[Federal Register Volume 60, Number 85 (Wednesday, May 3, 1995)]
[Rules and Regulations]
[Pages 21713-21717]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-10826]



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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52

[KY-80-1-6943; FRL-5200-8]


Control Strategy: Ozone (O3); Kentucky

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The EPA is approving an exemption request from the oxides of 
nitrogen (NOX) reasonably available control technology (RACT) 
requirement of the Clean Air Act as amended in 1990 (CAA) for the 
Kentucky portion of the Huntington-Ashland, moderate ozone (O3) 
nonattainment area. The exemption request, submitted by the 
Commonwealth of Kentucky through the Department of Environmental 
Protection, is based upon the most recent three years of ambient air 
monitoring data, which demonstrate that additional reductions of 
NOX would not contribute to the attainment of the National Ambient 
Air Quality Standard (NAAQS) for O3 in the area. The CAA requires 
states with designated nonattainment areas of the NAAQS for O3, 
and classified as moderate nonattainment or above, to adopt RACT rules 
for major stationary sources of NOX. The CAA provides further that 
the NOX requirements do not apply to these areas outside an 
O3 transport region if EPA determines that additional reductions 
of NOX would not [[Page 21714]] contribute to attainment of the 
NAAQS for O3 in the area.

EFFECTIVE DATE: This action will be effective June 2, 1995.

ADDRESSES: A copy of the exemption request is available for inspection 
at the following location (it is recommended that you contact Kimberly 
Bingham at (404) 347-3555 extension 4195 before visiting the Region 4 
office):
    United States Environmental Protection Agency, Air, Pesticides, and 
Toxics Management Division, Air Programs Branch, Regulatory Planning 
and Development Section, Stationary Source Planning Unit, 345 Courtland 
Street NE., Atlanta, Georgia 30365.
    Department for Environmental Protection Natural, Resources and 
Environmental Protection Cabinet, 803 Schenkel Lane, Frankfort, 
Kentucky 40601.

FOR FURTHER INFORMATION CONTACT: Kimberly Bingham, Stationary Source 
Planning Unit, Regulatory Planning and Development Section, Air 
Programs Branch, Air Pesticides and Toxics Management Division, U.S. 
Environmental Protection Agency, 345 Courtland Street NE., Atlanta, 
Georgia 30365.

