[Federal Register Volume 62, Number 103 (Thursday, May 29, 1997)]
[Rules and Regulations]
[Pages 29072-29078]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-14100]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[LA-21-1-7318; FRL-5832-5]


Approval and Promulgation of Section 182(f) Exemption to the 
Nitrogen Oxides (NOX) Control Requirements for the Lake 
Charles Ozone Nonattainment Area; Louisiana

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The EPA is issuing final approval of a petition from the State 
of Louisiana requesting that the Lake Charles marginal ozone 
nonattainment area be exempt from applicable nitrogen oxides 
(NOX) control requirements of section 182(f) of the Clean 
Air Act (Act). The section 182(f) NOX requirement from which 
the area will be exempt is NOX new source review (NSR). In 
addition, approval of the section 182(f) petition would remove the 
NOX general conformity provisions and the NOX 
build/no build provisions of the transportation conformity rule. This 
document will also correct the drafting error in the proposed rule in 
which the Lake Charles area was referred to as the Calcasieu Parish 
nonattainment area. This correction is merely a nominal change, since 
the Lake Charles nonattainment area contains only Calcasieu Parish.

EFFECTIVE DATE: This action is effective as of May 27, 1997.

ADDRESSES: Copies of the exemption request, public comments and EPA's 
responses are available for inspection at the following address:

Environmental Protection Agency, Region 6, Multimedia Planning and 
Permitting Division, 1445 Ross Avenue, Suite 700, Dallas, Texas 75202-
2733.
Louisiana Department of Environmental Quality, H. B. Garlock Building, 
7290 Bluebonnet, Baton Rouge, Louisiana 70810.

FOR FURTHER INFORMATION CONTACT:
    Mr. Matthew Witosky , Air Planning Section (6PD-L), Multimedia 
Planning and Permitting Division, EPA Region 6, 1445 Ross Avenue, 
Dallas, Texas 75202-2733, telephone (214) 665-7214.

SUPPLEMENTAL INFORMATION:

I. Background

    On October 28, 1994, the State of Louisiana submitted a petition to 
the EPA requesting that the Lake Charles marginal ozone nonattainment 
area be exempt from requirements to implement NOX controls 
pursuant to section 182(f) of the Act. Hereafter, any reference to 
``section'' shall be considered a reference to a portion of the Act. 
The exemption request was based on modeling that demonstrates 
additional NOX emission controls within the nonattainment 
area will not contribute to attainment of the ozone National Ambient 
Air Quality Standard (NAAQS) within the area. Subsequent to the 
original request for a waiver, ambient data became available indicating 
that area was in attainment of the ozone standard. The EPA is approving 
the exemption request based on modeling and monitoring data that 
together demonstrate that additional NOX reductions would 
not contribute to attainment. As stated in the summary, the Lake 
Charles ozone nonattainment area consists only of Calcasieu Parish.
    On June 13, 1996, the EPA proposed approval of the NOX 
exemption petition for the Lake Charles ozone nonattainment area (61 FR 
30024, again, proposed as the Calcasieu Parish nonattainment area). 
Adverse comments were received from a single commenter. In addition, 
three environmental groups submitted joint adverse comments on the 
proposed approvals of NOX exemptions for the Ohio and 
Michigan ozone nonattainment areas in August of 1994. These comments 
addressed the EPA's general policy regarding NOX exemptions. 
The commenters requested that these comments be addressed in all EPA 
rulemakings dealing with section 182(f) exemptions.

II. Public Comments

    The following discussion summarizes the comments received regarding 
the State's petition and/or the EPA's proposed rulemaking and presents 
the EPA's responses to these comments.
    Comment: Commenters argued that NOX exemptions are 
provided for in two separate parts of the Act, in sections 182(b)(1) 
and 182(f). Because the NOX exemption tests in sections 
182(b)(1) and 182(f)(1) include language indicating that action on such 
requests should take place ``when (the 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 section 182(f)(3), must occur during 
consideration of an attainment or maintenance plan, unless the area has 
been redesignated as attainment.
    Response: Section 182(f) contains very few details regarding the 
administrative procedures for acting on NOX exemption 
requests. The absence of specific guidelines by Congress leaves the EPA 
with discretion to establish reasonable procedures consistent with the 
requirements of the Administrative Procedures Act (APA).
    The EPA disagrees with the commenters regarding the process for 
considering NOX exemption requests under section 182(f) and 
instead, believes that sections 182(f)(1) and 182(f)(3) provide 
independent procedures by which the EPA may act on NOX 
exemption requests. The language in section 182(f)(1), which indicates 
that the EPA should act on NOX exemptions in conjunction 
with action on a plan or a plan revision, does not appear in section 
182(f)(3). While section 182(f)(3) references section 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 State 
Implementation Plans (SIPs). Additionally, section 182(f)(3) provides 
that ``a person'' (which section 302(e) of the Act defines to include a 
State) may petition for NOX exemptions ``at any time,'' and 
requires the EPA to make its determination within 6 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).
    With respect to major stationary sources, section 182(f) requires 
marginal areas to adopt NSR rules, unless exempted. These rules were 
generally due to be submitted to the EPA by November 15, 1992. Thus, in 
order to avoid the Act's sanctions, areas seeking

