[Federal Register Volume 59, Number 183 (Thursday, September 22, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-23112]
[[Page Unknown]]
[Federal Register: September 22, 1994]
_______________________________________________________________________
Part II
Environmental Protection Agency
_______________________________________________________________________
40 CFR Part 85
_______________________________________________________________________
Clean Air Act: Ozone Transport Commission: Low Emission Vehicle Program
for Northeast Ozone Transport Region; Proposed Rule
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 85
[FRL-5074-4]
Supplemental Notice of Proposed Rulemaking on Ozone Transport
Commission; Emission Vehicle Program for the Northeast Ozone Transport
Region
AGENCY: Environmental Protection Agency (EPA).
ACTION: Supplemental notice of proposed rulemaking.
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SUMMARY: Pursuant to section 184 of the Clean Air Act, the Northeast
Ozone Transport Commission recommended that EPA require all state
members of the OTC to adopt an Ozone Transport Commission Low Emission
Vehicle (LEV) program.
In today's supplemental notice of proposed rulemaking (SNPRM), EPA
is proposing to find that reduction of new motor vehicle emissions
through OTC LEV or LEV-equivalent program is necessary to mitigate the
effects of pollution transport and to bring nonattainment areas in the
OTR into attainment and to avoid interference with maintenance. EPA
believes an alternative federal low emission vehicle program can be
developed that would achieve reductions equivalent to or greater than
the OTC LEV program. EPA also believes there could be significant
additional benefits from such a program and proposes in today's notice
a process by which development of such a program could continue. The
Agency intends to work with stakeholders in this effort.
Given the absence of such a program, however, EPA is proposing
under sections 184(c) and 110(k)(5) of the Act that the OTC LEV program
is necessary throughout the OTR and is consistent with the Act. EPA is
thus proposing a SIP call under section 110(k)(5) to require each state
in the OTR to revise its SIP to include the OTC LEV program within one
year. Today's notice also proposes regulations determining ``model
year'' for purposes of section 177 and part A of title II of the Act as
that term is applied to on-highway motor vehicles.
DATES: The comment period for this rulemaking will reopen immediately
for purposes of taking comment on issues raised in this Supplemental
Proposal and will remain open until October 24, 1994. Please direct all
correspondence to the address specified below. EPA will hold a public
hearing on this Supplemental Notice of Proposed Rulemaking if one is
requested by September 29, 1994. EPA will hold such a hearing on
September 29, 1994. The hearing, if requested, would begin at 9 a.m.
and continue until 4:30 p.m. or until all commenters have the
opportunity to testify. Members of the public may call the contact
person indicated below to find out whether a hearing will be held and,
if so, the exact location.
ADDRESSES: Written comments should be submitted (in duplicate if
possible) to the Air Docket (see address below). Copies of information
relevant to this matter are available for inspection in public docket
A-94-11 at the Air Docket (LE-131) of the EPA, room M-1500, 401 M
Street SW., Washington, DC 20460, tel. (202) 260-7548, between the
hours of 8 am to 4 pm, on Monday through Friday.
The hearings, if requested, will be held in Washington, DC.
FOR FURTHER INFORMATION CONTACT: Michael Shields, Office of Mobile
Sources, U.S. EPA, 401 M Street SW., Washington, DC 20460, tel. (202)
260-3450.
SUPPLEMENTARY INFORMATION:
I. Outline and Background
This proposal supplements EPA's April 26 proposal, and EPA does not
intend to thereby withdraw from consideration any of the various
elements previously proposed. Rather, EPA intends to focus for purposes
of public comment on EPA's proposed specific approach to, and basis
for, approving the OTC LEV recommendation. In addition, EPA is
proposing today ``model year'' regulations that are relevant to, but
beyond the specific scope of EPA's April 26 proposal.
This proposal is organized into the following sections:
I. Outline and Background
A. Overview of Title I Scheme
B. Ozone Transport Region Provisions
C. Background Regarding OTC LEV Program
D. EPA Actions in Response to the OTC LEV Recommendation
II. Explanation of Proposed Action
III. Statutory Framework for Proposed Action
A. EPA's Authority under Section 184
B. State Obligations and EPA's Authority under Section 110
C. Constitutional Validity of Section 184 Process
D. Consistency of EPA Action with Limitations on Authority under
Sections 177, 202 and 209 of the Act
IV. Basis for Approval of OTC LEV Recommendation
A. Necessity
1. Legal Interpretation of Necessity
2. Analysis of Need for OTC LEV (or LEV-Equivalent) Program
(a) Magnitude of Reductions Needed for Attainment in 2005
i. General Conclusions
ii. Analytical Modeling Tools
(b) Contribution Analysis
(c) Analysis of Inventory and Options for Control Measures
i. Inventory Analysis
ii. Analysis of Options for Control Measures Without More
Stringent New Motor Vehicle Standards
iii. Determination Whether Reduction from OTC LEV (or LEV-
Equivalent) Approach to New Motor Vehicles Are Necessary
(d) Particular Circumstances of OTC LEV Program
(e) Conclusions Regarding Need for OTC LEV (or LEV Equivalent)
for Purposes of Attainment by the Dates Provided in Subpart II of
Part D of title I
3. Need for OTC LEV (or LEV-Equivalent) Program for Purposes of
Maintenance
(a) Legal Relevance of Maintenance
(b) Technical Analysis of Need for OTC LEV (or LEV-Equivalent)
Program for Maintenance
4. Relevance of EPA Transport Policy
B. Consistency with Section 177 of the Clean Air Act
1. Introduction
2. California Fuel Regulations
(a) Identicality Requirement
(b) Third Vehicle Prohibition
3. ZEV Sales Requirement
4. Incorporation of Minor Provisions of California LEV Program
5. NMOG Fleet Average
6. Averaging, Banking and Trading
7. Applicability of Section 177 in States without Plan
Provisions Approach under Part D
V. SIP Call
A. Explanation of Proposed SIP Call
B. Legal Basis to Provide for Possibility of Alternative
Standards Program in SIP Call
C. Sanctions
VI. Determination of Model Year
A. Introduction
B. Statutory and Regulatory Requirements
C. New York and Massachusetts Litigations
D. Determination of Model Year
VII. Statutory Authority
VIII. Administrative Designation and Regulatory Analysis
IX. Impact on Small Entities
X. Paperwork Reduction Act
I. Outline and Background
A. Overview of Title I Scheme
The OTC's recommendation under section 184(c) of the Act that EPA
mandate that states in the OTR adopt the LEV program arises in the
context of the program designed to address ozone (or ``smog'')
pollution in subpart 2 of part D of title I of the Act. This program is
described in detail in EPA's General Preamble for the Implementation of
Title I of the Clean Air Act Amendments of 1990, 57 FR 13498 (April 16,
1992), and the Nitrogen Oxides Supplement to the General Preamble, 57
FR 55620 (Nov. 25, 1992).
A number of provisions in subpart 2 and elsewhere in the Act are
particularly important to emphasize here. Part D establishes a system
for more polluted areas to have more time to attain the National
Ambient Air Quality Standards (NAAQS) and subjects those more polluted
areas to a graduated program of additional and more stringent specific
control requirements to be accomplished over the longer timeframe.
Section 181(a) provides for classification of ozone nonattainment
areas based on the degree of the nonattainment problem in the area (as
measured by the area's ozone design value), and provides that
attainment ``shall be as expeditiously as practicable but not later
than'' specified deadlines expressed as years after enactment. The
areas and the corresponding attainment deadlines are: Marginal (1993);
moderate (1996); serious (1999); severe (2005 or 2007, depending on the
design value); and extreme (2010). The Act also provides for
designation of areas as attainment or as ``unclassifiable.'' All
classifications other than extreme are represented in the OTR. Section
184(b) also specifies additional requirements applicable for attainment
areas in ozone transport regions, including: (1) Enhanced vehicle
inspection and maintenance programs in cities meeting specified size
thresholds; (2) state-wide implementation of reasonably available
control measures (RACT); (3) ``Stage II'' vehicle refueling vapor
controls or ``comparable measures''; and (4) treatment of major
stationary sources of ozone precursors as if they were in moderate
nonattainment areas.
Section 182 establishes the graduated control measures applicable
for each nonattainment classification. These measures are additive in
that the higher classifications must generally adopt, in addition to
measures specifically applicable to that higher classification, all
measures identified for lower classifications as well. A basic
requirement applicable to marginal and above classifications is that
states are to submit inventories of actual emissions from all sources
in each nonattainment area. See sections 182(a)(1) and 172(c)(3). These
emissions inventories may be important in determining whether the LEV
program is necessary in the OTR. The inventories are critical inputs
for models used to determine the magnitude of emissions reductions that
may be needed for attainment and the effectiveness of various measures
to obtain such reductions.
Another potentially key requirement is that moderate and above
areas must submit attainment demonstrations. Under section
182(b)(1)(A), for moderate and above areas, states are to specify in
their plans specific annual reductions in emissions ``as necessary to
attain the [NAAQS] for ozone by the attainment date applicable under
this Act.'' Under section 182(c)(2)(A), for serious and above areas,
states are to submit a demonstration that the SIP, ``as revised, will
provide for attainment of the ozone [NAAQS] by the applicable
attainment date.'' Further, this provision continues, ``[t]his
attainment demonstration must be based on photochemical grid modeling
or any other analytical method determined by the Administrator, in the
Administrator's discretion, to be at least as effective.'' The modeling
information is, of course, important to determining the reductions
necessary in areas to achieve attainment throughout the OTR.
It is also relevant that states are obligated to adopt various
measures specified for progress toward attainment, and to achieve
certain percentage reductions in emissions by interim dates. In
general, section 172(c)(2) requires that SIPs ``require reasonable
further progress'' (RFP), defined in section 171(1) to mean ``such
annual incremental reductions in emissions of the relevant air
pollutant as are required by this part or may reasonably be required by
the Administrator for the purpose of ensuring attainment of the [NAAQS]
by the applicable date.'' Section 182(b) specifically provides that, by
November 15, 1993, states were to submit SIP revisions for moderate and
above areas providing for, with a limited feasibility exception, a 15%
reduction by 1996 in emissions of volatile organic compounds (VOCs)
from a 1990 baseline. Further, section 182(c)(2)(B) provides that, by
November 15, 1994, states are to submit SIP revisions for serious and
above areas that will result, subject to a limited feasibility
exception, in additional reductions in VOC emissions from the 1990
baseline of 3% each year averaged over consecutive 3-year periods
beginning in 1996 and until the attainment date. Section 182(c)(2)(C)
provides for substitution of reductions in emissions of nitrogen oxides
(NOX) for VOC, in accordance with EPA guidance. These RFP
requirements establish minimum reductions that certain nonattainment
areas in the OTR will be required to achieve apart from whether EPA
approves or disapproves the OTC recommendation.
Finally, section 110 of the Act establishes general requirements
for SIPs. Section 110(a)(2) specifies minimum elements of a state's
SIP, and subparagraph (D) specifies that a state's SIP shall:
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 such national
primary or secondary ambient air quality standard.
This provision, as discussed in detail below, is the key mechanism
under the transport provisions of sections 176A and 184, and is central
to the OTC recommendation and to EPA's action on it.
B. Ozone Transport Region Provisions
The OTR was established by operation of law under section 184 of
the Act and is comprised of the States of Connecticut, Delaware, Maine,
Maryland, Massachusetts, New Hampshire, New Jersey, New York,
Pennsylvania, Rhode Island, Vermont, the District of Columbia, and the
portion of Virginia that is within the Consolidated Metropolitan
Statistical Area that includes the District of Columbia. Congress
established the OTR in the 1990 Amendments to the Act based on the
recognition that the transport of ozone and ozone precursors throughout
the region may render the northeast states' attainment strategies
interdependent.
Under section 184, the Administrator established a Northeast Ozone
Transport Commission for the OTR consisting of the Governors of each
state or their designees, the Administrator or her designee, the
Regional Administrators for the EPA regional offices affected (or the
Administrator's designees), and an air pollution control official
representing each state in the region, appointed by the Governor.
Section 184(c) specifies a procedure for the OTC to develop
recommendations for additional control measures to be applied within
all or a part of the OTR if the OTC determines that such measures are
necessary to bring any area in the OTR into attainment for ozone by the
applicable dates in the Act. Section 184(c)(1) provides that:
Upon petition of any States within a transport region for ozone,
and based on a majority vote of the Governors on the Commission (or
their designees), the Commission may, after notice and opportunity
for public comment, develop recommendations for additional control
measures to be applied within all or a part of such transport region
if the commission determines such measures are necessary to bring
any area in such region into attainment by the dates provided by
[subpart 2 of part D of title I of the Clean Air Act].
Section 184(c) also lays out procedures the Administrator is to
follow in responding to recommendations from the OTC. Upon receipt of
the recommendations, the Administrator is to publish a Federal Register
notice stating that the recommendations are available and providing an
opportunity for a public hearing within 90 days. The Administrator is
also to ``commence a review of the recommendations to determine whether
the control measures in the recommendations are necessary to bring any
area in such region into attainment by the dates provided by [subpart
2] and are otherwise consistent with [the] Act.'' Finally, in
undertaking her review, the Administrator is to consult with members of
the OTC and is to take into account the data, views, and comments
received pursuant to the public hearing.
Last, sections 184(c)(4) and (5) govern EPA's response to the OTC
recommendations. The Administrator is to determine whether to approve,
disapprove, or partially approve and partially disapprove the
recommendations within nine months of receipt. For any disapproval, the
Administrator is to specify:
(i) Why any disapproved additional control measures are not
necessary to bring any area in such region into attainment by the dates
provided by [subpart 2] or are otherwise not consistent with the Act;
and
(ii) Recommendations concerning equal or more effective actions
that could be taken by the commission to conform the disapproved
portion of the recommendations to the requirements of [section 184].
Section 184(c)(5) provides that, upon approval or partial approval
of any recommendations, the Administrator is to issue to each state in
the OTR to which an approved requirement applies a finding under
section 110(k)(5) that the SIP for that state is inadequate to meet the
requirements of section 110(a)(2)(D), quoted above. Under section
184(c)(5), the Administrator's finding of inadequacy under section
110(a)(2)(D) is to require that each affected state revise its SIP to
include the approved additional control measures within one year after
the finding is issued.
Finally, section 184(d) provides that, for purposes of section 184,
the Administrator is to ``promulgate criteria for purposes of
determining the contribution of sources in one area to concentrations
of ozone'' in another nonattainment area. These criteria are to
``require that the best available air quality monitoring and modeling
techniques be used for purposes of making such determinations.'' EPA
issued such criteria in 1991.1
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\1\See U.S. EPA, Doc. EPA-450/4-91-015, Criteria for Assessing
the Role of Transported Ozone/Precursors in Ozone Nonattainment
Areas (1991).
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C. Background Regarding OTC LEV Program
The Administrator convened the OTC on May 7, 1991. Thereafter, the
OTC moved to work toward a regional ozone strategy with emphasis on
consensus agreements to adopt regional measures to address the ozone
problem in the Northeast. To address the contribution of motor vehicles
to the northeast ozone problem, the OTC focused early on emissions
standards for new motor vehicles and on adoption of federal
reformulated gasoline throughout the OTR as potential additional
control measures. The Act, however, imposes certain limitations on the
states' ability to adopt new motor vehicle emissions standards.
Section 209 of the Act generally preempts states from establishing
new motor vehicle emissions standards, leaving such regulation to EPA
under section 202 of the Act. Section 209 does, however, provide an
exception for California to adopt new motor vehicle emissions standards
where the Administrator grants a preemption waiver based on a finding
that California's standards will be, ``in the aggregate, at least as
protective of public health and welfare as applicable Federal
standards.'' Further, under section 177 of the Act, any state which has
SIP provisions approved under part D of title I may adopt and enforce
new motor vehicle emission standards for any model year if:
(1) Such standards are identical to the California standards for
which a waiver has been granted for such model year, and
(2) California and such state adopt such standards at least two
years before commencement of such model year (as determined by
regulations of the Administrator).* * *.
EPA has granted a waiver for California's ``Low Emission Vehicle''
program. See 58 FR 4166 (Jan. 13, 1993)(announcing availability of
Waiver of Federal Preemption; California Low-Emission Vehicle Standards
(Jan. 8, 1993)). This program generally calls for five categories of
vehicles meeting progressively more stringent emissions standards:
California Tier I vehicles; Transitional Low Emission Vehicles (TLEV);
Low Emission Vehicles (LEV); Ultra-Low Emission Vehicles (ULEV); and
Zero Emission Vehicles (ZEV). California has also established an
overall non-methane organic gas (NMOG) standard that each manufacturer
must meet for its fleet of new vehicles in a particular model year by
selling any combination of vehicles certified by California as meeting
standards for one of the five categories. In addition, under
California's program, at least 2% of each manufacturers' new vehicle
fleet sold in California must be ZEV's by 1998 and 10% by 2003.
At its second meeting on July 16, 1991, the OTC adopted a
Memorandum of Understanding (MOU) in which the state and District of
Columbia representatives agreed that, in view of the significant
contribution of motor vehicles to the northeast ozone problem, they all
support California's Motor Vehicle Control Program, and call on their
jurisdictions to cooperatively evaluate the feasibility, air quality
benefits, and associated costs of this Program in the OTR. At its third
meeting on October 29, 1991, the OTC states agreed to a further MOU
providing that each OTC state would take steps to implement
California's Low Emission Vehicle program as soon as possible. New York
and Massachusetts are the only states that have adopted the California
LEV program in legislation and regulations without contingencies, and
both states are set to implement their programs. The automobile
manufacturers have challenged the legality of both programs, and both
lawsuits are ongoing. Other states have adopted or are adopting the
program contingent on regional program adoption, and the remaining
states are at various stages of the legislative or regulatory process
to adopt the program.
In August 1993, Maine, Maryland, and Massachusetts petitioned the
OTC to adopt a recommendation calling for the application of the
California LEV program throughout the OTR. During the fall of 1993, the
OTC held a number of public forums in various locations in the
northeast, and held a public hearing in Hartford, Connecticut on
December 16-17, 1993. Finally, at its winter meeting on February 1,
1994, in Washington, D.C., the OTC voted by a 9 to 4 majority to
recommend that EPA mandate the California LEV program throughout the
OTR. (The OTC refers to the program they recommend as ``OTC LEV.'') New
Hampshire, Virginia, Delaware, and New Jersey voted against the
recommendation. The OTC's recommendation contains the following
elements:
(1) The OTC LEV program would be applicable to all 1999 and
subsequent model year passenger cars and light-duty trucks in the OTR;
(2) Subject to certain very limited exceptions, all vehicles sold,
imported, delivered, purchased, leased, rented, acquired, received, or
registered in the OTR that would be subject to the OTC LEV program
would have to be certified pursuant to a California Air Resources Board
(CARB) Executive Order;
(3) The OTC LEV program would allow the sale of the five categories
of California vehicles: California Tier I, TLEV, LEV, ULEV, and ZEV;
(4) Manufacturers could choose any combination of California
certified vehicles to meet the following average NMOG fleet emission
standards:
1999--0.113 g/mi
2000--0.073 g/mi
2001--0.070 g/mi
2002--0.068 g/mi
2003 and later--0.062 g/mi
Regarding California's ZEV sales mandate, the OTC recommends that, to
the extent it must apply to satisfy section 177, it shall apply. But if
it is not required under section 177, the OTC recommends that the
``individual states within the OTC may at their option include such a
requirement and/or economic incentives designed to increase the sales
of ZEVs in the programs they adopt.''
(5) The effective date for the OTC LEV program would be January 1,
1996, allowing two vehicle model years prior to applicability of the
standards in 1999, but would not preclude earlier state implementation.
D. EPA Actions in Response to the OTC LEV Recommendation
On March 18, 1994, EPA published a notice announcing receipt of the
OTC's recommendation, as required by in section 184(c)(1). See 59 FR
12914. This notice explained EPA's process for responding to the
recommendation, identified the major elements of the recommendation,
and briefly explained EPA's intended approach at that time for
analyzing the issues. On April 8, 1994, EPA announced that the public
hearing as required by section 184(c)(1) would be held in Hartford,
Connecticut on May 2-3, 1994. See 59 FR 16811.
On April 26, 1994, EPA published a notice of proposed rulemaking
(NPRM) on the OTC recommendation. 59 FR at 21720. This notice described
the framework for EPA's action on the recommendation and provided
substantial detail regarding the issues EPA was considering in deciding
whether to approve, disapprove, or partially approve and partially
disapprove the recommendation. The NPRM described in detail the
background and context of the OTC's recommendation, as well as the
legislative history of section 184. The text of the OTC's
recommendation was reprinted as an appendix to the NPRM. It also
addressed the applicability of rulemaking procedures for EPA's action
on the recommendation. Thereafter, the notice addressed the standards
applicable to EPA's review of the recommendation, including both the
``necessary'' and ``consistent with the Act'' criteria. Regarding
necessity, the NPRM addressed the legal interpretation of this
standard, the magnitude of emissions reductions needed for attainment
in the OTR, the focus on contribution of emissions from across the OTR,
and the timing of the necessary reductions, including the relevance of
maintenance after attainment. The NPRM also explained the OTC's
recommended LEV program in detail, EPA modeling of the emissions
benefits from this program, and the auto manufacturers' FLEV
alternative. The NPRM then explained EPA's approach to considering
other alternatives to the OTC LEV program. Regarding consistency of the
OTC LEV recommendation with the Act, EPA addressed issues common to
pending litigation in New York and Massachusetts as well as other
issues regarding consistency of the OTC LEV recommendation with section
177 of the Act. Overall, EPA proposed, in the alternative, to approve,
disapprove, or partially approve and partially disapprove the OTC's
recommendation. The NPRM provided that the public comment period would
remain open until June 3, 1994, thirty days following the public
hearing.
To provide a further opportunity for interactive discussion of the
issues among the various interested parties, members of the public, and
EPA, the Agency held an additional series of three public
``roundtable'' meetings in Philadelphia, Pennsylvania, Durham, New
Hampshire, and New York City. The agenda for these meetings was
structured to generally follow the framework for analysis described in
the NPRM. EPA published a notice on June 2, 1994, providing the time,
place, and agenda for each meeting. See 59 FR 28520. The primary topics
discussed at the first meeting in Philadelphia were the proper
interpretation of the ``necessity'' standard, and the OTC LEV program
itself. The topics addressed at the second meeting in Durham included
the magnitude of reductions needed in the OTR, alternatives to the OTC
LEV program, and a proposal from the Environmental Defense Fund (EDF)
for emissions trading. At the third meeting in New York City, the
discussion continued regarding alternative approaches to achieving the
necessary emissions reductions, including the automakers' FLEV
proposal, and a proposal from Texaco, Merck, and Public Service
Electric & Gas Co. to establish a cap on NOX emissions together
with trading.
At the New York City roundtable meeting, EPA re-opened the public
comment period on the NPRM until July 30, 1994, to allow interested
parties to submit additional information in response to issues raised
in the roundtable meetings. See 59 FR 35292.
On August 4, 1994, EPA formally created a subcommittee of the Clean
Air Act Advisory Committee in accordance with the Federal Advisory
Committee Act, 5 U.S.C. App. The subcommittee will focus on issues
related to the OTC petition and provide a public forum to pursue
discussion of alternative car standards that could apply in 49 states.
The first substantive meeting of the subcommittee will take place in
Washington, D.C. on Tuesday, September 13 and Wednesday, September 14,
1994 at the Ramada Plaza Hotel. EPA published a notice of these
meetings on August 30, 1994. See 59 FR 44729.
II. Explanation of Proposed Action
EPA is proposing today to approve the OTC's LEV recommendation
based on the determination under sections 184(c) and 110(k) of the Act
that the recommended LEV or a LEV-equivalent program\2\ is necessary
throughout the OTR and that the recommended LEV program is otherwise
consistent with the Act. EPA is proposing to find under its SIP call
authority in section 110(k)(5)\3\ that the SIP for each state in the
OTR is substantially inadequate to meet the requirements relating to
pollution transport in section 110(a)(2)(D).\4\ EPA is thus proposing
to require each state in the OTR to revise its SIP to include the LEV
program within one year after the section 110(k)(5) finding is finally
issued. EPA is proposing that the SIP call allow individual OTR states
to give manufacturers the choice of complying with either the OTC LEV
requirements or--if such a program is developed--a voluntary new-
vehicle program to which automakers could voluntarily opt-in that
achieves equivalent or greater emissions reductions that are fully
enforceable and qualifies for SIP credits.\5\
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\2\A ``LEV-equivalent program'' is an alternative voluntary
federal program that would achieve emission reductions from new
motor vehicles in the OTR equivalent to or greater than would be
achieved by the OTC LEV program.
\3\Section 110(k)(5) authorizes the Administrator, whenever she
finds that a SIP for an area is substantially inadequate to mitigate
adequately the interstate pollutant transport described in section
176A or 184, or to otherwise comply with any requirement of the Act,
to require the State to revise the SIP as ``necessary'' to correct
the deficiency.
\4\Section 110(a)(2)(D) requires that SIPs contain adequate
provisions to prevent emissions within the state that contribute
significantly to nonattainment in, or interfere with maintenance by,
any other state.
\5\EPA does not ordinarily undertake rulemaking to issue a SIP
call. EPA usually issues SIP calls by letter containing a finding of
substantial inadequacy. The basis for the SIP call and finding would
then be the subject of notice-and-comment rulemaking before the
imposition of any sanctions warranted in response to state failure
to respond to the SIP call. Here, EPA is choosing instead to
undertake notice-and-comment rulemaking regarding the basis of the
SIP call before issuing it.
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EPA is also proposing that states in the OTR be allowed, but not
required, to adopt the Zero Emission Vehicle (ZEV) sales requirement.
The OTC recommended that EPA require states to adopt the ZEV sales
requirement only if it is a necessary component of a LEV program under
section 177. EPA is proposing today that a ZEV sales requirement is not
a required component of a LEV program adopted under section 177 and
that states would therefore not be obligated to adopt it. However,
states have the discretion to include a ZEV sales requirement. States
may also include economic incentives designed to increase the sales of
ZEVs as long as such incentives are consistent with sections 177 and
209 of the Act. EPA is also taking comment on whether to adopt a ``ZEV
equivalency approach'' to require states either to impose ZEV mandates
or to impose other requirements on new motor vehicles that achieve the
evaporative NMOG and NOX benefits associated with ZEVs.
Finally, EPA is proposing regulations to determine the term ``model
year'' for purposes of section 177 and part A of title II of the Act,
as that term applies to motor vehicles. The proposed regulations
provide that model year will apply on a model-by-model basis. This
regulatory action codifies long-standing EPA guidance on this
definition and should clarify the applicability of the two-year lead-
time requirement in section 177.
III. Statutory Framework for Proposed Action
Today's proposed action is authorized by several Clean Air Act
provisions. As discussed in the NPRM, EPA has authority to approve the
OTC's LEV recommendation under section 184(c). EPA also has independent
authority to require that states submit LEV SIP revisions under
sections 110(a)(2)(D) and 110(k)(5). EPA disagrees with the comments of
the automakers that argue that EPA lacks authority to approve the OTC
LEV recommendation because the section 184 process is unconstitutional
and because an EPA SIP call requiring state regulation of emissions
from new motor vehicles violates sections 177, 202, and 209 of the
Clean Air Act.
A. EPA's Authority To Act Under Section 184
Section 184 provides a clear statutory basis for EPA's action here.
