[Federal Register Volume 62, Number 113 (Thursday, June 12, 1997)]
[Proposed Rules]
[Pages 32058-32061]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-15411]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[MI51-01-7259; FRL-5840-6]


Approval and Promulgation of Implementation Plan; Michigan

AGENCY: Environmental Protection Agency.

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) proposes to approve 
Michigan's request to grant an exemption for the Muskegon County ozone 
nonattainment area from the applicable Oxides of Nitrogen 
(NOX) transportation conformity requirements. On November 
22, 1995, the Michigan Department of Environmental Quality (MDEQ) 
submitted to the EPA a State Implementation Plan (SIP) revision request 
for an exemption under section 182(b)(1) of the Clean Air Act (Act) 
from the transportation conformity requirements for NOX for 
the Muskegon ozone nonattainment area, which is classified as moderate. 
The request is based on the urban airshed modeling (UAM) conducted for 
the attainment demonstration for the Lake Michigan Ozone Study (LMOS) 
modeling domain. The rationale for this proposed approval is set forth 
in Supplementary Information; additional information is available at 
the address indicated.

DATES: Comments on this proposed action must be received by July 14, 
1997.

ADDRESSES: Written comments should be sent to: Carlton T. Nash, Chief, 
Regulation Development Section, Air Programs Branch (AR-18J), EPA, 
Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604-3590. 
Copies of the SIP revision, public comments and EPA's responses are 
available for inspection at the following address: United States 
Environmental Protection Agency, Region 5, Air and Radiation Division, 
77 West Jackson Boulevard, Chicago, Illinois 60604. (It is recommended 
that you telephone Michael Leslie at (312) 353-6680 before visiting the 
Region 5 Office.)
    A copy of this SIP revision is available for inspection at the 
following location: Office of Air and Radiation (OAR) Docket and 
Information Center (Air Docket 6102), room M1500, United States 
Environmental Protection Agency, 401 M Street S.W., Washington, D.C. 
20460, (202) 260-7548.

FOR FURTHER INFORMATION CONTACT: Michael G. Leslie, Regulation 
Development Section (AR-18J), Air Programs Branch, Air and Radiation 
Division, United States Environmental Protection Agency, Region 5, 77 
West Jackson Boulevard, Chicago, Illinois 60604, Telephone Number (312) 
353-6680.

SUPPLEMENTARY INFORMATION:

I. Background

    Clean Air Act section 176(c)(3)(A)(iii) requires, in order to 
demonstrate conformity with the applicable SIP, that transportation 
plans and Transportation Improvement Programs (TIPs) contribute to 
emissions reductions in ozone and carbon monoxide nonattainment areas 
during the period before control strategy SIPs are approved by EPA. 
This requirement is implemented in 40 CFR 51.436 through 51.440 (and 
Secs. 93.122 through 93.124), which establishes the so-called ``build/
no-build test.'' This test requires a demonstration that the ``Action'' 
scenario (representing the implementation of the proposed 
transportation plan/TIP) will result in lower motor vehicle emissions 
than the ``Baseline'' scenario (representing the implementation of the 
current transportation plan/TIP). In addition, the ``Action'' scenario 
must result in emissions lower than 1990 levels.
    The November 24, 1993, final transportation conformity rule 
1 does not

[[Page 32059]]