[[Page 29073]]

a NOX exemption would have needed to submit this exemption 
request for EPA review and rulemaking action several months before 
November 15, 1992. In contrast, the Act specifies that the attainment 
demonstrations were not due until November 1993 or 1994 (and the EPA 
may take up to 12 months to approve or disapprove the demonstrations). 
For marginal ozone nonattainment areas (subject to NOX NSR), 
no attainment demonstrations are called for in the Act. For areas 
seeking redesignation to attainment of the ozone NAAQS, the Act does 
not specify a deadline for submittal of maintenance demonstrations (in 
reality, the EPA would generally consider redesignation requests 
without accompanying maintenance plans to be unacceptable). Clearly, 
the Act envisions the submittal of and EPA action on NOX 
exemption requests, in some cases, prior to submittal of attainment or 
maintenance demonstrations.
    Comment: Commenters contended that section 182(b)(1) is the 
appropriate authority for granting interim period transportation 
conformity NOX exemptions.
    Response: The EPA agreed with the commenters and published an 
interim final rule that changed the transportation conformity rule to 
reference section 182(b)(1) as the correct authority under the Act for 
waiving the NOX ``build/no-build'' and ``less-than-1990 
emissions'' tests for certain areas. See 60 FR 44762, (August 29, 
1995). A related proposed rule (60 FR 44790), published on the same 
day, invited public comment on how the Agency plans to implement 
section 182(b)(1) transportation conformity NOX exemptions. 
That proposal has since been finalized. See 60 FR 57179 (November 14, 
1995). In that final rule, the EPA noted that section 182(b)(1), by its 
terms, only applies to moderate and above ozone nonattainment areas. 
Consequently, the EPA believes that the interim reduction requirements 
of section 176(c)(3)(A)(iii), and the authority provided in section 
182(b)(1) to grant relief from those interim reduction requirements, 
apply only to those areas subject to section 182(b)(1).
    It should be noted that a NOX waiver under section 
182(f) removes the NOX general conformity requirements 
entirely and would continue to do so. Since general Federal actions are 
not subject to section 176(c)(3)(A)(iii), which explicitly references 
section 182(b)(1), the EPA will continue to offer relief from 
NOX general conformity provisions under section 182(f)(3). 
The EPA intends to provide relief to marginal areas, such as Lake 
Charles, from transportation conformity provisions through the 
authority of section 182(f)(3) because marginal areas are not subject 
to section 182(b)(1). The EPA believes this approach is consistent both 
with the way NOX requirements in ozone nonattainment areas 
are treated under the Act generally, and under section 182(f) in 
particular. The basic approach of the Act is that NOX 
reductions should apply when beneficial to an area's attainment goals, 
and should not apply when unhelpful or counterproductive. Section 
182(f) reflects this approach but also includes specific substantive 
tests which provide a basis for the EPA to determine when 
NOX requirements should not apply. There is no substantive 
difference between the technical analysis required to make an 
assessment of NOX impacts on attainment in a particular area 
whether undertaken with respect to mobile source or stationary source 
NOX emissions. Moreover, where the EPA has determined that 
NOX reductions will not benefit attainment or would be 
counterproductive in an area, the EPA believes it would be unreasonable 
to insist on NOX reductions for purposes of meeting 
reasonable further progress or other milestone requirements. Thus, even 
concerning the conformity requirements of section 176(c)(1), the EPA 
believes it is reasonable and appropriate to: (1) Offer relief from the 
applicable NOX requirements of the general and 
transportation conformity rules in areas where such reductions would 
not be beneficial, and (2) rely in doing so on the exemption tests 
provided in section 182(f).
    In summary, the EPA will continue to process actions not subject to 
section 182(b)(1) under section 182(f)(3). The Lake Charles ozone 
nonattainment area is not subject to the requirements of section 
182(b)(1). Therefore, a transportation conformity NOX waiver 
and general conformity waiver may be granted under section 182(f)(3).
    Comment: Commenters argued that waiver of NOX control 
requirements is unlawful if such a waiver would impede attainment and 
maintenance of the ozone standard in downwind areas.
    Response: As a result of these comments, the EPA reevaluated its 
position on this issue and has revised previously issued guidance. See 
Memorandum, ``Section 182(f) Nitrogen Oxides (NOX) 
Exemptions--Revised Process and Criteria,'' dated February 8, 1995, 
from John Seitz. As described in this memorandum, the EPA intends to 
use its authority under section 110(a)(2)(D) to require a State to 
reduce NOX emissions from stationary and/or mobile sources 
where there is evidence, such as photochemical grid modeling, showing 
that the NOX emissions would contribute significantly to 
nonattainment in, or interfere with maintenance by, any other State or 
in another nonattainment area within the same State. This action would 
be independent of any action taken by the EPA on a NOX 
exemption request under section 182(f). That is, the EPA's action to 
grant or deny a NOX exemption request under section 182(f) 
for any area would not shield that area from the EPA's action to 
require NOX emission reductions, if necessary, under section 
110(a)(2)(D).
    Modeling analyses are underway or will soon be conducted in many 
areas for the attainment demonstration SIP revisions required pursuant 
to section 182(c)(2)(A). Recent modeling data suggest that certain 
ozone nonattainment areas may benefit from reductions in NOX 
emissions upwind of the nonattainment areas. For example, the Northeast 
Corridor States and the Lake Michigan Ozone Study are considering 
attainment strategies which may rely, in part, on NOX 
emission reductions hundreds of kilometers upwind. The EPA is working 
with the States and other organizations to design and complete studies 
which consider upwind sources and quantify their impacts. As the 
studies progress, the EPA will continue to work with the States and 
other organizations to develop mutually acceptable attainment 
strategies.
    At the same time as the large scale modeling analyses are being 
conducted, States have requested exemptions from NOX 
requirements under section 182(f) for certain nonattainment areas in 
the modeling domains. Some of these nonattainment areas may impact 
downwind nonattainment areas. The EPA intends to address the transport 
issue under section 110(a)(2)(D), based on a regional modeling 
analysis.
    Under section 182(f) of the Act, an exemption from NOX 
requirements may be granted for nonattainment areas outside of an ozone 
transport region if the EPA determines that ``additional reductions of 
(NOX) would not contribute to attainment of the national 
ambient air quality standard for ozone in the area.'' 1 As 
described in section