EPA described that provision in detail in the background section above,
and in its April 26 proposal. See 59 FR at 21722-24. In summary, the
OTC is a body created by operation of law under sections 176A and 184
of the Act, and is comprised of the Governor (or Governor's designee)
and an air pollution control official appointed by the Governor for
each state in the OTR, as well as the EPA Administrator (or her
designee) and the affected EPA Regional Administrators (or the
Administrator's designees). Decisions of the OTC are by majority vote
of all members other than the EPA representatives. Under section
184(c), the OTC may, after notice-and-comment, develop recommendations
for additional control measures to be applied within the OTR as
necessary to bring any area in the region into attainment by the dates
provided in subpart 2 of part D. The OTC is then to transmit such
recommendations to EPA to require such measures throughout the OTR.
Section 184 grants EPA authority to approve the recommendations and
issue SIP calls requiring that the affected states adopt the
recommended measures if EPA determines that the measures are
``necessary to bring any area in [the OTR] into attainment by the dates
provided by this subpart and are otherwise consistent with the Act.''
Upon approval, section 184(c)(5) authorizes the Administrator to issue
a finding under section 110(k)(5) that the SIP for any state to which a
requirement of the approved recommendation applies is inadequate to
meet the requirements of section 110(a)(2)(D) of the Act. The effect of
the finding is to require that any such state revise its SIP to include
the approved recommended measures within one year after the finding is
issued.
B. State Obligations and EPA's Authority To Act Under Section 110
EPA also is proposing to interpret section 110 of the Act to
provide that the Agency has independent authority for today's proposed
action under that section, apart from any authority provided by section
184. Under section 110(a)(2)(D), each state is obligated to submit SIP
provisions prohibiting sources in the state from contributing
significantly to nonattainment or interfering with maintenance in any
other state. If EPA finds that a SIP is substantially inadequate to
adequately mitigate interstate pollution transport, section 110(k)(5)
authorizes EPA to issue a SIP call to correct the inadequacy. Under
EPA's proposed interpretation, sections 110(a) and (k) allow EPA to
find at any time that a SIP is inadequate due to pollution transport.
Thus, EPA is proposing to find that, because of the transport of
pollution, OTC LEV (or LEV-equivalent) is necessary for areas in the
OTR to achieve or maintain the ozone NAAQS, and therefore, that EPA has
authority under sections 110(a)(2)(D) and (k)(5) to make a finding of
substantial inadequacy and to issue a SIP call requiring adoption of
OTC LEV. Rather than make a general finding of SIP substantial
inadequacy, EPA is proposing to find the SIPs substantially inadequate
only to the extent they do not contain the OTC LEV program. EPA is
therefore proposing to require these states to adopt the OTC LEV
program to correct the deficiency.
The 1990 Clean Air Act Amendments broadened each state's long-
standing obligation to address in its SIP the contribution of emissions
in its state to air pollution in other states.\6\ The changes expand
the provision beyond stationary sources that prevent downwind
attainment or maintenance to other sources and emissions activities
that contribute significantly\7\ to downwind nonattainment or interfere
with downwind maintenance. The expanded provision encompasses, among
other things, mobile source controls in light of the impact of mobile
sources on downwind attainment and maintenance.
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\6\Prior to 1990, section 110(a)(2)(E) required that the SIPs:
Contain adequate provisions * * * prohibiting any stationary
source within the State from emitting any air pollutant in amounts
which will * * * prevent attainment or maintenance by any other
state of any such national primary or secondary ambient air quality
standard.
In the 1990 Amendments, this provision was re-codified at
section 110(a)(2)(D) and broadened to require that a SIP submitted
under the Act shall:
Contain adequate provisions * * * 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 * * * contribute significantly to nonattainment in, or
interfere with maintenance by, any other state with respect to any
such [NAAQS].
\7\To some extent the reference to contribution merely codified
an EPA approach taken under the old section 110(a)(2)(E) and that at
least one court decision had upheld. See Air Pollution Control
District of Jefferson County, Kentucky v. EPA, 739 F.2d 1071 (6th
Cir. 1984).
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The mechanism for EPA to take action to require compliance with
section 110(a)(2)(D) is the SIP call authority provided in section
110(k)(5). That provision directs:
Whenever the Administrator finds that the applicable
implementation plan for any area is substantially inadequate to
attain or maintain the relevant [NAAQS], to mitigate adequately the
interstate pollutant transport described in section [176A] or
section [184], or to otherwise comply with any requirement of this
Act, the Administrator shall require the state to revise the plan as
necessary to correct such inadequacies.
Under section 110(k)(5), the Administrator is to notify the state of
the inadequacies and may establish reasonable deadlines, not exceeding
18 months after notice, for submission of the plan revisions.
Importantly, the Act does not address how states' attainment
demonstrations are to account for transport of ozone pollution and its
precursors.\8\ As was the case prior to the 1990 Amendments, neither
section 110 nor any other provision of the Act specifies when states
must submit SIP revisions to address the transport issue. Even with the
advent of the very specific SIP submission schedules in the subpart II
ozone program under the 1990 Amendments, no deadline is specified for
compliance with the section 110(a)(2)(D) prohibition. EPA believes it
may reasonably take action to make a finding of substantial inadequacy
as soon as EPA has a factual basis to believe that states need to act
in order to prevent the pollution transport problem from continuing
past the downwind areas' attainment deadlines. Absent a LEV-equivalent
program, EPA believes it is necessary that the states take action now
to adopt the OTC LEV program, and waiting to make this finding may
compromise their ability to achieve the reductions by the time they are
needed for timely attainment and maintenance thereafter. This action is
fully justified by the terms of section 110(k)(5). This provision
states that ``[w]henever'' EPA makes the requisite finding of
inadequacy, the state is obliged to submit a SIP revision. By its
terms, section 110(k)(5) makes clear that the timing of a SIP call
depends only on EPA's determination of inadequacy, and the section does
not contain any provision that would tie SIP calls to any particular
point on the SIP development timeline specified in sections 181 and
182.
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\8\EPA's proposed interpretation of sections 110(a)(2)(D) and
(k) is best understood in the context of the general statutory
scheme for attainment and maintenance of the ozone NAAQS. EPA's
April 26 proposal contains a substantial explanation of the
statutory program to address ozone pollution in subpart II of part D
of title I added in the 1990 Amendments to the Act. See 59 FR at
21721-22 (citing General Preamble for the Implementation of Title I
of the Clean Air Act Amendments of 1990, 57 FR 13498 (April 16,
1992)). As explained there, section 181 provides for the
classification of areas according to their degree of ozone
pollution. The greater the degree of pollution, the longer the area
has to attain and the more stringent control measures it must adopt.
The classifications and deadlines by which the areas are to attain
the ozone NAAQS are: marginal (1993); moderate (1996); serious
(1999); severe (2005 or 2007, depending on the ozone design value);
and extreme (2010).
Section 182 establishes the specific requirements and graduated
control measures applicable for each type of area. One basic
requirement is that states were to submit emissions inventories by
November 1992. A key upcoming requirement is that, by November 15,
1994, states are to have submitted, for all moderate and above
areas, demonstrations that the states' SIPs will provide for
attainment of the ozone NAAQS by the relevant attainment dates. As
described in detail in the April 26 notice and the General Preamble,
section 182 specifies a host of control requirements that states
must adopt for various areas to ensure progress toward attainment.
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Requiring submission of specific SIP revisions pursuant to section
110(k)(5) is consistent with past EPA actions. Prior to 1990 and the
enactment of section 184, EPA required states to submit specific
reasonably available control technology (RACT) control measures
applicable to stationary sources as part of a SIP call under section
110(k)(5). There, EPA's rationale was that:
Because of the relative imprecision of ozone databases and
modeling techniques * * * EPA historically has required most areas
to include in their control strategies certain stationary source
control measures that EPA believes are reasonably available, and
necessary to ensure that the SIP ``provides for'' attainment of the
ozone standard as expeditiously as practicable.\9\
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\9\For purposes of implementing the Clean Air Act after December
31, 1987 and prior to the 1990 Amendments, EPA interpreted the
statute as requiring states to develop corrective plans to attain
``as expeditiously as practicable.'' See 52 FR at 45044 et seq.
(Nov. 24, 1987); See also Delaney v. EPA, 898 F.2d 687 (9th Cir.
1990).
See 52 FR at 45062 (Nov. 24, 1987) (footnote added). EPA took this
action right away in response to a new list of areas violating the
ozone standard. See 52 FR at 45055; 53 FR 34500 (Sept. 7, 1988); 55 FR
30973 (July 30, 1990). EPA did not wait for these areas to develop
attainment plans before issuing a SIP call requiring them to adopt
specific controls necessary for attainment. Likewise, here EPA is
proposing to require submission of the OTC LEV program as necessary for
compliance with section 110(a)(2)(D).
EPA believes it has authority under section 110(k)(5) to find that
the states' SIPs are substantially inadequate for lack of the many
additional measures needed to fully achieve the emissions reductions
necessary to adequately mitigate transport, but does not believe it
should make such a broad finding of substantial inadequacy at this
time. This is because the states are on track to incorporate many
additional control measures into their SIPs for purposes of their
attainment demonstration obligations. In preparing these
demonstrations, the OTR states are actively working to adopt regional
strategies to address transport. In the ordinary course, EPA believes
it should allow states the first opportunity to address transport in
their forthcoming SIP revisions. There is still this opportunity for
states to adopt such other control measures to achieve the necessary
reductions in time for downwind states to meet their attainment
deadlines and to maintain the NAAQS thereafter.\10\ If those efforts do
not result in timely adoption of a regional strategy that will provide
the emission reductions needed for attainment and maintenance, EPA may
consider making a more comprehensive finding of SIP inadequacy insofar
as other measures in addition to LEV are lacking.
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\10\Section 181(a)(1) specified that ozone nonattainment areas
are to attain the NAAQS ``as expeditiously as practicable but not
later than'' the dates specified in that section. Based on currently
available information, EPA does not believe that the serious and
severe nonattainment areas in the OTR will be able to practicably
attain the NAAQS earlier than the dates specified in section
181(a)(1). This is because these areas will need to rely for
attainment on control measures that depend on equipment turnover
that will take time to occur. For this reason, EPA's analysis in
this SNPRM is based on the Agency's belief that the serious and
severe attainment dates are the dates specified in section
181(a)(1).
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EPA does not, however, believe it should wait to find the SIPs
inadequate insofar as they lack the LEV program. This is because the
LEV program depends on vehicle fleet turnover that will take an
unusually long time to generate the needed emissions reductions. If EPA
waits for the states' attainment demonstrations, the opportunity to
ensure that necessary emissions reductions from the LEV program are
achieved beginning in 1999 and growing thereafter may be irrevocably
lost. Any delay in beginning the fleet turnover to LEV vehicles in
model year 1999 will diminish the emissions benefits in the years
following. It is therefore necessary for the states to act now to adopt
OTC LEV, and appropriate for EPA to make a finding of substantial SIP
inadequacy now with respect to that program.
In sum, EPA is proposing to find now that the OTR states' SIPs are
substantially inadequate insofar as they do not contain the OTC LEV
program. This is because EPA believes that the states need to adopt
this program now to mitigate pollution transport adequately by the
attainment deadlines for areas in downwind states.
EPA is proposing to set a one-year deadline under section 110(k)(5)
for OTC LEV SIP submissions. Even though section 110(k)(5) authorizes
EPA to allow up to 18 months, EPA believes a one-year deadline is
appropriate here. EPA expects the one-year deadline to fall at the end
of calendar year 1995. To ensure implementation of the OTC LEV program
in model year 1999, and given the two-year lead-time requirement of
section 177, states must adopt the program before January 2, 1996. If
states were given more than about one year to adopt the LEV program,
they could not be assured of implementing it for all 1999 model year
vehicles. Since EPA is proposing to conclude that 1999 model year
implementation is necessary to achieve the necessary emissions
reductions, it is important that the SIP submission deadline fall in
time to meet the two-year lead-time requirement.
C. Constitutional Validity of Section 184 Process
The automakers' comments on EPA's April 26 proposal have raised a
number of arguments that the Agency's proceedings under section 184 are
unconstitutional.\11\ The Natural Resources Defense Council (NRDC) has
submitted a response to these constitutional arguments.\12\ EPA does
not believe the arguments that section 184 is unconstitutional have
merit. And in any case, given EPA's independent authority under section
110(k)(5), any constitutional question regarding the validity of
section 184 would not affect the validity of the action proposed today.
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\1\1See Letter from Kenneth W. Starr on behalf of the American
Automobile Manufacturers' Association and the Association of
International Automobile Manufacturers to Assistant Attorney General
Walter Dellinger (July 20, 1994).
\1\2See Letter from David Driesen on behalf of the Natural
Resources Defense Council to Walter E. Dellinger, III (Aug. 22,
1994).
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The automakers argue that Congress, through section 184, is
commandeering the legislative processes of the OTR states by directly
compelling them to take certain actions. The automakers argue that this
violates principles of federalism and the Tenth Amendment to the
Constitution. The Supreme Court has interpreted the Tenth Amendment to
mean that Congress cannot coerce states in their sovereign political
capacity to regulate private conduct.\13\ Section 184 is fully within
the scheme of ``cooperative federalism'' that the courts have confirmed
is consistent with constitutional requirements.\14\ As with many other
federal programs, section 184 is simply an unremarkable case under the
Clean Air Act's SIP program where Congress has provided incentives to
the states as a method of influencing their policy choices. Congress
may attach conditions on the receipt of federal funds (as long as the
conditions bear some relation to the purpose of the federal spending),
to influence states' legislative choices. And where Congress has the
authority to regulate private activity under the Commerce Clause, the
Court has recognized Congress's power to offer states the choice of
regulating an activity according to federal standards or having state
law pre-empted by federal regulation.\15\ Here, Congress provided
incentives to the states by placing conditions on highway funding; by
allowing states to apply a less stringent ``offset ratio'' for new
stationary pollution sources; and by allowing states to themselves
impose regulations rather than having the federal government implement
the program the state chose not to implement. See sections 179 (highway
and offset sanctions) and 110(c)(1) (federal implementation plans).
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\1\3See New York v. United States, 120 L.Ed.2d 123,139-44 (1992)
(discussing principles of federalism and limitations on federal
power to compel states to act in their political capacity under the
Tenth Amendment).
\1\4See Hodel v. Virginia Surface Mining & Reclamation Ass'n,
Inc, 452 U.S. 264, 289 (1981).
\1\5See New York v. United States, 120 L.Ed.2d at 144-45. See
also Brown v. EPA, 521 F.2d 827, 840 (9th Cir. 1975) (state may not
interfere with such regulation of air pollution sources as
Administrator may undertake pursuant to Clean Air Act and Congress
has power to authorize Administrator to obtain reluctant state's
consent by conditioning federal expenditures within state on
consent).
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The automakers also argue that section 184 constitutes an
unconstitutional delegation of federal authority to the OTC and
violates the Appointments Clause. They argue that through section 184
Congress delegated legislative authority outside the federal
government, or authorized state officials composing the OTC to exercise
significant federal executive authority that the Constitution commands
only federal officials appointed consistent with the Appointments
Clause may exercise. EPA does not, however, believe that state
officials exercise ``significant authority'' pursuant to federal law in
this context. EPA welcomes comment on the automakers' constitutional
arguments and the response from NRDC that are in the docket.
D. Consistency of EPA Action With Limitations on Authority Under
Sections 177, 202 and 209 of the Act
EPA's proposed action is fully consistent with both the letter and
spirit of sections 177, 202 and 209 of the Act. These three provisions
make it clear that Congress wanted auto manufacturers to have to meet
only two types of standards--federal standards and California
standards. Section 177 specifically contemplates that California's
standards may apply outside California. Approving the OTC's
recommendation is doing no more than requiring states, based on need,
to exercise authority given to them by Congress. EPA is authorized to
take this action under sections 184 and 110. EPA disagrees with those
commenters that claim sections 177 and 202 preclude EPA from approving
the OTC's recommendation.
Requiring adoption of the LEV standards in the OTR does not change
any current federal standard, so it is not prohibited by section 202.
Section 202(b)(1)(C) explicitly precludes EPA only from exercising its
authority under section 202 to modify certain specified standards prior
to model year 2004--it is not a general prohibition of all EPA action
relating to the control of emissions from motor vehicles. Thus, EPA may
not modify certain mandatory federal standards applicable nation-wide
to motor vehicles until model year 2004. However, today's proposal
requires only that states adopt certain programs applicable to motor
vehicles in such states, as states are permitted to do under section
177. EPA is not proposing to rely on section 202 to require the LEV
standards, so the prohibition in 202(b)(1)(C) is irrelevant.
The automakers have argued that granting the OTC petition violates
section 177 because EPA is making a choice (whether states should adopt
California standards) that section 177 reserves to the states. This
misconstrues the nature of section 177 and fails to read section 177
together with section 110(k)(5) or section 184. Section 177 provides an
exception to the general prohibition in section 209 against states
(other than California) adopting motor vehicle emission standards.
Section 177 thus provides states the discretion to adopt controls that
section 209 would otherwise preclude. Sections 110(k)(5) and 184 allow
EPA to require states to take actions that would otherwise be left to
their discretion. The language of section 177, that the states'
authority applies ``[n]otwithstanding section 209,'' makes clear that
Congress intended to provide an exception to section 209, not bar EPA
requirements under sections 110 or 184.
IV. Basis for Approval of OTC LEV Recommendation.
A. Necessity
1. Legal Interpretation of Necessity
EPA's April 26 proposal contains an extensive discussion of the
Agency's approach to interpreting the ``necessary'' standard under
section 184(c), and includes several options. See 59 FR at 21725-27.
Today, EPA is proposing its interpretation of this standard. Section
110(k)(5) also includes a ``necessary'' standard providing that, upon
an EPA finding of SIP inadequacy, the Agency is to require that the
state submit SIP revisions that are ``necessary'' to correct the
inadequacy. EPA is proposing that, in this particular case, the
``necessary'' standard under section 110(k)(5) be interpreted the same
as the ``necessary'' standard under section 184(c).
If EPA approves or partially approves the recommendation, section
184(c)(5) provides that EPA is to issue a finding that the SIPs for the
states to which an approved requirement applies are inadequate to meet
the requirements of section 110(a)(2)(D). Section 110(a)(2)(D) provides
that SIPs are to contain adequate provisions prohibiting emissions
within the state that will ``contribute significantly to nonattainment
in, or interfere with maintenance by, any other state.''
EPA is proposing that contributing emissions are significant under
section 110(a)(2)(D) at least where controlling such emissions is
necessary to bring any downwind area into attainment. EPA also is
proposing that emissions interfere with downwind maintenance under
110(a)(2)(D) at least where controlling such emissions is necessary for
downwind areas to maintain the NAAQS.\16\ EPA is further proposing to
interpret section 184 to mean that the Agency may approve the OTC's
recommendation if the measures are necessary for any area in the OTR to
attain or maintain the NAAQS.
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\16\EPA is not addressing in this rulemaking whether, under
section 110(a)(2)(D), a state's emissions may ``contribute
significantly'' to nonattainment or ``interfere with maintenance''
in another state when controlling the upwind state's emissions is
not strictly necessary but nevertheless would be helpful to downwind
states' efforts to attain and maintain the NAAQS.
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Section 110(k)(5) provides that EPA may issue a SIP call whenever
it finds a SIP for an area to be substantially inadequate to attain or
maintain the NAAQS, to mitigate adequately interstate transport under
sections 176A or 184, or to otherwise comply with any requirement of
the Act. EPA is proposing to interpret section 110(k)(5) to mean that
it may issue a SIP call based on a finding that a SIP does not comply
with the requirement of the section 110(a)(2)(D) to address adequately
the effect of pollution transport on downwind attainment and
maintenance. EPA may require that the states revise their SIPs to
include any particular measure that is necessary to comply with section
110(a)(2)(D).
EPA believes that the ``necessary'' standard requires the Agency to
evaluate the emissions reductions needed, and then whether reasonable
and practicable alternative measures could be adopted instead of the
OTC LEV program to achieve the needed reductions. The role of
``alternatives'' in EPA's analysis has often been confused in the
course of EPA's hearings and round-table proceedings. EPA believes two
distinct kinds of alternatives are relevant to necessity.
First, an alternative program to achieve the same emissions
reductions from the same emissions sources may render the OTC LEV
program unnecessary. An example is useful to illustrate this point. If
EPA or the states were (hypothetically) to mandate that all new motor
vehicles be ZEVs, then an OTC LEV program would not be necessary--it
would not make sense (and would be unnecessary) to mandate OTC LEV
tailpipe standards for a new vehicle fleet consisting entirely of cars
without tailpipes. This would be true regardless of what emissions
reductions are needed overall and what other measures are available to
achieve the needed reductions. It is in this sense that EPA believes
that OTC LEV would be unnecessary if there were another program
available to achieve emissions reductions from new motor vehicles
comparable to, or greater than, those from OTC LEV. Under this aspect
of the analysis, the ability of the alternative to achieve reductions
sufficient to comply with section 110(a)(2)(D) is not relevant.
EPA is aware of alternative programs that currently are under
discussion by various interested parties. EPA believes that some
alternative programs could be preferable to simply approving the
petition. Such alternatives focus on a 49-state approach, whereby auto
manufacturers would commit to produce cars with a cleaner internal
combustion engine (compared to current federal standards) nationwide.
Incentives for advanced technology and zero emission vehicles are also
part of the discussion. As these alternatives are developed and
modeling of associated benefits is undertaken, EPA will add the
analyses to the docket and publish a notice of data availability in the
Federal Register.
EPA believes that a 49-state low emission vehicle approach could be
better than the OTC LEV program in a number of respects. First, EPA
believes that a 49-state program could have significant environmental
benefits as compared to the OTC LEV program. A 49-state approach could
benefit the OTR by reducing incoming pollution from other states--both
transported air pollution and pollution from the migration of non-OTR
vehicles into the state (as a result both of tourism and relocation). A
49-state approach would also help non-OTR states by providing NOX
and VOC reductions and other air quality benefits. EPA also believes
that an alternative could provide equal or greater impetus to
development of advanced technology. Second, the auto industry would
benefit from uniform markets. See discussion in Section IV.A.2.(d) for
a discussion of the benefits of uniform markets. The auto industry
plays a vital role in our economy. Reducing the economic impacts of
EPA's actions, without reducing environmental benefits are matters of
concern to the Agency.
Once these 49-state alternatives are further developed, EPA intends
to complete a qualitative and quantitative comparison of their
environmental benefits relative to the OTC LEV program. The Agency will
then publish, as soon as possible, a Federal Register notice setting
forth the alternative and taking comment on issues it raises.
The options for developing an alternative program are somewhat
limited. As explained above, section 202 bars EPA modification of the
Tier I standards prior to model year 2004, and the states cannot, under
section 177 and 209, adopt standards other than the California
standards. Thus, the only alternative method for requiring vehicle
manufacturers to achieve reductions in tailpipe emissions from new
light-duty cars and trucks is a program in which manufacturers
voluntarily agree to be bound by more stringent standards. This concept
and the legal basis for it are discussed in greater detail in section V
of this notice, below.
It is this first kind of alternative that underlies the basis for
EPA providing in its SIP call for the possibility that an alternative
program may be developed that would achieve emissions reductions from
new motor vehicles that are comparable to or greater than those from
OTC LEV. If such a program were developed, it would not be necessary to
apply the OTC LEV program to vehicles subject to the alternative
standards. This concept and the legal basis for it are discussed in
greater detail in section V of this notice, below.
Second, the availability of alternative measures that are
sufficient to achieve the necessary reductions without further
reductions from new motor vehicles or trucks could likewise render the
OTC LEV program unnecessary. The question here is not whether EPA will
mandate such other measures in response to the OTC's recommendation.
The OTC did not recommend such other measures and; for the reasons
described in section III.B., EPA is not ready to consider mandating
them under sections 110(k)(5) and 110(a)(2)(D) at this time. Rather,
the question is whether such other measures are available so that it is
unnecessary for EPA to require the OTC LEV program. As EPA explained in
its April 26 proposal:
To the extent more reductions will be needed even with the LEV
program [to mitigate significant contribution to nonattainment in
the OTR], other measures that address that shortfall would not, for
that reason alone, qualify as ``alternatives'' to LEV. Rather, other
measures might qualify as ``alternatives'' only if such other
measures, singly or in combination, generate enough reductions to
fill the entire shortfall needed without LEV.
59 FR at 21734.
EPA has established a precedent for interpreting the ``necessary''
standard that is consistent with this approach. EPA's interpretation is
guided by its approach to interpreting that term (ultimately codified
by Congress), under section 211(c)(4)(C) of the Act, as explained in
the April 26 proposal. See 59 FR at 21734. That interpretation is
important to evaluating the availability of alternatives sufficient to
achieve the necessary emissions reductions. Under section 211(c)(4)(C),
controls are necessary if they would still be needed after adoption of
all other reasonable and practicable measures. That is, EPA would
consider alternatives available if they are comparatively reasonable
and practicable. And the reasonable and practicable alternatives must
be sufficient to achieve the necessary reductions in order to conclude
that the proffered control is unnecessary.17
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\1\7EPA also suggested in its April 26 proposal a different
possible approach to the ``necessary'' standard. Under that
approach, EPA might consider as necessary any additional control
measures that contribute to attainment, as long as measures
specifically required by the Act or that are otherwise in place are
insufficient to achieve attainment. That is, as long as the States
in the OTR still need more reductions to address the transport
problem, then EPA would consider the OTC LEV (or LEV-equivalent)
program necessary. Assessment of alternative control measures would
not be relevant. See 59 FR at 21725. While EPA is not proposing here
to adopt that approach, EPA notes that the facts showing that the
OTC LEV (or LEV-equivalent) program is necessary under the approach
discussed in the text would, a fortiori, be sufficient to show that
the OTC LEV (or LEV-equivalent) program is necessary under this
different approach.
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Of course, whether potential alternative measures are ``reasonable
and practicable'' as well as sufficient to achieve the necessary
reductions may not be self-evident. In its April 26 proposal, EPA
described approaches to factual uncertainty and other policy
considerations that could influence these determinations. See 59 FR at
21726-27. As with its decisions under section 211(c)(4)(C), here EPA
does not consider drastic measures such as gas rationing, or plant
shutdowns to constitute reasonable alternatives to the OTC LEV program.
Congress could not have intended that EPA should consider such drastic
alternatives, since such alternatives would clearly be adequate to
achieve any necessary reductions, and hence no proffered measure would
ever be necessary. This would essentially read section 184 out of the
Act. Further, EPA believes cost-effectiveness of potential alternatives
is a criterion in evaluating reasonableness and comparing other
measures to the measure proffered as necessary. But the comparison of
the reasonableness and practicability of various measures, including
what is ``too drastic,'' is a complicated policy determination
requiring consideration of cost and public acceptance, and need not be
supported by a highly specific technical record. See 59 FR at 21726.
While EPA believes that it is important to assess the sufficiency
of reasonable and practicable alternatives, states have the continuing
opportunity to come forward to adopt sufficient alternatives and prove
that the OTC LEV program indeed turns out to be unnecessary. EPA does
not believe states would seriously entertain unreasonable or
impracticable measures to adopt in place of OTC LEV in order to achieve
the necessary emissions reductions. Nonetheless, EPA recognizes that
states which do in fact adopt such other measures sufficient to comply
with section 110(a)(2)(D) might thereby render the OTC LEV program
unnecessary. EPA therefore is proposing that it would retain authority
under the SIP call to change its necessary determination and withdraw
its SIP call for those states that adopt controls sufficient to comply
with section 110(a)(2)(D), including those controls EPA might now
believe to be unreasonable or impracticable. As states in the northeast
have not yet adopted sufficient measures proving that the LEV program
(or LEV-equivalent) is unnecessary, EPA believes that it should
evaluate whether sufficient reasonable and practicable alternatives
exist based on the best current information and policy judgment.