require the build/no-build test and less-than-1990 test for 
NOX as an ozone precursor in ozone nonattainment areas, 
where the Administrator determines that additional reductions of 
NOX would not contribute to attainment of the National 
Ambient Air Quality Standard (NAAQS) for ozone. Clean Air Act section 
176(c)(3)(A)(iii), which is the conformity provision requiring 
contributions to emission reductions before SIPs with emissions budgets 
can be approved, specifically references Clean Air Act section 
182(b)(1). That section requires submission of State plans that, among 
other things, provide for specific annual reductions of volatile 
organic compounds (VOCs) and NOX emissions ``as necessary'' 
to attain the ozone standard by the applicable attainment date. Section 
182(b)(1) further states that its requirements do not apply in the case 
of NOX for those ozone nonattainment areas for which EPA 
determines that additional reductions of NOX would not 
contribute to ozone attainment.
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    \1\ ``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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    For ozone nonattainment areas, the process for submitting waiver 
requests and the criteria used to evaluate them are explained in the 
December 1993 EPA document ``Guidelines for Determining the 
Applicability of Nitrogen Oxides Requirements Under Section 182(f),'' 
and the May 27, 1994, and February 8, 1995, memoranda from John S. 
Seitz, Director of the Office of Air Quality Planning and Standards, to 
Regional Air Division Directors, titled ``Section 182(f) NOX 
Exemptions--Revised Process and Criteria.''
    On July 13, 1994, the States of Illinois, Indiana, Michigan, and 
Wisconsin (the States) submitted to the EPA a petition for an exemption 
from the requirements of section 182(f) of the Clean Air Act (Act). The 
States, acting through the Lake Michigan Air Directors Consortium 
(LADCo), petitioned for an exemption from the Reasonably Available 
Control Technology (RACT) and New Source Review (NSR) requirements for 
major stationary sources of NOX. The petition also asked for 
an exemption from the transportation and general conformity 
requirements for NOX in all ozone nonattainment areas in the 
Region.
    On March 6, 1995, the EPA published a rulemaking proposing approval 
of the NOX exemption petition for the RACT, NSR and 
transportation and general conformity requirements. A number of 
comments were received on the proposal. Several commenters argued that 
NOX exemptions are provided for in two separate parts of the 
Act, in sections 182(b)(1) and 182(f), but that the Act's 
transportation conformity provisions in section 176(c)(3) explicitly 
reference section 182(b)(1). In April 1995, the EPA entered into an 
agreement to change the procedural mechanism through which a 
NOX exemption from transportation conformity would be 
granted (EDF et al. v. EPA, No. 94-1044, U.S. Court of Appeals, D.C. 
Circuit). Instead of a petition under 182(f), transportation conformity 
NOX exemptions for ozone nonattainment areas that are 
subject to section 182(b)(1) now need to be submitted as a SIP revision 
request. The Muskegon ozone nonattainment areas is classified as 
moderate and, thus, is subject to section 182(b)(1).
    The transportation conformity requirements are found at sections 
176(c) (2), (3), and (4). The conformity requirements apply on an area 
wide basis in all nonattainment and maintenance areas. The EPA's 
transportation conformity rule was amended on August 29, 1995 (60 FR 
44762) to reference section 182(b)(1) rather than 182(f) as the means 
for exempting areas subject to section 182(b)(1) from the 
transportation conformity NOX requirements.
    The November 22, 1995, SIP revision request from Michigan, was 
submitted to meet the requirements in accordance with 182(b)(1). A 
public hearing on this SIP revision request was held on September 6, 
1995. The EPA issued a finding of completeness on January 17, 1996.
    In evaluating the 182(b) SIP revision request, the EPA considered 
whether additional NOX reductions would contribute to 
attainment of the standard in Muskegon County and also in the downwind 
areas of the LMOS modeling domain.
    The role that NOX emissions play in producing ozone at 
any given place and time is complex. NOX primarily 
represents a sum of two oxides of nitrogen, namely nitrogen oxide (NO) 
and nitrogen dioxide (NO2). In the presence of sunlight, 
NO2 photo-dissociates into NO2 and a single 
oxygen atom. The oxygen atom reacts with molecular oxygen 
(O2) to form ozone (O3). NO, on the other hand, 
near its source area readily reacts with ozone to form O2 
and NO. The generated NO2 is then free to photo-
dissociate and lead to ozone formation further downwind. The reaction 
of NO with ozone, which locally reduces ozone concentrations, is 
referred to as ozone scavenging and is one of the primary local sinks 
for ozone in the lower atmosphere in and near NO source areas. Since 
emissions of NOX from fuel combustion sources, whether 
internal combustion engines or stationary combustion sources, such as 
industrial boilers, contain significant amounts of NO, it is expected 
that ozone concentrations immediately downwind of such NOX 
sources will be reduced through ozone scavenging. Therefore, reducing 
NOX emissions can lead to increased ozone concentrations in 
the vicinity of the controlled NOX emission sources, whereas 
reducing NOX emissions may lead to reduction in ozone 
concentrations further downwind. Reducing NOX emissions in 
VOC-limited areas (areas with low VOC emissions relative to 
NOX emissions) may produce minimal ozone reductions or even 
ozone increases.
    As outlined in relevant EPA guidance, the use of photochemical grid 
modeling is the recommended approach for testing the contribution of 
NOX emission reductions to attainment of the ozone standard. 
This approach simulates conditions over the modeling domain that may be 
expected at the attainment deadline for three emission reduction 
scenarios: (1) Substantial VOC reductions, (2) substantial 
NOX reductions, and (3) both VOC and NOX 
reductions. If the area wide predicted maximum one-hour ozone 
concentration for each day modeled under scenario (1) is less than or 
equal to those from scenarios (2) and (3) for the corresponding days, 
the test is passed and the section 182(f) NOX emissions 
reduction requirements would not apply.
    In making this determination under section 182(b)(1) that the 
NOX requirements do not apply, or may be limited in the Lake 
Michigan area, the EPA has considered the national study of ozone 
precursors completed pursuant to section 185B of the Act. The EPA has 
based its decision on the demonstration and the supporting information 
provided in the SIP revision request.