[[Page 29074]]

4.3 of the December 13, 1993, EPA guidance document, ``Guideline for 
Determining the Applicability of Nitrogen Oxides Requirements Under 
Section 182(f),'' the EPA encourages, but does not require, States/
petitioners to consider the impacts on the entire modeling domain since 
the effects of an attainment strategy may extend beyond a designated 
nonattainment area. Specifically, the guidance encourages States to 
consider imposition of the NOX requirements if needed to 
avoid adverse impacts in downwind areas, either intra-or interstate. 
States need to consider such impacts since they are ultimately 
responsible for achieving attainment in all portions of their State and 
for ensuring that emissions originating in their State do not 
contribute significantly to nonattainment in, or interfere with 
maintenance by, any other State. See section 110(a)(2)(D)(i)(I) of the 
Act.
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    \1 \ There are three NOX exemption tests specified in 
section 182(f). Of these, two are applicable for areas outside of an 
ozone transport region: The ``contribute to attainment'' test 
described above, and the ``net air quality benefits'' test. EPA must 
determine, under the latter test, that the net benefits to air 
quality in an area ``are greater in the absence of NOX 
reductions'' from relevant sources. 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. 
Consequently, as stated in section 1.4 of the December 16, 1993, EPA 
guidance, ``[w]here any 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.''
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    In contrast, section 4.4 of the December 16, 1993, guidance states 
that the section 182(f) demonstration would not be approved if there is 
evidence, such as photochemical grid modeling, showing that the 
NOX exemption would interfere with attainment or maintenance 
in downwind areas. The guidance further explains that section 
110(a)(2)(D) (not section 182(f)) prohibits such impacts. Consistent 
with section 4.3 of the guidance, the EPA believes that the section 
110(a)(2)(D) and 182(f) provisions must be considered independently, 
and hence, has revised section 4.4 of the December 16, 1993, guidance 
document. Thus, if there is evidence that NOX emissions in 
an upwind area would interfere with attainment or maintenance in a 
downwind area, that problem should be separately addressed by the 
State(s) or, if necessary, by the EPA in a section 110(a)(2)(D) action. 
In addition, a section 182(f) exemption request should be independently 
considered by the EPA.
    The State of Louisiana is being included in one of the new modeling 
analyses referred to above that is being conducted by the EPA, States, 
and other agencies as part of the Ozone Transport Assessment Group 
(OTAG). The OTAG process is a consultative process among the eastern 
States and the EPA. The OTAG assessment process will evaluate regional 
and national emission control strategies using improved regional 
modeling analyses. The goal of the OTAG process is to reach consensus 
on additional regional and national emission reductions that are needed 
to support efforts to attain the ozone standard in the eastern United 
States. States have committed to submit plans (SIP revisions) that will 
show attainment of the ozone standard through local, regional, and 
national emission controls.
    As noted in a prior EPA rulemaking dated November 28, 1994 (59 FR 
60709), NOX waivers are approved on a contingent basis; the 
waiver applies only so long as air quality analyses, such as from 
additional ozone modeling, in an exempted area continue to show 
NOX reductions are detrimental to reaching attainment or 
would not contribute to attainment. Additionally, in the notice of 
proposed rulemaking on the Lake Charles exemption request, 61 FR 30024 
(June 13, 1996), the EPA indicated that the NOX exemption 
would remain effective for only as long as the area had no ozone 
violations, or modeling continued to show that NOX control 
activities would not contribute to attainment, in the Lake Charles 
area.
    Comment: Comments were received regarding the scope of exemption of 
areas from the NOX requirements of the conformity rules. The 
commenters argued 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 admitted 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, but want the 
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.
    Response: The EPA's transportation conformity rule 2 
originally provided a NOX transportation conformity waiver 
if an area received a section 182(f) exemption. As indicated in a 
previous response, the EPA has changed the reference from section 
182(f) to section 182(b)(1) in the transportation conformity rule since 
that section is specifically referenced by the transportation 
conformity provisions of the Act. See 60 FR 44762. The EPA has also 
consistently held the view that, in order to conform, nonattainment and 
maintenance areas must demonstrate that the transportation plan and the 
Transportation Improvement Program 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 was not reflected in the transportation conformity rule. The EPA 
has amended the rule to correct this error. See 60 FR 57179. However, 
the exemptions that are the subject of this final action are being 
processed under section 182(f)(3), which does not require the EPA to 
act under the authority of section 182(b).
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    \2\ ``Criteria and Procedures for Determining Conformity to 
State or Federal Implementation Plans of Transportation Plans, 
Programs, and Projects Funded or Approved under Title 23 U.S.C. of 
the Federal Transit Act,'' November 24, 1993 (58 FR 62188).
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    Comment: Commenters argued that the Act does not authorize any 
waiver of the NOX reduction requirements until conclusive 
evidence exists that such reductions are counterproductive.
    Response: The EPA does not agree with this comment since it ignores 
the 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, the EPA has sought 
an approach that reasonably accords with that intent. In addition to 
imposing control requirements on major stationary sources of 
NOX similar to those that apply for sources of VOC, section 
182(f) also provides for an exemption (or limitation) from application 
of these requirements if, under one of several tests, the EPA 
determines that, in certain areas, NOX reductions would 
generally not be beneficial towards attainment of the ozone standard. 
In section 182(f)(1), Congress explicitly conditioned action on 
NOX exemptions on the results of an ozone precursor study 
required under section 185B of the Act. Because of the possibility that 
reducing NOX in an 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 Title 
I of the Act, to avoid requiring NOX reductions where such 
would not be beneficial or would be counterproductive. In describing 
these various ozone provisions, including section 182(f), the House 
Conference Committee Report states in the pertinent part: ``[T]he 
Committee included a separate NOX/VOC [volatile organic 
compound] study

[[Page 29075]]

