX emission

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

Act if future ozone modeling demonstrates that such controls are needed

to achieve the ozone standard in downwind areas.

V. Administrative Requirements

A. Executive Order 12866

ing approval of the transportation conformity

NOX waiver SIP revision for the State of Indiana.

The EPA reserves the right to require NOX emission

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

Act if future ozone modeling demonstrates that such controls are needed

to achieve the ozone standard in downwind areas.

V. Administrative Requirements

A. Executive Order 12866

The Office of Management and Budget has exempted this regulatory

action from Executive Order 12866 review.

B. Regulatory Flexibility

Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., EPA

must prepare a regulatory flexibility analysis assessing the impact of

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

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

significant impact on a substantial number of small entities. Small

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

and government entities with jurisdiction over populations of less than

50,000.

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

do not create any new requirements, but simply approve requirements

that the State is already imposing. Therefore, because the Federal SIP

approval does not impose any new requirements, the Administrator

certifies that it does not have a significant impact on any small

entities affected. Moreover, due to the nature of the Federal-State

relationship under the CAA, preparation of a flexibility analysis would

constitute Federal inquiry into the economic reasonableness of the

State action. The Clean Air Act forbids EPA to base its actions

concerning SIPs on such grounds. Union Electric Co. v. EPA., 427 U.S.

246, 256-66 (1976); 42 U.S.C. 7410(a)(2).

C. Unfunded Mandates

affected. Moreover, due to the nature of the Federal-State

relationship under the CAA, preparation of a flexibility analysis would

constitute Federal inquiry into the economic reasonableness of the

State action. The Clean Air Act forbids EPA to base its actions

concerning SIPs on such grounds. Union Electric Co. v. EPA., 427 U.S.

246, 256-66 (1976); 42 U.S.C. 7410(a)(2).

C. Unfunded Mandates

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

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

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

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

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

or more. This Federal action approves pre-existing requirements under

state or local law, and imposes no new requirements. Accordingly, no

additional costs to state, local, or tribal governments, or the private

sector, result from this action.

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Ozone, Oxides of

Nitrogen, Transportation conformity, Transportation-air quality

planning, Volatile organic compounds.

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

Dated: December 19, 1997.

David A. Ullrich,

Acting Regional Administrator.

[FR Doc. 98-241 Filed 1-5-98; 8:45 am]

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