II. Summary of Submittal

    On November 22, 1995, the State of Michigan submitted as a revision 
to the SIP, a request for a waiver from the transportation conformity 
NOX requirements. The submittal included the LMOS UAM 
modeling for the attainment demonstration for 3 ozone episodes during 
1991. The modeling supported the request by documenting that 
NOX reductions in the LMOS modeling domain would not 
contribute to attainment and, in fact, would be detrimental to the goal 
of reaching attainment. The MDEQ held a public hearing on the submittal 
on September 6, 1996.

[[Page 32060]]

    Pursuant to 40 CFR Part 93, Subpart A, and 40 CFR Part 51, Subpart 
T, the SIP revision request seeks an exemption from the transportation 
conformity requirements for NOX in the Muskegon County ozone 
nonattainment area. The States' have utilized the UAM to demonstrate 
that reductions in NOX in the LMOS modeling domain will not 
contribute to attainment of the standard. To conduct the modeling 
analysis, the following steps were followed: (a) Emissions were 
projected to 1996 (the deadline for implementation of the 15 percent 
reasonable further progress reduction) and 2007 (the attainment 
deadline for the severe nonattainment areas) from the 1990 base year, 
(b) it was assumed that a 40 percent VOC emission reduction beyond that 
achieved as a result of emission controls mandated by the Act would be 
necessary to attain the ozone standard in the LMOS modeling domain, (c) 
a 40 percent NOX emission reduction in grid B (that portion 
of the LMOS modeling domain that is essentially composed of the ozone 
nonattainment areas within the modeling domain) beyond the projected 
emission levels was assumed for all anthropogenic NOX 
emissions, (d) a 40 percent VOC emission reduction and a 40 percent 
NOX reduction in grid B beyond projected emission levels 
were assumed for all anthropogenic VOC and NOX emissions, 
and (e) the ozone modeling results for (b), (c), and (d) were compared 
considering the modeled domain-wide peak ozone concentrations and 
temporal and spatial extent of modeled ozone concentrations above 120 
parts per billion (ppb).
    For all modeled days using 1996 and 2007 conditions, domain-wide 
peak ozone concentrations for ``VOC-only'' controls were found to be 
lower than or equal to those for ``NOX-only'' controls or 
those for ``VOC plus NOX'' controls. In addition, 
consideration of daily peak ozone isopleth maps (these maps are 
included in the documentation of the section 182(b) SIP revision 
request) shows that the ``VOC-only'' control scenario leads to the 
smallest areas with predicted peak ozone concentrations exceeding 120 
ppb.
    Additional sensitivity tests were conducted for a 40 percent 
NOX emission reduction that was applied only to point 
sources in Grid B for episode 2 and 1996 conditions for both an assumed 
NOX reduction alone and a 40 percent reduction in both VOCs 
and NOX. These sensitivity tests compared to the scenarios 
with across the board anthropogenic NOX reductions 
demonstrated that control of ground level NOX sources (such 
as transportation sources) did not contribute to attainment of the 
standard and in fact increased the domain wide peak ozone 
concentrations exceeding 120 ppb and the number of hours that exceeded 
120 ppb. This result was more pronounced than with the point source 
only NOX control.

