Approval and Promulgation of Air Quality Implementation Plans; DelawareNew Source Review

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[DE-12-1-5886; FRL-5948-9]

Approval and Promulgation of Air Quality Implementation Plans;

Delaware--New Source Review

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing

conditional approval of the State Implementation Plan (SIP) revision

submitted by the State of Delaware for the purpose of meeting certain

requirements of the Clean Air Act (Act), as amended in 1990, with

regard to new source review (NSR) in areas that have not attained the

national ambient air quality standards (NAAQS). The changes primarily

pertain to the ozone precursors, volatile organic compounds (VOCs) and

nitrogen oxides (NOx). This SIP revision was submitted by

Delaware to satisfy certain federal requirements for NSR in the State

of Delaware. The proposed changes to the Delaware NSR regulation

primarily address the definitions of major source size and the increase

in emission offset ratios based upon the classifications of ozone

nonattainment areas. EPA is proposing conditional approval because the

NSR SIP revisions submitted by Delaware strengthen the SIP, but

Delaware failed to revise the NSR regulations to adopt provisions

relating to modifications in serious and severe ozone nonattainment

areas, required by the 1990 Clean Air Act Amendments, and provisions

relating to emission offsets and public participation, required by EPA

regulations prior to the 1990 Clean Air Act Amendments.

DATES: Comments must be received on or before February 11, 1998.

Delaware failed to revise the NSR regulations to adopt provisions

relating to modifications in serious and severe ozone nonattainment

areas, required by the 1990 Clean Air Act Amendments, and provisions

relating to emission offsets and public participation, required by EPA

regulations prior to the 1990 Clean Air Act Amendments.

DATES: Comments must be received on or before February 11, 1998.

ADDRESSES: Comments may be mailed to Ms. Kathleen Henry, Chief, Permit

Programs Section, Air, Radiation, and Toxics Division (3AT23), U.S.

Environmental Protection Agency, Region III, 841 Chestnut Building,

Philadelphia, Pennsylvania 19107. Copies of the documents relevant to

this action are available for public inspection during normal business

hours at the Air, Radiation, and Toxics Division, U.S. Environmental

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

Pennsylvania 19107; and Delaware Department of Natural Resources &

Environmental Control, 89 Kings Highway, P.O. Box 1401, Dover, Delaware

19903.

FOR FURTHER INFORMATION CONTACT: Ms. Robin Moran, (215) 566-2064, at

the EPA Region III address above.

SUPPLEMENTARY INFORMATION:

I. Background

For ozone nonattainment areas and ozone transport regions, sections

182(a)(2)(C) and 184(b) require States to submit to EPA by November 15,

1992, a revision that includes each of the following: (1) Provisions to

require permits, in accordance with sections 172(c)(5) and 173 of the

Act, for the construction and operation of each new or modified major

stationary source

RMATION:

I. Background

For ozone nonattainment areas and ozone transport regions, sections

182(a)(2)(C) and 184(b) require States to submit to EPA by November 15,

1992, a revision that includes each of the following: (1) Provisions to

require permits, in accordance with sections 172(c)(5) and 173 of the

Act, for the construction and operation of each new or modified major

stationary source

(with respect to ozone) to be located in the area (section

182(a)(2)(C)(i) of the Act); and (2) provisions to correct requirements

in (or add requirements to) the plan concerning permit programs as were

required under section 172(b)(6) of the Act (as in effect immediately

before November 15, 1990) as interpreted in EPA regulations promulgated

as of November 15, 1990 (section 182(a)(2)(C)(ii) of the Act).

On January 11, 1993, the State of Delaware submitted a revision for

Regulation 25, ``Requirements for Preconstruction Review,'' sections 1

and 2 (pertaining to nonattainment NSR). The NSR-related revision

consists of changes in the definitions of major source size and

increases in the emission offset ratios based on the classifications of

Delaware's ozone nonattainment areas. The changes primarily pertain to

the ozone precursors, VOCs and NOX. The changes apply to New

Castle, Kent, and Sussex Counties. New Castle and Kent Counties are

designated nonattainment for ozone and classified as severe. See 56 FR

56694 (Nov. 6, 1991) and 57 FR 56762 (Nov. 30, 1992), codified at 40

CFR 81.308. Sussex County is designated as nonattainment for ozone and

is classified as marginal. See 40 CFR 81.308. Delaware is located in

the northeast ozone transport region (OTR). See section 184(a) of the

Act. Because Delaware is located in the OTR, at a minimum, the NSR

requirements applicable to moderate ozone nonattainment areas apply.