SUPPLEMENTARY INFORMATION: The air quality planning requirements for 
the reduction of NOX emissions are set out in section 182(f) of 
the CAA. Section 182(f) of the CAA requires states with areas 
designated nonattainment for O3 and classified as moderate or 
above to impose the same control requirements for major stationary 
sources of NOX as apply to major stationary sources of volatile 
organic compounds (VOCs). Section 182(f) provides further that these 
NOX requirements do not apply to areas outside an O3 
transport region if EPA determines that additional reductions of 
NOX would not contribute to attainment in such areas. In an area 
that did not implement the section 182(f) NOX requirements, but 
did attain the O3 standard as demonstrated by ambient air 
monitoring data (consistent with 40 CFR part 58 and recorded in the 
EPA's--Aerometric Information Retrieval system (AIRS)), it is clear 
that the additional NOX reductions required by section 182(f) 
would not contribute to attainment of the NAAQS.
    The criteria established for the evaluation of an exemption request 
from the section 182(f) requirements are set forth in an EPA memorandum 
from John S. Seitz, Director, Office of Air Quality Planning and 
Standards, dated May 27, 1994, entitled ``Section 182(f) Nitrogen 
Oxides (NOX) Exemptions--Revised Process and Criteria,'' and an 
EPA guidance document entitled ``Guidelines for Determining the 
Applicability of Nitrogen Oxides Requirements Under Section 182(f),'' 
dated December 1993, from EPA, Office of Air Quality Planning and 
Standards, Air Quality Management Division.
    On November 12, 1993, the Commonwealth of Kentucky submitted to EPA 
Region 4 a request to redesignate the Kentucky portion of the 
Huntington-Ashland moderate O3 nonattainment area to attainment. 
The redesignation request is currently under review and will be 
addressed in a separate rulemaking. On August 16, 1994, the 
Commonwealth requested that the Kentucky portion of the Huntington-
Ashland area be exempt from the NOX RACT requirement in section 
182(f) of the CAA. The 182(f) exemption also relieves the area of all 
NOX requirements of the CAA such as New Source Review, General 
Conformity, and Inspection/Maintenance. The exemption request is based 
upon ambient air monitoring data from 1991, 1992, and 1993, which 
demonstrate that the NAAQS for O3 has been attained in the area 
without additional reductions of NOX (a violation of the ozone 
NAAQS occurs when the average number of exceedances for any O3 
monitoring site in a three year period is greater than 1.0).
    Only one O3 exceedance was recorded in the Huntington-Ashland 
area for the period from 1991 to 1993: Monitor 21-019-0015--0.129ppm 
(1993). Thus, there has been no violation of the NAAQS in the area 
during this period and the area has maintained the standard through 
1994.
    EPA has reviewed the ambient air monitoring data for O3 
(consistent with the requirements contained in 40 CFR part 58 and 
recorded in AIRS) submitted by the Commonwealth of Kentucky in support 
of the exemption request and has determined that a violation of the 
O3 NAAQS has not occurred in the Huntington-Ashland, Kentucky 
portion area for the relevant three year period. Because the Kentucky 
portion of the Huntington-Ashland area is meeting the O3 NAAQS, 
this exemption request for the area meets the applicable requirements 
contained in the EPA policy and guidance documents referenced above.
    Continuation of the section 182(f) exemption granted herein is 
contingent upon continued monitoring and continued maintenance of the 
O3 NAAQS for the entire Huntington-Ashland area. If a violation of 
the O3 NAAQS is monitored in the Kentucky portion of the 
Huntington-Ashland area, EPA will provide notice in the Federal 
Register. A determination that the NOX exemption no longer applies 
would mean that the NOX RACT provision (see 58 FR 63214 and 58 FR 
62188) would immediately be applicable to the affected area. Although 
the NOX RACT requirements would be applicable, some reasonable 
period of notice is necessary to provide major stationary sources 
subject to the RACT requirements time to purchase, install, and operate 
any required controls. Accordingly, the Commonwealth may provide 
sources a reasonable time period to meet the RACT emission limits after 
the EPA determination that NOX RACT requirements are necessary. 
EPA expects the time period to be as expeditious as practicable, but in 
no case longer than 24 months.
    The EPA proposed approval of the Commonwealth of Kentucky's request 
for an exemption request from NOX and RACT requirements of the CAA 
as amended in 1990 (60 FR 5881). Comments were received supporting the 
exemption request. However, the National Resources Defense Council 
(NRDC), Sierra Defense Club, and EDF submitted adverse comments to Mary 
Nichols on August 24, 1994, addressing all Federal Register notices 
proposing to approve section 182(f) NOX exemption requests. The 
EPA has responded to the adverse comments by issue as set forth below.

NRDC Comment 1

    Certain commenters argued 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.