III. Analysis of the Submittal

    Review of the modeling results show a very definite directional 
signal indicating that application of NOX controls in the 
Muskegon County ozone nonattainment area would exacerbate peak ozone 
concentrations not in the LMOS modeling domain. The LMOS modeling 
domain includes Chicago, Northwest Indiana, Western Michigan and 
Eastern Wisconsin. The States and LADCo have now completed the 
validation process for the UAM modeling system to be used in the 
demonstration of attainment for the LMOS modeling domain. Therefore, 
documentation supporting the validity of the modeling results has been 
submitted with the SIP revision request.
    It is noted that the use of simple, area-wide emission projection 
factors raises some uncertainty in the modeling results for 1996 and 
2007. Some changes in modeling results may be expected if area-specific 
and source category-specific projection factors are used instead of the 
average factors used in these analyses. These more detailed projection 
factors will be used in the final demonstration of attainment for the 
LMOS domain. These changes, however, are not expected to reverse the 
directional signal of the modeling done to date, which shows that 
NOX reductions will not contribute to attainment in Muskegon 
County ozone nonattainment and throughout the LMOS domain.
    Although ozone concentrations modeled further downwind from the 
urban source areas increase as a result of increased NOX 
point source emissions, this is not the case with the ground level 
NOX sources. LADCo and the States view the potential 
increase in outflow ozone concentrations with increasing NOX 
point source emissions to be marginal. More importantly, the SIP 
revision request demonstrates that additional reductions in 
NOX would not contribute to attainment of the ozone standard 
in the LMOS domain. These results are believed to be consistent with 
EPA's section 185B report to Congress. Therefore, based on it's 
conformance with EPA guidance, the EPA believes the State of Michigan's 
demonstration is adequate, and thus is approving the transportation 
conformity waiver request. It is noted by LADCo, however, that 
subsequent modeling analyses may lead to an ozone attainment plan which 
includes, for specified portions of the LMOS domain only, both 
NOX and VOC emission controls. The modeling indicates that 
these NOX emission controls will most likely be limited to 
rural areas, but would not be required in the Michigan nonattainment 
area and will also not likely be applied to ground level sources.
    Monitoring data such as concentrations of non-methane hydrocarbons 
and NOX and derived/monitored ozone production potentials of 
air parcels, collected for the urban source areas during the 1991 field 
study support the approval of the NOX waiver. However, the 
primary basis for the approval of the NOX waiver is the 
modeling results submitted in support of the waiver. The 1991 field 
data by themselves may not be an adequate support for the waiver since 
these data are limited in nature and do not assess the impacts of post-
1991 NOX controls on LMOS modeling domain peak ozone 
concentrations.
    VOC and NOX emission reductions were found to produce 
different impacts spatially. In and downwind of major urban areas, 
within the ozone nonattainment areas, VOC reductions were effective in 
lowering peak ozone concentrations, while NOX emission 
reductions resulted in increased peak ozone concentrations. Farther 
downwind, within attainment areas, VOC emissions reductions became less 
effective for reducing ozone concentrations, while NOX 
emission reductions were effective in lowering ozone concentrations. It 
must be noted, however, that the magnitude of ozone decreases farther 
downwind due to NOX emission reductions was less than the 
magnitude of ozone increases in the ozone nonattainment areas as a 
result of the same NOX emission reductions.
    Analyses of ambient data by LMOS contractors provided results which 
corroborated the modeling results. These analyses identified areas of 
VOC-and NOX-limited conditions (VOC-limited conditions would 
imply a greater sensitivity of ozone concentrations to changes in VOC 
emissions; the reverse would be true for NOX-limited 
conditions) and tracked the ozone and ozone precursor concentrations in 
the urban plumes as they moved downwind. The analyses indicated VOC-
limited conditions in the Chicago/Northwest Indiana and Milwaukee areas 
and NOX-limited conditions further downwind. These results 
imply that VOC controls in the Chicago/Northwest Indiana, Milwaukee, 
and Western Michigan areas would be

