[Federal Register Volume 59, Number 227 (Monday, November 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-29195]


[Federal Register: November 28, 1994]


=======================================================================
-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[TX-45-1-6654; FRL-5114-2]


Conditional Approval and Promulgation of Section 182(f) Exemption 
to the Nitrogen Oxides (NOX) Control Requirements for the Dallas-
Fort Worth and El Paso Ozone Nonattainment Areas; Texas

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: In this action, the EPA is conditionally approving two 
petitions from the State of Texas requesting that the Dallas-Fort Worth 
(DFW) and El Paso ozone nonattainment areas be exempted from NOX 
control requirements of section 182(f) of the Clean Air Act (CAA) as 
amended in 1990. The State of Texas bases its request for DFW upon a 
demonstration that the DFW nonattainment area would attain the National 
Ambient Air Quality Standards (NAAQS) for ozone by the CAA mandated 
deadline without the implementation of the additional NOX controls 
required under section 182(f). Similarly, the State bases its exemption 
request for El Paso on a demonstration that the El Paso nonattainment 
area would attain the ozone NAAQS by the CAA mandated deadline without 
implementing the additional NOX controls required under section 
182(f), but for emissions emanating from Mexico. These exemptions are 
being requested under authority similarly granted under section 182(f) 
of the CAA.

EFFECTIVE DATE: This action is effective as of November 21, 1994.

ADDRESSES: Copies of the documents relevant to these actions are 
available for public inspection during normal business hours at the 
following locations. The interested persons wanting to examine these 
documents should make an appointment with the appropriate office at 
least 24 hours before the visiting day.

U.S. Environmental Protection Agency, Region 6, Air Programs Branch 
(6T6-A), 1445 Ross Avenue, Dallas, Texas 75202-2733.
The Air and Radiation Docket and Information Center, U. S. 
Environmental Protection Agency, 401 M Street, SW., Washington, DC 
20460.
Texas Natural Resource Conservation Commission, P.O. Box 13087, Austin, 
Texas 78711-3087.

FOR FURTHER INFORMATION CONTACT: Ms. Leila Yim Surratt or Mr. Quang 
Nguyen, Planning Section (6T-AP), Air Programs Branch, EPA Region 6, 
1445 Ross Avenue, Dallas, Texas 75202-2733, telephone (214) 665-7214.

SUPPLEMENTARY INFORMATION:

I. Background

    NOX are precursors to ground level (tropospheric) ozone, or 
urban ``smog.'' When released into the atmosphere, NOX will react 
with volatile organic compounds (VOC) in the presence of sunlight to 
form ozone. Tropospheric ozone is an important factor in the nation's 
urban air pollution problem.
    The 1990 Clean Air Act Amendments (CAAA) made significant changes 
to the air quality planning requirements for areas that do not meet the 
ozone NAAQS. Subparts 1 and 2 of part D, title I of the CAA as amended 
in 1990 contain the air quality planning requirements for ozone 
nonattainment areas. Title I includes new requirements to control 
NOX emissions in certain ozone nonattainment areas and ozone 
transport regions. Section 182(f) requires States to apply the same 
requirements to major stationary sources of NOX as are applied to 
major stationary sources of VOC. The new NOX requirements are 
reasonably available control technology (RACT) and new source review 
(NSR). These provisions are explained more fully in the EPA's NOX 
Supplement to the General Preamble published in the Federal Register 
(FR) on November 25, 1992 (see 57 FR 55620). In addition, the general 
and transportation conformity rules (conformity) required by section 
176(c) contain new NOX requirements (see 58 FR 63214 and 58 FR 
62188), and the vehicle inspection and maintenance rules required by 
section 182(c)(3) also contain new NOX requirements (see 57 FR 
52989).
    El Paso, Texas was designated nonattainment for ozone and 
classified as serious pursuant to sections 107(d)(4) and 181(a) of the 
CAA. The El Paso nonattainment area consists of El Paso County and 
shares a common airshed with Juarez, Mexico. Under section 181(a), 
serious areas must attain the ozone NAAQS by 1999. DFW was classified 
as moderate with an attainment deadline of 1996. The DFW nonattainment 
area consists of Dallas, Tarrant, Denton, and Collin Counties. Please 
reference 56 FR 56694 (November 6, 1991, codified for Texas at title 40 
of the Code of Federal Regulations in Sec. 81.344).