EPA also discussed in its April 26 proposal various approaches to
factual uncertainty regarding issues such as cost and the amount of
reductions needed for compliance with section 110(a)(2)(D). There, EPA
raised the question of whether the statutory structure, together with
the legislative history, support giving substantial weight or
``deference'' to the OTC's recommendation that the OTC LEV program is
necessary for attainment in the OTR. EPA suggested that it could
reasonably interpret the provisions to mean that EPA is to start with a
presumption of approving the OTC's recommendations and approve the
recommendation unless EPA found that the recommended measures were
unnecessary. EPA pointed to floor statements in the conference debate
in the Senate regarding section 184 that EPA bears a ``heavy burden''
to ``demonstrat[e] that the additional control measure(s) is not
necessary.'' See 59 FR at 21726 (quoting Baucus-Chafee Statement of
Managers and Senator Lieberman). EPA's public hearings and round-table
discussions reflected some confusion about the meaning of ``deference''
to the OTC. EPA questions whether there is any basis under any
provision of the Clean Air Act to relieve the Agency of an obligation
to consider independently all of the factual information available in
determining whether the OTC LEV program is necessary.
In this case, EPA believes the facts affirmatively show that this
measure is indeed necessary. In addition, EPA believes that its general
policy of prudence in making decisions regarding highly complex
scientific issues affecting public health should apply to its analysis
here. EPA believes this policy is reasonable and permissible in
addressing what is ``necessary'' to achieve and maintain the health-
based ambient air quality standard for ozone.18
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\1\8Courts have recognized that scientific evidence is
cumulative, and that EPA has discretion to take an environmentally
protective approach to protecting public health and welfare. In
Ethyl Corp. v. EPA, 541 F.2d 1 (D.C. Cir.), cert. denied, 426 U.S.
941 (1976), the court of appeals considered EPA's action to regulate
the lead content of gasoline on grounds that emissions ``will
endanger'' the public health or welfare under prior section
211(c)(1)(A). There, the court recognized that EPA's decision may be
based on ``the inconclusive but suggestive results of numerous
studies.'' Ethyl, 541 F.2d at 38. Further, the court found that the
Administrator appropriately acted ``conservatively'' based on
``suggestive'' evidence to make a ``prudent'' determination. Ethyl,
541 F.2d at 39. EPA believes such prudence is likewise appropriate
here, where the public health and welfare is at stake.
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EPA believes its general policy in favor of protecting public
health and welfare is particularly appropriate to evaluate whether a
particular measure is needed to solve an inter-state problem. EPA
believes that pollution transport and the states' obligations under
section 110(a)(2)(D) to control emissions that would contribute to
nonattainment or interfere with maintenance downwind are critical to
the integrity of the states' attainment plans under title I. Especially
in a region such as the Northeast, where extensive transport makes
states inter-dependent on their collective pollution control programs,
EPA believes that its general policy should apply to make sure that
states adopt controls necessary for other states' attainment. These
states depend for their own citizens' health on the actions of upwind
states that may lack an incentive to bear the costs of protecting
downwind citizens' health. In such circumstances, EPA's general policy
of prudence is particularly appropriate in evaluating what is necessary
in the upwind states to protect health downwind. Moreover, these
states' independent efforts (and their residents' support for them) to
address emissions within their own borders may depend significantly on
the confidence these states have that the other states in the region
are acting as ``good neighbors.''
High officials closely involved in the SIP planning process in
these states have now come to EPA, after extensive public processes of
their own, believing a particular measure is necessary for them and
their neighbors to do their part to address a substantially collective
public health problem. These officials, as the chief state officers
responsible for ensuring state compliance with the Clean Air Act, are
the closest to the air quality planning information in the states.
Whether EPA responds under section 184 or by exercising its authority
under section 110(k)(5), EPA believes that it makes policy sense to
apply its general approach of prudence in favor of environmental
protection to scientific uncertainties. EPA believes sound policy
dictates that it has a responsibility to do so. The legislative history
reviewed in EPA's April 26 proposal reflects that at least some in
Congress intended that EPA follow this approach.
To the extent EPA's analysis reveals that other measures are
reasonable and practicable but are not sufficient to achieve the
necessary reductions, EPA would have authority directly under section
110(k)(5) to require the states to adopt those measures, too. But, for
the reasons described above in section III.B., EPA does not believe it
need exercise its authority in this manner at this time. Of course,
states will need to adopt many of these measures as part of their
attainment demonstrations due November 15, 1994, and this may go a long
way toward these states' contribution to downwind nonattainment or
their interference with downwind maintenance. But EPA believes that it
should require this measure now, in light of the states'
recommendation, the time needed to yield emissions benefits (due to the
lead-time requirement and time for fleet turnover), and the need for a
coordinated decision to adopt the program for the entire region
collectively. Since it is both necessary to address the transport
problem and very difficult for the states to adopt the OTC LEV program
without assurance that their neighbors that need to will also do so,
the Agency believes that there is adequate reason to act now to require
this measure under sections 184 and 110(k)(5).
EPA recognizes that, under this approach, certain states would have
to adopt the OTC LEV program even though they did not vote to make this
recommendation to EPA. In its April 26 proposal, EPA questioned whether
the ability of certain states to override the wishes of others by vote
could militate against an environmentally conservative approach to
uncertainty. EPA does not view the objection of certain states as
justifying a different approach. Rather, EPA currently believes that
the weight of a recommendation from high officials in a majority of the
states justifies an environmentally conservative decision regarding
whether the measure in question is necessary. While the minority states
might understandably wish to reserve their options for compliance,
their adopted attainment demonstrations are due in a matter of two
months, and the work that those states have accomplished toward
assembling their attainment plans has not convinced EPA that the OTC
LEV (or LEV-equivalent) program will be unnecessary to address the
transport problem. As noted above, EPA believes that even if these
officials presented this recommendation without invoking the formal
section 184 process, EPA would appropriately take an environmentally
protective approach to deciding whether to issue a SIP call for the
measure directly under section 110(k)(5). Moreover, as discussed above,
EPA is proposing to explore the possibility that alternatives will
become available and adopted so that states would no longer need the
OTC LEV program, or that the states may demonstrate that they have
adopted sufficient measures without LEV (potentially including those
that EPA might otherwise dismiss as unreasonable or impracticable) to
comply with section 110(a)(2)(D).
2. Analysis of Need for OTC LEV (or LEV-Equivalent) Program
(a) Magnitude of Reductions Needed for Attainment in 2005.
i. General Conclusions.
The first step in EPA's analysis of whether the OTC LEV (or LEV-
equivalent) program is needed is to consider what emissions reductions
are necessary to bring all areas into attainment. Based on EPA's
region-wide modeling analyses, it is clear that very large reductions
in emissions of both NOX and VOC are needed for the serious and
severe areas of the OTR to come into attainment. Based on the best
analysis available to EPA to date, NOX emission reductions on the
order of 50% to 75% are needed throughout the OTR to reach attainment
with the ozone NAAQS. VOC emissions reductions on the order of 50% to
75% are needed for attainment particularly in the East Coast urban
corridor. These estimates are based on modeling analyses that used a
1985 emissions baseline. Updated inventory information indicates the
1985 inventory underestimated base case NOX and VOC emissions.
Therefore, EPA believes that at least a 50% to 75% reduction in
emissions is necessary from the 1990 baseline.\19\ Given EPA's belief
that in addressing areas of factual uncertainty here it should err on
the side of environmental protection, EPA requests comments on whether
reductions from reasonable and practicable measures should be in the
middle of these ranges before EPA would determine that the OTC LEV (or
LEV-equivalent) program is unnecessary.
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\1\9The Clean Air Act requires states to develop 1990 base year
emissions inventories of actual emissions on which to base planning
requirements, including attainment demonstrations. Therefore, the
remainder of the document will generally refer to emissions
reductions required or obtained from a 1990 emissions inventory. EPA
is relying on the above-noted relationship between the 1985 and 1990
inventory to draw conclusions about necessary emissions reductions
from the 1990 baseline inventory.
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EPA has reached these conclusions based on modeling analyses of the
impact of emissions reduction strategies for this region. For purposes
of its modeling studies, EPA considered the impact of various
strategies in the year 2005. Focusing first on the impact in 2005 is
reasonable because by then all control measures explicitly mandated in
subpart 2 of part D of the Act will be in place. EPA can thereby
analyze more precisely what reductions beyond those already explicitly
required will be needed. Since two of the three core severe
nonattainment areas in the urban corridor along the East Coast from
Washington D.C. to Boston have an attainment deadline of 2005, it is by
this date that the Clean Air Act mandates severe area controls to be in
place. These areas are the Baltimore and Philadelphia areas. The New
York-New Jersey-Connecticut severe area has the slightly later
attainment deadline of 2007 due to its higher ozone design value. EPA
also focused on this year in its studies in part because the OTC's
modeling committee asked that EPA do so.
It is important to note, however, that for purposes of this step in
the analysis, the year that is the subject of the study does not affect
the magnitude of necessary emissions reductions. This is because the
precise question in this step is what reductions are needed from a 1990
baseline emissions inventory in order for each of the nonattainment
areas in the OTR to come into attainment. For purposes of this
analysis, EPA assumes that all growth in emissions since 1990 must be
neutralized in addition to achieving the requisite emissions reductions
from the 1990 baseline. That is, EPA's conclusion is that emission
reductions on the order of 50% to 75% in VOC (primarily in the urban
areas and NOX (regionally) are needed in the OTR to reach
attainment, and that growth in emissions since 1990 must be neutralized
in addition to the 50% to 75% reductions. Of course, in later years the
amount of growth that must be neutralized on top of the 50% to 75%
reductions will increase. But the conclusion that 50% to 75% reductions
from the 1990 baseline are needed remains constant over time.
ii. Analytical Modeling Tools.
Two basic atmospheric modeling tools are used to analyze the need
for and effectiveness of various emissions reduction strategies to
attain the ozone NAAQS. These are both photochemical grid models into
which information regarding the atmosphere and emissions is input for
subunits in a grid that encompasses a particular area, or ``domain.''
The model is designed to measure the impact of changes in emissions
input for each subunit on the grid. An important aspect of the models
is the set of assumptions regarding the air that enters the modeling
domain at its boundaries, commonly referred to as ``boundary
conditions.''
The two basic models used to analyze ozone pollution in the
northeast United States are the Urban Airshed Model (UAM) and the
Regional Oxidant Model (ROM). The key differences between these models
are the size of the modeling domain and the resolution of information
about subunits in the photochemical grid. The resolution depends on the
size of the overall domain. As their names indicate, the UAM is an
urban scale model that yields more precise information about particular
urban areas, and the ROM is a broader regional model that is more
useful for assessing regional impacts. The UAM generally involves a
modeling domain on the order of 200 km on a side, with a horizontal
resolution of five km or better and five or more vertical layers.\20\
EPA is using a ROM to analyze the domain encompassing the United States
east of 99W longitude, covering approximately the eastern half of the
country. Horizontal resolution is approximately 18 km, with three
vertical layers considered.
---------------------------------------------------------------------------
\2\0Grid models, such as the UAM and the ROM, entail
superimposing a 3-dimensional box over the area to be modeled. This
box is subdivided into grid cells. The model predicts average
concentration within each cell for each hour of a simulation. The
spatial resolution possible with a model is defined by the size of
these individual grid cells. The models do not allow one to draw
conclusions about concentrations averaged over areas which are
smaller than the size of the individual grid cells.
---------------------------------------------------------------------------
The UAM is particularly useful to demonstrate with fine resolution
whether urban areas will achieve attainment using a particular
emissions reduction strategy, based on assumptions about the boundary
conditions of the UAM domain. The ROM is useful for assessing the
relationship between UAM domains and what is happening in the broader
region to determine appropriate boundary conditions for UAM modeling.
The function of ROM applications for developing attainment strategies
is to provide boundary conditions for the UAM analyses. Essentially,
boundary conditions are estimates of the amount of ozone and ozone
precursors entering each of the UAM domains from upwind. Boundary
conditions reflect the cumulative effect of pollutant transport as well
as control measures and growth applied in upwind areas. Upwind areas
for purposes of the ROM analysis include upwind UAM domains, portions
of the OTR outside the UAM domains, and the eastern U.S. outside the
OTR. The boundary conditions resulting from these ROM simulations serve
as an important input to the states' UAM analyses.
Modeling using the UAM and ROM tools is an iterative process.
First, UAM yield information about the strategies and impacts of
strategies in smaller areas. The information from these models can then
be fed into the ROM to yield information about the collective impact of
the UAM assumptions throughout the region. The strategies in each area
impact other areas downwind as the air moves from one area to another.
The ROM then yields information about the appropriate boundary
conditions to be input into the next round of each area's UAM. Each
iteration in this process yields more refined information about the
effect of strategies in the UAM domains and the appropriate boundary
conditions for each UAM domain. In sum, the UAM is useful to assess the
precise strategies in isolated nonattainment areas; the ROM is useful
to assess the relationship between areas in light of their
interdependence because of a common transported air mass throughout the
region and to provide boundary conditions for further UAM modeling.
The Clean Air Act requires that the states submit modeled
demonstrations of attainment to EPA on or before November 15, 1994. As
described, states will be using the UAM with input from the ROM
applications to make these modeled demonstrations, though none have yet
been completed and submitted to EPA for review. In the OTR, the states
will model four urban areas using the UAM: (1) New England; (2) New
York City/Connecticut/northern New Jersey; (3) Philadelphia/New Jersey/
Maryland; and (4) Baltimore/Maryland/Washington D.C. These urban areas
are so close together and so inter-dependent that each of these four
UAM modeling domains overlaps portions of at least one of the other
four. EPA does not expect the states to complete UAM modeling analysis
for the four urban areas that demonstrates that a particular control
strategy will achieve attainment (relying on ROM applications through
the iterative process discussed above), until well after November 1994.
EPA's analysis of the need for the LEV program relies principally on
several past and ongoing ROM studies. While EPA could use the complete
UAM studies to refine the analysis, EPA believes ROM is the more
important modeling tool for assessing transport. EPA further believes
that certain conclusions can now be drawn about the outcome of the UAM
analyses with respect to transport.
The Agency has used the ROM over the past several years to study
national policies and strategies for reducing ozone. Because of the
large domain subject to a ROM analysis, this tool is well-suited for
assessing effects of regional strategies on regional transport of ozone
and its precursors. ROM provides vital information for the states to
consider in choosing sets of individual measures within each
nonattainment area for purposes of their attainment demonstrations. EPA
has applied ROM in various studies since 1988 to assess regional
effects of control strategies. For purposes of assessing the amount of
reductions needed to attain the ozone NAAQS throughout the OTR, EPA
reviewed the results of these ROM studies. These studies analyzed
impacts of various control strategies using data from the actual ozone
exceedance episode in July 1988. During these particular episodes, the
ROM model predicted that two sub-regions in the OTR would have hourly
ozone concentrations over 180 ppb (50% over the ozone NAAQS), even
after application of the control measures specifically mandated in the
Act.
In EPA's ROMNET study,\21\ except for the New York metropolitan
area, scenarios with predicted ozone levels below the NAAQS involved
NOX reductions on the order of 60%-70% below 1985 levels. EPA's
conclusions regarding necessary NOX reductions varied from city to
city, depending on whether VOC or NOX was the limiting factor in
ozone production near the city. VOC tends to be the limiting factor in
urban areas, where there are less biogenic VOC emissions. In rural or
suburban areas where biogenic emissions of VOC from vegetation are
greater, NOX tends to be the limiting factor. NOX reductions
in the rural and suburban areas can be important even where such areas
are not themselves violating the NAAQS, because the ozone and ozone
precursors from these areas are transported into the nonattainment
areas, exacerbating conditions in the nonattainment areas. EPA
concluded that VOC reductions on the order of 70%-90% from 1985\22\
levels would be needed to reduce ozone levels to comply with the level
specified in the NAAQS in several of the large cities along the East
Coast urban corridor. Based on this and the other studies discussed
below, EPA believes that NOX controls are needed regionally, while
VOC reductions are critical particularly in and near the urban areas in
the region.
---------------------------------------------------------------------------
\21\See Regional Ozone Modeling for Northeast Transport
(ROMNET), EPA Doc. EPA-450/4-91-002a (June 1991).
\22\Both the ROMNET study and another study (the matrix study),
discussed later, used the 1985 National Acid Precipitation
Assessment Program (NAPAP) regional emissions inventory as the
baseline. The 1985 NAPAP inventory of NOX and VOC was the only
regional inventory available at the time for use in these studies.
---------------------------------------------------------------------------
Another ROM study, called ``the matrix study,''\23\ analyzed the
impact of uniform reductions in NOX and VOC emissions throughout
the eastern half of the United States. This analysis indicates that,
for the July 1-15, 1988 episode for the OTR portion of the modeling
domain, emission reductions for both NOX and VOC on the order of
50% to 75% from 1985 levels are needed to reduce maximum ozone levels
in the OTR portion of the modeling domain to the level specified in the
NAAQS.
---------------------------------------------------------------------------
\23\See Chu, S.H., E.L. Meyer, W.M. Cox, R.D. Scheffe, 1993,
``The Response of Regional Ozone to VOC and NOX Emissions
Reductions: An Analysis for the Eastern United States Based on
Regional Oxidant Modeling,'' Proceedings of U.S. EPA/AWMA
International Specialty Conference on Tropospheric Ozone:
Nonattainment and Design Value Issues, AWMA TR-23, pp.305-311
(1993).
---------------------------------------------------------------------------
While these studies used a regional 1985 emission inventory as the
baseline, it is the 1990 emissions baseline that is of particular
concern in determining whether LEV is necessary for attainment. Under
the Act, states are required to submit comprehensive 1990 inventories
of NOX and VOC emissions upon which to base their air quality
planning, including their attainment demonstrations. EPA believes that,
based on current, recently updated information, both the matrix and
ROMNET studies relied on assumptions about the emissions inventory that
underestimated base case VOC and NOX emissions.\24\ This is
because inventories used in both the matrix and ROMNET studies were
based on older estimates compiled for the National Acid Precipitation
Assessment Program (NAPAP).\25\ For example, EPA believes that
inventory assumptions in the matrix study underestimated 1990 baseline
emissions in the OTR for NOX by 16% and VOC by about 38%.
Correcting the inventory assumptions in the matrix study should
therefore result in modeling results that reductions in NOX and
VOC emissions needed for attainment throughout the OTR are even greater
than described above. EPA does not have a precise comparison between
the current inventory information and the assumptions relied on in the
ROMNET study, but a comparable difference is likely based on the
difference between the current recently updated inventory and the older
NAPAP-based inventory used in ROMNET. Based on these ROM modeling
studies and analysis of 1985 and 1990 emission inventory assumptions,
EPA concludes that, at a minimum, 50% to 75% reductions in NOX
throughout the OTR and VOC in and near the urban areas emissions will
be necessary for regional attainment from the 1990 baseline.
---------------------------------------------------------------------------
\24\See E.H. Pechan & Associates, Regional Interim Emission
inventories (1987-1991), Volume I: Development Methodologies,
Prepared under EPA contract 68-D2-159, Work Assignment No. 13, (May
1993).
\25\Saeger, M., J.Langstaff, R.Walters, L.Modica, D.Zimmerman,
D.Fratt, D.Dulleba, R.Ryan, J.Demmy, W.Tax, D.Sprague, D.Mudgett,
A.Werner. The NAPAP Emissions Inventory (Version 2): Development of
the Annual Data and Modeler's Tapes, EPA Doc. No.600/7-89-012a.,
U.S. EPA, Research Triangle Park, NC (1989).
---------------------------------------------------------------------------
(b) Contribution Analysis.
The second step in EPA's analysis is to assess the degree to which
transport contributes to the ozone problem in the OTR. As explained in
the April 26 notice, EPA believes that the ``need'' for additional
measures in the OTR in order to comply with section 110(a)(2)(D)
focuses primarily on the states' need to adopt the program in question
for the benefit of areas downwind. See 59 FR at 21728. Of course, the
states retain full authority to adopt the LEV program under section 177
for their own benefit without EPA approval. As explained below,
analysis of what reductions are needed for any specific area to avoid
causing ozone exceedances downwind is an enormously complicated task
that depends on regional, urban, and wind trajectory modeling
information and monitoring data. Further, the analysis of the controls
necessary in an upwind area depends on the controls assumed in the web
of downwind areas and other upwind areas. In dealing with these
complications and uncertainties, EPA emphasizes that the lead-time
together with the lengthy time needed for fleet turnover in order to
obtain the benefits from the OTC LEV program support reaching a
decision now based on the best data currently available. Based on this
data, EPA's conclusion is that very large reductions in NOX
emissions on the order of 50% to 75% throughout the OTR are necessary
for the serious and severe nonattainment areas in the OTR to attain the
ozone standard by their respective attainment dates. EPA also believes
that a similar magnitude of reductions in VOC emissions is necessary
primarily in and near the urban areas of the OTR.
Because ROM is useful to assess regional strategies in light of the
transport of ozone and ozone precursors across a region, and is
therefore critical to establishing boundary conditions for UAM models,
it is also useful to assess the degree of transport across a region.
The ROM studies discussed above therefore are a critical component of
the best current information regarding the extent to which upwind areas
contribute to exceedances of the ozone standard in downwind areas
throughout the OTR. Use of these studies, together with regional
trajectory analyses, to assess contribution between areas, is
consistent with EPA's published guidance for conducting contribution
analyses.\26\ The OTC, too, relied on these approaches consistent with
EPA's published guidance to establish the importance of addressing
pollution that is transported throughout the OTR and to thereby support
its recommendation that the LEV program is necessary region-wide.
---------------------------------------------------------------------------
\26\See U.S. EPA, Doc. EPA-450/4-91-015, Criteria for Assessing
the Role of Transported Ozone/Precursors in Ozone Nonattainment
Areas (1991).
---------------------------------------------------------------------------
EPA believes that the ROM studies, together with regional
trajectory analyses, show that the large percentage reductions in
NOX and VOC discussed above (on the order of 50% to 75%
reductions, with somewhat less emphasis on VOC reductions outside the
urban areas) are needed throughout the OTR for purposes of the downwind
nonattainment areas to attain the NAAQS. EPA recognizes that these
conclusions are based on ROM and trajectory analyses for the OTR as a
whole, and that factual uncertainty remains regarding the precise
degree of contribution for individual small subunits of the modeled
domain to ozone violations in other areas, and the amount of emissions
reductions needed to prevent such contribution.
To assess such contribution for each subunit in the grid would
require a myriad of sensitivity tests that are extremely complicated.
This is because contribution from one area to another can be enormously
difficult to isolate. The significance of any particular area's
contribution depends on the controls that have been implemented in
other areas that share the same airshed. The interrelationship between
the ROM and UAM models illustrates this point. The strategies needed in
the urban areas depend on what is being done in other areas that
affects UAM boundary conditions, and the strategies applied in all of
the areas determines the boundary conditions. In short, upwind areas
may need to do somewhat less to avoid causing downwind exceedances if
the downwind areas themselves do more, but the upwind areas may need to
do more if the downwind areas do less. And this relationship must
account for such variables in the many areas that share air throughout
the northeast.
While recognizing these complications and the associated factual
uncertainties, modeling and wind trajectory analyses show that
emissions transport from OTR areas in an arc extending from the south
and southwest to the northwest substantially affect nonattainment areas
along the East Coast urban corridor. The OTC's technical support
document for its recommendation\27\ contains several analyses that
support this conclusion. These analyses relate wind trajectory data to
monitored ozone data during three multi-day ozone exceedance episodes
in 1992 and 1993, as well as the July 1988 episode that was the subject
of the ROMNET study discussed above. These analyses also relate
monitoring data at mountaintop sites during these episodes that
indicate a broad region-wide buildup of ozone as the episodes progress.
For the 1992 and 1993 episodes, the wind trajectory data together with
the timing of high ozone readings at relatively rural sites in the
northern part of the OTR support the conclusion that transport from the
East Coast urban corridor toward the northeast portions of the OTR
leads to high regional ozone over a prolonged period.
---------------------------------------------------------------------------
\27\See ``The Long Range Transport of Ozone in the Ozone
Transport Region'' (January 1994).
---------------------------------------------------------------------------
The analysis of the July 1988 episode relies heavily on EPA's
ROMNET study. The ROMNET results indicate that emissions within the
East Coast urban corridor have a dominant impact on predicted ozone
levels within the corridor when emissions levels are very high. The
conclusion that corridor-wide emissions play a dominant role in
affecting predicted high ozone concentrations is consistent with
findings in a subsequent study EPA has performed for the OTC.\28\ The
ROMNET study separately modeled the impact of similar large percentage
reductions (60%) in NOX emissions first in OTR nonattainment
areas, second in OTR attainment areas and third in the four states
bordering the OTR. The modeling showed that ozone levels in the urban
corridor were more sensitive to reductions in the nonattainment areas
(which are mostly in the urban corridor). This was because the actual
quantity of emissions and hence the amount eliminated through a 60%
reduction was greater in the urban corridor, and because these
reductions were closer to the problem. However, as shown in the ROMNET
study, emissions from outside the urban corridor have an increasingly
important impact as the emissions within the corridor are reduced.
Since modeling indicates that very large reductions inside the urban
corridor are needed to approach the NAAQS, EPA expects that large
reductions outside the urban corridor will also become increasingly
important and in fact necessary for the nonattainment areas in the
urban corridor to reach the NAAQS.
---------------------------------------------------------------------------
\28\See Report of OTC Modeling Committee, ``Sensitivity of
Regional Ozone to Reductions in NOX and VOC Emissions: Results
of Phase III ROM Analyses'' (Section 9)(Winter 1993 Meeting).
---------------------------------------------------------------------------
In addition to the study of these three episodes on which the OTC
relied, EPA has reviewed additional surface and aloft wind trajectory
information. This information was generated from ROM wind fields for
each of the days analyzed in the four UAM modeling studies for purposes
of attainment demonstrations currently underway for the four UAM
modeling domains in the OTR. In all, EPA analyzed twenty-five days
during 1987, 1988 and 1991. EPA has found that on more than 80% of
these days surface winds\29\ are from the south to southwesterly
direction. This surface wind orientation is consistent with a large
cumulative impact of emissions along the northeast urban corridor. EPA
also found that, on about 70% of the days, winds aloft\30\ originate
from directions ranging from west-southwest through northwest. This
wind aloft orientation is consistent with a longer range impact on the
northeast urban corridor from sources located anywhere from the west-
southwest through the northwest of each of the OTR nonattainment areas
in the urban corridor. This would include sources in the western and
northwestern portions of the OTR and beyond.
---------------------------------------------------------------------------
\29\Surface winds in a ROM analysis represent wind flow in the
lowest 100-300 meters of the atmosphere.
\30\Winds aloft in a ROM analysis represent an average over a
layer from 300 meters to about 1500 meters above ground.
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Even though the UAM analyses for purposes of the attainment
demonstrations are not yet complete, EPA believes certain conclusions
can now be drawn about the outcome with respect to transport. The
episodes selected for these UAM analyses were chosen on the basis of
high observed ozone concentrations. In other words, the prevailing
meteorological conditions on these days were right for ozone formation.
These episodes correspond with wind trajectory information that
indicates a large impact from emissions transported across the region.
These wind trajectories will therefore also be used in the ROM analyses
to generate the boundary conditions for feedback into the UAM analyses.
These UAM analyses are the basis for the attainment demonstrations for
the OTR, and they are therefore likely to indicate that regional
controls are critical to demonstrating attainment for the four UAM
domains.
