[Federal Register Volume 61, Number 98 (Monday, May 20, 1996)]
[Rules and Regulations]
[Pages 25149-25151]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-12626]



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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 55

[FRL-5504-4]
RIN 2060-AG40 and AG39


Outer Continental Shelf Air Regulations Offset Remand

AGENCY: Environmental Protection Agency (EPA).

ACTION: Interim final rule.

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SUMMARY: The EPA is revising the outer continental shelf (OCS) 
regulations in response to a decision by the U.S. Court of Appeals for 
the District of Columbia Circuit. The OCS regulations establish air 
pollution control requirements for certain sources located on the OCS.
    On September 4, 1992, EPA promulgated the OCS regulations, which, 
in part, set up special offset requirements for OCS sources located 
within 25 miles of the States' seaward boundaries (the 25-mile limit). 
The Santa Barbara County Air Pollution Control District filed a 
petition for review of the regulations on several issues, including the 
special offset provisions. Upon review, the court found that the 
special offset provisions departed from the Clean Air Act directive, 
vacated the regulation in part, and remanded it to EPA for further 
consideration.
    By this action, EPA is revising the OCS regulations to delete the 
special offset provisions and to require that for sources located 
within the 25-mile limit, offset requirements apply as they are 
required in the corresponding onshore area (COA). The EPA is 
promulgating these revisions as an interim final regulation and is 
requesting comments on the revisions. The revisions will be in effect 
during the interim period while EPA receives, reviews and responds to 
any comments.

DATES: These rules shall be effective as of May 20, 1996. Written 
comments on this action must be received by EPA at the address below on 
or before June 19, 1996.

ADDRESSES: The public docket for this action is available for public 
inspection and copying between 8:00 a.m. and 4:00 p.m., Monday through 
Friday, at the Air and Radiation Docket and Information Center (6101), 
Attention Docket A-95-06, South Conference Center, Room 4, 401 M 
Street, SW, Washington, DC 20460. A reasonable fee for copying may be 
charged.

FOR FURTHER INFORMATION CONTACT: Mr. David Stonefield, U.S. EPA, MD-15, 
Research Triangle Park, NC 27711, telephone (919) 541-5350.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

    The Clean Air Act Amendments of 1990 (Act) (Pub. L. 101-549, 104 
Stat. 2399 (1990)) added section 328 to the Act and transferred 
authority to regulate sources on part of the OCS from the Department of 
the Interior (DOI) to EPA. The DOI retained the authority to regulate 
OCS sources in the Gulf of Mexico west of 87.5 degrees longitude. As to 
the remaining portions of the OCS--the Atlantic, Pacific, and Arctic 
coasts and the Gulf of Mexico east of 87.5 degrees--section 328 
requires EPA

[[Page 25150]]

to establish requirements for the control of air pollution from OCS 
sources, to attain and maintain Federal and State ambient air quality 
standards, and to comply with the provisions of part C of title I of 
the Act. For sources within 25 miles of the States' seaward boundaries, 
those requirements must be ``the same as would be applicable if the 
source were located in the [COA]. * * *'' For sources beyond the 25-
mile limit, the Administrator has discretion in determining the 
requirements. The EPA proposed (56 FR 63774, December 5, 1991) and 
promulgated (57 FR 40792, September 4, 1992) regulations to implement 
the requirements of section 328. Among other things, EPA said that it 
would require OCS sources to meet the requirements of the operating 
permits regulations (40 CFR part 71) and the enhanced monitoring 
regulations when promulgated.

B. Offset Provisions

    Generally, in nonattainment areas, a new source or existing source 
undergoing modification which results in increased emissions must 
secure emission reductions of an equal or greater amount from existing 
sources in that area to ``offset'' its new emissions. In promulgating 
the OCS regulations, EPA required that OCS sources obtain offsets based 
on the requirements imposed in the COA and in accordance with special 
offset requirements for OCS sources that EPA established in 40 CFR 
55.5(d). The EPA set up three zones based upon where the offsets were 
obtained and applied the offset program differently in each. Offsets 
obtained seaward of the proposed source, zone 1, are subject to the 
requirements of the COA including any distance penalty or discount. 
Offsets obtained between the proposed source and the State's seaward 
boundary, zone 2, are subject to the offset ratio of the COA but not 
any distance discounting or penalties. Offsets obtained on the landward 
side of the State's seaward boundary, zone 3, are subject to the 
requirements of the COA including any distance penalty or discount, but 
the proposed source is assumed to be located at the State's seaward 
boundary (40 CFR 55.5(d) and 57 FR 40796).

