[Federal Register Volume 62, Number 7 (Friday, January 10, 1997)]
[Proposed Rules]
[Pages 1420-1423]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-645]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[FRL-5674-4]


Calls for State Implementation Plan Revisions for Certain States 
To Reduce Regional Transport of Ozone

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of intent.

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SUMMARY: In accordance with section 110(k)(5) and 110(a)(2)(D) of the 
Clean Air Act (Act), the EPA plans to require States to submit State 
implementation plan (SIP) measures to ensure that emission reductions 
are achieved as needed to prevent significant transport of ozone (smog) 
pollution across State boundaries in the Eastern United States. These 
precursors include volatile organic compounds (VOC) and oxides of 
nitrogen (NOx).
    Today's notice announces the Agency's intention to publish a Notice 
of Proposed Rulemaking in the March 1997 timeframe, with final action 
scheduled for summer 1997. Ozone has long been recognized, in both 
clinical and epidemiological research, to affect public health. There 
is a wide range of ozone-induced health effects, including decreased 
lung function (primarily in children active outdoors), increased 
respiratory symptoms (particularly in highly sensitive individuals), 
hospital admissions and emergency room visits for respiratory causes 
(among children and adults with pre-existing respiratory disease such 
as asthma), inflammation of the lung, and possible long-term damage to 
the lungs. Today's notice announces EPA's intention to conduct the 
formal process for implementing the regional reductions in ozone 
precursors that are necessary for areas in the Eastern United States to 
reach attainment. The Ozone Transport Assessment Group (OTAG) was 
established approximately 1\1/2\ years ago to undertake an assessment 
of the regional transport problem. The OTAG is a collaborative process 
conducted by the affected States. The OTAG also includes 
representatives from EPA and interested members of the public, 
including environmental groups and industry, to evaluate the ozone 
transport problem and the development of solutions.

[[Page 1421]]

SUPPLEMENTARY INFORMATION:

Availability of Related Information

    Documents related to OTAG are available on the Agency's Office of 
Air Quality Planning and Standards' (OAQPS) Technology Transfer Network 
(TTN) Bulletin Board System (BBS). The telephone number for the TTN BBS 
is (919) 541-5742. To access the bulletin board a modem and 
communications software are necessary. The following parameters on the 
communications software are required: Data Bits-8; Parity-N; and Stop 
Bits-1. The documents will be located on the OTAG BBS. If assistance is 
needed in accessing the system, call the help desk at (919) 541-5384 in 
Research Triangle Park, NC. Other documents related to OTAG can be 
downloaded from OTAG's webpage at http://www.epa.gov/oar/otag/
otag.html.