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.'' 
See H.R. Rep. No. 490, 101st Cong., 2d Sess. 257-258 (1990).
    As noted in the response to an earlier comment, the command in 
section 182(f)(1) that the EPA ``shall consider'' the section 185B 
report taken together with the time period the Act provides 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 
the EPA to act on NOX exemption requests, even in the 
absence of the additional information that would be included in 
affected areas' attainment or maintenance demonstrations. 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 
the EPA from revisiting an approved NOX exemption if 
warranted by additional, current information.
    In addition, the EPA believes, as described in the EPA's December 
1993 guidance, that section 182(f)(1) of the Act 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), the EPA believes that each test provides an 
independent basis for a full or limited NOX exemption.
    Only the first test listed above is based on a showing that 
NOX reductions are ``counterproductive.'' If one of the 
tests is met (even if another test is failed or not applied), the 
section 182(f) NOX requirements would not apply or, under 
the excess reductions provision, a portion of these requirements would 
not apply.
    Comment: Commenters 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 agree with this comment. 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) NOX provisions over that 3-
year period. 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) NOX 
provisions, the EPA believes that the Section 182(f) test is met since 
``additional reductions of (NOX) would not contribute to 
attainment'' of the NAAQS in that area. In all cases, EPA's approval of 
the exemption is 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). In the case of Lake Charles, the EPA is 
confident that three years of clean data taken together with the 
modeling performed to support the request for a waiver are sufficient 
evidence to support the issuance of the waiver.
    Comment: Commenters stated that the modeling required by the EPA is 
insufficient to establish that NOX reductions would not 
contribute to attainment since only one level of control, 
``substantial'' reductions, is required to be analyzed. As such, the 
waiver does not provide a complete picture of the effect larger amounts 
of NOX reductions will have on ozone levels. They further 
explained that an area must submit an attainment plan that can be 
approved before the EPA can know whether NOX reductions will 
aid or undermine attainment.
    Response: As described in the EPA's December 1993 NOX 
exemption guidance, photochemical grid modeling is generally needed to 
document cases where NOX reductions are counterproductive to 
net air quality, do not contribute to attainment, do not show a net 
ozone benefit, or include excess reductions. The UAM or, in a transport 
region, the Regional Oxidant Model are acceptable models 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)'' (December 1993). Further, application of UAM 
should also be consistent with procedures contained in the EPA 
``Guideline for Regulatory Application of the Urban Airshed Model'' 
(July 1991). Thus, episode selection for the section 182(f) 
demonstration should be consistent with the UAM guidance for SIP 
attainment demonstrations.
    The EPA believes these analyses are appropriate to determine, in a 
directional manner, whether or not NOX reductions are 
expected to be beneficial to the air quality in the area/region. These 
analyses described in the EPA's December 1993 guidance may be less 
precise than an attainment demonstration required under section 182(c). 
As discussed in the proposed rule, the EPA believes that the State's 
UAM demonstration together with the ambient air quality data showing 
that the area is attaining the ozone standard support the granting of 
an exemption from the NOX requirements of section 182(f) of 
the Act.
    Although many ozone nonattainment areas used photochemical grid 
modeling, required by the Act for their attainment demonstrations, to 
apply for a NOX exemption, the Act did not require marginal 
areas like Lake Charles to perform such modeling for the purpose of an 
attainment demonstration. Thus, where such an area can make an adequate 
showing of the effects of NOX reductions with respect to 
attainment through alternative means that are otherwise consistent with 
relevant guidance, the EPA could approve the area's demonstration.
    The Louisiana Department of Environmental Quality (LDEQ) submitted 
the results of a photochemical grid modeling exercise that was carried 
out, in conjunction with Lake Charles' attainment efforts, to determine 
if the area was the object of ozone and precursor transport. The EPA 
acknowledges that the modeling performed for this exercise does not 
precisely replicate the procedures EPA guidance suggests be used to 
support a 182(f) exemption petition. Nonetheless, the EPA believes the 
modeling analysis that was performed by LDEQ, combined with the area's 
clean air data, is comprehensive enough to determine that the area 
merits an exemption.
    Comment: Commenters argued that the Act does not authorize delaying 
implementation of NOX controls if attainment modeling is not 
complete.
    Response: The EPA believes the modeling analyses submitted are 
appropriate to determine, in a directional manner, whether 
NOX reductions are expected to be beneficial with respect to 
the air quality in the area/region. Furthermore, subsequent

[[Page 29076]]

