[Federal Register Volume 62, Number 169 (Tuesday, September 2, 1997)]
[Rules and Regulations]
[Pages 46406-46409]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-23091]



[[Page 46405]]

_______________________________________________________________________

Part II





Environmental Protection Agency





_______________________________________________________________________



40 CFR Part 55



Outer Continental Shelf Air Regulations Remands; Final Rule

  Federal Register / Vol. 62, No. 169 / Tuesday, September 2, 1997 / 
Rules and Regulations  

[[Page 46406]]


=======================================================================
-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 55

[FRL-5880-6]
RIN 2060-AG40 and AG39


Outer Continental Shelf Air Regulations Remands

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The EPA is revising the outer continental shelf (OCS) air 
regulations in response to two remands from the U.S. Court of Appeals 
for the District of Columbia Circuit. These regulations establish air 
pollution control requirements for certain sources located on the OCS.
    In response to the requirements of section 328 of the Clean Air Act 
(Act), on September 4, 1992, EPA promulgated the OCS regulations 
setting up two regimes for controlling air pollution from OCS sources 
for the purposes of attaining and maintaining Federal air quality 
standards and to comply with certain Act requirements for 
preconstruction review of new and modified major sources on the OCS. 
The Santa Barbara County Air Pollution Control District (APCD) filed a 
petition for review of the regulations on several issues and the Court 
granted a remand on two of those issues.
    The first issue raised concerned EPA's decision not to provide for 
delegation to State and local agencies of the authority to implement 
and enforce the regulations for sources located beyond 25 miles of the 
States' seaward boundaries (the 25-mile limit). The EPA requested a 
voluntary remand of this issue, and the court granted the remand. On 
May 20, 1996, EPA proposed revisions to the OCS regulations to provide 
for delegation to State and local agencies the authority to implement 
and enforce the OCS regulations beyond the 25-mile limit. By this 
action, EPA is promulgating those regulations. Delegation of the 
program to any specific State or local agency will be under separate 
action.
    The Santa Barbara APCD also challenged the portion of the OCS 
regulations that set up special offset requirements for OCS sources 
located within the 25-mile limit. Upon review, the court found that the 
special offset provisions departed from the Act, vacated the regulation 
in part, and remanded that portion to EPA for further consideration.
    On May 20, 1996, EPA promulgated revisions to the OCS regulations 
to delete the special offset provisions and to require that for sources 
located within the 25-mile limit, offset requirements apply as they are 
required in the corresponding onshore area (COA). The EPA promulgated 
these revisions as an interim final regulation and requested comments 
on the revisions. Today's action removes the interim status of those 
regulations.
DATES: The revisions to the regulations will be effective October 2, 
1997.

ADDRESSES: Two public dockets for these actions are available for 
public inspection and copying between 8 a.m. and 4 p.m., Monday through 
Friday, at the Air and Radiation Docket and Information Center (6102), 
Attention Docket A-95-06 (for the Offset Remand) and Docket A-95-07 
(for the delegation remand), South Conference Center, Room 4, 401 M 
Street, SW, Washington, DC 20460. A reasonable fee for copying may be 
charged.

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

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

    The 1990 Amendments to the Act (Pub. L. 101-549, 104 Stat. 2399 
(1990)) added section 328 and transferred authority to regulate sources 
on part of the OCS from the Department of the Interior (DOI) to EPA. 
The DOI retained the authority to regulate OCS sources in the Gulf of 
Mexico, west of 87.5 degrees longitude. As to the remaining portions of 
the OCS--the Atlantic, Pacific, and Arctic coasts and the Gulf of 
Mexico, east of 87.5 degrees--section 328 requires EPA to establish 
requirements for the control of air pollution from OCS sources for 
attaining and maintaining Federal and State ambient air quality 
standards, and to comply with the prevention of significant 
deterioration (PSD) provisions of part C of title I of the Act. For 
sources within 25 miles of the States' seaward boundaries, those 
requirements must be the same as would be applicable if the source were 
located in the COA. For sources beyond the 25-mile limit, the 
Administrator had discretion in determining the requirements. The EPA 
proposed (56 FR 63774, December 5, 1991) and promulgated (57 FR 40792, 
September 4, 1992) regulations to implement the requirements of section 
328. The regulations require, among other things, that sources located 
beyond 25 miles of States' seaward boundaries meet applicable Federal 
pollution control requirements which include PSD, new source 
performance standards (NSPS), and national emission standards for 
hazardous air pollutants (NESHAP) regulations to the extent that they 
are rationally related to protection of air quality standards or part C 
of title I of the Act (40 CFR 55.13).