I. Background

A. Overview of 1990 Amendments to the Clean Air Act (1990 Amendments)

    In 1990, Congress amended the Act to address, among other things, 
continued nonattainment of the ozone national ambient air quality 
standard (NAAQS) (Pub. L. 101-549, Nov. 15, 1990, 104 Stat. 2399, 
codified at 42 U.S.C. 7401-7671q). Several of the provisions added, or 
revised, by the 1990 Amendments are relevant to today's notice.
    The 1990 Amendments divide ozone nonattainment areas into, in 
general, five classifications based on air quality design value and 
establish specific requirements, including new attainment dates, for 
each classification (sections 181-182).
    The 1990 Amendments require States containing ozone nonattainment 
areas classified as serious, severe, or extreme to submit several SIP 
revisions, including controls to progressively reduce emissions of 
ozone precursors by 9 percent over each 3-year period from 1996 through 
the attainment date (the rate-of-progress (ROP), or SIP submittals), 
under section 182(c)(2)(B);\1\ a demonstration of attainment (including 
air quality modeling) for the nonattainment area (the attainment 
demonstration), as well as SIP measures containing any additional 
reductions that may be necessary to attain by the appropriate 
attainment date under section 182 (c)-(e). These Act provisions 
established November 15, 1994 as the required date for these SIP 
submittals.\2\ On March 2, 1995, EPA Assistant Administrator for Air 
and Radiation, Mary D. Nichols, sent a memorandum to EPA Regional 
Administrators (Memorandum) to provide guidance on an alternative 
approach to provide States with serious and above ozone nonattainment 
areas flexibility in their planning efforts for the submittals due 
November 15, 1994.
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    \1\ These ozone nonattainment areas, as well as those classified 
as moderate, were also required to submit, by November 15, 1993, a 
SIP revision providing for reductions in VOC emissions of 15 percent 
by November 15, 1996 under section 182(b)(1).
    \2\ For ozone nonattainment areas classified as moderate, the 
attainment demonstration was due November 15, 1993 (section 
182(b)(1)(A)), except that if the State elected to conduct an urban 
airshed model, EPA allowed an extension to November 15, 1994.
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    The 1990 Amendments reflect general awareness by Congress that in 
some areas of the country, ozone is not merely a local problem, but 
rather is a regional problem in that ozone and its precursors can be 
transported long distances across State lines to combine with ozone and 
precursors downwind, thereby exacerbating the ozone problems downwind. 
As a result, section 184 delineates a multistate ozone transport region 
(OTR) in the Northeast part of the country, establishes the Northeast 
Ozone Transport Commission (OTC) for the purpose of implementing 
regionwide controls affecting all areas (including attainment areas) in 
the OTR, and requires specific controls in that region.
    Section 110(a)(2)(D) provides an additional tool for addressing the 
problem of transport. This provision, which applies by its terms to all 
SIP's for each pollutant covered by a NAAQS and for all areas 
regardless of their attainment designation, provides that a SIP must 
contain provisions preventing its sources from contributing 
significantly to nonattainment problems downwind. Specifically, this 
provision states, in relevant part, that the SIP must--

    contain adequate provisions * * * prohibiting * * * any source 
or other type of emissions activity within the State from emitting 
any air pollutant in amounts which will--
    (I) contribute significantly to nonattainment in, or interfere 
with maintenance by, any other State with respect to any such 
[NAAQS], or
    (II) interfere with measures required to be included in the 
applicable implementation plan for any other State * * * to prevent 
significant deterioration of air quality or to protect visibility. * 
* *

    Section 110(k)(5) provides EPA with a tool for assuring that SIP's 
include required controls by authorizing EPA to make a finding that a 
SIP is inadequate to meet an Act requirement, thereby requiring the 
State to submit, within a specified period, a SIP revision to correct 
the inadequacy. Specifically, this provision, which may be termed the 
SIP call provision, provides, in relevant part--

    Whenever the Administrator finds that the applicable 
implementation plan for any area is substantially inadequate to 
attain or maintain the relevant [NAAQS], to mitigate adequately the 
interstate pollutant transport described in section 176A or section 
184, or to otherwise comply with any requirement of this Act, the 
Administrator shall require the State to revise the plan as 
necessary to correct such inadequacies. The Administrator shall 
notify the State of the inadequacies, and may establish reasonable 
deadlines (not to exceed 18 months after the date of such notice) 
for the submission of such plan revisions.

    All of the Act provisions summarized above are described in more 
detail in EPA's rulemaking notices concerning low emission vehicles 
(LEV) in the Northeast OTR (OTC LEV), ``Proposed Rulemaking on Ozone 
Transport Commission; Emission Vehicle Program for the Northeast Ozone 
Transport Region,'' 59 FR 21720 (April 26, 1994); ``Supplemental Notice 
of Proposed Rulemaking on Ozone Transport Commission; Emission Vehicle 
Program for the Northeast Ozone Transport Region,'' 59 FR 48664 
(September 22, 1994); ``Final Rule on Ozone Transport Commission; 
Emission Vehicle Program for the Northeast Ozone Transport Region,'' 60 
FR 4712 (January 24, 1995).