monitoring data indicate the area has come into attainment, obviating 
NOX controls to reach attainment.
    Comment: One commenter stated that the EPA must rely on the recent 
National Academy of Sciences (NAS) report in its review of 
NOX waivers. The commenter pointed out that the NAS report 
found that to reduce transported ozone NOX reductions are 
needed.
    Response: The NAS report and the EPA's companion report both 
support the conclusion that, as a general matter for ozone 
nonattainment areas across the country, NOX reductions in 
addition to VOC reductions will be needed to achieve attainment. This 
general conclusion, however, must be assessed in the context of the 
more detailed analysis provided in those same reports. For example, the 
NAS report notes that NOX reductions can have either a 
beneficial or detrimental effect on ozone concentrations, depending on 
the locations and emission rates of VOC and NOX sources in a 
region. The effect of NOX reductions depends on the local 
VOC/NOX ratio and a variety of other factors. In its report 
issued pursuant to section 185B of the Act, the EPA stated that 
``[a]pplication of gridded photochemical models on a case by case basis 
is required to determine the efficacy of NOX controls, 
because the ozone response to precursor reductions is area specific.''
    The analyses performed in the Lake Charles area demonstrate no 
reduction in ozone concentrations as a result of NOX control 
in the modeling domain. Based on these modeling results, the area meets 
the test under section 182(f)(1)(A) of the Act required to support a 
waiver from the NOX requirements of section 182(f). The 
effect that NOX controls in the Lake Charles area may have 
on ozone levels in the eastern U.S. will be addressed in the OTAG 
process. Again, the EPA notes that the modeling and subsequent ambient 
data support the conclusion that NOX controls are not 
necessary for attainment.
    Comment: The commenter stated that NOX emission 
reductions will not only reduce transported ozone, but will also 
improve visibility, especially in downwind Class I areas.
    Response: The NOX exemption test Louisiana is relying on 
(pursuant to section 182(f)(1)(A)) requires an assessment of only the 
contribution of NOX emissions reductions toward ozone 
attainment.
    Comment: One commenter argued that the EPA Administrator has an 
obligation, under section 110(a)(2)(D), to prohibit any activity in a 
State which will contribute significantly to nonattainment in, or 
interfere with maintenance by, any other State. To this end, a 
``superregional'' NOX strategy should be adopted before the 
Administrator grants any section 182(f) NOX exemption or, at 
the very least, NOX exemptions should be restricted to 
expire if the OTAG and the EPA are unsuccessful in completing the 
requirements outlined in the EPA's March 2, 1995, attainment guidance 
document.
    Response: As discussed earlier in the response concerning transport 
to downwind areas, the EPA intends to use its authority under section 
110(a)(2)(D) to require a State to reduce NOX emissions from 
stationary and/or mobile sources where there is evidence, such as 
photochemical grid modeling, showing that the NOX emissions 
would contribute significantly to nonattainment in, or interfere with 
maintenance by, any other State or in another nonattainment area within 
the same State. This action would be independent of any action taken by 
EPA on a NOX exemption request under section 182(f). In 
reference to the latter part of the comment, the EPA has granted all 
NOX waivers on a contingent basis.
    Comment: One commenter contended that the monitors which observed 
the highest ozone concentrations in Calcasieu Parish ceased operating 
