[Federal Register Volume 63, Number 3 (Tuesday, January 6, 1998)]
[Proposed Rules]
[Pages 456-459]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-241]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[IN76-1; FRL-5945-9]


Approval and Promulgation of Implementation Plan; Indiana

AGENCY: Environmental Protection Agency.

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) proposes to approve 
Indiana's request to grant an exemption for the northwest Indiana (Lake 
and Porter Counties) severe ozone nonattainment area from the otherwise 
applicable Oxides of Nitrogen (NOX) transportation 
conformity requirements. On May 24, 1996, the Indiana Department of 
Environmental Management (IDEM) 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 northwest Indiana 
(Lake and Porter Counties) severe ozone nonattainment area. On November 
26, 1996, IDEM submitted additional materials, including Public Hearing 
documentation to complete the submittal. 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 below; additional information 
is available at the address indicated below.

Dates: Written comments on this proposed action must be received by 
February 5, 1998.

ADDRESSES: Written comments should be sent to: J. Elmer Bortzer, 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 and supporting documentation,

[[Page 457]]

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 Patricia Morris at (312) 353-8656 before visiting 
the Region 5 Office.)

FOR FURTHER INFORMATION CONTACT: Patricia A. Morris, 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 
that do not have motor vehicle emissions budgets. This requirement is 
implemented in 40 CFR Sec. 93.119, 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 transportation conformity rule \1\ and the 
August 15, 1997, final transportation conformity rule amendments: 
Flexibility and Streamlining,\2\ do not 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.
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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).
    \2\ ``Transportation Conformity Rule Amendments: Flexibili8ty 
and Streamlining; Final Rule'' August 15, 1997 (62 FR 43780).
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    Clean Air Act section 176(c)(3)(A)(iii), which is the conformity 
provision requiring contributions to emission reductions before SIPs 
with emissions budgets have been submitted, 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.
    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). As a result, instead of a petition under 182(f), 
transportation conformity NOX exemptions for ozone 
nonattainment areas that are subject to section 182(b)(1) are to be 
submitted as a SIP revision request. The northwest Indiana (Lake and 
Porter Counties) ozone nonattainment area is classified as severe (part 
of the Chicago severe nonattainment area) and, thus, is subject to 
section 182(b)(1). The EPA approved the NOX exemption for 
the States of Illinois, Indiana, Wisconsin and Michigan for RACT, NSR 
and general conformity on January 26, 1996, (61 FR 2428).
    The transportation conformity requirements are found at sections 
176(c)(2), (3), and (4) of the Act. 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 May 24, 1996, SIP revision request from Indiana was submitted 
to meet the requirements of 182(b)(1). A public hearing on this SIP 
revision request was held on June 11, 1996.
    In evaluating the 182(b) SIP revision request, the EPA considered 
whether additional NOX reductions would contribute to 
attainment of the standard in the Lake and Porter Counties ozone 
nonattainment area 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. In the presence of sunlight, 
nitrogen dioxide (NO2) photo-dissociates into nitrogen oxide 
(NO) 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 NO2. 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

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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 May 24, 1996, the State of Indiana submitted as a revision to 
the SIP, a request for a waiver from the transportation conformity 
NOX requirements for northwest Indiana (Lake and Porter 
Counties). 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 IDEM 
held a public hearing on the submittal on June 11, 1996.
    Pursuant to 40 CFR Part 93, Subpart A, 40 CFR Part 51, Subpart T, 
the SIP revision request seeks an exemption from the transportation 
conformity requirements for NOX in the northwest Indiana 
(Lake and Porter Counties) severe 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 
ozone 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 shows a very definite directional 
signal indicating that application of NOX controls in the 
northwest Indiana (Lake and Porter Counties) severe ozone nonattainment 
area would exacerbate peak ozone concentrations in the LMOS modeling 
domain. The LMOS modeling domain includes Chicago, Northwest Indiana, 
Western Michigan and Eastern Wisconsin. The States and LADCo have 
completed the validation process for the UAM modeling system used in 
the demonstration of attainment for the LMOS modeling domain and EPA 
has approved the validation. Documentation of the modeling validation 
is included in the SIP revision request materials.
    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. Modeling results with low level NOX 
source reductions are included in the documentation and show a 
disbenefit when NOX emissions are reduced. 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 the report's conformance with EPA guidance, the EPA believes the 
State of Indiana's demonstration is adequate, and thus is proposing to 
approve 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. Indiana and 
the other LADCO states have indicated their intent to review the need 
for NOX reduction in the nonattainment area.
    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, generally support the approval of the NOX waiver. 
However, the primary basis for approval of the NOX waiver is 
the modeling results submitted in support of the waiver. The 1991 field 
data by themselves do not provide adequate support for the waiver, 
since these data

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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. 
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 NOX limited conditions (VOC-limited conditions would 
imply a greater sensitivity of ozone concentrations to changes to 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 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 memorandum entitled ``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'', which is 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 
Northwest Indiana (Lake and Porter Counties) severe ozone nonattainment 
area and through out the LMOS domain will not contribute, but instead 
will interfere with attainment of the ozone standard. The modeling 
demonstration has been used to support the approval of a NOX 
exemption for the States of Illinois, Indiana, Wisconsin and Michigan 
for Ract, NSR and general conformity (see 61 FR 5291). The modeling has 
also been used to support transportation conformity NOX 
waivers under 182(b) for the Chicago ozone nonattainment area in 
Illinois (see 61 FR 5291), and, Muskegon County in Michigan (see 62 FR 
50512).
    In considering the importance of the Ozone Transport Assessment 
Group (OTAG) process and attainment plan modeling efforts, the results 
of OTAG technical work are now available. The EPA published on November 
7, 1997, a notice of proposed rulemaking which proposes to set State 
wide NOX budgets for 22 states including the State of 
Indiana. The proposed rulemaking would require appropriate States 
(including Indiana) to submit SIP measures to ensure emissions 
reductions of NOX needed to prevent significant transport of 
ozone. The States have the flexibility to determine which sources are 
the most appropriate from which to require reductions of 
NOX. The EPA, however, has based the proposed NOX 
budgets primarily on reductions from stationary sources such as 
utilities and industrial boilers. The EPA explains in the notice of 
proposed rulemaking the basis for the proposal and rationale.

IV. EPA Action

    The EPA is proposing approval of the transportation conformity 
NOX waiver SIP revision for the State of Indiana.
    The EPA 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. Administrative Requirements

A. Executive Order 12866

    The Office of Management and Budget has exempted this regulatory 
action from Executive Order 12866 review.

B. 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 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.
    SIP approvals under section 110 and subchapter I, part D of the CAA 
do not create any new requirements, but simply approve requirements 
that the State is already imposing. Therefore, because the Federal SIP 
approval does not impose any new requirements, the Administrator 
certifies 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 CAA, preparation of a flexibility analysis would 
constitute Federal inquiry into the economic reasonableness of the 
State action. The Clean Air Act forbids EPA to base its actions 
concerning SIPs on such grounds. Union Electric Co. v. EPA., 427 U.S. 
246, 256-66 (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 undertake various actions 
in association with 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. This Federal action approves pre-existing requirements under 
state or local law, and imposes no new 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, Ozone, Oxides of 
Nitrogen, Transportation conformity, Transportation-air quality 
planning, Volatile organic compounds.

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

    Dated: December 19, 1997.
David A. Ullrich,
Acting Regional Administrator.
[FR Doc. 98-241 Filed 1-5-98; 8:45 am]
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