[Federal Register Volume 59, Number 210 (Tuesday, November 1, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-27018]


[[Page Unknown]]

[Federal Register: November 1, 1994]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[AZ34-1-6418; FRL-5100-3]

 

Phoenix Ozone Nonattainment Area, Clean Air Act Section 182(f) 
Exemption Petition

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking (NPRM).

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SUMMARY: The EPA is proposing to approve a petition submitted by the 
Arizona Department of Environmental Quality (ADEQ) requesting that the 
EPA grant an exemption for the Phoenix ozone nonattainment area 
(Phoenix Area) from the requirement to implement oxides of nitrogen 
(NOX) Reasonably Available Control Technology (RACT). In 
accordance with the requirements of the Clean Air Act, as amended in 
1990 (the Act or CAA), the Phoenix area may be exempted from the 
NOX reduction requirements where the Administrator determines that 
net air quality benefits are greater in the absence of NOX 
reductions from the sources concerned or that additional NOX 
reductions would not contribute to attainment of the national ambient 
air quality standard (NAAQS) for ozone. The ADEQ petition uses the 
Urban Airshed Model (UAM) to demonstrate that additional NOX 
reductions in the Phoenix Area would not contribute to attainment of 
the ozone NAAQS. The EPA is proposing to exempt the Phoenix Area from 
the requirement to implement NOX RACT and the applicable NOX 
general and transportation conformity requirements. The EPA is 
proposing approval of this action under provisions of the CAA regarding 
plan requirements for nonattainment areas.

DATES: Comments on this proposed action must be received in writing on 
or before December 1, 1994.

ADDRESSES: Comments may be mailed to: Daniel A. Meer, Chief, Rulemaking 
Section (A-5-3), Air and Toxics Division, U.S. Environmental Protection 
Agency, Region IX, 75 Hawthorne Street, San Francisco, CA 94105.
    Copies of the exemption petition are available for public 
inspection at EPA's Region 9 office during normal business hours. 
Copies of the submitted petition may be obtained from the following 
locations:

Rulemaking Section (A-5-3), Air and Toxics Division, U.S. Environmental 
Protection Agency, Region IX, 75 Hawthorne Street, San Francisco, CA 
94105.
Arizona Department of Environmental Quality, 3033 North Central Avenue, 
Phoenix Arizona 85012.
Maricopa County Air Pollution Control District, 2406 S. 24th Street, 
suite E214, Phoenix, Arizona 85034.

FOR FURTHER INFORMATION CONTACT: Wendy Colombo, Rulemaking Section (A-
5-3), or Scott Bohning, Air Quality Section (A-2-4), Air and Toxics 
Division, U.S. Environmental Protection Agency, Region IX, 75 Hawthorne 
Street, San Francisco, CA 94105 Telephone: (415) 744-1202; (415) 744-
1293.

SUPPLEMENTARY INFORMATION:

Background

    On November 15, 1990, the Clean Air Act Amendments of 1990 were 
enacted. Public Law 101-549, 104 Stat. 2399, codified at 42 U.S.C. 
7401-7671q. The air quality planning requirements for the reduction of 
NOX emissions are set out in section 182(f) of the CAA. On 
November 25, 1992, EPA published a NPRM (57 FR 55620) entitled, ``State 
Implementation Plans; Nitrogen Oxides Supplement to the General 
Preamble; Clean Air Act Amendments of 1990 Implementation of Title I; 
Proposed Rule,'' (the NOX Supplement) which describes the 
requirements of section 182(f). The November 25, 1992, notice should be 
referred to for further information on the NOX requirements and is 
incorporated into this document by reference.
    Section 182(f) of the Act requires States to apply the same 
requirements to major stationary sources of NOX (``major'' as 
defined in section 302 and section 182(c), (d), and (e)) as are applied 
to major stationary sources of volatile organic compounds (VOCs). These 
requirements are RACT and New Source Review (NSR) for major stationary 
sources in certain ozone nonattainment areas.
    The RACT requirements for major stationary sources of VOCs are 
contained in section 182(b)(2), while the NSR requirements are 
contained in section 182(a)(2)(C) and other provisions of section 182. 
Section 182(b)(2) requires submittal of RACT rules for major stationary 
sources of VOC emissions (not covered by a pre-enactment control 
technologies guidelines (CTG) document or a post-enactment CTG 
document) by November 15, 1992. There were no NOX CTGs issued 
before enactment, and EPA has not issued a CTG document for any 
NOX sources since enactment of the CAA. Section 182(a)(2)(C) 
requires submittal of NSR rules incorporating the new preconstruction 
permitting requirements for new or modified sources. The RACT and NSR 
rules were required to be submitted by November 15, 1992.
    The Phoenix area is classified as a moderate1 nonattainment 
area for ozone; therefore this area is subject to the RACT and NSR 
requirements cited above and the November 15, 1992 deadline.2 On 
April 13, 1994, the State of Arizona submitted a petition to the EPA 
requesting that the Phoenix area be exempted from the requirement to 
implement NOX RACT measures pursuant to section 182(f) of the CAA. 
The exemption request is based on UAM modeling conducted in accordance 
with EPA guidelines.
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    \1\ The Maricopa County ozone nonattainment area was 
redesignated nonattainment and was classified by operation of law 
pursuant to sections 107(d) and 181(a) upon the date of enactment of 
the CAA. See 55 FR 56694 (November 6, 1991).
    \2\ The State of Arizona was issued a finding of nonsubmittal 
for the section 182(f) NOX RACT requirements on April 21, 1993, 
and subsequently submitted a commitment on April 23, 1993 to adopt 
and submit the NOX RACT rules. The commitment was submitted as 
an interim measure to satisfy the NOX RACT requirements, and 
proposed that the Maricopa County Bureau of Air Pollution Control 
(MCBAPC) would develop the NOX RACT rules for submittal in 
January 1994. The rules were to be developed at the same time that 
the Maricopa Association of Governments (MAG) was conducting UAM for 
the 1994 attainment demonstration requirements. If the UAM modeling 
showed that NOX reductions would not contribute to attainment 
of the ozone standard, then Arizona would petition for a section 
182(f) exemption from the NOX RACT requirements.
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General Criteria--Section 182(f) Exemption Requests