An additional source of specific information about transport along
the urban corridor is the calculation of boundary conditions for
Washington/Baltimore, Philadelphia, New York and New England for July
7, 1988.\31\ This is the only day subject to modeling in all four UAM
domains in the OTR. Estimates of the surface winds for this day are
consistently from the south-southwest for all four domains. Both
predicted and observed values for the boundary conditions for the UAM
domains are above or approaching the level of the NAAQS (120 ppm). And
the modeled values show a clear tendency to increase moving northeast
along the corridor, thus supporting the conclusion that the emissions
accumulate as they are transported up the corridor.
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\3\1Washington D.C. and Baltimore are combined in a single
modeling domain.
---------------------------------------------------------------------------
In addition, EPA has analyzed days selected for UAM modeling in any
of the four domains for which calculated ROM surface wind trajectories
were from the west or northwest. For most of these days, predicted and
observed boundary conditions are on the order of 50-90 ppb with one
exception on June 22, 1988 for New York. The data for the day with
higher boundary conditions are presented in the following table. The
mean values in the table represent the concentrations averaged for
several monitors near the boundary of the modeling domain. The maximum
(max.) values are the highest observations made in the vicinity of the
boundary.
Table 1.--Observed Upwind Boundary Conditions for New York on June 22,
1988.\1\
------------------------------------------------------------------------
Observed
ozone,
Time of day (ppb)
``Mean/
Max.''
------------------------------------------------------------------------
1000-1200.................................................... 79/94
1600-1800.................................................... 111/142
1000-1800 average............................................ 101/124
------------------------------------------------------------------------
\1\The table is derived from information presented in Possiel, N. and R.
Wayland, Preliminary Evaluation of ROM for Estimating UAM Boundary
Concentrations, (SRAB, TSD, OAQPS Internal Report)(April 1994).
Predicted ozone values at the western boundary of the domain for
this day are also on the order of 100 ppb. On this day, the ROM
trajectories indicate light surface winds prevailed. The data in the
table support the conclusion that these high boundary conditions result
at least in part from long range transport from the western and
northwestern OTR. This, together with all the other information
available, further supports the conclusion that controls in the western
and northwestern portions of the OTR are necessary for attainment
throughout the region.
Finally, EPA has compiled back-trajectories calculated from ROM for
each of the four UAM domains for all days selected for modeling. The
results generally support the conclusion that surface winds from the
south through west-southwest and winds aloft from the northwest to
south-southwest transport pollutants across the OTR. This, together
with all of the other available information, supports EPA's conclusion
that large emission reductions in NOX in both the northeast urban
corridor and upwind areas located to the far south-through-northwest of
the nonattainment areas in the urban corridor are necessary, and that
large emissions reductions in VOC at least in and near the urban
corridor are necessary.
In sum, EPA analyzed ozone monitoring data, wind trajectory data,
and information derived from several analytical techniques and modeling
studies. All of these analyses in combination lead EPA to conclude that
large scale regional transport is a critical component of the ozone
nonattainment problem in the OTR. It is clear that to reach attainment
in the northeast urban corridor, the nonattainment areas themselves
will have to implement very extensive emission control programs for
NOX and VOC to counteract their contribution to ozone violations
in their immediate areas and further downwind toward the northeast.
Also, EPA believes, based on best current information, that large
reductions in NOX emissions are necessary throughout areas located
from the south through the west and northwest, and that large VOC
reductions are necessary for at least the urban portions of the OTR.
(c) Analysis of Inventory and Options for Control Measures
Having assessed the magnitude of reductions needed throughout the
OTR, the next step in EPA's analysis is to assess the options available
for achieving the necessary 50% to 75% reductions in NOX across
the OTR and in VOC for the urban parts of the OTR. In doing so, EPA
first assessed the best available information about the inventory of
emissions across the OTR. Then EPA proceeded to consider various
potential control measures to reduce these emissions by the necessary
amount. As discussed above in section IV.A.1. and in the April 26
notice, EPA considered options that are at least potentially reasonable
and practicable in light of the OTC LEV program. Based on this
analysis, EPA believes that no combination of potentially reasonable
and practicable controls on large and small stationary point sources,
area sources, highway vehicles, offroad mobile sources, and fuels will
be sufficient to achieve the necessary reductions without more
stringent standards for new motor vehicles. And the only option legally
available to the states for achieving the necessary further reductions
from new motor vehicles is the OTC LEV program.
i. Inventory Analysis
The table below presents OTR-wide NOX and VOC emission
estimates for 2005. This information was derived from the 1990 interim
regional inventory EPA is currently using in the ROM analyses discussed
above to support UAM modeling for SIP attainment
demonstrations.32,33 These figures reflect the net effect of
growth and control programs projected from 1990. As discussed above in
section IV.A.2., EPA's conclusions regarding the percent reductions in
NOX and VOC emissions are based on modeling which used the 1985
NAPAP emissions inventory. However, as stated above, EPA believes that
the amount of reductions necessary from the 1990 baseline are
comparable to, or perhaps greater than the reductions from the 1985
inventory. This means that controls must counteract growth in emissions
to produce a reduction from the emissions levels in 1990 of at least
50-75%. Inventories reflecting growth and controls need to be compared
to the approximate reduction targets to fully evaluate the need for a
LEV program. The table below indicated that light-duty vehicles (and
mobile sources in general) represent a substantial portion of the OTR
inventory for both NOX and VOCs, even after accounting for
implementation of all controls in the year 2005 explicitly required in
the Act.
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\3\2,33See E.H. Pechan & Associates, Regional Interim Emission
Inventories (1987-1991), Volume I: Development Methodologies,
Prepared under EPA contract 68-D2-159, Work Assignment No. 13 (May
1993).
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(a) NOX.
Table 2.--OTR-Wide Inventory Anthropogenic Estimates for 20051
------------------------------------------------------------------------
Percent
Source category Tons per of total
day inventory
------------------------------------------------------------------------
Light-Duty Mobile.................................. 2034 28
Heavy-Duty Mobile (gas + diesel)................... 727 10
Offroad Emissions.................................. 1430 19
Stationary Point Sources........................... 2567 35
Stationary Area Sources............................ 555 8
Total Emissions.................................... 7314 100
------------------------------------------------------------------------
(b) VOC.
------------------------------------------------------------------------
Percent
Source category Tons per of total
day inventory
------------------------------------------------------------------------
Light-Duty Mobile.................................. 1481 19
Heavy-Duty Mobile (gas + diesel)................... 210 3
Offroad Emissions.................................. 1266 16
Point Sources...................................... 1103 14
Area Sources....................................... 3767 48
Total Emissions.................................... 7827 100
------------------------------------------------------------------------
1EPA recognizes that the precision implied by these numbers is greater
than justified, given the uncertainty associated with projected
emission estimates. However, the figures are provided in this and
subsequent tables displaying emissions data in order for the reader to
understand the full derivation of percentages reflecting the relative
importance of various components of the inventory.
EPA believes it is instructive to highlight the significance of
emissions from highway vehicles in the inventory. As shown in Table 2,
above, EPA expects that highway vehicles will account for approximately
38% of the total NOX inventory and 22% of the total VOC inventory
in 2005. Highway mobile source NOX and VOC emissions, therefore,
constitute a major portion of the emissions in the OTR, and it is
reasonable to conclude that a workable compliance plan for the OTR must
include substantial controls on motor vehicles.
Further, because the LEV program would achieve emissions reductions
primarily from gasoline-powered vehicles, it may be useful to separate
the projected mobile source emissions into gasoline and diesel
components. EPA estimates that gasoline-powered light-duty vehicles
constitutes 28% of the total NOX emissions and 19% of the total
VOC emissions in the 2005 projected inventory.
ii. Analysis of Options for Control Measures Without More Stringent New
Motor Vehicle Standards
This section reviews options for control measures that could
potentially render the OTC LEV (or LEV-equivalent) unnecessary in the
OTR. As will be discussed, EPA has determined that such measures do not
provide sufficient emissions reductions without LEV and that therefore
LEV is necessary.
In evaluating control options, EPA considered measures that it
believes are not clearly unreasonable or impracticable (and are thus
potentially reasonable and practicable). This does not mean that EPA
believes that such measures are in fact reasonable and practicable.
Rather, EPA believes that for purposes of assessing whether states
might adopt other reasonable and practicable measures to achieve the
needed reductions without OTC LEV, it should consider all measures that
are not clearly unreasonable or impracticable.34-35 EPA did not
consider measures such as mandatory plant shutdowns, gas rationing, and
bans on ownership of high-emitting vehicles because the Agency believes
these are clearly unreasonable or impracticable to impose in comparison
to the OTC LEV program.
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\3\4-35EPA does not intend its consideration of particular
measures here to suggest that the Agency believes such measures
constitute reasonably available control technology (RACT) or
reasonably available control measures (RACM) as those terms of art
are used in the Clean Air Act.
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As EPA explained in its April 26 notice and in section III.A.1.
above, the Agency believes that cost-effectiveness of control options
is one criterion in evaluating whether they are clearly unreasonable
and impracticable. EPA believes that it should consider additional
factors, such as extreme economic and societal costs, disruptions,
distributional impacts, and public acceptance, that would warrant the
conclusion that Congress would not have had the Agency consider
particular measures to be viable options for finding other measures
unnecessary. See 59 FR at 21726.
In assessing options for control measures, EPA relied, in part, on
the same ROM modeling studies EPA used to assess the overall magnitude
of reductions needed in the OTR. These studies are useful to check
whether the impact of specific control strategies corresponds with
predictions about the overall magnitude of reductions. See sections
IV.A.2.(a) and (b), above. The first ROM study analyzed the impact of
the control measures explicitly mandated in the Act for OTR areas. The
second study is the 1991 ROMNET ``matrix'' study of the impact of a
series of uniform reductions in emissions of NOX, VOC or both. As
discussed above, EPA reached conclusions about necessary emissions
reduction targets from these studies.
In the analysis, EPA first quantified the impact of the measures
required by the Act. Next, EPA evaluated an array of additional control
options that are not clearly unreasonable or impracticable that could
be implemented in addition to the mandatory measures. EPA then surveyed
other potentially reasonable and practicable control measures to
determine whether those options are sufficient to make up the shortfall
which exists after application of the mandatory measures without the
OTC LEV program. These other control options include the maximum
region-wide limit on NOX emissions that is not clearly
unreasonable or impracticable, measures EPA included in proposed
Federal Implementation Plans for three areas in California, and
measures listed in compilations of NOX and VOC controls prepared
by EPA and the State and Territorial Air Pollution Program
Administrators/Association of Local Air Pollution Control Officials
(STAPPA/ALAPCO).
The EPA considered both NOX and VOC control measures, but
focused primarily on NOX controls. As discussed previously, EPA
believes that very large reductions in NOX emissions on the order
of 50%-75% are needed region-wide, while a similar magnitude of VOC
reductions are necessary primarily in or near the East Coast urban
corridor. EPA believes that there are insufficient potentially
reasonable and practicable measures to achieve the necessary NOX
reductions region-wide without the LEV program. This is a sufficient
basis for approval of the OTC's recommendation and for issuing a
finding that the SIPs are substantially inadequate to meet section
110(a)(2)(A) without the LEV program for the entire region. EPA also
believes that there are insufficient potentially reasonable and
practicable measures to achieve the necessary VOC reductions in and
near the urban areas, which constitutes an additional basis for
approving the OTC's recommendation and for making a finding of
substantial inadequacy with regard to interstate transport for those
areas.
Control Measures Explicitly Mandated Under the Act
The Act includes a broad array of measures applicable to stationary
as well as mobile sources. As discussed above, EPA calculated emission
reduction estimates from these controls and input them into ROM to
study the impacts for particular meteorological episodes.36 The
modeling incorporated the following measures that, for technical
reasons, may differ slightly from those mandated in the Act.
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\3\6EPA used an 80% Rule Effectiveness value in calculating the
overall effectiveness of control measures. Rule effectiveness was
applied to all controls that were not an irreversible process change
(for which 100% effectiveness was assumed). Thus, for the controls
that consider Rule Effectiveness the emission reduction due to a
particular control device was calculated as the product of the
control efficiency and the Rule Effectiveness value. For example, a
device that controls at a level of 75% would produce an emissions
reduction of only 60% (i.e. 0.75 x 0.80). Rule effectiveness is
explained in detail in this section, below.
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1. Reasonably available control technology (RACT) on ``major''
point sources of NOX and VOC;
2. Federal emissions standards in place for off-highway vehicles;
3. Federal reformulated gasoline requirements in all OTR
nonattainment areas (including Phase II standards);
4. Enhanced Inspection/Maintenance (I/M) programs for all
metropolitan areas with populations above 100,000;
5. Emissions cap on large point sources (above 100 tons per
year37) after 1996 to reflect offset requirements for new and
modified major sources (i.e., equivalent to new source review
requirements and 1:1 offsets);
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\3\7The model assumed the 100 tons per year cutoff for reasons
related to the construction of the air quality model. EPA recognizes
that smaller sources are also subject to new source review
requirements. These are treated in the model as stationary area
sources. The model cannot readily separate those individual smaller
sources subject to new source review from other smaller sources.
---------------------------------------------------------------------------
6. Emissions cap on area sources in each nonattainment area
beginning on the attainment deadlines for those areas to reflect
maintenance requirements;
7. ``Stage II'' vapor recovery controls on gasoline pumps in all
metropolitan areas with populations above 100,000;
8. Application of RACT controls specified in EPA's Control
Technique Guidelines (CTG's) for eleven source categories;38
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\3\8These CTG's include reductions from area sources as well as
point sources, and therefore go beyond the RACT controls identified
in 1.
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9. Federal controls on emissions from commercial solvents, marine
vessel loading, municipal landfills and hazardous waste treatment,
storage, and disposal facilities (TSDF's);39
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\3\9One commenter asked that EPA, in assessing the need for the
OTC LEV program, consider the potential for emissions reductions
from landfills. EPA has proposed a new source performance standard
(NSPS) for landfills and proposed guidelines for existing landfill
sources. See 56 FR 24468 (May 30, 1991). EPA expects to take final
action on the NSPS and the guidance by December 1994. EPA has taken
the resulting emissions reductions into account among the Clean Air
Act mandatory measures.
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10. Federal ``Tier I'' tailpipe emission standards for new
vehicles;
11. Federal evaporative emissions controls for new vehicles;
12. Federal ``Phase 2'' controls on gasoline volatility;
13. Federal Maximum Available Control Technology (MACT) controls
for hazardous air pollutants (which include VOCs) for approximately
forty source categories;
14. Federal controls on NOX emissions from coal-fired utility
boilers under the Acid Rain program.
EPA calculated that application of these controls mandated in the
Act would achieve emissions reductions by 2005 in the OTR of 20% for
NOX and 37% for VOC from the 1990 baseline. As discussed above in
sections IV.A.2.(a) and (b), EPA believes this level of reductions will
not be sufficient to attain the ozone NAAQS throughout the OTR.
Confirming this conclusion, ROM studies of four episodes applying these
measures in 2005 for all days being modeled in the four UAM domains in
the OTR yield predictions of ozone levels above the 120 ppb NAAQS in
five OTR subregions. These subregions include the UAM domains for
Baltimore/Washington, Philadelphia, New York City and New England, and
west/central Pennsylvania. Further, the model predicts ozone levels
would exceed 160 ppb in at least one subregion for each of the
episodes.
Region-wide 0.15 NOX Standard
Beyond the measures explicitly mandated in the Act, the OTC also
asked EPA to analyze the impact of an additional region-wide limit on
NOX emissions of 0.15 lbs/MMBtu (the ``0.15 NOX standard'')
for boilers, gas turbines, and internal combustion engines with a
capacity of at least 250 MMBtu/hr. EPA evaluated the 0.15 NOX
standard to represent the maximum emissions reduction from large
stationary sources from measures that are not clearly unreasonable or
impracticable. EPA developed emissions estimates associated with this
additional control and modeled the impact on regional NOX
emissions. EPA's modeling conclusion is that a 0.15 NOX standard
would achieve a 15% reduction in inventory-wide NOX emissions from
a 2005 projected baseline, after application of other controls mandated
in the Act.40 Together with the mandatory measures, this
additional measure would therefore achieve a total NOX emissions
reduction in the OTR of 32% from 1990 baseline levels. Thus, even a
strategy including the additional 0.15 NOX standard region-wide in
addition to all mandated Clean Air Act measures would achieve only 32%
reductions in NOX and 37% reductions in VOC from 1990 baseline
levels.
---------------------------------------------------------------------------
\4\0EPA notes that these percentage reductions are from a 2005
projected baseline. EPA's conclusion that a 50%-75% reduction in
emissions is from a 1990 inventory baseline. It is important to bear
in mind throughout this analysis that the 1990 baseline inventory is
substantially larger than the projected 2005 baseline, which
presumes application of mandatory Clean Air Act controls. Therefore,
percentage reductions that particular measures achieve from the 2005
are larger than the percentage reductions those same measures would
achieve if calculated from the 1990 baseline.
---------------------------------------------------------------------------
After application of the mandated Clean Air Act measures together
with the O.15 NOX standard, highway vehicle emissions still
represent a substantial component of the emissions inventory. Table 3,
below, reflects these calculations.
Table 3.--Total and Mobile 2005 Emissions in the OTR Corresponding to
Mandatory Measures Plus Additional Controls on Large NOX Sources
------------------------------------------------------------------------
NOX, VOC,
Emissions tons per tons per
day day
------------------------------------------------------------------------
Total Emissions in the OTR.......................... 6181 7827
Highway Vehicle Emissions in the OTR................ 2759 1858
Percent of Total Emissions Attributable to Highway
Vehicles........................................... 45% 24%
------------------------------------------------------------------------
STAPPA/ALAPCO Compilations of VOC and NOX Control
Measures
EPA, together with STAPPA/ALAPCO, prepared two important
compilations of potential measures available to states in the OTR to
address ozone air quality problems.41 The STAPPA/ALAPCO
compilations provide fairly comprehensive lists of VOC and NOX
control measures that augment traditional controls. The VOC document
includes programs to obtain reductions from degreasers, vehicle
refueling (Stage II vapor recovery), aerospace manufacturing and
rework, bakeries, offset lithography, wood furniture coatings, and
automobile assembly, among others. EPA has, however, already included
most of the VOC measures from the STAPPA/ALAPCO compilation in the
analysis of Clean Air Act mandated measures, described above, while
others affect only a small portion of the VOC inventory.
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\4\1See Meeting the 15-Percent Rate-of-Progress Requirement
Under the Clean Air Act: A Menu of Options, STAPPA/ALAPCO (Sept.
1993); Controlling Nitrogen Oxides Under the Clean Air Act: A Menu
of Options, STAPPA/ALAPCO (July 1994).
---------------------------------------------------------------------------
The STAPPA/ALAPCO compilation of NOX control measures
identifies seventeen NOX source categories. Most of the source
categories listed are included in the 0.15 lbs/MMBtu NOX standard
that EPA considered. The only source categories included in the
compilation, but not in the 0.15 standard, are NOX emissions from
open burning and residential space and water heaters. However,
emissions from these source categories identified in the document are
extremely small compared to other source categories.
With the exception of coal-fired boilers, the STAPPA/ALAPCO
document recommends emission levels more stringent than the 0.15
NOX standard that EPA modeled through application of beyond-RACT
measures. Emissions from coal-fired boilers dominate the stationary
source emission inventory. That is, the additional NOX reductions
from those other source categories are a relatively small portion of
the emission inventory compared to the contribution from coal-fired
boilers (and an even smaller portion of the overall 35% stationary
source contribution to the total inventory).
Transportation Control Measures
EPA also considered transportation control measures (TCMs) as
potentially reasonable and practicable measures available for the OTR.
There are a wide range of TCMs that have been proposed, but EPA
believes that many of them, such as gasoline rationing, are
unreasonable and impracticable here. Two options that EPA considers
potentially reasonable and practicable are the extension of the
Employee Commute Option (ECO) program region-wide and implementation of
a comprehensive system of congestion pricing, employee parking pricing,
and emissions-based registration fees.
Section 182(d)(1)(B) of the Act mandates that the severe areas in
the OTR adopt employee trip reduction programs (also known as ECO
programs). Under these programs, each employer with more than one
hundred employees must offer incentives and encouragement for employees
to travel to work by means other than single-occupant vehicles. The
eventual goal of the program is to achieve a 25% increase in vehicle
occupancy for morning commuting trips. This is equivalent to one out of
five employees using a mode of commuting, other than driving. EPA's
best case estimate of the benefits of extending the ECO program region-
wide is a three percent reduction in vehicle miles travelled (VMT) in
the OTR. This reduction in VMT would correspond to approximately a two
percent reduction in NOX and VOC emissions from light-duty
vehicles in the OTR, and to a 0.6% reduction in overall NOX
emissions and a 0.4% reduction in overall VOC emissions from the 2005
baseline. The incremental amount of reductions is limited because the
program would only affect the limited number of large employers outside
the severe areas and because commuting trips are only a fraction of
overall trips and VMT.
A second TCM option is a comprehensive system of fees and
incentives designed to affect driving habits and vehicle usage. These
controls, including congestion pricing, employee parking pricing, and
emissions-based registration fees, are described in the Cameron
Report.42 These measures could possibly achieve a 12% reduction in
car and light-truck VMT in the OTR. This would correspond to a 12%
reduction in NOX and VOC emissions from light-duty vehicles, a 2%
reduction in overall VOC emissions and a 3% reduction in overall
NOX emissions from the 2005 baseline.
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\4\2See ``Transportation Efficiency: Tackling Southern
California's Air Pollution and Congestion'', Michael Cameron, EDF
and Regional Institute of Southern California (March 1991).
---------------------------------------------------------------------------
California Reformulated Gasoline
The use of California reformulated gasoline in the OTR is another
option that has been mentioned. This program would generate limited
additional emissions reductions in the OTR. California reformulated
gasoline achieves greater emissions reductions than Federal
reformulated gasoline, due to the different specifications for the
California fuel, such as a lower Reid Vapor Pressure (RVP). EPA
estimates that the implementation of California reformulated gasoline
in the OTR could provide an approximate six to seven percent reduction
in NOX and VOC emissions from gasoline vehicles. This corresponds
to reductions from the overall 2005 baseline of 1.7% for NOX and
1.5% for VOC. This issue was addressed in a study done for the State of
Maryland43 and a study prepared for the group of northeast
states.44 Both of these studies corroborate EPA's conclusion that
California reformulated gasoline would achieve limited reductions in
the OTR.
---------------------------------------------------------------------------
\4\3See Ellis, H., ``An Analysis of Ozone Control Strategies for
Maryland,'' Johns Hopkins University (Jan. 17, 1994).
\4\4See Screening Study of Mobile-Source Strategies for the
Northeast,'' Acurex Environmental Corporation (Oct. 1992).
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California Federal Implementation Plans Measures
EPA also considered additional emission reduction measures that the
Agency has included in a proposed Federal Implementation Plan (FIP) for
the Ventura, Sacramento, and South Coast areas of California. See 59 FR
23263 (May 5, 1994). As the following discussion indicates, the
measures proposed for consideration in these FIPs which are not
unreasonable or impracticable and which could be implemented by the
states in the OTR, have largely been considered as part of other
strategies discussed above. Those that remain would not generate a
substantial reduction in emissions from the overall inventory.45
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\4\5As the FIP proposal contains too many provisions to list
exhaustively, the following discussion focuses on examples to
illustrate EPA's approach.
---------------------------------------------------------------------------
Context Surrounding FIP Measures
The court-ordered obligation that EPA produce FIPs for three
regions of California has placed EPA in an unusual position. The Clean
Air Act places primary responsibility for clean air planning at the
regional, state and local levels. This is appropriate because state and
local officials have the specific knowledge, flexibility, and
sensitivity to tailor clean air plans to the particular needs of their
communities. Throughout the FIP development process, EPA has
acknowledged that the measures at its disposal include blunt
instruments that have the potential for significant social and economic
impact. Also, the time constraints imposed by the court order and the
functional limits on EPA's ability to fashion measures which meet the
specific needs of localities have forced the Agency to propose a number
of measures that would not be appropriate for implementation in the
OTR.
The pollution problems experienced in California are of a magnitude
far greater than those experienced anywhere else in the nation.
Moreover, the OTC, with its recommendation here, seeks to benefit from
the leadership California has demonstrated in setting strict pollution
standards for new vehicles. The measures proposed in the FIP generally
supplement measures California has already adopted. The LEV program is
a critical aspect of California's attainment strategy and the FIP. When
considering whether FIP measures may constitute part of a set of
measures sufficient to achieve the necessary reductions in the OTR
without the LEV (or LEV-equivalent) program, it is essential to stress
that EPA proposed these measures for California in addition to the LEV
program that California had already adopted in 1990. If the LEV program
had not already been adopted, EPA would have had to propose a measure
very much like it for the FIP, due to the substantial and relatively
cost-effective benefits that the program will provide in California.
Description of FIP Measures
For the purposes of this discussion, EPA has grouped proposed FIP
measures into four broad categories: (1) FIP measures that are not
practicable in the OTR because they depend on federal authority to be
implemented or are predicated on special regulatory authority Congress
has conferred only upon California; (2) FIP measures that are clearly
unreasonable and impracticable in the OTR because they are predicated
upon industrial or geographic circumstances that are particular to
California; (3) FIP measures that are unreasonable and impracticable in
the OTR relative to LEV implementation because they are too costly or
speculative; and (4) FIP measures which are not clearly unreasonable or
impracticable for implementation in the OTR.
(1) Measures excluded because they depend on unique authority.
a. Federal Authority--EPA proposed two different types of FIP
measures relying on EPA's unique federal authority. Most were measures
that would apply nationally, such as recreational marine vessel
controls, and thus would apply in the OTR, as well. Additionally, EPA
proposed some parts of the FIP solely under authority accorded to the
Agency under the FIP provisions in section 110(c). These parts of the
FIP regulated source categories including new locomotives and farm and
construction equipment under 175 hp. See section 209(e)(1). These
proposed FIPs would rely on section 110(c) to impose requirements for
these sources that are more stringent than EPA has proposed for the
nation as a whole. All states, including California, are preempted from
regulating this category of sources. Therefore, no state in the OTR has
the option of adopting these controls.
b. State Authority--California has authority under section 209 of
the Act to address pollution from on-highway and nonroad engines
(except certain categories of nonroad engines noted above), which other
states do not have. In the FIP proposal, EPA stepped into the shoes of
California and proposed several measures under California's section 209
authority for California only. Generally, these measures are tight new
emission standards for new on-highway and nonroad equipment. EPA also
proposed certain measures to improve durability of on-highway and
nonroad equipment to better control emissions in-use. EPA again
proposed these programs under California's special authority that other
states do not have. Because states are preempted from adopting such
regulations in the absence of California regulations actually adopted
under California's Clean Air Act authority, states in the OTR do not
now have the option of adopting any of these controls.
(2) FIP measures that are impracticable in the OTR because they are
predicated upon industrial or geographic circumstances that are
particular to California.
EPA proposed several programs for the FIP that deal with
circumstances unique to California's industrial and geographic
circumstances and are therefore inappropriate for the OTR. For example,
due to the fire hazards inherent in an arid region, California fire
departments burn vegetation periodically to lower the risk of a wild
fire. EPA proposed that these burns only occur on certain days so that
the pollution from the fire does not add to ozone exceedances. Since
such burns do not occur in the OTR, such requirements would not make
sense there. The rules regarding outer continental shelf oil
exploration are another example of rules which may make sense in
California but not in the OTR.