in 1992, leaving an ozone monitoring network which does not appear to 
monitor the area of the highest concentration.
    Response: As the commenter points out, the Lake Charles monitoring 
network underwent changes in 1992, when the State was obligated to move 
two monitors. When the Westlake monitor was originally established over 
10 years ago, the site required improvement in order to marginally meet 
the siting criteria (see 40 CFR part 58, Appendix E titled Probe Siting 
Criteria for Ambient Air Quality Monitoring--Ozone). After reviewing 
the Westlake monitoring site in 1991 and reconsidering site conditions, 
LDEQ and the EPA agreed that this monitoring site should be relocated. 
The Westlake monitoring site was subsequently relocated in September 
1992 to its present location on John Stine Road. The Vinton monitor was 
moved in 1992 because an adequate land lease could not be obtained. 
This monitor was relocated to its present location on Paul Bellow Road. 
Both sites meet the criteria for establishment of monitoring sites. The 
current monitoring network meets EPA-specified regulatory requirements, 
and adequately reflects air quality in the nonattainment area.
    Comment: A commenter stated that the EPA did not consider the 
effects of the prolonged regional economic recession particularly 
affecting the Lake Charles, Louisiana area. The commenter alleged that 
reduced economic activity in Lake Charles from 1993 to 1995 likely 
resulted in temporary reductions in ozone and ozone precursor emissions 
from sources in Calcasieu Parish. They further asserted that as the 
regional economic conditions improve, there will likely be a return of 
ozone exceedances and violations similar to those observed in 1990-
1992.
    Response: The EPA does not agree with the comment that states 
seeking waivers of NOX provisions are required to estimate 
and model what emissions might have been had economic conditions been 
more favorable. The State followed established procedures and EPA 
policy regarding the development of an emissions inventory for modeling 
purposes. The EPA approved the Lake Charles emissions inventory at 60 
FR 13908 on March 15, 1995. As stated in the proposed rule, if the EPA 
later determines through subsequent analysis, such as through 
photochemical grid analysis that NOX reductions would be 
beneficial in Lake Charles, the area would be removed from exempt 
status and would be required to adopt the NOX provisions of 
the NSR and conformity rules except to the extent that NOX 
reductions are shown to be ``excess reductions.''
    Comment: The commenter contended that the EPA omits any comment on 
NOX emissions in proximity to the oxygen depleted ``dead 
zone'' in the Gulf of Mexico. Further, the commenter asked why the EPA 
is permitting atmospheric nitrogen deposition from NOX 
emissions. The commenter alleged that NOX emissions from 
Calcasieu Parish will need to be reduced to mitigate nitrogen 
deposition damage in other areas, including Class I areas.
    Response: The EPA does not agree with this comment. No Class I 
areas are known to be affected by NOX emissions in Lake 
Charles. In addition, the requirements imposed by section 182 of the 
Act are to bring about attainment of the ozone standard in ozone 
nonattainment areas, and are independent of other requirements and 
controls under the Act, and any other applicable statutes that may 
address nitrogen deposition damage. The EPA's NOX waiver 
policy was developed to prevent the imposition of requirements of 
section 182 that do not contribute to that attainment. The other 
beneficial affects those requirements might have on visibility are not 
grounds to maintain or waive section 182 requirements.