II. Applicable EPA Guidance

    The CAA specifies in section 182(f) that if one of the conditions 
listed below is met, the new NOX requirements would not apply:
    1. In any area, the net air quality benefits are greater without 
NOX reductions from the sources concerned;
    2. In a non-transport region, additional NOX reductions would 
not contribute to ozone attainment in the nonattainment area; or
    3. In a transport region, additional NOX reductions would not 
produce net ozone benefits in the transport region.
    In addition, section 182(f)(2) states that the application of the 
new NOX requirements may be limited to the extent that any portion 
of those reductions are demonstrated to result in ``excess reductions'' 
of NOx. The NOX provisions of the conformity requirements would 
also not apply in an area that is granted a section 182(f) exemption 
(see 58 FR 63214 and 58 FR 62188). In addition, certain NOX 
provisions of the vehicle inspection and maintenance requirements would 
not apply in an area that is granted a section 182(f) exemption (57 FR 
52989).
    The EPA's Guideline for Determining the Applicability of Nitrogen 
Oxides Requirements under Section 182(f) (December 1993) describes how 
the EPA intends to interpret the NOX exemption provisions of 
section 182(f). In addition, a memorandum signed by John S. Seitz, 
Director of the EPA Office of Air Quality Planning and Standards, dated 
May 27, 1994, describes certain revisions to the process the EPA 
currently intends to follow for granting exemptions from NOX 
control requirements.
    As described more fully in the Seitz memorandum, petitions 
submitted under section 182(f)(3) are not required to be submitted as 
State Implementation Plan (SIP) revisions. Consequently, the State is 
not required under the CAA to hold a public hearing in order to 
petition for an areawide NOX exemption determination. Similarly, 
it is not necessary to have the Governor submit the petition.

III. International Border Area

    Section 818 of the 1990 CAAA incorporates a new section 179B into 
the CAA which contains special provisions for nonattainment areas that 
are affected by emissions emanating from outside the United States. The 
section 818 provisions are hereinafter referred to as section 179B. 
Because the El Paso nonattainment area shares a common airshed with 
Juarez, Mexico, the section 179B provisions apply to El Paso.
    Under section 179B, the EPA will approve a SIP if the area meets 
all other CAA requirements and establishes that implementation of the 
plan would achieve attainment of the ozone standard by the CAA 
statutory deadline ``but for emissions emanating from outside the 
United States.'' Customarily, an area must demonstrate, using EPA 
guideline models, that it would attain the relevant NAAQS. Since El 
Paso and Juarez, Mexico share an airshed and data are not available for 
a Juarez emission inventory, modeling of the entire airshed is not 
possible at this time. Current EPA policy allows an area subject to 
section 179B, such as El Paso, to perform modeling using only U.S. air 
emission data. Such modeling may form an acceptable basis for 
demonstrating attainment for analysis purposes required under section 
179B. For areas on an international border that demonstrate attainment, 
``but for emissions emanating from a foreign country,'' the provisions 
of section 179B will keep such areas from being subject to the ``bump 
up'' provisions of section 181(b)(2), which require reclassification to 
the next higher ozone nonattainment classification if the area fails to 
attain the relevant NAAQS by the applicable attainment date. See 57 FR 
13498, 13569-13570 (April 16, 1992).
    The State of Texas performed Urban Airshed Modeling (UAM) using 
only El Paso emissions data, and demonstrated that El Paso would attain 
the ozone standard by 1996 ``but for emissions emanating from Mexico.'' 
The El Paso UAM ozone modeling analysis will be referred to in this 
notice as the ``attainment demonstration'' for El Paso.
    Although the EPA allows an area such as El Paso to demonstrate 
attainment on a basis of U.S.-only modeling, it is understood that 
ultimately basin-wide modeling must occur in order to develop a control 
strategy in El Paso that will achieve the NAAQS. The United States 
entered into the Agreement for Environmental Cooperation along the 
U.S.-Mexico Border, referred to as the La Paz Agreement, with Mexico in 
1983 to address environmental concerns along the border between the two 
countries. Annex V of the Agreement, negotiated in 1989, calls for 
basin-wide modeling to be accomplished for the El Paso/Juarez airshed. 
The EPA has been working with Mexico and with the Texas Natural 
Resource Conservation Commission (TNRCC) to accomplish the basin-wide 
modeling. Since the statutory attainment date for serious ozone 
nonattainment areas such as El Paso is 1999, concerned agencies intend 
to complete such modeling by 1999.