B. Delegation Authority

    Section 328(a)(3) of the Act permits States adjacent to an OCS 
source to adopt and submit to EPA regulations for implementing and 
enforcing the requirements of that section. It requires that:

(i)f the Administrator (of EPA) finds that the State regulations are 
adequate, the Administrator shall delegate to that State any 
authority the Administrator has under this Act to implement and 
enforce such requirements.

    Therefore, EPA included Sec. 55.11 in the OCS regulations to 
authorize the delegation of the implementation and enforcement 
authority to State and local agencies for OCS sources that are located 
within the 25-mile limit. The EPA did not provide for the delegation of 
the implementation and enforcement authority for sources beyond the 25-
mile limit. (See the preamble to the proposed regulatory revision, 61 
FR 25173, May 20, 1996, for further information on the background of 
this issue.)

C. Offset Provision

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

[[Page 46407]]

proposed source was assumed to be located at the State's seaward 
boundary (40 CFR 55.5(d) and 57 FR 40796). (See the preamble to the 
interim final regulation, 61 FR 25149, May 20, 1996, for further 
information on the background of this issue.)

D. Judicial Review

    On November 2, 1992, the Santa Barbara County APCD filed a petition 
for review of the OCS regulations with the U.S. Court of Appeals for 
the District of Columbia Circuit (Santa Barbara County Air Pollution 
Control District v. EPA, 31 F. 3rd 1179 (D.C. Cir., 1994)). One of the 
issues that the Santa Barbara County APCD raised was EPA's failure to 
provide for delegation of the authority to implement and enforce the 
OCS regulations for sources located beyond 25 miles from a State's 
seaward boundary. Another issue raised by the Santa Barbara County APCD 
petition involved the regulatory offset provisions for OCS sources.
    In reviewing the delegation issue, EPA determined that section 328 
of the Act requires it to delegate ``any'' authority the EPA has under 
the Act to implement and enforce the requirements of section 328(a) if 
it determines that the State government has adequate regulations. 
Therefore, EPA requested the court to remand this issue to it for 
reconsideration. The court granted EPA's voluntary request for a 
remand.
    On August 12, 1994, the Court of Appeals vacated the offset portion 
of the OCS regulations as it applied to zones 2 and 3, finding that EPA 
should promulgate the same offset requirements for OCS sources as would 
be applicable if the OCS sources were located in the COA. The court 
remanded the provision to EPA for further consideration (Santa Barbara 
31 F. 3rd at 1181-82).

II. Response to the Delegation Remand

A. Proposed Revisions to the Regulations

    On May 20, 1996 at 61 FR 25173, EPA proposed to revise the OCS 
regulations to provide for the delegation authority to implement and 
enforce the regulations for sources located beyond the 25-mile limit. 
The EPA proposed revisions to specific language in Secs. 55.3(c), 
55.6(d), and 55.11(a) to allow for such delegation. In addition, EPA 
proposed revisions in the wording of other sections to clarify the 
regulations as they pertain to the delegation of authority for sources 
located beyond the 25-mile limit. The specific regulatory changes 
proposed included revisions to Sec. 55.2 (definition of nearest onshore 
area) and the addition of Sec. 55.11(j) (exercising delegation 
authority).
    The EPA rescinded that preamble language which specifically stated 
that delegation beyond the 25-mile limit is unacceptable (57 FR 40794, 
40797, 40801, and 40802).