(3) FIP measures that are unreasonable or impracticable in the OTR
because they are too costly or disruptive.
The FIP contains ``cap'' rules for stationary sources which impose
an annual rate of reduction on affected sources for as many
controllable VOC and NOX categories as possible. The emission
reduction targets are derived from the overall shortfall in the FIP
area rather than any consideration of available emission control
technologies. EPA's proposal anticipates that the state and local
agencies can over time develop carefully tailored economic incentive
programs or traditional rules based upon the most recent technologies
and regulatory approaches. But the cap rules themselves are not
examples of specific regulatory approaches to be adopted at the state
or local level. These are therefore blunt instruments without specific
and identifiable emissions control mechanisms in mind. As such, they
may be costly to achieve and EPA cannot now conclude that they are
based on technologies that are potentially practicable.
Beginning in 2004, the FIP also proposes to discourage the use of
older high polluting recreational boat engines through the imposition
of a user fee and permit system. EPA believes that measures which
restrict individual behavior or prevent citizens from benefitting from
investments made in property are particularly difficult to implement.
EPA does not believe it is reasonable to adopt such measures before
implementation of the LEV standards.
(4) Proposed FIP measures which are not clearly unreasonable and
impracticable.
Many of the proposed FIP measures are based on national, state and
local initiatives that EPA does not believe it should dismiss as
clearly unreasonable or impracticable. Nationally, there are a variety
of standards for stationary and mobile sources. California initiatives
include the LEV program itself, as well as other measures applicable to
consumer products. The FIP proposal also takes into account local
efforts in the affected California areas to reduce NOX from
stationary and mobile sources.
EPA is in the process of developing many national rules that it
took into account in the FIP proposal and that it therefore expects to
apply in the OTR. For example, apart from the FIP proposal, EPA is
developing by November 1995, nation-wide emission standards for new
marine engines. EPA is also developing standards for locomotives and
small nonroad engines under 25 hp. California has also developed rules
to reduce VOC emissions from paints and other consumer products and EPA
is developing similar controls on the VOC content of consumer and
commercial solvents and architectural coatings. EPA has already
accounted for the benefits of all of these measures for the OTR above,
in its modeling of the impact of the mandatory Clean Air Act measures.
Local areas in California, especially the South Coast Air Quality
Management District (South Coast), have been especially innovative in
developing emissions reduction programs. There are two programs that
EPA took into account in its FIP proposal which merit special comment
here. First, the South Coast developed an ECO program to reduce the
number of vehicle miles travelled to and from major employers. As
discussed above, the Clean Air Act now requires many nonattainment
areas to implement ECO programs. EPA proposed in the FIP to expand
coverage to Sacramento. As discussed above, the ECO programs already
required for certain areas in the OTR could be expanded region-wide, or
applied to smaller employers than currently mandated. However, as noted
above, the incremental benefits from these programs appear to be
relatively small.
The South Coast has also developed a new program that EPA took into
account in its FIP proposal, known as the Regional Clean Air Incentives
Market (RECLAIM), to establish a declining cap on NOX emissions
from stationary sources. Unlike the South Coast, however, large
stationary NOX sources in the OTR are dominated by coal-fired
utilities. In place of a declining NOX cap program, the OTR states
are developing a plan to impose a stringent NOX standard for
utilities. This is part of the 0.15 lbs/MMBtu NOX standard ,
discussed above. This standard is substantially more stringent than
many in the OTR believe to be reasonable, but EPA has nonetheless
modeled the impacts of such a strategy in its analysis here.
Consideration of Rule Effectiveness
In evaluating the emissions reductions attributable to particular
control measures, it is important to consider the effectiveness of the
rules. If all sources fully comply with the rules at all times, and if
there were never problems with control equipment, then the emission
reductions associated with control measures could be calculated and
summed to reflect the anticipated reductions as a result of applying
specific regulations. However, past history has shown that rules are
not consistently applied or enforced, control equipment malfunctions,
and operating and maintenance problems occur, all contributing to air
emissions. These emissions are accounted for through the application of
rule effectiveness (RE) guidelines. This is a means of identifying and
estimating the increased emissions failures and uncertainties in
emission control programs.
Rule effectiveness is a measure of the extent to which a rule
actually achieves its desired emission reductions. It accounts for a
variety of factors that influence the efficacy of emission control
programs, including: the nature of the regulation or control (e.g.,
complexity of record-keeping or test methods); nature of control
techniques (e.g., potential for fugitive emissions); performance of
sources in complying with the regulation (e.g., schedule of maintenance
and inspection of control equipment); and performance of those
enforcing the regulation (e.g., inspector training).
EPA accounts for RE for mobile source controls that affect the
mobile emissions factors internally in the MOBILE model. For stationary
sources, however, the emissions inventory must account for RE to yield
more reliable estimates of the actual emissions reductions that SIP
rules will achieve. In general, EPA specifies an 80 percent default RE
value in the absence of a local category-specific RE value. In essence,
this assumes that the ability to use control devices or regulations to
achieve emission reductions is only 80 percent effective. Without
application of RE to the emissions inventory, the emissions reductions
estimated to occur as a result of control measures would be overly
optimistic. Although EPA's analysis of measures mandated in the Act
accounts for RE, the emissions reductions assumed for the other
measures may not have accounted for REs and must therefore be
considered overly optimistic.
Conclusions
As described above, EPA believes reductions in the range of 50% to
75% from 1990 baseline NOX and VOC emissions levels will be needed
to enable all of the serious and severe nonattainment areas in the OTR
to attain the ozone standard. The NOX reductions are needed
throughout the OTR and the VOC reductions are needed at least in and
near the urban portions of the OTR. EPA recognizes that there are
uncertainties in its modeling analysis used to reach this conclusion.
For the reasons described earlier in this notice, EPA believes it would
be appropriate generally to resolve uncertainties in its factual
analysis in favor of the most environmentally conservative course. EPA
requests comment on whether, for purposes of its analysis of
alternative control measures, EPA should conclude that the middle of
this range, or at least a 65% reduction from baseline NOX
emissions, will be necessary throughout the OTR. Here, as described
below, EPA believes that focus on the low end of the range would not
change its conclusion. In addition to uncertainties in the atmospheric
models, uncertainties also exist in the base year emissions
inventories, the projected emissions that account for growth in the
future, the amount of emission reductions estimated to result from
implementation of the control measures (including consideration of rule
effectiveness), and the modeled ozone concentrations resulting from the
emissions. Additionally, EPA believes that it should err on the side of
environmental protection in addressing these uncertainties.
As described above, a strategy consisting of all of the mandatory
Clean Air Act measures and the 0.15 NOX standard for large
boilers, gas turbines, and internal combustion engines would achieve
approximately a 32% reduction in NOX from 1990 baseline levels.
Most of the source categories listed in the STAPPA/ALAPCO compilation
of NOX control measures are already included in the 0.15 NOX
standard, and the NOX emissions from the few remaining categories
of small stationary and area sources comprise an extremely small
portion of the stationary source segment of the emissions inventory,
and a proportionally smaller portion of the overall inventory. Hence,
it is likely that those additional measures would achieve no more than
a small percentage reduction in the overall NOX inventory.
In addition, the transportation control measures that EPA would not
consider clearly impracticable or unreasonable (including expanded
geographic coverage of ECO programs and implementation of a
comprehensive system of congestion pricing, employee parking pricing,
and emissions-based registration fees, and the versions of those
measures included in EPA's FIP proposal), would yield a combined
reduction of 2.5% from 1990 baseline inventory-wide NOX
reductions. Beyond that, implementation of California reformulated
gasoline requirements in the OTR would achieve approximately a 1.4%
reduction in NOX emissions from 1990 baseline inventory-wide
levels.
It is apparent that the combined NOX reduction of the entire
set of these measures would be significantly short of the 65% NOX
reduction EPA believes is needed throughout the OTR for attainment in
the serious and severe nonattainment areas of the region. As a result,
those areas will not be able to attain the standard through application
of all of the potentially practicable measures, without NOX
reductions from more stringent emissions standards for new vehicles
region-wide.
After evaluating the control measures discussed above, EPA
concludes that the emissions reductions resulting from application of
potentially reasonable and practicable control measures will not be
sufficient to achieve attainment throughout the OTR without more
stringent new vehicle emission standards.
Mobile source emissions comprise a significant part of the 2005
NOX and VOC emissions inventories. Indeed, EPA believes that,
apart from its analysis of each potentially reasonable control option
independently, the reasonableness and practicability of adopting all
these controls measures without adopting more stringent standards for
new motor vehicles is questionable. And for NOx, while additional
emissions reductions from other source categories will be important to
meet the attainment goal, EPA believes the measures will be needed in
addition to, rather than in place of, more stringent controls for new
motor vehicles throughout the OTR. Although EPA has not quantified all
of the VOC reduction measures described above, EPA believes the
conclusion also applies for VOC, at least in and near the urban
portions of the OTR.
iii. Determination Whether Reductions from OTC LEV (or LEV-
Equivalent) Approach to New Motor Vehicles Are Necessary.
EPA believes that the foregoing information supports the conclusion
that sufficient options to make up the shortfall in emissions
reductions necessary for attainment in the OTR are not available from
sources other than new motor vehicles, and that additional reductions
in NOX and VOC emissions from new motor vehicles are therefore
necessary. EPA believes that the OTC LEV program would achieve
reductions beyond the mandated Clean Air Act measures by 2005 of 4% for
NOX and 2% for VOC from the 2005 baseline. This information is
presented in Table 4, below.46
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\4\6EPA's analysis presumes that the only difference in
emissions between OTC LEV vehicles and federal vehicles is tailpipe
emissions.
Table 4.--Reduction in 2005 Baseline VOC and NOX Emissions Attributable
To a LEV Program
------------------------------------------------------------------------
NOX VOC
changes changes
Emissions component (percent) (percent)
------------------------------------------------------------------------
Total highway emissions........................... -10 -9
Total OTR emissions............................... -4 -2
------------------------------------------------------------------------
These calculations are based on the incremental effect of the LEV
program beginning in 1999 throughout the OTR over the reductions that
will take place in New York and Massachusetts as a result of their
existing LEV programs beginning in 1996. Due to the phase-in schedule
for the LEV program and the time required for fleet turnover, the
maximum benefit for LEV would not be realized until 2028. Therefore,
EPA expects that emissions reductions attributable to an OTC LEV
program would continue to grow after 2005.
Under the OTC LEV program, some increases in emissions would be
associated with the permanent migration of non-LEVs into the OTR, and
with temporary visits by non-LEV vehicles from other states. The amount
of excess emissions associated with migrating and visiting vehicles is
dependent on two factors: (1) the difference in emissions per car
between the cars entering the OTR and the ``native'' fleet within the
OTR; and (2) the number and age-mix of the cars entering the OTR from
outside. Both questions are difficult to answer and will have different
answers for permanent migration and temporary visitation. The numbers
in this Table 4 do not include these effects because EPA is still
analyzing this issue and has not yet quantified these effects.When this
analysis is ready, EPA will put it in the docket and publish a notice
of data availability in the Federal Register.
As described above, EPA does not believe other practicable options
are available to make up the shortfall to achieve the reductions
necessary in the OTR for attainment. Therefore, EPA believes that a
program available to achieve more reductions from new motor vehicles is
necessary.
Legal limitations make the LEV program the only option available to
the states to achieve what are necessary additional reductions from new
motor vehicles. Section 209 of the Act prohibits states from adopting
or attempting to enforce any standard relating to the control of
emissions from new motor vehicles or engines, except for California if
a waiver is granted. This is subject to a limited exception provided in
section 177 for states that have SIP provisions approved under part D
of the Act to adopt and enforce emissions standards for new motor
vehicles and engines if: (1) Such standards are identical to the
California standards for which a waiver has been granted; and (2)
California and the state adopt the standards at least two years before
the beginning of the model year in which the standards are to apply.
EPA has granted a waiver for the California LEV standards, and the
states can therefore adopt them.47,48 At the same time, section
202(b)(1)(C) explicitly prohibits EPA from changing the current ``Tier
1'' emissions standards for new motor vehicles in sections
202(a)(3)(B)(ii), (g), (h), and (i) before model year 2004.
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\4\7,48See Waiver of Federal Preemption: California Low Emission
Vehicle Standards (Jan. 8, 1993).
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Therefore, no options other than the LEV program are currently
available to achieve the necessary additional reductions from new motor
vehicles and engines. As explained in section V of this notice, EPA is
proposing to allow for the possibility that an alternative federal
program achieving comparable emissions reductions to the OTC LEV
program may be developed. But the possibility that such an alternative
program can be developed in the future does not contradict the
conclusion that the only option currently available to the states to
achieve the required reductions in new motor vehicle emissions (the LEV
program) is necessary.
EPA believes that the OTC LEV program would be reasonable and
practicable in the OTR. EPA granted California a waiver for its LEV
program on January 8, 1993 based on the finding required under section
209(b) of the Act.\49\ In addition, when the California Air Resources
Board (CARB or the Board) initially approved its LEV regulations in
1990, it directed CARB to report biennially to the Board on the status
of implementation of the regulations. The staff provided the Board with
the first such report at a June 11, 1992 public meeting. At the time
the Board found that the low-emission vehicle standards continued to be
technologically feasible within the required time frames, and
accordingly no changes to the standards or phase-in schedule were
needed.\50\
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\49\In EPA's waiver decision regarding California's LEV program,
the EPA Administrator stated, ``Based on EPA's review of this
record, I find reasonable and so adopt California's finding that
there is adequate leadtime to permit the development of technology
necessary to meet those standards giving appropriate consideration
to the cost of compliance within the required time frame.'' Waiver
of Federal Preemption; California Low-Emission Vehicle Standards at
69 (Jan. 8, 1993).
\50\See letter from Executive Officer James Boyd to EPA
Administrator Carol Browner (July 21, 1994). The Board and staff did
recognize that a variety of amendments would be appropriate to
augment the LEV regulations, make them clearer, and facilitate their
implementation. This recognition led to the adoption of several LEV
``follow-up'' amendments, which were formally adopted by the Board.
On September 22, 1993, CARB sent a letter requesting that EPA
confirm the Board's determination that these amendments fall within
the scope of the January 8, 1993 waiver for the California LEV
Program. EPA has not yet acted on this request.
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CARB held its second LEV ``status'' hearing May 12 and 13, 1994, at
which the Chairwoman stated in her closing statement that CARB had
``had a successful launch of the Low Emission Vehicle program.''\51\
The CARB Staff Report that preceded the May meeting stated that many of
the technologies that will be required for LEV ``are already in
production in some vehicle models, and the remaining technologies are
now developed to near commercial levels of readiness.''\52\ In fact,
CARB has to date certified several categories of LEVs, including TLEVs
(produced and sold), light-duty and medium-duty ULEVs (natural gas),
and ZEVs.
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\51\See Closing Statement by CARB Chairwoman Jacqueline Schafer
at Public Meeting to Review Low-Emission Vehicle Standards at 1 (May
13, 1994).
\52\See CARB Staff Report: 1994 Low-Emission Vehicle and Zero-
Emission Vehicle Program Review, at 17 (April 1994).
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Furthermore, two states, New York and Massachusetts, believed the
California LEV program to be reasonable and practicable enough to adopt
the LEV program in legislation and regulations without contingencies.
Both states are set to implement their programs. Other states have
adopted or are adopting the program contingent on regional program
adoption, and the remaining states are at various stages of the
legislative or regulatory process to adopt the program.
Finally, the legislative history of section 177 reinforces the idea
that states which adopt California standards do not create any undue
burden for the auto manufacturers. The House Report noted:
This new state authority [to promulgate standards under section
177] should not place an undue burden on vehicle manufacturers who
will be required in any event, to produce vehicles meeting the
California standards for sale in California.
H.R. Rep. No. 294, 95th Cong., 1st Sess. at 31.
EPA requests comment on whether it should require the OTR states to
achieve the additional emissions reductions associated with the ZEV
sales requirement from new motor vehicles if the Agency does not
require that the OTR states adopt the ZEV sales requirement. In an
August 4, 1994 letter, Arthur A. Davis, Chair of the OTC,\53\ stated
that, in the OTC's February 10 recommendation it indicated that one of
the criteria for OTC LEV alternatives that EPA might consider was
emission reduction equivalency. The letter went on to explain the
principle of equivalency for purposes of discussing different options
with the auto manufacturers:
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\53\See letter from Author A. Davis, OTC Chair, to Mary D.
Nichols, Assistant Administrator, Office of Air and Radiation, U.S.
EPA (Aug. 4, 1994).
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To determine emission reduction equivalency, alternatives must be
compared to the emission reduction potential of the OTC LEV
recommendation with respect to the primary ozone precursors. This means
that the OTC will assess non-methane organic gases (NMOG) exhaust
emissions, NMOG evaporative emissions, and exhaust emissions of
nitrogen oxides (NOX) of significant alternatives with the
emissions of the same pollutants under the OTC LEV recommendation with
the full benefits available from the ZEV component.
This statement might be understood to indicate that the OTC expects
its recommended program to achieve the full benefits of the ZEV sales
requirement even if EPA does not mandate the ZEV sales requirement.\54\
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\54\As indicated, the OTC plainly recommended that vehicle
manufacturers comply with the NMOG tailpipe limit regardless of
EPA's determination regarding the ZEV sales mandate. The issue
raised here pertains solely to the additional evaporative NMOG and
NOX benefits provided by ZEV's.
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In addition, several commenters believe that the OTC's petition
included a recommendation that EPA require states to adopt programs
requiring that the automobile manufacturers obtain the full emissions
benefits of the ZEV sales requirement. One commenter suggested that EPA
require that states' programs compel the automobile manufacturers
either to sell ZEV's or achieve equivalent reductions from the new
vehicle sector, including tailpipe and evaporative NMOG, NOX, CO,
toxics, and carbon dioxide. EPA believes that consideration of CO,
toxics and carbon dioxide benefits are beyond the scope of the Agency's
authority under Section 184 which pertains solely to ozone pollution
and its precursors.
In order for auto manufacturers to achieve the additional
evaporative NMOG and NOX emissions benefits of the ZEV sales
requirement without selling ZEV's, they would have to provide a mix of
vehicles subject to requirements in addition to the NMOG fleet average
achievement. Under the ZEV equivalency approach, states could provide
the auto manufacturers the option of either complying with the ZEV
sales requirement or selling a mix of other vehicles, which could
include some ZEVs, that satisfies both the NMOG requirements and also
achieves the additional benefits equivalent to those that would result
from meeting the full ZEV sales requirement. This approach raises a
number of questions on which EPA is soliciting comment: (1) What
emission reductions are attributable to the ZEV sales mandate that
would not be realized if only the NMOG fleet average part of the
program were adopted? (2) How would auto manufacturers demonstrate that
their mix of vehicles achieved the same total emissions reductions as
the NMOG average plus the ZEV sales mandate? (3) Would such a
demonstration require EPA or the states to set a new emission standard
or a sales mandate for non-ZEV vehicles?
EPA requests comment on a number of other issues pertaining to such
a ``ZEV equivalency'' requirement, and whether the Agency should
include such a requirement in the final rule. First, EPA requests
comment on whether the OTC's recommendation can be interpreted to
include a requirement that the states' programs achieve the benefits of
the ZEV sales requirement in addition to the remainder of the
recommended LEV program from the new vehicle sector. EPA also requests
comment on whether the August 4 letter from the Chair of the OTC
supports this interpretation, and the extent to which EPA may rely on
such a letter to determine the intent of the OTC's February 10
recommendation.
Finally, EPA notes that commenters suggesting this approach have
not provided a specific explanation of how the states may adopt it
consistent with sections 209 and 177 of the Act. EPA welcomes comments
from the public on these legal issues.
(d) Particular circumstances of OTC LEV program.
EPA believes that its analysis of the contribution from one area to
another in the OTR should be understood in the specific context of the
OTC LEV program in question here. EPA believes that several aspects of
this particular program further support EPA's conclusion that it is
necessary to adopt this program region-wide to counteract ozone
transport. Many parties have commented that the OTC LEV program should
apply on a region-wide basis in order to attain the greatest amount of
emissions reductions and facilitate operation of the LEV program.\55\
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\55\See, e.g., letter from Albert Hendricksen, Vice President,
United Illuminating, to Mike Shields, U.S. EPA (June 3, 1994);
comments to the OTC LEV docket from Gerald Esper, Director, Vehicle
Environment Department, American Automobile Manufacturers
Association (June 3, 1994); and comments to the OTC LEV docket from
Barbara A. Kwetz, Director, Division of Air Quality Control,
Massachusetts Department of Environmental Protection (June 3, 1994).
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First, new car sales are very much an interstate business,
particularly in the northeast where many smaller states are located
together. Consumers frequently travel throughout a particular state and
to different states to buy cars. To the extent consumers in the more
polluted nonattainment areas can continue to buy cars elsewhere in the
same state or in other states, then it is especially important that the
cars they buy elsewhere meet the strictest emissions standards needed
for emissions reductions in the more polluted areas.
The interstate business aspect is especially true in border areas
of larger states, and can pervade smaller states, such as those in the
OTR. For example, according to auto dealers in Greenwich, Connecticut,
fifty percent of their sales are to New York residents. Dealers in
different states regularly trade vehicles among themselves. Dealers
also engage in ``drop shipments,'' where a dealer accepts an order from
an out-of-state customer and the vehicle is shipped directly to the
customer without ever physically entering the dealer's inventory. To
accommodate such practices, EPA has adopted a ``cross-border sales''
policy that in effect permits the sale of cars certified to California
standards in states that are contiguous to those that have adopted
California standards.\56\ Indeed, members of Congress from Maine have
urged EPA to extend this cross-border sales policy to dealers in Maine
because they claim that 125 out of 170 Maine dealers rely on vehicle
trades with Massachusetts dealers. While they explained that those in
southern Maine are most affected, even dealers as far north as Bangor
trade with Massachusetts dealers.\57\
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\56\See letter from Charles N. Freed, Director, Manufacturers
Operations Division, U.S. EPA, to interested automobile
manufacturers (Nov. 16, 1993).
\57\See letter from Rep. Olympia J. Snowe, U.S. House of
Representatives, to Carol Browner, Administrator, U.S. EPA (July 18,
1994); letter from Thomas T. Brown, Jr., Executive Vice President,
Maine Automobile Dealers Association, to Sen. William Cohen, U.S.
Senate (June 10, 1994).
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It is important that the states adopt OTC LEV as soon as possible
because the air quality benefits from the program will not be realized
immediately. This delay in air quality benefits is due to the leadtime
requirement in section 177 and the time required for fleet turnover.
For the California standards to apply in another state, section 177 of
the Act requires that California and the adopting state adopt the
standards at least two years before commencement of the model year in
which the LEV standards are to apply. Due to the phase-in schedule for
the LEV program and the time required for fleet turnover, the maximum
benefit for LEV would not be realized until 2028.
It is also very important that the emissions sources in question
here are mobile. Residents of particular states drive their cars into
other states, and may even relocate to such other states. This may be
particularly true in the northeast, where there is a high concentration
of large metropolitan areas and a very dense transportation
infrastructure that allows people to drive into and between these big
cities. For this reason, it makes particular sense to ensure to the
maximum extent possible that the fleet of cars throughout the region
meet the strictest emissions standards needed for emission reductions
in the more polluted areas.
For these business and environmental reasons, industry and
government organizations, including auto dealers and states, have urged
that if the program is to be adopted, all states in the region should
do so.\58\ Requiring that different cars meeting LEV standards be sold
in different parts of the same state, in a potential patchwork across
the region, could create business difficulties and could also
compromise the intended environmental benefits of the program. Indeed,
congressional debate over the adoption of section 177 reflected this
concern.\59\ Presumably due to these concerns, a number of states in
the OTR have actually adopted legislative authority or actual
regulations to implement the LEV program under section 177 that would
go into effect on the condition that some number of other neighboring
states in the region likewise implement the program.
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\58\See, e.g., letter from Robert A. Beck, Vice President,
Environmental Affairs, Edison Electric Institute, to U.S. EPA (June
3, 1994); letter from Helene G. Goldberger and Joan Leary Matthews,
Assistant Attorneys General, State of New York Department of Law, to
U.S. EPA (June 2, 1994).
\59\See H.R. Rep. No. 294, 95th Cong., 2nd Sess., 309-311
(1977), reprinted in Legislative History of the Clean Air Act
Amendments of 1977 at 2776-78.
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Finally, EPA believes that its action in approving state volatility
controls as necessary under section 211(c)(4)(C) constitutes a
precedent for considering business practices to conclude that the
program should apply state-wide, even if it may not have been
environmentally necessary in that case across the entire state. In that
case, EPA approved New York's adoption of volatility controls as
necessary throughout New York, even in areas that were in attainment
for ozone, in part based on the fact that the pipeline distribution
network for gasoline made the supply of different gasoline to different
parts of the state difficult for business and for program
administration. Therefore, EPA concluded that the need for the program
in part of the state justified allowing New York to adopt it state-wide
under section 211(c)(4)(C).\60\
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\60\See 54 FR 26030, 26033 (June 21, 1989); 58 FR 12656, 12659
(March 28, 1989).
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EPA is not now proposing that Virginia adopt the OTC LEV program
state-wide, but requests comment on this issue. Congress designated
only the northern portion of Virginia that is part of the Washington,
D.C. metropolitan area as part of the OTR. Therefore, Congress clearly
intended that Northern Virginia can be treated separately from the
remainder of Virginia for the purposes of ozone transport, and that
pollution control in northern Virginia is particularly important for
attainment of the ozone NAAQS in the northeast. Also, there has been no
motion under section 176A to extend the OTR to the rest of Virginia on
grounds that the rest of the state contributes significantly to
nonattainment in the region.
However, certain commenters questioned a state's authority to adopt
California standards in part of a state. Though EPA disagrees with such
comments, as discussed below, EPA requests comment on whether its final
action should require Virginia to adopt the OTC LEV program state-wide.
While EPA believes that there is good reason generally for the program
to apply state-wide and region-wide in the OTR, EPA does not believe
that state-wide application is legally required under section 177.
Section 177 was clearly designed to deal with nonattainment of
standards. This is consistent with the heading for section 177: ``New
Motor Vehicle Standards in Nonattainment Areas.''61 Section 177
does not require statewide implementation of California standards; nor
do any of the explicit requirements of section 177 imply a requirement
for statewide implementation. Section 177 merely requires that the
state adopt standards that are identical to the California standards.
EPA believes it is most reasonable to interpret the geographical area
in which the standards apply to be a part of the California program
that is not an aspect of the term ``standards'' in section 177(l). Of
course, other states applying the California standards will necessarily
apply them in a variety of places different from California. And the
underlying rationale for the identicality requirement that other states
not adopt standards creating a ``third vehicle'' is not implicated by
limitation of the program to part of a state.
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\6\1See letter from EPA Administrator William Reilly to
Elizabeth Haskell, Virginia Secretary of Natural Resources (January
7, 1993).
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(e) Conclusions regarding need for OTC LEV (or LEV-equivalent) for
purposes of attainment by the dates provided in subpart 2 of part D of
title I.