IV. State Submittal

    On June 17, 1994, the TNRCC submitted to the EPA two petitions 
pursuant to section 182(f), requesting that the DFW and El Paso 
nonattainment areas be exempted by the EPA from the NOX control 
requirements of section 182(f) of the CAA.
    The State bases its petitions on a demonstration that NOX 
reductions would not contribute to attainment in either area, as 
allowed for under the test (2) listed above, because such NOX 
reductions would be in excess of the reductions necessary for 
attainment. Consistent with the EPA's December 1993 section 182(f) 
guidance, the State's excess emissions reductions demonstration is tied 
to the attainment demonstration SIP required under section 182(c)(2)(A) 
of the CAA.
    The State's submission for each petition includes: (1) A letter 
from Anthony C. Grigsby, Executive Director of the TNRCC, to Jane N. 
Saginaw, Regional Administrator of the EPA Region 6, transmitting the 
NOX exemption petition; (2) the petition from the TNRCC 
summarizing the State's UAM attainment demonstration results; and (3) 
technical reports documenting the State's base case UAM inputs. The 
State has also previously submitted to the EPA the 15 percent 
Reasonable Further Progress (RFP) SIPs for the DFW and El Paso areas, 
as required by section 182(b)(1) of the CAA. The 15 percent RFP SIPs 
contain regulations that are estimated to reduce VOC emissions in each 
area by 15 percent from 1990 levels, net of any growth that may occur. 
The State of Texas supplemented its petitions by submitting to the EPA 
in July 1994, two additional technical reports on the UAM for each 
area, which contained the following: base case performance evaluation, 
attainment year emissions report, and attainment year modeling report. 
These additional technical reports provided supplemental detail and 
documentation on the modeling information already provided to the EPA 
in the State's petitions.
    On August 29, 1994, the EPA proposed to conditionally approve the 
section 182(f) petitions for the DFW and El Paso areas (see 59 FR 
44386). The proposed rulemaking notice provides a detailed discussion 
of the EPA's rationale for proposing conditional approval of the 
State's petitions and should be referred to. In that notice, the EPA 
explained that although the State had completed its attainment 
demonstration SIPs for both areas, the SIPs had not yet been adopted by 
the State, nor submitted to the EPA. The EPA further explained that the 
EPA would not take final action to conditionally approve the petitions 
for each area unless and until the State submitted the attainment 
demonstration SIPs to the EPA in accordance with section 182(c)(2)(A) 
of the CAA.
    The TNRCC adopted the attainment demonstration SIP for the DFW area 
on September 21, 1994, and submitted it to the EPA on October 3, 1994, 
in accordance with section 182(c)(2)(A) of the CAA. Similarly, the 
TNRCC adopted the attainment demonstration SIP for the El Paso area on 
September 14, 1994, and submitted it to the EPA on October 3, 1994. The 
EPA is therefore proceeding to take final action on the section 182(f) 
petitions submitted by the TNRCC for the DFW and El Paso areas.