B. Response to Public Comments

    The EPA received one comment in response to its proposed regulatory 
change. The Minerals Management Service (MMS) of the DOI expressed one 
general concern and raised three issues about specific wording in the 
notice and the proposed regulations. The general concern involved the 
precedent established by delegating to State and local agencies the 
authority to control sources located up to 200 miles off the shore. The 
EPA understands MMS' concern about the potential precedent of 
delegating the implementation and enforcement authority for sources 
located on the OCS, however, the Act clearly states that EPA must allow 
such delegation. Although sources locating beyond the 25-mile limit are 
only subject to the Federal regulations developed and promulgated by 
EPA, many State and local districts already have the authority to 
implement and enforce those regulations onshore and within the State's 
seaward boundary. Therefore, many State and local agencies have already 
demonstrated their ability to implement and enforce these Federal 
regulations.
    One of the specific wording issues raised by MMS concerned an 
apparent discrepancy between the preamble language and the Act's 
language. In the preamble to the proposed regulations, EPA stated 
``[s]ources located within 25 miles of the States' seaward boundaries 
(the 25-mile limit) must comply with the regulations which are, in most 
respects, the same as the regulations for similar sources located 
onshore'' (emphasis added). While the Act states that the `` * * * 
those requirements must be the same as would be applicable if the 
source were located in the corresponding onshore area * * * '' 
(emphasis added). Although, as MMS pointed out, the CAA uses the phrase 
``must be the same as,'' it also provides for exemptions based on 
health and safety considerations. Furthermore, as provided in the 
preamble to the OCS regulations, EPA has the authority not to 
promulgate State or locally-adopted rules which it determines are 
arbitrary and capricious (57 FR 40802). While these exceptions from 
enforcing all COA requirements are few in number, EPA is justified in 
using the phrase ``in most respects.''
    The MMS also suggests revisions in the wording of proposed 
Secs. 55.6(d)(2) and 55.11(a). Specifically, MMS identified a 
typographical error in proposed Sec. 55.6(d)(2) and suggested numbering 
the phrases in Sec. 55.11(a) to clarify that there are two types of 
delegations, one for sources located within the 25-mile limit and one 
for sources located beyond that limit. In both cases, the wording of 
the final rules has been revised consistent with MMS's comments.

C. Today's Action

    Except for the minor clarifications to the wording of the 
regulations as discussed above, EPA is promulgating the revisions to 
the delegation provisions of the OCS regulations as they were proposed.

III. Response to the Offset Remand

A. Revisions to the Regulations

    The EPA addressed the court's August 12, 1994 decision by 
promulgating an interim final rule revising the offset provision that 
applies to OCS sources (61 FR 25149, May 20, 1996). Because the court 
vacated the existing regulations as they apply to zones 2 and 3, and 
created a gap in continuity of the regulation, EPA, under provisions of 
the Administrative Procedure Act (APA) (5 U.S.C. 553(b)(B)), 
promulgated final rules without prior notice and an opportunity for 
comment. The EPA did, however, provide the public with the opportunity 
to comment on this interim final action. The EPA committed to 
reevaluating its decision in light of any comments received during the 
comment period and taking a subsequent final action.

B. Response to Public Comments

    The EPA received one comment on the interim final regulation. The 
Santa Barbara County APCD supported and agreed with EPA's action. 
However, the APCD also criticized EPA's estimated costs for complying 
with the revised regulations. The APCD noted that the cost for 
obtaining the required offsets was overstated, and APCD provided 
examples of lower costs offsets. The EPA agrees that the cost may have 
been overstated, but the estimations were made as a rough measure as to 
whether this action should be considered as a major rule. Since the 
estimates were far below the minimum levels for a major rule, no 
further refinement of the estimates were or are necessary.

C. Today's Action

    In light of the favorable comment to its interim final rule 
regarding offsets, EPA finds that the interim rule does not

[[Page 46408]]

need revision, and thus, is revoking the interim status of the rule, 
effective 30 days following publication of this action in the Federal 
Register.

IV. Administrative Requirements

A. Review by the Office of Management and Budget

    Under Executive Order 12866 (58 FR 51735 (October 4, 1993)) the 
Agency must determine whether the regulatory action is ``significant'' 
and therefore subject to OMB review and the requirements of the 
Executive Order. The Order defines ``significant regulatory action'' as 
one that is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    Because the OCS sources would be regulated by two Federal agencies, 
EPA and DOI, EPA submitted the May 20, 1996 proposed regulation 
concerning the delegation remand and the interim final regulation 
concerning the offset remand to Office of Management and Budget (OMB) 
for review. Changes made in response to OMB suggestions or 
recommendations are documented in the public dockets. However, since 
EPA received minimum public comments on the notices, made no 
substantive changes in the delegation remand notice and is not revising 
the offset interim rules, this final rule was considered not 
significant by the OMB.