Therefore, in Sussex County, the Act's NSR requirements for a moderate

area apply and must be made part of the SIP.

II. Summary of Delaware's NSR Revisions

R 81.308. Delaware is located in

the northeast ozone transport region (OTR). See section 184(a) of the

Act. Because Delaware is located in the OTR, at a minimum, the NSR

requirements applicable to moderate ozone nonattainment areas apply.

Therefore, in Sussex County, the Act's NSR requirements for a moderate

area apply and must be made part of the SIP.

II. Summary of Delaware's NSR Revisions

For all classifications of ozone nonattainment areas and for the

OTR, States must adopt the appropriate major source size thresholds and

offset ratios. Under the Act, NOX as well as VOCs is

regulated as an ozone precursor, and states must adopt provisions to

ensure that any new or modified major stationary source of

NOX in an ozone nonattainment area or the OTR satisfies the

NSR requirements applicable to any major source of VOCs, unless a

special NOX exemption is granted by the Administrator under

the provisions of section 182(j).

Delaware has established new major source size thresholds for NSR

applicability and increased offset ratios for subject sources, in

accordance with the Act as follows:

1. Delaware Regulation 25 at section 2.2(B)(2) defines a major

source size applicability threshold in Sussex County (a marginal ozone

nonattainment area required to meet moderate area NSR provisions

because it is located in the OTR) as 50 tons per year (TPY) potential

to emit for VOCs and 100 TPY potential to emit for NOX.

Section 2.3(C)(2) requires an offset ratio of 1.15 to 1 (which means

that for every 1 ton increase in allowable emissions from a new major

stationary source, 1.15 tons of actual emissions must be reduced from

existing sources). These provisions satisfy the Act's NSR requirements

for defining a major stationary source and for establishing the offset

ratios in moderate ozone nonattainment areas.

2

ion 2.3(C)(2) requires an offset ratio of 1.15 to 1 (which means

that for every 1 ton increase in allowable emissions from a new major

stationary source, 1.15 tons of actual emissions must be reduced from

existing sources). These provisions satisfy the Act's NSR requirements

for defining a major stationary source and for establishing the offset

ratios in moderate ozone nonattainment areas.

2. Delaware Regulation 25 at section 2.2(B)(1) defines the major

source size applicability threshold for New Castle and Kent Counties

(which are classified as severe nonattainment areas for ozone) as 25

TPY potential to emit for VOCs and NOX. Section 2.3(C)(1)

requires an offset ratio of 1.3 to 1 (which means that for every 1 ton

increase in allowable emissions from a new major stationary source, 1.3

tons of actual emissions must be reduced from existing sources).

Delaware's plan submittal reflects appropriate modifications to

applicability levels, including a de minimis level of 25 tons, as

provided in Regulation 25, section 1.9(V)(1), definition of

``Significant.'' This section provides that increases in net emissions

shall not exceed 25 tons per year in New Castle and Kent Counties, or

40 tons per year in Sussex County, when aggregated with all other net

increases in emissions from the source over any period of five

consecutive calendar years which includes the calendar year in which

such increases occur. Delaware Regulation 25, section 1.9(V)(1), also

provides that no emission reductions from major stationary sources will

be creditable if they occurred prior to January 1, 1991, by specifying

that no part of the five consecutive calendar year period shall extend

before January 1, 1991.

EPA believes that the above changes to Delaware's NSR regulation

are consistent with the Act and strengthen the SIP

does not include the

following provisions:

1. Consistent with sections 182(c) (7) and (8) of the Act,

provisions for the special rule for modifications of sources in serious

and severe ozone nonattainment areas. Section 182(c)(7) applies to

facilities with potential emissions of VOC or NOX of less

than 100 TPY, where the modification results in an other than de

minimus increase in emissions. The owner or operator may choose to

offset the emissions of the proposed source with those elsewhere in the

same facility at a ratio of at least 1.3 to 1 in order to avoid having

the proposed source be considered a modification. If the facility does

not offset at the required ratio, the change shall be considered a

modification, but the facility would be required to install Best

Available Control Technology (BACT) instead of Lowest Achievable

Emissions Rate (LAER) technology. Section 182(c)(8) applies to

facilities with potential emissions of 100 TPY or more of VOC or

NOX, where the modification results in an other than de

minimus increase in emissions. The increase shall be considered a

modification, but the source may choose to offset the emissions from

the proposed source with emission reductions elsewhere in the same

facility at an internal offset ratio of 1.3 to 1 in order to avoid

installing LAER.