V. Response to Comments

    The EPA requested public comments on all aspects of the proposed 
action to conditionally approve the section 182(f) petitions for the 
DFW and El Paso areas. The EPA received 27 letters of support from the 
utility, transportation authority, metropolitan planning organization 
and local governments in the DFW area. The EPA received three letters 
of support from the City of El Paso, a local utility, and a 
metropolitan planning organization in the El Paso area.
    Three adverse comment letters were received from environmental 
groups, one of which applied only to DFW, while two of which applied to 
both DFW and El Paso. One of the letters was submitted by three 
environmental groups and contained generic comments objecting to the 
EPA's general policy on section 182(f) exemptions. The three 
environmental groups who submitted the generic letter requested that it 
be included in each EPA rulemaking action for each section 182(f) 
petition.
    Comment: One group objected to the use of methyl tertiary butyl 
ether (MTBE) as a fuel additive in reformulated gasoline. The TNRCC 
included the use of reformulated gasoline in its 15 percent RFP SIP for 
DFW as a control strategy to reduce VOC emissions.
    Response: This comment applies to the State's reformulated gasoline 
program, and its 15 percent RFP SIP for the DFW area that had 
previously been adopted by the State and submitted to the EPA. The EPA 
does not believe that this comment is relevant to the rulemaking action 
on the State's petition for a section 182(f) NOX exemption, since 
in this action, the EPA is not taking action on the State's 
reformulated gasoline program nor its 15 percent RFP plan. The EPA will 
rule on those control programs in a separate rulemaking action.
    Comment: One group felt that the UAM model for DFW was flawed from 
a scientific perspective so as to be inadequate to make sound 
predictions of attainment. They cited the fact that only three of the 
four episodes initially analyzed by the State had acceptable 
performance. In addition, they felt that the emissions inventories were 
significantly inaccurate so as to discredit the modeling results.
    Response: The EPA disagrees with this comment that the UAM modeling 
demonstration for DFW is flawed. Due to the large number of factors 
that influence ozone formation, the EPA agrees that the UAM model 
cannot precisely predict the exact relationship between VOC, NOX, 
and ozone. However, if the model performs within certain bounds of 
accuracy, the EPA believes that the model can and should be used to 
develop the attainment strategy since Congress clearly intended that 
photochemical grid modeling be used to form the basis of a control 
strategy plan. The EPA has established general criteria to evaluate the 
relative accuracy of a given modeling demonstration, and believes that 
models that meet those criteria are accurate enough to form the basis 
of the attainment strategy.
    The EPA's ``Guideline for Regulatory Application of the Urban 
Airshed Model'' generally requires that three episodes with acceptable 
model performance be used in the attainment demonstration. Because 
Texas had three episodes which exhibited acceptable performance, Texas' 
attainment modeling is fully consistent with the EPA's requirements. In 
addition, the EPA's model performance criteria apply to each individual 
episode rather than across episodes. Therefore, it is inaccurate to 
conclude that the model was 75 percent accurate because only three of 
the four episodes exhibited acceptable model performance.
    The EPA disagrees with the comment that the emissions inventories 
were too inaccurate to produce acceptable modeling results. The EPA 
evaluated the State's 1990 base year emissions inventories and a final 
approval was published in the FR on November 8, 1994.
    Comment: One group stated that NOX controls should be required 
because NOX emissions cause other adverse health and environmental 
effects besides contributing to ozone formation.
    Response: The EPA agrees that high NOX emissions can 
contribute to air pollution problems independent of their role in ozone 
formation; however, the EPA disagrees that the NOX controls 
required under section 182(f) of the CAA should be implemented in the 
DFW area regardless of their impact on ozone. Because ambient air 
monitoring shows that the DFW area is in attainment for the nitrogen 
dioxide NAAQS standard, the EPA does not believe that the current level 
of NOX emissions pose a public health or environmental risk in the 
DFW area. In addition, section 182(f)(2)(B)(i) specifically provides 
for an exemption in cases where NOX emission reductions would not 
contribute to the attainment of the NAAQS for ozone in the area. The 
TNRCC has demonstrated that the NOX reductions required by section 
182(f) would be in excess of the emission reductions necessary for 
attaining the ozone NAAQS. Finally, for the purposes of reducing acid 
rain deposition, certain NOX sources will still be required to 
reduce NOX emissions under Title IV of the CAA. For these reasons, 
the EPA does not believe that the NOX controls required under 
section 182(f) of the CAA should be implemented in the DFW area 
regardless of their impact on ozone.
    Comment: One group questioned whether the current ozone standard of 
120 parts per billion provides sufficient protection of public health.
    Response: The EPA does not believe that this comment is relevant to 
this rulemaking action on the section 182(f) petitions for DFW and El 
Paso. The EPA is currently reviewing the ozone primary and secondary 
standards and will address concerns over the current ozone standard 
through a separate rulemaking process. If the standard is revised, the 
EPA will determine at that time what action is appropriate for 
attainment SIPs and NOX exemption petitions that had previously 
been approved.
    Comment: One group felt that EPA's action to propose conditional 
approval of the State's exemption petitions without the attainment SIPs 
was premature and denied adequate public input on the issue. They 
commented that EPA should wait until the State actually submits the 
attainment SIPs before making any determination as to the feasibility 
of the two areas actually achieving the NAAQS for ozone.
    Response: The EPA disagrees with this comment for several reasons. 
The EPA does not believe its action proposing approval of the petitions 
was premature. As explained in the FR notice which proposed approval of 