EPA's approach has been to analyze the reductions needed in the OTR
for purposes of attainment, and then the options available to achieve
those needed reductions. As discussed above, EPA believes that a 50% to
75% reduction in NOX emissions throughout the OTR and VOC
emissions in and near the urban areas will be necessary for attainment
throughout the OTR. This range is based on studies that used a 1985
emissions baseline. Updated inventory information indicates that the
1985 inventory underestimated actual emissions. Therefore, EPA believes
at least 50% to 75% emissions reductions, and possibly more, are needed
from the 1990 emissions baseline. EPA's modeling analysis has focused
generally on the inventory in the year 2005. As discussed in section
IV.A.2.(a), the percentage reductions necessary from the 1990 baseline
for purposes of attainment do not change over time and do not depend on
EPA's choice of 2005 for purposes of modeling. Still, control options
for achieving those reductions by a particular time can vary, if it
takes time for certain measures to be developed or to be implemented
and to achieve reductions. Also, the growth that states must counteract
in order to achieve the percentage reductions from the 1990 baseline
will continue to rise over time. EPA's conclusion that the OTC LEV
program is necessary for attainment in the OTR applies for all of the
serious and severe areas with attainment deadlines of 1999, 2005 and
2007.
Based on the analysis focusing on the 2005 inventory, EPA believes
that the OTC LEV (or LEV-equivalent) program is necessary for the
severe nonattainment areas in the OTR to attain by the 2005 deadline.
EPA believes there is no basis to find that its conclusion that the OTC
LEV (or LEV-equivalent) program is necessary would be different for
emissions that contribute to nonattainment in the New York-New Jersey-
Connecticut severe area, which has a 2007 attainment deadline. The
control options EPA assessed will not achieve such greater reductions
in the extra two years so as to make up the shortfall in reductions
needed for attainment without the LEV program.
Also, it is important to note that each of the states in the New
York-New Jersey-Connecticut nonattainment area needs the OTC LEV (or
LEV-equivalent) program in order for the other two to reach attainment
by 2007. These three states are part of a common airshed and represent
a single area in which pollutants from VOC and NOX emissions mix
to form a plume of high ozone concentrations. In addition, there is
considerable interstate travel by commuters between these states within
this nonattainment area such that non-LEV vehicles from one state would
reduce the effectiveness of a LEV program in the adjacent states. For
similar reasons, these states may also need the LEV (or LEV-equivalent)
program in order that the southern New Jersey-Philadelphia
nonattainment area (that abuts the New York-New Jersey-Connecticut
area) may attain by 2005.
EPA further believes that the OTC LEV (or LEV-equivalent) program
is needed in the OTR in order for serious areas with a 1999 attainment
deadline to attain on time. Such areas, including the northern serious
areas downwind of the New York-New Jersey-Connecticut area and western/
northwestern New England, face a need for tremendous reductions on a
very fast track in order to attain by 1999. Since EPA believes that
other reasonable and practicable options are not available to achieve
the entire shortfall in emissions reductions necessary for timely
attainment, even the limited reductions that the OTC LEV program would
achieve in model year 1999 are actually necessary. And the program is
not impracticable or unreasonable for this purpose, since the costs in
1999 will be limited in proportion to the limited vehicles that will
meet the standards during that first model year.
Further, EPA believes the manner in which areas actually
demonstrate that they ultimately achieve attainment further supports
the conclusion that the OTC LEV (or LEV-equivalent) program is
necessary for the serious areas to attain by 1999. According to EPA
guidance, attainment is reached when an area experiences no more than
three exceedances of the ozone NAAQS over a three-year period.62
In other words, air quality that results in no more than one exceedance
of the NAAQS per year averaged over three years will be sufficient for
attainment, and three years of such data are necessary to demonstrate
that the state has achieved such air quality.
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\6\2This is assuming the area has complete ozone monitoring
data. An adjustment is specified in the ozone NAAQS to account for
missing data. Where data are incomplete, the number of exceedances
that would be expected had the data been complete is calculated to
determine the attainment status of the area; See 40 CFR 50.9 as
interpreted by Appendix H; ``State Implementation Plans; General
Preamble for the Implementation of Title I of the Clean Air Act
Amendments of 1990.'' 57 FR at 13506 (April 16, 1992); Memorandum
from John Calcagni, former Director of EPA Air Quality Management
Division to Regional Air Division Directors, ``Procedures for
Processing Requests to Redesignate Areas to Attainment.'' (Sept. 4,
1992.)
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The Clean Air Act attainment requirements take into account that
states may not be able to achieve air quality improvements two years
prior to the attainment year deadline in order to be able to show
attainment over a three-year period ending by that deadline year. Under
section 181(a)(5) of the Act, a state may apply to EPA for a one-year
extension of the attainment deadline specified in section 181 if the
state has complied with all SIP requirements and the area in question
has experienced no more than one exceedance of the ozone NAAQS during
the deadline year, containing the attainment date. EPA may grant up to
two one-year extensions under this provision. Of course, in order to
achieve the NAAQS and be eligible for redesignation to attainment, the
states must sustain the air quality improvements achieved in order to
have not more than one exceedance for each of the two extension years,
and are likely to have to control growth in emissions in order to do
so.
Serious areas in the OTR may need to rely on extensions of the
attainment deadline under section 181(a)(5) in order to avoid a finding
of failure to attain (and the consequent ``bump-up'' to a severe
classification with a 2005 attainment date).63 EPA believes it is
highly likely, in such a case, that OTC LEV (or LEV-equivalent) will be
necessary to achieve reductions in order to offset growth and sustain
attainment-level air quality through the 2000 and 2001 extension years.
OTC LEV would generate increasing reductions in those years, due to
fleet turnover.
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\6\3The available evidence described in this notice indicates
strongly that these areas will not be able to avoid a bump-up
without relying on the one-year extensions available under section
181(a)(5).
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In sum, since OTC LEV (or LEV-equivalent) is necessary to bring
serious and severe areas stretching from Washington, DC to Portsmouth,
New Hampshire into attainment by the 1999, 2005, and 2007 deadlines
applicable to those areas, and because the reductions from OTC LEV (or
LEV-equivalent) will be needed in areas located in a broad area
extending from the south through the northwest of each of those areas
and nearby locations from which vehicles may travel and be traded, EPA
proposes to conclude that OTC LEV is necessary throughout the OTR to
bring those areas into attainment by those dates.
3. Need for OTC LEV (or LEV-Equivalent) Program for Purposes of
Maintenance.
(a) Legal Relevance of Maintenance.
EPA discussed the timing of reductions from the OTC LEV program and
the relevance of maintenance to its inquiry at length in the April 26
proposal. See 59 FR 21728-21730. The program would not achieve
substantial reductions until after its first implementation in model
year 1999. There is much evidence that the nonattainment problem in the
severe areas is a regional problem in origin, and that the OTC LEV
program is therefore needed throughout much of the region to prevent
contribution to nonattainment in the severe areas. In addition,
however, EPA believes that the states in the OTR need the program to
avoid interference with downwind maintenance of the NAAQS even after it
is achieved.
While EPA believes it should consider this maintenance need here,
it must have legal authority to do so. In the April 26 notice, EPA
raised this issue because the language in section 184(c) describing the
basis for an OTC recommendation, EPA's obligation in reviewing it, and
EPA's obligation to explain why any control measure is not necessary
all reference necessity ``to bring an area in such region into
attainment by the dates provided by this subpart'' and omit any
reference to maintenance. Nevertheless, EPA currently believes that it
has legal authority to consider maintenance under section 184, and in
any case has independent authority for the action proposed here on
maintenance grounds directly under sections 110(k)(5) and 110(a)(2)(D).
EPA believes that these sections of the Act, together with the overall
structure of title I, support this conclusion.
To be sure, other provisions of the Act explicitly distinguish
between ``attainment'' and ``maintenance.'' Beginning with the overall
goal of healthful ambient air quality, section 109(b) requires EPA to
issue ambient air quality standards ``the attainment and maintenance of
which'' are necessary to protect the public health or welfare. The
current statutory structure as revised in the 1990 Amendments, however,
reflects a difference between the manner in which Congress addressed
states' attainment and maintenance obligations with respect to their
own independent air quality and the manner in which Congress addressed
states' obligations to prevent contribution to downwind nonattainment
and interference with downwind maintenance. In sum, EPA believes that
this new structure establishes particular time-frames for states to
address attainment separately from maintenance to protect their own air
quality, but left much greater discretion for EPA to insist that states
address these concerns at all times when states' emissions cause harm
in other states.
Prior to 1990, initial SIPs due nine months after EPA promulgation
of a NAAQS were to include programs designed both to attain and
thereafter maintain the standards. See prior section 110(a)(2) (B) and
(D) and section 172(a). In 1990, for areas designated as nonattainment
areas, Congress specified requirements for attainment and maintenance
in discrete provisions that provide for discrete SIP submissions to
address these two separable concerns. Section 172 continues to require
submission of a SIP providing for the attainment of the NAAQS in
nonattainment areas. The subpart 2 ozone program specifies deadlines
for submission of a variety of SIP revisions, including attainment
demonstrations for moderate and above areas. Maintenance considerations
for nonattainment areas were specifically relocated to a new section
175A, which provides that states are to submit plans, including
additional control measures, as necessary to ensure maintenance for at
least 10 years following redesignation to attainment. See section
175A(a). Significantly, section 175A includes no requirement that a
state adopt measures to address transport of pollutants that may
interfere with maintenance downwind.64
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\6\4One might assume that an area that is in attainment and
maintains that status could not interfere with attainment or
maintenance downwind. Intuitively, one might not expect a ``clean
air'' area to cause other areas to have ``dirty air.'' But this is
not the case. Areas that meet the standard may nonetheless have
emissions that interfere with attainment or maintenance downwind.
Indeed, Congress's decision to require control measures such as RACT
and nonattainment new source review even in attainment areas
throughout the OTR under section 184(b) indicates Congress
understood that ``clean air'' areas could contribute to ``dirty
air'' downwind.
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Consistent with this new structure, Congress changed the
requirement formerly codified at section 110(a)(2)(D) that required
SIPs to include a permit program for stationary sources as necessary to
assure that NAAQS ``are achieved and maintained.'' The new section
110(a)(2)(C) simply requires regulation of stationary sources as
necessary to assure that NAAQS ``are achieved.'' Thus, it appears that
Congress specifically deleted references to maintenance in section
110(a)(2) where it believed that to be appropriate in light of the new
structure and new section 175A.65
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\6\5Congress did leave a reference in section 110(a)(2)(C) to
``a permit program as required in parts C and D.'' The part C permit
program codified at section 165 of the Act is designed to prevent
significant deterioration of air quality in attainment areas, and
hence would only be relevant to maintenance, not achieving
attainment. One might argue from this that Congress intended the
reference to attainment in section 110(a)(2)(C) to include
maintenance, as well. But, the better view may be that Congress
simply overlooked the need to delete the reference to part C in
light of its specific deletion of the reference to maintenance.
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However, Congress made no such change to the pollution transport
provisions of section 110(a)(2). The transport provision was
significantly broadened from the former section 110(a)(2)(E) to new
section 110(a)(2)(D), as discussed above. Nonetheless, in changing the
language of the transport provision, Congress saw fit to retain the
reference to maintenance. Indeed, Congress had to specifically focus on
this issue when it changed the standard from ``prevent[s] attainment or
maintenance'' in the former provision to ``contributes significantly''
to nonattainment and ``interfere[s] with maintenance'' in the new
provision. This indicates Congress specifically sought to retain
maintenance as a criterion for pollution transport under section
110(a)(2) at the same time it was deleting maintenance as a criterion
for the permit provisions in light of section 175A.
EPA believes this structure is consistent with the absence of any
requirement that maintenance plans under section 175A address pollution
transport. Thus, the only provision in the Act that requires states to
prevent emissions within their borders that interfere with maintenance
in another state downwind is section 110(a)(2)(D). This may be
particularly important due to the staggered attainment deadlines under
section 181 for ozone. As is the case in the northeast, severe areas
with longer attainment deadlines may be located upwind of less polluted
nonattainment areas with shorter attainment deadlines. Even if the
downwind areas can attain on time, the upwind areas may continue to
generate substantial emissions interfering with downwind maintenance
until or even beyond the upwind area's longer attainment deadline.
As discussed generally above, EPA believes it has authority to act
under section 110(k)(5) at any time, even prior to submission of
attainment demonstrations under section 182, to require submission of
measures EPA believes are necessary for compliance with section
110(a)(2)(D). See 59 FR at 21730 (explaining EPA's independent basis to
issue SIP call under section 110(k)(5) to adopt measures necessary for
compliance with maintenance aspect of section 110(a)(2)(D)). It is
especially important that EPA act now, because the LEV program depends
on vehicle fleet turnover that will take an unusually long time to
generate the needed emissions reductions. If EPA waits for the states
to develop their attainment plans, and where applicable, their
maintenance plans, the opportunity to ensure that necessary emissions
reductions from the LEV program are achieved beginning in 1999 and
growing thereafter may be irrevocably lost. Any delay in beginning the
fleet turnover to LEV vehicles in model year 1999 will diminish the
emissions benefits in the years following. It is therefore necessary
for the states to act now to adopt OTC LEV and appropriate for EPA to
make a finding of substantial inadequacy now with respect to that
program for the purposes of maintenance. For the same reasons discussed
generally above, EPA believes an environmentally conservative approach
to evaluating the need for the LEV program to avoid interference with
maintenance is warranted here.
EPA believes that maintenance is a proper consideration under
section 184(c), too. To be sure, that provision references timely
attainment and omits maintenance. However, section 184(c)(5) provides
for an EPA finding of substantial inadequacy under section 110(k)(5)
that states' SIPs do not meet the requirements of section 110(a)(2)(D),
which specifically prohibits emissions in states from interfering with
maintenance in downwind states. Moreover, EPA believes there is an
adequate basis to reasonably interpret section 184(c) to include
maintenance. Specifically, EPA believes that it should understand
``attainment'' to include ``maintenance'' where the issue is whether
measures are ``necessary'' to comply with pollution transport
requirements.
The very emphasis on the ``necessary'' standard under section 184
supports this conclusion. In contrast, EPA's recent determination that
``attainment'' under section 182(f) does not include maintenance
involved a different standard. There, EPA's Conformity General Preamble
explained that the NOX exemption test in section 182(f)(1)(A)
where additional NOX reductions ``would not contribute to
attainment'' does not involve maintenance considerations. See 59 FR
31238. EPA stated that Congress could reasonably have believed it
appropriate to require states to impose specified requirements on
NOX sources for areas in nonattainment, but that states might
decide for themselves whether to impose such controls for maintenance
purposes, even if such controls would ``contribute'' to maintenance.
Id. EPA noted, however, that this distinction might not apply where the
test is whether control measures are ``necessary'' for attainment and
maintenance is not referenced, as here. Id.
Where measures are ``necessary'' for maintenance, EPA does not
believe it makes sense to let states decide for themselves whether to
adopt the measures. Inherent in the ``necessary'' determination under
section 184 is the conclusion that the states really have no choice:
They need to adopt the measure in order to avoid interfering with
downwind maintenance. Unlike the section 182(f) ``contributes''
context, as long as EPA determines that it is necessary, there really
is no choice. It seems less reasonable to believe Congress intended
that section 184 would not reach a measure in fact necessary for
maintenance, when the result of a failure to implement the measure
would therefore be downwind areas' relapse into nonattainment, perhaps
shortly after the attainment dates in subpart 2. Where the necessary
standard applies in the interstate pollution context, EPA believes it
is sensible to understand ``attainment'' to include ``maintenance.''
Finally, EPA believes its discussion of section 176A in its April
26 proposal identifies an additional statutory basis to support this
sensible conclusion. That is, the OTR in section 184 is established
under section 184(a) ``within the meaning of section 176A(a).'' Section
176A authorizes a transport commission under that provision to
``[r]ecommend to the Administrator such measures as the Commission
determines to be necessary to ensure that the plans for the relevant
states meet the requirements of section [110(a)(2)(D)].'' This
presumably includes both the attainment and maintenance aspects of
section 110(a)(2)(D). In all other respects, EPA's obligations in
response to a transport commission under section 176A are less strict
than under section 184. It would therefore be odd if section 176A
required EPA to consider maintenance in response to a commission's
recommendations, but that EPA would not be required to do so under
section 184. This is particularly so since it seems foolhardy to
consider measures necessary for attainment at the exclusion of those
necessary for maintenance.
Therefore, it seems reasonable to interpret the OTC under section
184 as a creature of both sections 184 and 176A. Section 184 simply
adds stringency to EPA's obligations in responding to recommendations
from the OTC, since Congress specifically identified the serious
transport problem between the many northeast states as surely deserving
the attention of such a regional commission. Thus, it makes sense to
believe that Congress intended the particular dates in section 184 to
highlight the specific deadlines in the subpart 2 ozone program that
the OTC is specifically charged with addressing. But in so doing it
does not seem as reasonable to believe that Congress intended to
displace the more general authority of a commission under section 176A
to make recommendations concerning the maintenance aspects of section
110(a)(2)(D). Thus, EPA believes it is most reasonable to understand
the references in section 184(c) to attainment to include maintenance
through section 176A, as well. Even if operating under sections 176A,
110(k)(5), and 110(a)(2)(D) directly, EPA believes it may issue a SIP
call at this time under section 110(k)(5) requiring states to adopt the
OTC LEV program as necessary to avoid interfering with maintenance in
other states.
(b) Technical Analysis of Need for OTC LEV (or LEV-Equivalent)
Program for Maintenance.
EPA believes that the OTC LEV program is necessary for all of the
nonattainment areas to maintain the ozone NAAQS, even after they
attain. This is because EPA's modeling analysis projects very high
rates of growth in emissions in the OTR that must continue to be
neutralized even after controls sufficient for attainment by the
attainment deadlines are in place. Based on EPA's analysis discussed in
sections II.A.(a), (b) and (c), the Agency does not believe that other
available control options are sufficient to attain without OTC LEV (or
LEV-equivalent). Since EPA is not aware of sufficient additional
control options to counteract growth following attainment, EPA
believes, a fortiori, that OTC LEV will be necessary for these areas to
demonstrate maintenance of the NAAQS over two consecutive ten-year
periods following redesignation (as required by section 175A of the
Act).
Not only does EPA believe that the OTC LEV (or LEV-equivalent)
program is necessary for the nonattainment areas in the OTR to maintain
the ozone NAAQS, but EPA believes that this program will play an
increasingly important role in counteracting growth over the
maintenance periods. Of course, implementation of the program in model
year 1999 will not begin to play a role until well into the maintenance
periods for the marginal and moderate areas that attain the standard by
1993 and 1996, respectively. Assuming areas could achieve redesignation
in their attainment years, for the serious and severe areas that have
attainment deadlines under section 181 of 1999, 2005, or 2007, the OTC
LEV program will contribute to both attainment and maintenance of the
NAAQS. Due to the phase-in schedule for the LEV program and the time it
takes for the fleet to completely turnover, the LEV program will
continue to accrue additional benefits through the year 2028. In 2015
(the last year for which EPA has done a projection analysis), emissions
reductions due to the OTC LEV program will be 1200 tons of NOX per
day and 670 tons of VOC per day. This is a 39% reduction in NOX
highway vehicle emissions and a 38% reduction in VOC highway vehicle
emissions compared to emissions in 2015 without the OTC LEV program.
The following table presents VMT growth rate information averaged
between 1990 and 2005 for mobile source emissions within the OTR. The
table focuses on growth estimates for mobile sources as the most
relevant for assessing the impact of LEV in the OTR, since LEV affects
emissions from this source category. These growth rates are derived
from the EPA's MOBILE5 Fuel Consumption model, and are taken from a
study prepared under EPA contract.66
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\6\6See E.H. Pechan and Associates, Regional Oxidant Modeling of
the Clean Air Act Amendments: Default Projection and Control Data
(Draft), Prepared under EPA Contract No. 68-D0-0120, Work Assignment
II-60 (April 1993).
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Emissions rates for mobile sources are calculated by multiplying
emissions factors developed for the fleet by projected activity levels,
characterized as projected vehicle miles travelled (VMT). Growth in VMT
tends to neutralize the downward trend in emissions factors resulting
from turnover in the fleet to vehicles meeting federal tier 1
standards, and implementation of advanced inspection/maintenance
programs. As the vehicle fleet turns over, fewer old cars with less
advanced technology will remain on the road, and the downward trend in
emissions factors will slow over time. Therefore, EPA expects that
growth in VMT will overtake current programs to increase growth rates
more and more over time beyond the 1990-2005 time frame in the table.
Of course, the OTC LEV program would be helpful in increasing and
extending the downward trend in emissions factors to offset growth in
VMT and counteract overall emissions growth.
Table 5.--Growth Rates and Projected Changes in Mobile Source Emissions
for OTR States, 1990-2005
------------------------------------------------------------------------
1990-2005
VMT
OTR State growth
rate, %/
year
------------------------------------------------------------------------
ME........................................................... 2.2
NH........................................................... 2.6
VT........................................................... 2.1
MA........................................................... 2.2
RI........................................................... 2.2
CT........................................................... 2.2
NY........................................................... 1.9
NJ........................................................... 2.3
PA........................................................... 2.0
DE........................................................... 2.7
MD........................................................... 2.4
Wash., DC.................................................... 1.8
VA........................................................... 2.6
------------------------------------------------------------------------
4. Relevance of EPA Transport Policy.
As EPA discussed in its April 26 proposal, EPA is developing a
policy to address the particular problem where overwhelming transport
from upwind areas with later attainment dates is such a dominant factor
accounting for nonattainment in a downwind area with an earlier
attainment date that the downwind areas will not be able to attain by
the deadline. See 59 FR at 21728-29. This problem was specifically
raised in the OTR for areas in Massachusetts in letters from the
Massachusetts Department of Environmental Protection and the
Conservation Law Foundation.\67\ Of course, one solution is for the
responsible upwind areas to relieve their overwhelming contribution so
that the downwind areas may attain by the specified year. But, as EPA
described in its April 26 proposal, in certain cases this could be at
odds with the overall title I scheme that establishes later deadlines
for attainment in more polluted areas and also establishes a graduated
program of additional and more stringent requirements to be
accomplished over the longer time-frame. It might be appropriate for
EPA to interpret the Act so that, if it is impracticable to accelerate
controls in the upwind areas and other facts are shown, then the
downwind areas might have additional time to reach attainment beyond
the section 181(a)(1) dates.
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\67\See letters from Renee Robins, Conservation Law Foundation
to John Seitz, Director, EPA Office of Air Quality Planning and
Standards (Jan. 25, 1994); from Barbara Kwetz, Director,
Massachusetts Division of Air Quality Control to John Seitz,
Director, EPA Office of Air Quality Planning and Standards (Jan. 14,
1994); from John Seitz, Director, EPA Office of Air Quality Planning
and Standards to Barbara Kwetz, Director, Massachusetts Division of
Air Quality Control (March 21, 1994); from John Seitz, Director, EPA
Office of Air Quality Planning and Standards to Renee Robbins,
Conservation Law Foundation (March 21, 1994).
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Since EPA's April 26 proposal, EPA staff has continued to work with
a group of officials from states across the country that are likely to
be affected, including officials from Massachusetts, Maine, and other
states to develop a policy to address this problem. This policy,
described in a September 1, 1994 memorandum from Mary D. Nichols,
Assistant Administrator, to EPA regional offices, provides that states
seeking to have the Clean Air Act interpreted so as to allow them a
later attainment deadline would have to make certain showings including
a showing of overwhelming transport.68
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\6\8See Memorandum form Mary D. Nichols, Assistant Administrator
for Air and Radiation, to Air Directors of EPA Regional Offices,
entitled, ``Ozone Attainment Dates for Areas Affected by
overwhelming Transport'' (Sept. 1, 1994).
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EPA does not expect that the states will be able to complete such
analyses and have EPA make a determination by the time EPA takes final
action on the OTC recommendation. Nevertheless, EPA recognizes that
pervasive transport in the OTR underlies the creation of the OTC and
the basis for EPA's proposed approval of the OTC LEV recommendation.
EPA expects that, on this basis, a few areas in the OTR are likely
candidates to make valid demonstrations that the Act should be
interpreted to allow them more time to attain because overwhelming
transport from upwind areas with later attainment deadlines will
unavoidably prevent earlier attainment.
While this has not yet occurred, EPA can anticipate the
implications here if it does. If downwind areas ultimately are subject
to later attainment deadlines than are currently believed to pertain,
then emissions reductions during the ``extension period'' would apply
to reaching attainment rather than to maintenance of the NAAQS after
attainment. To the extent EPA currently believes that the OTC LEV (or
LEV-equivalent) program is necessary for maintenance in such areas
after the section 181(a)(1) attainment year (and through any
``extension period''), then such reductions likewise would be necessary
for attainment if EPA grants that such areas have the ``extension
period'' to attain. EPA does now believe that areas in the OTR will
need the OTC LEV (or LEV-equivalent) program to maintain the NAAQS in
the years after the section 181(a)(1) deadlines. EPA therefore expects
that the OTC LEV (or LEV-equivalent) program will ultimately be
necessary in those years for such areas that may have longer under the
forthcoming transport policy to actually attain the NAAQS.
In addition, even if attainment dates are not extended pursuant to
a transport policy, EPA believes that it may conclude that certain
serious areas in the OTR will not be able to reach attainment by 1999,
nor to qualify for the one-year extensions described earlier. Such
areas would then be subject to ``bump up'' under section 181(b)(2) of
the Act and would have until 2005 (or, if sooner, as expeditiously as
practicable) to attain. EPA believes that the OTC LEV (or LEV-
equivalent) program will ultimately be necessary to achieve reductions
in the period after 1999 for any such areas to attain.
B. Consistency With Section 177 of the Clean Air Act
1. Introduction
Section 184 requires that in reviewing the recommendation of the
OTC, EPA must evaluate whether the additional control measures are
``otherwise consistent with this [Act].'' In general, states, with the
exception of California, are prohibited under section 209(a) of the Act
from regulating emissions from new motor vehicles. However, section 177
of the Act provides an exception from this prohibition that allows a
state which has plan provisions approved under part D of title I of the
Act to adopt California's standards relating to control of emissions
from new motor vehicles and to take other actions otherwise prohibited
under section 209(a) if--
(1) Such standards are identical to the California standards for
which a waiver has been granted for such model year, and
(2) California and such state adopt such standards at least two
years before commencement of such model year (as determined by
regulations of the Administrator). Nothing in this section or in
Title II of this Act shall be construed as authorizing any such
state to prohibit or limit, directly or indirectly, the manufacture
or sale of a new motor vehicle or motor vehicle engine that is
certified in California as meeting California standards, or to take
any action of any kind to create, or have the effect of creating, a
motor vehicle or engine different than a motor vehicle or engine
certified in California under California standards (a ``third
vehicle'') or otherwise create such a ``third vehicle''.
42 U.S.C. Sec. 7507.
Section 177 of the Act provides the only exception in the Act from
preemption of state standards for control of emissions from new motor
vehicles under section 209(a). The control measures recommended by the
OTC must therefore be consistent with section 177. EPA noted in the
NPRM that four aspects of the OTC recommendation may implicate section
177 of the Act. See 59 FR 21735. First, the OTC recommends that EPA
require use of California LEVs but specifically states that adoption of
California reformulated gasoline is not a part of the recommendation.
Second, the recommendation does not require inclusion of the ZEV sales
requirement in any state regulations except to the extent the sales
requirement is required under section 177. Third, EPA noted that the
recommendation did not explicitly incorporate California's regulations.
Instead, the recommendation merely stated that the OTC recommended
adoption of a low emission vehicle program that includes certain
elements detailed in the recommendation, pursuant to the requirements
of section 177. EPA also noted that the OTC recommended incorporation
of California's fleet NMOG standards and that some commenters believed
incorporation of the NMOG standards was inconsistent with section 177.
Finally, EPA requested comments regarding whether section 177 allows a
state to adopt a California vehicle program in a portion of the state,
rather than the entire state. This final point is not addressed in this
section of the preamble, but is addressed in section IV.A.2.(c)iii.,
above.