B. State Actions and EPA Administrative Policy

    Notwithstanding significant efforts, the States generally were not 
able to meet the November 15, 1994 deadline for the attainment 
demonstration and other SIP submissions required under section 182(c).
    The March 2, 1995 Memorandum recognized the efforts made by States 
and the remaining difficulties in making the ROP and attainment 
demonstration SIP submittals. The Memorandum recognized that in 
general, many States were unable to complete these SIP requirements 
within the deadlines prescribed by the Act due to circumstances beyond 
their control. These States were hampered by unavoidable delays in 
developing the underlying technical information needed for the required 
SIP submittals. The EPA recognized that development of the necessary 
technical information, as well as the control measures necessary to 
achieve the large level of reductions likely to be required, had been 
particularly difficult for the States affected by ozone transport.
    Accordingly, as an administrative remedial matter, the Memorandum

[[Page 1422]]

indicated that EPA would establish new timeframes for SIP submittals. 
The Memorandum indicated that EPA would divide the required SIP 
submittals into two phases. The Phase I submittals generally consisted 
of (i) SIP measures providing for ROP reductions due by the end of 1999 
(the first 9 percent of ROP reductions); (ii) a SIP commitment 
(sometimes referred to as an enforceable commitment) to submit any 
remaining required ROP reductions on a specified schedule after 1996 
(with submission no later than the end of 1999); and (iii) a SIP 
commitment to submit the attainment demonstration by mid-1997, with 
submission by no later than the end of 1999 of any additional rules 
needed to attain. By notice dated July 10, 1996 (61 FR 36292-36295 July 
10, 1996), EPA issued findings (July 1996 Findings), and thereby 
started sanctions clocks, for 10 States and the District of Columbia. 
The findings were made for nine nonattainment areas in those States 
under the Act for failure to make complete Phase I ozone SIP submittals 
as described above.
    The Phase II submittals were due at specified times after 1996 and 
primarily consisted of the remaining ROP SIP measures, the attainment 
demonstration and additional rules needed to attain, and any regional 
controls necessary for attainment by all areas in the region. The 
Memorandum contemplated that regional controls needed for serious areas 
to reach their 1999 attainment date would be submitted and implemented 
in a timeframe consistent with that deadline, and that regional 
controls needed for severe/extreme areas to attain would be submitted 
by the end of 1999.
    In addition, the Memorandum called for a collaborative process 
among the States in the Eastern half of the country to evaluate and 
address transport of ozone and its precursors. Subsequently, the OTAG 
was formed, which includes representatives from States, EPA officials, 
and interested members of the public, including environmental groups 
and industry, to provide for an assessment of the transport problem and 
the development of consensus solutions.
    It is becoming increasingly apparent that some of the most highly 
polluted ozone nonattainment areas will not be able to demonstrate 
attainment simply through the implementation of control measures within 
the nonattainment area. In some cases, significant ozone concentration 
and precursor emission reductions within the upwind air mass being 
transported into the nonattainment area also appear to be necessary.

C. OTAG Process

    The OTAG is organized into a number of subgroups and workgroups. 
The OTAG's Policy Group provides overall direction to its subgroups for 
the assessment of ozone formation and transport, as well as the 
development of controls strategies that will reduce concentrations of 
ozone and its precursors. The Modeling and Assessment Subgroup 
addresses issues relating to emissions inventories, monitoring, and 
modeling. It's goal is to assess ozone transport and its impacts. The 
Strategies and Controls Subgroup evaluates the availability, 
effectiveness, and costs of potential national, regional and local air 
pollution control strategies. The Financial Assessment and 
Implementation Subgroup addresses funding and budget issues. The 
Outreach and Communications Subgroup educates and informs the public 
about OTAG's mission and goals, specifically the environmental benefits 
of reducing the transport of ozone and its precursors. There are also 
work groups that address other issues such as trading and market-based 
incentives, criteria for evaluating strategies and implementation 
issues.
    The OTAG's first meetings were on May 18, 1995, in Reston, 
Virginia, and June 19, 1995, in Washington, DC. The OTAG has continued 
to meet regularly since then. The goal of OTAG is to--

    Identify and recommend a strategy to reduce transported ozone 
and its precursors which, in combination with other measures, will 
enable attainment and maintenance of the national ambient ozone 
standard in the OTAG region. A number of criteria will be used to 
select the strategy including, but not limited to, cost-
effectiveness, feasibility, and impacts on ozone levels.\3\
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    \3\ OTAG Policy Paper approved by the Policy Group on December 
4, 1995.