    The NOX RACT petition was submitted in accordance with the EPA 
guidance document entitled, Guideline for Determining the Applicability 
of Nitrogen Oxides Requirements Under Section 182(f) issued on December 
16, 1993 (exemption guidance). In addition to the exemption guidance, 
EPA's NOX exemption policy is contained in two memoranda\3\ 
providing that under section 182(f)(1)(A), an exemption from the 
NOX requirements may be granted for nonattainment areas outside 
the ozone transport region (OTR) if EPA determines that additional 
reductions of NOX would not contribute to attainment of the NAAQS 
for those areas. EPA's approval of monitoring-based NOX exemptions 
are granted on a contingent basis and last for only as long as the 
area's monitoring data continue to demonstrate attainment. As described 
below, EPA's approval of modeling-based NOX exemptions are also 
granted on a contingent basis.
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    \3\Michael H. Shapiro, Acting Assistant Administrator for Air 
and Radiation, dated September 17, 1993, entitled ``State 
Implementation Plan (SIP) Requirements for Areas Submitting Requests 
for Redesignation to Attainment of the Ozone and Carbon Monoxide 
(CO) National Ambient Air Quality Standards (NAAQS) on or after 
November 15, 1992'', and a subsequent revision to this memorandum 
from John S. Seitz, Director of EPA's Office of Air Quality Planning 
and Standards, issued on May 27, 1994, entitled, ``Section 182(f) 
Nitrogen Oxides (NOX) Exemptions--Revised Process and 
Criteria''.
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    EPA's conformity rules4, 5 also reference the section 182(f) 
exemption process as a means for exempting affected areas from NOX 
conformity requirements.6 Therefore, ozone nonattainment areas 
that are granted areawide section 182(f) exemptions under this approach 
will also be exempt from the NOX general and transportation 
conformity requirements.
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    \4\``Criteria and Procedures for Determining Conformity to State 
or Federal Implementation Plans or Transportation Plans, Programs, 
and Projects Funded or Approved under Title 23 U.S.C. of the Federal 
Transit Act'', November 24, 1993 (58 FR 62188).
    5``Determining Conformity of General Federal Actions to 
State or Federal Implementation Plans; Final Rule'', November 30, 
1993 (58 FR 63214).
    \6\The section 182(f) exemption is explicitly referred to and is 
described in similar language in 40 CFR 51.394(b)(3)(i), the 
``Applicability'' section of the transportation conformity rule, and 
in the preamble (see 58 FR 62197, November 24, 1993). The language 
is repeated in the provisions of the rule regarding the motor 
vehicle emissions budget test [section 51.428(a)(1)(ii)] and the 
``build/no-build'' test [sections 51.436(e), 51.438(e)], although 
section 182(f) of the Act is not specifically mentioned. In the 
general conformity rule, the section 182(f) NOX exemption is 
referred to in section 51.852 (definition of ``Precursors of a 
criteria pollutant'') and is discussed in the preamble (see 58 FR 
63240, November 30, 1993).
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    The EPA first provided guidance on NOX exemptions in the 
NOX Supplement. The guidance states that EPA would rescind a 
NOX exemption in cases where NOX reductions were later found 
to be beneficial to an area's ability to attain and maintain the ozone 
NAAQS. That is, a modeling-based exemption would last for only as long 
as the areas's modeling continues to demonstrate attainment without 
NOX reductions from major stationary sources.
    If EPA later determines that NOX reductions are beneficial 
based on new photochemical grid modeling in an area initially exempted, 
the area would be removed from exempt status and would be required to 
implement the NOX requirements, except to the extent modeling 
shows that the NOX reductions are excess reductions.7 A 
determination that the NOX exemption no longer applies would mean 
that the NOX general and transportation conformity provisions 
would again be applicable (see 58 FR 63214; 58 FR 62188; 59 FR 31238) 
to the affected area. The NOX requirements would also re-apply, 
although some reasonable time period after the EPA determination may be 
provided for sources to meet the RACT limits. EPA expects this time 
period to be as expeditious as practicable, taking into account any 
current and applicable State or Federal regulations.
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    \7\Section 182(f)(2) states that the application of the new 
NOX requirements may be limited to the extent necessary to 
avoid excess reductions of NOX as determined by applying tests 
similar to the net air quality benefits test, the contribute to 
attainment test, and the net ozone air quality benefits test.
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    The subsequent modeling analyses alluded to above need not be 
limited to the purpose of demonstrating attainment in the 1994 SIP 
revisions. For example, future modeling might also be initiated to 
resolve issues related to transport of ozone and ozone precursors into 
downwind nonattainment areas. State or local officials might want to 
consider a strategy that phases in NOX reductions only after 
certain VOC reductions are implemented. As improved emission 
inventories and ambient data become available, planning officials may 
choose to remodel. In addition, alternative control strategy scenarios 
might be considered in subsequent modeling analyses in order to improve 
the cost-effectiveness of the attainment plan.
    EPA's exemption guidance provides that pursuant to the requirements 
of section 110(a)(2), States should consider evidence, such as 
photochemical grid modeling, which shows that granting the NOX 
exemption would interfere with attainment or maintenance in downwind 
areas. The State of Arizona has not yet implemented NOX RACT, and 
at the time of this notice, EPA has not received evidence from the 
Phoenix Area or any downwind areas that shows that granting the 
NOX exemption for the Phoenix Area would interfere with attainment 
or maintenance in downwind areas.