Since the publication of the first NPRM, EPA has received comments
indicating that other aspects of the OTC's recommendation may violate
section 177. One commenter asserted that a state's incorporation of the
California LEV program after the program is initiated in California may
create a ``third vehicle'' because of the operation of California's
emissions credit banking regulations. Also, a commenter questioned
whether a state without a current nonattainment area or an approved
state implementation plan can impose the California LEV requirement.
EPA today proposes to find that the OTC's recommendation for EPA to
require implementation of the OTC LEV program throughout the OTR is
consistent with section 177. Moreover, EPA proposes to find that
implementation of the ZEV sales requirement is not necessary in order
for the recommendation to be consistent with section 177. Therefore,
EPA proposes not to require that states in the OTR adopt the ZEV sales
requirement. Individual states may, at their discretion, incorporate
the ZEV sales requirements into their programs.
2. California Fuel Regulations
EPA proposes to find that the OTC's failure to include California's
clean fuel requirements in its recommendation does not violate section
177. EPA believes that the failure to include the California fuels
requirements does not violate the requirement of section 177 that
standards must be ``identical to the California standards for which a
waiver has been granted for such model year.'' EPA also believes that
the lack of California fuel requirements does not violate the ``third
car prohibition'' of section 177.
(a) Identicality Requirement.
Both federal courts that have reviewed the issue have found that
failure of a state to promulgate California's fuel regulations does not
violate the section 177 requirement that an adopting state's standards
be identical to California's standards. Motor Vehicle Manufacturers
Association v. NYDEC, 17 F.3d 521 (2d Cir. 1994) and American
Automobile Manufacturers Association v. Greenbaum, No. 93-10799-MA (D.
Mass. October 27, 1993), (the ``New York case'' and the ``Massachusetts
case'', respectively). These decisions are in accord with EPA's
position on this matter. The Agency filed a brief as amicus curiae with
the Second Circuit in the New York case, and also filed a later brief
as amicus curiae in the First Circuit on the manufacturers' appeal in
the Massachusetts case.69 Both briefs have been placed in the
docket for this rulemaking.
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\6\9The manufacturers later requested that the appeal be
withdrawn with regard to all issues except one relating to lead-
time, which is not at issue for EPA's decision whether to approve
OTC recommendation but is discussed below in connection with the
model year proposal. On August 3, 1994, the First Circuit granted
the manufacturers' request to withdraw their appeal on these issues.
(AAMA v. Greenbaum, No. 93-2276 (1st Cir., August 3, 1994.)
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California's clean fuel provisions were not part of California's
waiver application under section 209. In fact, state standards that are
related to fuel as opposed to emissions of motor vehicles, are not even
governed by section 209(a). State fuel provisions are addressed
separately in section 211 of the Act, which provides a substantially
different regime for state fuel standards. Under section 211, states
may regulate fuels if they can demonstrate to EPA that such regulation
is necessary to meet federal air quality standards, except that
California may regulate fuel without such a demonstration. Therefore,
as California has not asked for a waiver for its fuel regulations, nor
is it required to do so under the Act, such standards are not
``standards * * * for which a waiver has been granted'' and thus are
not subject to the identicality provisions of section 177. Were the
Agency to find that states must also adopt California's fuel standards
to meet the section 177 identicality requirements, then every state
wishing to adopt California's motor vehicle standards would be required
to meet not only the requirements of section 177 but also the
requirements of section 211, so that it could simultaneously adopt
associated fuel controls. EPA believes that this would be an incorrect
interpretation of the Act, given the structure of the Act and its
explicit differentiation between vehicle and fuel requirements. For the
reasons provided in this notice and outlined by EPA in its amicus
curiae briefs and by the courts in the New York and Massachusetts
cases, EPA proposes to find that no conflict with section 177 exists on
this point.
(b) Third Vehicle Prohibition.
EPA also proposes to find that the lack of a clean fuel requirement
does not violate the ``third vehicle'' prohibition of section 177.
Manufacturers claim that the difference in sulfur levels between the
fuels sold in California and the northeast would cause deleterious
effects on emission control systems on California LEV vehicles, which
would require certain design changes to manage these effects. This,
they claim, would require them to manufacture vehicles for the OTR that
would differ from the vehicles they expect to sell for California, and
would thus violate section 177's ``third vehicle'' prohibition.
The manufacturers' arguments fail on several grounds. First,
nothing in the OTC recommendation requires any manufacturer to produce
any vehicle different from a California certified vehicle. In fact, the
OTC recommendation would require that any new car sold in the OTR be a
California-certified vehicle. Manufacturers are free to sell cars in
the OTC that are identical to those sold in California. Any design
changes made by manufacturers would result from a manufacturer's
voluntary decision to effect such a change. There is no third vehicle
violation where a manufacturer voluntarily decides to sell a third
vehicle in a state other than California. The court of appeals in the
New York case, responding to a similar ``third car'' challenge by
manufacturers regarding ZEVs, found that whatever design change ``the
manufacturers choose to install on cars sold in New York is a marketing
choice of theirs and not a requirement imposed by the [state].'' MVMA,
17 F.3d at 538.
Second, the ``third vehicle prohibition'' should not be read to
apply to every design change, regardless of its nature or scope.
Section 177 uses the phrase ``third vehicle'' to refer to ``a motor
vehicle or motor vehicle engine different than a motor vehicle or
engine certified in California under California standards.'' This
statutory language indicates that its meaning is tied to the concept of
emission certification, i.e. that ``third vehicle'' should be read to
refer to design changes needed to meet certification requirements. This
reading is consistent with the purpose of the third vehicle
prohibition, which is to reinforce the identicality requirement by
prohibiting a state from administering standards identical to
California's in a way that actually requires conformance to more
stringent standards.
The term ``third vehicle'' itself suggests it should be so limited.
It presumes the existence of ``first vehicles'' and ``second vehicles''
(vehicles that meet federal and California standards, respectively).
Congress was plainly aware that ``first vehicles'' include vehicles
with widely differing physical characteristics. For example, ``first
vehicles'' include cars both with and without rear-window defrosters.
This makes it clear that vehicles may contain minor differences in
design that are unnecessary to meet emission standards without creating
``third vehicles.'' The legislative history of section 177 confirms
that the ``third vehicle prohibition'' does not require physical
identicality of vehicles and that design changes would not create a
``third car violation'' unless they create an ``undue burden'' on
manufacturers.70 Though one manufacturer has stated in other
proceedings that it may need to use a different converter assembly (one
that is bolted, not welded) on vehicles sold in the OTR, the
manufacturers have not provided evidence indicating that significant
design changes creating an ``undue burden'' are required to implement
the OTC LEV program without California fuels.
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\7\0See 136 Cong. Rec. at S16976 (Oct. 27, 1990) (report
appended to the remarks of Senator Baucus; 136 Cong. Rec. at S16903
(Oct. 27, 1990) (Exhibit 1 to remarks of Senator Mitchell); 136
Cong. Rec. at S16954 (Oct. 27, 1990) (statement of Senator Chafee).
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3. ZEV Sales Requirement
EPA proposes to find today that the ZEV sales requirement is not
required to ensure consistency with section 177. Therefore, as the OTC
requested inclusion of the ZEV sales requirement only ``to the extent
that a Zero Emission Vehicle sales requirement must be a component of a
LEV program adopted under Section 177,'' EPA proposes to approve the
OTC recommendation without the ZEV sales requirement. Individual states
within the OTC may at their option include such a requirement in the
programs they adopt.71
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\7\1The OTC recommendation explicitly recommended that
individual states within the OTR be allowed to implement the ZEV
sales mandate if they so choose. EPA believes that incorporation of
the ZEV sales mandate into a state's LEV program is not inconsistent
with the requirements of section 177. The court of appeals in the
New York case similarly found that New York's incorporation of the
ZEV sales mandate did not violate section 177's prohibition on sales
limitations on California-certified vehicles or section 177's
``third vehicle prohibition.''
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As EPA discussed in the NPRM, the first question presented by this
issue is whether the ZEV sales requirement is a ``standard relating to
control of emissions.'' See 59 FR at 21735. EPA initially determined,
in letters sent to New York and Virginia state officials on January 7,
1993, that the ZEV sales requirement is not a standard, based on the
belief that it had no direct effect on emissions associated with the
LEV program, given the existence of the NMOG fleet average requirement.
EPA stated: ``The ZEV sales mandate simply limits the flexibility
otherwise accorded manufacturers to choose the mix of vehicles produced
to meet the NMOG fleet average requirement.'' Id. Therefore, as EPA
found that the ZEV sales mandate did not limit the quantity, rate or
concentration of NMOG emissions, EPA stated that the mandate was not an
emission standard, but instead was an accompanying enforcement
procedure. In fact, the OTC stated in documents accompanying its
recommendation that the ZEV sales mandate is an accompanying
enforcement procedure and is not required by section 177.
Indeed, the ZEV sales requirement does not require that overall
tailpipe emissions of NMOG from California vehicles be any lower than
they would have been in the absence of the sales requirement. The
amount of NMOG tailpipe emissions produced by such vehicles is
controlled by the NMOG fleet average requirement, not the sales
mandate. However, current EPA data indicates that the ZEV sales
requirement clearly will have a beneficial effect on emissions of
evaporative hydrocarbons and tailpipe emissions of NOX from
vehicles in the LEV program.
Therefore, it appears that the determination of whether the ZEV
mandate is a ``standard'' must be based on other factors. An argument
that the ZEV sales requirement is not an emission standard would be
based on the presumption that ``standards'' are only the numerical
limits placed on sources restricting emissions of particular
pollutants. This argument is similar to certain language found in Motor
and Equipment Manufacturers Association v. EPA (MEMA), 627 F.2d 1095
(D.C. Cir. 1979) the only significant court case to directly deal with
the term ``standard'' in the context of the Act's motor vehicle
emission program. EPA argued in that case that the term ``standard''
referred to ``a numerical value setting the quantitative level of
permitted emissions of pollutants by a new motor vehicle.'' Id. at
1111. The court neither adopted this definition nor did it take issue
with EPA's definition. The court did state that the legislative history
``indicates that Congress intended the word `standards' to mean
quantitative levels of emissions rather than regulations involving
certification or in-use maintenance restrictions'' (emphasis added).
Id. at 1112. The court also cited Adamo Wrecking Co. v. United States,
434 U.S. 275,286, 98 S.Ct. 566, 573 (1978), in which the Supreme Court
took a very narrow view of the term ``emission standards,'' stating
that it only applied to ``a quantitative level,'' not to work practice
standards. (Adamo was later overruled legislatively twice by Congress.
Congress first revised section 112 in 1978 and Congress then revised
section 302 in 1990 to ensure that EPA used a more expansive definition
of ``emission standard.'')
However, this approach has some disadvantages. First, it divorces
the term ``emission standard'' from actual emission reductions. Without
a mandate to sell cleaner cars, there is no enforceable benefit to
having numerical emission ``standards'' for those cars. In addition, it
can be argued that sales requirements do ``relate to the control of
emissions from new motor vehicles.'' Moreover, such a determination may
have implications for other requirements in the LEV program and other
programs, particularly requirements that include averaging, banking and
trading, requirements that include fleet averaging, and requirements
where a phase-in is used. (If a phase-in is not a standard, could a
state require 0% (or 100%) compliance, instead of partial compliance,
with a standard being phased in over time?) Moreover, the court in MEMA
stated that the ``only species of emissions control regulation which
directly addresses air quality is a standard.'' Id. at 1113. This
language seems consistent with a determination that the term
``standards'' includes sales requirements because without a sales
requirement, a numerical limitation on emissions from a type of vehicle
by itself has no effect on air quality.
As discussed below, EPA believes that it need not reach a decision
on this issue at this time. However, EPA requests comment on whether it
is appropriate in the context of this proceeding to decide this issue.
Regardless of whether EPA were to find that the ZEV sales
requirement is a standard, EPA believes that incorporation of the sales
requirement is not required for the OTC-LEV program to meet the
requirements for identicality under section 177. Section 177 allows a
state to adopt and enforce ``for any model year standards relating to
control of emissions from new motor vehicles and * * * engines * * * if
other such standards are identical to the California standards for
which a waiver has been granted for such model year.''
EPA believes that section 177 should not be read to require that
once a state has promulgated one California standard for a particular
model, the state must adopt all of California's standards relating to
the control of emissions from all types of motor vehicles for that
model year. The language of section 177 does not require adoption of
all California standards for a given model year. Section 177 requires
only that if a state adopts motor vehicle standards, such standards
must be identical to California standards. Therefore, the identicality
requirement only necessitates that the specific standards adopted by
the state be identical to the comparable California standards. As long
as the state adopts all standards that are necessary to implement a
particular California vehicle program,\72\ and as long as the state
adopts all standards necessitated by the other requirements of section
177 (e.g., the state must not prevent a California-certified car from
being sold in the state and must not create a ``third car''), the state
need not adopt other standards that are not integral to the particular
program being adopted.
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\72\EPA believes that all standards applicable to a segregatable
program must be implemented in order to assure that specific
vehicles required by a particular program are subject to the same
emissions requirements (e.g. a state could not adopt only
California's NMOG standards for a LEV without adopting the NOX
and CO standards.)
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Thus, as discussed in the NPRM, EPA believes that adoption of the
California LEV program does not require adoption of the California
heavy-duty engine program. Similarly, EPA believes that section 177
does not require a state to promulgate standards that are clearly
segregable from one another.
EPA believes that the ZEV sales requirement is clearly segregable
from the rest of the LEV program. The LEV program is essentially
comprised of several requirements limiting the quantity of emissions
that may be emitted from particular types of vehicles (e.g. TLEVs,
LEVs) and two requirements mandating sales of such vehicles. The first
is the NMOG fleet average. The second is the ZEV sales requirement.
Without implementation of either of these mandates, the requirements
defining emission levels for types of vehicles are basically
unenforceable because, unlike more traditional motor vehicle emission
programs, the LEV program separates emission levels from mandates to
buy vehicles meeting such emission levels. In other words, a statute
defining the levels one must meet for a vehicle to be called a low
emission vehicle may have little enforceable emissions value, unless
there is an enforceable requirement to manufacture such a vehicle. The
NMOG fleet average is the central provision of the LEV program to
require manufacture of the low emission vehicles in the program and to
obtain enforceable emission reductions from such vehicles. The ZEV
sales requirement, on the other hand, is a technology requirement
essentially designed to ensure the manufacture of technology-forcing
vehicles. It is designed to create a new generation of vehicles. As
noted previously, however, the ZEV sales mandate also provides NMOG
evaporative and tailpipe NOX emissions reduction benefits separate
and distinct from the NMOG fleet average requirement.
Though the two mandates are complementary, they are not essential
for one another. The designs of the vehicles in the LEV program will be
based on the emission levels that manufacturers must meet. The mandates
merely tell the manufacturers how many vehicles of each type must be
built. Each mandate creates a fully functional and enforceable motor
vehicle emissions program. Therefore, EPA believes that a LEV program
designed to reduce emissions in the northeast that includes the NMOG
fleet average may, but need not, include the ZEV sales requirement.
EPA continues to request comment on whether state incorporation of
the ZEV sales requirement is necessary to satisfy the identicality
requirement of section 177.
4. Incorporation of Minor Provisions of the California LEV Program
The OTC's initial recommendation to EPA does not specifically
identify every component of the California LEV program that it intends
to incorporate into the OTC LEV program; nor does the recommendation
include proposed regulations. Instead the recommendation identifies the
main elements of the OTC LEV program and the timeframe for the
regulations.
EPA believes that the implicit intent of the recommendation was
incorporation of emission standards that were identical to the
California LEV program and incorporation of all provisions of
California's LEV program necessary to ensure consistency with section
177 for 1999 and later model year passenger cars and light-duty trucks
(0-5750 pounds loaded vehicle weight). This intent is evidenced by the
implicit language of the recommendation. The recommendation
specifically notes that the OTC LEV program is to be applied
``[p]ursuant to the requirements of section 177.'' EPA believes that
the listing of the most important provisions of the California LEV
program to be incorporated was not meant to imply the exclusion of
other provisions necessary to ensure consistency with section 177. The
recommendation adopted the OTC LEV program ``including'' the listed
provisions, implying that other provisions would also be included.
EPA's interpretation of the petition is further supported by the
Response to Comments document submitted with the recommendation (and in
the docket), which clearly states, at page 27, that the recommendation
has been made consistent with section 177 and 184 of the Act. The
Response to Comments document also notes, at pages 6 and 33, that the
provisions of the recommended program were constrained by section 177's
identicality requirement. Another indication that the OTC clearly
intended the program to be consistent with section 177 is the fact that
the recommendation requests incorporation of the ZEV sales requirement
only to the extent it is required for consistency. Thus, the OTC was
willing to include this controversial provision if consistency depended
on its inclusion.
Moreover, the Executive Director of the OTC, Bruce Carhart, stated
explicitly, in an April 15, 1994 letter responding to an EPA inquiry,
that the OTC's ``intention is to maintain identicality with California
as required by the Clean Air Act.'' Mr. Carhart also indicated that the
OTC intended to incorporate secondary provisions in California's LEV
program into the OTC LEV program. EPA believes that it is appropriate
to use this letter as further evidence of the intent of the Commission.
Where there is ambiguity in the OTC petition, EPA does not believe that
its ability to review the OTC recommendation is limited to examining
the explicit language of the recommendation. Certainly, EPA approval of
the recommendation cannot include provisions that were not contemplated
by the recommendation and do not naturally arise from the face of the
recommendation. However, where the recommendation is ambiguous
regarding a certain point, EPA believes that, consistent with its
requirement to consult with the Commission, it may request
clarification of the OTC petition.
Further, under Sec. 184(c)(3), if EPA must interpret a
recommendation in a certain way in order to ensure consistency with the
Act, and such an interpretation is not inconsistent with the language
of the recommendation, then EPA is constrained to use that
interpretation.
For these reasons, EPA interprets the recommendation to require
emission standards identical to California's LEV standards and to
require promulgation of provisions that ensure consistency with section
177.
A commenter notes that the OTC recommendation for the NMOG standard
is not consistent with California's NMOG standard for light-duty trucks
3751-5750 lbs. This appears to have been an oversight on the part of
the OTC. As the letter from Mr. Carhart shows, the OTC intended
separate fleet averages for both classes of light-duty vehicles.
Consistent with the discussion above, EPA interprets the recommendation
to recommend NMOG fleet averages identical to California's NMOG
averages for light-duty vehicles 0-3750 lbs. and for light-duty
vehicles 3751-5750 lbs.
EPA does not intend at this time to delineate each portion of the
California LEV program that is required for satisfaction of the
requirements of section 177. Such determinations will be made in the
review of each state plan or in guidance to be issued by EPA later.
However, EPA notes that the April 15 letter from Bruce Carhart stated
that the following specific portions of the program have been included
in the OTC recommendation: The NMOG banking and trading provisions, the
relevant exemptions for small and intermediate manufacturers,
provisions for hybrid electric vehicles,\73\ and reactivity adjustment
factors as necessary for California certification.
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\73\CARB's LEV program provides for the development and use of
hybrid electric vehicles (HEVs) as part of the LEV fleet in
California. HEVs are expected to incorporate an electric motor and
an auxiliary power unit, such as a combustion engine, to allow for
the efficient operation of the vehicle's propulsion system as well
as its other systems, like lighting. CARB provides for three
different classifications of HEVs in its statutory formula used to
calculate a manufacturer's fleet average NMOG value. Additionally,
HEVs are tested differently from LEVs. See Title 13, California Code
of Regulations, section 1960.1 et. seq.
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5. The NMOG Fleet Average
As discussed in the April 26, 1994 NPRM, EPA believes that the
OTC's incorporation of the NMOG fleet average does not violate section
177. Even if the identicality provision of section 177 does not require
inclusion of the NMOG fleet average, manufacturers have provided no
clear argument regarding why inclusion of the NMOG average, which is
identical to the NMOG average promulgated by California, violates
section 177. Given that identicality with California standards is a
primary goal of section 177, any argument that such an identical
provision is forbidden by section 177 is dubious on its face. Section
177 was designed to provide manufacturers with assurance that they
would not be forced to produce several different types of vehicles to
comply with different state emission standards. Manufacturers have
provided no evidence that incorporation of the NMOG fleet average will
in any way cause manufacturers to produce different vehicles than those
certified for use in California.
Moreover, as the Second Circuit articulated in the New York case in
the context of the ZEV sales requirement, the fleet average requirement
does not violate the requirement of section 177 that states shall not
prohibit the sale of California cars. While the NMOG average requires
that a certain number of lower-emitting vehicles must be sold in a
state to assure compliance, it does not prevent any California-
certified car from being sold. Moreover, as the Second Circuit
realized, a finding that the fleet average violated section 177 would
in effect nullify section 177 for all practical purposes with regard to
the LEV program and any other program that uses any sort of averaging
or other flexible approach.
EPA believes that it may be appropriate for the states in the OTC
to enforce the NMOG fleet average provisions through a regionwide
averaging system. EPA has received comments supporting such an
enforcement program. EPA intends to issue guidance after this
recommendation is approved (if it is finally approved) addressing the
legal and policy issues implicated by such a program.
6. Averaging, Banking, and Trading
One commenter noted that as California's LEV program includes a
banking program and, as California's LEV program will start prior to
model year 1999, when the state programs under the OTC recommendation
would begin, a manufacturer may have banked credits under the
California program by the time the 1999 model year begins.
EPA does not believe this raises any question regarding consistency
with section 177. Once again, the state regulations do not require the
manufacture of a ``third vehicle''; nor do they prevent the sale of
California certified vehicles in the state, though a slightly different
mix of vehicles might be required in the first model year for a
manufacturer who takes advantage of California's banking program. This
amounts to a business decision by the manufacturer, and it does not
create any inconsistency. Moreover, a determination that such a
situation would be inconsistent with section 177 would render section
177 a nullity for any program that includes banking, because section
177's lead time requirements make it very difficult for states to begin
their programs at the same time California begins its program.
7. Applicability of Section 177 in States Without Plan Provisions
Approved Under Part D
A comment notes that section 177 applies only to states with plan
provisions approved under part D. All states in the OTR have such
approved plan provisions. All states except for Vermont currently
contain nonattainment areas with associated plans. Vermont has approved
plan provisions approved under part D related to earlier nonattainment
problems. See 40 CFR 52.2370(c)(10).
V. SIP Call
A. Explanation of Proposed SIP Call
EPA recognizes that the timing of its action is critical for the
states' SIP planning purposes. EPA intends to take final action on the
OTC's LEV recommendation in November 1994. Under section 184(c)(5), EPA
is to issue a SIP call under section 110(k)(5) upon approval. EPA
intends that final action approving the OTC recommendation would also
entail the SIP call under section 110(k)(5), thus triggering the
states' obligation to submit SIP revisions to include the OTC LEV (or
LEV-equivalent) program within one year, or in November 1995. Under any
circumstances, and regardless of EPA's final action on the OTC LEV
recommendation, the states are not precluded from adopting and
submitting a LEV SIP revision at any time consistent with sections 177
and 209 of the Act, as they have always had the independent authority
to do.
EPA recognizes, however, that it is possible an alternative program
could be promulgated in the future that would achieve equivalent
emissions reductions from new motor vehicles. Logically, such an
alternative program that achieves the emission reductions the OTC LEV
program would achieve, could render the OTC LEV program no longer
necessary. States could then decide whether to give auto manufacturers
the choice of meeting either OTC LEV standards or the alternative
federal program standards. The alternative program would create
emissions standards applicable to new motor vehicles that automobile
manufacturers could, at their option, opt for EPA to apply to their new
motor vehicles. EPA expects that, as long as issues pertaining to the
enforceability of such standards can be resolved, such alternative
federal standards could result in emissions benefits in the OTR
equivalent to those that would result from the OTC LEV program.
EPA is currently working with the federally chartered Clean Air Act
Advisory Committee (and a subcommittee created to consider this topic)
to allow for the possibility of such an alternative program that is in
the interest of stakeholders and the public at large. EPA expects to
obtain the advice of the Clean Air Act Advisory Committee considering
issues related to such a program during the fall of 1994. Thereafter,
if there is reason to proceed, EPA would undertake a notice-and-comment
rulemaking to establish the alternative federal standards program, and
to promulgate such standards early in 1995. EPA expects that it will
provide a period of time following promulgation for the automakers to
decide whether to opt into the alternative federal standards program.
Under a scheme EPA might consider, once automobile manufacturers opt
into this voluntary program, they would be subject to all provisions of
the Act and its implementing regulations (particularly provisions
relating to EPA enforcement of standards) that apply to other mandatory
standards currently applicable to such vehicles. EPA believes that, in
this manner, it can establish an alternative mechanism to achieve
emissions reductions from new motor vehicles equivalent to those that
the OTC LEV program would achieve in the OTR. The alternative
rulemaking would need to address a number of questions, including
whether auto companies should be able to opt out of the program once
they have opted in, whether states should give up their opportunity to
adopt or enforce the California LEV program under section 177, and
whether a consent decree addressing certain discrete issues would be
useful.
EPA's proposed SIP call requiring the OTR states to submit SIP
revisions keeps open the option of an alternative federal program while
ensuring that necessary emission reductions are not delayed. Under
EPA's proposed SIP call, each state would be required to submit the OTC
LEV program as a SIP revision, but the program could allow auto
manufacturers either to comply with the OTC LEV standards or to opt
into and comply with EPA promulgated alternative standards, if such
standards are developed. The states' regulations could provide that the
LEV program would not apply to auto manufacturers who are subject to an
equivalent federal program. The states' SIP revisions would have to
limit this exception to automakers subject to an alternative federal
program that EPA has promulgated as equivalent to the OTC LEV program.
EPA would address the criteria for its determination of equivalence in
any alternative federal standards rulemaking. Under this approach, the
automakers would not necessarily have to forfeit their ability to opt
out when they opt into the alternative standards program. Since the
states would all have to adopt and submit an OTC LEV SIP revision,
automakers that either do not opt into or later opt out of the
alternative standards program would be required to comply with the
states' OTC LEV program.
If EPA approves the OTC petition within the time specified by the
Act, states' SIP revisions would be due in November 1995. If states
delayed only slightly in meeting this deadline, it could result in an
inability to apply the standards to all vehicles in model year 1999.
Another benefit of EPA's proposed approach is that the automakers
need not all make the same choice. Rather, automakers could
independently choose whether to achieve the necessary emissions
reductions by opting into and complying with an equivalent federal
program or by complying with the OTC LEV program. Further, if the
automakers were to attach any conditions to their opt in to a federal
program allowing them to escape its obligations and were to trigger
such an escape provision, they would then fall back to mandatory
compliance with the states' adopted OTC LEV programs.
EPA is taking comment on whether, if all automakers opted into an
alternative federal standards program and did not have a right to opt
out, the states should have to adopt the OTC LEV program. The only
benefit EPA sees to such an approach is that the states' LEV program
would then be necessary as a ``back-stop'' mechanism used solely to
ensure that the automakers would not opt out of the alternative
standards program.
EPA is also considering another approach that would eliminate the
burden of state adoption of the OTC LEV program if all the automakers
opt into an alternative federal program. Under this second option, if
the Agency promulgates alternative emissions standards and auto
manufacturers opt into that program and commit not to opt out, the OTC
states' obligation to submit OTC LEV SIP revisions would automatically
terminate as no longer necessary. EPA urges states to respond under
either approach to a final approval with immediate action to prepare to
submit an OTC LEV SIP revision to EPA by November 1995.