B. Unfunded Mandates Act

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

C. Paperwork Reduction Act

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

D. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), as amended in 1996, requires 
Federal agencies to identify potentially adverse impacts of Federal 
rules upon small entities. Small entities include small businesses, 
organizations, and governmental jurisdictions. In instances where a 
rule would create a significant economic impact on a substantial number 
of these entities, agencies are required to perform a regulatory 
flexibility analysis. These revisions to the OCS regulations do not, in 
themselves, impose any requirements on small entities, nor require or 
exclude small entities from meeting the requirements of the OCS 
regulations. As a result, EPA has determined that these revisions will 
not have a significant impact on a substantial number of small 
entities. Therefore, as required under section 605 of the RFA, 5 U.S.C. 
605, I certify that these revisions do not have a significant impact on 
a substantial number of small entities.

E. Petition for Judicial Review

    Under section 307(b)(1)of the Act, 42 U.S.C. 7607(b)(1), petitions 
for judicial review of these actions must be filed in the United States 
Court of Appeals for the District of Columbia Circuit by November 3, 
1997. Filing petitions for reconsideration of these final rules by the 
Administrator does not affect the finality of these rules for the 
purpose 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. These actions may not be 
challenged later in proceedings to enforce the requirements.

F. Submission to Congress and the General Accounting Office

    Under 5 U.S.C. 801(a)(1)(A), as added by the Small Business 
Regulatory Enforcement Fairness Act of 1996, EPA submitted a report 
containing these rules and other required information to the U.S. 
Senate, the U.S. House of Representatives, and the Comptroller General 
of the United States prior to publication in the Federal Register. 
These rules are not ``major rules'' as defined by 5 U.S.C. 804(2).

List of Subjects in 40 CFR Part 55

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

    Dated: August 18, 1997.
Carol M. Browner,
Administrator.

    For reasons set out in the preamble, 40 CFR part 55 is amended as 
follows:

PART 55--OUTER CONTINENTAL SHELF AIR REGULATIONS

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

    Authority: Sec. 328 of the Clean Air Act (42 U.S.C. 7401, et 
seq.) as amended by Pub. L. 101-549.


Sec. 55.2  [Amended]

    2. In Sec. 55.2 the definition of ``Nearest Onshore Area (NOA)'' is 
amended by adding a comma after ``OCS source'' and removing the words 
``located within 25 miles of the States' seaward boundary,''.
    3. Section 55.3 is amended by revising paragraph (c) to read as 
follows:


Sec. 55.3  Applicability.

* * * * *
    (c) The OCS sources located beyond 25 miles of States' seaward 
boundaries shall be subject to all the requirements

[[Page 46409]]

of this part, except the requirements of Secs. 55.4, 55.5, 55.12 and 
55.14 of this part.
* * * * *
    4. Section 55.6 is amended by revising paragraph (d)(2) to read as 
follows:


Sec. 55.6  Permit requirements.

* * * * *
    (d) * * *
    (2) The Administrator or delegated agency shall not issue a permit-
to-operate to any existing OCS source that has not demonstrated 
compliance with all the applicable requirements of this part.
* * * * *
    5. Section 55.11 is amended by revising paragraph (a) and by adding 
paragraph (j) to read as follows:


Sec. 55.11  Delegation.

    (a) The governor or the governor's designee of any State adjacent 
to an OCS source subject to the requirements of this part may submit a 
request, pursuant to section 328(a)(3) of the Act, to the Administrator 
for the authority to implement and enforce the requirements of this OCS 
program: Within 25 miles of the State's seaward boundary; and/or Beyond 
25 miles of the State's seaward boundary. Authority to implement and 
enforce Secs. 55.5, 55.11, and 55.12 of this part will not be 
delegated.
* * * * *
    (j) Delegated authority. The delegated agency in the COA for 
sources located within 25 miles of the State's seaward boundary or the 
delegated agency in the NOA for sources located beyond 25 miles of the 
State's seaward boundary will exercise all delegated authority. If 
there is no delegated agency in the COA for sources located within 25 
miles of the State's seaward boundary, or in the NOA for sources 
located beyond 25 miles of the State's seaward boundary, the EPA will 
issue the permit and implement and enforce the requirements of this 
part. For sources located within 25 miles of the State's seaward 
boundary, the Administrator may retain the authority for implementing 
and enforcing the requirements of this part if the NOA and COA are in 
different States.

[FR Doc. 97-23091 Filed 8-29-97; 8:45 am]
BILLING CODE 6560-50-P