EPA Response

    Section 182(f) contains very few details regarding the 
administrative [[Page 21715]] procedure for acting on NOX 
exemption requests. The absence of specific guidelines by Congress 
leaves EPA with discretion to establish reasonable procedures, 
consistent with the requirements of the Administrative Procedure Act 
(APA).
    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 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).
    Section 182(f)(1) appears to contemplate that exemption requests 
submitted under these paragraphs are limited to States, since States 
are the entities authorized under the Act to submit plans or plan 
revisions. By contrast, section 182(f)(3) provides that ``person[s]'' 
may petition for a NOX determination ``at any time'' after the 
ozone precursor study required under section 185B of the Act is 
finalized, and gives EPA a limit of 6 months after filing to grant or 
deny such petitions. Since individuals may submit petitions under 
paragraph (3) ``at any time'' this must include times when there is no 
plan revision from the State pending at EPA. The specific timeframe for 
EPA action established in paragraph (3) is substantially shorter than 
the timeframe usually required for States to develop and for EPA to 
take action on revisions to a SIP. These differences strongly suggest 
that Congress intended the process for acting on personal petitions to 
be distinct--and more expeditious--from the plan-revision process 
intended under paragraph (1). Thus, EPA believes that paragraph (3)'s 
reference to paragraph (1) encompasses only the substantive tests in 
paragraph (1) [and, by extension, paragraph (2)], not the requirement 
in paragraph (1) for EPA to grant exemptions only when acting on plan 
revisions.
    With respect to major stationary sources, section 182(f) requires 
States to adopt NOX NSR and RACT rules, unless exempted. These 
rules were generally due to be submitted to EPA by November 15, 1992. 
Thus, in order to avoid the CAA sanctions, areas seeking a NOX 
exemption would need to submit their exemption request for EPA review 
and rulemaking action several months before November 15, 1992. In 
contrast, the CAA specifies that the attainment demonstrations are not 
due until November 1993 or 1994 (and EPA may take 12-18 months to 
approve or disapprove the demonstration). For marginal ozone 
nonattainment areas (subject to NOX NSR), no attainment 
demonstration is called for in the CAA. For maintenance plans, the CAA 
does not specify a deadline for submittal of maintenance 
demonstrations. Clearly, the CAA envisions the submittal of and EPA 
action on exemption requests, in some cases, prior to submittal of 
attainment or maintenance demonstrations.
    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 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, EPA notes that 
this issue has previously been raised in a formal petition for 
reconsideration of 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 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 Administrative Procedure Act. 
The EPA, therefore, believes that until a resolution of this issue is 
achieved, the applicable rules governing this issue are those that 
appear in EPA's final conformity regulations, and EPA remains bound by 
their existing terms.

NRDC Comment 2

    Three years of ``clean'' data fail to demonstrate that NOX 
reductions would not contribute to attainment. EPA's policy erroneously 
equates the absence of a violation for one three-year period with 
``attainment.''

EPA Response

    The EPA has separate criteria for determining if an area should be 
redesignated to attainment under section 107 of the CAA. The section 
107 criteria are more comprehensive than the CAA requires with respect 
to NOX exemptions under section 182(f).
    Under section 182(f)(1)(A), an exemption from the NOX 
requirements may be granted for nonattainment areas outside an ozone 
transport region if EPA determines that ``additional reductions of 
[NOX] would not contribute to attainment'' of the ozone NAAQS in 
those areas. In some cases, an ozone nonattainment area might attain 
the ozone standard, as demonstrated by 3 years of adequate monitoring 
data, without having implemented the section 182(f) NO 
provisions over that 3-year period. The EPA believes that, in cases 
where a nonattainment area is demonstrating attainment with 3 
consecutive years of air quality monitoring data without having 
implemented the section 182(f) NO provisions, it is clear 
that the section 182(f) test is met since ``additional reductions of 
[NOX] would not contribute to attainment'' of the NAAQS in that 
area. The EPA's approval of the exemption, if warranted, would be 
granted on a contingent basis (i.e., the exemption would last for only 
as long as the area's monitoring data continue to demonstrate 
attainment).

NRDC Comment 3

    Comments were received regarding exemption of areas from the 
NOX requirements of the conformity rules. They argue 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, EPA has acknowledged the need to amend a 
drafting error in the existing transportation conformity rules to 
[[Page 21716]] ensure consistency with motor vehicle emissions budgets 
for NOX, but want EPA in actions on NOX exemptions to 
explicitly affirm this obligation and to also avoid granting waivers 
until a budget controlling future NOX increases is in place.

EPA Response

    With respect to conformity, EPA's conformity rules, provide a 
NOX waiver if an area receives a section 182(f) exemption. In its 
``Conformity; General Preamble for Exemption From Nitrogen Oxides 
Provisions,'' 59 FR 31238, 31241 (June 17, 1994), EPA reiterated its 
view that in order to conform nonattainment and maintenance areas must 
demonstrate that the transportation plan and TIP 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, EPA states in the June 17th 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, 
EPA also intends to require consistency with the attainment 
demonstration's NOX motor vehicle emissions budget. However, the 
exemptions were submitted pursuant to section 182(f)(3), and 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 Agency'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 Agency, 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 Agency's final conformity regulations, and the Agency 
remains bound by their existing terms.