the petitions (see 59 FR 44386), the attainment demonstrations rely on 
VOC regulations contained in the 15 percent RFP SIPs which had 
previously gone through public comment, State adoption, and submission 
to the EPA. For this reason, the EPA did not anticipate that the 
substance of the final attainment demonstration SIPs would differ from 
what had already been submitted to the EPA by the TNRCC in the section 
182(f) exemption petitions. In addition, the EPA further explained that 
the EPA would not take final action to conditionally approve the 
petitions for each area unless and until the State had submitted the 
attainment demonstration SIPs to the EPA in accordance with section 
182(c)(2)(A) of the CAA. Therefore, the EPA has waited until the State 
submitted its attainment SIPs before making any final determination.
    The EPA believes the public has had adequate opportunity for public 
comment. The control strategies contained in the attainment SIPs had 
previously gone through public comment and State adoption as part of 
the 15 percent RFP SIP. In addition, the State proposed the attainment 
SIPs on July 27, 1994. The State's public comment period on the 
attainment SIPs closed September 2, 1994, while the comment period on 
the EPA's proposed action to conditionally approve the petitions closed 
on September 28, 1994. The proposed attainment SIPs were therefore 
available for public review for two months prior to and during the 
EPA's public comment period on the proposed action on the petitions.
    Finally, the EPA's action to approve the petitions is conditioned 
upon the EPA finally approving the modeling portion of the attainment 
SIPs, which will provide another opportunity for comment on the 
adequacy of the attainment SIPs as a basis for the section 182(f) 
exemptions.
    Comment: Three groups provided a generic comment arguing that 
NOX exemptions are provided for in two separate parts of the CAA, 
section 182(b)(1) and section 182(f). Because the NOX exemption 
tests in subsections 182(b)(1) and 182(f)(1) include language 
indicating that action on such requests should take place ``when [EPA] 
approves a plan or plan revision,'' these commenters conclude that all 
NOX exemption determinations by the EPA, including exemption 
actions taken under the petition process established by subsection 
182(f)(3), must occur during consideration of an approvable attainment 
or maintenance plan, unless the area has been redesignated as 
attainment. These commenters also argue that even if the petition 
procedures of subsection 182(f)(3) may be used to relieve areas of 
certain NOX requirements, exemptions from the NOX conformity 
requirements must follow the process provided in subsection 182(b)(1), 
since this is the only provision explicitly referenced by section 
176(c), the CAA's conformity provisions.
    Response: The EPA disagrees with the commenters regarding the 
process for considering exemption requests under section 182(f), and 
instead believes that subsections 182(f)(1) and 182(f)(3) provide 
independent procedures by which the EPA may act on NOX exemption 
requests. The language in subsection 182(f)(1), which indicates that 
the EPA should act on NOX exemptions in conjunction with action on 
a plan or plan revision, does not appear in subsection 182(f)(3). And, 
while subsection 182(f)(3) references subsection 182(f)(1), the EPA 
believes that this reference encompasses only the substantive tests in 
paragraph (1) (and, by extension, paragraph (2)), not the procedural 
requirement that the EPA act on exemptions only when acting on SIPs. 
Additionally, paragraph (3) provides that ``person[s]'' (which section 
302(e) of the CAA defines to include States) may petition for NOX 
exemptions ``at any time,'' and requires the EPA to make its 
determination within six months of the petition's submission. These key 
differences lead the EPA to believe that Congress intended the 
exemption petition process of paragraph (3) to be distinct and more 
expeditious than the longer plan revision process intended under 
paragraph (1).
    The CAA requires conformity with regard to federally-supported 
NOX-generating activities in relevant nonattainment and 
maintenance areas. However, EPA's conformity rules explicitly provide 
that these NOX requirements would not apply if the EPA grants an 
exemption under section 182(f). In response to the comment that section 
182(b)(1) should be the appropriate vehicle for dealing with exemptions 
from the NOX requirements of the conformity rule, the EPA notes 
that this issue has previously been raised in a formal petition for 
reconsideration of the EPA's final transportation conformity rule and 
in litigation pending before the U.S. Court of Appeals for the District 
of Columbia Circuit on the substance of both the transportation and 
general conformity rules. The issue, thus, is under consideration 
within the EPA, but at this time remains unresolved. Additionally, 
subsection 182(f)(3) requires that NOX exemption petition 
determinations be made by the EPA within six months. The EPA has stated 
in previous guidance that it intends to meet this statutory deadline as 
long as doing so is consistent with the public notice requirements of 
the Administrative Procedures Act. Absent the EPA action now, this 
deadline, as it applies with respect to the DFW and El Paso exemption 
requests, which were submitted in June 1994, would not be met. The EPA, 
therefore, believes that until a resolution of this issue is achieved, 
the applicable rules governing this issue are those that appear in the 
EPA's final conformity regulations, and the EPA remains bound by their 
existing terms.
    Comment: Three groups provided a generic comment on all section 
182(f) actions that the modeling required by EPA is insufficient to 
establish that NOX reductions would not contribute to attainment 
since only one level of NOX control, i.e., ``substantial'' 
reductions, is required to be analyzed. They further explained that an 
area must submit an approvable attainment plan before EPA can know 
whether NOX reductions will aid or undermine attainment.
    Response: The EPA does not believe that this comment is applicable 
to the DFW or El Paso actions because attainment plans have been 
submitted for both areas in conjunction with the section 182(f) 
petitions. The TNRCC based its petitions for DFW and El Paso on a 
demonstration that the NOX reductions would be in excess of the 