    In addition to sensitivity modeling analyses, OTAG is modeling 
three rounds of strategies in order to have the technical information 
necessary to make a recommendation to EPA on what is needed to meet the 
OTAG goal. The first round of modeling was performed during September 
and October 1996 and provided an initial evaluation of possible OTAG 
emission reductions. The results from the sensitivity analyses and the 
first round of strategy runs indicate that NOX reductions provide 
benefits across State or multi-state boundaries and local disbenefits 
in some urban areas. Regionwide VOC reductions provide little benefit 
on a regional scale but decrease ozone in urban areas, which also may 
lessen the disbenefits associated with certain NOx controls. The second 
round is being performed during November and December 1996 and is 
refining the emission reduction level for the strategies. The third 
round will be performed during January and February 1997 and will 
evaluate the geographic applicability of the OTAG strategies.
    As indicated in the Memorandum, EPA envisioned that OTAG would 
complete its work by the end of 1996. The modeling timetable described 
above goes beyond the original schedule called for in the Memorandum. 
While EPA believes that the results from the third round of modeling 
runs are important, the Agency recognizes that the delay, although 
relatively brief, will result in some further delay in the development 
of regionwide controls based on the OTAG regional assessment.
    In addition, according to the March 2, 1995 memorandum, States must 
submit, by mid-1997, the Phase II submittals that include a plan for 
attainment of the ozone NAAQS and any regional controls necessary for 
attainment by all areas in the region. The policy contemplates that 
these submittals will take account of the assessment of air quality 
controls and modeling runs performed by OTAG, as well as 
recommendations as to control strategies that OTAG may develop.

D. Revised Ozone NAAQS and Interim Implementation Policy

    On December 13, 1996, EPA issued a notice of proposed rulemaking to 
revise the ozone NAAQS (61 FR 65716), as well as set out the Interim 
Implementation Policy (IIP) (61 FR 65764), which describes the SIP 
requirements applicable to areas during the period from the 
promulgation of a revised NAAQS to the creation of the new SIP's 
required to attain the revised NAAQS. The proposal noted that a 
standard set at a level of 0.09 ppm would result in approximately 
equivalent public health protection as that afforded by the current 
standard; a 0.08 ppm level would provide greater protection. Thus, OTAG 
control strategies targeted at the reduction of boundary ozone and its 
precursors would be effective and consistent with any of the proposals 
for the new NAAQS.
    In the proposed IIP, EPA recognized that replacing the existing 
NAAQS has ramifications for the controls scheme for existing ozone 
nonattainment areas. For example, the attainment dates for 
nonattainment areas under the current NAAQS would be replaced by 
revised attainment dates under the revised NAAQS. Also, the proposed 
IIP states that nonattainment areas currently classified as serious and 
higher must continue to meet the same ROP

[[Page 1423]]

requirements as under the current NAAQS, which are provided by section 
182(c)(2)(B), except that if the NAAQS is revised as proposed, areas 
should submit ROP controls covering only the period up to the time they 
submit new SIPs to attain the revised NAAQS and not up to their 
attainment date under the current NAAQS. In addition, if the NAAQS is 
revised as proposed, areas would not be required to submit attainment 
demonstrations (including the controls) geared towards the existing 
NAAQS and attainment dates; rather, they would be required at a future 
time to submit an attainment demonstration geared to the revised NAAQS.
    The IIP further proposes to require States to submit, within 90 
days after promulgation of the final ozone NAAQS, a preliminary 
estimate of the amount of emissions reductions needed for their ozone 
nonattainment area to attain the revised NAAQS. Finally, the IIP 
proposes making revisions to the July 1996 Findings consistent with its 
principles.