NRDC Comment 4

    The CAA does not authorize any waiver of the NOX reduction 
requirements until conclusive evidence exists that such reductions are 
counter-productive.

EPA Response

    EPA does not agree with this comment since it ignores Congressional 
intent as evidenced by the plain language of section 182(f), the 
structure of the Title I ozone subpart as a whole, and relevant 
legislative history. By contrast, in developing and implementing its 
NOX exemption policies, EPA has sought an approach that reasonably 
accords with that intent. Section 182(f), in addition to imposing 
control requirements on major stationary sources of NOX similar to 
those that apply for such sources of VOC, also provides for an 
exemption (or limitation) from application of these requirements if, 
under one of several tests, EPA determines that in certain areas 
NOX reductions would generally not be beneficial. In subsection 
182(f)(1), Congress explicitly conditioned action on NOX 
exemptions on the results of an ozone precursor study required under 
section 185B. Because of the possibility that reducing NOX in a 
particular area may either not contribute to ozone attainment or may 
cause the ozone problem to worsen, Congress included attenuating 
language, not just in section 182(f) but throughout the Title I ozone 
subpart, to avoid requiring NOX reductions where it would be 
nonbeneficial or counterproductive. In describing these various ozone 
provisions (including section 182(f), the House Conference Committee 
Report states in pertinent part: ``[T]he Committee included a separate 
NOX/VOC study provision in section [185B] to serve as the basis 
for the various findings contemplated in the NOX provisions. The 
Committee does not intend NOX reduction for reduction's sake, but 
rather as a measure scaled to the value of NOX reductions for 
achieving attainment in the particular ozone nonattainment area.'' H.R. 
Rep. No. 490, 101st Cong., 2d Sess. 257-258 (1990). As noted in 
response to an earlier comment by these same commenters, the command in 
subsection 182(f)(1) that EPA ``shall consider'' the 185B report taken 
together with the timeframe the Act provides both for completion of the 
report and for acting on NOX exemption petitions clearly 
demonstrate that Congress believed the information in the completed 
section 185B report would provide a sufficient basis for EPA to act on 
NOX exemption requests, even absent the additional information 
that would be included in affected areas' attainment or maintenance 
demonstrations. However, while there is no specific requirement in the 
Act that EPA actions granting NOX exemption requests must await 
``conclusive evidence'', as the commenters argue, there is also nothing 
in the Act to prevent EPA from revisiting an approved NOX 
exemption if warranted due to better ambient information.
    In addition, the EPA believes (as described in EPA's December 1993 
guidance) that section 182(f)(1) of the CAA provides that the new 
NOX requirements shall not apply (or may be limited to the extent 
necessary to avoid excess reductions) if the Administrator determines 
that any one of the following tests is met:
    (1) In any area, the net air quality benefits are greater in the 
absence of NOX reductions from the sources concerned;
    (2) In nonattainment areas not within an ozone transport region, 
additional NOX reductions would not contribute to ozone attainment 
in the area; or
    (3) In nonattainment areas within an ozone transport region, 
additional NOX reductions would not produce net ozone air quality 
benefits in the transport region.
    Based on the plain language of section 182(f), EPA believes that 
each test provides an independent basis for receiving a full or limited 
NOX exemption. Only the first test listed above is based on a 
showing that NOX reductions are ``counter-productive.'' If one of 
the tests is met (even if another test is failed), the section 182(f) 
NOX requirements would not apply or, under the excess reductions 
provision, a portion of these requirements would not apply.

Pollution Probe (Ontario 9-27-94)

Air Quality Comment

    Several commenters stated that the air quality monitoring data 
alone does not support this exemption proposal. The air quality levels 
are below USEPA's definition of an exeedance of the ozone NAAQS at 
0.125 ppm, but are greater than the ozone NAAQS of 0.120 ppm.