reductions necessary for attainment. In contrast, the above comment 
refers to section 182(f) petitions that are based on a demonstration 
that NOX reductions would not contribute to attainment. Such a 
demonstration requires that various emission reduction scenarios be 
modeled which include substantial reductions of NOX.
    As described in Chapter 6 of the EPA's December 1993 section 182(f) 
guidance, the excess reductions demonstration used by the TNRCC for DFW 
and El Paso must be tied to the areas' attainment demonstration SIPs. 
This test must show that the excess reductions are reductions in excess 
of those specified in the attainment demonstration required by section 
182, and either contained in the approved SIP or as adopted by the 
State to meet the section 182 attainment demonstration requirement, and 
submitted to the EPA for approval. The EPA believes that the more 
precise modeling analysis contained in the State's attainment 
demonstration SIP is required for the excess reduction test because the 
demonstration must show that a specific portion of the total area-wide 
NOX emissions is not beneficial under one of the three tests 
listed above. The tie to the attainment demonstration assures that an 
excess reductions petition would not arbitrarily be based on small 
emissions and would not undermine the State's control strategy.
    In addition, the EPA's guidance specifies that photochemical grid 
modeling is generally needed to document cases where NOX 
reductions do not contribute to attainment or include excess 
reductions. The UAM is an acceptable model for these purposes. The EPA 
guidance also states that application of UAM should be consistent with 
techniques specified in the EPA ``Guideline on Air Quality Models 
(Revised).'' Further, application of UAM should also be consistent with 
procedures contained in the EPA ``Guidelines for Regulatory Application 
of the Urban Airshed Model'' (July 1991).
    Comment: Three groups provided a generic comment on all section 
182(f) actions that three years of ``clean'' data fail to demonstrate 
that NOX reductions would not contribute to attainment.
    Response: The EPA does not believe that this comment is applicable 
to the DFW and El Paso actions because neither area has based its 
section 182(f) petition on ``clean'' air monitoring data.
    Comment: Three groups provided a generic comment on all section 
182(f) actions that a waiver of NOX controls is unlawful if such 
waiver will impede attainment and maintenance of the ozone standard in 
separate downwind areas.
    Response: The EPA believes that, while this generic comment may be 
applicable to proposed NOX exemption actions for other areas, it 
is not applicable to the DFW and El Paso exemption actions because the 
EPA is unaware of, and the comment itself does not specify, any 
downwind area for which NOX transport is of concern. This is 
unlike the case regarding comments received by the EPA for certain 
areas for which NOX exemptions are pending such as in Ohio, for 
example, where the downwind areas of concern are clearly identified as 
areas in the Northeast Ozone Transport Region. It should also be noted 
that neither DFW nor El Paso is located near or within an ozone 
transport region.
    Comment: Three groups provided a generic comment on all actions 
exempting areas from the NOX requirements of the conformity rules 
that such exemptions waive only the requirements of section 182(b)(1) 
to contribute to specific annual reductions, not the requirement that 
conformity SIPs contain information showing the maximum amount of motor 
vehicle NOX emissions allowed under the transportation conformity 
rules and, similarly, the maximum allowable amounts of any such 
NOX emissions under the general conformity rules. The commenters 
admit that, in prior guidance, the EPA has acknowledged the need to 
amend a drafting error in the existing transportation conformity rules 
to ensure consistency with motor vehicle emissions budgets for 
NOX. The commenters, however, want the EPA to explicitly affirm 
this obligation in FR actions on NOX exemptions and to avoid 
granting waivers until a budget controlling future NOX increases 
is in place.
    Response: In its ``Conformity; General Preamble for Exemption From 
Nitrogen Oxides Provisions,'' 59 FR 31238, 31241 (June 17, 1994), the 
EPA reiterated its view that in order to conform, nonattainment and 
maintenance areas must demonstrate that their transportation plans and 
transportation improvement plans are consistent with the motor vehicle 
emissions budget for NOX even where a conformity NOX waiver 
has been granted. Due to a drafting error, that view is not reflected 
in the current transportation conformity rules. As the commenters 
correctly note, the EPA states in its June 17 notice that it intends to 
remedy the problem by amending the conformity rule. Although that 
notice specifically mentions only requiring consistency with the 
approved maintenance plan's NOX motor vehicle emissions budget, 
the EPA also intends to require consistency with the attainment 
demonstration's NOX motor vehicle emissions budget. The DFW and El 
Paso exemptions, however, were submitted pursuant to section 182(f)(3), 
and the EPA does not believe it is appropriate to delay the statutory 
deadline for acting on these petitions until the conformity rule is 
amended. As noted earlier in response to a previous issue raised by 
these commenters, this issue has also been raised in a formal petition 
for reconsideration of the EPA's final transportation conformity rule 
and in litigation pending before the U.S. Court of Appeals for the 
District of Columbia Circuit on the substance of both the 
transportation and general conformity rules. This issue, thus, is under 
consideration within the EPA, but at this time remains unresolved. The 
EPA, therefore, believes that until a resolution of this issue is 
achieved, the applicable rules governing this issue are those that 
appear in the EPA's final conformity regulations, and the EPA remains 
bound by their existing terms.
    Comment: Three groups provided a generic comment on all section 
182(f) actions that the CAA does not authorize delaying implementation 
of NOX controls if modeling is not complete.
    Response: The EPA does not believe that this comment is applicable 
to the DFW or El Paso actions because complete attainment modeling has 
been submitted for both areas, as part of the attainment SIPs, in 
conjunction with the section 182(f) petitions.