Exemption Modeling Requirements

    The policy documents cited above which contain guidance on the 
petition requirements state that the modeling performed for the 
petition should follow the Guideline on Regulatory Application of the 
Urban Airshed Model, EPA-450/91-013, July 1991, (UAM guideline). The 
UAM guideline describes procedures for the appropriate use of UAM, such 
as for attainment demonstrations required of all ozone nonattainment 
areas.
    Section 182(f) of the CAA recognizes that although VOC and NOX 
emissions are both precursors to ozone, in certain circumstances the 
reduction of NOX emissions can actually increase ozone 
concentrations. This occurs because two competing groups of chemical 
reactions are affected by NOX. NOX emissions reduction 
reduces one of the basic materials needed for ozone production, but it 
also enhances the formation of hydrocarbon radicals, thus increasing 
another basic ozone ingredient. Which effect dominates, if any, depends 
on the ratio of VOC to NOX in the atmosphere, temperature, and 
other factors. The atmosphere is said to be ``NOX-limited'' if 
NOX reductions decrease peak ozone concentrations, and ``VOC-
limited'' if NOX reductions increase peak ozone concentrations. 
UAM can simulate ozone photochemistry to determine the effects of VOC 
and NOX emission reductions on ozone. Therefore, if these 
simulations demonstrate that NOX emission reductions are of no 
benefit or are counter-productive, then an exemption under section 
182(f) would apply.
    The NOX exemption guidance sets forth two possible tests for 
showing that NOX emission reductions are of no benefit or are 
counter-productive to ozone attainment for areas outside the OTR. The 
petition must show that one or both of these tests is/are passed.
    (i) Net air quality benefit: Show that the required NOX 
reductions from the potential exempted sources are counter-productive 
for overall air quality, primarily considering the modeled effect on 
the number of ozone NAAQS exceedances. Also considered are welfare, 
visibility, toxic pollutants, the effect on secondary PM10 
formation, etc. This must include UAM modeling reflecting an area's 
submitted ozone attainment demonstration, with adopted control 
measures.
    (ii) Contribute to attainment: This test uses UAM modeling to show 
that substantial reductions of VOC emissions result in lower ozone 
levels than substantial reductions of NOX emissions AND combined 
reductions of VOC and NOX emissions.8 The maximum one-hour 
ozone concentrations from these three scenarios are then compared. 
These three UAM simulations need not be tied to an actual attainment 
demonstration9, but the modeled ``NOX reductions should be as 
source-specific as possible, rather than across-the-board'' (p.27), and 
should reflect ``baseline'' NOx reductions that are expected to occur 
without the exemption.
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    \8\``Substantial VOC reduction'' means that required to show 
attainment, and ``substantial NOx reduction'' means a similar 
percentage reduction.
    \9\If an exemption is being requested for only certain NOX 
sources, then the chosen test is to determine whether just the 
``excess emission reductions'' from these sources would be counter-
productive; in this case, the test must be tied to an actual 
submitted attainment demonstration.

    The UAM guideline describes procedures for applying UAM, such as 
choosing ozone episodes and the geographical domain to model, setting 
emissions and meteorological inputs, setting boundary conditions to the 
model, and evaluating the model's performance. The reliance of the 
NOX exemption guidance on the UAM guideline is intended to ensure 
that the model is used in a scientifically appropriate manner. Portions 
of the UAM guideline that are specific to SIP attainment demonstrations 
may not always be applicable to modeling used specifically for NOX 
exemptions.

Description of Submitted Petition

    The petition submitted by the ADEQ first briefly describes the 
methodology used. Then, citing UAM modeling results of simulations 
required for the chosen exemption test (the contribute to attainment 
test), it concludes that the test is passed. In an appendix (Exhibits 
1-4), the petition notes revisions to the emission inventory input made 
after the cited Addenda to the MAG 1993 Ozone Plan for the Maricopa 
County Area was prepared, and includes descriptions and graphs of UAM 
modeling performance indicators and concentration results cited in the 
main text.
    The contribute to attainment test applied in the petition requires 
a showing that substantial reductions of VOC yield a lower ozone peak 
than do reductions of NOX, and of both VOC and NOX. In order 
to make the modeling as source-specific as possible (required by the 
exemption guidance), UAM simulations were also performed to examine the 
effects of possible NOX RACT reductions at specific NOX 
sources in the Maricopa County nonattainment area.
    The ozone episodes chosen for modeling were the August 9-10, 1992 
episode, which is the base case modeling described in Exhibit 2 (of the 
petition) in an abbreviated form, and the June 13-14, 1993 episode. The 
petition notes that there is only a single meteorological regime 
associated with ozone NAAQS violations in Phoenix, due to stable 
weather patterns, its ``island'' location which isolates the area from 
other urban complexes, and its generally even distribution in size and 
location of NOX emissions throughout the area. The reduction 
levels chosen for the three 1996 modeled scenarios for each simulation 
are as follows:

Episode 1

    (1) A 20% VOC reduction, and a 0% NOX reduction;
    (2) a 0% VOC reduction, and a 60% NOX reduction; and
    (3) a 40% reduction of both VOC and NOX.
    The results of these reduction simulations are described and 
illustrated in Exhibit 1 of the petition. The ozone peaks are 11.9 
parts per hundred million (pphm), 16.5 pphm, and 12.8 pphm, 
respectively. Since the 11.9 pphm value, corresponding to the VOC-only 
reduction, is the lowest, the test is passed. Also noted for this 
scenario is the lowest area covered by high ozone concentrations.

Episode 2

    (1) A 20% VOC reduction, and a 0% NOX reduction;
    (2) a 0% VOC reduction, and a 20% NOX reduction; and
    (3) a 20% reduction of both VOC and NOX.
    The results of these reduction simulations are described and 
illustrated in attachment 1 of the Technical Support Document (TSD). 
The ozone peaks are 11.1 pphm, 14.6 pphm, and 13.0 pphm, respectively. 
Since the 11.1 pphm value, corresponding to the VOC-only reduction, is 
the lowest, this test is also passed.
    The petition also describes modeling of 1996 emissions (including 
adopted and committed control measures), with and without RACT applied 
to specific NOX sources (this modeling is explained in attachment 
1 of the TSD). Exhibit 1 of the petition states that the total NOX 
reductions from potential NOX RACT measures for the August episode 
is 50.6% of the large point source emissions, or 5.4% of the total 
NOX emissions for the second day of the ozone episode (August 10). 
These yielded a 0.1 pphm ozone increase. For the June episode, with a 
52.5% reduction in elevated point source NOX emissions and a 6.9% 
reduction in total NOX emissions, the results showed no impact on 
the maximum simulated concentration. As referred to above, a more 
detailed discussion of the petition can be found in the Technical 
Support Document, dated October 1994.

Evaluation of Submitted Petition

    The petition correctly utilizes an appropriate test from the 
NOX exemption guidance. The ``contribute to attainment'' test is 
available to nonattainment areas outside an OTR, and need not be tied 
to an adopted and submitted attainment demonstration.
    The single meteorological regime and the August 9-10, 1992 and June 
13-14, 1993 ozone episodes used in the three required reduction 
scenarios are described in the modeling protocol used for the Phoenix 
Area's ozone attainment demonstration due November 15, 1994. For 
attainment demonstrations, the UAM guideline requires an area with a 
single regime to model three episodes of that meteorological type. The 
intent in requiring that the UAM guideline be followed is to ensure 
that the UAM is utilized in a scientifically appropriate manner and to 
ensure that multiple meteorological regimes are addressed, if 
necessary. However, in cases where an area is using intensive data from 
a field study, a minimum of two episodes is acceptable. This is 
appropriate where a field study is conducted that provides more 
comprehensive data for the modeling analysis. The field study was 
conducted during the summer of 1992 and provided more air quality and 
meteorological data than is routinely available.
    Since 1996 is the required attainment year for a moderate ozone 
nonattainment area, the 1996 year is appropriate for use in the 
analysis using UAM simulations.
    The NOX and VOC reduction levels used in the test were 
``substantial'' within the meaning of the exemption guidance, and 
provide a reasonable basis for comparisons of their effect on ozone. 
The additional simulations of NOX RACT reductions at specific 
sources meet the exemption guidance requirement that the test be as 
source-specific as possible, and further substantiate the conclusion 
that implementation of NOX RACT for major stationary sources would 
not contribute to attainment.