B. Pre-1990 NSR Deficiencies

Section 182(a)(2)(C)(ii) requires that states must submit, by

November 15, 1992, a revision to the SIP which contains provisions to

correct requirements in (or add requirements to) the plan concerning

permit programs as were required under section 172(b)(6) of the Act (as

in effect immediately before November 15, 1990) as interpreted in EPA

regulations promulgated as of November 15, 1990. EPA finds that

(a)(2)(C)(ii) requires that states must submit, by

November 15, 1992, a revision to the SIP which contains provisions to

correct requirements in (or add requirements to) the plan concerning

permit programs as were required under section 172(b)(6) of the Act (as

in effect immediately before November 15, 1990) as interpreted in EPA

regulations promulgated as of November 15, 1990. EPA finds that

Delaware's January 11, 1993 submittal does not meet the requirements of

section 182(a)(2)(C)(ii) because Regulation No. 25 does not include the

following provisions:

1. Public participation procedures consistent with 40 CFR 51.161.

While section 3 of Delaware's Regulation No. 25, pertaining to the

Prevention of Significant Deterioration of Air Quality, contains public

participation procedures, Regulation No. 25 does not specify the public

participation procedures to be used in issuing nonattainment NSR

permits.

2. A requirement that where the emissions limit under the SIP

allows greater emissions than the potential to emit of the source,

emission offset credit will be allowed only for control below this

potential. See 40 CFR 51.165(a)(3)(ii)(A).

3. Provisions for granting emission offset credit for fuel

switching, consistent with 40 CFR 51.165(a)(3)(ii)(B).

4. Requirements consistent with 40 CFR 51.165(a)(3)(ii)(C)(1) for

the crediting of emission reductions achieved by shutting down an

existing source or curtailing production or operating hours below

baseline levels (shutdown credits). These requirements must include a

provision that such reductions may be credited if they are permanent,

quantifiable and federally-enforceable, and if the area has an EPA-

approved attainment plan.

Delaware may also include provisions consistent with 40 CFR

51.165(a)(3)(ii)(C)(2) which allow the use of shutdown credits in areas

without an approved attainment demonstration. EPA notes that the Agency

proposed two alternative revisions to these requirements in the NSR

Reform Rulemaking

permanent,

quantifiable and federally-enforceable, and if the area has an EPA-

approved attainment plan.

Delaware may also include provisions consistent with 40 CFR

51.165(a)(3)(ii)(C)(2) which allow the use of shutdown credits in areas

without an approved attainment demonstration. EPA notes that the Agency

proposed two alternative revisions to these requirements in the NSR

Reform Rulemaking. See 61 FR 38325 (July 23, 1996).

5. A requirement that the shutdown or curtailment is creditable

only if it occurred after the date of the most recent emissions

inventory or attainment demonstration. See 40 CFR

51.165(a)(3)(ii)(C)(1).

6. A requirement that all emission reductions claimed as offset

credit shall be federally enforceable. See 40 CFR 51.165(a)(3)(ii)(E).

7. Requirements for the permissible location of offsetting

emissions. See 40 CFR 51.165(a)(3)(ii)(F) and section 173(c)(1) of the

Act.

8. A requirement that credit for an emission reduction can be

claimed to the extent that the State has not relied on it in issuing

any permit under regulations approved pursuant to 40 CFR part 51 (i.e.,

the SIP), or the State has not relied on it in a demonstration of

attainment or reasonable further progress. See 40 CFR

51.165(a)(3)(ii)(G) and sections 173(c) (1) and (2) of the Act.

Because of the deficiencies identified in Sections III.A. and

III.B. above, EPA is proposing conditional approval of the Delaware SIP

revision for the NSR regulation, amended Delaware Regulation 25,

sections 1 and 2, which was submitted on January 11, 1993. EPA is

soliciting public comments on the issues discussed in this notice or on

other relevant matters. These comments will be considered before taking

final action. Interested parties may participate in the Federal

rulemaking procedure by submitting written comments to the EPA Regional

office listed in the ADDRESSES section of this notice.

Proposed Action

h was submitted on January 11, 1993. EPA is

soliciting public comments on the issues discussed in this notice or on

other relevant matters. These comments will be considered before taking

final action. Interested parties may participate in the Federal

rulemaking procedure by submitting written comments to the EPA Regional

office listed in the ADDRESSES section of this notice.