VI. Effective Date

    This rulemaking is effective as of November 21, 1994. The 
Administrative Procedure Act (APA) 5 U.S.C. 553(d)(1), permits the 
effective date of a substantive rule to be less than thirty days after 
publication of the rule if the rule ``relieves a restriction.'' Since 
the approval of the section 182(f) exemptions for the DFW and El Paso 
areas, is a substantive rule that relieves the restrictions associated 
with the CAA title I requirements to control NOX emissions, the 
NOX exemption approval may be made effective upon signature by the 
EPA Administrator.

VII. Final Action

    In this action, the EPA is conditionally approving1 the 182(f) 
NOX exemption petitions submitted by the State of Texas for the 
DFW and El Paso ozone nonattainment areas, conditioned upon the EPA 
approving the modeling portion of the attainment demonstration SIPs. If 
the EPA proposes to disapprove the modeling portion of the SIPs, the 
EPA will also propose disapproval of the section 182(f) NOX 
exemption petitions, based on the fact that the technical basis for the 
exemption is no longer valid. Upon final disapproval of the modeling 
portion of the attainment SIPs, the EPA will issue a final disapproval 
of the section 182(f) NOX exemption petitions as well.
---------------------------------------------------------------------------

    \1\This conditional approval is distinct from the conditional 
approval authority granted under section 110(k)(4), which pertains 
to SIP actions. As discussed in the previously cited John S. Seitz 
memorandum dated May 27, 1994, concerning the EPA's processing of 
section 182(f) petitions, these NOX exemptions petitions are 
not revisions to the SIP.
---------------------------------------------------------------------------

    There are several consequences if the EPA disapproves the section 
182(f) NOX exemption petitions based on the conclusion that the 
attainment SIPs were not approved by the EPA. The State would be 
required to submit NOX RACT rules and implement the relevant 
NOX conformity, NSR, and vehicle inspection and maintenance 
requirements for the DFW and El Paso areas. The EPA would issue a 
finding of nonsubmittal of the NOX RACT rules. As provided under 
section 179(a) of the CAA, if the State did not make a complete 
submittal within 18 months after the finding of failure to submit, the 
EPA would be required to impose the requirement to provide two-to-one 
NSR offsets. If the State had not corrected its deficiency within six 
months after imposing the offset sanction, the EPA would impose a 
second sanction, on highway funding. Any sanction the EPA imposes must 
remain in place until the EPA determines that the State has corrected 
the deficiency. In addition, the finding of failure to submit would 
trigger the 24-month clock for the EPA to impose a Federal 
Implementation Plan as required by section 110(c)(1) of the CAA.
    The EPA believes that all section 182(f) exemptions that are 
approved, should be approved only on a contingent basis. As described 
in the EPA's NOX Supplement to the General Preamble (57 FR 55628, 
November 25, 1992), the EPA would rescind a NOX exemption in cases 
where NOX reductions were later found to be beneficial in the 
area's attainment plan. That is, a modeling based exemption would last 
for only as long as the area's modeling continued to demonstrate 
attainment without the additional NOX reductions required by 
section 182(f).
    If the 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 
adopt the NOX RACT and NSR rules, except to the extent that 
modeling shows NOX reductions to be ``excess reductions.'' In the 
rulemaking action which removes the exempt status, the EPA would 
specify a schedule for States to adopt the NOX RACT and NSR rules 
and for sources to comply with the NOX RACT emission limits.
    The subsequent modeling analyses mentioned above need not be 
limited to the purpose of demonstrating attainment in the 1994 SIP 
revisions without the need for NOX controls required under section 
182(f). For example, future modeling might also be initiated to resolve 
issues related to transport of ozone and ozone precursors into downwind 
nonattainment areas. An area 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, areas 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.
    In summary, the EPA is conditionally approving the section 182(f) 
exemptions for the DFW and El Paso areas, conditioned upon EPA's 
approval of the modeling portion of the attainment demonstrations for 
these areas. These exemptions will remain effective for only as long as 
modeling in each nonattainment area continues to show that NOX 
control activities would not be beneficial in the DFW or El Paso 
nonattainment areas.
    In addition, the State of Texas and EPA have committed to data-
gathering and modeling throughout the El Paso-Juarez air basin in 
accordance with Annex V of the La Paz Agreement for Environmental 
Cooperation on the U.S.-Mexico Border. Once the data are collected and 
basin-wide modeling is concluded, the EPA, the State of Texas, and the 
Republic of Mexico can develop a binational control strategy that will 
result in improved air quality throughout the airshed. If EPA review of 
modeling and air quality data confirms that NOX control 
requirements on local U.S. sources would not be beneficial, the 
exemption would be sustained. In contrast, if the EPA determines that 
NOX control requirements would be beneficial, the exemption would 
be rescinded.