C. Judicial Review

    In November 1992, the Santa Barbara County Air Pollution Control 
District (APCD) filed a petition for review of the OCS rule in the 
Court of Appeals for the District of Columbia Circuit, claiming, among 
other things, that section 328 of the Act requires that the offset 
provision applicable to OCS sources must be the same as those that 
apply within the COA (Santa Barbara County Air Pollution Control 
District v. EPA, 31 F.3d 1179 (D.C. Cir. 1994)). The Santa Barbara 
County APCD claimed EPA overstepped the statutory boundaries by 
limiting the application of the COA offset provision with Federal 
requirements. On August 12, 1994, the Court of Appeals vacated the 
offset portion of the OCS regulations as it applied to zones 2 and 3, 
finding that EPA should promulgate the same offset requirements for OCS 
sources as would be applicable if the OCS sources were located in the 
COA. The court remanded the provision to EPA for further consideration.
    Another issue raised by the Santa Barbara County APCD petition 
involved EPA's prohibition on the delegation of the authority to 
implement and enforce the OCS regulations with respect to sources 
located beyond the 25-mile limit. Pursuant to a request for a voluntary 
remand, the court remanded this issue to EPA for reconsideration on 
February 10, 1994. Elsewhere in today's Federal Register, EPA is 
proposing revisions to the OCS regulations to delete that prohibition.

II. Revisions to the Regulations

    By this action, EPA is addressing the court's August 12, 1994 
decision by revising the offset provision that applies to OCS sources. 
The EPA is revising section 55.5(d) of the OCS regulations to provide:

    Offset requirements. Offsets shall be obtained based on the 
applicable requirements of the COA, as set forth in Secs. 55.13 and 
55.14 of this part.

    The EPA will delete the final clause of current Sec. 55.5(d) and 
the text of subparagraphs (1)-(7), which placed limitations on the 
application of the offset requirements of the COA.
    In accordance with the provisions of the Administrative Procedure 
Act (APA), EPA is invoking the good cause exception in taking this 
final action without prior notice and an opportunity for comment (5 
U.S.C. 553(b)(B); Shell Oil Co. v. EPA, 950 F.2d 741, 752 (DC Cir. 
1991); Mid-Tex Elec. Co-op., Inc. v. FERC, 822 F.2d 1123, 1131-34 (DC 
Cir. 1987)). Because the court has vacated the existing regulations as 
they apply to zones 2 and 3, there is a gap in continuity of the 
regulation. The EPA believes good cause exists to make this action 
final prior to providing an opportunity for notice and comment because 
such a procedure is unnecessary in light of the court's holding. The 
court decision clearly indicates that EPA was not entitled to interpret 
section 328 so as to allow a different application of offsets from what 
the COA's regulations provide. The court found that there is a clear 
statutory mandate which EPA should have followed. Since there is no 
judgment involved in the application of this provision, notice-and-
comment rulemaking is unnecessary. Furthermore, because of the gap in 
continuity of the regulations, it is not practicable to cause notice 
and an opportunity for public hearing prior to filling the gap, and it 
is not in the public interest to do so since the gap could cause 
confusion and delay with respect to permitting.
    Finally, for the same reasons articulated above, EPA is invoking 
the good cause exception to make this action effective immediately upon 
publication (APA, 5 U.S.C. 553(d)(3)).
    Although EPA is invoking the good cause exception to make this 
action final without prior notice and opportunity for comment, EPA is 
providing the public with the opportunity to comment on this interim 
final action. Therefore, the final action is ``interim'' because EPA 
will reevaluate its decision in light of any comments received during 
the comment period and take a subsequent final action.
    Appendix A to 40 CFR 55 identifies the State and local requirements 
incorporated into EPA's OCS regulations. Section 55.12 requires EPA to 
update appendix A to maintain consistency with onshore regulations. 
During the next consistency review for each area, EPA will incorporate 
any additional offset requirements necessary to comply with the 
requirements of these revisions.