II. Notice of Intent To Propose Rulemaking

    In this notice, the Agency is announcing its plans to issue SIP 
calls, under section 110(k)(5) of the Act, as needed to ensure that the 
necessary regional reductions are achieved that will allow current 
nonattainment areas to prepare attainment demonstrations for the 
current NAAQS. This action will reflect the technical work done by 
OTAG, as well as any OTAG recommendations for adoption of additional 
NOX and/or VOC controls. The EPA wants to ensure that the 
necessary regional reductions would be implemented by the relevant 
States within a specified timeframe. It is EPA's intention to review 
the assessments, modeling work, and any recommendations made by OTAG, 
and to base the SIP call on this review as well as any other 
information available. In the March 1997 timeframe, EPA intends to 
publish a Notice of Proposed Rulemaking (NPR). The EPA anticipates that 
the NPR will propose overall amounts or ranges of NOX and/or VOC 
emission reductions that each State would need to achieve to reduce the 
boundary condition concentrations of ozone and its precursors within a 
specified timeframe and require the submission of SIP controls to 
achieve these reductions. The EPA may or may not identify or require 
specific control measures. The SIP revision must also contain a 
schedule for adoption and implementation of these measures, and EPA 
intends to set out this schedule in more detail in the proposed 
rulemaking. The EPA intends to publish the final SIP call notice in 
summer 1997.
    Under section 110(k)(5) of the Act, EPA has the authority to 
establish the date by which a State must respond to a SIP call. This 
date can be no later than 18 months after the SIP call is issued. The 
EPA believes that it is appropriate for attainment areas to meet the 
same schedule as nonattainment areas for making SIP submittals. The EPA 
could thus allow up to 18 months for these submittals. However, EPA is 
considering a more accelerated schedule for submittals under this SIP 
call to attain air quality benefits sooner and to facilitate area 
specific SIP planning. The EPA will be requesting comment on deadlines 
ranging from 6 months to 18 months following the date of publication of 
the notice of final rulemaking.
    If EPA makes a finding under section 179(a) that the appropriate 
States have not made the required complete submittals by the date 
established in the SIP call, EPA plans to provide by rule that the 
offset sanction identified in section 179(b) will be applied in the 
affected areas, pursuant to section 179(a) and 40 CFR 52.31. If the 
States have still not made a complete submission 6 months after the 
offset sanction is imposed, then the highway funding sanction will 
apply in the affected nonattainment areas in accordance with 40 CFR 
52.31. In addition, section 110(c) provides that EPA promulgate a 
Federal implementation plan (FIP) no later than 2 years after a finding 
under section 179(a).
    The EPA believes that expedited implementation of regional control 
strategies to facilitate attainment of the current standard would also 
be beneficial if the Agency makes a final decision to revise the ozone 
NAAQS standard. In fact, it is likely that regional reductions in ozone 
and ozone precursors in upwind States will be even more critical to 
allow downwind States to attain a revised standard. Regional reductions 
could also minimize the number of areas designated nonattainment under 
a revised standard and/or lessen the severity of the nonattainment 
problem. In addition, as EPA goes through the process of developing an 
implementation program for the new standard, it will be able to take 
advantage of the information gathered by OTAG and account for emission 
reductions that result from the recommended strategy.
    The EPA's authority under section 110(k)(5) to issue a SIP call 
will not be changed by promulgation of a revised NAAQS because the 
requirements of section 110(a)(2)(D) will not be affected by the 
revised NAAQS. Under the revised NAAQS, upwind States must continue to 
demonstrate that their sources do not significantly contribute to 
nonattainment problems downwind.

    Dated: January 6, 1997.
Mary D. Nichols,
Assistant Administrator, Office of Air and Radiation.
[FR Doc. 97-645 Filed 1-9-97; 8:45 am]
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