[[Page 29077]]

    The EPA notes that the Breton National Wildlife refuge, the nearest 
Class I area to the Lake Charles nonattainment area, is approximately 
394 kilometers from the nonattainment area and over 300 kilometers from 
the modeling domain used to develop the NOX waiver. Since 
Lake Charles is not now considered a transport area for ozone or ozone 
precursors, the State is not required to evaluate the effect of a 
NOX waiver on regional haze, adverse impact on visibility 
(unless part of an established integral vista), or ozone attainment, in 
the Refuge.
    To address the substance of the comment, the EPA consulted the 
Department of Interior's (DOI) officials in charge of air quality and 
visibility in Breton National Wildlife Refuge. The DOI has no evidence 
that NOX sources in Calcasieu Parish are upwind of or are 
affecting air quality in this Class I protected area. The EPA believes 
there is a very small probability that sources in the Parish could be 
affecting this Class I area. The meteorological and air quality 
modeling provided in the petition indicate no potential for transport 
from the Lake Charles area to the Refuge. As evidence, air flow 
patterns from the model indicate that typical wind directions are 
northeasterly and southeasterly, clearly not in the direction of the 
protected area. The DOI concurred with this assessment. It should be 
noted that if this Class I area were within 100 kilometers of the 
Calcasieu nonattainment area, new pollution sources within the 
nonattainment area would be subject to different requirements under the 
nonattainment new source review program or the prevention of 
significant deterioration program, to prevent deterioration of air 
quality in the protected area.
    Finally, at 61 FR 29719 on June 12, 1996, the EPA published an 
Advance Notice of Proposed Rulemaking, in which the EPA informed the 
public that the EPA was combining the timing for its decision to retain 
or revise the current standards for particulate matter and ozone. The 
document also announced the EPA's intention to develop an integrated 
strategy for implementation of potential new ozone and particulate 
matter standards, and the regional haze program. The EPA will be 
accepting comments on the integration of control requirements for ozone 
precursors and gaseous emissions that contribute to the formation of 
fine particulate. The EPA invites the commenter to provide their 
comments to the EPA pursuant to the proposal of these new standards in 
November of 1996.

III. Effective Date

    The EPA has opted to make this regulation effective May 27, 1997 to 
minimize delay by the EPA. As noted above, section 182(f)(3) provides 
for EPA action on NOX exemption requests within six months 
of receipt, and the State originally requested the waiver over two 
years ago. Under the APA, 5 U.S.C. 553(d)(1), the EPA is authorized to 
establish an effective date for a substantive rule that is less than 
thirty days after publication if the rule ``relieves a restriction.'' 
The approval of the section 182(f) exemption for the Lake Charles ozone 
nonattainment area is a substantive rule that relieves the restrictions 
associated with the Act's title I requirements to control 
NOX emissions. The EPA is also making this action effective 
as soon as possible to expedite an overdue action. Hence, this action 
is effective on May 27, 1997.

IV. Final Action

    Although adverse comments were received, the EPA does not find 
these comments of sufficient merit to alter its proposed action on this 
NOX exemption request. Therefore, in this action, the EPA 
approves the 182(f) NOX exemption petition submitted by the 
State of Louisiana for the Lake Charles ozone nonattainment area. 
Approval of the exemption waives the Federal requirements for 
NOX NSR, NOX transportation conformity, and 
NOX general conformity applicable to the Lake Charles ozone 
nonattainment area.
    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). Similarly, if an area that 
received an exemption based on clean air quality data which shows that 
the area is attaining the ozone standard experiences a violation prior 
to redesignation of the area to attainment, the exemption would no 
longer be applicable.
    If the EPA later determines, because of an ozone violation or based 
on new photochemical grid modeling, that NOX reductions 
would be beneficial in Lake Charles, the area would be removed from 
exempt status and would be required to adopt the applicable 
NOX provisions of the NSR and conformity rules except to the 
extent that NOX reductions are shown to be ``excess 
reductions.'' In the rulemaking action which removes the exempt status, 
the EPA would provide specific information regarding the reapplication 
of the NSR rules and the conformity rules.