EPA recognizes that the states have authority to adopt whatever
measures they choose beyond those mandated in the Act in order to
achieve the necessary emissions reductions. EPA is therefore also
proposing that it would retain authority in issuing the SIP call to
change its necessary determination and withdraw its SIP call for those
states that adopt controls, including those applicable to stationary
and mobile sources, sufficient to comply with section 110(a)(2)(D).
B. Legal Basis To Provide for Possibility of Alternative Standards
Program in SIP Call
While EPA believes that the emissions reductions that the OTC LEV
program would achieve are necessary, the Agency recognizes that another
program to achieve equivalent reductions from the same emissions
sources could render the OTC LEV program unnecessary. But at this
juncture the Clean Air Act precludes EPA from mandating another program
modifying the Tier 1 controls on new light-duty vehicles to achieve
further emission reductions.74 The OTC's recommendation
specifically included in its recitation clauses the OTC's expectation
that EPA would evaluate alternatives comparable to the OTC LEV program,
``including the program presented by the automobile manufacturers with
enhancements.'' Especially in light of this statement, EPA believes it
is appropriate to leave open the possibility that an environmentally
equivalent alternative to OTC LEV that is mutually acceptable to the
states and automakers could be developed that would eliminate any need
for the states to apply the OTC LEV standard.
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\7\4Section 209 of the Act preempts states (other than
California) from establishing new motor vehicle emissions standards,
leaving such regulation to EPA under title II of the Act. See EPA's
earlier notices regarding OTC LEV, 59 FR at 21734 (April 26, 1994);
59 FR at 12915 (March 18, 1994). Of course, section 177 of the Act
provides an exception whereby the OTC states could adopt standards
that are identical to California's standards if certain conditions
are satisfied. It is this exception that the OTC has relied upon in
recommending that EPA require the states to adopt LEV standards
identical to those California adopted in its LEV program. But the
states in the OTR cannot establish alternative new motor vehicle
emissions standards different from but equivalent to California's
standards. Likewise, Congress explicitly provided that EPA may not
modify the ``Tier 1'' auto emissions standards specified in
subsections 202 (a)(3)(B)(ii), (g), (h), and (i) prior to model year
2004, and thus cannot mandate an alternative that would achieve
equivalent reductions. See 59 FR at 21730 (April 26, 1994).
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EPA believes that it is legally appropriate for it to specify in
its SIP call that the consummation of an alternative federal program
that achieves equivalent environmental benefits could alter the
Agency's conclusion regarding necessity. Thus, the Agency believes it
may specify criteria in this regard that, if satisfied, will terminate
the states' obligations under the SIP call to apply the LEV standards
to manufacturers subject to an equivalent alternative program. At the
same time, EPA does not believe there is any reason to wait to
determine whether the alternative federal program will be consummated
before issuing the SIP call based on the finding that the OTC LEV
program is necessary. EPA believes that additional new-vehicle tailpipe
emission reductions achievable by the OTC LEV program are necessary.
EPA cannot now assume, based on merely the prospect of an alternative
federal program and permanent opt-in by all auto manufacturers, that
OTC LEV will become unnecessary. Moreover, as explained earlier, EPA
believes it is important to act now for several reasons, including the
statutory deadline under section 184, the statutory requirement that
the states provide two years of lead-time before they can apply
standards under section 177 and the length of time it takes for the
fleet to turn over.
EPA believes it may issue a SIP call that would require that states
submit SIP revisions to include the OTC LEV program, but that would
allow the states to accept compliance with an equivalent alternative
program instead. Under this option, as discussed above, the states'
obligation to submit the OTC LEV program SIP revision would not
terminate upon the automakers' opt-in to an alternative standards
program. This would be necessary, for example, if EPA structured the
alternative program such that the automakers could opt out of it.
Indeed, the automakers might insist that they retain such an ``escape''
in case any state exercised its continuing authority under section 177
to adopt California standards not consistent with the alternative
federal program. Under this structure, the promulgation of the
alternative program would not guarantee that the OTC LEV program would
not be necessary, even if all automakers were to opt in initially.
Rather, EPA believes it might appropriately conclude that, as to
any particular automaker that opts in and complies with the alternative
program for any period of time, the OTC LEV program would not be
necessary for that automaker for that time. Thus, EPA believes it might
find the OTC LEV program necessary but allow states to withhold
implementation of the OTC LEV standards for automakers that opt into
the alternative program for as long as they remain in that program. EPA
believes this approach, too, fits squarely within its authority under
sections 184(c) and 110(k)(5). That is, just as EPA believes it may
take account of the possibility that an equivalent alternative program
could render OTC LEV no longer necessary, an equivalent alternative
program could render OTC LEV unnecessary for particular manufacturers
only for as long as they are bound by that program. EPA believes it may
fashion its approach to take account of this, so that the states must
revise their SIPs to include the necessary OTC LEV program, but need
only apply it to those parties for whom and when it is ``necessary'' in
light of those parties' choices. In sum, under section 110(k)(5), EPA
believes it may require that states revise their SIPs as necessary to
comply with section 110(a)(2)(D), but may allow states to account in
such SIP revisions for circumstances where application of the standards
may not be necessary.
C. Sanctions
Under section 179(a), if EPA finds that a state fails to make a
submission required under the Act, one of the sanctions specified in
section 179(b) is to apply unless the deficiency has been corrected
within 18 months after EPA's finding of failure to submit or
incompleteness under section 110(k). Section 179(b) specifies two
sanctions available to the Administrator: Withholding of certain
highway funding under section 179(b)(1); and application of a 2:1
offset ratio to new or modified stationary sources of emissions for
which a new source review permit is required under part D of title I.
EPA recently promulgated final regulations to implement section 179
of the Act, which specifies sanctions that are to apply where states
fail to make a submission required under the Act. See 59 FR 39832 (Aug.
4, 1994). These regulations specify the order in which these sanctions
will apply in the case of state non-compliance with provisions of the
Act. These regulations do not, however, address the imposition of
sanctions in the case of state failure to comply with a SIP call under
section 110(k)(5) of the Act. Since EPA is proposing a SIP call in this
rulemaking, EPA believes it is appropriate to propose the order of
sanctions for purposes of failure to comply if the SIP call is
promulgated as a final regulation. EPA believes that the general scheme
promulgated for sanctions generally should also apply here. Under that
scheme, EPA will generally apply the 2:1 offset sanction first and the
highway finding sanction second. EPA believes the rationale for this
approach in the sanctions rule applies with equal force here. In
addition, EPA is considering whether the particular circumstances here
that states must adopt the OTC LEV program by January 2, 1996 in order
to comply with the two-year lead-time requirement prior to model year
1999 may merit acceleration of sanctions. That is, EPA requests comment
on whether it should provide in the final rule that discretionary
sanctions under section 110(m) of the Act would apply beginning
immediately upon a finding of failure to submit the OTC LEV program.
VI. Determination of Model Year
A. Introduction
EPA is proposing today to promulgate regulations determining, for
the purposes of section 177 and Part A of Title II of the Clean Air
Act, the definition of the term ``model year'' as it applies to motor
vehicles and motor vehicle engines. This determination should remove
any confusion regarding when a model year commences under section 177.
EPA is proposing this determination in this SNPRM because, if EPA
approves the OTC's LEV recommendation, the OTR states will be required
to adopt the LEV program under the provisions of section 177 of the
Act. The definition of the term ``model year,'' in particular, the
issue of when a model year begins, has been a major issue in the
litigations that have resulted from New York and Massachusetts's
attempts to adopt California LEV standards under section 177. These
litigations have led to considerable confusion regarding when a model
year commences under section 177. EPA intends to remove this confusion
by providing nationally consistent regulations providing detailed
information regarding the term ``model year,'' including when such
model years commence.
B. Statutory and Regulatory Requirements
Section 177 of the Act provides that any state which has plan
provisions approved under part D may adopt and enforce California
standards for any model year if such standards are identical to the
California standards for which a waiver has been granted for such model
year and if California and the state ``adopt such standards at least
two years before commencement of such model year (as determined by
regulations of the Administrator).'' Section 202(b)(3)(A)(i) of the Act
defines model year as ``the manufacturer's annual production period (as
determined by the Administrator) which includes January 1 of such
calendar year. If the manufacturer has no annual production period, the
term `model year' shall mean the calendar year.'' This definition of
model year is repeated in regulations at 40 CFR Sec. 86.082-2 (1992).
EPA has not promulgated regulations providing more specific EPA
rules regarding determination of model year. Instead, EPA has
historically relied on Advisory Circulars to clarify agency policy on
the determination of model year and has used these policies and
definitions in the enforcement of Federal programs such as vehicle
certification. The first guidance regarding model year was issued on
March 27, 1972 (Mobile Source Pollution Control Program (MSPC) Advisory
Circular 6). This guidance was revised by MSPC Advisory Circular 6A
(September 1, 1972). The most recent iteration of this guidance was
issued on December 31, 1987 (EPA Office of Mobile Sources Advisory
Circular 6B).
C. New York and Massachusetts Litigations
While Advisory Circulars have been an adequate mechanism for the
purposes of establishing Agency policies and using such policies for
enforcement matters, the fact that EPA relies on Advisory Circulars in
addition to its regulations has been an issue in litigation challenging
the adoption of the California LEV program by New York and
Massachusetts. Section 177 states that the term ``model year'' shall be
``as determined by regulations of the Administrator.'' In the New York
litigation (Motor Vehicle Manufacturers Association v. NYDEC, 17 F. 3d
521 (2d Cir. 1994), the U.S. Court of Appeals for the Second Circuit
determined that the Advisory Circulars were not entitled to the
deference normally provided to Agency decisions under Chevron U.S.A.
Inc. v. Natural Resources Defense Counsel, 467 U.S. 837, 843 (1984).
The Second Circuit found that the circulars were not ``regulations''
required under section 177 and were, in any case, not prepared
specifically to implement section 177.75 The court also found that
application of Advisory Circular 6B to section 177 was ``newly minted''
for the New York litigation,76 and thus was entitled to little
deference. The court then provided its own opinion regarding the most
appropriate interpretation of the term ``model year'' in the section
177 context, and found that ``absent promulgated EPA regulations,
`model year' is best read as applying on an industry-wide basis.'' Id.,
at 535. As discussed below, the Second Circuit based its opinion on the
perceived practical problems that would occur if ``model year'' were
defined by engine family, rather than industry-wide, given the
existence of the NMOG fleet averaging program, as well as questions
regarding Congressional intent, industry confusion and enforceability.
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\7\5The Agency had filed an amicus curiae brief in this case, as
well as in the Massachusetts case, that argued that the Agency's
decision, as delineated in the Advisory Circulars, was entitled to
Chevron deference.
\7\6As shown in the Massachusetts case, discussed below, this
determination was factually incorrect.
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In the Massachusetts litigation, AAMA v. Greenbaum, No. 93-2276
(1st Cir., Aug. 3, 1994), the First Circuit decided not to follow the
lead of the Second Circuit, and instead upheld the EPA's implementation
of ``model year,'' as delineated in Advisory Circular 6B. Id., slip op.
at 11-24.77 However, the First Circuit noted that an argument
could be raised that the EPA Advisory Circular is owed no deference
because section 177 specifically requires EPA to define ``model year''
by regulation, not policy statements. The First Circuit found that
since plaintiffs had not raised the argument in earlier proceedings, it
was precluded from raising the issue in its appeal.
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\7\7In so doing, the First Circuit noted that the EPA's policy
had not been newly minted for these litigations, but had been issued
in 1987 and had been applied to section 177 in a letter to
Congressman John Dingell (D. Mich.) on March 7, 1991, prior to
litigation.
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Judicial review of this issue has thus resulted in contrary results
from the two courts of Appeals that have ruled on the matter. However,
while there was division in the circuit courts as to the final result,
both courts commented on the lack of EPA regulations that define model
year for the purpose of determining compliance with section 177. Though
EPA continues to believe that the existing regulations and Advisory
Circulars are entitled to Chevron deference, EPA is proposing new
regulations specifying its definition of model year as that term is
used in section 177 of the Act in an effort to remove further confusion
regarding this issue and to provide national consistency. EPA is also
proposing to apply these regulations to ``model year'' as that term is
used for regulation of motor vehicles under Part A of Title II of the
Act. EPA is not proposing to extend this determination at this time to
regulation of nonroad engines and vehicles, which may require somewhat
different provisions for ``model year.''
D. Determination of Model Year
The determination EPA is proposing today for implementation of
section 177 shall include the regulatory definition of model year as
that term has been defined under section 202 of the Act. It shall also
include the more specific determinations regarding model year,
including the definition of ``production period,'' delineated in
Advisory Circular 6B (Dec. 31, 1987). This Advisory Circular addresses
the duration of model year, defines production period and provides
information on EPA policy concerning the duration and applicability of
certificates of conformity. It notes that a specific model year must
include January 1 of the calendar year for which it is designated and
may not include a January 1 of any other calendar year, thus limiting
the duration of a model year to a calendar year plus 364 days. In
addition, Advisory Circular 6B defines ``annual production period'' for
any specific model within an engine family of light-duty vehicles or
heavy-duty engines as beginning either:
``(1) When such vehicle or engine is first produced, or (2) on
January 2 of the calendar year preceding the year for which the
model year is designated, whichever date is later.
The annual production period ends either: (1) when the last such
vehicle or engine is produced, or (2) on December 31 of the calendar
year for which the model year is named, whichever date is sooner.''
EPA believes that the definitions of ``duration of model year'' and
``production period for specific models within an engine family'' which
are contained in Advisory Circular 6B are the appropriate definitions
to be used to determine compliance with section 177 as well as to
determine compliance with the programs for which the Advisory Circular
has been used in the past. EPA believes these definitions, and the fact
that the production period is based on specific models within engine
families, provide vehicle manufacturers the maximum flexibility in
terms of adjusting the model year designation of their product line to
marketing needs and product changes. By permitting the designation of
specific engine families, or models within families, as ``pull ahead''
model year families without affecting the remainder of the vehicles in
the model year they are presently building, a manufacturer will be
able, for example, to launch a new vehicle as a 1995 model year vehicle
while the remainder of their models are being produced as 1994 models.
EPA also believes that a determination that model year should be
determined on a ``model-by-model'' basis is more appropriate than an
interpretation that ``model year'' should begin at the same time
industry-wide because the two-year lead-time of section 177 is better
fulfilled through a ``model-by-model'' approach. Manufacturers
determine the start date for manufacture of vehicle models on a model-
by-model basis. Therefore, individual manufacturers are in the best
position to determine when each model they produce in a model year will
begin production. The lead-time provisions of section 177 were designed
to give manufacturers sufficient lead-time to produce California
vehicles necessary to meet the supply needs of any state that
promulgates standards under section 177 (``177 state''). There is no
indication that Congress intended that states be unable to regulate
vehicle models that do not begin production before the two-year
deadline. Nor is there any practical reason why a particular vehicle
model should not be covered. Manufacturers are well aware of their own
production schedules and can assure that any vehicle models that begin
production after the two-year lead-time ends meet the California
requirements in a particular state.78
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\7\8Automobile dealerships in an affected state would be able to
contact their manufacturers to find out which vehicle models must be
sold to California standards in a particular state.
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EPA does not agree with the Second Circuit that an ``industry-
wide'' approach to model year would be more appropriate in the context
of California's NMOG fleet averaging program.79 In fact, though a
``model-by-model'' approach might be more complicated, it actually
provides to manufacturers more control over the particular engine
models that will be subject to an averaging program for a particular
model year, especially compared to an ``industry-wide'' approach. Under
the ``industry-wide'' approach, a manufacturer commencing production of
its vehicles after the lead-time expires cannot determine for itself
what models would be subject to the California requirements, but must
instead find out whether any of its competitor manufacturers have begun
production of a model for that model year prior to the deadline.
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\7\9EPA notes that this model year determination must be geared
toward application to all programs that may be promulgated by
California, not merely the programs promulgated as part of the LEV
program. Therefore, application of the model year determination to a
particular program should not be given overwhelming weight in our
determination. As the First Circuit noted, ``[f]leet averaging for
emissions programs is a concept devised by California, not
Congress.''
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Moreover, the increased complexity that may be caused by different
emission requirements for different vehicles in a single model year is
not unique to the Agency's approach to the term ``model year'' under
section 177. In fact, any program that includes a phase-in of standards
(e.g. the ``Tier I'' requirements of section 202(g)) results in
different standards for different cars within a model year. Moreover,
the California LEV program itself contemplates that different cars will
be certified to different standards during a single model year.
Also, any increased complexity must be balanced against the
emissions benefits of such a decision. The best example of the severe
emissions detriment that will occur if the ``industry-wide'' approach
is used is the example of Massachusetts' implementation of the
California vehicle program for model year 1995. Massachusetts'
promulgation of rules requiring model year 1995 cars to meet California
standards was completed by January 31, 1992. This gave manufacturers a
full two years of lead-time for any vehicle model that began production
after January 31, 1994. However, model year 1995 could begin, under EPA
rules, by January 2, 1994, and a few vehicle models had begun
production by that time. If the ``industry-wide'' approach had been
used for the Massachusetts situation, then, conceivably, all
manufacturers could continue to provide all of their model year 1995
vehicles to Massachusetts until December 31, 1995 without meeting the
California standards for any of the vehicles. Thus, there would be
close to four years between promulgation of the Massachusetts rule and
full compliance with such rule by manufacturers. Moreover, the
``industry-wide'' rule would require that California standards not be
enforced for any vehicles manufactured in the 1995 model year. Since
the 1996 model year does not begin for any vehicle until, at the
earliest, January 2, 1995, the ``industry-wide'' rule would provide
almost three full years between promulgation and any enforcement of
California standards. The emissions increases that would result from
the loss of a full model year from the California program could have a
significant impact on air pollution in ``177 states'' and on the
ability of such states to meet the attainment deadlines provided in the
Clean Air Act.
The ``model-by-model'' approach is also preferable to the
``manufacturer-by-manufacturer'' approach80 because it
substantially lessens the competitiveness concerns that could otherwise
result. Given that under the ``model-by-model'' approach, the
determination of model year would be based on when each individual
model begins production, there would be less of an opportunity for a
manufacturer to exempt its entire vehicle fleet for a full model year
by beginning production of one vehicle model before the two year
deadline. Thus, there is considerably less likelihood that two
manufacturers will have to meet different emission standards for all of
their vehicles for a particular year based only on when one model for a
particular manufacturer began production. Instead, the ``model-by-
model'' approach is likely to result in similar percentages of vehicles
for each manufacturer being covered by California rules for the
``split'' model year.
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\8\0The ``manufacturer-by-manufacturer'' approach would allow
any manufacturer that had begun production of any model before the
two year deadline to escape enforcement of the state regulations for
every model produced by that manufacturer during that model year.
This approach had been mandated by the trial court in the New York
LEV case before the Second Circuit opinion was delivered, see MVMA
v. NYDEC, 831 F. Supp. 57 (1993).
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Finally, EPA disagrees with the Second Circuit's belief that
Congress did not contemplate a ``split'' model year approach,
differentiating manufacturers based on when each commences production.
In fact, EPA's initial Advisory Circulars explaining EPA's ``model-by-
model'' approach were announced in 1972, five years before section 177
was added to the Clean Air Act. Congress must have at least
``contemplated,'' if not in fact expected, that EPA would interpret
``model year'' for section 177 as it had for section 202.
VII. Statutory Authority
Authority for the action in this notice is in sections 177, 184,
176(A), 110, 202, 206, 209, 307(d), and 301 of the Clean Air Act, as
amended, 42 U.S.C. 7511c, 7506a, 7525, 7410, 7607(d), and 7601.
VIII. Administrative Designation and Regulatory Analysis
Under Executive Order 12866, 58 FR 51735 (Oct. 4, 1993) the Agency
must determine whether the regulatory action is ``significant'' and
therefore subject to OMB review and the requirements of the Executive
Order. The Order defines ``significant regulatory action'' as one that
is likely to result in a rule that may:
(1) Have an annual effect on the economy of $100 million or more
or adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or state, local, or tribal governments or
communities;
(2) Create a serious inconsistency or otherwise interfere with
an action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements,
grants, user fees, or loan programs or the rights and obligations of
recipients thereof, or
(4) Raise novel or policy issues arising out of legal mandates,
the President's priorities, or the principles set forth in the
Executive Order.
Pursuant to the terms of the Executive Order 12866, since this
action could result in a rule that would have a substantial impact,
this notice is a ``significant regulatory action'' because the
estimated range of annual costs of the California LEV program in the
OTC states is between $300 million and $1.6 billion. As such, this
action was submitted to OMB for review. Changes made in response to OMB
suggestions or recommendations will be documented in the public record.
EPA has prepared an economic analysis for this rule under E.O. 12866. A
copy of this analysis has been placed in the docket. Any written
comments to EPA and any written EPA responses to those comments
regarding this analysis will be included in the docket for this
proceeding.
IX. Impact on Small Entities
The Regulatory Flexibility Act, 5 U.S.C. 601(a), provides that,
whenever an agency is required to publish a general notice of
rulemaking, it must prepare and make available a regulatory flexibility
analysis (RFA). While EPA intends to follow rulemaking procedures under
307(d) of the Clean Air Act, EPA believes it is not legally required to
publish a general notice of rulemaking here, and hence that it need not
prepare a RFA. But even if EPA is required to publish a general notice
of rulemaking here, a RFA is required only for small entities which are
directly regulated by the rule. See Mid-Tex Electric Cooperative, Inc.
v. FERC, 773 F. 2d 327 (D.C. Cir. 1985) (agency's certification need
only consider the rule's impact on regulated entities and not indirect
impact on small entities not regulated). The OTC's recommended LEV
program would directly regulate auto manufacturers. Since these auto
manufacturers generally do not qualify as small businesses within the
meaning of the Regulatory Flexibility Act, EPA does not believe a RFA
is needed for either the proposed or final rules, even if a rulemaking
is required. Accordingly, pursuant to 5 U.S.C. 605(b), the
Administrator certifies that this rule will not have a significant
economic impact on a substantial number of small entities.
Nevertheless, the Agency has considered the effect of an OTC LEV
program on new and used car dealerships as part of its regulatory
impact analysis, even though such analysis is not required because
these businesses would not be directly regulated under the rule. The
results of this analysis, set forth in the RIA, indicate that the OTC
LEV would not have a significant economic impact on automobile
dealerships.
X. Paperwork Reduction Act
The Paperwork Reduction Act of 1980, 44 U.S.C. 3501 et seq., and
implementing regulations, 5 CFR part 1320, do not apply to this action
as it does not involve the collection of information as defined
therein.
List of Subjects in 40 CFR Part 85
Environmental protection, Air pollution control, Motor vehicle
pollution, Penalties.
Dated: September 13, 1994.
Carol M. Browner,
Administrator.
For the reasons set out in the preamble, part 85 of title 40 of the
Code of Federal Regulations is proposed to be amended as follows:
PART 85--CONTROL OF AIR POLLUTION FROM MOTOR VEHICLES AND MOTOR
VEHICLE ENGINES
1. The authority citation for part 85 is revised to read as
follows:
Authority: 42 U.S.C. 7507, 7521, 7522, 7524, 7525, 7541, 7542,
7543, 7547, 7601(a), unless otherwise noted.
2. Part 85 is amended by adding subpart X to read as follows:
Subpart X--Determination of Model Year for Motor Vehicles and Engines
Used in Motor Vehicles Under Section 177 and Part A of Title II of the
Clean Air Act
Sec.
85.2301 Applicability.
85.2302 Definition of model year.
85.2303 Duration of model year.
85.2304 Definition of production period.
85.2305 Duration and applicability of certificates of conformity.
Subpart X--Determination of Model Year for Motor Vehicles and
Engines Used in Motor Vehicles Under Section 177 and Part A of
Title II of the Clean Air Act
Sec. 85.2301 Applicability.
The definitions provided by this subpart are effective [EFFECTIVE
DATE OF FINAL RULE] and apply to all light-duty motor vehicles and
trucks, heavy-duty motor vehicles and heavy-duty engines used in motor
vehicles, and on-highway motorcycles as such vehicles and engines are
regulated under section 177 and Title II part A of the Clean Air Act.
Sec. 85.2302 Definition of model year.
Model year means the manufacturer's annual production period (as
determined under Sec. 85.2304) which includes January 1 of such
calendar year, provided, that if the manufacturer has no annual
production period, the term ``model year'' shall mean the calendar
year.
Sec. 85.2303 Duration of model year.
A specific model year must always include January 1 of the calendar
year for which it is designated and may not include a January 1 of any
other calendar year. Thus, the maximum duration of a model year is one
calendar year plus 364 days.
Sec. 85.2304 Definition of production period.
The ``annual production period'' for any specific model within an
engine family of light-duty motor vehicle or heavy-duty motor vehicles
and engines begins either: When such vehicle or engine is first
produced; or on January 2 of the calendar year preceding the year for
which the model year is designated, whichever date is later. The annual
production period ends either: When the last such vehicle or engine is
produced; or on December 31 of the calendar year for which the model
year is named, whichever date is sooner.
Sec. 85.2305 Duration and applicability of certificates of
conformity.1
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\\\1\The extended coverage period described here for a
certificate of conformity (i.e., up to one year plus 364 days) is
primarily intended to allow flexibility in the introduction of new
models. Under no circumstances should it be interpreted that
existing models may ``skip'' yearly certification by pulling ahead
the production of every other model year. While this situation, to
the Agency's knowledge, has not occurred in the past, a practice of
producing vehicles for a two year period would violate Congress's
intent of annual certification based upon an annual production
period. The Agency is not currently setting forth rules for how to
determine when abuse has occurred, since this has not been a problem
to date. However, the Agency is requiring that manufacturers shall
continue to use normal yearly production periods for existing
models.
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(a) Except as provided in paragraph (b) of this section, a
certificate of conformity is deemed to be effective and cover the
vehicles or engines named in such certificate and produced during the
annual production period, as defined in Sec. 85.2304.
(b) Section 203 of the Clean Air Act prohibits the sale, offering
for sale, delivery for introduction into commerce, and introduction
into commerce of any new vehicle or engine not covered by a certificate
of conformity unless it is an imported vehicle exempted by the
Administrator or otherwise authorized jointly by EPA and U.S. Customs
service regulations. However, the Act does not prohibit the production
of vehicles or engines without a certificate of conformity. Vehicles or
engines produced prior to the effective date of a certificate of
conformity, as defined in paragraph (a) of this section, may also be
covered by the certificate if the following conditions are met:
(1) The vehicles or engines conform in all respects to the vehicle
or engines described in the application for the certificate of
conformity;
(2) The vehicles or engines are not sold, offered for sale,
introduced into commerce, or delivered for introduction into commerce
prior to the effective date of the certificate of conformity;
(3) The Agency is notified prior to the beginning of production
when such production will start, and the Agency is provided full
opportunity to inspect and/or test the vehicles during and after their
production; for example, the Agency must have the opportunity to
conduct selective enforcement auditing production line testing as if
the vehicles had been produced after the effective date of the
certificate.
(c) Vehicles or engines imported by an original equipment
manufacturer after December 31 of the calendar year for which the model
year is named are still covered by the certificate of conformity as
long as the production of the vehicle or engine was completed before
December 31 of that year. This paragraph does not apply to vehicles
that may be covered by certificates held by independent commercial
importers unless specifically approved by EPA.
(d) Vehicles or engines produced after December 31 of the calendar
year for which the model year is named are not covered by the
certificate of conformity for that model year. A new certificate of
conformity demonstrating compliance with currently applicable standards
must be obtained for these vehicles or engines, even if they are
identical to vehicles or engines built before December 31.
[FR Doc. 94-23112 Filed 9-21-94; 8:45 am]
BILLING CODE 6560-50-P