EPA Response

    For the reasons provided below, EPA does not agree with the 
commenter's conclusion. As stated in 40 CFR 50.9, the ozone ``standard 
is attained when the expected number of days per calendar year with 
maximum hourly average concentrations above 0.12 parts per million (235 
g/m3) is equal to or less than 1, as determined by 
Appendix H.'' Appendix H references EPA's ``Guideline for 
Interpretation of Ozone Air Quality Standards'' (EPA-450/4-79-003, 
January 1979), which notes that the stated level of the standard is 
taken as defining the number of significant figures to be used in 
comparison with [[Page 21717]] the standard. For example, a standard 
level of 0.12 ppm means that measurements are to be rounded to two 
decimal places (0.005 rounds up to 0.01). Thus, 0.125 ppm is the 
smallest concentration value in excess of the level of the ozone 
standard.

Final Action

    EPA is approving Kentucky's request to exempt the Kentucky portion 
of the Huntington-Ashland area moderate O3 nonattainment area from 
the section 182(f) NOX RACT requirement. This approval is based 
upon the evidence provided by Kentucky and the Commonwealth's 
compliance with the requirements outlined in the applicable EPA 
guidance. If a violation of the O3 NAAQS occurs in the Kentucky 
portion of the Huntington-Ashland area, the exemption from the NOX 
RACT requirement of section 182(f) of the CAA in the applicable area 
shall no longer apply. This action will be effective June 2, 1995.
    Under section 307(b)(1) of the CAA, 42 U.S.C. 7607(b)(1), petitions 
for judicial review of this action must be filed in the United States 
Court of Appeals for the appropriate circuit by July 3, 1995. Filing a 
petition for reconsideration by the Administrator of this final rule 
does not affect the finality of this rule for 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) of the CAA, 42 
U.S.C. 7607(b)(2)).
    The OMB has exempted these actions from review under Executive 
Order 12866.
    This action is not a SIP revision and is not subject to the 
requirements of section 110 of the CAA. The authority to approve or 
disapprove exemptions from NOX requirements under section 182 of 
the CAA was delegated to the Regional Administrator from the 
Administrator in a memo dated July 6, 1994, from Jonathan Cannon, 
Assistant Administrator, to the Administrator, titled, ``Proposed 
Delegation of Authority: `Exemptions from Nitrogen Oxide Requirements 
Under Clean Air Act Section 182(f) and Related Provisions of the 
Transportation and General Conformity Rules'--Decision Memorandum.''
    Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., EPA 
must prepare a regulatory flexibility analysis assessing the impact of 
any proposed or final rule on small entities. 5 U.S.C. 603 and 604. 
Alternatively, EPA may certify that the rule will not have a 
significant impact on a substantial number of small entities. Small 
entities include small businesses, small not-for-profit enterprises, 
and government entities with jurisdiction over populations of less than 
50,000. This rule approves an exemption from a CAA requirement. 
Therefore, I certify that it does not have a significant impact on any 
small entities affected.

List of Subjects in 40 CFR Part 52

    Air pollution control, Carbon monoxide, Hydrocarbons, 
Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate 
matter, Reporting and recordkeeping requirements, Sulfur oxides.

    Dated: April 17, 1995.
Patrick M. Tobin,
Acting Regional Administrator.

    Part 52, chapter 1, title 40, of the Code of Federal Regulations is 
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 II--Kentucky

    2. Section 52.937 is added to read as follows:


Sec. 52.937  Review of new sources and modifications.

    (a) Approval--EPA is approving the section 182(f) oxides of 
nitrogen (NOX) reasonably available control technology (RACT) 
exemption request submitted by the Kentucky Department for 
Environmental Protection on August 16, 1994, for the Kentucky portion 
of the Huntington-Ashland ozone (O3) moderate nonattainment area. 
This approval exempts this area from implementing NOX RACT on 
major sources of NOX. If a violation of the O3 NAAQS occurs 
in the area, the exemption from the requirement of section 182(f) of 
the CAA in the applicable area shall not apply.
    (b) [Reserved]

[FR Doc. 95-10826 Filed 5-2-95; 8:45 am]
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