V. Regulatory Action

    The EPA is issuing final approval of the request for a petition 
from the State of Louisiana requesting that the Lake Charles marginal 
ozone nonattainment area be exempt from applicable NOX 
control requirements. The section 182(f) NOX requirement 
from which the area will be exempt is NOX NSR. In addition, 
approval of the section 182(f) petition would remove the NOX 
general conformity provisions and the NOX build/no build 
provisions of the transportation conformity rule.
    Nothing in this action should be construed as permitting or 
allowing or establishing a precedent for any future request for 
revision to any SIP. Each request for revision to the SIP shall be 
considered separately in light of specific technical, economic, and 
environmental factors and in relation to relevant statutory and 
regulatory requirements.

VI Administrative Requirements

A. Executive Order (E.O.) 12866

    This action has been classified as a Table I action for signature 
by the Administrator under the procedures published in the Federal 
Register on January 19, 1989 (54 FR 2214-2225), as revised by a July 
10, 1995, memorandum from Mary Nichols, Assistant Administrator for Air 
and Radiation. The Office of Management and Budget (OMB) has exempted 
this regulatory action from E.O. 12866 review.

B. Regulatory Flexibility Act

    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. See 5 U.S.C. 603 and 
604. Alternatively, the 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.
    The SIP approvals under section 110 and subchapter I, part D of the 
Act do not create any new requirements but simply approve requirements 
that the State is already imposing. Therefore,

[[Page 29078]]

because the Federal SIP approval does not impose any new requirements, 
I certify that it does not have a significant impact on any small 
entities affected. Moreover, due to the nature of the Federal-State 
relationship under the Act, preparation of a flexibility analysis would 
constitute Federal inquiry into the economic reasonableness of State 
action. The Act forbids the EPA to base its actions concerning SIPs on 
such grounds. See Union Electric Co. v. U.S. EPA, 427 U.S. 246, 255-66 
(1976); 42 U.S.C. 7410(a)(2).

C. Unfunded Mandates

    Under section 202 of the Unfunded Mandates Reform Act of 1995 
signed into law on March 22, 1995, EPA must prepare a budgetary impact 
statement to accompany any proposed or final rule that includes a 
Federal mandate that may result in estimated costs to State, local, or 
tribal governments in the aggregate; or to the private sector, of $100 
million or more. Under section 205, the EPA must select the most cost-
effective and least burdensome alternative that achieves the objectives 
of the rule and is consistent with statutory requirements. Section 203 
requires the EPA to establish a plan for informing and advising any 
small governments that may be significantly or uniquely impacted by the 
rule.
    The EPA's final action relieves requirements otherwise imposed 
under the Act and, hence, does not impose any federal intergovernmental 
mandates, as defined in section 101 of the Unfunded Mandates Act. This 
action also will not impose a mandate that may result in estimated 
costs of $100 million or more to either state, local, or tribal 
governments, in the aggregate, or to the private sector. Since this 
action will not significantly impact any small governments, the EPA is 
not required to establish a plan pursuant to section 203.

D. Submission to Congress and the General Accounting Office

    Under 5 U.S.C. section 801(a)(1)(A) as added by the Small Business 
Regulatory Enforcement Fairness Act of 1996, the EPA submitted a report 
containing this rule and other required information to the U.S. Senate, 
the U.S. House of Representatives and the Comptroller General of the 
General Accounting Office prior to publication of this rule in today's 
Federal Register. This rule is not a ``major rule'' as defined by 5 
U.S.C. section 804(2).

E. Petitions for Judicial Review

    Under section 307(b)(1) of the Act, petitions for judicial review 
of this action must be filed in the United States Court of Appeals for 
the appropriate circuit by July 28, 1997. 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).)

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Oxides of 
nitrogen, Incorporation by reference, Intergovernmental relations, 
Ozone.

    Dated: May 22, 1997.
Carol M. Browner,
Administrator.

    40 CFR part 52 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 T--Louisiana

    2. Section 52.992 is amended by adding paragraph (d) to read as 
follows:


Sec. 52.992  Area-wide nitrogen oxides (NOX) exemptions.

* * * * *
    (d) The LDEQ submitted to the EPA on October 28, 1994, a petition 
requesting that the Lake Charles marginal ozone nonattainment area be 
exempted from the NOX control requirements of the Act. The 
Lake Charles nonattainment area consists of Calcasieu Parish. The 
exemption request was based on photochemical grid modeling which shows 
that reductions in NOX would not contribute to attainment in 
the nonattainment area. On May 27, 1997, the EPA approved the State's 
request for an area-wide exemption from the following requirements: 
NOX new source review, NOX general conformity, 
and NOX transportation conformity requirements. The waiver 
was granted on the basis of modeling, and ambient air quality data 
demonstrating the area has attained the ozone NAAQS.
[FR Doc. 97-14100 Filed 5-28-97; 8:45 am]
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