[[Page 32061]]

more effective at reducing peak ozone concentrations within the Lake 
Michigan ozone nonattainment areas.
    The consistency between the modeling results and the ambient data 
analysis results for all episodes with joint data supports the view 
that the UAM modeling system developed in the LMOS may be used to 
investigate the relative merits of VOC versus NOX emission 
controls. The UAM-V results for all modeled episodes point to the 
benefits of VOC controls versus NOX controls in reducing the 
modeled domain peak ozone concentrations.
    For a more detailed analysis of the modeling analysis results, 
please see the August 22, 1994 ``Technical Review of a Four State 
Request for a Section 182(f) Exemption from Oxides of Nitrogen 
(NOX) Reasonably Available Control Technology (RACT) and New 
Source Review (NSR) Requirements'' memorandum contained in the docket 
for this action.
    The EPA believes LADCo's UAM application has adequately met the 
requirement to demonstrate that NOX controls within the 
Muskegon County ozone nonattainment area and throughout the LMOS domain 
will not contribute, but instead will interfere with attainment of the 
ozone standard.

IV. EPA Action

    The EPA is proposing approval of the transportation conformity 
NOX waiver SIP revision for the State of Michigan. In light 
of the modeling completed thus far and considering the importance of 
the Ozone Transport Assessment Group (OTAG) process and attainment plan 
modeling efforts, EPA proposes to approve this NOX waiver on 
a contingent basis. When the results of OTAG technical work are 
available, EPA intends to require appropriate States to submit SIP 
measures to ensure emissions reductions of ozone precursors needed to 
prevent significant transport of ozone. The EPA will evaluate the OTAG 
technical work, along with EPA's emissions reduction requirements, to 
determine whether the NOX waiver should be continued, 
altered, or removed.
    The EPA also reserves the right to require NOX emission 
controls for transportation sources under section 110(a)(2)(D) of the 
Act if future ozone modeling demonstrates that such controls are needed 
to achieve the ozone standard in downwind areas.

V. Miscellaneous

A. Applicability to Future SIP Decisions

    Nothing in this action should be construed as permitting, allowing 
or establishing a precedent for any future request for revision to any 
SIP. The EPA shall consider each request for revision to the SIP in 
light of specific technical, economic, and environmental factors and in 
relation to relevant statutory and regulatory requirements.

B. Executive Order 12866

    This action has been classified as a Table 3 action for signature 
by the Regional 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 has exempted 
this regulatory action from E.O. 12866 review.

C. Regulatory Flexibility

    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 economic impact on a substantial number of small entities. 
Small entities include small businesses, small not-for-profit 
enterprises, and government entities with jurisdiction over populations 
of less than 50,000.
    This approval does not impose any requirements on small entities. 
Therefore, I certify that this action does not have a significant 
economic impact on any small entities.

D. Unfunded Mandates Reform Act

    Under section 202 of the Unfunded Mandates Reform Act of 1995 
(``Unfunded Mandates Act''), signed into law on March 22, 1995, the 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 of $100 million or more 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 has determined that the approval proposed does not include 
a Federal 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.
    This Federal document does not imposes any Federal requirements. 
Accordingly, no additional costs to State, local, or tribal 
governments, or the private sector, result from this action.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Hydrocarbons, 
Intergovernmental relations, Ozone, Oxides of Nitrogen, Transportation 
conformity, Transportation-air quality planning, Volatile organic 
compounds.

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

    Dated: May 30, 1997.
Valdas V. Adamkus,
Regional Administrator.
[FR Doc. 97-15411 Filed 6-11-97; 8:45 am]
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