Regulatory Process

    Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., the 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, the EPA may certify that the rule will not have a 
significant economic impact on a substantial number of small entities. 
Small entities include small businesses, small not-for-profit 
enterprises, and government entities with jurisdiction over populations 
of less than 50,000.
    Approvals of NOX exemption petitions under section 182(f) of 
the CAA do not create any new requirements. Therefore, because the 
Federal approval of the petitions does not impose any new requirements, 
the EPA certifies that it does not have a significant impact on 
affected small entities. 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 the 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)).
    If the conditional approval is converted to a disapproval based on 
the State's failure to meet the condition upon which the approval is 
granted, it will not affect any existing State requirements applicable 
to small entities. Federal disapproval of the State submittal does not 
affect its State-enforceability. Moreover, the EPA's disapproval of the 
submittal does not impose a new Federal requirement. Therefore, the EPA 
certifies that this disapproval action would not have a significant 
impact on a substantial number of small entities because such 
disapproval would not remove existing State requirements, nor does it 
substitute a new Federal requirement.
    Under section 307(b)(1) of the CAA, petitions for judicial review 
of this action must be filed in the U.S. Court of Appeals for the 
appropriate circuit by January 27, 1995. Filing a petition for 
reconsideration by the Administrator of this final 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 rule or action. 
This action may not be challenged later in proceedings to enforce its 
requirements. (See section 307(b)(2).)

Executive Order 12866

    Under Executive Order 12866 (58 FR 51735 (October 4, 1993)), the 
EPA must determine whether the regulatory action is ``significant'', 
and therefore subject to Office of Management and Budget (OMB) review 
and the requirements of the Executive Order. It has been determined 
that this rule is not a ``significant regulatory action'' under the 
terms of Executive Order 12866, and is therefore not subject to OMB 
review.

List of Subjects in 40 CFR Part 52

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

    Dated: November 21, 1994.
Carol M. Browner,
Administrator.

    40 CFR part 52 is amended as follows:

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

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

Subpart SS--Texas

    2. Section 52.2308 is added to read as follows:


Sec. 52.2308  Area-wide nitrogen oxides (NOX) exemptions.

    (a) The Texas Natural Resource Conservation Commission (TNRCC) 
submitted to the EPA on June 17, 1994, a petition requesting that the 
Dallas ozone nonattainment area be exempted from the NOX control 
requirements of section 182(f) of the Clean Air Act (CAA) as amended in 
1990. The Dallas nonattainment area consists of Dallas, Tarrant, 
Denton, and Collin counties. The exemption request was based on a 
photochemical grid modeling which shows that the Dallas nonattainment 
area would attain the National Ambient Air Quality Standards (NAAQS) 
for ozone by the CAA mandated deadline without the implementation of 
the additional NOX controls required under section 182(f). On 
November 21, 1994, the EPA conditionally approved this exemption 
request, conditioned upon the EPA approving the modeling portion of the 
Dallas attainment demonstration SIP.
    (b) The TNRCC submitted to the EPA on June 17, 1994, a petition 
requesting that the El Paso ozone nonattainment area be exempted from 
the NOX control requirements of section 182(f) of the Clean Air 
Act (CAA) as amended in 1990. The El Paso nonattainment area consists 
of El Paso county, and shares a common airshed with Juarez, Mexico. The 
exemption request was based on a photochemical grid modeling which 
shows that the El Paso nonattainment area would attain the NAAQS for 
ozone by the CAA mandated deadline without the implementation of the 
additional NOX controls required under section 182(f), but for 
emissions emanating from Mexico. On November 21, 1994, the EPA 
conditionally approved this exemption request, conditioned upon the EPA 
approving the modeling portion of the El Paso attainment demonstration 
SIP.

[FR Doc. 94-29195 Filed 11-25-94; 8:45 am]
BILLING CODE 6560-50-P