Proposed Action

In light of the above deficiencies, EPA is proposing conditional

approval of this SIP revision under section 110(k)(4) of the Act. EPA

is proposing conditional approval of the Delaware NSR SIP if Delaware

commits, in writing, within 30 days of EPA's proposal to correct the

deficiencies identified in this rulemaking. If the State does not make

the required written commitment to EPA within 30 days, EPA will

withdraw this proposed conditional approval action. If the State does

make a timely commitment, but the conditions are not met by the

specified date within one year, EPA is proposing that the rulemaking

will convert to a final disapproval. EPA would notify Delaware by

letter that the conditions have not been met and that the conditional

approval of the NSR SIP has converted to a disapproval. Each of the

conditions must be fulfilled by Delaware and submitted to EPA as an

amendment to the SIP.

If Delaware corrects the deficiencies within one year of

conditional approval, and submits a revised NSR SIP revision, EPA will

conduct rulemaking to fully approve the revision. In order to make this

NSR SIP approvable, Delaware must revise its NSR regulations to include

the provisions described in section III of this document by no later

than 12 months after EPA's final conditional approval.

Nothing in this action should be construed as permitting or

allowing or establishing a precedent for any future request for

revision to any state implementation plan

revision. In order to make this

NSR SIP approvable, Delaware must revise its NSR regulations to include

the provisions described in section III of this document by no later

than 12 months after EPA's final conditional approval.

Nothing in this action should be construed as permitting or

allowing or establishing a precedent for any future request for

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

the state implementation plan shall be considered separately in light

of specific technical, economic, and environmental factors and in

relation to relevant statutory and regulatory requirements.

IV. Administrative Requirements

A. Executive Order 12866

The Office of Management and Budget (OMB) has exempted this

regulatory action from E.O. 12866 review.

B. Regulatory Flexibility Act

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

must prepare a regulatory flexibility analysis assessing the impact of

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

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

significant impact on a substantial number of small entities. Small

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

and government entities with jurisdiction over populations of less than

50,000.

Conditional approvals of SIP submittals under section 110 and

subchapter I, part D of the Clean Air Act do not create any new

requirements but simply approve requirements that the State is already

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

any new requirements, 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 Act, preparation

of a flexibility analysis would constitute Federal inquiry into the

economic reasonableness of state action. The Clean Air Act forbids EPA

to base its actions concerning SIPs on such grounds. Union Electric Co.

v. U.S. EPA, 427 U.S

hat it does not have

a significant impact on any small entities affected. Moreover, due to

the nature of the Federal-State relationship under the Act, preparation

of a flexibility analysis would constitute Federal inquiry into the

economic reasonableness of state action. The Clean Air Act forbids EPA

to base its actions concerning SIPs on such grounds. Union Electric Co.

v. U.S. EPA, 427 U.S. 246, 255-66 (1976); 42 U.S.C. 7410(a)(2).

If the conditional approval is converted to a disapproval under

section 110(k), based on the State's failure to meet the commitment, it

will not affect any existing State requirements applicable to small

entities. Federal disapproval of the State submittal does not affect

its state-enforceability. Moreover, EPA's disapproval of the submittal

does not impose a new Federal requirement. Therefore, EPA certifies

that this disapproval action would not have a significant impact on a

substantial number of small entities because it does not remove

existing requirements nor does it substitute a new federal requirement.

C. Unfunded Mandates

Under section 202 of the Unfunded Mandates Reform Act of 1995

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

must

prepare a budgetary impact statement to accompany any proposed or final

rule that includes a Federal mandate that may result in estimated costs

to State, local, or tribal governments in the aggregate; or to private

sector, of $100 million or more. Under section 205, EPA must select the

most cost-effective and least burdensome alternative that achieves the

objectives of the rule and is consistent with statutory requirements.

Section 203 requires EPA to establish a plan for informing and advising

any small governments that may be significantly or uniquely impacted by

the rule

the aggregate; or to private

sector, of $100 million or more. Under section 205, EPA must select the

most cost-effective and least burdensome alternative that achieves the

objectives of the rule and is consistent with statutory requirements.

Section 203 requires EPA to establish a plan for informing and advising

any small governments that may be significantly or uniquely impacted by

the rule.

EPA has determined that the approval action proposed does not

include a Federal mandate that may result in estimated costs of $100

million or more to either State, local, or tribal governments in the

aggregate, or to the private sector. This Federal action 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 to the private sector, result from this action.

The Regional Administrator's decision to approve or disapprove this

SIP revision regarding Delaware's NSR program will be based on whether

it meets the requirements of section 110(a)(2)(a)-(K) and part D of the

Clean Air Act, as amended, and EPA regulations in 40 CFR part 51.

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, New source review,

Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements,

Volatile organic compounds.

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

Dated: December 18, 1997.

Thomas Voltaggio,

Acting Regional Administrator, Region III.

[FR Doc. 98-673 Filed 1-9-98; 8:45 am]

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