EPA Proposed Action

    This action proposes to exempt the Phoenix ozone nonattainment area 
from implementing the NOX RACT requirements and the general and 
transportation conformity regulations for NOX. It is based on UAM 
modeling for two episodes in the Phoenix area which demonstrate that 
NOX reductions do not contribute to attainment. The final action 
on this proposal will serve as a final determination that the finding 
of nonsubmittal for the NOX RACT requirements has been corrected 
and that on the effective date of the final action on this proposal, 
any Federal Implementation Plan (FIP) clock is stopped.
    Nothing in this action should be construed as permitting or 
allowing or establishing a precedent for any future implementation 
plan. Each request for a section 182(f) exemption shall be considered 
separately in light of specific technical, economic, and environmental 
factors and in relation to relevant statutory and regulatory 
requirements.

Regulatory Process

    The Office of Management and Budget has exempted this regulatory 
action from Executive Order 12866 review.
    Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., EPA 
must prepare a regulatory flexibility analysis assessing the impact of 
any proposed or final rule on small entities. 5 U.S.C. 603 and 604. 
Alternatively, EPA may certify that the rule will not have a 
significant impact on a substantial number of small entities. Small 
entities include small businesses, small not-for-profit enterprises and 
government entities with jurisdiction over population of less than 
50,000.
    This exemption action does not create any new requirements, but 
allows suspension of the indicated requirements for the life of the 
exemption. Therefore, because the proposed approval does not impose any 
new requirements, I certify that it does not have a significant impact 
on any small entities affected. Moreover, due to the nature of the 
Federal-state relationship under the CAA, preparation of a regulatory 
flexibility analysis would constitute Federal inquiry into the economic 
reasonableness of state action. The CAA forbids EPA to base its actions 
concerning SIPs on such grounds. Union Electric Co. v. U.S. E.P.A., 427 
U.S. 246, 256-66 (S. Ct. 1976); 42 U.S.C. 7410 (a)(2).
    Under section 307(b)(1) of the CAA, petitions for judicial review 
of this action must be filed in the United States Court of Appeals for 
the appropriate circuit by December 1, 1994. Filing a petition for 
reconsideration by the Administrator of this rule does not affect the 
finality of this rule for the purposes of judicial review nor does it 
extend the time within which a petition for judicial review may be 
filed, and shall not postpone the effectiveness of such a rule.
    This action may not be challenged later in proceedings to enforce 
its requirements. Section 307(b)(2).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Hydrocarbons, 
Intergovernmental relations, Nitrogen dioxide, Ozone, Reporting and 
recordkeeping requirements, Volatile organic compounds.

    Dated: October 25, 1994.
Carol M. Browner,
Administrator.

    Part 52, chapter I, title 40 of the Code of Federal Regulations is 
proposed to be amended as follows:

PART 52--[AMENDED]

    1. The authority citation for part 52 continues to read as follows:

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

Subpart D--Arizona

    2. Subpart D is proposed to be amended by adding Sec. 52.235 to 
read as follows:


Sec. 52.235   Control strategy for ozone: Oxides of nitrogen.

    EPA is approving an exemption request submitted by the State of 
Arizona on April 13, 1994 for the Maricopa County ozone nonattainment 
area from the NOX RACT requirements contained in section 182(f) of 
the Clean Air Act. This approval exempts the area from implementing 
reasonably available control technology (RACT) for major stationary 
sources of nitrogen oxides (NOX) and the NOX related 
requirements of general and transportation conformity regulations. The 
exemption is based on Urban Airshed Modeling as would last for only as 
long as the area's modeling continues to demonstrate attainment without 
NOX reductions from major stationary sources.

[FR Doc. 94-27018 Filed 10-31-94; 8:45 am]
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