IV. Administrative Requirements

A. Executive Order 12866

    Under Executive Order 12866, the Agency must determine whether the 
regulatory action is significant and therefore subject to review by the 
Office of Management and Budget (OMB) and the requirements of the 
Executive Order. The Order defines significant regulatory action as one 
that is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, productivity, 
competition, jobs, the environment, public health or safety of State, 
local, or tribal governments or communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another Agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees,

[[Page 25151]]

or loan programs or the rights and obligations of recipients thereof; 
or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    It is estimated that the upper bound for the economic impact of 
these revisions to the OCS rules is between $520,000 and $1,120,000 per 
year. However, pursuant to the terms of Executive Order 12866, OMB has 
determined that the revisions to the OCS rules are ``significant'' 
because the OCS sources would be regulated by two Federal agencies, EPA 
and DOI. As such, this action was submitted to OMB for review. Changes 
made in response to OMB suggestions or recommendations are documented 
in the public record.

B. Unfunded Mandates Act

    Section 202 of the Unfunded Mandates Act of 1995 requires that EPA 
prepare a budgetary impact statement before promulgating a rule that 
includes a Federal mandate that may result in expenditures by State, 
local, and tribal governments, in aggregate, or by the private sector, 
of $100 million or more in any 1 year. Section 203 requires EPA to 
establish a plan for obtaining input from, informing, educating, and 
advising any small governments that may be significantly or uniquely 
affected by the rule.
    Under section 205 of the Unfunded Mandates Act, EPA must identify 
and consider a reasonable number of regulatory alternatives before 
promulgating a rule for which a budgetary impact statement must be 
prepared. The EPA must select from those alternatives the least costly, 
most cost-effective, or least burdensome alternative that achieves the 
objective of the rule, unless EPA explains why a particular alternative 
is not selected or the selection of a particular alternative is 
inconsistent with law.
    Because this interim final rule does not impose any new mandates on 
State, local, or tribal governments, and the rule is estimated to 
result in the expenditures by State, local, and tribal governments or 
the private sector of less than $100 million in any 1 year, EPA has not 
prepared a budgetary impact statement or specifically addressed the 
selection of the least costly, most cost-effective, or least burdensome 
alternative. Because small governments will not be significantly or 
uniquely affected by this rule, EPA is not required to develop a plan 
with regard to small governments. However, EPA will work with State and 
local air pollution control agencies that have received delegation of 
authority to implement and enforce the OCS regulations.

C. Paperwork Reduction Act

    These rule revisions do not contain any information collection 
requirements subject to review by the OMB under the Paperwork Reduction 
Act of 1980, 44 U.S.C. 3501, et seq. 

D. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) of 1980 requires Federal 
agencies to identify potentially adverse impacts of Federal rules upon 
small entities. Small entities include small businesses, organizations, 
and governmental jurisdictions. In instances where significant economic 
impacts are possible on a substantial number of these entities, 
agencies are required to perform a regulatory flexibility analysis. 
Furthermore, EPA Guidelines for Implementing the Regulatory Flexibility 
Act, issued on April 9, 1992, require the Agency to determine whether 
regulations will have any economic impacts on small entities. As 
explained in the September 4, 1992 final rule (57 FR 40792), the OCS 
regulations do not apply to any small entities. Therefore, these 
revisions to the OCS regulations neither impose any requirements on 
small entities, nor require or exclude small entities from meeting the 
requirements of the OCS regulations. As a result, EPA has determined 
that these revisions will not have a significant impact on a 
substantial number of small entities.
    Therefore, as required under section 605 of the RFA, 5 U.S.C. 605, 
I certify that these revisions do not have a significant impact on a 
substantial number of small entities.

List of Subjects in 40 CFR Part 55

    Environmental protection, Administrative practice and procedures, 
Air pollution control, Continental shelf, Intergovernmental relations, 
Nitrogen oxides, Ozone, Permits, Reporting and recordkeeping 
requirements, Sulfur oxides.

    Dated: May 13, 1996.
Carol M. Browner.
Administrator.

    For reasons set out in the preamble, 40 CFR part 55 is revised and 
amended as set forth below.

PART 55--OUTER CONTINENTAL SHELF AIR REGULATIONS

    1. The authority citation for part 55 continues to read as follows:

    Authority: Section 328 of the Clean Air Act (42 U.S.C. 7401, et 
seq.) as amended by Public Law 101-549.4
    2. Section 55.5 is amended by revising paragraph (d) to read as 
follows:


Sec. 55.5  Corresponding onshore area designation.

* * * * *
    (d) Offset requirements. Offsets shall be obtained based on the 
applicable requirements of the COA, as set forth in Secs. 55.13 and 
55.14 of this part.
* * * * *
[FR Doc. 96-12626 Filed 5-17-96; 8:45 am]
BILLING CODE 6560-50-P